An important experiment is being tried in America by the Mutual-Life Insurance Company, which, if found to be successful, will react on insurance companies generally. The Mutual is stated to be the largest life office in the world, having assurances amounting to sixty millions sterling, and ninety ■ thousand policy' holders. In January of this year the company issued a circular to all its policy holders, drawing their attention “ to the “ increasing prevalence of death among “ insured persons resulting from the “abuse of intoxicating liquors.” This was, however, by no means the first step the company had taken in the same direction. Twenty-three years previously it required a declaration from those who sought assurance that no habit which would tend to shorten life should be practised. In 1872 this precaution was found to bo insufficient to protect the company’s interest, and the directors made it imperative that every person seek-' ing assurance should state whether “ his “habits of life were then and always “ had been temperate, and to enter into “ a covenant with the company that he “ W'ould still practise habits of sobriety.” Should it be discovered subsequent to accepting the risks on the life of the assured that false representations had been made to obtain a policy, and that the covenant of temperance entered into between the insured and the insurers “ had “ been deliberately and • systematically “violated, and that death had resulted “from such violation,” it was intended to resist the payment of the claims supposed or hold to be due under the policies thus rendered void. Again, in January, 1875, the following questions were inserted in all applications, viz.:—“Are “ you engaged in the manufacture of in- “ toxicating drinks ? Have you been so “engaged? State full particulars. Do- “ scribe fully your habits in regard to the “ personal use of alcoholic .or other “ stimulants, narcotics, and tobacco. What “has been your habit in this respect “ through life?” The following provisions wore also inserted in the policy itself\; — “If the said person upon whose death “ this policy matures shall'die by disease, “ violence, or accident, brought about by “ intoxication; or shall impair his health “ by narcotic or alcoholic stimulants, or “ shall have delirium tremens , the com- “ pany shall bo released from all liability “ on account of this contract.” But this clause even has not been found to suffice to carry out the intentions of the trustees in promoting habits of temperance among its clients, as it is found that in December last the president and vice-president stated “ that a large number of deaths “ occur every year among those insured “ by the company, which are the direct “ results of intemperate habits; and that “ a larger number of deaths attributed to “ miscellaneous causes are-the sequences “of the same habit of life.” The following resolution was then passed : —, “ That the executive officers of the cora- “ pany bo instructed to strictly enforce the “ conditions contained in the application “and policies; and with that end in “ view, that they bo instructed to pro- “ pare a circular letter setting forth the' “ duties and obligations of the insured.” A copy of the circular, which is too long for ua to print in full, was sent to each policy-holder. The concluding paragraph of it is as follows: —“During the past “year many policies upon the lives of “ persons who have become notoriously “ intemperate have been cancelled. It is “ our determination to pursue this course “ in the future, and if any to whom this “ circular shall como are conscious that ■“ persistence in evil ways is invalidating “ their legal claims upon the company, wo “ warn them that they may bo laying up a “ legacy ofdisappointmer.it, instead of the “ beneficent provision against want which “ an honorable fulfilment of their ongage- “ monts will obtain.” It will thus be soon that the Mutual Insurance Company of Now York persists in canying out to ■the fullest extent possible the policy of
management it inaugurated nearly a quarter of a .century ago. K is a policy which opens offt a -broad question a question that promises to have wide extension and is surrounded with considerable difficulties iilHhe shape of administration. What shall bo considered intemperate habits by an insure ahoe company many will consider a pertinent question. How will the company be able to determine whether disease resulting in death is engendered by tho use of alcohol or not ? Who are to bo judges In this determination ? It would appear at first sight that the Mutual will, by its contemplated action, ensure a multiplicity of lawsuits ; but whether it will .succeed in promoting habits of temperance among its policy holders is a problem that experience only- can determine. Deaths resulting from intemperate habits have always been a source of anxiety to insurance companies; but the Mutual of New York, if our recollection bo confect, is the only company that has hitherto boldly grappled with tho difficulty. Until lately the Australian Mutual Provident Society had a clause in its policies by which it was provided that if a person was known to “ die from habits of intemperance or “ disease, or injuries arising from such “ habits, or on proof to the board that “deceased had been 'an habitual “drunkard,”’ the policy was rendered void. But the directors Sliding the clause to bo of little value, and other companies accepting risks of intemperance without imposing similar conditions, it was abandoned, and the Mutual of Australia was placed in the same category as other companies. The next report of this OSTow York company will in all probability give information showing whether or not a decrease of business has resulted in consequence of the restrictions im’pbsed. Companies generally are not likely to follow the precedent cited until.it is demonstrated by experionce’that each a line of action is commercially profitable. . When it is remembered that a system of assur-.. ance. is a part of our Government machinery, that heavy liabilities are incurred by this department, and that the quantity of adulterated alcoholic spirits that is consumed in New Zealand is very great, the experiment now being tried in America should be watched with close attention both by the Government and the public generally.
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New Zealand Times, Volume XXXIII, Issue 5414, 3 August 1878, Page 2
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1,019Untitled New Zealand Times, Volume XXXIII, Issue 5414, 3 August 1878, Page 2
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