Utmost Good Faith

1. Material Facts

Insurance is a contract upon speculation. Lord Mansfield wrote that in 1766, in a case about a fort in Sumatra, and attached to it the doctrine that gave my profession its conscience: uberrima fides, utmost good faith. The special facts on which the contingent chance is to be computed lie most commonly in the knowledge of the insured only; conceal one, and the contract is void. It is the only contract in English law that dies of silence.

What is less often remembered is that Mansfield made the duty run both ways. The underwriter also must keep back nothing the proposer would wish to know. For the better part of three centuries that half of the doctrine cost us nothing, because we knew nothing about any one person that he did not know better himself. We knew the crowd; he knew the man. The whole industry lived in the gap between those two kinds of knowledge. Nobody thinks of a gap as a place to live until it closes.

I was an underwriter at the Provident Mutual for thirty-one years. For the first nineteen, the doctrine was the tool of my trade. For the last twelve it was the demolition order.

2. The Proposer

The Register was not built to ruin us. It was built the way most permanent things are, as an administrative convenience: cord blood, hospital records, prescriptions, the genome as one column among many. What changed everything was one late amendment: that a person has the right to see their own hazard curve.

A hazard curve is not a death date. I want to be exact about this, because the newspapers never were. It is a probability of dying in each future year, given everything the Register knows. For a young man it used to be a long, low meadow with a hill at the far end. What the Register did, year on year, was sharpen it: the meadow narrowed to a valley, the valley to a channel, until for most people the ninety-per-cent interval on their remaining life was six or seven years wide. Not a date. A season.

For nearly a decade the Provident wrote the most accurately priced life business in the history of the industry, and our margins showed it. The chairman called it a golden age at three consecutive general meetings, and I remember believing him.

Then a man named Ellery Dunn applied for two hundred thousand pounds of term cover, and his quotation came back at eleven times the standard rate, and he asked me — reasonably, under the doctrine, with a solicitor’s letter citing Mansfield — to disclose the material facts on which the contingent chance had been computed.

A premium is a price on a life. Disclose the price and you have disclosed the life. We had become an oracle with a cashier’s window.

Within two years, more people were applying to the Provident for quotations than for policies. They did not want cover. They wanted to be told, at one remove, wrapped in an annual figure, without the bare act of opening their Register file. We began charging a quotation fee. For a while — I find this the hardest part to say aloud — the fee income exceeded the premium income. A mutual assurance society founded in 1793, still pricing off tables descended from a dissenting minister’s arithmetic, spent three years as the politest fortune-teller in Britain.

3. The Schedule

Here is what the textbooks now call the unravelling, as I watched it from the fourth floor.

Those the Register read kindly stopped buying. Why pool your luck with strangers when you have been told you have no bad luck to pool? Those it read harshly bought everything they could, at prices reflecting exactly what the Register knew — prices that were no longer insurance but instalment plans on a certainty. The book split into people who did not need us and people we could not help.

The regulator imposed the Moratorium: no insurer might ask for a reading, or use one. It lasted four years and nearly finished us in half that, because proposers could still look. We were back inside Mansfield’s case, turned inside out — the special facts lay in the knowledge of the insured only, and now the special facts were everything. And the Moratorium did not merely blind us; it suspended the doctrine itself, because a proposer might now lawfully keep his reading back. The one contract that dies of silence was put on life support made of it.

So Parliament tried the deeper cure, and I will defend it in any company: the Sealed Lives Act. Readings closed until the age of twenty-five, and any life still sealed could join the common pool on the old terms, priced off the crowd, as every life had been for two centuries. You cannot buy cover against bad news after the news. What we had sold was never protection against dying — everyone collects on that wager, one way round or the other. It was protection against being found out early, and cover against being found out can only be bought by someone not yet found out. We could still sell the read population smoothing: level payments against a known channel, a way of moving their own money across their own years. Decent business, actuarially clean, and not insurance. Insurance was the other thing — the transfer between fates — and that requires the fates to be face-down on the table. By then the only lives we could write on the old basis were the sealed, and newborns: cover bound in the maternity ward, before the cord blood could say a word.

For six years the sealed pool held. Then the unravelling came back wearing ordinary clothes. A lender offered a fifth of a per cent off a mortgage for an attached reading. A pilots’ union negotiated reading-verified licences. Nothing compelled anyone. But every person whose reading was even slightly better than the average of the sealed had a private reason to unseal, and every unsealing lowered the average of those who remained, which handed the next tranche its private reason. Silence acquired a price, and the price compounded. The sealed pool did not burst; it evaporated, from the top, one rational decision at a time. By the end, remaining sealed was itself a disclosure. People assumed you had a mother who died young.

4. Exclusions

My husband unsealed in the spring of the amnesty year, with most of his choir. Eighty-three, the channel says, give or take fourteen months either side. He came home with the printout folded into his coat pocket and a bare-root walnut on the passenger seat, because a walnut takes ten years to bear and now he knew he would stand under it.

I have stayed sealed. I signed before the Act was a year old and I have never opened the file, and this has cost me, in mortgage points and licence classes and small officious frictions, more than I will ever total up.

Douglas has never once asked me to unseal. The only time we fought about it, he said:

“I don’t mind not knowing yours. What gets me is that it’s written. It’s sitting in the Register either way. You not looking doesn’t make it not a fact. It just means we’re the only two people in the country it’s hidden from.”

“That’s the whole of what I’m buying,” I said. “That is the product.”

“Explain it to me, then. Slowly. Because from here it looks like superstition with paperwork.”

I tried. I said that as long as I have not looked, my remaining years are a probability and not a fact, and a probability is a thing that can still be shared; that on the day I look, whatever I am carrying becomes mine alone, non-transferable; that I spent my working life at the counter where people arrived one day too late to share their luck, and I know what the last day before the news is worth, because I used to price it.

“You sound like a policy document,” he said. But he took my hand when he said it, and he has planted for me too, since then — beans, sweet peas, things that come up the same summer — and I have chosen not to work out what that means.

Our daughter attached her reading to her mortgage application the week it took two per cent off the rate. “Two per cent for thirty years, Mum. It isn’t even a decision.” She is right, of course. That is precisely the mechanism. It was never going to arrive looking like temptation; it arrives looking like arithmetic.

5. Surrender

The Provident Mutual held its final general meeting on a wet Tuesday in March. Item four was the winding-up resolution; it passed without a speech. Under the founding deed the surplus belonged to the members, share and share alike, and so the last act of the society was the first act of every society of its kind: a division among strangers. My cheque was for four hundred and eleven pounds. I have not cashed it, which is sentimentality, and I know what sentimentality costs, to the decimal.

A month after the dissolution, two people came to see me — sealed lives both, sealed by the Act as children and stubborn enough to have stayed that way past twenty-five. They are founding a friendly society. A subscription book, quarterly meetings, mutual assurance on the old basis, membership restricted to the unread. They wanted an actuary who remembered how.

I rated it honestly, out of the old tables and out of what thirty-one years taught me about who stays sealed and why. The pool is small and it is selected: we who remain unread are not a random draw of the country; we skew towards the stubborn, the frightened, and the children of parents who died young. I loaded the premiums forty per cent and told them the book will not survive its first fashionable unsealing, and that nothing in law or arithmetic will stop the unravelling coming for eleven thousand lives exactly as it came for sixty million.

Utmost good faith required me to disclose that. It does not require me to stop. We open the subscription book on the first of the month, and my life, about which I know nothing, will be bound in with theirs, about which I know nothing — which is the entire technology, first to last: a few people, face-down fates, share and share alike. Mansfield called it a contract upon speculation. It was always a strange bargain, the only one that dies of knowledge, and for the better part of three centuries, in the gap between the crowd and the man, it quietly held.

I have signed my name in the book where it says proposer. I have kept nothing back. There is nothing I know.