Various

“ The value of insurance as an institution cannot be measured by figures. No direct balance-sheet of profit and loss can exhibit its utility. The insurance contract produces no wealth. It represents only expenditure. If a thousand men insure themselves against any contingency, then, whether or not the dreaded event occurs to any, they will in the aggregate be poorer, as the direct result, by the exact cost of the machinery for effecting it. The distribution of property is changed, its sum is not increased. ”

“ They had no doubt but the intentions of this divinity had been to establish the same dependence among men which there is among animals, and setting out from the principle of the inequality of men, as our modern civilians do, from that of their equality, they inferred thence that the weak had no right to what they could not defend. This maxim which formed the basis of the law of Nations among the ancient inhabitants of Europe being dictated by their most darling passion, we cannot wonder that they should so steadily act up to it in practice. ”

“ To recognize it is to deny the first principle of insurance. The average amount by which the reserve of a company must be increased, because of the existence of policies of a given class, is to the actuary an important fact, and is commonly accepted as his best guide in the distribution of surplus. But a popular theory has seized upon the assignment of this average sum to each policy, in the technical shorthand of the actuary, and holds that it is in each case the special property of the owner of that policy. ”

“ As to the ancient nations, we attribute nothing to them here but what is justified to them by a thousand facts. They adopted the above maxim in all its rigour and gave the name of Divine Judgment not only to the Judiciary Combat, but to conflicts and battles of all sorts: victory being in their opinion the only certain mark by which Providence enables us to distinguish those which it has appointed to command others. ”

“ No scheme of government insurance, certainly, is adapted to a people impatient of paternalism in its rulers and thoroughly habituated to voluntary association for all common interests. The solution of the great problem, how to apply the insurance principle to the most pressing needs for protection of the class supported by the wages of labour, is now sought in Great Britain and America mainly in the universal offer to them of industrial insurance. ”

“ The occurrence of a few severe fires in one town, followed by an increase of insurance rates, may have, and indeed has had, the effect of driving some branch of trade to another locality, the seat of greater caution or better fortune. It is therefore obviously desirable that so important an influence should be exercised, not precariously or capriciously, but according to the combined wisdom and experience of those associations which may be supposed to understand the subject best, and which obtain their experience in the way that makes it perhaps of most value, by paying for it. ”

“ A useful life has an economical value. But no skill can make certain its continuance to its normal close. In the reasonable expectation that it will last until a competence is gained or the family ceases to be dependent, young men marry; but some will die too soon, and in the aggregate multitudes are left destitute. Both classes of loss are alike, in that they fall on individuals in the mass who are not known beforehand nor selected by any traceable law. But the sufferers are ruined, while the same pecuniary loss, if distributed over the whole number, would be little felt. ”

“ But, while the experience of any one office, taken by itself, furnishes a very imperfect criterion, each contributes its quota of knowledge and experience to the common stock, and the public get the benefit both of broad and trustworthy data and of that peculiar and intimate acquaintance with each different class of property or process which the conductors of one company or another are sure to possess. ”

“ The actual value of any one risk borne by a company is indeterminate. It may become a claim to-morrow, or not for a generation to come. In the former case the company must now hold funds to pay in full; in the latter, the future premiums will perhaps more than suffice, so that no present reserve is needed. An entire reserve for the whole body of risks is essential, and its amount is definite, upon the reasonable assumption that the general average remains undisturbed by individual changes. A distinct reserve for a single policy is inconceivable. ”

“ If the insured does obtain any sum in excess of indemnity, he is regarded as holding it in trust for his whole body of underwriters. It thus appears that in case of multiple insurance each underwriter is bound, as between himself and the other underwriters, to contribute to the loss rateably in proportion to the amount of his liability under the policy; and if any one pays more than his proper share, he is entitled to sue the rest for contribution. ”

“ Within a year a strong demand was heard that the city of London should itself insure the houses of its citizens, and the common council voted to do so at lower rates than the fire office. But the courts put a speedy end to this movement, holding that the charter conferred on the city no power to transact such business. Thus the socialistic theory that insurance is properly a branch of government is almost as old as the business itself, though it has never found favour or been practically tested on a large scale in Great Britain or America. ”

“ Only where a rule contemplates a person as attached more or less permanently to a particular territory, the tie which so attaches him to it may be either nationality or domicile if the territory is a separate state, as France; but it can only be domicile if the territory is combined with others in one state. Nothing but domicile can distinguish British subjects as belonging to England, Scotland or Jamaica, or citizens of the United States as belonging to New York or Pennsylvania. ”

“ But our conviction of the truth of the law is perhaps founded quite as much upon the idea that something not liable to loss is radiated outwards, and is distributed in succession over the surfaces of spheres concentric with the source, whose areas are as the squares of the radii. The something can only be energy; and thus we are led to regard the rate at which energy is propagated across a given area parallel to the waves as the measure of intensity; and this is proportional, not to the first power, but to the square of the amplitude. ”

“ The earliest plan of insurance which was successful as a business was that practised at Lloyd’s Coffee-house (see Lloyd’s) in London, and there applied almost exclusively to marine risks. Although the association known as Lloyd’s. Lloyd’s has been for generations a strong financial institution, with every modern safeguard, and since 1871 has been a chartered corporation with large funds, yet its name has become accepted as the symbol of the primitive practice of combined underwriting by individuals, each upon his own credit, for a share of the risk and without common liability. ”

“ But the results in the social economy, the substitution of reasonable foresight and confidence for apprehension and the sense of hazard, the large elimination of chance from business and conduct, have a supreme value. The direct contribution of insurance to civilization is made, not in visible wealth, but in the intangible and immeasurable forces of character on which civilization itself is founded. ”

“ It is remarkable that the average weekly premium in the United States appears to be about 10 cents, or two and a half times as high as in Great Britain. The average policy is also proportionally larger, and the progressive increase in its amount deserves notice. At the rate at which the practice of insurance is extending among working men, it would require but few years for it to become as universal in these countries as any paternal government has aimed to make it by compulsion. ”

“ In every contract of insurance there are certain conditions precedent to the liability of the underwriter and incumbent on the insured, which must be fully and literally complied with, whether material to the risk or not. ”

“ This elemental fire is in itself a divine rational process, the harmony of which constitutes the law of the universe. Human knowledge consists in the comprehension of this all-pervading harmony as embodied in the manifold of perception ”

“ The methods of fixing the amount of paid-up policy in the last-mentioned class of cases vary in different offices, but the principle underlying them all is that of applying the reserve value to the purchase of a new insurance of reduced amount.
An office, in entering on a contract of life insurance, does so in the faith that all circumstances material to be known in order to a proper estimate of the risk have been disclosed. These circumstances are beyond its own Conditions of insurance. ”

“ In matters of legal procedure every court follows its own practice exclusively (lex fori) , as, for instance, whether the remedy on a contract shall be damages or specific performance, and whether a judgment may be executed against the person or only against the property of a party. A point much disputed under this head is whether the time of limitation of actions shall, as held in the United Kingdom, be decided by the lex fori, as an incident to the procedure, or by the lex loci contractus in one of its varieties, as an essential modality of the obligation. ”

“ A factor of the special kind which also influences the growth of International Law is the so-called comity (Comitas gentium, Convenance et courtoisie internationale, Staatengunst) . In their intercourse with one another states do observe not only legally binding rules and such rules as have the character of usages, but also rules of politeness, convenience and goodwill. Such rules of international conduct are no rules of law, but of comity. The Comity of Nations is certainly not a source of International Law, as it is distinctly the contrast to the Law of Nations. ”

“ To sacrifice phrasing, and distinctness in real part-writing, to a crude imitation of the richness produced mechanically on the harpsichord by drawing 4-ft. and 8-ft. registers, is artistically suicidal. The genius of the modern pianoforte is to produce richness by depth and variety of tone; and players who cannot find scope for such genius in the real part-writing of the 18th century will not get any nearer to the 18th-century spirit by sacrificing the essentials of its art to an attempt to imitate its mechanical resources by a modern tour de force. ”

“ During the latter half of the 19th century the practice of insurance extended with unprecedented rapidity, partly in novel forms. While its several branches, such as life insurance, casualty insurance and others, have each had an independent and characteristic development, all these together form an institution peculiar to the modern world, the origin and growth of which attest a remarkable change in men’s ideas and habits of thought. ”

“ The actuary is forced to observe that the interest factor in his calculations is much less definitely fixed by known facts than the mortality factor. The longer a contract has to run, the greater the effect of the difference in rate. The value of a payment to be made in thirty years is greater by above one-half with interest taken at 3% than at 41⁄2%, and one to be made in thirty-six years is more than twice as great. Hence the most careful study of the forces determining for long periods the average rate of interest is fundamental in life insurance. ”

“ Like every other product of human skill, insurance is, for the most part, best supplied to the market by those who make it their calling to produce it for gain. But while the mutual plan has proved poorly adapted to the general service of the commercial world, in some communities, and especially among the owners of certain classes of property, it has achieved great and apparently permanent success. ”

“ The experience of every company confirms the general truth, that the number of fires in which a building is totally destroyed, or in which the loss amounts to the greater part of the property exposed under the same risk, is comparatively very small. It may be asserted with confidence that, in the grand aggregate of the business, much more than three-fourths of the loss occurs in fires in which less than one-tenth of the insurable value at risk is destroyed. ”

“ Any scientific plan of insurance, therefore, must provide another method for maintaining the proportion between amounts of premiums paid and the share in its benefits obtained for them. This is the purpose of what are generally called average or co-insurance clauses. The principle is, that when a proper rate for a class of risks is found, then the insured may protect at that rate any percentage of such a risk, and in case of fire shall be indemnified for the same percentage of his loss. ”

“ In a free competition it is the sanguine man’s views which regulate the market price, and the rates therefore cease to be remunerative. The consequences are that some offices disappear altogether, others take fright in time to avoid ruin, though not to escape serious loss, persons who might establish new offices are deterred from doing so, the business gets the character of being a highly speculative and hazardous one, requiring extravagant profits to induce men to carry it on at all, and the public have to bear the cost. Unrestricted competition therefore is not for their advantage. ”