2

MAJORITY REPORT.

of the present rate of 3 per cent. It should be noted that this
proposal involves no change in the rate of 3 per cent. which is
credited on reserve values. It is also worthy of observation, as
bearing upon the Committees recommendation, that the interest
income of Approved Societies is not subject to income tax, and
that regard may consequently be had to the gross rate earned.
175. With reference to the average annual rates of sickness
and disablement for which provision should be made, the
Committee draw attention to the fact that while among both
men and women the claims for sickness benefit have been below
the ‘* expectation *’ of the present basis in the years 1919 to
1924 there are disquieting features in the course of the claims
from year to year, especially among women. In the case of
disablement benefit the Committee evidently look with concern
upon the rapid increase in the claims which they have found
and from which it appears that among both men and women
the cost of this benefit in relation to the expectation, has doubled
itself between 1919 and 1924. Tt is evident that the Committee
have met with difficulty in dealing with these elements in the
situation, and so far as women are concerned they have found
themselves precluded from coming to a final decision. They
propose, so far as relates to men, to retain the Manchester Unity
Experience, 1893-97, on which the present basis in respect of
sickness and disablement is founded, but to eliminate the
addition of approximately 13 per cent. to the Manchester Unity
rates for which that basis provides. In regard to women, they
propose to discard the present basis and to substitute a new
basis drawn from the experience of a large sample of the female
insured population in the year 1923, with a loading of 10 per cent.
to the sickness rates thus obtained. The explanation of
the choice of a single year’s experience for this purpose
instead of that of the three years 1921-23 which the
Committee examined, is that the claims were rising steadily
throughout the three years, with the result that the experience
of 1923 was sensibly higher than the average of the whole period.
The Committee explain that in fixing the loading at 10 per cent.
they have had regard to certain small margins which they find
to be available for the assistance of the Societies.
176. With reference generally to the experience of sickness
and disablement claims which the Committee examined, they
draw our attention to a Memorandum appended to their Report
which contains the results of a study by the Government
Actuary’s Department of some of the more difficult features which
this experience presents. They consider that these results should
be examined, with a view to effective action, by the responsible
Departments, and we concur in this opinion. The features to
which attention is directed are evidently widespread and they
should receive the serious attention not only of the Departments