When one considers the variety of ‘options’ available to policyholders and the large number of lives assured who are in a position to exercise an option, one might be haunted by a vision of legions of operators speculating on the optimum moment at which to make a deliberate choice advantageous to themselves and detrimental to the financial stability of life offices. The fact that offices are prepared to encourage various types of options clearly indicates one of two things, either (a) that the skill of the operators is not held in high esteem, or (b) that the skill of the offices is high enough to overcome intelligent selection by the option-holders. If it were true that the value of any particular option could be accurately stated by a mathematical expression and if the incidence of the exercising of the option were established to universal satisfaction, (b) would be mercifully true. This condition, however, does not hold for many options, and it is this element of the unknown which gives spice to the subject and justification for further comments.

In this paper the taxation position is described as it applied in the fiscal year 1959–60. The detailed provisions of the various enactments which govern taxation in Great Britain are subject to revision from time to time and it must therefore be made clear that minor variations must be expected in the future. Major changes in the basis of taxation of retirement benefit schemes having been effected by the Finance Act 1956, it is not expected that the broad pattern will be greatly changed in the foreseeable future.

When your invitation came I thought what better subject is there to discuss than the problems facing our own institutions and in particular the problems that are likely to be left to your generation to solve or to suffer under. I therefore intend to deal in this address with one or two of the more controversial issues of the present time—issues which I feel will leave their mark on our business and our profession.

At the end of the 1914–18 War, Life Offices pondered and considered how they could regain their strength. Not only had war claims been heavy but they had suffered severe depreciation on their investments, due to the increase in the market rate of interest. The solution that the great majority found to this problem of regaining strength was to pass their bonus.

This report summarizes the conclusions reached and difficulties encountered by Group E in the discussions held over the past 4 years. It is thus an amplification and extention of the report made to a meeting of the various computer Study Groups held on 27 May 1957.

The Group consists mainly of actuaries employed by ordinary life assurance offices (some composite and some purely life). The Chairman is a member of the Mathematics Division of the National Physical Laboratory, Teddington. The Group has been joined from time to time by representatives of computer manufacturers and other visitors.