BY M. B. PELL, ESQ. 235 



Society, however, has increased so enormously during the last 

 few years, and the preponderance of very new policies, is so ex- 

 cessive, that a policy of six years standing may be regarded as 

 an old policy, and one of ten years as very old. 



On account of the favourable rates of mortality which the 

 Society has experienced, this new business has proved very 

 remunerative, and of the profits from this source, the policies of 

 longer duration have in some cases received a larger share than 

 what they actually contributed. Those who think there is any- 

 thing really inequitable in this, should remember that those who 

 have received the larger share of the profits have also incurred 

 the largafr share of the risk. The accumulated capital, the pro- 

 perty of the earlier members of the Society, was the guarantee 

 fund, without the security of which the greater number of the 

 newer members would never have insured their lives in the 

 Society at all ; and upon this fund, if any loss had been incurred 

 through a high rate of mortality, the larger share of the loss must 

 have fallen. Any such loss must have been made good, if possible, 

 out of the surplus arising from high rates of interest, to which 

 the newer members have contributed comparatively little. 

 The larger share of such losses would unavoidably have fallen 

 upon the earlier members, and, therefore, they are entitled to 

 participate in profits in proportion to the sums which they have 

 invested in the society and exposed to such risks. It would be 

 very unjust that the newer members should share fully in the 

 profits arising from favourable rates of mortality, whilst they are 

 to a great extent secured against losses by the funds already 

 accumulated. 



Even supposing that the real contributions to surplus from 

 every policy could be estimated, it would be inequitable to divide 

 profits in that proportion, unless there was an understanding that 

 losses in any way incurred should be separately estimated and 

 similarly apportioned. If the surplus from one source, or from 

 all sources, is merely held by the society in trust to be returned 

 to the members in certain proportions, then clearly if a loss be 

 incurred through rates of mortality in excess of the assumed 

 rates, or otherwise, this loss must be the private debt of the 

 members, to be paid by them in certain proportions, independently 



