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Actuary

insurance, knowledge, life, actuaries, company and rate

ACTUARY is the title given to a person who, after proper training, makes a profession of applying the doctrine of mathematical probabilities to those affairs of life from which life insurance, annuity, reversionary interest, and other analogous institutions derive their principles of operation. The actuary's field of operation also embraces as its peculiar province of inquiry all monetary questions involving a consideration of the separate or combined effects of interest and probabilities. At the present day practically every member of this profession in Great Britain would be either a member of the Institute of Actuaries of Great Britain and Ireland, or of the Faculty of Actuaries of Scotland. It is generally in connection with insurance business that the actuary will be met ; either as an officer holding a fixed appointment with a company or as a consulting actuary. There are no questions the solution of which require a stricter attention, or greater skill in investigation, than some in the practice of insurance. When difficult questions are brought before a company, the directors not being mathematicians, are under a necessity to refer them to their actuary, upon whose opinion and advice their subsequent action is based. As a statist, the actuary collects and arranges material for a mortality table ; as a mathematician he constructs, accommodates and corrects it, according to scientific principles. From this he calculates his tables of annuities and premiums. His knowledge of the nature of diseases, and of their effect upon certain constitutions and under different conditions, enables him to o-operate with the physician ; and thus the medical know ledge of that officer is combined with the statistical element in the hands of the actuary, and the knowledge of both is made practically useful. His legal knowledge, if sound, may save his company much expense—his sphere of use fulness is enlarged, and he becomes a valuable coadjutor of the legal adviser of his company. As a man of business, his services are invaluable.

The charter of incorporation of the Faculty of Actuaries of Scotland, granted in 1868, thus sets forth the duties of an actuary :—Firstly, to take care that the institution under his charge, or which may at any time desire his opinion and advice, is founded on a safe basis, both as regards the rate of mortality assumed for any particular coun try, class, or sex, and the rate of interest at which it may be calculated the money entrusted to the care of such institution can be safely improved. Secondly, to ascertain from time to time, as the institution makes progress, by appropriate calculations, whether the rate of mortality actually experienced, and the rate of interest realised, are in accordance with the data assumed. For the performance of these duties it is evident that not only a sound knowledge of mathematical principles is required, but also the practical application of financial judgment and experience. In addition to the requirements of Life Insurance Com panies, the profession of actuary is largely called into requisition, in the same manner as that of a barrister, in advising and directing the public in regard to a great variety of pecuniary interests, frequently involving interests of large amount.

In English Law, the first mention of the word occurs in the Friendly Societies Act, 1819, where we find " professional actuaries, or persons.skilled in calculation." At present they are met with in law only in the various Friendly Societies Acts, 1833-1896. The Institute publishes a quarterly Journal. Its contents may with confidence be recommended to students, embracing as it does papers of the highest importance in connection with the doctrine, hiitory, and practice of life insurance, and vital and other statistics bearing thereon.