Essays on a Comparative History of Fire Insurance [1 ed.] 9783428583720, 9783428183722

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Comparative Studies in the History of Insurance Law Studien zur vergleichenden Geschichte des Versicherungsrechts Volume / Band 16

Essays on a Comparative History of Fire Insurance Edited by

Phillip Hellwege

Duncker & Humblot · Berlin

PHILLIP HELLWEGE (ED.)

Essays on a Comparative History of Fire Insurance

Comparative Studies in the History of Insurance Law Studien zur vergleichenden Geschichte des Versicherungsrechts Edited by / Herausgegeben von Prof. Dr. Phillip Hellwege

Volume / Band 16

Essays on a Comparative History of Fire Insurance

Edited by

Phillip Hellwege

Duncker & Humblot · Berlin

The project ‘A Comparative History of Insurance Law in Europe’ has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement No. 647019).

Bibliographic information of the German national library The German national library registers this publication in the German national bibliography; specified bibliographic data are retrievable on the Internet about http://dnb.d-nb.de.

All rights reserved. No part of this book may be reproduced, translated, or utilized in any form or by any means, electronic or mechanical, without the expressed written consent of the publisher. © 2021 Duncker & Humblot GmbH, Berlin Typesetting: 3w+p GmbH, Ochsenfurt-Hohestadt Printing: CPI buchbücher.de GmbH, Birkach Printed in Germany ISSN 2625-638X (Print) / ISSN 2625-6398 (Online) ISBN 978-3-428-18372-2 (Print) ISBN 978-3-428-58372-0 (E-Book) Printed on no aging resistant (non-acid) paper according to ISO 9706 Internet: http://www.duncker-humblot.de

Preface The present volume results from the research project ‘A Comparative History of Insurance Law in Europe’ (CHILE). CHILE has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement No. 647019). The contributions to the present volume are based on papers presented at a conference in Augsburg in September 2019. Once again, I would like to thank Michael Friedman for his critical comments on an earlier draft of this volume and for correcting the English. Augsburg, March 2021

Phillip Hellwege

Table of contents Phillip Hellwege Chapter 1: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

Delphine Sirks Chapter 2: The Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13

Matthias Bogner Chapter 3: Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

Sinem Ogis Chapter 4 A: England. Fire assistance, prevention, and insurance before 1666 . .

65

Ervis Caja Chapter 4 B: England. The development of fire insurance after the Great Fire of London . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

76

Martin Sunnqvist Chapter 5: Fire help (brandstod) and other types of fire insurance in Scandinavia

91

Maura Fortunati Chapter 6 A: Italy. The development of fire insurance in Italy from the eighteenth to the twentieth century . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Federica Furfaro Chapter 6 B: Italy. The collaboration between fire insurance companies on the Italian Peninsula before and after the national unification . . . . . . . . . . . . 124 David Deroussin Chapter 7: The development of fire insurance in France (eighteenth and nineteenth centuries) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Jerònia Pons Pons Chapter 8: Regulation and practice of fire insurance in Spain (1800 – 1908) . . . 183 Phillip Hellwege Chapter 9: Comparative analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 List of Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

Chapter 1: Introduction By Phillip Hellwege The aim of the present volume is to reassess – from comparative perspectives – the history of fire insurance and fire insurance law in selected European countries. Its point of departure is the observation that the state of research on the history of fire insurance and fire insurance law is, for a number of reasons, unsatisfactory.1 First, the history of fire insurance and fire insurance law presents itself differently in the various European historiographies. German authors usually assert that modern fire insurance is rooted in the mutual help offered by medieval and early modern fire guilds, and German literature further claims that state-run fire insurance schemes as first established in the second half of the seventeenth century were of particular importance for the development of modern fire insurance. By contrast, English literature often treats fire insurance as being the offspring of marine insurance. English scholars further argue that modern fire insurance law, too, has developed from marine insurance law. Research in other European countries often follows English literature in treating fire insurance as being firmly rooted in marine insurance. The problem with this state of research is that it is rarely based on an in-depth analysis. For quite some time, German research has had a clear focus on fire guilds and state-run fire insurance schemes, neglecting the history of commercial fire insurance,2 and in many other European historiographies, the history of fire insurance and fire insurance law is simply treated as an annex to the history of marine insurance and rarely receives separate treatment.3 Secondly, modern research often claims that English fire insurance practice was of special importance for the development of fire insurance practice and law on the Continent.4 Since the late eighteenth century, English fire insurers were active on Continental European insurance markets. It is asserted that they used the policy conditions which they had developed for their domestic market and that these conditions in turn coined the nineteenth-century insurance practice of the newly founded Continental European fire insurers. It is further alleged that, in a second step, insurance practice heavily influenced insurance legislation. When Continental European legislatures first codified terrestrial insurance law, they simply resorted to 1 On what follows, see in detail Phillip Hellwege, Introduction, in: idem (ed.), A Comparative History of Insurance Law in Europe. A Research Agenda (2018), 9 – 26, 11 – 15. 2 See Bogner, p. 30, below. 3 See, e. g., Sirks, pp. 13 f., below. 4 See Hellwege (n. 1), 18 f.

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the established national insurance practices. Thus, it seems that English fire insurance practice had an indirect influence on Continental fire insurance legislation.5 However, this state of research is again problematic as it is not based on any detailed analysis. Against this background, it seemed worthwhile to revisit the history of fire insurance and fire insurance law from comparative perspectives. The present volume is part of a research project on a comparative history of insurance law in Europe. One ingredient in the project has been the organization of a number of conferences, each resulting in a conference volume:6 the first volume fully mapped out the project’s point of departure and its research agenda, the second volume focused on a specific product which existed across Europe and which is said to have influenced the history of life insurance and life insurance law (tontines), the third volume was on a specific institution which again existed across Europe and which is again claimed to have had an important impact on the history of life insurance (guilds), the fourth volume considered a specific context (risk management in the maritime context), the fifth volume looked at a specific group of beneficiaries in life insurance (widows), and the present volume addresses a specific risk (fire). Thus, three of these conference volumes have analysed aspects of the history of life insurance and life insurance law, two of them being supplemented by a monographic in-depth analysis of the developments in Germany,7 but only one volume is dedicated to the history of fire insurance and fire insurance law. However, there is a second ingredient in the project. Altogether twelve PhD-theses on different aspects of the history of insurance and insurance law have resulted from the project, and six of these have a strong focus on fire insurance,8 with the other 5

Peter Koch, Geschichte der Versicherungswirtschaft in Deutschland (2012), 49. Phillip Hellwege (ed.), Research Agenda (n. 1); idem (ed.), The Past, Present, and Future of Tontines. A Seventeenth Century Financial Product and the Development of Life Insurance (2018); idem (ed.), Professional Guilds and the History of Insurance. A Comparative Analysis (2020); Phillip Hellwege and Guido Rossi (eds.), Maritime Risk Management. Essays on the History of Marine Insurance, General Average and Sea Loan (2021); Phillip Hellwege, Widows and the History of Insurance. A Comparative Analysis (2021). 7 Phillip Hellwege, A History of Tontines in Germany. From a multi-purpose financial product to a single-purpose pension product (2020); idem, From Guild Welfare to Bismarck Care. Professional guilds and the origins of modern social security law and insurance law in Germany (2020). 8 Sinem Ogis, The Influence of Marine Insurance Law on the Legal Development of Life and Fire Insurance in England. Offspring or Gradual Convergence? (2019); Florian Siegwart, Englische und französische Feuerversicherungsbedingungen vor 1900. Gemeinsamkeiten – Einflussnahmen – Unterschiede (2021); Antonio Di Mieri, Die Feuerversicherung im italienischen Codice di commercio von 1882. Seeversicherungsrechtliche Tradition, Feuerversicherungspraxis und die Rezeption ausländischen Rechts (2021); Delphine Sirks, Fire and life insurance in the Dutch Republic. Development and legal aspects (2021); Matthias Bogner, Das Versicherungsvertragsrecht – ein Spiegel der vorgesetzlichen Praxis? Das Binnenversicherungsrecht und seine Quellen vom Preußischen Allgemeinen Landrecht (1794) bis zum Versicherungsvertragsgesetz (1908) (2021); Ervis Caja, Der Einfluß der englischen Feuerversicherungspraxis auf die Entwicklung deutscher Feuerversicherungsbedingungen (working title). 6

Chapter 1: Introduction

11

six theses either reassessing the history of life insurance and life insurance law or focusing on the interplay between insurance practice and insurance legislation or analysing the history of insurance supervision.9 Overall, the project has had a strong focus on the history of life and fire insurance law. The reason is simple: hitherto, many European historiographies simply had a strong focus on marine insurance law, leaving the history of life and fire insurance law under-researched. In comparative law and comparative legal history, it seems to have become state of the art that a volume editor develops a list of questions which the different authors should discuss. The great advantage of such an approach is that all contributions address similar points, allowing an in-depth comparison. Nevertheless, I have refrained from following such an approach for the present and the past volumes. There is always the danger, that such a questionnaire will reflect the editor’s Vorverständnis (literally: pre-understanding) of the topic, that he or she asks his or her questions in a way that is unsuitable for some countries, and that the editor developing such a questionnaire has blind spots and thus misses important points. A questionnaire used in the process of producing an edited volume only makes sense if the list of questions is constantly revised and if all authors to the volume have a word to say on which questions should be addressed in each contribution. More importantly, such an approach has as a prerequisite that there is a high degree of comparability. However, it is the very aim of the present volume to see whether and to what extent the national developments are in fact comparable to each other, and the present volume also wishes to uncover the extent to which the national developments differ from each other. Consequently, a questionnaire seems to be the wrong tool. Furthermore, it quickly became clear that in some European countries, fire insurance and fire insurance law began to develop much earlier than in others. It follows that the different contributions to this volume cover very different time frames. This again makes it close to impossible to develop a questionnaire that works for all contributions alike. Finally, as editor, I want to be surprised by contributions addressing points which I had not thought of before, points that further my own understanding of the topic. Developing a questionnaire and then implementing it with rigour has the danger of eliminating this stimulating moment of revelation. In this volume I have thus used the same approach as in the past volumes. I have asked the authors to produce contributions that reflect the state of 9 Michael Bachmann, Die französischen Lebensversicherungsbedingungen zwischen 1788 und 1880. Englischer Einfluss und autonome Entwicklung (2019); Katharina Doll, Die Lebensversicherung in Italien von den Anfängen bis 1800. Entwicklungen, Erklärungsansätze und Alternativen (2021); Thomas Heuermann, Einflüsse der englischen Lebensversicherungspraxis auf die Entwicklung deutscher Lebensversicherungsbedingungen (working title); Silvia Karmann, Die Ordonnance de la marine und die französische Versicherungspraxis. Die Entwicklung des Versicherungsvertragsrechts in Frankreich vom Guidon de la mer bis zum Code de commerce (2021); Veronika Leitenbacher, Die Entwicklung der Versicherungsaufsicht in Frankreich. Vom Ancien Régime bis zum ersten Versicherungsaufsichtsgesetz 1938 (2020); Laura Zampano, Die Ursprünge der Versicherungsaufsicht in Deutschland und Italien aus historisch-vergleichender Perspektive (2021).

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research in their respective countries, to cover points which they personally found to be of interest for an international audience, and to work out where the national development is linked to the developments in other countries. Furthermore, each author was asked to present his or her work-in-progress at the associated conference and then finalize the contribution in light of other contributions and the discussions at the conference. This approach gives each author the freedom to stress certain aspects of the development covered in his or her contribution, but at the same time it guarantees that certain aspects appearing in other papers will be picked up in the final versions of the contributions if they are of relevance for the respective national development. The present volume covers the developments of fire insurance and fire insurance law in seven countries: the (Northern) Netherlands, Germany, England, Scandinavia, Italy, France, and Spain. A colleague covering the developments in Belgium had been invited to contribute to the volume, but she had to cancel her participation. It proved impossible to find a substitute. Thus, Belgium is not covered in the present volume. This is particularly unfortunate as in 1874 Belgium enacted legislation covering insurance contract law which is said to have been based on Belgian and French insurance practice, but also on Dutch and German legislation,10 and the 1874 Belgian legislation is described as having influenced the provisions on insurance in the 1882 Italian Codice di commercio.11 As in previous volumes, the different contributions had to be presented in a sensible order. It seemed most plausible to adopt a roughly chronological order, based on the first appearance of fire insurance in the covered countries. Accordingly, the seven countries covered in the present volume fall into two groups. In the Netherlands, Germany, England, and Scandinavia, fire insurance made an early appearance. By contrast, in Italy, France, and Spain, fire insurance took firm roots only in the nineteenth century. Within these two groups one could, of course, argue that a different order should have been applied. If the focus of the entire volume were exclusively on commercial fire insurance, then England should have been first. However, if one includes other forms of insuring fire risks, such as mutual fire contracts, then it makes sense to start out with the Netherlands and Germany.

10

105.

See Dirk Heirbaut, Belgium. Non-marine insurance, in: Hellwege (n. 9), 89 – 110,

11 Fortunati, p. 120, above. In detail on the provisions in the 1882 Italian Codice di commercio on fire insurance and on the influence of Belgian law, see Di Mieri (n. 8), passim.

Chapter 2: The Netherlands By Delphine Sirks* A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. Local fire prevention and firefighting measures . . . . . . . . . . . . . . . . . . . . . . . . . . . II. From water bucket to fire hose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Living in a world without insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Early traces of Dutch fire insurance initiatives elsewhere . . . . . . . . . . . . . . . . . . . B. Instances of fire insurance in practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. Traces of premium fire insurance contracts in mid-seventeenth-century Rotterdam II. Mutual fire insurance contracts throughout the Dutch Republic during the seventeenth and eighteenth centuries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Insurance companies established in the Dutch Bubble of 1720 . . . . . . . . . . . . . . . IV. From the 1770s: (mutual) fire insurance companies . . . . . . . . . . . . . . . . . . . . . . . . C. Fire insurance in legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13 14 14 16 17 18 18 19 21 22 24 26

A. Introduction Over the years, several works have been published on the history of fire insurance in the Netherlands.1 An important contribution to the history of fire insurance and insurance in general has been delivered by Hendrik Gerrit Schuddebeurs.2 For example, in 1948, he compiled a list of over 500 instances of mutual fire insurance schemes which were established between 1663 and 1948.3 Concerning the history * Large parts of this chapter are based upon my doctoral research and are treated in more detail in my (as of yet unpublished) dissertation. 1 To mention but a few: Abraham B. van der Vies, Bijdragen voor de Geschiedenis der Verzekering in Nederland voornamelijk de Brandverzekering (1904); Hendrik G. Schuddebeurs, Brandverzekering (1925); Christiaan H. Slechte, Geschiedenis van de brandverzekering in Nederland; overzicht van de literatuur aanwezig in de Economisch-Historische Bibliotheek in Amsterdam (1971); Ton Langenhuyzen, Zekerheid en brand vóór 1800, in: Jacques van Gerwen and Marco H.D. van Leeuwen (eds.), Studies over zekerheidsarrangementen. Risico’s, risicobestrijding en verzekeringen in Nederland vanaf de Middeleeuwen (1998), 203 – 222. 2 For a biography and bibliography of Hendrik G. Schuddebeurs, see Ben P.A. Gales and Jacques L.J.M. van Gerwen, Sporen van leven en schade. Een geschiedenis en bronnenoverzicht van het Nederlandse verzekeringswezen (1988), 170 – 176. 3 Hendrik G. Schuddebeurs, Onderlinge Brandverzekeringsinstellingen in Nederland van 1663 tot 1948 (1948).

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of insurance law in the Netherlands, the text by Johan P. van Niekerk is a standard work.4 Van Niekerk’s focus, nonetheless, is mostly on marine insurance, and the history of fire insurance law is only briefly discussed in the chapter on non-marine insurance.5 Since then, the history of fire insurance law has received little attention. My doctoral research, however, has brought new sources to light. Therefore, this chapter offers the reader a revisited history of Dutch fire insurance law between 1500 and 1800. By way of an introduction, Part A offers a short overview of the various measures taken to deal with fire and fire damage. These measures help explain how the risk of fire was embedded within Dutch daily life. As such, these measures had an effect on and provided the further setting for any fire insurance scheme. Parts B and C focus on the various instances of fire insurance in practice as well as on fire insurance legislation within the Dutch Republic. Several instances of fire insurance that occurred outside of the Netherlands are treated briefly as well, as these instances seem to have been initiated by Dutch immigrants. I. Local fire prevention and firefighting measures Most cities issued ordinances on fire prevention measures. These ordinances had a local field of application and fire prevention measures thus differed from city to city. It appears that from the fifteenth century onwards, cities tried to reduce the risk of fire by prescribing building measures for houses, e. g. for fireplaces. Building a house from stone was encouraged and sometimes subsidized throughout the Dutch Republic if this particular building measure had not been made compulsory in the city in question.6 Not only did cities try to reduce the risk of fire in houses, but the local authorities also focussed on the risk of fire in industries. Some hazardous industries were banned within city limits, such as brickyards. Breweries and distilleries, by contrast, were ordered to stay within the city walls; this can be explained by the taxes breweries and distilleries had to pay, which were an important source of revenue for cities. Nevertheless, for such industries cities provided building measures as well, prescribing requirements for chimneys, fireplaces and ovens.7 II. From water bucket to fire hose Firefighting was organized on a local level. These measures therefore differed from city to city, too. Initially, firefighting consisted of people forming lines and handing each other buckets filled with water. To ensure that their citizens helped 4 Johan P. van Niekerk, The Development of the Principles of Insurance Law in the Netherlands from 1500 to 1800, 2 vol. (1998). 5 Van Niekerk, vol. 1 (n. 4), 423 – 429. 6 Langenhuyzen (n. 1), 203 f. 7 Langenhuyzen (n. 1), 205 – 207.

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with fighting fires, cities often prescribed how citizens were to behave and provide assistance. Often, cities set up a fire watch. Despite the efforts, people were quite helpless against fires. This changed once the fire hose was invented.8 On 11 June 1614, the States-General granted the first patent for a fire hose to Paulus Auleander.9 From that point, a number of improvements, similar inventions and patents followed. Around 1650, the fire hose invented by the German Johannes Hautsch was the most popular model.10 Amsterdam, exceptionally, had already acquired several fire hoses of the Hautsch model by 1658. A little later, in 1670, this city was divided into sixty districts. Each district had its own firefighting equipment at its disposal.11 A major improvement of the fire hose was developed in the early 1670s by Jan van der Heijden. On 29 July 1671, he and his brother were granted a patent by the States-General for their fire hose with a hose pump. On 12 January 1673, Van der Heijden was able to use his invention for the first time during a fire in Amsterdam.12 The added hose pump was a new innovation and total gamechanger. It could be placed near a water source and it would pump water into the fire hose. As a result, the fire hose itself did not have to be placed near water, meaning that the fire hose could be used in a more flexible way than before and from different angles. Van der Heijden’s invention became a success both in the Dutch Republic and abroad. He produced, advertised and sold his invention himself.13 Van der Heijden, further, reorganized the fire brigade in Amsterdam, putting himself at the head of the organization. Other cities in the province of Holland soon followed. These cities bought Van der Heijden’s firefighting equipment, and also (re)organized their fire brigade following his example. Some of these cities and areas, such as Haarlem, Dordrecht and the Zaanstreek, linked a reward system to their fire brigades: The first group or district of firefighters at the scene of a fire received a (financial) reward. This system, however, led to groups sabotaging each other and the practice was ultimately abandoned.14

8 André C. Broeshart, De geschiedenis van de brandweer in Nederland (1980), 18, 22, 26 f., 34 – 36; Langenhuyzen (n. 1), 207. 9 Arie Th. van Deursen (ed.), Resolutiën der Staten-generaal. Nieuwe reeks 1610 – 1670, vol. 2 (1984), 268, no. 501. Auleander appears to have been a German (hoochduytsch), see Johannes J. Dodt van Flensburg, Archief voor de kerkelijke en wereldsche geschiedenissen, inzonderheid van Utrecht, vol. 6 (1846), 356. 10 Broeshart (n. 8), 40; Hans Wildeboer, De ontwikkeling van de brandspuit in de zeventiende en achttiende eeuw, (1993) 10 Jaarboek voor de geschiedenis van bedrijf en techniek 9 – 41, 15 – 23. 11 Broeshart (n. 8), 40. 12 Broeshart (n. 8), 44, 168; Wildeboer (n. 10), 23, 26. 13 Langenhuyzen (n. 1), 207 f.; Wildeboer (n. 10), 28, 31 – 35. 14 Broeshart (n. 8), 47 f.; Wildeboer (n. 10), 28 f., 33 – 35; Cor van Dongen, Brand meester! Brand en brandbestrijding, (2011) 38 Zaans Erfgoed 18 – 21.

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III. Living in a world without insurance In a society without fire insurance, victims of fires had to rely on the mutual support of their families, friends or neighbours. Such support was informal, and its procedures or rules were unwritten, thus leaving them unknown.15 Extensive research has shown that craft guilds in the Dutch Republic did not provide mutual support to their members in the event of fire. Rather, the support by craft guilds was limited to the so-called ‘risks of life’, such as old age, illness or unemployment.16 Although some cities imposed the important task of firefighting on members of certain craft guilds or neighbourhood guilds, the task was limited to this activity only and did not extend to providing (financial) relief.17 Whereas it seems that in other parts of Europe victims of fires could obtain licenses granted for begging after a fire (brandbedelbrieven), such licenses were not really in use in the Dutch Republic. This has been attributed to the fact that living on the dole was well-organized in Dutch cities.18 For a multitude of victims, collections could be organized. This happened in 1631 in Wormer, after multiple houses and bakeries had been destroyed in a fire. The collection was meant to aid the poor.19 And in 1766, the local court in Leiden ordered a collection after multiple houses had been destroyed in a fire. In addition, the court ordered citizens to be at home at eight o’clock in the evening so that they could contribute to this collection.20 Collections to aid fire victims of other cities were organized as well. Such was done in Amsterdam in the eighteenth century by persons of name and fame. 38 collections to aid the fire victims of various other cities were organized between 1724 and 1799 in Amsterdam. Collections could also have an ecclesiastical purpose, as to aid fellow believers. In 1724, for example, permission was granted to collect 4,000 guilders for the rebuilding of the reformed church of Varseveld, a village that had suffered greatly from a fire.21 In addition to

15

Langenhuyzen (n. 1), 215. Sandra Bos, Uyt liefde tot malcander. Onderlinge hulpverlening binnen de NoordNederlandse gilden in internationaal perspectief (1570 – 1820) (1998), 19. This is in contrast with F.A.C. Westermann, Brandverzekering (1967), 12; Gales/Van Gerwen (n. 2), 60; Langenhuyzen (n. 1), 215, who simply claimed that craft guilds did provide mutual aid to its members in the event of fire. 17 Broeshart (n. 8), 36, 46; Jacques van Gerwen and Jan Lucassen, Mutual Societies in the Netherlands from the Sixteenth Century to the Present, in: Marcel van Linden (ed.), Social Security Mutualism. The Comparative History of Mutual Benefit Societies (1996), 431 – 479, 439. 18 Langenhuyzen (n. 1), 215. 19 Sipke Lootsma, Historische studiën over de Zaanstreek. Eerste bundel (1939), 51 f. 20 Langenhuyzen (n. 1), 215 f. 21 Marco H.D. van Leeuwen, Liefdadige giften in Amsterdam tijdens de achttiende eeuw, (1996) 22/4 Tijdschrift voor Sociale Geschiedenis 417 – 442, 434 – 437. 16

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various collections, when a fire destroyed two-thirds of the city Oss, the authorities released its citizens from paying taxes for several years.22 IV. Early traces of Dutch fire insurance initiatives elsewhere Some authors have noted that there are early traces of Dutch fire insurance initiatives elsewhere. These schemes were in one way or another initiated by immigrants from the Low Countries. One of those initiatives is said to have been the Hamburger Feuerkontrakte.23 Matthias Bogner addresses these mutual fire insurance contracts in more detail elsewhere in this volume.24 Flemish immigrants supposedly kickstarted the Hamburger Feuerkontrakte when they introduced the concept of marine insurance in Hamburg. Yet this theory has been questioned as it lacks substantial proof.25 Another initiative is that of Wilhelm Stiehl. He was a Flemish immigrant who had settled in Hamburg. In 1609, Stiehl proposed to Anton Günther, Count of Oldenburg, a fire insurance scheme for the insurance of houses. Although it has been suggested that the concept of the insurance scheme was inspired by the aforementioned Hamburger Feuerkontrakte, the specifics of the scheme remain unknown. The scheme was never established as the count rejected Stiehl’s proposal.26 A third and last initiative is that of the Holländer Mobiliengilde für die Landschaft Eiderstedt. This insurance scheme appears to have been established in 1648 by Dutch immigrants on the peninsula of Eiderstedt. The scheme was quite simple and insured livestock, hay, grain and other movable property against the risk of fire. It seems that the scheme stood completely in the tradition of the local Brandgilden and therefore constituted nothing new, although it may be noted that this scheme was one of the first of its kind to insure movable property.27

22

Langenhuyzen (n. 1), 216. Wilhelm Schaefer, Urkundliche Beiträge und Forschungen zur Geschichte der Feuerversicherung in Deutschland, vol. 1 (1911), 163 – 166; Schuddebeurs (n. 1), 5; Wilhelm Ebel, Die Hamburger Feuerkontrakte und die Anfänge des deutschen Feuerversicherungsrechts (1936), 32 – 34; Gales/Van Gerwen (n. 2), 62. 24 Bogner, pp. 31 ff., below. 25 Phillip Hellwege, Netherlands, in: idem (ed.), A Comparative History of Insurance Law in Europe. A Research Agenda (2018), 133 – 148, 139. 26 Wilhelm Schaefer, Urkundliche Beiträge und Forschungen zur Geschichte der Feuerversicherung in Deutschland, vol. 2 (1911), 104 – 107; Schuddebeurs (n. 1), 6; Langenhuyzen (n. 1), 216. 27 Schaefer (n. 26), 75. 23

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B. Instances of fire insurance in practice I. Traces of premium fire insurance contracts in mid-seventeenth-century Rotterdam In the Dutch Republic, the first traces of premium fire insurance appear in midseventeenth-century Rotterdam. These traces consist of two notarial documents. The first of these instances did not concern an insurance contract but rather the lack of it. On 8 January 1646, merchant Olivier Couwijn notified brewer Adriaen France Pieck through notary Balthasar Bazius that he would take further legal action if Pieck did not formalize their fire insurance contract.28 Apparently, Couwijn and Pieck had agreed on a fire insurance scheme for the insurance of a brewery, but the contract had not yet been formally concluded. Technically, a formalization of their agreement was not necessary because, according to Roman-Dutch law, the insurance contract was consensual, that is to say, created by an agreement alone.29 However, the circumstances regarding this scheme are questionable, which might have been the reason why Pieck had not formalized their insurance scheme in the first place. It seems unlikely that the fire insurance scheme was eventually enforced. Given the lack of a contract, the legal specifics of the scheme remain unknown. The second instance concerns an until now undiscovered private partnership from 1663. On 5 November 1663, Pieter Cornelisz Bijl, a carpenter, and Dirck Jansz, a miller, concluded a private partnership for the exploitation of a mill owned by Bijl.30 The private partnership itself was quite primitive as it simply stated that the men would share equally in the profits and the losses. They would settle the account every six months. However, the private partnership included provisions on insurance as well. The insurance scheme was as follows. Initially, the risk of a total loss would be divided between the two men. However, for a premium (asseurantie gelt) of fifty guilders per year, the risk was transferred completely to Bijl. Partial damage was nevertheless to be borne equally between the partners. Both of these instances of premium fire insurance appear in an isolated context that does not suggest a further standard practice of fire insurance. Nevertheless, the documents do prove that the concept of premium insurance was utilized for and adapted to the risk of fire already in the mid-seventeenth century. Interestingly, Bijl and Jansz killed two birds with one stone by including insurance provisions in their private partnership agreement rather than concluding a separate insurance contract. 28 Stadsarchief Rotterdam, 18 Archieven van de Notarissen te Rotterdam en daarin opgegane gemeenten (ONA), nr. 438, fol. 27 f. The document is reproduced in Jan Witkop, De ontwikkeling van het Verzekeringswezen, in: Emile O.H.M. Ruempol (ed.), 1328 – 1928. Gedenkboek uitgegeven ter gelegenheid van het 600-jarig bestaan van de stad Rotterdam (1928), 335 – 375, 340 f. 29 Van Niekerk, vol. 1 (n. 4), 182 – 184. 30 Stadsarchief Rotterdam, 18 Archieven van de Notarissen te Rotterdam en daarin opgegane gemeenten (ONA), nr. 236, fol. 126 f.

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II. Mutual fire insurance contracts throughout the Dutch Republic during the seventeenth and eighteenth centuries Besides these traces of premium fire insurance, mutual fire insurance came into practice elsewhere in the Dutch Republic around the same time. Between 1663 and 1783, more than 65 mutual fire insurance contracts were concluded in the Zaanstreek. A famous example of the Zaanstreek contracts is the Olieslagerscontract, which united more than a hundred oil millers at its heyday. Technically, the Olieslagerscontract existed of two contracts. The contract from 1727 insured only the merchandise whilst the contract from 1733 insured the mills.31 The development of the Zaanstreek contracts can be divided into roughly three stages. The first stage took place between 1663 and 1680. Simple insurance schemes and a variety of approaches characterize this stage. In the first stage, exclusively oil millers who lived in the same village concluded mutual fire insurance contracts. Furthermore, these contracts insured merchandise but not mills. The second stage took place during the 1680s. Notably, a uniform approach characterizes this stage, even though various notaries were involved in the various contracts. In this stage, mixed contracts emerged, as millers from both other industries as well as other villages joined in. Now, the contracts insured mills rather than merchandise. From the 1690s, however, the third stage entered and a variety in approaches returned. Contracts were clearly tailored to individual needs. The large number of contracts and the great variety therein over time make it difficult to summarize the insurance schemes of these contracts. In an insurance scheme, all objects could be insured for the same fixed amount, resulting in a standard indemnification, or objects could be valued individually. If the latter situation was the case, an apportionment system would be used, which means that each contribution to the indemnification of another was in proportion to one’s own insured value. In the mid-eighteenth century, millers in other parts of the Dutch Republic started to conclude mutual fire insurance contracts as well. In Amsterdam, for example, a contract dated from 3 December 1740 was concluded between saw millers. Unfortunately, the contract itself has not survived, and therefore the insurance scheme and its characteristics remain unknown. Nevertheless, its existence is shown in two notarial documents prepared by Amsterdam notary Godefridus Schaak that registered the inclusion of new contract partners to this contract. These registrations date from 9 and 22 July 1751, indicating that the contract lasted for over eleven years and that the scheme was able to attract new participants over time. Another Amsterdam mutual fire insurance contract was concluded between 42 sugar refiners on 29 and 30 September 1755.32 This contract was confirmed by the

31

See also Jan Walig, Gedenkboek van het Olieslagerscontract (Contract van verzekering tegen brandschade aan oliemolens en derzelver ladingen aan de Zaan) 1727 – 1912 (1912). 32 Stadsarchief Amsterdam, 107 Archief van de Onderlinge Brandverzekering Aangegaan tusschen Eenige der Suikerraffinadeurs binnen de Stad Amsterdam en rechtsvoorganger, nr. 1,

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Court of Holland (Hof van Holland) on 15 October 1755 through a voluntary decree (willige condemnatie). The contract lasted for 73 years, as on 1 January 1828 a new mutual fire insurance contract for sugar refiners replaced it. The contract was quite improved and subdivided into 13 sections. According to section 1, the contract insured only sugar, syrups and loose tools, but not other merchandise, equipment or the buildings. A separate contract for the insurance of the buildings had existed as well.33 The insurance scheme worked with an apportionment system similar to that of the Zaanstreek contracts. Each contract partner had to contribute to the indemnification of another in proportion to his own insured value. In the province of Groningen, mutual fire insurance developed slightly differently.34 Two mutual fire insurance contracts between hull millers are known of. The first contract dated from 23 February 1743 and was concluded between twelve hull millers. The contract lasted for 41 years, as on 14 July 1784 it was replaced by the second known contract, which was concluded between twenty hull millers. The contract of 1743 was quite simple, as, for example, the clauses were not subdivided into different sections. The contract of 1784 was slightly more refined than the contract of 1743 and consisted of fifteen sections. More of these contracts seem to have existed in the province of Groningen, as section 6 of the contract of 1784 declared that a miller could not claim indemnification if he had insured his mill in another mutual fire insurance scheme as well. Both Groningen contracts insured the mills but not the merchandise. The insurance scheme was as follows: An apportionment system was not applied, as all mills were insured for the same fixed amount. Each miller, therefore, had to contribute an equal amount to the indemnification of another. The payment procedure was divided into two instalments, of which the first was due within six weeks and the second within six months after the fire. In addition to indemnification, the contracts provided aid in kind as well. The three millers living closest to the damaged miller were obliged to mill a certain amount of barley for the damaged miller that was either their own or the damaged miller’s (hondert mudden garst, ‘t sij eigen of buuren goet) without receiving any compensation for their efforts. Where does the origin of mutual fire insurance lie in the Dutch Republic? Van Niekerk suggested that the Zaanstreek contracts were an offspring of the Hamburger Feuerkontrakte,35 but this influence seems unlikely for several reasons.36 For example, the Hamburger Feuerkontrakte were already quite sophisticated at the fol. 11 – 14. See also the online introduction to the archive at https://archief.amsterdam/invent arissen/details/107 (consulted on 17 January 2020). 33 As is shown, for example, in Stadsarchief Amsterdam, 107 Archief van de Onderlinge Brandverzekering Aangegaan tusschen Eenige der Suikerraffinadeurs binnen de Stad Amsterdam en rechtsvoorganger, nr. 1, fol. 317. 34 Both contracts are reproduced in Bob D. Poppen, Groninger molenhistorie. Vijftig opstellen over historische aspecten van Groninger molens (2012), 440 – 443. 35 Van Niekerk, vol. 1 (n. 4), 424 n. 34, 636. 36 See also Hellwege (n. 25), 142 f.

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time when the oldest Zaanstreek contracts emerged. If the Zaanstreek contracts were an offspring, would not they have been more sophisticated as well? One such sophistication was, for example, that five elected members managed a Hamburger Feuerkontrakt of 1664. The appointment of elected members in the Zaanstreek, however, was a development that occurred only in the 1680s, thus during the second stage of the Zaanstreek contracts. For these and other reasons, it would seem that the Zaanstreek contracts developed on their own instead. The Amsterdam contracts, on the other hand, seem to have been an offspring of the Zaanstreek contracts, given also the close geographical and economic connections between Amsterdam and the Zaanstreek. As for Groningen, there are indications that mutual fire insurance developed in a different manner. The different insurance scheme and characteristics of the Groningen contracts suggest a different origin than the Zaanstreek contracts. III. Insurance companies established in the Dutch Bubble of 1720 In the year 1720, the development of fire insurance took another turn, as the Dutch Bubble of 1720 brought along with it the first limited liability companies.37 During the Dutch Bubble, four insurance companies were established in Rotterdam, Middelburg, Gouda and Utrecht. Only two of them lasted for a longer period of time.38 The Middelburg Insurance Company existed until 1814. Unfortunately, little is known about the company and its insurance business. Although the company did underwrite fire insurance policies, it is unknown whether the company issued its own fire insurance policies.39 The Rotterdam Insurance Company, however, still exists today, after many mergers and acquisitions, in the form of ASR Nederland NV. According to the prospectus of the Rotterdam Insurance Company, dating from 21 June 1720, the company would underwrite marine insurance policies on the example of successful English insurance companies.40 Nevertheless, on 4 July 1720, the recently chosen directors of the company informed the shareholders that, be37

The Dutch Bubble of 1720 followed the English and the French Bubbles of 1720. During the Dutch Bubble, a number of joint stock or limited liability companies were projected between June and October 1720. A speculative climate led to a rise in the share prices of these projected companies until the bubble eventually burst. See further Egidius Joannes Josephus van der Heijden, De ontwikkeling van de Naamlooze Vennootschap in Nederland vóór de codificatie (1908); Jan de Vries and Ad van der Woude, Nederland 1500 – 1815. De eerste ronde van moderne economische groei (1995), 188 – 190; Oscar Gelderblom and Joost Jonker, Mirroring Different Follies. The Character of the 1720 Bubble in the Dutch Republic, in: William N. Goetzmann et al. (eds.), The Great Mirror of Folly. Finance, Culture, and the Crash of 1720 (2013), 121 – 139. 38 Hendrik G. Schuddebeurs, Het Nederlandsche verzekeringsbedrijf gedurende de laatste twee eeuwen, voor zoover dit werd uitgeoefend door naamlooze vennootschappen, (1928) 14 Economisch-historisch Jaarboek 1 – 178, 62. 39 Schuddebeurs (n. 38), 17. 40 Antonie J. Bothenius Brouwer, Gedenkboek 200-jarig bestaan der Maatschappij van Assurantie, Discontering en Beleening der Stad Rotterdam. 1720 – 1920 (1920), 2.

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sides having started to underwrite marine insurance policies, the company would soon issue its own fire insurance policies as well. The directors assumed that people would be willing to pay a fair premium for fire insurance.41 Although many English fire insurance companies, as well as the English Bubble of 1720, preceded the Dutch Bubble of 1720 and the Rotterdam Insurance Company, the company did not seem to lean on English examples. Instead, the Resolution Book shows that the directors created their fire insurance policy and practice from scratch. For example, on 4 July 1720, the directors discussed what kind of buildings the company would insure: warehouses that contained hazardous and flammable goods. They listed four types of buildings with corresponding premium rates.42 However, on 23 October 1720, the directors agreed on a final list of insurable objects and corresponding premium rates, which by then had evolved into a list of eighteen types of buildings.43 Whereas the list of 4 July simply listed several industrial buildings, the list of 23 October listed buildings and objects with industrial, commercial and private purposes. The insurance records of the company from 2 September 1720 until 31 December 1727 reflect this mixed practice.44 Authors have noted that the fire insurance branch was initially of little economic importance for the company.45 Notwithstanding this economic unimportance, the insurance records show that a small group of people took out fire insurance for a variety of buildings on a regular basis. IV. From the 1770s: (mutual) fire insurance companies After the Dutch Bubble of 1720, it took 50 years before new insurance companies were established. From the 1770s, insurance companies became a booming business. Between 1770 and 1799, 14 insurance companies were established.46 Authors have given various reasons for this period of 50 years without the establishment of new insurance companies. Schuddebeurs, for example, assumed that the financial market needed to recover from the Dutch Bubble of 1720 and its financial impact.47 Recent research, however, has shown that the Dutch Bubble of 1720 did 41 Stadsarchief Rotterdam, 199 Archief van de Maatschappij van Assurantie, Discontering en Beleening der Stad Rotterdam anno 1720, nr. 1, fol. 17, nr. 36. 42 Stadsarchief Rotterdam, 199 Archief van de Maatschappij van Assurantie, Discontering en Beleening der Stad Rotterdam anno 1720, nr. 1, fol. 18, nr. 38. 43 Stadsarchief Rotterdam, 199 Archief van de Maatschappij van Assurantie, Discontering en Beleening der Stad Rotterdam anno 1720, nr. 1, fol. 97, nr. 216. 44 Stadsarchief Rotterdam, 199 Archief van de Maatschappij van Assurantie, Discontering en Beleening der Stad Rotterdam anno 1720, nr. 209 and nr. 210. 45 Paulus Th. van de Laar and Huibert H. Vleesenbeek, Van Oude naar Nieuwe Hoofdpoort. De geschiedenis van het Assurantieconcern Stad Rotterdam Anno 1720 N.V., 1720 – 1990 (1990), 38. 46 Schuddebeurs (n. 38), 62 f. 47 Schuddebeurs (n. 38), 18.

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not have a serious impact on the economy, despite the many bubble schemes and the speculative climate. Instead, economic historians have now generally accepted that the losses and damages suffered because of the Dutch Bubble were inconsequential.48 Ton Langenhuyzen gave another explanation for the period of 50 years, adding to the previous explanation that the limited success of the Rotterdam Insurance Company of 1720 deterred other investors looking to establish insurance companies.49 Although the results of the (marine) insurance practice were somewhat unstable, and the overall company results fluctuated,50 it seems unlikely that the results of the Rotterdam Insurance Company of 1720 deterred other investors on the whole. Unfortunately, the financial performance of the Middelburg Insurance Company of 1720 is unknown, and, therefore, cannot be compared. Instead, the following reasons may have played a role. For one, the Rotterdam insurance market was smaller than its Amsterdam counterpart. Therefore, the market might have been satisfied for years with just one insurance company. In addition, it seems that English insurers already had a large share in the Rotterdam insurance market, as they heavily slandered the establishment of the Rotterdam Insurance Company in 1720.51 In other words, there might just not have been enough market share left for new insurance companies until much later on. Furthermore, when it comes to Amsterdam, where most of the new insurance companies were established between 1770 and 1799,52 it must be noted that the individual insurers of Amsterdam maintained a strong position on the Amsterdam insurance market. They were able to keep insurance companies, and thus competition, at bay.53 Lastly, as for the Dutch Republic in general, the psychological impact of the Dutch Bubble of 1720 should not be underestimated. In spite of a minimal financial impact, the Dutch Bubble might have caused investors to act cautiously. They might have felt more comfortable investing their money in reliable and familiar projects. Just what had caused this to change in the 1770s, when suddenly insurance companies sprang up like mushrooms, is unclear. One development, however, might have been that from the late 1770s merchandise was increasingly used as collateral for credit loans. Often, creditors demanded that merchants had insured the merchandise against the risk of fire.54 Whereas between 1770 and 1799 fourteen premium (fire) insurance companies were established in Amsterdam in particular, the same cannot be said for mutual fire insurance companies. Between 1770 and 1799, sixteen mutual fire insurance com48

Gelderblom/Jonker (n. 37), 121. Langenhuyzen (n. 1), 217. 50 Van de Laar/Vleesenbeek (n. 45), 38 – 41. 51 Van de Laar/Vleesenbeek (n. 45), 33 f. 52 With the exception of a company in Rotterdam in 1770 and a company in Middelburg, Zeeland, no date, Schuddebeurs (n. 38), 62 f.; Langenhuyzen (n. 1), 219. 53 Langenhuyzen (n. 1), 217. 54 Van de Laar/Vleesenbeek (n. 45), 62 f. 49

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panies were established, fourteen of which were within the province of Groningen. The two exceptions were a mutual fire insurance company in Schiedam, established in 1777,55 and a mutual fire insurance scheme in Kampen, established in 1788.56 Only after 1800 did mutual fire insurance companies spread to other parts of the Netherlands as well. Langenhuyzen has suggested that the prevalence of mutual fire insurance companies in the Groningen countryside might have been linked to the development of local mutual aid systems, collectively called burenhulp (‘neighbours’ help’).57 Around the end of the eighteenth century, burenhulp was documented and formalized for the first time in some parts of the Groningen countryside.58 This formalization process would certainly explain why so many mutual fire insurance companies were suddenly established in such small communities. Initially, a mutual fire insurance company would insure only immovable or movable property, but not both. Thus, in Uithuizen, Middelstum and Usquert, for example, two mutual fire insurance companies were established on the same day within the same village, one for immovable property and one for movables.59 It seems that premium fire insurance companies, on the other hand, offered nation-wide insurance coverage. C. Fire insurance in legislation Whereas the previous paragraphs show that there were many instances of fire insurance in practice throughout the Dutch Republic, legislation did not recognize or regulate fire insurance until 1744. The Amsterdam insurance keur of 10 March 1744 regulated fire insurance in section 18 and in Model Policy no. 4.60 Nevertheless, this legislation was promulgated for Amsterdam and not for other places in the Dutch Republic, where fire insurance remained unregulated. Furthermore, section 18 regulated solely premium fire insurance, as it did not mention mutual fire insurance. Section 18 listed a number of buildings as examples of insurable objects. However, insurable objects were not limited to buildings and could be immovable or movable, whether the object had an industrial, commercial or private purpose. Interestingly, section 18 stated that it did not matter where the insurable object was located, meaning it was inconsequential whether it was within the Dutch Republic 55

Schuddebeurs (n. 3), 6 no. 66. Schuddebeurs (n. 3), 6 no. 67. 57 Langenhuyzen (n. 1), 219. 58 Vincent Sleebe, Burenhulp tussen 1500 en 1800, in: Van Gerwen/Van Leeuwen (n. 1), 234 – 250, 238. 59 Schuddebeurs (n. 3), 6. Contrary to T.J. Hillebrands, Burenhulp en brandkas. Een beschrijving van de plaatselijk of regionaal werkende onderlinge brandverzekering van 1794 – 1968 (1968), 11, 13; Langenhuyzen (n. 1), 219, who claimed that mutual fire insurance for movables was of a much later date in this region. 60 Section 18 and Model Policy no. 4 are reproduced in Van der Vies (n. 1), 23, 28 – 30. 56

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or abroad. This enabled the insuring of property in the Dutch colonies. An Amsterdam policy of 12 September 1770, for example, insured a plantation in Suriname against the risk of fire.61 Section 18 further restricted the duration of fire insurance to one year. The model policy attached to the keur of 1744 was a valued policy. A valued policy meant that the insured value was recorded in the policy.62 This particular aspect was criticized by contemporary English authors as it could facilitate fraud.63 However, by comparison, valued policies were the rule in marine insurance,64 and the known mutual fire insurance contracts, too, worked in a similar fashion with predetermined insured values. The Amsterdam insurance keur of 10 March 1744 was amended on 31 January 1775. Section 18 and Model Policy no. 4 were altered and extended.65 The use of Model Policy no. 4 was now made compulsory, although it would seem that there was no legal consequence or penalty if people contravened this provision and used their own policy.66 Other changes were, for example, that the duration of the insurance was no longer restricted to one year but left to the agreement of the contract parties. Furthermore, the new section 18 explicitly mentioned plantations as insurable objects. Lastly, the risk insured against was extended. In 1744, the principle of universal coverage was applied to the risk of fire.67 The keur of 1775, however, extended the application of this principle not only to the risk of fire but also to risks incurred by firefighting. Thus, the model policy also covered water damage resulting from firefighting as well as theft committed in the chaos of firefighting. As previously mentioned, the Amsterdam insurance keur of 1744 and its amendment of 1775 regulated premium fire insurance for the first time. A further development was that fire insurance in this form could be traded at the Amsterdam and Rotterdam stock exchanges. Especially from the 1770s onwards, when more and more (fire) insurance companies were established, bigger risks could be covered collectively through brokers at the stock exchange. The earlier-mentioned fire insurance policy of 12 September 1770 that covered the plantation in Suriname, for example, was an Amsterdam policy, but its underwriting was organized by a Rotterdam brokerage. The insurance market was not limited to the Amsterdam model

61

The policy is reproduced in Rudolf Mees, Gedenkschrift van de firma R. Mees & Zoonen ter gelegenheid van haar tweehonderd-jarig bestaan 1720 – 1920 (1920), appendix 21. See also Langenhuyzen (n. 1), 212; Van Niekerk, vol. 1 (n. 4), 429 n. 61. 62 Van Niekerk, vol. 2 (n. 4), 1132 f. 63 Nicolas Magens, An Essay on Insurances, vol. 2 (London 1755), 153; John Weskett, A complete Digest of the Theory, Laws, and Practice of Insurance (London 1781), 219; Cornelius Walford, The Insurance Cyclopaedia, vol. 1 (1871), 92. 64 Van Niekerk, vol. 2 n. 4), 1132. 65 The amended section 18 and Model Policy no. 4 are reproduced in Van der Vies (n. 1), 23, 30 – 32. 66 Van Niekerk, vol. 1 (n. 4), 538. 67 See Van Niekerk, vol. 1 (n. 4), 349, 427 f.

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policy or the policies of companies. In Rotterdam, at least from 1799, a standardized fire insurance policy was in use at the stock exchange as well.68 D. Conclusion Thus, in conclusion, during the mid-seventeenth century, the Dutch Republic saw the emergence of both fire insurance based on profit as well as fire insurance based on mutuality. The relatively late development of fire insurance in the Dutch Republic has been attributed to the relatively late development of insurers that were better suited for the risk of fire, such as insurance companies rather than individual insurers.69 The first insurance company of the Dutch Republic was established as late as 1720. Moreover, at that time, most cities prescribed various measures to deal with fire and fire damage, which may have also played a role in the late development of fire insurance. Another factor may have been that of supply and demand. Fire insurance schemes between 1500 and 1800 in the Dutch Republic covered mostly buildings or objects with industrial purposes. The insurance of dwelling houses hardly occurred. Nevertheless, the Rotterdam Insurance Company of 1720 occasionally insured dwelling houses. Likewise, a Zaanstreek mutual fire insurance contract of 6 June 1733 apparently insured houses and warehouses.70 As such, the problem may have been one of demand rather than of supply. The Amsterdam Fire Insurance Company of 1771 explained this in its brochure of December 1823 as follows: According to this company, the general public hardly knew of the concept of fire insurance before 1800, which made it difficult selling fire insurance for dwelling houses. Thus, fire insurance was a relatively new concept, to which the brochure adds that the general public was, at that time, opposed to anything new. As a result, fire insurance was only interesting in the case of unusually great risks, which lay more at hand with industrial objects and buildings.71 Van Niekerk too has noted that the emergence of fire insurance coincided with a period of industrialization.72 Between 1500 and 1800, premium fire insurance was mostly practised in the province of Holland. This was the case particularly in Rotterdam and Amsterdam. 68

Johannes Petrus Vergouwen, De geschiedenis der Makelaardij in Assurantiën hier te lande tot 1813 (1945), 106. Such a policy dating from 22 May 1799 is reproduced in Mees (n. 65), appendix 19. 69 Van Niekerk, vol. 1 (n. 4), 423. 70 Schuddebeurs (n. 3), 5 no. 53. 71 The introduction of the brochure is reproduced in Van der Vies (n. 1), 49 – 51. The Amsterdam Insurance Company of 1771 under the direction of Guljam van den Broeke and Jan Heemskerk Junior was the first company of the Dutch Republic to insure exclusively against the risk of fire. See further Jacques Le Moine de l’Espine and Isaac le Long, De koophandel van Amsterdam, vol. 2 (10th edn., 1801), 48; Schuddebeurs (n. 42), 18; Langenhuyzen (n. 1), 218 f. 72 Van Niekerk, vol. 1 (n. 4), 423.

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Mutual fire insurance, however, could be found in the more northern parts of the Dutch Republic, varying from the Zaanstreek to Groningen. Instances of fire insurance, whether based on profit or on mutuality, are not known to have occurred in provinces such as Friesland or Utrecht. The occurrence of fire insurance may have had to do with the distribution of money in the Dutch Republic. Amsterdam and Rotterdam were big commercial centres located within the province of Holland. Consequently, the wealthiest people of the Dutch Republic lived in the province of Holland.73 Since the nature of insurance requires parties to have a certain amount of money at their disposal, finding premium fire insurance in that area is more likely. Mutual fire insurance, by contrast, works differently and requires less money. Mutual fire insurance can therefore be expected and found elsewhere as well. It is perhaps the case that those regions of the Dutch Republic where traces of fire insurance appear to be lacking may have been too destitute to introduce a concept such as insurance. In other words, people in those regions may have preferred to keep their money in their own pockets instead. Mutual fire insurance was long linked to the Zaanstreek. Interestingly, from the mid-eighteenth century onwards, many mutual fire insurance schemes were established in the province of Groningen. This development may have built on a strong local tradition of mutual aid. It remains unanswered why other regions with similar local traditions of mutual aid did not see a similar emergence of mutual fire insurance schemes. Before the late 1770s, mutual fire insurance was practised in the form of contracts between individuals. From the late 1770s onwards, however, mutual fire insurance increasingly became practised in the form of companies. Premium fire insurance developed differently from mutual fire insurance. The first traces of premium fire insurance can be found in Rotterdam, although these instances appear in an isolated context. Rotterdam was the second port of the Dutch Republic. It had its own stock exchange and insurance ordinances. It therefore comes as no surprise that people would adapt the concept of marine insurance to the risk of fire. Interestingly, the development of premium fire insurance remained linked to Rotterdam for some time. The first insurance company of the Dutch Republic was established in 1720 in Rotterdam. This company, the Rotterdam Insurance Company of 1720, started issuing premium fire insurance immediately and regularly. Even when fire insurance was of little economic importance, the company had a small group of regular clients. The Rotterdam Insurance Company of 1720 even managed to attract some merchants in Amsterdam as its clients. Thus, it may come as no surprise that when Amsterdam renewed its previous insurance ordinance of 1598, the new ordinance of 1744 included provisions on premium fire insurance. Whereas Amsterdam initially kept the establishment of insurance companies at bay, in 1771 the first premium fire insurance company was established there. This company was followed by many 73 Kees Zandvliet, De 250 rijksten van de Gouden Eeuw. Kapitaal, macht, familie en levensstijl (2006), xxii–xxv.

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other premium fire insurance companies having their principal seat in Amsterdam. Working in combination, individual insurers and insurance companies were able to organize the insurance of bigger risks at the Rotterdam and Amsterdam stock exchanges.

Chapter 3: Germany By Matthias Bogner A. The origins of state-run fire offices and German Kameralismus (cameralism) . . . . . . I. The Hamburg Feuerkontrakte: the first spark? . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. The state taking the initiative: the creation of public fire offices . . . . . . . . . . . . . . III. German cameralism and fire insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. The public fire offices’ legal framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Effectively insuring ‘the masses’ versus preventing fraud . . . . . . . . . . . . . . . . . 2. The ‘principle of mutual support’ and its legal implementation . . . . . . . . . . . . 3. Rebuilding the burnt-down houses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B. The rise of private fire insurance companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. The General Prussian Territorial Law of 1794 – a law anticipating practice? . . . . II. A short account on the genesis and content of the General Prussian Territorial Law of 1794 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. The foundation years of private fire insurance companies after 1812 . . . . . . . . . . IV. Two examples testing the impact of English influences and the importance of the General Prussian Territorial Law of 1794 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Premium default: a clause imported from England . . . . . . . . . . . . . . . . . . . . . . 2. Increase of risk: a subtle impact of the General Prussian Territorial Law . . . . . V. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C. Public and private fire insurance schemes in the mid-nineteenth century: two monolithic systems? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. Fire insurance developing into an unregulated ‘bulk business’ . . . . . . . . . . . . . . . II. Opening the markets: competition between the two systems . . . . . . . . . . . . . . . . . III. Exchange of ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31 31 34 36 37 37 39 41 42 42 43 46 49 49 51 55 56 56 59 60 64

When comparing the history of German fire insurance to that of other European countries, the most obvious difference is that in Germany fire insurance is based on two distinct historical foundations. While in England, for instance, there existed since the late seventeenth century a large number of fire insurance companies, which were driven exclusively by private actors, German fire insurance was only since the nineteenth century operated by private insurance companies. These private insurance companies existed, however, side-by-side with state-run fire offices. These public fire offices, the so-called Feuersozietäten or Feuerkassen, had appeared long before private fire insurance companies were first established, their emerging already in the late seventeenth century. Furthermore, it is frequently

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presumed that these public Sozietäten are rooted in even older fire guild traditions. For a long time research had a strong focus on these public fire offices and their origins.1 Modern scholars researching the history of fire insurance and using this literature as a starting point will consequently be led to believe that these state-run fire insurance schemes must be the root of modern German fire insurance. And it is usually implied that the development of fire insurance law followed a similar path: It is rooted in the legal provisions established by these state-run fire offices. The present contribution will cast a spotlight on both types of fire insurance. First, the origins of the state-run fire offices will be traced back into the late sixteenth century. Furthermore, the purposes which they served will be examined, especially by taking a closer look at their legal framework as defined in their statutes and bylaws (see below A). Following this, the origins and purposes of the private initiatives which first appeared in the nineteenth century will be analysed with a special focus on their general policy conditions (see below B).2 One would believe that the state-run fire offices must have had an important impact on the private fire insurance companies and their policy conditions. However, it is already questionable whether there was any significant resemblance between state-run fire offices and private fire insurance companies. Furthermore, modern literature discusses also a second possible source of inspiration for the practices and general policy conditions of the German private insurance companies of the early nineteenth century: English fire insurers had been active on the German market since the late eighteenth century. The answer to the question whether state-run fire offices had an impact on the private fire insurance companies of the early nineteenth century raises follow-up questions: How did the two systems interact in the subsequent development? Did they develop independently from each other or did their development converge in the later nineteenth century? These last two questions will be the central problem discussed in the last section of the present contribution (see below C). 1 See, e. g., Franz Büchner, Die Entstehung der Hamburger Feuerkasse und ihre Entwicklung bis zur Mitte des 19. Jahrhunderts, in: Hamburger Feuerkasse (ed.), 300 Jahre Hamburger Feuerkasse (1976), 1 – 49; Wilhelm Ebel, Die Hamburger Feuerkontrakte und die Anfänge des deutschen Feuerversicherungsrechts (1936); Otto Gierke, Das deutsche Genossenschaftsrecht, vol. 1 (1868, reprinted 1954); Georg Helmer, Die Geschichte der privaten Feuerversicherung in den Herzogtümern Schleswig und Holstein (1925); idem, Entstehung und Entwicklung der öffentlich-rechtlichen Brandversicherungsanstalten in Deutschland (1936); Karl von Hülsen, Geschichte, Umfang und Bedeutung des öffentlichen Feuerversicherungs-Wesens, (1867) 7 Zeitschrift des Königlich Preussischen Statistischen Bureaus 321 – 348; Wilhelm Schaefer, Urkundliche Beiträge und Forschungen zur Geschichte der Feuerversicherung in Deutschland (1911); Cornel Zwierlein, Der gezähmte Prometheus. Feuer und Sicherheit zwischen Früher Neuzeit und Moderne (2011). 2 Only modern research has started to focus on the development of general policy conditions, see, e. g., Alexander Müssener, Die Entwicklung der Aachener Feuer-VersicherungsGesellschaft im 19. Jahrhundert (2008); Ralph Neugebauer, Versicherungsrecht vor dem Versicherungsvertragsgesetz (1990). Critically as to the practical feasibility of such a research approach, Ludwig Raiser, Das Recht der Allgemeinen Geschäftsbedingungen (1935), 42.

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A. The origins of state-run fire offices and German Kameralismus (cameralism) The often-cited Hamburger General Feur-Ordnungs Cassa of 1676 is said to be the first state-run fire insurance scheme. However, the city of Hamburg did not invent the idea of fire insurance from scratch. The 1676 Cassa is rather deeply rooted in private initiatives, the so-called Feuerkontrakte (fire contracts). In order to understand the origins and purpose of public fire offices, these Feuerkontrakte have to be examined first. Only thereafter will the state-run fire offices and especially their legal aspects be analysed. I. The Hamburg Feuerkontrakte: the first spark? The first Feuerkontrakt was concluded on 3 December 1591: One hundred Hamburg brewery owners joined together to insure their breweries against the risk of fire. Breweries have always been exposed to the risk of fire.3 It does not come as a surprise that the objective of these contracts was an economic one. Almost all real property purchased in Hamburg was financed by credit, which was secured by rent charges hypothecated on the property. Thus, there was a need to secure the creditors in case the house burnt down. In essence, the first Feuerkontrakt of 1591 was meant as a way to increase the financial credibility of the participating brewers.4 In the event of fire damage, every brewer received the fixed sum of 1,000 imperial talers as damages in order to rebuild his brewery. Hence every party to the contract had to contribute ten imperial talers after a fire had occurred.5 The design of the 1591 fire contract was rather simple:6 ‘Da averst by Dage oder Nachte ein oder mehr der in specie hernach benöhmeden Bruwerve/ dat GOtt vorhöde/ gantz affbrennen würde oder würden/ so ys hirmit belevet und angenahmen/ dat ein jeder düsser Einhundert Eigendöhmer dem einen oder mehren/ der oder des Führes Nodt und nadehl erleden/ einem jeden dersülvigen beschedigten Tein Enkelte Rickesdahler van einem jeglichem synem in düssem Contract benömeden BruwErve jnnerhalb Monats frist nach beschenen Führesschaden ohn einige verwegeringe oder Gerichtsforderinge tho beteringe des Unglücks geben und bethalen solle: Alßdann ock de eigentliche upsicht dorch de Eltisten unnd Vornehmsten Eigendöhmere diesser Consorten thodragende/ dat ungesümet vor alle düth ingebrachte Gelt/ Steine/ Kalck/ Holdt vnd dergelyken materie, tho schlüniger (als benantlich binnen Jahr und Dage) wedder 3

Hermann Brämer and Karl Brämer, Das Versicherungswesen (1894), 235; Büchner (n.1), 4; Ebel (n. 1), 7; Eugen von Liebig, Das deutsche Feuerversicherungswesen (1911), 11; Helmer, Entstehung und Entwicklung (n. 1), 32; Schaefer (n. 1), vol. 1, 166; Clemens von Zedtwitz, Die rechtsgeschichtliche Entwicklung der Versicherung (2000), 126 f. 4 Büchner (n. 1), 7; Erich Prölss, Die Entwicklung des Feuerversicherungsrechts, (1942/ 43) 14 Das Versicherungsarchiv 156 – 173, 157; Schaefer (n. 1), vol. 1, 169. 5 Büchner (n. 1), 4; Ebel (n. 1), 8; Otto Prange, Die Theorie des Versicherungswertes in der Feuerversicherung (1895), vol. 1, 24; Schaefer (n. 1), vol. 1, 167; von Zedtwitz (n. 3), 126 6 Cited from Ebel (n. 1), 66.

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Matthias Bogner Erbuwinge eines oder mehr affgebranten Hüser gekofft und beschaffet/ Sonsten averst düth Geldt (by vorlust dessülvigen) tho keinem andern Ende bestediget werden schöle.’ ‘But when, by day or by night, one (or several) of the hereafter mentioned brewery houses burns (or burn) down completely, which God may prevent, so is hereby decided and accepted, that each of these one hundred proprietors shall give and pay to him (or those), who suffer(s) from poverty and disadvantage through fire, ten imperial talers, which shall be given and paid by each brewer mentioned in this contract to each damaged (party) within a period of one month after the fire damage has happened without any refusal or legal proceedings in order (for the damaged party) to recover from the misfortune: then, the eldest and most noble proprietors of these members shall supervise, that from all the collected money, stones, chalk, timber and such materials are bought and purchased without delay (namely within one year and one day) for the purpose of the quick reconstruction of the burned house or houses, but apart from that, that the money shall (by penalty of its forfeiture) not be used for any other purpose.’

For the time span between 1591 and 1676, altogether 46 further fire contracts in Hamburg have been identified by modern research.7 They became increasingly sophisticated. Under the 1591 contract, each proprietor had to pay the same contribution: ten imperial talers. Under later contracts the contributions were, for example, calculated on the basis of the value of the insured property.8 Furthermore, later examples were not restricted to brewers, and also other wealthy Hamburg real estate owners started to form such associations.9 An analysis of the Hamburg fire contracts raises the question whether they were the first spark for the idea of fire insurance in Germany. Of course, different means of support and aid in case of fire damage had developed long before the first Feuerkontrakt was concluded: The sovereign of a territory might have donated wood (Gnadenholz), he may have granted tax allowances or the church may have arranged special collections for the benefit of fire victims.10 Yet, these means to help owners of buildings which were destroyed by fire cannot be described in terms of insurance. However, there was a further institution predating the Hamburg fire contracts, an institution which has attracted academic interest for a long time:11 the so-called fire 7 Büchner (n. 1), 9; Schaefer (n. 1), vol. 1, 173, counted 43 such contracts. For a full account of all Hamburg Feuerkontrakte, see Schaefer (n. 1), vol. 1, 170 – 172. 8 Ebel (n. 1), 45 (referring to a contract of 1665 called ‘S. Georg’); Schaefer (n. 1), vol. 1, 179 (referring to a contract of 1656 called ‘Concordia’). 9 Ebel (n. 1), 10. 10 von Liebig (n. 3), 13 f.; for a detailed account of these means of help, see Schaefer (n. 1), vol. 2, 81 (church collections), 82 – 88 (private collections), 89 – 91 (‘Gnadenholz’). 11 Gierke (n. 1), 3, depicts the German fire guilds as a manifestation of the ‘unfailing Germanic spirit of association’ – a narrative that is occasionally copied without challenging a possible ideological bias, see, for example, Peter Koch, Die historische Entwicklung des Versicherungsvereins auf Gegenseitigkeit, in: Wolfgang Peiner (ed.), Grundlagen des Versicherungsvereins auf Gegenseitigkeit (1995), 13 – 26, 13. In addition, see Büchner (n. 1), 5; Ebel (n. 1), 34; Helmer, Geschichte (n. 1), vol. 1, 215; Richard Ehrenberg, Studien zur

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guilds in Schleswig-Holstein, a region near Hamburg. These fire guilds can be traced back to the fifteenth century. They provided mutual support in the event a member’s house was destroyed by fire.12 It is often suggested that these guilds are the direct predecessors of the Hamburg Feuerkontrakte.13 Indeed, these guilds had ongoing business connections with Hamburg brewers. The latter delivered beer for the guilds’ social events, and it was argued that this alone makes it likely that the Hamburg brewers were inspired by these guild schemes when forming the first fire contract of 1591.14 However, a closer look reveals that the details of these guilds are distinct from those of the Feuerkontrakte. First of all, the Schleswig-Holstein guilds were formed by oath, and they were based on strong social bonds between their members, there being frequent guild feasts (Gildegelage) with detailed codes of conduct, especially with respect to the consumption of beer. Some guilds also gathered together for ritualised shootings. And most of them also provided for deceased guild members’ widows or paid towards a member’s funeral costs.15 The Feuerkontrakte, on the other hand, were not formed by oath; rather, they were simple contracts, and they did not exhibit any social elements but were mainly a manifestation of mercantile reasoning.16 Secondly, whereas the parties to the Hamburg fire contracts compensated fire damage only financially by providing a specific sum of money to the damaged party, the fire guilds offered other forms of support to fellow brothers who had suffered a damage through fire. For example, they provided food, cattle and construction materials, or they helped with the rebuilding of the destroyed house. Some later guilds, however, also included additional payments of money.17 Thirdly, and most importantly, the Hamburg fire contracts introduced the novelty that each contracting party had, in the case that his house had experienced fire damage, an individual claim against the other parties to the contract. This sharply contrasts to the guilds. Here, only means of indirect enforcement were known. A brother who was not in compliance with the rules of the guild, including the obligation to support a fellow guild brother who had suffered a damage from fire, was fined by the guild. He had to pay as fine a predefined sum of money or – more Entwickelungsgeschichte der Versicherung, (1902) 2 Zeitschrift für die gesammte Versicherungs-Wissenschaft 35 – 41, 35 f.; von Hülsen (n. 1), 322; Schaefer (n. 1), vol. 1, 21 – 88. 12 For a list of Schleswig-Holstein guilds since the fifteenth century, see von Hülsen (n. 1), 322 f. 13 Helmer, Geschichte (n. 1), vol. 1, 225; von Hülsen (n. 1), 322. 14 Cf. Ebel (n. 1), 37 (disregarding the theory of Feuerkontrakte being the offspring of fire guilds); see also Büchner (n. 1), 5. 15 Büchner (n. 1), 6; Ebel (n. 1), 34; Koch (n. 11), 14; R. Ehrenberg, Studien zur Entwickelungsgeschichte der Versicherung (1901) 1 Zeitschrift für die gesammte Versicherungs-Wissenschaft 101–107, 104; Schaefer (n. 1), vol. 1, 52, 168; von Zedtwitz (n. 3), 73. 16 Büchner (n. 1), 6; Ebel (n. 1), 40; von Zedtwitz (n. 3), 130. 17 Brämer/Brämer (n. 3), 235; Büchner (n. 1), 5; Ebel (n. 1), 36; von Liebig (n. 3), 12; Müssener (n. 2), 18; Schaefer (n. 1), vol. 1, 42 f.

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commonly – he had to provide beer. The fine benefited the whole guild and not just the guild brother who had suffered a damage through fire. Further, the damaged brother did not have a legal right against his fellow brothers to support.18 In conclusion, it cannot be upheld that the Hamburg Feuerkontrakte as a rather ‘mercantile’ institution were rooted in any way in the Schleswig-Holstein fire guilds.19 If the fire contracts have any predecessors, these should rather be searched for in other mercantile institutions – most probably Dutch marine insurance, which was brought to Hamburg by protestant Dutch refugees fleeing from the Spanish siege of Antwerp in 1584/85. It is often proposed that it cannot be a coincidence that the first marine insurance contract concluded in Hamburg was drawn in 1588 by a Dutchman, Hans de Schotte, only three years before the first fire contract emerged.20 Finally, it should be noted that many of the Schleswig-Holstein fire guilds, which were often very small schemes, survived all later developments in the context of fire insurance,21 and a number of them still exists today. II. The state taking the initiative: the creation of public fire offices The prototype for state-run fire offices was established in 1676: the General Feur-Ordnungs Cassa (Hamburg General Fire Office). Just about the same time when London was devastated by the Great Fire of 1666, Hamburg was hit by several fires in the 1660s and 1670s, the most disruptive occurring in 1676. Modern research claims that these fires overburdened the parties to the Feuerkontrakte. They had to make contributions which exceeded their financial capabilities.22 It seems that the parties to the fire contracts had already understood that it is crucial for the financial stability of any insurance scheme not to accumulate too many ‘correlating’

18

Ebel (n. 1), 39; Müssener (n. 2), 17; Prölss (n. 4), 156. Ebel (n. 1), 41 f.; Schaefer (n. 1), vol. 1, 168. 20 Büchner (n. 1), 8; Thomas Dreyer, Die ‘Assecuranz- und Havereyordnung’ der Freien und Hansestadt Hamburg von 1731 (1990), 23; Ebel (n. 1), 33; Helmer, Entstehung und Entwicklung (n. 1), 12 f.; Schaefer (n. 1), vol. 1, 161 f.; von Zedtwitz (n. 3), 103. Of all the authors writing on Hamburg marine insurance, only Schaefer (n. 1), vol. 1, 163, concludes that the marine insurance contract of 1588 may have been a source of inspiration for the Hamburg Feuerkontrakte. 21 See Schaefer (n. 1), vol. 1, 81 – 86, for a full account of 134 Schleswig-Holstein fire guilds still existing in 1911, with most of them insuring movables as the insurance of buildings was taken over by public fire offices; see also Prange (n. 5), vol. 1, 28 – 38. 22 Büchner (n. 1), 10; von Liebig (n. 3), 17 f.; Heinrich Ohlmeier and Paul-Christian Spohnholtz, Die wirtschaftliche Entwicklung der Hamburger Feuerkasse, in: Hamburger Feuerkasse (ed.), 300 Jahre Hamburger Feuerkasse (1976), 51 – 115, 53; Schaefer (n. 1), vol. 1, 174; von Zedtwitz (n. 3), 130 f. 19

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risks at the same time.23 They had taken care that the buildings insured in a single fire contract were not neighbouring each other, but were distributed over the whole city.24 Nevertheless, when great parts of the city burnt down, even these precautionary steps did not help any more. By this point, the city of Hamburg acknowledged the importance of a single fire office which distributed the risk over larger segments of the Hamburg building owners.25 Thus, even before the ‘disastrous’ year of 1676 ended, the statutes of the General Feur-Ordungs Cassa had been enacted by the city of Hamburg, and the scheme itself had been established. It was the first state-run fire office. It consolidated all of the then existing private fire contracts, and their members were transferred to the new Cassa.26 Furthermore, the scheme was open to all real estate owners in Hamburg, without, however, introducing compulsory membership.27 With respect to its legal rules as contained in the 1676 statutes, it is obvious that the legal heritage of Feuerkontrakte was not simply abandoned, but that these fire contracts, to the contrary, had provided the fundament for the 1676 statutes28 – a point to which I will return again further below. The advantages of public fire offices were soon recognized in the other German states, especially in Prussia, where a public fire office was founded 1685 in the city of Magdeburg.29 However, the first two attempts to establish a more extensive Prussian public fire insurance (the Feuerordnung auffm Lande in der Chur und Mark Brandenburg of 1701 and the Stadt- und Land-Feuer-Cassa of 1705) failed. The latter Cassa was planned to cover the entire Prussian territories, and this proved too ambitious as the administration of such an office could not be accomplished effectively.30 Smaller public fire offices followed, each one covering only one city or several villages. The first such office was the Berliner Feuersozietät of 1718 – 23 On the problem of ‘accumulated risks’, see also von Liebig (n. 3), 159 f.; Wilhelm Hagena, Die Ansichten der deutschen Kameralisten des 18. Jahrhunderts über das Versicherungswesen (1910), 37 f. 24 Büchner (n. 1), 10; Ebel (n. 1), 13 (the first example of ‘distributing’ risks can be seen in a Feuerkontrakt of 1628, called ‘Neue Brandordnung’). 25 Ebel (n. 1), 51. 26 Puncta der General Feur-Ordnungs Cassa (1676), Art. 1 (reproduced in Schaefer (n. 1), vol. 1, 226); see also Brämer/Brämer (n. 3), 235; Büchner (n. 1), 12; Ebel (n. 1), 51 f.; Helmer, Entstehung und Entwicklung (n. 1), 43 f.; Müssener (n. 2), 25; Prange (n. 5), 43; R. Ehrenberg (n. 11), 37; Schaefer (n. 1), vol. 1, 175; von Zedtwitz (n. 3), 159; Zwierlein (n. 1), 223. However, the General Feur-Ordnungs Cassa affected only the Feuerkontrakte within Hamburg’s city walls. For a full account of the further development of the Feuerkontrakte and small fire guilds outside the city walls after 1676, see Ohlmeier/Spohnholtz (n. 22), 69– 87. 27 General Feur-Ordnungs Cassa (n. 26), Art. 4, 5; Ebel (n. 1), 52; Schaefer (n. 1), vol. 1, 175. 28 Büchner (n. 1), 12; Ebel (n. 1), 25, 31; Schaefer (n. 1), vol. 1, 175. 29 Büchner (n. 1), 15; Ebel (n. 1), 63. 30 Brämer/Brämer (n. 3), 236; Ebel (n. 1), 65; von Liebig (n. 3), 18 f.; Prange (n. 5), vol. 1, 42; Prölss (n. 4), 157; Schaefer (n. 1), vol. 2, 140.

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just like the Hamburg fire office of 1676, the Berlin office of 1718 still exists today, even though in a different legal form.31 In contrast to the Hamburg fire office of 1676, membership in some Prussian public fire insurance schemes was compulsory. Modern research claims that the Prussian population, unlike the citizens of Hamburg, lived in deep poverty and at times suspected the contributions to these schemes were ‘hidden’ taxes, without understanding the corresponding benefits.32 Despite this initial distrust, state-run fire offices were soon established throughout the entire Prussian state and in almost all other German territories,33 all of them sharing similar legal patterns. III. German cameralism and fire insurance When analysing these legal patterns, it is crucial to understand that eighteenthcentury public fire insurance is linked to the ideas of German Kameralismus (cameralism). Kameralismus is an administration science which had a strong influence on German sovereigns, its promoting a centralized economic policy characterized by state intervention. It was developed subsequent to the Thirty Years’ War (1618 – 1648), when many areas in Germany were devastated and large parts of the population had been killed either by warfare or by disease. As a means of restoring the functioning of the state and the economy, it was considered vital to foster the growth of population and to increase state earnings. By promoting the welfare of the people and by re-populating fallow territories, the sovereigns hoped to restore their economies and, therefore, to regain political and military power.34 Cameralism actively promoted the introduction of public fire insurance schemes, too. Its main objective was to see the rebuilding of houses which were destroyed by fire. The aim was not simply to provide homes for families who have been affected by fires, but ultimately to secure state revenue. Houses were seen as the economic 31 Brämer/Brämer (n. 3), 236; Büchner (n. 1), 15; Ebel (n. 1), 65; von Liebig (n. 3), 19; Helmer, Entstehung und Entwicklung (n. 1), 71; Müssener (n. 2), 26; R. Ehrenberg (n. 11), 38; Prange (n. 5), vol. 1, 42; Prölss (n. 4), 157; Schaefer (n. 1), vol. 2, 163; von Zedtwitz (n. 3), 160; Zwierlein (n. 1), 295 f.; the statutes of the 1718 Berlin Feuersozietät (Reglement, wie es bey der in denen Residentzien aufgerichteten Societät mit dem von denen Eigenthümern derer Häuser zur Ersetzung eines Feuer-Schadens aufzubringenden Beytrag zu halten) of 29 December are reproduced in Schaefer (n. 1), vol. 2, 232. 32 Schaefer (n. 1), vol. 2, 136. 33 The first state-run fire offices to follow were those in the Kur- und Neumark (1719), Altpommern (1720), Magdeburg (1721), Stettin (1722); the last territory and the last city to establish such fire offices were, respectively, Bavaria (1811) and Frankfurt am Main (1817). For a list of all known eighteenth-century Feuersozietäten, see von Hülsen (n. 1), 324 – 326; for a similar list from the point of view of modern research, see Zwierlein (n. 1), 370 – 372. 34 Hagena (n. 23), 14 f. (arguing that aspects of public welfare were of only secondary importance); Müssener (n. 2), 24; Schaefer (n. 1), vol. 2, 134; von Zedtwitz (n. 3), 210 f.; on cameralism, see Siegbert Lammel, Die Gesetzgebung des Handelsrechts, in: Helmut Coing (ed.): Handbuch der Quellen und Literatur der neueren europäischen Privatrechtsgeschichte, vol. II/2 (1976), 571 – 1083, 587 – 590.

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basis of each family guaranteeing the ability to pay taxes.35 Furthermore, the practice of so-called ‘fire begging’ (Brandbettel) was to be abandoned. Under this practice, the state issued a kind of ‘begging licence’ to fire victims. It was argued that ‘fire beggars’ did not generate any economic benefit to society. And it was claimed that many of these beggars acted fraudulently as they held a license without having suffered a damage through fire.36 IV. The public fire offices’ legal framework The legal framework of these public fire offices was defined in the statutes of each of the many offices, and these statutes took the form of legislation. For a simple reason these statutes exhibited common features: The statutes of the Hamburg General Feur-Ordnungs Cassa of 1676 and of the Berliner Feuersozietät of 1718 had served as a model for many of these state-run fire offices. Although these Feuersozietäten were, via the Hamburg office of 1676, rooted in the older tradition of the Hamburg fire contracts, the legislators added and modified some typical clauses in order to promote public welfare, introducing ideas from German seventeenth- and eighteenth-century cameralism to the development of these fire offices. 1. Effectively insuring ‘the masses’ versus preventing fraud In order to cover, in accordance with the cameralistic ideas of public welfare, as many people as possible, membership in many Feuersozietäten was compulsory for all real property owners in the district for which the scheme was set up. Some statutes establishing such schemes even introduced an ipso iure membership.37 It 35 From the cameralistic literature, see, e. g., Günther Heinrich von Berg, Handbuch des Teutschen Policeyrechts, vol. 3 (1800), 72; Johann Heinrich Gottlob von Justi, Grundsätze der Policey-Wissenschaft (2nd edn., Göttingen 1759), 194; see also von Liebig (n. 3), 20; Hagena (n. 23), 16 f.; Prange (n. 5), vol. 1, 40. 36 Hagena (n. 23), 10; Müssener (n. 2), 20; Prange (n. 5), vol. 1, 40; R. Ehrenberg (n. 11), 36; Schaefer (n. 1), vol. 2, 91 f.; von Zedtwitz (n. 3), 160. 37 Berliner Feuersozietät (n. 31), Art. 3: compulsory membership; Marggräflich BadenDurlachische Brand-Versicherungs-Ordnung of 25 September 1758, Art. 1 (reproduced in Carl Friedrich Gerstlacher, Sammlung aller baden-durlach’schen … Verordnungen (Karlsruhe 1774), vol. 2, 476): ipso iure membership; membership was voluntary for the sovereign, churches and schools; Herzoglich-Württembergische allgemeine Brand-Schadens-Versicherungs-Ordnung of 16 January 1773, § 5 (reproduced in Gustav Hermann Zeller and Friedrich Franz von Mayer, Sammlung der württembergischen Regierungs-Gesetze (1843), vol. 3, 871): ipso iure membership; exceptions for the nobility were possible; Reglement der Brand-Societät Westphalen (1778), § 2 (reproduced in Johann Josef Scotti, Sammlung der Gesetze … in den ehemaligen Herzogthümern Jülich, Cleve und Berg (1821), vol. 1, 973): compulsory membership with the exception of the nobility; Reglement zur Feuer-Societät für das platte Land in West-Preussen (1785), §§ 1 f. (Novum Corpus Constitutionum PrussicoBrandenburgensium, vol. 7 (Berlin 1786), 326): ipso iure membership; voluntary membership

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was apparently only in those regions where the majority of homeowners joined these schemes voluntarily that the legislature abstained from introducing compulsory membership.38 Furthermore, except for the Hamburg General Feur-Ordnungs Cassa, public fire offices had an absolute monopoly for the districts for which they were set up.39 However, notwithstanding the aim of insuring as many homeowners as possible, cameralistic literature and public authorities feared that insurance coverage could easily be abused if the insured was to receive full indemnification. Namely, it was suspected that the insured could be induced to commit acts of arson in order to gain profit out of a decayed building or that he would at least act carelessly towards his property.40 In reaction, many public fire insurance schemes introduced compulsory underinsurance41 as is exemplified already in the Hamburg General Feur-Ordnungs Cassa of 1676:42 ‘Art. 2. Sollen die Eigenthümer / bey Eintretung der Neuen Ordnung / schuldig seyn / ein Quart Risico ihrer Erben zulauffen / und alsdann ihre Häuser oder Erben auff eine gewisse Summa / jedoch die Principalisten nicht über 15000. Marck einzeichnen zulassen / und von jedem eingeschriebenen 1000. Marck der gemeinen Cassa anfänglich 1. Marck Lüb. zu erlegen.’ ‘Art. 2. The owners shall, when these regulations come into effect, be liable to bear a quarter of the risk of their real property and have to enrol their houses for a specific sum, but for no more than 15,000 Mark, and initially they have to pay 1 Mark Lüb. for each subscribed 1,000 Mark to the benefit of the general office.’

for the nobility. From the cameralistic literature, see, e. g., von Justi (n. 35), 194 f. See also von Liebig (n. 3), 21; Hagena (n. 23), 46; Lammel (n. 34), 714; Müssener (n. 2), 22. 38 See, e. g., Brandversicherungs-Gesellschaft des Herzogthums Berg of 26 September 1801, § 2 (reproduced in Scotti (n. 37), vol. 2, 810); Reglement der vereinigten Land-Feuersozietät im Bezirk der Ostpreußischen Landschaft of 22 April 1809, § 3 (Novum Corpus Constitutionum Prussico-Brandenburgensium, vol. 12 (1822), 823). Also the General FeurOrdnungs Cassa (n. 26), Art. 4 f, and its successor, the Neue General-Feuer-Cassa-Ordnung of 28 September 1753, Art. 1 (reproduced in Schaefer (n. 1), vol. 1, 232), abstained from compulsory membership. 39 A monopoly was explicitly introduced for the Societät West-Preussen (n. 37), according to § 3 of its statutes, with exceptions for already existing schemes (§ 3) and societies that offered help in kind (§ 4), probably referring to private fire guilds. 40 From the cameralistic literature, see, e. g., Johann Heinrich Jung, Lehrbuch der StaatsPolizey-Wissenschaft (Leipzig 1788), 381; see also Hagena (n. 23), 28 f. 41 From the cameralistic literature, see, e. g., von Berg (n. 35), 69; see also von Liebig (n. 3), 175; Hagena (n. 23), 72; Müssener (n. 2), 185; Neugebauer (n. 2), 119. 42 General Feur-Ordnungs Cassa (n. 26), Art. 2. The same clause was included in the newly revised Neue General-Feuer-Cassa-Ordnung (n. 38), Art. 3 – 5. Similar provisions were included in the Neue Feuer-Cassen-Ordnung für Billwärder und andere Stadt Ländereyen of 6 June 1774, § 3 (reproduced in Christian Daniel Anderson, Sammlung hamburgischer Verordnungen (Hamburg 1783), vol. 1, 13); Societät West-Preussen (n. 37), § 7.

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Other schemes did not introduce compulsory underinsurance, but the value of the insured building could either be revised by public authorities or the value was estimated by them.43 2. The ‘principle of mutual support’ and its legal implementation The Feuersozietäten were not meant to generate a profit. They were established to serve public welfare. Therefore, according to the ideas of cameralism, it was not appropriate to calculate the contributions on the basis of the risk of fire as this would contradict their idea of public welfare which aimed at creating an equal level of wealth for all inhabitants. Calculating the contributions on the basis of the risk would have meant that some of the insured would have had to pay prohibitively high contributions. Instead, the idea was that the entirety of the insured should mutually support each other by paying in the same contributions. Literature spoke of a principle of mutual support (Unterstützungsprinzip).44 The only distinction that was made was that the contributions were dependent on the insured value. Only a few exceptions were made, for instance with respect to risks which were regarded to be too high to receive coverage: mills, theatres, ironworks and smelters were in many offices excluded.45 In order to calculate each insured’s contribution, the value of the insured building had to be estimated. For that purpose, experts were officially appointed, such as master masons or master carpenters. The estimated value was then recorded in a public register.46 Once a fire had occurred, the damage needed to be assessed in order to calculate the indemnity. In the case of total loss, the full registered value 43 See, e. g., Neue General-Feuer-Cassa-Ordnung (n. 38), Art. 17 (revision every 10 years); Baden-Durlachische Ordnung (n. 37), Art. 10, 17 – 19 (taxation by public authorities, annual revision); Württembergische Ordnung (n. 37), §§ 26 f. (revision by public authorities possible); Societät West-Preussen (n. 37), § 7 (taxation by public authorities); Brandversicherungs-Gesellschaft Berg (n. 38), § 4 (immediate revision by public authorities possible); Vereinigte Societät Ostpreußen (n. 38), § 27; see also von Liebig (n. 3), 125, 175; Hagena (n. 23), 72; Schaefer (n. 1), vol. 2, 166 (discussing the Berlin Sozietät of 1718). 44 From the cameralistic literature, see, e. g., Johann Heinrich Ludwig Bergius, Policeyund Cameral-Magazin (2nd edn., Wien 1786), vol. 3, 45; see also Hagena (n. 23), 33; Neugebauer (n. 2), 15. 45 Cf. Neue General-Feuer-Cassa-Ordnung (n. 38), Art. 18; Baden-Durlachische Ordnung (n. 37), Art. 2 lit. d; Württembergische Ordnung (n. 37), § 14; Societät West-Preussen (n. 37), §§ 1, 5; Brandversicherungs-Gesellschaft Berg (n. 38), § 3; Vereinigte Societät Ostpreußen (n. 38), § 9. The Hamburg General Feur-Ordnungs Cassa of 1676 did not yet exclude any high risks. 46 Berliner Feuersozietät (n. 31), Art. 1; Neue General-Feuer-Cassa-Ordnung (n. 38), Art. 9 (taxation by masons and carpenters only needed if value exceeded 20,000 Mark); Baden-Durlachische Ordnung (n. 37), Art. 11, 14; Societät Westphalen (n. 37), §§ 21, 28; Societät West-Preussen (n. 37), §§ 6 f.; Brandversicherungs-Gesellschaft Berg (n. 38), §§ 4 f.; Vereinigte Societät Ostpreußen (n. 38), § 27; see also Lammel (n. 34), 713; Prölss (n. 4), 158.

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was paid out. In the case of partial loss, the loss ratio was estimated and multiplied with the value. This was again in the hands of the said experts.47 The compensation was then apportioned over all members of the Feuersozietät in proportion to their insured values.48 With some schemes, the procedure of a subsequent damage apportionment was supplemented by premiums or entrance fees in order to build up a fund.49 The statutes of the Berliner Feuersozietät of 1718 exemplify the system of damage apportionment:50 ‘Art. 1. Nachdem die Häuser und Gebäude der Einwohner, theils nach gegebener SpecialInstruction in eine gewisse Taxe gebracht, wobey was oberhalb der Erden befindlich, nicht aber der grund, oder was in die Erde gebauet, angeschlagen worden, theils auch von einigen Eigenthümern selbst geschätzet, und darnach in ein Catastrum angezeichnet worden; So müssen die Eigenthümer, wann ein Brand-Schaden geschiehet, von jedem Eingezeichneten 100. Thlr. der Taxe, so viel, als die Noth erfordert, zur Ersetzung des taxirten Schadens beytragen.’ ‘Art. 1. After the houses and buildings of all inhabitants have been estimated, partly according to a special instruction (and in doing so only what is above ground may be taken into consideration, but not the value of the land itself or of what is built into the ground), partly by some owners themselves, and after that the value will be registered; when a fire damage occurs, the owners have to contribute, as much as the hardship requires, from each registered 100 talers of the estimate in order to compensate the appraised damage.’

In contrast to modern insurance, where the insured has to disclose at the conclusion of the contract any circumstances that affect the risk and where he has to notify the insurer of any circumstances which subsequently change the risk, no such duties were needed in these public insurance schemes: the insured’s contribution was not calculated on the basis of his personal risk of fire.

47

General Feur-Ordnungs Cassa (n. 26), Art. 6, 8 (estimation of partial damage, payment of the enrolled sum in the event of total damage); Berliner Feuersozietät (n. 31), Art. 6 (estimation of damage); Neue General-Feuer-Cassa-Ordnung (n. 38), Art. 12 f.; Württembergische Ordnung (n. 37), §§ 50 – 54, 80, 81; Societät Westphalen (n. 37), §§ 11 f.; Brandversicherungs-Gesellschaft Berg (n. 38), § 6; Vereinigte Societät Ostpreußen (n. 38), §§ 14 f. The Societät West-Preussen (n. 37), Art. 11, paid out the full registered value, even if only the roof had burnt down and thus even in a case of partial damage; this contradicts the efforts of preventing over-compensation. 48 See also Müssener (n. 2), 24 f.; Prölss (n. 4), 157; Schaefer (n. 1), vol. 2, 167 (on the Berlin Sozietät of 1718). 49 With a focus on the Hamburg Feur-Ordnungs Cassa of 1676, see Ebel (n. 1), 53; Ohlmeier/Spohnholtz (n. 22), 60. 50 Berliner Feuersozietät (n. 31), Art. 1; cf. also Neue General-Feuer-Cassa-Ordnung (n. 38), Art. 10 f.; Baden-Durlachische Ordnung (n. 37), Art. 25; Württembergische Ordnung (n. 37), § 21; Societät West-Preussen (n. 37), §§ 8 f.; Brandversicherungs-Gesellschaft Berg (n. 38), § 7; Vereinigte Societät Ostpreußen (n. 38), § 21.

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3. Rebuilding the burnt-down houses In accordance with the ideas of the German cameralism, the public fire insurance schemes were primarily introduced to ensure that inhabitants whose property was affected by fire would quickly regain an economic position such that they could again pay taxes. Accordingly, the statutes of the different schemes required the insured to rebuild a house which had burnt down.51 Of course, the same obligation was already included in the first Hamburger Feuerkontrakt of 1591. However, here this obligation did not serve the common good but was intended to protect the interest of the insured’s creditors. The Berliner Feuersozietät of 1718 then contained an extreme rebuilding clause which demonstrates how the rationale underlying such rebuilding clauses had changed:52 ‘Art. 12. Und weil dieses Werck vornehmlich dahin abzielet, dass die Stadt und Häuser sofort wieder im guten Stande gesetzt werden sollen; So soll ohne Unterscheid, es sey durch Nachlässigkeit des Einwohners oder Verwahrlosung das Feuer entstanden, oder ohne dessen Verschulden auskommen, der Beytrag aufgebracht, und vorhingesetzter massen zum Wieder-Aufbau angewandt werden. Es ist aber nichts destoweniger mit genauer Untersuchung wider denselben zu verfahren, und er, nach Befinden, andern zum Exempel, nachdrücklich zu bestraffen, auch wol gar nach Gelegenheit seines Verschuldens anzuhalten, den Grund und was vom Feuer noch übrig geblieben, einem andern zu verkauffen, welchem aus dem verordneten Beytrag das Haus wieder anzubauen.’ ‘Art. 12. And as the present institution mainly intends that the city and the houses are immediately restored; the contribution shall be collected and be used for the reconstruction as previously described without any difference, may the fire be caused due to the negligence of its resident or due to decay, or without his fault. But nevertheless, an accurate investigation is to be conducted against him, and he is, in case of any findings, to be forcefully punished to provide an example to others, and he shall, based on the circumstances, even be commanded to sell the real property and whatever is remaining after the fire to another person, who has to reconstruct the house from the awarded contribution.’

Especially the last sentence is crucial to understand the intention of this clause: Even where the insured acted fraudulently, having himself set the fire, the public authorities wanted to see the house being rebuilt without the arsonist profiting from his act.

51 From the cameralistic literature see, e. g., Jung (n. 40), 384; von Berg (n. 35), 66; see also Brämer/Brämer (n. 3), 259; von Liebig (n. 3), 21; Hagena (n. 23), 73; Schaefer (n. 1), vol. 2, 167 (on the Berlin Sozietät of 1718). 52 Berliner Feuersozietät (n. 31), Art. 12; for other rebuilding clauses, cf. General FeurOrdnungs Cassa (n. 26), Art. 6; Neue General-Feuer-Cassa-Ordnung (n. 38), Art. 12; BadenDurlachische Ordnung (n. 37), Art. 36; Württembergische Ordnung (n. 37), § 76; Neue FeuerCassen-Ordnung Billwärder (n. 42), § 11; Societät Westphalen (n. 37), § 13; Societät WestPreussen (n. 37), §§ 25 f.; Brandversicherungs-Gesellschaft Berg (n. 38), §§ 11 f.

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B. The rise of private fire insurance companies In eighteenth-century Germany, insurance was often compulsory for building owners in the districts for which a public fire office had been established or where the scheme had at least been granted a monopoly. Consequently, only little space was left for private actors on the fire insurance market. However, public fire offices insured buildings only. Thus, insurance of movables against the risk of fire was not available. And indeed, it was not possible for the public fire offices to simply apply all the principles which they had developed for the insurance of buildings against the risk of fire to the insurance of movables: the stock of movable goods can change, movables can by definition change their location, and the value of movables is much more likely to decrease quickly than the value of any building.53 The whole situation changed at the dawn of the nineteenth century when the German market was entered by private companies which had found actuarially sound ways to insure movables such as commercial goods and household items. These companies offered insurance products which the public fire offices had never succeeded in developing.54 The first insurers who were able to offer functioning products to insure movables against the risk of fire were English private insurance companies like the London Phoenix of 1782, which had a branch in Hamburg since 1790.55 I. The General Prussian Territorial Law of 1794 – a law anticipating practice? Prima facie, the late eighteenth- and early nineteenth-century German private insurance sector exhibits a surprising paradox. It is usually claimed that the Berlinische Feuerversicherungs-Anstalt of 1812 was the first lasting German private fire insurance company. Of course, there were earlier examples, such as the Fünfte Hamburgische Assekuranz-Compagnie of 1779, which initially offered only marine insurance, but from 1789 also engaged in insuring commercial goods against the risk of fire.56 However, its statutes included only a relatively short 53

From the cameralistic literature, see e. g. Johann Georg Krünitz, Oeconomische Encyklopädie, vol. 13 (Brünn 1778), 158 – 231, 220 f.; see also Hagena (n. 23), 74. 54 A public fire office insuring movables had existed in Saxony, but it only allowed one to insure 25 % of the goods’ value and it ceased to exist shortly after it had been established, see the Churfürstlich-sächsisches Mandat, wegen der neuen Einrichtung in Ansehnung der erlittenen Brandschäden of 10 November 1784, partly reproduced in Krünitz (n. 53), vol. 92 (1803), 329; see also Lammel (n. 34), 713. 55 Wilhelm Benecke, System des Assekuranz- und Bodmereiwesens (2nd edn., 1810), vol. 4, 522; Büchner (n. 1), 17; Müssener (n. 2), 32 f.; R. Ehrenberg (n. 11), 40; Schaefer (n. 1), vol. 1, 193. 56 Further examples are the Erste Assekuranz-Compagnie (1765) and the Vierte Assekuranz-Compagnie (1772). See von Liebig (n. 3), 23; Müssener (n. 2), 37 f.; Schaefer (n. 1), vol. 1, 193. The Brand-Versicherungs-Association, the so-called Bieber’sche Anstalt, had started its business in 1795 but restricted its activities to Hamburg; see Benecke (n. 55), vol. 4,

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standard policy on fire insurance, indicating that the legal approach to fire insurance of movables was at that stage not very advanced. Aside from these few examples, it was primarily English companies which were insuring movables against the risk of fire in late eighteenth-century Germany, most importantly the London Phoenix.57 German private fire insurance companies entered the market only in the early nineteenth century, and it was only then that their statutes exhibited sophisticated legal rules on fire insurance for movables. Against this background, it comes as a surprise that Prussian legislators had already in 1794 codified insurance law in its entirety, covering not only marine insurance but including also terrestrial insurance: Part II, Title 8, §§ 1934 – 2358 of the Allgemeines Landrecht für die Preussischen Staaten of 1794 (General Prussian Territorial Law – ALR).58 No less than 455 paragraphs were dedicated to insurance. No other piece of European insurance legislation is said to have had codified fire insurance as early as the General Prussian Territorial Law.59 Many of its articles on fire insurance are strikingly complex, and these articles applied only to fire insurance for movable goods because fire insurance for immovables was fully covered by the statutes of the public Feuersozietäten.60 This raises the question of why the Landrecht of 1794 fully covered fire insurance law despite the German private fire insurance market being mired in only its very beginnings. II. A short account on the genesis and content of the General Prussian Territorial Law of 1794 Most provisions of the 1794 Landrecht on insurance law cover marine insurance, not terrestrial insurance. And these provisions relied heavily on maritime insurance law as codified in the Preussische Assekuranz- und Havereyordnung of 1766 (Prussian Assurance and Average Regulation),61 which in turn was based on the Hamburgische Assekuranz- und Havereyordnung of 1731 (Hamburg Assurance and

522; Büchner (n. 1), 17; von Liebig (n. 3), 24; Müssener (n. 2), 34 f.; Schaefer (n. 1), vol. 1, 193. 57 von Liebig (n. 3), 24. 58 Reproduced in Hans Hattenhauer, Allgemeines Landrecht für die Preußischen Staaten von 1794 (2nd edn., 1994). 59 Benecke (n. 55), vol. 4, 523; see also Prölss (n. 4), 158. 60 Angela Duvinage, Die Vorgeschichte und die Entstehung des Gesetzes über den Versicherungsvertrag (1987), 6; von Liebig (n. 3), 26; Peter Koch, Die Behandlung des Versicherungsrechts im preußischen Allgemeinen Landrecht – Gedanken zum 200jährigen Jubiläum des Allgemeinen Landrechts, (1994) 45 Zeitschrift für Versicherungsrecht 629 – 633, 632. 61 See Dreyer (n. 20), 209 f.; Neugebauer (n. 2), 28; Koch (n. 60), 629.

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Average Regulation).62 Since the Landrecht of 1794 did not codify maritime and terrestrial insurance law in two separate sections, their being instead ‘interwoven’,63 a short excursus to the cornerstones of Prussian maritime insurance law is inevitable. Insurance contracts are characterized by an information asymmetry, and this also applies to marine insurance. Consequently, the insured was from an early point required to disclose to the insurer all circumstances affecting the risk before the contract was concluded; and he was required to disclose all circumstance changing the risk after the conclusion of the contract.64 On the basis of this information, the parties were free to fix the insured sum as long as it did not exceed the value of the insured object.65 Thus, in contrast to the practice of the Feuersozietäten, the insured sum in marine insurance did not necessarily correspond to the full value of the ship or goods insured.66 This practice affected the legal framework of maritime insurance: provisions (in policies) and rules (in legislation) concerning over-, under- and double insurance were common, and they can also be found in the General Prussian Territorial Law. For example, according to Part II, Title 8, § 1995 ALR, any insurance contract was void as far as the insured sum exceeded the value of the insured interest. A similar rule applied in the case of double insurance: The later contract was void as far as the insured sum of both contracts exceeded the value of the insured object (Part II, Title 8, §§ 2003, 2008 ALR). Furthermore, earlier insurance coverage had to be disclosed to the second insurer; otherwise, if the insured acted in bad faith, both contracts were void (Part II, Title 8, § 2002 ALR). On the other hand, Part II, Title 8, §§ 2264, 2268 ALR stated that in the case of underinsurance, the compensation had to be reduced in the exact ratio of the insured sum to the value of the insured object. In the case of total damage, the whole insured sum as fixed in the policy was paid out according to Part II, Title 8, §§ 2242, 2262 ALR. In the case of partial damage, the depreciation of the ship or goods had to be estimated by expert witnesses such as experienced mariners, master shipbuilders and sailmakers (Part II, Title 8, §§ 2246 ff. ALR) or by reference to documents such as invoices (Part II, Title 8, §§ 2265 ff. ALR).

62

Dreyer (n. 20), 210 f.; Duvinage (n. 60), 4; Heinrich Makower, Das allgemeine deutsche Handelsgesetzbuch (11th edn., 1893), 813 n. 1; Paul Rehme, Geschichte des Handelsrechts (1914), 229; Neugebauer (n. 2), 28; Koch (n. 60), 629; von Zedtwitz (n. 3), 152. 63 See also Neugebauer (n. 2), 31; Prölss (n. 4), 158. 64 See Part II, Title 8, §§ 2024 ff. ALR. According to § 2064 ALR, any non-disclosure rendered the insurance contact void; see also Koch (n. 60), 632. 65 See Part II, Title 8, § 1983 ALR; see also Koch (n. 60), 631. 66 Compare Benecke (n. 55), vol. 4, 305; Hans Wüstendörfer, Neuzeitliches Seehandelsrecht mit besonderer Berücksichtigung des angloamerikanischen und internationalen Rechts (2nd edn., 1950), 18.

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The Prussian Landrecht then included special provisions on fire insurance. However, these special provisions were not united in a separate section on fire insurance. They were dispersed over the whole chapter on insurance law. The systematic approach was, thus, not to have separate sections for the different branches of insurance but to group together the different substantive legal problems. After the presentation of a certain substantive rule on marine insurance, the Landrecht would immediately present any modification for other branches of insurance. This is why one may describe the systematic approach as being an ‘interwoven’ approach. For instance, following the provision that the insured has to disclose any relevant circumstances to the insurer in marine insurance, the Landrecht regulates which circumstances the insured has to disclose to the insurer in the case of fire insurance: He had to disclose the quality of insured movables, he had to disclose whether there were specifically enumerated dangerous objects among the insured goods, he had to disclose the quality of the buildings in which the insured movables were stored, and he had to disclose whether the movable goods were located in a neighbourhood in which dangerous professions were carried out (Part II, Title 8, §§ 2053 ff. ALR). Other provisions on maritime insurance, like those on over-, under- and double insurance, were applicable to fire insurance without any modification. In other words, the Prussian legislature simply extended maritime insurance law to fire insurance and adapted the former where necessary. Consequently, some authors claim that fire insurance law as codified in the Landrecht is nothing but an analogy drawn from maritime insurance law.67 This approach had some drawbacks. The Landrecht did not, for example, include any provision as to how to assess the actual damage to the insured goods in the case of fire insurance. However, the corresponding Part II, Title 8, §§ 2246 ff. ALR were clearly designed for the needs of maritime insurance, and it is not possible to apply these provisions to any other type of insurance. An explicit proposal of some Hamburg and Lübeck merchants to include the fire insurance practices of Hamburg’s maritime insurers was not adopted by the legislature.68 This example proves that Prussian legislators were not able to fall back on any sophisticated Prussian practice concerning private fire insurance for movables. Such practice was, at the end of the eighteenth century, simply not existent. It is generally claimed that the General Prussian Territorial Law is characterized by a tendency to distrust the insured. Legislators feared that the insured would act fraudulently, and they sought to prevent that the insured enriched himself by intentionally causing damage to the goods insured. Thus, the General Prussian Territorial Law introduced severe sanctions against any objectionable acts of the in67 R. Behrend, Der Entwurf eines Reichsgesetzes über den Versicherungsvertrag, (1904) 55 Zeitschrift für das gesamte Handelsrecht 1 – 144, 4; Duvinage (n. 60), 4; Müssener (n. 2), 137; Neugebauer (n. 2), 28 f.; Koch (n. 60), 631; Prölss (n. 4), 159. 68 Geheimes Staatsarchiv Preußischer Kulturbesitz, I. HA, Rep. 84, Abt. XVI, Nr. 49.007.324 (these archival materials probably refer to the Hamburg Assecuranz-Compagnien; they were maritime insurance companies which engaged in fire insurance as a ‘side business’).

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sured. If, for example, the insured had not disclosed that there were dangerous goods among the insured goods, according to Part II, Title 8, § 2054 ALR, the whole contract was void and all premiums were forfeited. The contract was void even if the insured had acted innocently. Furthermore, according to Part II, Title 8, § 2002 ALR, in the case of fraudulent double insurance, both contracts were void; it was not only that the later contract was void. Consequently, the insured forfeited both premiums, and he was subjected to criminal proceedings. Finally, in some cases, both the insured and the insurer had to pay the insured sum as penalty to the state treasury. This was, for instance, the case when the insured risk resulted from prohibited acts (Part II, Title 8, § 1954 ALR).69 The technique by which the Prussian legislature regulated fire insurance law analogously to marine insurance law and the fact that the Landrecht of 1794 predated a private fire insurance practice that fully flourished only in the nineteenth century raise the question of what impact the Landrecht had on this later practice. I will revisit this question later in this contribution by discussing two examples. III. The foundation years of private fire insurance companies after 1812 When the Napoleonic Wars came to an end, commerce started again and with it private fire insurance began to flourish. This era saw a number of successful private insurance companies, some of which still exist today. This period is, therefore, often referred to as the first Gründungswelle (literally: wave of foundation) of private fire insurance companies. The first lasting foundation of a fire insurance company was the Berlinische Feuerversicherungs-Anstalt, established in 1812 as a joint-stock company by the Hamburg merchant Georg Friedrich Averdieck (1774 – 1839).70 Other companies soon followed, namely the Gotha Feuerversicherungsbank für den deutschen Handelsstand of 1820, launched by the merchant Ernst Wilhelm Arnoldi (1778 – 1841) as a mutual fire insurance company,71 and the Aachener FeuerversicherungsGesellschaft of 1825, a joint-stock company initiated by the Hamburg merchant David Hansemann (1790 – 1864).72 Other examples of private fire insurers are the

69 On these and similar examples, see e. g. Duvinage (n. 60), 8 – 10; Neugebauer (n. 2), 32 – 35. 70 Anton Sailer and Wolfgang Lohmüller, Hundertfünfzig Jahre Berlinische Feuer-Versicherungs-Anstalt. 1812 – 1962 (1965), 13. 71 Arwed Emminghaus, Ernst Wilhelm Arnoldi: Leben und Schöpfungen eines deutschen Kaufmanns (1878), 183; Koch (n. 11), 22; the company is today known as the ‘Gothaer’ and is still in operation as a mutual insurance company. 72 Müssener (n. 2), 41.

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Leipziger Feuer-Versicherungs-Anstalt (1819) and the Vaterländische Feuer-Versicherungsgesellschaft in Elberfeld (1823).73 All of these companies were established out of a similar motivation: German merchants held it necessary to establish German insurance companies in order to prevent a capital drain from Germany to foreign countries, especially England. English insurance companies were commonly regarded as aggressively profitseeking and, therefore, drawing more capital from the German markets than the German merchants liked to bear. The founding charters of some of the first German private insurance companies make this motivation explicit.74 Early on, these companies used general policy conditions (Allgemeine Versicherungsbedingungen), which exhibit many similarities.75 For that reason it is possible to quickly summarize the basic principles of nineteenth century German private fire insurance practice. Private fire insurance companies provided coverage against the risk of fire for both buildings and movables. In the early nineteenth century, however, building insurance could only cover those buildings which public fire offices did not insure, especially buildings with a high risk of fire.76 The insurance would come into force only after payment of the first premium. Subsequent premiums had to be paid at the beginning of each insurance period.77 The premiums were calculated by a classification of risks according to actuarial principles.78 According to all policy conditions, the insured had to disclose any circumstances that were necessary to assess the risk and, thus, to calculate the premium, e. g. the type of construction of the insured building, the location of 73 Müssener (n. 2), 40; for a list of large private fire insurance companies which were established after 1812, see Brämer/Brämer (n. 3), 238; von Liebig (n. 3), 25 f.; Neugebauer (n. 2), 137 – 140; Prölss (n. 4), 262. 74 Verfassung der Feuer-Versicherungsbank für den deutschen Handelsstand in Gotha (1820), preamble (reproduced in Sammlung von Versicherungsbedingungen deutscher Versicherungsanstalten (1908), vol. 1, 6); see also von Liebig (n. 3), 25; Emminghaus (n. 71), 179 f.; Neugebauer (n. 2), 24; Sailer/Lohmüller (n. 70), 11. 75 According to Müssener (n. 2), 9, the conditions of the Aachener of 1825 served as a model for the policies of later companies. However, the conditions of the Aachener show resemblances to the earlier conditions of the Berlinische; see also Neugebauer (n. 2), 137 – 139. 76 Verfassung der Berlinischen Feuerversicherungs-Anstalt (1812), Art. 34 s. 1 (reproduced in Sammlung von Versicherungsbedingungen (n. 74), vol. 1, 22); Gothaer (n. 74), § 18; conditions of Aachener Feuerversicherungs-Gesellschaft (1825), § 1 (reproduced in ibid., 26); Statuten der Würtembergischen Privat-Feuerversicherungs-Gesellschaft (1828), Art. 1, 52 sect. 1 (reproduced in ibid., 14); see also von Liebig (n. 3), 26; Neugebauer (n. 2), 138 f. (on the Berlinische and the Gothaer). 77 Berlinische (n. 76), Art. 38; Gothaer (n. 74), § 2; Aachener (n. 76), § 5; Würtembergische (n. 76), Art. 3; see also Neugebauer (n. 2), 138, 140 (on the Berlinische and the Gothaer). 78 Brämer/Brämer (n. 3), 258 f.; von Liebig (n. 3), 148 – 150 (on the development of the relevant actuarial principles); a concrete example can be seen in the conditions of the Gothaer (n. 74), § 20.

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insured movables or the insured’s profession carried out in the respective building.79 Furthermore, the insured was not permitted to change any of these circumstances without the insurer’s authorization, and he had to disclose when any of these circumstances incidentally changed during the insurance period.80 Moreover, as the insured sum could be chosen freely by the insured, the general policy conditions had to provide rules concerning over-, under- and double insurance: By no means was the insured to receive a compensation exceeding the value of the insured object.81 Every instance of double insurance had to be disclosed to the insurer, otherwise the contract was rendered void.82 In the event of a disclosed double insurance, the compensation was divided between all insurers in proportion to their respective sums insured.83 When the insured sum was lower than the value of the insured object, the compensation, too, was proportionally reduced.84 A large part of early general policy conditions focused on the procedures of how to assess the occurred damage. In the case of a total damage, the whole insurance sum as fixed in the policy had to be paid.85 In the case of a partial damage, expert witnesses examined the site of the fire, and they calculated the indemnity on the basis of commercial documents.86 Even without going further into detail, this overview suggests a notable difference between the general policy conditions of the newly founded private fire insurance companies – both joint-stock companies and mutual insurance companies – and the statutes of the older (especially Prussian) public fire offices. This raises the question as to the origins of these general policy conditions. For the purpose of developing an answer to this question, it is feasible to focus on the Berlinische Feuerversicherungs-Anstalt of 1812. After all, it was the first lasting private fire 79

Berlinische (n. 76), Art. 36; Gothaer (n. 74), §§ 22 f.; Aachener (n. 76), § 6; Würtembergische (n. 76), Art. 75; see also Brämer/Brämer (n. 3), 257; Müssener (n. 2), 213 (on the Aachener); Neugebauer (n. 2), 138, 140 (on the Berlinische and the Gothaer). 80 Berlinische (n. 76), Art. 40; Gothaer (n. 74), §§ 30 f.; Aachener (n. 76), § 10; cf. also Müssener (n. 2), 219 (on the Aachener); Neugebauer (n. 2), 139 f. (on the Berlinische and the Gothaer). 81 Berlinische (n. 76), Art. 46; Gothaer (n. 74), § 3; Aachener (n. 76), § 14; Würtembergische (n. 76), Art. 60; compare also Müssener (n. 2), 187 f. (on the Aachener). 82 Berlinische (n. 76), Art. 46; Gothaer (n. 74), § 24; Aachener (n. 76), §§ 7 f.; compare also Müssener (n. 2), 191 (on the Aachener). 83 Berlinische (n. 76), Art. 45; Gothaer (n. 74), § 39; some insurers did not include any explicit provisions on this problem, e. g., the Aachener Feuerversicherungs-Gesellschaft of 1825. 84 Berlinische (n. 76), Art. 43; Gothaer (n. 74), Art. 34, 39; Würtembergische (n. 76), Art. 119; compare Müssener (n. 2), 149. 85 Berlinische (n. 76), Art. 45; Gothaer (n. 74), § 34; Aachener (n. 76), §§ 15 f.; Würtembergische (n. 76), Art. 113; compare Müssener (n. 2), 181 f., 264 f. (on the Aachener); Prange (n. 5), vol. 1, 49. 86 Berlinische (n. 76), Art. 44 f.; Gothaer (n. 74), § 34; Aachener (n. 76), §§ 15 f.; Würtembergische (n. 76), Art. 113; compare also Müssener (n. 2), 264 (on the Aachener); Neugebauer (n. 2), 139 f. (on the Berlinische and the Gothaer).

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insurance company to use general policy conditions which later functioned as a ‘blueprint’ for other companies. Its founder, Averdieck, had worked as a clerk for the London Phoenix in Hamburg, and he took the English policy conditions as a model for the conditions of the Berlinische. It has been suggested that the company’s first director, Wilhelm Benecke – a Hamburg merchant, an expert on maritime insurance and the author of the well-known treatise on insurance law – then ‘adapted them to Prussian needs’.87 Thus, it seems that the Berlinische – and all later insurers – designed their policy conditions mainly based on the model of the London Phoenix, and these conditions then experienced a complex process of transformation.88 However, there is also a second narrative: Other authors claim that the General Prussian Territorial Law of 1794 left essential traces in the German general policy conditions of the private insurance companies which were established in the nineteenth century.89 Yet, as is often the case in insurance legal history, these narratives are not supported by any closer analysis. The two following examples are meant to add such analysis to the discourse. These two examples will assess the impact of the English insurance policy conditions and the importance of the Landrecht of 1794. IV. Two examples testing the impact of English influences and the importance of the General Prussian Territorial Law of 1794 1. Premium default: a clause imported from England Averdieck and Benecke had used the policy conditions of the London Phoenix as a model for those of the Berlinische.90 It does not come as a surprise that consequently many English traces can be found in German policy conditions. The clause on the insured’s premium default can serve as an example. Article 38 of the 1812 conditions of the Berlinische states: ‘Art. 38 S. 1. Die Versicherung tritt in Kraft, sobald die Prämie bezahlt ist, und beginnt von dem Tage mittags 12 Uhr, welcher in der Police bemerkt wird.’ ‘Art. 38 S. 1. The insurance comes into effect as soon as the premium is paid, and it starts from noon of the day which is notified in the policy.’

Accordingly, if the insured failed to pay the first premium, the contract did not come into force (Einlösungsprinzip; literally: ‘principle of redemption’).91 In 1790,

87

Sailer/Lohmüller (n. 70), 14. Compare von Liebig (n. 3), 24; Müssener (n. 2), 38; Neugebauer (n. 2), 19. 89 Neugebauer (n. 2), 46, 143 f.; Prölss (n. 4), 159; Koch (n. 60), 632. 90 See n. 87 and n. 88, above. 91 For other examples, see the text corresponding to n. 86, above; Duvinage (n. 60), 172, 178; Müssener (n. 2), 196 (on the Aachener); Victor Ehrenberg, Versicherungsrecht (1893), 264 (in general on insurance practice before 1900). 88

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the London Phoenix had used in its Hamburg branch an apparently more detailed clause, which however also addressed default as regards renewal premiums.92 ‘4) Die Prämien müssen an baaren Gelde zu der Zeit da die Versicherung gemacht wird, bezahlet werden; und die Versicherung fängt von dem Augenblicke an, da solche bezahlet worden, und behält ihre volle Kraft so lange als die Bezahlungen, bey jedesmaligem Verfluß des in der Police festgesetzten Termins, oder innerhalb fünfzehn Tagen nachher, bey der Assuranzkammer in London, oder bey dem Agenten dieser Sozietät in Hamburg, richtig gemacht werden; welcher letztere ebenfalls gedruckte vollständige Quittungen darüber ausstellen wird. […]’ ‘Art. 4. The premiums have to be paid in cash at the time when the insurance contract is concluded; and the insurance comes into effect at the moment when such [premiums] are paid, and it remains in full effect as long as the payments are correctly made whenever the due date fixed in the policy passes, or within fifteen days afterwards, to the insurance chamber in London or to the agent of this fire office in Hamburg; whereby the latter will also issue printed, complete receipts. […]’

The Berlinische of 1812 did not copy the whole clause to its full extent. It omitted the part on the renewal premiums. The reason is simple: The first German private fire insurance companies did not allow for the possibility of ongoing insurance. They only offered short-term policies. A simple renewal by paying the premium was, thus, not possible. The insured had to enter into a whole new contract.93 Thus, the problem of a default of a renewal premium could simply not arise as any premium was, legally speaking, the first premium for a new contract. The Einlösungsprinzip was applied to every premium. The practical effect of these two models was, of course, the same.94 A completely different approach had been adopted by the General Prussian Territorial Law, and it is clear that it did, insofar, not influence early nineteenthcentury general policy conditions. The Landrecht was mainly mirroring the maritime insurance law and practice of its time. According to marine insurance practice, it was not necessary that the insured paid the premium first in order to gain insurance coverage. Instead, it was not unusual that insurers collected the premiums only after the ship’s passage or that they set it off against the insured’s claim to the insured sum.95 The aforementioned Einlösungsprinzip is unknown to the Landrecht.96 Consequently, the Landrecht did not introduce any special default rules for

92 Propositiones der London Phoenix in Hamburg (1790), Art. 4 (reproduced in Johann Friedrich Krügelstein, Vollständiges System der Feuerpolizeywissenschaften, vol. 3 (1800), 98); for the English policy clauses, see also Benecke (n. 55), vol. 4, 527 f. 93 Berlinische (n. 76), Art. 39; this was a common practice, see Würtembergische (n. 76), Art. 72; the Aachener Feuerversicherungs-Gesellschaft of 1825 subsequently introduced a different practice, see Aachener (n. 76), § 5. 94 Cf. also Neugebauer (n. 2), 138. 95 Benecke (n. 55), vol. 4, 359. 96 Neugebauer (n. 2), 34.

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fire insurance. Instead, the provisions on maritime insurance were applicable to all other branches of insurance (Part II, Title 8, §§ 2109, 2110 ALR). Furthermore, it is clear that the statutes of public fire offices did not in any way influence the default rules in the general policy conditions of early nineteenthcentury private fire insurance companies. With the public fire offices, a premium default did not affect insurance coverage. A premium default was treated like delayed tax payments, and the payment of premiums was enforced by public authorities.97 2. Increase of risk: a subtle impact of the General Prussian Territorial Law The clauses in the general policy conditions of the early nineteenth-century German private fire insurance companies on premium default were, thus, imported from England. When it comes to the clauses on an increase of risk, things look different. As mentioned before, the statutes of eighteenth-century public Feuersozietäten did not include any clauses on the increase of risk: As the insured’s contribution depended solely on the value of the insured object, and as the specific risk was irrelevant for calculating the premium, an increase of risk was simply of no importance. Furthermore, English policies similarly did not include any sophisticated clause on the increase of risk. At first sight, this may be surprising. For English insurers the fire risk had always been a relevant factor in calculating the premium.98 The reason why the problem of an increase of risk was not explicitly addressed in English policies has something to do with so-called warranties, a particularity of English insurance contract law. Warranties may be explained in very simple language as follows: The policyholder warrants that all factors which are risk relevant will persist during the duration of the contract. A change of these circumstances rendered the contract void.99 Thus, there was no need to further regulate an increase of risk. By contrast, the Prussian Landrecht of 1794 specifically addressed the problem of an increase of risk in fire insurance. First, it includes two general provisions that 97 Berliner Feuersozietät (n. 31), Art. 10; Baden-Durlachische Ordnung (n. 37), Art. 30; Württembergische Ordnung (n. 37), § 62; Neue Feuer-Cassen-Ordnung Billwärder (n. 42), § 10; Societät Westphalen (n. 37), § 16; Societät West-Preussen (n. 37), § 8; Brandversicherungs-Gesellschaft Berg (n. 38), § 9; Vereinigte Societät Ostpreußen (n. 38), §§ 8, 24; see also Schaefer (n. 1), vol. 2, 167 (on the Berlin Sozietät of 1718); see also Müssener (n. 2), 22. 98 Cf. the London Phoenix (n. 92), premium table; see also von Liebig (n. 3), 24. 99 Benecke (n. 55), vol. 3, 18; Samuel Marshall, A Treatise on the Law of Insurance (1805), 248.

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were derived from maritime law.100 Both were applicable to any kind of insurance. They distinguished between an increase of risk caused by the insured himself (Part II, Title 8, § 2117 ALR) and all other increases of risk (§ 2118 ALR). As enforced by forfeiture of his right to the insured sum, the insured was not allowed to undertake any actions that increased the risk. If an increase of risk occurred without his involvement, he had to notify the insurer or otherwise he would again forfeit his rights to the insured sum. Part II, Title 8, §§ 2119 – 2156 ALR then address – in a casuistic approach – numerous problems arising from an increase of risk in the context of marine insurance,101 and §§ 2157 – 2163 do the same for fire insurance, making use of the distinction between those increases which have been caused by the insured and those which have not:102 ‘§ 2157. Wird ein Theil der versicherten Sache an einen andern als den in der Police bestimmten Ort der Aufbewahrung gebracht: so hört die Gefahr des Versicherers in so weit auf, und er behält dennoch die ganze Prämie. § 2158. Wird aber des Versicherten Wohnung, oder der in der Police bestimmte Ort der Aufbewahrung sämmtlicher versicherten Sachen verändert: so muß dieses, bey Verlust des Rechts, dem Versicherer schleunig bekannt gemacht werden. § 2159. Alsdann hat der Versicherer innerhalb der §. 2137. bestimmten Frist die Wahl: ob er den Contrakt fortsetzen, oder davon abgehen, und nach Verhältniß der noch nicht abgelaufenen Zeit, das Ristorno statt finden lassen wolle. § 2160. Wenn durch Veranlassung des Versicherten eine gefährliche Nachbarschaft entsteht: so ist der Versicherer für den daraus erwachsenden Schaden nicht verhaftet. § 2161. Ein Gleiches findet statt, wenn die gefährliche Nachbarschaft zwar ohne des Versicherten Zuthun entstanden ist, derselbe aber die davon erhaltene Nachricht dem Versicherer nicht binnen der §. 2137. bestimmten Frist mitgetheilt hat. § 2162. Ist die Anzeige gehörig geschehen: so hat es bey der Vorschrift des §. 2159. sein Bewenden. § 2163. Eine Veränderung in der Person des Eigenthümers der versicherten Sache, ändert nichts in der Versicherung, wenn nicht damit zugleich eine Veränderung des Orts, der Aufsicht, der Art der Aufbewahrung, oder der Nachbarschaft verbunden ist.’ ‘§ 2157. When a part of the object insured is brought to a place other than the one defined in the policy: the risk of the insurer ceases to this extent, but he still is allowed to keep the entire premium.

100 The Hamburgische Assekuranz- und Havereyordnung of 1731 had already contained a provision regarding the situation where the route had to be changed (Title VII, Art. 5, similar to Part II, Title 8, § 2122 ALR); nevertheless, it lacked a general provision on the increase of risk; compare Benecke (n. 55), vol. 4, 282. 101 Cf. the detailed discussion by Benecke (n. 55), vol. 4, 279 – 304. 102 See Benecke (n. 55), vol. 4, 532; and compare Koch (n. 60), 632; V. Ehrenberg (n. 91), 400 – 405.

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§ 2158. But when the insured’s accommodation or [any other] location where all insured objects are in accordance with the policy designated to be stored is altered: this has to be disclosed to the insurer as soon as possible, by forfeiture of all rights. § 2159. Thereafter, the insurer has to choose within the period set out in § 2137: whether he wants to continue or terminate the contract and [in the latter case] to refund the premium in proportion to the time that has not yet passed. § 2160. When, at the instance of the insured, the neighbourhood turns dangerous: the insurer is not liable to pay for the damage caused thereby. § 2161. The same applies when the neighbourhood has developed to be dangerous and this has occurred not at the instance of the insured, but he has not disclosed this to the insurer within the period set out in § 2137. § 2162. When the notification has been given duly: § 2159 applies. § 2163. Any change regarding the person of the owner of the object insured does not affect the insurance, when it does not also involve a change of location, supervision, the manner of storage or the neighbourhood.’

How were the drafters of the Prussian Landrecht able to develop such detailed provisions on the increase of risk in the context of fire insurance if they were not able to refer to a pre-existing fire insurance practice?103 The only possible explanation is that the drafters relied on a well-established marine insurance practice that was generalized in Part II, Title 8, §§ 2117 f. ALR and then intuitively transplanted to fire insurance. In a next step, the private fire insurance companies of the early nineteenth century resorted to the Landrecht when drafting their general policy conditions. However, the early policy conditions only included clauses on the increase of risk caused by the insured. The reason is straight forward and follows from what has been said before. Initially, fire insurance contracts were short-term contracts. They could only be renewed by concluding a new contract. Then the insured had to disclose all relevant risks once again and, thus, also those circumstances leading to an increase of risk which had occurred, without him having caused these circumstances, during the term of the first contract.104 Apart from that, the policy conditions of the Berlinische Feuerversicherungs-Anstalt and of later private fire insurance companies adopted many of the details first appearing in Part II, Title 8, §§ 2157 – 2163 ALR. This may best be exemplified by the 1825 policy of the Aachener Feuerversicherungs-Gesellschaft:105 103 The Plan der erneuerten Fünften Assekuranz-Compagnie (1789) (reproduced in (1789) Allgemeine Handlungs-Zeitung 71), for instance, only included a very short clause on increase of risk. 104 See the text corresponding to n. 93, above. Benecke, the drafter of the policy conditions of the Berlinische, expressly stated that he deemed such clauses on an increase of risk which had not been caused by the insured as unfair, see Benecke (n. 55), vol. 4, 532. 105 The clause was probably copied from the conditions of the Berlinische (n. 76), Art. 39 – 41. However, the wording of these articles was vague. That is why I discuss an example from the conditions of the Aachener. It is a curious fact that the Aachener was the first German

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Matthias Bogner ‘§ 9. Eine gleiche Anzeige ist zu machen, wenn versicherte Gegenstände ganz oder zum Teil die in der Police angegebenen Eigentümer wechseln, mit Ausnahme jedoch von Erbschaftsfällen. § 10. Wenn wesentliche die Gefahr vermehrende Veränderungen an den Gegenständen vorgenommen, oder neue Anlagen mit denselben verbunden werden; wenn feuergefährliche Gewerbe in dem versicherten Lokale, oder in demjenigen, welches versicherte Gegenstände enthält, errichtet; oder wenn feuergefährliche Gegenstände, als die ursprünglich versicherten, darin niedergelegt werden, so ist hiervon unverzüglich Anzeige zu machen […]. Der Gesellschaft bleibt in den durch diesen und den 9. Paragraphen vorgesehenen Fällen überlassen, zu bestimmen: ob die Versicherung zu den bisherigen, oder – bei etwa erhöhtem Risiko – zu einem höheren Prämiensatze fortdauern, oder aber ganz aufhören soll. In jedem Falle verbleibt die gezahlte Prämie der Gesellschaft. § 11. Die Anzeigen, welche durch die §§ 8, 9, 10 vorgeschrieben sind, müssen spätestens innerhalb 14 Tagen nach den bezeichneten Veränderungen geschehen, und zwar bei derjenigen Agentur, bei welcher die ursprüngliche Versicherung stattfand. Unterläßt der Versicherte diese Anzeigen in dem vorgeschriebenen Zeitraume, so verliert er, ohne daß es deshalb irgend einer Förmlichkeit von seiten der Gesellschaft bedürfte, jeden Anspruch auf Entschädigung im Falle eines Brandes und büßt zugleich die bereits gezahlte Prämie ein, welche der Gesellschaft verfällt. Die Versicherung beweglicher Gegenstände hört auf, wenn solche aus den Räumen gebracht werden, in welchen sie versichert sind; es sei denn, daß der Versicherte sich deshalb mit der Gesellschaft vorher verständigt habe.’ ‘§ 9. The same notification is to be made when the property in objects insured completely or partially passes to a person other than indicated in the policy, with the exception of cases of inheritance. § 10. When significant risk-increasing alterations are made to the objects or new units are connected with them; when fire-hazardous businesses are started on the premise insured, or in the building which contains objects insured; or when objects which are more firehazardous, other than those originally insured, are brought into [the building], a notification thereof is to be made without delay. […] In cases covered by this paragraph or paragraph 9, the company may decide: whether the insurance shall continue with the original or – in the case of increased risk – with a higher premium, or if it shall terminate. In any case, the paid premiums remain with the company. § 11. The notifications, which are prescribed by §§ 8, 9, 10, have to be made not later than within 14 days after the described alterations have occurred, namely to the agency where the insurance contract was concluded. If the insured omits theses notifications within the prescribed period of time, he will lose every right to compensation in the event of a fire, without any formality from the company being necessary, and he loses the premium already paid, which is forfeited to the company. The insurance of movables terminates when they are moved from the location in which they are insured; unless the insured has previously reached an agreement with the company on these changes.’

Of course, §§ 9 – 10 are not an exact copy of the Prussian Landrecht. However, if one considers that any practice on increase of risk was virtually non-existent in fire insurance before 1794, it seems likely that the Landrecht had created the doctrinal company to introduce a model of long-term contracts (see the text corresponding to n. 93, above), but it did not adapt its clauses on an increase of risk.

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framework from which nineteenth-century insurance companies, like the Aachener, started when drafting their policy conditions.106 Both the Landrecht and the nineteenth-century policy conditions exhibit a number of similarities. Next to many other parallels between the Aachener’s conditions and the Landrecht, there is especially one notable anomaly regarding the Landrecht. It classified the change of the person insured as an increase of risk: Part II, Title 8, § 2163 ALR.107 Usually, a change of the insured was treated as a cessation of the interest insured.108 The early policy conditions, though, adopted the classification of the Landrecht, a classification which persisted until the late nineteenth century.109 V. Conclusion Early nineteenth-century fire policy conditions are based on two models: the conditions of English fire insurers and the General Prussian Territorial Law of 1794. The insurance law in the Landrecht of 1794 is in turn rooted in the Hamburgische Assekuranz- und Havereyordnung of 1731 (Hamburg Assurance and Average Regulation). It was mainly because the Landrecht codified fire insurance before any widespread German fire insurance practice had emerged that the Landrecht had a strong influence on the later practices of German fire insurers. And this influence was not limited to Prussia. All German private insurance companies employed in the nineteenth century similar policy conditions – irrespective of the territory in which they carried out their business. Furthermore, nineteenth-century insurers did not simply replicate the Landrecht or English policy conditions. They adapted them to their needs. But how do these findings relate to the above-mentioned narrative which focuses on the public fire offices, the Feuersozietäten, as the predecessors of German fire insurance?110 If reduced to the idea of fire insurance, this narrative is indeed correct: The idea first emerged in the context of public fire offices, and by the time private fire insurance companies were established in Germany, it had already been widely known.111 Nevertheless, this finding relating to the cultural history of fire insurance must be distinguished from its legal history. In legal terms, public fire offices and private fire insurance companies do not share many commonalities. Of course, there are clauses appearing in both the statutes of public fire offices and the policies of 106 Cf. the standardized conditions of the Verband deutscher Privat-FeuerversicherungsGesellschaften (1886), § 5 (reproduced in Sammlung von Versicherungsbedingungen (n. 74), vol. 1, 75); V. Ehrenberg (n. 91), 402 – 405. 107 See also Benecke (n. 55), vol. 4, 533; Duvinage (n. 60), 9; V. Ehrenberg (n. 91), 393. 108 Compare Benecke (n. 55), vol. 4, 533 (regarding respective clauses within the English policy conditions). 109 See, e. g., Berlinische (n. 76), Art. 41; Gothaer (n. 74), § 31; Verband deutscher PrivatFeuerversicherungs-Gesellschaften (n. 110), § 5. 110 See the text corresponding to n. 1, above. 111 Cf. R. Ehrenberg (n. 11), 40 f.

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private fire insurers, such as those excluding war damages from the insurance112 or those defining the procedures of how to assess a damage (such as appointing masons and carpenters).113 Nevertheless, a narrative suggesting that the general policy conditions of nineteenth-century German private fire insurance companies are rooted in the statutes of the earlier public fire offices should be questioned.114 C. Public and private fire insurance schemes in the mid-nineteenth century: two monolithic systems? Nineteenth-century Germany, thus, saw two systems of fire insurance. The one was operated by public fire offices. It may be described as the ‘cameralistic’ system of fire insurance. The other was pursued by private fire insurers. Despite the existence of mutual fire insurance companies, it is possible to characterize it as the ‘capitalist’ system of fire insurance. Both systems existed side by side. However, would it be correct to speak of two self-contained systems which were opposed to each other, figuratively like two ‘monoliths’? Or did they interact with each other, exchanging ideas and certain clauses, melting together and forming a new system? These questions need to be answered when analysing the further development of German fire insurance law in the nineteenth century before it was codified in the Versicherungsvertragsgesetz of 1908 (Insurance Contract Law Act), an act still in force today. In order to do so, it is, however, first necessary to present a short overview of the further development of Germany’s insurance market in the course of the nineteenth century. I. Fire insurance developing into an unregulated ‘bulk business’ During the second half of the nineteenth century, private fire insurance experienced a great economic surge. While the first private fire insurance companies had primarily served the needs of merchants insuring merchandise, the business was extended to private households in the 1840s and 1850s.115 The fledgling private fire insurance companies probably stood their hardest test in 1842, when the Great Fire 112 Public fire offices: Württembergische Ordnung (n. 37), Art. 20; Societät West-Preussen (n. 37), § 18; Brandversicherungs-Gesellschaft Berg (n. 38), § 3; Vereinigte Societät Ostpreußen (n. 38), § 20. A different approach is taken by Baden-Durlachische Ordnung (n. 37), Art. 7. Private fire insurance companies: Berlinische (n. 76), Art. 43; Gothaer (n. 74), Art. 37; Aachener (n. 76), § 4; Würtembergische (n. 76), Art. 110; Verband deutscher PrivatFeuerversicherungs-Gesellschaften (n. 110), § 1. 113 Public fire offices: General Feur-Ordnungs Cassa (n. 26), Art. 8; Berliner Feuersozietät (n. 31), Art. 6; Neue General-Feuer-Cassa-Ordnung (n. 38), Art. 13; Neue Feuer-CassenOrdnung Billwärder (n. 42), § 8. Private fire insurance companies: Gothaer (n. 74), § 23. 114 Compare R. Ehrenberg (n. 15), 107 (suggesting a primary influence of maritime insurance on fire insurance, but without in-depth discussion). 115 See also Neugebauer (n. 2), 183; Raiser (n. 2), 16 f.; Sailer/Lohmüller (n. 70), 70.

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of Hamburg destroyed over 4,200 buildings, seven churches and even the Hamburg town hall. The immovable property insured with the public Generalfeuerkasse alone had a total value of more than 38 million marks,116 and these dimensions may cast some light on the damage that private insurers most likely had to shoulder, too. When in the 1840s and 1850s, fire insurance for private households developed into a ‘bulk business’ of great economic importance, the private insurance companies gained a strong bargaining position over the individual policyholders. Consequently, they were now able to unilaterally dictate their conditions. And these conditions were, factually, the only applicable fire insurance ‘law’, even though they were nothing but contractual provisions. The general policy conditions developed so as to contain inordinately cautious clauses on the one hand and severe sanctions against any policyholders who were in breach of contract on the other hand. The take-it-or-leave-it situation for anybody seeking insurance117 was aggravated by the fact that the general policy conditions of the different insurers exhibited a remarkable concordance to each other. This became even more problematic when the major private fire insurance companies started to form associations in the second half of the nineteenth century, such as the Verband deutscher Privat-Feuerversicherungs-Gesellschaften in 1871 (Federation of German Private Fire Insurance Companies) or the Vereinigung der in Deutschland arbeitenden Privat-Feuerversicherungs-Gesellschaften in 1900 (Association of Private Fire Insurance Companies Operating in Germany).118 Though certainly of great significance that the members of these associations agreed upon collusive premiums at the onset of the twentieth century,119 it should be observed that already in the late nineteenth century they had introduced standardized model policies that were used by every associated insurer, with only few variations. The first such policy was introduced in 1874, and it was used by 14 insurance companies. A clause from the 1874 standardized model policy of the Verband deutscher Privat-Feuerversicherungs-Gesellschaften, once again addressing the problem of increased risk, may serve as a pars pro toto for the strict insurance practices of the time:120 ‘§ 5. Wenn im Laufe der Versicherungen die Feuergefährlichkeit sich vermehrt, oder versicherte Gegenstände noch anderswo versichert werden, so erlischt die Entschädigungsverpflichtung bezüglich aller versicherter Gegenstände. Wenn versicherte Gegenstände transloziert werden, oder, außer in Erbschaftsfällen, den Eigentümer wechseln, so erlischt 116

Büchner (n. 1), 31 – 33; Sailer/Lohmüller (n. 70), 71; Schaefer (n. 1), vol. 1, 197 f. The Fire of Hamburg is said to have had a great impact on the rise of professional premium calculation and reassurance; cf. Neugebauer (n. 2), 21; Ohlmeier/Spohnholtz (n. 22), 63. 117 Müssener (n. 2), 312; Neugebauer (n. 2), 108, 145; Raiser (n. 2), 18 f.; V. Ehrenberg (n. 91), 80. See also Brämer/Brämer (n. 3), 245 f.; Duvinage (n. 60), 53; Müssener (n. 2), 143; von Liebig (n. 3), 191. 119 Duvinage (n. 60), 53 – 55; Müssener (n. 2), 143; Prölss (n. 4), 163. 120 Reproduced in Sammlung von Versicherungsbedingungen (n. 74), vol. 1, 38; compare also Neugebauer (n. 2), 151 f.

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Matthias Bogner die Entschädigungsverpflichtung bezüglich der betroffenen Gegenstände. Die Entschädigungsverpflichtung tritt jedoch in obigen Fällen wieder in Kraft, wenn die Gesellschaft nach Kenntnisnahme des betreffenden Umstandes sich zur Fortsetzung der Versicherung schriftlich bereit erklärt hat. Zur Rückerstattung der für das laufende Jahr gezahlten Prämie ist die Gesellschaft in keinem Falle verbunden.’ ‘§ 5. If the fire risk increases in the course of the insurance or if objects insured are insured anywhere else, the insurer’s liability terminates regarding all insured objects. If objects insured are translocated or change their owner, apart from cases of inheritance, the insurer’s liability terminates regarding these specific objects. The liability to indemnify comes, however, again into force if the company, after having taken notice of the respective circumstance, agrees in writing to continue the insurance. The company is on no account obliged to reimburse the premiums paid for the current year.’

The clause is an extreme example of how policy conditions favoured the insurers’ interests: The insurer’s liability terminated ipso iure with any increase of risk; the clause did not distinguish between an increase of risk caused by the insured and an increase of risk occurring incidentally; furthermore, it was for the application of the clause irrelevant whether the insured had brought about the increase of risk intentionally, negligently or without any fault. The different German legislatures did not intervene to protect the interests of the insured. To the contrary, some acts regulating private fire insurance, such as the Prussian Mobiliarfeuerversicherungsgesetz of 8 May 1837 (Fire Insurance of Movables Act) that was in force until 1901, proves that legislators still saw it as their mission to prevent the insured from committing acts of arson: Every fire insurance contract for movables which was concluded in Prussia had to be approved of by the local police authority before coming into force in order to prevent any ‘harmful’ over-insurance.121 During the nineteenth century, three German states made attempts to codify insurance contract law as a part of their commercial or private law codifications: Arts. 428 – 533 of the Entwurf eines Württembergischen Handelsgesetzbuches of 1839 (Draft of a Württemberg Commercial Code), Arts. 327 – 384 of the Entwurf eines Preußischen Handelsgesetzbuches of 1857 (Draft of a Prussian Commercial Code) as well as Arts. 800 – 829 of the Entwurf eines Bürgerlichen Gesetzbuches für das Königreich Bayern of 1861 (Draft of a Civil Code for the Kingdom of Bavaria) included provisions on insurance contract law.122 None of these drafts included any provisions for the protection of the insured. 121 Gesetz-Sammlung für die Königlichen Preußischen Staaten 1837, 102. Similarly in Württemberg: Gesetz, betreffend die polizeilichen Beschränkungen der Versicherung des beweglichen Vermögens gegen Feuers-Gefahr of 3 June 1830 (Regierungs-Blatt für das Königreich Württemberg (1830), 207). See also Duvinage (n. 60), 11 f.; von Liebig (n. 3), 127 – 129; Müssener (n. 2), 106; Neugebauer (n. 2), 89; Prange (n. 5), 119.; Prölss (n. 4), 160. 122 On these drafts, see Christoph Bergfeld, Handelsrecht, in: Typologie der Gesetzgebung des Privatrechts und Prozessrechts, in: Helmut Coing (ed.): Handbuch der Quellen und Literatur der neueren europäischen Privatrechtsgeschichte, vol. III/3 (1986), 2853 – 2968; Bar-

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By contrast, Arts. 894 – 921 of the Dresdner Entwurf zum Obligationenrecht of 1866 (Dresden Draft of a Law of Obligations), the first attempt to codify insurance contract law for all of Germany, showed first traces of the idea that the insured suffered from a structural disadvantage when negotiating the contract and that he, consequently, needed to be protected from imbalanced clauses.123 However, none of these drafts actually came into force, whereas Arts. 782 – 905 of the Allgemeines Deutsches Handelsgesetzbuch of 1861 (General German Commercial Code) included only maritime insurance law.124 In conclusion, German private fire insurance companies enjoyed an unrestricted freedom of contract and could, thus, develop without much state intervention throughout the nineteenth century. It was only in 1901 that the German Empire installed an insurance supervision system,125 and insurance contract law was finally codified by the Versicherungsvertragsgesetz of 1908.126 II. Opening the markets: competition between the two systems Alongside the private insurance companies specializing in fire insurance for movables, numerous public fire insurance offices still specialized in the insurance of immovables. In Prussia, they held a monopoly until the 1830s and 1840s. In some parts of Prussia, this monopoly was abolished in the 1830s.127 This development was connected to market-liberalism, which slowly began to impact the legal sphere. Finally, private insurance companies were also allowed to insure immovables – without restrictions.128 As a consequence, the Prussian public fire offices soon suffered from a financial imbalance: They still did not calculate the premiums according to the risk of fire. For fire-hazardous buildings such as mills the same premium was charged as for residential buildings as long as they had the same value. Owners of low-risk properties, thus, changed to private insurers who were able to offer coverage for lower premiums. It was only the high-risk properties that bara Dölemeyer, Deutschland, in: ibid., vol. III/2 (1982), 1403 – 1625; Duvinage (n. 60), 16 – 31; Müssener (n. 2), 148; Neugebauer (n. 2), 48 – 67, 75 – 86. 123 Protocolle der Commission zur Ausarbeitung eines Allgemeinen Deutschen Obligationenrechtes (1863 – 1866), 3372 – 3374, 4568 – 4570; see also Franz Philipp Kübel, Die Verhandlungen der Dresdener Bundeskommission zur Ausarbeitung eines allgemeinen deutschen Obligationenrechts über den Versicherungsvertrag, (1866) 1 Zeitschrift für Versicherungsrecht 321 – 407, 336 f.; Duvinage (n. 60), 31; Neugebauer (n. 2), 85 f. 124 Cf. Bergfeld (n. 122), 2948; Neugebauer (n. 2), 68; Müssener (n. 2), 148. 125 Gesetz über die privaten Versicherungsunternehmungen of 12 May 1901 (Reichsgesetzblatt 1901, 139); cf. also Neugebauer (n. 2), 90 f. 126 Gesetz über den Versicherungsvertrag of 30 May 1908 (Reichsgesetzblatt 1908, 263). 127 See, e. g., Reglement für die Provinzial-Feuer-Sozietät der Rhein-Provinz, § 11 (Gesetz-Sammlung für die Königlichen Preußischen Staaten 1836, 13); Reglement für die Provinzial-Feuer-Sozietät der Provinz Westphalen, § 11 (Gesetz-Sammlung für die Königlichen Preußischen Staaten 1836, 49); cf. Brämer/Brämer (n. 3), 238 f. 128 Brämer/Brämer (n. 3), 238 f.; von Liebig (n. 3), 27; Müssener (n. 2), 27 f.

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remained with the public Feuersozietäten. Consequently, these public offices quickly faced problems covering damage from the premiums they received.129 Beginning in the 1860s, these developments led to a progressive reform of the business model under which Prussian public fire offices operated.130 They started to adopt premium models based on the risk they covered.131 The Feuersozietät der Haupt- und Residenzstadt Königsberg, for example, revised its statutes in 1862. On the basis of the construction of buildings, it distinguished between three risk categories, dividing these three categories further into two or three sub-categories according to the building’s use. A considerable surcharge had to be paid if a profession was exercised in the insured building which was regarded as especially firehazardous, thus affecting structures such as breweries, bakeries, distilleries, or sugar refineries.132 Furthermore, it was now possible to freely choose the insured sum, and compulsory underinsurance was no longer required.133 Some of the Feuersozietäten even successfully engaged in insuring movables against the risk of fire.134 III. Exchange of ideas Thus, the public fire offices reacted to the opening of the markets and to the competition of the private fire insurance companies by adapting their actuarial mechanisms, more specifically, by adopting premium models based on the fire risk which they covered. This finding raises the question whether they also adopted the legal framework of the private fire insurance companies as defined in their general policy conditions. If public fire offices now also calculated the premiums according to the covered risk, they also suffered from the same information asymmetry as private fire insurance companies, meaning they now needed to burden the insured with a duty of disclosure. And they now had to address the problem of an increase of 129

Brämer/Brämer (n. 3), 238 f.; von Liebig (n. 3), 27; Müssener (n. 2), 200. Brämer/Brämer (n. 3), 239; von Zedtwitz (n. 3), 211. 131 See also Brämer/Brämer (n. 3), 35 f.; Schaefer (n. 1), vol. 1, 200 f. (referring to the Hamburger Generalfeuerkasse). 132 For other examples, see Revidirtes Reglement für die Westphälische ProvinzialFeuersozietät, §§ 41 – 42 (Gesetz-Sammlung für die Königlichen Preußischen Staaten 1859, 477); Revidirtes Reglement für die Feuersozietät der Stadt Königsberg i.Pr., § 18 (GesetzSammlung für die Königlichen Preußischen Staaten 1862, 80); Revidirtes Reglement für die Feuer-Sozietät der Provinz Posen, §§ 27 – 31 (Gesetz-Sammlung für die Königlichen Preußischen Staaten 1863, 578). 133 Feuersozietät Königsberg (n. 132), §§ 17 – 19; for other examples, see Westphälische Provinzial-Feuersozietät (n. 132), §§ 19 f.; Feuer-Sozietät Posen (n. 132), § 18. 134 See, e. g., Statut wegen Versicherung von Mobilien bei der landschaftlichen FeuerVersicherungsgesellschaft für Westpreußen of 29 March 1871 (Gesetz-Sammlung für die Königlichen Preußischen Staaten 1871, 163); Reglement der Provinzial-Feuer-Versicherungsanstalt der Rheinprovinz (1903) (reproduced in Sammlung von Versicherungsbedingungen (n. 74), vol. 1, 99); see also Brämer/Brämer (n. 3), 239; von Liebig (n. 3), 27; Müssener (n. 2), 111. 130

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risk. It would seem natural that the public fire offices carefully assessed how private fire insurers had solved these problems in their general policy conditions. A condition governing an increase of risk may serve as an example. The Feuersozietät der Haupt- und Residenzstadt Königsberg introduced a clause that recalls the clauses which had already been used by almost all private fire insurers in their general policy conditions:135 ‘§ 22. Wenn während der Versicherungszeit in oder an dem Gebäude bauliche Veränderungen oder Anlagen gemacht, oder in dem Gebäude feuergefährliche Gewerbe betrieben oder besonders feuergefährliche Gegenstände gelagert werden, so daß grundsätzlich die Versetzung des versicherten Gebäudes in eine andere zu höheren Beiträgen verpflichtende Klasse (§§. 19. 20.) stattfinden müßte, so ist der Versicherte verpflichtet, der Feuersozietäts-Deputation sofort und spätestens an dem Tage, von welchem ab das Gebäude zu dem durch die Veränderung bestimmten Zwecke gebraucht, oder von dem ab feuergefährliche Gewerbe darin betrieben oder besonders feuergefährliche Gegenstände darin gelagert werden, Anzeige zu machen und sich der aus der größeren Feuergefährlichkeit folgenden Beitragserhöhung zu unterwerfen. […] § 24. Geschieht im Falle des §. 22. die Anzeige später als in dem vorgeschriebenen Zeitpunkte, oder wird von der Feuersozietäts-Deputation entdeckt, daß ein Gebäude durch die Schuld des Versicherten nicht zu den vorschriftsmäßigen Beiträgen katastrirt ist, so muß der Eigenthümer eines solchen Gebäudes von dem Zeitpunkte der Veränderung (§. 22) resp. von dem Tage der Versicherung die höheren Beiträge nachzahlen. Unterbleibt die Anzeige oder die Entdeckung ganz, und das Gebäude wird durch Feuer beschädigt oder vernichtet, so ist der Eigenthümer jedes Anspruches auf Brandvergütigung verlustig, sofern er nicht den Nachweis zu führen vermag, daß die Anzeige ohne sein Verschulden unterblieben ist. In keinem dieser Fälle findet eine Zurückerstattung der gezahlten Feuerkassenbeiträge statt.’ ‘§ 22. When, during the time of insurance, constructive alterations or attachments are made in or to the building insured or when a fire-hazardous business is operated, or highly inflammable objects are stored, in the building, so that the insured building would have to be transferred to another insurance class with higher premiums (§§ 19, 20), the insured is obliged to notify the Deputation of the fire office immediately and no later than on the day when the building is used for the purpose destined by the alteration, when the fire-hazardous business is operated, or when the highly inflammable objects are stored therein, and he has to submit himself to the increase of premiums resulting from the higher risk of fire. […] § 24. If, in the case of § 22, the notification is made later than prescribed or if it is discovered by the Deputation of the fire office that a building is not assigned to the correct class of premium by fault of the insured, the owner of such building has to pay the higher premiums retrospectively from the moment of the [relevant] alteration (§ 22), or from the day the insurance took effect. If the insured fails to notify [the fire office] or if [the alterations] are not discovered and if [furthermore] the building is damaged or destroyed by 135 Feuersozietät Königsberg (n. 132), §§ 22 – 24; cf. also Westphälische ProvinzialFeuersozietät (n. 132), §§ 46 – 49; Versicherung von Mobilien bei der Feuer-Versicherungsgesellschaft Westpreußen (n. 134), §§ 14, 18; Provinzial-Feuer-Versicherungsanstalt Rheinprovinz (n. 134), Part A §§ 17 f., Part B § 3.

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Matthias Bogner fire, the owner loses every right to compensation, unless he is able to prove that he had failed to notify [the fire office] without his fault. Paid premiums will not be reimbursed in any of these cases.’

The conditions of the Königsberg Feuersozietät resemble the general policy conditions of the private fire insurance companies in two points. The risk increasing circumstances which have to be disclosed are identical. And the legal consequence of a non-disclosure is the same: The insured has no coverage and, in certain cases, the paid premiums are forfeited. Nevertheless, there are also some differences: according to § 24 of the statutes of the Königsberg Feuersozietät, the insured did not lose insurance coverage if he had acted without fault. By contrast, according to the policy conditions of private fire insurance companies, the insured lost his coverage even if he had acted without any fault. Consequently, the public fire offices did not simply copy the policy conditions of their private competitors. It seems that they still followed the idea of providing a broad insurance coverage to large parts of the population – an idea rooted in eighteenth-century cameralism – and that they, as public offices, served the common good, thus disallowing them from excluding members who had acted innocently. Further examples could be added proving the general observation that the public fire offices adopted a number of clauses from their private competitors in the second half of the nineteenth century. The Feuersozietäten had lost their monopoly, they allowed the insured to freely choose the sum insured, and this raised the need to regulate problems of over-, under- and double insurance.136 Furthermore, some public fire offices abolished the requirement that any indemnification had to be used to rebuild the building – an essential ingredient to all Feuersozietäten of the cameralistic era.137 However, some of these developments were limited to Prussia. It was largely only Prussia that opened the fire insurance market to private insurers. The development in other German states followed different paths. The oldest public fire office, the Hamburger Feuerkasse of 1676, received a state monopoly for the insurance of buildings against the risk of fire for the first time in 1817.138 And especially in the south of Germany, the markets for insuring buildings against fire remained closed, the public fire offices retained their monopolies and, in some cases,

136

Westphälische Provinzial-Feuersozietät (n. 132), §§ 10, 18, 56; Versicherung von Mobilien bei der Feuer-Versicherungsgesellschaft Westpreußen (n. 134), § 8, 10, 14; Provinzial-Feuer-Versicherungsanstalt Rheinprovinz (n. 134), Part A, §§ 3, 16 – 18. 137 Cf. Westphälische Provinzial-Feuersozietät (n. 132), § 77; Feuer-Sozietät Posen (n. 132), § 66; Provinzial-Feuer-Versicherungsanstalt Rheinprovinz (n. 134), Part A §§ 29 – 32 (rebuilding optional). 138 Neu revidirte Hamburgische General-Feuer-Casse-Ordnung (1817), § 1 (reproduced in Christian Daniel Anderson, Sammlung der Verordnungen der freyen Hanse-Stadt Hamburg, seit deren Wiederbefreyung im Jahre 1814 (1817), vol. 4, 212); Büchner (n. 1), 23; Ebel (n. 1), 57; Ohlmeier/Spohnholtz (n. 22), 54; Schaefer (n. 1), vol. 1, 194.

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membership still was compulsory.139 Consequently, these southern German public fire offices, unlike their Prussian counterparts, held on to their legal acquis as it had developed during the cameralistic era.140 It follows that by the end of the nineteenth century the statutes of, and the legislation covering, public fire offices were characterized by a multitude of different approaches. Whereas in the period before 1850 it was possible to identify common features in the legal framework of these Feuersozietäten, the same was impossible by 1900. Finally, it is noteworthy that the exchange of legal ideas was not a one-way process from private to public insurers. Starting in the 1850s, private insurers adopted a modified clause requiring the insured to rebuild any destroyed buildings in order to secure their use as real security and in order to protect the interests of the respective creditors141 – returning to the rationale of such clauses as found in the Hamburg Feuerkontrakte. The 1886 standardized policy conditions of the Verband deutscher Privat-Feuerversicherungs-Gesellschaften may serve as an example:142 ‘§ 12. Wenn auf versicherte Gebäude Hypotheken, Grundschulden oder andere Realverpflichtungen vor dem Brande eingetragen sind, so wird die Entschädigung nur behufs der Wiederherstellung und nachdem letztere gesichert worden, bezahlt, die sämtlichen vor dem Brande eingetragenen Gläubiger müßten denn in die unbedingte Zahlung willigen oder selbst zur Empfangnahme berechtigt sein. […].’ ‘§ 12. If mortgages, land charges or other real charges were registered on the insured buildings before the fire had occurred, the compensation will only be paid for the purpose of reconstruction and after the latter has been secured, unless all creditors who had been registered before the fire occurred agree with the unconditional payment or are authorized to receive the payments by themselves. […]’

This clause resembles the respective reconstruction clauses of the public Feuersozietäten.143 However, there is one marked difference. The public fire offices had introduced the obligation to rebuild the destroyed building in order to protect public interests, i. e. to secure the building owner’s ability to pay taxes. By contrast, private fire insurance companies introduced the respective clause for the benefit of real security creditors. And this explains the differences why, according to the latter, a rebuilding was necessary only if there was such a real security creditor and why a creditor was entitled to consent to the indemnity being paid out without the insured having to reconstruct the property.

139 Brämer/Brämer (n. 3), 241; for a list of all compulsory and non-compulsory public fire offices, see Motive zum Versicherungsvertragsgesetz (reprinted 1963), 486 – 489. 140 See, e. g., Badisches Gebäudeversicherungsgesetz of 1902 (reproduced in Sammlung von Versicherungsbedingungen (n. 74), vol. 1, 79). Cf. also Prange (n. 5), vol. 1, 60; Prölss (n. 4), 161. 141 Prölss (n. 4), 164. 142 Reproduced in Sammlung von Versicherungsbedingungen (n. 74), vol. 1, 75. 143 See the text corresponding to n. 52, above.

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D. Conclusion Historically, German fire insurance rests on two pillars. On the one hand, there are public fire offices. They first appeared in the late seventeenth century. Initially, they insured buildings only. On the other hand, there are private insurance companies. They appeared primarily in the nineteenth century. At first, they insured movables and, in some instance, highly fire-hazardous buildings which were not eligible to join a public fire office. The first public fire office originated from the Hamburger Feuerkontrakte, the earliest being concluded in 1591. These fire contracts were then absorbed by the first public fire office, the Hamburger General Feur-Ordnungs Cassa of 1676. The statutes of these public fire offices were shaped by cameralistic ideas intended to further the common good. The first German private fire insurance companies, initially established in the early nineteenth century, were inspired by commercially-driven English fire insurance schemes which were active on the German market beginning in the late eighteenth century. However, the general policy conditions of these German private fire insurance companies were not simply modelled after their English counterparts. They were also influenced by the General Prussian Territorial Law of 1794, which had codified private terrestrial insurance, including private fire insurance, before private fire insurance was widely practised in Germany. From a legal perspective, public fire offices and private fire insurance companies did not share a common legal tradition, and they developed independently from each other. This was to change only from the 1850s onward. When the market for insuring buildings against the risk of fire was finally opened to private insurance companies, the legal provisions governing public and private fire insurance started to converge. The strong focus on fire guilds, fire contracts and public Feuersozitäten in twentieth-century literature reflects their significance for the cultural history of fire insurance – but not their importance for the legal history of modern fire insurance. Future research should focus on the first general policy conditions of the German private insurance companies which had been established starting in 1812. Future research should fully assess the similarities with, and differences from, their English counterparts and find explanations as to why the German insurers did not simply follow English models. Even though these research questions have been touched on in the second part of the present contribution, overall they remain unilluminated and blurred.

Chapter 4: England A. Fire assistance, prevention, and insurance before 1666 By Sinem Ogis* I. II. III. IV. V. VI. VII.

General overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guilds and fire guilds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fire briefs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fire prevention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First proposition to introduce fire insurance schemes . . . . . . . . . . . . . . . . . . . . . . . . Fire insurance after the Great Fire and earlier initiatives compared . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65 66 67 68 69 72 75

According to modern literature, fire insurance started to develop in England only after the Great Fire of London in 1666.1 However, even before 1666 there existed initiatives and plans for mutual help in the event of fire, for the prevention of fires, and for fire insurance. The present paper will analyse these initiatives and plans, compare them with the first fire insurance schemes established after 1666, and thereby work out their importance for our understanding of the beginnings of fire insurance in England. I. General overview Modern literature asserts that the 1666 Fire was the starting point for the development of fire insurance in England. Klaus Gerathewohl, for examples, writes that ‘England’s insurance and reinsurance industries expanded significantly as a direct * Parts of this chapter are based on research completed for my dissertation: Sinem Ogis, The Influence of Marine Insurance Law on the Legal Development of Life and Fire Insurance in England (2019). 1 Frederick H. Haines, Chapters of Insurance History: The Origin and Development of Insurance in England (1926), 42 – 46; Bertram Williams, Fire Marks and Insurance Office Fire Brigades (1927), 1 – 6; W. Eric Jackson, London’s Fire Brigades (1966), 7 – 10; Walter George Bell, The Great Fire of London in 1666 (1971), 1 – 20, 313 – 318; Sally Holloway, London’s Noble Fire Brigades, 1833 – 1904 (1973), 1 – 9; Brian Wright, The British Fire Mark 1680 – 1879 (1982), 20; Robert Evans, The Early History of Fire Insurance, (1987) 8 The Journal of Legal History 88 – 91, 88.

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result of the disaster of 1666’.2 By speaking of an expansion of the insurance industry, he acknowledges that marine insurance had existed before 1666. Furthermore, under marine insurance policies ships were insured against the risk of fire. However, no separate fire insurance branch had emerged before 1666.3 It was only after the Great Fire that such an independent fire insurance branch developed. Nevertheless, it is clear that England had always been struck by fires. Andover in Hampshire was, for example, devastated by a fire in 1141.4 Furthermore, already during the Middle Ages people had entered into agreements that had clearly addressed the risk of fire, that had introduced measures to prevent fire risks, and that had allocated resulting losses. An agreement between Thomas Bat and the Mayor of London dating from 1302 may serve as an example: ‘Thomas Bat came before John le Blund, Mayor of London, and the Aldermen, on the Friday next before the Feast of St. Hilary in the 30th year of the reign of King Edward, son of King Henry, and bound himself, and all his rents, lands, and tenements, to keep the City of London indemnified from peril of fire and other losses which might arise from his houses covered with thatch, in the Parish of St. Laurence Candelwykstrete; and he agreed that he would have the said houses covered with tiles about the Feast of Pentecost then next ensuing. And in case he should not do the same, he granted that the Mayor, Sheriffs, and bailiffs, of London, should cause the said houses to be roofed with tiles out of the issues of his rents aforesaid.’5

II. Guilds and fire guilds The 1302 agreement between Bat and the Mayor of London was a single agreement between two parties. However, there existed, prior to 1666, also associations that had introduced mechanisms to share fire losses, most importantly guilds.6 Guilds were polyfunctional associations affecting every aspect of life. In addition, it is claimed that they had introduced mechanisms of mutual help in the 2

Klaus Gerathewohl, Reinsurance, Principles and Practice, vol. 2 (1982), 703, n. 221. Haines (n. 1), 39. However, according to Wright (n. 1), 30, ‘one of the many who submitted plans for rebuilding of London after the fire was the famous architect Christopher Wren, who presented his plans to the King only six days after the fire was extinguished. One interesting point is the allocation by Wren of a building for “The Fire Insurance Office”, which indicates either an expectation by Wren that a fire insurance scheme would be established, perhaps by the City Corporation, or that some form of scheme was already in operation and Wren expected it to become more important.’ 4 See www.localhistories.org/andover.html (accessed 9 December 2019). 5 Reproduced in Henry Thomas Riley (ed.), Memorials of London and London Life in the 13th, 14th and 15th Centuries (1868), 46 f., cited from www.british-history.ac.uk/no-series/me morials-london-life/pp46-47 (accessed 9 December 2019). See also John H. Magee, General Insurance (5th edn., 1957), 16. 6 See in detail Cornelius Walford, The Insurance Cyclopedia: Being A Dictionary of the Definition of Terms Used in Connexion with the Theory and Practice of Insurance in all Its Branches, vol. 3 (1874), 438 – 594; A. Fingland Jack, An Introduction to the History of Life Assurance (1912), 72 – 126. 3

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event of fire as well as other calamities of life. Brian Wright, for example, makes reference to sixteenth-century craft guilds: ‘The earliest example of fire insurance appears to be a scheme run by a craft guild in Exeter during the Elizabethan period which required each member to pay a penny when the house of one of its members was burnt.’7

Guild members had to contribute to a loss suffered by a co-member.8 However, there are even earlier examples, such as that of the 1284 ordinances of the guild of the palmers: ‘When it happens that any of the bretheren or sisteren of the gild shall have been brought to such want, through theft, fire, shipwreck, fall of a house, or any other mishap, that they have not enough to live on; then once, twice, or thrice, but not a fourth time, as much help shall be given to them, out of the goods of the gild, as the rector and Stewards, having regard to the deserts of each, and to the means of the gild, shall be up-raised again, through the ordinances, goods, and help of his bretheren.’9

And according to the 1310 statutes of a guild in Killingholme, each brother or sister had to contribute half a penny to the rebuilding of a co-member’s house that had been destroyed through fire.10 However, it needs to be clear that these examples of mutual solidarity cannot be described in terms of modern insurance. III. Fire briefs Furthermore, it was custom to issue briefs for the benefit of fire victims, but also for the benefit of the victims of other calamities.11 They bore the royal signature and were addressed to bishops, churchwardens, and the clergy of parishes; they recommended and authorized the collection of money. They belong to the sphere of charity and had various names such as Kings’ briefs, fire briefs, or Kings’ letters. At first they were read out and the collections were made in church. In later periods, the churchwardens of a parish made house-to-house collections. A fire brief issued by the Commonwealth of England under Oliver Cromwell may serve as an example.12 It was granted in 1653 in reaction to a large fire in Marlborough, the centre 7

Wright (n. 1), 30. See also the example in Joshua Toulmin Smith, Lucy Toulmin Smith, and Lujo Brentano, English Gilds: The Original Ordinances of More than One Hundred Early English Gilds (1963), 6 f. 9 Smith/Smith/Brentano (n. 8), 193. 10 Smith/Smith/Brentano (n. 8), 185 f. 11 On what follows, Walford, Insurance Cyclopedia, vol. 3 (n. 6), 313; idem, Kings’ Briefs: Their Purposes and History (1882), 3 f.; Francis Boyer Relton, An Account of the Fire Insurance Companies (1893), 405; Geoffrey Vaughan Blackstone, A History of the British Fire Service (1957), 22. 12 Walford, Insurance Cyclopedia, vol. 3 (n. 6), 313; idem (n. 11), 21 – 24; Blackstone (n. 11), 30 (all with a reproduction of the brief). 8

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of the woollen cloth manufacturing trade in England. The brief recommended that sheriffs, justices of peace, and other public officeholders oversee the collections, most probably to strengthen the trust in them and to prevent abuses.13 The brief system was indeed a vehicle for fraud.14 In 1697, for example, a fire occurred in an empty house in Westminster, which was owned by a man named Pemberton, then spreading to neighbouring buildings and causing loss to approximately 20 people, one of whom was called Davies. Under the common law, Pemberton was liable for the damages incurred by his neighbours as he had acted negligently,15 and Davis had already successfully sued Pemberton for the value of his house. In order to prevent the other injured parties from suing him, Pemberton made the proposal to them that ‘if [they] would sign a release to him that [they] would not sue him for [their] losses, he would lay down the money to procure the King’s letters patent to collect the charity of well-disposed persons throughout England for [their] relief’. However, the others never saw any of the so collected sums, and subsequent investigations revealed numerous irregularities and frauds. The case led to ‘An Act for the better collecting charity money on briefs by letters patent and preventing abuses in relation to such charities’ (1705).16 Finally, briefs were abolished in 1828.17 However, it was not only fraud that briefs invited. It is also said that they kept people from taking measures to prevent fires and from taking out insurance. The Great Fire of London apparently was a turning point, overburdening the briefs system. The London Fire started on Sunday night, 2 September 1666, in the bakery of Thomas Faryner (Farrinor, Farryner, or Farynor) in Pudding Lane, devastating within five days an area of 436 acres, or four-fifths of the city, and destroying more than 10,000 houses, numerous churches including St. Paul’s Cathedral, and many public buildings.18 The Great Fire revealed the merits of modern fire insurance, and respective societies and companies began to spring up. However, in the decades preceding the Great Fire, an increasing awareness of fire risks and the necessity to reduce them had already emerged. IV. Fire prevention Manchester is said to have largely been a ‘wooden city’ until the end of the seventeenth century, and the use of wood as building material is identified as the

13

See Blackstone (n. 11), 83. On what follows, see Walford, Insurance Cyclopedia, vol. 3 (n. 6), 314 f. 15 Frederick Clifford, A History of Private Bill Legislation, vol. 2 (1968), 595. 16 4 Anne, c. 14. 17 9 Geo. IV, c. 42: ‘An Act to Abolish Church Briefs, and to Provide for Collections for Building Churches and Chapels’. See also Walford (n. 11), 55. 18 Magdalena Alagna, The Great Fire of London of 1666 (2003), 36. 14

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main reason why many cities were devastated by fires throughout history.19 The great enlargement of London and its suburbs then led in 1604 to a prohibition against erecting new houses in the City of London or within a mile thereof ‘except all the utter walls and windows thereof, and the forefront of the same, be wholly made of brick, or brick and stone’.20 The aim was to reduce the use of timber as building material, to lower the number of thatched roofs, and thereby to lower the risk of fire.21 However, the 1604 prohibition seems to have had little to no effect, and consequently further prohibitions were issued in 1607, 1608, and 1615. V. First proposition to introduce fire insurance schemes The first known English fire insurance policy was signed by Nicholas Barbon in 1682. Barbon is said to have been a leading figure in the reconstruction of London after the 1666 fire,22 and according to various sources he had operated a fire office since 1667. However, the evidence proving such early activities is vague. Nevertheless, it is clear, that Barbon’s fire office had existed since 1680.23 It was the first office insuring buildings against the risk of fire. Barbon had started the office by himself,24 but, due to his success, in 1680 he established a company together with eleven associates.25 Its exact corporate form is unknown. At first, it was called the Insurance Office at the Back-side of the Royal Exchange, later simply Fire Office, and according to Wright it was renamed as Phenix in 1705.26 In the aforementioned 1682 policy signed by Barbon, insurance coverage was sought for a property owned by Robin Walker: ‘This present Instrument or Policy of Insurance, witnesseth that Dr Nicolas Barbon and Samuell Tookie Gents in Consideration of the Sume of four pounds eleven shillings and eight pence in hand paid by Sr William Twisden Barronett for the Insuring of an House Scituate on the south side of Barbican now in the possession of Robin Walker being the second howse westward from Redrose Streete […] for the Term of Thirty One yeares, […] after the said House shall be Burnt down, Demolished, or Damnifyed, by, or by Reason or Means of Fire.’27 19 Barry Bridgwood and Lindsay Ann Lennie, History, Performance, and Conservation (2009), 163; Peter Mytton-Davies, A Practical Guide to the Repair and Maintenance of Houses (1988), 23. 20 Haines (n. 1), 39. 21 On fire protection, see Walford, Insurance Cyclopedia, vol. 3 (n. 6), 620 – 624. 22 Haines (n. 1), 48; George Clayton, British Insurance (1971), 37. 23 See Walford, Insurance Cyclopedia, vol. 3 (n. 6), 441; Harold E. Raynes, A History of British Insurance (2nd edn., 1964), 74; Sir William Holdsworth, A History of English Law, vol. 8 (1966), 294; Evans (n. 1), 89. 24 Haines (n. 1), 48. 25 Relton (n. 11), 20. 26 Relton (n. 11), 28; Wright (n. 1), 31 f. 27 Archive of the Association of British Insurers, 1402.

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It was only the building that was insured, and it was only in 1710 that the Sun Fire Office introduced insurance of movables.28 The 1682 policy already included all the essential elements which are also to be found in later policies: the name of the contracting parties; the insured object; the duration of the insurance; the risk; and the premium. For instance, a 1713 policy issued by the fire office Hand in Hand followed the same pattern: ‘Robert Child […] is become a Party to the Agreement for Securing Houses, Chambers, or Rooms from Loss by Fire, by Amicable Contribution: Now in Consideration of the Sum of nine Shilling in Hand paid, by the said Robert Child.’29

However, even if one accepts that Barbon sold fire insurance as early as 1667 and, thus, shortly after the Great Fire of London had occurred in 1666, there are proposed schemes introducing fire insurance that date even from the time before the Great Fire. A proposal dated 1635 is considered to be the first such plan in England. It was presented to the Privy Council. It is reproduced in Cornelius Walford’s Insurance Cyclopedia: ‘To the King’s most excellent majesty – The humble Petition […] showeth, That there frequently happening great and lamentable losses by Fire to divers your majesty’s subjects, to the utter undoing themselves and families, as also much trouble to your majesty by petition for obteyning your majesty’s gracious favour for gathering of reliefe by Briefes, being a continuall charge to the subject, and often not without abuse. For the future prevention whereof, upon your majesty’s gracious favour extending to your petitioner […] Authorising your petitioner to ensure all your majesty’s subjects whomsoever for soe much of their estates combustible as they themselves shall conceive in danger of Fire, not taking above 12d. per centum, yearly for soe much soe insured, And giving such securitie to your majesty’s said subjects as they shall like of, paying your majesty for the first two years £ – (figures partly worn away) And £500 p. a. during the terme graunted from your majesty […].’30

In 1638, William Ryley and Edward Mabb presented another petition to Charles I for a fire insurance scheme. They asked for a ‘pattent […] for the term of 41 years’. The petition also included measures for the prevention of fires and for firefighting. It is again reproduced by Walford.31 The fact that the petition spoke of a ‘term of 41 years’ is of interest in the present context. After 1666, most fire insurance policies were time policies. They were taken out for a fixed period, and unlike marine and life insurance policies, the first known fire insurance policies were for a longer term as there was no statutory provision fixing a maximum term of the policy. The first known time policies in the marine insurance branch were, for

28 29 30 31

See Relton (n. 11), 290. Aviva Archive, CU 2129. Walford, Insurance Cyclopedia, vol. 3 (n. 6), 439. Round brackets added by Walford. Walford, Insurance Cyclopedia, vol. 3 (n. 6), 439 f.

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example, made for a period of twelve months.32 Later, section 8 of the Customs and Inland Revenue Act 1867 and section 93 of the Stamp Act 1891 declared marine insurance policies for any time exceeding twelve months invalid.33 Similarly, early life insurance policies were short-term insurances – either for a single voyage or for a fixed period of time usually ranging from a few months to a year.34 In fact, the sixteenth century Book of Orders held that no life insurance could exceed one year and that policies made for a longer term were automatically reduced to one year.35 By contrast, the parties to a fire insurance contract were able to agree on any term, and the aforementioned 1682 policy issued by Barbon’s Fire Office was signed for a term of 31 years. A fire insurance policy dating from 1686 was to run for a term of seven years.36 It was only in the course of the eighteenth century that fire insurance policies began to be issued for one year only, but the insured were allowed to renew them.37 In summary, marine and life insurance seem to have started with similar practices concerning the duration of insurance: with both, short term policies were common usually for a period no longer than twelve months. By contrast, fire insurance started with a different practice: with the 1682 policy, insurance was taken out for a term of 31 years. Prima facie, this roughly parallels earlier proposals such as the 1638 petition. However, one has to be cautious in reaching conclusions. The 1638 petition spoke of ‘a pattent for the sole ordering and disposing of the same for the term of 41 years’. Thus, it is unlikely that the whole scheme was limited to, or that coverage under the scheme was promised for, a term of 41 years. It seems rather that Ryley and Mabb had applied for a 41-year monopoly. The report of the Attorney-General dating 4 August 1638 proposed that membership in the scheme should be voluntary, and in October 1638, the King ordered the preparation of a corresponding patent. However, the plan was never implemented.38 The year 1660 saw yet another plan for a fire insurance scheme proposed to Charles II, but it was rejected by the Common Council ‘on the ground that they thought it is unreasonable for private persons to manage such an undertaking, or that any one but the City should reap the profits of the enterprise’.39 The details of the plan are unknown, but the reasons given for its rejection suggest that it was a project for a private insurance, whereas the Common Council would have preferred a 32 See, e. g., Wynne v. Fellowes (1691) 1 Show. K.B. 334; Cougham c. Kindt, in: Reginald G. Marsden, Select Pleas in the Court of Admiralty and Upon Appeal therefrom, vol. 2 (1897), 198 f. 33 30 & 31 Vict., c. 23; 54 & 55 Vict., c. 39. 34 Katherine D. Watson, Poisoned Lives: English Poisoners and their Victims (2004), 105; Pamela Odih, Advertising in Modern and Postmodern Times (2007), 67. 35 Guido Rossi, Insurance in Elizabethan England: The London Code (2016), 648 – 650. 36 Aviva Archive, GA 2736. 37 Johan P. van Niekerk, The Development of the Principles of Insurance Law in Netherlands from 1500 to 1800, vol. 1 (1998), 426. 38 Walford, Insurance Cyclopedia, vol. 3 (n. 6), 440; Relton (n. 11), 11. 39 Cited from Walford, Insurance Cyclopedia, vol. 3 (n. 6), 440.

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public scheme. In fact, in Hamburg such a public fire insurance scheme was established in 1676:40 the famous Hamburger General Feuer-Cassa. The Hamburg scheme was based on a network of privately organized mutual fire insurance contracts, the so-called Feuerkontrakte, first concluded in 1591 between 100 brewers. Even earlier, Schleswig-Holstein had seen, on a local level, fire guilds, and these continued to exist, subsequently being developed into fire insurance schemes. Even though it seems clear that the 1676 Feuer-Cassa was based on the Feuerkontrakte, it is unlikely that these Feuerkontrakte were inspired by the Schleswig-Holstein fire guilds, notwithstanding the geographical proximity and the fact that there existed commercial links between Hamburg and the respective communities in SchleswigHolstein. A final recommendation predating the 1666 Fire was made by Sir William Petty. He wrote in 1662 in Chapter 6 (‘Of Customs and Free Ports’) of his ‘Treatise of Taxes and Contributions’:41 ‘And finally, that the Customs had been an ensurance upon losses by enemies as the ensurance now usual, is of the casualities of sea, winde, weather, and Vessel, or altogether; or like the ensurance in some Countreys of Houses from Fires for a certain small part of their yearly Rent.’42

In summary, numerous attempts and propositions were made to establish fire insurance schemes even before the Great Fire of London had occurred, but only thereafter was the time ripe to implement fire insurance in England. VI. Fire insurance after the Great Fire and earlier initiatives compared These observations raise the question whether the fire insurance societies and companies that were established after the Great Fire of London were in any way influenced by one of the earlier proposals. It is usually claimed that fire insurance is simply the offspring of marine insurance. By comparing the newly established fire insurance societies and companies with earlier proposals it will be possible to test this assertion. A comparison of the 1682 policy issued by Barbon’s Fire Office and the 1713 policy with the statutes of guilds, such as the 1310 statutes of the guild of Killingholme, reveals that the latter did not offer insurance in the modern sense; rather, guild members had promised only mutual help to each other. The congruence between modern fire insurance and mutual guild help is too minimal to suggest any direct influence of guilds on late seventeenth-century fire insurance societies and companies. 40 41 42

On what follows, see Bogner, pp. 34 ff., above. See Walford, Insurance Cyclopedia, vol. 3 (n. 6), 441. William Petty, A Treatise of Taxes and Contributions (1662), 36.

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However, what about the early seventeenth-century proposals? One similarity between these proposals and late seventeenth-century fire insurance practice has already been put in perspective. Ryley and Mabb had in 1638 petitioned for a ‘pattent […] for the term of 41 years’, and the 1682 policy issued by Barbon’s Fire Office was signed for a term of 31 years. However, a closer analysis has suggested that Ryley and Mabb had applied for a monopoly running 41 years. The petition does not say that the whole scheme or individual insurance coverage was limited to a term of 41 years. By contrast, marine insurance contracts were concluded for a specific voyage or for the duration of no more than twelve months. Life insurance practice followed from the very beginning marine insurance practice. It is remarkable that fire insurance started off with a distinct practice, even if this practice is not based on the 1638 petition.43 Another similarity concerns the insured object: the early seventeenth-century proposals concerned immovable property. The insurance companies of the late seventeenth century, too, only offered coverage for immovable property. By contrast, marine insurance covered only movable property. Fire insurance was subsequently extended to goods and merchandise only at the beginning of the eighteenth century.44 A further possible similarity relates to the classification of risks. Early seventeenth century fire prevention measures clearly distinguished between buildings made of wood and houses with thatched roofs as being more fire hazardous than houses made of brick and stone and buildings with tiled roofs. The 1605 prohibition – followed by similar legislation in 1607, 1608, and 1615 – wanted to reduce the use of timber as building material in order to decrease the number of thatched roofs and thereby lower the risk of fire. In fact, towns had already in early times tried to implement ordinances to the same end.45 Finally, in 1667, ‘An Act for Rebuilding the City of London’ was passed ordering brick and stone to be used for the rebuilding of houses.46 Similarly, for the purpose of calculating the premium, modern fire insurance companies distinguished between different risk classes based on building materials and the construction of the building.47 Already with Barbon’s Fire Office of 1680, the premium had been declared as ‘being Six Pence in the Pound Rent for Brick43

See in detail Sinem Ogis, The Influence of Marine Insurance Law on the Legal Development of Life and Fire Insurance in England (2019), 87 – 94. 44 See in detail Ogis (n. 43), 77 – 87. 45 Walford, Insurance Cyclopedia, vol. 3 (n. 6), 621. 46 19 Car. II., c. 8. See also Walford, Insurance Cyclopedia, vol. 3 (n. 6), 623 f. 47 See Walford, Insurance Cyclopedia, vol. 3 (n. 6), 398 – 407; James Biggs Porter, The Laws of Insurance: Fire, Life, Accident, and Guarantee (1889), 105; Relton (n. 11), 361 f.; Peter G.M. Dickson, The Sun Insurance Office 1710 – 1960 (1960), 83 – 85; Barry E. Supple, The Royal Exchange Assurance: A History of British Insurance 1720 – 1970 (1970), 84; Clayton (n. 22), 46.

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Houses, and Twelve Pence for Timber’.48 Similarly, the Friendly Society of 1683 provided that a brick house could be insured for six shillings eight pence, whereas the insured had to pay the double amount for a timber house. Later, these distinctions were further refined and extended to other insured objects. The fire insurance office Double Hand in Hand, which was established in 1714 for insuring goods and merchandise, drew a distinction between three classes of risk: half-hazardous, hazardous, and doubly hazardous goods; the Royal Exchange Corporation spoke in 1721 of common, hazardous, and doubly hazardous insurance.49 Nineteenth-century fire insurers further refined the system by introducing four or five classes of risk.50 According to Peter G.M. Dickson, fire insurers had learned the calculation of premiums from the marine insurance practice.51 However, there were obvious differences. In marine insurance, the most important factor for calculating the premium was the age of the ship.52 By contrast, with fire insurance it was not the age of buildings but the building materials that were the most important factor.53 Is it therefore correct to say that fire insurance practice was inspired by the early seventeenth-century prohibitions against building houses of wood and houses with thatched roofs rather than being inspired by marine insurance practice? Such a conclusion would clearly be wrong. The 1638 proposition developed by Ryley and Mabb as reproduced by Walford did not calculate the premiums with reference to the risk involved. The plan fixed the premium at 12 pence per annum for every 20 pounds in yearly rent, regardless of any classification of the house. However, the insured had to use the compensation to rebuild the house ‘according to His Majesty’s proclamation’, and this most probably meant that it had to be rebuilt using stone and brick, so that they were ‘sett in as good or better state as they were before’.54 By contrast, late seventeenth-century fire insurers calculated the premium on the basis of the risk involved. It is most likely that they were insofar inspired by marine insurance. However, they correctly observed that the most important factor influencing the risk was not the age of the building but the materials it was built of. Nevertheless, they did not simply adapt a marine insurance practice by identifying a different relevant risk factor. In marine insurance, premiums were calculated indi48 Cited from David Jenkins and Takau Yoneyama (eds.), History of Insurance, vol. 1 (2000), 11. 49 Anonymous, Fire Insurance, (1865) 4 The Railway News 81; Relton (n. 11), 167. 50 See Walford, Insurance Cyclopedia, vol. 3 (n. 6), 411 f.; Porter (n. 47), 146, 149; Rates and Proposals of the Atlas Assurance Company (1823), 25. 51 Dickson (n. 47), 3, 87 f. 52 Richard Morrison, On the Principles of Marine Insurance, (1864) 11 The Assurance Magazine and Journal of the Institute of Actuaries 285 – 299, 297; Herbert B. Mason, Encyclopedia of Ships and Shipping (1908), 360; Solomon Heubner, History of Marine Insurance, in: Lester W. Zartman (ed.), Fire Insurance (1909), 294 – 331, 294 f.; Hugh A.L. Cockerell and Edwin Green, The British Insurance Business 1547 – 1970 (1976), 9. 53 Anonymous, Marine Insurance Report, (1872) 9 The Chronicle 321 – 324, 323. 54 Walford, Insurance Cyclopedia, vol. 3 (n. 6), 440.

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vidually for each contract, taking into account the age and quality of the ship, the details of the voyage, and the time of year. By contrast, fire insurers used a typifying approach by assigning the individual risk to a limited number of predefined risk classes. VII. Conclusion The present paper has sought to analyse initiatives and plans for mutual help in the event of fire, for the prevention of fires, and for fire insurance that had existed before the Great Fire of London and it has compared them with the first fire insurance schemes established after 1666. The present paper has thereby aimed to work out the importance of these initiatives and plans for the beginnings of fire insurance in England and to test the generally shared opinion that modern fire insurance is simply the offspring of marine insurance. (1) Whereas marine insurance contracts were concluded for a specific voyage or for a duration of no more than twelve months and whereas life insurance practice simply followed from the very beginning marine insurance practice, fire insurance started off with a distinct practice. The first known fire insurance contract dating form 1682 was concluded for a duration of 31 years. Even though it is not possible to link this different practice to the 1638 petition made by Ryley and Mabb, it is clear that fire insurance did not simply follow marine insurance. (2) The first modern fire insurance companies offered coverage only for immovable property, being in accordance with early seventeenth-century plans for establishing fire insurance schemes. It was only later in the development that modern fire insurance was extended to cover goods and merchandise. By contrast, in marine insurance, the insured objects had always included goods and merchandise. (3) The fact that late seventeenth-century fire insurance may be characterized as an amalgam of different traditions rather than as a simple offspring of marine insurance becomes most obvious when analysing how the premiums were calculated. The 1638 proposition developed by Ryley and Mabb did not calculate the premiums by reference to the fire risk to which the insured building was exposed. Rather, the premium was calculated exclusively on the basis of the insured value. Late seventeenth-century fire insurance companies then also took the risk into consideration as it had always been the practice in marine insurance. However, unlike in marine insurance, late seventeenth-century fire insurers did not make an individual risk assessment by taking a number of different parameters into consideration. Rather, modern fire insurers introduced a classification system that applied the same criteria which had already been used by early seventeenth-century building acts. In all, it seems that late seventeenth-century fire insurance practice did not simply mimic marine insurance practice. It seems rather to be an amalgam of different traditions.

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B. The development of fire insurance after the Great Fire of London By Ervis Caja I. II. III. IV. V.

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The factual and legal framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The first fire insurance companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Standardization of policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The development of policy conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Classification systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Increase of risk and relocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Excluding certain risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Limiting the insured sum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Insurable interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

76 76 78 79 80 80 85 86 88 89 89

I. Introduction There are already numerous studies analysing the history of British fire insurance from the perspective of economic history. By contrast, legal history has thus far stayed behind. This article wishes to fill this gap by taking a closer look at the historical development of fire insurance law and, more specifically, the legal development of, first, the provisions found in individual fire insurance contracts and, second, the great many policy conditions. Even though there existed earlier plans to introduce fire insurance in England and even though late seventeenth-century fire insurance seems to have been an amalgam of different earlier traditions,1 it is safe to say that the Great Fire of London in 1666 was the turning point for the development of fire insurance in Britain. For that reason, it is necessary to present in a first step the aftermath of the Great Fire of London and to analyse the factual and legal framework in which fire insurance was able to take root. After that, it will be possible to examine the standardization of fire insurance policies and the development of a selection of policy conditions. II. The factual and legal framework Just one year after the Great Plague, the Great Fire caused tremendous devastation in London. It started on 2 September 1666 and lasted for just under five days, destroying approximately 13,200 houses and 89 churches.2 Even though guilds offered mutual help to their members in the event of fire, the majority of citizens had 1 2

See Ogis, pp. 69 ff., above. George Clayton, British Insurance (1971), 34.

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to hope for charity.3 Furthermore, a catastrophe of the scale of the Great Fire must have overburdened guilds and charity. Apart from the losses caused by the Great Fire, it proved to stimulate and intensify developments which then served as the factual and legal framework for the emergence of modern fire insurance. Daniel Defoe described London before the Great Fire, and his description gives us a better understanding of the devastating potential which a fire could have:4 ‘But the manner of the buildings in those days, one storey projecting beyond another, was such that in some narrow streets the houses almost touched one another at the top and it has been known that men in case of fire have escaped on the top of the houses by leaping from one side of a street to the other; this made it often and almost always happen that if a house was on fire the opposite house was in more danger to be fired by it according as the wind stood than the house next adjoining on either side, […] the streets were not only narrow and all built of timber, lath and plaster, or as they were very properly called, paper work; and one of the first range of buildings in the Temple to this day is called Paper Buildings from that usual expression.’

The narrow architecture, the rapid urban development, and the use of flammable building materials allowed even a small fire to quickly burn out of control. One of the first reactions to the Great Fire was the passing of the ‘Act for rebuilding the City of London’ in February 1667. It regulated the reconstruction of the city. Special attention was given to the permissible building materials: ‘And in reguard the building with Bricke is not onely more comely and durable but alsoe more safe against future perills of Fire Be it further enacted by and with the Authoritie aforesaid That all the Outsides of all Buildings in and about the said City be henceforth made of Brick or Stone, or of Brick and Stone together, except Door-cases and WindowFrames, the Brest Summers, and other parts of the first Story to the Front, between the Piers, which are to be left to the discretion of the Builder, to use substantial Oaken Timber instead of Brick or stone, for Convenience of Shops.’5

Furthermore, the Act distinguished between four different types of houses. Each type had its own regulations defining, for example, their exact height and the thickness of the walls. Shortly after the Rebuilding Act, another Act entitled ‘An Act for Preventing and Suppressing of Fires within the City of London, and Liberties thereof’ was passed in November 1667 in order to enhance firefighting. It divided London ‘into four equal Parts or Quarters’, and each quarter had to be furnished with ‘Eight Hundred Leathern Buckets, Fifty Ladders, viz. Ten Forty two Foot long, Ten Thirty Foot long, Ten Twenty Foot long, Ten Sixteen Foot long, and Ten Twelve Foot long; as also

3

Harold E. Raynes, A History of British Insurance (1948), 76. Cited from Henry B. Wheatley, London Past and Present. Its History, Associations, and Traditions, vol. 3 (2011), 28. Also cited in Raynes (n. 3), 76. 5 An Act for rebuilding the Citty of London, 19 Car. II., c. 8, reproduced in: John Raithby (ed.), Statutes of the Realm, vol. 5 (1819), 603 – 612, 604. 4

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Ervis Caja of so many Hand-Squirts of Brass as will furnish two for every Parish, Four and twenty Pickax-Sledges, and Forty Shod Shovels’.6

George Clayton describes these acts as insufficient, but he nevertheless recognizes that they represented the ‘first systematic attempt to reduce the risk of fire’ and claims that they were an ‘essential prerequisite for the development of fire insurance’.7 Harold E. Raynes adds that the rebuilding of the destroyed parts of London demanded significant financial investments.8 These investments went hand in hand with a growing need for security. It was the combination of the reduction of fire risk, the improvement of firefighting, and the need for security when rebuilding London that created the ideal setting for the development of the first fire insurance companies in Great Britain. III. The first fire insurance companies It is generally accepted that several fire insurance companies were launched in the 1680s and 1690s. However, it is unclear when exactly the first fire insurance offices appeared. Cornelius Walford and Francis Boyer Relton claim that Nicholas Barbon had set up an operating fire office already in 1667.9 Unfortunately, no records have survived supporting this hypothesis. Therefore, the opinion prevails that the first offices were established in the 1680s.10 Peter G.M. Dickson offers an explanation why it is in fact implausible that an operating fire insurance had already appeared in the late 1660s. Dickson discusses a plan for an insurance scheme developed by Benjamin De Launes in 1669. The plan failed, and Dickson argues that the reason for this failure was simply that the city was not yet rebuilt.11 The lack of 6

An Act for Preventing and Suppressing of Fires within the City of London, and Liberties thereof (London 1668), 2 f. 7 Clayton (n. 2), 36. 8 Raynes (n. 3), 79. 9 Cornelius Walford, The Insurance Cyclopedia: Being A Dictionary of the Definition of Terms Used in Connexion with the Theory and Practice of Insurance in all Its Branches, vol. 3 (1874), 438 ff.; Francis Boyer Relton, An Account of the Fire Insurance Companies Associations Institutions Projects and Schemes established and projected in Great Britain and Ireland during the 17th and 18th Centuries including the Sun Fire Office (1893), 19 f., 22. William Robert Scott, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720 (1911), 372, simply follows Relton and Walford without presenting further evidence. 10 Peter G.M. Dickson, The Sun Insurance Office 1710 – 1960. The history of two and a half centuries of British Insurance (1960), 7; Barry Supple, The Royal Exchange Assurance. A History of British Insurance 1720 – 1970 (1970), 7; Raynes (n. 3), 80; Clayton (n. 2), 36; Hugh A.L. Cockerell and Edwin Green, The British Insurance Business 1547 – 1970. An Introduction and Guide to Historical Records in the United Kingdom (1976), 18; John MacLeod, England and Scotland, in: Phillip Hellwege (ed.), A Comparative History of Insurance Law in Europe. A Research Agenda (2018), 166; Robin Pearson, Insuring the Industrial Revolution: Fire Insurance in Great Britain, 1700 – 1850 (2004), 62. 11 Dickson (n. 10), 7.

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insurable buildings and the priority of rebuilding the city provide a coherent explanation for the absence of any demand for fire insurance. In September 1681, the first fire insurance office began its business: Nicholas Barbon’s Fire Office, subsequently known as the Phenix. Only two months later, the City of London initiated an insurance, too. Both schemes were mainly based on Augustine Newbold’s scheme of 1674.12 The beginning of the fire insurance business thus immediately saw serious competition between the Fire Office and the City’s scheme. The Fire Office and the City’s insurance scheme instantaneously produced a price war that resulted in discussions about the role of the City in the commercial field. Eventually, the debate was ended by a resolution of 13 November 1682, which led to the termination of the City’s insurance scheme. New competition arose in 1684: already in 1683 William Hale and Henry Spelman had published a pamphlet for ‘The Friendly Society for Securing Houses from Loss by Fire’, but the society started to operate only in 1684.13 In 1696, The Amicable Contributors for Insuring from Loss by Fire, subsequently known as The Hand-in-Hand, was founded.14 Some years later, in 1710, the Sun Fire Office was established, followed by Union Fire in 1714, the Westminster Fire Office in 1717, and the Royal Exchange Assurance and the London Assurance, both in 1720. Over the course of the eighteenth century, fire insurance, initially limited to London offices, expanded to the rest of Great Britain, and the fire insurance market experienced continuous growth. The first office outside of London was the Bristol Crown, founded in 1718. In Edinburgh, the Friendly Insurance Office, a mutual society, was founded in 1720, followed by a joint-stock company called the Edinburgh Society for Insuring Houses against Loss by Fire. First insurance schemes and companies were proposed in Dublin at the same time. An essential pillar of this expansion, which was – to a large extent – steered from London, was the appointment of agents, allowing companies to operate their business in distant parts of the country. However, the operation through agents had an important implication. IV. Standardization of policies The business volume of each individual agent was small, and agents usually operated far away from their headquarters. For that reason, insurance companies relied on standardized policies including standard terms of contract.15 Indeed, it is said that the idea of mass contracts originated in the United Kingdom. In the eighteenth century, the entire British fire insurance industry was targeting the

12

On what follows, see Clayton (n. 2), 37 f.; Raynes (n. 3), 85 f. See Raynes (n. 3), 86; Dickson (n. 10), 9; Supple (n. 10), 7. 14 On what follows, see Supple (n. 10), 7; Clayton (n. 2), 11, 40; Dickson (n. 10), 33; Cockerell/Green (n. 10), 19; Scott (n. 9), 374. 15 Cockerell/Green (n. 10), 19. 13

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maximization of profits.16 The attempt to close as many contracts as possible had another favourable effect. It caused a risk-spreading effect through the ‘law of the large number’.17 As the quantity of underwriting extended with the Industrial Revolution and the growth of capital in Britain, the terms of insurance were continuously influenced by the economic and social trends.18 V. The development of policy conditions At the core of every insurance policy are those conditions that concern and define the risk. The majority of policy conditions actually relate to the risk. However, it is impossible to analyse all of these conditions in the present article. I will, therefore, focus on conditions that are directly connected to the risk of fire. 1. Classification systems With fire insurance, the premiums were calculated on the basis of a classification or tariff system. The insurance scheme of the City of London, for example, had adopted the following system: ‘[…] the Premium of Insurance, […] is Fourty Eight Shillings per Cent. For Thirty One Years for Brick-Houses, and double the Price for Timber […]’.19 The bipartite distinction between brick and timber buildings and the double premium clause are characteristic of the late seventeenth-century tariff systems. Such a system is, of course, imprecise. At first, it was, for example, of no importance whether the insured person was keeping flammable goods in the insured building, as there was, in general, no fire insurance available for movables at that time.20 However, soon this simple system was replaced with a more elaborated tripartite classification comprising common, hazardous, and doubly hazardous insurance. Nevertheless, not all insurance companies followed this trend. Surprisingly, the 1710 proposal of the Sun Fire Office lacked even the simple double premium clause, which had by then been known for almost three decades.21 By contrast, Union Fire implemented the following conditions in its 1714 fire insurance policy for goods and merchandise:

16

Tilmann J. Röder, From Industrial to Legal Standardization, 1871 – 1913 (2012), 11. Röder (n. 16), 11. 18 Supple (n. 10), 103 f. 19 Fire Office, Observations on the Proposals of the City, to Insure Houses in case of Fire (London 1681), 2. 20 Frederick Harcourt Kitchin, The Principles and Finance of Fire Insurance (1904), 33. See Ogis, pp. 73 f., above. 21 Proposals set forth by the Company of London Insurers for Insuring Houses, Moveable Good, Merchandizes, Furniture and Wares, from Loss and Damage by Fire. From the SunFire-Office (London 1710). 17

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‘Article VII. To pay for each 100 l. insured (and proportionably for any greater or lesser Sum) 2 s. Premium, and 10 s. Deposit, besides the Stamp-Duties, and 3 s. 8 d. for the Policy and Mark. By a subsequent Agreement, the Charge of Insuring Goods, which are not within Walls of Brick or Stone, is 3 s. Premium, and 15 s. Deposit for each 100 l. Hazardous Insurances as to Situation or Kind of Goods to pay 3 s. Premium, and 15 s. Deposit per Cent. in Brick; and 4 s. Premium, and 20 s. Deposit in Timber.’22

In fact, Union Fire was offering only insurance for movables. The clause demonstrates a new form of risk assessment. Prima facie, it differentiates only between hazardous and non-hazardous insurance. However, Union Fire applied such a bipartite system on two different levels: it distinguished between the hazardousness of the insured movable, on the one hand, and the hazardousness of the building in which the movables were stored, on the other hand. Richard Atkins was thus wrong when he claimed that there was no classification of risk at the commencement of the insurance of movables against loss by fire.23 Relton points out another inaccuracy:24 Atkins assumed that ‘the subscribers were probably confined to the proprietors of ordinary dwellings and shops, while all buildings and trades of a more hazardous description were altogether excluded from the subscription’.25 However, Relton claims that he has found ‘policies On Goods in a Sugar House [and] On Goods in a Still-house of a Distillery, Each at the usual quarterage’.26 The quarteridge is the premium that had to be paid on a quarterly basis.27 Unfortunately, Relton does not provide his reader with any references in support of his findings. However, let us return to the 1710 proposal of the Sun Fire Office that did not calculate the premiums on the basis of any risk classification system. It was probably not a simple beginner’s mistake as the 1712 proposal still did not distinguish any risk classes. The premium remained the same regardless of the risk involved.28 The 1721 and 1724 proposals of the Sun Fire Office similarly continued to lack any classification of risk.29 By contrast, the Royal Exchange Assurance introduced a fourfold classification system in 1721: 22

Abstract of the Deed of Settlement of the Union-Society, For Insuring of Goods and Merchandizes from Loss by Fire (London 1714), 1. 23 Richard Atkins, The Average Clause. Hints on the Settlement of Claims for Losses By Fire under Mercantile Policies (1866), 9. 24 Relton (n. 9), 358 f. 25 Atkins (n. 23), 9. 26 Relton (n. 9), 359. 27 See, e. g., Proposals from the Sun Fire Office of 1710 (n. 21), 1. 28 Proposals set forth by the Company of London Insurers for Insuring Houses, In Threadneedle-Street, behind the Royal-Exchange, London, from the Sun-Fire Office (London 1712). 29 Proposals From the Sun Fire-Office in Threadneedle Street, behind the Royal Exchange, London, for insuring Houses, Moveable Goods, Merchandize, Furniture and Wares, from Loss

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Ervis Caja ‘First. –This Corporation will assure any College, Hall, House, or any other Building, and all Goods, Wares, and Merchandizes (except Notes, Bills, Tallies, Books of Accompts, ready money, China and Glass wares, jewels, plate, pictures, writings, Corn, Hay, and Straw, not in trade) to their full value, the Assureds paying but 5 s. per annum for every 250 l. on Brick or Stone Buildings, or Goods and Merchandizes therein inclosed, and 8 s. per annum for every 250 l. on Timber, Plaister, and Thatched Buildings, or Goods and Merchandizes therein inclosed, if the sum assured exceeds not 1,500 l., but for any Assurance exceeding that sum the Assured to pay 7 s. 6d. per annum for every 250 l. on Brick or Stone Buildings, or Goods and Merchandizes therein inclosed, and 12 s. per annum for every 250 l. on Timber, Plaister or Thatched Buildings, or Goods and Merchandizes therein inclosed. And whereas Assurances to Brewers, Distillers, Chymists, Apothecaries, Powder-men, Ship and Tallow Chandlers, Sugar and Bread-bakers, Dyers, Soap Boilers, Oylmen and Colourmen, are more hazardous than others, such persons are to pay 7 s. 6d. per annum for every 250 l. so assured on or in Brick or Stone, and 12 s. for every 250 l. on or in Timber, Plaister, and Thatched Buildings; and Looking and other Glass and China wares in Trade, being more hazardous goods are to pay the same.’30

Even though the provision does not explicitly speak of a classification system, it is possible to identify one:31 – the first class included brick and stone buildings, and/or common goods therein; – the second timber, plaster and thatched buildings, and/or common goods therein; – the third listed hazardous industries situated in brick or stone buildings; and – the last such industries situated in timber, plaster, and thatched buildings. Different rates applied to each class. In all, the Royal Exchange Assurance introduced in 1721 a classification system that was far more sophisticated than the aforementioned double-price clause of the insurance scheme of the City of London. It took the Sun Fire Office until 1727 to implement a classification system. After some further changes in the 1730s, it remained ‘much the same until the second half of the nineteenth century’.32 The 1727 proposal introduced a tripartite system of common, hazardous and doubly hazardous insurance: ‘Article IV. The Rates for Insurances may be seen in the following Table: Under the Head of Common Insurances are to be understood any Buildings cover’d with Slate, Tile, or Lead, and having the Front, Rear, and Side Walls of Brick or Stone, and where none of the Harzadous Goods, or Trade hereafter specify’d, are deposited or carry’d on. Under that of Hazardous Insurances are to be understood, Timber and Plaister Buildings, and Goods and and Damage by Fire, in any Part of Great Britain, according to the following Articles (London 1721); Proposals From the Sun Fire-Office in Threadneedle Street, behind the Royal Exchange, London, for insuring Houses, Moveable Goods, Merchandize, Furniture and Wares, from Loss and Damage by Fire, in any Part of Great Britain, according to the following Articles (London 1724). 30 Proposals by the Royal Exchange Assurance of Houses and Goods from Fire, reproduced in Relton (n. 9), 158. 31 Supple (n. 10), 84 f. 32 Dickson (n. 10), 79.

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Merchandize therein, not Hazardous, or Brick or Stone Buildings wherein Hazardous Goods or Trades are deposited or carry’d on. Under that of Doubly Hazardous are to be understood, all Thatch’d Buildings, all Timber or Plaister Buildings, as Sugar-Bakers and Distillers in Brick or Stone Buildings, any China, Glass, or Earthen Wares, Houses on London-Bridge, and all Mills. The Hazardous Trades and Goods are Apothecaries, Chymists, Bread and Bisket-Bakers, Ship and Tallow-Chandlers, Stable-keepers, Inn holders, and malt-houses; Hemp, Flax, Tallow, Pitch, Tar, and Turpentine, Hay, Straw and Fodder of all Kinds, and Corn unthrash’d.’33

The provision resembles that of the 1721 proposal of the Royal Exchange Assurance in many ways. Especially the definitions of hazardous trades run parallel. Already in 1721, the London Assurance had adopted a classification system similar to that of the Royal Exchange Assurance. However, the London Assurance had simplified the fourfold system of the Royal Exchange Assurance by adopting solely a tripartite system (common, hazardous and doubly hazardous), and Art. 4 of the 1727 proposal of the Sun Fire Office, too, adopted this threefold classification that became standard for more than 100 years for the British fire insurance industry.34 There were, however, continuous adaptions to react to new fire risks that emerged due to new innovations and social changes. Although the classification system made great progress in the first years, quickly overcoming the overly simplistic double premium clause, it is surprising that the fundamentals of the tripartite classification system were able to survive that long. As fire insurance was in the beginning experimental, being mainly based on experience and being characterized by a trial-and-error method, one would have assumed a more frequent change of classification systems in the early years. One possible reason why the threefold classification system could persist so long was that earlier insurers did not share their experience with each other, but simply copied each other’s proposals. On this basis, a rational development was barely possible. It took the offices until the 1820s, when they faced a very competitive market with falling prices, before they finally initiated conferences with their competitors. In 1825, the three leading fire offices (the Sun Fire Office, the Phoenix Fire Office founded in 1782,35 and the Royal Exchange Assurance) began to share their experience and expertise on a large scale.36 There had already been constant communication between them since 1788 on certain details, such as the premiums for cotton mills. The cooperation of the offices eventually led to the agreement on a common tariff or premium system in 1826. A further attempt to bring together the 33

Proposals From the Sun Fire-Office, near the Royal Exchange, for insuring Houses and other Buildings, Goods, Wares and Merchandize, from Loss and Damage by Fire (London 1727), 1. 34 Supple (n. 10), 85; Kitchin (n. 20), 33; George Morley Dowdeswell, The Law of Life and Fire Insurances (1846), 82. 35 Clive Trebilcock, Phoenix Assurance and the Development of British Insurance, 1782 – 1870, vol. 1 (1985), xvii. 36 On what follows, Cockerell/Green (n. 10), 22 f.; Supple (n. 10), 90; Raynes (n. 3), 332; Kitchin (n. 20), 35.

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different fire offices for the purpose of determining minimum premiums for different risks was made in Scotland in 1829. The so-called Association of Managers of Fire Insurance Offices had its first meetings on 18 July 1829. The cooperation finally culminated in the founding of the Fire Offices’ Committee in 1868. The founding members were 19 London, 17 provincial, nine Scottish, three Irish, and two foreign fire offices. In order to agree on common premiums, it was necessary to first standardize the classification system. This standardized classification of risks was based on the well-known division into the three classes of common, hazardous and doubly hazardous risks. However, this tripartite system was complemented by special rates for exceptional fire hazards that had to be assessed by surveyors. A comparison of the policies of the Edinburgh Friendly Insurance and the Sun Fire Office exhibits how advanced standardization had already proceeded in the late eighteenth century. The 1775 policy of the Edinburgh Friendly Insurance stated: ‘Article IV. The several Heads of Insurance. COMMON INSURANCES are Buildings covered with slate, tile, or lead, and built on all sides with brick or stone, and Goods and Merchandize therein not hazardous, and where no hazardous trades are carried on. HAZARDOUS INSURANCES are Timber or Plaister Buildings, and Goods and Merchandize therein not hazardous; or Brick or Stone Buildings, wherein hazardous goods or trades are deposited or carried on, such as apothecaries, chymists, bread and sugar bakers, coulour-men, ship and tallow chandlers, stable-keepers, inn-holders, sail and rope makers, malt houses and kilns, hemp, flax, tallow, pitch, tar and turpentine. DOUBLY HAZARDOUS INSURANCES, are Thatched Buildings, and Goods and Merchandize therein, Timber or Plaister Buildings, wherein hazardous goods or trades are deposited or carried on, also ship-carpenters, Boat-builders, China, Glass, or earthen Wares; Hay, Straw, all manner of Fodder, and Corn unthreshed.’37

The 1787 proposal of the Sun Fire Office includes a provision that is – apart from some minimal differences – identical: ‘Article IV. The several Heads of Insurance. COMMON INSURANCES are Buildings covered with Slate, Tile, or Lead, and built on all Sides with Brick or Stone, and Goods and Merchandize therein not hazardous, and where no hazardous trades are carried on. HAZARDOUS INSURANCES are Timber or Plaister Buildings, and Goods and Merchandize therein not hazardous; or Brick or Stone Buildings, wherein hazardous Goods or Trades are deposited or carried on, such as Coopers, Bread and Biscuit Bakers, ColourMen, Ship and Tallow Chandlers, Stable Keepers, Inn-Holders, Sail and Rope Makers, Malt-Houses, Hemp, Flax, Pitch, Tar, Turpentine and Apothecaries Stock. DOUBLY HAZARDOUS INSURANCES are Thatched Buildings, and Goods and Merchandize therein, Timber or Plaister Buildings, wherein hazardous Goods or Trades are 37 Proposals from the Edinburgh Friendly Insurance-Office, New Stairs, Parliament Close, For insuring Houses and other Buildings, Household Furniture, Goods, etc. from Loss and Damage by Fire (Edinburgh 1775), 1.

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deposited or carried on, also Chemists, Ship-Carpenters, Boat-Builders, China, Glass, or Earthen Wares; Hay, Straw, all Manner of Fodder, and Corn unthreshed.’38

Only marginal differences can be found, such as the placement of chemists in the doubly hazardous risk class by the Sun Fire Office while the Edinburgh Friendly Insurance assessed ‘Chymists’ only as a hazardous risk. In all, this is not an isolated phenomenon, instead being exemplary for the policy provisions of many fire offices in Great Britain.39 2. Increase of risk and relocation Another clause that became common early on addresses an increase of risk and the issue of relocation. Both questions are often linked together as it was very likely that the risk would be altered when the insured moved to another place. The 1710 and 1712 conditions of the Sun Fire Office, for example, included the following provision: ‘10 April 1710 […]. Article XII. If any Person insured, removes his or her Habitation, he or she must give Notice, and have his or her Policy changed at the Office, paying the Stamp-Duty only.’40 ‘4 July 1712 […]. Article XII. If any Person insur’d, removes his or her Habitation, he or she must give Notice where remov’d to, and have his or her Policy indors’d at the Office, without Charge.’41

As mentioned above, the Sun Fire Office introduced a classification system only in 1727. For that reason, Art. 12 of the 1710 and 1712 conditions did not address the problem of an increase of risk. The implementation of the tripartite classification system led to the inclusion of a risk alteration clause in 1727: ‘Article VIII. Persons Insured, removing their Habitations or their Goods and Merchandize Insur’d, may preserve the Benefit of their Policies, if the Nature and Circumstance of such

38

Proposals from the Sun-Fire-Office in Cornhill, near the Royal Exchange, For Insuring Houses, and other Buildings, Goods, Wares, and Merchandize, etc. from Loss and Damage by Fire (London 1787), 1. 39 See, e. g., Proposals from the Phoenix Assurance Company of London, For Insuring Houses, Buildings, Stores, Goods, Wares, and Merchandize, From Loss and Damage by Fire (London 1785); Proposals From the Manchester Fire Office, For Insuring Houses, and other Buildings, Goods, Wares, and Merchandize from Loss, and Damage by Fire (Manchester 1771); Alliance British and Foreign Life and Fire Assurance Company, Bartholomew Lane, London. Terms and Conditions of the Fire Department (1824); Proposals by the Corporation of the Royal Exchange Assurance, Established by His Majesty’s Royal Charter, For Assuring Houses and other Buildings, Goods, Wares, and Merchandizes from Loss or Damage by Fire (London 1776). 40 Proposals from the Sun Fire Office, 1710 (n. 21). 41 Proposals from the Sun-Fire Office, 1712 (n. 28).

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Ervis Caja Policies is not altered, but such Insurance will be of no Force ‘till such Removal or Alteration is allowed by Indorsement on the Policy.’42

Fire offices had an interest in being informed of any increase of risk as only then was it possible to adjust the premium. However, a potential increase in the premiums as a reaction to an increase in the risk was made explicit only in the 1750 conditions of the Sun Fire Office.43 The application of these provisions led to uncertainty for the insured,44 as the conditions were silent as to what exactly amounted to a relevant ‘alteration’. The insured had to constantly reflect on whether an alteration might have occurred in order not to forfeit his coverage.45 One could think of several constellations where this clause would lead to an unfair outcome. For instance, a landlord may simply have difficulties maintaining control over the goods brought into the insured object by his tenants. Equally, the owner of a warehouse with frequently changing stock was continuously at risk of forfeiting his insurance. Thus, these conditions received much criticism and were finally modified in 1903.46 Furthermore, in order to address the difficulties that came along with insuring commercial warehouses having constantly changing goods therein, the fire offices developed so-called ‘general’ policies and ‘floating’ policies.47 3. Excluding certain risks In the 1720s, provisions were developed that limited the risks that were covered by the insurance contract. The effect of these provisions was that certain losses were not classified as fire loss in the meaning of the contract even if they in fact were caused by fire.48 The 1710 proposal of the Sun Fire Office had not developed such a provision and neither had the 1722 proposal of the London Assurance.49 The 1727 proposal of the Sun Fire Office then included the following provision: ‘Article VII. No loss or damage by fire happening by any invasion, foreign enemy, civil commotion, or any military or usurped power whatsoever, is to be made good.’50 42

Proposals from the Sun Fire Office, 1727 (n. 33). Proposals From the Sun Fire-Office, near the Royal Exchange, for Insuring Houses and other Buildings, Goods, Wares and Merchandize, from Loss and Damage by Fire (London 1750), 2. 44 Dickson (n. 10), 81. 45 On the possible forms of alterations, their effects, and insurance conditions in the late nineteenth and early twentieth centuries, see in detail Alfred William Baker Welford and William Whitmore Otter-Barry, The Law Relating to Fire Insurance (1911), 195 ff. 46 Kitchin (n. 20), 88 f. 47 On the difference between the two kinds of policy, see Dickson (n. 10), 79. 48 Welford/Otter-Barry (n. 45), 68. 49 Proposals By the Corporation of the London Assurance, establish’d by His Majesty’s Royal Charter, for Assuring Houses, and all other Buildings; all Goods, Wares, and Merchandizes, from Loss and Damage by Fire (London 1722). 50 Proposals from the Sun Fire Office, 1727 (n. 33). 43

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Relton pointed out that the policy conditions of the Royal Exchange Assurance and the London Assurance had contained a provision that was phrased almost identically: ‘No Loss or Damage by Fire happening by any Invasion, Foreign Enemy or any Military or usurped power whatsoever, to be made good.’51

According to Charles Ellis, the Sun Fire Offices had first introduced the provision in 1726, but without the words ‘civil commotion’, which were added in 1727.52 By contrast, the reference to ‘civil commotion’ was not mentioned in the 1726 proposal of the London Assurance Corporation, and it was also missing in later versions. This difference became significant in the 1767 case of Drinkwater v. London Assurance Corporation.53 In that instance, a mob had set the plaintiff’s malting house in Norwich on fire. The Assurance argued that a mob was within the aforementioned policy condition (‘usurped power’), so that they were not liable. However, the court refused to follow this line of argument. Wilmot C.J. held that ‘if common mobs had been in their [the contracting parties’] minds they would have made use of the word mob’ and that ‘they cannot mean the power used by a common mob’ even if one acknowledges the great variety of meanings these words may have.54 By contrast, the Sun Fire Office prevailed in the 1780 case Langdale v. Mason because the Sun Fire Office had included the words ‘civil commotion’ in its conditions.55 Frederick H. Kitchin concluded that the Sun Fire Office had decided to include this language on account of a rebellion that had occurred in 1715 and that a similar event in 1745 proved to it that this had been the right decision.56 However, this leaves the question unanswered as to why the London Assurance and the Royal Exchange Assurance did not feel the same need to act. Still in 1734, the Royal Exchange Assurance did not exclude loss or damage caused by civil commotion.57 One would think that fire insurers would have added the words ‘civil commotion’ to their exclusion clauses at the very latest in reaction to Drinkwater v. London Assurance Corporation. However, this was not the case. One possible explanation

51

Relton (n. 9), 327. Charles Ellis, The Law of Fire and Life Insurance and Annuities with practical Observations (1832), 42, 43. 53 Drinkwater v. London Assurance Corporation (1767) 2 Wils. K.B. 363. 54 Drinkwater v. London Assurance Corporation (1767) 2 Wils. K.B. 363, 364 f. See also Willard Phillips, A Treatise on the Law of Insurance, vol. 1 (3rd edn., 1853), 696. 55 James Allan Park, A System of the Law of Marine Insurances; with three Chapters on Bottomry, on Insurances on Lives, and on Insurances against Fire, vol. 2 (8th edn., 1842), 966. 56 Kitchin (n. 20), 72. 57 Proposals by the Corporation of the Royal Exchange Assurance, Established by His Majesty’s Royal Charter, For Assuring Houses and other Buildings, Goods, Wares, and Merchandizes from Loss or Damage by Fire (London 1734). 52

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refers to the Riot Act of 1714.58 In fact, Langdale was able to recover his loss under this Act.59 Further risks were added to these clauses in the course of the nineteenth century, excluding the insurers’ liability mainly for unpredictable natural events. At the end of that century, the standard policy stipulated that no ‘Loss or Damage occasioned by, or happening through, subterranean fire, earthquake, hurricane, volcanic eruption, or other convulsion of nature, Invasion, Foreign Enemy, Insurrection, Civil Commotion, Riot, or any Military, or Usurped Power whatever’ was covered by the policy.60 4. Limiting the insured sum Another common way of reducing the risk covered by, and thereby making the risk calculable for, the insurer was to limit the insured sum. This practice was established already in the beginning of the eighteenth century. The Sun Fire Office originally established a limit of 500 l. in 1710.61 By 1727 it had changed its conditions, now insuring up to 3,000 l. per policy.62 The Union Fire Office introduced a limit of 1,500 l. in 1722; all future insurances that exceeded the sum of 1,000 l. had to pay the double premium.63 This demonstrates that the fire offices were early on aware that limiting the insured sum had the effect of reducing the risk which the insurer promised to cover. The Royal Exchange Assurance imposed a limit of 5,000 l. in 1723,64 but already in 1734 it altered it to 3,000 l., allowing the insured to seek coverage for larger sums by special agreement.65 By 1808, the Sun Fire Office had connected these limits to the classification system; common insurance was limited to 10,000 l., hazardous insurance to 6,000 l., and doubly hazardous insurance to 3,000 l. By the end of the nineteenth century, the limits on warehouses, sugar refineries, and other objects which could only be insured by special agreement had been extended to the range between 8,000 l. and 10,000 l., whereas cotton or paper mills could be insured only up to a sum of 3,000 l. to 5,000 l.66

58

1 Geo. I, St. 2, c. 5. See Kitchin (n. 20), 72 f. Relton (n. 9), 353. 60 J. Alfred Eke, The Elements of Insurance, A Guide to the Principles and Practice of Accident, Fire, Marine, and Life Insurance (1909), 99. 61 Proposals from the Sun Fire Office, 1710 (n. 21). 62 Proposals from the Sun Fire Office, 1727 (n. 33). 63 See Relton (n. 9), 103. 64 See Supple (n. 10), 85. 65 Proposals from the Royal Exchange Assurance, 1734 (n. 57). 66 See Cockerell/Green (n. 10), 30. 59

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5. Insurable interest The requirement that the insured had to have an insurable interest in the insured object was already indicated in early proposals without, however, being made explicit. The 1710 proposal of the Sun Fire Office stipulated in Art. 1 that every person could insure ‘his or her house or moveable goods’,67 and whenever the proposal mentioned the insured object, it was accompanied by possessive pronouns linking it to the insured person. Thus, early proposals required the insured to have an insurable interest, and they implied that only the owner had an insurable interest. It was only in 1774 that an insurable interest was also required by force of law. Section 1 of the Life Assurance Act (also known as the Gambling Act) stated: ‘No insurance shall be made by any person or persons, bodies politic or corporate, on the life or lives of any person or persons, or any other event or events whatsoever, wherein the person or persons for whose use, benefit, or on whose account such policy or policies shall be made shall have no interest, or by way of gaming or wagering; and every assurance made contrary to the true intent and meaning hereof shall be null and void in all intents and purposes whatsoever.’68

Although the Act’s full title indicates that it only regulates ‘Insurances upon Lives’, the preamble (‘making insurances on lives or other events’) and section 1 (‘insurance […] on the life or lives of any person, or persons, or on any other event or events’) suggest that it also covered fire insurance.69 Finally, there is case law from the time before the 1774 Act: Lynch v. Dalzell (1729) and The Sadlers’ Company v. Badcock (1743) confirmed the reading of the policies requiring property as insurable interest.70 VI. Conclusion Sinem Ogis has shown in her contribution that late seventeenth-century fire insurance practice did not simply mimic marine insurance practice, its being instead an amalgam of different traditions.71 The present contribution has subsequently analysed the further development of fire insurance practice in the eighteenth and nineteenth centuries by focussing on certain risk-relevant policy conditions. It has been shown that the development of fire insurance practice can only be appreciated when it is presented in its socio-economic context. The trend towards standardiza67

Proposals from the Sun Fire Office, 1710 (n. 21). 14 Geo. 3, c. 48. The full title is: An Act for regulating Insurances upon Lives, and for prohibiting all such Insurances except in cases where the Persons insuring shall have an Interest in the Life or Death of the Persons insured. 69 See in detail, Sinem Ogis, The Influence of Marine Insurance Law on the Legal Development of Life and Fire Insurance in England (2019), 152 – 157. 70 (1729) 4 Bro. P.C. 431; (1743) 2 Atk. 554. See also the discussion by George D.B. Beaumont, The Law of Fire and Life Insurance, with latest Decisions (1846), 12 f. 71 Ogis, pp. 72 ff., above. 68

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tion, for example, becomes plausible only when put into the context of the different fire offices expanding to all parts of the country as they then had to rely on a network of agents. Furthermore, the trend towards standardization is a direct result of the companies exchanging their knowhow. This leads to another finding: the development of fire insurance practice started out with the adoption of a simple trial-and-error method that saw the different fire insurance offices often (but not always) simply copying each other’s policy conditions. It was only in the nineteenth century that the fire offices started to actively exchange their experience, thereby leading to a more rational risk assessment, on the one hand, but also to further standardization and a tariff system, on the other hand. Finally, the present analysis suggests that the further development of fire insurance policies during the eighteenth and nineteenth centuries was not so much inspired by marine insurance practice but rather resulted from the specificities of fire insurance and depended on its socio-economic context.

Chapter 5: Fire help (brandstod) and other types of fire insurance in Scandinavia By Martin Sunnqvist A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B. Locally arranged fire help (brandstod) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. Fire-help arrangements in the countryside or in towns . . . . . . . . . . . . . . . . . . . . . . 1. Origins and early examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Fire help in Swedish legislation from the mid-thirteenth century . . . . . . . . . . . II. Contractual fire help through guilds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Guilds of St. Canute and St. Eric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Craft guilds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Guilds in the countryside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Begging and exemption from taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C. Fire insurance associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. Reasons for organizing fire insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Denmark-Norway, eighteenth century . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Sweden-Finland, eighteenth century . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Freedom of trade in the mid-nineteenth century . . . . . . . . . . . . . . . . . . . . . . . . . . . D. Concluding comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. Insurance or poor relief? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Law or custom? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Public law or private law? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91 92 92 92 95 96 96 97 98 98 99 99 99 101 103 105 105 106 107

A. Introduction In an earlier article, I have discussed the literature on the history of insurance in Scandinavia generally.1 The time period up to c. 1814 is covered in three volumes, one each for Denmark, Sweden and Norway,2 written in the 1930s.3 These were

1 Martin Sunnqvist, Scandinavia, in: Phillip Hellwege (ed.), Perspectives of a Comparative History of Insurance Law in Europe. A Research Agenda (2018), 199 –222, 200–202. 2 In 1523, after the end of the Kalmar Union between the three kingdoms, DenmarkNorway was united as one kingdom until 1814, when Norway was transferred to a personal union with Sweden. Norway gained its independence in 1905. Finland was part of Sweden until 1809, when it was ceded to the Russian emperor, who became grand duke of Finland. Finland gained its independence in 1917.

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written by the economic historians J.O. Bro Jørgensen and Tom Söderberg, and the secretary of the Norwegian Insurance Association, Karsten T. Lorange. The rest of the nineteenth century is covered by three volumes written in the 1960s,4 authored by the deputy director of a Danish insurance company, Alfred Thomsen, the lecturer Bengt Bergander and the administrative director of the Norwegian Insurance Council, Karl Færden. The volumes are rather independent in relation to each other, and no systematic comparisons or analyses were made. More recently, another volume providing an overview specifically for Denmark has been published. It starts with the ‘insurance law’ of the Middle Ages and ends with the most recent questions about insurance in the welfare state.5 Besides this, there are several books dedicated to specific fire insurance companies in relation to their anniversaries in the twentieth century. I refer to some of them in order to provide some relevant details. I have in earlier articles covered different aspects of the legal development of fire insurance in the Nordic countries. In a first article, I gave an overview of the history of fire insurance in the Nordic countries.6 In another contribution, I discussed the importance of guilds for the development of Nordic fire insurance.7 This present article will be based on my findings in these two contributions supplemented with some further details and with a new concluding discussion and analysis. B. Locally arranged fire help (brandstod) I. Fire-help arrangements in the countryside or in towns 1. Origins and early examples In parts of today’s Sweden, there was in the twelfth and thirteenth centuries a precursor to fire insurance, or an early form of fire insurance. It was the so-called brandstod, which literally means fire help or fire support. Its main characteristic was that the other people in the local community had to help a person whose house had burnt down to rebuild it, either because they were legally obliged to do so or because there was a custom to that effect.

3

J.O. Bro Jørgensen, Forsikringsvæsenets historie i Danmark indtil det 19. aarhundrede (1935); Tom Söderberg, Försäkringsväsendets historia i Sverige intill Karl Johanstiden (1935); K. Lorange, Forsikringsvesenets historie i Norge inntil 1814 (1935). 4 Alfred Thomsen, Forsikringsvæsenets historie i Danmark i det 19. Århundrede (1963); Bengt Bergander, Försäkringsväsendet i Sverige 1814 – 1914 (1967); Karl Færden, Forsikringsvesenets historie i Norge 1814 – 1914 (1967). 5 Ole Feldbæk, Anne Løkke and Steen Leth Jeppesen, Drømmen om tryghed (2007). 6 Sunnqvist (n. 1). 7 Martin Sunnqvist, Scandinavia, in: Phillip Hellwege (ed.), Professional Guilds and the History of Insurance. A Comparative Analysis (2020), 123 – 132.

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Söderberg thoroughly analysed the development of the brandstod. His conclusion is that it was a unique Nordic phenomenon. It first developed in Scania8 in the mid-twelfth century at the latest. It was defined in chapter 226 of the Scanian law book, which was recorded in written form in about 1200. The brandstod was applied in cases where no one could be held responsible for the spread of fire. If the fire had caused damage to a certain minimum value, the owner of the burnt house could bring the matter to the county Thing (local court assembly). The other inhabitants of the rural district would have to contribute a penny, a bushel of grain or two bushels of oats to the homeowner.9 The system of fire help spread – albeit with differences in details – to Östergötland in the first half of the thirteenth century and to Västmanland and Dalarna (Dalecarlia) at the latest in the second half of the thirteenth century.10 These provinces are in central Sweden. In Östergötland, there were rules about fire help in section 44 of the book on buildings in the law book of that province, written towards the end of the thirteenth century. The rules provided that the owner of the house that had burnt down could choose between receiving three marks from the person who was responsible for the fire or go to the Thing and receive payments as fire help from the whole rural district or parts of it depending on the value of the loss. The text of the law book referred to a custom when it came to the fire help.11 In Västmanland and Dalarna, each peasant in the whole district, or from a third of it depending on the value of the loss, had to pay two pennies, or four pennies if also harvested crops were burnt.12 In parallel, a similar legal institution developed in Iceland. In a law book from about 1200, the Grágás,13 there are rules about support from the other inhabitants of a rural district that is to be provided to a person who lost cattle through disease or buildings through fire. The owner had to pay half the cost himself and prove the value of the burnt house.14 As regards the origins of the brandstod, Söderberg has convincingly argued that it was a custom which was transformed into law. His main argument is that the similar Icelandic institution was not developed through transfer from Scania or the other way around. These two legal institutions seem to have developed independ8 Scania (Skåne) is since 1658 a province in southern Sweden, but until 1658 it was part of Denmark (except 1332 – 1360). 9 Erik Kroman and Stig Iuul (eds.), Skaanske Lov og Jyske Lov (1968), 76 – 78. 10 Söderberg (n. 3), 21 – 46; Sven Ljung, Brandstod, in: Kulturhistoriskt lexikon för nordisk medeltid, vol. 2 (1957), 208. 11 Åke Holmbäck and Elias Wessén, Svenska landskapslagar tolkade och förklarade för nutidens svenskar, vol. 1 (1933), 225 f., 244 f. (Östgötalagen). 12 Åke Holmbäck and Elias Wessén, Svenska landskapslagar tolkade och förklarade för nutidens svenskar, vol. 2 (1936), 62, 76 (Dalalagen), 147 f., 164 (Västmannalagen). 13 Grágás (edn. Odense 1974). 14 Jørgensen (n. 3), 18 f.; Lorange (n. 3), 189 – 191.

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ently, a conclusion to which Jørgensen also has come. Jørgensen pointed out that some differences – especially the fact that the amount to be paid in Iceland depended on an estimate of the loss but in Scania the figure was fixed in the law for each payer – show that there was not a transfer of legal rules. However, according to both Söderberg and Jørgensen, both the Scanian and the Icelandic rules derive from a common Nordic custom which developed into two similar legal institutions with some differences in detail.15 Interestingly, in parts of Denmark where there are no traces of legal rules on fire help, there is evidence showing that people who had lost their houses through fire could obtain ‘certificates for fire help’ (‘brandstødbreve’) which gave them the right to collect fire help in a specified geographical area.16 As already pointed out by Jørgensen, it may be questioned whether this custom is uniquely Nordic. Jørgensen briefly referred to a similar ancient custom in Elbmarsken, Ditmarsken and Eiderstedt – all three areas are located in SchleswigHolstein – as well as in Eastern Prussia.17 According to one author, C.F. Trenerry, a similar legal institution also existed in the twelfth and more clearly in the thirteenth century in Flanders, where people in towns or villages were obliged to contribute certain amounts to the victims of a fire. He claimed that there was an ancient custom underlying the rules.18 However, Dirk Heirbaut has analysed this custom more closely. Even though the custom was based on a principle of mutual assistance, his conclusion is that its main function was to prevent arson by giving the community an incentive to betray arsonists.19 What has been discussed so far raises the question whether a similar ancient custom existed in other jurisdictions as well, and in that case how much verifiable knowledge is available. The evidence points in the direction of a common northern European custom of mutual help in cases of fire in buildings in the countryside. The reason behind the custom is probably not more complicated than that there was an understanding in rural communities, and perhaps in early urban society, that mutual help was in the long run to the advantage of the whole, especially since the other villagers probably had in any event to assume responsibility for those who had become homeless and lost the opportunity to support themselves.20 As regards Iceland, Lorange has explicitly referred to the fact that there was a duty of the local

15

Söderberg (n. 3), 29 f.; Jørgensen (n. 3), 18 f. J.O. Bro Jørgensen, Brandstod, in: Kulturhistoriskt lexikon för nordisk medeltid, vol. 2 (1957), 211 f. 17 Jørgensen (n. 3), 20, cf. 245 – 248, referring to Georg Helmer, Die Geschichte der privaten Feuerversicherung in den Herzogtümern Schleswig und Holstein, 2 vol. (1925/1926) and Franz Steer, Verbreitung und Ursprung der kleinen Feuerversicherungsvereine in den östlichen Provinzen Preussens (1922). 18 C.F. Trenerry, The Origin and Early History of Insurance Including the Contract of Bottomry (1926), 252 – 256. 19 Dirk Heirbaut, Belgium. Non-marine insurance, in: Hellwege (n. 1), 89 – 110, 91 – 94. 20 Ljung (n. 10), 208; Feldbæk/Løkke/Jeppesen (n. 5), 27 – 29. 16

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community to support the poor and to prevent people from becoming poor.21 It may be that the custom in some areas evolved into statutory fire insurance while in other areas it was not sustained and eventually was replaced by other mechanisms. 2. Fire help in Swedish legislation from the mid-thirteenth century The brandstod in the law books of Östergötland, Västmanland and Dalarna was modified and transferred to King Magnus Eriksson’s law code for the countryside in Sweden, dating from about 1350. Magnus Eriksson was also the king of Norway and Scania, but the law code did not affect, nor was it influenced by, the law of these jurisdictions. According to this law code, the rule was such that the person who owned the burnt houses should report the matter to the Thing, and the judge would appoint six men who would assess the damage. The payment should be half a bucket of grain or four Swedish pennies. If the loss was estimated at a value of 20 marks or more, the owner should be paid by the inhabitants of the whole district; if it was worth 10 marks, from half the district; and if it was worth five marks, from a quarter of the district.22 In the 1442 law code of King Christopher, which replaced the law code of King Magnus, the rules were similar, with some alterations only reflecting changes of the value of the currency. These alterations confirm that fire help was still legally relevant, even though there are relatively few traces of its application in the preserved documents from the period.23 The rules about brandstod fell partly into disuse in some parts of Sweden. However, they were successively reinstated. During the reign of King Charles XI, rules about the types of houses which a peasant should build and maintain, enacted in 1681 (Husesynsordning),24 and about a reorganization of the brandstod through the provincial governors (landshövdingar) made clear that the state wanted the system of fire help to work properly.25 In 1734, a law code for Sweden was enacted, which replaced both the law code for the countryside of 1442 and a law code for the towns from c. 1350, which had been written at the same time as the first law code for the countryside. The rules on 21

Lorange (n. 3), 189. Ch. 28 § 6 book on buildings in the law code of the countryside of King Magnus Erikssons, Åke Holmbäck and Elias Wessén (ed.), Magnus Erikssons landslag i nusvensk tolkning (1962), 120, 147; Söderberg (n. 3), 22. 23 Ch. 37 § 2 book on buildings in the law code of the countryside of King Christopher, Petter Abrahamsson (ed.), Swerikes Rijkes Lands-Lag (Stockholm 1726), 510 – 512; Söderberg (n. 3), 22 f. and 42 – 45; Ljung (n. 10), 208 f. 24 See Joh. Schmedeman (ed.), Kongl. stadgar, förordningar, bref och resolutioner …, vol. 1 (Stockholm 1706), 738 – 746. 25 Söderberg (n. 3), 66 – 71. 22

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the brandstod were kept, in chapter 24 of the book on buildings, with some alterations. The duty to pay was differentiated according to the value of the property, and in each district the peasants should at the local court assembly in the presence of the provincial governor agree in advance about the sums of compensation for different types of fire accidents. When a fire had taken place, the district court under the presidency of the district judge (häradshövding) would decide which of these sums of compensation the owner of the burnt house had the right to claim.26 The rules in the law code of 1734 about brandstod were in force until 1853. The rule that the peasants should meet at the local court assembly in the presence of the provincial governor and agree in advance about the sums of compensation for different types of fire accidents facilitated the organization of local brandstod associations. From 1766, these did not have to comprise an entire district and could, instead, be formed for a single parish. Some of these also insured some types of chattels.27 II. Contractual fire help through guilds 1. Guilds of St. Canute and St. Eric The brandstod was legally enforced and was based on ancient custom. Another way of organizing fire help was through mutual contracts, such as the membership in a guild where the members promised to support each other in certain situations. The earliest example of fire insurance through guilds is in the charter of the guild of St. Canute in Odense in Denmark from c. 1245. There, each member of the guild had to pay three pennies to the owner of a house that had burnt down.28 In 1256, there was a meeting in Skanör (at that time in Denmark, now a part of Sweden) between 18 aldermen of different merchants’ guilds in the Danish kingdom.29 They met to draft some common rules for the charters of their guilds. One of these rules concerned mutual insurance for fire, and it was then introduced in the charters of the guilds of St. Canute in Malmö (now in Sweden) and Store Heddinge (in Denmark) and the guild of St. Eric in Kallehave (in Denmark, now Kalvehave). According to this rule, if a member of the guild suffered losses through fire in his kitchen, room, or grain-filled barn, all other members should help him by paying him three pennies each.30 26 Ch. 24 §§ 4 – 6 book on buildings in the 1734 law code of the realm (edn. 1780, reprint 1984); Söderberg (n. 3), 38. 27 Söderberg (n. 3), 392 – 436; Bergander (n. 4), 15 – 21. 28 Jørgensen (n. 16), 211; C. Nyrop, Danmarks gilde- og lavsskraaer fra middelalderen, vol. 1 (1899 – 1900/1977), 28 (§ 9). 29 Christoph Anz, Gilden im mittelalterlichen Skandinavien (1998), 237 – 239. 30 Jørgensen (n. 3), 54; Nyrop (n. 28), 40. Cf. ibid., 51 (Store Heddinge, § 25) and 64 (Kalvehave, § 28).

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In the charter of the guild of St. Canute in Malmö from about 1350, the rule was less detailed.31 If a member of the guild suffered losses from fire in the house where he lived, each brother should pay him three pennies each.32 The amount of money was at this time called brandstod, fire help. The probable reason for the use of the word brandstod is, according to Söderberg, an influence from the countryside of the surrounding province of Scania.33 There, fire help was an established legal phenomenon from at least about 1200. In later charters of guilds of St. Canute, the rules were less detailed and less insurance-like. According to the 1586 charter of the guild of St. Canute in Lund, a member who suffered losses from fire and demanded help from the other members did not have the right to receive a specific amount of money. Rather, at the next meeting of the guild the members were to decide on the amount of the loss and how much each member should pay in contribution.34 This regime is less insurance-like and closer to poor relief. The fact that guilds arranged mutual fire insurance is not a uniquely Nordic phenomenon. For example, in the charter from 1310 of the guild of Kyllingholm (Killingholme) in Lincolnshire, there was a rule to the effect that if the house of a brother or sister burnt by mishap, every brother and sister was to give a halfpenny towards a new house.35 2. Craft guilds There are only a few known charters of Danish craft guilds which mention fire insurance. In the charters of the guilds of smiths in Roskilde and Copenhagen, from 1491 and 1512 respectively, the rule was that if the house of a brother or sister burnt down by accident, each brother and sister was to give the owner of the house a grot. In the charter of the shoemakers’ guild in Sønderborg, there was a similar rule, but the brothers and sisters should give the owner of the house a certain amount of sheaves, 20 laths and two days’ work.36 According to the 1571 charter of the barber-surgeons in Stockholm, the members should each Sunday give at least an ortig to the treasury of the guild. If a member was impoverished or suffered from fire, these contributions were to be used to help the member in need. There is also an example from another craft guild, the pot founders in Stockholm, whereby a member who had suffered from fire received an 31

Jørgensen (n. 3), 54. Nyrop (n. 28), 97 (§ 33). 33 Söderberg (n. 3), 38. 34 Anders Bruzelius (ed.), S:t Knuts gille i Lund. 1586 års skrå (1986), 26. 35 Toulmin Smith (ed.), English Gilds. The Original Ordinances of more than one hundred Early English Gilds (1870), 185. 36 Jørgensen (n. 3), 77 f.; C. Nyrop, Danmarks gilde- og lavsskraaer fra middelalderen, vol. 2 (1895 – 1904/1977), 211 (§ 39), 332 (§ 20), 195 (§ 9). 32

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insurance-like payment from the treasury of the guild. Such payments could, however, just as well be described as help towards impoverished members that were outside the realm of insurance and based on the obligation for guild members to help each other.37 Apart from this, there were, as far as we know, no guilds through which fire help was organized in the towns in Norway and in Sweden.38 3. Guilds in the countryside In Norway, there was a guild for the peasants of Sunnhordland in western Norway, near Bergen. In a charter, which probably relates to that guild, the members promised to help each other to rebuild houses that had burnt down and to replace burnt grain.39 There is also an example from 1314 of an organization similar to a guild in the countryside of Sweden. The clergy in the districts of Västanstång and Kinda in the diocese of Linköping agreed on mutual help in the form of a fixed sum of money in the event of fire.40 III. Begging and exemption from taxes In Norway, there was no statutory fire help, and there is no evidence that there was a custom to the same effect. Instead, the support to people who had lost their property through fire came through the right to beg and to be exempted from taxes. The right to put a beggar’s bowl outside the church door was given to people who had lost their assets; people in the countryside received this right only if they had lost their assets at sea. Peasants who lost their assets through fire had to apply for exemption from taxes or for an authorization to walk around in the area over the course of, for example, three months and ask people for help. Such exemptions and authorizations were regularly granted. The main reason why exemption from taxes was granted was that the taxes could not be collected anyway when people had suffered a fire.41 Although Sweden had rules about compulsory fire help, also there we find begging and exemption from taxes. In 1642, a statute about begging was enacted (tiggarordning), and begging for fire help was prohibited. A person who had lost assets through fire should, according to the law, apply for brandstod at the local

37

Söderberg (n. 3), 76 f. Lorange (n. 3), 201 – 207; Söderberg (n. 3), 38. 39 Lorange (n. 3), 186 – 189. Cf. Håkon Haugland, Fellesskap og brorskap. En komparativ undersøkelse av gildenes sosiale, religiøse og rettslige rolle i et utvalg nordiske byer fra midten av 1200-tallet til reformasjonen (2012), 43. 40 Söderberg (n. 3), 40 f. 41 Lorange (n. 3), 191 – 207. 38

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court and not travel around and beg for money.42 The enactment of this rule shows that the system of fire help did not work properly and needed to be reinforced. In the statute about begging, there was a rule to the effect that the six men administering the tithes in each parish should enforce the right to fire help and deliver the fire help to the person who had suffered the loss.43 From the late sixteenth century, there are examples of the state granting exemption from taxes to peasants whose houses had burnt down. The relationship between such measures and the fire help is not fully clear, but there seems to be an interaction between them; in some parts of the country the legal fire help had mostly fallen out of practice before being reinstated by the state.44 C. Fire insurance associations I. Reasons for organizing fire insurance In the Nordic countries, the Great Fire of London in 1666, the establishment of the General Feur-Cassa in Hamburg in 1676 and the establishment of an insurance scheme in Altona in 1714 were well known.45 As will be seen in the following discussion, the first half of the eighteenth century was the time period when insurance associations for the towns in the Nordic countries were established. As regards the question of whether the London fire or the establishment of the General FeurCassa in Hamburg was, respectively, the stimulus or prototype for Nordic commercial fire insurance, Söderberg has found that there were Swedish proposals both before and after 1676 and that fire insurance in towns may have had its roots in the part of maritime insurance covering storage on land. His conclusion is that the notion of organizing fire insurance was in the air in the 1670s in many parts of Europe and that ideas were transferred and connected to each other in complicated ways.46 II. Denmark-Norway, eighteenth century In 1725, an initiative to establish a fire insurance association was taken in Halden (at that time Fredrikshald) in Norway, but it did not succeed. Further initiatives were taken in the 1730s and 1740s. Finally, a fire insurance association was established in 1753 for Christiania (now Oslo, Norway), and it could start its work on 1 January 42

See art. XVIII of the tiggarordning: A.A. von Stiernman, Samling utaf kongl. bref, stadgar och förordningar &c. angående Sweriges rikes commerce, politie och oeconomie …, vol. 2 (Stockholm 1750), 327–334. 43 Söderberg (n. 3), 52 f. 44 Söderberg (n. 3), 48 and 56 – 66. 45 Lorange (n. 3), 207; Söderberg (n. 3), 310 – 312; Jørgensen (n. 3), 248 f., 258. 46 Söderberg (n. 3), 311.

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1754. The first year, 175 insurance contracts were signed, and in 1765 there were 380 insurance contracts. The association also engaged in money lending.47 In 1728, the Great Fire of Copenhagen destroyed 1,450 buildings, two-fifths of the town. The fire made it relevant for the Danish government to investigate insurance issues. In 1731, a fire insurance association was established, Københavns brandforsikring. It was formally an independent association but with close connections to the mayor and magistrate of the town. In 1795, there was another great fire in Copenhagen. In total 983 buildings burnt down. The association’s economic gains as well as gains in independence over the recent decades were lost as a result. The compensation to be paid was double the assets of the association, and most of these assets were lent to house owners. The insurance association was in reality bankrupt, but the state arranged loans, reduced and postponed the right to compensation, and made the insurance compulsory. The state also partly took control over the board of the association.48 After the Great Fire of Copenhagen in 1728, the Danish government also investigated insurance issues in the duchies of Schleswig and Holstein, which were subject to the Danish King but not part of the Kingdom of Denmark. In Schleswig and Holstein, there was a network of small fire insurance associations which stretched into each other’s districts. These associations were too small to cover the losses, which led house owners to insure their houses in several of them, leading to compensation exceeding the value of the house. The government wanted to replace these small associations with a central state-run insurance. In the 1730s and 1740s, the government organized fire insurance for different counties and towns. Before the government had centralized fire insurance for the duchies, there were fires, e. g. in 1747 in Bornhøved and in 1759 in Haderslev. In 1759, after the Haderslev fire, the government decided to merge all fire insurance associations in Schleswig, the King’s territory in Holstein, Pinneberg, the county of Rantzau and Altona. This general fire insurance for these provinces was governed by an office which was part of the College of Commerce in Copenhagen.49 Also in the countryside of the Kingdom of Denmark, the Copenhagen fire in 1728 had the consequence that proposals for better fire insurance were put forward. In 1730, a provincial governor suggested to implement fire insurance, similar to the fire help, for each diocese. However, no such fire insurance was established. In 1748, the government had given up on the idea, but a town bailiff secured royal permission to establish an insurance association for the towns in northern Jutland. Some other fire insurance associations were established at this time, e. g. in 1749 an insurance association for manors on the isle of Fyn was established (it lasted until

47 48 49

Lorange (n. 3), 207 – 238. Jørgensen (n. 3), 258 – 269; Feldbæk/Løkke/Jeppesen (n. 5), 105 – 108, 142 f., 166 – 168. Jørgensen (n. 3), 249 – 257.

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1822), and in 1752 an insurance association for manors and farms on the isle of Sealand was established (it lasted until 1768).50 The state eventually decided to organize insurance in Denmark. That the state organized insurance was considered necessary by the Kameralisten, the at-the-time dominant school of economic thought. Thus, in 1761, a general fire insurance association was established in Denmark, Købstædernes forsikring. Participation was compulsory for buildings in the towns, except Copenhagen, and was possible for other buildings. In this way, the fire insurance associations in the countryside could continue working, as could also the insurance associations in Copenhagen and the duchies. The insurance association for the towns in northern Jutland was dissolved. From 1761 to 1788 the general fire insurance association increased its business in insuring buildings in the countryside; in 1788, the insured rural buildings represented for the first time a higher value than the insured buildings in the towns. As of 1792, the insurance association of 1761 was to handle insurance only for buildings in towns, whereas the voluntary insurance for buildings in the countryside was transferred to a new association, Landbygningernes almindelige brandforsikring. The two associations of 1761 and 1792 were, just as the fire insurance association in Copenhagen, closely tied to the state administration, both centrally and locally.51 In the late eighteenth century, two insurance associations for chattels were established.52 In 1767, an ordinance similar to the 1761 ordinance in Denmark was enacted for Norway. At first, this ordinance met opposition from most towns, and it was difficult to secure the success of the regime. Eventually, it started working, and beside it worked the already-mentioned association for Christiania (Oslo). In 1814, Norway was transferred from Danish rule to a union with Sweden, and in 1827, the insurance association for Christiania decided to merge its insurance business with the general insurance association for buildings in towns, Norges brannkasse. In Norway, the close connection between the insurance association and the state was maintained well into the twentieth century.53 III. Sweden-Finland, eighteenth century The first suggestion for a fire insurance association for Stockholm can be traced to 1676 or 1677, but this initiative led to nothing. In 1742, a group of Stockholm burghers took a new initiative to establish a fire insurance association. The at-thattime active maritime insurance association pursued a similar initiative. Competition 50

Jørgensen (n. 3), 270 – 295; Feldbæk/Løkke/Jeppesen (n. 5), 144 f. Jørgensen (n. 3), 296 – 306; Thomsen (n. 4), 237 – 259; Feldbæk/Løkke/Jeppesen (n. 5), 168 – 171; Carlo M. Pedersen, Om broders huus vorder brent. Købstædernes almindelige brandforsikring gennem to hundrede år (1960). 52 Thomsen (n. 4), 202 – 227, 261 – 291. 53 Lorange (n. 3), 244 – 263; Færden (n. 4), 227 – 252. 51

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between the two was, however, not in the mind of the Swedish officials. It was understood as self-evident that one of the associations would be granted a monopoly. In 1746, the King granted a charter to the fire insurance association which the group of burghers had initiated, and it received the name Stockholms stads brandförsäkringskontor or just Brandkontoret. It used an emblem with a Phoenix rising from the ashes, which can still be seen on old insured buildings in Stockholm.54 Before this, however, a fire insurance association was established in 1733 in Jönköping, and later, in 1760, 1768 and 1772, fire insurance associations were established in Karlskrona, Gothenburg and Borås, respectively.55 In 1782, the General Fire Insurance Fund (Allmänna brandförsäkringsfonden) was established.56 It insured buildings in towns and in the countryside, and participation was – in contrast to the Danish and Norwegian associations of 1761 and 1767 – voluntary. The established local fire insurance associations, based on the brandstod system, were retained. In 1808, the General Fire Insurance Fund was split into two, one for the towns and one for the countryside, with the General Fire Insurance Office (Allmänna brandförsäkringsverket) as a common organization. When Sweden lost Finland in 1809, the Finnish insurance offices were to be dissolved, and in 1816 a similar fund was established in Finland. The fire insurance association that had been established in Borås in 1772 had been merged with the General Fire Insurance Fund and was then part of the fund for towns. In 1827 most of Borås burnt down, as well as huge parts of Åbo (though in Finland it was still mostly insured by the Swedish town fund) and parts of Uddevalla. The town fund was then bankrupt. In 1828, a new fire insurance association for towns was established, Städernas allmänna brandstodsbolag. Additionally, some regional fire insurance associations for towns were established. The General Fire Insurance Office’s fund for the countryside lived on, and in 1818 the rules about brandstod were no longer to be applied on property insured under this fund.57 The Phoenix Assurance Company, which was established in London in 1782, opened an office in Hamburg in 1794 also for its Swedish business. It was the most important of the foreign insurance companies working in Sweden. In the period of 1805 to 1830, Phoenix concluded about 9,000 insurance contracts in Gothenburg, according to Bergander’s research.58

54 See Reinhold Gustaf Modée, Utdrag utur alle publique handlingar …, vol. 3 (Stockholm 1749), 2302 – 2313; Mats Wickman, För all framtid. Stockholms stads brandförsäkringskontor 250 år (1996). 55 Söderberg (n. 3), 311 – 351. 56 Its charter is printed in Reinhold Gustaf Modée, Utdrag utur alle publique handlingar …, vol. 12 (Stockholm 1799 – 1802), 266 – 281. 57 Söderberg (n. 3), 352 – 391; Bergander (n. 4), 26 – 41; Sören Karlsson, Kunglig glans för all framtid. Brandförsäkringsverket 1782 – 2007 (2007). 58 Bergander (n. 4), 21 – 25.

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However, an important part of fire insurance was organized through the local associations based on the brandstod communities. An example of how such a fire insurance association was organized is provided by the history of the association of Rönneberg and other districts (Rönnebergs m.fl. härads brandstodsbolag). It was set up in 1834 on the initiative of a local landowner, Baron Gustaf Coyet of Rönneholm. Baron Coyet wrote to the provincial governor, who requested that the district judge S.T. Cassel convene the inhabitants of the districts of Rönneberg, Onsjö and Luggude to deliberate on the issue. During these discussions, it appeared that the inhabitants of the Luggude district disagreed with the inhabitants of the districts of Rönneberg and Onsjö about the desirability of the creation of the association. The result was that the inhabitants of the Rönneberg and Onsjö districts as well as the inhabitants of the parish of Ottarp in the Luggude district formed the association. The inhabitants of most of the rest of the district of Luggude formed another association the following year. Every owner or possessor of a house had to take part, unless he could show that he had some other fire insurance. The insurance was mutual, and the compensation amount was levied from the participants in proportion to the amount of the insurance. In each parish a committee was elected at the parish assembly under the presidency of the vicar. Above these committees was a board, which was elected under the supervision of the district judge by electors appointed by each parish.59 This example shows that in the nineteenth century fire insurance in the countryside was closely connected to the local community – the landowning noblemen, the district judge, the clergy and the peasants who owned or rented their farms. It was not until the twentieth century that the large-scale insurance companies came to dominate the fire insurance market also in the countryside. IV. Freedom of trade in the mid-nineteenth century To this point, the insurance associations in the Nordic countries had needed permission from the King or a state authority to be established. They were based on the principle of mutuality, and the extent to which they had been able to build up a fund of money varied. Most of them had gone bankrupt as a result of some great fire. During the nineteenth century, it was legally obligatory to have fire insurance for houses in towns, and it became very common also for houses in the countryside because it was a prerequisite when borrowing money with the house as security.60 In 1849, absolutism was abolished in Denmark and the separation of powers was established. This also meant that the state no longer governed various trades as strictly as before. The Danish fire insurance associations were transformed into 59 Erik Forslid, Rönnebergs m.fl. härads brandstodsbolag 1834 – 1934 (1935), XV–XXIV; Carl Gustaf Weibull, Luggude härads brandstodsbolag 1836 – 1936 (1936), 21 – 35. 60 Feldbæk/Løkke/Jeppesen (n. 5), 165, 168.

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private companies, and at the turn of the twentieth century two new fire insurance companies were founded.61 The insurance association of 1761 for buildings in towns stills exists as a mutual insurance company under the name Købstædernes forsikring,62 and the insurance association of 1792, Landbygningernes almindelige brandforsikring, exists under the name of Alm. Brand.63 In 1853, it was decided in Sweden that fire help was to be abolished in 1856, and here one sees a close temporal connection with the establishment of freedom of trade in 1864 and other liberal reforms.64 Brandkontoret, the fire insurance association for Stockholm established in 1746, still exists today.65 Städernas allmänna brandstodsbolag of 1828 is part of the insurance company Trygg-Hansa. The fire insurance fund of 1782, which after 1828 dealt only with insurance in the countryside and was called Brandförsäkringsverket, was dissolved in 2008, but its archives – which contain important documents about the history of buildings in Sweden – were transferred to a foundation, Stiftelsen för bebyggelsehistorisk forskning.66 From the 1850s onwards, many commercial insurance companies were established, starting with Skandia in 1855, and also foreign insurance companies did business in Sweden.67 In Norway, there was still a state-run insurance association, Norges brannkasse. From 1816 onwards, however, local fire insurance associations were established. They were small and resembled the local Swedish fire insurance associations for only a single parish.68 Insurance of chattels was made first through foreign companies, then from 1838 by various local associations.69 The legislation on insurance companies had until the twentieth century largely been part of public law. In the 1910s and 1920s, joint Nordic initiatives were taken to regulate the private law aspects of insurance contracts. These initiatives resulted in similar Danish, Finnish, Norwegian and Swedish statutes on insurance contracts.70 61

Thomsen (n. 4), 237 – 261, 302 – 337; Feldbæk/Løkke/Jeppesen (n. 5), 171 – 173. See www.kfforsikring.dk. 63 See www.almbrand.dk. 64 Bergander (n. 4), 41 – 44. 65 See www.brandkontoret.se. 66 See www.brandverket.se. 67 Bergander (n. 4), 59 – 137. 68 Lorange (n. 3), 200; Færden (n. 4), 360 – 399. 69 Færden (n. 4), 272 – 359. 70 Rudolf Ekelund, Förslaget till lag om försäkringsavtal, (1925) 10 Svensk juristtidning 292– 297; idem, Den nya lagen om försäkringsavtal, (1927) 12 Svensk juristtidning 217– 220; A. Drachmann Bentzon, Dansk Lov om Forsikringsaftaler, (1931) 31 Svensk juristtidning 170– 174; Denmark: Loven om Forsikringsaftaler of 15 April 1930; Finland: lagen den 12 maj 1933 om försäkringsavtal (132/33); Norway: forsikringsavtaleloven av 6 juni 1930 nr. 20; Sweden: lag (1927:77) om försäkringsavtal. 62

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In the 1734 law code, where chapter 24 of the book on buildings dealt with fire help, fire was discussed in terms of fire that had come loose, i. e. fire that was out of control. In Swedish, there are two words for fire: eld for fire more generally and brand for fire that is out of control. Thus, brand is eld that is out of control (‘eld som är kommen lös’). In the travaux préparatoires of the Swedish statute on insurance contracts, this way of talking about fire was observed, and it was made into a legal definition in the statute.71 The same happened in the Finnish statute,72 unsurprisingly, since the 1734 law code forms the basis of both Swedish and Finnish law. The distinction not only found its way into the Swedish statute but is a classical legal formulation, also used to define different types of fire in other legal contexts.73 In the Danish and Norwegian statutes, by contrast, more prosaic ways of defining fire were used. D. Concluding comments I. Insurance or poor relief? The first issue which is interesting for a deeper analysis is how to draw the line between insurance and poor relief. Here, a definition of insurance is necessary. Phillip Hellwege has concluded that two elements are most important: first, that the insured needs to have an enforceable claim against the insurer; second, that the institution needs to involve the transfer of risk.74 We could then easily rule out begging and exemption from taxes from the core area of fire insurance, just as we can rule out the activities of guilds in helping poor brothers and sisters. In that context, it did not matter whether poverty was an effect of fire, disease, bankruptcy or anything else. The clause on fire help in the Scanian law book is, on the other hand, clearly a type of insurance. It is not based on contract, but there was a legal obligation for the inhabitants of the rural district to contribute to the owner of the burnt house certain money or goods. There was a transfer of a risk from an individual to the members of the district, and already the fact that the matter was to be brought before the Thing shows that the claim was legally enforceable. Similarly, the clauses on fire help in the 1256 charters of the guilds of St. Canute and St. Eric were clearly insurance contracts. No funds were set up, but the members of the guilds agreed to pay a defined sum of money to a brother or sister whose house had burnt down. There was a transfer of a risk from an individual to the members of the community, and the claim was legally enforceable. Even though there is, as far as I know, no example that shows that a dispute about an insurance 71 72 73 74

SOU 1925:21, 180; 79 § lag (1927:77) om försäkringsavtal. 79 § lagen den 12 maj 1933 om försäkringsavtal (132/33). See, e. g., an arson case from the Supreme Court, NJA 2009, 149. Phillip Hellwege, Introduction, in: idem (n. 1), 9 – 26, 26.

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issue was decided by one of these guilds, there is no reason to believe that disputes between guild members about this type of issue were not tried by the authorities of the guild. Generally, the ambition of the guild was that disputes between its members should be solved within the guild.75 II. Law or custom? When we discuss these old clauses on fire help, it is interesting to consider the relationship between law and custom. Emily Kadens has recently stressed the importance of custom as a predominant source of law in medieval Europe, before about 1200 when Roman law expanded its influence.76 Since the influence of Roman law in the Nordic countries came later and never became as predominant as in large parts of continental Europe, custom can be considered as having had a more lasting impact there. Custom, however, ‘did not need to be old’, ‘did not need to be repeated’ and ‘did not, in fact, even need to exist’.77 The explanation for this is that custom was seldom well-documented and relied on memories that were not always correct. With the advent of learned lawyers, the question arose as to what was a non-binding usage as distinguished from a legally-binding custom.78 This is a question of the quality of the norm, whether it is something you live by or something which is also raised to the level of law.79 It is obvious that we can trace the metamorphosis from custom to customary law in the early development of fire help. Similar rules were present in Scania and Iceland in the Nordic countries, and in Schleswig-Holstein, eastern Prussia and perhaps Flanders. Similar rules were also present in the guild statutes in what is today southern Sweden and Denmark and in Killingholme in England. Probably, the reason for all this is that there was an understanding in rural communities and in early urban society that mutual help was in the long run to the advantage of the whole. The other villagers probably had in any event to take responsibility for those who had become homeless and who had lost the opportunity to support themselves. It is easy to understand that fire help agreed upon ad hoc (possibly under the pretence of a custom) could have formed a true custom that became customary law and then was taken into statute books and guild charters in the thirteenth century. 75

Anz (n. 29), 208 – 219; idem, Gildernes form og funksjon i middelalderens Skandinavia, in: Lars Bisgaard and Leif Søndergaard (eds.), Gilder, lav og broderskaber i middelalderens Danmark (2002), 21 – 40; Haugland (n. 39), 321 – 365. 76 Emily Kadens, Convergence and the colonization of custom in pre-modern Europe, in: Olivier Moréteau et al. (eds.), Comparative Legal History (2019), 167 – 185. 77 Kadens (n. 76), 172. 78 Kadens (n. 76), 178 f. 79 Jürgen Weitzel, Gewohnheitsrecht und fränkisch-deutsches Gerichtsverfahren, in: Gerhard Dilcher et al. (eds.), Gewohnheitsrecht und Rechtsgewohnheiten im Mittelalter (1992), 67 – 86.

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III. Public law or private law? The divide between public and private law, as we know it today, is a relatively late phenomenon. Even though some legal issues were treated as quaestiones iuris publici or as belonging to ius publicum in the seventeenth century, and even though this was based on a distinction in Roman law, the division between public law and private law is a development of the nineteenth century.80 The Nordic understanding was, at that time, modelled on the German development.81 This suggests that it is not meaningful to define guilds with the help of the dichotomy of public and private law. Guilds had tasks and an institutional character that would today fall under both areas of law. The same can be said about the insurance associations of the eighteenth and early nineteenth centuries; they needed legislation or royal charters to be able to work as legal entities, or they were organized in close connection with the administration of towns. In the nineteenth century, with the introduction of freedom of trade, the dichotomy between private companies and the state became clearer and recognizable for modern observers: Companies are independent and (mostly) privately owned, but they are supervised by state inspectorates governed by public law, and insurance contracts are regulated through legislation within the realm of private law. In this manner, insurance – characterized by the transfer of risk and an enforceable claim against the insurer – has been administered at first through local corporations, then through various arrangements involving the state or public authorities and finally through privately owned companies supervised and regulated more or less rigidly by the state.

80

Michael Stolleis, Geschichte des öffentlichen Rechts in Deutschland, vol. 1 (1988), 58, vol. 2 (1992), 51 – 53. 81 Mats Kumlien, Politi och förvaltningsrätt i ett rättsgenetiskt perspektiv, in: Claes Peterson (ed.), Den svenska förvaltningsmodellen (2020), 80 – 134.

Chapter 6: Italy A. The development of fire insurance in Italy from the eighteenth to the twentieth century By Maura Fortunati I. The birth of the first fire insurance companies in Italy . . . . . . . . . . . . . . . . . . . . . . . . II. Fire insurance in the first post-unification period: regulatory gaps and the strength of practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. The Codice di commercio of 1882: between innovation and tradition . . . . . . . . . . . . IV. The 1882 Codice di commercio and insurance policies in the courtroom . . . . . . . . . . V. A paradigm shift in 1942 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. The birth of the first fire insurance companies in Italy Up to now, I have not found any traces of something comparable to even a primitive form of fire insurance in Italy prior to the eighteenth century. Not even the notary archives, which are rich in documentation on maritime insurance, are of any help. Of course, fire risks had always been addressed in maritime insurance policies. Yet, for a long time no separate fire insurance sector evolved. Nevertheless, there are some medieval and early modern sources that addressed – outside the maritime context – fire risks and that introduced forms of help: some statutes exhibit a duty of cooperation for the benefit of those whose houses were damaged or destroyed by fire: the inhabitants of a town or, more frequently, a village had to offer help to rebuild the affected house. The sixteenthcentury statutes of Altare in Liguria, for example, included the following provision:1 ‘Ancora hanno ordinato che in caso che si fussi abbruciata qualche casa in l’Altare et colui di cui sarà la volesse reedificare che li huomini dell’Altare siano tenuti darli aiuto infra 3 giorni doppo che saranno richiesti con la persona et con bestie et arteficii suoi, come qui desotto, cio è chi haverà bestie con bestie, et chi bovi con bovi, et cosi d’altre bestie da basto; et chi non havera bestie con instromenti più utili et convenienti al lavoro secondo 1 Statuti et decreti della terra dell’Altare (Casalmaggiore 1573), c. 22v–c. 23r., cap. 110 ‘Delle case abbrusciate’. The research for this part of the present paper focused on examples from Liguria.

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che richiederà colui qual vorra refabricare, et nel lavoro ogni persona sera tenuta di contribuire una giornata della persona, a sue proprie spese: riservato se richiesto da esse soldi 6 per la giornata et se doi o più volesseno reedificare le case bruciate et paresse alli giuriati et Conseglio che detta giornata per quello anno si duplicassi, ognuno potrà esser astretto di due giornate per anno et se fusseno doi o piu in detto tempo dette giornate, in tal caso per la corte del luogo, o per li giuriati le dette giornate si despensaranno secondo il lavoro et la necessita di colui che vorrà reedificare. Et chi contrafara in non dar detta giornata, o detti soldi 6, infra tre giorni, doppo la richiesta, pagara il doppio a colui che vorra reedificare et tanto di bando: seranno pero esenti le donne et minori d’anni 17.’

The men of Altare were obliged to help with the rebuilding of a house that had been destroyed by fire. The fire victim was allowed to request such help, and the men of Altare had to comply with the request within three days. They had to invest a day’s work at their own expense. If they had animals, such as oxen, or tools that could be useful, they had to bring them along. Alternatively, they could pay a specified some of money. Those who refused to comply with the request had to pay the double amount as penalty. Women and children under the age of 17 were exempt from the obligation to help. The statutes of Altare provide us with a very detailed example. More frequently, the statutes simply introduced the obligation to collaborate in the reconstruction of the affected house without specifying the obligation in detail.2 However, such forms of help cannot be analysed in terms of insurance. These findings raise the question of why fire insurance was missing in Italy until the eighteenth century. One possible explanation is that the preferred building materials were stones and bricks, whereas in other parts of Europe houses were often built of wood. A stone house is, of course, more resistant to fire. It may be that there was, consequently, no pressing need to develop any form of fire insurance. By contrast, ships were built of wood, and they may have transported fire hazardous goods. This may explain why marine insurance policies regularly addressed fire risks. Terrestrial fire insurance took firm root in Italy only at the beginning of the nineteenth century and thus relatively late. Already the seventeenth and eighteenth centuries had seen discussions to regulate fire insurance by analogy to marine in2 Examples can be identified in smaller Ligurian cities and villages, e. g., Carcare in 1433: Capitula, Statuta et Ordinamenta communitatis villae Carcherarum, Archivo di Stato di Savona, Comune Savona, 1, 1202, n.1964, rub. ‘De domo quae comburetur in fine Carcherarum’ (‘Item statutum est quod si aliqua domus combureretur in villa Carcherarum homines dicti loci teneantur adiuvare alsare dictam domum illi cuius erit sufficienter et videlicet de palia et de lignaminis […]’); or Pallare in 1539: Pallerarum Statuta sive ordinamenta, Archivo di Stato di Savona, carte Noberasco III/5: De refficiendo domos combustas aliquibus casibus invenientibus (‘Item statuerunt et ordinaverunt quod si aliqua domus vel aliquae domus comburantur aut combustae aut combustia fuerint, modo aliquo vel casu fortuito aut divino iudicio, quod communitas Pallerarum teneatur et debeat domos combustas reficere et adaptare; taliter debeat murare domum et domos combustas sitas in posse Pallerarum; et hoc hominibus tantum in dicto loco’).

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surance law. In the early eighteenth century, probably before 1720, captain Ottavio Raviolati presented to Vittorio Amedeo II of Savoia, future King of Sardinia, a scheme for public fire insurance, but the King rejected the plan.3 He probably feared that he would incur excessive liabilities under such a scheme. However, according to Raviolati’s plan, the scheme would have been operated by an independent royal bank established at the same time as the insurance. The plan would have introduced, with some exceptions, compulsory insurance.4 In cases of accidental fire, the funds collected would have had to be used to rebuild burned houses; in the event of fire caused by the enemy during a war, house owners were to be compensated, and it seems that in this case there was no obligation to rebuild the house. There were two further projects which were proposed in 1734 and 1778, yet once again neither was implemented,5 and some nineteenth-century projects in Lombardy met with the same fate.6 Even if the Austrian Banco di assicurazione e cambi marittimi established in Trieste in 1786 sporadically dealt with fire damage, it was only in 1825 that the first insurance company operating in the fire sector was founded. It was established in Milan by merchants, bankers, and industrialists. However, it was not limited to offering fire insurance. It also operated in the life insurance sector and sold life annuities. In 1827 its business grew considerably due to the fire that destroyed parts of Saronno, a town close to Milan. The fire made people aware of the risk of fire, and they consequently began to seek coverage against it.7 A parallel development had occurred after the Great Fire of London in 1666. Then in 1829, the Reale Società di assicurazione generale e mutua contro gli incendi (Reale Mutua) was 3 The project is published in Luigi Einaudi, Uno schema settecentesco di assicurazione obbligatoria contro gli incendi nel Piemonte, in: Miscellanea di Studi Storici in onore di Antonio Manno, vol. 1 (1912), 241 – 255. Raviolati’s motivation is clear: ‘Supplico humilmente concedermi la cariga della Amministratione, con quattro piazze nel sudetto banco con suo stipendio per puoter impiegare cinque miei figlioli’ (‘I humbly beg to grant myself the office of Administration, with four salaried positions in the above mentioned Banco for five of my sons’). In essence, he wanted safe jobs for himself and his sons. 4 The insurance was, for example, optional for country houses that were at least 300 meters away from inhabited places. 5 The first project was presented in 1734 by Bagneret de Pressy, ‘per evitare che i sinistrati non abbiano, come oggi, altro mezzo che di ricorrere a pubbliche collette tra i vicini o ai soccorsi di Sua Maestà’ (‘to prevent victims from having, as they do today, no other means than to resort to public collections among their neighbours or to Her Majesty’s help’). The second project was presented by somebody called Des Roches. On both projects, see Giuseppe Prato, Gli albori delle assicurazioni in Piemonte, in: idem et al. (eds.), Lo sviluppo e il regime delle assicurazioni in Italia, vol. 1 (1928), 11 – 65; Riunione Adriatica di Sicurtà (ed.), Nel primo centenario della Riunione Adriatica di Sicurtà (1838 – 1938) (1939), 34 f. 6 See Bruno Caizzi, Assicurazione ed economia nell’età moderna, in: Ania – Associazione nazionale fra le Imprese Assicuratrici (ed.), L’assicurazione in Italia fino all’Unità. Saggi storici in onore di Eugenio Artom (1975), 355 – 435, 401 f. 7 Cf. Ennio De Simone, Le assicurazioni nella storia d’Italia, in: Carlos Barciela López et al. (eds), Le assicurazioni. Sicurezza e gestione dei rischi in Italia e Spagna tra età moderna e contemporanea (2016), 21 – 44, 33

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established in Turin on the initiative of a French businessman, Giuseppe Henry. It was given a monopoly on fire insurance for 30 years by the sovereign Carlo Felice. Consequently, it was impossible for competitors to set up new mutual fire insurance companies within the mainland territories of the Kingdom. Furthermore, it became forbidden to take out fire insurance with any foreign insurance companies which were already operating in the territory – on pain of nullity of the contract and payment of a fine.8 Nevertheless, only four years later, in 1833, the Compagnia Anonima di Assicurazione di Torino (known as Toro) was established at the initiative of a group of capitalists led by the banker Giovanni Battista Barbaroux. The group obtained authorization to establish the said company in the fire insurance branch even though the Reale Mutua had tried to intervene. In fact, Toro was ‘una società privata a premio fisso e non una mutua, sicchè la privativa non la riguardava’ (‘a private company with fixed premiums and not a mutual society, so that the monopoly was not affected’).9 More or less in the same years, further companies were founded throughout the Italian peninsula, or at least there were plans to establish such companies, even if not all the corresponding plans materialized. Naples, for example, saw in 1825 plans for the establishment of a mutual fire insurance company. It received support from the government, but the plans proved to be unsuccessful due to a lack of capital in the Kingdom.10 In Rome, Pope Gregorio XVI authorized in 1837 the establishment of a ‘società anonima commerciale diretta alle assicurazioni di vita, ed incendi delle merci viaggianti per terra, e delle campagne dalla grandine’ (‘anonymous commercial company for life insurance, fire insurance of goods travelling on the ground, and hail insurance in the countryside’), called the Privilegiata Società pontificia di assicurazioni.11 In 1841, the Duke of Modena promulgated an edict forbidding his subjects from insuring their buildings against fire with foreign companies. The motivation behind the edict was to hinder foreign insurance companies (specifically those from Trieste) from entering the Duchy. Furthermore, the edict imposed the obligation on ‘tutti i possidenti indistintamente dei nostri domini di prestarsi pei rispettivi fabbricati ad una reciproca assicurazione dei medesimi’ (‘all landowners of our domains, without exception, to mutually secure each other’s property’). In essence, a monopoly on fire insurance was given to a compulsory mutual society. It covered 8 Regia Patente 13 gennaio 1829, in: Raccolta degli atti del governo di S.M. il Re di Sardegna dall’anno 1814 a tutto il 1852, vol. 19 (1846), 94 – 153. The patent also contains the text of the company’s articles of association. 9 De Simone (n. 7), 34 f. 10 Giuseppe Stefani (ed.), Il centenario delle Assicurazioni Generali: 1831 – 1931 (1931), 100. 11 Regolamento e Sovrana Autorizzazione della Privilegiata Società Pontificia di Assicurazioni (1838). In 1860 the company’s activities in the fire branch in Bologna, Ferrara, Ravenna, and Forlì (until then part of the Papal State) were suspended due to financial problems and transferred to Generali. See Stefani (n. 10), 116.

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urban and rural buildings, straw and hay, wheat, seeds, animal shelters, and stables. In the event of fire, the state treasury advanced the sums needed to indemnify the fire victim. The sums so advanced were then imposed on the members of the insurance scheme.12 Indeed, most fire insurers of that era were established as mutual societies. With some, membership was compulsory. However, it was more common that membership was voluntary. It was claimed that mutual insurance societies were less expensive for the insured as members were obliged to pay only after a fire had occurred. In an 1829 pamphlet, the engineer Paolo Racchetti wrote in the preface (‘Al cortese lettore’, ‘To the courteous reader’) that ‘molti possidenti uniti in mutua o scambievole società possono con poco dispendio, […] assicurare la loro rendita annua, e che ognuno di essi che poco, o molto posseda in campi ed in fabbricati civili, rustici o cascine, troverà un eguale vantaggio nella doppia veste di assicuratore, e di assicurato.’13 ‘many landowners united in a mutual or reciprocal society can at little expense […] insure their annual income and each of them, whether he owns little or much in land and private buildings, cottages or farmhouses, will equally find advantage in the dual role as insurer and insured.’

Further projects to establish mutual insurance societies were, thus, developed in that period and continued to be successful in the years to come. Indeed, the principle of mutuality had several advantages: it offered a system of mutual supervision, lower costs, and a reduction in the number of intermediaries. On the other hand, it could also present some difficulties. Gerolamo Boccardo, for example, claimed that it would be difficult for mutual insurers to define the different risk classes and the corresponding contributions if the insured buildings were too varied: ‘Così nessuno potrà mai porre a paragone una associazione di mutue sicurtà contro il fuoco a Genova o a Torino, con un’altra nelle campagne, ove le costruzioni sono più variate, i mezzi di soccorso difficili e diversi tra una località e l’altra. Nelle nostre città meridionali, ove la pietra ha la maggior parte negli edificii, le assicurazioni contro l’incendio hanno minori disastri da paventare che nel Nord, ove il legno è elemento principale.’14 ‘No one can ever compare one mutual insurance against fire in Genoa or Turin with another in the countryside, where buildings are more varied, firefighting more difficult, and where there are differences from one location to another. In our southern cities, where most buildings are made of stone, fire insurance has fewer disasters to fear than in the North, where wood is the main element.’ 12 On the distribution method and the edict in general, see Augusto Graziani, Sull’assicurazione di Stato contro gli incendi nel ducato di Modena, (1913) 24 La riforma sociale. Rivista critica di economia e di finanza 160 – 166; Gustavo Del Vecchio, Le assicurazioni di Stato nei ducati di Modena e di Parma (1911). 13 Paolo Racchetti, Intorno al modo di garantirsi vicendevolmente fra possidenti dai danni degli incendi e della grandine (1829). 14 Gerolamo Boccardo, Dizionario universale di economia politica e di commercio, vol. 1 (2nd edn., 1875), 202.

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And he further observed:15 ‘Dal che emerge il principio che le assicurazioni mutue sono tanto più facili e tanto più utili ad applicarsi in una data regione, quanto più è possibilmente uniforme la natura degli stabili compresi nella regione medesima. È questa una delle ragioni per le quali nelle città le assicurazioni mutue contro gli incendi sono più opportune che nelle campagne.’ ‘Mutual insurance is all the easier and all the more useful to apply in a given region, the more uniform the nature of the buildings in that region is. This is one of the reasons why mutual fire insurance is more appropriate in cities than in the countryside.’

II. Fire insurance in the first post-unification period: regulatory gaps and the strength of practice Italy saw the first legislation covering terrestrial insurance, including fire insurance, only in 1882 with enactment of the revised Codice di commercio. Until then, fire insurance contract law remained uncodified. However, already at the time of unification in 1861, when the drafting process for the first post-unification codes started, the question of how to codify insurance law had been debated, both from a systematic point of view and in terms of content. The first problem was where to include insurance law: in the civil code or the commercial code? With respect to maritime insurance the answer was clear. Maritime insurance legislation had a long-standing history. It was first fully codified in France, and subsequent Italian legislation had taken French legislation as a model. Ample space was reserved for it in Book II of the Codice di commercio, Book II being devoted to maritime trade. With respect to land insurance, finding an answer was more complicated. The need for regulating insurance beyond maritime insurance had long been felt, and during the preparatory work on the Codice civile of 1865, the possibility of including life, fire, and hail insurance contracts, and land insurance contracts in general, was discussed: Pasquale Stanislao Mancini had insisted on doing so, but the drafting committee ultimately decided to exclude these contracts from the Codice civile, arguing that they should be covered by the commercial code as was the case in Spain, Holland, Portugal, Prussia, and Wurttemberg.16 However, the drafting committee for the Codice di commercio of 1865 also considered it inappropriate to include land insurance contracts, for reasons which were largely based on the customary nature of commercial law. Firstly, it was objected that the land insurance sector was relatively novel. The development of its customs and practices was still in an early phase. The customs and practices were still in the making, and consequently the legislature could not fall back on fully 15

Boccardo (n. 14), 201 f. Verbali della commissione di coordinamento, in: Sebastiano Gianzana, Codice civile preceduto dalle Relazioni Ministeriale e Senatoria, dalle Discussioni Parlamentari e dai Verbali della Commissione coordinatrice, vol. 3 (1887), 290. 16

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developed customs. Thus, it was argued that it would have been inappropriate to codify these customs in this early stage of their development. A code would have been like a procrustean bed, at best only delaying the further development of insurance customs, at worst distorting them. Secondly, it was recalled that the relationship between the insurer and the insured was primarily governed by contractual agreement. On the assumption of the inevitable incompleteness of the code, it was considered best to leave insurance contracts to be regulated by the parties’ agreements. Furthermore, it was thought to be preferable to first have legal scholars work out the principles of insurance law before it was codified.17 Thus, until the Codice di commercio of 1882, the main legal source for fire insurance law was the insurance policy itself (and with respect to mutual societies their statutes) as well as case law and legal literature. Let us turn first to policies. What were the usual elements of these policies? First of all, they obviously defined the risks covered: usually a fire insurance policy covered damage resulting from fire and lightning. Furthermore, it usually covered damage caused by firefighting. By contrast, policies regularly excluded the coverage of fire damage caused by war, invasions, riots, and earthquake. Even though the open-textured phrase ‘danni occasionati dal fuoco ed etiam dal fulmine del cielo’ (‘damage caused by fire and lightning from the sky’) can often be found in nineteenth century policies, its interpretation was problematic. Literature was in agreement that insurers were only obliged to indemnify the insured if the lightning actually caused a fire. Nevertheless, the interpretation of the phrase led to discussion in the courts as an 1860 case proves. The case concerned a horse that had died of asphyxiation as a result of lightning that struck the insured stable. The horse had suffered of asphyxiation as a direct result of being struck by lightning. Although the lightning did not cause a fire, the Milan commercial court of first instance ruled in favour of the insured party. The court of appeal and the court of third instance, however, held for the insurer. The different judgments stemmed from a different interpretation of Art. 1 of the policy. The court of first instance had argued that the phrase ‘danni occasionati dal fuoco ed etiam dal fulmine del cielo’ (‘damage caused by fire and lightning from the sky’) covered damage caused by fire or lightning. The assumption was that otherwise it would have been superfluous to explicitly mention damage caused by lightning: ‘Qualora si avesse voluto assicurare l’oggetto dal danno occasionato non già soltanto dal fulmine per sé stesso, ma sì bene ed esclusivamente dal fuoco prodotto da quello, si avrebbe usata una dizione equivalente, o quanto meno sarebbesi omessa l’enunciativa del fulmine, supplendovi abbastanza quella del fuoco, qualunque potesse essere la causa o derivazione dello stesso.’18

17

See Luigi Borsari, Codice di commercio del Regno d’Italia annotato, vol. 2 (1869), 674. Filippo Bettini, Giurisprudenza del Regno. Raccolta generale progressiva di giurisprudenza, legislazione e dottrina (1860), 323. 18

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‘If one had wished to insure the object from damage caused exclusively by fire including fire caused by lightning, but not from damage caused by lightning alone, a corresponding phrasing would have been used or, at least, the word “lightning” would have been omitted, being [with this interpretation] only a subset of “fire”, whatever cause […] it may have had.’

The court of third instance adopted a different reading of Art. 1. It noted that the policy always referred to fire as the cause of damage. It concluded that coverage extended only to lightning causing fire and that coverage was excluded in any other case: ‘Le espressioni adunque etiam dal fulmine del cielo valgono bensì ad estendere la promessa dell’assicurazione al caso d’incendio causato da quella meteora […] ma siccome unico e costante effetto del fulmine non è l’incendio, così il qualunque altro disastro che ne derivi a danno anche delle cose assicurate non può dar luogo a compenso.’19 ‘The expression “and from the lightning from the sky” extends the coverage of the insurance to the case of fire caused by a fireball […] but since [in the present case] the lightning did not cause a fire, any other misfortune that results in damage even to the insured property cannot give rise to compensation.’

If the policy restricted coverage to buildings, then damage caused to the ground, wells, and canals was excluded. Furthermore, flammable goods, money, documents, gold, silver, and jewellery were always excluded from coverage.20 Secondly, the policy would include details concerning the policyholder and the date of signature, it identified the insured objects and the insured sum, and it specified the term of the contract (usually one year) as well as the premium. These elements were, as well as any special conditions, usually added in handwriting to the general terms and conditions pre-printed in the policy. As for the insured goods, a detailed description was not necessary. It was sufficient to refer to a species or genus, and it was even possible to insure future objects, such as ‘the horses in my stables’ or ‘goods of any kind stored or to be stored in my warehouses’. This was one of the most evident differences between land and marine insurance: in marine insurance, it was in principle necessary to specify the insured goods, to describe their nature, and to indicate their value.21 The policies burdened the insured with certain duties. He had to disclose whether the same goods were already covered by another insurer, and he had to prove his insurable interest. However, the insured did not have to be the sole owner in order to prove an insurable interest. Commentators pointed out that, for instance, a co-owner or condominium owner, the partners of a civil or commercial society, and agents may have an insurable interest, too.22 In addition, the insured had to act truthfully, 19

Bettini (n. 18), 324. See, e. g., the policy of the Riunione Adriatica di Sicurtà, a company that operated in various Italian regions, reproduced in: Riunione Adriatica di Sicurtà (n. 5), 122 f. 21 See Borsari (n. 17), 680. 22 Cf. Borsari (n. 17), 683 – 689. 20

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and he had to notify the insurer of any changes subsequent to the conclusion of the contract that increased the risk. In the case of an increase of risk, the insurer was entitled to request an increase in premium or, alternatively, to cancel the policy.23 Finally, the policyholder had to act loyally and in good faith. A breach of these obligations led to the nullity of the contract. More specifically, the contract was null and void in cases of non-disclosure, false declaration, and fraudulent omission of risk-relevant factors. In the event of fire, the insured had the duty of ‘non starsene spettatore indifferente dell’incendio della propria casa’ (‘not being an indifferent spectator of the fire in his house’) and of using all means in his power to extinguish the fire and save the insured objects. The policies authorized the insured to incur expenses necessary to extinguish the fire and save the insured objects. However, these expenses should not exceed the value of the objects so saved. The corresponding clause was open to different readings. Academic literature stressed that such a clause should not be interpreted too strictly and that, above all, a breach does not necessarily result in a forfeiture of the right to compensation: ‘Leggerete questa clausola in quasi tutte le formule stampate. Essa va intesa in modo conveniente e discreto. Il naturale istinto ci spinge dapprima a salvare noi stessi e i nostri cari […] Se dimentichiamo di avere degli assicuratori e per loro amore non ci gettiamo in mezzo al fuoco non sarà poi una colpa […] Per quanto niuna delle precauzioni più sottili sia sfuggita all’accorgimento delle compagnie di assicurazione, non ricordo d’aver letto che l’inazione dell’assicurato lo faccia decadere dal diritto della indennità.’24 ‘One is able to find this clause in almost all printed policies. One should adopt an appropriate and moderate reading. Natural instinct urges us first of all to save ourselves and our loved ones […]. If we forget that we have insurers and we do not throw ourselves into the midst of the fire for their benefit, it will not count as fault […]. Although insurers usually take the most subtle precautionary steps in their policies, I do not remember having read that the inaction of the insured makes him lose his right to compensation.’

Literature and case law offered further, often sophisticated, interpretations of the standard clauses included in the policies. When, for example, is it possible to say that damage had been caused by fire? It was argued that the insurers’ liability covered only damage directly resulting from fire (abbruciamento). Indirect damage, such as damage resulting from high temperature, was not covered, especially if no fire was involved. Equally, damage directly caused by human acts was excluded. These were subtle distinctions, borrowed from French literature and case law. By way of example, Luigi Borsari pointed out that an insurer was not liable if heat coming from a boiler heated a wall so that sugar stored in the neighbouring warehouse was damaged.25

23 24 25

See, e. g., the policy of the Riunione Adriatica di Sicurtà. Borsari (n. 17), 711. Borsari (n. 17), 702

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Furthermore, literature and case law offered detailed discussions on the insured’s responsibility for his own acts as well as the acts of his employees and relatives. The policies did not include a clause holding the insured responsible for such acts, and insurers did not try to escape liability by invoking that the insured should be held responsible for such acts. Literature and case law followed similar lines. The Court of Appeal in Venice, for example, held in 1877 that negligent acts by an employee of the insured were covered as, for the building owner, they were simply an accident.26 In this respect, fire insurance (and land insurance in general) differed from maritime insurance. The reason for this difference was explained by Boccardo. In maritime insurance, ‘l’assicuratore non risponde che dei sinistri fortuiti, e non prende a suo rischio il danno proveniente da fatto o colpa dell’assicurato o de’ suoi dipendenti, meno il caso di espressa assunzione della Baratteria. Gli accidenti marittimi sono già abbastanza numerosi, perché, anche ristretto in questi termini, il contratto di assicurazione conservi un immenso campo d’azione. – Ma se si volesse applicare lo stesso principio restrittivo al secondo contratto [assicurazioni terrestri], questo perderebbe quasi tutta la sua efficacia. Per mero caso fortuito ben raro è che accada un incendio; tali sinistri sono, nella grande pluralità dei casi, provocati dalla negligenza o dalla colpa del proprietario o dei suoi preposti. Ciò stante, la convenzione comprende, giusta l’universale consuetudine, e non ostante il silenzio della polizza sull’estensione dei rischi, la garanzia del danno risultante da un fallo dell’assicurato.’27 ‘the insurer is only liable for accidental loss and does not take at its own risk the damage resulting from the acts or fault of the insured or his employees, except in the case of the express assumption of the barratry. Maritime accidents are already numerous enough, so that, even if restricted in these terms, insurance contracts cover an immense variety of cases. – But if the same restrictive principle were to be applied to the second kind of contract [i. e. land insurance contracts], such contracts would lose almost all their efficacy. It is rare for a fire to happen by mere chance; such accidents are, in the great plurality of cases, caused by the negligence or fault of the owner or of the supervisor of the insured object. In view of this, the agreement includes, in accordance with universal practice, and despite the silence of the policy on the extent of risks, the coverage of loss resulting from fault on the part of the insured person.’

Nevertheless, some authors distinguished between fraud, malice, or guilt, on the one hand, and different degrees of negligence, on the other hand. The details were subject to debate. Boccardo, following Fremery, argued that the insurer was free only if the insured’s fault was so serious that it can be said that he had acted almost wilfully.28 Borsari, by contrast, referred to Art. 466 of the 1865 Codice di commercio, according to which the insurer was not liable for damage caused by the fault or act of the owner: 26

Azienda assicuratrice di Trieste v. Lanificio Rossi, 30 May 1877, (1877) 18 Monitore dei tribunali 707. 27 Boccardo (n. 14), 200. 28 Boccardo (n. 14), 201, following A. Fremery, Etudes de droit commercial (1833), cap. XXXIX, 342 – 349

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‘Gli assicuratori non rispondono dei cali, delle diminuzioni e delle perdite che provengono da vizio inerente alla cosa, nè dei danni cagionati dalla colpa o dal fatto dei proprietari.’ ‘The insurers are not liable for shrinkage, decrease and loss that result from an inherent defect, nor for damage caused by the fault or by the act of the owners.’

He further relied on Arts. 1151 f. of the 1865 Codice civile, according to which the decision is left to the judge: ‘I giudici diranno se l’incendio abbia la sua vera causa nella colpa dell’assicurato o se questa non possa considerarsi che come una concausa secondaria e senza una importanza decisiva nel fatto dell’incendio.’29 ‘The judges will decide whether the fault of the insured was the true cause of the fire or whether it can only be considered to have been a negligible cause without crucial importance for the occurrence of the fire.’

Finally, literature discussed further problems in detail. As mentioned above, a policyholder needed to have an insurable interest in the insured object. Literature identified those who had an insurable interest without being the owner: co-owners, condominium owners, partners of civil or commercial societies, agents, guardians, administrators, and others.30 The position taken by Italian literature partly deviated from that adopted in jurisdictions north of the Alps. Often literature applied by way of analogy the provisions of the 1865 Codice di commercio on maritime insurance. Commentators, for example, argued in favour of applying Art. 456 to fire insurance as relating to the possibility to insure the premium paid and to reinsurance.31 III. The Codice di commercio of 1882: between innovation and tradition The fire insurance sector had seen considerable growth since the unification of Italy. Urbanization, new buildings, the use of gas for lighting and heating, the use of steam-engines in factories, and the inadequate number of firemen (firefighting services extended to only 5 % of the national territory) increased the risk of fire and thus functioned as a catalyst for growth.32 Against this background, it does not come as a surprise that the legislature finally decided to cover fire insurance in the 1882 Codice di commercio. Book II on maritime trade still only included maritime 29

Borsari (n. 17), 701. In detail, see Borsari (n. 17), 683 – 699. 31 On reinsurance and its distinction from double insurance, the latter being (just like in France) forbidden, see Borsari (n. 17), 681. 32 In 1894, 26 mutual societies, 16 Italian companies, and about 10 foreign companies operated in fire insurance, see De Simone (n. 7), 36 f. Even though the number of firefighters started to increase, firefighting was at first organized on the municipal level. It was only in 1935 that the statutory basis for organizing firefighting on the national level was enacted. The Corpo Nazionale dei Vigili del Fuoco then replaced the municipal corps. Fire insurance companies had to contribute to the maintenance of the Corpo Nazionale with 2 % of their premium income. Cf. Regio Decreto legge 10 ottobre 1935, n. 2472. 30

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insurance. However, Book I dedicated within Title 14 a complete section to terrestrial insurance, with five articles on fire insurance (Arts. 441 – 445).33 Just like in 1865, the first problem that needed to be addressed in the drafting process was where to include insurance law: in the civil code or the commercial code. It was clear that offering premium insurance with the intention to make a profit was a commercial activity and therefore had to be included in the Codice di commercio. However, the picture was less clear with mutual insurance societies. ‘Ognuno dei soci è pertanto assicuratore ed assicurato nello stesso tempo e come l’assicurato […] non si propone mai una speculazione, non fa atto commerciale, così l’assicuratore per mutua associazione non fa mai atto di commercio, ma bensì un atto di vicendevole assistenza e beneficenza reciproca, senza ombra di guadagno qualsiasi.’34 ‘Each member is thus, at the same time, both insurer and insured, and just as the insured […] never acts for the purpose of making a profit and thus never engages in a commercial activity, so too does the insurer in the form of a mutual society never act commercially; rather, the insurer performs acts of mutual assistance and mutual charity, without any sign of making a profit whatsoever.’

Accordingly, the ministerial draft (progetto ministeriale) presented in June 1877 to the Senate by Mancini with the approval of Salvatore Majorana Calatabiano (then Ministro dell’Agricoltura, Industria e Commercio) included a provision according to which ‘le assicurazioni terrestri mutue non sono atti di commercio, se non quando riguardano oggetti o stabilimenti di commercio’35 (‘mutual land insurance is not an act of commerce except when it concerns commercial objects or establishments’). However, this provision did not appear in the final text, and fire insurance remained within the scope of the new Codice di commercio. The 1882 Code was based on previous insurance practice and the case law, but it was also inspired by foreign legislation, especially the Belgian insurance act of 1874. The 1882 Code included general provisions on non-life insurance (defining, for example, the essential elements of the contract, the insurable value, and instances of the nullity of the contract) and special provisions on fire insurance. According to the 1882 Code, fire insurance covered all damage caused by fire regardless of its cause, including damage resulting from unforeseeable circumstances and force majeure as well as damage caused by gross negligence on the part of persons for whom the insured was civilly liable. In addition, and contrary to Art. 434 from Title 14, chapter 1 on Disposizioni generali, the insurance extended 33 The Codice di commercio has not been in force since 1942. Consequently, the current Codice civile does not specifically regulate fire insurance, which thus remains subject to the general policy conditions as adopted by the companies. 34 Antonio Scevola, Il codice di commercio. Commento libro primo, titolo XIV. Del contratto di assicurazione in: Nuovo Codice di commercio italiano. Testo – Fonti – Motivi – Commenti – Giurisprudenza (1889), 14. For the parliamentary debate, see Atti Parlamentari – Camera dei deputati, leg. XIV – I sessione Discussioni, tornata 21 gennaio 1882. 35 Art. 5 of the Progetto del codice di commercio del Regno d’Italia (1877).

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to damage caused by defects in the insured building itself, unless it could be proved that the insured was aware of them at the time the contract was concluded. Consequently, it was only damage resulting from the gross negligence of the insured person or, unless otherwise agreed, from war and turmoil that was excluded from coverage (Art. 441 and Art. 434).36 The insurer only had to indemnify damage to the insured property itself: according to Arts. 435, 441, and 444 f., the insured received compensation only for danni materiali that was an immediate and direct consequence of the fire, and the insurer had to pay the difference between the value of the insured property before the loss and the value remaining after it. The legislature thereby followed insurance policy practice from the time before the 1882 Code, according to which the insured person was not to be compensated for consequential loss resulting from the loss of property, such as a loss of profits due to the impossibility of renting out the lost property. Article 442 provided a list of further losses which were recoverable: ‘Sono parificati ai danni d’incendio, se non vi è convenzione contraria: 1. i danni derivati alle cose assicurate dall’incendio avvenuto in altro prossimo edificio o dai mezzi impiegati per arrestare o per estinguere l’incendio; 2. le perdite e i danni avvenuti per qualunque causa durante il trasporto delle cose assicurate eseguito allo scopo di sottrarle ai danni dell’incendio; 3. i danni derivati dalla demolizione dell’edificio assicurato eseguita allo scopo di impedire o di arrestare l’incendio; 4. i danni prodotti dall’azione del fulmine, dalle esplosioni od altri simili accidenti, ancorché non ne sia derivato incendio.’ ‘Unless otherwise agreed, the following positions are treated as loss resulting from fire: 1. damage to the insured property caused by a fire in another nearby building and damage inflicted to the insured property in order to stop or extinguish such fire; 2. loss and damage that occurred from any cause to the insured objects during their transport in order to remove them from a fire site; 3. damage resulting from the demolition of the insured building carried out in order to prevent or stop a fire; 4. damage caused by lightning, explosions, or similar events even if no fire has resulted from such event.’

Article 442 did not fully mirror the position taken either in insurance practice or in case law and literature, as becomes obvious from the treatment of lightning.37 Such modifications of insurance practice were introduced for the better protection of the insured.38 Nevertheless, Art. 442 was a non-mandatory provision. Other provisions reflected such pre-1882 insurance practice: according to Art. 443, for example, insurance coverage started at noon of the day after the signing of the policy, unless otherwise agreed; and the recoverable loss was quantified by com-

36 These provisions were in accordance with Art. 33 of the Belgian Loi sur les assurances of 11 June 1874 and the Hungarian Code of 1875. The rationale behind the provisions was discussed in the drafting process. See Cesare Vivante, Il contratto di assicurazione, I, Le assicurazioni terrestri (1885), 247. See also Ercole Vidari, Il nuovo codice di commercio compendiosamente illustrato coi motivi di esso (2nd edn., 1884), 403. 37 See the text corresponding to n. 18 f., above. 38 Vivante (n. 36), 246.

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paring the value of the insured building before and after the fire had occurred (Art. 444). IV. The 1882 Codice di commercio and insurance policies in the courtroom In order to fully understand the development of fire insurance law in Italy, it is not enough to simply analyse the 1882 Code. Its interpretation by the courts and the effects of such interpretation on the policy practices is of utmost importance. I would like to present two examples. At the outset of the discussion, it should be noted that after the 1882 Code was enacted, a standard policy was drawn up by the Concordato Italiano Incendio Rischi Industriali in 1884.39 The first example concerns riots. In 1933, the Corte suprema di cassazione had to decide on the interpretation of a clause that exempted insurers from payment in the event that a fire was caused by a riot. Such clauses were regularly included in policies. Up until the end of World War I, they had not given rise to particular problems of interpretation. Things started to change in the turbulent post-war period and especially in the years corresponding to the rise of the fascists, when rival political parties clashed often and frequently violently. In these years, despite often being called upon to construe such clauses, the courts were typically unable to reach a satisfactory or generally accepted interpretation. The judiciary faced the problem that the wording of these policy provisions differed from that used by the 1882 Code. Furthermore, insurers did not, despite the trend towards standardization, use identical policy provisions; instead, their wording exhibited great variances. Art. 434(3) of the 1882 Code spoke of sollevazioni populari (popular/national uprising), whereas insurers used expressions such as ‘riots’, ‘popular uproar’ or ‘uproar for the purpose of devastation’. Even though similar in their general idea, these different wordings exhibited nevertheless subtle differences. As a consequence, courts took diverse approaches to interpreting these policy clauses. For some courts, a single and isolated violent act was enough to exempt the insurer from his liability. For other courts, the riots must have resulted in a paralysis of the public authorities such that it was impossible for them to intervene. Again other courts held that the insurer was exempted only if it involved a ‘movimento insurrezionale, dilagante e coinvolgente una folla eterogenea, con il fine della ribellione all’Autorità e della violenza contro quanto è protetto dall’ordine giuridico.’40 ‘movement that is riotous and rampant and that involves a heterogeneous crowd, with the aim of rebellion against authorities, and that involves violence against what is protected by the legal order.’

39

On the Concordato, see in detail Furfaro, pp. 132 ff., especially pp. 139 f., below. Paolo Greco, Corte di Cassazione del Regno, sez. II, 9 dicembre 1933: Confederazione Nazionale Sindacati Fascisti v. Riunione Adriatica di sicurtà, (1934) 2 Assicurazioni 83 f. 40

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It was this narrow understanding which the Corte suprema di cassazione adopted in 1933. The second example concerns earthquakes. Policies often excluded fires that were directly caused by an earthquake from coverage. There were many difficulties in interpreting the policy clauses regulating earthquakes even if, at first sight, they were easy to resolve. This is demonstrated by two judgments, one from the Tribunale di Messina and the other from the Tribunale di Milano. Within less than a year, both courts adopted opposite interpretations.41 The judgment of the Tribunale di Messina of 1909 concerned the aftermath of the 1908 Messina earthquake. On 28 December, the earthquake almost completely destroyed the city and surrounding region and caused around 80,000 casualties. The insured’s house had survived the earthquake intact, but in early January it suffered from fire damage. The insurer, the Assicurazioni Generali di Venezia, refused to adjust the insured’s claim arguing (1) that the fire was the result of the earthquake: the fire had brooded in the surrounding ruins since the night of the earthquake, even though it developed later; (2) that the basis of the insurance contract had fallen away as a result of the disaster: devices necessary for rescue had also been destroyed; and (3) that the insured persons had not warned the insurer of the increased fire risk; furthermore, the insured had not notified them of the accident as required in the policy; finally, the insured had not tried to prevent the fire from spreading or to extinguish it as provided for in the policy. However, the Tribunale di Messina held for the insured, stating (1) that the exclusion clause required the insurer to prove that the fire was caused by the earthquake, which Assicurazioni Generali had not sufficiently done; (2) that the increase of risk resulting from unforeseeable circumstances or force majeure remained the responsibility of the insurer – the court referred to French case law from the years following the 1870 war; French courts had interpreted the exemption from war risks in a restrictive way; and (3) that the insured was not at fault as it was physically impossible for him to have knowledge of the fire; in fact, the insured had received an order from the military authorities to leave Messina immediately after the earthquake.42 In 1910, the Tribunale di Milano arrived at the opposite conclusion in a similar case, following the opinion of two eminent jurists, Giorgio Arcoleo and Carlo Fadda. It ruled in favour of the insurers, stating that the fire was a consequence of the earthquake and that, in any case, the exceptional nature of the event had ipso facto led to the termination of the contract due to a radical change in the insured risk. 41 Tribunale di Messina, 12 agosto 1909, Costarelli v. Assicurazioni Generali di Venezia; Tribunale di Milano, 12 marzo 1910, Siracusano v. Società anonima cooperativa italiana per l’assicurazione contro l’incendio, (1910) Foro italiano 454 – 470. 42 Furthermore, a decree of 1 January 1909 suspended any limitation period and all other time limits, both legal and conventional.

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V. A paradigm shift in 1942 1942 then saw yet another paradigm shift. With the promulgation of the 1942 Codice civile, the Codice di commercio was abrogated. The 1942 Code includes provisions on insurance contracts, but it abstains from including specific provisions on fire insurance, leaving the specificities of fire insurance contracts again to the conditions of the insurers’ standard policies. B. The collaboration between fire insurance companies on the Italian Peninsula before and after the national unification By Federica Furfaro I. The beginnings of fire insurance in pre-unification Italy . . . . . . . . . . . . . . . . . . . . . . . 1. A first Tyrolean initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Obstacles, shortcomings, and mistrust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. The breakthrough . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Nineteenth-century fire disasters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. The Concordato between Italian fire insurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Origins, aims, and sources of inspiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. The original Concordato of 1842 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Different stages of development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) A constitutive phase (1842–1844) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) A test phase (1845 – 1872) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) A phase of suspension (1873 – 1883) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) A phase of consolidation (1884 to mid-twentieth century) . . . . . . . . . . . . . . . . . III. The Concordato and the development of fire insurance . . . . . . . . . . . . . . . . . . . . . . . . 1. Achievements … . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. … and presumed merits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124 126 126 130 131 132 133 135 137 137 137 138 139 139 140 141 142

I. The beginnings of fire insurance in pre-unification Italy The development of fire insurance in the Italian territories reflects a more general phenomenon: the ‘lungo e farraginoso processo di recupero del terreno perduto e di convergenza’ (‘long and confused process of recovery of lost grounds and of convergence’).1 This general process started at the end of the Napoleonic Wars and then, step by step, pushed the pre-unification Italian states towards the model of other European nations. The economic revival on the Italian Peninsula – together with structural, political, and legislative factors – was undoubtedly one of the main driving forces behind these developments. Therefore, the revived trading with the 1

SwissRe Corporate History, La storia delle assicurazioni in Italia (2013/2017), 15.

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most economically thriving European regions laid the foundations for the development of an insurance sector in Italy’s main urban centres: beginning in the 1820s the first modern insurance companies were set up, following the example of European nations that were more advanced in the insurance sector. Consequently, insurance branches other than the traditional marine insurance sector (in particular, life, fire, and hail insurance) began to take root in the Italian states already prior to the national unification, and this development ran parallel to the above-mentioned general process. In particular, the progress of fire insurance on the Italian Peninsula ran parallel to economic growth. Italy experienced a modern economic and industrial development with significant delay compared to other nations, including first and foremost England. It was thus not by chance that the first private fire insurance companies were founded in London, shortly after the Great Fire of 1666. However, the first public fire insurance scheme was the famous Hamburger Feuerkasse of 1676, which covered only immovable property and which is the oldest insurance scheme still operating today.2 Finally, it should be noted that the fire insurance sector often developed later than other insurance branches, such as transport insurance (especially marine insurance) and even life insurance. This was the case not only in Italy but also in other countries such as France.3 In pre-unification Italy, the beginnings of fire insurance can be traced to the territories subject to the House of Austria, followed shortly thereafter by the Kingdom of Sardinia. These first schemes shared one important characteristic: the particular attention of sovereigns for the nascent fire insurance sector that translated into crucial government support at least in the initial start-up phase. In the Habsburg domains, for example, the establishment of private fire insurance schemes was expressly permitted with the sovereign regulation of 4 September 1819.4 The first of these initiatives, which were usually introduced by small groups of promoters, generally concerned the establishment of mutual fire insurance societies, whose members thus had the role of insurer and insured, sharing the aim of protecting private property and personal goods, but not commercial products.5

2

Riccardo Mainardi, Le assicurazioni incendi (2nd edn., 1922), 4. Bruno Caizzi, Assicurazione ed economia nell’età moderna, in: ANIA – Associazione nazionale fra le Imprese Assicuratrici (ed.), L’assicurazione in Italia fino all’Unità. Saggi storici in onore di Eugenio Artom (1975), 355 – 435, 401. See also Deroussin, pp. 143 ff., below. 4 Max Leimdörfer, 100 Jahre Donau-Versicherung 1867 – 1967 (1967), 5; Luciano Giulio Sanzin, Cent’anni di accordi fra le compagnie italiane nelle assicurazioni incendio (1942), 12. 5 Mario Riberi, Economia nazionale e mercato assicurativo dall’unità d’Italia alla Seconda Guerra Mondiale, (2013) 4 Quaderni dell’Associazione Reale Mutua 3 – 17, 5. 3

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1. A first Tyrolean initiative The approval of the Austrian Emperor Franz I was crucial for the launch of the first mutual fire insurance society, the Ente assicurativo contro gli incendi per il Tirolo – Feuer-Versicherungs-Anstalt für Tirol (Tyrol Fire Insurance Association). It was set up as a private initiative by the Tyrolean guilds. Contrary to the negative opinion issued by the Viennese Chancellery, the Emperor approved its constitution with a rescript of 5 October 1821. Shortly after, the drafting of its statutes began. After a first version drafted in the same year by Count Karl Chotek von Chotkow und Wognin, Governor of Tyrol and Vorarlberg, the final version of the statutes was approved and published by government circular on 15 March 1823.6 On 10 February 1825, the association finally started its business as Ente assicurativo contro gli incendi del Tirolo e Vorarlberg (Tyrol and Vorarlberg Fire Insurance Association). It was designed to insure buildings only. This private and non-profitmaking institution was run by the guilds and governed by the principle of mutuality. Membership was voluntary. Probably thanks to Chotek, it operated in the whole of Tyrol, the Italian Trentino, and Vorarlberg. In 1829, it further expanded its activities to Liechtenstein which is historically linked to the Austrian Empire.7 2. Obstacles, shortcomings, and mistrust Beyond the Tyrolean example, the first fire insurance companies in pre-unification Italy encountered mixed success due to technical, financial, and bureaucraticlegal shortcomings.8 The first problem was the lack of actuarial expertise: in the early days of the fire insurance industry, insurers could obviously not rely on a wellfounded statistical experience. For this reason, the attempts undertaken by the

6 See the website of the Tiroler Versicherung: www.tiroler-versicherung.it/Unternehmen/ TIROLER-Geschichte (accessed on 26 February 2020). Karl Chotek von Chotkow und Wognin (1783 – 1868) studied law in Vienna and Prague and began his administrative career in Moravia and Trieste. With the Restoration he was promoted Governor General of Naples, a position he held until 1819. He then moved to Tyrol, where he played a decisive role, especially for the cultural development. Later, he became Hofkanzler (Court Chancellor) and president of the Studienhofkommission (Courtly Studies Committee): government circular of 25 May 1825, n. 8457 – 2176: Raccolta delle leggi ed ordinanze dell’anno 1825 per la Dalmazia (1828), 128, number 85. He ended his career as Privy Councillor (Geheimer Rat) and Supreme Burgrave (Oberstburggraf) of Bohemia, a position he held from 1826 to 1843. See Adam Wolf, Graf Karl Chotek, geheimer Rat und Oberstburggraf von Böhmen (1783 – 1868). Ein Lebensbild (1868), 6 – 8; Chotek Karl Graf, Staatsbeamter, in: Österreichisches Biographisches Lexikon, 1815 – 1950, vol. 1 (1957), 146. 7 Following the annexation of parts of Tyrol by the Kingdom of Italy after World War I, the association was divided up into different societies that still today operate in the fire branch: Tiroler Versicherung and ITAS Mutua. 8 SwissRe Corporate History (n. 1), 20.

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Habsburg governments of Parma and Mantua to set up compulsory insurance against fire had failed. They had incorrectly calculated the premiums.9 However, even greater were the financial challenges. It proved to be difficult for the first fire insurance companies to collect the capital necessary for their establishment and to set aside sufficient reserve funds. The 1822 plan to establish in Venice the Società di mutua assicurazione contro il danno degli incendi (Mutual Fire Insurance Society) may serve as an example. It is most likely that the plan did not materialize because it did not attract sufficient subscriptions. The plan had specified that it was necessary to collect subscriptions for an insured value of 50 million for the company to start its activities.10 The fact that the Venetian initiative was a failure follows from the observation that it is not mentioned in subsequent reviews of the fire insurance sector.11 However, the plan stands out for its earliness in pre-unification Italy. Francesco Rivierre was the society’s main promoter and its first designated director. He had covered the costs for establishing the society and the initial administration costs, which were set at 0.025 % of the total insured value.12 The society was designed to insure private buildings. Primarily, it was the owners of such buildings that could join the society. However, anybody who could suffer damage from a house being on fire was able to become a member, such as tenants and mortgagees, provided that they complied with all the requirements set out in the society’s rules.13 Tenants were allowed to seek insurance only with the prior consent of the owner of the building. Theatres and other public places used for performances could, in principle, not be insured. However, there could be exceptions, established by agreement with the society’s board of directors. Moreover, fires caused ‘da invasioni, da sommosse civili, o da forza militare’ (‘by invasions, civil uprisings, or military force’) were expressly excluded from coverage, as the company was obliged to compensate only for damage caused by accidental fires.14 This was a clause commonly found in fire insurance policies. 9

Sanzin (n. 4), 12; Riberi (n. 5), 5. Regolamento, in: Piano e regolamento della società di mutua assicurazione contro il danno degl’incendii (1822), 9 – 20, 10 and 19. The plan does not specify the currency, but it was most likely the currency in circulation at the time, i. e., the Austrian lira. When compared with the fund of other contemporary companies, the amount seems to be unrealistically high: it thus likely reflects a calculation error. 11 See the (not entirely exhaustive) list produced by Vincenzo Di Renzo, an engineer employed by the Compagnia di assicurazione di Milano. He listed the companies in chronological order in five periods (1825 – 1894; 1895 – 1914; 1915 – 1918; 1919 – 1922, and 1923 – 1929). He further subdivided his list according to the insurers’ nationality and corporate form. There are no traces of the Venetian mutual society in his list: Vincenzo Di Renzo, Note e ricordi sullo svolgimento tecnico dell’assicurazione dei rischi d’incendio (1895 – 1929) (1932), 7 – 10. See also Mainardi (n. 2), 4; Caizzi (n. 3), 401 – 403. 12 Regolamento (n. 10), 19, Art. 42. 13 Regolamento (n. 10), 11 f, Art 9 f. 14 Regolamento (n. 10), 9, Art. 2. 10

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The promoters of the society were aware of its pioneering and experimental nature. They made no secret of the problems and uncertainties they had encountered when developing their plan. They had tried to deal with them by compiling as detailed as possible guidelines for the functioning of the society, and initially they had proceeded with purely exploratory intent. In order to test the project and not to oblige interested parties to make payments right away, they first collected subscriptions only for reserving the right to shares. It was planned to implement the project only when these reservations had reached the envisioned 50 million of insured capital.15 Despite the fact that it was a purely private initiative, governmental approval was sought from the outset, and in fact the published plan expressly referred to such approval granted by the ‘Governo illuminato, al quale niente sfugge di quanto contribuir può al ben essere dei Cittadini’ (‘enlightened Government, from which escapes nothing as to how it can contribute to the welfare of the citizens’).16 The features of the enlightened Habsburg dirigisme are well recognizable: since the eighteenth century, the sovereigns had actively promoted the establishment of insurance companies in the territories of the House of Austria, as the example of the free port of Trieste proves.17 Accordingly, the government had the power to inspect and supervise the society’s administration.18 The society’s activities were not limited to offering insurance. In addition, the promoters set themselves the ‘scopo nobilissimo’ (‘very noble aim’) of encouraging citizens to watch out for fire,19 as Art. 11(2) of the statute proves:20 ‘Chiunque non avendo interesse porterà il primo alla Commissione Provinciale l’annuncio di un qualche incendio in uno stabile assicurato, riceverà una ricompensa a seconda di quanto verrà fissato dai regolamenti disciplinari della Presidenza’. ‘Whoever, while not himself having an interest [in the building], first notifies the Provincial Commission of a fire in an insured building will receive a reward according to what will be established by the regulations enacted by the board of directors’.

15 Piano disciplinare, in: Piano e regolamento (n. 10), Cenni preliminari, 5 – 8, 6; Regolamento (n. 10), 10, Art. 6. 16 Piano disciplinare (n. 15), 5. 17 The constitutive general meeting of the first Compagnia di Assicurazione in Trieste was held on 1 and 2 October 1766. Maria Theresia had supported the initiative, which she considered of vital importance for the future of the young marketplace in Trieste, by, for example, granting considerable tax privileges: see Federica Furfaro, Verso la codificazione del diritto marittimo mediterraneo: nel cantiere dell’Alto Adriatico di fine Settecento, (2017) 12 Historia et ius. Rivista di storia giuridica dell’età medievale e moderna 1 – 43, 18 (paper no. 7). 18 Regolamento (n. 10), 16, Art. 32; Piano disciplinare (n. 15), 7. 19 Piano disciplinare (n. 15), 6. 20 Regolamento (n. 10), 12, Art. 11.

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In order to make insured buildings immediately recognizable to anyone, fire marks were to be attached to them.21 However, the preventive measures taken by the society were not limited to insured buildings. The promoters of the society intended to take appropriate steps for the general prevention of fire. Accordingly, one of the directors’ obligations was to consult with public authorities as to what measures should be taken to avoid the danger of fire and prevent criminal offences as well. And indeed, the society’s statute made reference to the Austrian Gesetzbuch über Verbrechen und schwere Polizey-Übertretungen (Criminal Code) of 1803.22 After the Restoration, the 1803 Code had been translated into Italian as it was applicable in the Italian territories subject to Austrian rule.23 Articles 184–209 of the Code, for example, penalized – with the tendency for detail typical of the Habsburg legislator and adopting clear distinctions based on the status of offenders – any act in breach of the provisions aimed at avoiding the danger of fire.24 Article 208 corresponded to the society’s statutes, thereby establishing fines commensurate with the circumstances of the case, especially the risk caused by anyone, ‘chi cerca di occultare un incendio nel suo nascere, o chi omette di denunciare un incendio, che si manifesta presso di lui’ (‘who tries to conceal a fire in its origin, or who fails to report a fire, which manifests itself to him’). The fate of the Venetian society was shared by the Lombard Società mercantile di assicurazione dei rischi terrestri (Terrestrial Insurance Company), which was planned only a year later, in 1823. It intended to insure, in addition to buildings, also goods in storage or in transit. Furthermore, it planned to offer crop insurance. Even though the Lombard society aimed to offer coverage against more heterogenous risks than the Venetian society, its capital was supposed to be much smaller (one 21

Regolamento (n. 10), 18, Art. 38. Regolamento (n. 10), 20, Art. 44. 23 On the Austrian Criminal Code of 1803, its genesis and its main characteristics, see Ettore Dezza, Saggi di storia del processo penale nell’età della codificazione (2001) 241. See also Sergio Vinciguerra (ed.), Codice penale universale austriaco (1803), (2001); Loredana Garlati, Nella disuguaglianza la giustizia. Pietro Mantegazza e il Codice penale austriaco (1816), (2002); Aldo Andrea Cassi, Negare l’evidenza e aver salva la vita. Codice penale e tribunali speciali nei processi contro la Carboneria bresciana, in: Pio Caroni and Ettore Dezza (eds.), L’ABGB e la codificazione asburgica in Italia e in Europa (2006), 317 – 338; the contributions in chapter 5 of Wilhelm Brauneder and Milan Hlavacˇ ka (eds.), Bürgerliche Gesellschaft auf dem Papier: Konstruktion, Kodifikation und Realisation der Zivilgesellschaft in der Habsburgermonarchie (2014), 327 – 436; Chiara Valsecchi, Criminali o eroi? Processi politici in Veneto nell’ultimo dominio austriaco (1860 – 1866), in: Floriana Colao et al. (eds.), Giustizia penale e politica in Italia tra Otto e Novecento. Modelli ed esperienze tra integrazione e conflitto (2015), 351 – 384. 24 Codice penale universale austriaco coll’appendice delle più recenti norme generali, vol. 2 (2nd edn., 1815), 58 – 64, Art. 184 – 209. While architects, master builders, stove manufacturers, and master chimney sweepers were punished with a fine (and in the event of repeated offences with a ban from the profession), labourers and servants were punished with arrest (and in the event of repeated offences with corporal punishment too). Those acts which were regarded as being most dangerous were sanctioned with particular severity and without any distinction based on the offender’s status. 22

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million florins or 2,6 million Austrian liras). The initiators of the Lombard society foresaw the problem of finding enough subscriptions: unlike their Venetian colleagues, they planned to implement the society once they had secured subscriptions for at least half of the capital. Nevertheless, the initiative was never put into effect.25 These two failed projects prove the difficulty of raising the necessary capital which the initiators of the first fire insurance societies faced. To a large extent, this was caused by a mistrust of securities, since the Italian credit system still favoured real estate as security. More generally, the shortage of capital was one of the main obstacles to the economic development of pre-unification Italy, and it was primarily attributable to this mistrust.26 In addition to these financial difficulties, the initiators met with further challenges, e. g. bureaucratic obstacles. Especially the communication between the private promoters of these initiatives and public authorities proved to be problematic. Furthermore, there were legal problems: a regulatory framework was still missing. The first insurance societies tended to fill this legal lacuna by publishing detailed regulations, plans, or statutes. Finally, the private initiators of mutual societies often applied for privileges, such as a monopoly, but public authorities rejected such requests as they wanted to encourage the establishment of commercial companies without privileges of any kind.27 These problems demonstrate the difficulty of giving a precise legal form to insurance, which is largely modelled on practice. 3. The breakthrough The beginnings of an Italian fire insurance industry, based on the modello economico-attuariale of Lloyds of London, may be located in Trieste and Milan.28 A few decades after the emergence of fire insurance, the newly established companies had installed a system of agreements for an amicable cooperation – this system of agreements will be the focus of the second and third parts of the present contribution. Trieste made the start. This city had witnessed already in 1795 a first, unsuccessful, attempt to establish a fire insurance business. Subsequently, in 1822, the Azienda Assicuratrice was founded and started operating in Trieste.29 In Lombardy, the Compagnia di assicurazione di Milano was set up on 24 July 1825. It was established on the initiative of well-known traders and forwarding 25

Caizzi (n. 3), 402. Riberi (n. 5), 4; Caizzi (n. 3), 402 f. 27 The problems faced by the Milan Società de’ compensi vicendevoli contro i danni della grandine (Hail insurance company), established in 1824 by Angelo Petracchi, may serve as an example, see Caizzi (n. 3), 403 – 407. 28 Riberi (n. 5), 5. 29 See Francesco Basilio, Le assicurazioni marittime a Trieste (1911), 33; Giuseppe Stefani (ed.), Il centenario delle Assicurazioni Generali: 1831 – 1931 (1931), 39; Riunione Adriatica di Sicurtà (ed.), Nel primo centenario della Riunione Adriatica di Sicurtà (1838 – 1938) (1939), 35; Sanzin (n. 4), 10. See also Fortunati, p. 111, above. 26

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agents, such as Giuseppe Marietti, Giuseppe Negri, Felice Quinterno, and Giulio Mylius. It was not limited to the fire insurance sector but operated also in the life insurance branch and in the annuity business.30 It quickly became the single most important commercial company that operated in Lombardy at the time of the Restoration.31 There were two reasons for its success. On the one hand, it had substantial capitalization, with 40 % of its share capital being allocated to the fire insurance business and the remaining 60 % to the life insurance business.32 On the other hand, it proved to have developed sophisticated insurance techniques. In the same year, fire insurance took root also in Naples with the Compagnia di Assicurazioni reciproche contro gli incendi. However, it was not a success, and the companies from Trieste and Milan quickly absorbed the southern Italian insurance market.33 In 1828, the fire insurance branch took root in the Kingdom of Sardinia with the establishment of the Reale Società di Assicurazione Generale e Mutua contro gli incendi (Reale Mutua). It was founded with approval of King Carlo Felice (hence the use of the word Reale, Royal, in its name). In the case of the Reale Mutua, the sovereign’s permission was as important as in the Tyrolean case. King Carlo Felice was also the first policyholder, having bought coverage for his residence Palazzo Chiablese,34 thereby creating trust in the society. The Reale Mutua had a monopoly. Nevertheless, only five years later the Compagnia Anonima di Assicurazione di Torino (Toro) was established, which also offered fire coverage.35 Furthermore, French companies, the Compagnia di assicurazione di Milano, and the Assicurazioni Generali Austro-Italiche (established in Trieste in 1831) were active on the Savoy insurance market.36 4. Nineteenth-century fire disasters In addition to the aforementioned factors influencing the development of fire insurance in nineteenth-century pre-unification Italy, we must not forget the im30 Compagnia di assicurazione di Milano (ed.), La Compagnia di assicurazione di Milano nel 1258 anno della sua fondazione, 1825 – 1950 (1950). See also Mainardi (n. 2), 4; Caizzi (n. 3), 407 f.; Riberi (n. 5), 5. 31 See Mainardi (n. 2), 4; SwissRe Corporate History (n. 1), 15; Caizzi (n. 3), 407. 32 80 % of all shares were registered shares; the remaining 20 % of the shares were bearer shares, see Caizzi (n. 3), 408. 33 Sanzin (n. 4), 13. 34 Mario Riberi, Lo sviluppo dell’attività assicurativa in Italia dall’inizio del XIX secolo alla prima guerra mondiale, in: Paolo Garonna (ed.), Assicurare 150 anni di Unità d’Italia. Il contributo delle assicurazioni allo sviluppo del Paese (2011), 23 – 66; Riberi (n. 5), 5 f. 35 On the Turin companies, see Fortunati, pp. 112 ff., above. 36 Di Renzo (n. 11), 9. In addition, see Stefani (n. 29); Roberto Rosasco (ed.), Il tempo del Leone: il lungo viaggio delle Assicurazioni generali dal 1831 al terzo millennio (2015); SwissRe Corporate History (n. 1), 16.

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portance of fire catastrophes which, on the one hand, drew to everyone’s attention the usefulness of fire insurance, but which, on the other hand, proved to be a great challenge to the newly founded societies and companies. The Tyrolean case is the most emblematic: as wood was notoriously used in Tyrol as the main building material for housing as well as for agricultural buildings, frequent fires were a real scourge. On 16 April 1825, only two months after the Tyrol Fire Insurance Association had been established, a major fire destroyed 72 buildings in Lienz, seriously questioning the future of the young insurance company. But the Lienz fire was only the beginning: throughout the second half of the nineteenth century until the beginning of the twentieth century, there was a wave of great fires destroying at times entire towns in Trentino and South Tyrol. It was possible to rebuild these towns only thanks to the compensation paid by the Fire Insurance Association, which was, as a result, able to gradually consolidate and strengthen its portfolio.37 In Lombardy, a huge fire destroyed half of Saronno in 1827, strongly drawing the attention of property owners to the opportunity of buying coverage against the risk of fire. A similar development had occurred two centuries earlier in London. The Great Fire in 1666 had induced Nicholas Barbon (1637/1640 –1698/9) to take the problem of fire seriously. Even though he had received medical training, he became the pioneer of fire insurance in England.38 Furthermore, after the 1666 fire, an attempt was made to minimize the risk that a fire would spread to other buildings by promoting the replacement of traditional wooden houses with more solid stone buildings.39 II. The Concordato between Italian fire insurers Turning to the legal sphere, three factors contributed to the development of Italian fire insurance legislation: first, the expansion of fire insurance companies as outlined above40 and, in conjunction with this, the advancement of fire insurance practice. Secondly, there were agreements between the different competitors in the fire insurance branch heavily influencing the further evolution; the first such agreement was the Concordato tariffario nel ramo incendi (Tariff Agreement in the Fire Insurance Sector), dating back to 1842. Finally, there was the development of Italian national codifications, leading up to the Italian Codice di commercio of 1882, which included provisions relating to fire insurance contracts. In the re37

The fires are listed on the website of Tiroler Versicherung (n. 6). See also the historical overview on the website of ITAS Mutua: www.gruppoitas.it/storia (accessed on 26 February 2020). 38 Peter George Muir Dickinson, The Sun Insurance Office 1710 – 1960. The history of two and a half centuries of British insurance (1960), 7; Roy Porter, London. A social history (1998), 100; Elizabeth McKellar, The birth of modern London. The development and design of the city 1660 – 1720 (1999), 42 – 51; Richard D. Sheldon, Barbon, Nicholas, in: Oxford Dictionary of National Biography (2008), www.oxforddnb.com/view/10.1093/ref:odnb/ 9780198614128.001.0001/odnb-9780198614128-e-1334 (accessed on 27 February 2020). 39 Caizzi (n. 3), 408. 40 See pp. 124 ff., above; Fortunati, pp. 109 ff. above.

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mainder of the present contribution, I intend to discuss the second aspect, the agreements between competitors. The last aspect has been covered by Maura Fortunati.41 1. Origins, aims, and sources of inspiration The Concordato was concluded in 1842 between four well-known fire insurance companies, the first coming from Milan (the Compagnia di assicurazione di Milano) and the other three being based in Trieste: the Assicurazioni Generali, the Riunione Adriatica di Sicurtà (RAS),42 and the Azienda Assicuratrice. They created an extensive framework of agreements to promote effective collaborations in a particular field of the fire insurance branch: the insurance of industrial and industryrelated risks. It is an important observation that all the founders of the Concordato were part of the same institutional reality, the Austrian Empire. Trieste was part of the so-called Erbländer (Hereditary Territories) which formed the core of the territories acquired by the House of Habsburg since the Middle Ages. Milan, in turn, was the heart of the Kingdom of Lombardy-Venetia, which was in Austrian hands until the battle of Solferino in 1859. The Concordato thus developed in a particular setting: it was in these territories that, since 1819, the first fire insurance companies had been established with the support and approval of the sovereign. When these companies concluded the Concordato, they were thus already established market players. In substance the Concordato was a private agreement. It was intended to promote the coordination between competitors, especially with respect to tariffs. It is not surprising that the agreement concerned primarily tariffs for the insurance of industrial and industryrelated risks. It is indeed this aspect that proves the impact which the Industrial Revolution had on the fire insurance business. The production in factories relied on steam engines, increasing the risk of explosions and fires exponentially.43 In addition to these objectives which were made explicit in the agreement, it is possible to identify an underlying motivation behind the Concordato which becomes evident when analysing the institutional setting in which it was concluded. The success of these newly established insurance companies depended on the expansion into new markets. However, such expansion was hampered by the political fragmentation in pre-unification Italy. It proved to be an arduous undertaking to enter foreign markets or even to extend business activities into a city different from that of origin. The public authorities often imposed numerous restrictions on foreign 41

See Fortunati, pp. 119 ff., above. It had been founded in 1838 as Riunione Adriatica by the Adriatico Banco d’Assicurazione and was soon renamed as Riunione Adriatica di Sicurtà SpA (RAS). It quickly developed into one of the most renowned Italian insurance companies of international standing. See Sanzin (n. 4), 55; SwissRe Corporate History (n. 1), 16. 43 See Riberi (n. 5), 6. 42

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companies. The Compagnia di assicurazione di Milano, for example, experienced numerous limitations imposed by the Savoy government when it wanted to enter the Piedmont market, and the Assicurazioni Generali of Trieste was not allowed to expand into Lombardy.44 Nevertheless, Lombardy had already proven to be a permeable market for Trieste companies. In fact, Trieste, as the most important port of the Austrian Empire, experienced great economic growth. The nineteenth century was the city’s golden century, with its nearby competitor, the Venetian port, having experienced an economic slowdown. Already in 1824, a group of citizens of Trieste, led by a businessman named Kramer,45 saw the potential of the Lombard market and obtained a power of attorney to market insurance against both hail and ‘contro i danni del fuoco, tanto sopra stabili in città e campagna, sopra effetti fermi, e merci in deposito, quanto anche sopra merci per terra o per fiume.’46 ‘against fire damage, over buildings in the cities and countryside, over personal property and goods in storage, as well as over goods [transported] on land or on rivers.’

It may have been the difficulties which the newly established insurance companies experienced which made agreements such as the Concordato a reasonable choice to proceed. However, the most important source of inspiration was a similar pact between Trieste marine insurance companies. Starting in 1820, they had held informal meetings, and then in 1838 they signed a formal agreement, the Commissione delle Unite Compagnie di Sicurtà alla Prima Sezione del Lloyd.47 Based on these experiences, the two Trieste-based insurance companies Assicurazioni Generali and Azienda Assicuratrice had as early as 1836 considered signing a reinsurance agreement to share the risks resulting from fire policies signed in Trieste. These negotiations resulted in the broader initiative leading to the signing of the Concordato. On a more general level, these observations once again confirm Trieste’s importance for the development of (fire) insurance in Italy. Trieste was a laboratory for Italian insurance practice.

44

SwissRe Corporate History (n. 1), 15; Caizzi (n. 3), 409. Since the eighteenth century, Kramer had been a well-known name in Milanese economic circles. It may have been Johann Adam De Kramer, born in Essenheim or near Frankfurt am Main. Having settled in Milan when he was young, he had become president of the Court of Commerce. See the entry on his son in: Constant von Wurzbach, Biographisches Lexikon des Kaiserthums Oesterreich, vol. 3 (1858), 210 – 211, 210. 46 The original archival source is cited by Caizzi (n. 3), 403. See also SwissRe Corporate History (n. 1), 15 – 23. 47 The agreement had a long-lasting success, later leading to the Comitato triestino degli assicuratori marittimi, see Basilio (n. 29); Giuseppe Stefani, Il Comitato triestino degli assicuratori marittimi (1933); Riunione Adriatica di Sicurtà (n. 29), 95. 45

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2. The original Concordato of 1842 The original Concordato of 1842 was actually composed of two separate agreements. The first agreement was concluded between the four aforementioned insurance companies on 14 March 1842. They agreed on ‘i premi minimi da applicarsi alle assicurazioni contro gli incendi di stabilimenti industriali, di case coloniche e di alcuni altri rischi’ (‘minimum premiums to be applied to fire insurance for industrial buildings, farmhouses, and certain other risks’) in Lombardy, Veneto, and Trentino. The agreement defined a minimum premium for the different insured objects, which included not only buildings but also movables normally found in buildings so insured, such as spinning machines in textile mills and timber saws in farmhouses, stables, and barns. The agreement entered into force on 15 April 1842.48 The second agreement was signed by only three of the four companies. The Azienda Assicuratrice had in the meantime sold its business in the Kingdom of Lombardy-Venetia to RAS. The second agreement was signed in Milan and Trieste on 1 and 9 June 1842, respectively. It entered into force on 1 July. It introduced a compulsory sharing of certain risks between the companies without, however, prescribing joint and several liability. The shared risks concerned ‘filature di lana, lino e cotone, con o senza tessitura, nonché le raffinerie di zucchero nel LombardoVeneto, nel Trentino e nel circolo di Gorizia’ (‘wool, linen, and cotton spinneries, with or without a weaving mill, as well as sugar refineries in Lombardy-Venetia, Trentino, and Gorizia’).49 The duration of the second agreement was limited to three years. Moreover, the second agreement aimed at further intensifying the overall links between the participating companies by making the first agreement ‘vieppiù inalterabile’ (‘increasingly unalterable’).50 Almost at the same time when the second agreement was signed, all participating companies extended the scope of the first agreement to include Trieste, Istria, and Dalmatia.51 Formally, this was a third agreement. In all, even though the Concordato was inspired by the 1838 pact between the Trieste marine insurance companies, the Concordato took on a broader scope: the 1838 pact concerned insurance tariffs only. The 1842 agreements included further arrangements on risk sharing.52 It follows that the Concordato was truly innovative. Even though the second agreement had introduced compulsory risk sharing, it did not prescribe the exact form of how to implement the sharing of risks. The 48

The original agreement has been lost. It is reported in a printed newsletter of the Venetian branch of Assicurazioni Generali of 5 April 1842. This is the oldest printed version of the Concordato still available. See the reproduction in Sanzin (n. 4), 58 f. 49 Sanzin (n. 4), 20. 50 Sanzin (n. 4), 3. 51 Sanzin (n. 4), 20 f. 52 Sanzin (n. 4), 19 f.

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companies had two options: co-insurance and reinsurance.53 Later, the clear distinction between co-insurance and reinsurance was expressly acknowledged by Italian legislation: the 1882 Codice di commercio regulated both forms of risk sharing in Art. 427 and Art. 422. However, it should be noted that, until the last decades of the nineteenth century, co-insurance prevailed over reinsurance. The latter gained ground only after the establishment of companies specializing in reinsurance. The first Italian company that exclusively operated in the reinsurance market was the Genoese Ausonia founded in 1898.54 It may, nevertheless, be reasonably assumed that the mentioning of reinsurance in the 1842 Concordato could have paved the way for an Italian reinsurance market, not only in the fire insurance sector but in the entire insurance market. The Concordato did not create a ‘struttura giuridica di società, né di associazione con personalità propria’ (‘legal structure of a company, nor an association with its own personality’).55 Its nature was completely private stemming ‘da convenzioni particolari di buona fede, la cui osservanza era affidata sin dai primordi all’onore e alla lealtà delle parti contraenti’ (‘from particular conventions of good faith, the observance of which was entrusted from the beginning to the honour and loyalty of the contracting parties’).56 The Concordato remained in force only by virtue of the constant collaboration between the contracting parties, and the details of the cooperation were governed by ‘convenzioni tacitamente o esplicitamente rinnovate alla loro scadenza’ (‘agreements tacitly or explicitly renewed upon their expiry’).57 This nature of the Concordato had certain consequences. At least in the initial phase, there were no permanent and executive bodies. Representatives of the participating companies simply met to agree on what to do without having full powers. Any decisions made thus needed subsequent ratification by the respective company directors.58 This explains why the first agreement is at times dated differently. The companies’ representatives had concluded it on 14 March 1842. However, it was only on 1 April 1842 that the agreement was ratified by the companies’ central administrations.59 In addition, the participating companies had to pay fines when in non-compliance with the obligations concerning insurance tariffs which resulted from the agreements. These penalties again had a purely contractual character. The contracting parties adjusted them periodically in order to ensure that they served

53 Sanzin (n. 4), 4 f. On co-insurance, reinsurance, and the respective differences, see Mainardi (n. 2), 46 – 53; Carlo Pisacane, Uno dei ferri del mestiere nell’assicurazione contro l’incendio: la repartizione dei rischi. Studio (2nd edn., 1926). 54 SwissRe Corporate History (n. 1), 16. 55 Enrico Marchesano, Prefazione, in: Sanzin (n. 4), VII, XI, and XIII. 56 Sanzin (n. 4), 4. 57 Marchesano (n. 55), XI. 58 Sanzin (n. 4), 5. 59 Sanzin (n. 4), 20.

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their purposes.60 Finally, it is noteworthy how durable the system of these agreements proved to be, being capable of reacting and adapting to radical politicalinstitutional upheavals, still witnessing the advent of a new century, and benefiting from a progressive expansion. 3. Different stages of development The Concordato experienced a long evolution, and for the purpose of describing this development it is possible to distinguish four different phases. a) A constitutive phase (1842–1844) The first stage, lasting from 1842 to 1844, can be described as a constitutive phase. In the years immediately following the conclusion of the two original agreements, the participating companies reached further agreements aimed, on the one hand, at extending the duration of the first agreements and, on the other hand, at expanding their scope of application beyond the Austrian Empire. In 1843, the expiry date of the aforementioned second agreement was postponed to 31 January 1849, and the participating companies reached consensus that both agreements should also apply to the Grand Duchy of Tuscany and the Principality of Lucca. The following year, further conventions were signed to include the Kingdom of the Two Sicilies and the Swiss Canton of Ticino. However, these pacts were not prolonged into the new decade: after 1849, the activities of some of the participating companies temporarily ceased in Tuscany and in the Two Sicilies, and in the Canton Ticino the Compagnia di assicurazione di Milano obtained a monopoly from 1854 to 1860.61 By contrast, the agreements concerning Lombardy-Venetia and Trieste, which represented the real territorial core of the Concordato, were to be renewed for a lengthy period. b) A test phase (1845 – 1872) A second stage in the development of the Concordato, lasting from 1845 to 1872, may be described as test phase. It was characterized by refinements and expansions, but it also saw numerous difficulties and a totally new institutional setting brought about by national unification. The fact that it was possible to overcome these inconveniences quickly within the framework of the Concordato is proof of how effective it worked. Nevertheless, the Concordato was repeatedly dissolved and renewed in this second phase. On the one hand, two new companies joined: in 1848 the Viennese Prima Compagnia Austriaca and in 1855 the Nuova Società Commerciale of Trieste. On the other hand, the Azienda Assicuratrice left the arrangement. Unbridled and persistent competition from this firm had even led 60 61

Sanzin (n. 4), 5. Sanzin (n. 4), 22 f.

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to a brief dissolution of the Concordato in 1852.62 This experience, however, led the partners to give the Concordato a greater ‘corporeità’, and this is why this second period may be described as a test phase.63 The Concordato was reconstituted in December 1852, and it was decided to provide it with two permanent commissions, one based in Milan and the other in Venice, each of which was headed by a president. The creation of these commissions answered a number of needs: it became easier to reinforce the binding nature of the agreements as well as to adapt the tariffs to the different risks and to introduce procedures to adjudicate any infringements of the arrangements.64 Finally, in reaction to the Italian national unification, the scope of application of the Concordato was again further extended to cover the entire Italian Kingdom in 1864. Furthermore, the agents of the contracting parties were authorized to implement the risk-sharing mechanisms with respect to all risks, industrial and common.65 However, some challenges remained: it proved, for example, difficult to gain the trust of other insurance companies already operating in the Kingdom and to induce them to join the Concordato. c) A phase of suspension (1873 – 1883) With some delay, the new opportunities brought about by national unification led most participating companies to temporarily suspend their collaboration, allowing them to freely face the competition from other insurers which had not bound themselves to the agreement. For that reason, the third stage may be described as a phase of suspension, which lasted from 1873 to 1883. This period is short when compared to the overall development of the Concordato. Nevertheless, even though the Concordato was officially suspended, the insurance companies did not stop collaborating altogether. In fact, the previous partners resumed their negotiations from time to time or initiated concerted actions for the protection of their common interests. However, despite the Concordato being suspended by most participating companies in the third period of its history, there was one exception: the Trieste companies upheld it uninterruptedly.66 It was the Reale Mutua that in 1881 brought up the idea of a new structure of agreements between Italian insurance companies. The Reale Mutua was one of the most important insurance firms in the Kingdom and, until then, had remained outside the Concordato. The initiative was picked up by former contracting partners and companies which had not previously participated in the agreements. Finally, a new Concordato was concluded in Bologna on 30 October 1883. It came into force on 1 January 1884. Compared to the original Concordato, this new agreement included more contracting partners. The most important were the Compagnia di as62 63 64 65 66

Nel centenario della Compagnia di assicurazione di Milano: 1825 – 1925 (1925), 61. Sanzin (n. 4), 5. Nel centenario della Compagnia di assicurazione di Milano (n. 62), 61. Sanzin (n. 4), 29 f. Sanzin (n. 4), 31 – 37.

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sicurazione di Milano, Generali, RAS, Toro, La Fondiaria of Florence, and two foreign companies (the Donau of Vienna and, joining in 1891, L’Union of Paris). Even though the Reale Mutua had initiated the negotiations leading to the new Concordato, it had ultimately decided not to join as it considered membership to conflict with its own nature as a mutual society.67 In term of its scope of application, it covered ‘tutte indistintamente le province del Regno d’Italia’ (‘all the provinces of the Kingdom of Italy without distinction’).68 d) A phase of consolidation (1884 to mid-twentieth century) In 1884, a phase of consolidation began, and the agreements survived the advent of a new century and two World Wars, proving the effectiveness of the collaboration between the companies. The Concordato seems to have stabilized the insurance market in times of economic, political, institutional, legal, and social crisis. In addition to the participation of new companies, the 1884 Concordato was characterized by a series of important innovations. First, a single standardized policy was introduced. It replaced the different general policy conditions used by each company. Insurers wanted to adopt uniform policy conditions in reaction to the new legislative framework introduced by the 1882 Codice di commercio. Furthermore, the contracting parties agreed on uniform tariffs for industrial and industryrelated risks, and they constantly updated these tariffs. The 1884 Concordato again adopted risk-sharing mechanisms such as co-insurance and reinsurance. Finally, it introduced new bodies and institutions. There was a demand for ‘lo studio e la risoluzione di problemi di interesse comune’ (‘the study and resolution of problems of common interest’). To that end, the contracting parties held an annual congress with the possibility of having also extraordinary congresses whenever this was deemed necessary. The chair of these conferences rotated annually between the directors of participating companies.69 III. The Concordato and the development of fire insurance Having described the different phases in the evolution of the Concordato, it is now possible to assess its effects on the development of fire insurance. In doing so, it is necessary to remember the one feature that was present in the entire history of the Concordato: the openness to including an increasing number of companies operating in the fire insurance branch. This attitude proved to be stronger than the fear of competition.

67 See La Società Reale Mutua di assicurazioni e i suoi cento anni di vita: 1828 – 1928 (1928), 124 f. 68 Sanzin (n. 4), 40. 69 Sanzin (n. 4), 41.

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1. Achievements … It is possible to identify three main reasons why fire insurance companies joined the Concordato, and it seems that they were able to achieve the corresponding objectives. First, there was the practical necessity of developing a sound and refined risk-management system. Even though they were already well established in the fire sector, the companies were in the constant search for a better-balanced risk portfolio. To that end, the Concordato had introduced risk-sharing measures such as coinsurance and reinsurance. The second achievement relates to the agreement on minimum premiums for the different insured objects. Of course, price agreements are detrimental to a freemarket economy. However, for the insurance companies these arrangements resulted in essential synergy effects. The insurance of industrial risks was a delicate and complex business. Technological progress was rapid, constantly changing existing risks or creating new risks. The pricing of these risks required in-depth and continuous technological study, based on the shared experience of the companies. In this context, communication between insurers and the sharing of know-how was felt to be of utmost importance. This approach allowed fire insurance to evolve into a proper science. However, exchange of information and cooperation were felt to be necessary also for a second reason. Until the enactment of the 1882 Codice di commercio, the Italian legislature had remained completely silent on the regulation of fire insurance contracts. Even though the 1882 Code then introduced some provisions on fire insurance contracts,70 its drafters were nevertheless guided by the principle of freedom of contract. Consequently, even after the 1882 Code, the most important source of fire insurance contract law remained the policy conditions of the fire insurance companies. In this context, too, the fire insurers started to agree on the standardization of general policy conditions. Finally, it seems that the coverage of industrial risks made a significant contribution to Italy’s industrialization. Again, it needs to be remembered that the Concordato concerned industrial risks. By covering these risks, insurers gave the industry essential risk-management tools. As we have seen, one main objective of the Concordato was to share information on the correct assessment of risks and the needs of the insured, aimed at the constant adjustment of tariffs. It seems that these efforts had the positive effect of increasing the safety, productivity, and performance of industrial activities.71 The progress of industrialization – and insurers’ understanding of it – was mirrored in the development of the tariffs: from a few in 1842 to around 600 in 1942.72

70

See Fortunati, pp. 119 ff., above. See Giulio Daglio, I rischi industriali, (1938) 6/4 Notiziario della Riunione Adriatica e de L’Assicuratrice Italiana 73 – 76, 74. 72 Sanzin (n. 4), 181. 71

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2. … and presumed merits Even though the Concordato was able to stabilize the newly founded fire insurance market by introducing risk-sharing measures and by allowing the fire insurance companies to exchange their knowledge on the ever-changing risks and even though the Concordato had positive effects on Italy’s industrialization, one merit, which was attributed to it on the centenary of its constitution should be reassessed. In 1942 it was claimed that the Concordato was a patriotic endeavour. Nationalist fascist rhetoric assigned to the companies which founded the first agreements in 1842 ‘an immediate understanding of the idea of the unification, when it was only a deep feeling without a political realization’ (‘un’immediata comprensione dell’idea unitaria, quando essa era allo stato di un sentimento profondo ma che non aveva trovato ancora una sua realizzazione politica’), thereby ‘anticipating political events with the force of economic reality’ (‘precorrendo gli eventi politici con la forza della realtà economica’). However, it seems that Italian fire insurance companies were simply reacting to the expansion of the insurance market. Furthermore, in 1942, the 1884 Concordato was characterized as being truly ‘italiano’, to emphasize its supposedly national character. However, it should not be forgotten that also foreign companies had joined the 1884 Concordato. In the difficult situation caused by World War II, ‘il fervore di un’attività costruttrice e il vigile senso di solidarietà delle compagnie’ (‘the fervour of building activities and the vigilant sense of solidarity of these companies’) lent itself easily to consolatory reinterpretations. Finally, the system of these agreements was celebrated as ‘un altro primato dell’assicurazione italiana’ (‘another primacy of Italian insurance’), ‘una tipica istituzione nostra’ (‘a typical Italian institution’), which was then exported abroad.73 However, the major English companies had been accustomed to entering into tariff agreements as early as the 1820s.74 In the 1830s, these pacts were mostly sporadic and short-lived, but they began to be more extensive and formalized starting in the early 1840s, culminating in the establishment of the Fire Offices’ Committee in 1860.75 Extensive agreements on minimum premiums can also be found in Scotland: as early as December 1830, all Scottish fire insurance companies signed a detailed table describing the main types of risks together with the respective minimum premiums.76

73

Marchesano (n. 55), IX-XIII. See Caja, pp. 80 ff., above. 75 See in detail Robin Pearson, Taking Risks and Containing Competition: Diversification and Oligopoly in the Fire Insurance Markets of the North of England during the Early Nineteenth Century, (1993) 46 The Economic History Review 39 – 64. 76 The table is reproduced in Frederick George Smith, Practical remarks on the present state of fire insurance business: the evils of competition pointed out; with hints of improvement (1832), 64 f. 74

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IV. Concluding remarks After it had overcome initial difficulties, the Italian fire insurance branch experienced rapid growth, becoming over the nineteenth century, together with life insurance, the largest Italian insurance sector and gradually closing the gap with major European markets.77 This success story is to a large extent attributable to the system of agreements between the individual fire insurance companies, usually referred to as Concordato, which is analysed in the present contribution. As we have seen, these agreements were first initiated by Trieste and Milanese companies. In the Italian territories subject to the Austrian Empire, fire insurance companies had early on found favourable conditions allowing them to flourish, this due to the attention shown by the Habsburg authorities to the development of insurance in general and fire insurance in particular. Since the eighteenth century, the Habsburg government had in general been committed to promoting the economic development of their domains through institutional and legislative initiatives. Emperor Franz I had not only approved the establishment of private fire insurance schemes on 4 September 1819, but, above all, he had also promulgated the Austrian Allgemeines Bürgerliches Gesetzbuch, the long-awaited civil code, which was the fruit of an endeavour that had begun many decades earlier with Maria Theresia of Austria.78 An in many ways similar development occurred in the Savoy Kingdom. King Carlo Felice licensed the foundation of the Reale Mutua, marking the beginnings of fire insurance in the Kingdom, and was also engaged in more general legislative efforts.79 The initiatives of these sovereigns were intended to support the economic transformations taking place in their territories in the nineteenth century, which called for a comprehensive rethinking of the insurance business. In the lands of the Habsburgs and Savoys, the Industrial Revolution was at a more advanced stage than in the rest of the Italian Peninsula. Therefore, it was necessary to equip especially the fire insurance sector with the technical and financial structures appropriate to modern times. In all, those Italian territories which were under Habsburg and Savoy rule set the stage for the later development of fire insurance in the Kingdom of Italy.

77

Compare Riberi (n. 5), 5. See the proceedings of the international conference held in Trieste on the civil code’s two hundredth anniversary: Pio Caroni and Riccardo Ferrante (eds.), La codificazione del diritto fra il Danubio e l’Adriatico. Per i duecento anni dall’entrata in vigore dell’ABGB (1812 – 2012), (2015). 79 On the institutional and legislative initiatives in the Kingdom of Sardinia after the Restoration, see: Ombre e luci della Restaurazione in Piemonte. Trasformazioni e continuità istituzionali nei territori del Regno di Sardegna (1997). 78

Chapter 7: The development of fire insurance in France (eighteenth and nineteenth centuries) By David Deroussin A. Fire insurance in the eighteenth century . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. Mutual fire offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Insurance companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Unfinished projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B. From the French Revolution to the Napoleonic Empire . . . . . . . . . . . . . . . . . . . . . . . . C. The Restauration: the establishment of the modern French insurance sector . . . . . . . . I. Mutual insurance societies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Fixed-premium insurance companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D. Fire insurance since the second half of the nineteenth century: between liberalism and state intervention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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It is commonplace to assert that fire insurance was first invented in the U.K. Following the Great Fire of London in 1666, the first fire insurance associations were formed, such as the Friendly Society Fire Office in 1684. Of course, it was possible to seek insurance coverage against the risk of fire already before the end of the seventeenth century. Nevertheless, an independent insurance sector specializing on the risk of fire had not developed. Rather, since the sixteenth century, English marine insurers covered fire risks as part of marine insurance – a practice that continued even after the establishment of an independent fire insurance sector.1 In Pelly v. Royal Exchange Assurance, the judges, for example, held by reference to trade practice that there was an implied coverage against fire risks in a marine insurance policy, so that a fire occurring on a boat while it was at the docks was covered by marine insurers.2 In accordance with English practice, Book III, Tit. 6, Art. 26 of the French Ordonnance sur le marine of 1681 burdened marine insurers with all losses incurred at sea due to – among other things – storm, shipwreck, collision, and also fire: such 1 For a general overview, see James Allan Park, A System of the Law of Marine Insurances. With Three Chapters on Bottomry; on Insurances on Lives; and on Insurances against Fire (1800). 2 (1757) 1 Burr. 341, 97 ER 342. See also Susan Hodges, Law of Marine Insurance (1996), 201; Warren Swain, The Law of Contract, 1670 – 1870 (2015), 88.

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losses were considered to be cases of simple damage covered by insurance and not of general average.3 According to the commentators on the Ordonnance, it was not only fire caused by lightning (‘feu du ciel’) and by the enemy that was covered, but also fire caused by the captain if setting the ship on fire and fleeing with a rescue boat was the only way for him to escape from falling into the hands of enemies or pirates. There are several judgments of French courts of admiralty to this end (Bordeaux, 7 September 1747; Marseille, 27 April 1748).4 In order to be covered by insurance, the captain must have thus set the ship on fire for a specific cause. Otherwise, it was considered to have been caused by the captain’s fault, and according to the droit commun, insurers did not cover losses caused by the fault of the captain unless they had insured the captain’s barratry.5 Finally, the standard marine insurance policies (in particular those of Marseille and Nantes) also explicitly covered the risk that a fire broke out on board of the insured ship.6 Turning to terrestrial insurance, it is only towards the end of the eighteenth century that fire began to be considered as an insurable risk. The reason for the delay compared to the developments in England may be that, for a long time, fire was perceived in France less as a controllable risk than an omnipresent and uncontrollable danger that needed to be addressed primarily by administrative measures and by means of civil liability. Things started to change from the second half of the eighteenth century. The development seems to have had two stimuli. First, the royal administration pursued greater efficiency consistent with a (new) policy of taking a more active role in furthering the economy. Secondly, economic agents capable of raising the necessary capital understood that insurance was a lucrative business model. Whereas marine insurance was at the time still exercised mostly by single merchants, land insurance (including fire insurance) required different forms of organizations, such as insurance companies with sufficient capitalization. With marine insurance it was still the practice to conclude short-term contracts or contracts for a specific voyage. By contrast, fire insurance contracts tended to be concluded for a longer duration, necessitating that the insurer guarantee the fulfilment of his obligation for several years.

3

Balthazard-Marie Émérigon, Nouveau commentaire sur l’ordonnance de la marine, vol. 2 (Marseille 1780), 627; René-Josué Valin, Nouveau commentaire sur l’ordonnance de la marine, vol. 2 (La Rochelle 1766), 150. 4 See Balthazard-Marie Émérigon, Nouveau commentaire sur l’ordonnance de la marine, vol. 2 (1803), 106. 5 See Émérigon (n. 3), 434 – 436; Robert Joseph Pothier, Traité du contrat d’assurance (1810), n. 53. 6 See, e. g., the standard policy from Marseille, reproduced in Balthazard-Marie Émérigon, Traité des assurances et des contrats à la grosse, vol. 1 (1827), 34 f.

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In order to outline the development of fire insurance in France,7 a chronological approach seems preferable, and the period known as the Restauration (1814 – 1830)8 beginning right after the fall of Napoleon appears to be the key period in the development of insurance associations and improvements in legal techniques. It is primarily the statutes and policies of the different insurance societies and companies that witnessed such improvements in legal techniques: they started to exhibit greater precision and sophistication. By contrast, the Code civil of 1804 limited itself to qualifying insurance contracts as aleatory contracts and to sketching the legal framework in just a few articles formulating only some general rules. To describe the Restauration as the key period in the development of insurance obviously does not imply that the following years did not see further steps in such development. For example, companies offering fire insurance coverage in exchange for the payment of fixed premiums arrived relatively late. The first such companies were established between 1819 and 1820. The years 1828 and 1829 then saw the creation of some further companies. However, in the first years of the Monarchie de Juillet (1830 – 1848) no new companies were formed. It was only in 1837 that the development gained momentum. In total, 108 fixed-premium companies were created between 1819 and 1900. Of these, only 20 were still active after World War I.9 Moreover, during the second half of the nineteenth century, the insurance market remained unregulated, i. e. it regulated itself. Consequently, land insurance law was developed, alongside companies’ statutes and policies, by academic literature and jurisprudence. Especially from the 1840s, a new genre developed: handbooks written by legal practitioners without any scholarly or doctrinal interest, aiming only at informing the general public.10 Furthermore, due to the growing importance of terrestrial insurance, courses on insurance law were taught – yet this did not occur in the universities’ law schools (Facultés de droit) as insurance law had developed outside the Code civil; rather, these courses took place in specialized institutes, such as, starting in 1886, the Paris Institute of Commerce, which was partly financed by the insurance sector. It was only in the beginning of the twentieth century that professors of civil law started to show an interest in terrestrial insurance law and that it was covered by treatises on the civil law, such as that authored by Ambroise Colin and Henri Capitant.11

7

See Didier Pouilloux, Mémoires d’assurances. Recueil de sources françaises sur l’histoire des assurances du XVIe au XIXe siècle (2011); Patricia Toucas-Truyen, Histoire de la mutualité et des assurances (1998). 8 On this period, see Jean Laurent Vonau, Contribution à l’histoire de l’assurance en France: L’assurance incendie en Alsace 19e – 20e siècles (1979). 9 See Vonau (n. 8), 15. 10 See, e. g., Émile Agnel, Manuel général des assurances, ou guide pratique des assureurs et des assurés (4th edn., 1900). 11 Henri Capitant and Ambroise Colin, Cours élémentaire de droit civil, vol. 2 (1914), 597 – 629.

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In all, the Restauration was the starting point for the development of the modern fire insurance sector in France with two main actors: mutual societies and fixedpremium insurance companies. The observation that the Restauration was the starting point for the development of the modern fire insurance sector in France does not, however, imply that there were no earlier attempts to organize fire insurance. For that reason, it is worthwhile to start the present analysis in the eighteenth century. A. Fire insurance in the eighteenth century The Ancien Régime, especially the second half of the eighteenth century, saw the birth of the first insurance companies in France. These companies were operating either in the marine or land insurance sector, with some even limiting their activities to fire insurance. The fires striking Paris in the second half of the eighteenth century probably had an impact on the creation of these fire insurance companies. Fires occurred, for example, at the fair of St. Germain during the night of 16 to 17 March 1762 and at the Hôtel-Dieu on 30 December 1772.12 There is a marked difference in how such companies functioned in comparison to their English counterparts. Members of the English Friendly Society Fire Office of 1684, for example, had to pay a fixed annual premium, and they had to contribute to losses incurred by other members. By contrast, French insurance companies either took the form of mutual offices requiring members to contribute to losses incurred by another member, or they were fixed-premium companies. However, they never mixed the two models. The following sections will, by way of example, discuss associations of the eighteenth century representing both models, some of which were never implemented. I. Mutual fire offices The first French fire insurance schemes were organized as mutual offices. However, a first manifestation of the idea of mutuality may be found, in very general terms, in another measure of help. Those affected by fire often appealed to the benevolence of public authorities, especially the King. After the fire of SainteMenehould in 1719 had destroyed large parts of the community, for example, its inhabitants appealed to the King and his council, who then granted a tax exemption to the affected inhabitants for several years. Similar exemptions were granted after the fires of Rennes in 1720 and Châteaudun in 1723. The inhabitants of Châteaudun were exempted from any taxation for ten years. In return, they had to pay a symbolic sum of five sols and stay in the city to help rebuild it.13 In the administrative language of the French monarchy, these exemptions were called secours ex12

See Anon., Rapport sur l’incendie de l’Hôtel Dieu de Paris (undated), Archives nationales, H21964, fol. 34. 13 Archives nationales, E 974a, fol. 258 (quoted by Claire Bellenger, Histoire de l’assurance de dommages en France (2011), 48 and 51).

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traordinaires. They were granted by the King in his council, after an investigation carried out by the intendant, the local representative of the King. In fact, the Contrôleur général des finances was – in the name of the King and as the rapporteur in the Conseil d’État privé, finances et direction – the true decision-maker. It was under his direction that the overwhelming majority of the decisions of the Conseil were drafted.14 These tax exemptions were not exclusively related to fire losses: they could be granted also in other cases, such as in the case of losses through hail or thunderstorms. Sometimes the administration compensated the tax losses which it suffered from granting such exemptions by passing these losses on to non-affected taxpayers. Sometimes it even did so on national level. After the fire of Châteaudun in 1723, the King ordered the levying of a sum of 200,000 pounds per year for three years (and, thus, in total 600,000 pounds) on all taxpayers who were subject to the taille and who resided in the twenty generalities that formed what was called the pays d’élections (in contrast to the pays d’États), according to a distribution au marc la livre.15 This order was taken to compensate for the tax losses caused by the ten-year exemption granted to the inhabitants of Châteaudun. This is why such exemptions may be described in terms of mutuality. However, such measures to compensate tax losses were, of course, unpopular, and that is why they were not always taken. However, in the present context, another form of mutual support is of greater interest: mutual fire offices. In the second half of the eighteenth century, such mutual offices were created to provide assistance in the event of fire. Examples are the many fire offices (Bureaux des incendiés) set up under the aegis of the church and most often at the initiative of the intendants. Several such Bureaux were established in the eighteenth century, for example in Paris in 1717, Troyes in 1769 (still operating on the eve of World War I), Reims in 1780,16 or in the département de la Marne in 1774 (Caisse des incendies de la Marne), which was created at the initiative of the bishop of Châlons. Collections were usually organized after harvest when villagers regularly had sufficient funds to make contributions, and the collections were usually restricted to the parish covered by the specific office, as the internal procedural rules of the Bureau in Troyes prove. The collections were made in order to support those affected by fire. The order issued by the archbishop of Reims, Alexandre Angélique de Talleyrand-Périgord, for the creation of the Reims Bureau in 1780, for example, provided:17 ‘Désormais, il ne sera plus accordé de permissions particulières dans le diocèse; deux quêtes générales seront faites dans toutes les paroisses; le produit en sera versé dans une caisse établie à Reims, ladite caisse sera administrée par un Bureau auquel le prélat pré14

See Michel Antoine, Le Conseil du roi sous le règne de Louis XV (1970). See Archives nationales, E 974a, fol. 259. 16 See Charles Loriquet, Le Bureau des incendiés et les autres établissements de charité de M. de Talleyrand (1875). 17 Cited from Loriquet (n. 16), 10. 15

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sidera lui-même. Lorsqu’il arrivera quelque incendie, le Bureau donnera sur le champ des secours, et les administrateurs emploieront tout leur zèle, toute leur vigilance pour que les distributions se fassent suivant l’équité, l’exactitude, les proportions désirables.’ ‘From now on, special permissions will no longer be granted in the diocese; two general collections will be made in all the parishes; the proceeds will be paid into a fund established in Reims, and the said fund will be administered by a Bureau which will be chaired by the prelate. When a fire occurs, the Bureau will give immediate assistance, and the administrators will use all their diligence, all their vigilance to ensure that the distributions are made in accordance with equity, accuracy, and the desirable proportions.’

The Bureau was given a kind of monopoly in so far as no permission to beg was granted to individuals – this is what is meant when the text refers to permissions particulières. Fire victims, thus, had to ask for the assistance of the Bureau. In the case of the Bureau in Troyes, aid was distributed once a year in spring. However, in event of an emergency, the Bureau was able to step in and help immediately. Of course, only those who participated in the scheme and who were thus obliged to contribute themselves were eligible for help. The inhabitants of those parishes that did not take part in the collections could not ask for help, and the same rule was applied by the Bureau of Sens. If a parish organized a collection after a fire had occurred for the benefit of one of its members, this member was entitled to the amount so raised. According to regulations of the Bureau of Sens, the collections were made at the homes of members, not at church. The names of donors and the amount of their contributions ‘in respect of their abilities’ were recorded in a register. Donations could be in cash or in kind, as clarified in Art. 1 of the Règlement général en faveur des incendiés.18 The registers kept in the departmental archives allow us to get an idea of the sums collected. In 1791, before the scheme was temporarily put on hold during the Revolution, the Bureau in Troyes had funds amounting to 25,523 pounds, and it paid out 13,582 pounds in help. In 1769, the year when the Bureau was established, it collected 9,600 pounds and granted relief for a total amount of 5,561 pounds.19 In 1778, the Bureau in Sens collected 18,000 pounds and distributed 17,000 to fire victims.20 The collections in Sens averaged 35,000 pounds a year, with peaks sometimes exceeding 70,000 pounds, for example 79,000 pounds in 1784.21 The statutes of these fire offices included provisions on how a loss was to be adjusted. According to the internal rules of the Bureau of Reims,22 the victim was required to provide a certificate issued by the parish priest as well as a report signed by the officers of justice and by specific residents of the parish. These documents 18

See Loriquet (n. 16), 11. See L. Berger, Bureau de secours aux incendiés du département de l’Aube (1915): Archives départementales de l’Aube, HB-94. 20 Archives départementales Seine et Marne, 16C16, fol. 257 – 259 (archives personnelles du subdélégué de Nemours, Prieur de La Comble). 21 See Loriquet (n. 16), 26. 22 Art. 6 of the Règlement général en faveur des incendiés, see Loriquet (n. 16), 12 – 14. 19

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had to indicate in detail the fire’s nature, its extent, the circumstances, and the cause. More specifically, these documents had to attest that the fire was not caused by the victim’s own fault or negligence. They had to answer questions on the victim’s character. They had to specify what had been lost. They had to detail whether there was a total loss of the buildings or whether they could still be rebuilt. Furthermore, these documents had to specify the amount of direct tax (taille) paid by the parish and the victim – a good indicator for assessing the victim’s assets. However, even if such precautionary steps were taken, it is probable that these fire offices were not always perfectly administered. Otherwise the Archbishop of Sens would not have felt obliged to intervene on 28 September 1780, asking parish priests ‘to ensure that the minutes and the evaluations are made with the most scrupulous fidelity and accuracy’ (‘de veiller à ce que les procès-verbaux et les évaluations soient faites avec la fidélité et l’exactitude la plus scrupuleuse’).23 II. Insurance companies The Ordonnance sur le marine (1681) did not regulate fire insurance, but it did not prohibit it, either. Thus, it would have been possible for fire insurance practice (that had already developed elsewhere) to take root in France in the late seventeenth and early eighteenth centuries. After all, French contemporaries in general took notice of the developments in England. Philosophers of the French enlightenment studied and discussed, for example, the English Constitution. And indeed, English insurance practice was often mentioned, too. However, when the first French fire insurance companies were established, English insurance practice was not simply copied. It was primarily a point of reference when it came to justifying the creation of French insurance companies. The drafters of the statutes of the Chambre générale des assurances de Paris of 1750, for example, compared their proposals with the organization of London insurance companies.24 Furthermore, the English practices were a point of reference when it came to criticizing French initiatives. This was, for example, the case when Jacques-Pierre Brissot de Warville launched in 1786 a campaign against the idea of insurance by comparing English practices with the customs of France.25 It took until the middle of the eighteenth century for fixed-premium insurance companies to be established in France. It was primarily financiers who took the initiative to establish such companies.26 The Chambre générale des assurances de Paris, also known as the Chambre royale des assurances, took the lead in 1750. It 23

Archives départementales Seine et Marne, 16C16, fol. 258. Bibliothèque nationale de France, fonds Joly de Fleury, Avis et mémoires sur les affaires publiques (1712 – 1787), 303, fol. 368 ff. 25 Lettre à M. le comte de S. sur un nouveau projet de compagnie d’assurances contre l’incendie (London 1786). 26 See Edgar Blum, Les assurances terrestres en France sous l’Ancien Régime, (1920) 8 Revue d’histoire économique et sociale 95 – 104, 97. 24

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was created at the initiative of Hilaire de Maisonneuve, a merchant associated with the nobility and with notables (such as councillors of the King) as well as members of the bourgeoisie (such as bankers, lawyers, and merchants). Initially, the Chambre was only active in marine insurance. However, in 1754 it diversified its activities, stretching into the fire insurance sector.27 It is likely that Robert Joseph Pothier was referring to this company when discussing a fire insurance initiative in his Traité des contrats aléatoires in 1767.28 Primary sources are not concordant with respect to dates. However, its statutes and regulations, perhaps a revised version, were filed in 1753 or 1754 before a notary of the Châtelet.29 Unfortunately, we do not know much about its operation and success.30 Nevertheless, its statutes provide interesting information. A fund of 9,000,000 pounds was set up and divided into shares of 3,000 pounds each.31 Half of this fund was earmarked for the company’s marine insurance branch, the other half for its home insurance business. The collected sums were to be handed over by a notary into a specific box and served as a guarantee fund. The company’s financial situation seems to have flourished: on 21 January 1789, the company’s balance sheet exhibited a surplus of more than 1,500,000 pounds, which allowed it to pay a dividend of 7 % per share.32 The statutes of the company were accompanied by regulations specifying several points. There were four different rates varying according to the risk of the insured property. A first category comprised buildings built of brick or stone that were covered with slates, tiles, or lead, and in which no dangerous trade was exercised. The annual premium was set at 18 sols per 1,000 pounds in insured value. The second category included buildings constructed of wood or plaster and covered with slate, tile, or lead. The rate was calculated at 27 sols, provided that these buildings did not contain any combustible or dangerous goods. Stone or brick buildings that were occupied by entrepreneurs engaged in dangerous occupations, such as bakers, confectioners, carpenters, candlemakers, apothecaries, and grocers, were considered as doubly hazardous. They formed the third category, and the tarif amounted to 45 sols per 1,000 pounds in insured value. The fourth category comprised those who wished to insure their house for a fixed number of years (7 years). The 27 See Guillaume Cerise, La lutte contre l’incendie avant 1789 (1885), 42 ff.; Jacques Savary des Brûlons, Dictionnaire universel de commerce (Copenhagen 1765), 1708. Valin (n. 3), 25, dates its first statutes to 29 March 1754. 28 Robert Joseph Pothier, Traité des contrats aléatoires, selon les règles tant du for de la conscience, que du for extérieur (Paris 1767), para. 3. 29 See Alphonse Grün and Louis-Joseph Joliat, Traité des assurances terrestres et de l’assurance sur la vie des hommes (1828), 6. 30 V. Senès, Les origines des compagnies d’assurances soit à primes, soit mutuelles, fondées en France depuis le XVIIIe siècle jusqu’à nos jours (1900), 32 f. 31 According to Isidore Alauzet, Traité général des assurances: assurances maritimes, terrestres, mutuelles et sur la vie, vol. 1 (1843), 106, it initially had a capital of 4,500,000 pounds. It was only in 1753 that the capital was increased to 9,000,000 pounds. 32 See Georges Hamon, Histoire générale de l’assurance en France et à l’étranger (1895), 45.

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annual amount of the premium was then calculated on the basis of 17 sols per 1,000 pounds in insured value. Finally, for buildings that were constructed of wood and plaster and that were occupied by entrepreneurs exercising a dangerous profession, these tariffs were not applied and the company fixed the premium discretionarily. As the premium was calculated on the basis of the value insured, it was necessary to assess the value. This was done by experts sent by the Chambre to the insured property. The Chambre did not insure the full value: one fifth was deducted in order to address the problem of moral hazard. The premium had to be paid in cash, and in return the policy was handed over to the insured and insurance coverage started. The policy contained all the terms and conditions of the contract. It also defined the covered risks: the Chambre was, for example, not liable if the fire originated from, and only affected, the chimney. If such fire spread into the building, the Chambre was, however, liable. Furthermore, fires caused by war, invasion, or military occupation were excluded from coverage. Finally, it needs to be stressed that the Chambre only insured immovable property. As with many other early insurance companies, the Chambre, too, included in its regulations an arbitration clause.33 Two arbitrators were to be appointed, one by the company and the other by the insured. If they were not able to reach an agreement, they had to appoint a third arbitrator. If they could not agree on a third arbitrator, he was appointed by the competent court at the request of the parties. Every aforementioned element was, more or less, also present in the arrêts of the King’s council establishing two further insurance companies in 1786. It seems as if the statutes of the Chambre had served as model. However, there is one important exception to this observation. The Chambre was established not by an arrêt of the King’s council but by private notarial act and, thus, without intervention or authorization of the state. This observation is of interest as, at the end of the Ancien Régime, the French economy was characterized by an increasing interventionism of the state. The first of the two companies was established in 1786. It was initiated by the two brothers Jacques-Constantin and Auguste-Charles Périer. They had already founded the Compagnie des eaux de Paris. The Compagnie was in financial difficulties,34 and with this new initiative the Périer brothers wanted to diversify their 33 Archives nationales, minutier central, ET/XLV/492, règlement général de l’association de la compagnie sous le titre d’assurances générales de Paris. See Cerise (n. 27), 51 ff. 34 Étienne Clavière, Sur les Actions de la Compagnie des Eaux (London 1785), accused the Perrier brothers of having made a dishonest attempt to increase the value of their shares beyond their real value. See also Mirabeau, Recueil de divers écrits du comte de Mirabeau sur les Eaux de Paris (Paris 1786). The difficulties were overcome due to an intervention of the state. In 1788, 90 % of the company’s shares were in the hands of the government: Bibliothèque historique de la ville de Paris, Ms. 33, fol. 114, les ci-devant administrateurs de la compagnie des Eaux de Paris aux administrateurs du département de la Seine, 9 prairial an 5 (28 May 1797), quoted by Richard Whatmore and James Livesey, Étienne Clavière, Jacques-

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activities. On 20 August 1786, the Conseil du roi granted the requested arrêt.35 It allows us to reconstruct the process of how an insurance company was created in France at the end of the eighteenth century. A prospectus was printed, and this was only possible with the King’s permission. The prospectus36 indicated the conditions under which the fire insurance would be offered to the public. Furthermore, it specified the deposit which was to guarantee future payments of indemnities. Finally, it, of course, also praised the initiative’s merits. The circulation of the prospectus then made it possible to collect subscriptions. The procedure was subject to the control of one of the most powerful ministers: the Contrôleur général des finances. His role was to draw up a report based on the information provided in the prospectus and based on the list of future subscribers. The King’s decision, ruling in the Conseil du roi, to grant his permission was in turn based on the report. Even a quick glance at the report proves that the King’s intervention was intended to protect the insured, especially by ensuring the company’s solvability. To that end, the King compelled insurers to make deposits in securities producing interest. Furthermore, the King mandated the Prévôt des marchands of Paris to oversee that these deposits existed at all times. There were further mechanisms to protect the insured. In addition to making deposits, insurers had to mortgage some of their property. Finally, the arrêt imposed on the insurer a time limit for the payment of the indemnity. This time limit was also mentioned in the prospectus. The company had to pay within six weeks after the date of the inspection of the damaged building and of the records specifying the losses. However, it needs to be stressed that the King did not intend to regulate the insurance contract. It was described as private contract. In particular, the King did not interfere with the setting of the amount of the premium due. It was accepted that insurance contracts were consensual contracts (even if they already then resembled what we call today a standard form contract). The arrêt and the prospectus provide us with further details on the contract and its formation. The most important factor was the nature of the building with respect to the fire risk involved. If it was of ordinary construction, such as a dwelling house, then the calculation of the premium was fixed in the prospectus and the premium was not open to negotiations: it was set at 20 cents per 1,000 pounds in insured value. Nevertheless, there was in fact room for negotiations: the value of the building was defined by agreement between the insurer and the insured. FurtherPierre Brissot et les fondations intellectuelles de la politique des girondins, (2000) 312 Annales historiques de la Révolution française 1 – 26. 35 Arrêt du conseil d’Etat par lequel le roi approuve l’offre faite par les sieurs Perier et Cie d’affecter un fonds de 4 millions aux assurances qu’ils donneront contre les incendies, et nomme un commissaire pour en surveiller le dépôt, 20 August 1786. 36 Encouraged by Clavière, Brissot severely criticized in his Seconde lettre contre la Compagnie d’assurances pour les incendies à Paris et contre l’agiotage en général that the creation of the company was useless insofar as fires were rare in Paris, see Jean Bouchary, Les compagnies financières à Paris à la fin du XVIIIe siècle, vol. 2 (1941), 12.

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more, there was a discount of 50 % for those who were already customers of Compagnie des eaux. In all of these situations, the contract may be described in modern terminology as a contrat d’adhésion. However, if the building was used for public or professional activities, such as theatres, workshops, or factories, then the premium was individually negotiated, and the same mechanism applied when somebody sought to insure goods and movable property. Only a few months after the Périer brothers had established their company, a second fire insurance company was created and approved by the King. It was initiated by Baron de Batz and Étienne Clavière. Clavière was a Swiss entrepreneur who was born in 1735 in a Protestant Geneva family of merchants and financiers. The family was, however, originally from France. Clavière had stayed in London where he met Mirabeau.37 It was here where he also became interested in the operation of English insurance companies and where he read the treatises authored by Richard Price on life annuities and life insurance. The fire insurance company was established by an arrêt of 6 November 1786.38 Probably, for Clavière, this was only a first step towards the establishment of a life insurance. The arrêt of 1786 is for a number of reasons of interest to modern research. First, it proves that Paris was, or at least had the potential to become, an important insurance market: as soon as the prospectus was published, the owners of more than 600 large houses (‘Propriétaires de plus de six cens hôtels ou maisons considérables’) announced that they wanted to take out a policy. Secondly, the arrêt again allows us to reconstruct the procedure followed when establishing the company. It makes explicit that even before drafting the prospectus, the project had already been mentioned before the King or a King’s counsellor: ‘ayant présenté à Sa Majesté un projet d’assurances contre les incendies à des conditions plus avantageuses qu’aucunes de celles qui ont été proposées jusqu’à présent, Sa Majesté a bien voulu lui permettre de les annoncer par un Prospectus imprimé’. ‘having presented to His Majesty a plan for a fire insurance company on terms that are more advantageous than any of those which have been proposed so far, His Majesty has graciously allowed him to announce it with a printed prospectus’.

Furthermore, it is again clear that the King based his subsequent decision to allow the establishment of the company on its prospectus and on the report prepared by the services of the Contrôleur général des finances. 37

André Straus, France: insurance and the French financial networks, in: Peter Borscheid and Niels Viggo Haueter (eds.), World Insurance: The Evolution of a Global Risk Network (2012), 118 – 142, 118. See also Albert Morancé (ed.), Centenaire de la Nationale, ancienne compagnie royale d’assurances sur la vie (1830 – 1930) (1930), 24; Mathieu Chaptal, De Genève à la France, la pensée républicaine d’Etienne Clavière: réforme financière, souveraineté populaire et révolutions (1735 – 1793) (Thèse Droit, Université de Genève, 2020). 38 Arrêt du conseil d’Etat qui permet au sieur Labarthe d’établir une compagnie d’assurances contre les incendies, Paris, 6 November 1786 (Paris 1786), Archives nationales, F12 798 A.

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Thirdly, the arrêt confirms what was probably a common practice at the time, namely that the calculation of the premiums depended on the nature of the insured building (whether it was built of stone or not), its use, and the occupation of the owner. According to Art. 1, it accepted two modes of calculation. In the case of a stone building used for normal purposes so that no increased risk was involved, the premium depended on the value of the insured property and was not open to negotiations: it was fixed at ten sous per year and per 1,000 pounds of insured value (there were twenty sous in one livre). The premium was, thus, half of that of the Compagnie of the Périer brothers. If the building was constructed differently (i. e. if it was built of materials other than stone) or if it was due to its use or due to the profession of those occupying it exposed to a higher risk of fire, the premium was freely negotiated between the parties. According to Art. 2, premiums for the insurance of movable property were also freely negotiable. Being able to freely negotiate premiums obviously allowed the company to react to the specific fire risk involved. It can be further noted that the royal administration allowed the company to create a fire mark, and by signing the insurance policy, each insured agreed that the fire mark was to be affixed to the insured building (Art. 10). Fourthly, the arrêt again informs us how fire damage was assessed. In all, the process of assessing the damage and of indemnifying the insured seems to have protected the interests of the insured rather than those of the insurer. According to Art. 3, it was the rule that the caused damage was verified and estimated by mutual agreement. Nevertheless, each party had the right to request the appointment of experts to verify and estimate the damage suffered. Then, each party had the right to appoint one expert. These experts had to swear an oath before the Lieutenant général de Police de la ville de Paris. The requirement of an oath was probably introduced in order to ensure that the experts were acting impartially. The Lieutenant général de Police represented the authority of the King in Paris and rendered justice on his behalf. In the event the two experts were unable to agree, the Lieutenant général de Police had the power to appoint a third expert. The finding that the arrêt protected the interests of the insured is manifested in the fact that all expenses necessary for the evaluation of the insured property and for assessing the loss as well as all legal expenditures had to be covered by the company. After the parties had agreed on the loss or after the experts had determined it, the insurer had a period of two months to indemnify the insured (Art. 4). Fifthly, on the basis of the arrêt, the royal administration seems to have had little influence on the running of the company. Nevertheless, it imposed three important obligations. First, the King forced the company to make a security deposit of eight million pounds. This sum needs to be contextualized: the losses caused by the fire of the Hôtel-Dieu in Paris in 1772 were, for example, estimated at two million pounds; the fire that partially destroyed Troyes on 10 September 1686 caused more than one million pounds of damage; and the fire, which from 23 to 29 December 1720 almost completely destroyed the centre of Rennes, caused damage estimated

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at nine million pounds.39 The company’s minutes of August 1787 show the composition of the deposit fund:40 government bonds having a value of 5,040,000 pounds issued in December 1784; quittances de finance having a value of 170,000 pounds from a public loan issued in 1782; bonds issued by the city of Paris; and 2,000 shares in the new East India Company worth (on the day of their issue) 1,000 British pounds each. According to Art. 8, the deposit was divided into 16,000 shares of 500 pounds each. The shareholders were called porteurs. In effect, they were partners of a limited partnership as the arrêt ordered that they were only liable to the extent of their contribution. Furthermore, when it came to be decided who was to become a shareholder, preference was given to those who at the same time took out an insurance policy. In order to encourage policyholders to subscribe shares, the arrêt provided that the shares were issued at the same time when the insurance contract was concluded. The idea behind this detail was probably that a policyholder, who was at the same time a shareholder, would act more responsibly and would be encouraged to prevent the eventuation of risks. It was a way to address problems of moral hazard. Additionally, a policyholder buying shares would not invest in the company for the purpose of pure speculation. The solution they found resembled the functioning of mutual insurance societies. According to Art. 5 of the arrêt, the bonds and quittances constituting the deposit fund had to be coffered in an iron box which was kept in the hôtel de ville of Paris. The box could only be opened by jointly using three keys. The Prévôt des marchands of Paris, one of the company’s directors, and the company’s treasurer each had one key. These measures are explainable as a means to increase the trust in the company’s finances, and they mirrored parallel measures taken by other associations, such as guilds. However, a further explanation why the company installed these measures may have been that these credit instruments (bonds and quittances) were not held for the purpose of speculation. Furthermore, they were not meant to be used in the company’s daily business, i. e. to pay compensation to the insured. The company was authorized to use them only as a guarantee. Indemnities were to be covered by the premiums collected and the interest generated by the bonds and quittances constituting the deposit. If, under exceptional circumstances, the company was forced to rely on the deposit and cash it, it was under the obligation to return the same sum within a month.41 Indeed, according to Art. 6 of the arrêt, the Prévôt des marchands could require the company at any time to prove that the deposit was intact. Furthermore, according to Art. 9, the company had to send to shareholders and policyholders a financial statement on the company’s income, its expenditure, especially the paid indemnities, and all financial operations, when it 39 See Cerise (n. 27), 17; Bellenger (n. 13), 47; Claude Nières, La reconstruction d’une ville au XVIIIe siècle: Rennes 1720 – 1760 (1972), 13. 40 Archives nationales, F12 798 A. See also Lettre du 8 août 1787 du ministre de Breteuil aux administrateurs de la compagnie d’assurances, Archives nationales, O1 498, fol. 527. 41 The company’s minutes covered these shifts of assets, see the minutes preserved in the Archives nationales, F12 798 A.

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wanted to pay out dividends. That also policyholders received such financial statements is noteworthy. According to our modern understanding, it should only be shareholders who had a right to be informed about the company’s financial situation. Apparently, the arrêt did not clearly distinguish between the two groups and assumed that the policyholders, too, had an interest in the running of the company – an observation which will also be made below with respect to nineteenth-century companies. Perhaps the drafters of the arrêt were (consciously or not) influenced by the thinking of mutual societies. Finally, the company was under the obligation to pay to the King a quarter of its annual profits for the primary purpose of establishing (and most probably also maintaining) a fire brigade (Art. 7). There is an inherent logic in linking a fire insurance company to the financing of a fire brigade: a fire brigade lowered the risk of loss through fires. The two 1786 arrêts call for further remarks. The corporate form of both companies mobilized significant capital and offered a great advantage to shareholders: they were not jointly and severally liable for the company’s debts. By promoting the shareholding of policyholders, they offered policyholders the chance to directly benefit from profits. Furthermore, this detail again proves that the initiators of the companies and the drafters of the two arrêts were still thinking in terms of mutual societies or wished to organize these two companies as close as possible to such societies. However, the corporate structure did not protect these companies from interference by public authorities. Several letters sent by the Minister Louis Auguste Le Tonnelier de Breteuil to de Batz and to the directors of the company he had established together with Clavière show that the government took an interest in its running and specifically in the development of its share price.42 In particular, the sharp increase in the share price during the first months of its existence raised fears that the company was created only for the purpose of speculation. In January 1787, de Breteuil personally intervened in the operation of the company by demanding the appointment of one of his trusted men as administrator,43 who was instructed to inform him of all relevant details in the running of the company. De Breteuil also demanded that a copy of the standard insurance policy form which the company intended to use be sent to him, and he made the same claim with respect to the plan which the company intended to adopt with regard to the shares offered to the public.44 In the same vein, de Breteuil wrote to the directors of the company on 29 June 1787 to express his concerns as regards the deposit of eight million pounds which the company had undertaken to make, but which it still had not performed.

42

Archives nationales, 01 498, fol. 39 à 525. Lettre du ministre de Breteuil du 19 janvier 1787 à M. Delessert, banquier, refusant la nomination d’un administrateur de la compagnie et proposant à sa place la nomination de M Duval d’Ailly, Archives nationales, 01 498, fol. 39. 44 Lettre du 3 février 1787 du ministre de Breteuil au baron de Batz, Archives nationales, 01 498, fol. 93. 43

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If one compares the two aforementioned arrêts with an edict of 1686 that authorized a marine insurance company45 – a company that in fact was never initiated – many differences may be highlighted. The two fire insurance companies were authorized for an unlimited period of time, whereas the marine insurance company received permission for a period of six years only (Art. 4). The registered capital of the marine insurance company was only 300,000 livres, but the liability incurred by the partners was greater: the company’s directors who had signed the insurance policies as well as the associates could not be held jointly and severally liable for debts greater than the amount of the capital (i. e. 300,000 livres), yet beyond that limit they could be required to pay au sol la livre in proportion to the interest they had in the company, i. e. the value of their shares. A compulsory arbitration mechanism was set up for potential disputes, with a possibility to appeal to the Lieutenant général de Police, the Prévôt des marchands, and the councillors of state appointed by the King, and each insurance policy contained a corresponding arbitration clause (Art. 10). If the parties failed to appoint arbitrators, they were appointed by the Lieutenant Général de l’Amirauté. Moreover, the 1686 edict forbade the partners of the company from entering into insurance contracts with the same company whereas the 1786 arrêts even encouraged policyholders to also become shareholders. Finally, the edict granted to the company a monopoly on offering marine insurance in Paris (Art. 25), and it gave further privileges to its partners. By contrast, the 1786 arrêt did not grant such a monopoly to the company, which was established by the Périer brothers, even though the two brothers had asked for a monopoly, a decision that was confirmed by the Contrôleur général des finances in a letter dated 3 August 1787. It is difficult to assess how the two fire insurance companies which were established in 1786 developed.46 Not much is known about the activities of the company of the Périer brothers. Probably, it did not meet expectations: in the first year (1786) it had collected only a little over 2,400 pounds in insurance premiums.47 The company created at the initiative of de Batz and Clavière left more traces. In 1787, it requested authorization to extend its activities to life annuity transactions, a request that was rejected by de Breteuil in a letter dated 31 May1787. However, it was allowed by a royal edict of 27 July 1788 to break up into two branches, the one engaging in the fire insurance sector, the other being active in the life insurance sector. Although it seems that its business was not flourishing in the first months of

45 Édit pour l’établissement d’une compagnie d’assurances et grosses aventures à Paris, Versailles, mai 1686, in: Athanase Jourdan, Decrusy and François-André Isambert, Recueil général des anciennes lois françaises, vol. 19 (1829), 549. 46 Merlin de Douai, in his reissue of Guyot’s Répertoire universel et raisonné, did not mention these companies. In dealing with insurance in the French Ancien Régime, he made no reference to fire insurance: Philippe-Antoine Merlin de Douai, Répertoire universel et raisonné de jurisprudence (1807 – 1809), s.v. Police et contrat d’assurance. 47 Archives nationales, X1b 8986. See Bouchary (n. 36), 13.

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its existence, the prospect of profits quickly spawned speculation – at least if we believe a 27 January 1787 letter from de Breteuil that was addressed to de Batz.48 Moreover, some insurance policies have survived, such as the policy taken out by the parish priest of Saint-Sulpice in 1787.49 This policy, concluded for five years and for a total value of 384,000 livres, proves that the company not only insured buildings but also movable property, including clothing and books.50 However, Art. 12 of the policy excluded from coverage items such as mirrors, books of account, bills of exchange, precious stones, and jewellery. The annual premium was fixed at 230 livres, which was 20 % more than the basic rate, probably because craftsmen had their workshops in the insured houses. Most of the policy terms and conditions expressly referred to the arrêt of 6 November 1786 as if it were a binding reference on the parties to the contract. For example, Art. 18 f. referred to the provisions of the arrêt on the assessment and settlement of damages as well as on the arbitration of disputes. More generally, the policy has all the characteristics of modern policies, relying on the same principles as modern insurance contracts do: it took into account the risk when setting the premium; it saw the need to define the risk as precisely as possible (taking into account, for example, the quality of the building as well as its use); and it was based on the principle of indemnity. The first four articles set the premium in accordance with the nature of the risk. Articles 5 f. aimed at assessing the value of insured buildings and furniture. Article 7 required the insured to inform the insurer of any changes in the use of the insured properties. The policy defined the extent of the company’s obligations: it limited its obligations to the damage caused by the fire to the insured buildings and the insured furniture; the houses of neighbours that may also have been affected by the fire were excluded from coverage (Art. 9). The company reserved the right to pursue recourse from those who had caused the fire and were thus liable for damages. Multiple insurance was possible if the insured informed the insurer. In that case, the damage was apportioned among the different insurers in proportion to the value each insured, and the indemnity could not exceed the value of the insured property (Art. 16 f.), again implementing the principle of indemnity.

48 Lettre du 27 janvier 1787 du ministre de Breteuil au baron de Batz, Archives nationales, 01 498, fol. 71. 49 Police d’assurance no. 686 du 6 juin 1786 garantissant le curé de Saint-Sulpice contre les dommages pouvant résulter d’incendie pour vingt-trois maisons lui appartenant, Archives nationales, T107/8, quoted by Bellenger (n. 13), 95. Some were published by Hamon (n. 32), 45 – 48. He reproduced, for instance, a policy signed for a period of two years by a grocer on 30 July 1787, concerning a house insured for a value of 10,000 pounds. 50 The possibility of extending the insurance to movable property was on several occasions demanded by de Breteuil, see Lettre du 16 mars 1787 du ministre de Breteuil à Duval d’Ailly, Archives nationales, 01 498, fol. 186; Lettre du 22 mars 1787 du ministre de Breteuil à Duval d’Ailly, Archives nationales, 01 498, fol. 197 f.

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III. Unfinished projects Inspired by examples from other European countries, a project that is neither signed nor dated proposed to the Royal government to set up numerous caisses de feu throughout the kingdom as funded by an additional tax.51 According to the plan, each owner had to register his houses or buildings with the nearest caisse for three quarters of their value with the last quarter being left to be covered by the owner in order to avoid any abuse. He was to pay five or six sols per 100 pounds in insured value. Each of these caisses was to invest the collected funds for profit and, in the case of fire, distribute them to the fire victims. The aim was not to create companies but to introduce a public service administrated by representatives of the state together with the church, local authorities, and homeowners (six noblemen and six bourgeois). The project was never implemented. It is, nevertheless, interesting because it proves that the idea of a state-run fire insurance scheme – an idea that would surface again during the revolution of 1848 – existed already during the Ancien Régime. Based on the idea of pooling risks and the obligation to contribute, the project proposed for the first time in France a system of compulsory insurance characterized by close involvement of the state and without the motive of making a profit. This overview of projects that have remained dead letters would not be complete without mentioning a project drafted in 1783 by Louis-François de Beaufleury, a lawyer in Parliament who was born in the Judeo-Portuguese community of Bordeaux in 1746. The project provided for the creation of fire insurance offices not only in the city of Bordeaux but also in the largest cities of the Kingdom. It established a list of tariffs which varied according to the nature of the materials used for the construction of the insured buildings and which increased when the building housed a dangerous commercial or industrial activity.52 B. From the French Revolution to the Napoleonic Empire From the perspective of the history of fire insurance, the period from 1789 to 1814/1815 is not without interest: in the first years of the Revolution, stock companies were prohibited. Furthermore, despite the interest shown in fire insurance during the Ancien Régime and despite the fact that the people were still aware of the fires that had struck Paris in the second half of the eighteenth century, all insurance companies were banned during the Revolution. 51 Projet d’établissement d’une caisse de feu dans chaque généralité du royaume, Bibliothèque Nationale de France, Arsenal, 8 S 18108, quoted by Bellenger (n. 13), 72 and Bouchary (n. 36), 10. 52 This project was presented in a brochure entitled: Projets de bienfaisance et de patriotisme pour la ville de Bordeaux et pour toutes les villes et gros bourgs du royaume (1783). This brochure also contained a plan to fight begging, see Mercure de France, 15 November 1783, 121 and Bouchary (n. 36), 10.

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There are several reasons for these prohibitions. On the one hand, there was the simple fact that companies were regularly endowed with privileges granted by the King at the time of their creation. These privileges were contrary to the liberal ideology that drove the Revolution. However, one has to remember that not all companies had received such privileges. Especially, the aforementioned fire insurance companies had not received any privileges. On the other hand, insurance was looked upon as a morally reprehensible practice: at best, insurance induces owners to act negligently; at worst, it seduces the insured to commit malicious arson. Furthermore, Mirabeau and Brissot de Warville argued that insurance favours financial speculation on shares (agiotage). Finally, banning insurance was seen as a way of fighting against the corrupting power of money at a time when financiers were suspected of betraying the general interest by transferring their capital out of the country. These general developments also affected the lives of the early protagonists of insurance in France: Clavière, who was one of the pioneers in the French insurance sector, initiating one of the first fire as well as life insurance companies, was appointed finance minister in March 1792 with the support of the Girondins. In 1793 he was imprisoned, and in December of that same year he committed suicide. Let us now turn to the exact chronology: in August 1792, an act was passed that taxed shareholding in order to restrict the transfer of shares and capital. As a consequence, investments in stock companies became unattractive. In a second step, a decree of August 1793 outlawed certain companies, including life insurance companies and joint-stock companies. The 1793 decree directly affected French fire insurance companies as they had the form of joint-stock companies. The decree was short, comprising only three articles. Article 1 pronounced the dissolution of all stock companies; according to Art. 2, the creation of new stock companies needed the authorization of the legislative assembly; Art. 3 had a narrower focus as it concerned only the dissolution of so-called caisse d’escompte. These bans and prohibitions did not, however, prevent insurance practice from developing further. Rather, they led insurance practice in a specific direction: mutualism. A first mutual insurance society was created in 1798, during the second phase of the Revolution. It obliged each member to contribute to repairs in the event any person suffered damage from fire. It was established by notarial act of Fructidor 3, an VI (20 August 1798) at the initiative of three persons named Lacornée, Cottu-Millon and Moreau.53 Its founders published a prospectus that praised the merits of the idea of mutualism.54 Furthermore, the prospectus also defined the terms of joining the society and the insurance scheme. The cost of joining was fixed at 90 centimes or 18 cents per 1,000 francs in insured value. In addition to this 53

Convention de sociétés passée entre les citoyens Lacornée, Cottu-Millon, Moreau le 3 fructidor an VI pour la création d’une société d’assurances mutuelles contre l’incendie, minute enregistrée par le notaire Dupont, Archives nationales, minutier central, ET/LXXII/522. 54 Premier prospectus de l’administration générale d’assurances mutuelles entre les propriétés contre les incendies, Archives nationales, minutier central, ET/LXV/558, ET/LXVI/ 720, ET/X/831, ET/XII/782, ET/LXXV/914, ET/XLV/664.

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registration fee, members were not required to pay any premium. Membership ran for a period of five years but was (tacitly) renewable. In the event of a fire affecting the property of a member of the society, the other members had to make contributions towards the compensation paid to the fire victim. The individual contributions were calculated (au marc la livre) on the basis of the value of the property which each member had insured. For that purpose, the value of each insured property was assessed on the basis of tax rolls when joining the society. In February 1799, a second prospectus was distributed. It introduced a distinction between houses built of wood and houses built of stone. Thus, it was not only on the basis of the insured value that the individual contributions which each member had to make in the event of fire were calculated. Rather, the individual risk of the insured properties was taken into account, too.55 Furthermore, the second prospectus provided that disputes between the members and the societies should not be brought before the ordinary courts but be submitted to the arbitration of the society’s conseil général, which was composed of the society’s administrators, two former judges of the Cour de cassation, and notaries. The 1798 mutual fire insurance society was the first of its kind established after the 1793 decree. Was it a success? Probably not. According to materials kept in the Archives nationales, the society attracted only seven members between 1798 and 1799, too small a number for it to function properly. However, during the Consulat (1799 – 1804) and the First Empire (1804 – 1814/1815), several private initiatives were taken to establish further mutual insurance societies. These societies were founded in a legal context that is noteworthy: the Code civil of 1804 mentions insurance contracts as an example of aleatory contracts, but it does not include any detailed provisions regulating insurance contracts. And the Code de commerce of 1807 only covered marine insurance contracts. The most important of these initiatives took place in Toulouse at the beginning of the Consulat. In a first step, Pierre-Bernard Barrau developed plans for a mutual insurance society to insure crops, especially against hail. It was established on 5 April 1802. In a second step, he turned to fire insurance.56 Its distinctive feature related to its temporary nature: while Art. 30 allowed a renewal of the society57 – which indeed occurred – under Art. 3 of its règlement the Société d’assurances réciproques contre l’incendie was supposed to last five years.58 The calculation of the premiums functioned similarly to both the 1796 society which was established 55

29 pluviôse an VII (17 February 1799), Deuxième prospectus de l’administration générale d’assurances mutuelles entre les propriétés contre les incendies, Archives nationales, minutier central, ET/LXVI/720, ET/XII/782, ET/XLV/664. 56 Pierre-Bernard Barrau, Projet d’assurances réciproques pour les maisons, contre l’incendie (1803). 57 However, it was not possible to compel an insured to continue to insure his house beyond the five years. See: Société d’assurances réciproques contre l’incendie, pour les maisons de la ville et des faubourgs de Toulouse, établie le 1er pluviôse an XIII (1805), Art. 30. 58 Règlement de la Société d’assurances réciproques contre l’incendie (without date), 5.

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by Lacornée as well as to other societies: premiums were calculated on the basis of the value of the insured building, with a minimum value of 600 francs and with one franc per year for each 1,000 francs in value (Art. 4). The value of the building was determined on the basis of the property tax paid by the owner. However, the owner was free to have his building assessed at his own expense by two experts of the company (Art. 7). According to Barrau’s calculations, the sums so collected sufficed to build up a compensation fund, without the need to put in place further mechanisms such as the obligation of members to contribute to the losses of comembers. However, a member who stopped paying his annual premium lost his membership and forfeited the premiums which he had already paid (Art. 29). If no fire occurred during the five years, each participant received back the amount he had paid. The determination of the value of the insured property was important not only because it allowed the calculation of the annual insurance premium (Art. 7: ‘cette estimation [i. e. the estimated value of the insured property] servira de base aux conditions de l’assurance’). The value was also crucial for calculating the insured’s indemnification. The exact assessment of loss was in the hands of experts of the company. The policyholder had to contact the company within five days after a fire. It seems likely that the failure to observe this time limit had the legal effect that the insured lost all rights to claim indemnification even if the règlement did not make this legal consequence explicit. In conclusion, the mutual fire insurance society designed by Barrau exhibits a feature that still characterizes modern insurance: the insured value determined the premiums and the measure of compensation. In the event of total loss of the insured building, compensation was limited to five-sixths of its value, with one-sixth to be shouldered by the insured himself (Art. 23). Furthermore, risk-enhancing factors, such as the case of a building made of wood, were not considered when calculating the premium. Rather, they affected the amount of compensation. The owner of a building with wooden facades received only three-quarters of the estimated value as compensation (Art. 24). In 1805, the society had 189 members insuring 241 houses for a value of 3,323,300 francs. In 1809, after the society had been renewed with the same statutes, it had 191 members with 227 insured houses for a total value of 3,248,300 francs. The premiums collected were 3,329 francs in 1805 and 3,796 francs in 1809. No fire occurred during those years.59 In 1809, the Conseil d’État was consulted for his opinion on the statutes of the society and on the possibility and usefulness of creating similar societies in all the départements of the country. From a general point of view, the Conseil d’État expressed a favourable opinion as he regarded fire insurance useful. However, the Code de commerce had in the meantime been adopted in 1807. It provided in Art. 37 that public limited companies could only be created after authorization and 59 Rapport du directeur de la société d’assurances réciproques contre la grêle et contre la mortalité des bestiaux du 31 août 1810 par Barrau, directeur, Bibliothèque municipale de Rouen, Mt Br 943 Fonds Cas, quoted by Bellenger (n. 13), 130.

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approval by the government.60 The Conseil d’État advocated that the establishment of mutual insurance societies should also need prior administrative authorization61 and refused to approve the statutes of the society established by Barrau on the grounds that they had various shortcomings. Barrau tried to intervene with the Ministre de l’Intérieur, but without success. He was asked to terminate the society as from 1 January 1811.62 Nevertheless, the whole incident proves that the government began to show an interest in insurance. This interest also reveals itself through the creation of an insurance commission at the Ministère de l’Intérieur. It was established by Jean-Pierre de Montalivet, then Ministre de l’Intérieur, in response to another intervention by Barrau. Its vice-president was Benjamin Delessert, the son of Etienne Delessert, who was one of the administrators of the insurance company founded by de Batz and Clavière.63 A second example is provided by Laurent, who in 1808 and 1809 published several prospectuses with the plan of establishing mutual fire insurance.64 Laurent copied the statutes of Barrau’s company by planning to require an annual premium calculated on the basis of one franc per 1,000 francs of insured value. Apart from this obvious similarity, Laurent’s plan was, however, more ambitious than the society that Barrau had established: Laurent’s society was planned to extend to the entire country. Furthermore, he wanted to provide all necessary equipment for the prevention of fire and for firefighting in each district of each département. For the running of the society, Laurent imagined an organization reminiscent of the civil administration: special receivers (receveurs spéciaux) were to be appointed in each district. Laurent thought of appointing tax collectors to this position if the préfets agreed. And he planned to nominate general receivers (receveurs généraux) in each département whose function would be collecting the insurance premiums and paying the indemnities to fire victims. In each département, an inspector was to be installed to supervise the receivers. In addition, Laurent wanted to publish in each arrondissement the society’s financial reports and to hand over one copy to the 60 In 1808, Joseph de Deverneilh-Puiraseau, Observations sur le projet de Code rural (dated 1808, first published only in 1811), 617, proposed to insert in Tit. III, Chap. 10 of the Code the possibility of creating, at the level of one or more departments, mutual and voluntary insurance societies protecting against the risk of fire and hail as well as livestock insurance. He suggested that the statutes of these societies should be approved by the Emperor. 61 Avis du Conseil d’État sur la formation et l’existence des compagnies d’assurances contre la grêle, les incendies et la mortalité des bestiaux of 30 September 1809, Journal du département de la Haute-Garonne, 18 March 1810, no. 630. 62 See Pierre-Bernard Barrau, Manuel des propriétaires de toutes les classes ou traité des fléaux et des cas fortuits (1816), 585. 63 Barrau (n. 62), 586. In 1813, Montaliver finally agreed to resume his activities in Toulouse, but Barrau did not follow up after having been installed in Paris. 64 Prospectus pour l’établissement de secours et d’assurances respectives contre les incendies, signé de Laurent (1808), Archives nationales, AD/XIV/6; Prospectus pour une assurance avec réciprocité contre les ravages de la grêle, signé par Laurent (1809), Archives nationales, AD/XIV/6.

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Ministre de l’Intérieur and the préfets. Laurent himself, thus, had envisaged a kind of voluntary state supervision, probably hoping that this would increase the public trust in the running of the society. However, apart from the aforementioned prospectuses, no records of any activities of the society have survived. It is therefore impossible to say with certainty whether this project actually came into being. In the meantime, prefectural decrees restored in many départements the ancient Caisses (dépôts) des incendiés which had initially been established during the Ancien Régime and which had then been placed under the authority of the bishops: Aube in 1800; Yonne in 1803; Marne in 1804; Ardennes and Meuse in 1805. These offices had never been considered as mutual insurance societies.65 They were reorganized and placed under the responsibility of mayors and préfets. The civil administration, thus, took the place of the clergy. Apart from these organizational changes, the example of the fire office in the département Aube proves that these offices operated similarly to those of the Ancien Régime: the 1801 regulations for the Aube office included eleven articles which were similar to the regulations adopted in 1769: it adopted, for example, a principle of proportionality, according to which the indemnity granted depended on the amount of the alms which the victim had donated.66 These offices were not limited to functioning as mutual schemes indemnifying fire victims. Mayors and préfets hoped to utilize them as a vehicle to prevent fires, for example by encouraging the construction of tiled instead of thatched roofs. In 1813, the préfet of the département Aube, for example, decided to allocate a portion of the funds to finance roofing with tiles. It offered to cover half the costs for the tiles. With respect to the support offered to fire victims, a 1909 report of the département Aube stated that the relief granted was capped in two ways. Either, the sum offered equalled 1,200 times the donations which the fire victim himself had made at the collections (with the same cap also applying in the département Marne67). Or the fire victim received nine-tenths of the loss he had suffered. Thus, these offices observed the principle of indemnity, an essential element of insurance. However, despite their obvious usefulness, these offices suffered during the Napoleonic Empire the same problems as during the Ancien Régime: the sums collected were simply insufficient. For example, in 1814, the Bureau du département de l’Aube had remaining funds amounting to only 14,000 francs (and these funds had to be handed over to armies invading the département at that time).68 Nevertheless, many of them continued to operate until the beginning of the twentieth century. Furthermore, at the turn from the nineteenth to the twentieth century, the sums 65 The Conseil d’État, being consulted by the government on 21 May 1896, declared that the creation of a fire insurance company was not within the legal powers of the départements, see (1896) 3 Revue générale d’administration 408, as quoted by Bellenger (n. 13), 154. 66 See Berger (n. 19), 23 – 25, as quoted by Bellenger (n. 13), 144. 67 The Marne bureau was transformed into a mutual society in 1875, see Jean Couteaux, Le Monopole des assurances: historique, justification, fonctionnement (1911), 322. 68 See Berger (n. 19), 28, 30.

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collected were much larger than at the beginning of the nineteenth century. The office in Marne, for example, raised in 1910 a total of 478,291 francs, almost twenty times more than in 1804.69 In 1906, the office in Aube even published a report on its activities since 1800, showing that in a little over a century the income amounted to nearly 5,500,000 francs. The sum mostly came from collections (a little less than 4,000,000 francs) and income on annuities (1,313,000 francs), and to a lesser extent from donations and legacies. In total, 3,600,000 francs were paid to fire victims. Furthermore, the office had bought water pumps. The remaining funds were used to purchase annuities from the French state.70 C. The Restauration: the establishment of the modern French insurance sector The years immediately following the fall of Napoleon were of great significance for the development of the French insurance market, and they witnessed important legal advances as well as improvements in the insurance practice. Further progress was seen in actuarial science. In 1812, for example, Pierre Simon de Laplace published a book entitled Théorie analytique des probabilités,71 French jurists of the nineteenth century were open about the fact that they turned to England as a source of inspiration. French lawyers believed that terrestrial insurance and – especially – fire insurance were invented in England. This was, for example, asserted by Isidore Alauzet.72 None of the French specialists in non-marine insurance law would think of ignoring English law. Alphonse Grün and Louis-Joseph Joliat, for example, quoted the works of John Weskett and Samuel Marshall, although both books were not translated into French.73 Though England was not seen as model that had to be strictly followed, commentators felt that it was worthwhile reflecting on English insurance practice and law because the English developments were seen to be advanced compared to France.74 Furthermore, France experienced in these years an economic growth due to the industrial revolution gaining momentum. Shareholding increased, and the whole intellectual environment changed. Due to economic stability, the insurance sector grew rapidly. Both mutual insurance societies and commercial fixed-premium insurance companies profited from this growth. As a consequence, mutual societies

69

Couteaux (n. 67), 312 – 322. Berger (n. 19), 40. 71 Pierre Simon de Laplace, Théorie analytique des probabilités (1812). 72 Alauzet (n. 31), 101. 73 John Weskett, A complete Digest of Theory, laws and practice of insurance (1781); Samuel Marshall, A Treatise on the Law of insurance (1805). 74 See Gustave Sautayra, De l’assurance contre l’incendie (1841), preface. 70

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diversified their activities,75 while fixed-premium fire insurance companies expanded again from 1819. The latter did so with the support of the banking sector and the business community. Due to the efforts of the Breton banker Marie-Auguste de Gourcuff, Louis XVIII abandoned his reservations towards fixed-premium insurance, especially with respect to the problems of moral hazard.76 As a consequence, the Ministre des Finances decided on 30 November 1819 to exempt insurance companies from the tax called patente on the ground that insurance is not in itself a commercial activity.77 Thus, a dualistic system took root. Of course, philanthropic behaviour and private help did not disappear.78 However, the idea of state-run fire insurance schemes were, in the name of liberal principles, abandoned between 1820 and 1825. The dualistic system rested, on the one hand, on mutual societies. They had to choose the corporate form of a public limited company, société anonyme. On the other hand, there were fixed-premium companies. They could take several corporate forms. Most often, they, too, were established as limited companies, but they could also take the form of a limited partnership (société en commandite) or of a general partnership (société en nom collectif). With mutual societies, it was only policyholders who were at the same time shareholders. With fixed-premium insurance companies, policyholders were not necessarily at the same time shareholders, even if policyholders could of course buy shares for speculative reasons.79 Thus, it is important to note that the dividing line ran in France differently than in other European countries. In France, it was not that mutual insurance societies stood in contrast to public limited insurance companies, as also mutual insurance societies took the corporate form of a public limited company. Rather, in France, the dividing line was between mutual societies that were funded by members’ contributions and established without the intention to make a profit, on the one hand, and insurance companies that required policyholders to pay fixed premiums and that had been established with the intention of shareholders making a profit, on the other hand. Four fixed-premium insurance companies operated in 1826 in Paris in the form of public limited companies: the Compagnie d’Assurances Générales, the Com75 See Christian Lion, La Mutuelle de Seine-et-Marne contre l’incendie de 1819 à 1969. Mutualité, assurance et cycles de l’incendie (2008); Pierre Martin, Deux siècles d’assurance mutuelle. Le groupe Azur (2009). 76 The King’s fears were perhaps not totally unfounded: after the Cour de Cassation on 21 November 1822 had ruled that Art. 434 of the Code pénal on arson could be applied to an owner who sets fire to his own property that he had insured, a letter from the Minister of Justice to the Attorney General, dated 25 January 1823 and reproduced by Grün/Joliat (n. 29), 215, suggests that the number of fires had increased since the advent of insurance companies. 77 See Grün/Joliat (n. 29), 62. 78 François Jarrige and Bénédicte Reynaud, Les usines en feu. L’industrialisation au risque des incendies dans le textile (France, 1830 – 1870), (2014) 249/4 Le Mouvement Social 141 – 162. 79 Grün/Joliat (n. 29), 31.

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pagnie française du Phénix, the Compagnie Royale d’Assurances, and Le Soleil (established in 1826 by Charles Xavier Thomas, who also took part in the creation of L’Aigle Incendie in 1843). At the initiative of the Count de Raincy, director of Le Soleil, these companies formed a union in 1834 titled Comité syndical des compagnies à primes fixes contre l’incendie – the precursor of the Assemblée plénière des sociétés d’assurances dommages. It is difficult to specify how many buildings were insured in the early nineteenth century, and it is equally difficult to estimate their insured value. However, contemporaries did not hesitate to assert that a ‘significant segment’ (‘partie notable’) of the buildings in France were insured.80 In any event, many of these companies grew quickly. For example, 25 years after it had been established, the value insured by the Compagnie d’Assurances Générales had increased by more than a factor of 20;81 and the premiums collected by Le Phénix rose from 1,000,000 francs in 1820 to 22,000,000 francs in 1918, which was twice the amount which the company had to pay in compensation.82 Considering the growth in the non-marine insurance market, it does not come as a surprise that the French legislature – or more generally: French lawmakers, including the administration responsible for administrative regulations – felt at the same time (i. e. in the beginning of the Restauration) the need to introduce specific rules to regulate these activities. A first initiative concerned the general rules on how to establish a public limited company. This first initiative, thus, did not exclusively apply to fixed-premium insurance companies. An instruction of Ministre de l’Intérieur Joseph Henri Joachim Lainé dated 22 October 1817 clarified how to apply Art. 37 Code de commerce.83 The instruction outlined that any request for the creation of a public limited company had to be addressed to the préfet of the département where the company will have its registered office. This request had to indicate the names of the shareholders, the object for which the company was to be constituted, its intended duration, the details of its administration, the amount of share capital, and the period within which the capital was to be raised. Furthermore, the statutes, which had to be drafted before a notary, had to be attached to the application. A long and complex procedure then began involving the Ministre de l’Intérieur and the Conseil d’État.84 As mentioned above, the ministerial instruction was of general application. It was clear that it applied to fixed-premium companies in the form of the public limited companies. However, the instruction left no room for doubt that it also wanted to cover mutual societies: it explicitly referred to 80

Grün/Joliat (n. 29), 9. La compagnie d’assurances générales contre l’incendie, 1819 – 1919, Cent ans d’assurances et de sagesse financière (1919), 58 and 84. 82 Centenaire de la compagnie française du Phénix incendie (1919), 35 and 36. 83 Instruction sur les demandes en autorisation et approbation de S.M. pour l’établissement des sociétés anonymes (1817). 84 On the procedure in detail, see Sautayra (n. 74), 2. 81

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societies whose members ‘placent simplement en commun les risques qui affectent leurs propriétés, comme les compagnies d’assurances mutuelles’ (‘simply pool the risks that affect their properties, such as mutual insurance societies’). Nevertheless, it was not self-evident that mutual insurance societies were put on par with fixedpremium insurance companies. The members of mutual societies do not seek to make profits, yet the intention to make a profit is one element formulated in Art. 1832 Code civil as defining societies. Consequently, the instruction raised a scholarly dispute. Jean-Marie Pardessus, for example, was opposed to treating mutual insurance societies like fixed-premium insurance companies.85 However, the Cour de cassation held, in an important judgment of 1842, that although mutual insurance companies are not commercial companies, the creation of mutual insurance companies nevertheless follows the same procedure as the creation of public limited companies – not because they are commercial companies, but on grounds of public policy.86 A second instruction ministérielle of the Ministre de l’Intérieur dated 11 July 1818 primarily concerned what we call today insurance contract law.87 According to a prevailing practice in marine insurance, the indemnity in a case of a total loss was limited to nine-tenths of the insured value. Accordingly, the insured was burdened to shoulder one-tenth of his loss himself. The 1818 instruction explicitly declined to introduce a corresponding rule as compulsory for land insurance. Indeed, some companies operating in the land insurance sector had already voluntarily adopted a similar practice, such as Le Phénix. However, others had not. Likewise, the instruction refused to introduce a rule which would have prevented the insured from signing separate policies for a building, on the one hand, and for the movable property located in the building, on the other hand. Furthermore, the instruction did not establish a uniform and mandatory way of calculating the indemnity. Some companies, such as Le Phénix, the Compagnie Royale, and the Assurance mutuelle de Paris, started with the estimated value of the destroyed property. Others took the price of the reconstruction. This was the case with the Compagnie d’Assurances Générales. Finally, the 1818 instruction did not require that compensation be paid in cash: in order to prevent fraud, several French companies, such as Le Phénix and the Compagnie d’Assurances Générales, followed the English model in that they reserved the right for themselves to repair or rebuild insured buildings. In all, the instruction followed a very liberal approach, refraining from limiting the parties’ (and especially: the insurer’s) contractual freedom. However, the instruction contained, nevertheless, a very important restriction, a restriction which we could today qualify as belonging to the law of insurance supervision: it forbade companies from insuring different types of risk.

85 86 87

Jean-Marie Pardessus, Cours de droit commercial, vol. 3 (6th edn., 1857), no. 1044. Cour de cassation (Chambre des requêtes), 12 janvier 1842, (1842) 1 Recueil Sirey 14. Reproduced in Grün/Joliat (n. 29), 44 f.

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When analysing these instructions, we have to remember that they were instructions ministérielle: administrative regulations. They were not passed by the legislature. It was not until 1930 that the first general insurance contract law was enacted that went beyond marine insurance.88 Thus, it is only by analysing insurance policies, case law, and contemporary literature, such as the works of Pardessus or Grün and Joliat,89 that it is possible to understand legal developments in fire insurance in nineteenth-century France. In principle, literature’s approach was simple. It started from the idea that marine insurance law and land insurance law ran parallel. They differed only in the objects insured. It was, thus, possible to apply the rules relating to marine insurance contracts to non-marine insurance contracts. For example, Art. 351 Code de commerce, which exempted the insurer from any liability to indemnify for any loss caused by the insured himself, was simply applied to fire insurance. Likewise, Art. 348, which declared an insurance policy null and void if the insured had failed to disclose information necessary for the exact assessment of the risk, was applied to all insurance contracts. However, there were also exceptions to this general approach: it was the rules of the Code civil on prescription that were applied to fire insurance contracts, and not Art. 432 Code de commerce. I. Mutual insurance societies On 4 September 1816, the Société d’assurance mutuelle immobilière de la ville de Paris was established. It was the first mutual fire insurance society in Paris.90 It was created in the corporate form of a public limited company. It was authorized by Louis XVIII. Such authorization had been necessary since the Ancien Régime. Jacob Du Pan had filed the statutes with a notary on 13 August 1816. Du Plan, a banker, also became the society’s general manager.91 The statutes were signed by 26 founding members, who insured buildings located in Paris for 8,125,000 francs.92 It was only the buildings that were insured. Movable property located in the buildings was not covered. There are certain details that resemble the 1796 society which had been established by Lacornée and others. Members had to join the society for a minimum 88 On the preparation of this act, see David Deroussin, H. Capitant et le droit des assurances, (2016) 36 Revue d’histoire des Facultés de droit 297 – 337. 89 See Jean-Marie Pardessus, Cours de droit commercial, vol. 2 (1814); Grün/Joliat (n. 29). 90 Société d’assurances mutuelles immobilières contre l’incendie pour la ville de Paris, Pétition adressée à l’Assemblée nationale au sujet du projet de reprise des assurances par le gouvernement (1848). 91 Acte notarié pour la création de la compagnie d’assurance mutuelle contre les incendies, Archives nationales, F1 1106, reproduced in Grün/Joliat (n. 29), Annexe, 4. 92 However, the statutes specified that the right to an indemnification existed only when the total value of the insured buildings had reached at least 25,000,000 francs.

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period of five years, and membership was renewable by tacit agreement. The society did not require members to pay an annual premium. In the event of loss suffered by a co-member through fire, each member had instead to make a contribution, calculated in proportion to the value he had insured. However, the contribution was also dependent on the specific risk insured: a member who exercised a dangerous profession in the insured building had to pay double the amount as contribution. Furthermore, the statutes borrowed elements from the 1802 society that Barrau had established in Toulouse. The term of insurance was set at five years. The value of buildings was calculated on the basis of the property tax. Alternatively, if the insured or the society so requested, the value was assessed by three experts, one appointed by the insured, the other by the company, and the third by the first two experts. The costs of such an assessment had to be covered by the party who requested the expertise. The so calculated or estimated value was the basis defining, on the one hand, the amount of indemnity to which the insured had a right in the event of fire and, on the other hand, the amount which co-members had to contribute to such indemnity. The statutes explicitly excluded certain risks, such as fires caused by civil riots, by the army, or following an invasion. In his role as a shareholder, each member had to give surety representing 1 % of the insured value (the sum of these guarantees forming the share capital). Like the statutes of most of the aforementioned societies, also those of the Société d’assurance mutuelle immobilière de la ville de Paris included detailed provisions on how to determine the damage. The damage had to be assessed within 24 hours after the fire had occurred. It follows that the insured had to declare the loss immediately and without delay. The company had to pay compensation no later than four months after the minutes had been drawn up by the experts. Finally, the statutes included an arbitration clause: two arbitrators were appointed by the parties and a third by the district’s justice of the peace.93 However, at least two provisions were novel compared to the statutes of previous societies. First, tenants and mortgage creditors were allowed to insure property that they rented or that was used as security. Secondly, materials that had survived the fire became the property of the society, which was required to remove any such materials within 15 days after the minutes had been drafted by the experts. This rule recalls the technique known in marine insurance as délaissement. Last but not least, one-tenth of the subscription fee paid by each member benefited the Hospices civils de Paris, underlining the idea of mutualism inherent in the company and exhibiting charitable elements. In 1848, the Société d’assurance mutuelle immobilière de la ville de Paris had 18,000 members, insuring nearly 24,000 houses. At that time, Paris counted in total around 30,000 houses.94 The society was successful throughout the nineteenth 93 94

Grün/Joliat (n. 29), Annexe, 15. Pierre-Joseph Richard, Histoire des institutions d’assurances en France (1956).

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century. By the end of that century, the total insured value had increased to nearly eleven billion francs. By then, it also had diversified the insured risks.95 It is one of the oldest societies that merged into what is today known as the AXA group. Numerous mutual insurance societies were created in several départements throughout France. Their statutes were often inspired by the statutes of the Société d’assurance mutuelle immobilière de la ville de Paris:96 in 1818 in the départements of Haut-Rhin,97 Seine-Inférieure, and Eure; in 1819 in the départements of Seine-etOise, Seine-et-Marne,98 and Rhône. In 1821, the Société d’assurances mutuelles de Loir-et-Cher followed.99 At times, these societies were established at the initiative of private individuals. In other cases, it was the municipal authorities that took the initiative. This was, for example, the case with the Société d’assurance mutuelle contre l’incendie dans le département du Bas-Rhin. In all, it seems that mutual insurance societies were better suited for those insurers whose scope was limited to a city or a département, whereas fixed-premium insurance companies required a greater organization and, consequently, a larger radius of action. In any event, the development of mutual fire insurance societies during the Restauration calls for several final remarks. First, the question has been asked whether the pooling of risks is sufficient to analyse these societies in terms of insurance. After all, the insured did not have to pay fixed and periodic premiums as the price for being insured. With these mutual societies, the exact amount which the insured had to contribute was not fixed at the time when he signed the policy. With the Parisian society of 1816, for example, the accounts were balanced at the end of each financial term, and each member was obliged to pay whatever was necessary for having indemnified those members who had suffered loss through fire. These sums could be greater or smaller, depending on the loss suffered in that financial term. Nevertheless, most contemporaries analysed these societies in terms of insurance: the obligation to contribute to losses of comembers is the price for being insured. Moreover, some mutual societies, unlike the Parisian society of 1816, provided for the payment of periodic contributions in order to build up a rolling fund, i. e. working capital.100

95

See Hamon (n. 32), 66. Vonau (n. 8), 46, claims that the statues of the two mutual societies established in Alsace were closest to those of the Parisian society. 97 See Vonau (n. 8), 38. When it was established, it already had more than 500 subscribers with an insured value of 12,538,300 francs. 98 Assurance mutuelle, compagnie d’assurance mutuelle contre l’incendie, particulière au département de Seine-et-Marne, créée sous les auspices de M. le Préfet, et administrée par les propriétaires de son choix (undated), Archives Départementales Seine-et-Marne, AZ 14501. 99 See A. Rayneau, La Société d’assurances mutuelles de Loir-et-Cher contre l’incendie, 1821 – 1921 (1921). 100 E.g., the Compagnie mutuelle du Haut-Rhin, see Vonau (n. 8), 52. 96

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Secondly, each policyholder was, in his function as a shareholder, debtor to the company of a sum representing his share. All statutes took special care to exclude any form of solidary liability. Thirdly, mutual insurance societies were favoured in legal literature. Alauzet, for example, believed that mutual societies could ‘lead to the best results’ (‘conduire aux plus beaux résultats’).101 However, were they also favoured by the government? They were part of the social and political logic of their time. Literature often highlighted this political dimension and stressed that only mutualism offers the advantage of reconciling individual interests with the common interest.102 Fourthly, they were organized according to the same census model which also structured political participation: the administration of these societies was in the hands of those with the highest insured value. This was, for example, the case with the mutual societies of Eure-et-Loir, Seine, Seine-et-Oise, and Gironde. In its first years, the Mutuelle du Rhône accepted on its board of directors only members that had registered an insured value of 100,000 francs – a considerable sum. As these amounts represented the value of real estate, it is clear which parts of society were in charge of running these mutual insurance societies.103 The Société d’assurance mutuelle immobilière de la ville de Paris established in Paris in September 1816 followed the same logic: the society’s conseil général represented only those 50 members with the highest insured values. The conseil appointed the executive board. Only those who had register an insured value of at least 100,000 francs were eligible to sit on the board of directors.104 The similar logic behind the criterion defining the possibility to participate in the running of these mutual societies and the census criterion defining political participation suggests that the government must have favoured mutual societies over fixed-premium insurance companies, as did literature. More specifically, this finding suggests that the governments of Louis XVIII and Charles X must have encouraged the creation of such societies and that they must have given preference to them over fixed-premium companies, and this is indeed the conclusion reached by Christian Lion and Michel Dreyfus.105 According to them, it was only the so-called Monarchie de Juillet (1830 – 1848) that preferred fixed-premium insurance companies. However, in 1826, the government turned to fixed-premium companies to insure public immovable property, prohibiting préfets from taking out insurance with mutual societies.106 101

Alauzet (n. 31), 125. See, e. g., Manuel des statuts de la Société d’assurances mutuelles parisienne, dite Mutuelle immobilière Pépin-Lehalleur (1837). 103 Christian Lion and Michel Dreyfus, L’assurance mutuelle contre l’incendie sous la Restauration (1815 – 1830), (2008) 308 Revue internationale de l’économie sociale 77 – 89, 82. 104 See Grün/Joliat (n. 29), Annexe, 9. 105 Lion/Dreyfus (n. 103), 78. 106 Administrative circular sent to the prefects on 21 October 1826, see Grün/Joliat (n. 29), 51. 102

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Fifthly, as has already become clear, mutual societies did not develop autonomously without any intervention by public authorities: their statutes had to be approved by the government.107 For instance, Art. 27 of the statutes of the Société d’assurance mutuelle immobilière de la ville de Paris as well as the royal ordinance of 4 September 1816 establishing the society authorized the Ministre de l’Intérieur to appoint a commissioner. The commissioner had the right to monitor the activities of the society, to inform the préfet de police of anything that concerned public order, and to suspend any decision contrary to the company’s statutes or the legal or public order.108 In 1825, the government of Charles X further specified the requirement of a public authorization,109 and a ministerial circular of 25 October 1829 defined the criteria on which public authorities should base their decision: the public interest and public safety, these including the society’s financial soundness, its morality, its integrity, and the social standing of the society’s promoters.110 Furthermore, it was seen that a mutual society is based on the mutual and personal trust of each member. For this reason, the circular also restricted a society’s radius of activities to a single département. It should be noted that the requirement of public authorization also had a positive side effect for mutual societies: it protected them from competition, as foreign insurers without such authorization were excluded from the market. Finally, most French mutual fire insurance societies only insured immovable property.111 This was contrary to insurance practice in England or Switzerland, where such societies also offered coverage for movable property. Consequently, it was fixed-premium insurance companies that offered insurance for, most importantly, crop and farm equipment. Most probably, such companies were better suited to offer crop insurance: the insured value was subject to considerable market fluctuation.112 II. Fixed-premium insurance companies Fixed-premium insurance companies did not necessarily differ from mutual insurance societies in their corporate form: they, too, could take the form of a public limited company. However, they differed in their business model. Furthermore, the radius of operation of fixed-premium insurance companies was larger. Some even entered foreign markets. They were able to provide insurance for both movable and immovable property. Finally, they were able to expand to other branches, such as reinsurance: in the 1820s, French fire insurance companies started to offer rein107 For examples of respective royal decrees including their statutes, see the Bulletin des lois and Jourdan/Isambert/Decrusy (n. 45). 108 Grün/Joliat (n. 29), Annexe, 16. 109 Grün/Joliat (n. 29), 32. 110 Grün/Joliat (n. 29), 55 – 57. 111 For exceptions, see Grün/Joliat (n. 29), 55. 112 Lion/Dreyfus (n. 103), 83.

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surance to foreign companies. The first known contract was concluded in 1821 between the Compagnie royale d’assurances and the Propriétaires réunis, a Belgian company. The first three fixed-premium fire insurance companies were established in the years 1819 and 1820. This development aroused criticism and suspicion on the side of mutual societies. The Compagnie d’Assurances Générales contre l’Incendie most probably took the lead. This is, at least, suggested by a brochure distributed by the company’s Lyon agency which claims that it was the first such company founded since the Revolution.113 It was established at the initiative of Auguste de Gourcuff and received its authorization by royal decrees of 14 February and 20 October 1819.114 It was followed by the Compagnie française du Phénix, initiated by Jacob Du Pan and Charles Xavier Thomas. It used the former seal of Clavière’s company and was authorized by a royal ordinance on 1/17 September 1819. Both companies were also licensed to operate in other insurance branches, such as marine and life insurance.115 According to a ministerial instruction of 11 July 1818, companies that operated in several insurance branches were obliged to have separate funds for each of these branches.116 Finally, on 11 February/ 26 April 1820, the Compagnie royale d’Assurances was reorganized. It had been established already in 1816 by the most influential Parisian bankers, including James de Rothschild. Initially, its activities were limited to marine insurance. In 1820, it was reorganized to operate in marine, life, and fire insurance: Royale-Vie, Royale-Incendie, and Royale-Maritime. Several other companies were created thereafter, such as the Union-Incendie in 1828, the Soleil-Incendie in 1829, and L’Urbaine de la Seine in 1838. Each of these companies was established (or recognized) by a royal decree, and this allowed public authorities, just like in the case of mutual societies, to exercise some control. However, a distinction needs to be made. Public authorization was not required for all fixed-premium insurance companies: when in 1809 the Conseil d’État had formulated its opinion that the establishment of insurance should require prior administrative authorization, it limited its advice to mutual societies as fixedpremium insurance companies did not exist in 1809;117 furthermore, according to the Code de commerce, only the establishment of public limited companies was subject to public authorization. Nevertheless, most fixed-premium insurance companies took the form of public limited companies. Moreover, public supervision over insurance companies was not limited to their establishment. The royal decree 113

See Bibliothèque municipale de Lyon, 114302. The statutes are reproduced by Grün/Joliat (n. 29), Annexe, 17. 115 For example, the three branches (marine, life, and fire insurance) of the Compagnie d’Assurances Générales were independent from each other. In 1820, the shares issued by the company on the Paris Stock Exchange had a return of 25 %. See Alauzet (n. 31), 110. 116 See Grün/Joliat (n. 29), 51. 117 See Grün/Joliat (n. 29), 33. 114

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of 14 February 1819 approving its statutes, for example, specified that the Compagnie d’Assurances Générales had to submit a statement on its financial situation every six months to the préfet, the commercial court, and the chamber of commerce of Paris.118 In addition, governmental authorization was revocable: it could be withdrawn in particular if the company was in breach of law or its own statutes. In all, were these forms of control and supervision effective? The most we can say is that they did not keep financiers from creating insurance companies. Nevertheless, they also did not guarantee the durability of the companies so established. In the absence of any special legislation on land insurance contract law, fixedpremium companies were able to freely draft and print uniform general contract clauses which were then incorporated into each insurance policy. They were complemented by particular conditions which usually reflected the specific conditions of an individual insured and which were inserted by hand. All insurance policies followed the same structure and included identical elements: – the date of the conclusion of the contract, – the name and domicile of the insured, – the function in which the insured acted (whether the insured is the owner of the insured object or a tenant), – description of the insured object, – the estimated value of the insured object, – the sum insured (which could differ from the estimated value of the object), – the contract duration, – the premium, and – an arbitration clause. Furthermore, the policies included detailed provisions defining the risks which were covered: most companies covered damage caused by lightning (‘feu du ciel’) but not fires caused by wars119 or riots. They required the insured to immediately report any changes in the business which was carried out in rented premises, any relocation of insured objects, or any construction or modification of insured buildings that may increase the risk.120 They indicated a period of time in which the loss had to be specified. According to Art. 13 of the policy of the Compagnie d’Assurances Générales, the insured had, for example, a period of 30 days after the fire. However, the policies of some companies were sometimes less precise than those of 118

Reproduced in Edited by Grün/Joliat (n. 29), Annexe, 27. See also ibid., Annexe, 50. The same was true for mutual societies. They, too, regularly did not cover risks related to war. There were, however, exceptions, e. g. the mutual society of Haut-Rhin, see Vonau (n. 8), 48. 120 Arts. 6 and 8 of the policy of Le Phénix; Art. 6 of the policy of the Assurances Générales; Arts. 6 and 8 of the policy of the Compagnie royale. 119

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other companies. The policy of Le Phénix, for example, simply required the insured to declare the loss immediately. Furthermore, the policy did not specify a sanction if the insured was in breach. An arbitral award issued in Paris on 24 January 1823, specified the meaning of the word ‘immediately’ and further held that the insured lost all rights under the policy if he was in breach of the provision.121 Many policies required the policyholder to prove that the insured objects had still existed when the fire occurred.122 Other policies required him to do everything possible to limit the spread of the fire and to save the insured objects (in essence, this clause substantiated, in the context of fire insurance, the obligation to minimize the loss suffered).123 With respect to the payment of the premium, most policies provided that, in the case of short-term policies, the insured had to pay the premium in advance in a single payment. If an insurance ran more than one year or if it was renewable, French insurers early on adopted the practice that also prevailed in England: the insured had to make periodic payments. Furthermore, many policy clauses specified reasons for the contract to be null and void. Most importantly, the non-disclosure or misrepresentation of risk-relevant facts resulted in the nullity of the contract.124 Finally, and in accordance with the statutes of the two companies established before the Revolution, the policy included arbitration clauses. The policies of Le Phénix, the Compagnie royale, and the Compagnie d’Assurances Générales required three arbitrators: one appointed by the insured, the other by the company, and the third by the first two arbitrators. Whereas the policy conditions regulated the contractual relationship between the insurer and an individual policyholder, the companies’ statutes primarily specified the internal organization and operation of the company. They determined the amount of the share capital and, in the case of a public limited company, the number of shares. Often the statutes aimed at controlling who was eligible to subscribe to shares as well as their circulation. The Compagnie d’Assurances Générales, for example, had a share capital of 2,000,000 francs: 300 shares of 5,000 francs and 1,000 shares of 500 francs. The shares costing 5,000 francs were nominal shares that could be subscribed only by policyholders and that could be sold only with the consent of the board of directors. By contrast, the shares of 500 francs were bearer shares.125 It was further regulated that it was necessary to hold at least two registered shares to attend the company’s general assembly and to be eligible to become one of the eight directors of the company. Finally, anyone holding a nominal share was 121

See Grün/Joliat (n. 29), 282. Art. 16 of the policy of Le Phénix; Art. 15 of the policy of the Assurances Générales. 123 Art. 12 of the policy of the Assurances Générales. According to Grün/Joliat (n. 29), 290, a Milan fire insurance company had adopted a similar provision. 124 Art. 11 of the policy of the Compagnie Générale d’Assurances, cited from Grün/Joliat (n. 29), Annexe, 53. See also Art. 12 of the policy of Le Phénix; Art. 14 of the regulation of the Compagnie royale, reproduced in Grün/Joliat (n. 29), 262. 125 Arts. 3, 5 and 9 of the statutes of the Compagnie Générale d’Assurances, see Grün/ Joliat (n. 29), Annexe, 18 f. 122

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entitled to three bearer shares. It was likely that the share capital was concentrated in the hands of a few. Furthermore, it seems that fixed-premium insurance companies established in the corporate form of a limited liability company still tried to mimic mutual insurance societies: they tried to ensure that shares were mostly in the hands of policyholders. By comparison, the Compagnie royale had 2,000 shares of 5,000 francs each. The share capital, thus, totalled 10,000,000 francs. All shares were nominal shares, and no shareholder was allowed to hold more than 100 shares. In order to be eligible to be appointed as director, one had to hold at least ten shares. Finally, the statutes provided that the board of directors had to approve by a secret ballot with a three-quarter majority the admittance of a new shareholder.126 Le Phénix had a share capital of 580,000 francs. However, it was possible to increase the share capital to more than 2,400,000 francs by issuing new shares. With mutual insurance societies, policyholders were at the same time shareholders. With fixed-premium insurance companies, the situation was different. Policyholders were not necessarily also shareholders (even if there was a tendency to ensure that shares were mostly held by policyholders). Consequently, policyholders did not as a matter of course have any rights in the company. In this regard, the Compagnie royale introduced a novelty: in addition to the board of directors, three censeurs were appointed from among the insured who were not shareholders. These three censeurs were in charge of monitoring the running of the company in order to see that it operated in compliance with its statutes.127 For a modern lawyer, this is an unusual detail. However, it again reinforces the observation that fixedpremium insurance companies incorporated elements from mutual insurance societies. Furthermore, with mutual insurance societies, the statutes took effect as between the insured in their role as shareholders. With fixed-premium insurance companies in the form of a public limited company, the statutes had no effect whatsoever on the position of the insured. This may explain why some provisions appeared both in the policy conditions and the statutes. Most probably this was to signal their importance in defining the external relationship to the insured and the internal running of the company. The statutes, for example, regularly specified who could take out insurance: according to Art. 2 of the statutes of the Compagnie d’Assurances Générales, this was any person with interest, not only the owner of the insured object. Furthermore, the statutes regulated how to assess the value of insured objects. For their part, the policies often reproduced important provisions of the statutes, such as those on the exclusion of risks related to war.128

126

See Grün/Joliat (n. 29), Annexe, 5. Art. 25 of the Compagnie royale, reproduced in Grün/Joliat (n. 29), Annexe, 43. 128 See, e. g., Art. 2 of the policy of the Compagnie Générale d’Assurances, reproduced in Grün/Joliat (n. 29), Annexe, 51. 127

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D. Fire insurance since the second half of the nineteenth century: between liberalism and state intervention The subsequent 100 years in the development of fire insurance in France were characterized by two conflicting poles: liberalism and state intervention. Numerous proposals and plans for the nationalization of the (fire) insurance sector were made. However, none of these plans were ever implemented. Driven by its social agenda, the government of the Second Republic (1848 – 1852) had plans to bring the private insurance market to a halt. A draft act of 13 June 1848 prepared by the Commission du pouvoir exécutif would have implemented a state-run fire insurance scheme replacing all private insurers with effect as of 1 January 1849 (Art. 1).129 Article 2 would have introduced compulsory insurance (including the furniture) for all building owners. The insurance of other goods, such as crops or livestock would have remained voluntary. All details concerning the internal organization of the scheme were to be specified in a ministerial decree, and all details specifying the rights and obligations of the insured were to be defined by further legislation. It was planned that between 1 July and 31 December 1848 the existing fire insurance companies would continue to operate, but on the account of the state.130 However, the project was never implemented: it was rejected by the Assemblée nationale in 1850 with reference to the liberal ideas of the revolutionary constitutions of 1791 and 1795 and the constitution of 1848. In 1851/52, LouisNapoleon Bonaparte again considered the possibility of introducing a public fire insurance scheme. This plan was, however, limited to buildings in rural areas whose value did not exceed 1,500 francs. This plan did not succeed either. A legislative initiative that was, however, successful concerned taxing issues: according to an act of 5 June 1850, the conclusion of an insurance contract was subject to a stamp duty. The second phase of the Second Empire (1852 – 1870), starting in 1860, is known as the Empire libéral. Article 37 of the Code de commerce still required that public limited companies needed governmental authorization in order to be established. The provision was finally abolished by an act of 24 July 1867.131 According to Art. 21 of that act, public limited companies could now be formed by private deed. The act also contained a special provision on insurance companies: according to Art. 66, Parliament delegated to the executive the power of specifying the requirements for establishing an insurance company. A decree of 22 January 1868 then allowed the creation of insurance companies without governmental authoriz129

Moniteur universel, 14 June 1848, 1359. On the project, see Louis-Antoine Garnier-Pagès, Histoire de la révolution de 1848, vol. 10 (1872), 397. See also Jacques Kayser, Les grandes batailles du radicalisme (1820 – 1901) (1962), 313. In addition, the Journal des assurances terrestres spoke out on several occasions against ideas of nationalization, see (1851) Journal des assurances terrestres 97. 131 On Art. 37, see Anne Lefebvre-Teillard, L’intervention de l’État dans la constitution des sociétés anonymes (1807 – 1867), (1981) 59/3 Revue historique de droit français et étranger 383 – 418. 130

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ation.132 There were two exceptions: tontines and life insurance companies. However, in order to protect the insured, the decree subjected fixed-premium insurance companies to special provisions reminiscent of those of the Ancien Régime. Accordingly, fixed-premium insurance companies were required to have a capital de garantie of at least 50,000 francs. Each year, they had to pay at least 20 % of their net profits into a reserve fund. Finally, investments in movable capital were possible only if they consisted in securities guaranteed by the state. Furthermore, the decree included provisions on mutual insurance societies, specifying the minimum content which the statutes of such societies had to have and requiring the society to attach the statutes to all membership applications. Finally, the decree provided that, in accordance with previous practice since the Restauration, only the members insuring certain sums were eligible to be on the board of directors. In 1870, the Third Republic (1870 – 1940) was established. After having been consolidated beginning in 1875, the regime wanted to find answers to the pressing question sociale. Did this bring to a halt the liberal phase which had started in the second phase of the Second Empire (Empire libéral)? Indeed, by the end of the 1870s, several proposals to institute state-run insurance schemes again appeared.133 They were developed especially in the field of agricultural insurance because private insurance companies were accused of discriminating against smallholders, who had to pay higher premiums than building owners in large cities. However, the Conseil d’État stressed on several occasions that the départements should not introduce state-run insurance schemes.134 The plans and proposals took two forms. On the one hand, it was proposed that the state itself should act as an insurer. On the other hand, it was suggested to establish separate mutual funds which were to be managed by the state. On 29 July 1879, for example, a draft bill proposing a voluntary insurance fund protecting against fire, hail, and floods was discussed in the Assemblée nationale.135 It was drafted by, among others, Léon Vacher, and it was to cover both immovable and movable property. The fund was to be established at the Ministry of Agriculture. Another proposal was made on 14 January 1882. It wanted to establish compulsory insurance again against fire, hail, and floods.136 Further

132 (1868) 4 Dalloz Périodique 15. The text of the decree is also published by Henri de Lalande, Traité théorique et pratique du contrat et assurance contre l’incendie (1868), Annexe, 690. 133 Paul Girard, Le monopole des assurances contre l’incendie (1913); Robert Pardoux, L’État français et les compagnies d’assurances contre l’incendie (1906). 134 E.g., (1888) 3 Revue générale d’administration 322. 135 Proposition de loi pour l’établissement d’un service d’assurances par l’Etat, présentée par MM. Vacher, Lecherbonnier, Tondu, Mayet (1879). 136 (1882) Journal Officiel de la République française. Assemblée Nationale 145.

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plans followed for the creation of public insurance schemes for farmers.137 However, none of these plans succeeded. The liberal regime put in place in 1867 by abolishing Art. 37 of the Code de commerce of 1807 therefore continued to apply. Nevertheless, the 1867 act did not result in an increase in the number of fixed-premium fire insurance companies. The opposite was the case. In the first half of the nineteenth century, approximately 100 such companies had been created, of which only around 30 still existed in 1882.138 However, the top five companies – the Société d’assurances générales contre l’incendie, the Phenix, the Compagnie royale d’assurances, the Union-Incendie, and the Soleil-Incendie – had seen exponential growth. At the same time, French insurers started to develop international banking relationships and to enter foreign markets. The Union-Incendie was the first French insurer to develop such foreign operations, especially in Spain, Switzerland, Germany, and England, and it was the first to cross the Atlantic to operate in South America before extending to the Far East. By contrast, the number of mutual fire insurance societies decreased. Of the 200 mutual insurance societies founded between 1816 and 1883, only 51 still existed in 1892. The consolidation of the French fire insurance market was not a result of mergers between companies and societies. Such mergers were the exception. It is rather likely that many companies and societies disappeared due to financial difficulties. The victory of the political left in the elections of 1906 once again stimulated the discussions on a possible nationalization of the insurance sector and on introduction of a state monopoly. Respective proposals were made in the Assemblée nationale on 27 February 1908 and on 12 July 1909. A similar plan was adopted on 15 March 1910 by a commission of the Assemblée nationale presided over by Ferdinand Buisson. It was argued that both the state and the insured would benefit from such a monopoly. The state would secure the revenue flowing from the insurance business for itself. Furthermore, a number of problems experienced by the insured under a system of private insurance would be remedied: premiums to insure small risks were felt to be too high, and insurance policies often included clauses to the disadvantage of the insured.139 French economists objected,140 and so did French insurers. In 1895, 44 fixed premium companies specialized in the different insurance branches had established the Union syndicale des compagnies d’assurances à primes. In a memoir addressed to the Chambre des députés, the Union pointed to the 137 For the year 1893 alone, there are no less than three proposals: (1893) Journal Officiel de la République française. Assemblée Nationale, annexe no. 2689, 453; annexe no. 2724, 537; annexe no. 2769, 61. 138 La compagnie d’assurances générales (n. 81), 27. 139 15 March 1910, (1910) Journal Officiel de la République française. Assemblée Nationale, no. 3212. 140 See Alfred Potier de Courcy, De l’Assurance par l’État (1894); Alfred Thomereau, Quelles sont les limites de l’intervention de l’Etat en matière d’assurances? (1894).

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disadvantages of public insurance and stressed the benefits of private insurance.141 The 1910 elections again weakened the supporters of nationalization, putting a provisional end to the discussions which, however, resumed again during World War I – yet again without success. In summary, none of the proposed plans and draft bills to nationalize the insurance sector were ever implemented. Neither the Cartel des Gauches taking political power in 1924 nor the Front populaire coming to power in 1936 led to a compulsory public fire insurance scheme. However, the idea of a state-run insurance system later became more successful in other insurance branches, namely retirement insurance and occupational accident insurance; after World War II modern social security schemes were implemented in France to cover these respective risks. By contrast, the fire insurance sector remained in the hands of private insurers. The first and at the same time last nationalization of insurance companies occurring in 1946 was not able to change this: it only affected three fixed-premiums insurance companies and none of the mutual fire insurance societies.

E. Conclusion In France, the history of fire insurance started later than in other European countries. The Ancien Régime saw mutual fire offices, often under the aegis of the church, which simply made collections for the benefit of fire victims. Apart from these offices, there were three fire insurance companies established between 1750 and 1786. However, the development came to a halt due to the Revolution: insurance companies and joint-stock companies were banned. Mutual fire insurance societies started to reappear in 1798. However, the key period in the development of fire insurance in France was the period known as the Restauration, which saw numerous mutual fire insurance societies and fixed-premium insurance companies created. To understand the development of fire insurance in France it is important to note that the dichotomy was not between mutual insurance societies, one the hand, and public limited insurance companies, on the other hand. Mutual insurance societies as well took the corporate form of a public limited company. Rather, in France the dividing line was between mutual societies that were funded by members’ contributions and established without the intention to make a profit, on the one hand, and insurance companies that required policyholders to pay fixed premiums and which were established with the intention of shareholders making a profit, on the other hand. There is second characteristic of the French development: fixedpremium insurance companies often mimicked characteristic elements of mutual insurance societies. They, for example, tried to encourage policyholders to become shareholders. And even policyholders who were not shareholders may have had certain rights in the running of the company. Since the Second Republic, French fire insurance developed between two extreme positions: liberalism and state inter141

See Hamon (n. 32), 189.

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vention, with plans for a nationalization of the insurance sector being the most extreme form of state intervention. Turning to the legal sphere, it must be noted that legislation on non-marine insurance contract law was passed only in 1930. The Code civil of 1804 only included some general principles on insurance law. Consequently, insurance contract law developed mostly in the statutes and policies of the different insurers, and it was further shaped by legal literature: these statutes and polices as well as the relevant literature were influenced by maritime insurance contract law and by English models. With respect to insurance regulation, it has been clear that the French executive authorities have from the beginning developed different forms to intervene in the running of insurance companies, often with the clear objective of protecting the insured. Accordingly, the roots of modern insurance regulation thus go back to the time of the Ancien Régime.

Chapter 8: Regulation and practice of fire insurance in Spain (1800 – 1908) By Jerònia Pons Pons A. Freedom in the creation of joint-stock companies and mutual fire insurance societies (1829 – 1848) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B. Restrictions on the creation of joint-stock companies (1848 – 1868) . . . . . . . . . . . . . . C. The modernization of insurance practice and regulation (1868 – 1908) . . . . . . . . . . . . D. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Fire insurance contracts were not specifically regulated in Spain until the passage of the Commercial Code of 1885. The only novelty from the previous Commercial Code of 1829 was the incorporation of legal principles that were to govern terrestrial insurance contracts in general. Apart from that, the 1829 Code included the traditional regulation of marine insurance that was firmly based on medieval and early modern Spanish maritime ordinances alike. Book 3, Title 3, Section 3 of the 1829 Code regulated maritime trade and established the basis of the form of the insurance contract as well as the obligations between the insured and insurers. Book 2 covered trade agreements in general and introduced regulatory aspects of inland transport insurance. There was no mention of any other types of insurance, such as fire or life insurance. Both types of insurance fully developed in Spain only in the course of the nineteenth century. The explanatory notes of the 1885 Code clarified why only inland transport insurance was incorporated in the 1829 Code: ‘these were the only known insurances at the time of its promulgation’ (‘éstos eran los únicos conocidos en la época de su promulga’).1 Nevertheless, in practice, different types of insurance (including fire, life, crop and livestock insurance as well as tontines) were already being offered in the 1820s, both by foreign companies, which had introduced these transactions to Spain, and by Spanish companies and mutual societies.2 However, these contracts lacked a special legislative framework. Exceptionally, an article con1 José Gallostra y Frau (ed.), Código de Comercio Español vigente en la península e islas de Cuba y Puerto Rico (1887), preamble at 50. This edition has been used for the present study. 2 Jerònia Pons Pons, La transformación del Mercado de seguros español en el siglo XIX, in: Carlos Barciela et al. (eds.), Le Assicurazioni. Sicurezza e gestione dei rischi in Italia e Spagna tra età moderna e contemporanea (2016), 169 – 191.

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cerning fire insurance had been included in the 1861 Mortgage Act (Ley Hipotecaria), ‘declaring the goods insured to be legally mortgaged for the amount of the insurance premiums of two years, and when the insurance is mutual, for the last two dividends that had been distributed’ (‘declarando hipotecados legalmente los bienes asegurados por el importe de los premios del Seguro de dos años, y cuando el Seguro fuese mutuo, por los dos últimos dividendos que se hubieren repartido’).3 However, the economic as well as the demographic and urban growth of nineteenth-century Spain prompted a diversification of insurance. Fire insurance played a significant role in this process. Although the fire insurance contract was not explicitly regulated until the 1885 Commercial Code, there were nonetheless important changes linked to four factors: (a) the attempts by different authorities, especially municipal councils, to provide cities with fire prevention and firefighting systems, as fires had become one of the great risks for urban areas during the nineteenth century; (b) the entry of British and French fire insurance companies into the Spanish market, introducing those fire policies to Spain which they had developed for their domestic markets; (c) the regulation of the formation of commercial companies (partnerships and companies with share capital) and mutual societies; and (d) the many collusive arrangements between insurance companies, introduced to Spain by French and British companies in imitation of the situation in their countries of origin. These four factors conditioned the development of the practice of fire insurance and its regulation. A. Freedom in the creation of joint-stock companies and mutual fire insurance societies (1829 – 1848) In the absence of a specific legislative regime regulating fire insurance contracts, the legislation that most affected the insurance industry (and especially the fire insurance sector which had developed relatively early) governed the formation of joint-stock companies. Such legislation, especially where it introduced hurdles to creating such companies, had an important effect on the form of association which a fire insurer would opt for. In a first phase of the development lasting until 1848, the regulatory framework as consolidated in the 1829 Commercial Code permitted freedom in the creation of joint-stock companies and mutual societies. The Code regulated three types of company: general partnerships, limited partnerships, and joint-stock companies. In fact, none of them needed government authorization. According to Art. 293 of the Code, they were formed by notarial deed, and they had to adopt their own statutes which only needed the approval of a commercial court. The earliest information on the creation and activity of a company operating in the fire branch dates from the 1820s. In 1821, a French company operating in Spain under the name Compañía de Seguros generales contra incendios appointed Mr. Julián Perez, based in Madrid, as its agent and legal representative. One of its 3

Código de Comercio de 1885 (n. 1), 50.

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main advertising claims was that its policies included a clause ensuring that there would be no litigation between the company and policyholders in the event of claims, but that an amicable settlement would be sought via arbitrators.4 Despite the liberal regulatory regime towards establishing joint-stock companies, it was not until the 1840s that the first Spanish initiatives to found such companies appeared. These initiatives were taken in Madrid, Barcelona, and other provincial capitals, and they included initiatives for the creation of fire insurance companies, too. According to its own advertising, the oldest such company was La Española, which had been active since 1841.5 La Española started operating in fire insurance, a branch that had thus far been completely dominated by mutual societies. La Española’s premium rates ended up being the point reference for other companies that decided to cover fire risks. The lack of regulation fostered innovation. However, abusive practices soon followed, too, as the example of Nazario Carriquiri’s La Amiga de la Juventud proves, spurring discussions on the need for a firm state control over joint-stock companies and leading to the legislation of 1848.6 Due to the lack of any legislative and regulatory framework, the first fire insurance companies listed in Table 1, below, were able to autonomously define in their statutes the risks which they promised to cover. The statutes of La Alianza, founded in 1844, for example, stipulated that it would not insure unharvested crops without a fixed value. Similarly, it was not possible to insure gunpowder factories, depots, and warehouses. Furthermore, the statutes excluded banknotes, bills of exchange, gold, silver, and other valuables from coverage. Finally, a coverage limit of one-and-ahalf million reales was introduced.7 In all, its statutes included 26 articles specifying the risks which it covered and which it excluded, defining the respective premiums and their calculation, and the mechanisms for the payment of compensation. In essence, the statutes of La Alianza reflected those principles that recurred throughout the nineteenth century time and again in Spanish fire policies. El Áncora, a joint-stock company offering marine, inland transport, and fire insurance that was established in Madrid in 1845, was able to reduce the rules defining the risks it insured to just a few articles. It limited coverage for buildings and stored 4 Gaceta de Madrid, no. 109, 17 April 1821, 540. The Gaceta de Madrid (with some changes to its name over time) was the official publication that from 1697 to 1936 announced the legislation and decrees emanating from the executive and legislative powers in Spain. During the Civil War, the Republican government adopted the name of Gaceta de la República. Diario Oficial whilst the side supporting the coup opted for Boletín Oficial de la Junta de Defensa Nacional. As from 1939, when the Franco dictatorship began, the official name became Boletín Oficial del Estado (BOE). 5 Metropolitan Archives, Sun insurance company 1.31522-236, p. 56. 6 Juan Manuel Guillem Mesado, La difícil mayoría de edad de las sociedades de seguros por acciones en la primera mitad del siglo XIX, in: Jerònia Pons Pons and María Ángeles Pons (eds.), Investigaciones Históricas sobre el Seguro Español (2010), 49 – 79. 7 Biblioteca Nacional de España, La Alianza, compañía de seguros generales, marítimos, contra incendios y sobre la vida (1845).

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goods to two-thirds of their value and up to a maximum of 500,000 reales de vellón (a silver-copper alloy).8 Table 1: Spanish joint-stock insurance companies operating in the fire branch, established before 18489 City

Name

Year of foundation

Bilbao

La Unión

1840

Málaga

Unión Malagueña

1842

Madrid

Compañía General Española de Seguros ‘La Española’

1841

La Alianza Compañía de Seguros Generales

1844

La Probidad

1844

La Esperanza

1844

Amiga de la Juventud

1845

El Áncora

1845

La Aurora de España

1845

La Seguridad

1846

El Fénix

1846

Even though the 1829 Commercial Code granted much freedom to establish joint-stock companies, the preferred form of association for institutions operating fire insurance was in practice that of a mutual society. The reason for this clear preference is simple: lack of capital. Throughout the history of insurance in Spain, mutual societies remained of importance. As early as 1820, we find a first project to form a mutual fire insurance society: the Compañía de San Fernando, also known as Asociación nacional de Seguros recíprocos contra los incendios.10 The plan was promoted by a Spanish citizen who had spent time in London and Paris and who intended to initiate a mutual fire insurance society along the lines of a similar society established in Paris on 3 September 1817.11 The society planned to collect contributions of one real per year for each 1,000 reales insured. In September and October 1820, the society managed to attract members who subscribed for a total value of 12 million reales. However, it was intended to implement the plan only after subscriptions amounting to an insured value of 100 million reales in urban properties had been collected. It seems that this objective was complicated by the rivalry of another company, a joint-stock company that offered insurance policies at 8

Biblioteca Nacional de España, El Áncora, Sociedad Mercantil Anónima, seguros marítimos, terrestres y de Incendios (1845). 9 Source: María Jesús Matilla Quiza, La formación de capital en la España del siglo XIX: las compañías de seguros, in: Pons Pons/Pons Brías (n. 6), 17– 48, 28; Guillem (n. 6). 10 Gazeta del Gobierno, no. 60, 27 August 1820, 248. 11 Gazeta del Gobierno, no. 65, 1 September 1820, 268. According to the promoter of the mutual, the French company was founded with 150 members who had insured properties to the value of 25 million francs, and by 1 June 1820 it had increased the number of houses insured to 12,613 for a value of 721,113,000 francs, equivalent to 1,884,448 reales de vellón.

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half a real per 1,000 reales insured. Consequently, the society felt obliged to reduce its contributions to a half real per 1,000 reales, too.12 Ultimately, the society was not authorized by the Madrid administration because its statutes did not guarantee sufficient protection for participating members.13 Despite these earlier projects, the first Spanish mutual fire insurance society started operating in Madrid in 1822: the Sociedad de Seguros Mutuos de Incendios de Casas de Madrid. Its promoters had met a large number of Madrid houseowners and chose a group of proprietors to draw up draft statutes. The first meeting of its members was held on 17 October 1822, choosing, among other things, its first office holders: Manuel María de Goiri, Timoteo Rodríguez Carrillo, Josef Pío Santos, Josef Garay, Francisco López de Olavarieti, Francisco Izquierdo, and Pedro Garrido.14 The society was set up under the protection of the Madrid city council. The initial value of the insured properties was estimated at 66,011,128 reales de vellón. A fire mark was fixed to each house to show that it was insured against fire. The society’s first policies did not include the contract clauses. They only indicated the number of houses and the amount insured. Policy no. 5,729, issued in Madrid on 7 November 1838, for example, simply identified five houses which were insured against fire for the amount of 410,000 reales de vellón. It was partly printed, partly handwritten, and it was signed by the society’s directors. At the bottom of the document, the insured property was precisely identified by giving the name of the street, the house number, and the block. Furthermore, here the insured value was specified. On its back, there was room to indicate, among other things, modifications to the insured property.15 From 1823 to 1838, the number of members of the society increased steadily. In the first two years of its existence, there were over 600 members insuring 1,000 houses. Between 1825 and 1838, 190 new members with 230 houses insured joined the society on average annually. In 1838, the society had 4,556 members, and it insured 5,905 houses. The insured value was 1,019,385,572 reales de vellón. However, the situation changed in 1839. The number of new members per year decreased considerably. After 1839, it never again exceeded 100. One of the reasons for this slowdown in growth was the creation of further mutual societies operating 12

El Constitucional, no. 490, 16 September 1820. Manuel Maestro, Madrid, capital aseguradora de España (1991), 121 f.; Marina Bonomelli (ed.), Fondazione Mansutti. Quaderni di sicurtà. Documenti di storia dell’assicurazione (2011), 115. 14 Gaceta de Madrid, no. 317, 30 October 1822, 1594. José Martínez Moscoso, Mariano Monasterio, Pedro Sainz de Baranda, and Juan Fernández Casariego should also be added to this list, as they comprised part of the first board of directors. Fundación Mapfre, Fondo bibliográfico Manuel Maestro, documents nos. 356 and 357. 15 Museo Virtual del Seguro. Fundación Mapfre: www.museovirtualdelseguro.org/es/ musobjects/911.html?ctx=freetext%3A52 (accessed on 24 August 2019). The policy was made out in the name of Juan Manuel Calderón, legal representative of Excmo. Sr. Duque de San Lorenzo y del Parque. 13

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outside the city walls and which, over time, were able to exert some competitive pressure. In December 1838, one of these societies, which was established 1834, requested a merger with the 1822 society, and a commission was set up to consider the request.16 Subsequently, further mutual fire insurance societies as well as jointstock companies appeared in Madrid, explaining the society’s continuing stagnation. In December 1871, the 1822 society had 4,469 members and insured 5,856 houses for a value of 1,363,954,288 reales de vellón.17 This type of entity also played a key role in the development of fire prevention and firefighting strategies in large cities. To that end, the Madrid city council and the 1822 society agreed to collaborate in 1849. They identified a strategic location in the city (Calle del Moro, next to Pozo Santo) where pumps, waggons, ladders and other auxiliary equipment belonging to the society were deposited in order to respond quickly to any fire.18 The success of the 1822 mutual society prompted the creation of another such society to cover buildings situated outside the city of Madrid. Its rules and regulations were approved in 1834.19 Further mutual fire insurance societies spread through the rest of the country. Ten years after the creation of the Sociedad de Seguros Mutuos de Incendios de Casas de Madrid, similar societies were established in Valladolid and Seville with more to follow in the main Spanish provincial capitals in the following decades. The history of some of these societies has already been told, and with others the information is available to do so. Table 2: The founding years of mutual fire insurance societies in Spain20 Year

Registered address

Year

Registered address

1822

Madrid

1844

Valencia

1832

Valladolid/Seville

1846

Pamplona

1833

Burgos

1847

San Sebastián

1835

La Coruña

1849

Valencia21

1836

Barcelona

1857

Gerona

1840

Málaga

1860

Bilbao

1842

San Sebastián

1862

Palma de Mallorca

16

Gaceta de Madrid, no. 1525, 18 January 1839, 4. Seguros mutuos de Incendios de casas en Madrid. Historia, Reglamento, instrucción y Estadísticas de la misma (1872), 51. 18 Gaceta de Madrid, no. 5626, 25 December 1849, 3. 19 In 1848, it extended its range of action to towns adjacent to Madrid. Gaceta de Madrid, no. 5128, 27 September 1848, 4. 20 Source: Manuel Reina, Compañías de Seguros en España. El nacimiento del moderno sector asegurador en España, 1830 – 1910 (Tesis doctoral, Madrid 1999), 31; Manuel Maestro, Madrid, capital aseguradora de España (1991), 138, 182; Jerònia Pons Pons, El sector seguros en Baleares. Empresas y Empresarios en los siglos XIX y XX (1998), 147; Eduardo J. Alonso Olea, El mundo del seguro en Vizcaya. 1890 – 1936. Empresas y Empresarios, in: Pons Pons/ Pons Brías (n. 6), 157 – 190, 159. 21 The society received two machines to fight fires from England in 1851: Gaceta de Madrid, no. 6034, 20 January 1851, 3. 17

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The Sociedad de Seguros Mutuos de Casas de Sevilla was founded in 1832, promoted by its first director Pedro Nautet. Its statutes were amended in 1847. The board of directors was made up of two directors, an accountant, a treasurer, and a secretary. None of these office holders received a remuneration. The society, however, had two clerks paid from the funds of the society. In 1849, two pumps and other firefighting equipment were purchased, and as with other such societies, it reached an agreement with the Seville city council to reorganize the fire prevention and firefighting strategies. Circa 1845 to 1850, the society had 1,517 members, and it insured 4,928 houses with an insured value of 215 million reales.22 In Málaga, the civil governor, Ventura de Córdoba, convinced the city’s most important property owners and traders to organize a society similar to the one in Madrid.23 In an article in the Boletín Oficial de la Provincia, the official gazette for the province, he also invited the owners of country estates to participate in a preregistration process in order to assess the interest in the project. On 15 December 1839, the Sociedad de Seguros Mutuos contra incendios de edificios en Málaga was founded with the participation of many members of Málaga’s upper bourgeoisie. The first board of directors included Manuel Agustín Heredia as the first chairman along with Jerónimo Rubio, Manuel de Medina, and Manuel Torriglia as conciliarios (advisers) and Juan Kreisler as secretary. They were, together with 22 other persons, the society’s founding members.24 The Málaga mutual fire insurance society was very active until 1869. From then on, information is sporadic and incomplete but indicates growing economic difficulties. This is to a large extent explainable by the fact that such mutual societies were slowly replaced by national and international joint-stock companies that entered the Spanish fire insurance market from the 1870s onwards. The Asociación de Seguros contra incendios de San Sebastián was created in 1842. It was promoted by the commercial bourgeoisie and property owners. Following earlier examples on how to set up such a society, a small group of promoters approached the city council to request support in the creation of the society: institutional endorsement was an important factor for these societies when it came to attracting members.25 From the outset, the society covered the risk of buildings both inside and outside the city. In the case of fire, the insured had to cover half of the firefighting costs incurred by the society, and then the cost of repairing or replacing the damaged property was met by the insurer. A similar scheme was established in 22 Pascual Madoz, Diccionario Geográfico-Estadístico-Histórico de Andalucía (1845 – 1850/1986), 338. 23 E. De Mateo Avilés, La Sociedad de seguros contra incendios de edificios y los orígenes del servicio de Bomberos de Málaga durante el siglo XIX (2000), 25. 24 De Mateo (n. 23), 25 f. 25 Carlos Larrinaga Rodríguez and Carmen Lázaro, Los inicios del seguro privado en Guipúzcoa: de las sociedades de socorros mutuos a las primeras compañías (1842 – 1914), (1996) 9 Espacio, Tiempo y Forma 43 – 66, 47.

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1846 in Pamplona,26 and yet another association was created for the entire province of Guipúzcoa in 1847. The Sociedad de Seguros Mutuos contra incendios de Casas y Caseríos de Guipúzcoa was promoted by the provincial council with some 30 property owners endorsing its statutes in July of the same year. As its activities were not limited to a single town but extended from the very beginning to the entire province, it had a body of inspectors distributed throughout the province to collect the contributions towards the society and to pass out the certificates proving that the property was insured.27 Mutual fire insurance societies continued to operate after the legislative changes of 1848 restricted the creation of joint-stock companies, and during the nineteenth century, mutual societies without fixed premiums were the most widespread form of association in the fire branch in Spain. Still in 1860, a mutual fire insurance society was founded in Bilbao,28 and one of the last such projects was the Compañía de Seguros mutuos contra incendios de edificios de Palma. In 1862, the civil government of the Balearic Islands requested a report on the public benefits of such a society. The project was advocated by a resident of Madrid, José Luis Retortillo. It was planned that the society’s activities would be limited to the city of Palma, its suburbs, and country houses.29 Its envisaged duration was a period of 50 years. Three different fire insurance products were planned to be offered depending on the insured building: (1) buildings that did not contain any flammable materials, (2) public premises and wooden warehouses, and (3) factories and theatres, that is, fire hazardous buildings. Although it is clear that the 1862 Palma society was projected, there is no further information with respect to its implementation. B. Restrictions on the creation of joint-stock companies (1848 – 1868) Despite the regulatory freedom regarding their creation, joint-stock companies had been minimally involved in the fire insurance business from 1829 to 1847. 1848 then saw with the enactment of the Act on Commercial Joint-Stock Companies the introduction of restrictions on establishing such companies. The Act of 28 January 184830 was drafted by the Ministry of Commerce, Education and Public Works, and it was published with an accompanying Regulation of 17 February 1848.31 In its 26 Museo Virtual del Seguro. Fundación Mapfre: www.museovirtualdelseguro.org/es/ musob jects/870.html?ctx=freetext%3A52 (accessed on 24 August 2019). The museum conserves the rules and regulations that were sent by the company directors to the Pamplona City Council for its approval as well as the affirmative response from the authorities from May 1846. The printed edition of this text is dated 1855. 27 Larrinaga/Lázaro (n. 25), 53. 28 Alonso Olea (n. 20), 159. 29 Pons Pons (n. 20), 56. 30 Gaceta de Madrid, no. 4905, 18 February 1848, 1. 31 Gaceta de Madrid, no. 4905, 18 February 1848, 1 – 3.

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first article, the Act restricted the creation of such companies by requiring government authorization: ‘No se podrá constituir ninguna compañía mercantil, cuyo capital, en todo ó en parte, se divida en acciones, sino en virtud de una ley ó de un Real decreto.’ ‘No commercial company, the capital of which, wholly or in part, is divided into shares, may be constituted, except by virtue of law or a Royal decree.’

Authorization was only granted if the company’s object was in the common public interest (‘utilidad pública’). The request for authorization was usually accompanied by a list of subscribers who intended to set up the company, letters of application for shares, the deed of incorporation, and all the statutes and articles of association established to govern the running of the company. The latter needed to be approved by a general meeting of those who wanted to set up the company before the request could be filed (Art. 6 of the Act). The letters of application for shares were strictly necessary to file the request, as authorization would not be granted until at least half of the company’s capital had been subscribed (Art. 7 of the Act). When these requirements were met, the government proceeded to assess the request. If it was decided to grant authorization, the government demanded that part of the capital be paid up, however never more than 25 %. The Regulation of 17 February 1848 comprised 44 articles that were obligatory for new companies that wished to incorporate; they also applied to existing companies that needed to amend their original deed of incorporation and articles of association and that needed to request their authorization. Article 1 contained a total of 16 prerequisites that the company’s deed of incorporation had to meet. Once the deed of incorporation and articles of association were obtained, it was necessary to go to the political head of the province, who examined four particular points (Art. 13 of the 1848 Regulation): (1) whether the statutes were in accordance with the 1829 Commercial Code and the 1848 Act; (2) whether the company’s object was licit and in the common public interest (‘utilidad pública’); (3) whether the capital envisaged in the deed of incorporation was sufficient for the company’s object; and (4) whether the administrative and managerial system offered sufficient security to shareholders and the public (‘Si el régimen administrativo y directivo de la compañía ofrece las garantías morales, que son indispensables para el crédito de la empresa, y la seguridad de los intereses de los accionistas y del público’). The process was further complicated by the fact that the political head of the province had to solicit reports from the provincial council, the district commercial court, the regional Sociedad Económica de Amigos del País, and the municipal council before he could confirm that the company’s object was in the common public interest (Art. 14 of the 1848 Regulation). Once he had completed the file, it was sent to the Royal Council, which in turn forwarded it to the government or the Cortes (parliament) depending on the type of company. The 1848 legislation, thus, restricted the objects that a joint-stock company could pursue by requiring that the object was in the common public interest. It

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seems that it was not enough if a company’s objective was to further solely private interests. Moreover, once the company had been established, the government monitored and audited its activities through its representatives in the company. The 1848 Act established a period of two months allowing existing joint-stock companies not in possession of royal authorization to request such authorization, subject to the prior agreement of shareholders. A subsequent Royal Order of 24 June 184832 instructed the political heads of the provinces and judges of first instance to proceed with the dissolution of companies if they had not taken the necessary steps within this period, and to publish the dissolution in the Gaceta del Gobierno and the Boletín de la Provincia. This new regulation resulted in very few fire insurance companies from the previous period continuing their activity, and at the same time only very few new joint-stock companies operating in the fire insurance business received approval (Table 3). Table 3: Spanish fire insurance companies that survived the 1848 law or that were founded between 1849 and 186833 City

Name

Year

Barcelona

La Aseguradora

1856

Salvadora de Seguros

1857

Catalana de Seguros de Incendios

1864

Madrid

La Alianza

1857

La Garantía

1857

Compañía Hispana

1857

Compañía General Española de Seguros/ La Española, Compañía General de Seguros

1841

La Unión, Compañía General de Seguros

1856

C. The modernization of insurance practice and regulation (1868 – 1908) In 1868, after the revolution that led to the end of the reign of Queen Isabel II, freedom of association was proclaimed, and the provisional government passed a decree that extended this freedom to joint-stock companies.34 It was argued that the circumstances which had led to the passage of the 1848 Act were no longer present; consequently, the decree abolished the restrictive measures of the 1848 Act with some transitional provisions for companies that already existed. In essence, the decree returned to the regime of the 1829 Commercial Code. After the repeal of the 1848 legislation, new fire insurance companies were established in the main regional markets: Madrid, Barcelona, the Balearic Islands, 32 33 34

Gaceta de Madrid, no. 5036, 27 June 1848, 1. Source: Gabriel Tortella Casares et al., Historia del seguro en España (2014), 91. Gaceta de Madrid, no. 303, 29 October 1868, 6 f.

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Valencia, and Andalusia (Table 4). These initiatives were driven by local businessmen and traders. They partook in the creation of insurance companies, especially fire insurance companies, to help protect their own businesses and property. For them, it was a risk sharing strategy and a means of participating in business activities subsidiary to their main focus in the banking sector, the industry, or the regional infrastructure sector, such as railways, gas, and electricity. Most of these local elites complemented these diverse economic activities with municipal and regional political engagement. Table 4: Spanish joint-stock insurance companies that operated in the fire branch after 1864 by region (share capital in million pesetas)35 Business name

Year

Registered address

Catalana de Seguros contra incendios36

1864

Barcelona

Share capital

Other branches operated in

Year of liquidation

Catalonia

5

Madrid La Unión y El Fénix Español 186437 Madrid

12

Life

Andalusia El Mediodía

1871

Seville

2.5

La Previsión Española

1883

Seville

2

La Balear

1876

Palma de Mallorca

La Unión Alcoyana

1877

Alcoy

1889 Accident

Balearic Islands 2.5

1892

Valencia 0.25

After the passage of the Companies Act of 1869, there was an increase in the number of financial institutions in the Balearic market. Most of these were banks, but two insurance companies were also created: El Seguro Mallorquín (a marine insurer) and La Balear. La Balear was a joint-stock company specializing in fire insurance. The share capital was set at 2.5 million pesetas, but only 6 % were paid up during the entire period of its operation, which lasted until 1892 when the company was liquidated. Its governance was based on a system of annual rotation for the posts of president and vice-president. By contrast, the position of the managing director was permanent, providing stability for company operations. La Balear reinsured part of its policies with other Spanish and foreign companies and also acted as a reinsurer. One of its main handicaps was the geographical limitations of its operations, which were confined to the Balearic area, and specifically to Ma35

Source: Statistical Yearbook of Spain (Anuario Estadístico de España) for 1888. In 1868, four reales were the equivalent of one peseta. 36 In 1879 El Fénix merged with La Unión. 37 According to Maestro (n. 13), it was established in 1864, but the Yearbook dates it to 25 August 1865.

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jorca, where it had to compete with other Spanish and foreign companies. Furthermore, La Balear is a good example of the way insurance companies acted at this time as regards the speculative investment of their reserve fund – activities that brought significant short-term profits but which also made them vulnerable and left them on the verge of bankruptcy at times of crisis. La Balear invested most of its shareholders’ funds in shares and bonds of industrial and financial companies during the speculative prosperity of the 1870s that continued until 1881.38 During this period, the company participated in the upward movement and obtained significant profits. In 1876, close to 72 % of its income was obtained from investments of its shareholders’ funds while only 26.22 % of income came from insurance premiums. This situation continued until 1881, when profits from shareholders’ funds accounted for 85 % of the annual income. As from 1882, the situation changed with the devaluation of the shares and bonds of the portfolio in the financial crisis of the Febre d’or, the effects of which continued until 1889. That year, La Balear saw a deficit of 37,444 pesetas, followed by two years of exiguous profits. In 1892, it ended up being wound up. The practice of distributing high dividends, making speculative investments, and holding a small reserve fund – shortcomings that were compounded by the recession of the island’s economy as a result of phylloxera infestation – led to the company’s partners deciding to liquidate the company. Its portfolio was acquired by La Catalana in 1892.39 Although founded in the previous phase, the Sociedad Catalana de seguros contra incendios a prima fija now became a considerably more significant player in the fire insurance sector. La Catalana is based in Barcelona and has been one of the most important and longest-lived insurance companies in Spain.40 Until 1876, La Catalana only operated in Catalonia, especially in insurance operations related to public buildings. Then, in 1876 it started its expansion, appointing regional inspectors in Valencia, Navarre, and Castile. Its expansion strategy was different to that of the other large insurers of the same period, such as the La Unión y El Fénix Español or El Banco Vitalicio de España, which diversified their insurance business after the insurance law legislation of 1908.41 La Catalana continued to operate only in fire insurance, and at the beginning of the twentieth century its directors decided to participate in other subsidiary companies specialized in other branches, such as La Previsión Nacional, Covadonga, El Banco Vitalicio de España (life) or the Caja

38 Several stock companies were created in Barcelona that participated in the stock market. The febrile climax of the creation of new companies occurred in 1881, when 23 stock companies were founded, twelve of them banks and two credit societies: Josep Fontana, La Vieja Bolsa de Barcelona (1961), 43 – 47. 39 Pons Pons (n. 20), 76 f. 40 See the information included in the publication: Análisis histórico de la compañía española de seguros contra incendios La Catalana, El defensor del Asegurado (1901), 6. 41 Catalana Occidente, 125 años de Catalana Occidente (1989), 18 – 21.

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de Previsión y Socorro (industrial accidents).42 An important contribution to its expansion was the strategy of purchasing the portfolios of small companies. Before 1901, it had already acquired the portfolios of La Providencia,43 El Progreso Nacional, La Lubecker, La Balear (in 1892), La Mutua de Puigcerdà, La Mutua de Soria, and La Mutua de Toro.44 In this phase, the Spanish market began to be attractive to French and British fire insurers who found that their domestic markets were starting to be saturated with a high degree of competition, which drove them to seek new markets. With the international spread of the insurance business around the 1880s, European and American companies began to establish agencies in other countries, including Spain (Table 5). Here, foreign companies continued their activity until the 1920s despite the increase in protectionist legislation, higher taxes on foreign insurance institutions, and also the growing cost of administrative expenses due to the increase in brokers and agents without any direct control in situ.45 Table 5: Multinational companies operating in the fire insurance sector in 188446 Business name

Nationality

Date of authorization in Spain

Location of the branch

Le Monde

French

27 April 1864

Barcelona

L’Urbaine

French

15 February 1870

Madrid

La Paternelle

French

3 August 1872

Barcelona

Le Phénix

French

28 July 1877

Madrid

Le Soleil

French

27 October 1879

Madrid

L’Aigle

French

29 December 1879

Madrid

La Centrale

French

10 February 1880

Barcelona

Le Progrès National

French

18 February 1881

Madrid

The Royal

British

1 October 1873

Málaga

The Guardian

British

4 March 1876

Málaga

42 Jerònia Pons Pons, Diversificación y cartelización en el seguro español, 1914 – 1935, (2003) 3 Revista de Historia Económica 567 – 592, 580. The first governing board of the Banco Vitalicio de España in 1898 included the Marquis of Alella, Fernando Delás, and José María Delás as members, all prominent directors of La Catalana: Banco Vitalicio de España, Centenario del Banco Vitalicio de España, 1880 – 1980 (1980), 14; Catalana Occidente (n. 41), 29. 43 The French company was incorporated in Paris in 1838 and had an agency in Barcelona from at least 1872, according to what is recorded in one of its policies that is conserved in Mapfre’s virtual insurance museum. Museo Virtual del Seguro. Fundación Mapfre: www. museovirtualdelseguro.com/es/musobjects/654.html?ctx=freetext%3A55 (accessed on 24 August 2019). 44 Análisis histórico (n. 40), 11. 45 Robin Pearson and Mikael Lönnborg, Regulatory Regimes and Multinational Insurers before 1914, (2008) 82 Business History Review 59 – 86; Jerònia Pons Pons, Multinational Enterprises and Institutional Regulation in the Life Insurance Market in Spain, 1800 – 1935, (2008) 82 Business History Review 87 – 114. 46 Source: Reseña geográfica y estadística (1888), 918 f.

196 Business name

Jerònia Pons Pons Nationality

Date of authorization in Spain

Location of the branch

The Commercial Union

British

12 October 1877

Barcelona

The Northern

British

27 December 1877

Málaga

The Lion (Anglo-French)

British

4 August 1880

Barcelona

From the 1860s, with the proliferation of foreign and national companies operating in an increasingly competitive market, companies applied mechanisms for good risk selection. As there was no specific regulation in the 1829 Commercial Code in force, it is the fire insurance policies that reveal how good risks were selected by making explicit the purpose of the contract and the reasons for excluding certain risks from coverage. Furthermore, the policies defined the procedure to be observed after a damage had occurred and when a claim was made. Policies at this time were becoming more standardized, although each company included some particular details and clarifications. Policies of La Providencia from 1862, La Unión from 1874, and La Unión y El Fénix from 1880 have been compared in modern literature. Modern authors have noted an increase in complexity and in precision in the specification of risks covered and excluded, but there is also considerable continuity in the basic principles. From one of the policies analysed, dated 17 May 1862 and signed by the French insurance company La Providencia at its Barcelona office, it is possible to deduce the basic principles of the insurance practice. However, at the same time, the policy exhibits a certain degree of flexibility. It was possible to exclude specific risks or to include these via special conditions and through the payment of a special premium.47 In Art. 1 of the 1862 contract, La Providencia insured all immovable properties against fire, even in the event that damage resulted from ‘fire from the sky’ (‘fuego del cielo’ – presumably lightning). It then included special conditions adding further risks that were covered by the policy: gas explosions, tenant’s risks, and neighbour’s recourses.48 On the other hand, according to Art. 2, the following risks were not insured: ‘La Compañía no asegura tampoco: 18 Los depósitos, almacenes y fábricas de pólvora; las fábricas de fuegos artificiales y de pajuelas químicas; los billetes de banco; los títulos, contratos, escrituras y otros documentos; las barras de oro y plata, el dinero, las medallas y manuscritos. 28 Los diamantes y perlas finas sin montar, y que no sirvan al uso personal ó que estén comprendidos entre los objetos depositados en establecimientos públicos. 47 Museo Virtual del Seguro. Fundación Mapfre: www.museovirtualdelseguro.org/es/ musobjects/654.html?ctx=freetext%3A82 (accessed on 24 August 2019). 48 The tenant’s risk concerned the tenant’s liability towards the landlord for damage due to fire in the leased premises. There is also specific cover provided by civil liability insurance. See the Mapfre Insurance Dictionary: www.fundacionmapfre.org/fundacion/ es_es/publicacio nes/diccionario-mapfre-seguros (accessed on 25 August 2019). The neighbour’s recourse insurance guaranteed the insured against any action that neighbours may bring against him for the spreading of the fire.

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Tampoco responde de los incendios o explosiones ocasionados por la guerra, invasion, alboroto popular, fuerza militar, volcanes y temblores de tierra. La Compañía no responde, á no ser en caso previsto del 28 del art. 18, de los perjuicios que la explosión causare, aunque sea la del fuego del cielo; responde solamente de los que produce el incendio resultado por ella. No responde la Compañía de los objetos perdidos ó robados. Tampoco responde de los túles, encajes, cachemires, alhajas, plata, cuadros, estatuas, ni de los demás objetos raros ó preciosos, muebles e inmuebles, sino cuando están expresados en la póliza. Las excepciones arriba dichas son igualmente aplicables al seguro del riesgo locativo ó de los vecinos.’ ‘The Company also does not insure: 1. Gunpowder depots, warehouses, and factories; firework and sparkler factories; bank notes; titles, contracts, deeds, and other documents; gold and silver bars, money, medals and manuscripts. 2. Unmounted diamonds and fine pearls, and which do not serve for personal use or are included among the objects deposited in public establishments. It is also not liable for fires or explosions caused by war, invasion, civil commotion, military force, volcanoes, and earthquakes. The Company is not liable, except in the case envisaged in Art. 1.2, for the damage caused by an explosion, even though it is an explosion caused by fire from the sky; it is only liable for the damage produced by the resulting fire. The Company is not liable for lost or stolen objects. It is also not liable for tulles, laces, cashmeres, jewellery, silver, paintings, statues, or for any other rare or precious objects, movable and immovable, except when they are specified in the policy. The aforementioned exceptions are equally applicable to tenant’s risk insurance or neighbour’s recourse insurance.’

Later policies were increasingly complex, introducing fine distinctions and specifying the risks covered in greater detail. Thus, the fire insurance policy offered by La Unión in 1874 broadens the formula:49 ‘Asegura también a primas especiales de los daños que los objetos experimenten por fuego del cielo y explosiones de gas de alumbrar ó de aparatos de vapor sin incendio. Pero no responde de ningún perjuicio en los objetos asegurados que provenga ó sea consecuencia de incendio, explosión ó preparación al efecto causados por la fuerza armada, nacional ó extranjera, sublevación popular, erupciones volcánicas, huracanes y terremotos.– tampoco indemniza por cambio de alineación, falta de alquiler ó disfrute, rescisión de contratos, vacaciones o cesación de trabajo, provenientes de incendio.’ 49 Museo Virtual del Seguro. Fundación Mapfre. Póliza de seguro de incendios no. 23714 de la compañía La Unión, 1874: www.museovirtualdelseguro.org/es/musobjects/ 1090.html?ctx= freetext%3A105 (accessed on 26 August 2019).

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‘It is also possible to insure against damage caused to objects due to fire from the sky and explosions of gas lighting or steam appliances without fire by payment of special premiums. However, this does not include liability for damage caused to insured objects that arises from, or is the consequence of, fire, explosion or preparations for this purpose caused by armed forces, national or foreign, riot, volcanic eruptions, hurricanes and earthquakes. Nor does it indemnify for change in alignment, lack of rent or usufruct, termination of contract, vacations or termination of employment as a result of fire.’

Over time, certain uninsurable risks would end up being insurable, with an increase in the premium, of course. The most prominent case, which caused great controversy among companies as well as significant repercussions in the world of insurance and which led to political and governmental intervention, was the coverage of fire caused by riot or civil commotion.50 Some companies had included this risk in their fire policies at the start of the twentieth century, although they tried to distinguish losses caused by civil commotion or riots from losses caused by war. This led to intense debates during the Spanish Civil War due to the difficulties in distinguishing the different concepts. In addition, the Franco government had expressed their views on the distinction, further complicating the settlement of claims.51 The 1862 policy conditions of La Providencia contained a total of 25 articles. Article 4 stipulated that, in order to renew a policy, the premium had to be paid at the end of the term for which the policy was running. The renewed policy came into effect only when the payment had been verified. In the following years, the insured was granted 15 days of grace to pay the premium. Companies’ previous experiences with a variety of circumstances that could ensue with the payment of the premium led companies to include far more nuanced conditions to remove all possibility of the insured being in default. In 1880, La Unión y El Fénix introduced further specifications into the article on premium payment: ‘Las primas siguientes á las del primer año deben pagarse siempre adelantadas y en la forma prevenida en la primera parte del artículo 58- La cobranza de cualquier prima que la Compañía hiciere voluntariamente recaudar en el domicilio de los asegurados no puede interpretarse como derogación de la anterior disposición ni considerarse por ella obligada la Compañía á cobrar las primas sucesivas en el domicilio del asegurado. Sin que el pago de las primas se haya realizado, sea cualquiera la causa, y sin que se haya recogido por el 50 On the diffusion of this clause and the problems it caused after the Spanish Civil War and the consequences for the Second World War, see G.D. Feldman, Civil Commotion and Riot Insurance in Fascist Europe, 1922 – 1941, (2003) 10 Financial History Review 165 – 184; Jerònia Pons Pons, Spain: International influence on the domestic insurance market, in: Peter Borscheid and Niels V. Haueter (eds.), World Insurance. The Evolution of a Global Risk network (2012), 189 – 212, 198 f. 51 For example, the revenue of the Phoenix Group in Spain was 60,860 pounds in 1935 and only 15,927 pounds in 1938. This dramatic fall was due to the claims linked to clauses covering riots included in some policies. Clive Trebilcock, Phoenix Assurance and the Development of British Insurance, vol. 2 (1998), 822.

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asegurado el recibo talonario que le justifique, ningún derecho le asiste y nada puede reclamar a la Compañía por indemnización, á ocurrir un incendio en los valores objeto del seguro. El pago de la prima hecho durante ó después que ha ocurrido el incendio no dá derecho al siniestrado para que se le indemnicen los daños que le cause.– Sin embargo, se conceden al asegurado ocho días de plazo para satisfacer sus primas; transcurridos los cuales la Compañía puede reclamar judicialmente su importe en el lugar donde se ha de verificar su pago y el de las costas y gastos que con tal motivo se la originen […]’52 ‘The premiums subsequent to the first year must always be paid in advance and in the form envisaged in Art. 5.1. Collection of any premium that the Company allows to be voluntarily paid at the policyholder’s home cannot be interpreted as revocation of the former provision, nor is the Company thereby obliged to collect subsequent premiums at the policyholder’s home. Without payment of the premium having been effected, whatever the cause, and without the insured having collected the receipt justifying payment, the insured has no rights, and no claim for indemnification from the Company may be made in the event of a fire damaging any insured object. The payment of the premium made during or after the occurrence of the fire does not give the affected party the right to indemnification for the damage caused. Nevertheless, the insured is granted a period of eight days to pay the premiums; after which time the Company may legally claim the corresponding amount at the place where payment has to be verified and the costs and expenses incurred for such reason […].’

The competition between companies and the expansion strategies they employed led some companies to cover higher risks. These companies adopted more aggressive risk practices than others. Thus, the risk selection was stricter in some companies than in others, and as a consequence some companies obliged their agents to reject insurance proposals that they considered high risk. Ramon Basterra, who was from 1870 the general agent of the Sun Insurance company in Bilbao, complained of the strict guidelines that the company imposed on its agents when it came to accepting a policy proposal. He called on the Sun’s central executives to allow greater flexibility in risk selection. Basterra criticized that local agents had to compile information which was not required by competitors. The head office in London, for example, obliged its agents to collect information on the premises neighbouring those that were applying for insurance, including the name, surnames, and occupation of neighbours. Furthermore, he complained that the Sun did not insure factories even though he received numerous proposals to insure such buildings. Moreover, an additional fee was charged if a business only occupied a quarter of the insured building. However, the head office sought to maintain its strict standards of control over the policies sold. The Sun’s managers were not prepared to abandon these standards even though French and Spanish companies were not as restrictive in their risk assessment. Nevertheless, the Sun gave in on one point and

52 Museo Virtual del Seguro, Fundación Mapfre, Póliza de La Unión y El Fénix no. 5060, www.museovirtualdelseguro.com/es/musobjects/1112.html?ctx=freetext%3A106 (accessed on 26 August 2019).

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allowed businesses that only occupied a quarter of a building to be insured without any surcharge.53 The new Commercial Code of 1885 finally reflected the new reality and the long years of practice by codifying fire insurance contract law for the first time.54 Book 2 regulated the various commercial contracts, with Title 7 focusing on insurance contracts. In Title 7, Section 1 dealt with insurance contracts in general, with Section 2 then codifying the law on fire insurance contracts. Articles 386 – 415 defined the characteristics of the contract and described the risks covered by a fire insurance contract and those which were excluded from coverage. Overall, the 1885 Code introduced only a few novelties compared to the content of the policies that foreign and national companies had used for decades. Furthermore, the 1885 Code did not introduce mandatory provisions; instead, the parties were free to deviate from its provisions. Articles 386 f. specified the objects which are usually insured under a fire insurance contract: ‘Art. 386. Podrá ser materia del contrato de seguro contra incendios todo objeto mueble o inmueble que pueda ser destruido o deteriorado por el fuego. Art. 387. Quedarán exceptuados de esta regla los títulos o documentos mercantiles, los del Estado ó particulares, billetes de Banco, acciones y obligaciones de compañías, piedras y metales preciosos, amonedados ó en pasta, y objetos artísticos, á no ser que expresamente se pactare lo contrario, determinando en la póliza el valor y circunstancias de dichos objetos.’ ‘Art. 386. All movable and immovable objects that may be destroyed or damaged by fire may be covered by a fire insurance contract. Art. 387. The following objects are excepted from this rule: commercial, state or private title deeds or documents, banknotes, company shares and bonds, precious stones and metals, coined or cast, and artistic objects, unless expressly agreed to the contrary, determining the value and circumstances of said objects in the policy.’

The following articles regulated the premium, which had to be paid in advance (Arts. 388 f.), as well as the problems arising from the alteration or substitution of the insured object (Arts. 390 – 392). Articles 393 – 397 covered the insured’s right to compensation in the event of damage and exceptions to that right, e. g. when the insured had set the fire intentionally. Articles 399 f. dealt with the problem of double insurance (in principle, the insured was not allowed to take out a second insurance if he had insured the same objects already for their full value; but there were exceptions to this rule). The effects of the insured’s death, liquidation, or bankruptcy were defined (Arts. 401 – 403). Articles 405 f. established how the insured had to report the damage to the insurer as well as respective deadlines, and it dealt with questions of proof. Finally, Arts. 407 – 415 defined further details concerning the payment of compensation. The problem of how reinsurance is dealt with

53 54

Metropolitan Archives, Sun Insurance Company 3.31522-238. Código de Comercio 1885 (n. 1), 376 – 415.

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under the 1885 Code was discussed in the 1887 commentary on the Code55 authored by José Gallostra y Frau, a jurist and politician who was Minister of Finance from 13 October 1883 to 18 January 1884 during the government of José de Posada Herrera. He stressed that the Code does not allow the insured to make a profit, as insurance should only indemnify a loss. Nevertheless, the 1885 Code permitted several insurance contracts on a single insured object. The only limitation was that a second insurance contract is not allowed if the object is already insured for its entire value under a first contract. However, reinsurance as well as the assignment of the insurance to another insurer, even without the consent of the insured, were not prohibited, yet such reinsurance or assignment did not alter the legal relationship between the insured and the first insurer. The provisions of the 1885 Code can be considered as the basic and minimum legal principles of fire insurance contract law as it had developed in Spanish fire insurance practice. The practical experience made by both foreign and national insurance companies had shaped the fire insurance policies, and these policies had become over time increasingly complex and sophisticated, introducing ever finer distinctions for the numerous problems. Nevertheless, the Code only established the basic common principles and still gave insurers great flexibility. The 1885 Code remained the central piece of legislation for the fire insurance branch until the Act on Private Insurance of 1908 was enacted. However, even thereafter the 1885 Code continued to be the central piece of legislation for insurance contract law as the 1908 Act only concerned the establishment of company deposits and reserves. The 1908 Act regulated the law of insurance supervision. One would think that the 1885 Code had a great effect on the practices of the different fire insurers. More specifically, one would think that the provisions of the 1885 Code as a uniform legal framework may have led to a greater harmonisation of the insurance practices of the individual fire insurers. However, it seems that it was the collusion and cartelization in the fire insurance sector that was the driving force behind the development towards greater harmonization.56 In Spain, the creation of such cartels was influenced by foreign insurers. British insurance companies were already familiar with cartelization since the 1860s. In particular, Oliver Westall has analysed how the increase in competition between London and provincial fire insurance companies had led to the creation of the Fire Offices’ Committee (F.O.C.).

55

Código de Comercio 1885 (n. 1), 68. Dalit Baranoff, A policy of co-operation: the cartelisation of American fire insurance, 1873 – 1906, (2003) 10 Financial History Review 119 – 136. For collusive strategies in other markets, see Monica Keneley, The origins of formal collusion in Australian fire insurance, 1870 – 1920, (2002) 42 – 1 Australian Economic History Review 54 – 76. For later periods, see the case of Sweden as discussed by Alexander Boksjö and Mikael Lönnborg-Andersson (1994), Collusive and Competitive Institutions in the Swedish Insurance Market, (1994) 2 Nordisk Forsikringstidsskrift 139 – 159. 56

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The F.O.C. established a complex system of tariffs that in effect enabled the strongest companies to maintain their domination.57 However, some precedents of collusive agreements can already be found in nineteenth-century Spain in the more competitive traditional branches of insurance, including fire insurance, before the trend towards cartelization was intensified due to foreign influences.58 One of the first cartels in Spain was formed in 1880. In a letter dated 23 October 1880, the director of La Unión y El Fénix Español in Madrid informed the president of the British Sun Fire Insurance in London that the city of Santander had just been the victim of a disastrous fire. Furthermore, he calculated that the insurance companies operating in Spain had paid out more than 4 million francs over the last 10 years. The reasons that he gave for both the fire in Santander and the high pay-outs in indemnifications were the lack of firefighting teams, the poor quality of buildings, and the strong winds in the Santander area. As a result, the French companies L’Aigle, Le Soleil, Le Phenix, Le Urbain, and Le Monde had agreed on tariffs and had invited him to join the cartel. These agreements between French companies were consolidated during the 1880s. This development towards consolidation was led by La Unión y El Fénix Español, a Spanish company with French capital. It tried to create a system of tariffs in which both French and British companies participated. In 1882, French and Spanish companies created the Sindicato General de Compañías para el Seguro de Incendios.59 It was a system modelled by the French with the intention of blockading the British.60 The British companies did not participate because they considered the tariffs in Spain too low in comparison with other countries and perceived the risks as excessive, especially in rural areas.61 This practice of cartelization continued in the Spanish market until the Spanish Civil War. These agreements concerned not only tariffs. They also resulted in guidelines concerning various aspects of the insurance practices of cartel members, such as insurable risks, commissions, and the details of insurance policies. 57 Oliver Westall, David and Goliath: The Fire Offices’ Committee and non-tariff competition, 1898 – 1907, in: idem (ed.), The historian and the business of insurance (1984), 130 – 154; idem, The Provincial Insurance Company, 1903 – 1938 (1993), 25 – 35. Further references in Hurgh A.L. Cockerell and Edwin Green, The British insurance business. A guide to its history & records (1994), 40. 58 Jerònia Pons Pons, The Influence of Multinationals in the Organization of the Spanish Insurance Market. Diversification and Cartelisation, 1800 – 1939, in: Peter Borscheid and Robin Pearson (eds.), Internationalisation and Globalisation of the Insurance Industry in the 19th and 20th Centuries (2007), 49. 59 It had two committees, one each in Madrid and Barcelona. The syndicate comprised the main companies in the fire insurance branch: La Urbana, La Unión y el Fénix Español, La Paternal, La Catalana, El Sol, El Águila, El Fénix Francés, El Mundo, La Unión Francesa and El Progreso Nacional. See Manuel Maestro, Formación del mercado español de seguros, 1908 – 1960 (1993), 113. 60 Peter G.M. Dickson, The Sun Insurance Office, 1710 – 1960. The History of Two and a Half Centuries of British Insurance (1960), 180. 61 Post Magazine and Insurance Monitor, 1 January 1898, 14.

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D. Conclusion Fire insurance contract law was codified for the first time with the enactment of the Spanish Commercial Code of 1885. In practice, fire insurance policies had been introduced to Spain by foreign, especially French, companies which were active in Spain and which had adapted their policies and tariffs to the Spanish market. The legislation that most affected insurance companies in a first period of the development of fire insurance in Spain, starting around 1820, concerned the formation of joint-stock companies. This first period was characterized by a liberal approach towards the establishment of such companies. This era came to an end with the legislation of 1848. It subjected the creation of joint-stock companies to a restrictive process of authorization, and such authorization was dependent on the company serving the common public interest (‘utilidad pública’). This restrictive approach together with a shortage of capital led to the development and predominance of mutual fire insurance societies. Such societies spread throughout Spain from the 1820s onwards, specializing above all in insuring immovable property against the risk of fire. They adopted a very simple design, without the need for actuarial calculations: the insured had to make derramas (special contributions) mirroring the annual indemnification which the society had to pay. These societies enabled the dissemination of fire insurance at a time when the firefighting infrastructure was extremely limited, and they in fact helped to create, develop, and finance the development of fire prevention and firefighting strategies in many Spanish cities. After the liberal revolution of 1868, the 1848 legislation was repealed in the same year, and this in turn facilitated the creation of joint-stock companies. As a consequence, the number of joint-stock companies active in the insurance sector, including the fire insurance sector, increased. Furthermore, Spain opened up to foreign companies that were undergoing international expansion within the process of the first globalization of insurance markets. On the one hand, this enabled increased competition in the Spanish insurance market from the 1870s, yet, on the other hand, it also brought with it the introduction of cartel mechanisms promoted either by foreign companies themselves or by their Spanish subsidiaries. These cartels had a significant impact on the private regulation of tariffs, risks covered and excluded, and also many other details which were regulated in the policies. Legislation in the new Commercial Code of 1885 belatedly included some rules for (fire) insurance contracts. However, the 1885 Code did not introduce mandatory provisions. Thus, the insurers still had the freedom to include clauses in their policies that deviated from or amended the provisions of the 1885 Code, giving flexibility to private societies and companies as well as to future cartels which were subsequently formed in the different branches of insurance, including fire insurance.

Chapter 9: Comparative analysis By Phillip Hellwege A. The history of fire insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 B. The history of fire insurance law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215

A. The history of fire insurance The aim of the present volume is to reassess the history of fire insurance and fire insurance law in selected European countries from comparative perspectives. Let me start with a comparative analysis of the history of fire insurance. I will turn to the legal developments in the second section below.1 The order in which the chapters to this volume are presented roughly reflects the chronology of the beginnings of fire insurance. The volume starts with chapters on the developments in the Netherlands, Germany, England, and Scandinavia, with chapters on Italy, France, and Spain following in the second half of the volume. In this summary, too, I would like to begin with the first group of countries. In England, the first privately organized insurance societies and companies were established in the 1680s in the aftermath of the Great Fire of London in 1666.2 It is important to note that at the same time the City of London initiated a public fire insurance scheme which, however, proved to be a failure.3 In addition, it is equally important to remember that the idea for a public fire insurance scheme actually predated the Great Fire. Sinem Ogis reminds us that the year 1660 had seen a plan for a private fire insurance scheme which was rejected ‘on the ground that […] it is unreasonable for private persons to manage such an undertaking, or that any one but the City should reap the profits of the enterprise’.4 English research claims that fire insurance is rooted in marine insurance. Indeed, it was common for a marine insurance policy to cover the risk that a vessel or goods on board were destroyed by fire, and prima facie it seems plausible that this practice inspired terrestrial fire insurance. Nevertheless, Sinem Ogis proves that it would be

1 2 3 4

See pp. 215 ff., below. The developments are summarized by Caja, pp. 76 ff., above. See Caja, p. 79, above. See Ogis, pp. 71 f., above.

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an oversimplification to assert a simple monocausal link between marine insurance on the one hand and fire insurance on the other hand.5 First, if fire insurance had been inspired by the practice of marine insurers to cover the risk that a vessel or goods on board were destroyed by fire, one would assume that terrestrial fire insurance would have started with insuring goods and merchandise. However, this was not the case. The first English fire insurance societies and companies of the late seventeenth century exclusively offered to insure immovable property. It was only in the beginning of the eighteenth century that it became possible to insure movable property, too. The first English fire insurance societies and companies of the late seventeenth century shared their limitation of insuring solely immovable property with the state-run Hamburg fire insurance office (Hamburger Feuerkasse), but also with early English plans dating back to the 1630s. Secondly, there is a marked difference concerning the duration of insurance as between the first English fire insurance societies and companies of the late seventeenth century and marine insurance practice. In marine insurance, coverage was bought for a specific voyage or for a specified period of time, which usually did not exceed one year. By contrast, the first surviving English fire insurance was concluded for a duration of 31 years, and later insurance contracts were concluded for the duration of seven years.6 Both findings make it unlikely that the first English fire insurance societies and companies of the late seventeenth century simply mimicked marine insurance practice. However, there is one aspect which the English fire insurance societies and companies of the late seventeenth century from the very beginning took over from marine insurance practice.7 The German state-run fire insurance schemes of the late seventeenth and the eighteenth centuries calculated the premiums and contributions only on the basis of the insured value. The premiums and contributions did not reflect the risk which the insurer promised to cover.8 A similar practice may be found in other European countries of the time.9 In addition, the English plans from the 1630s for the introduction of fire insurance schemes similarly suggest that the premiums and contributions should be calculated only on the basis of the insured value.10 By contrast, in marine insurance the premium had always reflected the risk which the insurer offered to cover. Risk relevant factors which were taken into 5

On what follows, see Ogis, pp. 68 ff., above; eadem, The Influence of Marine Insurance Law on the Legal Development of Life and Fire Insurance in England. Offspring or Gradual Convergence? (2019), 210 ff. 6 Ogis, p. 71, above. 7 Ogis, pp. 75 ff., above. 8 Bogner, pp. 39 ff., above; idem, Das Versicherungsvertragsrecht – ein Spiegel der vorgesetzlichen Praxis? Das Binnenversicherungsrecht und seine Quellen vom Preußischen Allgemeinen Landrecht (1794) bis zum Versicherungsvertragsgesetz (1908) (2021); § 1 C.III.2. 9 See Sirks, pp. 19 ff., above. 10 Ogis, pp. 69 ff., above.

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consideration for calculating the premium were, among other things, the vessel’s age, its condition, the time of year when the voyage was made, and the destination. English fire insurance societies and companies of the late seventeenth century then similarly calculated their premiums on the basis of the risk which they promised to cover. This was an important innovation to which I will return again in this chapter,11 and it may well be that these fire insurance societies and companies were indeed inspired by marine insurance practice. However, there is a significant difference between fire and marine insurance practice. Unlike marine insurers, the fire insurance societies and companies did not assess the risk in each contract individually. They introduced a limited number of risk classes.12 In order to define these risk classes, they resorted to a self-evident differentiation which had already been applied in public building acts of the early seventeenth century and which became important in the rebuilding of London after the Great Fire: brick and stone were to be preferred over wood and timber as building materials; the number of thatched roofs was to be reduced. The so-called double premium clause, according to which the premium for a house built of timber was twice the premium for a stone house (if the insured value remained the same),13 mimicked this simple differentiation. Thus, it seems to be an oversimplification to allege that the English fire insurance market, as it was established in the aftermath of the Great Fire of London in 1666, was simply an offspring of marine insurance. It rather seems that the English fire insurance societies and companies of the late seventeenth century fused together different traditions, thereby creating something new. The result is what English scholars call the first ‘modern’ and ‘rational’ fire insurance, attributions to which I shall return further below.14 The further history of this newly created product is well known,15 and Ervis Caja stresses that this history was not so much influenced by marine insurance, but that the further developments of fire insurance reflected its own specificities and its own socio-economic context.16 Nevertheless, the present volume did not commence with the chapter on England but put the Netherlands and Germany first, even though I have claimed that a rough chronological order would be applied based on the first appearance of fire insurance in the covered countries. Already in 1591, 100 Hamburg brewers entered into the

11

See p. 210, below. See in detail Caja, pp. 80 ff., above. 13 Caja, pp. 80 ff., above. 14 See p. 211, below. 15 A summary of the further developments in England is provided by Florian Siegwart, Englische und französische Feuerversicherungsbedingungen vor 1900. Gemeinsamkeiten – Einflussnahmen – Unterschiede (2021), chapter 2 A.I.1; John MacLeod, England and Scotland, in: Phillip Hellwege (ed.), A Comparative History of Insurance Law in Europe. A Research Agenda (2018), 149 – 169, 166 f.; Caja, pp. 76 ff., above; Ogis (n. 5), 57 ff., above. 16 Caja, pp. 89 f., above. 12

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first so-called fire contract.17 The members obliged themselves to pay to a comember who had suffered loss through fire a specific sum of money for the rebuilding of the destroyed brewery. It is not possible to clarify whether the Hamburg fire contracts are rooted in any earlier traditions and, if so, on what earlier traditions they are based. The first such fire contract of 1591 explicitly refers to similar schemes being common in other places without further specifying what kind of schemes these were and where they existed.18 Literature discusses three possibilities, and this project has added a fourth possible link. (1) Some scholars claim that the Hamburg fire contracts were inspired by fire guilds as they had existed in Schleswig-Holstein since the Late Middle Ages,19 some of which still exist today in a different form. The proximity to Hamburg as well as the fact that Hamburg brewers exported their beer to the villages where such fire guilds existed make it prima facie likely that there was a link between these fire guilds and the first Hamburg fire contract. However, a closer analysis has proven that the differences between the two are so substantial as to make it unlikely that the first Hamburg fire contract was referring to these fire guilds. For this reason, literature has already in the past rejected this proposition.20 (2) Other authors assumed Dutch influences.21 In 1588, the first surviving marine insurance contract was concluded in Hamburg. One of the contracting parties was Dutch, and it is believed that marine insurance came via the Netherlands to Hamburg. It is striking that the first Hamburg fire contract was concluded only three years after the first marine insurance contract. Yet here again, it is impossible to reconstruct any direct link between the two.22 (3) It has further been alleged that Dutch guild support may have influenced the developments in Northern Germany. However, it is again impossible to reconstruct any direct link between the two developments.23 (4) Finally, it may be asked whether the mutual fire contracts concluded between Hamburg brewers and those concluded between oil millers in the seventeenth century in the Zaanstreek in the Northern Netherlands are rooted in a common tradition or even whether they influenced each other.24 However, Delphine Sirks has concluded that any form of reciprocal influence is unlikely.25 17 A summary of the developments in Germany is provided by Bogner, pp. 31 ff., above; idem (n. 8), § 1 C.III. 18 See the text of the 1591 contract as reproduced by Wilhelm Ebel, Die Hamburger Feuerkontrakte und die Anfänge des deutschen Feuerversicherungsrechts (1936), 66. 19 See Georg Helmer, Die Geschichte der privaten Feuerversicherung in den Herzogtümern Schleswig und Holstein, vol. 1 (1925), 225 f. 20 Ebel (n. 18), 37. See also Bogner, pp. 31 ff., above; idem (n. 8), § 1 C.III1. 21 See Wilhelm Schaefer, Urkundliche Beiträge und Forschungen zur Geschichte der Feuerversicherung in Deutschland, vol. 1 (1911), 163. 22 Delphine Sirks, Fire and life insurance in the Dutch Republic. Development and legal aspects (2021), chapter 2 A.III; eadem, pp. 17 ff., above. 23 Sirks (n. 22), chapter 2 A.III; eadem, pp. 17 ff., above. 24 See Phillip Hellwege, Netherlands, in: idem, Research Agenda (n. 15), 133 – 148, 139 ff. 25 Sirks (n. 22), chapter 2 C.I.1; eadem, pp. 19 ff., above.

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In summary, the present project had to leave unanswered the question of what earlier examples the drafters of the 1591 Hamburg fire contract were referring to. However, it is clear that it was not only in Schleswig-Holstein that guilds promised help to members suffering from loss through fire. Similar schemes existed in the Netherlands, England, and Scandinavia,26 and this was the reason why the present volume commenced with a chapter on the Netherlands. However, in the Netherlands and England, such practices had seemingly fallen into disuse already in the Late Middle Ages, so that they cannot be linked to modern fire insurance. In Scandinavia and Germany, they survived much longer.27 And this may be the reason why German research has again and again asked how fire guilds relate to modern fire insurance. It is often claimed that medieval and early modern mechanisms of mutual help in the event of fire were a common Northern European tradition or phenomenon.28 However, it should be noted that Maura Fortunati discusses similar examples from fifteenth- and sixteenth-century Italy.29 Thus, it seems that mechanisms of mutual help in the event of fire may have actually been a pan-European phenomenon and that we only know very little about it because little evidence has survived. Nevertheless, there is no need to conduct further research in order to find more examples of such mechanisms within a project on the history of fire insurance and fire insurance law because even if one finds that these mechanisms were more widespread than known today, they seem not to have left any marks on the development of modern fire insurance and fire insurance law. The subsequent development in Germany has been well researched. In 1676, the Hamburg General Feuerkassa – the first state-run fire insurance scheme – was established.30 It replaced the many Hamburg fire contracts as they had developed since 1591. Starting at the end of the seventeenth century and then throughout the eighteenth century, similar state-run fire insurance schemes were founded throughout Germany. They specialized in the insurance of immovable property. Often, they had a monopoly, and at times insurance was compulsory. As a consequence, there was hardly any room for private initiatives to develop. However, the Hamburgische Assekuranz- und Havereyordnung of 1731 (Hamburg Assurance and Average Regulation) hints that private fire insurance may have existed despite the dominance of the state-run fire insurance schemes. The 1731 Regulation codifies marine insurance law, but in Title III, Art. 2 makes explicit that the insurance of houses and other things was allowed as well. Nevertheless, it was only at the end of the eight26 Heirbaut, Belgium. Non-marine insurance, in: Hellwege, Research Agenda (n. 15), 89 – 110, 91 ff.; Sunnqvist, Scandinavia, in: ibid., 199 – 222, 207; idem, pp. 92 ff., above; Ogis, pp. 66 f., above. 27 Sunnqvist, pp. 92 ff., above. 28 See Sunnqvist, pp. 92 ff., above. 29 See Fortunati, pp. 109 ff., above. 30 On what follows, see the summary offered by Bogner, pp. 34 ff., above; idem (n. 8), § 1 C.III.

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eenth century that private fire insurance companies finally entered the German fire insurance market. English fire insurance companies were the first to undertake the activity.31 In many German territories, they were at first only able to offer insurance for movable property as the state-run insurance offices still held a monopoly over the insurance of immovable property. It was only in the nineteenth century that the first German private fire insurance companies were established, both in the form of mutual societies and in the form of joint-stock companies.32 The German state-run fire insurance schemes of the late seventeenth and eighteenth centuries had not adopted the innovation which had been introduced by English fire insurers at the end of the seventeenth century.33 Namely, English fire insurers of the late seventeenth century had started to calculate their premiums on the basis of the risk which they promised to cover, even if they did not assess the risk in each case individually but used a typifying approach by introducing a limited number of risk classes. By contrast, the German state-run fire insurance schemes calculated the premiums and contributions only on the basis of the insured value.34 The individual risk was irrelevant for setting the premiums and contributions: the owner of a stone building and the owner of a timber house had to pay the same premium and contribution as long as both insured buildings had the same value. With the first Hamburg fire contract of 1591, there was probably no need to distinguish different risk classes as it was 100 brewers that had concluded the contract. One may assume that these breweries involved similar fire risks and that even under the English system breweries may have fallen into the same risk class. However, as the state-run fire offices developed further, different fire risks were pooled together in the state-run fire offices. The two models can be described as an individual risk model as opposed to a collective or solidary risk model, mirroring a dualism that also characterized the early nineteenth-century life insurance market.35 The different risk classes developed by English fire insurers reflected – even if only in a typifying fashion – the individual risk to be insured. With each insurance contract, the premiums which each insured had to pay were calculated to match the risk which the insured wanted the insurer to cover. By contrast, the German state-run fire insurance scheme had adopted what could be called a collective risk model: insurers only had to see that the total sum of premiums and contributions reflected the pooled risks. It may also be referred to as solidary model because some insured paid higher premiums than their individual risk would demand, whereas other insured paid lower premiums than their individual risk would require. One should be cautious in describing the 31

Bogner, p. 42, above. Bogner, p. 46, above. 33 See p. 207, above. 34 Bogner, pp. 39 ff., above; idem (n. 8); § 1 C.III.2. 35 On what follows, see Phillip Hellwege, Germany, in: idem (ed.), Widows and the History of Insurance. A Comparative Analysis (2021), F.II.5 – 6. 32

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English individual risk model as ‘modern’ or ‘rational’36 as such characterization would imply that the German collective risk model was ‘outmoded’ or ‘irrational’. However, such a conclusion would be wrong. Both models simply followed two different philosophies, and both models had to see that the total income generated through premiums or contributions equalled the total sum of indemnification paid to the insured. The entry of English fire insurers adopting the individual risk model in the German market and the newly established German private insurance companies of the nineteenth century following the same model37 had far reaching consequences for traditional German state-run insurance schemes following the collective risk model. Just as on the life insurance market, the individual risk model adopted by English insurers proved to be an ‘invasive species’ in Germany.38 On a liberalized market where English insurers were allowed to offer fire insurance for immovable property, people with a low risk would opt for an insurer implementing the individual risk model because they would then pay lower premiums than with an insurer implementing the collective or solidary risk model. The traditional German staterun fire insurance schemes adopting the collective risk model would have been left with the high risks. There were three options of how to respond to this problem: (1) If they wanted to keep applying the collective risk model, the state-run fire insurance schemes would be able to survive only if they had a monopoly. (2) On a liberalized market, they could have increased their premiums and contributions in order to reflect the bad risks with which they were stuck. (3) Finally, on a liberalized market, they could have similarly switched to the individual risk model. In the fire insurance market, it was this last option that prevailed – at least in Prussia – after a period of transition. It seems that the developments in the Scandinavian countries ran very much parallel to those in Germany.39 Already in the Middle Ages, forms of mutual support and guild support in the event of fire had been developed, surviving well into the nineteenth century. The second half of the seventeenth century saw proposals for the introduction of fire insurance schemes. The eighteenth century then saw (at times compulsory) state-run fire insurance schemes covering immovable property. After all, Kameralismus was influential in Scandinavia, too. In the late eighteenth century, English fire insurance companies entered the Scandinavian insurance market. The nineteenth century then saw the establishment of Scandinavian private fire insurers. Turning to the Netherlands, we see a different development. Mutual fire insurance contracts existed already in the seventeenth and eighteenth centuries. They often were concluded for longer terms: Delphine Sirks refers to mid eighteenth36 37 38 39

See p. 207, above. On what follows, see Bogner, p. 47 and pp. 59 ff., above. On the developments in life insurance, see Hellwege (n. 35), F.II.6. On these developments, see Sunnqvist, pp. 91 ff., above.

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century contracts which lasted for eleven, 41, or even 73 years.40 It seems as if the specific risk was irrelevant for the calculations of the contributions which members had to pay in the event a co-member suffered damage through fire, and it seems that members did not have to pay premiums, but that each contracting partner had to contribute to the indemnification paid to a co-member only after a fire had occurred.41 Furthermore, it seems that these mutual fire contracts are based on a tradition different from marine insurance. In addition, Sirks finds different threads of development.42 As mentioned above,43 she finds that the mutual fire contracts in the Zaanstreek developed independently from the Hamburg fire contracts. The mutual fire contracts in Amsterdam appear to be based on the contracts in the Zaanstreek. However, the mutual fire contracts in Groningen seem to have developed independently. The ‘Dutch Bubble’ of 1720 saw the creation of a number of private fire insurance companies.44 Sirks argues that these were not modelled after English examples. In particular, they drafted their policies from scratch. This becomes most obvious from the fact that the Rotterdam Insurance Company had introduced 18 risk classes, a much larger number than applied by English fire insurers of the same time. After the ‘Dutch Bubble’, the development of private fire insurance companies came to a halt.45 It took until 1770 before further fire insurance companies were established. However, it seems that English fire insurance companies had been active on the Dutch market since the 1720s. In many other European countries, the development of fire insurance started much later. Even though in some Italian territories, plans had emerged in the eighteenth and early nineteenth century to establish (compulsory) state-run fire insurance schemes, these plans never materialized.46 A similar plan in London in the 1680s had proven unsuccessful, too.47 In the eighteenth century, France saw on the local level numerous bureaux des incendiés.48 However, they seem to belong to the sphere of charity and cannot be described in terms of insurance. Furthermore, they were set up under the aegis of the Church. Nevertheless, David Deroussin also mentions an undated project for the establishment of a state-run fire insurance scheme that calculated the contributions only on the basis of the insured value, and further plans for such a state-run fire insurance were again formulated in the 1820s. However, these plans were never implemented.49 Furthermore, already in the sec40 41 42 43 44 45 46 47 48 49

Sirks, p. 19, above. Sirks, pp. 19 ff., above. Sirks, p. 20, above. See p. 208, above. Sirks, pp. 21 ff., above. Sirks, pp. 22 ff., above. Furtonati, pp. 111 and 113, above. See p. 205, above. Deroussin, pp. 146 ff., above. Deroussin, pp. 159 f. and 166, above.

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ond half of the eighteenth century, France had seen a limited number of private fire insurance companies introducing risk classes and thus following the individual risk model.50 However, with the French Revolution the developments in France experienced a great caesura.51 Apart from these and some other attempts to set up mechanisms of mutual help in the event of fire and to establish fire insurance schemes, it was only in the course of the nineteenth century that private fire insurance was able to firmly take root in Italy, France, and Spain.52 This late appearance of fire insurance in these countries is often linked to the use of different building materials: whereas in Northern Europe many buildings were built of timber and had thatched roofs, in Southern Europe houses were mostly built of stone. Consequently, the risk of fire was lower, and there may have simply been no demand for fire insurance. This explanation is compelling. Nevertheless, it may be worthwhile to test it. First, it is striking that late medieval and early modern Italian town statutes saw the need to regulate mutual help in the event of fire.53 If fires were singular incidents, there should not have been the necessity to regulate mutual fire help. Or to put it differently: if town statutes saw the necessity to regulate mutual fire help, there could also have been a demand for fire insurance. Secondly, a risk is insurable only if it is controllable, and the first English fire insurance companies were established in London only when the city was rebuilt in the aftermath of the Great Fire using primarily brick and stone.54 Both observations put a question mark behind the proposition that there was no demand for fire insurance in Southern Europe due to different building materials being used. One should rather try to analyse the late arrival of fire insurance in Southern Europe from the perspective of the different economic functions it served. In Germany, the state-run fire insurance schemes were established for fiscal reasons: sovereigns wanted to ensure that each citizen was able to pay taxes.55 A citizen who lost his or her house through fire and who thereby sank into poverty would not be able to pay taxes. Private fire insurers served a different function: building owners who wanted to use their immovable property as collateral security often had to buy fire insurance.56 It may be that the fiscal settings and the practices of creditors demanding real security in immovable property in Northern European countries were simply different from those in Southern European countries. And indeed, Sirks 50

Deroussin, pp. 149 ff., above. On the effects of the French revolution on the development of French insurance supervision, see Veronika Leitenbacher, Die Entwicklung der Versicherungsaufsicht in Frankreich. Vom Ancien Régime bis zum ersten Versicherungsaufsichtsgesetz 1938 (2020), passim. 52 Fortunati, p. 111, above; Deroussin, pp. 165 ff., above; Pons Pons, pp. 183 ff., above. 53 Fortunati, pp. 109 f., above. 54 Caja, p. 78, above. 55 Bogner, p. 37, above. 56 Sirks, p. 23, above; Bogner, p. 31, above. 51

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explains the establishment of numerous private fire insurance companies in the Netherlands between 1770 and 1799 with reference to a changed practice of creditors: ‘One development, however, might have been that from the late 1770s merchandise was increasingly used as collateral for credit loans. Often, creditors demanded that merchants had insured the merchandise against the risk of fire.’57 Sirks, thus, suggests a link between the practices of money lenders and the appearance of fire insurance. Finally, in Germany, the state-run fire insurance offices had insured dwelling houses from the very beginning. In the Netherlands, it was generally only industrial buildings that were insured until 1800, with the insuring of dwelling houses occurring only rarely.58 Again, this may perhaps be explainable on the basis of different fiscal settings and the practices of creditors in demanding real security in immovable property. Finally, English literature, too, contends that the need for security was one of the factors favouring the development of fire insurance.59 Further research is needed on this question. Even though fire insurance had taken root in the nineteenth century across Europe, the developments did not run parallel in the different European countries. In France, mutual fire insurance companies seem to have been preferred over fixed premium fire insurance companies in the aftermath of the French Revolution, and the latter seem to have mimicked certain details of mutual fire insurance companies.60 By contrast, as regards Dutch developments, Sirks explains the choice between mutual fire offices and premium fire insurance companies with different factors: mutual fire offices were better suited for a local business, whereas premium fire insurance companies operated on national level; additionally, the development may have reflected the distribution of wealth.61 Furthermore, France seems to have seen heated debates on a nationalization of the insurance market.62 By contrast, the German and the Scandinavian markets saw a liberalization that put pressure on state-run fire offices which followed the collective or solidary risk model.63 Finally, Federica Furfaro discusses the collaboration between fire insurers in detail, but such collaboration existed in a number of different European markets, paving the ground for a standardization of insurance practices in each insurance market.64

57

Sirks, p. 23, above. Sirks, p. 26, above. 59 See Caja, p. 78, above. 60 Deroussin, pp. 173 ff., above. 61 Sirks, pp. 22 ff. and pp. 26 f., above. See also Pons Pons, p. 186, above. 62 Deroussin, pp. 178 ff., above. 63 Bogner, pp. 59 ff., above; Sunnqvist, pp. 103 ff., above. 64 Furfaro, pp. 124 ff., above. In addition, see Bogner, pp. 57 f., above; Caja, p. 83, above; Pons Pons, p. 184, above. 58

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B. The history of fire insurance law In summary, the development of fire insurance exhibits fundamental differences in the individual European countries. It follows that fire insurance law developed in very different settings, and as much as it is impossible to reduce the history of fire insurance in Europe to a simple narrative, it is equally impossible to boil the development of fire insurance law down to such a simple narration. English literature often treats fire insurance as being the offspring of marine insurance, and English scholars further argue that modern fire insurance law, too, developed from marine insurance law. However, it has become clear that the English fire insurance societies and companies of the late seventeenth century did not simply mimic marine insurance practice.65 Rather, they fused together different traditions. Furthermore, Caja stresses that the further history of fire insurance reflected its own specificities and its socio-economic context rather than simply imitating marine insurance practice.66 This becomes most obvious when analysing the development of the risk classification or tariff systems.67 In the course of the eighteenth century, each insurer followed a trial-and error method to further develop its tariff system, and it was only in the nineteenth century that fire insurers started to collaborate and share their experiences, thus leading to a largely standardized classification system.68 However, at the same time it is clear that marine and fire (as well as life) insurance did not develop in complete isolation as in the course of the eighteenth and nineteenth centuries a general insurance contract law emerged.69 In 1720, the Rotterdam Insurance Company was established. It was also active in the fire insurance sector.70 Sirks points out that its directors did not simply follow English examples when devising its fire insurance practice. Rather, they drafted the Company’s policy conditions from scratch. And as a consequence, the policy conditions introduced, for instance, 18 risk classes, thus presenting a much more refined classification system than English fire insurers had developed. Between 1770 and 1799 further insurance companies were founded which were active in the fire insurance branch. In all, Sirks comes to the conclusion that premium fire insurance practice was under the influence of the corresponding marine insurance practice. As early as 1744, Amsterdam saw its first legislation covering also fire insurance, legislation which was again firmly rooted in marine insurance contract law.71 65

See p. 207, above. See p. 207, above. 67 Caja, pp. 80 ff., above. 68 Caja, p. 83, above. 69 Ogis (n. 5), passim. 70 Sirks, pp. 16 ff., above. See also idem, Fire and life insurance in the Dutch Republic. Development and legal aspects (2021), passim. 71 Sirks, pp. 24 f., above. 66

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Turning to Germany, it is important to note that fire insurance practices initially developed in a totally different setting than in England. At first, the German fire insurance market was dominated by state-rune fire insurance offices.72 It was only at the end of the eighteenth century that private fire insurance companies entered the German market. The state-run fire insurance schemes followed the collective or solidary risk model.73 Consequently, they calculated the premiums and contributions only on the basis of the insured value. The individual risk was irrelevant for setting the premiums and contributions: the owner of a stone building and the owner of a timber house had to pay the same premium and contribution as long as both insured buildings had the same value. It follows that the statutes of these insurers could do without any provisions concerning the risk: they did not introduce a duty of disclosure, nor did they include any provisions on an increase of risk.74 Furthermore, state-run insurance schemes served fiscal purposes. As noted above, sovereigns wanted to ensure that each citizen was in a position to pay taxes. It follows that state-run fire insurers introduced rebuilding clauses that had to be strictly adhered to.75 In addition, the problem of how to address the problem of an insured being in default with paying his or her premiums and contributions takes on a different legal character with a state-run fire insurance scheme than with a private insurance company.76 However, some issues, of course, had to be addressed equally by the statutes of state-run fire insurance schemes and the policies of private insurers, e. g. the question of compulsory underinsurance77 or the problem of how to assess damage.78 Against this background it is surprising that the Allgemeines Landrecht für die Preußischen Staaten of 1794 (General Prussian Territorial Law – ALR) included provisions on private fire insurance: in 1794, no private fire insurance business had yet evolved in Prussia.79 However, it has already been mentioned that the Hamburgische Assekuranz- und Havereyordnung of 1731 (Hamburg Assurance and Average Regulation) hinted that private fire insurance may have existed.80 The 1731 Regulation codifies marine insurance law, but in Title III, Art. 2 it makes explicit that the insurance of houses and other things is allowed. However, it did not contain any provisions on fire insurance, instead simply ordering that fire insurance contracts be handled analogously to marine insurance. Nevertheless, even though the 1731 Hamburg Regulation hints at the possibility of private fire insurance, it 72 73 74 75 76 77 78 79 80

See pp. 209 f., above. See pp. 210 f., above. Bogner, pp. 39 ff., above. Bogner, pp. 41 f., above. Bogner, p. 51, above. Bogner, p. 38, above. Bogner, pp. 55 f., above. Bogner, pp. 42 ff., above. See p. 210, above.

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seems that even in Hamburg private fire insurance had not developed into a serious business model. Thus, the drafters of the ALR were not able to take any German fire insurance practice as a model when drafting the provisions of the ALR on private fire insurance, and the statutes of the state-run fire insurance schemes were to a large extent unsuited for that purpose. Matthias Bogner finds that the drafters of the 1794 Act resorted to the Preußische Assekuranz- und Havereyordnung of 1766 (Prussian Assurance and Average Regulation), which in turn was based on the Hamburg Regulation of 1731, both primarily regulating marine insurance.81 In fact, the 1794 Act regulated marine insurance, and the provisions on marine insurance were applicable to terrestrial insurance, too. Furthermore, the 1794 Act modified, where necessary, these provisions on marine insurance to fit terrestrial insurance and fire insurance. Some provisions of the 1794 Act prove that the drafters were lacking the input of a sophisticated private fire insurance practice. Matthias Bogner then raises the question of what impact the 1794 Act had on the policy practices of early nineteenth-century German private fire insurance companies. He finds that the policies presented an amalgam of the provisions of the 1794 Act and of the policies used by English fire insurance companies and societies.82 An influence of English fire insurance practice on German private fire insurance companies is undeniable and all but surprising if one keeps in mind that many of the founders of German private fire insurance had previously worked for English insurers. However, it was impossible for German private fire insurance companies to simply copy English policies as the legal framework was different. German law, for example, did not – and still does not – know an equivalent to warranties, and for that reason German fire insurers had to find a different solution to deal with the problem of an increase of risk. In this context they further developed the provisions as found in the 1794 Act. The subsequent developments in Germany were marked by a complex interplay between the practices of the state-run fire insurance schemes that had started to adopt the individual risk model and private fire insurance companies.83 Since the second half of the nineteenth century, leading up to the Versicherungsvertragsgesetz of 1908 (Insurance Contract Law Act), German legislation and case law was marked by an increasing tendency to protect the insured as the weaker party to the contract.84 For Italy, the fact that fire insurance practice did not simply mimic foreign practice but instead saw drafters of the statutes and policies taking careful consideration of the national regulatory framework becomes obvious in the example discussed by Federica Furfaro: certain provisions of the 1822 statutes of the planned Venetian Società di mutua assicurazione contro il danno degli incendi (Mutual Fire 81 82 83 84

Bogner, pp. 43 ff., above. Bogner, pp. 49 ff., above. Bogner, pp. 60 ff., above. Bogner, p. 59, above.

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Insurance Society) correspond to the Austrian Gesetzbuch über Verbrechen und schwere Polizey-Übertretungen (Criminal Code) of 1803.85 In Italy, it was the Codice di commercio of 1882 that first covered fire insurance contract law, and it is often claimed that the Belgian insurance legislation of 1874 covering non-marine insurance strongly influenced the 1882 Codice di commercio.86 However, the influence of the 1874 Belgian Act should not be overstated. Numerous provisions of the 1882 Codice di commercio rather reflect Italian marine insurance traditions, and at times the Italian legislature also took notice of foreign insurance legislation other than the Belgian Act of 1874, whereas Italian fire insurance practice was of little importance.87 For that reason it does not come as surprise that the 1882 Codice di commercio seems to have had only minimal effect on fire insurance practice: its provisions were non-mandatory and they were largely ignored by actors on the fire insurance market. The provisions of insurance contract law in the Spanish Código de Comercio of 1885 experienced a similar fate.88 The 1829 predecessor legislation regulated solely marine insurance, and it was only in 1885 that fire insurance contracts were for the first time regulated by Spanish legislation. The preceding insurance practice, too, saw English influences, as proven by the institution of the days of grace when renewing a policy. The 1885 legislation subsequently codified the basic principles of insurance contract law as they had evolved in insurance practice. However, as in Italy, the 1885 Código de Comercio had only a very minimal effect on the resulting fire insurance practice. The late eighteenth-century French fire insurance companies exhibit parallels to English fire insurance companies: they, too, employed a limited number of risk classes.89 However, already in the nineteenth century, French commentators did not see English insurance practice and law as a model that had to be strictly adhered to, even though French literature was in agreement that English insurance law was much advanced.90 The legal discussions concerning fire insurance seem to have emancipated themselves from English law. These observations are in accordance with Florian Siegwart’s overall findings:91 Siegwart was able to identify a number of parallels between English and early French fire insurance practice going beyond the example of risk classes: the rule on an insurable interest, provisions excluding certain risks, the insured’s duties after a fire had occurred, and the implementation 85

Furfaro, p. 129, above. Fortunati, p. 120, above. 87 Antonio Di Mieri, Die Feuerversicherung im italienischen Codice di commercio von 1882. Seeversicherungsrechtliche Tradition, Feuerversicherungspraxis und die Rezeption ausländischen Rechts (2021), passim. 88 Pons Pons, pp. 192 ff., above. 89 Deroussin, p. 150 and p. 153, above. 90 Deroussin, p. 165, above. 91 Siegwart (n. 15), passim. 86

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of the days of grace when it came to renewing a policy. Furthermore, it is clear that early French fire insurers were aware of English fire insurance practices. At the same time, it is clear that they did not simply copy them but that they adapted them to French needs and to the French regulatory framework. This becomes clear, for example, when analysing the different approach followed by French insurance practice in defining who had an insurable interest.

List of Contributors Matthias Bogner is a Candidate Notary with the Chamber of Notaries of Bavaria, Germany. Ervis Caja is a PhD candidate in law at the University of Augsburg, Germany, and a practising lawyer at the law firm Kapellmann und Partner in Munich, Germany. David Deroussin is Professor of Legal History at the University of Lyon, France. Maura Fortunati is Associate Professor of Medieval and Modern Legal History at the University of Genoa, Italy. Federica Furfaro is Associate Professor of Medieval and Modern Legal History at the University of Genoa, Italy. Phillip Hellwege is Professor of Private Law, Commercial Law, and Legal History at the University of Augsburg, Germany. Sinem Ogis is a practising lawyer at Ogis Law Firm and a part-time Lecturer at Yasar University, Izmir, Turkey. Jerònia Pons Pons is Professor of Economic History at the University of Seville, Spain. Delphine Sirks is a Lecturer in Private Law at Leiden University, Netherlands. Martin Sunnqvist is Associate Professor of Legal History at the University of Lund, Sweden.

Index Aachen 46, 53, 55 Aachener Feuerversicherungs-Gesellschaft 46, 53, 55 Act for rebuilding the City of London 77 Alauzet, Isidore 165, 172 Alcoy 193 Allgemeines Bürgerliches Gesetzbuch 142 Allgemeines Deutsches Handelsgesetzbuch 59 Allgemeines Landrecht für die Preußischen Staaten 29, 43, 49, 51, 216 Allmänna brandförsäkringsfonden 102 Allmänna brandförsäkringsverket 102 Alm. Brand 104 Altare 109 Altona 99 Amicable Contributors for Insuring from Loss by Fire 79 Amiga de la Juventud 186 Amsterdam 15, 19, 21, 23, 25 – 28, 212 Amsterdam Fire Insurance Company 26 An Act for Preventing and Suppressing of Fires within the City of London, and Liberties thereof 77 Andalusia 193 Andover 66 Anton Günther (Count of Oldenburg) 17 Antwerp 34 arbitration clause 151, 157, 170, 185 Arcoleo, Giorgio 123 Ardennes 164 Arnoldi, Erns Wilhelm 46 Asociación de Seguros contra incendios de San Sebastián 189 Asociación nacional de Seguros recíprocos contra los incendios 186 Assemblée plénière des sociétés d’assurances dommages 167 Assicurazioni Generali 133 f. Assicurazioni Generali Austro-Italiche 131 Assicurazioni Generali di Venezia 123

Association of Managers of Fire Insurance Offices 84 Assurance mutuelle de Paris 168 Atkins, Richard 81 Aube 164 Auleander, Paulus 15 Ausonia 136 Austria 125 f., 128, 137, 142, 218 Averdieck, Georg Friedrich 46, 49 AXA 171 Azienda Assicuratrice 130, 133 – 135, 137 Banco di assicurazione e cambi marittimi 111 Barbaroux, Giovanni Battista 112 Barbon, Nicholas 69, 72 f., 78, 132 Barcelona 185, 188, 192 – 196 Baron de Batz 153, 156 f., 163 Barrau, Pierre-Bernard 161 – 163, 170 Basterra, Ramon 199 Bat, Thomas 66 Bavaria 58 Bazius, Balthasar 18 begging 16, 37, 91, 98 Belgium 12, 120, 174, 218 Benecke, Wilhelm 49 Bergander, Bengt 92, 102 Bergen 98 Berlin 42, 48 – 50, 53 Berliner Feuersozietät 35, 37, 40 f. Berlinische Feuerversicherungs-Anstalt 42, 46, 48 – 50, 53 Bijl, Pieter Cornelisz 18 Bilbao 186, 188, 190, 199 Boccardo, Gerolamo 113 Bologna 138 Borås 102 Bordeaux 144, 159 Bornhøved 100 Borsari, Luigi 117 Brandförsäkringsverket 104

224 Brandkontoret 104 brandstod 91 f., 103 Brissot de Warville, Jacques-Pierre 160 Bristol 79 Bristol Crown 79 Buisson, Ferdinand 180 bureaux des incendiés 147, 212 Burgos 188

Index

149,

Caisses des incendiés 164 Caja de Previsión y Socorro 195 Calatabiano, Salvatore Majorana 120 cameralism 29, 31, 36, 41, 56, 101, 211 Carlo Felice 112, 131, 142 Carrillo, Timoteo Rodríguez 187 Carriquiri, Nazario 185 Castile 194 Catalana de Seguros contra incendios 193 Catalana de Seguros de Incendios 192 Catalonia 193 f. Châlons 147 Chambre générale des assurances de Paris 149 charity 77, 170, 212 Charles X 172 f. Charles XI 95 Châteaudun 146 Chotek von Chotkow und Wognin, Graf Karl 126 Christiania 99, 101 Christopher 95 classification system 76, 80, 150, 207, 210, 215, 218 Clavière, Étienne 153, 156 f., 160, 163, 174 Clayton, George 78 Code civil 145, 161, 168 f. Code de commerce 161 f., 167, 169, 174, 178, 180 Codice civile 114, 119 Codice di commercio 12, 109, 114, 118 f., 132, 136, 139, 218 Código de Comercio 183 f., 186, 191 f., 196, 200 f., 203, 218 collective risk model 210, 216 Comité syndical des compagnies à primes fixes contre l’incendie 167

Commissione delle Unite Compagnie di Sicurtà alla Prima Sezione del Lloyd 134 Compagnia Anonima di Assicurazione di Torino 112, 131 Compagnia di assicurazione di Milano 130 f., 133 f., 137, 139 Compagnia di Assicurazioni reciproche contro gli incendi 131 Compagnie d’Assurances Générales 166, 168, 175 f. Compagnie d’Assurances Générales contre l’Incendie 174 Compagnie des eaux de Paris 151, 153 Compagnie française du Phénix 167, 174 Compagnie Royale d’Assurances 167, 174, 180 Compañía de San Fernando 186 Compañía de Seguros generales contra incendios 184 Compañía de Seguros mutuos contra incendios de edificios de Palma 190 Compañía General Española de Seguros 186, 192 Compañía Hispana 192 compulsory insurance 36 f., 101, 111 f., 127, 151, 179, 181, 212 Concordato Italiano Incendio Rischi Industriali 122 Concordato tariffario nel ramo incendi 132 contrat d’adhésion 153 Copenhagen 97, 100 f. Couwijn, Olivier 18 Covadonga 194 Coyet, Baron Gustaf 103 Cromwell, Oliver 67 Customs and Inland Revenue Act 1867 71 Dalarna 93, 95 Dalecarlia 93 Dalmatia 135 days of grace 218 f. de Beaufleury, Louis-François 159 de Breteuil, Louis Auguste Le Tonnelier 156 f. de Córdoba, Ventura 189 de Goiri, Manuel María 187 de Gourcuff, Auguste 174 de Gourcuff, Marie-Auguste 166

Index de Laplace, Pierre Simon 165 de Launes, Benjamin 78 de Maisonneuve, Hilaire 150 de Medina, Manuel 189 de Montalivet, Jean-Pierre 163 de Olavarieti, Francisco López 187 de Rothschild, James 174 de Schotte, Hans 34 de Talleyrand-Périgord, Alexandre Angélique 147 Defoe, Daniel 77 Delessert, Benjamin 163 Delessert, Etienne 163 Denmark 91 f., 94, 96 f., 99, 101, 103 f., 106 Dickson, Peter G.M. 74, 78 Ditmarsken 94 Donau 139 Dordrecht 15 Double Hand in Hand 74 double insurance 44 f., 48, 62 double premium clause 80, 207 Dresden 59 Dresdner Entwurf zum Obligationenrecht 59 Dreyfus, Michel 172 Du Pan, Jacob 169, 174 Dublin 79 Dutch Bubble 21 – 23, 212 duty of disclosure 216 earthquakes 115, 123 East India Company 155 Edinburgh 79, 84 Edinburgh Friendly Insurance 84 f. Edinburgh Society for Insuring Houses against Loss by Fire 79 Eiderstedt 17, 94 El Áncora 186 El Banco Vitalicio de España 194 El Fénix 186 El Mediodía 193 El Progreso Nacional 195 El Seguro Mallorquín 193 Elberfeld 47 Elbmarsken 94 Ellis, Charles 87

225

England 9, 12, 23, 29, 51, 55, 65, 106, 125, 132, 141, 146, 153, 165, 173, 176, 180, 195, 205 f., 209 f., 212 f., 215, 217 Ente assicurativo contro gli incendi del Tirolo e Vorarlberg 126 Ente assicurativo contro gli incendi per il Tirolo 126 Entwurf eines Bürgerlichen Gesetzbuches für das Königreich Bayern 58 Entwurf eines Preußischen Handelsgesetzbuches 58 Entwurf eines Württembergischen Handelsgesetzbuches 58 Eure 171 Eure-et-Loir 172

Fadda, Carlo 123 Færden, Karl 92 Feuer-Versicherungs-Anstalt für Tirol 126 Feuerkontrakte 17, 20, 31 – 35, 41, 63 f., 72, 208 – 210, 212 Feuersozietät der Haupt- und Residenzstadt Königsberg 60 f. Feuerversicherungsbank für den deutschen Handelsstand 46 Finland 91, 101, 104 fire briefs 67 fire contracts 12 Fire Office 69, 72 f., 79 Fire Offices’ Committee 84, 141, 201 fire prevention 13 f., 65, 68, 77, 129, 163, 188 f., 203 firefighting 13 f., 70, 77, 115, 119, 163, 188 f., 202 f. fixed-premium insurance 143, 146, 173 Flanders 94, 106 Florence 139 France 12, 114, 117, 123, 125, 131, 143, 195, 199, 202, 205, 213 f., 218 Franz I 126, 142 Fredrikshald 99 French Revolution 213 f. Friendly Insurance Office 79 Friendly Society Fire Office 143, 146 Friendly Society for Securing Houses from Loss by Fire 79 Friesland 27

226

Index

Fünfte Hamburgische Assekuranz-Compagnie 42 Fyn 100

Heredia, Manuel Agustín 189 Holland 114 Hospices civils de Paris 170

Gambling Act (1774) 89 Garay, Josef 187 Garrido, Pedro 187 Geneva 153 Germany 9, 12, 15, 29, 180, 205 – 207, 210 f., 213 f., 216 Gerona 188 Gesetzbuch über Verbrechen und schwere Polizey-Übertretungen 129, 218 Gironde 172 Gotha 46 Gothenburg 102 Gouda 21 Grágás 93 Great Fire of Copenhagen 100 Great Fire of Hamburg 57 Great Fire of London 34, 65, 68, 70, 72, 75 f., 99, 111, 125, 132, 143, 205, 207, 213 Gregorio XVI 112 Groningen 20, 24, 27 Grün, Alphonse 165, 169 guilds 9, 16 f., 30, 33, 66, 72, 76, 91, 96 f., 126, 208 Guipúzcoa 190

Iceland 94, 106 immovable property 37, 42, 47, 73, 75, 101, 151, 173, 206, 210 increase of risk 29, 51, 57, 61, 76, 85, 117, 175, 216 individual risk model 210, 216 f. Industrial Revolution 80, 133, 142, 165 industrialization 26 insurable interest 76, 89, 116, 119, 218 Insurance Office at the Back-side of the Royal Exchange 69 insurance supervision 152, 173 f., 185, 190, 201 Ireland 84 Isabel II 192 Istria 135 Italy 12, 205, 209, 212 f., 217 Izquierdo, Francisco 187

Haarlem 15 Haderslev 100 hail insurance 114, 125 Halden 99 Hale, William 79 Hamburg 17, 20, 29, 31 – 35, 37 f., 41 f., 49 f., 55, 57, 63 f., 72, 99, 102, 125, 206 – 209, 212, 216 Hamburg Feuerkasse 31, 34 f., 37 f., 64, 72, 99, 125, 206, 209 Hamburgische Assekuranz- und Havereyordnung 43, 55, 209, 216 Hampshire 66 Hand in Hand 70, 79 Hansemann, David 46 Haut-Rhin 171 Hautsch, Johannes 15 Heirbaut, Dirk 94 Henry, Guiseppe 112

Kadens, Emily 106 Kallehave 96 Kalvehave 96 Kameralismus 29, 31, 36, 41, 56, 64, 101, 211 Kampen 24 Karlskrona 102 Killingholme 67, 97, 106 Kinda 98 Københavns brandforsikring 100 Købstædernes forsikring 101, 104 Königsberg 60 – 62 Kreisler, Juan 189

Jansz, Dirck 18 Joliat, Louis-Joseph 165, 169 Jönköping 102 Jørgensen, J.O. Bro 92, 94 Jutland 100 f.

La Alianza 185 f., 192 La Amiga de la Juventud 185 La Aseguradora 192 La Aurora de España 186 La Balear 193, 195

Index La Catalana 194 La Centrale 195 La Coruña 188 La Española 185 f., 192 La Esperanza 186 La Fondiaria 139 La Garantía 192 La Lubecker 195 La Mutua de Puigcerdà 195 La Mutua de Soria 195 La Mutua de Toro 195 La Paternelle 195 La Previsión Española 193 La Previsión Nacional 194 La Probidad 186 La Providencia 195 f., 198 La Seguridad 186 La Unión 186, 192, 196 f. La Unión Alcoyana 193 La Unión y El Fénix 193 f., 196, 198, 202 L’Aigle 195, 202 L’Aigle Incendie 167 Lainé, Joseph Henri Joachim 167 Landbygningernes almindelige brandforsikring 101, 104 Langenhuyzen, Ton 23 Le Monde 195, 202 Le Phenix 202 Le Phénix 168, 176 f., 195 Le Progrès National 195 Le Soleil 167, 195, 202 Le Urbain 202 legislation 13, 24 Leiden 16 Leipzig 47 Leipziger Feuer-Versicherungs-Anstalt 47 Liechtenstein 126 Lienz 132 life annuity 157 Life Assurance Act (1774) 89 life insurance 10, 114, 125, 157, 174, 210 f. lightning 144, 175, 196 Liguria 109 Lincolnshire 97 Linköping 98 Lion, Christian 172 Lloyds of London 130 Lombardy 111, 130, 134

227

London 34, 49 f., 73, 75 – 77, 79 f., 82, 99, 102, 111, 130, 132, 153, 199, 201 f., 205, 212 f. London Assurance 79, 83, 86 Lorange, Karsten T. 92, 94 Louis-Napoleon Bonaparte 178 Louis XVIII 166, 169, 172 Lucca 137 Luggude 103 Lund 97 L’Union 139 L’Urbaine 195 L’Urbaine de la Seine 174 Lyon 174 Mabb, Edward 70, 73 – 75 Madrid 185 – 188, 190, 192 f., 195, 202 Magdeburg 35 Magnus Eriksson 95 Málaga 186, 188 f., 195 Malmö 96 Mancini, Pasquale Stanislao 114 Mantua 127 Maria Theresia 142 Marietti, Giuseppe 131 marine insurance 9, 14, 34, 43, 66, 70, 73, 75, 109, 114, 116, 118 f., 125, 143 f., 146, 150, 168, 174, 183, 185, 193, 205 f., 208, 215 f. Marlborough 67 Marne 147, 164 Marseille 144 Marshall, Samuel 165 Mayor 66 merchandise 19 Messina 123 Meuse 164 Middelburg 21 Middelburg Insurance Company 23 Middelstum 24 Milan 111, 115, 123, 130 f., 133, 135, 138, 142 mills 19 Mirabeau 153, 160 Mobiliarfeuerversicherungsgesetz 58 Modena 112 monopoly 42, 59, 112, 130, 148, 157, 180, 210 f.

228

Index

movable property 17, 42, 47, 70, 73, 75, 206, 210 mutual help 9, 209, 213 mutual insurance 19, 24, 26 f., 29, 39, 48, 112, 125, 143, 146, 160 f., 163, 186, 208, 211 Mutuelle du Rhône 172 Mylius, Giulio 131 Nantes 144 Naples 112, 131 Napoleonic Wars 46, 124 nationalization 178 Nautet, Pedro 189 Navarre 194 Negri, Giuseppe 131 Netherlands 12, 34, 205, 207 – 209, 211, 214 Newbold, Augustine 79 Norges brannkasse 101, 104 Norway 91, 95, 98 f., 101, 104 Norwegian Insurance Association 92 Norwegian Insurance Council 92 Norwich 87 Nuova Società Commerciale 137 Odense 96 Onsjö 103 Ordonnance sur le marine 143, 149 Oslo 99, 101 Östergötland 93, 95 overinsurance 44 f., 48, 62, 201 Palma de Mallorca 188, 193 Pamplona 188, 190 Pardessus, Jean-Marie 168 f. Paris 139, 146 f., 154, 169 f., 172, 174 f. Parma 127 Perez, Julián 184 Périer, Auguste-Charles 151, 153 f., 157 Périer, Jacques-Constantin 151, 153 f., 157 Phenix 69, 79 Phoenix 42 f., 49 f., 83, 102 Pinneberg 100 Portugal 114, 159 Pothier, Robert Joseph 150 premium default 29, 49 premium insurance 23, 27

Preußische Assekuranz- und Havereyordnung 43, 217 Price, Richard 153 Prima Compagnia Austriaca 137 private fire insurance 56 private insurance companies 29, 42 Privilegiata Società pontificia di assicurazioni 112 Propriétaires réunis 174 Prussia 29, 35, 43, 48 f., 51, 58 f., 94, 106, 114, 216 public fire insurance 48, 51, 56, 111 public fire offices 29 f., 34, 37, 42 public insurance 205 Quinterno, Felice

131

Racchetti, Paolo 113 Rantzau 100 Raviolati, Ottavio 111 Raynes, Harold E. 78 Reale Società di Assicurazione Generale e Mutua contro gli incendi 111, 131 rebuilding clause 29, 41, 111, 216 Reims 147 f. reinsurance 134, 136, 139 f., 201 Relton, Francis Boyer 78, 81 Rennes 146, 154 Retortillo, José Luis 190 Rhône 171 riots 115, 198 Riunione Adriatica di Sicurtà 133 Rivierre, Francesco 127 Rome 112 Rönneberg 103 Rönnebergs m.fl. härads brandstodsbolag 103 Roskilde 97 Rotterdam 18, 21, 23, 25 – 28, 212, 215 Rotterdam Insurance Company 23, 26 f., 212, 215 Royal Exchange Assurance 79, 81 – 83, 88 Royal Exchange Corporation 74 Royale-Incendie 174 Royale-Maritime 174 Royale-Vie 174 Rubio, Jerónimo 189 Ryley, William 70, 73 – 75

Index Sainte-Menehould 146 Salvadora de Seguros 192 San Sebastián 188 Santander 202 Santos, Josef Pío 187 Sardinia 111, 125, 131 Saronno 111, 132 Scandinavia 12, 91, 205, 209, 211, 214 Scania 93, 95, 106 Schaak, Godefridus 19 Schleswig-Holstein 33 f., 72, 94, 100, 106, 208 f. Schuddebeurs, Hendrik Gerrit 13, 22 Scotland 84, 141 Seine 172 Seine-et-Marne 171 Seine-et-Oise 171 f. Seine-Inférieure 171 Sens 148 f. Seville 188 f., 193 Sicily 137 Sindicato General de Compañías para el Seguro de Incendios 202 Skandia 104 Skanör 96 Sociedad Catalana de seguros contra incendios a prima fija 194 Sociedad de Seguros Mutuos contra incendios de Casas y Caseríos de Guipúzcoa 190 Sociedad de Seguros Mutuos contra incendios de edificios en Málaga 189 Sociedad de Seguros Mutuos de Casas de Sevilla 189 Sociedad de Seguros Mutuos de Incendios de Casas de Madrid 187 f. Società di mutua assicurazione contro il danno degli incendi 127, 217 Società mercantile di assicurazione dei rischi terrestri 129 Société d’assurance mutuelle contre l’incendie dans le département du Bas-Rhin 171 Société d’assurance mutuelle immobilière de la ville de Paris 169 – 173 Société d’assurances générales contre l’incendie 180 Société d’assurances mutuelles de Loir-etCher 171

229

Société d’assurances réciproques contre l’incendie 161 Söderberg, Tom 92 – 94, 97, 99 Soleil-Incendie 174, 180 Solferino 133 solidary risk model 210, 216 Sønderborg 97 South America 180 Spain 12, 34, 114, 180, 183, 205, 213, 218 Spanish Civil War 198 Spelman, Henry 79 St. Canute 96 St. Germain 146 Städernas allmänna brandstodsbolag 104 Stamp Act (1891) 71 standardization 76, 79 state-run insurance 9, 100, 104, 166, 178, 181, 206, 209 f., 212 f., 216 f. Stiehl, Wilhelm 17 Stiftelsen för bebyggelsehistorisk forskning 104 Stockholm 97, 101, 104 Stockholms stads brandförsäkringskontor 102 Sun Fire Office 70, 79 – 88, 199, 202 Sunnhordland 98 Suriname 25 Sweden 91, 93, 95 f., 98, 101 f., 104, 106 Switzerland 173, 180 tax exemptions 146 The Commercial Union 196 The Guardian 195 The Lion 196 The Netherlands 13 The Northern 196 The Royal 195 Thomas, Charles Xavier 167, 174 Thomsen, Alfred 92 Ticino 137 Torriglia, Manuel 189 Toulouse 161, 170 Trenerry, C.F. 94 Trentino 126 Trieste 111 f., 128, 130 f., 134 f., 137, 142 Troyes 147 f., 154 Trygg-Hansa 104 Turin 112, 131

230

Index

Tuscany 137 Tyrol 126, 132 Uithuizen 24 underinsurance 44 f., 48, 60, 62, 216 Union Fire 79 f., 88 Union-Incendie 174, 180 Unión Malagueña 186 Union syndicale des compagnies d’assurances à primes 180 Usquert 24 Utrecht 21, 27 Vacher, Léon 179 Valencia 188, 193 f. Valencia 193 Valladolid 188 van der Heijden, Jan 15 van Niekerk, Johan P. 14, 20, 26 Västanstång 98 Västmanland 93, 95 Vaterländische Feuer-Versicherungsgesellschaft 47 Venice 118, 127, 129, 138, 217

Venice 123 Verband deutscher Privat-Feuerversicherungs-Gesellschaften 57, 63 Vereinigung der in Deutschland arbeitenden Privat-Feuerversicherungs-Gesellschaften 57 Versicherungsvertragsgesetz 56, 59, 217 Vienna 126, 137, 139 Vittorio Amedeo II 111 Vorarlberg 126 Walford, Cornelius 70, 78 Walker, Robin 69 Weskett, John 165 Westall, Oliver 201 Westminster 68 Westminster Fire Office 79 Wilmot C.J. 87 Wright, Brian 67 Württemberg 58, 114 Yonne

164

Zaanstreek

15, 19 f., 26 f., 208, 212