Tontine
The Tontine or tontines or the Tontinengeschäft how the Tontine is shown in the Insurance Supervision Act (VAG), is an early form of pension insurance.
In a tontine, a life insurance company or the State committed a so-called "organizer" to accept deposits paid and interest at certain times returned, the accumulated capital of the then still living depositors.
The principle of Tontine can be the example of a knockout tournament illustrate.
Take, for example, 64 players participated in such a tournament, then the pricing scheme look like this:
- Before the first round, each of the 64 participant pays an entry fee of 1 € - in accordance with the mise (ie single premium actually French stake ) at a tontine.
- After the third round - with a Tontine this corresponds to the delay or waiting period - there is a first dividend in the amount of 16 €: Each of the eight " survivors " thus receives 2 €.
- After the fourth round, a second distribution in the amount of 16 € is carried out: Each of the four " survivors " will now receive additional € 4.
- After the fifth round, a third distribution in the amount of 16 € is carried out: each of the two " survivors " now gets 8 €.
- After the sixth round, the final distribution will be made: The winner of the tournament receives the last " survivor" another 16 €; his total payout sum of all rounds is therefore 2 4 8 16 = 30 €.
The tontines were named after its inventor, the Italian banker Lorenzo de Tonti (* around 1602, † 1684). He taught at the instigation of Cardinal Mazarin in 1653 a first Tontine in Paris. Tontines found especially in Latin countries very well received.
In France, the Tontinengeschäft was operated soon after its invention by the state. This therefore slid into financial difficulty and gave the business up again. The last major Tontine was established in 1759.
Tontines not part of the insurance business in the strict sense: The essence of the tontine is namely the fact that the organizer accepts no share in the underwriting risk of longevity. This risk is borne entirely by the participants, ie the insured community.
In the modern life insurance mathematics the Tontine lives on the fact that policyholders in actual mortality experience to take on the endowment policy on the so-called " natural surplus " or " profit-sharing systems " share. They are indirectly involved in risk by the accumulated surpluses year after year are assigned to each survivor.
The widespread at tontines combination of life insurance and lottery has been preserved in the so-called " draw Insurance ".
In German-speaking tontines are practically not present and are not offered by the insurance companies. In France and in the English-speaking world Tontines are used even today. There they exist especially as contracts between individuals Communities. This can be settled out of death, other criteria of resignation.
Tontines also play in various crime stories a significant role, for example in The Wrong Box by Robert Louis Stevenson and 4:50 from Paddington by Agatha Christie.
Tontines in West Africa
The misleading known as tontines local savings and credit groups in the various West African countries such as Cameroon, which also have a social impact through their cooperative nature, are more like a collective savings business (see, building society, collective building society or Tontine (Africa) ) than the traditional tontine.