ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1919.

Appendix to the Journals of the House of Representatives, 1920 Session I, H-08

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1920. NEW ZEAL AND

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1919.

Presented to both Houses of the (feneral Assembly pursuant to the Provisions of the Government, Life Insurance Act, 1908.

Government Insurance Office, Wellington, 28th May, 1920. I have the honour to submit the following report upon the transactions of the Department for the year ended the 31st December, 1919, and its position at that dale. The' Revenue Account, Balance-sheet, and Statement of Business are; appended. New Business and Amontit in Force. --—During the year 5,721 proposals were de'.-ili with, for the' assurance of .£1,876,797. The' number of policies actually completed was 4,983, assuring £1,617,795, with annual premiums amounting to £58,569. These figures constitute a record for the Department. The facilities offereil by the Department's war-loan policies, enabling subscriptions to be made to war loans with the least possible inconvenience, were evidently appreciated by the public, as a large amount of business was done under them. Thirty-seven annuities were also granted, mi which the purchase-money was £20,265. The' total business now in force, including 438 immediate and deferred annuities for £23,195 per annum, is 55,770 policies, bearing an annual premium income of £423,065. The sum assureel, payable at death or maturity, is £14,123,728, to which arc attached reversionary bemuses amounting to £1,423,016. The total business on the boeiks thus amounts to £15,546,744. Income. —The total income of the Department was £701,423 —viz., premium income, £411,306; interest income (h'ss land and income tax), £26!),852; annuity purchase-money, £20,265. Out (jo. —During the- year 758 policies matured, for £180,102; and 648 policies became claims by the death of policyholders, the amounts payable' being £195,341. Of these, 115, for £24,656, represent deaths among the oversea forces through wounds anei sickness, and approximately 93, foi' £24,000, deaths from influenza; The death claims were less by 643 policies, representing £142,426, than in 1918, and in fact were smaller than in any year since' 1914, Accumulated Funds. —The total assurance, annuity, ami endowment funds, apart from a special investment reserve of £288,825, now stand at £5,354,904. The Balance-sheet. —On the 31st December, 1919, the' total assets of the Departmenl amounted to £5,728,681, and were invested as shown in the following statement, which also gives the distribution of the; assets at the end of the previous year for purpose's of comparison : —

As compared with the 1918 balance-sheet, the holdings of war-loan stock by the Life Branch show an increase of £424, 9(V, bringing the total up to £969,900-, in addition to £40,000 debentures under.' the Finance Act, 1915,

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At 31st December, 1918. Class of Investmen*. , Percentage Amount. | , m „t , . ', .„ of Total Assets. At 31st December, 1919. . Amount. . V ?\ C ™^« ot I otal Assets. l_ ' & 3,038,552 53-6 per cent. Mortgages oil freehold property 13-0 „ Loans on policies 1,250,900 22-0 „ Government securities 211,711 3-7 ., Local bodies'debentures 134,864- 2-1 ., Landed and house property .. 128,593 2-3 „ Miscellaneous-assets .. 170,343 3-0 ,, Ca.sh in hand and em current account -t: 2.784,532 ! 48-6 per cent. 733,943 12-8 1,635.800 28-6 210,597 • 3-7 134,83! 2-3 130,179 2-3 98,799 1-7 5,672,981 100-0 per cent. Total 5,728,681 100-U per cent.

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The rate of interest realized on the mean funds, after deduction of land and income tax from interest, was £5 2s. Id. Jubilee of the Department. —The Department, which was established under the- Government Annuities Act, 1869, at the instance! erf the late Sir Julius Vogel, commenced operations in January, 1870, and has therefore completed the first fifty years of its existence. The first Commissioner was the Hon. W. Gisborne (1869-76), who was followed by Mr. Jonas Woodward, Deputy Commissioner (1876-78), Major Charles Heaplry, V.C. (1878-79), Mr. D. M. Luckie (1879-89) and Mr. F. W. Frankland (1889-90). In 1890 the Department came unde-r my charge. Tin- progress of the Department is illustrated by the- following figures:— Date. Funda - June, 1879 ... .. ... ... 371,890 December, 188!) ... ... ... ... 1,582,448 December, 1899 ... ... ... ... 2,997,681 December, 1909 ... ... ... 4,405,141 December, l!)l!) .. .. ... ... 5,354,901 The following Consolidated Revenue Account shows the total receipts from the' commencement, ••mil the manner of their dispersal by payments to policyholders and otherwise:— Consolidated Revenue Account, January, .7870. to December, 1919. £ Funds at commencement .. .. Nil. i Paid to policyholders— £ £ Premiums .. .. .. 11,578,973 ; By Death .. .. 4,739,.56:1 Consideration'for aflnuities .. .. 425,678 ' Maturity .. .. 2/691(047 Interest .. .. .. £5,82(1,882 Annuities .. .. 435,079 Eesstaxes.. .. .. 356,150 Other.. .. .. 1,830,215 5,470,732 I 9,695,904 Tontine funds transferred .. .. 35,314 j Commission .. .. .. .. 655,961 Miscellaneous .. .. .. .. 786 ! Expenses of management .. .. 1,475,554 Reserve for depreciation in securities .. 329,160 Funds at 31st December, 1919 .. .. 5,354,904 £17,511,483 £17,511,483 It will be; seen from this that the total amount paid in by policyholders since the establishment of the' Department has been £12,004,651, of which £9,695.904 has been returned to them in claims, surrenders, &c, while- funds have at the same' time' been accumulated amounting to £5,354,904. The sums paid to policyholders or reserved for future claims therefore amount to £15,050,808, en- 125 per cent, of the premiums received, the interest earned being sufficient to meet all expenses anil arid 25 per cent, to the payments of the assured. In reviewing the Department's history it is impossible to avoid notice of the gigantic event which overshadowed the closing years of the period, and it may be of interest to set oui the Department's position in relation thereto. The Department having always made a feature of charging minimum rates of premium and issuing a policy free from restrictions, there were no restrictions as to military service in respect of those who insured before the war: consequently the bulk of the war losses had to be' borne without extra premium. When the war commenced, persons then insuring were charged an extra premium of 5 per cent, on the sum assured, increased for later entrants to 7i per cent., which was known to be- considerably below the actual cost of the war mortality. 'The war claims numbered 1,756, representing sums assured of £357,514, and of these 1,756 claims an extra premium to cover the war risk had been paid in 216 cases only, and in the remaining 1,54(1 cases, or 88 per cent, of the total, no extra premium was charged. T may say that the mortality amongst the oversea Forces in the- different war years ranged from 8 per cent, to 15 per cent, per annum of the total Force, the average being about 10 per' cent., en- considerably in ewevss of the rate- charged. The extra premiums we're remitted without proof of health at the ederse of the war or on the return of the assured to New Zealand. Consequently an addition io the- loss must be made for subsequent extra mortality through wounds and generally impaired health. The- claims from influenza (which is more or less attributable to the war) amounted io about £100,000, ami when this is taken into account the total sum paid by the Department to the representatives of policyholders dying from war causes cannot have' been loss than £500,000, an amount giving some indication of the importance of the insurance principle in general, and of the operations of tin' Department in particular, in the sere-ial economy of thecountry. As already stated, £1,009,900 has been invested in Government securities since the commencement of the war, and it is satisfactory that the Department has been able to meet the large losses ilne- to the war and render substantial aid financially towards its successful conclusion. Jl may finally be remarked that while the origin of State' life insurance in New Zealand is to be found primarily in the panic resulting from the breakdown of large- insurance concerns in Great Britain in the late "sixties," the' Department lias not only assisted iii placing life insurance in New Zealand upon a. sound basis, but a great feature of its fifty years' work has been the provision of insurance protection at a low eerst in direct anei successful competition with commercial companies. As a matter of fact, the premiums charged by the Department are the lowe'sl in Australasia. It is owing in no small degree to the' Department's operations that the population of New Zealand is one of tin' host insured in the' world, the' sum assured per head working out ai £42 in 1917, as against £31 in Australia and approximately £29 in Great Britain. Notwithstanding the' restriction of its business to so small an area as New Zealand, and in the face erf the intensive competition indicated by these striking figures, the Department has nevertheless attained a magnitude that would give it a, considerable rank in a country like' England ; and it can furthermore take credit nol only for past achievements, but also for the firm and solid basis upon which are built ils hopes for- the future. J. H. RTOtrATiirsoN, Government Insurance Commissioner,

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Revenue Account of the Government Life Insurance Department pok the Year ended 31st December, 1919. £ s. d. I £ s. d. Amount of Funds at Ist January, 1919 5,191,744 19 5 ; Death claims under polioies, Assurance, Renewal premiums — Assurance, An- inclueling bonus additions .. .. 195,340 18 11 nuity, and Endowment .. .. 354,672 19 8 Endowment Assurances matured, inNew premiums (including instalments oluding bonus additions .. .. 177,737 4 0 of first year's premiums falling due : Endowments matured .. .. 2,365 5 0 in the year) .. .. .. 55,035 14 0 | Premiums returned on endowments .. 434 10 10 Single premiums Assurance and En- Bonuses surrendered for cash .. 3,288 0 7 dowment .. .. .. 1,597 16 6 Annuities .. .. .. .. 19,618 5 7 Consideration for Annuities.. '.. 20,2(55 1 2 Surrenders .. .. .. 22,092 10 7 Interest .. .£276,142 15 4 Loans released by surrender .. .. 29,536 19 1 Less land and in- Commission, new* .. £31,361 2it come tax .. 6,290 19 7 „ renewal 2,976 10 11 269,851 15 9 , 34,337 13 10 Expenses of management— Salaries— Head Office ..£20,394 14 4 Branoh offioes and agents .. .. 9,520 15 11 Extra clerical assistance 5,604 12 2 Medical fees and expenses .. .. 5,917 8 2 Travolling-exponses .. 798 17 1 Advertising .. .. 751 3 10 Printing and stationery 2,688 7 2 Rent .. .. 2,941 0 5 Postage and telegrams 2,083 8 0 Exchange .. .. 69 2 3 General expenses .. 2,343 9 6 Triennial expenses .. 400 0 0 53,512 13 10 Amount of funds, 31st December, 1919 5,354,904 4 9 £5,893,168 7 0 80,893,168 7 v ! Including Agents' allowances, Balance-bhket of the Government Life Insurance Department on 81st December, 1919. Liabilities. Assets. £ s. d. £sd £sd Total Assurance Annuity, and En- Loans on policies .. .. 733,943 i i dowment Funds (as per Revenue Government securities - Account) .. .. 5,354,904 4 9 Consolidated stock .. 625,<)0<) 0 0 Claims admitted, proofs not yet com- Debentures issued yleted 76,115 13 5 under the authority Annuities 359 11 6 of tiro Finance Aot", Commission 2,294 6 7 1918 ~ ~ 10000 0 0 Medical fees . .. .. 420 6 0 New Zealand Inscribed Premium and other deposits.. .. 0,619 12 4 Btook—War Loans 969,900 0 0 Fire-insurance moneys in suspense .. 23 0 0 , j (jyj y O O 0 Sundry accounts owing .. 113 0 7 Municipal Corporation debentures .. ' 1ie',924 2 8 Investment Fluctuat.on Reserve .. 288,825 6 1 County securities .. .. 7,597 511 Harbour Board debentures .. .. 35,800 0 0 Town Board debentures .. .. 26,450 0 0 Road Board debentures .. .. 21,800 0 0 Drainage Board debentures .. .. 2,026 5 5 Landed and bouse property .. .. 133,120 13 8 Landed and house property (leasehold) 1,710 16 0 Mortgages on property .. .. 2,784,531 13 4 Properties acquired by foreclosure .. 574 8 3 Overdue premiums on policies in force .. £7,091 18 1 Outstanding premiums due but not overdue.. 40,656 8 8 17,748 1 9 Overdue interest .. £634 19 1 Outstanding interest due but not overdue.. 8,353 17 1 Interest aoorued but not due .. .. 66,312 5 5 75,301 1 7 Agents' balances .. .. .. 6,554 13 6 Cash in hand and on current account,.. 98,798 14 10 £5,728,681 1 3 £0,728,681 1 3 Government Life Insurance Department, 28th May, L'JW. •I. 11. Richardson, Commissioner. Geo. W. Babltbop, Secretary. Audited and found correct. Robert J. Collins, Controller and Auditor-General.

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Statement of Business

TOTAL. Whole-life and Tern Assurances. YEAR 1919. Annual Annuities. -kt Sum ! ?' ever - Premiums. | I. Immediate or No - assured. R ™?JL 1. Ordinary. enteredwpon. Bonuses. g _ Extra. ■ it. Deferred. Sum ' Bev <srNo - assured, nonary Bonuses. Annual Premiums. 1. Ordinary. 2. Extra. POLIC POLIC HES ISSUED AN DISCON- £ £ £ a. d.| £ s. d. £ s. d. £ £ £ s. d. Policies in force at 31st 53,803 13,257,682 1,512,86lj [ 386,083 10 10 19,202 7 5 1 Decomber, 1918 1 18,819 9 0 3,125 18 1 ) 19,202 7 5 1 3,125 18 1 ) 11,827 3,622,220 739,491 j 82,504 19 3 ) 1 5,891 0 8 J New Business .. .. 5,020 1,617,795 .. I 57,761 6 0 2,071 5 10 1 1 808 3 7 51 9 10 J 2,071 5 10 ) 51 9 10 J 578 261,900 I 6,597 2 10 I 1 235 4 6 j" Total.. .. 58,82314,875,477 1,512,8011 443,844 16 10 21,333 13 3 1 I 19,627 12 7 3,177 7 11 f 1,512,861 f 443,844 10 10 21,333 13 3 I I 19,627 12 7 3,177 7 11 f 21,333 13 3 I 3,177 7 11 f 12,405 3,884,120 739,491 I 89,102 2 1 i ( 6,126 5 2 J Policies discontinued 3,053 751,719 89,8451 J 22,684 12 2 918 16 0 1 during 1919 | 17,782 110 397 8 8 f 89,845| i 22,684 12 2 918 16 0 1 | 17,782 1 10 397 8 8 f 918 16 0 1 397 8 8 f 707 218,065 39,551 j 5,314 17 3 ) ( 5,042 8 8 f Total Policies in force at 55,770 14,123,728 1,423,016 ( 421,160 4 8 20,414 17 3 1 31st December, 1919 ' | 1,845 10 9j 2,779 19 3 | 1,423,016 ( 421,160 4 8 20,414 17 3 I I 1,845 10 9 2,779 19 3 j 11,698 8,666,055 699,940 f 83,787 4 10 1 \ 1,083 10 6 J PARTICUL PARTICUL RS OF P< LICIES DISCONHow discontinued. By Death .. .. 664 158,756 34,803 ( 5,212 13 9 918 16 0] 1 nan is 5 so a h 260 16 3 32 6 8 Maturity .. .. 753' 144,838! 33,101 f 5,648 8 ll i a k d 8 o 4 1 Surrender.. .. 57? 1 150,018 8,446 ( 4,273 11 3 .. 1 I 1 A P. O Of'C I) A f 34,808 ( 5,212 13 9 ! 918 16 01 I 260 16 3 32 6 8 J 33,101 ( 5,648 8 11 \ 8 5 4| 8,446 j 4,273 11 3 .. | I 14 6 8 365 2 0] 22 j 1,205 15 6|| r. AOt 323 121 97.450 1 37,898l 29,292 3,492 j 2,598 15 3 ) ( 71 9 7 j" j 827 3 6 1 ( 6 3 6f f 356 15 3 \ I •• ) I 14 6 8 365 2 0) 50 Cancellation .. 167 45,550 22 1 1,205 15 61 15,550: Surrender of Bonus.. .. .. 5,481 '• 3,440 5,481 Lapse .. .. 878' 250,195 7,601 \ 6,019 19 8) { 22 19 10) Expiry of Policy .. 9 1,650 .. [ 26 15 51 y ' 1 88 0 0 7,601 ( 6,019 19 81 | 22 19 10) [ 26 15 51 j 38 0 01 f 125 2 71 391 J 172 5 11) \ 17,437 13 9) 204 9 65,450 f 1,650, 3,032 f 1,448 3 7 1 I 19 10 0 , I 26 15 5 1 \ 38 0 0 j" j 35 10 8 ) 21*18 7) 1 4,907 5 7 ] ( aa u U| Expiry of Premium.. .. .. .. f 125 2 71 Miscellaneous .. .. 142 3911 172 5 11) \ 17,437 13 9) 67' 295 Total .. 3.053 1 751,749: 89,845 J 22,684 12 2 918 16 0| I 17,782 1 10 397 8 8) 3,053 751,749: 89,845 ( 22,684 12 2 918 16 0| ( 17,782 1 10 397 8 8f 707. 218,065 39,551 f 5,314 17 3 1 I 5,042 8 8 [ PROrtRTT.SS nv mTKTMTT.KK OW TITF. rtOVTi I PRO' JRESS OF BUS 3INESS OF THE GOVS 3RN1V ENT LIFE INSURANCE Total issued .. .. 148,952 37,311,630 3,563,310 j ' J {J 199, 485 1 4 148,952 J 1,145,195 7 11 | „., ,„. , , | 38,334 4 10 | 98 ' 488 l 4 724,035 3 8l„g 1 36,488 14 1 | tb ' AM i W 45,403 13,828,5591,918,233 {**»f»\l §} i0,162,504|l,218,293 j»"».»j| J 7| 3,666,055 699,940 83,787 4 10 37,311,630 3,568,310 Total void .. .. 93,182 23,187,902 2,145,294 | H 76,290 4 10 93,182 23,187,902 2,145,294 33,705 Total in force .. 55,770 14,123,728 1,423,016 421,160 4 8,1 23,194 16 6 55,770 14,123,728 1,423,016 421,160 4 8 1 23,194 16 6 11,698 Extra Premiums Reduction of Premiums by Bonus, &«. 1,845 10 9 59 12 3 1,083 16 6 52 13 0 £423,065 7 8 £84,923 14 4 NoTB,—The Ordinary Premium is the Wellington, 3rd March, 1920. premium charged

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at End of Year 1919.

.). 11. Richardson, Commissioner Percy Muter, Actuary.

ipproximate Cost of Paper. —Preparation, not given; printing (1,000 copies), £10 10s

Authority : Marcot F. Mark 3, Government Printer, Wellington.—l92o

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noouriAiiiuiio. Endowment Assurances. Annual Sun, Rever- Premiums. N "' assured. = . I Ordinary. Annuity Assurances. 1. Sum Annuities. m. 0 a8 S"™,/ ; 1- Entered Annual N °- ___i™" , "f . ft"*™* Bonuses. I "• deferred. ANNUITIES. ENDOWMENTS, INVESTMENTS, ETC. Annuities. N Annual 7. Immediate or Premiums. entered upon. 2.Deferred. 1. Sum Annual assured. Premiums. NO ' "sionarT I-Ordinary. TINUED DURING THE YE/ A.R 1919. I j £ £ s. d. £ £ £ s. d. I £ £ s. d. £ s. d. £ s. d. £ s. d. 19,557 9,273,655 770,625 (293,329 16 9) t 12,922 18 4 )' 4,202 1,312.495 .. 1 49,847 18 6 ) 1 572 19 1 j 59 f 13,822 28 9 41 713 2 5 \ 2,125 2,955 18 If .. j 550 5 9 101 85 8 2 \ .. 26 0 10J (415 .. 19,233 18 1 1 I 2 20 0 6 170 0 0 I l,948i]347,985 9,515 11 11 ) I I 620 5 10 0) J 36 .. 2,065 16 0 \ \ 1 .. 25 9 Of 203 I 42,850 il,280 16 6 I 1 -. I -. » 48,75910,586,150 770,625 (343,177 15 3 1 \ 13,495 17 5 I 59! j 14,372 33 19 2| 748 10 7 |1 2,125 2,981 18 11) f 451 i 3 20 0 6 21,299 14 1 1 195 9 Of 2,146) ( 390,835 10,796 8 5 | j 1 620 5 10 0 J 2,204; 505,112 49,560 116,511 2 10 1 I 12,734 3 2 ) 6 1 2,677 .. ) 115 9 0 h 494 I 397 8 Q, LL 918 16 0 1 120 j 25,895 ! 743 3 1 I \ 240 5 10 0 ) 41,555! 10,081,038 721,065 (826,666 12 51 ( 761 14 3) 53 ( 11,695 33 19 2) 633 1 7 \ 1,631 J2.5S4 10 3[ n 20 0 6 20,380 18 1 ] 195 9 0 f 2,026| ( 364,940 10,053 5 4 I 1 380 , .. J I TINUED DURING THE YE , 1919. 323: 60,909 5,42'J f 2,613 9 10 ) I 189 6 8 f 74l' 142,713 32,861 ( 5,583 14 8 I 1 8 5 4 I 384 92,670 4,596 ( 2,826 15 2 ) ( 8 3 2 j' 118i 29,100 22 j 823 3 7 j 1,987 1 1 I 877 .. 1 I 82 32 6 8 f 16 918 16 0 If 20 j 0 8 8) 17 j 2425 64 13 5 I I 240 .. j 67 j 17,750 504 13 1 | 4 j ' '900 : 25 ie 8 1 17 5 5 I 2,300 .. 1 114 19 6 I 358 j 365 2 0 j 67 4 ■ ( "-I 643 179,645 4,569 I 4,458 8 8 | | 3 9 10 J 31 f 5,100 113 7 5 ) t •• ) 31 I 56 18 6 I 75 96 1 148'l2 5 1 t 12,524 18 2 j 0 9 6 ( 32 13 5 1 ( 1 10 51 I 5 10 Of 2,204 505,112 49,560 I 16,511 2 10 | ( 12,734 3 2 f 6 6 I 2,677 .. ) 115 9 0 ( 2,677 \ 494 1 397 8 8 f 16j 918 16 0 120 I 25,895 ! 743 3 1) 1 240 5 10 0} DEPARTMENT SINCE DATE OF ESTABLISHME1S STT TO 3] st D 3CEMBER, 1919. I 714,939 22,656 6 1 ) 1 1,666 20 10 0 f ( 349,999 12,603 0 9 } ( 1,286 20 10 0 f 16,213(22,609,182 1,641,573 { ? 2o'487 X \ l \\ 1106 i 57 ' 418 12 6 I )4,e58Jl2,528,144 920,508 | ] £ j ' 1053 | j ft4 _ m) g 1 (754,703 19 11] 1 20,487 2 If J428,037 7 6| ( 19,725 7 IO/ 18,489 9 8 915 477 362 0 10 42,066 8 10 5,315 7,856 8 1 342 0 4 21,490 1 9 3,289 11,55510,081,038; 721,065 326,666 12 5 53 { U'™) 2,618 9 5 633 1 7 438 20 0 6 I 20,576 7 1 2,026 026 j 364,940 10,053 5 4 i 380 __._. f 761 14 3 6 19 3 £20 0 6 ________ £327,435 5 11 £633 1 7 £10,053 5 4 at the true age; the Extra, t I mi charged for any reason whatei ihe additional premii lever.