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th This book is published to commemorate the 50 Anniversary of the S.S. Huebner Foundation for Insurance Education. Administered at the Wharton School of the University of Pennsylvania, the Huebner Foundation was established in 1941 to strengthen insurance education at the collegiate level by increasing the number of professors specializing in insurance and enriching the literature in the field. The financial support of leading life insurance companies has enabled the Foundation to provide post-graduate education for prospective insurance teachers and scholars. Through its fellowship program, the Foundation supports students in the Ph.D. program in Risk and Insurance at the Wharton School. The success of the Foundation is measured by the accomplishments of its alumni. Former Huebner Fellows play leading roles in every major area of insurance education. Fellows teach insurance to tens of thousands of undergraduate and MBA students each year and have written hundreds of books and thousands of articles on insurance. Fellows hold leadership positions at the American College, the Life Office Management Association, and the Certified Employee Benefit Specialist Program. The Foundation was created in honor of Dr. Solomon S. Huebner, a pioneer in insurance education. Dr. Huebner taught the first organized course on the economics of insurance ever offered at the collegiate level in 1904. An internationally recognized author and teacher, Dr. Huebner had a profound impact on both insurance education and the insurance industry. He served on the faculty of the Wharton School for more than nearly fifty years.

Two different applications have been considered, automobile claims from Massachusetts and health expenses from the Netherlands. We have fit 11 different distributions to these data. The distributions are conveniently nested within a single four parameter distribution, the generalized beta of the second type. This relationship facilitates analysis and comparisons. In both cases the GB2 provided the best fit and the Burr 3 is the best three parameter model. In the case of automobile claims, the flexibility of the GB2 provides a statistically siE;nificant improvement in fit over all other models. In the case of Dutch health expenses the improvement of the GB2 relative to several alternatives was not statistically significant. * The author appreciates the research assistance of Mark Bean, Young Yong Kim and Steve White. The data used were provided by Richard Derrig of The Massachusetts Automobile Rating and Accident Prevention Bureau and by Bob Van der Laan and The Silver Cross Foundation for the medical insurance claim data. 2~ REFERENCES Arnold, B. C. 1983. Pareto Distributions. Bartonsville: International Cooperative Publishing House. Cummins, J. D. and L. R. Freifelder. 1978. A comparative analysis of alternative maximum probable yearly aggregate loss estimators. Journal of Risk and Insurance 45:27-52. *Cummins, J. D., G. Dionne, and L. Maistre. 1987. Application of the GB2 family of distributions in collective risk theory. University of Pennsylvania: Mimeographed manuscript. Hogg, R. V. and S. A. Klugman. 1983. On the estimation of long tailed skewed distributions with actuarial applications.

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The local justification of beliefs and hypotheses has recently become a major concern for epistemologists and philosophers of induction. As such, the problem of local justification is not entirely new. Most pragmatists had addressed themselves to it, and so did, to some extent, many classical inductivists in the Bacon-Whewell-Mill tradition. In the last few decades, however, the use of logic and semantics, probability calculus, statistical methods, and decision-theoretic concepts in the reconstruction of in­ ductive inference has revealed some important technical respects in which inductive justification can be local: the choice of a language, with its syntactic and semantic features, the relativity of probabilistic evalua­ tions to an initial body of evidence or background knowledge and to an agent's utilities and preferences, etc. Some paradoxes and difficulties encountered by purely formal accounts of inductive justification, the erosion of the once dominant empiricist position, which most approaches to induction took for granted, and the increasing challenge of noninduc­ tivist epistemolgies have underscored the need of accounting for the methodological problems of applying inductive logic to real life contexts, particularly in science. As a result, in the late fifties and sixties, several related developments pointed to a new, local approach to inductive justification.

Local anesthetics are among the most widely used drugs. Their development over the past century ranges from a documented influence on Freud's Interpretation of Dreams 1 to the synthesis of the ubiquitously popular lidocaine, as described in Chapter 1. For surgical procedures the use of regional, epidural and intrathecal local anesthesia has increased continuously during the past decade. Local anesthetics are also applied by physicians to ameliorate unpleasant sensations and reactions to other procedures, such as tracheal intubation. The presence or the threat of cardiac arrhythmias is often countered by chronic administration oflocal anesthetic-like agents, such as lidocaine or procainamide. Relief of acute pain, accompanying dental manipulations, for example, and of chronic pain are also accomplished with traditional local anesthetics. And over-the-counter formula­ tions of topical local anesthetics provide practitioners of solar indiscretion welcome relief from their otherwise unaccommodating sunburn. In all these applications the final effect of the local anesthetic is an inhibition of electrical activity, accomplished as a reduction or total blockade of action potentials. The primary site of action is the sodium channel, a transmembrane protein which is essential for the influx of sodium ions that subserves impulse generation and propagation in nerves, skeletal muscle, and heart. The detailed mechanisms oflocal anesthetic action are still being investigated and Chapter 2 of this volume provides a current overview of that subject.

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