Page 3 Advertisements Column 4

Poverty Bay Herald, Volume XIII, Issue 4709, 13 October 1886, Page 3

New Zealand Government Life Insurance Association Versus of LIFE INSURANCE COMPANIES a- AND FAILURES: n- — — One of the most important and suggestive se . Je terns in the news from Home brought by th e late mail is that which records the collapse n- of a large Life Insurance Company. There has been no similar catastrophe, on a like ;h scale, since the failure of the Albert and European offices many years ago, as this J. fie failure of the Briton Medical and General Company. Those who remember the 0 . misery which followed the former offices will s> be prepared to regard this latest failure as a oie serious public misfortune. The Briton ■ ty Medical and General Office has been establi. i lished for 31 years and has in its time a * absorbed about a dozen other offices. Its :n assets, including capital paid up, as returned in 1885, in accordance with the profe to visions of an Imperial Act of Parliament, a were given as £688,988. It has collapsed owing to the fradulent abstraction of securiy ties, amounting to upwards of £100,000 and is js it is now left with liabilities of nearly a h million, and but £400,000 to meet them. r * The defalcations arc said to have been made it by the late Secretary and Actuary, who is y j now dead, and to have extended over lB t a number of years. It is said that the audit waa usually preceded by a v champagne luncheon, and that the auditors •• were deceived by bundles of dummy seenris ties, of which they examined only the 6 * documents on top and bottom, without disy covering that those in the middle were only c c blank sheets of parchment. It is reckoned c . that the company may possibly, if reconstituted on a reduced basis, pay 4s in the £. The terrible blow this will be to men who have for long periods— in some instances a quarter of a century— been paying pref miums in order to ensure a provision for their families after their own death, may f well he imagined. There are also a large number of annuitants who will of course l suffer equally. The failure of this company _ appears to have excited great attention * throughout the United Kingdom, and the press generally are devoting much time and trouble to the case itself and to enquirs >ng into the position of other Insurance i . Companies. "Truth is devoting a series of trenchant, searching articles to the j subject, and some of its remarks on the in- \ vestments of certain old-established companies are certainly very disquieting. Thus, , for instance, it points out that one wellknown company, supposed to stand in the very front rank of life assurance associai 8 tions, have invested £1,293,000 out of their r total assets of £1,964,000 in mortgages of ' B real property in the United Kingdom, 1 £168,410 being on Irish property, "of which . £91,926 is known to be jeopardised. Mr r Labouchere points out that within the last g 20 years the value of real property has in | many instances depreciated 30 to 40 per cent, c and that consequently, of the 75 millions of insurance funds known to be invested in mortgages, a considerable portion must be '» very unsafe, on account of thiq depreciation. >t Fortunately, comparatively few people in this «olony are directly interested in English c Life Insurance Companies, as none of these l " now do business in New Zealand, but the lessons which the history of English comd panics, and present aid past failures, afford in should be carefully applied by the policy--7 holders in all colonial institutions. The 1, necessity for all public returns of assets c and the nature of investments, a thorough, n frequent, and searching investigation as it to the actual existence of the securities, and is jf great care in regard to investments on freey hold security, are points which cannot be it a too strongly insisted on. Of course in the Government office the policyholders run no risk as such, because the State guarantees them, and the loss, if any, which might be i- incurred by defalcations, injudicious invest- * ments, or otherwise, would fall on the comn munity generally, only affecting the bonuses c c of the policyholdera. This naturally gives c every taxpayer in the community an interest in the management of the office. In regard s to the Mutual offices, of course any loss would fall directly and solely on the policyy holders, as there are no shareholders in any y way responsible. Recent events in England should certainly render those interested in t ( . colonial institutions alert in the protection c of their interests, so as to prevent such a collapse as that of the Briton Medical and is , General otfice ever taking place in regard to ii any colonial institution. n is »r The business done by the New Zealand Government Life lnsurauce Association last ie j. week throughout the Colony was 200 propoi- sals for £48,000. c An agent, who will be prepared to give all particulars in reference to the Government's c business, will be in Gisborue next week. In „ the meantime intending assurers are requested to carefully weigh the facts cont: iued *n the above article.