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1902. NEW ZEALAND.

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1901.

I J resented to both Houses of the General Assembly pursuant to the provisions of the Acts relating to Government Life Insurance.

Government Insurance Office, Wellington, 17th June, 1902. 1 have the honour to submit my report upon the transactions of the Department for the past year, together with the accounts and usual statement in detail of the progress of business. New Business. During the year 4,414 proposals were dealt with, for the assurance of £878,897, of which 3,196 proposals for life insurance, assuring the sum of £630,346, were completed. One hundred and four pure endowments were granted for £13,700, and also twenty-six immediate annuities for £1,014 per annum, for which the purchase-money was £11,615. The annual premiums on these new policies amount to £22,246, in addition to £2,815 of single premiums, representing considerable increases on the annual and single premiums for the previous year. Income. The total income of the Department (excluding £16,753 transferred from the Tontine No. 1 Fund) was £444,000, comprising £142,449 from interest and £301,542 from premiums, which is £14,811 in excess of the premium income of the previous year. Claims, etc Three hundred and thirty-five policies, representing with bonus additions the sum of £122,471, became claims during the year through the death of the persons insured. The payments on this account are naturally increasing with the growth of the Department, but the amount is considerably less than is provided for in the tables on which the premiums are calculated. . One hundred and fifty-seven endowment policies also matured during the year, securing to their holders the sum of £42,389. The total amount paid by the Department since its inception in 1870, m respect oi death claims and matured endowments, has been £2,165,305. The ordinary surrenders and loans released by surrender amounted to £37,948, which represents a total decrease of £8,845 on the previous year. In addition to the above there was a sum of £25,375 paid to tontine-policy holders who selected the option of closing their contracts on the termination of the tontine period. This, however, will not be a recurring item. The disbursements on account of commission and management expenses show not only an absolute decrease during the year in the total amount so disbursed, but the ratio of the total expenses and commission to the premium income declined from 21-4 per cent, to 19-6 per cent., and is now lower than for many years past. Accumulated Funds. The assurance and annuity funds on the 31st December last amounted to £3,285,416, being an increase during the year of £i45>459> of which the sum of £16,753 represents the Tontine No. 1 Fund reserve, which was transferred to the ordinary funds as the equivalent ol the special reversionary bonuses allotted to tontine policies at 31st December, 1900.

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The Balance-sheet. On the 31st December, 1901, the total assets of the Department amounted to £3,363,126, and were invested as shown in the following comparative statement: —

The chief points of interest brought out by the above summary of the balance-sheet are— (1) An increase of £125,720 in the amount lent on freehold mortgage, and (2) an increase of £22,695 in loans on policies. Attention might also be drawn to the extreme smallness of the item " Overdue interest," which last year stood at only £653, and has now fallen to £472, or about 03 per cent, of the income from interest, which amounted to £142,449. This affords a convincing testimony to the character of the Department's investments, and the care with which they are watched. General Remarks. It is not necessary to remark on the Accident Branch, which was inaugurated during the year, as an independent report will be presented to Parliament in connection therewith, further than to say that the life and accident funds of the Department have been kept entirely distinct, as demanded by the Act, and to point out that the reduction in the ratio of expenses in the Life Branch is a conclusive answer to the statements which have been circulated that the interests of the life-policy holders would be sacrificed to the needs of the new branch. As was stated in my previous report, the tontine which expired at the end of 1900 was valued and the resulting fund distributed in accordance with the regulations early in the year now under review. Later in the year the tontine-policy holders exercised their right to select one of several options offered to them at the initiation of the tontine, with the result that a considerable number selected the option which enabled them to terminate their policies and draw the full value available. These discontinuances, which were, of course, a necessary consequence of the maturity of the tontine, had the effect of swelling to some extent the business going oil the books. Apart from this cause, however, the voids show a marked decrease on the previous year. Finally, it may be stated that the course of business lias been distinctly favourable throughout the year, as instanced by the following features, to which attention is specially drawn : (1.) Increase in new premium income. (2.) Increase in total premium income. (3.) Increase in accumulated funds. (4.) Decrease in ordinary surrenders. (5.) Decrease in total expenses. (6.) Decrease in ratios of expenses to premium income and to total income. (7.) Decrease in overdue interest, already abnormally low. (8.) And, lastly, it may be said that an official valuation of all the policies as they stood at the end of last year discloses exceptionally large profits for the two years of the current triennium which have already.elapsed, and renders it practically certain that the bonus to be divided early next year will be considerably higher than at the last triennial valuation. J. H. Richardson, Government Insurance Commissioner.

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At 31st December, [900. At 31st Dei aeniber, 1901. Percentage Amount. of Total Assets. Class of Investment. Amount. Percentage of Total Assets. £ 1,488,759 727,899 579,494 135, 26 3 122,687 91,522 64,916 5>589 463 per cent. , Mortgages on freehold property 22'6 „ Government securities i8'o „ a Loans on policies 4'2 „ : Local bodies'debentures ..-. 3-8 „ Landed and house property 2-9 „ Miscellaneous assets 2'o „ Cash on current account ... o'2 „ Properties acquired by foreclosure ... £ 1,614,479 728,911 602,189 132,227 123,563 95,°97 61,508 5,152 48-0 per cent. 217 I7-9 3'9 37 2'8 i'8 0'2 „ 3,216,129 a ioo-o per cent. Total 1^3,363,126 IOO'O if

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Revenue Account of the Government Life Insurance Department for the Year ended 31st December, 1901. £ s. d. j £ s. d. Amount of funds at Ist January, 1901 8,139,956 13 6 j Death claims under policies, Assurance, ♦Tontine Savings Fund No. 1, trans- including bonus additions.. .. 122,471 8 0 ferred at maturity .. .. 16,752 13 11 Endowment Assurances matured, inRenewal premiums — Assurance, An- eluding bonus additions .. .. 41,212 11 0 nuity, and Endowment .. .. 266,815 14 10 Endowments matured .. .. 1,176 1 9 New premiums (including inFatalments Premiums returned on endowments .. 10 9 8 of first year's premiums falling due Bonuses surrendered for cash .. 16,276 17 6 in the year) .. .. .. 20,295 15 10 Annuities .. .. .. .. 11,628 15 6 Single premiums—Assurance and En- Surrenders, ordinary .. .. 23,919 4- 2 dowment .. .. .. 2,815 8 8 ; Surrenders — Tontine policies at maConsideration for Annuities .. .. 11,614 19 0 turity of their tontine periods .. 25,375 910 Interest .. .. .. .. 142,449 6 0 Loans released by surrender.. .. 14,028 13 4 Fees .. .. .. .. 9 19 Commission, new ..£12,038 7 9 „ renewal .. 2,045 7 7 14,083 15 4 Land-and income-tax .. .. 10,142 15 4 Expenses of management— Salaries— Head Office .. £10,640 13 6 Branch offices and agents .. .. 6,174 8 2 Extra clerical assistance 2,765 1 9 Medical fees and expenses .. .. 4,564 3 5 Travelling-expenses .. 803 0 1 Advertising .. .. 988 12 0 Printing and stationery 1,455 16 2 Rent .. .. 2,175 13 4 Postage .. .. 1,191 6 8 Telegrams .. .. 446 4 3 Exchange .. .. 105 7 3 Office-furniture depreciation '.. .. 310 2 2 General expenses .. 2,673 15 7 Triennial expenses' .. 673 10 0 34,967 14 4 Amount of funds, 31st December, 1901 3,285,415 12 9 £3,600,709 8 6 £^600^^1~6 P ar^tS a^iS t T^t^st I vl o^V^Uri. all<rtted " '• Te » ton «y *»«•-. amounting to £38,880 35., to policies

Balance-sheet of the Government Life Insurance Department on 31st December, 1901. Liabilities. Assets £ s. d. £sd £sd Total Assurance, Annuity, and En- Loans on policies .. 602 189 6 5 dowment Funds (as per Revenue Government securitiesAccount) .. .. .. 3,285,415 12 9 Consolidated stock .. 625,900 0 0 Claims admitted, proofs not yet com- Treasury bills 60 000 0 0 P let . ed 28,092 18 6 Railway debentures Annuities 53 11 0 (guaranteed by GoOommission 427 6 3 vernment) .. 40,000 0 0 Medical fees .. .. 456 15 0 Debentures issued Premium and other deposits.. .. 5,827 6 4 under "The Immi-Fire-insurance moneys in suspense .. 1,327 10 0 gration and Public Tontine Savings Fund No. 2 .. 5,228 5 1 Works Act, 1870" 2,010 12 1 Investment Fluctuation Reserve .. 36,296 19 7 Advance on hypothecation of Debentures issued under " The Government Accident Insurance Act, 1899" .. 1,000 0 0 ~ . . , „ 728,910 12 1 Municipal Corporation debentures .. 91,883 13 9 County securities .. ~ ~ 843 23 q . Haibour Board debentures .. .. 39,000 0 0 Town Board debentures .. .. 500 0 0 Landed and house property .. .. 123,563 510 Office furniture (Head Office and agencies) .. .. .. 2 ,633 1 2 Mortgages on property .. .. 1,614,478 17 8 Properties acquired by foreclosure .. 5,152 1 4 Overdue premiums on policies in force .. 5,794 13 11 Outstanding premiums due but not overdue.. 34,093 15 4 n . . x 39,888 9 3 Overdue interest .. 471 12 8 Outstanding interest due but not overdue.. 5,692 0 4 Interest accrued but not due .. .. 40,279 5 3 ... , 46,442 18 3 Agents balances .. .. ~ 3 ggg 1 u Sundry accounts owing .. .. 4 2 Cash in hand and on current account.. 61,507 19 8 £3,363,126 4 6 | £3,363,126 4 6 Government Life Insurance Department, 22nd April, 1902. J. H. Eichardson, Commissioner. .-,.,,,,,-. W. B. Hudson, Audited and found correct. o J. K. Warburton, Controller and Auditor-General.

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Statement of Business

Wellington, ist March, 1902.

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ASSURANCES, TOTAL. Whole-life and Term - Assurances. YEAR 1901. _ Annual a llrY , Rever- Premiums. N°. ; Assumed. %°™l -J^a^r 2. Extra. Annuities. Sum KeverNo - fed sionary Assuied. , Bonus Annual Premiums. 1. Ordinary. 2. Extra. 1. Immediate. ! e. Deferred. f ! POLK HES ISSUED AND DISCONI .1 ~7 ~T . , 'olicies in force at 31st December I 1900 f f] I l £ £ s - °- 1 1 285,256 10 1 j 40,3689,697,035 ' 942,942 j 3 ,696 18 7 J e r I 22 .'55 15 o ■ 3,326| 644,046 I .. j 89 18 5 £ »■ d. 11,496 2 10) 15.725 M 9f 1,013 19 61 4.175 17 IJ 17,414 £ £ 5,090,383 664,999 £ s. d. [125,439 2 2) ( 2,884 7 9| ( 81 2 6) \ 3 18 Of 3 1,234 lew business, 1901 Pontine Bonus allotted I 33.350 I 26,444 Total .. .. .. 143,694(10,341,081 976,292 1 307,412 5 1 ( 3,786 17 o ( 17,718 iS 1 I 35o 15 4 12,510 2 4 \ 19,901 11 10) 732 19 10 I 489 14 4) 17,417 5,091,617 691,443 (125,520 4 8) ') 2,888 5 9/ ( 8,455 4 5) \ 275 9 11)" 'olicies discontinued during 1901 .. ; 91,131 1,078 329,083 73,555 2,403 598,979 ?otal in force at 31st December, 1901 1 289.693 7 0 i 3,436 1 8 11,777 2 IP 1H.411 17 Hi 4,762,534 617,888 |117,065 0 31 \ 2,612 15 10J 41,291 9,742,1112 885,161 .6,339 ARTICUL lRS < )F POI JCIES DISCONHow Discontinued. By Death ( { I 1 ( I 3,088 15 o 136 2 7 1,691 2 o l6 12 I 2,939 5 1 60 12 10 732 19 101 20 O O ) 233 83,382 ,. ( 2,270 11 71 lo,l/5, j 128 10 U) 349 104,177 16,782 Maturity 157 35,379 6,435 )' Surrender 379 95,243 6,100 I 35i ' 3) 145 45,682 ( 1,238 8 2 1 4 - 438 j 48 12 4f Surrender of Bonus .. 37,693 " 32,257 Lapse Winding up Tontine No. 1 Expiry of Policy 1,078 439 1 236,107 127,973 100 5,603 18,518 ( I 1 I I "i 1 I I I 6,811 4 7 62 15 9 3,003 2 11 47 6 11 1 10 o 500 150 13 3 724 33 5 3 15 2 10 118 13 1 [ I I > 299 400 1 80,046 119,278 100 j 2,10119 111 4 ' 2J0 I( 32 5 3) .„ ,,..J I 2,07* 15 3! i7,395| 44 4 3 ) 1 10 Oi I 5 0 0/ 150 13 3) \ 7 2 4) J 14 11 31 j 9 15 Of Expiry of Premium I 1 I I Miscellaneous 1 Total .. ( 17,718 18 1 I 350 15 4 732 19 10l 489 14 4 f 1,078 329,083 73,555 I 8,455 4 5) \\ 275 9 11) 2,403 598,979 91,131 1 ;ogi ,ESS O BUS NESS OF T HE GOVEI :nme SNT li: 'E INS 5URANCE Total issued 84,69920,992,8701,629,745 9 "f: 40.430 12 1 43,40811,250,768 744,584 IHoSawl 9 ' 241 I2 : J39, 57111,687.953 1,139,207, '{*§'$ g ) 23,232 0,925,419 521,319 j 19 Total void Total in force 41.291] 9,742,1(12 883,101 Jonus, &c. .. ■ ■ . 289,69:1 7 II { 31,189 II 0 3.436 1 8 " 264 o 5 I 16,339; 4,762,5341 617,888J (117,065 0 31 j 2,612 15 10) Extra Premiums Eeduction of Premiums by .—The Ordinary Premium is the premium charged £m:m y l

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at end of Year 1901.

J. H. RICHARDSON, Commissioner. MORRIS FOX, Actuary.

Approximate Coat of Paper- Preparation, not given ; printing (6,375 copies), ±'11 4s.

By Authority: John Mackay, Government Printer, Wellington. —1902. Price 6d.]

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ASSUR/ 0 WCES. SIMPLE ENDOWMENTS, INVESTMENTS, &C. ANNUITIES. Endowment As. ■surances. Annuity Assurances. Sum Rever- 1 No - Assured «™ary Assured. , Bonus Annual Premiums. 1. Ordinary. :.'. K.rtra. 1. Sum M Assured, i Deferred Annual [, °' A .never- , Annuities. Premium. sionary Bonus, i ■_ Annual Annuities. m S ?= m Annual sired. PwwHwi. ■ Premium. L immediate. i 2. Deferred. TINUED DUR] ING THE Yl EAR 1901. £ s. d. j £ s. d. I 264 .. 11,496 2 10) I 9 74 0 8 511 4 8) £ £ £ s. d. j155,794 8 7| I 812 10 10)" ( 20,978 12 7) \ 86 0 5) £ £ s. d. £ s. d. 305 ' 40 'g°°[ 15,214 10 ll2,127 13 2 £ £ s. d. 21,913 4,517,809277,119 463 48,5431,821 5 6 463 3,112' 618,112 81 11,000 4,175 17 1 586 8 0 26 .. 1,013 19 6 104 13,700 509 11 11 104 .. I .. 6,906 25,025 5,135,921 284,025 1176,773 1 21 I 898 11 3/ I 9,002 15 6) I 75 5 5 J 386 I 51 '|a2} 19 ' 390 7 2 9 { i'™) 469 14 4 2,714 1 2 ( 290: 1 9j 74 0 8 (is! ( 1 12 16 2 12,510 2 4) 511 4 8) 732 19 10) 20 0 0) 567 36 62,243 4,026 2,330 17 5 176 13 10 1,266 204,470 17,554 71 8 2 23,759' 4,871,451 |266,471 (167,770 5 8) \ 823 5 10| 377 { 4 ' J '802f 18 ' 920 12 10 2,642 13 0 ( 277! \ 8j 61 4 6 11,777 2 6) 491 4 8 j 531 58,217 J2.154 3 7 TINUED DURING THE YEAR 1901. I 102 20,795 1,607 ( ( I I 805 7 3| 7 11 10/ 1,619 15 81 16 12 1) 1,582 12 5) 12 0 6) ( 13 I 1 12 16 2 732 19 10) 20 0 01" 140, 34,203 6,435 17 1,176 71 6 4 215! 46,561 1,648 7 ( X '"S} 351 1 3 61 3 0 12 1,800 57 6 6 5,436 770 154,211 1,305 I i ( I 4,651 3 8| 30 10 61 325 7 8) 3 2 81 2 ( 200) I 8) 118 13 1 10 0 0 7 1,050 48 1 0 39! 8,700 1,123 I 1 18 8 10) 5 7 10) (052 1 I 1,266 201,470 17,554 ( I 9,002 15 61 75 5 5) f 1,4001 1 22 [ 469 14 4| 71 8 2 I 13 1 1 12 16 2 732 19 10) 20 0 Oj 36 4,026] 176 13 10 DEPART] IEN1 SINCE DATE OF ESTABLISHMENT TO 31st DECEMBER, 1901. :2,034 9,105,003 .8,275 4,233,552 kHlISS" ?}|"6| 0 52,966,3 C 228,166 | 1S 19 10| 39 j 6-150} 1,981 7 7: 324 0 C j I ' \ kHj 167 \j) 12 10 | 2,642 13 0 438 203 11 11 19,528 11 8 153 142 7 5 7,260 4 6 2,240143,864 6,452 13 7 1,709 85,647 4,298 10 0 531 58,217 2,154 3 7 S3,7594,871,451 285 61 4 6 12,268 7 2 it the true age; the Extra, the additional premium imposed for any reason whatsoever.