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On the Equitable Distribution of Surplus

Published online by Cambridge University Press:  18 August 2016

Sheppard Homans Esq.
Sheppard Homans Esq.*
Affiliation:
Mutual Life Insurance Company of New York
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Extract

Having read with much pleasure and profit the several articles upon this subject, chiefly in the Assurance Magazine, from such able contributors as Messrs. De Morgan, Jellicoe, Brown, Sprague, Pattison and others, whose names are known and honoured on this side the Atlantic as well as at home, I have thought that, in return, a brief account of the method adopted in the recent distribution of the surplus of our largest American Life Company might be acceptable to the members of the Institute of Actuaries.

Type
Research Article
Information
Journal of the Institute of Actuaries , Volume 11 , Issue 3 , October 1863 , pp. 121 - 129
Copyright
Copyright © Institute and Faculty of Actuaries 1863

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References

page 123 note * The present values, or reserves, of policies at tie last dividend (in 1858) were determined, by valuing the net premiums according to the “Gill” Table of Mortality, at 4 per cent. interest, with a margin of 15 per cent.; thus:—

The reserves at the present distribution were based upon a new table of mortality, constructed by the present actuary, at 4 per cent. interest, but by a valuation of the effective annual premium , thus:—

page 127 note * I had intended to apply this test to an imaginary Company charging, for instance, premiums by the Carlisle 3 per cent. (properly loaded), and having an experience similar to that shown by the English Life Table, and 4 per cent. interest, but have not been able to do so from want of time Perhaps one of the younger members of the Institute will feel inclined to undertake this computation as a matter of practice.