In April 1931 a Departmental Committee was appointed by the Treasury “to examine and report on the law and practice relating to Industrial Assurance...”, and the statutory provisions relating to paid-up policies and surrender values under industrial assurance contracts have again come under consideration. The subject presents many difficulties but the technical considerations are of first importance and it is thought that, by discussion of those technical points with which the Institute is peculiarly qualified to deal, some guidance may be afforded to the larger public whose interests are neither those of the Government Departments nor those of the Corporations great and small which are engaged in the business of industrial assurance.

In these days of continuous change in mortality, with the necessity of forecasting in many of our operations, a paper concerned with the graduation of mortality statistics may appear to be academic, the more so if attention is restricted to the fitting of mathematical curves, with or without any attempt to advance that elusive and, as some think, delusive conception, the law of mortality. Nevertheless, it is felt that if progress is to be made in any branch of science, theoretical research and experiment are essential, as also is the publication of the results, unless the work is completely abortive. It has become the fashion to speak of graduation as though its function were restricted to the provision of a practical instrument for monetary calculations; as Todhunter is reputed to have said, the tabulated values of lx are merely successive terms in a commutation column. Notwithstanding this, most of us retain, consciously or unconsciously, a feeling that, underlying all the roughnesses in our data referable to errors of observation and an ever-changing environment, there may be an inherent mathematical system of law and order, which if it could but be discovered would give such insight into the meaning of the unadjusted figures that a considerable advance would be made in the practical application of our science.

With the advent of National Health Insurance the friendly society movement in this country entered upon a new phase of its history. The period which has elapsed since 1911 has witnessed farreaching changes affecting not only the methods by which friendly societies conduct their operations and the nature of the benefits they offer but also the character of their experience and even the outlook of the members. It may not be without interest therefore to review the more important of these changes so far as this is possible within the limits of a short paper.

It is nearly two years since the submission of a paper to the Institute by Mr L. K. File, B.A., F.I.A., F.A.S., entitled “Disability Benefits in Conjunction with Life Insurance Policies,” dealing with the business very largely from the point of view of Canada and the United States. To-night Mr E. E. Rhodes, F.I.A., F.A.S., F.A.I.A. and an Honorary Fellow of this Institute, contributes a paper in which he discusses the business in America from a special point of view. The object of this paper is to outline the present practices and past experience of the Life Offices willing to write Disability benefits in this country, and to discuss the value and scope of the benefits.

The method of selecting risks has undergone radical changes during the span of one man’s lifetime. In the early days of my experience all proposals for life insurance were submitted to a Board of Directors which consisted mainly of landed proprietors, lawyers and accountants. They were assumed to have sufficient knowledge to determine which lives should be accepted, which should be rejected and which should be charged an extra premium, with the aid of the medical adviser and of the actuary. The former was usually a prominent physician who based his judgment on impressions and observations, and the latter on the meagre statistics then in existence. Contrast that with the method in use in the principal American companies at the present time. The majority of the proposals are not submitted to a medical director, actuary or underwriter, but are passed upon by lay reviewers with or without the use of a numerical rating system. Experience has shown that such a practice is safe, as in one-half or more of the proposals there is nothing of moment against the risk, and, unless the amount of insurance is large, the time of experts can be given with greater advantage to the more difficult types of cases.