H.—B

36

Consolidated Revenue Account.

It will be seen that the regularity of the increase of income and outgo has also been well marked. Income.— The chief item of importance, besides v substantial increase in the premium income, is the revenue from interest, which exceeded by £77,509 the interest earnings of the previous three years. The average rate of interest realized each year for the past six j'ears has been as follows :— Mate of Interest (deducting Taxes from Interest). £ s. d. £ %. d. 1909 .. .. .. ..472 1912 .. .. .. 4 7 11 1910 .. .. .. ..467 1913 .. .. .. .. 4 810 1911 .. .. .. 4 6 11 1914 .. .. .. 4 10 7 These figures were obtained by dividing the interest, less the mortgage and other taxes, by the mean of the funds at the beginning and end of the year, and they show that the rate of interest earned on the Department's investments has been more than maintained. Outgo. —The claims have considerably increased, but the death-rate is still much lower than assumed in the valuation, and the surplus has consequently received a large accretion from favourable mortality. The amount paid through policies maturing has steadily increased from year to year, and the sum received by policyholders during the triennium—£433,Bss —shows the important dimensions this form of thrift has now attained. The surrenders show a large decrease, as was anticipated, those for the previous triennium being considerably above the average owing to the number of policies relinquished immediately after the expiry of the Tontine Savings Fund No. 2. The decrease in the bonuses surrendered for cash is also attributable to the same cause. The Valuation. The business to be valued consisted of 52,273 policies, assuring £13,797,075 inclusive of bonus additions, and £22,523 immediate and deferred annuities per annum, the ordinary annual premiums thereon amounting to £368,723. The Department also receives £2,070 per annum, representing additions to the tabular premiums imposed when assurances are effected on lives which are estimated to fall below the requisite standard for any reason. These extra premiums are held to cover the current year's extra risk, and are not brought into the valuation as an asset. Basis of Valuation. —'Hie net premium method of valuation has been strictly adhered to, whereby the whole margin of loading has been reserved as a provision for future expenses. The H m Table of Mortality, with 3A per cent, interest, has been used, but an additional reserve of £108,000 has been added to the liability, making it equivalent to that produced by an H m valuation. The annuities were valued by the British Offices Life Annuity Tables (1893), using 3 per cent, interest. £ The value of the total liability under the several contracts is ... 8,110,987 Deduct the value of the future net premiums ... ... ... 3,407,168 4,703,819 Add special reserve of ... ... ... ... ... 108,000 Making an immediate net liability of ... ... 4,811,819 The accumulated funds (-after making further provision of £75,458 towards the Investment Reserve Fund) are ... ... 5,033,884 Difference, being excess of assets over liability, or gross surplus at 31st December, 1914 ... ... ... £222,065

Triennium ending 31st December, 1914. Previous Triennium. Triennium ending 31st Dece: iber, 1914. Previous Triennium. Funds at beginning of triennium Renewal premiums New premiums Consideration for annuities Interest Fees Tontine Savings Fund No. 2 transferred at maturity £ 4,699,970 986,253 89,689 39,264 700,918 22 £ 4,264,685 936,581 75,810 47,755 623,409 10 18,562 Death claims Matured claims Annuities paid Surrenders Bonuses surrendered for oash Commission Taxes Expenses Investment reserves Funds at end of triennium.. £ 485,688 433,855 53,269 166,724 18,694 72,045 46,947 129,552 75,458 5,033,884 £ 416,364 332,899 47,944 •197,055 24,712 58,151 39,152 120,565 30,000 4,699,970 Total £6,516,116 Total £5,966,812 £6,516,116 £5,966,812 •Ii icluding tbntim policies at maturity.