INSURANCE: POST OFFICE FACILITIES. The grant of Government life insurances in Great Britain through the agency of the Post Office was inaugurated by the Government Annuities Act, 1864. The avowed object of the scheme was to provide facili ties for members of the working classes to insure their lives for moderate sums with the advantages of Government security.
The Act empowered the National Debt Commissioners to make ordinary life insurance contracts with any person between the ages of 16 and 6o, but not for a greater sum than £ 100 or for less than f 20, and authorized the Postmaster General to direct his officers to receive premiums and pay claims on behalf of the National Debt Commissioners. The rates of premium were to be calculated on the basis of 3% interest, and in such a manner as to form a fund ade quate to meet all claims without entailing any charge, whether for claims or expenses, on the Consolidated Fund.
From the outset the amount of business transacted under the scheme was much smaller than had been anticipated, and in 1882 a Select Committee of the House of Commons was appointed to enquire into its operation. An amended scheme on the lines of the committee's recommendations was prepared, and received statu tory sanction in the Government Annuities Act, 1882. Revised rates of premium were introduced and new forms of policies were made available, but the most important alteration was the linking up of the insurance system with the Post Office Savings Bank.
Under this scheme the premiums are payable by means of ordi nary postage stamps to be affixed weekly by the insured person in a premium book. At the end of each 13 weeks the stamped page containing the premiums for the quarter is withdrawn on presenta tion of the book at a post office. The scheme is available for per sons of either sex between the ages of 14 and 5o.
The tables show the amounts which are insured at death by the payment until age 6o of premiums varying from 2d. to Is. per week, and therefore invite comparison with those of industrial in surance companies which show the sums assured by weekly prem iums of one penny or multiples thereof payable throughout life. Owing to the shorter period over which premiums are payable, the sums assured under the Post Office scheme, particularly for the smallest premiums which are the most heavily loaded for ex penses, are generally less than those quoted by the companies, and it is not improbable that many prospective insurants obtain the impression that the terms offered by the Post Office are less gener ous than they are in reality.
Under the ordinary scheme of premiums payable by transfer from the insinant's savings bank account the lives of persons of either sex between 14 and 65 years of age may be insured for any amount from £5 up to £Ioo, the lives of children between 8 and 14 years of age may be insured for L5, but children under 8 years of age are not insured. If the amount of the insurance purchased is less than £ 1 oo further insurance may be purchased from time to time until the total sum assured is £ 1 oo. Insurances not ex ceeding £25 can be effected with or without medical examination.
These meagre results were in marked contrast with the success which since the inception of the scheme has attended the grant of immediate life annuities by the government, both through the National Debt office and through the savings banks. A substantial portion of the total amount of the life annuity business of the United Kingdom has invariably been transacted by the gov ernment.
In 1919 a departmental committee was appointed to enquire into the business carried on by Industrial Insurance Companies and Collecting Societies. The committee presented a unanimous report (192o) in which the Post Office system was criticized. Not withstanding this criticism the scheme remained substantially unaltered.
The Select Committee on Estimates in a report presented to the House of Commons in July 1928, recommended that the Post Office life insurance business should be discontinued.
Subsequently the National Debt Commissioners announced that after December 31 of that year, no further policies would be issued because the volume of business transacted was infinitesimal when compared with that of the big companies, also the energies of the Post Office officials could be more usefully employed in other services. This ruling was put into force in the beginning of IQ2q.
The country in which Post Office insurance has attained its highest development is Japan, where the undertaking is in effect a national industrial insurance scheme. It is a government monop oly, but it is not compulsory. Postmen act as canvassers and col lectors of premiums. The maximum sum assurable is 450 yen and the minimum 20 yen. The premiums are payable monthly either to a post office collector, or at a post office, or by transfer from a savings account. It was inaugurated in 1916, and within 1I years the number of policies in force was over 1 o millions and the sums assured amount to about £130 millions. Surpluses have accrued which are being returned to the assured partly in the form of re funds to the policy-holders and partly in establishing and main taining health and welfare services. (P. G. B.)