It is quite impracticable to devise an equitable mode of winding-up an insolvent life insurance company (5).

A company being found to be insolvent, what is to be done with it ?… The actuaries have unanimously recommended a reduction of the sums assured, the same premiums being paid, but the lawyers have agreed that this is impracticable … The actuaries are able to take a much higher view; they need not consider what is the law, but what is most consistent with real and substantial justice to all parties. In fact, we may sum it up by saying that the courts of this country are not courts of justice but courts of law (4).

[In relation to a method of treating insolvent life insurance companies as a closed fund] Its simplicity, and the entire absence of opportunity for the kind of deception and fraud usually committed by those who manipulate the assets of insolvent companies, are its most striking merits, and are certainly merits of a high order (1).

I am always happy to be back where my Institute life started and I am grateful to your Committee for fitting me in at short notice.

When you start to write, ideas take on a being of their own. Life is a shy child which hides its face when you stand aloof, but is soon at your elbow to help when you kneel to build with its bricks. Then other bricks begin to appear. As it turns out, my helper is concerned about imagination so ‘imagination’ shall be our subtitle.

First, a brief reference to my 1972 paper: the winning themes were—in reverse order, as for beauty queens—third prize to the imminent collapse of our society, second prize to the essential unity of the universe, but an easy winner was double faults at tennis.

Permanent Health Insurance is essentially a practical subject because, more so than in any other line of long-term business, an office is virtually in the hands of the policyholder once they have issued the contract. Of course a life assurance policyholder can always precipitate a claim, but this is rather a drastic move! How much easier merely to stay off work. And as Dr Peter Taylor wrote in 1974, “The time has come to admit quite openly that medical certificates are now, for all practical purposes, issued on demand.” (1) If we ever see in the United Kingdom the developments in medical malpractice suits current in the United States it is difficult to visualize any doctor being prepared to contradict a patient when the latter says he feels unfit to work.

The introduction of high-speed electronic computers has opened the way for analyses of motor insurance risk statistics on a scale not previously possible. We may regard the purpose of the analyses which form the subject of this note as being to test the validity of the existing rating structure by finding out how the claims experience varies from one rating cell to another within that structure; and, more generally, to explore the possibility of devising a more efficient rating structure by defining new levels within the existing factors, or by using new factors in addition to, or in replacement of, those already used.

To achieve this purpose it is appropriate to consider on the one hand a detailed investigation of the experience over a limited period, analogous to that carried out when constructing a new standard life table and, on the other hand, a system for keeping the emerging experience under more or less continuous review. For this second aspect it is natural to think in terms of making comparisons between the actual experience and that expected according to the standard table.

It is now 20 years since a Joint Working Party of the Institute and Faculty, comprising Messrs Spratling, Bacon and Bromfield, presented a paper (J.I.A. 83, Part III) on the results of its investigation into the actuarial and other problems arising in connexion with the transferability of pension rights.

That paper and the discussions on it at the Faculty and Institute were concerned mainly with the general principle involved in maintaining or ‘preserving’ the rights of individual members of occupational pension schemes who changed employment. This could be achieved either:

(i) through the scheme of the employer the member was leaving by providing what they called ‘cold storage benefits’ (and which we refer to in this paper as preserved benefits) or

(ii) through the scheme of the employer which he was joining by means of a transfer value payment to that scheme from the former scheme.

Some years ago G. F. Hardy proposed a method of performing a mortality graduation in accordance with Makeham's formula. This method is now well known to actuaries of the British tradition, having been absorbed into textbooks some time ago. A less known method of performing such a graduation was suggested by Cramér and Wold in 1935. The two methods differ in their approach to the non-linear Makeham constant c. This paper briefly considers the choice between the two methods from a theoretical viewpoint. Theoretically, the choice seems to be fairly clearly in favour of the method of Cramér and Wold. This does, however, involve extra computation. For this reason, and because Hardy's method has become entrenched in British tradition, its efficiency has been tested by simulation. The results of this simulation are reported in the paper and throw serious doubt on whether, despite its computational saving, Hardy's method should be used.