An existing contract which is a lawful contract and which is validly taken out will continue. As an aside on that Senator Sheehy Skeffington asked how long those contracts would continue in accordance with the terms of the contract. Most insurance contracts relating to health, providing against ill-health and so on, are yearly contracts, so that existing contracts of insurance in the vast majority of cases would continue merely for the existing year. There may be—I do not know—contracts of health insurance with a longer period. If so, they will continue for whatever the contract period may be, but in any event the object of the licensing provisions in this Bill is to reserve the Irish market for the voluntary health insurance board on the grounds that more than one organisation would mean lack of business for both.
That is the policy behind the licensing provisions. If it is agreed that policy is correct, as the House has agreed, then it seems unwise in any way to weaken that position. You cannot provide licensing provisions and, in effect, protection for the new insurance board, and at the same time open a back door and allow in through that back door a whole lot of competing interests. I feel that is what would take place if Senator Stanford's amendment were allowed.
The Senator has with some justice— I would not accuse him of arguing from the particular to the general—taken the particular case of a person who for many years has been accustomed to insuring against ill-health and is now no longer a good risk and who may find himself unable to get cover under this new scheme. That is a hard case undoubtedly, but I think it would be a hard case anyway. I am told that the practice of all the provident associations is not only to screen new subscribers, but also to exclude from benefit in succeeding years conditions which have given rise to claims in a particular subscription year. The practice of the provident association is to screen the new, intending subscribers and, in relation to existing subscribers, to exclude in the new insurance year any particular condition that has given rise to claims in the year under review.
That might mean, for example, that a person holding an insurance contract with the provident association for a number of years who may be unfortunate enough to get a coronary thrombosis, would be told by the provident association: "We will carry you on in the new year for everything, except claims that might arise from that condition." That is the universal practice, I am informed, with these provident associations. Therefore, I am saying to the Senator that the person he has in mind is, in fact, in no worse position, because he would get cover here under the new arrangement for all conditions, except those from which he is at present suffering and, in fact, he would get the same type of cover as would be available to him in the provident associations.
He will have to pay more for it because the premiums here will be higher, as I explained on the last occasion, than those commonly charged by existing provident associations in Britain. As I explained to the House, there are reasons for that and the premiums that will be charged here will be the premiums which need to be charged, and no more. They will not contain any element of profit; they will be merely designed to ensure that the board from its premium revenue meets its expenditure. I think that is the least we could expect in running a scheme of this kind.
For these reasons, I feel I cannot accept the Senator's amendment. I agree there may be difficulties, but I feel the amendment, if accepted, would weaken what I believe to be an important part of the Bill—necessary protection to the insurance body to operate. I feel that, in the particular case the Senator has mentioned, no real injustice, in fact, is done because the person he has in mind should be able to obtain here the same kind of cover as he will be able to obtain from the provident associations.