INSURANCE

-Halakahic Aspect Insurance activity may well serve as a model for the economic activities of the Jewish merchant throughout the ages. Hundreds of sources dealing with insurance for transport and fire are found in the halakhic literature, especially in the responsa collections. There is no reference in the Bible to the practice of insurance, perhaps as a result of the biblical prohibition of interest in the loan agreements connected with it. The use of commercial agreements, however, such as the ancient Babylonian maritime loan, wherein an investor loaned money to an agent-entrepreneur who would convey merchandise abroad, sell or barter it, return and repay the loan, the profit and a fee for the insuring of the merchandise by the investor, was well known. The topic of insurance as found in the halakhah can be divided into 5 periods: the Talmud, the Mediterranean countries (1100–1500), the Mediterranean countries during the Ottoman Empire (1500–1800), Europe (1700–1900), and the Twentieth Century. THE TALMUD The earliest Jewish record of an insurance practice is found in the Tosefta (BM 11:12) and is discussed in B. Bava Kamma 116b. Donkey drivers on caravan would arrange a program of mutual insurance whereby a driver losing his donkey during the course of the caravan would receive another donkey from a common fund. The same practice was found among Jewish shippers on Babylonian rivers, who would, in case of loss, receive a new boat from the ship owners' common fund. Both these practices were enforceable in the rabbinic court. THE MEDITERRANEAN COUNTRIES 1100–1500 The next source for the insurance practice is found in Sefer ha-Ezer of Rabbi Meir ben Rabbi Yiẓḥak of 12th century Provence, who sanctions a contemporary use of the maritime loan among Jewish international shippers (quoted in Kaftor va-Feraḥ, Chapter 44; the original work is not extant). He is practically the only Jewish sage to sanction such a loan agreement. Rabbi Solomon ben Adret (the "Rashba") in 13th century Spain mentions and permits a practice reminiscent of the maritime loan, but based upon the laws of bailment, as prevalent among Jewish overseas agents (Resp. 1:930; 2:325), and a practice among partners to include a clause guaranteeing income from profits earned by the partnership in case of illness (ibid., 2:79, but see Tashbeẓ 1:35). In a responsum dating from 1388, Rabbi Isaac bar Sheshet validates the maritime shipping insurance contract involving a premium payment, long in practice, but not one containing a loan repayment formula (Ribash 308). From Algeria, at the turn of the 15th century, there are records of gold bullion shipped to Christian Majorca under coverage of insurance – a standard expense (Tashbeẓ 3:74) – and the insuring of a cow bought by a butcher for kosher slaughter, against the danger of being found unfit for Jewish consumption (trefah; see Rashbash, Tikkun Soferim, laws of Asmakhta). There are no references in the standard histories of insurance to these important sources for the early history of modern insurance. THE MEDITERRANEAN LANDS DURING THE OTTOMAN EMPIRE (1500–1800) The resettlement of Spanish Jewry after the Expulsion centered in North Africa, Italy and primarily the Ottoman Empire. Salonika, Constantinople, Venice, Ancona and Cairo boasted large, viable Jewish communities whose economic activities were based on international trade. The cold and not-so-cold war between Turkey and Christian Europe did not interfere with trade, but led to a proliferation of insurance contracts, and consequent litigation before the rabbinic courts, especially those of Salonika, whose dayyanim became experts in the insurance contract. Changes in course of transit, confiscation by the authorities, the different genres of accidents under coverage – all such disputes are found in the Salonikan rabbinic court decisions, usually decided upon the basis of prevalent commercial practice and interpretation of the contract. Even Italian merchants would litigate in Salonika. (See, for example, the responsa of Maharashdam, Divrei Rivot; Maharshach, Torat Emet, et al.) The use of the cambio agreement, based upon repayment of a loan, together with an insurance charge, was quite prevalent, but it met with rabbinic opposition, on the grounds that it constituted an infringement of the laws of interest (ribbit).   From Italy and Turkey, the use of insurance spread to the land of Israel, Egypt, Corfu, Rhodes, and Tunis. EUROPE (1700–1900) The well-known Jewish halakhic periodical, Peri-Eẓ-Ḥayyim, published by the Eẓ Hayyim Sephardi yeshivah of Amsterdam (1691–1807), in which scholars of the yeshivah replied to queries posed to them from throughout the Dutch colonial empire of its day, contains several references to shipping from the New World by Jewish merchants, under insurance coverage also granted by Jewish merchants. Eastern Europe became the next center of insurance activity, especially Galicia. In the early 19th century, the rabbis of Brod dealt with the basic validity of the insurance contract, and the various halakhic problems involved, e.g., interest, asmakhta, etc. (see Bet Efraim, Ḥoshen Mishpat 34, 35 and Gur Aryeh Yehudah, Yoreh De'ah 119). The use of fire insurance became widespread in Poland in general, and many responsa were written on the topic of the insurable interest and the indemnity principles. Towards the end of the century, material on fire and transport insurance occurs in the writings of Russian, Lithuanian and Hungarian rabbis. -The Twentieth Century The twentieth century saw the emergence of life insurance, and questions were addressed to European authorities on its permissibility according to Jewish law. Further insurance topics are found in the works of the rabbis of Hungary (the prime center of Jewish activity after the decline of Galician Jewry), Poland, and – after World War II – Israel and America. (Menahem Slae) -Jewish Involvement in Insurance The Talmud contains references to partnership as a means of minimization of risks, but this must be differentiated from insurance proper, based on premiums. In the 14th to 16th centuries the insurers of the wool export of burgos included some 40 marrano families, related by birth or marriage, who maintained connections with the strategic centers of international trade – Bruges, Antwerp, Rouen, Nantes, and Florence – by means of commission agents and brokers who were generally relatives. In Amsterdam some Marranos ("Portuguese") entered insurance. In Hamburg an insurance contract with the participation of "Portuguese" Jews was signed only three years after the first such contract had been drawn up. In the 1620s and 1630s the "Portuguese" dominated the insurance field, constituting more than half of the insurance brokers and being particularly active in colonial shipping, where the risks and premiums were highest. Many rich Jews engaged in marine insurance too, such as Manuel Teixera. In the late 17th and 18th centuries Jews left insurance in Hamburg and by 1778 only one remained there. In France the gradis family of Bordeaux played a leading role in marine insurance. In 1757 Gradis and Alexander, "negociants juifs," had agreed to insure a corsair but postponed signing the contract because of the Sabbath: the next day the news that the ship had been seized by the British arrived. In the ensuing litigation the insurance was annulled by the court. Two Sephardi Jews, Joshua Mendes Da Costa (1741–1801) and Lewis Mendes (1716–1790), "one of the first Merchants of the City of London," were among the original founders of Lloyds, in which many Jews later participated, including the hart , goldsmid , samuel , solomons , montefiore , rothschild , and sassoon families. Benjamin gompertz (1779–1865) was a member of Lloyds and of the Royal Society, whose achievements in actuary statistics were internationally acknowledged. Nathan rothschild and Moses montefiore founded the Alliance Assurance Company for which the mathematician and actuary-statistician, Benjamin Gompertz, was chief actuary. In Italy Giuseppe Lazzaro morpurgo (1762–1835) introduced modern methods and founded a number of insurance companies, among them the Assicurazioni Generali, the largest Italian insurance company. In the late 18th and early 19th centuries a number of Jewish insurance experts and entrepreneurs from Trieste helped to found and develop Austrian and Italian insurance and shipping companies. Jews did not play an important role in insurance in other countries in modern times. In the first years of World War I a group of Jewish financiers in Russia headed by N.B. Glazer formed an insurance company syndicate to fill the vacuum created by the withdrawal of the German companies. In both Europe and America Jews were proportionately underrepresented in the insurance business, though there were some notable exceptions, such as L.K. Frankel (1867–1931), pioneer in social insurance and second vice president of the Metropolitan Life Insurance Company, and Louis I. Dublin, a public health and actuarial specialist. -BIBLIOGRAPHY: HALAKHIC ASPECT: S. Passamaneck, Insurance in Rabbinic Law (1974); M. Slae, Ha-Bituaḥ bi-Mekorot ha-Halakhah (1974); idem, in: Nazir Eḥav, 3 (1978), 292–327; idem, in: Noam, 20 (1978), 272–8. JEWISH INVOLVEMENT IN INSURANCE: J. Graf, in: Dr. Bloch's Oesterreichische Wochenschrift, 29 (1912), 843–5, 865, 880; H.I. Bloom, Economic Activities of the Jews of Amsterdam (1937), index; W.S. Samuel, in: JHSEM, 5 (1948), 176–92; H. Kellenbenz, Sephardim an der unteren Elbe (1958), 268–71; G. Stefani, Insurance in Venice, 1 (1958), 262f.; Z. Szajkowski, Franco-Judaica (1962), 94–100; J. Zoller, in: Freie juedische Lehrerstimme, 6 (1917), 45–7, 74; H. Landaw, in: Ekonomishe Shriften, 2 (1932), 102–3; J. Pick, in: The Jews of Czechoslovakia (1968), 366–9.