THE LIFE INSURANCE DEPARTMENT.

New Zealand Herald, Volume XXXI, Issue 9617, 15 September 1894, Page 4

THE LIFE INSURANCE DEPARTMENT.

Mb. John Allen, of Pukekohe, draws attention to the position of the Government ' Life Insurance Department. Those insured in that department have in the hands of the Government, money to the amount of close on £1,000,000, on which the Government allow 4 or 4£ per cent, interest. We have heard it stated, indeed, that on a very large amount in the possession of the Government, belonging to this department, only 2| or 3 per cent, is allowed to the department. It is quite right that a considerable amount of the funds of the department should be invested in such form as should be readily negotiable, but the Government seem to have ' ' collared" an altogether disproportionate amount. TheLifelnsuranceDepartment is not like a bank, on which at any moment there may be a run. The managers should know to a small amount what will be their responsibilities in any given period, and if these are provided for they are safe, with ordinary care. All the other funds should be dealt with in the way most* conducive to the interests of the policyholders. The Government Insurance Department should not be treated merely as a piece of machinery for collecting money to be available for the Government at a low rate of interest. The Government are going to London for a considerable sum in order to lend it to farmers at 5 per cent. It would be far better for them to liberate

half-a-million of the Insurance funds, and to allow the department to lend it to settlers at sor 5£ per cent. In that way the interest would be kept in the country instead of being transmitted to London, and the policy-holders of the department would obtain larger bonuses than they at present do.