The Lyttelton Times. WEDNESDAY, DEC. 1, 1875.

Lyttelton Times, Volume XLIV, Issue 4617, 1 December 1875, Page 2

The Lyttelton Times. WEDNESDAY, DEC. 1, 1875.

During each of the last three sessions of the English Parliament a great deal of time was taken up in the passing of a Friendly Societies’ Bill, and at last an Act was obtained which, curiously enough, was anticipated in some of its important particulars by our own Friendly Societies’ Act of 1867. But it would appear that this latter Act has been, hitherto almost a dead letter, and therefore Mr Rolleston during the last Session of the General Assembly called the attention of the Government to this fact, as well as to the great importance of the whole subject, urging upon Ministers the necessity of their preparing during the recess a draft Bill for the amendment of the Act of 1867, and especially of circulating it amongst the members of the Friendly Societies themselves for their criticism. The importance of -this question is such as to deserve a great deal of careful consideration at the hands of the Government; at the same time it is beset with so great difficulties that unless this attention is bestowed upon it, it had better be left untouched. A glance at the ninth section of the Act of 1867 will show that both these assertions are true. The purposes for which a Friendly Society may be formed under that Act are there defined to he: —(1). Insuring, a sum of money to be paid on the birth of a child, on the death of a member, or for defraying the burial expenses of a member of his family. (2). For the relief or maintenance of a member or his family in sickness, old age, or widowhood. (3). For insuring the goods of a member against loss by fire, flood, or shipwreck. (4). For the frugal investment of savings of members. These subjects are sufficiently extensive to make the question one of great consequence to any community ; it is a question- which affects principally the working men, the bone and sinew of the population of every country. But it is of much more than ordinary importance to us, on account of the large preponderance of that class here, and especially as by our scheme of Immigration we are introducing to the Country large numbers of working men every year. These men are not slow to appreciate the advantages which the Societies hold out to them. In the United Kingdom there are four millions of paying members, and it is estimated that their funds had relieved the poor rates to the extent of £2,000,000. If we look to the nature of the business which is transacted by these societies, we must confess it is rather a matter for wonder that they have succeeded so well, than that from an actuarial point of view many of them are discovered not to be in a sound financial position. The ordinary business of a Life Assurance Company is of so difficult a nature, that many men of great ability and attainments devote their lives to the study of the principles on which it can be best conducted; they, however, have usually only the questions of annuities and of death to deal with. They have trustworthy data to go upon in framing tables of contributions to be paid by any person who insures his life with them. But Friendly Societies engage not only to make payments in case of death, and sometimes to make provision for old age, but their distinctive characteristic is to provide medical attendance and sick pay for their members during illness. Let anybody reflect how very seriously the introduction of this element into the question complicates it, and he will cease to wonder, not that several of these societies are not sound, but that they have not all of them become insolvent long ago. The great danger to which they have been,* and are stiil exposed, is that of placing the rate of contribution of their members too low. The competition of very many similar* societies will ensure their not fallinginto the opposite error. But to properly adjust the scale of payments, even if a really trustworthy data, corresponding to the table of mortality used by a Life Assurance office, were in existence, would tax the ability of the most skilful of actuaries. Again, not merely is one lump sum to be paid if a man fall ill, as would be the case if he died, but he is paid so much per week during the continuance of his illness. Therefore, in tables of payments that were properly constructed, DC* only ought account t 9 be taken of a mail’s chance of falling sick, but also of his being laid by for certain numbers of weeks. Admitting that the calculation, of these cases, though complicated, is not impossible if trustworthy data are in existence, if we ask the question, whence are we to obtain the data, the answer is, that can only be obtained from the societies themselves. They and they alone are in a position to furnish accurate information of the kind required. It is useless merely to provide, as our present Act does, that before a society can be registered under that Act, its tables of contributions must be certified by the Actuary of some Life Assurance Company, unless means are taken to procure data by which a scientific Actuary can verify those tables. It is always difficult to decide how fai' Governmental interference is necessary or justifiable; but in the case we are considering, seeing that the vital interests of large numbers of people are concerned, and that from the intricacy of the questions involved, it is perfectly idle to expect any man of ordinary intelligence and education, to form a correct opinion as to the financial soundness of a society which he may be desirous of joining, Government might, with great advantage, step in to his aid. Our Friendly Societies Act goes a considerable distance in this direction. It provides that certain returns shall be made every five years to the Registrar of Friendly Societies, and that he shall report thereupon to the General Assembly. But this provision hardly goes far enough. It ought to secure that a proper actuarial valuation of the liabilities and assets of each registered society should be made'

every five years and sent in to the Registrar. Moreover, there ought, as speedily as possible, to be collected from all the societies throughout the Colony the results of their experience as to the health or sickness of their members, and these results ought to be tabulated for actuarial use. If an intending member knew that registrations meant that the Societies’ tables were calculated in the way we have pointed out, and that at tho last quinquennial valuation, it was financially sound, he would feel safe in joining it. It may be said that this would require undue interference. We believe, however, that any well-conducted society would gladly conform to such regulations as these, and if Government went further, and provided an actuary for this especial purpose—one whom they might absolutely rely upon to give them efficient aid in their difficulties—they would be only too glad to avail themselves of his services. We trust, then, that the new Bill will go beyond the Act of 1867, in the direction which we have tried to indicate, and, above all, that its provisions will not be allowed to remain a dead letter and a mere encumbrance to our Statute Book.