ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1945

Appendix to the Journals of the House of Representatives, 1946 Session I, H-08

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1946 NEW ZEALAND

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1945

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

Government Insurance Office, Wellington, 30th May, 1946. I have tlie honour to submit the following report upon the transactions of the Department for the year ended 31st December, 1945, 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 8,786 policies, assuring the sum of £4,923,809, the premiums thereon being £108,892 per annum. Twenty-seven annuities were also granted, the purchasemoney being £20,251. The total business in force at the end of the year (including immediate, deferred, and contingent annuities for £116,607 per annum) comprises 107,023 policies, bearing an annual premium income of £960,989. The total sum assured is £40,837,857, to which reversionary bonuses amounting to £4,126,420 have been added. Income. —The total income amounted to £1,561,670, made up as follows : premium income, £996,049 ; interest income (net), £545,370 ; annuity-purchase money, £20,251. The total for the year exceeded that for the previous year by £72,004. Outgoings. —During the year 2,057 policies became claims by the death of the policyholders and by maturity, the payment involved being £772,633. The total amount paid in claims since the inception of the Department amounts to £21,407,803. Accumulated Funds.—Assurance, annuity, and endowment funds, apart from special reserves of £532,644, now stand at £13,508,4-03, an increase of £378,685 over the previous year. Bonus Distribution.— Owing to war conditions no bonus notices were distributed to policyholders last year, but bonuses were allotted for the year ended 31st December, 1944, at the same rates as for the three previous years.

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The bonus investigation for the past year has been carried out by the Actuary, and his report discloses a net cash surplus of £214,477, 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 four years. Owing to shortage of staff, however, bonus notices will not be distributed to participating policyholders. Expense Ratios.—The ratio of expenses to (a) total income and (b) premium income for 1943, 1944, and 1945 is as follows : Ratio of Expenses to 1943. 1944. 1945. (a) Total income .. ~ .. 8-15 8-90 10-66 (b) Premium income .. .. .. 13-15 14-06 16-37 The increase in 1945 is principally due to the substantial increase in the volume of new business. General.—The results for the past year have been very satisfactory. The record new business obtained in 1944 has been eclipsed during the past year, the total written being £1,081,113 in excess of the 1944 figures. The result achieved reflects- great credit on our field staff and justifies the efforts being made to more extensively advertise the work of the Department. A substantial portion of the increased business is due to group and staff superannuation schemes, and it is very gratifying that the Department's progressive methods enable it to compete successfully in this sphere of life insurance. It is appropriate this year that we should honour and extend our grateful thanks to all the members of the Department's staff who served in the cause of freedom. The majority of those who were in the Armed Forces have now resumed duty, and it is pleasing to find that they are settling down very well. We deeply regret to record that six of our young men lost their lives whilst on service overseas. In conclusion, I wish to pay a tribute to the excellent work of the staff, many of whom are still carrying out extra duties. Without their loyal co-operation it would have been impossible to maintain the Department's reputation for prompt and efficient service. J. W. Macdonald, Commissioner.

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£ f £ Amount offends at Ist -January, 1945 .. .. .. 13,129,718 Death claims under assurance policies, including bonus Renewal premiums: Assurance, annuity, and endowment, additions .. .. .. .. .. .. 304,972 less reinsurance premiums .. .. .. .. 852,186 Endowment assurances matured, including bonus additions 459,723 New premiums (including instalments of first year's premiums Endowments matured .. .. .. .. .. 7,481 falling due in the year), less reinsurance premiums .. 100,390 Premiums returned on endowments .. .. .. 457 Single premiums: Assurance and endowment .. .. 43,473 Bonuses surrendered for cash .. .. .. .. 1,736 Consideration for annuities .. .. .. .. 20,251 Annuities .. .. .. .. .. .. 35,651 £ Surrenders .. .. .. .. .. .. 32,882 Interest, rent, and other income .. .. 555,192 Loans released by surrender .. .. .. .. 24,154 Less property expenses .. .. .. 9,822 • £ 545,370 Commission, new .. .. .. .. 72,896 Commission, renewal .. .. .. .. 7,173 80,069 Contribution to Public Service Superannuation Fund .. 747 Land and income tax .. .. .. .. .. 133,013 Agents' retiring-allowances .. .. .. .. 2,206 Expenses of management .. .. .. .. 82,601 War-damage-insiirance premiums .. .. .. 792 Property depreciation .. .. .. .. .. 6,501 Transfer to Investment Reserve.. .. .. .. 10,000 Amount of funds at 31st December, 1945 .. .. 13,508,403 £14,691,388 £14,691,388

Revenue Account of the Government Life Insurance Department for the Year ended 31st December, 1945

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Liabilities £ Assets £ Total assurance, annuity, and endowment funds (as per Loans on policies .. .. .. . • •• 835,349 Revenue Account) .. .. .. .. .. 13,508,403 New Zealand Government securities .. .. .. 4,741,918 Claims admitted, proofs not yet completed .. .. 95,594 Loans to local bodies .. .. .. •• •• 2,939,669 Annuities .. .. .. .. .. .. 528 Landed and house property .. .. .. .. 507,613 Medical fees .. .. .. .. .. .. 573 Mortgages on property .. .. • • • • 4,498,268 Premium and other deposits .. .. .. .. 44,438 £ Sundry creditors .. .. .. .. .. 11,086 Overdue premiums on policies in force .. .. 2,611 Accident and Fidelity Fund .. .. .. .. 5,000 Outstanding premiums due but not overdue .. 78,924 Investment Reserve Account* .. .. .. .. 527,644 81,535 £ Overdue interest .. .. .. .. 2,225 Sinking funds on local-body loans .. .. 3,176 Outstanding interest due but not overdue .. 7,860 Interest accrued thereon .. .. .. 39 Interest accrued but not due .. .. .• 128,053 3,215 138,138 Sundry debtors .. .. .. •• •• 9,745 Office "furniture and fittings .. .. .. . • 1 , 000 Income-tax paid in advance .. .. .. .. 49,000 Cfash in hand and on current account .. .. .. 394,246 £14,196,481 £14,196,481 ♦lncreased by amount of exchange on loan of £625,900 held in London and now shown in accounts in New Zealand currency.

J. W. Macdonald, Commissioner.' H. L. Ryan, Secretary. Government Life Insurance Department, 28th March, 1946. 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.— J. P. Rutherford, Controller and Auditor-General.

Balance-sheet of the Government Life Insurance Department on 31st December, 1945

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J. W. Macdonald, Commissioner.

S. Beckingsale, F.1.A., Actuary.

Statement of Business for the Year 1945

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Year 1945. Number. Sum assured. Reversionary Bonuses. Annual Premiums. Annuities. I Ordinary. Extra. 1 Immediate. Deferred. Policies in force at 31st December, 1944 .. New business Bonus allotted Total Policies discontinued during 1945 Total policies in force at 31st December, 1945 Pa How discontinued — By death By maturity By surrender By change to other tables By cancellation By lapse By expiry .. .. .. Total discontinued during year 1945 Progress of Business of the Gov&, Total issued Total void Total in force Policies issut 101,893 8,813 id and disco £ 37,318,708 4,923,809 ntinued duri £ 4,027,374 299,928 ng the Year 1 £ s. d. 886,495 3 6 108,732 14 10 945 £ s. d. 5,147 10 4 159 1 5 £ s. d. 33,912 16 6 1,770 11 0 £ s. d. 74,524 7 6 9,390 2 8 110,706 3,683 42,242,517 1,404,660 4,327,302 200,882 995,227 18 4 36,407 10 7 5,306 11 9 3,138 7 7 35,683 7 6 534 13 2 83,914 10 2 2,456 4 8 107,023 40,837,857 4,126,420 958,820 7 9 2,168 4 2 35,148 14 4 81,458 5 6 Hiculars of 779 1,278 743 48 104 625 106 Policies disc £ 245,437 357,578 289,901 19,446 48,681 249,338 194,279 ontinued dm £ 62,908 109,036 19,824 1,062' 89 7,963 'ing the Year £ s. d. 7,226 16 4 15,053 14 8 6,572 7 4 414 15 7 1,095 13 3 5,724 8 5 319 15 0 1945 £ s. d. 55 7 5 10 17 11 24 18 9 3,040 2 8 7 0 10 £ s. d. 1,283 12 10 -748 19 8 £ s. d. 72 0 0 1,293 5 0 215 5 0 875 14 8 3,683 1,404,660 200,882 36,407 10 7 3,138 7 7 534 13 2 2,456 4 8 rnment Life 303,165 196,142 Insurance D £ 95,842,560 55,004,703 epartment sv £ 10,921,515 6,795,095 nee Date of Es £ s. d. 2,611,232 16 11 1,652,412 9 2 tablishment to £ s. d. 42,206 2 10 40,037 18 8 31st Decembei £ 257,055 140,448 •, 1945 s. d. 1 2 i 1 4 107,023 40,837,857 4,126,420 958,820 7 9 2,168 4 2 116,606 19 10

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ACTUARY'S REPORT ON THE VALUATION OF THE GOVERNMENT INSURANCE DEPARTMENT AS AT 31st DECEMBER, 1945

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

29th May, 1946. In accordance with, your instructions, a valuation of the Department's liabilities under its policies has been made as at 31st December, 1945, 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 107,023 policies assuring, inclusive of bonus additions, the sum of £44,964,277 and £116,607 immediate and deferred annuities per annum ; the office premiums thereon amounting to £960,989 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. The valuation disclosed a total surplus of £219,173, as follows : £ Total funds at 31st December, 1945 .. .. .. .. 13,508,403 Less value of liabilities .. .. .. .. 13,293,926 Net surplus .. .. .. .. .. 214,477 Interim bonus paid during year .. .. .. .. 4,696 £219,173

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I recommend that £191,344 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., £23,133 —be carried forward : Policies issued under present premium tables — p er cent. Whole-life assurances and endowment assurances maturing at £ s. d. ages eighty and over .. .. .. .. ..140 Other endowment assurances .. .. .. ..100 Pure and double endowment assurances .. .. 0 17 0 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), £l2 10s.

By Authority: E, V, Paul ? Government Printer, Wellington. —1946, Price 6'd.]

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