ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1902.

Appendix to the Journals of the House of Representatives, 1903 Session I, H-08

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1903. NEW ZEALAND.

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1902.

Presented to both Houses of the General Assembly pursuant to the provisions of the Acts relating to Government Life Insurance.

Government Insurance Office, Wellington, 26th May, 1903. I have the honour to submit my report upon the transactions of the Department for the past year, together with the accounts and usual statement in detail of the progress of business. New Business. The number of proposals received during the year was 4,199, for assurances of ,£863,674, and the number of policies issued was 3,352, assuring the sum of ,£679,403, an increase of ,£35,357 on the previous year. Twenty-seven annuities - were also granted during the year, the purchase-money for which amounted to The premiums on the new policies issued amount to per annum. Income. The total income of the Department was 1,348, comprising from interest and from premiums, or an increase in the total income for the year of Claims, Maturities, and Expenses of Management. Three hundred and fifty-nine policies, representing with bonus additions the sum of became claims during the year through the death of the persons insured. Three hundred and twenty-six policies matured during the year for the sum of ,£89,291, an increase of £"46,902 over the previous year. The amount paid on account of matured policies is higher than in any previous year, and is, of course, a satisfactory feature, implying as it does the payment of the premiums and the maintenance of the policies until the sums assured become payable by effluxion of the periods agreed upon. The amounts required being known in advance, the payments cause no strain on the resources of the Department, proper provision being made beforehand to meet the payments as they become due. The total amount paid by the Department since its inception in 1870 in respect of death claims and matured policies has been £2, 376,495. The expenses, which were reduced last year to 13-3 per cent, of the total income, have been kept down to the same low figure, in spite of the special expenses incidental to the triennial valuation. Investment Fluctuation Reserve and Accumulated Funds. In accordance with the Department's practice for many years past, all securities have undergone a rigid scrutiny preliminary to the ascertainment and distribution of the surplus as at 31st December, 1902. The investment fluctuation reserve, which has been increased to is believed to be much in excess of all probable requirements, but in making periodical provisions of this character the Department has always sought to amply provide for all possible contingencies. It is believed that this course is approved and appreciated by the policyholders, whose best interests demand that the Department's finances shall be maintained in an impregnable position. After making provision for the investment reserve as narrated above, the accumulated funds have increased by and amounted at 31st December to I—H. 8.

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Balance-sheet. On 31st December, 1902, the total assets of the Department amounted to £3,474,134, and were invested as follows:—

During the year a parcel of Treasury bills amounting to £60,000 was paid off by the Treasury, whilst the amount on current account with the bank, which earns only a low rate of interest, was reduced by over £28,000. These amounts, in conjunction with the 3?ear's accretions, have been invested in more remunerative securities, chiefly in mortgages of freehold property, which, it will be noted, show an increase of over £194,000. The overdue interest, which at the end of 1901 stood at the low figure of £472, was down at the close of 1902 to the unprecedentedly low amount of £400, or the small ratio of ss. sd. per £100 of interest due. Viewing the position as a whole it will be seen that the amount collected actually exceeded the amount falling due by £72, a very satisfactory index of the character of the Department's securities. The foreclosed properties were further substantially reduced, and at the close of the year stood in the Department's books as £1,833 only. The Department has since sold the last of these properties, and the small amount remaining at the debit of the account represents the balances of purchase-money not yet due. General Remarks. The valuation of the Department's policy liabilities at the 31st December last was completed early in the present year, and particulars thereof are contained in the report by the Actuary on the triennial valuation. The results were eminently satisfactory, and, after a stringent valuation at the low rate of 3 -J- per cent, interest, and reservation of the whole of the premium loading for future expenses, a sum of £167,933 was divided, representing additions to the sums assured of £290,074. Since its inauguration in 1870 the Department has divided cash profits amounting to £1,001,285, representing additions to the sums assured of no less than £1,919,820. It has hitherto been the practice to allow prospective bonuses only in the case of policies emerging by claim between two distributions of surplus. Arrangements have now been made to include interim bonuses in all computations of surrender value either in cases where policies are actually surrendered or borrowed upon, or for the purpose of giving the largest possible cover where the premiums are overdue. Even in the case of a yearly distribution of surplus the policyholder who is unfortunately compelled to surrender forfeits on the average half a year's bonus, but under the Department's new system he would receive the proper proportion of accrued bonus for every premium paid since the last distribution. J. H. Richardson, Government Insurance Commissioner.

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At 31st December, rgoi. At 31st Dei :ember, 1902. I Percentage |Amount. of Total Assets. Class of Investment. Percentage of Total Assets. Amount. £ 1,614,479 728,911 602,189 132,227 123,563 95.O97 61,508 5>!52 48 - o per cent. 217 I7-9 3 9 37 2-8 i-8 Mortgages on freehold property Government securities Loans on policies Local bodies' debentures ... Landed and house property Miscellaneous assets Cash on current account ... Properties acquired by foreclosure ... £ 1,808,683 668,923 607,588 131,178 123.575 98,909 33-445 1,833 52-1 per cent. 19-2 i7\5 3-8 „ y5 2-8 „ I'O „ O-2 o-i „ ■3,363,126 ioo'o per cent. Total 134 loco per cent.

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Revenue Account of the Government Life Insurance Department for the Year ended 31st December, 1902. £ s. d. Death claims under polioiee, Assurance, £ a. d. Amount of funds at Ist January, 1902 8,285,415 12 9 ! including bonus additions .. .. 121,882 18 0 Renewal premiums — Assurance, An- Endowment Assurances matured, innuity, and Endowment .. .. 271,173 18 9 oluding bonus additions .. .. 87,704 13 0 New premiums (including instalments Endowments matured .. .. 1,586 4 3 of first year's premiums falling due Premiums returned on endowments .. 16 0 0 in the year) .. .. .. 21,068 1110 Bonuses surrendered for cash .. 2,141 11 5 Single premiums—Assuranoe and En- Annuities .. .. .. .. 11,817 15 11 dowment .. .. .. 1,939 14 0 i Surrenders .. .. .. 24,151 16 1 Consideration for Annuities .. .. 9,664 6 4 Loans released by surrender.. .. 21,967 3 3 Interest .. .. .. .. 147,485 12 3 Commission, new ..£12,785 15 10 Fees .. .. .. .. 16 2 3 ! . renewal .. 2,130 010 14,915 16 8 Land-and inoome-tax .. .. 8,811 4 10 Expenses of management— Salaries — HeadOffioe ..£11,268 6 0 Branch offioes and agents .. .. 5,982 7 1 Extra clerical assistance 1,924 7 1 Medical fees and expenses .. .. 5,040 4 9 Travelling-expenses .. 664 14 10 Advertising.. .. 1,202 18 3 Printing and stationery L,143 16 0 Bent .. .. 2,175 0 0 Postage .. .. 1,197 14 2 Telegrams .. .. 387 16 9 Exohange .. .. 82 17 5 Office-furniture depreoiation .. .. 301 711 General expenses .. 2,880 8 4 Triennial expenses .. 1,736 5 0 Compensation for loss ofoffioe.. .. 180 0 0 ■ 36,168 3 7 Investment Fluctuation Reserve .. 22,783 9 6 ! Amount of funds, 31st December, 1902 3,382,817 6 8 £3,736,763 18 2 - £3,736,763 18 2 Balance-sheet of the Government Life Insurance Department on 31st December, 1902. Liabilities. Assets. £ s. d. £ s. d. £ s d Total Assurance, Annuity, and En- Loans on policies .. .. .. 007,588 6 7 dowment Funds (as per Revenue Government securitiesAccount) .. .. .. 3,382,817 6 8 Consolidated stock .. 625,900 0 0 Claims admitted, proofs not yet com- Railway debentures pleted •• •• •• .. 21,450 11 2 (guaranteed by GoAnnuities .. .. .. .. 7 0 3 vernment) .. 40,000 0 0 Commission .. .. .. 470 8 2 Debentures issued Medical fees .. .. .. 660 9 0 under " The ImmiPremium and other deposits.. .. 5,69316 0 gration and Public Fire-insurance moneys in suspense .. 200 0 0 Works Act, 1870" 2,023 3 0 Tontine Savings Fund No. 2 .. 6,239 2 8 Advance on hypotheInvestment Fluctuation Reserve .. 56,595 2 8 cation of Debentures issued under " The Government Accident Insuranoe Act, 1899" .. 1,000 0 0 668,923 3 0 Municipal Corporation debentures .. 90,893 17 11 County securities .. .. .. 784 9 6 Harbour Board debentures .. .. 39,000 0 0 Town Board debentures .. .. 500 0 0 Landed and house property .. .. 123,575 4 10 Office furniture (Head Office and agencies) .. .. .. 2,870 1 7 Mortgages on property .. .. 1,808,682 14 0 Properties acquired by foreclosure .. 1,832 8 1 Overdue premiums on polioies in foroe .. 6,046 14 10 Outstanding premiums due but not overdue.. 33,201 1 0 39,247 15 10 Overdue interest .. 400 1 7 Outstanding interest due but not overdue.. 5,574 14 2 Interest aoorued but not due .. .. 42,518 8 1 ■ 48,493 310 Agents'balances .. .. .. 4,174 17 3 Sundry accounts owing .. .. 4,122 11 6 Cash in hand and on ourrent aocount.. 33,445 2 8 £3,474,133 16 7 £3,474,133 16 7 Government Life Insurance Department, 31st March, 1903. J. H. Eichardson, Audited and found correct. Commissioner. J. K. Waeburton, W. B. Hudson, Controller and Auditor-General. Secretary.

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Statement of Business

ASSURANCES. TOTAL. Whole-life ,d Term Assurances. YEAR 1902. o,™ ReverNo - Assured Nonary - Assurea Bonus. Annual Premiums. ;. Ordinary. 3. Extra. Annuities. M „ Sum "°- Assured. Reversionary — Bonus. Annual Premiums. 1. Ordinary. 2. Extra. 1. Immediate. 2. Deferred. POLI IES :ssue: AND DISCONPolicies in foroe at 31st December, I 1901 } 41,291 £ ! 9,742,102| £ 885,161 / s. d. j 289,693 7 o 1 3,436 1 8 1 23,538 3 o \ 200 9 5 £ s - tiii,777 2 61 19,411 17 6J 1,216 9 4I 5,356 5 2/ 16,339 £ 4,762,534 £ 617,889 £ s. d. (117,065 0 3) 1 2,012 15 10) 80 7 101 | 100 0 1} New business, 1902 3,379 679,403; 16 3,474 Total .. 44,670 10,421,505 885,161 1 313,231 10 o ( 3,636 11 1 I 16,629 7 9 1 253 3 10 12,993 « 10I 24,768 2 8} 875 15 7) 494 4 71 16,355, 4,766,008 617,889; (117,145 8 1| I 2,712 15 11)' ( 4,885 18 41 \ 180 13 9} Policies discontinued during 1902 .. 2,264 524.933; 47,073 611 181,378 25,923| Total in foroe at 31st December, 1902 42,40(1 9,896,572; 838,088 1 296,602 2 3 ( 3,383 7 8 12,117 16 81 24,273 18 1} 15,744 ,4,584,630 591,960 (112,259 9 91 t 2,532 2 2} ARTICUL. RS p po: ICIES DISCONHow Discontinued. By Death 370 103,555 15,867 1 1 I 1 3,072 16 3 89 16 7 3,091 2 6 24 o 3 3.093 5 1 20 15 o 875 15 7 I 80 19 9 f 255 80,558 14,479 ( 1 2,170 7 91 76 4 11J Maturity 326 73.067 13.895 I Surrender 420 98,070 5.701 294 9 10 } 149 42,929 3,338 ( 1 1,127 6 81 15 11 Of Surrender of Bonus 4,126 3,304 Lapse Expiry of Polioy 1,143 5 249,141 1,100 7.484 I I 1 ( I 7,127 19 11 63 5 6 16 o 5 33 5 io 165 18 6 o 15 0 62 5 1 21 5 8 ) ) ! 118 15 o } 202 5 56,791 1,100 4,802 I 1 I ] 1 I ( 1,383 8 111 36 2 10} 16 0 51 33 5 10} 165 18 61 0 15 0} 22 16 li 18 14 2/ Expiry of Premium Miscellaneous Total .. I 16,629 7 9 253 3 10 875 15 7 I 494 4 7} 611 181,378| 25,923 1 1 4,885 18 41 180 13 9) 2,264 524,933 47,073 PROGRESS O: BUSINESS OF THE GOVE ,NMENT LIFE IN iURANCE 'otal issued 'otal void Total in force .. 88,078 21,672,274 .. 45,672 11,775,702 .. 42,406 9,896,572 21,672,274 11,775,702 1,629,746 791,658 I 663,842 3 11 1 13,899 18 8 I 367,240 1 8 I 10,516 11 5 47,003 6 7 10,611 12 3 39,587 23,843 11,691,4271,139,208 7,106,797 547,242 (308,254 4 91 1 10,778 15 9 1 (195,994 15 0) ( 8,246 13 7} 838,088 296,602 2 3 36,391 14 4 15,744 4,584,630 591,966 (112,259 9 91 1 2,532 2 2} Extra Premiums Reduction of Premiums by Bonus, &c. 3,383 7 3 270 3 2 Not: :.—The Ordinary Premium is tl ie premium charged £300 255 12 8 Wellini ;ton, 1st March, 1903.

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at end of Year 1902.

J. H. RICHARDSON, Commissioner. MORRIS FOX, Actuary.

Approximate Cost of Paper.—Preparation not given ; printing (6,375 copies), £10 17s. 6d.

By Authority: John Mackay, Government Printer, Wellington.—l9o3. Price, 6d.

ASSURANCES. ANNUITIES. SIMPLE ENDOWMENTS, INVESTMENTS, &C. Endowment A •surances. Annuity Assurances. Sum Eevel " No - Assured. «° nar y ° Bonus. Annual Premiums. 1. Ordinary. 2. Extra. No. 1. Sum 2 A Rever: Deferred Annual Annuities. Premium. Bonus. I No. Annual Annuities^ Premium. j immediate. 3. Deferred. No S A™ Annual s«ed. Premium. TINUED DUR: :ng the y: 1902. 23,759 £ 4,871,451 £ 266,471 £ s. d. (167,770 5 81 ( 823 5 10} j 22,210 13 8\ ( 100 9 4} 377 £ (49,9001 t 801} £ s. d. £ s. d. 18,920 12 10i2,642 18 0 ! 5,642 0 2i 763 11 2 £ s. d. ( 277 | 8; 61 4 6 (27 I .. 14 10 7 £ a. d. 11,777 2 6 1 491 4 8} 1,216 9 4 1 - 285 15 0 f 531 £ 58,217 £ s. d. 2,154 3 7 3,133 647,604' 100 14,500 103 13,825 469 0 2 26,892 ! ! 5,519,055 266,471 (189,980 18 11| I 923 15 2 J J 11,491 13 31 I 72 10 l} 477 9 (64,400| I 801} 1 1,1501 1 25} 24,562 13 0 3,406 4 2 494 4 7, 60 8 8 (304 t 8 75 15 1 i 11 ( •• I 12,993 11 10 I 205 9 8 | 875 15 7 i 634 51 72,042 4,859 2,623 3 9 191 7 6 1,582} 337,546 21,125 25,310! 15,181,509 245,346 (178,489 5 81 1 851 5 If 4G8j (63,2501 ( 776 f 24,068 8 5 3,845 15 6 I ! I 293| \ 8 75 15 1 12,117 16 3 1 205 9 8 J 583, 67,183 2,431 16 3 NUED DURING THE Y 1902. 102 308 22,797 71,458 1,382 13,895 ( 891 5 6) ! ( 13 11 8}j ( 3,020 17 61 ( 24 0 3f; j 1,859 10 21 \ 5 4 0} ( 80 19 9 I 11 3 0 11 875 15 7 18 1,609 70 5 0 244 52,491 2,345 5 f 6001 I 18} 294 9 10 31 9 0 22 2,050 74 19 3 822 928 190,800 2,681 j 5,680 17 91 I 27 2 81 2 ( ".I 118 15 0 17 10 0 11 1,200 46 3 3 ! f 39 2 41 \ - 2 11 6} I 11,491 13 31 72 10 l} | U1 %\ 0 6 8 1,582 337,546 21,125; 9 494 4 7 60 8 8 11 875 15 7 51 4,859 191 7 6 DEPARTMENT SINCE DA' F ES ABLISH ENT T 31st DECE BER, 190! 45,167 9,752,608 489,637; 1 34 X \ jjl 4,571,099 244,291 j ™ *} - -.01 mo « oar' i 178,489 5 81 0,181,509 245,346- g 51 g jj 516 ] 10 'IH] 26,544 0 7 3,730 4 I 7 'l25f 2 ' 475 12 2 384 8 | 63 '||°l 24,068 8 5 3,345 15 3,730 4 465 218 2 6 20,459 6 0 2,34: 157,689 6,921 13 9 19,857 48 ! 384 8 164 142 7 5 8,136 0 1 1,761 90,506 4,489 17 6 25,310 468 301 75 15 1 12,323 5 11 583 67,183 2,431 16 3 at the ti rue age; the Extra, the additional premium ii iposed for any reason whatsoever. •