The records of papers read before the Students' Society or published in its Journal contain few references to the system whereby surplus is allotted to policyholders primarily in the form of reduction of premium. It is thought that this system would form a suitable subject for discussion and would be of interest to members as well as of value to those students who are concerned in their studies with Valuation and Surplus.

The description of the system contained in Mr R. K. Lochhead's book issued in the Consolidation of Reading Series is necessarily brief, and it may be convenient to enlarge on this by tracing the development of the system in one of the offices which has transacted this class of business for upwards of one hundred years dating from the early 1800's.