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structural law of the legislative and executive branches of the English government and to the subjects indicated by the title of the book, i. e., the Law of Persons and Status, using these terms as they are used in the foregoing classification of law. The second book he devotes to primary property rights, including some matter on contracts. The third book he devotes (1) to the structural law relating to courts of justice; (2) to torts, i. e., to violations of the law of persons, of property and of status; and (3) to civil procedure, i. e., remedies to redress and prevent torts and violations of contracts. The fourth book he devotes to criminal law and criminal procedure. He devotes no separate space to the second branch of Public Law, Part 2, the rights of persons against the State, nor to the Law of Nations, but touches upon these subjects under other heads. He omits no extensive topics as do Kent and the authors of the Code Napoléon, but his arrangement of matter is not well adapted to show the true relations of its different parts.
At the time the great body of Roman law was digested and codified under the orders of Justinian, an elementary textbook of the Roman law was prepared by his direction, called, the "Institutes.''* It is divided into four books. The first book is devoted, (1) to general topics, which, according to the classification of law in the text, would be grouped under head 8 thereof, relating to general principles, definitions and rules of construction, and (2) to the law of persons and status. The second book and a part of the third are devoted to property, including inheritance. The remainder of the third book and part of the fourth are devoted to obligations, i. e., contracts and quasi contracts. The remainder of the fourth book is devoted, in great part, to civil procedure, and a few paragraphs at the end are devoted to criminal law and criminal procedure. The three great heads, Structural Law, relating to the organization of
* See a tabular arrangement of Justinian's "Institutes." Hunter," Roman Law," p. xxvi; Moyle, “Imperatoris Justiniana Institutionum," vol. 2, p vii.
the government, Public Law, Part 2, relating to the rights of the State against individuals and to the rights of individuals against the State, and the Law of Nations, receive only slight and incidental treatment. It is to be remarked, the phrase, jus gentium, in the Roman law, does not mean the law of nations, as that phrase is used in the foregoing classification of law. The Roman phrase signifies such municipal law as is common to nations generally.*
The classification of law stated in this paper does not include the whole science of law. That embraces: 1. The 2. The descrip
present law in force in different countries. tive history of law, consisting of a statement of the law in force in different countries at successive dates. 3. The principles of the evolution of law and comparative law. art of legislation, embracing the application of the knowledge of the evolution and history of law to the moulding of future law by legislatures and courts, and specific measures of law reform.
Kent Law School of Chicago.
"Kent's Commentaries," 12 ed. vol. I, p. 1, n. I.
RUSSELL H. CURTIS.
AMERICAN LIFE INSURANCE METHODS.
Life insurance is in all cases essentially a simple operation, embracing at most four or five easily comprehended elements. The moneys paid in by the insured form a fund which may or may not be improved by interest; from this accumulation from time to time are deducted the death-losses and other maturities paid and the expenses of the company. The remainder, if any, is either carried forward, sometimes as policy-credits, sometimes as a general fund, or else is divided among the insured. It will be observed that in any case the operation is radically mutual, the same persons being in effect if not in name both insurers and insured.
Of course, these four simple elements-to which might be added a fifth, namely; the increase of individual shares in the fund by the diminution of the number interested-admit of a variety of permutations and modifications. The diversities created by modes of treating these elements have led many men to think that life insurance is complex and indeed undecipherable to any but the most expert. This idea has been fostered by persons interested in preventing too clear an understanding of life insurance becoming common. On the one side it has suited many to get a reputation for learning by looking wise and talking in cabalistic language. On the other side it has subserved the selfish interests of many others to cause the people to think that this mystery is for no purpose but to conceal fraud. Both sides are equally disposed to avoid the light which might interfere with their personal ends.
To begin at the beginning, there are several ways of collecting the premiums, falling naturally into two groups, namely; payment in advance or payment upon call after the death for which indemnity is demanded. The latter was
properly called the assessment plan, not because other plans. do not also assess the losses, but because this plan brought that fact home to all concerned by assessing against money in the members' pockets instead of against funds already paid in by the members. Few of the so-called assessment companies now-a-days make use of this plan, they are no longer really assessment companies.
Whether premiums are collected before or after the losses occur, naturally has a bearing on the interest question. If no funds are carried in hand, the interest factor is perforce eliminated from the problem. In many cases, where funds are collected in advance, they are not materially in excess of current demands and no interest is earned. Often too, when the funds in hand are not inconsiderable, interest plays no part in the transaction, being no part of the scheme of the society. Companies which use interest as a factor in their computations variously credit it, some credit each policy with the average interest actually earned upon its entire share of the assets, others deduct something for the expense of management, and yet others credit only an arbitrarily fixed rate.
In this connection it is proper to remark that claims put forward by insurance companies to opportunities for investment superior to those of private persons may be dismissed as nonsense. The rate of interest earned may differ and indeed does differ in the various companies owing to the accident of location or to the policies of the management, but a life insurance company has no better opportunities for investment than any other person or corporation in the same locality. Some companies for inscrutable reasons choose to invest their assets principally in convertible securities, receiving a smaller revenue on that account. No such interest can be expected on deposits subject to check as on time deposits and the same law obtains in the security market. As there is practically no danger of a sudden and forced liquidation of insurance companies whose liabilities.
mature gradually, and as there are wide fluctuations in the current prices of listed, negotiable securities which have many times caused the ruin of companies otherwise solvent, there would seem to be no good reason why the insured should forego any profit upon their invested funds in order to secure the doubtful advantage of ready convertibility. The members desire absolute security on the part of insurance investments and expect as large returns as can be had without endangering that safety. They willingly surrender all chance of speculative enhancement of values when they invest in the life insurance companies, they do not wish to run the risk of speculative decline.
About no factor in life insurance is there so wide a disagreement as about the proper apportionment of death-losses. The methods in vogue are readily classified into three divisions. One mode which was most popular with the earlier assessment companies, was to tax the death-losses equallyso much per member or per thousand of insurance without regard to age. Another method taxes death-losses by some fixed proportion according to the age at entry. Usually this gradation is taken from some mortality table, and results from a misconception of the significance of natural premium tables which are intended to cover an increasing premium, as will be hereafter explained. But a class of societies has arisen in the West, which operate upon a plan which fixes the rate of assessment in proportion to the years of one's age at entry, that is, for ages 30 and 40 in the ratio, 30: 40. This is artificial and puerile, and it is a relief to know that its originator, once so proud of it, has recently experienced a change of heart. The successful and economical management of this first society served to conceal the defect of the plan for a long time, and to make others think that the success was the consequence of the perfection of the plan.
It is apparent that there is a greater risk at age 40 than at age 30, and that, other things being equal, there is as great a hazard in covering a life now at age 40, but admitted at