H.— 8.

1934. NEW ZEALAND.

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1933.

Presented to both Houses of the General Assembly pursuant to the Provisions of the Government Life Insurance Act, 1908.

Government Insurance Office, Wellington, 30th June, 1934. I have the honour to submit the following report upon the transactions of the Department for the year ended 31st December, 1933, and its position at that date. The Revenue Account, Balance-sheet, and Statement of Business are appended. New Business and Amount of Business in Force.—New business for the year amounted to 3,527 policies, assuring the sum of £1,295,656; the premiums thereon being £31,579 per annum. Forty-five annuities were also granted, the purchase-money being £30,142. The total business in force at the end of the year (including immediate and deferred annuities for £48,987 per annum) comprises 67,567 policies, bearing an annual premium income of £625,905. The total sum assured is £20,769,292, to which reversionary bonuses amounting to £2,805,177 have been added. Income. —The total income amounted to £1,062,705, made up as follows : Premium income, £649,082-; interest income (net), £383,481 ; annuity-purchase-money, £30,142. The total for the year exceeded that- for the previous year by £22,284. Outgoings.—During the year 1,517 policies became claims by the death of the policyholders and by maturity, the payment involved being £501,989. The total amount paid m claims since the inception of the Department amounts to £13,744,453. Accumulated Funds.—Assurance, Annuity, and Endowment Funds, apart from special reserves of £396,121, now stand at £8,965,061, an increase of £220,512 over the previous year. Investments.—On the 31st December, 1933, the total assets ol the Department amounted to £9,442,343, and were invested as follows : — Class of Investment. Percentage of Total Assets. Mortgages of freehold property .. • • ■ • • • .. 39 • 2 Government securities, including rural advances bonds . . .. .. 28 • 6 Local-body debentures .. -• •• •• " iq'q Loans on policies .. . • ■ • • ■ ■ • • '' q' 7 Miscellaneous assets .. .. ■ • • ■ • • • •• Landed and house property .. •• •• • •• Investment Fluctuation Reserve. —It was deemed advisable to transfer a further £60,000 to this Reserve. Fund, which now stands at £391,121 Is.

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H.—B.

Expense Ratios and Rate of Interest.—The ratio of expenses to (a) total income and (b) premium income have further declined, and the effective rate of interest (after deduction of taxes) earned on the funds also shows a slight decrease. The respective figures for 1933 and the two preceding years are : — 1931. 1932. 1933. Ratio of expenses to — Per Cent. Per Cent. Per Cent. (a) Total income .. .. .. 7-71 7-46 7-24 (b) Premium income .. .. .. 12-96 11-82 11-33 Net effective rate of interest . . ... £5 13s. 4d. £4 10s. lOd. £4 Bs. 6d. General.—ln previous reports reference has been made to the legislation for the relief of mortgagors and to the statutory reduction of interest-rates. This legislation has naturally had an influence on the year's business, and it has therefore been necessary to' continue the conservative policy rendered desirable by the abnormal times. Notwithstanding these difficulties, the Department has been able to declare the usual high rates of bonus and to make a substantial addition to the Investment Fluctuation Reserve. Mr. A. E. Allison retired from the Commissionership during the year after almost half a century of faithful and distinguished service. The results of the Department's trading during the past year may be viewed with every satisfaction. The investment of the large funds of the Department naturally calls for a great deal of time and thought, but, taking into consideration the abnormal times through which the Dominion has been passing, the losses have been singularly few. Altogether the Department has come through this period in a creditable manner and stands to-day in an impregnable position, a position which could only have been achieved by sound business methods and with the unfailing support and confidence of the people of the Dominion. W. E. Arnold, Commissioner.

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Revenue Account of the Government Life Insurance Department for the Year ended 31st December, 1933. £ s. d. £ s. d. Amount of funds at Ist January, 1933 8,744,548 13 10 Death claims under assurance policies, Renewal premiums—Assurance, annu- including bonus additions .. 206,567 2 0 ity, and endowment, less reinsurance Endowment assurances matured, inciudpremiums .. .. .. 593,844 3 6 ing bonus additions .. .. 286,549 11 0 New premiums (including instalments Endowments matured .. .. 8,780 2 0 of first year's premiums falling due Premiums returned on endowments .. 92 3 5 in the year) less reinsurance premiums 28,029 10 2 Bonuses surrendered for cash .. 15,651 10 2 Single premiums—Assurance and en- Annuities.. .. .. .. 23,693 19 7 dowment .. .. .. 27,208 13 9 Surrenders .. .. .. 61,262 2 5 Consideration for annuities .. 30,14118 11 Loans released by surrender .. 101,396 19 7 Interest, rent, and other £ s. d. £ s. d. income .. 417,035 7 7 Commission, new* .. 21,575 17 3 Less land and in- „ renewal 4,259 19 7 come tax, £24,855 25,835 16 10 9s. 3d. ; property Contribution to Public Service Superexpense's, £1,512 annuation Fund.. .. .. 755 13 10 ss. lOd.; stamp £ s - d. duty on interest, Expenses of management— £7,186 l'6s. lid. 33,554 12 0 Salaries .. .. 31,015 18 5 383,480 15 7 Extra clerical assistance .. .. 327 3 7 Payment to Treasury under Finance Act, 1931 (No. 2) .. 3,665 4 0 Medical fees and expenses .. .. 1,563 5 0 Travelling-expenses 1,082 10 11 Advertising .. 554 5 1 Printing and stationery .. .. 1,407 11 8 Rent .. .. 4,414 0 8 Postage and telegrams .. .. 1, 624 3 9 Audit fees .. 325 0 0 General expenses .. 4,378 9 5 50,357 12 6 Property depreciation .. .. 1,250 0 0 Transfer to Investment Fluctuation Reserve Account .. .. 60,000 0 0 Amount of funds, 31st December, 1933 8,965,061 2 5 £9,807,253 15 9 £9,807,253 15 9 * Including agents' allowances. Balance-sheet of the Government Life Insurance Department on 31st December, 1933. Liabilities. Assets. £ s. d. £ s. d. Total assurance, annuity, and en- Loans on policies .. .. .. 1,302,727 14 7 dowment funds (as per Revenue New Zealand Government securities 2,526,810 0 0 Account) .. .. .. .. 8,965,061 2 5 Rural advances bonds .. .. 168,909 0 0 Claims admitted, proofs not yet Municipal Corporation debentures .. 355,821 14 6 completed .. .. •• 40,652 3 5 County securities .. .. .. 120,138 4 3 Annuities .. .. •• 171 3 1 Harbour Board debentures.. .. 25,200 0 0 Commission .. .. •• 316 1 2 Town Board debentures .. .. 26,803 11 3 Medical fees .. .. •• 306 12 0 Road Board debentures ... .. 21,800 0 0 Premium and other deposits .. 10,858 10 7 Drainage Board debentures .. 1,657 15 1 Sundry creditors .. .. .. 3,402 4 1 Power Board debentures .. .. 710,783 5 4 Accident and Fidelity Fund .. 5,000 0 0 Landed and house property .. 122,916 7 8 Investment Fluctuation Reserve .. 391,121 1 0 Landed and house property (leasehold) 1,756 10 8 Sinking funds on local £ s. d. Mortgages on property .. .. 3,702,316 14 1 body loans .. 25,120 7 2 Properties acquired by foreclosure .. 40,163 9 7 Interest accrued there- Overdue premiums on £ s. d. on .. .. 333 11 8 policies in force .. 8,804 1 5 25,453 18 10 Outstanding premiums due but not overdue 54,674 8 6 63,478 9 II Overdue interest .. 65,044 17 9 Outstanding interest due but not overdue 9,534 14 4 Interest accrued but not duo .. .. 109,347 12 8 — 183,927 4 9 Sundry debtors .. . . .. 504 19 4 Deposited with bank .. . . 25,000 0 0 Cash in hand and on current account 41,627 15 7 £9,442,342 16 7 £9,442,342 16 7 W. E. Arnold, Commissioner. J. W. Macdonald, Secretary. Government Life Insurance Department. The Audit Office, having examined the Revenue Account and Balance-sheet, and compared them with the relative books, documents, and securities, hereby certifies them to be in accordance therewith.—G. F. C. Campbell, Controller and Auditor-General.

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Statement of Business

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TOTAL■ Whole-life and Term Assurances. YEAR 1933. , I i Annual Annuities. I. Sum | Annual n m i Rever- ! Premiums. I. Immediate or N assured Nonary Premiums. No. nq f™ d sionary L Ordinary. entered upon. h0 ~ 2.Deferred Bonuses- i °J^ ry - assured. j Bonuses.j 2 . Extra. 2. Deferred. Annuity. 2. Extra. POLICIES ISSUED AND DISCON- £ £ £ s. d. £ 8. a. £ £ :£ s. d. P„,,l.t 68,650110,910, 811 2,708,948 j «,«17 623« 18 4, ««£-£ «70,005 j 80,627 J 0) December, 1932 I ' ' I v „ -70 1 295 656 •• I 31,517 18 8 2,843 15 4 1 467 243,031 .. |j 3,477 3 2 V New business .. .. 3,572 1,290, W* - gl g 5 g g61 12 0 | 1368 p. a . J 17 3 0 | DOA AQ7 .. .. •• 27,498 ; .. Bonus allotted .• •• •• t f«l 72 22222~206 467 3~032,975 f 668,245 16 225,896 13 81 8,9343,364,058 597,503 ( 84,104 6 2 I Tota1 -- 72,222-^,2Ub, 4t>/ £>,U3<i,j<o j 2 J 4 1474 s .p.a. 1 549 16 i] ■ j- ,. -j a per 1 407 -\ntr 007 70Q I 43,985 7 0 1,001 4 8 | 556 217,842 44,842 ( 6,059 6 4 ) Policies discontinued 4,655; l,437,17o 227,7J8 «,wo # q | 47 6 10 [ during 1933 ! _ J : ... , i cT cc7 on 7RQ 9Q9 9 177 ( 624 260 9 2 24,895 9 0 | 8,378 3,146,216 552,661 f 78,044 19 10 | Total policies, n forceat 67,567 20,769,292 2,805,177 j ' 3869 4 S .p.a. 502 9 6 31st December, lydo j i J PARTICULARS OP POLICIES DISCONHow discontinued. By Death .. .. 485 157,470 SO.Sfiejj 5,073 10 7 1,037 11 8| 252 83,087 35,331 J 2,003 13 6j Maturity .. 1,048 231,170 62,356 j 8,821 1 1| .. Surrender.. .. 1,867 577,354 81,708 j 17,756 2 61 .. 137 60,044 5,690 j 1,752 16 7 | n. hq 1« o«,n 1 144 ( 437 16 81 •• 9 8,550 37 J 61 16 7 1 Change to other 39 16,250 1,144 M/ - 10 dl ] 5 0 0 } Tables S43 16 4 ..12 1,195 .. f 10 0 10 1 Cancellation .. 45 13,516 58 34o lo 19 8 0 0) \ .. } T 1 171 441 415 31,976(11,5-53 0 3 36 7 01 156 69,966 3,784 j 2,230 18 10 \ La P se '• " ' | 23 0 0 857 3 Of 288 p.a. j 12 12 0, , , . . c -c 1 aq7 r/e; 997798 ( 43 985 7 0 1,001 4 81 556 2,17,842 44,842 J 6,059 6 41 Total discontinued during 4,655 1,437,175 227,798 43 JS5 / 0 l,uui g . j g j. year 193B 1 ' PROGRESS OF BUSINESS OF THE GOVERNMENT LIFE INSURANCE Total issued .. .. 218,572 60,703,913 7,104,418 | { n 1 149,969 S 10 51,808 16,852,199 2,898,058 j ® 10j ,, |"1 005 30 934 621 4 299 241 fl 240,161 15 t\ 100,982 3 8 42,925 13,705,983 1,845,392 I | ]) Total void .. 151,005 39,934,621 4,299,241 j 39,000 13 5' 288 p!a. \ 18,071 12 4 j Total in force .. 20,769,292 2,805,177 624,260 9 2 48,987 2 2 8,378 3,146,216 552,661 78,044 19 10 3859 4s. p«8i. Extra Premiums .. •• 1,644 8 6 .. | . • •• •• 502 9 6 £625,904 17 8 £78,547 9 i Note.—Tlie " ordinary " premium is the premium charged

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at End of Year 1933.

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ANNUITIES. ENDOWMENTS, Endowment Assurances. I Annuity Assurances. INVESTMENTS, ETC. 1 q„ m ; Annual Sun i Annuities. Annuities. | Sum Annual assured ■ Eeyer " Premiums. assured. Immediate or Annual N Annual j. Immediate or N 2 Eever- Premiums. No - 2. Detaed »° n n «y 1. Ordinary. No ' . entered upon. Premiums. No ' Premiums. entered upon. No ' 1. Ordinary. Annuity. | Bonnses - a. Extra. Bonuses. De f erred ■ g. Deferred. | Bonuses. Ex,ra ' TINUED DURING THE YEAR 1933. £ £ £ s. d. £ £ s. d. £ s. d. £ s. d. £ s. d. £ £ s. d. 6,99216,807,879 2,114,395 (541,495 9 11] 24 / 5,397 288 4 9)191 18 6 394 91 12 6 122,764 13 7 1 2,773 j 976,508 14,321 13 7j 11376 p.a. 1 1,155 14 3j 1 1,491 1,130 0 2 } I 300 0 0 | \ 23,057 9 17 6j 2 522 737,258 .. j 24,347 18 9) .. .. .. .. 45 .. J 2,843 15 41 538 ] 315,367 3,692 16 9 [ ' 819312s p.a \ 42 13 8/ I • • J 1 •• 1 59 1 293,940 .. | .. Ill •• •• •• •• •• •• 2 ' 478 9,51417,54«,137 2,408,835 (565,843 8 8) 24 f 5,397 288 4 9 1191 18 6 439 91 12 6(25,608 8 11 1 3,311(1,291,875 18,014 10 41 19569 12s. I 1,198 7 111 11 1,602 1,130 0 2 f \ 300 0 0 J 1 25,535 11 3 3' 3,777 1,100,666 180,344 1 36,236 2 81 I f 150 .. I 7 9 4 15 .. ( 1,001 4 8 1 306 j 118,517 1.682 8 8| 73016s! p.a. 1 67 4 8} \\ 70 36 7 0 } t J 1 2 > 542 0 7 6i 5 73716 444 4712 227 991(529,607 6 01 23 f 5,247 288 4 9 1184 9 2 424 91 12 6 ( 24,607 4 3 1 3,005(1,173,35816,332 1 81 18838 16s. ' | 1,131 3 s} j 1,532 1,093 13 2} j 300 0 0 j | 22,993 10 15 9 | p.a. 1! I — ~TIJSfUED DURING THE YEAR 1933. 213 72,783 15,225 ] 3,051 0 21 .. .. .. .. 16 .. ( 1,037 11 8 1 4 1,600 18 16 11 j 19 2 8 J 1 •• f 1,000 224,270 60,548 ( 8,548 0 61 1 .. .. •• •• 48 j 6,900 273 0 71 11 7 4 i i 69 i I 1,739 .. | 1 627 484,013 76,017 ( 15,300 10 31 .. ( .. 1 .. .. •• •• •• 1° 3 33,267 702 15 8 1 25 4 2 [ 1 1 j 27 10,700 1,107 ( 357 15 11) .. .. •• •• •• •• 3 2 > 000 18 3 9 39 10,721 58 J 318 7 7 1 .. •• •• •• •• 4 1 . 600 15 7 11 871 298fl49 27,389 j 8,660 8 3 [ 1 150 j 17 9 4 -1 .. -36 7 0 144 j 73,150 654 3 10) 53216s. p.a. j 10 0 6) | t 36 7 Of ■ 1 803 0 7 6 f 3,777 1,100,666 180,344! I 36,236 2 8.1 1] ( 150 1 .. } 7 9 4 15 .. j 1,001 4 8 1306(118,517 1,682 8 81 73016s. p.a. |1 67 4 8 f j || 70 36 7 Oj 1 .. I 1 2,542 0 7 6} DEPARTMENT SINCE DATE OF ESTABLISHMENT TO 31st DECEMBER, 1933. 55,882'4,648,311 1,131 { '} 60,173 0 10 9,360 10 9 1,274 866 6 8 65,935 9 0 8,982 ( 2 46 ' 9 j® 00,145^ff2,420,32 0 ( 1,108 { 17 f'J®g } 58,791 2 119,176 1 7 850 774 14 2 41,028 4 9 5,977 )«^0 80,607 8.J 55,737 16,444,4712,227,991 529,607 6 0 23 { J-jjg 1 1,881 17 11 184 9 2 424 91 12 6 24,907 4 3 3,005 16 ' 332 _ 1 8 | 18838 16s. ' p.a. - - — -- 1,131 3 3 .. | .. .. •• •• •• •• •• 10 15 9 £530,738 9 3 £184 9 2 £91 12 6 £16,342 17 5 at the true age; the" extra" the additional premium charged for any reason whatsoever. AkNOLD Commissioner S. Bbckingsale, P.I.A., Actuary.

H.—B.

ACTUARY'S REPORT ON THE VALUATION OF THE GOVERNMENT INSURANCE DEPARTMENT AS AT 31ST DECEMBER, 1933.

Presented to both Houses of the General Assembly pursuant to Section 40 of the Government Life Insurance Act, 1908.

Wellington, 4th April, 1934. In accordance with your instructions, a valuation of the Department's liabilities under its policies has been made lor the year ending 31st December, 1933, with the object of ascertaining the net surplus available for distribution amongst the policyholders, and in accordance with section 40 of the Government Life Insurance Act of 1908, and amendments, I have the honour to report as follows Tlie liabilities arise in respect of 67,567 policies, assuring, inclusive of bonus additions, the sum of £23,574,469, and £48,987 immediate and deferred annuities per annum ; the Office premiums thereon amounting to £625,905 per annum. The bases adopted for the valuation were as follows : —• (a) The British Offices Om Table, 1893, and the British Offices Annuity Tables, 1920, were employed in the case of assurances and annuities respectively, with 3 per cent, interest; and (b) The net premium method of valuation was employed, thus reserving the whole of the future loading ; in addition, adequate reserves were included for future bonuses, imme- ' diate payment of claims, and other contingencies. The valuation has disclosed a total surplus of £217,152 as follows: — £ Total funds at 31st December, 1933 .. .. •• 8,965,061 Less value of liabilities .. .. •• •• •• •• 8,750,897 Net surplus .. .. •• 214,164 Interim bonus paid during year .. . . • • • • • • 2,988 £217,152 As required by the Act, surplus arising from favourable mortality has been investigated separately for the General and Temperance Sections, the result indicating that the same rates of bonus should be allotted to policies of the same class in both sections. I accordingly recommend that the following rates of compound reversionary bonus be declared on the sum assured and existing bonuses in respect of each full year's premium paid during the year: —- Policies issued under present premium tables: — _ Per Cent. Whole-life assurances, and long-term endowment assurances maturing at f s. d. ages eighty and over .. .. • • • • • • .. 117 0 Other endowment assurances . . . . • • • • .. 113 0 Double endowment assurances and pure endowments . . . . ..140 Policies issued under premium tables which have been closed : — Whole-life and endowment assurances .. ..1110 Double endowments .. .. •• ■■ ..170 The above bonuses will absorb the sum of £207,604, and I recommend that the balance of the net surplus—£6,s6o—be carried forward. S. Beckingsale, P.1.A., Actuary. The Government Insurance Commissioner, Wellington.

Approximate Cost of Paper.—Preparation, not given ; printing (1,936 copies), £12 ss.

By Authority : G. H. Loney, Government Printer, Wellington—l 934.

Price 6d.~\

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