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When this Order wm applying.fiE>r incorporation in I^Sq, the undersigned had the honor to tabmit for the coniideration of the Standing Committee on Banking and -Coinmerce a menuwandum containing bis views regarding the Bill then before Parliament, and which resulted in the existing Act pcotporating the Order which the present Bill is intended to amend, The"^ views then expressed (except u to the items of expense) remain unchanged. I then stated (paragraph s) that the Society was practically carrying on the business of life insurance on the level premium plan and at insudicient rates. An alteration has tbeen made lifthe by-law relative to special assess- ments as it. then existed.! The by*li|w is now numbered 255 and reads as follows : — ** Whenever there ai|e no available Ainds to pay the endowments or " other benefits of the Order, the Executive Council stiall order a special I" assessment which shall \m paid by each member into his own 9|ubordinate " court Within thirty days from the dateof the call, and the subordinate court shidl fokthwiih transmit the same to the Supreme Secretary." A& I understand this by*law, until the whole of the reserve fund is ;hat)|sted, a special assessment cannot be made, and until then only the tes fixed by the,by-laws can be demanded from the members. In confirmation of the statement that the Order is transacting the iiness of insurance practically on the level premium plan, notwithstanding ^h^ provisions of such by*l|kw, I reliw to a small pamphlet issued by the , dated ist of October, 1894, in which are given the f«rilowing reasons wh^ you should join the I. O. F. :— f^ I. Because it has already over a miUia« dollars of surplus to back *fup\its promises! Because there are no assessmento on death ; every Forester exactly how much be has to pay each months Because a membership in the I. O. F. will secoie fimn $250 to on total and permanent disability from disease or accident without itiqnal cost "^ -ot aswtSHm eata youL '««eto\ frmn month to month. Members pay each month a atipofatteid \ ^ I --V- -t - *^^^ ,-. V }^% ih' * fU I ::fV^1 "rate according to age at iniliation. These payments may beimidejrf'onthlv 'lJ^''tZ^^°^^^-^'''^T^^^ theOrder's mfcthod of domg busmess ipd-to establish the feet that taetabers aTd . .ntendmg members, are beiJg assured in the most explicit S tSt tie busmess IS bemgdone on th J level /r^«««^ p/an ^ _ Now aft to the sufficiency of the rajes. - 1 quote first from an article in ;'wf;:^roL?ui°?^p ' toenS^riir:::^^ The article is as follows :-~ ' •' ° ' «, " " We haverecenUy taken exception to the couoie taken by an American .;^urance company'Un pulfiishing misleading estimates J th^XZ hkely to accrue from polices effected with the^vin fac* of the fact Sit such estimates have^roved erroneous, and we Sv*l,ow to d^w attlntt " ;to another company which lays^tsilf .open in a very much iSre fla^n" manner to a charge of inducing business m,der W*p„«^ntationT^^ company .s the 'rndependsnt Order of Foresters,' 4ich has for some 'years existed mfcanada ara fnendly society. It was also s^^Sto register the comLny in tie United Kingdom as'a fnendly soc^^ n he course of ,^2, but t.eir r^ethod of conducting business was such "tth':S£'ro^; °^;*V"'""*'^" ^" Rive/through the 7^:t '. .n 1 ^^T r . '"*^ ^ ^^•*'''" *** *''« prospectus as then issued "E'^h ''"^^'1^'^ .^^^^^^^ *•>** '=*«'<'« should be observed byany persons having dealings with th? Society. Subsequent - Ill . "I f °»«J"«« of gh a t Ui i l^^ V ■, '-«..• -ta;,!.!: f^^Vjlf A , r \ • /- y »■ ■''»< f J ^ ;. ••l^efiS m1 T^r ;'" 8^* * PO»-y i»s»ring the following .bewfits: I) Payment of ^,00 at de^fr. or (2) in the event of total permanent d.saWen,ent, and (3) all premium paying to cease at age 70, whilstfor^ ordinary insurance for ;^r^. p^yible at death, the average "rate charged by British offices is given a7^2 los. id ' •• „;3'^"'!L°'^r''' ^ '°'^'* ***** *^'" **^'''^' '■**^°"« thecomparison thus ■ made .s neither fe.r nor true. In the first place, it is evident that the "hSLT^^r*n°'^"*".'^^'=" isa .withp;ofif one,entitnng 5: holder JO jiarticipate m profits.eamed, whereas in no case can the policy- ;; holders of the • Foresters ' derive an advantage of the kind. Second^/- No surrender values are allowed by the 'Order of Foresters ' such as would be given by any British office. Thirdly: If is found that at the for a certificate of membership, of not less than 2s. for registration, of 5s. -I'^Z w '"'7 "*"' '"** °^^'' °'' •"°"' f°'' ""^•^*' examinatfon. whilst an annual fee of los. or .2s. >s payable for Court expenses, although it is difficult to understand in what way such expenses a^ i„cur«d. since the Order has no practical existence as a Friendly Society. No such charges « ^f^l T" "**** ^^ any British office. Fourthly : There is a provision (although no mention of this can be found in either prospectus or adver- ;;t.sement) to the effect that should at any time theprei^ums received prove insuflScient to meet the demands made, the 'Order' may call for extra premiums whenever required. ^^ . '« Such a provision is utterly unknown among British offices, and is ^^ especiaUy ominous in face of the fact that although we are unable to dis- ^ cover definitely m what way the table of premiums has b^, obtained ^^ the rates charged are indubitably less than the bare cost ofl^hole life ^^ ^surance asshpwn in the tables of the Institute of ActuariesKeing, in feet, appro,dm5tely the cost of a temporary assurance efiected for one year only, and then lapsmg without theK>ption of continuation. It is therefore plam that un ess the experience of the 'Foresters' proves in the future more favorable than that of other companies, the premiums will have to be mcreased. unless an unusual profit is made in other direcUons. In the opinion of the Supreme Chief Ranger, such profits may reasonably be " H?^.*?J° *T' ?r *''* ''P''"« °^* ^'«'' proportion of the policies. He^stated in his address that in the year 1892 lapses occurred to the numberof 5,i8geutof an average memTjership of 37,114, and on this ^^ basis estimates that in the course of seven or eight years thiwhole of the membership would be practically renewed. Apart from the^ct that such I reasoning has agai„ ^^ again been proved by experience to be fallacious, It qiay be doubted whether the confession, coupled with the fact that no Jshould the a«ured at any time, for any reason, be compeUed to reign his ^^y, he loses «*at money h»iB«,r Jwvep»id^ to premium, wh i te gh oug— ^t, to avoid such loss, maintain his policy in force, there is always an un- '1 li '<( fc.' ' ■ ■ ' ' - 'i0i\ :.}.. r'>» ■•-Silll^^^^. *'-*' -'h- ^^ pleasant posmbility of bis being called upon to pay an increased premium, m consequence of otb^rs as tenacious as himself having declined to con- ^^^to the expectations of the 'Order,' and allowed their policies to ^^ " The comparison of rates !i not, however, the only one contained in the prospectus which is manifestly unfair, and therefore misleading. It is claimed that the ra«o ef the expenses to premiums received is very con- siderably smaller than that of British offices, and some examples are given. And as regards thi^it need simply be said that no' account is taken of the soV j« , ■«*. -* 'viBi.:^s'rs.^ii r ^ry"^^^ cen$, upon the ttdsting fand. The balance of the. intecest, according to said report, was apidied as follows :— . Sick and Funeral Benefit Department ,"jg, 32 14s. 8d, Extension of the (^der and Supplies Department... 2,926 i£^ 4 . Profit and Loss Account i.ow o % Makbg together 7 ^,909 13s. 3d. This goe^ to show that a very considei^ble portion of the interest earned is being applied towards the payment of the expenses of the Order, and that the 5 per cent, deducted firam the premiums is far from being suffi- cient to pay the necessary woxking expenses of the Order. In view of the foregoing it appears to be established that the Ordei\ as at present constituted, cannot make good fti contracts and representations, and that failure in the no distant future must result, unless a readjustment of premiums and benefits be made. '^ ^. The Order has under its pr^ent charter power to issue policies up to $3,ooOi and by the first section of the Bill an increase up to ls,ooo is asked j this appears to be the most important diange sought by the Bill. Such an increase, if granted, will be r^^ed by the public as practic^y an endorse- ment of the Order a« it stands, add of its methods, ^d will be looked upori*»^ as a fresh certificate of confidence in the Order on the 'part of Parliam^t. It will be, in a sense, a re-affixing of the Government stamp, and as the Order which received incorporation as a friendly society pure and simple, , and not as a level premium insurance company, does not come up to the standard fixed for level premium companies, it is pio^ respectfully submit- ted that Parliament should not, grant the seal of approval which the Bill asks. ^ ' « For these reasons, the undersigned is of the opinion that the first sec- tioil of the Bill should not be adopted. ^ Section No. 2 of the Bill :-^ ' The amendment proM||^ by this section, if adopted, will enable the ^ Hij^ Courts, Subordinat^qPirts and Encampments of Foresters to estab- ' lish funds for the relief of % an^ distn^sed members, a power which they do not now possess. In other words, each such High Court, Subordinate Court or Encampment will become an independent society for the purpose oftransacting the business of sickness insurance. This power appears to be in addition to t|ie power possessed by the Supreme Court of the Order. It will thus be seen that this aniendmept will constitute a very extensive addition tp the alre&dy too extensive powers of the Order, and it is a sub- ject which deserves very careful consideration, whether »t»y such additional powers should be granted. / > -Section No. 3 of the BiU:^ ' This section is intjjnded to amend section 6 of the Act of Incorpora. o, the suin of ;f20,ooo sterling to enable" the Order to carry on basiness as a life insurance company in Great . Britain. If the amendment proposed be adopted -the Order will be lenabled to invest in United States oi* Britisl^ Government securities. The undersigped is of the opinion that the securities in whidS the Ord,er t)roposes to invest are free from objection, jf the Order is to con- . tinue tado business outside of Canada. It will be noticed that under the proposed amendment one half of the whole surplus funds of the'Soci^y may be invested in securities other than' Canadian. It is suhmitu^ that in no case shQuld the amount inve^ed in foreign securities be greater in proportion to the foreign membeilhip than that ' invested in Canadian securities in proportion to the membership in Canada! The odds it is believed should be largely in favor of investments in Canada. The usual clause in a Bill for the incorporation of a life company limits the amount which may be invested in foreign securities to the "sum neces- sary to the maintenance of aily foreign branch"; some similar limitation should be made in the case of the Order, if an amendment is concurred in. Section 4 of the Bill :^ . > Section 8 of the Act of Incorporation of the Order, as it now stands, requires that tliere shall be printed in legible type and in red ink upon everyi policy, upon every application and upon every receipt given for payment in ' connection therewith, the. words " The insui;ance undertaken by this Society " comes under the exception contained in Section 43 of the Insurance Act " applicable, to fraternal and benevolent societies, and is not subject to " Government inspection." *' If the amendment asked be granted, these words would l^ limited to Canadian policies, applications, &c., andwould not be endorsed upon policies, applications or receipts outside of Canada. If they are necessary or desirable in Canada, they areequally necessary' outside of Canada. The application to have them omitted, it is believed, can have arisen only from a desire on the part of the Order to appear what it is not, perhaps to appear as an insurance company pure and simple, as it is now doing in^ England, or else to appear as a society subject to Government inspection, which it -is not ^To ^gnnt the amendment asked would give unscrupulous represenlfetives/jf the Order greater facilities to mislead the public, by concealing the actual facts as to the Order's true position. ■_ ♦ . 1 •* I ■'*i*»&5 ^ ■t^ V- ♦ . ^' I "9" \ The undersigned submits that the kmendment asked by this section should net be allowed. Respectfully, submitted, Ottawa, 26th June, 18^5. WM. FITZGEfRALD, Superintendent of Insurance. COPY OF REPORT MADE WHEN OJRBER WAS SEEKING INCORPORATION. ^ , Copy. N J j[NSURANCE Branch. ' •» ; «. ^ Ottawa, March i6th, 1889. R. N. HALL,. Esq., M.P< ." Chairman Banking and Commerce Committee Dear Sir,'^ - ^^ Re Act to incorporate the Supreme Court of the Independent Order 01 Forestei^. Since .the Bill to incoiporate the abova mentioned Society was intro- duced, I have given much carefiil consideration to the questions wlych arise thereuitder,- and in dealing with the matter in Committee it seems to me that the following considerations should not be lost sight of: — / ^ 1. The Society is undoubtedly an insurance company, and while it is*^ possible that it n>ay confe within tU^ letter of the provisions contained in section 43 of the Insurance Act, it seetHs to be almost certain''that it does JUipt come within the spirit or' intentfon thereof. \ As I take it, that section yr^ intended to apply only to a Soci^ty^ where insurance was only an incident and not th4 main object of the Society, and it was probably never intended to extend to insurance exempt insurance in ^e 'hatore of sick or.fiineral benefits, or some such limited, object. " « ' 2. The Insurance Act has certain provisions relating to two classes of life insurance companies, viz., to companies which are called assessment companies, and companies other than assessment companies, and as to the latter a certain standard has been adopted, the requirements of which will be seen by referring to sub-section i of section 10 and sub-s^ion 10 of section 25 of the Act. > '->>•■ ■ ^ 3. The Government being np^' asked to incorporate this Society, is asked to recognize it as an insurance company which is worthy- of the con- fidence of the people, and may be trusted and dealt with as sufih. I am not, I think, wrong in stating that this is the avowed objecf of the Society in seeking incorporation, but Whether the avowed object Tor not, if incorpora- tion simply be granted without any restriction or, qualification, its effect will be a virtutd endorsement by the Govemment'or the Society as it ekists. 4.- It ^iceau to be unquestionable that any Society which goes to the ^mbncr bearing: ihe Goy^mment stan apy sh e uld comejup to the ^Gov ^^aeat^ Standards. \^:^^-<'^''A'.'' . iJ 1 li ■♦Wf 'Jii * 4 ^%. /f^ -H. \ Ti'^^^v-ri I'-fk. ^ l» V*- J ,?.^ ;,¥■ TIT"* 5. It « admitted that this Society ufc«^ih>m each of its members or policyholders a certain fi^ed monthly premium, caUed an assessment, which •emams the same throughout life. There are no assessments upon the death of a member, but there is a provision contained in section i<>8 of the constitution that provides that " Whe^evet, by reason of an Excessive mor- tality, there are no available Amds to meet promptly the endowment claims, etc, etc^ etc^ the Executive Council shall oidtx a special assess- .ment, etc., etc.. etc.," but it is contended that there wiU never be a necessity for a special assessment, and that the premiums or assessments now tajcen are ample to provide for^U endowments or death losses as they anse. The meaning pf the words, "an Excessive mortality," in the clause juskquoted, IS not quite dear. It is, it seems to me, doubtful whether under this clause the Society could legally levy a special assessment without first showing that the mortality Was in e)ipess of the mortality which forms the basis of the standard English or American morttOity uble^ The Society in the past has, both from its form of contract and itimanner of collecting pre. miums, being doing business upon what is known as the le*'el premium irian and the provision quoted relating to the right to levy special assessm^s does not, in my judgment, alter the case. If recognised by Government, therefore, It would follow that the Society should fulfil the fconditloni required of companies doing a level premium business according to the standard before referred to. • _ The rates o^ the Society are acknowledged to be very much less than the rates required by the Government standard, due allowance being made for the expense element, which is certoinlyin the Foresters reduced to a minimum. It is asserted by the Chief Ranger that the rotes aie founded upon certain mortality tables, but the persons who formed the tables for the' Society appear to have faUen into the error of supposing that a premium which was intended to carry a risk for one year was sufficient to carry it throughout life. It is also asserted that a Urge revenue is derived from lapses, sufficient to compensate for the deficiency in the rates. If this be the Mse, then the funds so derived in the past mnst'bem the treasury, and * the Society need not hesitate to have their liabilities under their policies or endowment certificates submitted to a valuation. It is, however, reasonably clear that it is only among the younger lives that there aie many lapses, and I am convinced that the revenue derived from this source is much less than 1? supposed by the officers of the Society, and am also quite satisfied that the Society does not possess the revenue which the Government re- quires of companies doing the dass of business which this Society has been J^nsaatng, that is, the level premium business. The Society is now, I understand, asking for incorporation simply, and floes not desire, oiunther wishes to avoid inspection and compliance with Je provisions of the Insurance Act. A fair view of the matter seems to be, jgat ifthe Soae^ rome s uptotha Govemmrnt regu i wm e attri^shouMe wiie^ /:.i ^%', under the Insurance Act, an4 if it does not, it should not seek Government recognition by incorporaticm or QtHierwiie. — r • r 4' W - j.f .J," c to. -Ik." A-r^ * . .'St /^^A ?* ^A /. fiR,-*" \ "^ , - ""^ '*»«- — iEffL ■*!' S;-^"**-4?p>#^<^; n The Society also c^ims that it is doing bu^nness uiidsr conditi(Mis much the same as the Provincial Provident Institution, which is registtrad under the Insurance Act, and tha^this Society should be permittedto do business as an assessment society. As to this, it is worthy of note that the PijOvb- cial Provident Institution has always done an assessment business, while the Foresters have done a level premium businets, |fae hitter requiring, while the former does not, from the very nature of its contract, require a reserve.^ In all registered assessment companies doing business in Canada, the foUowing^lause is contained in the Contract, viz. : " Aiid the said company agrees to pay.......... dollars out of " the death fund of the company aild out of any monies realized from " assessments to be made for that purpose, and the said (Company agrees "forthwith, and from time to time,' to make assessments to an amount " adequate with its other available funds to pay all ojdigations created '* under this certificate or policy, widuut deduction or abatement," and there are printed upon the contracts the^^ds "Assessment System." "This " association is not requited by law tb maintain the revenue which is required •• of ordinary life assurance companies." If the Society was now asking for pemQussion to do business for the first time, there would not be any unsuripountable obstacle to prevent registering it and permitting it to do business on the assessment system (some modifications in its constitution and by-laws would be needed), but the thirteen thousand contracts made on a different basis prevent this unless it is established that the Society is now in a sound and satisfactory condition, regard being had to the nature of the business and the form of the contract which it has already made with its existing members, and to their rights under existing contracts. 6. No company organized for the purpose of inwifncc since my con- nection with the Department, and indeed I believe for several years previous, has been granted incorporation except upon the condition of its complying with the existing law' in relation to insurance 7. There seems no sufficient reason, so far as I ani able to judge, why an exception should be made in the case of the Foresters. The principle 'which the Committee gave effect to in refusing the application of the* Lon- don Miitual Fire Insurance Company, viz., that the principle of the Bill would contravene the existing insurance law, seems to me to be equaUy a pplicable in the present case^ ' 8. For the reasons briefly indicated above (which have been all more or less fully discussed in the various interviews which have taken place), I feel it to be my duty to state i,that I am of the opinion that incorporation simply, without any restriction or limitation, should not be granted to the Society. According to my view, the interest of the public and the interest of the present members of the Order of Foresters will be best served by making compliance with^ the Insura n ce A r t a co nd it i o i i of granting inmr . 4 *jiy 'Jl l J ' ll >v ^ £■ V <-SS«^ yfj^n# ^ p ,«*;.WT'.T SVr^'"^ ~i=-''TT . -'l • » •> 1 ■ \ \ 12 H It f ft: 4: ./• 4 « „ " ^If *l' "^ ** ^'"^ ^"^ tacorporatcl, and the eMrcise ri ,h, I have, etc., etc., W.FITZGERALD. f ' Sup/. 0/ Insurance. EXTRACTS, RESULTS, CONCLUSIONS, &c. Ta/^en from Pq^er referred to on page 7 of memo. THE ENDOWMENT BENEFITS OF THE INDEPENDENT ORDER OF FORESTERS. The beneficiary member, of this Order are divided into three classes : (1) Ordinary Class. (2) Hazardous Class. (3) Extra Hazardous Class. The Ordinary Class contains the great bulk of the membershio Th* benefits .n this class are $500. $1,000. $2,000 and $3,000, payable afdelth At the age of 70, members are freed from any fu^TJ^ents of ^^^^^ one-tenth of the amount of the insurance payable tach vear fr«m «»• ,« L 79 inclusive and should death occur beforl^L me^^r ^^ iS ag^^JL; balance of the insurance is then paid. ^ ^* ^ o.^J^'l'';*"^ "V""'**'' '^o™e» permanently disabled from disease or accident, he .s entitled to. one-half the amount of the insurance, and J", « the same time lelieve^rom all further payments. The remainiig half of thi insurance is payable aTdeath. naming nau ot tbe hv A^***" *"* '^i** " ''*''*** " Expectation of Life Benefits." The member tatb^Tfr?frvV°^°"°l''^*''' '"'"'*"'=* "P°° his^attalning the Expec- at!^n ^ '^ " ** ^^^ *^' ^^ *° 73. according to the age at iJS. A^ '^''^'f "««»» •f' Pwd ^r by monthly assessments, and five per cent i« H.-\ ♦•■* y > . if y f^', 13 s to tbe nee ;red iety Vet, live The foUowing table Rives the monthly kssessment for each $i.oeen deducted for expenses : Assessment Rates-I.O. F; Ordinary Class, $i,> ,000. :c. Age. Moathly Assessment. Net Yearly Payments. Age. Monthly Assessment. ' ■ Net Yearly Payments. 18 19 $0.60 , $6.84 6.95 35 36 $0.78 .80 $8.89 9.12 20 21 22 .62 63 .64 7.07 7.18 730 37 38 39 .82- .84 .86 9-35 9-58 9-80 V .23 24 .65 .66 7.41 7.52 40 41 .88 •90 , 10.03 10.26 25 26 27 .67 .68 .69 7.64 7-75 7.87 42 43 44 •92 •95 .98 10.49 10.83 11.17 28 29 •70 .71 7.98 8.09 45 46 1.02 1.07 11.63 12.20 30 31 32 •72 •73 •74 8.21 8.44 47 ■ 48 49 1.14 1.22 1-35 13.00 1391 1539 33 34 •75 •76 8.S 8.66 50 51 2.50 2.60 28.50 29.64 52 2.70 30.78 S3 2.85 32.49 « 54 • 300 34-20 »■* As the Order, in its advertising literature, claims that its schedule of rates between ages 18 ai^d 49 is based upon the Combined Experience (.^Offices) Table, it may be well to compare the rates charged'hy the -^ O. F. with the annual net premium for tbe same benefits (excludinit the y total and permanent disability benefits) based upon (i) the 17 Offices Table. 4 per cent interest, (2) the Institute of Actuaries' Hm. Table. 4I per cent, mtertst, and (3) the Canada Life Experience, 4 per cent, interest I. O. F. BBNBVITS— NBT PKBMIUMS. Age. I. O. p. net Annuml Premium. ao »5 30 35 40 43 P 7 07 7 64 8 21 8 89 10 03 11 63 17 Offices 4% Net Premium. $»3 65 15 68 18.14 ax 86 a6 O9 MM. H.M. PremtoE Net inm. $ia 2g 14 30 17 01 ao 5a ....il..Qt.. CenlStda Life Bspeilence 4% Net PnmiuojL $10 91 12 80 15 29 1865 aj a6 ~aM»- 37 26 -W-~i' ~WW 41 3» »«3 ^^,ri|^ -■>, • . 't^At jJih.\ m r 1 '"4. .& X V \, ■I: t , < ^(, ■ 5 14 It may b^asked by some how is it possible for a soctetv roIl**^5«„ «te of premium so far below that requireflQ. stJXS S^TmSy' to accumulate a large reserve fund and to show an apwmmtDm,~«w^' a number of years Is it not possible that this ^^^^l^^^^^^l that the soc ety wilt be able to meet its obligations frauTmircomer' The following investigation iUustratts the oroeress of a i,«««»k-»- . accumulated which wiU incrlarfo^atml^r^^^^y^^^^^^^^^^ maximum, ajjd then it will decrease and in a few more years iyd^t^ar notw«.stand.ng^ ^act that the ..embership is co^nuari^'d^^^J Mr. Blackadar gives in detail his calculations. Theynre based uoon the mortaUty experience of the Institute of Actuaries, with thTmoSS^atir The death rate for the first year is assumed to be inly 40 per ctnt of^h. exited and m this it follows pretty closely the rate ^ enc^' by the I. O. F d^nng the first year of assurance. In the second year the ilte assumed .s 50 per cent, of the expected ; third year, 60 per cTnt L^h year. 70 per cent.; fifth year, 80 per cent; sixth yL, i^r^i^ and b the tr:tTed."''^""*^**"***' actual dekth^at;^?.,^:^^^^^^^^^^^^ The following results are brought out in the calcuUtions^^ 2nd. If the old age benefits are paid (that is. death claims, endowment, and an„uu.es pa,d to members who are over 55 years of ^)tT^Tr may be able to accumulate a reserve fund for a n^mberVj^^^^^.'^C^ th'en ti rr^T''^ " ''" ^""^' >"* *• »•«»• will arrive^^er'riat when the fund will cease grewing. and a rapid decrea^. wiU take pUcI The following figures show the progress of a hypothetical sdcietv in which a uniformly increasing new business is assumS^^d wLT^owth follows very closely the progress of the I O F fi«« fhl ™« /^owtn These calculations were made early in the year 1803. neariv two vlr. and a half ago. and it was then shown that the Socie^^^S^'^^nrto Tl^ assumption made) would have on the ist July. 1895. abo^ fcl^fr L^ Insurance in force, and a reserve fund of ii.^, !?; H^w^?? '^ calculation, agree with the actual fact, win .^'.^'U "^e X^^l^Z t^T^n. of the Order, which show a membership on m^riT or70« representmg over 190.000,000 of insorwce. and ; re«^S'oi^^i•'^^^^^ J-*' i, d jL ^- — .-. -nr- IllVit » t ^ h ^ fr 'f:' "■ •X /■ 1 \ «> .'^■; > "*'. /»5 May, of.|i,a»7,73S.26, and M*icb. on the ist July, should «ach very nekrly the figures as calculated nearly two and a half years ago. r Hypothetical Society. Date. Amt. in force. $ 47S.OOO 1,056,000 1,984,000 2.824ooo 3,609,000 . 5.177.OPO 7,841,000 it.88i.ooo 16.617,000 34.551,600 34.887.000 40.272.000 _4i,oi7,ooo 76.855,000 94.557.000 It4.899.000 '36.665.000 161,341,000 186,843,000 914,203,000 ^♦3.374.ooo 274^23,000 308,020,000 34a.435.000 378.532.000 416,294,010 435.623,750 496.541.990 538.99a.010 58a.93a.a60 628,312,520 675.083.560 i 723,191,170 I 77a.587.000 Funds. $ 1,439 5.613 13,680 25.335 39.943 59.053 87.324 128,801 186.379 269,028 386,823 542.900 745.418 988,285 1,271.483 *.59i.or7 1.943.823 a.318.753 3.709.723 3."i."7 3.505.659 3,885,106 4.333.202 4.531.166 4-761.331 4899,186 4.918,346 4,789,602 4,482,812 ^.965,759 3.191.143 a. 110543 766,430 — «.*9i.530 Rate per $1000. $ 3 03 5 31 6 90 8 98 ri 07 II 41 II 14 10 84 11 22 lO 96 II 09 " 73 12 21 12 86 13 45 13 85 t4 22 14 37 14 50 H 5a 14 40 14 14 13 74 »3 23 12 58 II 77 10 80 9 67 ^fembW' ship. 396 880 . 1.737 2.360 3.046 4.628 6,921 9.858 14,286 ao.459 28,894 38,560 50.849 62,738 832 6 80 5 08 13 06 I. O. F. Funds. ^ • • • • 1.145 7.583 19,815 28,037 44,221 ^71.381 96.105 160,111 204,815 337.719 468,083 710,503 946.440 Rate perSxooo in force. $ •• •• I 08 3 62 6 96 763 7 92 854 8 08 9 29 8 29 9 68 9 98 II 58 12 50 r^*ri" 7 An ^ination of this auounary will show that, in hypothetical «««y. ^e membership is rapidly incn«ing throughout, the fimds T^K. *;'^' ^*" '^' ^ *«* **«='«^ rapidly untU the year ,9,^ when they disappear. The rate of fund, per $1,000 of insurance in for^ •lio >n«««.e. unt.1 the year 1900. when a maximum rate of $,4.52 is leach^ f^ Ift after the year 1894. we suppose the incieale of membership to JJIJ!l'in "^ ^^ '•" admission of an equid number of new tesuren Mch year, the «nn«ll ■fimimimin b c iag On mm w we haw 4. 1. t u - Vi > I. v-i '• 3 I ^j-; ,1 »- .- JW / I • W.' ■ . 16 assumed m the preceding investigation for the year 1893-4, viz., $17,700,- 000, the following will be the state of the membership and funds after 1894 : — Date. — — — 1 Amount in force. i — Funds. Rate per $1000 in force. 30th June. 1894 1895 .1896 1897 1898 1899 1900 1901 ■ 1902 1903 1904 1905 1906 1907 1908 1909 1910 $ 76,855,000 92,756.500 108.480,800 124,032,500 139,416,400 154.570.300 169,547.800 ' 184,322.700 198.888,500 213,236.900 227,360,900 24r,25i.90o 254.921.300 268,300,100 281,438,700 294.307.300 306,894,700 $ 988.285 1.266.029 1. 561. 627 1.859,162 2,144.130 2.403,139 2.623,83^ 2.794.970 2.905.364 2,942,887 2.893.975 2.744.757 , 2,475.^13 2.069,325 1.505,166 76-1.026 —173.507 $12 86 13 65 14 40 14 99 15 38 15 55 15 48 15 16 14 61 13 80 12 73 II 38 9 71 7 71* 5 35 2 60 —0 57 Here the funds reach a maximum in 1903 and finally disappear in 1910, about four years earlier than in the case where the new membership rapidly increases. A third case was tested, that in which tha new membership rapidly decreases. Here the funds reach a maxintium in 1900 and disappear in 1907. Hence when the rate of assessment levied is inadequate to provide for the full benefits promised, the " infusion of new blood " is able to prolong the existence of a society Tjut a few years. If we make full allowance for the benefit of lapses combine^ with a light rate of mortality, the net premium at Age 3ofor the benefit under consid- eration is $13.48, and at age 40 the premium is $20.25, •" each casc^ payable in advance at the beginning of each year. This is probably a lower premium than can safely be charged for the benefit. If any lower rate is collected, disaster must eventually follow. These premiums were calculated by the Canada Life Select Table with lapses, interest at 4 per c^ntrt The net annual premiums of the I. O. F. at ages thirty a^d forty, are $8.21 and $10.03 respectively, payable monthly throughout the year, and they are considerably less than the minimum safe rates indicated above. -f ---i;n5 The Senate does itQt Authorize Foresters to Issue — " Polletes for S5.000. .,( Ottawa, July 20th, 1896. The Independent Fore$ter»' Bill to authorize the iaaue of Policiea for " $6,000 was before the Seriate Committee on Banking and Commerce, and failed to pass. Thua enda\ for the preaent, the attempt made by Supreme Chief Oronhyatekha to obtain enlarged powere at OttatuST ~^'' — -.— ,— ^r—- N^^ 1^ \