ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1934.

Appendix to the Journals of the House of Representatives, 1935 Session I, H-08

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1935. NEW ZEALAND.

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1934.

Presented to both Houses of the General Assembly pursuant to the provisions of the Government Life Insurance Act, 1908.

Government Insurance Office, Wellington, 24th June, 1935. I have the honour to submit the following report upon the transactions of the Department for the year ended 31st December, 1934, and its position at that date. The Revenue Account, Balance-sheet, and Statement of Business are appended. New Business and Amount of Business in Force.—New business for the year amounted to 4,629 policies, assuring the sum of £1,661,348 ; the premiums thereon being £37,107 per annum. Fiftythree annuities were also granted, the purchase-money being £43,466. The total business in force at the end of the year (including immediate and deferred annuities for £59,686 per annum) comprises 68,094 policies, bearing an annual premium income of £625,085. The total sum assured is £21,191,168, to which reversionary bonuses amounting to £2,893,453 have been added. Income. —The total income amounted to £1,106,508, made up as follows : Premium income, £667,488 ; interest income (net), £395,554 ; annuity-purchase money, £43,466. The total for the year exceeded that for the previous year by £43,803. Outgoings. —During the year 1,638 policies became claims by the death of the policyholders and by maturity, the payment involved being £524,851. The total amount paid in claims since the inception of the Department amounts to £14,269,305. Accumulated Funds. —Assurance, Annuity, and Endowment Funds, apart from special reserves of £458,843, now stand at £9,241,764, an increase of £276,703 over the previous year. Investments. —On the 31st December, 1934, the total assets of the Department amounted to £9,768,759, and were invested as follows : —• Class of Investment. er , Ce n nt A age . of lotal Assets. Mortgages of freehold property .. .. .. .. .. 38 • 9 Government securities, including rural advances bonds . . .. 25 • 8 Local-body debentures .. .. .. .. .. ..13-1 Loans on policies .. .. .. .. .. .. ..13-0 Miscellaneous assets .. .. .. . . .. . . .. 7-9 Landed and house property .. .. .. . . .. .. 1-3 ♦ Investment Fluctuation Reserve. —It was deemed advisable to transfer a further £30,000 to this Reserve Fund, which now stands at £453,843.

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Expense Ratios and Rate of Interest. —The ratio of expenses to (a) total income, (b) premium income, and the eflective rate of interest (after deduction of taxes) earned on the funds for 1934 and the two preceding years are : — 1932. 1933. 1934. Ratio of Expenses to Per Cent. Per Cent. Per Cent. (a) Total income .. .. .. 7-46 7-24 7-51 (b) Premium income .. .. ..11-82 11-33 11-68 Net effective rate of interest .. .. £4 10s. lOd. £4- Bs. 6d. £4 Bs. lOd. General. —The results of the Department's trading during the past year may be viewed with every satisfaction. The new business for the year was exceptionally good and the rate of bonus declared for the previous year has been maintained. This rate, in conjunction with the low premiums charged by the Department, provides contracts which will bear comparison with those of any other life-insurance office transacting business in the Dominion. In conclusion, I desire to express my appreciation of the good work performed by the Office and field staffs, which has contributed in a great measure to the success that has been achieved by the Department. W. E. Arnold, Commissioner.

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Revenue Account op the Government Life Insurance Department for the Year ended 31st December, 1934. £ s. d. £ s. d. Amount of funds at Ist January, 1934 8,965,061 2 5 Death claims under assurance policies, Renewal premiums—Assurance, annu- including bonus additions .. 201,389 6 0 ity, and endowment, less reinsurance Endowment assurances matured, includpremiums .. •. • • 583,667 5 0 ing bonus additions .. .. 312,955 2 0 New premiums (including instalments Endowments matured . . .. 10,314 19 0 of first year's premiums falling due Premiums returned on endowments .. 192 0 2 in the year) less reinsurance premiums 33,336 1 5 Bonuses surrendered for cash .. 13,086 8 11 Single premiums—Assurance and en- Annuities .. .. .. 25,526 9 11 dowment .. .. .. 50,484 12 3 Surrenders .. .. .. 53,204 10 7 Consideration for annuities .. .. 43,466 3 0 Loans released by surrender.. .. 98,840 6 0 Interest, rent, and other £ s. d. £ s. d. income .. 417,655 17 7 Commission, new* .. 27,702 14 6 Less land and in- » renewal 4,103 7 4 come tax, £20,833 31,806 1 10 3s. 3d.; property Contribution to Public Service Superexpenses, £1,268 annuation Fund .. .. .. 727 1 0 Bs. 9d. . . .. 22,101 12 0 £ s. d. 395,554 5 7 Expenses of management — Salaries .. .. 33,611 14 6 Extra clerical assistance .. .. 415 911 Payment to Treasury under Finance Act, 1931 (No. 2) .. 916 6 0 Medical fees and expenses .. .. 1,480 3 10 Travelling-expenses 897 4 4 Advertising .. 348 6 9 Printing and stationery .. .. 1,276 7 3 Rent .. .. 4,656 15 10 Postage and telegrams .. .. 1,649 19 11 Exchange .. 34 5 1 Audit fees .. 325 0 0 General expenses .. 4,901 15 1 50,513 8 6 Property depreciation .. .. 1, 250 0 0 Transfer to Investment Fluctuation Reserve Account .. .. 30,000 0 0 Amount of funds, 31st December, 1934 9,241,763 15 9 £10,071,569 9 8 £10,071,569 9 8 * Including agents' allowances. Balance-sheet of the Government Life Insurance Department on 31st December, 1934. Liabilities. Assets. £ s. d. £ s. d. Total assurance, annuity, and en- Loans on policies .. .. •• dowment funds (as per Revenue New Zealand Government securities .. 2,520,060 0 0 Account) .. •• •• 9,241,763 15 9 Loans to Local Bodies .. .. 1,284,335 1 6 Claims admitted, proofs not yet Landed and house property .. 121,603 2 7 comnleted .. .. •• 40,894 19 2 Landed and house property (leasehold) 2,023 10 0 Annuities .. 312 15 1 Mortgages on property .. .. 3,801,369 11 0 Commission .. .. •• 469 1 0 Properties acquired by foreclosure .. 34,666 19 9 Medical fees .. • • • ■ 143 17 0 Overdue premiums on £ s. d. Premium and other deposits .. 8,682 16 6 policies in force .. 6,50119 5 Sundry creditors .. .. . • 3,233 12 7 Outstanding premiums Accident and Fidelity Fund.. .. 5,000 0 0 due but not overdue 57,030 8 1 Investment Fluctuation Reserve .. 453,843 3 4 —— 63,53Sinking funds on local £ s. d. Overdue interest .. 48,238 911 body loans .. 14,215 511 Outstanding interest Interest accrued there- due but not overdue 10,863 2 9 on .. .. 199 13 11 Interest accrued but j 14,414 19 10 not due .. .. 97,302 0 6 156,403 13 2 Sundry debtors .. . • • • 864 15 9 Income-tax paid in advance.. .. 22,500 0 0 Cash in hand and on current account.. 489,225 1 3 £9,768,759 0 3 £9,768,759 0 3 W. E. Arnold, Commissioner. J. W. Macdonald, Secretary. Government Life Insurance Department. The Audit Office, having examined the Revenue Account and Balance-sheet, and compared them with the relative books, documents, and securities, hereby certifies them to be in accordance therewith.—G. F. C. Campbell, Controller and Auditor-General.

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Statement of Business

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TOTAL. Whole-life and Term Assurances. YEAR 1934. , ; i = Annual Annuities. j. Annual No i Sum | Premiums. 1. Immediate or „ assured. Jonarv Premiums. I assured. 1. Ordinary. entered upon. °' 2. Deferred 1. Ordinary. Bonuses. g Extra. 2. Deferred. Annuity. bonuses. g Extra. POLICIES ISSUED AND BISCON- £ £ £ s. d. £ s. d. £ £ £ s. d. Policies in force at 31st 67,567Sid,769,2922,805,177 ] 624,260 9 224,895 9 0) 9,028 3,505,946 560,251(93,048 12 7 December, 1933 1 1,644 8 624,091 13 2 J 17,928 p.a. \ 609 15 2 } New business.. .. 4,682 1,661,348 .. I 37,053 7 8 4,346 10 2) 1,051 511,399 .. 110,033 16 7 ) | 53 13 6 9,633 12 0 ] 7,977 12s. p.a. | 21 10 10 } Bonus allotted .. .. .. 319,428 .. .. .. .. 32,349 Total.. .. 72,24922,430,6403,124,605 ] 661,313 16 10 29,241 19 2 110,079 4,017,345 592,600(103,082 9 21 | 1,698 2 0 33,725 5 2j 12s. p.a. ( 631 6 0) Polioies discontinued 4,155 1,239,472 231,152 1 37,804 16 11 2,195 11 0) 548 211,965 49,416] 5,20112 10 1 during 1934 { 121 18 4 1,086 0 Of 792 p.a. { 47 4 5 J ___ | Total policies in force at 68,094 21,191,168 2,893,453 1 623,508 19 11 27,046 8 2 1 9,531 3,805,380 543,184(97,880 16 4| 31st December, 1934 ( 1,576 3 8 32,639 5 2 J 25,11312a. p.a. |,{ 584 1 7 J PARTICULARS OF POLICIES DISCONHow discontinued. By Death .. .. 543 149,368 55,313 f 4,412 15 1 2,345 11 0) 255 77,623 39,113 ] 1,923 10 11 1 41 17 3 ) | 31 16 5) Maturity .. .. 1,130 248,906 72,"666 / 9,354 12 111 .. ... .. .. .. t 20 17 5f Surrender.. .. 1,341 427,318 65,572] 13,255 16 7 .. 1 103 46,770 5,652] 1,21115 8 1 1 22 2 9 72 0 01 72 p.a. { 3 3 0 f Change to other 47 18,815 1,483 ] 492 17 31 .. 14 7,515 37 172 15 0 Tables 1 ■ ! 1 I Cancellation .. 65 20,650 62 ] 470 15 4 .. | 9 2,600 .. ] 73 9 3 I [ .. 144 0 0) 144 p.a. | .. f Lapse .. .. 1,029 374,415 36,056 ( 9,817 19 9 -150 0 01 167 77,457 4,614 ] 1,820 2 10 1 1 37 0 11 870 0 Of 576 p.a. { 12 5 0 } Total discontinued during 4,155 1,239,472 231,152 ( 37,804 18 11 2,195 11 01 548 211,965 49,416 ] 5,20112 10 1 year 1934 j 121 18 4 1,086 0 0 J 792 p.a. | 47 4 5 ) PROGRESS OP BUSINESS OP THE GOVERNMENT LIFE INSURANCE Total issued .. .. 223,254 62,36-5,261 7,423,846 { 1,9 ?n'cQa ī« 2 L 163,949 8 0 53,004 17,723,328 2,437,992 "H I 4U,bJS 10 Of 26,193 12s. p.a. (18,702 18 4f Total void .. .. 155,160 41,174,093 4,530,393 12 3 j 104,263 14 8 43,473 13j g 17i9 4 8 1)89 4 i80 8 J 18 51 ( da,122 11 J I 1,080 p.a. t 18,118 16 9/ Total in force .. 68,094 21,191,168 2,893,453 623,508 19 11 59,685 13 4 9,531 3,805,380 543,184 97,880 16 4 25,113 12s. p.a. Extra Premiums .. .. .. 1,576 3 8 .. j .. .. 584 1 7 £625,085 3 7 £98,464 17 11 Note. —The " ordinary " premium is the premium charged

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at End of Year 1934.

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ASSURANCES. SIMPLE ANNUITIES. ENDOWMENTS, Endowment Assurances. Annuity Assurances. INVESTMENTS, ETC. I 1 Slim ! „ Annual 1- Su ™ Annuities. Annuities. „ I assured. I Eever- Premiums. o aS S™' 11. Immediate or Annual N Annual 1. Immediate or N 2. Rever- F ™ n " ums - No ' 2. Deferred 1 "™ a a r y 1. Ordinary. No ' 2 si 1 entered upon. Premiums. No ' Premiums. teredupon. No ' | Annuity, i Bonuses - 2. Extra. Bonuses. \ S ' Be f erred - 2 ' Deferred. Bonuses. 2 - Extra - TINUED DURING THE YEAR 1934. £ I £ £ s. d. £ £ s. d. £ s. d. £ s. d. £ s. d. £ £ s, d. 55,08716,084,7412,220,401 (514,603 13 3| 23 f 5,247 288 4 9 1 184 9 2 424 91 12 6] 24,607 4 3)3,005 11,173,35816,332 1 8[ 4,770 p.a. I 1,023 17 7) 1 1,532 1,093 13 2 } \ 300 0 0 f \ 22,993 10 15 9J 2,866 774,286 .. ( 23,509 18 6) .. .. .. .. 53 .. ] 4,346 10 2) 712] 375,663 3,509 12 7i 1,656 p.a. i 30 7 ll| I J 1 •• „„ 1 14 9 ' 284,527 .. .. 110 .. .. .. .. •• •• M42 57,95316,859,027 2,504,928(538,113 11 9) 23 f 5,247 288 4 9 1184 9 2 477 91 12 6 ( 28,953 14 5 ) 3,717 (1,549,021 19,341 14 3| 6,426 p.a. I 1,054 5 6 f \ 1,642 1,093 13 2} \ 300 0 0 J { 25,435 12 10 6) 3,339 942,032 178,917 1 31,240 14 101 If 150 24 4 8 I .. 35 77 12 6f 2,171 6 4 1 232 J 85,325 1,284 16 91 144 p.a. 1 74 1 5} I 54 .. \ 1. 150 0 oj t 2,765 0 12 6f 54 61415,916,9952,326,011(506,872 16 111 22 f 5,097 264 0 11184 9 2 442 14 0 0 ( 26,782 8 1 ) 3,485 (1,463,696 18,556 17 6| 6,282 p.a. I 980 4 If \ 1,588 1,093 13 2 J | 150 0 0 J \ 22,670 1118 0/ TINUED DURING THE YEAR 1934. 243 67,695 16,169 ( 2,445 8 10 1 1 f 150 24 4 8 1 .. 35 .. ( 2,321 6 1 9 3,900 43 16 2 \ 10 0 10 \ 131 J 1 f 1,069 240,706 70,575 ( 9,004 7 51 .. .. .. .. •• ■■ 61 j §>200 350 5 61 { 20 17 5) 1 2,091 •• J 1,174 354,723 59,897 (11,610 14 11 .. f .. 1 .. .. •• •• •• 64 25,825 433 6 10 ( 18 19 9 J i 23 f 32 11,000 1,446 j 313 6 6 ( .. .. .. •• •• 1 300 6 15 9 41 11,150 62 ( 325 11 8 1 .. .. .. .. •• •• •• 15 6 > 900 71 14 5 780 256,758 30,768 j 7,541 6 4 1 .. .. .. .. 77 12 6 ( - 150 0 0 1 82 I 40,200 378 18 1) 144p.a. \ 24 3 5j 1 150 0 Of \ 0 12 6 ) 3,339 942,032 178,917 J 31,240 14 10 | 1( 150 24 4 8 1 .. 35 77 12 6 ( 2,171 6 4 1 232 ( 85,325 1,284 16 9) 144p.a. t 74 1 5 | j 54 .. } t 150 0 0 j t 2,765 0 12 6) DEPARTMENT SINCE DATE OF ESTABLISHMENT TO 31st 1934. 158,098 4 J; 3 8 0 6 0 2 f 6 f 4,925,248 3 J 1131 J 179,100 0109>360 1 0 91,327 866 6 8 70,281 19 2 9,694 { 4150,448 16 g 103,484 lomefpl 2,599,237 { 8 ® 8 ;°| ® o} 1 ' 109 { 346 ( 58,815 7 79,176 1 7 885 852 6 8 43,349 11 1 6 ' 209 ( 29,«)f 10 o} 54,61415,916,995 2,326,011 506,872 16 11 22 | 5, g 97 1 1,857 13 3 184 9 2 442 14 0 0 26,932 8 1 3,485 | 1,4 ||'g 96 18,356 17 6 } 6,282 p.a. 1 ' ' 980 4 1 "| " " " " " " " 11 18 0 £507,853 1 0 £184 9 2 £14 0 0 £ 18,56815 6 at the true age ; the " extra " the additional premium charged for any reason whatsoever. . . W. E. Aknold, Commissioner. S. Beckingsale, P.I.A., Actuary.

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ACTUARY'S REPORT ON THE VALUATION OP THE GOVERNMENT INSURANCE DEPARTMENT AS AT 31st DECEMBER, 1934.

Presented to both Houses of the General Assembly pursuant to Section 40 of the Government Life Insurance Act, 1908.

In accordance with your instructions, a valuation of the Department's liabilities under its policies has been made for the year ending 31st December, 1934, with the object of ascertaining the net surplus available for distribution amongst the policyholders, and in accordance with section 40 of the Government Life Insurance Act of 1908, and amendments, I have the honour to report as follows :— The liabilities arise in respect of 68,094 policies assuring, inclusive of bonus additions, the sum of £24,084,621, and £59,685 immediate and deferred annuities per annum ; the Office premiums thereon amounting to £625,085 per annum. The bases adopted for the valuations were as follow : — (a) The British Offices Om Table 1893, and the British Offices Annuity Tables 1920, were employed in the case of assurances and annuities respectively, with 3 per cent, interest; and (b) The net premium method of valuation was employed, thus reserving the whole of the future loading; in addition, adequate reserves were included for future bonuses, immediate payment of claims, and other contingencies. The valuation has disclosed a total surplus of £224,136, as follows : — £ Total funds at 31st December, 1934 .. .. .. 9,241,764 Less value of liabilities .. .. •• •• •• 9,020,978 Net surplus .. .. .. 220,786 Interim bonus paid during year .. .. .. .. ■ • 3,350 £224,136 As required by the Act, surplus arising from favourable mortality has been investigated separately for the General and Temperance Sections, the result indicating that the same rates of bonus should be allotted to policies of the same class in both sections. I accordingly recommend that the following rates of compound reversionary bonus be declared on the sum assured and existing bonuses in respect of each full year's premium paid during the year Policies issued under Present Premium Tables. Per Cent. £ s. d. Whole-life assurances, and long-term endowment assurances maturing at ages 80 and over .. .. • • • • • • .. 117 0 Other endowment assurances .. .. • • • ■ .. 113 0 Double endowment assurances and pure endowments .. ..140 Policies issued under Premium Tables which have been closed. Per Cent. £ s. d. Whole-life and endowment assurances .. . . ■ ■ ..1110 Double endowments .. .. .. •• ..170 The above bonuses will absorb the sum of £198,349, and I recommend that the balance of the net surplus —£22,437 —be carried forward. S. Beckingsale, F.1.A., Actuary. The Government Insurance Commissioner, Wellington.

Approximate Cost of Paper.—Preparation, not given; printing (1,910 copies), £12 10s.

By Authority: 6. H. Loney, Government Printer, Wellington. —1935.

Price 6d.]

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