TEXT: ANA SOJO, FUNDACIÓN MAPFRE IMAGES: © FUNDACIÓN MAPFRE INSURANCE MUSEUM
Novels, movies, even several TV series and a whole episode of The Simpsons deal with this type of insurance. And they say that insurance is not entertaining.
According to the entry in the dictionary of the RAE (Royal Spanish Academy), the second sense of a tontine is “a joint financial arrangement whereby the participants contribute equally to a fund which, together with the accrued interests, is to be shared out at a given date between those surviving participants who are still members of the group.”
The Neapolitan banker Lorenzo Tonti (1602-1684) gave his name to this savings system (similar to current life and retirement insurance policies) which he was commissioned to create by Cardinal Mazarin. Following his participation in a revolt against the Spanish viceroy in the south of Italy, Tonti sought political exile in France. It was there, in 1653, that he devised the issue of a fixed-interest bond for the purpose of financing the public coffers. The subscribers were registered and a fixed amount was paid for the interest to the survivors. On the death of the last subscriber, the capital reverted to the state.
In 1791, during the French Revolution, the ‘tontine Lafarge’ was created, based on the experience of the original tontine.
Tontines went on to become a sort of life insurance with no scientific basis and were very popular in some European countries, as well as in the United States. The participants lost all their rights to the capital in the event of death, with said capital (in part or in its entirety) and its interests being distributed among the survivors.
The practice of distributing the capital among the survivors had the result of encouraging murders. This was because there was a clear incentive to eliminate participants, as a greater sum then corresponded to the remaining subscribers. Thus, in addition to filling the crime report columns of major newspapers, tontines also sparked the imagination of prominent novelists and filmmakers who used this motive for their plots.
In Spain, the Royal Decree of April 9, 1926 prohibited the creation of new tontines, as well as the establishment of foreign delegations of tontine companies.
But, what happened in other countries? There are countries where several varieties of Tonti’s system continue to this day and there is even some debate as to whether we should return to this type of operation, simply updating some of its main features. Our digital edition includes articles from the Washington Post and the Japanese newspaper Mainichi on this topic.
Tontines in literature and film
Robert Louis Stevenson’s novel The Wrong Box was inspired by tontines. A film adaptation was released in 1966. Agatha Christie dealt with this same topic in her famous novel 4.50 From Paddington which was also made into a movie in 2014. The Murdoch Mysteries series, the Mash series and episode 22 of the seventh season of The Simpsons, among others, all drew inspiration from tontines to create their plots.