URUGUAY. 



MORTGAGE INSURANCE. 



SOURCE : 



BANCO DE Seguros DEL Etado. Seguro Hipotecario. [Insurance Bank of the State. 

 Mortgage Insurance). Impr. Juan J. Dornaleche. Montevideo, 1916. 



§ I. Preliminary Remarks. 



The growing development in this country of long-term mortgage oper- 

 ations, thanks to the facilities afforded by the Mortgage Bank of Uruguay 

 and other similar institutions, has given birth — among other enterprises of 

 the vState Bank of Insurance (i) — to a scheme foi insurance which aims at 

 providing for the pa3'ment by mortgagers, in the case of their death, of the 

 interest and the amortization quotas which they have engaged to pay. In 

 other words an attempt has been made to find a method of avoiding that 

 the heirs of a mortgager, generally his wife and children, be in the sad neces- 

 sity of having to give up the property they ha\e inherited because they can- 

 not continue to fulfil the mortgager's engagements ; of avoiding, that is, 

 that they inherit not a property but a debt which they cannot pay. 



The State Bank of Insurance gave attention to the solution of this prob- 

 lem, which froni the outset it considered to be in harmony with its mission 

 as the chief agent of thrift in the economy and society of Uruguay, and was 

 forced, in forming a basis for insurance of this type, to take different consi- 

 derations into account. First such insurance should effectively correspond 

 to the ends in view ; secondly its cariff" should be so low that the payment of 

 the premium does not involve a sacrifice for those paying it ; thirdly the 

 terms should be brought into line with the S3'stem of granting financial 

 facilities otherwise followed b}^ the bank ; and fourthly the delay before ])re- 

 miums are paid should be f.s short as possible. 



In order to understand the insurance of mortgage debts we will take 

 a concrete example. 



A married man, twent3'-five 3'ears old, having limited pecuniarj' re- 

 sources, buys a property worth .3,000 pesos (2) but has only 1,500 pesos at 



(ij For the organization and operations of the Statt Bank of Insurance, see our issue 

 lor March 1917, page 35. 



(2) I peso = 4.283 s. at par. 



