The Principles which should regulate the Reassurance of Risks

Extract

The extent to which the interchange of risks is made by Assurance Companies at the present day, renders it of no small importance that a clear understanding should exist as to the terms upon which these contracts are to be carried out. There was a time, we believe, when a proposition from one Company to effect an assurance with another was looked upon with coldness, if not with suspicion; and the fact that such proposals were often made when the proposing Office declined to assume any portion of the risk itself, would seem, very naturally, to give rise to such a sentiment. This practice, however, we believe, is now quite on the decline; and with well-conducted Companies it is pretty clearly understood that these transactions must be in every respect perfectly bonâ fide, and that the arrangement of them must be entirely just and equal, as between all the parties concerned. As the wealth of the country increases, the cases are becoming more frequent in which the sums to be assured upon individual lives are larger than any single Company would care to sustain the liability of; and as propositions of this nature are being at intervals made to all, each becomes sensible of the advantages of the system of reassurance, and of the necessity of its being based upon principles of perfect fairness and equality.