MANAGEMENT OF AN INSURANCE OFFICE. 29 1 



a larger division might be made in their favour. Add 

 to this that the older members carry with them in the 

 discussion of questions, that influence which age na^ 

 turally and properly gives in the management of impor- 

 tant affairs; and as to which the conduct of an in- 

 surance office only forms an exception, because questions 

 arise in which the interests of the old and young 

 clash * with each other, which is nowhere else the case. 

 Under such circumstances the disposition to break in 

 upon the surplus is the fault to which the body has a 

 tendency, and it is not a bad thing to place some small 

 difficulties in the way of doing this. Now if a fraction 

 of the surplus be withdrawn from the calculation of 

 the dividend, it is very easy to change one fraction 

 into another. A vote of the general meeting, and a few 

 strokes of the actuary's pen, and the thing is done. 

 But when the requisite fraction of the surplus is de- 

 ducted by the supposition of a lower rate of vitality 

 (or of interest) than actually prevails, no change can 

 be made without the entrance of a large number of 

 important considerations, the discussion of which occu- 

 pies some time, and places a useful check in the way of 

 the restless. 



But is it then proposed that every office shall be pro- 

 vided with a fund, which, though slowly, is yet inde- 

 finitely, to increase ? Not necessarily; for the reserved 

 portion of one year is not put aside, and considered as 

 inalienable, but enters into the surplus of the next year. 

 There may be, then, a limit to the increase of the sur- 

 plus, as follows. Suppose the office to be in a stationary 

 state, having arrived at the point where the influx of 

 the new members compensates the efflux occasioned by 

 death or surrender. The receipts of the office consist 

 entirely in premiums and produce of capital, the ex- 

 penditure in management and payment of claims. As 

 long as the surplus increases, the sum of the first pair 



* The members of a mutual insurance office are not properly repre- 

 sented in their list of directors, unless the individuals composing it are of 

 very different ages. 



u 2 



