The title of the paper may suggest to readers that the authors are about to enter into a highly moralistic debate comparing those persons who take the ‘evil weed’ against those that lead ‘clean wholesome lives’. Whilst this is obviously not the case, the inference of competition is totally relevant. As the U.K. life insurance market moves slowly but surely to a smoker/non-smoker division, new dimensions of competition could open up between those offices who adopt a differential system and those who do not. One purpose of this paper is to comment on this feature.

The main purpose of the paper, however, is to highlight the financial and underwriting problems involved in this type of market which represents a highly significant departure from previous practice. Many readers will have already debated these problems within their offices and perhaps with their reassurer. However, to our knowledge, no discussion has yet taken place across the British actuarial profession as a whole, and we believe it highly desirable that such debate takes place. This paper, therefore, should be seen as offering nothing new or conceptually original, but as merely the catalyst for discussion.