ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1930.

Appendix to the Journals of the House of Representatives, 1931 Session I-II, H-08

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1931. NEW ZEALAND.

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1930.

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

Government Insurance Office, Wellington, 6th June, 1931. I have the honour to submit the following report upon the transactions of the Department for the year ended 31st December, 1930, 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 5,780 policies, assuring the sum of £1,946,322, the premiums thereon being £62,137 per annum. Twentynine annuities also were granted, the purchase-money being £18,598. The introduction of a new policy of deferred assurance for children, incorporating various liberal options exercisable on the attainment of age 21, has met with a ready response from the assuring public. The total business in force at the end of the year (including immediate and deferred annuities for £25,152 per annum) comprises 71,868 policies, bearing an annual premium income of £665,447. The total sum assured is £21,418,413, to which reversionary bonuses amounting to £2,426,621 have been added. Income.—The total yearly income continues to expand steadily, the income for 1930 being £1,114,322, made up as follows : Premium income, £656,751 ; interest and rents (after deduction of land and income tax amounting to £20,621), £438,973 ; consideration for annuities, £18,598. Claims.—During the year maturity claims amounting to £307,664 on 1,131 policies arose, and 577 policies, assuring the sum of £224,345, became claims by death of the assured. The total amount paid in claims since the inception of the Department amounts to £12,269,927. Accumulated Funds.—The Assurance Funds increased by £322,323, and now amount to £8,248,847. In addition, the Department has an Investment Fluctuation Reserve, constituted in respect of mortgages and other investments, which now amounts to £238,882, a sum of £25,000 having been transferred thereto at the end of the year. Investments.—The funds of the Department have been kept closely invested, and the cash in hand and on current account at the end of the year stood at the low figure of £2,006. The distribution of the investments is as follows :— Class of Investment. Percentage of Total Assets. Mortgages of freehold property .. .. .. .. . . 43-0 Government securities .. .. .. .. .. .. 26-7 Local-body debentures .. .. .. .. .. .. 13-6 Loans on policies . . .. .. . . .. . . .. 12-5 Miscellaneous assets .. .. .. .. .. .. 2-4 Landed and house property .. .. . . ~ .. .. 1-8 100-0

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Expense Ratios and Rate of Interest—The ratio of expenses to (a) total income and (b) premium income have further declined, and the effective rate of interest (after deduction of taxes) earned on the funds has increased. The respective figures for 1930 and the two preceding years are . 1928. 1929. 1930. Ratio of expenses to — Per Cent. Per Cent. Per Cent. (a) Total income 9-35 8-79 841 (b) Premium income .. •• •• ' '' m tF ; 11 7 Net effective rate of interest .. ..£5 9 9 £5 10 10 Annual Bonus Distribution—The attached Valuation Report, pursuant to section 40 of the Government Life Insurance Act, 1908, discloses a net surplus of £228,799 (excluding interim bonuses paid during year), and of this sum £224,145 has been allotted in the form of compound reversionary bonuses upon the sum assured and existing bonuses. The total reversionary bonuses thus allotted amount to £3?1 The rate of bonus allotted in the case of ordinary endowment and whole-life assurances under the present premium tallies ranges from £1 18s. per cent, to £2 2s. per cent on the sum assured foir policies one year in force, and up to £3 15s. per cent, m the case of policies of long dxiration. .1 lie declaration of such satisfactory rates of bonuses, coupled with the stringent basis employed m the valuation, speaks for itself of the Department's strong financial position. _ _ „ , General. —Notwithstanding trade conditions prevailing m the Dominion, the new business for t year was very satisfactory, and was again the highest m the history of the Department The rate of bonus declared for 1928-29 has been maintained, and this rate, m conjunction with ® charged by the Department, provides contracts which will bear comparison with those of any othe life-insurance office transacting business in the Dominion. Commissioner .

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Revenue Account of the Government Life Instance Department for the Year ended 31st December, 1930. £ 8. d. £ s - d - Amount of funds at Ist January, 1930 7,926,524 12 11 Death claimsunto■ «stance policies, Renewal premiums Assurance, An- ' Raiment; ceding bonus additions .. .. 300,053 3 0 SPremiUinB falUngte 58,380 14 3 endowments!: 'l! 8 J 3 sx, .. Si!' dowment .. .. •• 5,769 b Z . g Consideration for Annuities 18,598 210 by'surrender' " 66;632 11 5 £ s d Vn 463,757 0 8 Commission, new* .. 34,463 16 11 land and l renewal 4,542 3 7 come tax, £20,620 " 39,006 0 6 16s. 10d. ; pro- Contribution to Public Service Superperty expenses, w , 1 463 910 £4,163 15s. Bd. .. 24,784 12 6 animation Fund .. 438,972 8 2 ' Expenses of management — Salaries £ s - "• Head Office .. 21,992 9 10 Branch offices and agents .. 12,532 18 3 Extra clerical assistance .. •• 3,130 3 2 Medical fees and expenses •• 2,626 13 9 Travelling-expenses 623 6 8 Advertising .. 592 10 2 Printing and stationery . • 1. 537 0 4 Rent .. •• 4,973 511 Postage and telegrams .. •• 1,795 11 4 Exchange .. 43 9 10 General expenses .. 3,445 9 0 g Transfer to Investment Fluctuation a a Reserve Account .. •• 25,000 0 0 Amount of funds, 31st December, 1930 8,248, J £9 040.846 11 9 .. £9,040,846 11 9 * Including agents allowances. ===== — Balance-sheet of the Government Life Insurance Department on 31st December, 1930. .. i Assets. Liabilities. £ s. d. i: ll i I Account) .. • Municipal Corporation debentures .. 266,767 13 I Claims admitted, proofs not yet com- ~y securities MS £ 'n Annuities' 349 7 0 Harbour Board debentures .. |7,600 0 0 Annuities .. 5 Town Board debentures .. •• 28,778 12 11 218 18 6 Road Board debentures .. •• o c Premium and other deposits .. 11,474 15 9 1» » asrasssass!-." -as 1 ' 2 :: »•"!£ \ ? Overdue premiums on £ s. d. policies in force .. 9,124 9 8 Outstanding premiums due but not overdue 59,619 17 9 _ Overdue interest .. 9,684 7 7 Outstanding interest due but not overdue 12,826 18 6 Interest accrued but not due.. - "I."» 0 5 133,927 6 6 Sundry debtors .. 1.294 1 4 Cash in hand and on current account 2,00b » o 0 6 £8,558,563 0 6 A. E. Allison, Commissioner. H. Rose, Secretary. Government Life Insurance Department. The Audit Office, having examined the Revenue Account and Balance-sheet, a,nd compared them with the relative books, documents, and securities hereby certifies them to be m accordance therewith.—G. F. C. Campbell, Controller and Auditor-General.

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Statement of Business

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TOTAL. Whole-life and Term Assurances. YEAR 1930. : r | Annual Annuities. Annual No Sum , : Premiums. Immediate or N Sum Jonarv Premiums, i assured. ! : 1. Ordinary. entered upon. assured. 1. Ordinary. Bonuses. 2 Extra% 2 Deferred. j 011111568 - g. Extra. POLICIES ISSUED AND DISCONI £ £ £ s. d. £ . s. d. £ £ £ a. d. Policies in lorce at 31st 70,189'20,700,0692,265,539 / 640,227 4 023,439 9 4) 9,863 3,623,355 613,749 ( 91,868 18 6) December, 1929 \ 1,912 17 6 1,511 13 2 / { 715 9 3 J New business .. .. 5,809 1,946,322 .. ( 62,066 17 1 1,552 10 4 ) 153 83,425 .. I 3,107 19 2 1 1 70 11 10 4 0 4 / 1 10 8 5 } Bonus allotted .. . • .. 352,347 .. .. .. .. 37,100 Total.. .. 75,99822,646,3912,617,886 / 702,294 1 124,991 19 8 110,016 3,706,780 650,849 ( 94,976 17 8 1 | 1,983 9 4 1,515 13 6 / \ 725 17 8 f Policies discontinued 4,130 1,227,978 191,265 J 38,638 4 3 1,305 11 8) 628 256,466 55,204 / 6,832 4 0 1 during 1930 ( 192 14 7 49 16 4 J { 95 6 8 | Total policies in force at 71,868 21,418,413 2,426,621 f 663,655 16 10 23,686 8 0 ) 9,388 3,450,314 595,645 / 88,144 13 8) 31st December, 1930 I 1,790 14 9 1,465 17 2 j ( 630 11 0 / PARTICULARS OP POLICIES DISCON How discontinued. | | ByDeath .. .. 577;' 166,686 56,20lj/ 5,245 1 9 1,355 9 2) 302 98,198 44,037 ( 2,616 31 71 I I 58 0 1 j { 41 6 7 f Maturity .. .. 1,131 241,119 64,658 ( 9,265 13 It t 19 17 Of Surrender.. .. 1,083 343,187 42,076/10,375 19 1) .. 138 65,724 6,942 /♦ 1,677 10 4 1 I 41 14 6/ | 25 0 1 I Changes to other 75 28,250 1,103 I 717 3 21 .. 24 11,150 .. | 299 18 4) Tab l es . j | j Cancellation .. 142 45,100 137 I 1,456 5 111 .. 2 3,250 .. ( 24 16 4 i t i is or ! 1 .. f Lapse .. .. 1,122 403,636 27,090 / 11,578 1 3 ( — )49 17 6| 162, 80,144 4,225 / 2,213 7 5) t 71 11 0 ( + )49 16 4 j j 1 29 0 0 j Total discontinued during 4,130 1,227,978 191,265 ( 38,638 4 3 1,305 11 8 | 256,466 55,204 / 6,832 4 0) year 1930 j 192 14 7 49 16 41 | 95 6 8 ( PROGRESS OP BUSINESS OP THE GOVERNMENT LIFE INSURANCE Total issued .. .. 207,988 56,813,363 6,031,762 j 7 J 117,721 1 4 50,60916,481,554,2,301,127] 1|'5I0 12 10} Total void .. .. 136,120 35,394,950 3,605,141 j 1,0 ||'ggi 13 2 I 92,568 16 2 41,22113,031,240 1,705,482! | 3^'^ 6 ® Total in force .. 71,868 21,418,413 2,426,621 663,655 16 10 25,152 5 2 9,388 595,645 88,144 13 8 ! i Extra Premiums .. .. .. 1,790 14 9 .. | .. .. .. 630 11 0 £665,446 11 7 £88,775 4 8 Note.—The " ordinary " premium is the premium charged

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at End of Year 1930.

A. B. Allison, Commissioner. S. Beckingsale, Acting-Actuary.

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ASSURANCES. SIMPLE ANNUITIES. ENDOWMENTS, Endowment Assurances. Annuity Assurances. INVESTMENTS, ETC. -p Annual ! ' • Annuities. I Annuities. Sum Annual No Sllm sionarv Premiums. . „ H™' 1. Immediate or\ Annual ~ Annual 1. Immediate or „ aa Premiums, assured. Bonuse y s 1. Ordinary. : No ' si o°™v entered upon. Premiums. No ' Premiums. entered upon. No ' 1. Ordinary. »■»«""• B™es. \2- Deferred, j 2. Deferred. Bomnaes. '•*«*»• j : TINUED DURING THE YEAR 1930. £ £ s. d. £ £ s. d. £ a. d. £ s. d. £ s. d. £ s. d. ; 57,984 16,710,5791,629,322 /537,903 6 9/ 27/ 5,785 1 264 2 9)229 16 6 408 91 12 6(23,175 6 7 ) 1,907(360,350 10,133 9 9) 1 1,195 18 9/ 1 1,298 / 1,211 13 2 / 1 300 0 0 f j 21,170 1 9 6j 5,1961,655,241 .. / 56,390 0 7) .. / 100 .. l 25 19 0 29 .. ( 1,552 10 4 ) 431(207,556 2,542 18 41 I 58 0 11} | 4 0 4) j \ j .. 2 2 6j 312,015 .. .. 132 .. .. .. .. .. .. 3,100 63,18018,365,8201,941,337 /594,293 7 4) 27 / 5,885 264 2 9)255 15 6 437 91 12 6 ( 24,727 16 11 ) 2,338 ( 567,906 12,676 8 ll | 1,253 19 8 f | 1,430 1,215 13 6 j | 300 0 0 | | 24,270 3 12 o' 3,319 935,674 134,075 / 30,826 5 10) 2 / 138 ( —)24 2 0 | 45 6 0 26 .. / 1,329 13 8 ) 155 I 35,700 934 8 si I 97 7 11/ j 112 ( + ,49 16 4 / j .. } { 1,874 .. I 59,86117,430,146 1,807,262 /563,467 1 6) 25 / 5,747 288 4 9)210 9 6 411 91 12 6/ 23,398 3 3) 2,183(532,206 11,741 19 8| ( 1,156 11 9 f I 1,318 1,165 17 2 / ( 300 0 0/ | 22,396 3 12 0/ TINUED DURING THE YEAR 1930. | 245 68,288 12,164 / 2,619 18 11) .. .. .. .. 28 .. ( 1,355 9 2) 2 f 200 8 11 31 1 16 13 6 | •• 1,090 234,919 63,154 / 9,015 16 01 .. / .. I .. .. 41 6,200 249 17 1) ( 19 17 0) t 111 ) ! 393 874 257,663 35,133 j 8,259 16 11 j .. j .. .. 71 / 438 11 101 51 17,100 1,103 | 417 4 10) .. .. .. .. .. .. .. .. " 130 40,650 137 / 1,326 19 9 I .. .. .. .. .. .. .. 10 I 3,200 104 9 lOi t 112 oi | 929 317,054 22,384 / 9,186 9 5[ 2 / 138 (—) 24 2 0 ) 45 6 0 (-)2 .. f (-) 25 15 6) 31 f 6,300 132 18 5 [ 42 11 0) \ (+) 49 16 4 j j .. j j 481 } 3,319 935,674 134,075 / 30,826 5 10 1 2, 138 (—) 24 2 0 ) 45 6 0 26 .. / 1,329 13 8 ) 155 | 35,700 934 8 5) 1 97 7 11 f | 112 (+J 49 16 4 } { .. J ] i, 87 4 .. \ DEPARTMENT SINCE DATE OP ESTABLISHMENT TO 31st DECEMBER, 1930. 147,757 38,854,764 3,681,603 ®} 1,106 | } 57,50116 10 8,645 14 8 1,175 866 6 8 60,219 4 6 7,341 | 37,728 4 7j 87,896 21,424,6181,874,341 | 7^ ; 2|8 16 11J 1>m { 154,803 1 56>0 47 14118,435 5 2 764 774 14 2 36,521 1 3 5,158 j 25,986 1 1} 59,86117,430,1461,807,262 563,46?' 1 6 25 I 1 1,454 111 210 9 6 411 91 12 6 23,698 3 3 2,183 i 532,20611,741 19 81 v » ) | 22,396 I 1,156 11 9 ..j .. .. .... i 3 12 0 _J : | I I j £564,623 13 3 £210 9 6 £91 12 6 £11,745 11 8 at the true age; the "extra " the additional premium charged for any reason whatsoever.

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REPORT OF THIS VALUATION OF THE GOVERNMENT INSURANCE DEPARTMENT AS AT 31st DECEMBER, 1930.

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

Wellington, 2nd March, 1931. In accordance with your instructions, an investigation and a valuation of the annuity and the assurance contracts of the Department have been made for the year ended 31st December, 1930, with the object, of ascertaining the net surplus available for distribution amongst the policyholders, and, m compliance with section 40 of the Government Life Insurance Act, 1908, and amendments, I have the honour to report as follows : — The business to be valued consisted of 71,868 policies, assuring, inclusive of bonus additions' £23,845,034, and £25,152 immediate and deferred annuities per annum, the Office premiums thereon amounting to £665,447 per annum. The bases adopted for the valuation were as follows (a) The British Offices Om Table, 1893, and the British Offices Annuity Tables, 1920, were employed in the case of assurances and annuities respectively, with 3 per cent, interest, and . . . ... (b) The net premium method of valuation has been followed in arriving at the value, according to the above tables, of the liabilities in respect of the Department's contracts, and additional reserves have been included for future bonuses, expenses, and other contingencies. The valuation has disclosed a total surplus of £232,581 as follows Total funds at 31st December, 1930 .. •• •- " o'ntn'nll Less value of liabilities .. •• •• • •• 8 ,020,048 Net surplus . . •• ■■ •• Add interim bonus paid during year .. • • •• ■■ o,io* Total surplus .. • • • • • ■ • ■ ' Separate investigations of the General and the Temperance Sections, as required by the Act, disclosed that identical rates of bonus should be declared in both sections. I accordingly recommend that the following rates of compound bonus be declared'on the sum assured and existing bonuses in respect of each full year's premium paid during the year Policies issued under present premium tables Per Cent. Whole-life assurances, and long-term endowment assurances (Tables A, B, £ s. d and A special) .. •• •• " ." ? n Endowment assurances (excluding Tables A, B, and A special) . . . . I 18 Double-endowment assurances and pure endowments .. ■■ ..17b ' Policies issued under premium tables which have been closed . Whole-life and endowment assurances . . ■ ■ • • " 110 n Doublesendowment assurances . • • • - ■ • • The above bonuses will absorb £224,145, and I recommend that the balance of the net surplus —£4,654 —be carried forward.

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The effective rate of interest earned on the funds of the Department, after deduction of taxes, increased from £5 10s. lOd. per cent, in .1929 to £5 lis. 7d. per cent, in 1930. The expenses of management further declined to 13-88 per cent, of the premium income, or 8-41 per cent, of the total income, the corresponding figures for 1929 being 14-40 per cent, and 8-79 per cent, respectively. Death claims increased by £28,644 as compared with 1929, the respective figures being £224,226 and £195,582. Nevertheless the incidence of the claims has been such that the present high rates of bonus can safely be maintained without adversely affecting the financial strength of the Department. S. Beckingsale, A.1.A., Acting-Actuary. The Government Insurance Commissioner, Wellington. Approximate Cos tof Paper.—Preparation, not given ; printing (1,450 copies), £13.

By Authority : W. A. G. Skinner, Government Printer, Wellington.—l93l. Price 6d.\

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