By expressing the values of both liabilities and assets as it is possible to obtain the valuation surplus and its analysis not only at the end of the year but also at any time during the year. Practical forms of gi(t) are discussed and formulae for a continuous analysis of surplus are given.

The taxation treatment of the general annuity fund gives rise to additional variables in the calculation of premium rates. The paper discusses premium rates with particular reference to the impact of the tax structure and an attempt is made to determine a basis appropriate to a mutual life office. Some specimen rates applicable to recent conditions are then calculated and compared with market terms at the time of writing.

Up to the present, medicine has successfully concentrated on the treatment of specific diseases and the successful progress has contributed notably to reductions in mortality rates in early and middle life. This progress has, however, not materially increased the total life span. Future improvements in longevity may therefore come from methods of delaying the “aging” process, rather than from specific advances in preventative medicine. Such methods are known to be effective when applied to the animal world, and the possibility of applying them to human life opens fascinating prospects. The possibilities of, and need for research into these factors are discussed.

This paper sets out to demonstrate a set of principles for the allocation of surplus in a mutual life office.

Surplus is defined as a capital item and the principles governing its measurement and allocation are developed without regard to the method by which surplus may be distributed in the form of cash or additional guaranteed benefits. Particular attention is paid to the special problems arising where there is substantial investment in equities or where a substantial portion of surplus comes from the profits of without profits business.