2, 
2% 
APPENDIX A. 
—— 
ROYAL COMMISSION ON NATIONAL HEALTH INSURANCE. 
REPORT OF THE DEPARTMENTAL ACTUARIAL COMMITTEE 
To the Right Honourable Lord LAWRENCE of KINGSGATE, 
Chairman of the Roval Commission on National Health Insurance. 
My Lorbp, 
We have the honour to present our Report upon the question 
submitted to us by the Minister of Health as stated in our Terms of 
Reference, copy of which is annexed. 
1. The present rates of contribution under the system of National 
Health Insurance are 10d. a week for a man and 9d. a week for a 
woman, these rates being payable during insurable employment until 
the age of 70 and providing, inter alia, for sickness and disablement 
benefits in periods of incapacity up to this age. Under the Widows’, 
Orphans’ and Old Age Contributory Pensions Act, pensions are provided 
for insured persons at the age of 65 and, from January, 1928, this age 
is accordingly substituted for 70 as the limit of insurance for sickness and 
disablement benefits, ‘and for the payment of contributions, the rates 
of contribution being reduced, from January, 1926. to 9d. a week for a 
man and 84d. a week for a woman. 
These contributions are divisible as follows: — 
0 
Benefit Fund and cost of administration... a on 
Reserve Values (interest and redemption) os 
Contingencies Fund® ... ay a ud 
Women. 
9 8% 
9. In the case of an entrant at the age of 16 the contributions to the 
Benefit Fund providet on the present actuarial basis for seven-ninths 
of the liability in respect of benefits (including the cost of administra- 
tion) the remaining two-ninths being met by Exchequer grants. The 
question referred to us is, in effect, to determine whether such 
modifications in the actuarial basis as would reduce these contributions 
of 74d. for a man and 71d. for a woman are justifiable and if so to state 
the amount of the reduction. Inasmuch as the actuarial basis governs 
the estimates of the reserves required to support the liabilities of the 
Approved Societies, as well as the basic contribution, any change by 
which the contribution was diminished might normally be expected to 
involve some reduction in these reserves. Practical effect would be given 
to this reduction by decreasing the reserve values credited to the 
Approved Societies and this operation might be utilised to shorten the 
term over which the redemption of the reserve values will extend 
— estimated at approximately 30 years from the present time—or alter- 
natively to diminish the part of the contribution applied, as shown 
above, to the service of reserve values (interest and redemption). In 
the latter event the sum released by the reduction of the basic con- 
tribution would be increased. We may say at once that we see no reason 
to advise a diminution in the length of the redemption period and our 
recommendation will take this alternative form 
* The joint weekly contributions to the Central and Contingencies Funds are gd. for a 
man and 2d. for a woman. Of these sums a maximum of 5d. in the case of a man and 
Jd. in the case of a woman may, at the discretion of the Joint Committee, be credited to 
fhe Central Fund. At the present time the whole of the above contributions are carried 
40 the Contingencies Fund. 
+ Owing to changes introduced by the Contributory Pensions Act theie is a small 
margin in the contribution in the case of women, see para. 30 of the Report of the 
Government Actuary on the Financial Provisions of the Bill (Cmd. 2406).