H.— 8

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.

2

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.