FIRE INSURANCE

COMPANIES AND SCHEMES.

CHAPTER I.

PRIOR TO 1666.

OFFICE OF INSURANCES.-EARLY HISTORY.-GILDS.-CUSTOM OF FURNES. PROPOSAL TO COUNT V. OLDENBURG.-EARLY ENGLISH SCHEMES.

R

EGARDING the ANTIQUITY OF INSURANCE, the following letter, signed "Cantab," appeared some years ago in the Times newspaper. Dr. Adler is mistaken in saying that the earliest notice of insurance is to be found in the Talmud. The oldest portion of the Talmuds, the Mishna, belongs to a period subsequent to the beginning of the Christian æra, but the practice of insurance was common in India for many centuries before that time. In the Manava-dhar-masastra, or Institutes of Mana, it is referred to incidentally as a well-known charge in the transit of goods, to be taken into account in estimating the tax that was to be levied on the trader. "Having ascertained the rates of purchase and sale, the distance, the expense of food and condiments, the charge for securing (insuring) the goods carried, and the net profits of trade, let the King oblige traders to pay taxes (accordingly) (vii, 127). The Sanskrit word equivalent to our "insurance"--yoga kshema--is very ancient, being found in the "Rig-Veda" (x. 166, 5). It is explained by Grassmann as "Erwerb und Besitz,” but more probably it meant property held by an assured, or full

legal tenure;

and hence its use in a later period as a law term, meaning "a contract

between two parties by which one undertakes to guard, or insure, any property or even the life of the other, for a certain consideration."

In a paper read by Mr. Charles Stewart, of the Lancashire Insurance Company, before the Insurance and Actuarial Society of Glasgow, in the year 1881, he gave an interesting account of the earliest particulars he had been able to gather in respect of Marine Insurance, and he traced the system in some form or other to a very early period.

It is not our intention to enter upon a history of Marine Insurance. We will confine ourselves to a notice of the plan which existed for many years in this country for regulating the business.

OFFICE OF ASSURANCES, CHAMBER OF INSURANCES,

or,

POLICIES OF INSURANCE COURT.

In the year 1574, "Sir James Hawes being Maior," one Richard Candeler, mercer, obtained from Queen Elizabeth a grant to make and register all manner of assurances, policies, intimations, renunciations, and other things whatever that thereafter should be made upon any ship or ships, goods or merchandise, or any other thing or things, in the Royal Exchange in London, or in any other place within the City, by any manner of persons of what nation, condition or quality soever.

We are indebted to Mr. Walford for this notice, and in his Insurance Cyclopædia (vol. i., pp. 485–487) will be found a lengthened account of Chambers of Insurance in general, and of that in England in particular. The latter was doubtless an imitation of those which had existed on the Continent for some centuries.

The object of the chamber was to register all contracts of Insurance negotiated, and record the terms thereof for reference in case of dispute -no policies probably being written in some cases. It appears to have been the practice for the clerk of the Chamber of Insurances to grant a Certificate of Loss after a proper investigation had been made into all the circumstances of the Case, and the Chamber had become satisfied thereon.

A special Court of Commissioners, composed of "grave and discreet" merchants, was appointed by the Lord Mayor, to the decision of which all disputes respecting insurances were referred.

In Statute 43 Eliz., cap. 12 (1601), An Act concerning matters of Assurances used among Merchants, the first passed in England affecting Insurance associations, it was stated that Marine Insurance had been "tyme out of mynde an usage amongst Merchantes both of this realme and of forraine nacyons," and under this Act Commissioners were appointed for hearing and determining causes concerning Policies of Assurance.

These Commissioners met weekly at the Office of Assurances on the west side of the Royal Exchange.

Marine Insurance was centered at the place described in the Act as "Office of Assurances," but more generally known as Chamber of Insurances.

Policies remained with the assured, but if lost the parties might proceed on the register and recover.

That marine underwriters were an important class, and carried on an

extensive business, may be judged from the following item of intelligence.

1615. There was here in London a merchant called Mr. Havers, who was a great assurer of goodes (a common trade in the Cittie), and thereby he was growne vnto a good estate, and esteemed to be worth. 30 or 40,000l.

In 1627 (temp. Charles I.) it was stated that the office had been created for the sole making and registering of all manner of Assurances, etc., made on ships, goods, or merchandise in the Royal Exchange or other places in the City of London, for 31 years.

In consequence of abuses, the Lord Chancellor was authorised to appoint Commissioners to try Insurance cases.

The Chamber and its records were destroyed in the Fire of London. After that fire, Sir C. Wren, when preparing his plan for laying out the new city on a regular and consistent design, indicated as one of the buildings which he proposed to erect,

Office for Insurance.

It was to be situated at S.W. corner of his proposed Royal Exchange Square.

The Post Office forming the N.W. corner;

The Excise Office the N.E. corner;

The Mint the S.E. corner;

The Royal Exchange being in the centre of the square.

The building was doubtless intended for the "Chamber of Insurance" or " Policies of Insurance Court" above referred to, and is in no wise to be deemed to have any relation to, or connection with, Fire Insurance.

In the Act of 1667, for rebuilding the City after the fire, it was stated that all tenders of money which ought to be made at the late Assurance Office in the Royal Exchange, were to be good if made at the "present Assurance Office in Gresham House."

In 1682 the Office was described as being "on the Royal Exchange"; In 1693, as "behind the Royal Exchange";

In 1720, as "on the Royal Exchange."

In the reign of Charles II. (13, 14, Car. II., cap. 23) the powers of the Commissioners were enlarged.

At a later date it was declared that the court was not competent to deal with Life Insurances 1—only with such contracts as related to mer

Notwithstanding this statement, we find under article "Insurance," Chambers's Encyclopædia, vi. 175, 1890, a statement that the earliest Life Assurance Policy of which particulars have been preserved, was made on 15 June, 1583, at the Office of Insurance within the Royal Exchange. When the person whose life was insured died,

chandise (ie. Marine Insurance); besides, it only extended to actions by Assured against Assurers, and its decisions were no bar to actions respecting the same subjects in the Common Law Courts.

By neglect of its duties the jurisdiction of the Court became contracted; references thereto fell into disuse, and it gradually disappeared.

It having been decided that the Court had no jurisdiction in the case of Life Insurances, it is evident that it could not have had any in the case of Fire Insurances, which system did not exist in Great Britain when the Acts establishing the Court were passed.

In Feb., 171, advertisements were published by the "Publick Assurance Office on the Royal Exchange" for the discovery of "illegal and fraudulent practices committed to the prejudice of this office."

Walford was of opinion that the real reason for the decline of the Chamber of Insurance was the establishment of Lloyd's Coffee House, in 1710, and the two Chartered Companies (Royal Exchange and London) in 1720.

He may have had information respecting the decline of the Chamber, as he proposed to treat of that subject under the heading of "Policies of Insurance Court," but the publication of his Insurance Cyclopædia ceased before arriving at that title.

We now turn to the subject of the provision of some means fo recouping sufferers for their losses by fire, and of Fire Insurance in general.

Mr. Stewart says :—

The earliest application of fire insurance known to us was in connection with communes of towns and districts. These communes flourished in Assyria and the East more than 2,500 years ago. Judges, priests, and magistrates were appointed for each town and district, with power to levy contributions from each member of the commune to provide a fund against sudden calamities, such as drought and fire. If the judges were satisfied that the fire was accidental they empowered the magistrates to assess the members of the commune either in kind or in money, and in the event of any member being unable through poverty to meet his share of the contribution, the deficiency was made up from the common fund. These communes still exist in a modified form in China. In some towns of Russia the inhabitants are jointly responsible for accidental fires, and the Government make enforced contributions according to the status and wealth of the inhabitants of the town or village. These communists had and have nothing in common with the communism of the present day, which means the negation of private property.

payment was disputed on the point whether the time for which the life was insured was 12 months of 28 days, or a full whole year. The commissioners ruled in favour of the latter interpretation and ordered the underwriters (13, in sums of 257. and 50. each-total 3831. 6s. 8d.) to pay.

This decision was upheld by two judges on an appeal to the Court of Admiralty.