ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1944

Appendix to the Journals of the House of Representatives, 1945 Session I, H-08

11.-8

1945 NEW ZEALAND

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1944

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

Government Insurance Office, Wellington, 24th. April, 1945. I have the honour to submit the following report upon the transactions of the Department for the year ended 31st December, 1944, 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 7,080 policies, assuring the sum of £3,842,696, the premiums thereon being £83,609 per annum. Twentyseven annuities were also granted, the purchase-money being £19,062. The total business in force at the end of the year (including immediate, deferred, and contingent annuities for £108,437 per annum) comprises 101,893 policies, bearing an annual premium income of £891,643. The total sum assured is £37,318,708, to which reversionary bonuses amounting to £4,027,374 have been added. Income.—The total income amounted to £1,489,666, made up as follows : premium income, £924,029 ; interest income (net), £546,575 ; annuity-purchase money, £19,062. The total for the year exceeded that for the previous year by £87,245. Outgoings.—During the year 2,061 policies became claims by the death of the policyholders and by maturity, the payment involved being £742,554. The total amount paid in claims since the inception of the Department amounts to £20,635,170. Accumulated Funds.—Assurance, annuity, and endowment funds, apart from special reserves of £370,659, now stand at £13,129,718, an increase of £4-65,005 over the previous year. Bonus Distribution.—Owing to the conditions arising out of the war the annual distribution of bonuses was discontinued temporarily iri 1941, but last year an allotment for the three years 1941-43 was arranged. The bonus investigation for the past year has been carried out, and the Actuary's report discloses a net cash surplus of £209,153, excluding interim bonuses paid during the year. The surplus is sufficient to enable bonuses to be allotted at the same rates as for the past three years, but, in view of war conditions still prevailing, bonus notices will not be distributed to policyholders.' Expense Ratios. —The ratio of expenses to (a) total income and (b) premium income for 1941 1942, 1943, and 1944 is as follows :—- Ratio of Expenses to 1941. 1942. 1943. 1944. (a) Total income .. .. .. 8-62 7-62 8-15 8-90 (b) Premium income .. .. 13-81 12-21 13-15 14-06 The slight increase in 1944 is due to the marked increase in the volume of new business. General.—The results achieved, particularly as regards new business, are very gratifying. The good efforts of the field staff, aided by an extension of our advertising programme, produced a new business record, the amount written being an increase of £1,167,860 over the 1943 figures. Fifty-eight of the Department's office staff are still on active service. We look forward to the early victorious conclusion of the war in Europe and the safe return of those members of our staff who have done such fine work overseas. I wish again to take the opportunity of paying a tribute to the excellent work done by the members of our depleted staff during the war years. Without their willing co-operation in carrying out extra duties the Department could not have handled the increased business and continued to give efficient service to the policyholders. J. W. Macdonald, Commissioner.

H.—B

Revenue Account of the Government Life Insurance Department for the Year ended 31st December, 1944 £ £ Amount of funds at Ist January, 1944 .. 12,664,713 Death claims under assurance policies, Renewal premiums: Assurance, annuity, including bonus additions . .. 343,919 and endowment, less reinsurance premiums 802,546 Endowment assurances matured, including New premiums (including instalments of first bonus additions .. .. .. 386,216 year's premiums falling due in the year), Endowments matured . . . . .. 11,858 'less reinsurance premiums .. .. 79,352 Premiums returned on endowments .. 561 Single premiums : Assurance and endowment 42,131 Bonuses surrendered for cash .. .. 3,659 Consideration for annuities .. .. J9,062 Annuities .. .. .. . • 35,753 £ Surrenders .. .. .. .. 30,318 Interest, rent, and other income .. 560,424 Loans released by surrender .. .. 49,689 Less property expenses .. 13,849 £ 546,575 Commission, new .. .. 53,104 Commission, renewal .. .. 6,788 59,892 Contribution to Public Service Superannuation Fund .. ■.. .. .. 585 Land and income tax .. .. .. 3,378 A gent's retiring-allowances .. .. 2, 036 Expenses of management .. .. 68, 220 War-damage-insurance premiums .. 1,904 Property depreciation .. .. . • 6,673 Transfer to Investment Reserve .. .. 20,000 Amount of funds, 31st December, 1944 .. 13,129,718 £14,154,379 £14,154,379 Balance-sheet of the Government Life Insurance Department on 31st December, 1944 Liabilities £ Assets £ Total assurance, annuity, and endowment Loans on policies .. .. .. 908,623 funds (as per Revenue Account) .. 13,129,718 New Zealand Government securities .. 4,083,166 Claims admitted, proofs not yet completed 135,120 Loans to local bodies .. .. .. 3,051,911 Annuities .. .. .. •• *'23 Landed and house property .. .. 492,599 Medical fees " .. .. 467 Mortgages on property .. .. .. 4,708,947 Premium and other deposits .. .. 20,551 Properties acquired by foreclosure .. 23,250 Sundry creditors .. .. ■■ 11,174 Overdue premiums on policies in £ Accident and Fidelity Fund .. .. 5,000 force .. .. .. 1,993 Investment Reserve Account .. .. 365,659 Outstanding premiums due but not £ overdue .. .. .. 67,827 Sinking funds on local-body loans.. 2, 929 Interest accrued thereon .. 36 Overdue interest .. .. 2,67,) 2,965 Outstanding interest due but not overdue .. ■■ 14,961 Interest accrued but not due .. 120,440 138,076 Sundry debtors .. .. .. 5,321 Office furniture and fittings .. .. 1, 500 Cash in hand and on current account .. 188,064 £13,671,277 £13,671,277 J. W. Macdonald, Commissioner. H. L. Ryan, Secretary. Government Life Insurance Department, 12th March, 1945. 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.— Cyril G. Collins, Controller and Auditor-General.

2

H.—B

Statement of Business for the Year 1944

Policies issued and discontinued during the Year 1944

Particulars of Policies discontinued during the Year 1944

Progress of Business of the Government Life Insurance Department since Date of Establishment to 31st December, 1944

3

Annual Premiums. j Annuities. Year, 1044. Number. Sum assured. ' i Ordinary. Extra. | Immediate. Deferred.

£ £ £ s. d. £ s. d. £ s. d. £ a. d Policies in force at 31st 98,477 34,815,381 3,444,497 834,916 1 3 5,325 2 7 35,201 3 6 66,019 .5 10 December, 1943 New business .. .. 7,107 3,842,696 .. 83,458 15 10 150 6 10 1,839 16 10 10,633 12 0 Bonus allotted .. .. .. 793,230 Total.. .. 105,584 38,658,077 4,237,727 918,374 17 1 5,475 9 5 37,041 0 4 76,652 17 10 Policies discontinued 3,691 1,339,369 210,353 31,879 13 7 327 19 1 3,128 3 10 2,128 10 4 during 1944 Total polices in force at 101,893 37,318,708 4,027,374 886,495 3 6 5,147 10 4 33,912 16 0 74,524 7 6 31st December, 1944

How discontinued— £ £ £ s. d. £ s. d. £ s. d. £ s, d By death .. .. 882 284,234 70,681 7,833 19 5 49 5 0 2,932 6 0 By maturity .. 1,179 302,754 94,081 10,357 10 7 18 11 1 By surrender .. 581 228,676 22,783 5,278 17 6 22 12 0 .. 1,847 8 0 By change to other tables 32 14,514 824 360 15 6 2 7 6 .. 144 0 0 By cancellation .. 85 38,244 120 924 0 2 7 2 11 By lapse .. .. 932 470,947 21,864 7,124 10 5 228 0 7 195 17 4 137 2 4 Total discontinued during 3,691 1,339,369 210,353 31,879 13 7 327 19 1 3,128 3 10 2.128 10 4 year 1944

£ £ £ a. d. £ s. d. £ s. d. Total issued .. .. 294,352 90,918,751 10,621,587 2,502,500 2 1 42,047 1 5 245,894 7 6 Total void .. .. 192,459 53,600,043 6,594,213 1,616,004 18 7 36,899 11 1 137,457 3 6 Total in force .. 101,893 37,318,708 4,027,374 886,495 3 6 5,147 10 4 108,437 4 0

H.—B

ACTUARY'S REPORT ON THE VALUATION OF THE GOVERNMENT INSURANCE DEPARTMENT AS AT 31st DECEMBER, 1944

Presented to both Houses of the General Assembly pursuant to Section 40 of the Government Life Insurance Act, 1908 26th April, 1945. In accordance with your instructions, a valuation of the Department's liabilities under its policies has been made as at 31st December, 1944, 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 101,893 policies assuring, inclusive of bonus additions, the sum of £41,346,082 and £108,437 immediate and deferred annuities per annum ; the office premiums thereon amounting to £891,643 per annum. The bases adopted for the valuation were as follows :— (а) Endowments : 3 per cent, interest without mortality. (б) Temporary Assurances : The proportion of the premiums corresponding to the unexpired risk. (c) All other classes of assurance : The O m mortality table with 3 per cent, interest. (d) Annuities : The a (m) and a (/) mortality tables with 3 per cent, interest. The net premium method of valuation was employed in respect of groups (a) and (c) above, and, in addition to the liability brought out on that basis, reserves were included for future bonuses, immediate payment of claims, and other contingencies, including those likely to arise out of the present war. The valuation disclosed a total surplus of £217,227, as follows £ Total funds at 31st December, 1944 .. .. .. .. 13,129,718 Less value of liabilities .. .. .. .. ■■ 12,920,565 Net surplus .. .. .. .. .. 209,153 Interim bonus paid during year .. .. .. .. .. 8,074 Total surplus .. .. .. .. .. £217,227 I recommend that £180,535 of the above net surplus be divided amongst all participating policies in the form of a compound reversionary bonus on the sums assured and bonuses existing at the valuation date at the undermentioned rates for each full year's premium paid during the year, and that the balance of the net surplus —viz., £28,618 —be carried forward Policies issued under present premium tables— Per Cent. Whole-life assurances and endowment assurances maturing at ages £ s. d. eighty and over .. .. .. .. .. ..140 Other endowment assurances .. .. .. .. ..100 Pure and double endowment assurances .. .. .. ..0170 Policies issued under closed premium tables .. .. .. ..100 S. Beckingsale, F.1.A., Actuary. The Government Insurance Commissioner, Wellington.

Approximate Cost of Paper.—Preparation, not given ; printing (848 copies), £8.

By Authority: E. Y. Paul, Government Printer, Wellington.—l94s.

Price 3d.]

4