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A History of Tontines in Germany
From a multi-purpose financial product to a single-purpose pension product
(2018)
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Abstract
A tontine may be described as a pooled life annuity. Investors buy shares, and the issuer promises to pay interest on the raised capital. The characteristic feature of tontines is that the annuities of deceased investors are shared by surviving investors. With the death of the last survivor, the issuer's obligation to pay annuities terminates and the issuer has no obligation to pay the raised capital back. Investors may use a tontine as a pension product and the issuer may use it as a means to raise capital. It is generally believed that the Italian Lorenzo Tonti (1602-1684) invented tontines and that he proposed them to Cardinal Mazarin (1602-1661) in 1653.Phillip Hellwege analyses the origins of tontines, their occurrence and their diverse designs in German-speaking territories from the middle of the 17th century to their decline in the late 19th century and early 20th century. Furthermore, he assesses their importance for the development of insurance (law) in Germany.A tontine may be described as a pooled life annuity. Investors buy shares, and the issuer promises to pay interest on the raised capital. The characteristic feature of tontines is that the annuities of deceased investors are shared by surviving investors. With the death of the last survivor, the issuer's obligation to pay annuities terminates and the issuer has no obligation to pay the raised capital back. Investors may use a tontine as a pension product and the issuer may use it as a means to raise capital. It is generally believed that the Italian Lorenzo Tonti (1602-1684) invented tontines and that he proposed them to Cardinal Mazarin (1602-1661) in 1653.Phillip Hellwege analyses the origins of tontines, their occurrence and their diverse designs in German-speaking territories from the middle of the 17th century to their decline in the late 19th century and early 20th century. Furthermore, he assesses their importance for the development of insurance (law) in Germany.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Preface | 5 | ||
| Contents | 7 | ||
| A. Introduction | 11 | ||
| I. A modern definition of tontines | 11 | ||
| II. The occurrence of tontines in German-speaking territories | 12 | ||
| III. Tontines and the history of life insurance | 13 | ||
| IV. Lorenzo Tonti and the origins of tontines | 15 | ||
| V. The objectives of the present volume | 16 | ||
| B. The occurrence of tontines in German-speaking territories | 19 | ||
| I. Tontines mentioned in the modern literature | 19 | ||
| II. The origins of tontines in German-speaking territories | 20 | ||
| III. The three phases of the development of tontines | 25 | ||
| 1. The first phase: self-contained tontines in the 17th and 18th centuries | 26 | ||
| a) Self-contained tontines in German-speaking territories | 26 | ||
| b) Foreign tontines | 28 | ||
| 2. The second phase: tontines issued by pension funds and savings banksin the 19th century | 30 | ||
| 3. The third phase: tontine life insurance products in the late 19th century | 32 | ||
| IV. Comparative observations | 33 | ||
| V. Conclusion | 34 | ||
| C. Tontine designs in German-speaking territories | 35 | ||
| I. Basic tontine designs | 35 | ||
| II. The first phase: self-contained tontinesin the 17th and 18th centuries | 38 | ||
| 1. The Gdańsk tontines of 1657 and 1688 | 38 | ||
| 2. The Bremen loan of 1692 | 40 | ||
| 3. The Prussian tontine of 1698 | 42 | ||
| 4. A Wrocław tontine lottery of 1706? | 42 | ||
| 5. Hamburg tontine lotteries of 1706, 1708, and 1709? | 43 | ||
| 6. The Lübeck tontine plans of 1708 and 1715 | 44 | ||
| 7. The Saxon tontine lottery plan of 1723 | 45 | ||
| 8. The Schweinfurt tontine plan of 1735 | 46 | ||
| 9. A Viennese tontine plan prior to 1736 | 46 | ||
| 10. The Bolzano tontine of 1737 | 46 | ||
| 11. The Hesse-Kassel tontine lottery plan of 1743 | 49 | ||
| 12. The Berlin tontine plan of 1747 | 50 | ||
| 13. Two Saxon tontine lotteries of 1748 | 51 | ||
| 14. The Wied tontine plan of 1749 | 54 | ||
| 15. The Hesse-Kassel tontine plan of 1750 | 55 | ||
| 16. A Merseburg tontine of 1750? | 56 | ||
| 17. The Gotha tontine lottery of 1752 | 56 | ||
| 18. The Augsburg tontine of 1753/55 | 57 | ||
| 19. The East Frisian tontine plan of 1755 | 59 | ||
| 20. The plan for a Prussian tontine lottery of 1757 and the Saxe-Weimar tontine lottery prior to 1757 | 60 | ||
| 21. The Mecklenburg tontine plan of 1758 | 60 | ||
| 22. The Austrian life annuity fund of 1760 | 61 | ||
| 23. The Cleves tontine of 1763 | 61 | ||
| 24. The Halberstadt tontine plan of 1764 and the Wrocław tontine plan of 1766 | 63 | ||
| 25. A tontine by the Freimaurer after 1764 | 64 | ||
| 26. Saxon tontine plans of 1765 | 64 | ||
| 27. Upper Lusatian tontine lottery plans of 1766 | 64 | ||
| 28. Four academic tontine plans of 1766 | 65 | ||
| 29. The Bremen tontines of 1767 and 1772 | 65 | ||
| 30. The Wolfenbüttel tontine of 1768 | 67 | ||
| 31. The Osnabrück tontine of 1768 | 67 | ||
| 32. The Regensburg tontine lottery of 1768 | 69 | ||
| 33. The Mainzer Life Annuity Society of 1769 | 69 | ||
| 34. The Swedish-Pomeranian tontine lottery of 1772 | 70 | ||
| 35. The Gdańsk tontines of 1775 and 1792 | 71 | ||
| 36. The Hamburg tontine of 1776 | 72 | ||
| 37. The Mecklenburg-Strelitz tontine plan of 1776 | 72 | ||
| 38. The Stade tontine of 1777 | 73 | ||
| 39. The Upper Lusatian tontine plan of 1777 | 75 | ||
| 40. The Nuremberg tontines of 1777 and of 1783 | 76 | ||
| 41. The Mecklenburg tontine plan of 1787 | 79 | ||
| 42. A Rostock tontine of 1788? | 80 | ||
| 43. The Prussian tontine of 1788 | 80 | ||
| 44. The Lippe tontine loan of 1805 | 81 | ||
| 45. The Bremen tontine of 1805 | 82 | ||
| 46. The Hamburg tontine plan of 1807 | 84 | ||
| 47. The Lübeck Tontine or Life Insurance Company of 1809 | 85 | ||
| 48. The Westphalian tontine of 1811 | 87 | ||
| III. The second phase: tontines issued by pension fundsin the 19th century | 87 | ||
| 1. The Hamburg General Pension Fund of 1778 | 88 | ||
| 2. The Oldenburg tontine of 1782 | 89 | ||
| 3. The Württemberg Life Annuity Bank of 1822 | 90 | ||
| 4. The Hamburg General Pension Tontine of 1822 | 92 | ||
| 5. The Austrian General Pension Fund of 1823 | 96 | ||
| 6. The Prussian Pension Insurance Fund of 1838 | 97 | ||
| IV. The third phase: tontine life insurance products in the late 19th century | 98 | ||
| V. Conclusion and comparative observations | 100 | ||
| D. From a multi-purpose to a single-purpose financial product | 106 | ||
| I. The first phase: self-contained tontines in the 17th and 18th centuries | 106 | ||
| II. The second phase: tontines issued by pension fundsin the 19th century | 109 | ||
| III. The third phase: tontine life insurance productsin the late 19th century | 110 | ||
| E. Tontines and the development life insurance | 111 | ||
| I. Tontines and the development of actuarial science | 111 | ||
| II. Spreading the idea of life insurance | 112 | ||
| III. The legal aspects of tontines andthe development of life insurance law | 114 | ||
| 1. Classifying tontines: life annuity, insurance or gambling? | 116 | ||
| a) 18th-century Kameralismus | 118 | ||
| b) 19th-century discourse in political economics | 121 | ||
| c) The private law discourse of the 18th and 19th centuries | 121 | ||
| d) The private law discourse of the 20th century | 124 | ||
| e) Conclusion | 127 | ||
| 2. Financial soundness, solvency, securities, and transparency: the development of insurance supervision and insurance regulation | 128 | ||
| a) The first phase: self-contained tontines in the 17th and 18th centuries | 128 | ||
| b) The second phase: tontines issued by pension funds in the 19th century | 136 | ||
| c) The third phase: tontine life insurance products in the late 19th century | 139 | ||
| d) Conclusion and comparative observations | 141 | ||
| 3. Alteri stipulari nemo potest? | 143 | ||
| 4. Explaining the hereditary principle | 143 | ||
| 5. Preventing fraud on the side of the investor | 147 | ||
| 6. Protecting the investor’s heirs and creditors | 149 | ||
| 7. Usury and laesio enormis | 150 | ||
| 8. Preventing fraud on the side of the payees | 150 | ||
| 9. The nominee’s death | 153 | ||
| 10. The payor’s default and insolvency | 154 | ||
| IV. Conclusion and comparative observations | 154 | ||
| F. Conclusion | 156 | ||
| Archival Sources | 161 | ||
| Other Sources | 165 | ||
| Bibliography | 167 | ||
| Index | 183 |