H.—B.

Outgo. —During the year 407 policies became void by death, for claims amounting to £"132,428. This is a decrease in amount as compared with the previous year, and considerably under what is provided for in the tables of mortality used by the Department. Three hundred and eighty-two policies also matured as claims during lifetime for £"101,829, an d it will be of interest to know that £"3,661,650 has been paid in respect of claims by death and survival since the Department was founded thirty-nine years ago. The ordinary surrenders amounted to (as against in 1907, and £"32,810 in 1906), and a further sum of £ 25,234 has been paid to Civil servants on relinquishing their policies in order to join the Superannuation Fund. There is reason to believe that the passing of the Public Service Superannuation Act, besides being responsible for .the whole of the latter item, has also been partly the cause of the increase in ordinary surrenders, as quite a number of ordinary policies have been given up by Civil servants on the ground that they could not afford to keep them in force after joining the Superannuation Fund. On the other hand, loans released by surrender decreased from £"20,680 to £"18,121, and the sum assured under lapsed policies is about £Ti2,000 less than in 1907. Accumulated Funds. —The net increase in the funds during the year (after payment of the surrender value of the Civil Service policies and providing a further addition of £"20,000 to strengthen the Investment Fluctuation Reserve) amounted to £"117,273, and the total assurance, annuity, and endowment funds, apart from special reserves, now exceed four and a quarter millions, standing as an actual fact at £"4,264,685. 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, 1908, the total assets of the Department amounted to £4,399,848, and were invested as shown in the following comparative statement: —

The chief items of interest in the balance-sheet are the following :— (1) The item " Properties acquired by foreclosure " has again disappeared from the assets, the Department having no foreclosed properties on its hands. (2) The total investments show an increase of ,£"221,471, now amounting to £"4,276,470. (3) Cash in hand and on current account has decreased from £"94,644 to £"17,288, the difference being invested in mortgages on property anJ other securities bearing a higher rate of interest than that of the bank. Triennial Investigation. —The valuation of the Department's liabilities on the 31st December last was completed early in the present year, and the full particulars are contained in the Actuary's report. A strict net premium valuation on the basis of H m per cent, disclosed a surplus of £"249,196, after allowing for £"13,138 interim bonuses paid during the triennium, and making a further provision of £"20,000 towards the Investment Fluctuation Reserve. Of the surplus £"56,766 was carried forward for the purpose of still further strengthening the valuation basis in the near future, and the balance of £"192,430 was applied to provide bonus additions to all participating policies by the compound reversionary bonus method, by which policyholders receive bonuses not only on the sum assured, but on all the previously allotted bonuses which have not been surrendered. The resulting bonus rate to policies in the General Section was 20s. per cent, per annum, and in the Temperance Section 225. per cent. In the Valuation report attention is drawn to the satisfactory results of the last triennium, in consequence of which " the Department is now in a position to allot increased bonuses all round, and also to make such substantial reserves as will enable it to commence another triennial period of activity with every confidence." J. H. RICHARDSON, Government Insurance Commissioner.

2

Year. Policies in Force. ———— —- Total Income. Number. Sum assured. Bonuses. Annuities. Policies in Force. Accumulated Funds. Total Ratio of Total Expenses (excluding Taxes) to Total Premium Income. Income. {excluding Taxes). 1888 1898 1908 £ £ £ £ 26,168 7,076,252 286,236 4,540 282,201 .. J 37,848 9,304,741 819,486 20,906 410,148 ■■ 47,033 10,955.749 1,068,950 20,679 534,441 £ 1,452,479 2,861,534 4,264,685 £ 42.361 50,075 56,420 Per cent. Per cent. 150 203 I2'2 l8'O 106 i6-6

At 31st December, 1907. At 31st Dei :ember, 1908. Amount. Percentage of Total Assets. Class of Investment. Amount. Percentage of Total Assets. £ 2,388,021 697-054 667,996 176,804 122,436 104,467 94,644 56-2 per cent. 16-4 „ 157 4'2 2-9 2-4 2-2 Mortgages on freehold property Loans on policies Government securities Local bodies' debentures ... Landed and house property Miscellaneous assets Cash on current account ... £ 2,571,865 73°.865 668,oi3 I2 4>325 107,983 17,288 58-5 per cent. i6-6 15-2 4 -1 2-8 2-4 o'4 £\, 251,422 loco per cent. Total ... ioo'o per cent.