GOVERNMENT LIFE ASSURANCE.

Hawke's Bay Times, Volume 18, Issue 1151, 20 October 1871, Page 2

GOVERNMENT LIFE ASSURANCE.

PEESS, OCT. -6,] The report of the Annuities Commit sioner which has been laid before Pa r , liament is .on the whole satisfactory. The numbei of proposals received showg that an increasing interest is beiua , taken in the subject of life assurance and i hat the undertaking of this busi. ness by tim Government is beginning to be appi eciated by the public at large. We are nevertheless of opinion that the system has not met with the encourage, ment it deserves. The successful cou? iduct of the business of life assurance is so largely dependent upon activity and pushing management, that it is scarcely to bo wondered at that, however-great the advantages of the Government Assurance may be over those of assurance companies, the latter have succeeded in holding their own agajnst it. We shall attempt to point out what advantages the Government ofijice offers in compari? son with those of companies. In the first place the most striking difference is in the particular of security. In the case of companies, this consists of the investments in which the premiums and reserve fund have been accumulated, such portion of the paidup and uncalled capital of the shares as may not have disappeared, and the un-. limited liability of the shareholders. In the case of the New Zealand Govern? ment Assurance, the security is simply the colony itself. Nothing short of the utter and irretrievable insolvency of the colony can, by any possibility, defeat the satisfaction of any claim. Judging fairly of both cases, the balance of ad? vantage in security seems to be ob? viously on the side of the Government office. Experience has repeatedly shown that the best conducted assurance com-! panies may undergo, in a few years, a complete revolution in their management and condition. Half a century of the strictest care, of investments on abundant security, and with corres* pondingly moderate profits, may be succeeded by a period of speculation, in which the accumulations of years are dissipated, and a position of v* ealth an 4 safery exchanged for a floating existence dependent mainly upon the chapter of accidents and the doing fresh business to cover claims arising out of the old, It would be unjust to suggest that, in the case of many companies, perhaps in most, such disasters are at all likely to. happen, but we think it right to point OMt that the whole security which the assured has, generaly speaking, rests upon assets and administration overwhich he can have no control or in* fluenee whatever, and which may be v good or bad. Life assurance as hitherto conducted has unquestionably been a great public benefit, but it is worth while to see whether its benefits cannot be made more sure and more general, When people insure their lives, unless for some temporary purpose of business, it is done once for all; they deposit their savings in the full confidence that there is no shadow of doubt as to theirintention being fulfilled. It is therefore startling, every now and then to read of an old-established company being wound up, and its policies becomes little better than waste paper. We believe that the New Zealand Gch vernment Assurance should be looked upon with thorough confidence in this respect. There may be some who affect to question the ability of the colony to provide a perfect security to the assured. The reply to these is the simplest. If New Zealand cannot make good its life policies to i f s its own colo* nists it is not a safe place to invest any savings or capital in, nor to settle in. Another point of comparison, and one of an importance secondary only tu the question of security, is the difference in the rates of premium. An examination of the rates charged by companies shows that on assurance without profits, the lowest rate adopted by any company is considerably hjghei than the New Zealand Government rates. Of life assurance with profits, we are nob now treating, for it is, of course, out of the question for the Government to undertake business of tins kino!. W 0 think, however, that it will not be difficult to see that the extra premiums, paid for assuring with profits, would,, ii invested in shares in building sod--ties, and similar institutions, prove more profitable in. the majority of cases than paying so much more than. $

necessary for assurance to the directors ,of the assurance company to invest or speculate with on behalf of the assured. Indeed, it seems clear, that if the profits are to be better than those which the assured could make out of his extra payments, the risk of the company's investments must be so considerable as to be quite incompatible with certainty that the policy will be paid when it falls in. There are other reasons which should .entitle the Government Assurance to be warmly supported by the public. Amongst other* we will, without laying undue stress on it, mention that if the profits of life assurance can be made to now into the Colonial Treasury, instead of into the pockets of foreign shareholders, the public gain will not be slight. Still better will it be, jf the taking up of this business by the Government leads to the profits of assurance remaining in great part in the pocket of the provident colonist. Notwithstanding the advantages which, in our opinion, should make the Government Assurance popular, we think that there are certain obstacles to speedy success. One of these is the habit of reference to Wellington before any policy is concluded. Surely a means might be devised of doing away with :such a fertile cause of delay and ex* pense. A very moderate annual outlay should suffice to make risks readily acceptable in the large towns throughout the colony. In the case of the most important places, it is probable that it might answer well to have an agency in the hands of an officer who should have enough of his time to push the business. It is to be hoped that the Government will give earnest attention to perfecting the system which they have wisely introduced, and which, we think may be of the greatest per • manent benefit.