APPENDIX A. 
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3. The Contingencies Fund is, in effect, a sub-account of the Benefit 
Fund to which after each valuation its accumulated balances are trans- 
ferred. The contributions credited to the Contingencies Fund thus 
constitute a part of the provision made for benefits and we have 
regarded the consideration of them as falling within the scope of our 
terms of reference. 
4. The following factors enter into the financial basis of the system : 
(a) The rate of interest at which the funds are assumed to fructify 
by investment; 
(b) the probability of survivorship from age to age; 
(c) the average amount of sickness and disablement benefit payable 
in each year of age; 
(d) the probability that maternity benefit will be payable in each 
year of age; 
(e) the probability, at each age, that an unmarried woman will 
marry and cease to be insurably employed ; 
(f) the probability that an insured married woman will become a 
widow in passing through each year of age; 
(9) the claims for sickness and maternity benefit under the special 
terms and conditions applicable to women who have recently left 
insurable employment on marriage. (Class K.); 
In respect of (b), (¢) and (d) the cases of men and women 
require to be separately considered, and in regard to women the 
cases of the unmarried (spinsters and widows) and the married 
must be distinguished so far as concerns (¢) and (d). The 
factors (e), (f) and (g) arise only in the case of women. 
(h) the average number of weeks during which an insured person 
will be unemployed in each year; 
(i) the cost of medical benefit; 
(k) the provision to be made for expenses of administration. 
The question submitted to us requires us to consider each of these factors. 
We deal with them, seriatim, in the following paragraphs. 
5. Before proceeding to this stage we think it necessary to refer to 
certain considerations which arise out of the peculiar conditions governing 
the finance of the system of National Health Insurance. The system is 
operated through a large number of financially independent or semi- 
independent units, either societies or branches of societies, and these 
units differ materially from one another in their experience in respect 
of the greater number of the factors enumerated above. The contribu. 
tions are nob, however, equated to the varying risks undertaken by the 
separate units; they are uniform in amount for all insured persons of each 
sex, and the Reserve Values, representing the estimated loss arising from 
the acceptance of persons of higher ages than 16 at the rate of contri- 
bution appropriate to that age, are likewise uniform in amount for all 
persons of the same age and sex. It follows that widely differing results 
are found on the valuation of the separate societies and branches, and 
no rearrangement of the financial basis which retains the present 
uniformity of contributions can avoid this feature. 
The discrepancies between the basic assumptions as to the cost of the 
risks undertaken and the realised facts of the working of the societies, 
which are inherent in the existing system, might be held to invest us 
with a wide discretion as to the provision to be made, on the uniform 
basis, for the liabilities of the future. It is clear, however, that Parlia- 
ment intended the scheme to be solvent regarded as a whole whatever 
might follow from the grouping of risks incidental to the voluntary 
segregation of insured persons in Approved Societies, and we read our 
terms of reference as requiring us, in advisine anv chances. to conform