There are three conditions which must be borne in mind in the calculation of office premiums.

Necessity for adequacy. Every premium charged must be sufficient to cover the risk and the expenses which are incurred in connection with the particular policy in question, and also to provide a reasonable contribution towards the general expenses and to leave a margin for profit. The fact that several offices charge very low rates for whole of life without-profit policies seems to indicate that the necessity of complying with this condition is a question on which some difference of opinion exists.

Influence of competition. The rates should compare well with those charged by other companies. An office which charges exceptionally low rates at certain ages or for certain classes of assurance will find that it is issuing a large number of policies in these sections of the business, and that people are going elsewhere for the classes of policy for which its rates are high.

Principle of consistency. The rates charged at differentages, and for different classes of assurance, should be consistent, and the differences between the with-profit and without-profitrates should be reasonable in view of the rate of bonus whichthe office is, in normal times, in the habit of granting.