the coal stoppage is of interest. In submitting the figures it is right to record that we are satisfied that, despite the great pressure under which they were working during the latter half of the year, the examining officers continued to apply their normal criteria in arriving at an opinion as to whether or not incapacity for work existed.

The cost of the District Medical Service continues, as hitherto, to be a charge against Insurance Funds.

17. Soldiers, Sailors and Airmen.-There has been no change in the general arrangements affecting discharged and disabled members of societies who are receiving highest degree disablement pensions or industrial training allowances.

During the year notification was received from the Ministry of Pensions of 277 awards of 100 per cent. disablement pensions for periods in excess of four weeks, bringing the grand total of approved society members to whom such pensions have been awarded up to 17,323. Only 1,646 of these pensions are, however, still in force. The number of grants of training allowances notified by the Ministry of Labour during the year was 21, the total number notified to 31st December, 1926, being 6,496.

18. Second Valuation of Approved Societies.-During the year the valuations of those societies whose second valuations fell to be made as at 31st December, 1923, were completed. As was forecast in the last Report, the results shewed generally a satisfactory improvement on the 1918 valuation results of the same units. The following table compares the results emerging at the first and second valuations respectively in respect of (1) the units valued in the 1923 group, and (2) all units, whether valued for the second time at 31st December, 1922, or at 31st December, 1923. The figures relate solely to units whose valuation reports fell to be issued by the Department-that is to say, units whose offices or head offices are situated in Scotland, or who elected to have their Scottish membership valued separately from that in other countries. They do not therefore cover the Scottish membership of centralised societies whose head offices are outwith Scotland, and whose membership is not valued separately for Scotland, but they include the extra-Scottish members of international centralised societies whose head offices are in Scotland, and whose membership is valued internationally..

The increased gross deficiency emerging on the second as compared with the first valuation is chiefly due to the fact that the women's section of one of the few societies which has a separate valuation for each sex shewed a deficiency of £2,595 in 1923 compared with £128 in 1918. In all, only one centralised society (of which the women members only were in deficiency) and three branches were in deficiency as at 31st December, 1923. Subsequent to that date, one of the three branches was amalgamated with another branch which had a surplus, and when a revised valuation report was issued a surplus was declared available for the provision of additional benefits to all the members of the new combined unit.

Three societies and four branches, with a total membership of 105,217, while not in deficiency, were found to have no surplus available for the provision of additional benefits.

Taken as a whole, the results of the Second Valuation proved very satisfactory, and afforded convincing proof of the financial stability of the National Health Insurance scheme. A full report on the Second Valuation has been prepared by the Government Actuary and has been placed on sale by H.M. Stationery Office (Cmd. 2785).

19. Schemes of Additional Benefits (1923 Valuation Societies). -Following on the valuation of fourteen societies and 136 branches as at 31st December, 1923, new schemes of additional benefits to be provided out of the surpluses emerging on that valuation came into force on 4th July, 1926, replacing in most cases schemes which had been in force since July 1921. Four societies (one in respect of women members only) and six branches, comprising 113,818 members, were unable to adopt any such schemes, having been found either to be in deficiency or to have no surplus available for distribution. Certain transfers of engagements took place between the date of valuation and the date on which the new schemes were to come into operation, and

the total number of units in the 1923 valuation group in respect of which schemes of additional benefits were approved was 138, consisting of eleven societies (one in respect of male members only) and 127 branches, embracing 969,390 members. schemes are designed to operate for a period of five years.

The

An analysis of the schemes is given in Appendix XIII. Table A shews the extent to which increases in the statutory rates of the cash benefits (usually described as "additional cash benefits") are being given. It will be observed that the great majority of the units are giving additional cash benefits to some extent, and that of the 1,083,208 insured persons covered by the valuation group, 793,852 are now entitled to additional cash benefits, 413,316 being entitled to three or more units additional cash benefits.*

An analysis of the other benefits provided under the new schemes is given in Table B.

20. Second Valuation Schemes of Additional Benefits (1922 and 1923 Societies combined.-Under schemes of additional benefits resulting from the second valuation, the members of 72 societies and 395 branches, numbering in all approximately 1,300,000 insured persons (or 82 per cent. of the total insured), are now entitled to increases in the statutory rates of cash benefits. 770,000 married persons (or 48 per cent. of the insured) are covered by schemes giving three or more units of increase.

The extent to which the various treatment benefits have been provided as a result of the second valuation is shewn in the following table :

One unit additional cash benefits comprises 1s. per week additional sickness benefit, 6d. per week additional disablement benefit, 6d. per week additional Class K sickness or disablement benefit (married women), and 28. additional maternity benefit.

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21. Additional Cash Benefits.-These benefits, consisting as they do merely of increases in the statutory rates of benefit, are distributed by means of machinery already in existence, and in accordance with rules with which societies are well acquainted. Consequently, although they are now available to 82 per cent. of the Scottish membership affected by the second valuation, no difficulties have arisen in regard to their administration.

22. Dental Benefit.-In the Report for 1924 reference was made to the uniform conditions which it was proposed that societies should be required to incorporate in their schemes for the provision of dental benefit. All schemes for the provision of the benefit now in force embody these conditions. Briefly, a society administering the benefit is required by its scheme to defray the whole cost of conservative treatment, and not less than 50 per cent. of the cost of prosthetic work. The society is, however, permitted to adopt a scale of charges for dental treatment, and to determine the cost of treatment in each case, and, consequently, the amount of its liability, by reference thereto, instead of to the cost actually incurred. Further, the member is entitled to the benefit only if he obtains treatment from a registered dentist who is willing to perform the work at the charges laid down in the society's scale. Dental benefit is financed in the same way as all other non-cash additional benefits; that is to say, a society's additional benefits scheme provides for the allocation to the benefit, out of its available surplus, of an annual sum of fixed amount. If and when the sum allocated to any particular period is exhausted, it is contemplated that the society will refuse, or, preferably, defer until the subsequent period of account, the grant of any further applications received. In order, however, to minimise as far as possible the risk of difficulties arising through shortage of funds, we endeavoured to ensure that the sums set aside in societies' schemes for the provision of the benefit were reasonably adequate to meet all claims which might be expected to arise.

The great majority of societies and branches providing dental benefit had adopted a scale of charges agreed to by representatives of certain societies and an organisation of dentists who were willing to treat patients under the arrangements laid down in the schemes. The agreement under which the scale of fees was operative was due to terminate in July last. In common with the Ministry of Health, we considered it essential, in the interests of insured persons, that the administration of dental benefit should be facilitated by a general agreement between societies and dentists which would provide for a recognised standard of treatment, for a generally accepted scale of charges, and for uniformity of procedure and conditions, and at the same time would secure the co-operation of all sections of the dental profession in providing a thoroughly satisfactory service. The Board accordingly collaborated with the Ministry of Health in the establishment in June last of a Dental Benefit Joint Committee, consisting of 28 members, 14 being representative of approved societies and 14 of

the dental profession, to consider the question. Pending the result of their deliberations the old scale of fees was continued for a further period.

Early in August the Committee issued a report recommending the adoption by societies and dentists of a new scale of dental charges which were on the whole somewhat higher than those previously in force. The scale was accompanied by a schedule of conditions to be observed by dentists and societies, and a specification of materials to be used in dental work. The new proposals represented a compromise arrived at after full discussion. and interchange of views between the two sides of the Committee, and were recommended for general adoption by an almost unanimous vote of the Committee. The Committee further recommended that the introduction of the new arrangements should be accompanied by the establishment of a service of Regional Dental Officers charged with duties somewhat similar in character to those of the District Medical Officers.

The Committee's report was submitted to the Consultative Council on National Health Insurance and was unanimously approved. The attention of all societies and branches administering dental benefit was then directed to the agreement arrived at, and they were recommended to adopt the new arrangements as from 1st October.

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Realising that the acceptance by societies of the new scale of charges would result in an increase in their liabilities, and that the increase might in certain cases threaten exhaustion of the funds available for meeting claims, we informed societies that, if satisfied in any particular case that such a position was likely to arise, we would be prepared to relax the condition embodied in the scheme of additional benefits which required them to defray the full cost of conservative treatment. At the close of the year only two applications had been received for such relaxation, but further applications were anticipated.

The recommendation of the Dental Benefit Joint Committee on the subject of a Regional Dental Service also received attention. In conjunction with the Ministry of Health, a scheme was prepared for the establishment of a service of such Officers. On the scheme being approved by the Joint Committee and by the Consultative Council, steps were taken to bring it into operation. The scheme provides for the appointment in Scotland of one whole-time Dental Officer, whose headquarters will be in Glasgow, but who will conduct sessions at appropriate places throughout Scotland as and when required. The services of this officer will only be available to those units which adopt the new scale of charges and conditions referred to above, and his duties will be as follows:

(1) the examination of such estimates for dental treatment and such patients as may be referred to him by the Department, by the Dental Benefit Joint Committee, by approved societies which are parties to the agreed scheme, or by dentists;