During the last ten years the legislation governing taxation has changed at an ever-increasing rate until the present situation is one in which an actuary requires to be familiar with some part of every Finance Act. The paper describes and comments upon the tax legislation and cases in this period likely to be of interest to an actuary in the various functions in which he acts, including that of employer and personal taxpayer.

The paper considers the effect on actuarial calculations of recent legislation and in particular gives an example of the type of analysis which may be undertaken prior to fixing premium rates for a proprietary office, including consideration of the distorting effect of apportionment of interest by mean funds. The author gives his opinions on the effect of capital transfer tax on reversionary business.

Finally there is a section briefly describing the recent new taxes on development gains, value added, and capital transfers, including reference to the position of trust policies under Scots law.

The paper seeks to examine the fundamental principles underlying the periodic actuarial investigations of life insurance companies. It attempts to define the attributes of an equitable and efficient set of standards, to classify the causes of failure of life offices and to enumerate the realities of any life office. Having examined the background to the present situation it then proceeds to attempt to derive a general valuation standard.

The paper discusses the implications of the Social Security Pensions Act 1975 and associated Regulations for occupational pension scheme design and finance. Firstly, a general preface deals with currently topical matters. Secondly, integration of State and Occupational Schemes as practised up to the present time is described. Next, integration in future, whether contracted in or contracted out, is considered from the scheme design point of view, and some problems are mentioned. Finally, the financial background to the contracting-out conditions is described and some evaluation made of the terms available.

By courtesy of the Government Actuary, the preliminary crude data relating to the proposed English Life Tables (No. 13) were made available to the authors. In this paper various graduations derived from these data “are described and an outline is given of the salient features of each.

The investigation covered the calendar years 1970, 1971, and 1972. For each integer x ≥ 2 the values of θx, the number of deaths during the investigation period aged x last birthday at the time of death, and Exc, the corresponding central exposure to risk, were available for both sexes. The central exposures to risk were obtained using population totals from the 1971 national census, by a method similar to that described in Appendix I of reference 4.

In the course of some recent work (cf. reference 2) it proved necessary to construct a life table from a set of graduated values of mx, the central death rate at exact age x. This meant that values of qx had to be derived in order to produce the life table from a given radix. Since the values of mx were known only for integer values of x, it was necessary to use an approximate method to derive the corresponding values of qx at each age. In this note we discuss briefly the approximations which we adopted. Our results are necessarily of an elementary nature and the principal reason for setting them down is to provide a reference for possible future use. It is perhaps worth pointing out that in a situation where the values of mx are given by an explicit mathematical formula values of qx may be obtained exactly using the results of reference 1.

In this paper an attempt is made to present the theory in such a way as to permit a more general application in practice. The conditions for immunisation are defined for functions whose characteristics, as well as values, are dependent on the rate of interest, and the effect of assuming one particular form of variable yield curve is examined. A simple graphical method is illustrated for finding the rate of interest at which a particular asset and liability are immunised and hence for determining the appropriate rate of interest at which the liability should be valued if the rate of interest at which the asset is valued is not the immunising rate of interest. Applications of the method to actuarial valuations, including gross premium valuations, are outlined.

The main purpose of this paper is the determination of a basis for the calculation of “prudent” reserves for maturity guarantees in annual and single premium unit-linked life assurance policies, particularly those in which the investment medium is a broad range of U.K. equities. Estimates of the proceeds of equity investments required, and theories of stock market movements are discussed; it is concluded that yearly growth rates, including reinvested net income, may be represented approximately by the lognormal distribution and that yearly growth rates are not random, but negatively correlated. A mathematical model is then developed; the evaluation of the resulting distributions, which is a problem of some interest in its own right in the annual premium case, is discussed in the Appendix. There is a general discussion of certain valuation principles, and we give tables showing the level of reserves suggested by our methods. Various practical questions, such as the treatment of the assets and the effects on reserves of mortality, withdrawals, capital gains tax, policies with different terms and existing business, are also considered.