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A History of Tontines in Germany

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Hellwege, P. (2018). A History of Tontines in Germany. From a multi-purpose financial product to a single-purpose pension product. Duncker & Humblot. https://doi.org/10.3790/978-3-428-55616-8
Hellwege, Phillip. A History of Tontines in Germany: From a multi-purpose financial product to a single-purpose pension product. Duncker & Humblot, 2018. Book. https://doi.org/10.3790/978-3-428-55616-8
Hellwege, P (2018): A History of Tontines in Germany: From a multi-purpose financial product to a single-purpose pension product, Duncker & Humblot, [online] https://doi.org/10.3790/978-3-428-55616-8

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A History of Tontines in Germany

From a multi-purpose financial product to a single-purpose pension product

Hellwege, Phillip

Comparative Studies in the History of Insurance Law / Studien zur vergleichenden Geschichte des Versicherungsrechts, Vol. 3

(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