ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1907.

Appendix to the Journals of the House of Representatives, 1908 Session I, H-08

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1908. NEW ZEALAND.

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1907.

Presented to both Houses of tlie General Assembly pursuant to the Provisions of the Acts relating to Government Life Insurance. Government Insurance Office, Wellington, 12th May, 1908. I have the honour to submit the following report upon the transactions of the Department for the year ended the 31st December, 1907, and its position at that date. The Revenue Account, Balance-sheet, and Statement of business are appended. New Bnsi7iess. —During the year 4,016 proposals were dealt with, for the assurance of £"921,142, and the number of policies actually completed was 3,293, assuring being ,£"22,960 in advance of the new business for the previous year. The annual new premiums on new policies amounted to £"24,204. Thirty-four annuities were also granted, on which the purchase-money amounted to £17,179. The steady rate of progress of the Department's new business will be seen from a comparison of the figures for the past four years : —

Total Business in Force. —The total business now in force is 46,595 policies, assuring (and £"1,124,970 bonuses) at death or maturity, together with 350 immediate and deferred annuities for £"59,617 per annum ; the total business bearing an annual premium income of £"331.430. In the Civil Service section, which is included in the foregoing total business, there were 895 policies, assuring £"134,041 (and £"4,382 bonuses), and entitling the survivors at age sixty to annuities amounting to £"43,172 per annum, the annual premium income being It is expected that this section will be practically abolished during the current year, as the natural result of the working of " The Public Service Superannuation Act, 1907." It may be pointed out, however, that the provision for widows and dependants under the new superannuation scheme is not on such a high scale as to make insurance no longer necessary, and no doubt large numbers of Civil servants whose own old age is well provided for by the Superannuation Fund will see the wisdom of making provision for their families by assurances on their lives, for which this Department offers special facilities. Income. —The total income of the year was made up as follows:— New premiums (including single premiums) ... ... ... 22,111 Renewal premiums ... ... ... ... ... ... 303,792 Purchase-money for annuities ... ... ... ... 17,179 Interest ... ... ... ... ... ... ... 183,618 Fees ... ... ... ... ... .. ... 13 Total income for 1907 ... ... ... ... £"526,713 Attention is drawn to the steady increase of both premium and total income during the past few years, as shown by the following:—

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Year New Sum assured Year. New Sum assured. I904 I9O5 £ 694.556 716,021 ! 1906 1 1907 £ 729,105 752,065

Year. Premium Income v . T (excluding Annuities).] Y Increase Total Income. Yearly Increase. Year. 1904 1905 1906 1907 £ £ 309,239 314,003 4,764 3*9.775 5.772 325,903 6,128 £ 480,716 490,925 507.070 526,713 £ 10,209 16,145 19,643 1904 1905 1906 1907

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It will be seen that the rapidly growing revenue is now considerably over half a million sterling, and it will be a surprise to many to learn that, of eighty-six British offices, there are only about twenty with a larger income than that of the New Zealand Insurance Department. Outgo. —During the year 388 policies became void by death, for claims amounting to £135,671, which is considerably under what is provided for in the tables of mortality used by the Department. Three hundred and sixty-seven policies matured as claims during lifetime for £105,461, a larger amount than has ever before been paid to the holders of matured policies in any one year. This is entirely satisfactory, being a practical testimony to the permanent nature of a form of assurance which makes provision for old age as well as early death, and probably meets the requirements of the people more effectually than any other. The large amount paid for these matured policies causes no strain on the Department's resources, as the amount being exactly known beforehand is adequately provided for in advance. The surrenders and loans released by surrender have decreased from £52,926 in the previous year to £46,450 in 1907. A satisfactory feature of the year has been the reduction of the expenses of management from £39,884 to £38,352, concurrently with an all-round increase in operations, resulting in a material reduction of the expense ratios and a consequent saving to policyholders. The total amount paid by the Department, since its foundation thirty-eight years ago, in respect of death claims and matured endowments, has been £3,427,327. Of this amount £241,145 was paid in 1907, against £190,979 in 1906. Accumulated Funds. —The net increase in the funds during the year amounted to £155,813, and the total assurance, annuity, and endowment funds, apart from special reserves, have passed the fourth million, and now stand at £4,147,411. The following statement shows the progressive growth of the Department in this and other respects during the past twenty years:—

The Balance-sheet. —On the 31st December, 1907, the total assets of the Department amounted to £"4,251,422, and were invested as shown in the following comparative statement: —

A prominent feature is the advance in mortgages on freehold property, which asset has been increased by £"216,784, and now statids at £"2,388,021. The detailed balance-sheet shows a decrease in premiums overdue and outstanding, indicating more prompt payment. A feature in the year's operations has been an advance, small but satisfactory, in the rate ot interest earned on the Department's mean funds, the rate having risen from £"4 gs. iod. per cent, in 1906 to ios. 3d. per cent, in 1907. The satisfactory position of the investments is indicated by the fact that the overdue interest only amounts to £"532 14s. 4d., out of an annual income from interest amounting to £"183,618. The small item ot £524 17s. id. appearing in the balancesheet under the heading of " Properties acquired by foreclosure " represents two small properties which fell into the Department's hands through foreclosure of the mortgages thereon, but I am pleased to state that both these properties have since been sold at satisfactory prices, and at the present date the Department has no foreclosed properties on its hands. These three points—an advance in the rate of interest earned; the small amount of interest overdue, and the absence of properties acquired by foreclosure of mortgages —appear to me to afford a striking tribute to the care with which the Department's investments have been made, and to the success which has attended its financial operations. Triennial Investigation. —The preliminary work is in hand in connection with the forthcoming triennial investigation of the assets and liabilities to be made at the end of the current year, and the results of a recently made interim valuation give every reason to believe that policyholders will again receive increased bonuses. J. H. RICHARDSON, Government Insurance Commissioner.

Year. Policies in Force. Total Total Accumulated Expenses Income. Funds. (excluding Number. Sum assured. Bonuses. Annuities. Taxes). Ratio of Tol (excluding tal Expenses ! Taxes) to Total Income. Premium Income. 1887 1897 1907 ££££££ 25,439 6,831,934 305.010 4,527 268,372 1,328,493 42,316 36,174 9,002,601 854,409 19,486 398,121 2,725,106 51,149 46,945 10,855,153 1,124,970! 59,617 526,713 4,i47, 4< n 55,591 Per cent. 158 128 106 Per cent. 210 i9 - o l6 - 2

At 31st D< :cember, [906. At 31st December, 1907. Amount. Percentage of Total Assets. Class of Investment. Percentage Amount. of Total Assets. £ 2,171,237 694,847 667,980 163,444 122,436 104,883 183,102 52-8 per cent. 16-9 „ i6-3 . 4'o 3-o 2-5 4'5 Mortgages on freehold property Loans on policies Government securities Local bodies' debentures ... Landed and house property Miscellaneous assets Cash on current account ... I 2,388,021 562 per cent. 697,054 i6 - 4 „ 667,996 157 176,804 4-2 122,436 29 104,467 2-4 94,644 22 Total ... £4,251,422 £4,107,929 ioo-o per cent. iocvo per cent.

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Revenue Account of the Government Life Insurance Department for the Year ended 31st December, 1907.

£ s. d. Death claims under policies, Asauranoe, £ a. d. Amount of Funds at 1st January, 1907 3,991,598 14 11 including bonus additions .. .. 135,671 9 0 Renewal premiums — Assurance, An- Endowment Assurances matured, innuity, and Endowment .. .. 303,791 16 2 eluding bonus additions .. .. 104,191 Oil New premiums (including instalments Endowments matured .. ,. 1,269 19 4 of first year's premiums falling due ! Premiums returned on endowments .. 12 17 4 in the year) .. .. .. 21,765 17 11 ! Bonuses surrendered for oash .. 2,232 1 9 Single premiums—Assurance and En- Annuities .. .. .. .. 14,402 10 2 dowment .. .. .. 345 5 9 Surrenders .. .. .. 25,770 8 7 Consideration for Annuities .. .. 17,179 7 5 Loans released by surrender.. .. 20,679 16 6 Interest .. .. .. .. 183,617 12 1 Commission, new .. £14,883 9 7 Peee .. .. .. .. 13 6 5 . renewal 2,355 8 11 17,238 18 6 Land and Inoome Tax .. .. 11,078 19 9 Expenses of management— Salaries— Head Offioe .. £13,177 2 9 Branoh offices and agents .. .. 7,161 11 5 Extra olerical assistance 1,517 9 9 Medical fees and expenses .. .. 4,525 2 3 Travelling-expenses .. 891 17 4 Advertising.. .. 1,400 18 4 Printing and stationery 1,266 16 5 Rent .. .. 2,519 16 4 Postage and telegrams 1,405 9 3 Exchange .. .. 93 6 10 Office-furniture depreciation .. .. 200 9 3 General expenses .. 3,215 11 3 Triennial expenses .. 579 2 6 Compensation for loss of office .. .. 497 9 8 38,352 3 4 Amount of Funds, 31st December, 1907 4,147,411 9 6 £4,518,812 0 8 £4,518,312 0 8

Balance-sheet of the Government Life Insurance Department on 31st December, 1907.

Liabilities. Assets. £ s. d. £ s. d. £ e. d. Total Assurance, Annuity, and En- Loans on policies .. .. 697,054 3 4 dowment Funds (as per Revenue Goverument securities— Account) .. .. .. 4,147,411 9 6 Consolidated stock .. 625,900 0 0 Claims admitted, proofs not yet com- Railway debentures pleted .. .. .. .. 19,677 2 11 (guaranteed by GoAnnuities .. .. .. .. 223 14 2 vernment) .. 40,000 0 0 Commission .. .. .. 37 15 11 Debentures issued Medical fees .. .. .. 420 0 0 under " The ImmlPremium and other deposits.. .. 6,108 12 6 gration and Public Fire-insurance moneys in suspense .. 564 0 0 Works Act, 1870" 2,096 1 1 Tontine Savings Fund No. 2 .. 13,169 17 0 667,996 1 1 Investment Fluctuation Reserve .. 63,808 19 11 Municipal Corporation debentures .. 135,163 8 6 County securities .. .. .. 440 7 9 Harbour Board debentures .. .. 39,000 0 0 I Town Board debentures .. .. 2,200 0 0 I Landed and house property .. .. 122,436 1 11 Office furniture (Head Office and agencies) .. .. .. 2,163 14 3 Mortgagee on property .. .. 2,388,020 12 11 Properties acquired by foreclosure .. ryli 17 1 Overdue premiums on policies in force .. 5,503 8 5 Outstanding premiums due but not overdue.. 37,829 5 0 43,332 18 5 Overdue interest .. 532 14 4 Outstanding interest due but not overdue.. 6,117 16 6 Interest accrued but not due .. .. 48,741 0 4 55,391 11 2 Agents'balances .. .. .. 2,429 10 2 Sundry aocounts owing .. .. 624 9 8 Cash in hand and on current account.. 94,643 17 8 £4,251,421 11 11 £4,251,421 11 11 Government Life Insurance Department, 28th February, 1908. J. H. Richardson, Commissioner. W. B. Hudson, Secretary. Audited and found correct. J. K. Wabbukton, Controller and Auditor-General.

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Statement of Business

ASSURANCES. Whole-life and Term Assurances. Whole-life and Term Assurances. YEAR 19O7. Annual . I _ Annual tj Sum Rever- Premiums. Annuities. SllIU Rever- Premiums. No - Assured. n u a s r e y s 1, Or,U,,ar U . I. Immediate. Assured. %£?£*. I. Ordinary. 2. Extra. i «. Deferred. I __ 2. Extra. I Annual Sum lii'vur- Premiums. N °- Assured. ™£ L Ordin ary. 1 __ 2. Extra. POLICIES ISSUED AND DISCONIIES ISSUED AND DISCON- £ £ £ s. d. / .. d. £ £ £ a. A. Policies in'force at 31st December, I „ fifi „!{ 322,615 18 7 14,152 7 61 ., 1, „, „,, ... 400 I 94,422 7 3[ 1906 J 45,98110,667,5911,183,900,! 2i8ii 2 2 3g435 g 7 | 13,607 3, Jol, 955 744,400, 19g8 1 g | New buainese, 1907 ..3,327 752.065 .. j 24,, |J '| * 3 800 -. | 28 19 9 } Total 4^o _ 8 I :,4:9,a56; i ,.8 3 , 9 oo;) ,3,908 xaoj 8i963(M6 | Wi-0 ( M.JM 7 0} Polioiea discontinued during 1907 I 2,363 564.503' 58,93O ( | '| '° 2 ,? 487 143,554 29,891]] I5 7} £ £ £ a. A. 13,6073,951,955 744,400 j J 3j 3 900 .. j 2819 9 } 13,6103,952,855 487 143,554 744 400 I 94 > 451 7 °l 744,400 J 1998 x 6 | „„ „„. ( 3,941 17 II 120 15 7 J Total Policies in foroe at 31st De-1 .„„.,:.„„.,.,„ ,,„, q7n I 328,531 14 11 15,124 2 5) ,, 12 o'o ROq o 01 ! 714 509! I 90 - 509 9 u I oember, 1907 | 4b,94& 1U,BD!J,10ct },]H,9IO \ 2,714 4 1 91 w>^ 8 . 808 . 801 7l4,50J|j lg77 5 u | 13,1233,809,301; 714,5091 j 9 \\l PARTICULARS OF POLICIES DISCONiB,S OF POLICIES DISCONHow Discontinued. By Death 405 112,915 21,199 { 3 ' 2 g6 " 1) \\ 88 5 IO 3 " 261 88 ' 215 18 ' 350 { 2 ' 2 81 16 l} Maturity 367 86,376 j J5 5 J Surrender 525 111,113 &.945 1 ] j !j > 5 103 98,180 B.889 | 3 4} ■261 88,818 18,350 { 9 ' 9 » « 8 [ .. 103 '28,1901 8,889 J g 4} Surrender of Bonus .. ... .. 3.749 .. .. .. 2,299 2,299 Lapse 1,066 254,049 9,i 95 J 7,3 || X f ] «4 7 8 128 32,149, 5,403i| ? ff ii 10} Expiry of Policy .. .... Expiry of Premiums -»J J ° | ( g} Miscellaneous .. .. 5 o .. j ».8 | 3 Q 6 , j 15 14^ 123 82,149J 6,403. { T « JJ £\ f 277 6 0| I 8 19 6) 15 14 01 I 0 1 10} 1 ;_ : ; Total J 2,363 564,503 58,930 { 18, ?68 [ 3,403 0 10 487! 143,554. 29,891 | \l J} 487| 143,554! 29,891 ) 3 ' JJ J} PROGRESS OP BUSINESS OP THE GOVERNMENT LIFE INSURANCE NMENT LIFE INSURANCE Totalissued 10403725,266,371 2,222,728! | °j 82,35415 6 39.609Jll,700,8951,436,988 j 3^ £\ Total void 57,09214,411,2181,097,758 | gj 22,73711 4 26,486 7,891,094 722,479! | Jj 39,609Jll,700,3951,436,988 ) £\ 26,486 7,891,094 722,479' J g U Total in foroe .. .. 46,945 10,855,153 1,124,970 328,531 14 11 59,617 4 2 13,123 3,809,3011 714,509 { 90 /^ 7 l 9 \\\ , ' Extra Premiums .. .. .. .. .. 2,714 4 9 Note.—The Ordinary Premium is the premium charged Reduction of Premiums by Bonus, &c. .. .. 184 2 5 £331,430 2 1 Wellington, 2nrl March, 1908 i^=s

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at end of Year 1907.

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

.tjiiuosinuiti! tW of Printing,— Preparation, dot giren ; printing (8,500 coiiiem, £11 I

Authority : John Maukay, Government I'rinter, Wellington.—l9oB.

Price fid.]

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ASSURANCES. ANNUITIES. SIMPLE ENDOWME nITS, INVESTMENTS, ETC. Endoivment Assurances. Annuity Assurances. Annual }■ Sum M Sum "ever- Premiums. Assured. De f e rred Annual N " Assured. ; Ordumry \*££ Annuities. Pren.iun.s. i. Extra. Honiises. No Annual Annum, s. • Premiums. j Immt tUatl. 1. Hum Assured. , , N °- 2 sioXBonuses. TINUED DURING THE YEAR 1907. 30,575 £ £ £ s. d. £ £ s. d. £ s. d. ),5756,516,528 435,651 j " 1} 751 39 ' 213 4 " 5 '' 679 1 4 i<047 720,965 .. ■ 22,624 19 §| 464 | 600 ! 7,776 3 51,048 15 0 £ s. d. £ s. d. ,„„ r-r- ,n r- < 14,152 7 6| 333 ,7 10 7j ' 823 4 8 | „ 1,766 4 6 1 ■• -loo o of o fi7 77 10 7 I 15,908 12 01 367 77 10 71 1M 4 8 | £ £ s. d. 715 92,363 8,488 1 4 3,047 79 10,600 430 2 3 13,622 7,237,493 ,or km (241,578 17 81 435,651 g84 9 5) OQ 071 I 13,769 7 2) II M.aii J i7 10 7) 915 53 j 12 g'g 4 g[. 46,989 8 4 6,727 16 4 ■[ 6- 2,618 11 3 320 15 8 794 102,903 3,913 3 7 1,761 409,829 17 .. 784 9 7 45 4,970 184 19 11 11,8616,827,664 406,780 j } 8 X J| 862 | 12 «,370 17 16,407 0 8 11,861 6,827,664 — - sn (227,809 10 1 106,780 1 836 18 10i m 350 1 77 10 7 15,246 7 1 749 97.993 3,728 8 8 I I TINUED DURING THE YEAR 1907. i .1 125 99,00(1 -2,839 I l,04 J j{j j|j| 2 | 2 ™ ] - 101 0 8 10 8 0 353 85,106 17,842 J 3 ' j 2 10 ,j. .. 80S 74,088 2,94'.) ' 2 ' 52 ® j°| 48 I 2,430 2 5 290 15 0 17 .. 784 9 7 14 1,270 87 9 7 21 2,400 91 4 5 1,450 .. j .. 930i 220,300 3,791 j 6,5^ 7 18 , 3 J 8 I 30 °l 84 7 H 15 0 0 10 1.300 Sβ 9 11 I *l 8 10J .. J**;. 3 0 6 4 13 8 1,76] 109,629 '28,871 J 1:i,7 47 io 7} I 53 { 6 'Jgs} 2,618 U 3 32<) 15 8 0 8 0 17 .. 784 !) 7 45 4.970 184 19 11 DEPARTMENT SINCE DATE OF ESTABLISHMENT T O 31st DECEMBER, 19 07. i9,922Jl3,193,637 781,167' j 455 ;'™ °|'lO99 i 16^ 56,103 13 10 8,047 13 6 !8,061 6,365,973374,387 j 227 18 "I 237 { 31 '882} U ' 732 16 ,jl - 640 12 10 580 265 2 0 26,251 1 8 2,821 I - 9,446 0 6 2,072 J I 5,717 16 10 2361 187 11 5 11,004 14 7 11,861 6,827,664 4(16,780 -J 2 ' \g 862 j 120 , ,^ I 44,370 17 16,407 0 860 77 10 7 15,240 7 1 97,998 I 3,728 3 8 ,t the true age; the Extra, the additional premium imposed for any reason whatsoever.