¹ The development of the life-insurance market in Britain is described in various works, including Withers, Hartley, Pioneers of British Life Assurance (London, 1951)Google Scholar; Pearson, Robin, “Thrift or Dissipation? The Business of Life Insurance in the Early Nineteenth Century,” Economic History Review 43, no. 2 (1990): 379–414CrossRefGoogle Scholar; Clark, Geoffrey, Betting on Lives: The Culture of Life Insurance in England, 1695-1775 (Manchester, U.K., 1999)Google Scholar. For the evolution of life insurance in the United States, see Knight, Charles Kelley, The History of Life Insurance in the United States to 1870 (Philadelphia, 1920)Google Scholar.

² Ransom, Roger L. and Sutch, Richard explain the novelty of this new product in “Tontine Insurance and the Armstrong Investigation: A Case of Stifled Innovation, 1868-1905,” Journal of Economic History 47, no.2 (1987): 379CrossRefGoogle Scholar. Tontine insurance, introduced in 1868, combined the features of life insurance with an unusual old-age savings plan. North, Douglass C., “Life Insurance and Investment Banking at the Time of the Armstrong Investigation of 1905-1906,” Journal of Economic History 14, no. 3 (1954): 209–28CrossRefGoogle Scholar.

A portion of the annual premium was accumulated in a fund that was divided among the surviving policyholders after twenty years. Although many authors use the concept of “tontine insurance” in referring to this kind of policy, the concept of “deferred dividend policies” more clearly differentiates this type of policy from the old tontine policies invented by Lorenzo Tonti in the seventeenth century. For the development of mortality tables and actuarial techniques in the United States, see Knight, The History of Life Insurance. For Europe, and Italy in particular, see Fanfani, Tomaso, “L'assurance-vie en Italia entre initiative privée et monopole (XIX siècle-début XXe siècle),” in Insurance in Industrial Societies: Economic Role, Agents and Market from the Eighteenth Century to Today, ed. Nuñez, Clara E. (Seville, 1998)Google Scholar.

³ This system afforded advantages to multinationals, especially American companies. According to Robert Wright, E. and Smith, George David, “American sales methods, especially the commission agency system, were aggressive in comparison to European practices.” Mutually Beneficial: The Guardian and Life Insurance in America (New York, 2004), 39Google Scholar. Equi-table Life prior to 1900, for example, allowed its agents a 75 percent commission in the first year. Cited in Price, William H., “Life Insurance Reform in New York,” American Economic Association Quarterly 10, no. 4 (1909): 49Google Scholar.

⁴ The electric telegraph enabled written communications between executives at the insurance companies’ home offices and their agents on both sides of the Atlantic. Pearson, Robin, “Growth, Crisis and Change in the Insurance Industry: A Retrospect,” Accounting, Business & Financial History 12, no. 3 (2002): 490CrossRefGoogle Scholar. For its role in the control of agents, see Stalson, J. Owen, Marketing Life Insurance: Its History in America (Cambridge, Mass., 1942)Google Scholar.

⁵ The MNEs of the insurance sector engaged in the strategies common to other multi-nationals. See, for example, Wilkins, Mira, “European and North American Multinationals, 1870-1914: Comparisons and Contrasts,” Business History 30, no.1 (1988): 8–10CrossRefGoogle Scholar; Jones, Geoffrey, ed., Banks as Multinationals (London, 1990)Google Scholar; and Jones, Geoffrey and Schroter, Harm G., eds., The Rise of Multinationals in Continental Europe (Aldershot, 1993)Google Scholar.

⁶ Clough, Shepard B., A Century of American Life Insurance: A History of the Mutual Life Insurance Company of New York (New York, 1946)Google Scholar; Buley, R. Carlyle, The Equitable Life Assurance Society of the United States, 1959-1964, 2 vols. (New York, 1967)Google Scholar; Rapone, Anita, The Guardian Life Insurance Company, 1860-1920: A History of a German-American Enterprise (New York, 1987)Google Scholar; and Wilkins's, Mira more general study, The Emergence of Multinational Enterprise: American Business Abroad from the Colonial Era to 1914 (Cambridge, Mass., 1970)Google Scholar.

⁷ Keller, Morton, The Life Insurance Enterprise, 1885-1910: A Study in the Limits of Corporate Power (Cambridge, Mass., 1963)CrossRefGoogle Scholar. The big three at the end of the nineteenth century were the New York Life Insurance Company, the Equitable Life Assurance Society of the United States, and the Mutual Life Insurance Company of New York.

⁸ The Guardian Life Insurance Company, 1860-1920, esp. ch. 7, about the firm's consolidation in Europe that came about as a result of the agency system and the new types of policies.

⁹ The history of this company can also be consulted in the excellent work by Wright and Smith, Mutually Beneficial.

¹⁰ For the case of Russia, see Best, Paul J., “Insurance in Imperial Russia,” Journal of European Economic History 18 (Spring 1989): 139–69Google Scholar.

¹¹ For an overall view of foreign investment in Spain in the nineteenth century, see Platt, D. C. M., “Las Finanzas extranjeras en España,” Revista de Historia Ecónomica 1, no.1 (1983): 121–50CrossRefGoogle Scholar.

¹² Average life expectancy in Spain during the period 1863-70 was 29.8 years, in contrast to 43.1 years in the more advanced Western countries (Denmark, France, England and Wales, Norway, the Low Countries, Sweden, and the United States). Data are from Dopico, Fausto and Reher, David-Sven, El declive de la mortalidad en España, 1860-1930 (Zaragoza, 1998), 29Google Scholar. According to Leandro Prados, the growth in the GDP per capita in Spain in 1880 was 0.564. Spain occupied fourteenth place in the growth ranking among the more developed countries. Prados, Leandro, “International comparisons of Real Product, 1820-1990: An Alternative Data Set,” Explorations in Economic History 37, no. 1 (2000): 25.Google Scholar

¹³ For the development of tontines, see Magro, A. Bahamonde, El Horizonte Económico de la Burguesía Isabelina: Madrid, 1856-1866 (Madrid, 1981), 138–71Google Scholar.

¹⁴ In England, the Londoner Institute of Actuaries of Great Britain had been created in 1848, and similar institutions were created in France in 1872 and in Italy in 1889. Fanfani, "Assurance-vie en Italie entre initiative,” 107.

¹⁵ One of the first mortality tables in Spain was prepared by Miguel Merino in 1866, but it contained a number of errors due to the unreliability of the data. The Geographical and Statistical Institute subsequently prepared mortality tables for the periods 1861-70 and 1878-92, using the same system as Merino. Dopico and Reher, El declive de la mortalidad en España, 12. The real problem, however, arose from the dearth of actuaries in Spain who were capable of carrying out the necessary calculations on the basis of this information. These first attempts were followed by others in the 1880s: J. A. Sorbias's “Ensayo de tabla de mortalidad y exposición del seguro de vida técnico” in 1882; and an essay on the topic of life insurance, entitled “Memoria dilucidando un tema de seguros sobre la vida,” in 1886. References from Ester Arencibia Urien in Actuarios 17 (June 1999).

¹⁶ For the foreign companies’ different strategies and points of entry in Spain before 1914, see Robin Pearson, “Foreign Insurance Companies in Spain before 1914,” VIII Congreso de la Asociación Española de Historia Económica, 13-16 September 2005, Santiago de Compostela. For more information about the American insurance companies in Spain, see Pons, Jerònia Pons, “Large American Corporations in the Spanish Life Insurance Market (1880-1922),” Journal of European Economic History 34, no.2 (2005): 467–81Google Scholar.

¹⁷ Royal order of 19 July 1881.

¹⁸ When New York Life established itself in Spain in 1881, it carried a list of all its reserves in its advertising as a guarantee to policyholders. All these reserves were in the United States. They were composed of external debt of the United States; bonds of cities in the states of New York, Virginia, and Tennessee; American railroad bonds; and bank mortgage bonds. Generalidades acerca del seguro sobre la vida y de La New-York (The New-York Life Insurance Company) (Madrid, 1881).Google Scholar The divergent development of life-insurance companies in Great Britain and the United States came about, according to Henry Moir, as a result of a number of advantages: the introduction of the agency system; the payment of generous commissions for new policies from very early on; and the contracting of agents totally dedicated to the insurance business. Moir, Henry, “Divergent Developments of Life Insurance,” Transactions of the Actuarial Society of America 29, pt. 1, no. 79 (1928): 58–59.Google Scholar

¹⁹ Generalidades acerca del seguro.

²⁰ Buley, Equitable Life, 1: 89, 289, 451-55.

²¹ Frax, Esperanza and Matilla, María Jesús, “Los seguros en España: 1830-1934,” Revista de Historia Económica 14, no. 1 (1994): 183–203Google Scholar.

²² Royal decree of 11 Aug. 1893 (published in Gaceta de Madrid, 13 Aug. 1893) and royal order of 18 Nov. 1893 (Gaceta de Madrid, 19 Nov. 1893).

²³ Pearson, “Foreign Insurance Companies in Spain before 1914,” 16, records the discontent of the British insurers who decided to pass on the cost of the tax to their Spanish policy-holders. In contrast, the Spanish and French companies decided to absorb the taxes in order to make their policies more competitive.

²⁴ Keller, The Life Insurance Enterprise, 106.

²⁵ Buley, Equitable Life, vol. 1: 454. Rapone in The Guardian Life Insurance comments that other companies had abandoned markets as a result of similar demands. For example, Germania abandoned Canada in 1868 and Mexico in 1902.

²⁶ Wilkins, Emergence of Multinational Enterprise, 105-6.

²⁷ In 1911, Equitable Life had its reserves invested in the public debt of New York State and of American railroad companies. Only about 18 percent of its reserves were in Spain, invested in the building it used as its headquarters in Madrid. The reserves of other companies had a similar composition. For example, the French L'Abeille and Le Phenix invested in French state funds, and the British Gresham and Standard Life invested in British national debt, or in the national debts of India and other British colonies.

²⁸ Generalidades acerca del Seguro sobre la Vida y de la New York.

²⁹ For a review of the effects of regulation in the insurance business at this time, see Robin Pearson and Mikael Lonnborg, “Regulatory Regimes and the Globalisation of Insurance,” paper presented at the 2003 Business and Economic History Annual Meeting.

³⁰ The new obligations governments imposed on the insurance companies initiated changes in the composition of their investments. State securities would become increasingly important, in contrast to private industrial and commercial securities. See Baker, Mae and Collins, Michael, “The Asset Portfolio Composition of British Life Insurance Firms, 1900 1965,” Financial History Review 10, no.2 (2003): 137–64CrossRefGoogle Scholar.

³¹ Wilkins, in Emergence of Multinational Enterprise, 105-6, considers that both the withdrawal of New York Life from Prussia in 1894 and the withdrawal of Equitable from Switzerland in 1891 started this tendency toward regulation of the sector.

³² R. Roig Armengol, “La interventión del Estado en los Seguros,” Anuario Español de Seguros (1914): 75-77.

³³ “Everywhere, for all the companies, the post-Armstrong years were a time of difficulty. With foreign governments hostile, regulatory activity took on new or renewed life from the 1905 revelations,” Keller, The Life Insurance Enterprise, 277.

³⁴ This was the first and most important lobby of insurance professionals of the time. It was founded in Barcelona in 1905 and was declared an official corporation in 1914. Its members were directors and representatives of the insurance companies operating in Barcelona.

³⁵ Anuario Legislativo de Seguros (1913-1916): 61-65.

³⁶ Royal order of 3 Feb. 1913 (Gaceta de Madrid, 21 Feb. 1913); royal order of 6 Mar. 1913 (Gaceta de Madrid, 14 Mar. 1913); and royal order of 3 July 1913 (Gaceta de Madrid, 14 July 1913).

³⁷ Clough, A Century of American Life Insurance, 228-29. An extensive analysis of life insurance reform in New York can be found in Price, “Life Insurance Reform in New York,” 1-95.

³⁸ Wilkins, Emergence of Multinational Enterprise, 106.

³⁹ The American companies were the Equitable Life Assurance Society of the United States, the New York Life Insurance Company, and the Germania Life Insurance Company of New York, known as the Guardian Life Insurance Company from 1917. The British companies were the Consolidated Assurance Company Limited, the Gresham, the Norwich Union Life Insurance Society, and the Standard Life Assurance Company.

⁴⁰ J. H. Treble has analyzed the causes of the expansion of the Standard Life Assurance Company between 1875 and 1914 in “The Pattern of Investment of the Standard Life Assurance Company, 1875–1914,” Business History 22, no. 2 (1980): 170.CrossRefGoogle Scholar According to Treble, the leadership of this company was based on its professional executive structure, the increase in the scope of its activities abroad, and the variety of services it offered to clients.

⁴¹ Anuario Espanol de Seguros (1917): 62-63.

⁴² Buley, Equitable Life, 2: 865-66.

⁴³ The MNEs were affected by the World War I, and especially by the monetary chaos that ensued. Guardian Life was one of the most affected because of the concentration of its business in Germany. Wright and Smith, Mutually Beneficial, 60-62.

⁴⁴ Schooling, William affirms, in The Standard Life Assurance Company (Edinburgh, 1925), 78Google Scholar, that the company had established itself in Barcelona in 1904. It remained in the Spanish market until 1929. Its investment policies can be seen in Treble, “The Pattern of Investment of the Standard Life,” 170-88.

⁴⁵ During the 1920s, this company abandoned certain international markets, transferred its clients to other companies or to its agents, and limited its activities to the renewal of policies. In the case of Spain, it decided to withdraw when its agent in Barcelona, Ernest Noble, died in 1920. Butt, John, “Life Assurance in War and Depression: The Standard Life Assurance Company and Its Environment, 1914–1939,” in The Historian and the Business of Insurance, ed. Westall, Oliver M. (Manchester, U.K., 1984), 168–69.Google Scholar

⁴⁶ The sale of “tontine policies” was prohibited in 1906 following the Armstrong investigation. The commission related tontine policies to corruption and extravagance. Ransom and Sutch, “Tontine Insurance and the Armstrong Investigation,” 388-90, argue that this prohibition was unnecessary and that, despite some cases of corruption that were detected by the committee, this kind of policy fulfilled an important function at a time when private pension plans and social insurance did not exist.

⁴⁷ Wright and Smith, Mutually Beneficial, 63.

⁴⁸ Schooling, The Standard Life Assurance Company, 79, looks to the problems created by the war in order to explain why the company decided to withdraw from business on the Continent. Its business in Hungary, Norway, and Denmark was transferred to local companies, and it no longer accepted new risks in Brussels, Barcelona, and Stockholm.

⁴⁹ Pons, Jerònia Pons, “Diversificatión y cartelización en el seguro español, 1914–1935,” Revista de Historia Económica vol.XXI, no.3 (2003): 567–92.CrossRefGoogle Scholar

⁵⁰ French capital was the most important foreign investment in Spain in the nineteenth century, especially French investment in two of the most important companies: the railroad companies Ferrocarriles del Norte (linked to Crédit Mobilier) and M.Z.A. See Platt, D. C. M., “Las finanzas extranjeras en España,” Revista de Historia Económica 1, no.1 (1983): 121–49.CrossRefGoogle Scholar For more detail on investments, see Pons, Jerònia Pons, “Las entidades aseguradoras y la canalizatión del ahorro en España,” Revista Española de Seguros 115 (2003): 337–58.Google Scholar

⁵¹ Esperanza Frax and Matilla, María Jesús, “La evolución del sector seguros en Francia y España, 1800–1936,” in Insurance in Industrial Societies: Economic Role, Agents and Market from the Eighteenth Century to Today, ed. Nuñez, Clara E. (Seville, 1998).Google Scholar

⁵² Pearson, Robin, “British and European Insurance Enterprise in American Markets, 1850–1914,” Business and Economic History 26, no. 2 (Winter 1997): 450.Google Scholar

⁵³ This phenomenon was duplicated in many countries where the native firms were favored by the increase in the obligatory deposits to be held in the country and by a rise in taxes. Butt, “Life Assurance in War and Depression,” 156.

⁵⁴ Huerta, R. Huerta, Inversiones extranjeras en España: Estudio multidisciplinar (Madrid, 1992), 90.Google Scholar

⁵⁵ Gaceta de Madrid, 12 Nov. 1922.

⁵⁶ Information from El Eco del Seguro, a magazine of the insurance sector, Feb. 1926 issue, p. 12.

⁵⁷ The nationalization projects for the insurance business, or some part of it, appeared in various European countries, with different results. Nationalization of life insurance took place in Italy. See Fanfani, “L'assurance-vie en Italie entre iniciative,” 31-55. For the case of Portugal, see Malgalhaes, J. Romero, “Les premiers projects de municipalisation et nationalisation des assurances au Portugal au debut du Xxè siècle,” in Insurance in Industrial Societies: Economic Role, Agents and Market from the Eighteenth Century to Today, ed. Nuñez, Clara E. (Seville, 1998), 45–55.Google Scholar

⁵⁸ The dinner was held on 15 Mar. 1930 for the following members of the Junta Consultiva de Seguros: José Ma Delás (La Catalana), Domingo Aldomá (La Nationale), Vicente Muntados (Banco Vitalicio de España, Assicurazioni Generali), and Salvio Masoliver (Mutua General de Seguros). All were representatives of Catalan insurance firms and, in some cases, representatives of foreign companies.

⁵⁹ The information comes from the brief of the lawsuit published under the title La cesión de carteras de las compañías de seguro (Madrid, 1923).Google Scholar Biblioteca Nacional de España, VC/12790/13.

⁶⁰ New York Life had been founded seventy-four years previously; in 1918 it issued 145,000 policies for a capital of 763 million gold pesetas in all the countries in which it operated. The Spanish company, however, had only been started six years before, with a capital outlay of 1.2 million pesetas and with policies insured in 1919 for a value of about 25 million pesetas. La cesión de carteras de las compañías de seguros, 23.

⁶¹ Figures published in Gaceta de Madrid. Figures for 1913 were published on 27 June 1914, app. 1, p. 847; those for 1914 were published on 29 June 1915, app. 1, p. 1002; for 1915, on 28 June 1916, app. 1, p. 1097; and for 1916, 28 June 1917, app. 1, p. 791.

⁶² La cesión de carteras de las compañías de seguros, 4.

⁶³ Gaceta de Madrid, 9 Apr. 1927.