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The Balance-sheet. On the 31st December, 1899, the total assets of the Department amounted to £3,071,581, and were invested as shown in the following comparative statement: —

It will be seen that there has been a further decrease of £"39,971 in Government securities, and of £"14,200 in cash in hand. There have also been decreases of £"11,918 in local bodies debentures, and £13,545 i n properties acquired by foreclosure. The increase in loans on policies —£18,088 —is much smaller than usual, and the asset which shows the greatest advance is that of mortgages on freehold property, which has been increased by £"202,769. Triennial Investigation. The triennial valuation of the liabilities has been completed, and the report of the Department's Actuary is appended. Before the basis of valuation was finally adopted, the advice of the Department's well-known Consulting Actuaries in London was sought, and these gentlemen (Messrs. Ralph P. Hardy and George King) acquiesced in the view here held that the valuation should be made upon the basis of 3J per cent, interest. The valuation was accordingly made upon that basis, the resulting surplus of £"126,600 being converted into reversionary bonuses, and the certificates have been forwarded to the policyholders. Although, by valuing at per cent., and also making strong reserves in connection with the investments, the bonuses suffer a slight temporary reduction, it is felt that undoubted security is the first thing to be considered ; and, under existing circumstances, the course now adopted must inevitably tend to develop the best interests of the policyholders. General Remarks. During the last session of Parliament a short Amending Act was passed, making better arrangements for dealing with property of the Department, and enabling the Commissioner to delegate certain duties to subordinate officers for the more efficient conduct of business. An Act was also passed enabling the Department to transact Accident Insurance, and the preliminary arrangements necessary to give effect to the Act are receiving attention. A further reduction in the rate of interest charged on loans to policyholders upon the security of their policies was made, the change coming into effect immediately after the 31st December, 1899. The war in South Africa compelled the Department to face, for the first time, the question of war risks, as many ol its policyholders were likely to engage in the war, and applications for insurance were received from those actually proceeding to the front. In such cases temporary assurances for two years were granted, at a uniform rate of £"6 10s. per cent, per annum, the policies being limited to £"250, but no restrictions whatever were imposed upon those already insured ; and I am happy to say that, up to the date of this report, the Department has had only two. claims directly traceable to the effects of the war. After consultation with the London Actuaries, and a thorough consideration of the matter in all its bearings, it was decided to place the premium - rates upon a 3-J-per-cent. basis. Complete new tables of premiums consequently formed, and applied to all new business after the 31st December, 1899. Now that the valuation of existing business and the premiums for new business are both placed upon a basis, the Department's financial position is greatly strengthened, and I confidently anticipate the best results for the policyholders. J. H. Richardson, Government Insurance Commissioner.

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Policies i: Force. Revenue Accumulated Funds. Year. Year. Premium Income. — from Interest. No. Sum assured. Bonuses. 1879 1889 1899 IO,223 27,218 39,3 66 £ 3,726,300 7,326,100 9,558,200 £ 274,4°° 783,5oo £ 118,200 218,800 284,500 £ 16,700 81,400 133,50° £ 371,900 1,582,400 2,997,700 1879 . 1889 1899

At 31st Di :cember, 1898. At 31st December, 1899. Amount. Percentage of Total Assets. Class of Investment. Amount. Percentage of Total Assets. £ 1,130,609 827,858 54 I >474 150,829 120,938 85,151 47,735 19,770 387 per cent. 28-3 18-5 „ 5-2 4-1 2-9 i-6 „ 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 ... £ i,333,378 787,887 559,562 138,911 122,650 89,433 33,535 6,225 43'4 P er cent. 257 18-2 4 - 5 4'° 2-9 i-i 07 0-2 „ '2,924,364 ioo-o Total £3,071,581 I00 - 0 it