The paper describes an investigation which is being conducted by a life office into the mortality experienced by certain classes of impaired lives. The investigation was initiated in 1947 and the results for the period 1947-1958 are compared with a control experience of first-class lives.

It is emphasised that owing to the limited amount of data, and also to a certain lack of strict comparability in the control experience, the results must be regarded with some caution. The purpose of the paper is, in fact, not so much to communicate statistical information as to describe the methods followed in planning the investigation and to promote a discussion of the feasibility of setting up an investigation under the auspices of the Joint Mortality Investigation Committee to which all life offices operating in Great Britain would be invited to contribute data.

The paper presents a coding system for the impairments covered and discusses briefly the results so far obtained within the main groups. For some of the larger groups it has been possible to include a summary analysis by cause of death.

The paper points out that, owing to the increasing complexities of U.K. tax legislation, it is no longer possible in the majority of cases to use unadjusted yields for comparative purposes in the selection or review of investments. The three main types of investment in respect of which yield adjustments to allow for the effect of taxation require to be made are considered, which are as follows :—

1. (1) Redeemable investments.

2. (2) Shares of U.K. companies which receive Double Taxation Relief because of their overseas interests.

3. (3) Shares of foreign companies in respect of the dividends on which U.K. shareholders are entitled to claim Double Taxation Relief.

The taxation assumptions which require to be made for the calculation of correct comparative yields on the above types of investments are discussed and formulae are given which make allowance for the effect of these assumptions. Comparative tables are also given showing the yields brought out on differing tax assumptions and on two different basic methods of calculating redemption yields.

In the body of the paper the assumptions discussed and formulae given refer to a British life office or life fund doing business in the U.K. only; but in a short appendix mention is made of some further adjustments which may be required in the case of life offices which also do business abroad.

The following Reports by the Study Groups on Electronics are the product of an experiment begun by the Faculty in 1959. During the discussion on the Paper by Gwilt and Philip (Application of Computers to Group Schemes) given to the Faculty in that year, the opinion was expressed that the Faculty should do something to enable those Fellows who were interested, to acquire a knowledge of the working and the uses of electronic computers. Following the suggestion, a meeting was called to which a few of the younger Fellows who were known to be interested in the subject were invited. A circular was subsequently issued to all offices, and to individual actuaries, advising them that the Faculty had decided to form Study Groups on Electronics, and asking the offices to supply names of any Fellows of the Faculty or Institute who would be interested in taking part in the project.

Recent developments affecting the bases of calculation of ordinary life assurance and annuity premiums include the publication of the A1949-52 and a(55) mortality tables, the passing of the Finance Act 1956 and the rise in interest yields on life assurance funds to unprecedented heights, resulting in high bonus rates.

Part I of the paper deals with the general effect of these and other developments on the three main variables of mortality, interest and expenses and in the charge to be made for the right to participate in surplus.

Part II deals with the detailed effect of these developments on the actual premium calculation formulae used for various standard types of policy and for types of policy that have come into existence or increased substantially in importance in recent years, including self-employed annuities, variations on the temporary assurance theme and policies effected for estate duty purposes such as pure endowments with return and whole life assurances for large amounts at high ages.

The paper attempts to show how the present basis of assessment to income tax of mutual life assurance companies has developed by modifying the general taxation system of the United Kingdom to fit special features of life assurance.

Section 1 of the paper deals with those aspects of the general tax laws which are relevant to life assurance companies and analyses the position which would arise in the absence of specialised legislation applicable only to life assurance.

Section 2 describes the evolution of specialised provisions affecting the taxation of life assurance and the present position is analysed in Section 3. Section 4 contains some suggestions for future legislation to remove anomalies in the present) basis.