IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I 11.25 I^|2j8 |25 ■u Uii |2.2 2.0 us I ffllll Photographic Sciences Corporation •^%'' 33 WIST MAIN STRUT WIRSTH.N.Y. MSSO (7:4) 873-4S03 '^ CIHM/ICMH Microfiche Series. CIHM/ICIVIH Collection de microfiches. Canadian Institute for Historical Microreproductions / Institut Canadian de microreproductions historiques signifia "A SUIVRE", la symbols ▼ aignifia "FIN". Laa cartas, planchas, tablaaux, ate, pauvant *tra filmte * daa taux da reduction diff*rants. Lorsqua la documant ast trop grand pour Atra raproduit an un saul clich*, 11 ast film* * partir da I'angla aup*riaur gaucha, da gaucha * droita, at da haut an bas, an pranant la nombra d'imagaa n*cassaira. Las diagrammaa suivants illustrant la m*thoda. 1 2 3 1 2 3 4 6 6 ■M.^^A ^/m ^"MM' i ',.;^^T^*^- *f ^^S 'i% 2^*^ m III".' '■^^&,..^^ ■• ■ ■ university of manitoba ifii*:-^ mt\& "vxf. ' -'^ "ii^^iW f/,,*S.A.-_ •■. ,."HflS-ajaH!";^i73 m$aoiions of the Aciniarial Society of Edinburgh Volume III. J\fo. 7 LIFE ASSURANCE IN CANADA BY FRANK SANDERSON, M.A. OF THE CANADA LIFE ASSURANCE COMPANY, HAMILTON, ONTARIO T. AND A. CONSTABLE, EDINBURGH AND PUBLISHED BY :harles and edwin layton, farringdon st., London 1894 ACCESSION NUMBER Price Two Shiilings 99Z9 3*-^ --A V . ';r#! <»'.*''* ..-"'»'•■■*' . "J, ."^^T^^B "-■ :-^,:- ■i--i f^.--,!^:i. W.'. :' ■^^:;r"''TOfvONT0, CANADA, '' . ^ l-ll. ".Tl-Ci* .jg ^tQHONTQj&^Seil.^ OI ■^, ^v"^".?^^'-? • vo. 3(e> cC ,5' a) e>6 /iff 4/ Life Assurance in Canada '\ BY FRANK SANDERSON, M.A. OF THE CANADA LIFE ASSURANCE COMPANY, HAMILTON, ONTARIO ^^ «-. I CS ,-^ y\ p:; Y \ VOL. III. K ■■■^WWi^^ i il t / Diagram Illustrating Table 4. Assurances in Force 1870 to 1892 jeo, ooa ooo ta^ ooo, ooo t4tO. ooo ooo foo, ooo, ooo /jeo, Ooo, ooo I/O, ooo, ooo 100, ooo, ooo 90, ooo, ooo so, ooo, ooo 70, ooo, ooo eo, ooo, ooo so, 000,000 44), ooo, ooo 30, ooo, ooo zh,ooo,ooo 70, 000,000 1 ^ ^^ _. _ . -i — : 11+ /- J F- • / r Z^ oAmeaaa^ mpn&aents «5^^ year- nrvi oraina/e' tfte- amoun/^ o/'tA^ tzssit/'t — . ^ . . _j _ / - - - i- t/i^ f-^ ^ - t ^ ' ^ i / V ; \^^'l"- 1 J .-' ■"' .' r \,^ .*' ^- ^ >'' '" / y .* ■ / ^^ : ' \ ,' ? * ^* *' • - ..- --.. — ■/ *' / y / y r ^ _. . ,S N N K N i =4^ r- "^ s e^ DrAGRAM Illustrating Table 3. Premium Income (870 to 1892 "" ^ •w ■-- . Srifz^/v A — —. ~ — /tmen^^an , — -_ _ ' (tfriou^ o/" /Ac preyrr^M/r' - irt^>u>mje/. - - 1 •- -■ -.. - -- -- [" . a, O0O, oco __ 1 — " " . J i; SOO, ooo f i - - t 1 - - A / r I - I / «, ooo, ooo 1 1 \. / H- -^ ^ -- - _, 1 3 aoo,ooo _i 7 - t ^t ^ ^ ••' .1, ooo, n^n _j_ _ _. — t- ' J -, r ":* VX-' ^ ^ J^ X', soo, ooo J 1. ._ t J -^ t ^ i ? -. o /foo ooo —J _ _ _ _j. ,:_z ,_ _ _+ — -f— ^ _ _ I- —1— <^ -/■ ■ —t— / -> ' ^^ -."^ 7, ^oo ooo ^ •' ' "■ 5* / ^^ / ^' -- / .'•• ^i z.-'* -•--.-i^^ /, ooo, ooo _ « iL _ __ _ _ ^^ _ _ -- -" ± "^ - - -- - ~ ..'^ ±^^ -'■ ^ ^E?^^-, SO€>, ooo '* ^ '^ ^'' ^-^ _ -r~~i ^ I / >. 1 *| y. L ^^- 5 . Y -_-t ]2 S(_ ; 1 - /- ^ r i 4- ' T 1 ^ ■" -i ^ ' ^ " " '^~ / ,. 1_._ - - M- T ^ -y~ ^ ~ 44 / '^^'^ 1^"" -K-y-t f" - 1^ / \ ~ / ^ 7-t / k J / \ / j / S-~ ^''^ / - . ^ — . ^ -" v!3l-" ■" / 7 s^ - ' :L.L ^ ' " A v"-^'- ^ J V _^ .' \ /v ^_ ^ t ^' *' ■ \,' "■■-f y. . "^"'■'t^.ZJi^-''t-- - ^*--^'" ,;:»'*y^- __,,. "^ r i" T E P I 5 5 S S N «0 C» § K ti 5 ACOE Life Assurance in Canada. Vi {Bead before the Achiar ial Society of Edlnhurgh, January Uth, 1894.) Introduction. position of Lte Assurance n^^^^^^^^^^ ^.^^ ^^^^ „t , rmint%n ord« W beS appreciate the developments of tl.e past a»"'^P.°'''"i''^!;l*tISrof the Provinces of Ontario Tlie Dommion of Canada ™™'''" r-,„ada> New Brunswicli, and Quebec ^^"^^^'^ ^^.^t^ll^^iL^. Manitoba, Nova Scotia, P"""" Edivaul Islauu, Dominion and the North-west Ternt^ ^^^ ^^^^ „„f is about 3.«C,383 squ,re mue „„^ f„„ „orth to south From west to <>-' ^^-^^Tf^ ^^dland, although included in 1400 miles. The Islana oi ix« j Dominion ; British North America, J»<:%' ° Jd StatS and Labrador is under while Alaska belongs to the United Wat^s, a .^ ^,,„„j the control of Newfoundland Jbe««a o l^^_j jg^^^g 3,661,300 square mdes,»d^^^^^^ „i,es Ss Srgt\hr:i:^^^a Stai: omitting Alaska. Poptdation. \ ACCESSION NUMBtR ill i iitM'junawMmKn i ii mm ■■fHi 158 Li/e Assurance in Canada. Dominion has been taken on only three different occasions, viz., in 1871, 1881, and 1891, According to the census, the population was 3,635,000 in 1871, 4,325,000 in 1881, and 4,833,000 in 1891.1 The following Table will show the population of each province and the rate of increase : — POPULATION IN 1871, 1881, AND 1891. Province. Ontario, . Quebec, Nova Scotia, New Brunswick, Manitoba, British Columbia, Prince Edward Island, The Territories, TotaK 1871. 1,620,851 1,191,516 387,800 285,594 18,995 36,427 94,021 \ 3,635,024 1881. 1,926,992 1,359,027 440,572 321,233 62,260 49,459 108,891 56,446 4,324,810 Increase 1891. Increase per cent. per cent. 18-6 2,114,321 9-93 14-0 1,488,535 9-53 13-6 450,396 2.22 12-4 321,203 0-00 247-2 152,506 144-95 36-4 98,173 98-49 15-8 109,078 017 ... 98,967 75-33 1 ' 18-97 4,8.33,239 11-74 The rapid development of Manitoba, British Columbia, and the Territories during the last ten years, as shown in the foregoing table, is in strong contrast to the stationary population of New Brunswick, and the slow growtli of Prince Edward Island and Nova Scotia. Of the 4,833,239 persons in Canada at the 1891 census, 86*6 per cent, were born in Canada ; lO'l per cent, were born in British possessions, and only 33 per cent, were born in foreign countries, the foreigners being largely composed of emi- grants located in Manitoba and Britisli Columbia. The number of persons per square mile in Great Britain and Ireland has been given as 315, whereas, according to the last census, Canada only shows 1*5 persons per square mile. The life insurance in force in Canada per head of population was 812-61 in 1871, |23*88 in 1881, and 854-10 in 1891. Vital Statislics. The expense connected with a complete registration of Birtlis and Deaths has hitherto prevented the Dominion Government 1 For an interesting account of tlie growth of poimlatiou, etc., in Canada, vide Longstalf, Studies in Statistics, cliap. vii. Life Asstirance in Canada. 159 from attempting any such statistics for the whole Dominion, so that beyond the system of registration in the Province of Ontario, and that of the Catholic population of Quebec, the only particulars of births and deaths of any importance are the comparatively uncertain results of the Dominion census. The Province of Quebec has recently passed an Act requiring returns of vital statistics. This Act came into force in July 1893. An attempt was made in 1892 to have the various provinces co-operate with the Dominion Government in the establishment of a complete system of registration, but the effort was unsuccessful. From the great importance of the result of such a registration, it is to be hoped that the end will yet be attained. Even in Ontario, the Registrar is compelled to admit that, as the result of careful examination into the system of registration ' in several directions, the working of the Act in the past has been but partially successful in the attainment of the desired ends.' In the Dominion census of 1891, great pains were taken to secure returns of births and deaths as accurate as possible. Accord- ing to these returns the number of deaths per 1000 was 14-10, the proportion of males being 52'4 per cent., and of females 47'6 per cent. The death-rate per 1000 for each province at the two census years 1881 and 1891 was as follows : — 1881. 1 1891. Ontario Quebec, Nova Scotia New Brunswick, Manitoba, ... ... British Columbia, Prince Eilwanl Island, The Territories, Canada, 11-81 19-07 14-54 15-02 12-34 20-35 14-27 14-37 1130 18-91 14-57 13-36 10-36 13-94 12-26 7-32 1410 In 1891 tiie birth-rate for the Donrnion was 28-1 per 1000, as compared Avith 31-8 in 1881. The well-known relation as to the number of male births to female ia sustained also in Canada, where there were lOG'S boys born to 100 girls in 1871 ; 106-3 to 100 in 1881 ; and lOG-5 to 100 in 1891. The excessive birth-rate and death-rate of the Province of Quebec, especially its Eoman Catholic population, is i6o Life Assurance in Canada. worthy of remark. Comparing Quebec Avith Ontario, we get the following figures from the census returns : — Bihtu-Ratk. Dkath-Hate. 1881. 1891. 2-1-50 3G-Sti 1881. 1 1891. J Ontario, Quebec, 29-01 39-03 i " 11-81 11.30 19-07 18-91 14-0 10-8 DEATH-RATE, 1891. Roman Catholics of Quebec, . 20-1 Roman Catholics of Ontario, , Protestants ,, ,, . 10-8 Protestants ,, ,, The excessive birth and death rate of the Roman Catholic population (which largely predominates in Quebec) has been attributed, on the one hand, to the prolific nature of the French Jbahitant, and, on the other, to the corresponding backward state of sanitary knowledge and improvements. AVere it not for this excessive death-rate among the French-speaking population, Canada would rank as one of the healthiest countries in the world (if not the healthiest), as the following extract from the Dominion census report testifies : — 'The conclusions to be deduced from the examination of these returns are that Canada is the healthiest country of any which have statistics of deaths, excepting two or three of the colonies of the Australian Group ; that it is not surpassed in this regard even by the Australian continent as a whole ; that the deaths of children under twelve months are fewer in Canada than in other countries, excepting Norway, New Zealand, Scotland, Sweden, and Ireland ; that the average death-rate would be lower than it is were it not for the comparatively high death-rate among French-speaking ('anadians, and that this higher death-rate requires investigation to ascertain, if possible, the causes, for the purpose of providing a remedy, success in which would place Cnna'la at (he, litad of all coun/riet as the lieatthii.Kt.' This portion of our paper may bo concluded by giving an interesting table compiled by the Dominion census officer : — Table shoiciug (he deidh-rate per 1000 ((/ various ages in different eoiintries : — C'OUNTHY. Canada . Victoria . England . United States . Frauce . Prussia . Austria . Switzerland . Italy Spain Belgium . Sweden . Undi;r5. 5 to 10. 10to'.i5.; 40-73 0-02 2 -92 .30 -O 3-5 3-9 03-0 0-6 5-5 5H-H l(»-l 5-4 75 9-2 8-8 *.• 9-2 0-4 Ill 7 9-8 6-0 • •■ 8-5 0-3 110-0 11-0 7-8 100-2 11-7 8-8 08-1 12-7 8-1 .17-0 8-0 4-8 lotolS. 0-88 10-2 10-2 10-8 12-7 1 1 -5 1 1 -3 11-0 11-7 12-9 12 9 8-2 45 to 55. 55 to 65. 05 to 75. .30-68 9-34 15-96 10-2 29-2 21 l 17-4 31-8 64-3 17-0 27-2 51-4 16-0 28-3 00-3 18-6 33 04-5 211 41-5 92-8 19-3 .38-4 82-5 17-3 .33-1 70-0 23-8 42-0 95-0 19-0 32-3 74-5 14-7 27-4 62 1 Life Assurance in Canada, i6i Origin of Life Assttrance in Canada. With the organisation of the Canada Life Assurance Company on the 21st August 1847, and the issue of its first policy on the 29th October of the same year, the real history of Canadian life assurance may be said to begin. Prior to this date, several British Companies apjiear to have had agencies in Canada, but the amount of their annual business would not appear to have been large, for in 1847 the annual premium income of these Companies in Canada was only about £15,000. Of the Companies reporting to the Government in 1869, the Scottish Amicable seems to have been the first Company to tr£insact business in Cana^la, the date of its commencement being given as 1846. The first annual report of the Canada Life Assurance Company states that in 1847 'the practice of life assurance was but little understood among us, notwithstanding the exertions of the colonial .agencies of many British Companies, while its governing principles were still less generally understood.' A fact in this same report, regarding the expenses incident to organisation, will no doubt be of interest, especially in view of the experiences of other Companies in more recent years. The total receipts for the first year were £2153, whereas the expenses of the year were only £380, so that, as the report states, the Company v/as ' placed in a position at its first annual meeting, which is unexampled in the history of British life assurance, that of having realised profits without having included, as is usual, the value of the risks already earned.' For nearly a quarter of a centuiy the Canada Life was the only native Company doing business in the Dominion. A sentence from its prospectus in 1859 will give some idea of the reception it received during these early years : — ' It encountered coldness where it might have expected cordiality, lukewarmness where there should have been zeal, and misgivings where there should have been con- fidence.' But with the march of years this lukewarmness and lack of confidence gradually gave way to admiration and implicit confi- dence, so that for many years past the Canada Life has held the foremost place among Canadian Life Assurance Companies. The year 1847 was also marked by the introduction of the Standard of Edinburgh, which still continues to do a substantial business in the Dominion. In 1850 appeared an American Com- pany, the ^tna Life. Then followed the Liverpool, London and Globe, and the Royal in 1851 ; the Edinburgh Life and the Life Association of Scotland in 1857 ; the Scottish Provincial and the Queen Insurance Company in 1859 ; the London Assurance Cor- poration, and the North British and Mercantile in 18G2; the 1 mfmmmmmm !««-!«■■ mmmmnmw If 162 Lt/e Assurance in Canada. Commercial Union and the London and Lancashire in 1863 ; the Travellers in 1865, and the Phoenix Mutual in 1866. The next year, 1867, was the birthday of the Dominion of Canada, when the existing provinces were confederated into one Dominion, and A constitution was given by the Imperial Parliament in the British North America Act, 1867, to which reference will have to be made k er on when discussing the question of Dominion versus Provincial jurisdiction in insurance matters. From 1867 onward a rapid succession of Companies, native and foreign, followed. The dates of entry, dates of retirement, etc., of the various Com- panies that have transacted business in Canada are given in Table * A ' in the Appendix. An examination of this table shows that sixteen Canadian Companies have been organised and commenced business in Canada. Of the twelve existing Dominion Com,panies, nine have their head oflSces in Ontario ; one in Quebec (Province) ; one (a young Company) in Manitoba ; and one (a Natural-Premium Company) in New Brunswick. Strthat, with the exception of the Company in Quebec Province, all the principal Canadian Companies' h&ve their chief offices in Ontario. In addition to these, there are two Provincial Companies in Ontario^ both young and not included in these remarks. The following statement shows what has become of these sixteen Companies : — Total number of Canadian Companies commenced business, „ „ „ existing, . .12 w .».- H re-insured, . 4 If.' failed, Total, 16 16 Thus 75 per cent, of the Canadian Companies are still in existence, and no Canadian Life Assurance Company has ever gone into liqui- dation. Two of the American Companies that transacted business in Canada failed, while one English Company suspended after ceasing for some years? to transact any new business in Canada. That no Canadian Companies have ever gone into liquidation, and that so large a percentage are still doing business, is a creditable record for a country in which, from the nature of the case, a high standard of the knowledge of life assurance principles and practice has not always existed. The first Dominion legislation affecting life assurance was passed in the first Parliament of Canada in 1868, by which, \iit Life Assnrance in Canada. 163 Sirf among other provisions, every Company doing business required a licence, and a Government deposit of at least $50,000. In 1875 the Dominion Government Insurance Department was established by 38 Victoria, Chapters 20 and 21 ; and more ex- plicitly in 1877 by 40 Victoria, Chapter 42. The first Insurance Blue Book was issued by the Department in 1876, which gave the statements of Companies for 1875, and also an abstract and summary of the total business transacted in Canada from 1869 to 1875. xhe Dominion Insurance Act at present in force is chiefly a consolidation of the above-mentioned Acts, with some alterations and amendments. The text of the Act (which is known as the Canadian Insurance Act, 1886) may be found in the Journal of the Institute of "Actuaries (xxvii. p. 456). The Act is also contained in the Dominion Insurance Blue Book for the year ending 31st December 1885. Growth of Life Assurance in Canada. The' growth of life assurance in Canada can perhaps best be shown in tabular form from an examination of the Insurance Blue Books. The following Table (No. 1) shows the number of active Companies licensed ami doinrj business in Canada from 1869 to 1892 : — Year. 1869 Canadian. British. American. Total. 1 14 9 24 1870 1 15 9 25 1871 2 15 9 26 1872 4 15 11 30 1873 4* 14 13 31 1874 6 15 13 34 1875 7 14 13 34 187G 7 14 13 34 1877 7 13 12 32 1878 6 11 6 23 1879 7 11 5 23 1880 7 11 5 23 1881 8 11 5 24 1882 9 11 6 26 1883 9 11 7 27 1884 9 11 7 27 1885 10 11 8 24 188G 10 11 8 29 1887 11 10 9 30 1888 11 10 8 29 1889 12 9 10 31 1890 12 9 10 31 IS''l 11 9 10 30 1892 12 9 1(1 31 164 Life Assurance in Canada. In 1870 the number of licensed Canadian Companies was only 1 ; of British 15; and of American 9. In 1880 the figures were, Canadian 7; British 11; and American 5; while in 1890 they were, Canadian 12; British 9; and American 10. These last figures remained the same in 1892. The succeeding Tables will show the result of the operations of these three classes of offices. The continuous growth of the Canadian Companies from the lowest to the highest place in the three following Tables is worthy of notice, and reveals a gradual but mai'ked change in public opinion. In order to exhibit this growth of public confidence in native institutions more fully, reference may be made to the three accom- panying graphic illustrations : — i y TABLE II. New AssruAN'CEs Effected in Canada froaf 1870 to 1892 by British, Canadian, and American Companies. Year. Canadian BllITISH American COXU>ANIKS. COJIPANIKS. Companies. .«i8,952,747 1870 !?1, 584,456 .^l,657,4r>3 1871 2,623,944 2,212,107 8,486,575 187-2 5,276,859 1,S!»6,655 13,896,587 1873 4,608,913 1,704,338 14,740,367 1874 5,259,822 2,143,080 14,705,319 1875 5,077,601 1,689,833 8,306,824 1870 5,465,966 l,6S3,3.-)7 6,740,804 1877 5,724,648 2,142,7(12 5,667,317 1878 5,508,5,16 2,789,201 3,871,998 1870 6,112,706 1,877,918 3,363,600 1880 7,547,876 2,302,011 4,057,000 1881 11,158,479 2,536,120 3,923,412 1882 11,855,545 2,833,2.-.0 5,423,960 1883 11,883,317 3,278,008 (i,4l 1,635 1884 12,926,265 .3,167,910 7,323,737 1885 14,881,695 3,9,-)0,647 8,332,646 1886 19,289,694 4,it54,279 11,827,375 1887 23,505.549 3,067,040 11,4.3.->,721 1888 24,876,259 3, 98.-), 787 12,364,483 1889 26,4.38,.358» 3.399,313 14,719,266 1890 23,541,404 3,390,972 13,591,080 1891 21,904,302 2,947,246 1.3,014,739 1892 25,.')85,5.34 3,625,213 15,409,266 !3!282, 637,748 ! 862,334,480 1 .><216,556,4,j8 * Including 20 niontlis' Imsines.s of the Canaila Lifo, wliioh changed the date of its fiscal year. 1l ! \ L Life Assurance in Caniada. TABLE III.— Premium Incomk durino 1870 to 1892. 165 I TABLE IV.— Amount of Assurancks ix Force, 1870 to 1892. Year. Canadian UltlTISH Ameuican Companies. Companies. Companies. 1870 .«!6, 404,4.38 .$17,391,922 •SI 8, 898, 353 1871 8,711,111 18,405,325 18,709,499 1872 13,070,811 19,258,166 34,90.5,707 187:^ 15,777,197 18,862.191 42,861,508 J874 19,(m,3]9 19,803,867 46,218,139 187;") 21,957,296 19,4.")5,6(»7 43,.596,361 1870 24,()4100, while every insurance agent in Ontario, whether representing a Provincial or Dominion Company, is compelled to be licensed and pay a yearly fee of $2*00 to the Provincial Government. The Insurance Corporations' Act just mentioned is a compre- hensive and important piece of legislation, in which the jurisdiction of the Provincial legislature is strongly assert^ ^ Three of the other Provinces had previously passed laws respecting taxes on Life Insurance Companies or agents. The I'rovince of Quebec imposes on Life Insurance Companies a tax of 8500 per annum, with an additional tax of $100 per annum for each office in Montreal or Quebec city, and $500 for each office or place of business estab- lished in any other place. Jn the Province of New Brunswick, special or travelling life insurance agents are compelled to pay an annual tax or licence fee of Si 00, but this does not apply to agents who for twelve months have resided in the Province and have had during such time a fixed place of business. In the city of Char- lottetown, Province of Prince Edward Island, every Life Insurance Company is assessed in respect to the real estate or moveable pro- ])erty owned by said Company, in the same way as the other rate- payers, and has in addition to pay a licence fee of S50.00. State Stipervision. The question of State supervision has given rise to a great deal of discussion on both sides of the Atlantic. AVhile liberty and publicity are the features of the British system, strict legal super- vision and publicity characterise the Canadian system. The reading of Mr. King's paper at the Institute of Actuaries Life Assurance in Canada, 171 » (J.I.A. 29) broiiyht out forcibly tlie opposition to any system of strict legal supervision for Great Britain, similar to the American system. It may be quite probable that the opinion of State super- vision, created in the British mind, is dfdved largely from the American system, and it is therefore important to point out that in some important respects the Canadian law is radically different from the Americ.an. Canadian supervision of Companies doing business throughout Canada is Federal, not local or provincial (although the Province of Ontario does supervise Companies doing business in Ontario only). The result is, in place of having to deal with seven or eight local departments, Companies deal direclly with one Federal Insurance Department at Ottawa. The benefits of this are : — (a) Uniform laws and regulations. (b) Freedom from continuous changes of local departments. (c) The publication of the official statements of Companies on similar standards at the same time. (d) ''. aving in expense. (e) The education of i)ublic opinion according to one well-recog- nised standard, thus avoiding a conflict of opinion and a conflict of Government standards. The second point of distinction is that the appointment of Superintendent of Insurance is not a political appointment depend- ing on every change of government, as in the United States. This is a most important improvement on the American system, and one which renders difficult the passing of crude insurance laws and regulp,tions, and especially the manipulation of the insurance department for personal or political ends. Since the establishment of the Canadian Insurance Department in 1875, there have been only two Superintendents of Insurance, the first, Prof. Cherriman (a Cambridge wrangler), who left the chair of mathematics in Toronto University to accept the position ; the second, Mr. Fitzgerald, who is a University man and a barrister. The separa- tion of the office of Superintendent from the arena of party politics is a wise and necessary precaution to successful State super- vision. It is not too much to say that the Canadian system of State supervision has, on the whole, been a success. While the doctrine of laisser faire may Avork satisfactorily in an old country like Great Britain, with an educated public opinion, in a young country like Canada, where immature schemes and irresponsible corporations are liable to spring into being at any time, it is almost a necessity to have some means beyond mere publicity by which to regulate their development and exhibit their true standing. At the present time it is impossible for any insurance corpora- VOL. TIT. L I 170 Life Assurance in Canada. A number of local Fire Insurance Companies, and one or two Life Companies, have been under the sole superintendence of the Ontario Insurance Department ; while Companies having Dominion licence have been largely under the jurisdiction of the Dominion Insurance Department, but amenable to any existing Provincial laws. Ofthe Provincial enactments on insurance, those of Ontario are the most numerous and important, this being the only Province with an insurance department and an inspector or superintendent of insurance. The above-mentioned compromise was, hoAvever, considerably invaded by the passing of the Ontario Corporations Act in 1892 (and amendments thereto in 1893), to which reference will have to be made later on. For instance, every Company having a Dominion licence is required to be registered in the office of the Ontario Inspector of Insurance, and in addition is required to pay certain fees, the chief of which is the yearly tax of Si 00, while every insurance agent in Ontario, whether representing a Provincial or Dominion Company, is compelled to be licensed and pay a yearly fee of S2"00 to the Provincial Government. The Insurance Corporations' Act just mentioned is a compre- hensive and important piece of legislation, in which the jurisdiction of the Provincial legislature is strongly asserted. Three of the other Provinces had previously passed laws respecting taxes on Life Insurance Companies or agents. The Province of Quebec imposes on Life Insurance Companies a tax of $500 per annum, with an additional tax of $100 per annum for each office in Montreal or Quebec city, and $500 for each office or place of business estab- lished in any other place. Jn the Province of New Brunswick, special or travelling life insurance agents are compelled to pay an annual tax or licence fee of $100, but this does not apply to agents who for twelve months have resided in the Province and have had during such time a fixed place of business. In the city of Char- lottetown. Province of Prince Edward Island, every Life Insurance Company is assessed in respect to the real estate or moveable pro- ])erty owned by said Company, in the same way as the other rate- payers, and has in addition to jiay a licence fee of $50.00. » * State S^ipervisiou. The question of State supervision has given rise to a great deal of discussion on both sides of tlio Atlantic. AVliile liberty and publicity are the features of the British system, strict legal super- vision and publicity characterise the Canadian system. The reading of Mr. King's paper at the Institute of Actuaries Life Assurance in Canada, 171 (J.I. A. 29) brought out forcibly the opposition to any system of strict legal supervision for Great Britain, similar to the American system. It may be quite probable that the opinion of State super- vision, created in the British mind, is derived largely from the American system, and it is therefore important to point out that in some important respects the Canadian law is radically different from the American. Canadian supervision of Companies doing business throughout Canada is Federal, not local or provincial (although the Province of Ontario does supervise Companies doing business in Ontario only). The result is, in place of having to deal with seven or eight local departments, Companies deal direclly with one Federal Insurance Department at Ottawa. The benefits of this are : — («) Uniform laws and regulations. (6) Freedom from continuous changes of local departments. (c) The publication of the official statements of Companies on similar standards at the same time. ((?) Saving in expense. (e) The education of public opinion according to one well-recog- nised standard, thus avoiding a conflict of opinion and a conflict of Government standards. The second point of distinction is that the appointment of Superintendent of Insurance is not a political appointment depend- ing on every change of government, as in the United States. This is a most important improvement on the American system, and one which renders difficult the passing of crude insurance laws and regulations, and especially the manipulation of the insurance department for personal or political ends. Since the establisiiment of the Canadian Insurance Department in 1875, there have been only two Superintendents of Insurance, the first, Prof. Cherriman (a Cambridge wrangler), who left the chair of mathematics in Toronto University to accept the position ; the second, Mr, Fitzgerald, who is a University man and a barrister. The separa- tion of the ofiice of Superintendent from the arena of party politics is a wise and necessary precaution to successful State super- vision. It is not too mu(!h to say that the Canadian system of State supervision has, on the Avhole, been a success. While the doctrine of hmser faire may work satisfactorily in an old country like Great Britain, with an er^ucated public opinion, in a young country like Canada, where immature schemes and irresponsible corporations are liable to spring into being at any time, it is almost a necessity to have some means beyond mere publicity by which to regulate their development and exhibit their true standing. At the present time it is impossible for any insurance corpora- VOL. Ill, L I 17.2 Life Assuiance in Canada. tion to obtain corporate powers under Dominion law, except by special application to Parliament, where the proposed charter has to run the gauntlet of the banking and finance committee. There is no means whereby an Insurance Company can incorporate under a Dominion Act by Letters Patent, as is possible under the Ontario law. The effect of this, together with the stipulation that $50,000 deposit is required with the Government before com- mencing a regular life insurance business, puts a pretty effectual check on the hasty organisation of Dominion Life Insurance Companies. The one point where the Canadian system has pressed severely, if not unjustly, is in requiring a strict net premium valuation according to the H*' 4| per cent. Table from all Companies, whether old or young. In three or four cases, within recent years, young Companies commencing business in the face of severe com- petition have been placed at a serious disadvantage in public esti- mation by having to wear on their banners for several years the stigma of 'capital impaired,' the result being that their natural growth has been unwisely checked by having to comply with a severe valuation regulation at a period in their history when it was least applicable or necessary. This regulation, together with the required deposit of $50,000, renders it practically impossible for any Dominion mutual life assurance company to come into exist- ence in the future. The above considerations account for the fact that there is only one purely mutual Canadian life assurance company doing business in Canada. This Company began in 1870 as an Ontario Company, and continued so until, after possessing the requirements of the Dominion Act, it extended its business beyond Ontario under Dominion supervision. With regard to Government inspection, the Superintendent of Insurance makes at least a yearly visit to the head offices of Canadian Companies, either in person or by deputy, where a rigid verificatioii of the sworn statements of the Companies is made, including a personal inspection of the assets. When occasion arises, the Superintendent is empowered also to visit the head offices of companies incorporated elsewhere than in Canada and examine into their condition. Within recent years an inspection was made by the Canadian Superintendent of Insurance at the head offices of several American Companies that do business in Canada. With regard to valuation of policies, the Canadian policies of all Companies doing business in Canada are valued every fifth year by the Dominion Insurance Department, according to the II*' table of mortality and interest at 4J per cent. In the intervening years, •N •>• Life Assurance in Canada. 173 •jS the Companies either make the valuations themselves, or may request the Insurance Department to do so at a fixed charge. These valuations are not made on the usual British method of classifying the systems of assurances, and valuing the total sums assured and total premiums, but the value to the nearest month of each policy is usually made separately. For this purpose the Dominion Insurance Department has prepared books of valuation of all ordinary forms of assurance policies usually written (Life, Endow- ment Assurance or Term), according to the H" 4| per cent, table, and each Canadian Life Company is furnished with a copy for its own use. These tables, which occujjy about 650 pages, are most complete and valuable, and reflect credit on the actuarial branch of the Canadian Insurance Department. In concluding this topic, it may be said that since its estab- lishment the Canadian system of State supervision has had a salutary effect on the business of life assurance, that the officers of the Insurance Department have shown tact and judgment in administering the law, and that many evils charged against the American State supervision have not found their counterparts in the Canadian system. Cost of Business. The expense of conducting a progressive business in America has been a much-discussed question in recent years. The results of the ' high pressure ' methods introduced by American Com- panies have had their eff'ect on Canadian Companies competing on their own ground with the large American Companies. The eff'ect of ' lightiiing insurance solicitors ' and ' executive special agents ' from the United States, making flying visits to different points in Canada, and in many cases seducing local agents of Canadian Companies froia their allegiance, and off'ering tempting rebates to assurers, has had a most demoralising eff'ect on public opinion. Not only so, but native Companies have been com- pelled to raise their agency commissions to points which they should not otherwise have reached. Two or three of the older Canadian Companies have stoutly opposed this despoliation of policyholders' interests, and have managed to keep their expense ratios within reasonable bounds. Taking all the Canadian Com- panies together, tlie reduction in the percentage of expenses to income has not been as rapid as the increasing age of the Companies would have led us to expect. It must be remembered, howevei', that a majority of these Companies are comparatively young, and a low ratio of expense to income could not be expected in conse- quence of the neAV business bearing such a large ratio to the 174 Life Assurance in Canada. renewal business. Unfortunately, the Government returns do not separate the new from the renewal premiums, so that it is not easy to get at the actual cost of the new business. The following Table shows that, during the fourteen years, 1879-1892, the percentage of expenses to premium 'ncome has been 25 per cent., and of expenses to total income, about 20 per cent. EXPENDITURE OF CANADIAN COMPANIES. SN Percentage of General 1 Percentage of General Year. Expenses to Premium Expenses to Total Income. Income. 1879 26-96 20 66 1880 26-23 19-97 1881 27 19 20-88 1882 25-37 20-33 1883 26-41 20-72 1884 26-31 20-91 1885 24-44 19-23 1886 26-58 20-91 1887 25-21 19-48 1888 26-82 21-66 1889 23-87 18-27 1890 23-76 19-27 1891 24-24 19-48 1892 24-17 19-58 Average 25-07 19-98 From Eourne's Handy Assurance Guide (1892), we obtain the percentage of expenses to life -premium income for seventy-eight British Companies, and also for four American Companies. For the year 1891 we have the following comparison : — Percentage of Expenses to Prenuum Income. 78 British Companies, 4 American Companies, . 12 Canadian Companies, . 14-01 25-22 24-24 To use these figures without considering the ages and circum- stances of the Companies is of course open to objection. Most of the British Companies being of many years* standing, a fairer comparison would no doubt be obtained by taking the oldest k Life Assurance in Canada. 175 Canadian Company, whose age, moreover, corresponds more nearly with that of the American Companies. For the year 1891, the corresponding percentage of the oldest Canadian Company (which also did the largest amount of new business among native Com- panies) was 17 68, a percentage which compares favourably with many British Companies writing a corresponding amount of new business, and which is much lower than the percentage of the four American Companies. While the commission contracts of local agents for one or two of the oldest Canadian Companies range from 15 to 40 per cent, on new premiums, with 5 to 7| per cent, on renewals, taking one Company with another, it may be stated that the Commission Contracts of Canadian Companies will average about 45 per cent, on new premiums, and 5 to 7 J per cent, on renewals. The commission paid by American Companies on new business in Canada considerably exceeds that of the average Canadian Company. In quoting these figures it should be understood that these commissions on new business practically cover the agents' remuneration, the British practice of salaried branch managers not being in vogue here. Moreover, the premiums of Canadian Companies being considerably lower than those of British Companies, the adiml outgo for commissions is correspondingly less, when based on the same rate of commission. Investment of Life Assurance Funds, A very fair idea of the direction in which Life Assurance Funds are invested can be obtained from the following classification of the assets of Canadian Companies at the four quinquennial periods, 1877, 1882, 1887, 1892. The large increase in the last quin- quennium in the real estate owned is accounted for by the three large new buildings erected by three of the largest Canadian Companies. From 1887 until 1892, a general and commendable falling off has taken place in the item of agents' balances and bills receivable. The loans and obligations on policies in force in 1892 amount to over 9 per cent, of the invested assets. A practice prevails among several Canadian Life Assurance Companies, especially the younger Companies, of taking the note of the assured for one to six months, to cover the first premium. This applies especially to business secured from farmers. The policy is thus left in full force during the currency of the note, and lapses if the note be not paid at maturity. Although facilitating the closing of business promptly, the effect of this practice on the whole is injurious. These short-date notes are included under the heading ' outstanding premiums.' h 176 Life Assurance in Canada. CLASSIFICATION OF ASSETS OF CANADIAN COMPANIES. f 1877. $184,72.3 1882. 1887. 1892. Real Estate, . $381,194 $552,885 $2,058,368 Loans on Real Estate, 914,450 2,194,373 5,569,694 11,226,804 Loans on Collaterals, 38,498 271,575 1,260,270 2,240,115 Cash Loans and Pre- mium obligations on Policies in force, 381,551 665,893 1,149,900 2,268,681 Stocks, Bonds, and Debentures, . 2,045,470 3,438,521 4,250,877 6,248,246 Cash on hand and In banks, . 61,371 204,619 319,515 266,113 Agents balances and Bills Receivable, . 16,368 62,022 120,923 23,360 interest and Rents due and accrued, , 47,678 153,335 302,685 528,968 Outstanding and de- ferred Premiums, . 270,OP'2 365,854 739,887 991,031 Other Assets, . 42,564 49,814 83,740 76,601 Totals, $3,999,675 $7,787,200 $14,350,376 $25,928,287 m. It may be worth while pointing out in a few words the relative position occupied by investments generally in Canada as com- pared with those in other parts of the world. The past two years have witnessed a remarkable series of financial crises in different countries, seriously affecting many investments hitherto regarded as safe. Amid this financial up- heaval, investments generally in Canada have maintained a solidity that proves their soundness and reliability. It has been a matter of some surprise that, amid the prevailing depression, the banking and other financial corporations of Canada should have been able to maintain their credit. This is partly accounted for by the sound system of banking in Canada, which has few superiors in any country in this respect, and partly by the slow but patient and industrious nature of Canadian life. Canadian investors are not easily carried away to an Eldorado of high interest rates combined with doubtful security, and in this respect Canada will make a most favourable comparison with Australia and the United States. The investments of Life Assurance Companies in Canada are therefore of a high character, so that the risk of loss from a financial crisis is reduced to a minimum. tj Life Assurance in Canada. 177 Rate of Interest. Within recent years the important question of the rate of interest earned on Life Assurance Funds has given rise to a good deal of anxiety and discussion in America as well as in Great Britain. In the early history of the oldest Canadian Life Com- pany, valuations were made at ' 6 per cent, as a safe rate of interest.' In 1870 this was reduced to 5 per cent., and in 1880 to 4^ per cent. As previously indicated the legal standard for valuation of policies in Canada is 4^ per cent. Until recently the average interest earnings of the Canadian Companies have been such that a safe margin has existed between the standard rate and the rate earned. But the steady decline in the rate to be obtained on the best securities has caused the leading Companies to carefully con- sider whether or not the time was near at hand when a change to a 4 per cent, basis would be not only prudent but necessary. Omitting mention of a recently organised Company (which com- mences by holding a 4 per cent, reserve) no Canadian Company has yet changed to a 4 per cent, basis. Foreseeing the downward tendency of interest rates, the oldest Canadian Company at its last quinquennial valuation (31st December 1889) put aside $250,000 (over a,nd above the American Experience 4| per cent, reserves) as a special fund towards the creation of a 4 per cent, reserve. This has been the first step towards a new standard, but from the annual reports of other Companies, and the opinions of their officers, it is evident the matter is having serious attention, but it will probably be some years yet before a change to a 4 per cent, basis will be enacted by the Government. The interest earnings of Canadian Companies are given in the following Table, extracted from the Lisurance and Finance Chronicle, of Montreal. The rates are obtained from the formula ^^, I being the true interest revenue for the yeai", and A and B the funds at beginning and end of year. As is known, this function gives the force of interest The expression j^^i, which gives the true rate of interest approximately, would bring out slightly higher values, but the following Table, based on the first expression, will no doubt show with sufficient accuracy the ruling rate of interest, and also the steady decline from year to year : — ( 178 Life Assurance in Canada. INTEREST EARNINGS OF CANADIAN COMPANIES. Hate of Interest YF\n Rate op EARNED, INCLUDING Interest earned. Profits on Saee of Securities. 1880 ■■71 6-75 1881 ! 70 6-77 1882 619 6-20 1883 6-23 6-61 1884 6-09 6 13 1885 6 08 6-22 1886 6 07 6-29 1887 5-77 6-57 1888 5-77 5-83 1889 5 61 5-74 1890 5-50 5-58 1891 5-54 5-59 m» Mortality. As previously indicated, the Table of Mortality adopted as the standard in Canada is the H" Table of the Institute of Actuaries. Unfortunately, no Canadian Company has yet taken out its mortality experience, although it is hoped and expected that some of the older Companies will undertake this important work. Thus it is not possible to give any accurate comparison of the mortality in Canadian Companies, either among themselves or with foreign Companies. From the perusal of the various annual reports of the Companies from year to year, we find the oft-repeated phrase that the mortality experience was well within the expected mortality. To what extent these statements are based on actual calculation is not known outside the offices making them. In order to give some idea of the death-rate per 1000 among insured lives in C mada, the following Table has been compiled from the Companies' returns and printed in the report of the Superintendent of Insurance : — DEATH-RATE PER 1000 LIVES. Ykar Active Assessment Retired All 1885 Companies. COMPAN -S. Companies. Companies. 9-646 6-207 16-041 loor 1886 8'1.32 7-997 15-817 8-651 1887 8-317 9-120 17 943 8-955 1888 8-614 9-727 23-489 9-495 1889 8-846 8-250 16-840 9-083 1890 10-148 8-475 24-417 10 -.340 1891 10-178 9-345 20-109 10-3.35 1892 10-676 8-946 26-512 10-860 V «¥r Life Assurance in Canada. 179 It will be noticed that the mortality of the active Companies, among which Canadian Companies largely predominate, is quite low, being on the average less than 10 per 1000. Of course this is largely accounted for by the fact that the lives are comparatively recently selected and drawn largely from among young persons. But there can be little doubt that the insured lives in Canada would make a favourable comparison in point of quality of risk with those of any other country. With a better knowledge of the climate and risk of travel, the ' extra premium ' for foreign residence, as applied to Canada by British Companies, is now a matter of history only. Foreign Business of Catiadian Co^npanies. Three or four Canadian Companies are doing business elsewhere than in Canada. The only Canadian Company doing business in any of the United States is the Canada Life Assurance Company, and it is besides the only foreign life company that is at present operating in the United States.^ Its business is confined to the three states of Michigan, Minnesota, and Ohio, although it will no doubt enter other states in the future. Two other Canadian Companies are doing business in South America and the West Indies, and one of these, the Sun Life Assurance Company, has also made a new departure by commencing operations recently in England. The amount of the foreign business of the Canadian Companies in force at 31st December 1892, was ^7,000,000, on which the premium income was $277,000. Friendly Societies. To even trace in outline the rise and progress of Friendly Societies in Canada would require more space than can here be allotted to it, and hence only very brief notes will be made. For some years the Friendly Societies in Canada have been undergoing a gradual evolution from mere Benefit Societies, whose payments were founded on donations to Friendly Societies with benefits founded on contract between society and member. To discover or evolve order out of this chaos has been no easy task. As yet Friendly Societies in Canada cannot be said to be more than Assessment Societies whose life assurance schemes are founded on what the President of the Institute of Actuaries in 1890 (Mr. j William Sutton) called *a fallacious principle which had long ago \ ^ Since the above was written, the Neclerland Life Insurance Company of Holland has been admitted to do business in the State of New York. I i8o Life Assurance in Canada. been exploded in this country (England).* These Friendly or Assessment Societies are of two classes — (1) Those founded in connection with fraternal order. (2) Those having no fraternal feature. The former are not under Dominion Government supervision ; the latter are to a limited extent, if doing business in more than one Province. Both these classes differ from a regular mutual Assurance Company or Society, in that the latter must be actuarially solvent, whereas a Friendly Society in Canada need only possess sufficient available assets to meet present liabilities. Of the four non-fraternal societies coming under class 2 above, two found it expedient in 1892 to anticipate their natural fate by re-assuring in a similar but stronger American Assessment Society. The Dominion Insurance Department supervises the business of societies under class 2 (native or foreign) which do business in more tlian one Province, but it assumes no responsibility for, nor vouches for, their actuarial solvency ; and such societies have by law to bear about in their literature and advertisements the opprobrious title 'Assessment System' Although called 'Assess- ment Societies,' nearly all of these societies of both classes have regular periods of assessment, and comparatively regular levies or rates. In many instances these rates approach to those of short- term rates of a regular Company, but a great deal of controversy and misunderstanding prevails among the members of these societies and others as to the possibility and necessity of these assessment rates ever increasing. On this subject an educational process has been and is still going on. The first attempt to deal with Friendly Societies in Canada in a comprehensive way is found in the Ontario Insurance Corpora- tions Act, 1892, although various laws respecting benefit societies have been passed since 1850. But the above Act is the only case where an attempt has been made to regulate these societies, fraternal or non-fraternal. Of course this law does not affect societies operating entirely outside of Ontario. The general effect of the above Act, as regards Friendly Societies, has been to change them, so far as possible, from societies whose pjiyments rested on donation, to societies with payments founded on contract. All Friendly Societies undertaking insui'ance contracts in Ontario must now be registered on the 'Friendly Society Register' of ■Ontario. Various clauses are enacted for the regulation and conduct of these societies, e.rj. — (1) The registration and classification of their contracts and accounts in a form approved by the Registry Officer. (2) An annual ' bona fide and business-like audit of its books of record and account,' showing the actual assets, liabilities, Life Assurance in Canada. i8i receipts and expenditures, and the statement of tho insurance fund or funds, and a copy of such summary statement shall be filed in the office of the Registrar,' as well as furnished to the members or lodges. (3) The investment of the surplus funds in specified securities. (4) An official audit in certain cases by the Registrar. (5) Penalties for falsifying accounts or obstructing an official audit. (6) The suspension or cancellation of the Registration of a fraudulently conducted or insolvent society. (7) Regulations as to foreign Friendly Societies. (8) The exclusion of foreign Assessment Endowment Societies, and the prohibition of the future incorporation of native Assessment Endowment Societies. The certificate of registry issued to a Friendly Society, or the reporting to the Insurance Department, does not imply any approval of the financial standing or basis of a society, as they are not per- mitted to make any deposit with the Ontario Insurance Department, which assumes no responsibility for their actuarial solvency. It may be stated that the Wives' and Children's Act, hereafter de- scribed, now applies in Ontario to Friendly Societies. The foregoing regulations only apply to Friendly Societies operating within Ontario. Societies whose operations are confined to any other Province are not subject to these regulations. Insnrable Interest {Ontario). The laws of Ontario are founded on the common law of England ; certain Imperial Statutes (prior to 1792); and Provincial Enact- ments. Among the Imperial Statutes is the well-known Gambling Act of 1774 (14 Geo. in. cap. 48), Avhich has been law in Ontario and remains so, except as modified by the Insurance Corporations Act (1892). Section 35 (2) of the latter Act, reads thus : — ' In order to render valid any contract of life assurance, the beneficiary under the con- tract, being other than the assured or the parent or bona fide assignee or nominee of the assured, or a person entitled under the Will of the assured or by operation of law, must have had at the date of the contract a pecuniary interest in the duration of the life, or other subject insured.' Section 35 (1) removes the incapacity of a minor between ages 15 and 21 to make a contract of life insurance (either for his own benefit or for that of his father, mother, brother, or sister), and he may now not only make such a contract but he may also give a valid discharge for a surrendered policy or other benefit thereunder. l82 Life Assurance in Canada. Prior to the Insurance Corporations Act, 1892, a parent did not have an insurable interest in the life of his child, when a pecuniary interest did not exist. Notwithstanding this, a large number of Industrial Policies on children had been issued in apparent ignorance of the law. Instead of exempting policies on children from the oi)eration of the Gam- bling Act, 1774, as was done in the case of tlie Friendly Societies Act in England, the force of the above-mentioned Act was modified iu the Corporations Act by legalising such policies for the future within certain limits as to amount and age. But existing insurances were not interfered with. Thus from ages 2 to 10, the amount of insurance that may be effected on children (where a pecuniary in- terest does not exist) is limited and gradually graded from $25 to $147. After 10 years of age, the restriction as to amount of insurance ceases. According to decisions of the United States Courts, it has been held that a parent has an insurable interest in the life of his minor child, especially where relationship is accom- panied Avith presumptive or conclusive evidence of pecuniary in- terest, benefit or advantage from the continuance of the life assured. Accepting this wider view of insurable interest, the Insurance Corporations Act provides, Section 35 (G) : — ' In respect of insurance heretofore or hereafter effected on the lives of persons under 21 years of age, where such insurance has been effected by a parent upon the life of his child, such insurance shall not be deemed to be invalid by reason only of the parent's want of pecuniary interest in the life of the child.' Wives and Children Acts. The Dominion Parliament has never passed any Act similar to the Married Woman's Property Act of England, or that of Scot- land, so that for legislation on this important subject we have to look to the various provincial enactments. By far the most im- portant or these is that in force in Ontario. It is most important as being the first passed, the most IVtquently amended, and the one to which most frequent referr'iice is made and decisions given. After noting the most salient featuvo^^ of this Act, a few brief notes on similar Acts in other Provin<;ts will be made. Ontario. — In 18G5 was passed the first law not only in Ontario but also in Canada relating to life insurance for the benefit of wives and children. This legislation was promoted by the Canada Life Assurance Company and has been the subject of such frequent exten- sions and amendments that it may now bo supposed to have arrived at that position which some of its admirers claim for it, viz., the most f Life Assurance in Canada. 183 comprcliensive caiul best working * Wives and Cliildren Act ' passed by any legislature. This Act has been before the Ontario Legis- lature about fifteen times, and it will be found that many of the points which have given rise to doubt and trouble in tlio corre- sponding EngliHli and Scotch Acts are now definitely settled in the Ontario Act. The general object of the Act is for the protection of sums assured in favour of a wife or children, free from all claims of creditors. The following are the principal sections of the Ontario ' Wives and Children Act : * — 5. In caHe a policy of insurance effected I)y a man on hia life is cxpicssed upon the f.ice of it to he for the l)enefit of his wife, or of liis wife and uliildren, or of any of tliein, or Jn case he has heretofore indorsed, or may liereafter 1. lorso, or by any writing identifying tlie policy by its number or otherwise has made, or may hereafter make a declaration that tlie policy is for the benefit of Ii'i; wife, or of hia wife and children, or .iny of them, such policy shall inure and l)e deemed a trust for the benefit of his wife, for her separate use, and of his children, or any of them, according to the intent so expressed or declared, and so long as any object of the trust remaina the money payable under the policy shall not be subject to the control of the busbanil or hia creditors, or form part of his estate when the sum secured by the policy becomes payable, but tliis shall r'^t be held to interfere with any pledge of the policy to any person prior to such declaration. 5 {«). In the case of a policy or written contract of life insurance effected before marriage, a declaration under this section shall be, and shall be deemed to have been, as valid and effectual as if such policy or contract had been effected after marriage, but nothing herein contained sliall affect any action or proceeding now pending. 6 (a). The husband may, by an instrument in writing, attached to or indorsed on, or identifying the policy by its number or othenvise, vary a policy or a declaration or an apportionment previously mad^ so as to restrict or extend, transfer or limit the benefits of the policy to the wife alone, or the children, or to one or more of them, or to the mother of the assured as a beneficiary or sole beneficiary, although the policy is expressed or declared to be for the benefit of the wife and children, or of the wife alone, or for the child or children alone, or for the benefit of the ■wife for life and of the children after lier death, or for the benefit of the wife, and, in case of her death during the life of tlie insured, then for the child or children, or any of them, or although a prior declaration was so restricted ; and he may also apportion the insurance money among the persons intended to be benefited, and may, from time to time, by an instrument in writing attached to or in- dorsed on the policy or referring to the same, alter the apportionment as he deems proper ; he may also, by his will, make or alter the apportionment of the insurance money, and an apportionment made by his will shall prevail over any other made before the date of the will, except so far as such other apportionment has been acted on before notice of the apportionment by the will or for one or more of the above-mentioned persons for life and after his or their decease, for the benefit of any one or more of *hc survivors. 7. Where no apportionment is made, all persons entitled to be benefited by the insurance shall be held to share equally in the same ; and where it is stated in the policy or declaration that the insurance is for the benefit of the wife and children generally, or of the children generally, without specifying the names of the children, the word 'children' shall be held to mean all the 1 84 Life Assurance in Canada. children of the insured living at the maturity of the policy, whether by his tlien or any former wife, and the wife to benefit by the policy shall be the wife living at the maturity thereof ; provided always that any such policy may be surrendered or assigned ; (a.) Where the policy is for the benefit of the children only, and the cliildren surviving are all of the full age of twenty-one years, if tlie persons insured and all such surviving children agree to so surrender or assign ; or (5.) Where the policy is for the benefit of both a wife and children, and the surviving children are all of the full age of twenty-one years, if the person insured and his then wife (if any) and all such surviving children agree to so surrender or assign ; or (c. ) Wherf: the policy is for the benefit of a wife oi.dy, or of a wife and children, and there are no children living, if the person insured and his then wife agree to so surrender or assign. 8. Where an apportionment has been made, if one or more of the persons in whose favour the apportionment has been made die in the lifetime of the insured, the insured may, by any instrument in writing attached to or indorsed on or otiierwise referring to and identifying tue policy of insurance, declare that the share formerly apportioned to the person so dying shall be for the benefit of such other person or persons as he may name in that behalf, not being other than the wife and children of the insured, or one or more of them, and in default of any such declaration, the share of the person so dying shall be the property of the insured, and may be dealt with and disposed of by him as he may see fit, and shall at his death form part of his estate. 9. Where no apportionment has been made, if one or more of the persons entitled to the benefit of the insurance die in the lifetime of the iusured, and no apportionment is subsequently made by the insured, the insurance shall be for the benefit of the survivor or of the survivors of such persons in equal shares if more than one ; and if all the persons so entitled die in the lifetime of the insured, the policy and the insurance money shall form part of the estate of the insured ; or after the death of all the persons entitled to such benefit, the insured may, by an instrument executed as aforesaid, make a declaration that the policy shall be for the benefit of his then or any future wife or children, or some or one of them. 10. (1) When the insurance money becomes due and payable it shall be paid according to the terms of the policy, or of any declaration or instrument as aforesaid, as the case may be, free from the claims of any creditors of the insured, except as herein provided. 11. The insured may, by the policy or by his will, or by any writing under his hand, appoint a trustee or trustees of the money payable under the policy, and may from time to time revoke such appointn^ent in like manner and appoi'.t a new trustee or new trustees, and make provision for the ap- pointmen'^ of a new trustee or new trustees, and for the invistnient of the moneys payable under the policy. Payment made to such trustee or trustees shall discharge the Company. 12. If no trustee is named in the policy, or appointed as mentioned in sec- tion 11, to receive the shares to which infants are entitled, their shares may be paid to the executci's of the last will and testament of the insured, or to a guardian of tiie infants duly appointed by one of the Surrogate Courts of this Province, or by the High Court of Justice, or to a tiustee appointed by the last-named Court upon the application of the wife or of tlie infants or their guardian, and such payment shall be a good discharge to the lusui'ance Company. T Life Assurance in Canada. 185 16. If a person who lias heretofore effected, or who hereafter effects an insurance for the purposes contemplated by this Act, whether the purpose appears by the terms of the policy or by indorsement tliereon, or by an in- strument referring to and identifying the policy, finds himself unable to contuuie to meet the premiums, he may surrender the policy to the Company, and accept in lieu thereof a paid-up policy for such sum as the premiums paid would represent, payable at death, or at the Endowment age, or othci wise (as the case may be), in the same manner as tlie money insured by the original policy, if not surrendered, would have been payable, and the Company may accept the surrender and grant the paid-up policy, notwitlistanding any declaration or direction in favour of the \vife and children, or any or either of them. 17. The person insured may from time to time borrow from the Company insuring or from any other Company or person, on the security of the policy, puch sums as may be necessary, and shall l)e applied to keep tiie policy in force, and on such terms and conditions as may be agreed on, and the sum so borrowed, together with such lawful interest thereon as may be agreed on, shall, so long as tlie policy remains in force, be a first lien on the policy and on all moneys payable thereunder, notwithstanding any declaratioji or direc- tion in favour of the wife and children, or any or either of them. 20. No declaration or apportionment affecting the insurance money or any portion thereof, nor any appointment or revocation of a rustee, made after the passing of this Act, shall be of any force or effect as respects the Com- pany, until the instrument or a duplicate or copy thereof is deposited with the Company. Where a declaration or indorsatio'^ has been heretofore made, and notice has not been given, the Company may, until they receive notice thereof, deal with the insured or his executors, administrators or assigns, in respect of the policy, in the same manner and with the like effect as if the declaration or indorsation had not been made. 21. If the policy was effected iaid premiums paid bj' the insured with intent to defraud his creditors, the creditors shall be entitled to receive, out of the sum secured, an amount equal to the premiums so paid. 23. Where all ths persons entitled to ue benefited, whether b}' original insurance, by written declaration, or by instrument of apportionment under any policy are of full age, they and the person insured may surrender the policy or assign the same, either absolutely or by way of security. The followijig important provisions as to Insurance are contained in the 'Act respecting Contracts of Life Insurance,' 53 Vict. c. 39 (Onfc.) :— 1. Where a contract of life insurance is effected by an unmarried man, for the benefit /.' By tliis amendment, for example, policies issued by a foreign Company (whose native state laws make no provision for, ov prevent the assured dealing with the policy, Avith or without the legal consent of the wife or cliildren), are now subject to the laws of Ontario, and the policies can be dealt with by the assured acconlingly. «^^... ._, ) win. iUflh a , to fill )oUcies _iolicies i old st in one the life aturity. Lc usual e word Endow- w what ad what ita as to ct. mportant porations le policy Asiness in \'e in its e subject- jst within • resident ; evidenc- delivered le therein, cnof; and stipulation a foreign DU foi', or rithuut the to the laws ;he assured Lt/e Assii7'ance in Canada. 195 APPENDIX. Table (A) showing date of commencement of business in Canada (and other data) of Life Assurance Companies. (Canadian Companies in italicti.) Date of Entry Name of Coniiiany. Date of Jletirenient. 1878 Date Reinsured anil Where. Failed. Htill Licensed 3Lst Dec. 1802. 1846 Scottish Amicable, . 1847 1847 Canada Life, . Standard Life, Licensed. 1850 1851 rEtna Life, Liverpool, London and Globe. ... Licensed. Licensed. 1851 Royal, . Licpnspfl 1857 Edinburgh, 1877 -■.^iVrfClladl • 1857 Life Association of Scotland. 1878 1859 Scottish Provincial, 1875 185!) Queen Insurance 1892 Royal Company. 1862 London Assurance Corporation. Licensed, but ceased new business. 1862 North British and Mercantile. Licensed. 1863 Commercial Union, . Lirermpd 1863 London and Lanca- shire. Licensed. 1865 Travellers, • . . Licensed. 1866 Plutnix Mutual, 1878 ■ ■ iX* *■./ J. 4fJ \^ VA • 1867 Atlantic Mutual, 1877 1877 1868 Citizens, . 1892 Sun Life *-\j 1 t 1868 Connecticut Mutual, 1878 1868 New York Life, 1878, but returned 1883. Licensed. 1868 Star Life, Licensed 1868 Union Mutual, Licoii^ijod 1868 Equitable New York, Licpimpfl 1868 Reliance Mutual, . Licensed, but ceased new business. VOL. in. V T 196 Life Asstirance in Canada. Date Date of Kctircnicut. Date Still Licensed of Entry. Name of Coiniiaiij'. 1 1 Huiiisiircd Failed, und Where. 1 31st Dec. 18i»2. 1870 Ontario Mutual, Licenacd. 1870 Uiiton, Medical and 1875 '.'.'. ! 1886 General Life Asso- ciatiun. 1871 Coiifcdtrallon, ... Lieensed. 187! North-western, 1878 1871 Sun Life, • ■ . Lieensed. 1872 Life AsHociation of Canada. 1888 Partially in 1886 in Con- federation. 1872 Metropolitan, . Licensed. 187'2 Toronto Lift, . ... 1884 Federal. 1873 Globe Mutual U.S., 1879 1873 United States, 1877 Returned 1882 ... Licensed. 1874 London Life, . • • • Licensed. 1874 Positive Government, 1876 1875 Stadacona, ... 1878 Con- federation. 1876 Briton Life Associa- tion (Limited). 1887 1887 iiritish Empire. 187(5 National Life, . 1878 1881 North American Life, Li( 'ised. 1881 Lion Life, 1883 British Empire. 1881 Dominion Safety Fund. ... x^. ,cd. 1882 Federal, . Lice'iocd. 1883 liritisii Fmpiro, ... ... Licensed. 1885 Mutual Life N.V.. . Licensed. 1880 Temjurance and General. ... Licensed. 1887 Gcrnumia, Licensed. 1887 Manafarturerx, < . . Licensed. 1889 Provident Savings, . Licensed. 1889 Dominion Life, t • • Licensed. 1892 Ureal West,' . Licensed. Scottish Provident. Date of Entry not ascertained, but it had ."^272,000 at risk in 1869. L. I C4 ■■,-'< i\ rt V ! m^t^^^mmmfmmmm^i ■iseil. .d.