GOVERNMENT LIFE INSURANCE

Otago Witness, Issue 3882, 7 August 1928, Page 26

GOVERNMENT LIFE INSURANCE

LABOUR CHARGES.

A COMPLETE REFUTATION

WELLINGTON, July 31. This afternoon, when Mr F. J. Rolleston asked leave to lay on the table of the House of Representatives the annual report of the Government Life Insurance Department, the Labour Party, while admitting the value of this Department of State, argued that it was not being sympathetically administered, and that much more could be done with it in the interests of the public. Mr W. E. Parry (Auckland Central) went so far as to say that the department was not being administered as w-as originally intended. A Government member: Ob, yes it is. Mr R. A. Wright: Are j’ou suggesting a monopoly ? Mr Parry: No. I never mentioned monopoly, but great influence is being used.- and the Government ig falling for that influence from private concerns. Mr J. A. Lee (Auckland East) who

started the discussion, interjected that the institution was too sound even to bq injured bv Reform incompetence. A Mr .R. A. Wright said the Government was just as sympathetic in regard to the Government institution as anyone on the other side of the House, and had never done anything to' hamper it. On the contrary it had been assisted in every way. The Government could not possibly injure the institution. A Labour member: It can go slow. Mr Wright; Nothing of the sort.

The Leader of the Opposition (Mr H. E. Holland) said the charge was that the State Office worked in with the privatelyow’ned institutions. That was the line followed by all our State insurance. It was particularly so in regard to the Bank of New Zealand and the Post Office Savings. Bank The State met the companies in regard to policy. If there was competition better terms would be given than were given at the present time. Mr A. D. M’Leod said the Labour Party, in saying that the Government department was controlled bv the other companies, •was drawing a red herring across the scent. His renly to that was that 90 per cent, of the life policies issued in New Zealand were issued bv concerns that were entirely mutual. The Labour Party was setting up a pure bogey for political purposes. The whole of the profits of these institutions went to those who took out policies in them. Mr R. T. Armstrong (Christchurch East) said that if the Government could put out the private concerns by competition it should do so with a view to creating a State monopoly. Mr F. J. Rolleston said he had only been in charge of the department fiir

a few hours, but he nevertheless m:> ' a very effective reply to the Labour criticisms. He quoted figures to show the great progress the .department had made. Indeed, it was. be said, ahead of every other company doing business in New Zonl.nnd with the exception of the A.M.P Society. JI? -< ; L-,’od: And it is very close up to it.

Mr Rolleston said that in 1928 it was ahead of the A.M.P. Society in the number of policies issued, but he understood that in the last returns the A.M.P was ahead. The whole of the profits were given back to the policy holders. In some cases bonuses were increased. 50 per cent more than thev were, and in some, cases 100 per cent more. As to working in conjunction with other companies, as a mai‘°r of fact there was tierce competition with the other com panics. In any case the Government could not influence the commissioner, because his powers were defined by Act of Parliament, and no Government conld interfere with that. The statement that the policy .charges were fixed in conj.unjtion with the other companies was' incorrect. Mr .1 A. Lee: They are the same.

Mr Rolleston : That is because they are all fixed actuarially. In anv comparison that was made it had also to be remembered that several of the other companies did considerable business outside New Zealand Mr Lee had given the Government the greatest opportunity of showing how well’ the institution was being run.

REPORT OF DEPARTMENT.

NET SURPLUS EXCEEDS £200,000.

WELLINGTON, July 31

The annual report of the Government Life Insurance Department for the year ended December 31 last, which was presented to Parliament to-day, states that the amount of new business has been satisfactory, 5555 policies having been issued for asurances totalling £1,791,845 with annual premiums amounting to £58,000. Twenty-three annuities were granted, the purchase money being £14,329. The total business now in force (including immediate and deferred annuities for £24,914 per annum) comprises 06,856 policies bearing -an annnual premium income of £595,780. Tire total sum assured is £19,303,916, to which reversionary bonuses amounting to £1,973,434 have been added.

The total income of the department for the year was £987,326, made up as follows:—Premium income £586,535; interest and rents (after payment of land and income tax £15,235), £386,462; and annuity purchase money, £14,329. During the year 1046 policies matured for £275,069 and 495 policies became claims by the death of the assured, the amount payable being £198,130. These figures bring the amount paid in claims since the inception of the office up to £10,732,053. The total assurance fund amounts to £7,303,925, being an increase for the year of £274,341. The department also has an investment fluctuation reserve fund amounting to £209,707. On December 31, 1927, the total assets of the department amounted to £7,584,401. The- total investments increased by over £300,000, practically all of which has been advanced on mortgages of freehold securities. Cash in hand on current account stands at the low figure of £10,161 5s 2d. Adequate provision has been made in respect of the item “£19,331 7s lOd properties acquired by foreclosure.” Moreover, this amount has been reduced to £10,226 by sales since the accounts were made up.

The effective net rate of interest earned was £5 10s. lOd per cent., as compared with £5 Ils Id per cent, earned during the previous year. The slight decrease has been caused by heavier income tax, but it is satisfactory to note that the rate is still considerably greater than the rates earned in previous years. The report adds that the expense ratios show satisfactory reductions. The ratio of expense to total income has come down, from 11.29 in 1924 to 9.84 in: 1927, and the ratio to premium income from 18.46 to 16.17. In accordance with statutory authority the department is now for the first time in its history distributing its profits annually.

The report of the actuary discloses a net surplus of £207,351 (excluding interim bonuses paid during the year) and of this sum £190,500 has been allotted in the form of compound reversionary bonuses upon the sum assured and existing bonuses. The total reversionary bonuses thus allotted amount to £305,484.

Speaking at a Wellington Rotary Club luncheon recently. Dr H. Kenrick Christie told an amusing story about a candidate at a- medical examination, who was- asked what bone he would press in the event of ft certain hcemorrhage occurring (reports the Auckland Star). Another student, wishing to be of service, whispered to the other: “The bone taken from Adam to make Eve.” The candidate, in a flash of understanding, thereupon turned to the examiner and said: “ The backbone 1 ' A Scotsman paid £4OOO at Sotheby's recently for the shield of Prince Charles Edward, the young Pretender, which was presented to him by'his- admirers in 1745; Mr Alexander Fraser, an Inverness dealer, bought it for “ a client whose ancestors were at Culloden,, and who- did not want, it to leave its rightful home, the Highlands.” The Pretender’s pistols brought £2OO, his snuffbox went for £l3o', and the last ruffle worn on the day he marched to Edinburgh £220.