THE GOVERNMENT LIFE INSURANCE BONUS.

Observer, Volume 2, Issue 45, 23 July 1881, Page 504

THE GOVERNMENT LIFE INSURANCE BONUS.

" Parturiunt monies, nctscitur ridiculus onvs." Our readers will please excuse this parade of our classical attainments, but the proverb is so apropos to the position of the Government Insurance and their long-looked-for bonus, now publicly announced, that we feel none other so aptly expresses the extremely ludicrous aspect of the grand denoueoiient. "The mountains are in labour, and a ridiculous mouse is brought forth." For ten long years the Government Life Insurance mountain has been in labour ; for ten long years the eyes of the devoted insurers have been anxiously Avatching the earthquaky and erratic movement of the mountain and the volumes of fire and smoke that have issued from it from time to time ; for ten long years their ears have ibeen sometimes tickled with sweet sounds emanating from it, and sometimes horrified with the most discordant noises, until at last, when they were all nearly beside themselves with anxiety, a miserable little mouse in the shape of a divisible bonus of £50,000 comes crawling forth, and the worst and the best are alike known. The orifice for the exit of this "ridiculous mouse " was caused by a lightning flash, on which travelled the words — ' ' Finances department: Surplus £77,000, very good; recommend divide £50,000. The results are creditable to the department." And the message came from the two eminent London actuaries who for the small gratuity of £2000 have kindly lent their aid to work out this enormous calculation, and supplement the efforts of the eminent New Zealand actuary, Mr Godfrey Knight, who receives £600 a-year for doing the same work. £2000 represents one twenty-fifth of the whole divisible bonus, which thus quietly glides away before the eyes of the hungry policy-holders into the pockets of the eminent London actuaries. But let us analyse this divisible bomis, and compare it with (for instance) the quinquennial bonus of the Australian Mutual Provident Society. We select the latter because it is to a considerable extent a typical society. It stands very high in the public estimation, it is a purely mutual society, and the premiums charged are low, though not quite so low as those charged by the New Zealand Government. Besides this the Government Insurance have more than once challenged and drawn comparisons between themselves and this society, to the disparagement of the latter. They have even had the audacity to publish under the sacred emblem of the Royal Arms — an emblem that all true Englishmen revere and trust — false and misleading statements in order to aggrandise themselves at the expense of the A.M.P. Society. Thisis a base prostitution of the insignia of royalty, and if the fact were brought before Her Majesty's Privy Council, would no doubt caxise them to interfere and stop the Life Insurance branch of the New Zealand Civil Service from ever afterwards placing the Royal Arms at the head of their puffing advertisements. The New Zealand Press generally, not knowing perhaps, or not caring to analyse, the state of the Government Insurance Department, have gone into transports of delight over its now (as they say) ascertained stability. The Auckland Herald has almost daily, since the result was known, sung a pean over this miserable mouse, which, according to them, must be a whole drove of elephants. Unfortunately for the Herald in its last Saturday's issue appears a paragraph over the well-known signature of "Toby Twinkle" which will completely destroy the effect of their previous jubilations. ' ' Toby " hits the right nail on the head. He says, " What do the eminent English actuaries know about the value of the lives taken ?" " Better," he says, "keep the money in hand, Nobody has got any money in the affair, nobody is interested in seeing that all's right. Bad idea this Government Insurance with no interested control. Wants careful watching, or the Colony will open its eyes one of these days and have to pay the piper." Bravo, "Toby;" your candour is commendable. But how came such a paragraph to slip into the columns of the Herald ? But there is one thing the public would like to know — that is, what body is to authorise the division and payment of this £50,000 bonus? Are the public completely at the mercy of the two eminent London actuaries ? Will the Insurance Department, without the sanction of Parliament, proceed to pay away money on this account ? Surely the members of the House of Representatives, who are the custodians of the public purse, will have a voice in this matter. As the said public purse is chargeable with the guarantee of the payment of the policies, it is manifestly the duty of the members to see that that purse is not jeopardised. Again, ought not, and will not, this bonus be subject to the ten per cent, reduction? There are many members of the House thoroughly well fitted to discuss and criticise the finance of the Insurance Department ; there are many others who imagine they arc equally well qualified, and we foresee an interesting but peculiarly unbusiness-like wrangle should this matter of the division of profits be debated in the House. We see the Great Mogul of the department proposes to get authority from the House to form another insurance Board. Yet another Board ! If he succeeds this will make the fourth or fifth, for really we have almost lost count of them ! But the members of the House will be false to their duties if they allow a matter where millions of money are at stake to be taken oxit of their control and placed in the hands of irresponsible persons. But now let us glance at this Government bonus. According to the telegrams, a policy of £1000 of ten years standing, will become entitled to a reversionary bonus of about £40. Supposing the policy holder to have been 25 years of age when he joined, he will have paid the Government in premiums a sum of £160 8s 6d, leaving a balance in favor of Government of £120 Ss 6d. Taking a similar case in the A.M.P. Society, a man in 1869 aged 25, took out a policy for £1000. Nine years afterwards, that is in 1878, when the last bonus was declared, the man was entitled to a reversionary bonus of £308 10s. In the nine years he had paid a sum of £191 18s 6d in premiums, leaving

a balance therefore in his favor of £116 11s Gd. Had this man insured with the Government instead of the A.M.P. he would have been £120 to the bad, instead of being, as he is, £116 to the good. In 1854 a man insured with the A.M.P. for £1000, in 1878 his bonus additions amounted to £1133, that is, his policy then, which was originally £1000, had increased to £2133. According to the ridiculous mouse style of the Government operations, this man's reversionary bonus would amount in the same time to £100 !! ! The last divisible bonus of the A.M.P. Society in Jive years as much exceeded half a million, as the whole surplus of the Government Department amounted to in ten years. We have received communications from various parts of the colony commenting on the papers recently published in the Observer on the Government Insurance Department, one of them just to hand when space offers, we purpose publishing. Our correspondent in it enlarges on the "radical vice" of the Department, namely, that of taking bad lives. We were fully aware of this "vice," it is, in fact, a subject of public notoriety. We know one private insurance office where it used to be, and may be now, a standing joke, to hand over all the bad and rejected lives to the Government Agent, who eagerly snapped them up, cheerfully paying half commission for the lives thus run in. The following on dit is clipped from the Wellington New Zealand Times : — "A gentleman holding an important position in connection with a statistical Government Department having sent in his resignation, it is rumoured that the Government intend to transfer to his post an officer in another department, whose duties at present comprises calculating work of a similar character, and that the position vacated by the Latter will not be filled up, but that two consulting officials are to be appointed — namely, an eminent mathematician in the South Island and the gentleman who is to be transferred. This mysterious announcement means that Mr Frankland, the Government actuary to the Friendly Societies, has been forced to succumb to the malign influences of the Department, and that Godfrey Knight and an "eminent mathematician" are to be appointed consulting actuaries to the Government Insurance Department. Want of space precludes us from dwelling upon this new departure, but we may en passant congratulate Mr Knight upon at last having got rid of his bete noir, Mr Frankland. The latter gentleman was the only one in the whole Department whose figures and calculations were reliable ; in fact, though a very young man, he has a remarkable talent for high mathematics, and the Government will sustain a serious loss through his resignation.