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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.