[j H. BICHARDSON.

18

I

. — 11-A.

The prospectus says, ''The following pages contain estimates of the probable results of modified tontine policies based upon the published experience of offices transacting this class of business The amounts are not guaranteed , they are, however, calculated on actual experience for a number of years, and, even if the results should fall slightly below the estimates, they will certainly be more favourable than could be looked for in any other form of policy When the paid-up policy exceeds the original amount of the assurance, a certificate of continued good health from one of the society's medical officers may be required before granting the member liberty to elect this mode of settlement. Mr Larsen's policy is one securing the sum assured and a return of all the premiums paid in the event of death vntlnn fifteen i/ears, but lie has evidently been allotted the same bonus as ordinary tontine policies, and they are all equally short of the.estimates. There was little chance of these estimates being realized, but the position has been made worse by the reduction in the rate of interest, losses on investments, and the high rate of the expenses of management. The "ate of interest on the mean funds of the Colonial Mutual was reduced from £o 15s. Id. per cent, in 1891 to £3 16s. 9d. per cent, in 1907, and is now about £4 3s. 3d. per 1 'in order to meet the demand for tontine insurance, the Department opened two—one in 1887 which was wound up on the 31st December, 1900; and the second m January, 1891, which will be wound up at the close of this year. In connection with these tontines however, no estimates were issued or used in any way The only difference between tontine and ordinary policies in this Department is that the bonuses are not negotiable until the wmdmg-up of the tontine- but in all other respects they enjoy the same privileges-the ordinary bonuses are. allotted to the policies every three years, and the extra bonus out of the tontine accumulations on £500, thirteen years in force, came to £84 95., and the extra to £21 3s or £105 12s. in all. There are several tontines conducted in a semi-private manner by the agents of the National Mutual Life Insurance Association. They are effected by taking out policies, in the National Mutual, and assigning them to trustees. The rules differ slightly in the different tontines, but in some only the premiums with interest are paid in the event of death, and the sum assured remains to swell the share of the survivors. I may ay that, so far as I am aware, with the exception of the schemes associated with the National Mutual Life no office transacting business in the colonies, whether American or colonial, is underakns tontine business at the present time, so this question is not such a burning one as it would It if the business were still being carried on on the lines of extravagant estimates. I am quite prepared to answer any questions. 3 Mr Fraser 1 You said in your letter which we had read this morning that your office had never issued any policies similar to that issued to Mr Larsen?-That is so. The Government Department has never issued a mortuary-dividend policy Department offio / that issued such policies ?-We do not know of any m the COl ° n s ieS And there are none now being issued like thati-There are not, so far as we are aware-in faC Y e W 7 fiYwhtif e yo e ur ar o e pin!on with regard to this kind of policy? Is it wise to allow it to be launched unchecked upon the community, or do you think that by legislation or some other it to b \ launcnea unci f prevent by legislation any future issue I Tdo irik so as rTga d tontine policies where-theV-nuses only are tontined if any company wants to transact that class of business; but I think that where the sum assured is tontined, and a man stands to lose the whole sum assured, it is hardly right 7 Do you think it is necessary for legislation to be introduced to prevent do not think the conduct' of the business by the companies now renders legislation necessary 8 The Chairman 1 Do you think it desirable that there should be legislation passed by which heok could bl placed upon any wild-cat schemes of insurance that might be launched at some conditions have to be of a uniform character. Tut Aliens Do you mean that to apply to any life-insurance po icy, whether tontine or whole of this trouble in Mr. Larsen's case comes back to that, 10 Does this trouble of estimates arise now with ordinary policies 1-1 do not think so. Ot tions we d™him. mis l ea ding-I mean, by any companies now?office f_JNo, I think not. The companies behave in a fair manner, I thmk