A ~ ~ THE INSTIWTE OF AcTuARIES OF AuSTRALIA A.C.N. 000 423 656 Transactions 1992 ISSN 1033-0763 © 1993 The Institute of Actuaries of Australia R.J. Atfield, FIA,FIAA President of The Institute of Actuaries of Australia THE INSTITUTE OF ACTUARIES OF AUSTRALIA Suite 1, 8th Floor, 49 Market Street Sydney NSW 2000 (Tel: 02 264 2411 l FOUNDED 1897 INCORPORATED 1963 COUNCIL & OFFICERS 1991-92 President RODNEY JOHN ATFIELD, FIA (1988) Senior Vice President Vice President RONALD WILLIAM CHAMPION ROBERT GEORGE GLADING FFA (1987} BSc,FIA (1989} Immediate Past President CATHERINE MARY PRIME, BSc,FIA,DipLaw,ASA ( 1988} Council (1991} KEVIN FRANCIS ALLPORT, BA,FIA (1989} GEOFFREY MICHAEL ATKINS, BA,FIA (1991} IAN FRASER BELL, FIA ( 1990) GEOFFREY FRANK BURGESS, BA,FIA (1991) BRUCE ANTHONY HOWE, BEc(Hons),UM (1989) JOHN KENT, FIA,ASA (1989) STEPHEN PAUL MILES, BA,FIA (1990} PHILIP ROGER MUIR, FIA (1991} JOHN JOSEPH REID, BSc,FIA (1991} DAVID ANDREW SCOTT, BA (1990} WALTER ADRIAN SCOTT, FFA (1990) JOHN ERNEST WALSH, BSc,AIA,ASA (1990} BARRY CHARLES ARTHUR WELLAND, FIA ( 1989} CHRISTOPHER JOHN WHITE, FIA,ASA Secretary & Treasurer ROBIN VALENTINE CAREY, MA,FIA,ASA The year in brackets is the year of election to Council. PAST PRESIDENTS The Actuarial Society of New South Wales 1897-1918 The Actuarial Society of Australasia 1919-1959 The Actuarial Society of Australia and New Zealand 1960-1962 The Institute of Actuaries of Australia and New Zealand 1963-1976 The Institute of Actuaries of Australia. 1977 on President Year W.R. Dovey, FFA, AlA 1897 D. Carment, FIA, FFA, FAS 1898 E.M. Moors, MA, FIA 1899 R. Teece, FIA, FFA, FAS, FSS 1900 W. R. Day, FIA 1901 T.W. Bremner, FFA, AlA 1902 R.D. Miller, FFA 1903 G.F. Diamond, AlA 1904 R. Teece, FIA, FFA, FAS, FSS 1905 D. Carment, FIA, FFA, FAS 1906 A.C. Hollingworth, AlA 1907 E.M. Moors, MA, FIA 1908 A. Jobson, AlA 1909 C.A. Elliott, FIA 1910 W.R. Day, FIA 1911 W.R. Day, FIA 1912 G.F. Diamond, AlA 1913 R. Tho dey, FIA 1914 D. Carment, FIA, FFA, FAS 1915 B. Latham, AlA 1916 A.W. Sneddon, FIA 1917 J.J. Kelly, FIA 1918 A.C. Hollingworth, AlA 1919 A.M. Laughton, FIA, FFA 1920 M.C. Alder, AlA 1921 H.M. Jackson, FIA 1922 T.W. Bremner, FFA, AlA 1923 C.H. Wickens, FIA, FSS. 1924 R.D. Miller, FFA 1925 J.S. Wilson, FIA 1926 B. Latham, AlA 1927 F.C. McPhail, AlA 1928 C.A. Elliott, FIA 1929 H.M. Jackson, FIA 1930 A.T. Traversi, FIA 1931 P.O. Touzel, AlA 1932 H. Vaughan, FIA 1933 PAST PRESIDENTS J.J. Lohan, AlA 1934 L.S. Polden, FIA 1935 A.C. Bradbury, FIA 1936 F.F. Innes, FIA 1937 0. Gawler, FIA 1938 G.E. Moore, AlA 1939 D. Drybrough, MA, FFA 1940 C. Gostelow, FIA 1941 E.H. Templeton, FIA 1942 L.W. Offord, FIA 1943 H.G. Walker, BCE, FIA 1944 W.J. Cooksey, BSc, FFA 1945 W.J. Falconer, FFA 1946 H. Vaughan, FIA 1947 J.B. Fletcher, MA, FFA 1948 W.J. Dowd, BA. FIA 1949 L. Shotlander, MA, AlA 1950 L.G. Oxby, FIA 1951 A.M. Parker, FIA, FSS 1952 P.C. Wickens, MA, LLM, FIA 1953 G.B. Palmer, FIA 1954 A.H. Pollard, MSc, MSc(Econ).PhD, FIA 1955 S.J.R. Chatten, FIA 1956 G.R. Kensit, MA. FIA, FSS 1957 R.B. Levey, FIA 1958 K.J. Hedley, BCom, FFA, FSS, FIS, ASA 1959 V.H. Arnold, FIA, ASA 1960 A.W.R. Wheatley, FIA, ASA 1961 G.C. Lane, FIA, ASA 1962 E.H. Templeton, FIA 1963 F. Ross, BA, FIA 1964 H.V. Napier, FIA 1965 L.J. Cohn, FFA, ASA 1966 S.W. Caffin, FIA, FSS, ASA 1967 B. Whittle, FFA 1968 J.M. Anderson, FIA, ASA 1969 C.J. Stevens, FIA 1970 F.J. Young, FIA 1971 M.J. Werner, FFA. ASA 1972 R.M. Craig, FIA 1973 J.G. Rutherford, FIA 1974 R.F. McDonald, FFA 1975 R.C. Palmer, FIA, ASA 1976 B.R. Paul, FIA 1977 R.G. McCrossin, FIA 1978 G.L. Melville, BA. FIA, ASA 1979 A.E.M. Geddes, BA, BCom, FIA, ASA, AASA 1980 PAST PRESIDENTS D.J. Kimber, FIA 1981 W.K. Roberts, FIA 1982 O.F. Roach, MA, FIA 1983 J. Graham, FFA, MAAA, ASA, ASIA 1984 T.C. Jenkins, FIA 1985 B.C. Amend, FIA, ASA 1986 J.H. Pollard, BSc, PhD, FIA, FSS, FASSA 1987 G.B.K. Trahair, FIA, ASA 1988 J.R. Hunter, FFA 1989 J.F.M. Ross, FFA, AlA 1990 C.M. Prime, BSc,FIA,Diplaw,ASA 1991 CONTENTS Page Presidential Address- R.J. Atfield 7 Mismatching Reserves for Investment Account Business - Capital Adequacy Sub-Committee 60 Capital Adequacy - Traditional Business - Capital Adequacy Sub-Committee 73 Impaired Lives- A Company's Experience over 25 years - K.S. Pike, J.G. Richards 87 Inwards (General) Reinsurance- O.F. Roach 145 Stochastic Investment Models- R.M. FitzHerbert 197 Continuing Professional Development - Education Management Committee 276 Maintainable Earnings and Actuarial Methods for Valuing Life Insurance Companies - A.M. Coleman, B.A. Edwards, D.M. Torrance 307 Retirement Incomes Policy Statement - Retirement Incomes Policy Committee 473 Members' Forum The Actuary of the Future 538 Actuaries and the Media 566 Supply and Demand for Actuaries 608 Monitoring Compliance 616 Continuing Professional Development 619 Superannuation Guarantee Issues - Superannuation Practice Committee 622 Standard for Determination of Capital Adequacy Reserves - Capital Adequacy Sub-Committee 643 CONTENTS BULLETIN 1992 Court Decisions 716 Administrative Appeals Tribunal Decisions 723 Statutes 726 Australian Publications 1992 727 Aids Report No 6 728 1992 EXAMINATIONS 745 Examiners 746 Tuition 747 Tutors 748 Results 749 Papers 754