224 Mr. Spens on Life Insurance, 



presumed to be given on the one side, and a corresponding injustice 

 committed on the other. 



15. As an illustration of what I have been saying, I will cite the 

 bonus additions of a Scottish office. It would be absurd to deny that 

 their coincidence with the test of fairness proposed, is greatly owing 

 to accident. We find that, adding the premiums in Table II. annexed, 

 to the annual values of additions, at the rate of li per cent. (Article 

 0, 3d mode,) as made by that Society, the sums are very nearly the 

 same as the premiums charged by them, thus — 



I have stated that I have myself great confidence in the table of 

 premiums I have given, and the values of the annual additions ; and 

 undoubtedly if the premiums and values I have stated be correct, ad- 

 ditions of no considerably greater value than have been given by the 

 above office can be expected to be maintained by any office, that does 

 not charge higher premiums or make more than 4 per cent, from its 

 interest and profits, less expenses. Certainly in the early stage of an 

 office, the large number of recently selected lives will tend to make 

 the proportion of surplus greater at first. And if some extraordinary 

 profit has been acquired, and a large reserve of surplus be made, there 

 may perhaps be little further objection to the declaration of the full 

 addition resulting from the calculations, though not likely to be con- 

 tinued, than the disappointment a reduction will cause. There is, 

 however, great competition among offices ; and although probably there 

 is very little danger now, in the improved information on the subject, 

 that the security of an office will be endangered by charging too low 

 premiums for definite sums, it is desirable that the public should not, 

 by the expectation of unreasonable additions, tempt any office to force 

 its surplus to maintain them. 



16. I will only add, that I trust no one will suppose I am prepared 

 to advocate the minimum table of premium here given as a sufficient 

 one for an office to adopt ; indeed, it is clear, that supposing it is cor- 

 rect, an addition must be made by an office assuring to make profit ; 

 and I have already stated, that it is generally considered proper that 

 the premiums of a Mutual Society should be such as will undoubtedly 

 yield a surplus. 



