On account of the facility afforded by recent Acts of Parliament to the proprietors of Entailed Estates for disentailing, we trust that a paper dealing with the provisions of the Entail Acts which require actuarial calculations for giving effect to them, forms a suitable subject to be brought under the notice of this Society, any of whose members may be called upon to estimate the value of the pecuniary interests of the various heirs of entail. In treating the subject we beg leave to draw your attention briefly to the most important Statutes relating to Disentail, and to one or two decisions of the Courts on points affecting the actuarial calculations of the pecuniary interests of the heirs of entail. Before doing so,.however, we might shortly refer to the origin of entails in this country. An entail is a deed by which the succession to heritable property is settled on a series of individuals or heirs of entail, who may be different from the ordinary legal heirs. More generally speaking, an entail or tailzie comprehends every deed by which the legal course of succession is altered and an arbitrary one substituted. Deeds of this nature have been known in most civilised nations, and their origin is doubtless due to the desire natural to man, to perpetuate his name and family in connection with his possessions, fostered by the State, for political ends which were specially suited to a bygone age. In Greece, Rome, and also in France, deeds of entail, restricting the line of succession to a special series of heirs, have existed from a very remote period, and in Great Britain they date from the time, at least, of Alfred the Great, in whose reign the first Statute relating thereto was passed.

Any difficulty which may be experienced by an Honorary President of this Society in selecting materials for his opening address does not arise from there being a dearth of subjects likely to interest you. It has occurred to me, however, that for one who has retired from active business and who is almost certainly addressing you for the last time, an appropriate object might be to try whether his own professional experience could suggest any ideas or hints that might possibly be even a little helpful to his younger brethren. The chief occupation of my life has been to administer the affairs of a Joint Stock Company, and I propose now to speak of the work of administration generally, and more particularly of the management of such associations as Insurance Offices. In doing so, I need scarcely say that if a man near the close of life can think of any lessons he has learnt or any he can possibly impart, they must be chiefly drawn from his own mistakes and failures. Experience and reflection which have often come too late for his own use may be not altogether unserviceable to others.

When I had the honour of being asked to occupy this chair, I had little difficulty in choosing a subject upon which to address you at the opening meeting of the Session. For I at once determined to bring before you something of a practical nature, connected with the business in which most of us are engaged, and there was one subject in particular which had lately been occupying my own mind and the minds of many others who have to do with the investment of money. The stoppage of thirteen Banks within a period of six weeks, suspending liabilities for deposited money amounting to many millions sterling, and creating a financial situation in the Australian Colonies unparalleled perhaps in the whole history of modern times, is an occurrence which may well engage our attention if we are able to gather from it any of the lessons which must surely be involved in an event of such remarkable significance.

Let me say at the outset that I cannot pretend to offer to you any picture of the situation as that must have presented itself to those in the midst of it. Nor is it my purpose to attempt to bring before you the inner and more intimate causes which contributed to the catastrophe. I could no doubt quote a good deal that has been written and said on the subject of Australian banking and finance generally, pointing out the artificial prosperity created by an undue importation of borrowed money—the inflation of land-values that led up to the ‘boom’ in Melbourne and its natural issue in collapse—the consequent failure of Companies that practically had been formed to assist or engage in land speculation—the reaction upon the Banks of these things and of the resulting financial depression—and the culmination of these and other causes in the loss of public confidence that brought about the disasters of the present year.

Gentlemen,—This Society was privileged during a recent Session to listen to an eloquent and highly original address by Professor Chrystal:— ‘On some fundamental Principles in the Theory of Probability.’ The value of such addresses, dealing, as Professor Chrystal's did, with questions on which wide differences of opinion exist, is not to be measured simply by the amount of information they contain ; they serve a much more useful purpose, by leading those who hear them, or afterwards read them, to think out for themselves the various questions discussed. Speaking for myself, I have to thank the Professor, not only for a pleasant evening spent in listening to him, but for causing me to consider carefully the fundamental principles of the theory with which, as Actuaries, we are all supposed to be so much concerned. I have found the subject a most interesting one, and I propose to lay before you this evening, some of the reflections that have occurred to me, and the conclusions at which I have arrived, after carefully studying what has been written on the subject by a number of authors.

It will probably conduce to clearness if I explain at the outset the order in which I propose to deal with the subject of this paper.

In the first part of the paper I propose to discuss, in relation to policies of insurance, (1) the general rules of law in regard to fraud or misrepresentation in the preliminary negotiations, as invalidating contracts; and (2) the rules of law as to concealment in relation to contracts, such as contracts of insurance, in regard to which the law requires the utmost good faith on both sides. I shall also consider the effect of misrepresentation or concealment by a third party, not a party to the contract.

In the second part I shall refer to the usual forms of provision in policies of life assurance, relating to the answers by the assured to the questions in the proposal, and consider their effect in modifying the rules of the common law. In this connection I shall endeavour to classify policies on well-marked lines of distinction, and will also deal with the question of the interpretation of the usual inquiries in the proposal, and the rules of construction of ambiguous or contradictory provisions in the policy or declaration.

The Silver Question, as it is called, like the Land Question and the Labour Question, is really a group of several complex and difficult problems, and it would be absurd to attempt to give in an address of a popular kind an adequate account even of the main issues in the controversy. I have used the term popular with some trepidation, for after many attempts I doubt if it is possible—at any rate for me—to give even the semblance of popularity to the intricacies of the currency. In the whole subject there is, I believe, only one recognised joke, namely, that any considerable attention given to it is sure to end in lunacy, and a good many people imagine that this is not a joke at all, but a very solemn warning. Again, there is no scope for quoting little bits of poetry which are often so effective in popular discourses. The only lines I ever felt inclined to quote are those of the well-worn couplet—He that complies against his will Is of his own opinion still.

There is no one so stubborn in opinion as the budding lunatic of currency. It is obvious that a problem which in some parts can be most clearly explained by the use of algebraic symbols will not readily lend itself to eloquence, and the statistics of foreign countries are not likely to arouse enthusiasm in the insular mind. In fact, a careful survey of the different devices for making an address popular leads to the conclusion that in currency only one is available. Being the only one, it has naturally been very widely adopted.

Before proceeding to trace the origin, growth, and present position of Life Assurance in Canada, it will be necessary to give some idea of the size, population, and vital statistics of the Dominion in order to better appreciate the developments of the past and the possibilities of the future.

The Dominion of Canada consists of the Provinces of Ontario and Quebec (formerly Upper and Lower Canada), New Brunswick, Nova Scotia, Prince Edward Island, British Columbia, Manitoba, and the North-west Territories. The area of the whole Dominion is about 3,456,383 square miles, including the water surface. From west to east it is about 3500 miles, and from north to south 1400 miles. The Island of Newfoundland, although included in British North America, does not yet form part of the Dominion; while Alaska belongs to the United States, and Labrador is under the control of Newfoundland. The area of Europe is about 3,661,360 square miles, and of Great Britain and Ireland 120,849 square miles, so that Canada is only about 200,000 square miles smaller than all Europe, while it is nearly twenty nine times as large as the whole United Kingdom. It is also 400,000 square miles larger than the United States, omitting Alaska.

Gentlemen,—I have to express my most sincere and cordial thanks to you for the honour which you have conferred upon me, by having for the third time elected me as President of the Actuarial Society.

I have been a member of the Society almost from its commencement; and before the date of my becoming a member, I was permitted, as a young student, to attend some of the meetings. Thus it happened that I was present at the first meeting, and had the privilege of hearing the first inaugural address, delivered by the first President, the late Mr. William Thomas Thomson, a gentleman who was practically the Founder of this Society and also of the Faculty of Actuaries, and to whom both Societies are under very great obligations.

When recalling what took place in the first session of the Society, I may be permitted to refer to three notable papers by Mr. James Meikle, which I also had the privilege of hearing read, on the Nature, Calculation, and Sufficiency of the Premium required for Assurance of a Sum at Death, afterwards published under the title of “The Rationale of Life Assurance Premiums.” The author of these early papers has frequently filled the Presidential Chair, and has been extremely helpful to this Society throughout its whole existence; but if (instead of being the most extensive contributor to the Transactions of the Society) he had done nothing beyond giving us these papers, he would nevertheless have placed the Society deeply in his debt.

On looking over the list of interesting and varied subjects which have been submitted for consideration and discussion in past years to this Society, in the enjoyment of which I have been a constant participant, I find that it is fully sixteen years since I appeared before you in the position which I am glad to occupy again to-night as the reader of a paper.

The subject then selected related to the distribution of population in the United Kingdom, and discussed how each district could most effectively be occupied by branches and agencies, so as to bring the beneficent system of Life Assurance within the reach of every one. Since that paper was read, it has been my good fortune to extend my experience from the superintendence of the outside organisation of a great office to other departments of the business of Life Assurance, and especially to give the closest attention in a variety of connections to that most important but most difficult subject, the investment of moneys at the highest rate of interest consistent with the safety of the principal.

In the lectures which I delivered last year to the Actuarial Society of Edinburgh, I dealt with the representations in the proposal for insurance which usually form the subject of one of the conditions in the policy. In the present lecture I propose dealing with the other usual conditions in life policies, including the statutory condition as to insurable interest, the conditions relating to the payment of premiums, and lastly, the conditions excepting certain risks from the policy in respect either of locality, occupation, or cause of death. I shall also deal incidentally with the powers of local agents to waive a forfeiture of any of the conditions of the policy. In regard to the references to the American authorities, perhaps I should explain that I have in all cases referred to English or Scottish authorities where there were any, and have only used American cases as ancillary to our own, or where there was no English or Scottish authority. In some cases I have referred to American authorities by way of contrast, but when this is the case, I have always explained the differences between the American law and our own.

There are various ways in which life policies may be made available as securities. An existing policy upon the debtor's life and in the debtor's name may be assigned to the creditor, or a policy may be taken out in the creditor's name, in which case no assignment is necessary. Unless, however, the policy has already acquired a value, the security is defective if there is no additional security for the payment of the premiums by the debtor. Consequently, policies are. most frequently used as supplementary to other securities. For example, an annuity upon the debtor's life, or on some other life, is assigned to the creditor, of sufficient amount to cover the interest on the loan and the premiums upon a policy upon the annuitant's life. The policy secures the repayment of the principal sum when the annuity lapses. In the same way, a reversionary interest may be assigned along with a policy upon the life on whose survivance the reversion depends. In the latter case it is not unusual to burden the reversion not only with the principal, but with the whole or a part of the interest and premiums upon the policy. If this is done, there seems no reason, as I stated in my last lecture, why the policies should not cover the interest and premiums for which credit is given as well as the principal.

Accident Insurance is of comparatively recent growth. In 1880 there were only ten accident insurance offices in the United Kingdom, and the business was chiefly in the hands of one company, the Railway Passengers Assurance Company. Since then the premium income for accident insurance has been trebled, and a large number of new companies, such as the Scottish Employers, and the Northern Accident Company, have been established, in consequence, mainly, of the great impetus given to the business of accident insurance by the passing of the Employers' Liability Act of 1880. Various changes have been introduced into accident policies during this period, in the direction chiefly of increased compensation without additional premium. In 1850, the Accidental Death Insurance Company introduced policies covering temporary disablement in addition to the ordinary fatal risks. The Scottish Life Assurance Company was the first to make the full sum insured payable in the case of permanent total disablement as well as in the case of death, and the half of the sum insured where the disablement was permanent but only partial. Under a system recently introduced by the Scottish Accident Insurance Company, the compensation in the latter case takes the form of a pension for life. When the disablement is not permanent, it is usual to allow so much a week till a cure is effected, the period being restricted in all cases to twenty-six weeks for any one accident.

The law of fire insurance depends on the two fundamental principles, that a fire policy is a contract of indemnity, and that, in its usual form, it is a personal contract. In the present lecture I propose only to deal with the conditions in fire policies which express or modify these principles.

The first principle, that fire insurance is a contract of indemnity, is founded on considerations of public policy, and is a rule of law which cannot be set aside by consent of parties. An insurance against loss by fire for a fixed sum, irrespective of the actual loss sustained by the insured, would not be valid or enforceable.

Policies of marine insurance, which, like fire insurance, is a contract of indemnity, are sometimes made valued policies, but this does not mean that the policy will be sustained if it is proved that the value stated in the policy exceeds the actual value of the subject insured. The object of the valuation is to supersede the necessity of inquiry into the value of the vessel and cargo after they have been lost, but if it is proved that there has been a fraudulent over-valuation on the part of the insured, or an illegal agreement between the insurer and insured to effect an insurance without interest, the policy will not be sustained for the actual value, but will be treated as altogether void. A valued policy is therefore good for its amount or for nothing.

In the present lecture I propose, in deference to a suggestion emanating from your Society, to discuss the Married Women's Policies of Assurance (Scotland) Act, 1880 (43 and 44 Vict. c. 26). The Act, as you are no doubt aware, is quite a short one, consisting of two clauses: one of which empowers a married woman to effect a policy of assurance on her own life or that of her husband for her separate use, while the other empowers a married man to effect, by means of a policy of assurance over his own life, a trust for behoof of his wife, or family, or both. In both cases the object is similar—to protect the sum assured against the husband and his creditors. Now it is impossible to appreciate the necessity of attaining this object, and the changes wrought in the law by the effort of the statute to secure it, without some knowledge of the previously existing rights of husband and wife respecting property and contracts, and of the rights of the wife and children under postnuptial contracts and declarations of trust by the husband. Such knowledge, in a non-legal assembly, I am scarcely entitled to assume. And before I deal with the text of the Act, I accordingly propose to give a brief sketch of the general common law rights above referred to, and to note the results of the cases decided on the special rights of the spouses and children with respect to policies of assurance effected on the life of either spouse. So stated, my task is not a particularly easy one. The rights and disabilities of the wife were never very clearly defined, and of their somewhat vague and unsatisfactory nature the cases on policies are typical illustrations, while the Act itself, though it involves many points of difficulty, has been subjected to very little judicial interpretation since it passed. Its provisions are, indeed, very similar to those of Section 10 of the English Married Women's Property Act, 1870 (33 and 34 Vict. c. 95), which was replaced by Section 11 of the Married Women's Property Act, 1882 (45 and 46 Vict. c. 75); and upon both of these sections there have been a considerable number of decisions, which I shall refer to, if not as direct authorities, at any rate as important illustrations and analogies in discussing the Scots Statute. But even when allowance is made for this, any detailed commentary on the Act must necessarily be of a somewhat speculative character.

Having recently had occasion to deal with some statistics relating to lives resident in Africa—principally missionaries and traders—and being much struck with the exceedingly heavy mortality experienced by them, I thought a few notes on the subject might interest the members of this Society.

The source from which I obtained the necessary data is a book by the Right Reverend E. G. Ingham, Bishop of Sierra Leone, entitled Sierra Leone after a Hundred Years, and published this year by Seeley and Co. of London. The greater part of the book is taken up with an account of missionary work, which, however important it may be in its own place, does not at present concern us; but on pp. 200–208 inclusive, there are some figures which are quite a “find” from an actuarial point of view. They consist of a list of 113 European missionaries who went out to Sierra Leone, with dates of the commencement of their residence in Africa, and of the termination of residence there by death, or by the missionary returning home. The majority of them appear to have lived in Sierra Leone itself, which has a notoriously deadly climate, though a few seem to have gone to places in the neighbourhood; and I think that an examination of the figures will convince any one that that town fully deserves its name of “the white man's grave,” besides giving an approximate measure of the risk incurred by Europeans living there. Unfortunately, the particulars given are not quite complete; the dates of termination of residence in Africa being omitted in eight cases, and the dates of death in two cases. Also in one case, although the date of termination of residence in Africa is given, that of its commencement is omitted.

In the first portion of the President's address this Session, we were favoured with a short account of the origin of life assurance, which showed that, in the earliest days of insurance, a policy was a contract of indemnity to secure a certain sum. in the event of the life assured dying within a specified time (usually a year) of the date of the assurance; that there was no right of renewal on the part of the assured; and that the object of the contract was originally to secure creditors against loss, the earliest life policies being effected in connection with marine insurance. The safety of a ship and its cargo depends largely on the skill of the captain, and would probably be endangered to a certain extent by his death, and it was therefore natural to provide against the risk of this by a contract to pay a certain sum in the event of his dying during the voyage in question, or within a specified time, say a year. In later times, when the right of renewal was granted to the assured, the contract appears to have radically altered in its object, and to have been entered into chiefly for the purpose of providing a fund for the maintenance, after the death of the life assured, of those who were dependent on him, and particularly to guard against their being left destitute by his premature death. In fact, at that time an assurance company was somewhat of the same nature as the “Friendly” or “Benefit” Societies of the present day.

Some time ago it was suggested to me that select life tables might form the subject upon which a few remarks might be acceptable to this Society; and the following include a brief review of what has been done in the past towards furnishing us with select tables, and a note of those at present available for office use. An apology is almost needed for bringing forward again such a well-worn subject, especially as it is neither presented in a new light, nor is anything added to the original contributions, that have appeared from time to time. But while there is little of what follows that is not already very familiar to the older members, these remarks may suggest to them a few points for discussion, and it may be useful to the younger members to have a few facts concerning these tables brought together. In various ways there seems to have recently been a revival of interest in the subject of select tables. In connection with the new experience, the preliminary stage of collecting from the contributing offices their mortality cards is, I believe, nearly complete; and the results we may expect from this material, when investigated, will probably place us in a new position with regard to the instruments we employ in office calculations. While from many causes there has probably been a decline in the death rate since the twenty offices' experience, most offices have within the last few years suffered from the heavy mortality amongst young and old due to influenza; and it is possible that premiums on a select basis, ascertained from the new experience, may be higher than those we have at present, especially for the older lives.

Gentlemen,—For the honour which you have done me by electing me Honorary President of our Society for the new Session which we inaugurate to-night, I return you my most sincere and cordial thanks. All the more do I appreciate the compliment in that, during the greater portion of my business life, I have been more or less intimately connected with the Societ, and have learned much from the many important papers which have been read at its meetings, and from the discussions which have taken place upon them.

It has occurred to me that a fitting subject for this evening would be an historical sketch of the rates of premiums charged for Life Assurances, and a consideration of the grounds upon which such premiums have from time to time been adjusted, together with an examination of tendencies at work which may yet lead to further modifications in our methods or our results.

Life Assurance appears to have been practised to a limited extent in the seventeenth century, and earlier part of the eighteenth, as a simple branch of underwriting. Those whose business it was to insure ships against loss at sea, came in due course to be asked to insure also masters of vessels—not against death, but against the risk of their being taken by the Moorish or Turkish pirates, etc., in order that, in such an event, a fund might be available to pay their ransom.