While for many years, and perhaps
indefinitely, a company might be successfully conducted, if under a
competent management, depending solely upon assessments, yet
contingencies arc liable to arise in which it will be evident that true
conservatism and wise forethought would have held in hand some funds for
use without imposing, at that particular time, the burden of an
assessment upon the policy holders.
The advocates of such conservatism have been met with the argument that
it is contrary to the principle of assessment insurance, and a
concession to the theory of the level premium plan. But the reply is
that the requirements of an assessment company in the form of an
emergency or reserve are in no sense comparable with those of a level
premium company, and the application of it is upon an entirely different
principle, and for an altogether different purpose.
An assessment company may need funds in hand to relieve its members of
an assessment when otherwise they might be overburdened, because the
death rate fluctuates in different years.
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