Attention has recently been drawn to the legal aspects of Children's Deferred Assurances by the decision In re Englebach to which reference is made later on in this paper, although that case introduced no new principle of law and strictly followed the lines of earlier decisions.

There are those who think that the legal aspects of life policies from the Proposer's point of view are matters for his own attention on which he should be advised by his own Solicitor, and that from the Assurance Office's point of view they are matters for the attention of the Solicitors to the Office. In other words, they think that the Proposer must protect his own interests.

There are others who do not subscribe to that view. They think that the Office should give the Proposer a detailed and lucid explanation of every important phase of any policy which it offers to the public and that the Proposer ought to be able to enter with complete confidence into any contract for a policy in the ordinary form of the Office without having to take the advice of his own Solicitor.

The scope of Insurance has within the past few years widened to such an extent that it is no longer sufficient for a member of the profession to be an expert in his own particular section. By the process of amalgamation the modern Composite Company has come into existence, and the time is past when a keen member of the Staff of a large Insurance Company is content to sit in the self-contained section of his Office—Life, Fire, or Accident—and not to know what is going on outside his own water-tight Department.

It is not an easy matter for Life Insurance Companies nowadays to find remunerative investments for their funds, with Income Tax at its present figure, and although large sums are invested in Stock Exchange Securities, which do not come within the scope of this paper, further large amounts are advanced on security of mortgages of property, reversions, life interests, Stocks and Shares, etc., etc., and it is with these advances that I propose to deal.

The subject of Disability and Sickness benefits in conjunction with Life Assurance is of recent growth. The only occasions when the Members of the Institute have had the matter before them appears to have been in 1911 when a paper was read by W. C. Fielder before this Society, and in 1924 when a discussion took place at one of the General Meetings of the Institute.

The immense strides that have been made in America in the last five years, and the latent interest aroused in this country, as reflected by the amount which has been written in Insurance publications will, I hope, justify a discussion of the subject once more.

It will not be out of place to quote the following from a recent number of The Review:

“The attitude of British Actuaries on this question (Sickness and Disability benefits) is perhaps best described as one of neutrality. Were circumstances to force them to a decision for, or against, it would seem probable that many would be antagonistic. In the meantime, so long as they are not forced into open hostility they are prepared to ignore the business as much as possible. This is, of course, no more than an impression gathered from conversations here and there, and odds and ends of information that have come to hand from time to time. We imagine, however, that it comes fairly near to being an accurate statement of the case. If that be so then we can but regret it. The value of Disability Insurance to the public is so great, the amount of suffering it could eliminate so large that were Actuaries busily engaged in searching for the means of making it universally available the middle classes might look to the future with greater confidence.”

Although the title of this paper is “Reversions in Theory and Practice,” the greater part of these remarks will deal with the practical side, as it is essentially a practical subject. Those who deal with reversions will at once agree with the necessity for practical experience, a little of which is worth a great deal of theory. Mr Collins concludes his lectures on reversions with the advice, “Do not flummox yourself with formulae till you can't see the wood for the trees,” but I think that that admirable warning would really form a better preface. A glance through the writings on our subject will reveal at once a lack of complicated formulae. An absolute reversion is valued simply by the appropriate “A” factor and for a contingent reversion, there is merely deducted from the “A,” the cost of providing against whatever contingencies may be involved. Before one gets to that point, however, other considerations are necessary.

In reading the following remarks, three considerations should be clearly borne in mind.

Firstly, it has been necessary to describe some of the benefits valued, but this description in no way purports to be an authoritative interpretation of the Act, nor in fact could it be.

Secondly, any opinions expressed are entirely personal ones and have no official authority.

Thirdly, the examples given are merely specimens of the way in which official statistics may be used to obtain the required functions. Since each computation was part of an enormous mass of co-related calculations, it has not always been possible to divorce a particular problem from its context, and the examples must be taken neither as necessarily the best methods to apply in all circumstances nor indeed as being in all cases the methods adopted where actually the function in question was developed from another which was already available.

The “New Spirit in Industry” appears to be beginning to assert itself in many ways, one of these being the inauguration of Staff Benefit Schemes of all kinds. This is an excellent thing from every point of view and a matter which actuaries must necessarily follow with the closest attention. The title of this paper is very wide in its scope, and any attempt to treat of the subject completely would involve a volume rather than a Students' Society paper. It is therefore proposed to limit these remarks to the consideration of the form in which a scheme may be set up, i.e. either as an individual Pension Fund or by means of contracts effected with an Assurance Company, and then to the discussion of schemes established in the latter manner only.