The following further particulars are extracted from the Returns under the Fifth and Sixth Schedules of the Life Assurance Companies Act:

The principles upon which the Valuation is made are:—

First. The liability of the Company is ascertained by taking the difference between the present value of the sums Assured and the present value of the future Premiums, after deducting the loading.

The rates of interest assumed in the calculation are:

First-For Policies for the whole term of life, with and without profits, and on which uniform Premiums are payable, the rate of interest is 34 per cent per annum. On the Policies of the United Kingdom Assurance Company, taken over by this Company, the rate of interest is 4 per cent.

Note. By the agreement with United Kingdom Company, the funds were to be accumulated at 4 per cent.

Second.-For all other classes of Policies the rate of interest is

3 per cent, except Children's Endowments, on which the rate of interest is 3 per cent.

Third.-For Immediate Annuities the rate of interest is 3 per cent.

The proportion of the Annual Premium income reserved as a provision for future expenses and profits is 10 per cent on Non-participating Policies, and 26 per cent on Participating Policies-except Terminable Premiums and Endowment Assurance Premiums with profits, on which the reserve is 23 per cent, and Double Assurance Premiums, whereon the reserve is 7 per cent. On the Premium income of the United Kingdom Company's Policies, the reserve is

5 per cent on Non-participating Policies, and 15 on Participating
Policies.

Note. By agreement with United Kingdom Company, the business was
to be managed free of expense, except a charge of 5 per cent for
Commissions.

These principles are determined by the Directors in accordance with
the Bye-Laws of the Company.

The principles upon which the distribution of Profits among the
Policyholders is made are also fixed by the Bye-Laws of the Company.
Policyholders paying the Participation Rates of Premium, participate
in the Profits of the Life Department to the extent of nine-tenths,
the remaining one-tenth being reserved for the Shareholders. The
respective shares of the Profit allocated to the Policies is reckoned
according to the sum Assured, with all previous Bonuses added thereto,
multiplied by the number of years the Premium has been paid since
the last Division. The Directors have also power to declare, at each
Quinquennial Division of Profits, a Prospective Bonus on such Policies
as may become Claims within the next Quinquennium, but such
Bonus must not exceed four-fifths of the rate declared at that Division.

Policies share in the profits from the date of issue, but the Bonus allocated does not vest until the Policy has been five full years in force.

Specimens of Bonuses allotted at 31st December 1870 to Policies for £100 effected at the respective ages of 20, 30, 40, and 50, and having been respectively in force for five years, ten years and upwards, at intervals of five years respectively, together with the amounts apportioned under the various modes in which the Bonus might be received.

Summary and Valuation of the Policies as at the 31st December
1870 (see pp. 222 and 223).

Dr.

Valuation Balance-Sheet as at 31st December 1870.

Consolidated Revenue Account of the Life Department for Five Years commencing 1st January 1866 and ending 31st December 1870.

Amount of Funds on 1st January 1866, the beginning

of the period

Premiums after deduction of Re-assurance Premiums

Interest and Dividends.

Profit on Investments

Recording Fees..

The average Rate of Interest, after deducting Income-tax, at which the Life Assurance Fund of the Company was invested at the close of each year, during the period since the last investigation, was: