ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1908.

Appendix to the Journals of the House of Representatives, 1909 Session II, H-08

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1909. NEW ZEALAND.

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1908.

Presented to both Rouses of the General Assembly pursuant to the Provisions of " The Government Life Insurance Act, 1908."

Government Insurance Office, Wellington, 15th May, 1909. I have the honour to submit the following report upon the transactions of the Department for* the year ended the 31st December, 1908, and its position at that date. The Revenue Account, Balance-sheet, and Statement of business are appended. New Business. —During the year 3,863 proposals were dealt with, for the assurance of ,£"908,691, and the number of policies actually completed was 3,282, assuring ,£"780,597, being £"28,532 in advance of the new business for the previous year. The annual premiums on new policies amounted to £"24,562. Twenty-four annuities were also granted, on which the purchase-money amounted to £"9,755 • The very steady rate of progress of the Department's new business will be seen from a comparison of the figures for the past five years : —

Total Business in Force. —The total business now in force is 46,674 policies, assuring £"10,955,749 (and £"1,068,950 bonuses) at death or maturity, together with 359 immediate and deferred annuities for £"20,679 per annum ; the total business bearing an annual premium income of £"331.830. In the Civil Service section, which is included in the foregoing total business, there were 142 policies, assuring £"33,046 (and £"1,071 bonuses), and entitling the survivors at age sixty to annuities amounting to £"3,820 per annum, the annual premium income being £"1,554. As was foreshadowed in last year's report, the bulk of the Civil Service annuity assurances were relinquished during the year, this being the natural result of " The Public Service Superannuation Act, 1907. In a number of cases, however, policies under other tables were effected in exchange to make further family provision in the event of death, the amount provided by the Superannuation Fund—viz., £~iB per annum to widows, and £"13 per annum to children under fourteen— not being sufficiently large to render other provision unnecessary. Income. —The total income of the year was £"534,441, made up as follows :— £ New premiums (including single premiums) ... ... ... 25,957 Renewal premiums ... ... ... ... ... ... 304,849 Purchase-money for annuities ... ... ... ... 9,755 Interest ... ... ... ••• ... ... ... 193,870 Fees ... ... ... ... ■•• ■■ ... 10 Total income for 1908 ... ... ... ... £"534,441 The renewal premiums showed only a relatively small increase during the year owing to the large number of Civil Service policies which were discontinued through the operation of the Superannuation Act, but the income from interest showed a satisfactory increase of £"10,252, the average rate earned on the mean funds having increased from £"4 10s. 3d. to £"4 12s. 2d. per cent. Attention is drawn to the steady increase of income from the two principal sources, premiums and interest, during the past few years, as shown by the following :—

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' Year. New Sum as; New Sum assured. Increase on Previous Year. 1904 ... 1905 ... 1906 1907 ... 1908 £ 694.556 716,021 729,105 752,065 780,597 £ 21,465 13,084 22,960 28,532

Year. Premium Income (excluding Annuities). Interest. Total Income. 904 ... 905 ... 906 ... 907 ... 908 ... £ 309,239 314,003 319.775 325.903 330,806 £ 158,196 169,153 175,512 183,618 193,870 £ 480,716 490,925 507,070 526,713 534.441

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Outgo. —During the year 407 policies became void by death, for claims amounting to £"132,428. This is a decrease in amount as compared with the previous year, and considerably under what is provided for in the tables of mortality used by the Department. Three hundred and eighty-two policies also matured as claims during lifetime for £"101,829, an d it will be of interest to know that £"3,661,650 has been paid in respect of claims by death and survival since the Department was founded thirty-nine years ago. The ordinary surrenders amounted to (as against in 1907, and £"32,810 in 1906), and a further sum of £ 25,234 has been paid to Civil servants on relinquishing their policies in order to join the Superannuation Fund. There is reason to believe that the passing of the Public Service Superannuation Act, besides being responsible for .the whole of the latter item, has also been partly the cause of the increase in ordinary surrenders, as quite a number of ordinary policies have been given up by Civil servants on the ground that they could not afford to keep them in force after joining the Superannuation Fund. On the other hand, loans released by surrender decreased from £"20,680 to £"18,121, and the sum assured under lapsed policies is about £Ti2,000 less than in 1907. Accumulated Funds. —The net increase in the funds during the year (after payment of the surrender value of the Civil Service policies and providing a further addition of £"20,000 to strengthen the Investment Fluctuation Reserve) amounted to £"117,273, and the total assurance, annuity, and endowment funds, apart from special reserves, now exceed four and a quarter millions, standing as an actual fact at £"4,264,685. The following statement shows the progressive growth of the Department in this and other respects during the past twenty years :—

The Balance-sheet. —On the 31st December, 1908, the total assets of the Department amounted to £4,399,848, and were invested as shown in the following comparative statement: —

The chief items of interest in the balance-sheet are the following :— (1) The item " Properties acquired by foreclosure " has again disappeared from the assets, the Department having no foreclosed properties on its hands. (2) The total investments show an increase of ,£"221,471, now amounting to £"4,276,470. (3) Cash in hand and on current account has decreased from £"94,644 to £"17,288, the difference being invested in mortgages on property anJ other securities bearing a higher rate of interest than that of the bank. Triennial Investigation. —The valuation of the Department's liabilities on the 31st December last was completed early in the present year, and the full particulars are contained in the Actuary's report. A strict net premium valuation on the basis of H m per cent, disclosed a surplus of £"249,196, after allowing for £"13,138 interim bonuses paid during the triennium, and making a further provision of £"20,000 towards the Investment Fluctuation Reserve. Of the surplus £"56,766 was carried forward for the purpose of still further strengthening the valuation basis in the near future, and the balance of £"192,430 was applied to provide bonus additions to all participating policies by the compound reversionary bonus method, by which policyholders receive bonuses not only on the sum assured, but on all the previously allotted bonuses which have not been surrendered. The resulting bonus rate to policies in the General Section was 20s. per cent, per annum, and in the Temperance Section 225. per cent. In the Valuation report attention is drawn to the satisfactory results of the last triennium, in consequence of which " the Department is now in a position to allot increased bonuses all round, and also to make such substantial reserves as will enable it to commence another triennial period of activity with every confidence." J. H. RICHARDSON, Government Insurance Commissioner.

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Year. Policies in Force. ———— —- Total Income. Number. Sum assured. Bonuses. Annuities. Policies in Force. Accumulated Funds. Total Ratio of Total Expenses (excluding Taxes) to Total Premium Income. Income. {excluding Taxes). 1888 1898 1908 £ £ £ £ 26,168 7,076,252 286,236 4,540 282,201 .. J 37,848 9,304,741 819,486 20,906 410,148 ■■ 47,033 10,955.749 1,068,950 20,679 534,441 £ 1,452,479 2,861,534 4,264,685 £ 42.361 50,075 56,420 Per cent. Per cent. 150 203 I2'2 l8'O 106 i6-6

At 31st December, 1907. At 31st Dei :ember, 1908. Amount. Percentage of Total Assets. Class of Investment. Amount. Percentage of Total Assets. £ 2,388,021 697-054 667,996 176,804 122,436 104,467 94,644 56-2 per cent. 16-4 „ 157 4'2 2-9 2-4 2-2 Mortgages on freehold property Loans on policies Government securities Local bodies' debentures ... Landed and house property Miscellaneous assets Cash on current account ... £ 2,571,865 73°.865 668,oi3 I2 4>325 107,983 17,288 58-5 per cent. i6-6 15-2 4 -1 2-8 2-4 o'4 £\, 251,422 loco per cent. Total ... ioo'o per cent.

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Revenue Account of the Government Life Insurance Department for the Year ended 31st December, 1908. £ a. d. Death claims under polioies, Assurance, £ s. d. Amount of Funds at Ist January, 1908 4,147,411 9 6 including bonus additions .. .. 132,427 13 0 Renewal premiums — Assuranoe, An- Endowment Assurances matured, innuity, and Endowment .. .. 304,848 9 0 oluding bonus additions .. .. 97,928 18 0 New premiums (including instalments Endowments matured .. .. 3,900 0 0 of first year's premiums falling due Premiums returned on endowments .. 65 5 4 in the year) .. .. .. 22,600 14 11 Bonuses surrendered for oash .. 2,039 14 10 Single premiums—Assuranoe and En- Annuities .. .. .. .. 15,118 17 2 dowment .. .. .. 3,356 8 11 Surrenders—Ordinary .. .. 33,927 9 8 Consideration for Annuities .. .. 9,755 8 9 . Civil Service polioies reInterest .. .. .. .. 193,869 11 3 linquished in terms of Fees .. .. .. .. 9 17 8 section 14 of " The Public Service Superannuation Act, 1907" .. 25,234 3 0 Loans released by surrender .. .. 18,121 4 11 Commission, new* .. £15,378 18 3 renewal 2,358 13 3 17,737 11 6 Land and Inoome Tax .. .. 11,984 2 0 Expenses of management— Salaries —■ Head Offioe .. £15,801 19 2 Branoh offioes and agents .. .. 6,942 19 0 Extra clerical assistance 303 3 0 Medical fees and expenses .. .. 4,449 810 Travelling-expenses .. 668 3 9 Advertising .. .. 1,022 14 9 Printing and stationery 1,113 15 1 Rent .. .. 2,661 10 11 Postage and telegrams 1,418 4 2 Exchange .. .. 86 1 4 Office-furniture depreciation .. .. 270 9 3 General expenses .. 2,968 5 6 Triennial expenses .. 975 6 8 38,682 1 5 Investment Fluctuation Reserve .. 20,000 0 0 Amount of Funds, 31st Deoember, 1908 4,264,684 19 2 £4,681,852 o_o £4,681,852 0 0 * Including Agents' allowances. Balance-sheet of the Government Life Insurance Department on 31st December, 1908. Liabilities. Assets. £ s. d. £ s. d. £ s. d. Total Assurance, Annuity, and En- Loans on polioies .. .. 730,865 5 10 dowment Funds (as per Revenue Government securitiesAccount) .. .. .. 4,264,684 19 2 Consolidated stock .. 625,900 0 0 Claims admitted, proofs not yet com- Railway debentures pleted .. .. .. .. 30,292 7 1 (guaranteed by GoAnnuities .. .. .. .. 249 0 2 vernment) .. 40,000 0 0 Commission .. .. .. 353 5 8 Debentures issued Medical fees .. .. .. 491 8 0 under " The ImmiPremium and other deposits.. .. 5,355 14 11 gration and Publio Tontine Savings Fund No. 2 .. 14,757 10 8 Works Act, 1870" 2,112 18 5 Investment Fluctuation Reserve .. 83,663 6 1 668,012 18 5 Municipal Corporation debentures .. 137,947 12 1 County securities .. .. .. 360 15 6 Harbour Board debentures .. .. 39,000 0 0 Town Board debentures .. .. 2,200 0 0 Landed and house property .. .. 124,325 1 2. Office furniture (Head Offioe and agenoies) .. .. .. 1,893 5 0 Mortgages on property .. .. 2,571,865 1 11 Properties acquired by foreclosure .. Nil. Overdue premiums on policies in force .. 5,468 5 8 Outstanding premiums due but not overdue.. 37,840 4 5 43,308 10 I. Overdue interest .. 1,013 19 11 Outstanding interest due but not overdue.. 7,044 4 2 Interest aeorued but not due .. .. 51,485 4 6 59,543 8 7 Agents'balances .. .. .. 2,641 18 9 Sundry aooounts owing .. ... 595 12 3 Cash in hand and on current aocount.. 17,288 2 2: £4,399,847 11 9 £4,399,847 11 9 Government Life Insurance Department, 12th February, 1909. J. H. Eichaedson, Commissioner. W. B. Hudson, Secretary. Audited and found correct. J. K. Wabbueton, Controller and Auditor-General. Inset—H. 8.

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Statement of Business

YEAR 19O8. TO" No - Assumed sionary - Asswea. Bonuses TOTAL. TAL. Annual Premiums. 1. Ordinary. 2. Extra. Whole-life and Term Assurances. ASSURANCES. Annuities. Annual Sum Kever- | Premiume. No. ABHiired sionary Assured. Bonu8eSt 2 , Ordinary. 2. Extra. ] 1. Immediate. 2. Deferred. 1. Ordinary. 2. Extra. POLI ies issue: AND DISCON'olioies in force at 31st December, 1907 Jew business, 1908 46,945 3,306 £ 10,855,153 780,597 £ 1,124,970 £ s. d. 328,531 14 111 2,714 4 9) 24,482 11 0| 79 4 3) £ s. d. 15,124 2 51 44,493 1 9) 799 1 2 1,055 3 4J 13,123 £ 3,809,301 £ 714,509 £ s. d. 90,509 9 111 1,877 5 11) 114 1 10) 10 0 0J 3 2,662 Total .. 50,251 11,635,750 1,124,970 353,014 5 11) 2,793 9 Of 24,006 13 4) 172 15 Of 15,923 3 7) 45,548 5 If 516 17 0) 40,275 11 If 13,126 3,811,963 714,509 90,623 11 91 1,887 5 11f 3,973 16 61 95 18 9 J 'olicies discontinued during 1908 .. 3,218 680,001 56,020 475 135,297 25,552 'otal Policies in force at 31st December, 1908 47,033 10,955,749 1,068,950 329,007 12 71 2,620 14 Of 15,406 6 71 5,272 14 Of 12,651 3,676,666 688,957 86,649 15 31 1,791 7 2f ARTICUL RS F PO JCIES DISCONHow Discontinued. By Death .. ".: 594 8 0 419 110,280 19,281 3,378 9 111 70 4 4j 3,299 2 11 21 3 7) 4,297 12 4| 29 6 31 5,783 0 O'| 2 19 Oj 256 78,629 16,347 2,255 18 10) 59 9 10/ Maturity 382 83,101 16,563 Surrender 604 134,550 7,519 1,148 9 1 111 31,762 4,051 907 4 41 17 10 2} 80 0 0 'Surrender of Civil Service Policies Surrender of Bonus 770 110,103 3,142 38,854 17 10 6 1,890 141 3,361 2,047 Lapse 1,043 241,967 6,154 7,023 10 71 33 17 4/ 194 13 2 102 23,016 2,966 588 0 111 7 4 4/ Expiry of Policy Expiry of Premiums Miscellaneous 141 12 51 17 2} 83 6 01 13 17 4j 125 9 7) 1 7 2J 17 2 101 10 7 3/ Total 3,218 680,001 56,020 24,006 13 41 172 15 0) 40,792 8 1 475 135,297 25,552 3,973 16 61 95 18 9/ ,og: iESS O BUS! ESS OF T: :e gove ;nm: INT LI 'E IN iURANCE 'otal issued 'otal void 107343 60,310 26,046,908 15,091,219 2,222,728 1,153,778 f806,621 0 01 1 14,351 16 6f |477,613 7 Si I 11,731 2 6J 84,209 ' 0 0 39,612 11,703,057 1,436,988 (308,702 6 101 t 10,807 14 11f J 222,052 11 7\ t 9,016 7 9/ 63,529 19 5 26,961 8,026,391 748,031 Total in force 47,033 10,955,749 1,068,950 329,007 12 7 20,679 0 7 12,651 3,676,666 688,957 f 86,649 15 31 1 1,791 7 2/ Extra Premiums Reduction of Premiums by 2,620 14 0 201 13 3 Note.—The Irdinary Premium is the premium charged tonus, :c. £331,829 19 10 *Civil Service policies relinquished in terms Wellington, 1st March, 19'

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at end of Year 1908.

Approximate Cost of Printing. —Preparation, not given ; printing (6,500 copies), £10 Is. 6d.

Authority: John Mackay, Government Printer; Wellington.—l9o9

Price 6d.]

J. H. EICHAEDSON, Commissioner. MOEEIS FOX, Actuary.

ASSURANCES. SIMPLE ' ENDOWMENTS, INVESTMENTS, ETC. ANNUITIES. Endowment Assurances. Annuity Assurances. Sum ? ever - Anniirerl sionary Assured. Bonuses | Annual Premiums. 1. Orditmry. 2. Extra. 1. Sum w„ 0*%?™ Deferred Annual Bionarv" Annuities. Premiums. Bonuses. N Annual Premiums. Annuities. 1. Immediate. 2. Deferred. 1. Sum Assured. Annnnl N °- VS2? Bonuses. No. t: NUED DURl :NG THE YEAR 1908. £ 6,827,664 £ 406,780 £ s. d. 227,809 10 II 836 18 10f 23,540 3 0) 69 4 3 f ' 862 £ 120,195 1 3,681j 5,050[ •• ) £ s. d. 44,370 17 1 £ s. d. 6,407 0 8 £ s. d. £ s. d. 15,124 2 51 122 4 8) 799 1 2| J 749 £ 97,9931 13,100 £ s. d. 3,728 3 8 31,861 3,178 759,785 6 1,055 3 4 284 18 0 3431 7f 24 1 77 10 7 95 543 8 2 0 11 '21 15,923 3 7) 122 4 8/ 516 17 0) 24 12 0) 844 111,093 j ;4,271 11 10 j 35,039 7,587,449 406,780; 251,349 13 1) 906 3 If 14,094 14 8) 76 16 3| 868 125,245) 3,681/ 104, '50) 2,866} 45,426 0 5 6,691 18 8 77 10 7 1,908 431,043 27,602 764 40,250 19 1 5,580 11 4 56 8,911 348 10 10 9 0 0 33,131 7,156,406 379,178 237,254 18 51 829 6 ION ' l 104 20,495) 815) 5,175 1 4 1,111 7 4 3541 5f 68 10 7 15,406 6 7 97 12 8 788 102,182 3,923 1 0 T] INUED dur: NG THE Y: 1908. 149 31,401 2,925 1,110 1 1] 10 14 6) 3,151 19 2) 21 3 7) 3,116 6 21 11 16 If 289 11 01 2 19 0/ 2 250) 9f 97 13 4 12 10 0 12 496 14 8 369 79,190 16,563 13 3,911 147 2 11 436 96,638 3,365 20 2,400) 103 J" 738 101,700) 2,754f 1,103 14 9 124 19 0 3 9 0 0 44 14 4 34 3,750 140 2 10 26 6,513 247 38,854 17 10 5,413 9 0 .. • ' .. 1,314 928 217,301 3,188 6,369 9 5) 26 13 0/ 41 400) 194 13 2 20 18 0 9 * 45 2 3 1,250 16 2 10 57 7 10) 3 10 1/ 8 15 4 1,908 431,043; 27,602 14,094 14 8) i 76 16 3f|| 764 104,750) 40,250 19 1 2,866 J I ■ 40,250 19 1 5,580 11 4 15 9 0 0 541 9 56 8,911 348 10 10 I I ' SINCE DA' TE OF ESTABLISH] rABLISH] DEPARTMEN1 :ent .st DECEMBER, 19 08. j 63,10013,953,422 781,167 (479,331 11 0] j i 3,544 1 7J| 1242,076 12 7) \ 2,714 14 9/ 1105 { 15 l'f 6 l} 57,158 17 2 1001 j 13 3'^gj'51,983 15 10 8,332 11 6 610 265 2 0 27,050 2 10 2,916 | 234 > 2 39 1 ! 9>989 8 g 2jl2g | 132,057 j. J 6i066 7 8 29,969 6,797,016401,989 7,221 4 2 251 196 11 5 11,546 3 7 13,131 7,156,406379,178 [237,254 18 5) 1 829 6 10/ .„. f 20,495) . 117K , 104 1 815) 5 ' 175 1 1,111 7 4 359 68 10 7 j 15,503 19 3 788 { 102 ' 182 |i3,923 1 0 ' ! it the true age; the Extra, ;he additional premium imposed for any reason wliai jsoever. if section 14 of "The Public Service Superannuation Act, 1907. "