After completing the work of reference, in which tables were constructed reflecting the mortality of England and Wales over the years 1970 to 1972, the authors received the corresponding data for Scotland. The purpose of the present note is to describe briefly the results of our experiments in graduating these Scottish data. The technical details of the procedures used are virtually identical with those described in reference and accordingly in this paper we give only an outline of our methods. Finally, some comparisons are made between the results of the present work and those relating to England and Wales.

The European Economic Community (Common Market) was established by the Treaty of Rome signed by six countries, namely, Belgium, France, Germany, Italy, Luxembourg and the Netherlands, in 1957.

Many of the eleven basic aims of the Treaty have some bearing on insurance business. The free movement of persons, services and capital is of the greatest technical interest to insurers but the measures designed to promote the economic growth of the Community which will include the expansion and improvement of capital markets could be of even greater interest—particularly to life assurers. Another aim of the Treaty, viz. to ensure fair competition within the Community, could act as a constraint on the introduction of liberalizing measures.

The general programme for the progressive establishment of the Common Market over a transitional period of 12 years (extended if necessary) included a specific timetable for the introduction of freedom of establishment and freedom of services in respect of insurance transactions. The implementation of this programme as it concerns insurance has fallen into arrears and only one of the five directives which were scheduled has so far been promulgated. Nevertheless, the achievement of the aims of the Treaty of Rome must eventually result in the gradual harmonization of legislation affecting insurance business within the member states. Chiefly because of the need to avoid any distortion of competition, the measures introduced are likely to apply to all insurers within the E.E.C. irrespective of whether they transact business in one or more member states.

It is premature to consider in detail the likely terms and conditions of the E.E.C. legislation as this is still a long way off. Insofar as the present pattern of insurance control legislation of most E.E.C. countries is more restrictive—particularly for long-term business—than in the United Kingdom, any short-term solution for harmonizing legislation would seem likely to involve British companies in more stringent rules. It is hoped that the E.E.C. will take into account the outcome of the discussions on similar issues which have taken place over the last decade within international organizations such as the Organization for Economic Co-operation and Development and the Comité Européen des Assurances on which the United Kingdom is represented. E.E.C. thinking may also be influenced in the direction of the progressive liberalization of insurance control legislation by the record of life assurance business in the United Kingdom and by the need to encourage the development of capital markets to which life assurance is an important contributor as a source of long-term and regular savings. Thus the ultimate pattern of E.E.C. legislation may well reflect the British system of freedom, provided such a system is well presented within the E.E.C. negotiations. Generally, problems for the British actuary will arise from the imposition of new rules within the E.E.C. not only for insurance transactions but for the many other commercial transactions with which the actuary is professionally interested as advisor or participant.

Special areas of long-term business such as pension schemes; life reassurance; equity-linked contracts and private sickness insurance are described. Last but not least, in connexion with the introduction of freedom of mobility of labour, it may be necessary to consider to what extent actuarial qualifications earned in another member country can be recognized as enabling an actuary to practise in the United Kingdom.

The principles upon which surrender values should be calculated are discussed at length in papers by Mr. Macfadyen (J. I. A., xvii, 381); Mr. Crisford (J. I. A., xxi, 301); and Mr. Fulford (J. I. A., xxxv, 199), but none of the methods proposed appear entirely satisfactory in practice, and I have therefore attempted to devise a scheme which shall not only give results in reasonable accordance with strict theory, but also prove simple and easily worked in its practical application.

In an earlier paper the author traced the development to 1949 of public service superannuation schemes (other than for the Armed Forces) which are provided wholly or partly out of Exchequer or rate funds, i.e. for the benefit of civil servants, teachers, national health and local government employees, police and firemen. It was shown that those schemes, other than for (principally) police and firemen, tended to follow a common pattern although not all had reached the same stage of development and there were numerous variations of detail.

1. Mr. James John M’Lauchlan has done excellent service, in his Presidential Address to the Faculty of Actuaries on the 30th of November 1908, by drawing attention to the natural growth of a normal Pension Fund, and the necessity of accumulating large invested funds during the first 40 or 50 years of its existence, in order to provide for the heavy liabilities which will then be maturing for payment. He has done this by a few simple and easily understood illustrations involving a very considerable amount of accurate calculations which do not appear in the work.

It will no doubt be readily admitted that in these days investment profit makes the greatest contribution to surplus in life funds and it is not surprising, therefore, that many actuaries are called upon to devote a great deal of their time to investment problems. What is surprising, however, is the fact that property has so rarely been discussed at this Institute despite the large amount of life funds now invested therein.

[After some interesting preliminary remarks on the subject of statistics generally, and the utility of interpolation in their preparation, Professor Westergaard points out that in vital statistics the enumeration of the population at each year of age is seldom wanted, and, in fact, owing to the well known exaggeration in census returns of the numbers living at decennial ages, an adjustment is generally needed. He then proceeds:] The decennial reports by the English Registrar-General of births, deaths and marriages, contain full materials for the study of the mortality of professional men. The report published in 1875 gives a very detailed classification of ages, but it is not so with the next decennial report, which divides the ages into five periods only—15–20, 20–25, 25–45, 45–65, 65 and upwards.

Although the Carlisle Table of Mortality, constructed by the late Mr. Milne from certain tabulated facts given by Dr. Heysham, has for many years played an important part in life assurance calculations, I have not been able to find that anyone has taken the trouble to compare the original facts with the Carlisle Table as given to the world by Mr. Milne. This has probably arisen from the somewhat vague manner in which the methods employed are described in Milne's well-known treatise. For many matters, probably, this once-famous mortality table will in the future be supplanted by the Institute's tables published a few years ago; but it is still worthy of some attention, and I therefore make no further apology for bringing this short note before the readers of the Journal.

In Art. 705 (p. 410) of vol. ii of his Treatise, Milne says:— “ Table II ” [being the Carlisle Table, as known to actuaries], “ exhibiting the law of mortality at Carlisle, has been constructed “ from Tables A and C of the last article, by the methods laid “ down from Art. 174 to 183; except that, between the ages of “ 100 and 105 years, the decrements of life are greater than they “ should be, according to the formula of Art. 177. * * * * * “ The population of Carlisle is too small to afford a sufficient “ number of facts for determining the law of mortality with “ accuracy, after the age of 100. * * * * I have therefore “ assumed the annual decrements after the age of 100, as they “ appear in the table, somewhat arbitrarily, so as to fix the limit “ of life at 105 years.”

In his paper of 1941, Seal included details of some experiments he performed in an attempt to estimate the appropriate number of degrees of freedom for the chi-square goodness-of-fit test of a summation formula graduation. These results are referred to by Tetley and by Benjamin and Haycocks in their textbooks when they mention the difficulty of determining the number of degrees of freedom or mean chi-square value.

The paper presents a theoretical framework for the valuation of a general insurance company to actuaries, but also aims to provide reference work for non-actuarial users of appraised values. It distinguishes between the price that may be paid for an insurance operation from what may be called the economic or appraised value. The paper describes the elements of the appraised value calculation, selection of parameters, the uses of such evaluations and explores the future development into explicit stochastic modelling rather than the implicit methodology. Theoretical and practical considerations are illustrated and example valuations of a single line insurer are given.

1.1 1992 has become a symbol. A symbol of change in a Europe which feels itself threatened by the economic might of America in the West and Japan in the East. 1992 really does mean that millions of people, despite wide gulfs of language and culture, and a history of often bloody conflict between them, are making one more effort of collective will to club together in the belief that the one thing they have in common, geography, is sufficient reason to disguise differences and create a powerful economic union for the greater benefit of European suppliers and consumers.

In 1953 together with a colleague (Benjamin and Logan) the author called attention to a paper by Haenzel (1950) describing a new index of mortality years of life lost.

The argument was that many people were living for more than the three score and ten years and that every earlier death represented a loss of potential further years of life; that adding up the total years of life lost might be a significant measure of the toll of largely preventable disease; that changes in this total year by year would maximize the improvement gained by curative and especially preventative medicine.