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as to restrict it and limit it.
At the foot of the Ordinance the objects and
reasons of the legislation are stated to be to secure the
solvency and permanence of Companies carrying on the business
of life assurance in the Colony as is done in England by the
Life Assurance Companies Acts. This is entirely praiseworthy,
but the Ordinance itself goes much beyond English legislation,
and in a direction which in England has been universally con-
-demned as likely to injure, and not benefit, life assurance,
and due effect is not given to English legislation as it
actually operates, because the changes that have taken place
in the administration of the law through the wise exercise of
the limited powers which have been bestowed on our Board of
Trade have been ignored. For present purposes the two main
points to be considered are the standard of solvency imposed by
the Hongkong Ordinance, and the deposit required under it from
Companies operating in China.
As to the standard of solvency, the table
known in America as the Actuaries Table, and in this country as
the Seventeen Offices Table, has been imposed, and it is laid
down that there must be a net premium reserve by that table at
4% interest. Now, altogether apart from the question whether
there should be a standard of solvency, the table selected is
obsolete, and is open to serious objections. I do not know of a
single Company that new values by it, and very few British
Companies ever made use of it. The result is that the subsidiary
tables based upon it, and which are necessary to a life office,
are very few, and a Company valuing by it would require, at
great expense and trouble, te prepare these tables. If, there-
-fore, the Seventeen Offices Mortality is taken as the standard,
a valuation for testing solvency would have to be made by that
table, which would probably not have been used by the Company
previously in its valuations, and every actuary knows what that
means. It is true that in the British Acts the Seventeen
Offices