CO129-346 - Governor Sir Lugard - 1908 [1-3] — Page 206

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and retained in hand only a sum sufficient to meet the

current year's risk in respect of new policies and valued

them at 1 year older was actuarially sound. That being so

it must be manifest that the conditions of the ordinance

absolutely prohibit any new company being formed and further

restrict the amount of new business that even a well

established company can place upon its books, while as I

pointed out above in the case of a company doing little or

no new business the reservation of only 75% is insufficient.

While on the subject of the deposit I may

point out that no securities are specified as being allow-

-ed, beyond a Bank deposit receipt, but that the sole

judge of the suitability shall be the Governor. This is

far too vague and throws too much responsibility upon the

opinion of one man. It is open also to the further object-

-ion that the position of Governor is not a permanency

and the securities that one may deem suitable, his

successor may totally disapprove of.

Further no provision is made for the pay-

-ment of interest upon the securities and it would be

interesting to learn how the Government would propose to

deal with say a deposit of debentures with interest

coupons attached such as a Bank automatically collect for

one.

Section 6:-

Provides that the deposited funds shall be

held in Trust for pålicy holders in Hongkong and China

only, not for the whole body of policy holders. Thus in

the case of a company transacting business in China,

the Philippines, the Straits, Burmah, and India and else-

-where the total funds of the company, i.e. the contribu-

-tions from all policy holders are liable for the pay-

-ments to the Hongkong and China policy holders, but in-

-versely the contribution from the latter are not liable

for the payments to other policy holders, which is

manifestly an unfair proposition.

Section