1.1. Section 78 of the Insurance Companies Act 1974 makes provision for Regulations to be made for the valuation of assets and liabilities. Regulations relating to the valuation of assets, although not published at the time of writing, are expected to be laid before Parliament in the near future.

It is expected that the corresponding Regulations for the valuation of liabilities will be issued later in 1975.

1.2. The Department of Trade has consulted interested bodies, including the Faculty and the Institute, with regard to proposals for the content of the Valuation of Liabilities Regulations and with its permission part of the relevant Consultative Note is reproduced in Appendix I.

This paper is based on ideas originally developed in a paper in 1957 (J.S.S., 15, 1). In seeking to reintroduce and expand these principles at the present time the author has a variety of motives, some of which, it is hoped, will commend themselves to the Institute. Although attracting little attention at the time, and indeed essentially repudiated by the 1959 Radcliffe Report, the monetarist approach which it adopted has since become more respectable, so that (especially since one of its central contentions, as to the causes and likelihood of inflation, has been verified by subsequent events) it is hoped that there may now be a greater measure of general agreement with the principles put forward. Perhaps more important, the conduct of the United Kingdom's financial affairs is still, it may be judged, based on methods little changed from the time of Radcliffe, though an advance has recently been made in the administrative control of money supply.