H.—B

2

During the year some difficulty arose in dealing with the investment of the Department's funds. A falling-off occurred in the demand for mortgage loans of the smaller amounts, and this, combined with an unprecedented increase in the Department's income, with resultant rapid accumulation of funds, caused the statutory limitations upon the Department's lending-powers to be more severely felt than hitherto. Under the circumstances special action was initiated, with the satisfactory result that at the end of the year the whole of the funds available were definitely contracted for. Jm Interest. —The net effective rate of interest credited to the Insurance Fund, after deduction of land and income tax from interest, was £5 6s. Bd. per cent. Investment Fluctuation Reserve. —It will be remembered that, owing to conditions arising out of the world war, it was deemed advisable in 1917 to set aside the sum of £99,704 to strengthen the Investment Fluctuation Reserve Fund. After full consideration of the improved financial outlook and all the other factors involved, and more particularly in view of the fact that the basis of valuation of the actuarial liabilities of the Department was being strengthened by approximately £250,000, it was decided that the best interests of the Department would be served by a repayment to the Assurance Fund, and accordingly £75,788 was transferred Fluctuation^Reserve Fund. ■ Triennial Investigation. —Tho triennial valuation of the Department's liabilities and assets as at 31st December, 1923, was completed by the Actuary early this year. The most important features of the valuation —the results of which are set out fully in the Actuary's report —are(l.) The valuation has been made upon the very severe basis of Om 3 per cent, as against the former Hm 3J per cent. —that is to say, not only is a more stringent mortality table employed, but a future interest-earning power of only 3 per cent, has been taken credit for in place of the former 3-J per cent. The result is a strengthening of the actuarial reserves by approximately a quarter of a million pounds, against which must bo reckoned the transfer from the Investment Fluctuation Fund mentioned above, the net strengthening of the total reserves being approximately £173,000. (2.) The material increase in the rate of compound reversionary bonuses provided by the record surplus of £336,350. The amount of cash surplus distributed to policyholders was £317,563, which is greater by £99,857 (or nearly 50 per cent.) than the amount divided at the last triennial investigation. It is extremely gratifying to be able to report that, as indicated above, the Department was able to place its rcservesjjupon so very strong a basis and simultaneously to declare bonuses in excess of anything done before. General. —The impregnable position disclosed by the actuarial valuation, including the very satisfactory margin existing between the rate of interest assumed (3 per cent.) and the actual earning-power of the Department's funds, which gives every promise of satisfactory continuance, indicates the virility of the Department and constitutes the best possible augury of future prospects. A. T. Teaveesi, F.1.A.,[ Commissioner.

Revenue Account oe the Government Life Insurance Department foe the Yeae ended 31st December, 1923. £ s. d. £ s. d. Amount of Funds at Ist January, 1923 5,922,824 13 4 Death claims under assurance policies, Renewal premiums — Assurance, An- including bonus additions .. 166,657 7_£o nuity, and Endowment .. .. 444,539 7 3 Endowment Assurances matured, inNew premiums (including instalments eluding bonus additions .. .. 229,865 15 0 of first year's premiums falling due Endowments matured .. .. 5,542 15 0 in the year) .. .. .. 42,854 14 1 Premiums returned on endowments .. 139 8 3 Single premiums—Assurance and En- Bonuses surrendered for cash .. 2,416 12 5 dowment .. .. .. 1,777 2 4 Annuities .. .. .. 20,630 3 7 Consideration for Annuities .. 10,042 S 9 Surrenders .. .. .. 30,899 14 1 Interest and Rent .. £320,901 5 9 Loans released by surrender .. 43,589 12 9 Less land and income Commission, new* .. £30,501 8 10 tax, £8,098155. 4d.; „ renewal 3,148 18 9 property expenses, |§ 33,650 7 7 &c, £3,377 10s. 6d. 11,476 5 10 Expenses of management— 315,424 19 11 Salaries— £ s. d. Transfer from Investment Fluctuation Head Office .. 23,088 12 9 Reserve Account .. .. 75,788 0 0 Branch offices and agents ..12,499 1 8 Extra clerical assistance .. .. 629 0 8 Medical fees and expenses .. .. 6,225 15 8 Travelling-expenses 562 5 7 Advertising .. 484 0 8 Printing and stationery 1,904 13 11 Rent .. .. 5,236 18 10 Postage and telegrams 1,892 3 1 Exchange .. 43 17 8 General expenses .. 3,600 8 4 Triennial expenses .. 1,207 18 2 57,374 17 0 Amount of funds, 31st December, 1923 6,222,484 13 0 £6,813,251 5 8 £6,813,251 5 8 * Including agents' allowances.