I understand that there has been agreement that the Minister's amendments will be taken and the Bill reprinted incorporating these amendments, and that then there will be an opportunity of moving the other amendments to the Bill as reprinted. Do I take it that the inclusion of any of the Minister's amendments will not preclude a Deputy from moving an amendment which appears to be in conflict with an amendment now accepted from the Minister?
Insurance Bill, 1935—Money Resolution. - Insurance Bill, 1935—Committee Stage.
Question proposed: "That Section 1 stand part of the Bill."
It will be clearer if I put it this way: When the Bill emerges with the Government's amendments incorporated therein, it may be treated as if it had passed the Second Stage, for the purpose of putting in amendments.
Question put and agreed to.
Section 2 agreed to.
SECTION 3.
I move amendment No. 3:—
In page 5, after line 43, to insert new paragraphs as follows:—
(h) public liability insurance business,
(i) engineering insurance business,
(j) glass insurance business.
(k) guarantee insurance business,
(l) burglary insurance business.
The Bill in its present form applies only to the classes of insurance business defined in the Act of 1909, as amended by the Road Traffic Act of 1933. There appears, however, to be a good case for extending the provisions of the Bill so as to include certain other classes of business which are set out in the amendment. The classes of business set out in the amendment are important, and I think it is desirable, in the interests of insurers, that the same provisions in respect of control and supervision should apply to them as to the classes of business defined in the 1909 Act. I notice that other Deputies have moved amendments to similar effect, and there appears to be a general opinion that it is desirable that all these classes of business set out in the amendment should be brought subject to the control and supervision which the Bill proposes should apply to other classes of general insurance business.
Can the Minister name any categories of insurance business which remain uncovered by the Bill after the insertion of the amendment?
There are quite a number, such as marine insurance, live-stock insurance, and a number of other insurances, some of which, however, are of a special character, and are perhaps not unusually carried out by specialist companies.
Is the Minister satisfied that it is necessary that specialist companies should carry out all the types of insurance which will not be included in the Bill as amended by his amendment?
I think the nature of the business which is involved in these other classes of insurance is such that it is not necessary that the degree of control and supervision which will be exercisable under the Bill in connection with defined classes of business should apply to them also.
Do I take it that while the Minister is bringing in certain additional types of insurance for the purpose of exercising that control, his amendment is not definitely intended to indicate that that is the only type of business he is prepared to bring within scope of the Bill?
If there is an amendment moved on the next Stage, I shall be prepared to consider it.
Would it be correct to say that most of these types of insurance left uncovered are dealt with by lawyers?
Not all.
In this country at present, most live-stock insurance is done through insurance agents. I do not know what type of company actually cover those risks. Marine insurance, I think I am right in saying, is almost completely covered by lawyers. Is the Minister in a position to say, in the case of live-stock insurance, what type of company carries it? Is it the ordinary general company?
No. I believe they are specialist companies—companies which do that class of business almost entirely.
Amendment agreed to.
I move amendment No. 6:—
In page 6, line 9, after the word "life" to insert the words and brackets "(other than superannuation allowances and annuities payable out of any funds applicable solely to the relief and maintenance of persons engaged or who have been engaged in a particular profession, trade, or employment or of the dependents of such persons) and also including contracts which are attached to or dependent on contracts of assurance on human life and under which the assurer has no right of cancellation and which provide for the payment of moneys in case of fatal or other accident to or disease of the assured."
This amendment effects two changes. The object of the first part, that is, the part set out in brackets, is to exempt from the provisions of the Bill such staff pension funds, superannuation funds and the like as are not life assurance business within the meaning of the Act of 1909. In such institutions as banks and railways, there are mutual funds which have been established for the benefit of, and are confined to, the staffs concerned who make periodical contributions, entitling them or their dependents to pensions or other benefits, and it is not intended that the provisions of the Bill should apply to such funds. The second part of the amendment deals with accident benefits attaching to life policies. Many life assurance policies include provision for the payment of benefits on accident or disability. They are distinguished from ordinary accident policies by the fact that they form part of a life assurance, and are not subject to cancellation by the insurer. In the case of an ordinary accident policy, the insurer can cancel when renewal is due. If we do not effect this amendment, the other provisions of the Bill, requiring the separation of life assurance from general insurance business, would prevent life companies from giving these accident benefits in connection with life policies.
I take it that the accident benefit referred to by the Minister is the kind of benefit which doubles the value of the policy in the event of the holder dying by accident?
There are various kinds but there are a number of life policies which provide for certain payments in the case of accident or disability, and it is desirable that a life company should be allowed to continue to issue such policies which would otherwise be illegal if this amendment were not effected.
I see no objection in principle to what the Minister is doing, except that it seems to me to open a very wide door. What is there to prevent a company incorporating a life benefit of an infinitesimal size in any given accident policy and thus bring itself within the scope of this amendment and release itself from the obligations of the Bill? For instance, suppose one insures against accident. The Minister's intention is to leave that insurance policy outside the scope of this amendment.
No. The Bill separates life business from general business and prohibits any company which does life business from doing general business. If this amendment were not inserted, the issuing of life assurance policies containing this accident benefit provision would be illegal because it would mean that a life company was doing accident business. In so far as these assurance policies are effected on the life of the assurer and are not subject to cancellation as an accident policy would be, on renewal, there is no reason why we should prohibit life companies from continuing to do that class of business.
Suppose a life company wants to do the accident insurance which the Bill prohibits it from doing, and they issue an accident policy with the proviso in it that the policy carries life insurance for 1/- on the occasion of the death of the insured person, or that a part of the normal premium paid for the accident risk shall be sequestered for the purpose of securing the 1/- life benefit? That is, of course, a purely fictitous insurance in so far as the life part of it is concerned. The effect of that fictitious life value is injected into the accident policy and makes it possible for a life company to issue what is really an accident policy within the terms of the amendment.
Yes, but why should any person take an accident policy in that way? If he wants an accident insurance policy he can get it. If he takes a policy of this kind he must effect it upon the basis of a life policy. The person who wanted an ordinary accident policy naturally would go to the company which could issue him such a policy.
We are ad litem on the line. My suggestion is that in this amendment you are opening a door which the skilful will push more widely open. This amendment will still be an answer to any proceedings brought by the Minister against a life company for having issued such a policy. The insured person need never have been informed about the life policy at all.
The policy must be a contract of assurance on a human life and under which the insurer has no right to cancellation.
But the insurer says this is one life policy and the life premium is covered by the premium which you pay for your annual accident risk. They may say "we are going to give you one premium policy on your life for 1/- and it is going to cost you no more and we are doing that in order to get your business."
Can the Deputy imagine any circumstances in which the insurer who wishes to take out an accident policy would pay a premium for the whole of his life instead of for the particular period during which he wants to be insured?
That would be a whole life period for 1/-. That would be the only element in the policy which survives for the whole life.
That is a very improbable development.
Then my objection is withdrawn.
I would like to know if this applies to superannuation and accident benefit which might be provided specifically by a trade union?
We are specifically providing for that in another amendment.
Is this a counterpart of the other amendment?
No; to Section 6 there is an amendment which specifically excepts trade unions.
Amendment No. 6 agreed to.
I move amendment No. 7:—
In page 6, to delete all from the word "but" line 9 to and including the word "unions" in line 12.
This is in a sense a drafting amendment, because we felt it better to provide for exemption for trade unions in a specific way. There is an amendment to Section 6 which replaces in the Bill the provisions which are being deleted by this amendment. We consider it more appropriate that the provisions should be in such a section than in the form in which it was included in the original draft.
Amendment agreed to.
I move amendment No. 8:—
In page 6, to delete lines 16 and 17 and substitute the words "of less than two months and are collected by means of collectors".
This amendment changes the phrase, "not exceeding two months and are collected by persons authorised in that behalf by the company which carries on such business" to "of less than two months and are collected by means of collectors." This amendment is self-explanatory. I understand the premiums are sometimes collected by other than authorised collectors such as the wife of an authorised collector during the latter's illness or absence from work. The companies are anxious that that practice should not be interfered with by a provision which imposes a statutory prohibition against collection by deputies. That would result in a considerable inconvenience and might interfere with the smooth working of the business in which the collector is engaged.
Does the word "collector" there require definition in the definition section of the Bill?
I do not think so.
Would not the Minister tighten this amendment by at the same time providing for the collection by deputy?
We are merely defining what constitutes industrial business, and we are defining it as life business in which the premiums are collected at periods of less than two months and by collectors. The only change we are making is to provide that the premiums must be collected at intervals of less than two months. The amendment also provides that the premiums must be collected by collectors authorised by the company, "by persons authorised in that behalf by the company which carries on such business." The purpose of the change is to loosen up the rather tight definition in the original section and to provide a definition of industrial assurance business which will not prohibit the making of the collection by a person other than the authorised collector in the circumstances I have described.
It does not meet the point which is sought to be met in the case of amendment No. 9; but I suppose we cannot argue that under this amendment?
The point in the next amendment is that the Deputy seeks a definition which will confine industrial assurance business to business where the premiums are collected at intervals of one week. There is business which is definitely industrial assurance where the collections are made monthly, and I think it would be a mistake to exempt that business from the control which this Bill proposes to impose. The effect of the amendment is the names of Deputies Keyes and Pattison would be to take this class of business, industrial assurance business, outside the scope of the industrial insurance provisions of the Bill.
I wonder if the Minister has looked into the reaction on those on whom the responsibility of collectting those premiums fall, because of the fact that it is sought to make their business ordinary branch business. Ordinary branch terms apply to the collection of these premiums whereas industrial branch terms ought to apply.
Is it not fairly common that arrangements are made in ordinary branch assurance business for monthly payments, and while the ordinary terms of the company are on the basis of premiums to be paid yearly, half-yearly or quarterly, in many cases the arrangements are made whereby persons who are paid monthly salaries pay their premiums monthly?
There are certain controls in the Bill, but the essential difference between industrial business and ordinary business is that in the case of industrial insurance the collection of premiums is made by collectors. That is an essential difference.
Is the Minister aware that it is possible to throw on the collector the responsibility of collecting from a householder or assured person the premiums in cases where the premiums is collected yearly, half-yearly or quarterly? In some cases the collector must collect the premiums weekly while the collector's remuneration is fixed on the basis of collecting them yearly, half-yearly or quarterly.
That is a different point to that which we are discussing.
Someone is going to define the word "collector." As the Bill stands, the court should define it, but I think it is more expedient to define it in the Bill. An alternative method of meeting the insurance companies without defining the word "collector" would be to say "and are all collected by persons authorised in that behalf by the company which carries on such business, or their agents."
The word "collector" is defined in Part V of the Bill relating to industrial assurance.
And that definition will cover the reference to that word in Part I?
Yes, Where used in Part I it relates to industrial assurance.
Amendment agreed to.
I move amendment No. 10:—
In page 6, line 18, before the word "but" to insert the words "including contracts which are attached to or dependent on such assurances and under which the assurer has no right of cancellation and which provide for the payment of moneys in case of fatal or other accident to or decease of the assured."
The object of this amendment is to make the extension in respect of accident benefits in the case of industrial assurance policies as has already been made in the case of ordinary life assurance policies. It is similar to the amendment we have discussed.
The Minister will look into the point I have made to see if it does not leave a wider door than he at first thought?
Yes.
Amendment agreed to.
I move amendment No. 11:—
In page 6, line 26, to delete the word "further."
This amendment merely provides for the deletion of the redundant word.
Amendment agreed to.
I move amendment No. 12:—
In page 6, line 39, immediately after the word "upwards" to insert the words "but of less than two months."
This is purely a drafting amendment.
Amendment agreed to.
I move amendment No. 13:—
In page 6, line 52, immediately after the word "sickness" to insert the words "except any contracts which are attached to or dependent on contracts of life assurance business or industrial assurance business and which confer benefits on the assured in case of fatal or other accident to or decease of the assured and under which the assurer has no right of cancellation.
This amendment is consequential on the amendments dealing with the extension of the definition of life assurance and industrial assurance business in connection with accident benefits.
Amendment agreed to.
I move amendment No. 16:—
In page 6, line 66, before the word "effecting" to insert the word "of".
This is merely a drafting amendment.
Amendment agreed to.
I move amendment No. 17:—
In page 7, between lines 3 and 4, to insert the following words:—
"the expression ‘public liability insurance business' means the following and no other classes of assurance business, that is to say, the business of effecting contracts of insurance indemnifying the insured against liability to pay compensation or damages to any person in respect of personal injury, loss, or damage sustained by such person through the negligence of the insured or of his servant or agent acting within the scope of his employment or authority as such servant or agent (as the case may be) and the business of effecting contracts of insurance indemnifying the insured against liability to pay compensation or damages arising out of or in connection with the negligent use or condition of the property, whether real or personal, of the insured;
the expression ‘engineering insurance business' means the following and no other class of assurance business, that is to say, the business of effecting contracts of insurance against loss arising from damage or injury to any boiler or other apparatus containing gas, vapour or liquid under pressure or any mechanical apparatus or other machinery or arising in any other way from or in connection with the use of any such apparatus or machinery, including liability to pay compensation to third parties in relation to such apparatus or machinery;
the expression ‘glass insurance business' means the business of effecting contracts of insurance against loss by or incidental to the breakage of glass;
the expression ‘guarantee insurance business' means the business of effecting contracts of insurance with employers against loss by or incidental to fraud, embezzlement, misappropriation, forgery, theft, or larceny by employees and the business of issuing bonds or contracts of suretyship;
the expression ‘burglary insurance business' does not include guarantee insurance business, but subject to that overriding limitation the said expression means the business of effecting contracts of insurance against loss by or incidental to burglary, housebreaking, theft, or larceny;".
This is consequential on amendment No. 3, and provides definitions of the additional classes of business brought within the scope of the Bill.
It is consequential on amendment No. 3?
It is.
And it describes the types of business set out in that category?
Exactly.
Amendment agreed to.
I move amendment No. 18:—
In page 7, between lines 3 and 4, to insert the words—
the expression "sinking fund or capital redemption business" means the business of effecting contracts of insurance (otherwise than upon human life) whereby the insurer in consideration of the payment to him of one premium, or of two or more premiums paid at intervals of not less than two months, agrees to pay to the insured at a future date or on future dates one sum or a series of sums.
Sinking fund or capital redemption business is not a class of business that comes within the scope of the 1909 Act or of this Bill, but it is referred to in the definition of bond investment business on page 6. It is necessary to have it defined, and that is what this amendment is designed to do.
Give us a short description of what sinking fund or capital redemption business is in practice.
That is what the amendment is designed for.
The amendment defines what the business is in technical terms, but it does not convey to somebody who is not engaged in the insurance business actively what are the circumstances in which contracts of this character are entered into. It might appear that these were transactions wherein a person pays a single premium for the purpose, say, of insuring against death duties.
Against obligations which arise when debentures have to be redeemed, for example.
Or against the obligation to pay death duties when realising capital from a deceased person's estate. These are single premium insurance policies.
They need not be single premium policies. I think the definition describes the class of business involved. If people contract a loan which has to be repaid at the end of a period, they can effect a policy under which the insurance company contracts to provide the amount necessary to redeem the loan in consideration of the payment of premiums in the interval.
This would apply to house purchase agreements with insurance companies?
No.
There is a system whereby I can buy a house and borrow 80 per cent. of the cost from the insurance company and take out an insurance policy on my life on foot of which the insurance company undertakes to discharge the debt due on my house at a certain time, in the event of my death earlier than the date fixed. There is an endowment system and you undertake to pay premiums for 20 years. At the end of that time your loan on the house is extinguished, but there is a proviso that if you die before the 20 years have lapsed the insurance company will pay off the outstanding mortgage on the house. Does an insurance contract of that character come within the terms of this amendment?
No; there is no life interest in this class of business at all.
Amendment agreed to.
I move amendment No. 20:
In page 7, line 9, after the word "worth" to insert the words "payable or", and in line 10 to delete the words "or given".
This amendment is designed to secure a more complete definition of the word "premium."
Amendment agreed to.
Section 3, as amended, and Sections 4 and 5 agreed to.
SECTION 6.
I move amendment No. 28:—
In page 7, line 49, to delete the word "either."
This is purely a drafting amendment. It is consequential on the fact that we propose to insert two new paragraphs.
It is certainly more than a drafting amendment.
It is really consequential on the insertion of two new paragraphs in the section.
Amendment agreed to.
I move amendment No. 29:—
In paragraph (a), page 7, line 50, after the word "validity" to insert the words "or the due continuance and fulfilment".
The object of this amendment is to make it clear that the provisions of the Bill will not operate to interfere with the continuance and fulfilment of existing contracts where the insurer does not obtain a licence under the Bill.
Amendment agreed to.
I move amendment No. 30:—
In page 7, at the end of the section to add the following word and new paragraph:—
or
(c) any business lawfully carried on by societies and other bodies registered in Saorstát Eireann under the Acts relating to friendly societies or to trade unions.
This is an amendment which is consequential on an earlier amendment to which I referred and it provides for the exemption of the business of registered friendly societies and registered trade unions. It is considered that the exemption, which it was intended to afford in any event, could more appropriately be effected by a provision in this section rather than in the earlier section. The desirability of exempting that class of business from the provisions of the Bill is clear. Certain trade unions carry on minor forms of insurance. They may, for instance, insure a worker against the loss of his tools and it is not necessary to have that business brought under the provisions of the Bill.
I would like some clarification of this position from the Minister. The first intention of the Bill appeared to be to bring the trade unions carrying on business which might be described as life insurance business within its scope, making provision for certain forms of exemption, in the case of a union registered in Saorstát Eireann. It appears that you require a union not so registered to make a deposit as a condition of continuing that kind of business and that condition would apply not merely to unions which definitely do not desire to register but unions which were prevented by the constitutional position here from registering. I would like the Minister to indicate what is the effect of this amendment on the Bill as first circulated. I think his own explanation of the thing is rather inadequate.
There is no change, except perhaps a minor one. The Bill as originally circulated excluded from the definition of life assurance business any contracts described as "effected by societies and other bodies registered in Saorstát Eireann under the Acts relating to friendly societies or to trade unions." That has been deleted, and we are proposing to provide here that nothing in this Act shall affect any business lawfully carried on by societies or trade unions registered in Saorstát Eireann under the Acts relating to friendly societies or trade unions. That widens the scope of the exemption in so far as it extends it to cover business other than life assurance business as defined, but the effect of it is the same and it confines the exemption to business carried on by trade unions registered in Saorstát Eireann. That is, however, a question to which I had given very considerable attention, and it may be necessary to consider it again at a later stage. There are unions operating here which have been deemed not to be registered in Saorstát Eireann, and the effect of the Bill on those unions has to be considered. I should not like to give the impression that I have arrived at a final conclusion as to the best course to adopt in relation to such unions, but in so far as this amendment is concerned it leaves the position unchanged. If it is decided to change the scope of the Bill in relation to those unregistered unions it will require another amendment.
Will the Minister say precisely what types of insurance he has in mind in connection with this amendment?
Any classes of insurance, such as a superannuation fund, provision for the payment of benefit on accident or in similar circumstances, insurance against loss of tools, or any of the things that a trade union might do for the benefit of its members in accordance with the law.
Why does the Minister think it is desirable to exclude from the supervision that is provided for in this Bill insurance enterprises carried on by a trade union?
I do not think it is necessary to have special provisions for the supervision of that business in an Insurance Bill. There are, of course, Acts relating to trade unions, but in any event the requirement of a deposit and so forth would be well beyond the capacity of many of the trade unions concerned.
I can quite see that there are certain parts of the Bill which would not be applicable to the minor activities of a trade union of an insurance character, but I can see no reason why the activities of a trade union in an insurance enterprise, no matter how small, should not be subject to the same type of supervision that the industrial insurance company or the minor branch insurance which is practised by large companies must submit to. On the contrary, I think it is a very good thing that any insurance contracts of that character should be under the strictest State supervision. We have got to bear in mind that the men dealing with a trade union insurance enterprise of that kind are of a type most easily victimised because they ordinarily have not the time or the resources to prosecute legal claims against a trade union or insurance company. Therefore, there should be the utmost vigilance by the State to see that substantial justice is done between themselves and the assuree body. I think it would be better from the point of view of the trade unions and the members thereof if all insurance activities carried on by a trade union were subject to the closest scrutiny that is provided for any other insurance body in the State. We quite agree that they would have to be delivered from the necessity of putting up big deposits such as insurance companies are required to do, because insurance is not the prime purpose of a trade union; it is a side activity. That may be easily done without taking them out of the scope of the Bill altogether.
Supervision is provided for in the Trade Union Acts. My point is that it is not desirable to provide for the supervision in an Insurance Act. There is provision for supervision in the Trade Union Acts, and, although the Trade Union Acts are in many respects antiquated and may have to be revised at some stage, if any further provision were deemed necessary to cover those classes of businesses done by trade unions it is in that code that the provision should be made, and not in this.
Would not Deputy Norton agree with me that in the interregnum between bringing the trade union code up to date it would be desirable if power were vested in the Minister for Industry and Commerce to supervise the insurance activities of any trade union to the same extent as this Bill allows him to supervise insurance companies?
I do not think the position is the same as in the case of an ordinary insurance company. The benefits which trade unions provide, for instance in the form of tool money for a member, or emigration money, or superannuation benefit, or other special kinds of benefit, are not in the nature of contractual obligations. They are a kind of discretionary benefits which are given. The condition of entitlement to them is not related to the fact that a member pays any individual contribution for them, but rather being a member of a society his membership of the society entitles him to consideration in the matter of having such benefits extended to him. But he has no individual contractual rights to benefits of that kind. In practically all cases he does not pay for any special benefits, but gets them in a kind of discretionary way under the rules of the society. I think it may well be argued, in respect of the kind of business which trade unions do, that in fact they do not come within the scope of insurance legislation as conceived and expressed here, because in many cases the element of contract is wholly absent, and that is the main basis upon which insurance is defined in this Bill.
Does not the Minister think that Deputy Norton's statement in regard to this matter strengthens the case for closer supervision? Is it a desirable thing that insurance activities should be carried on by a trade union on an indeterminate and vague basis such as that outlined by Deputy Norton? After all, anybody who has any knowledge of those things knows that if the trade unions are carrying on their insurance activities on a sound basis they must earmark a part of the dues of a member of the trade union for benefits under the various schemes they have in mind. At first glance I cannot approve of a pseudo insurance system which is based on paternalism, leaving discretion in the trade union authorities to give the benefit to one man and withhold it from another, because in my opinion the trade union will be forced into the position of allowing their judgment to be influenced by their knowledge from time to time of what funds they have at their disposal. To me that does not seem to be fair. If two men are paying the same dues to the same trade union those two men should be entitled to the same benefits of every character. A trade union cannot possibly make those benefits effectively available unless they have made a rule of earmarking a part of every man's dues to finance the benefits which it is their intention to confer. I think it is necessary that the Department of Industry and Commerce should have the power of supervising that activity in order to ensure that substantial justice is done as between one member of the trade union and another, and in order to see that the dues of one man will not be sequestered to pay the benefits of another, when the other's dues have not made any contribution towards benefit for the first.
Arising out of Deputy Norton's remark, if there is no contract it is not insurance business, and would not come under this Bill in any event. If there is any need for better supervision or regulation of such activities by trade unions it is not by a section of this Bill that that would be done but by an amendment of the existing Trade Union Acts.
I should like to correct what I think is a misapprehension on the part of Deputy Dillon. I used the term "discretionary" as indicating the power of the union to give a benefit to the member, but the inability of the member to sue for the extension of that particular benefit as a matter of contractual right. In fact, the grant of a benefit of that kind is not given in a discretionary way as between individuals. The discretion is exercised collectively over the whole membership, and the benefit is paid by the whole body of members. The right to pay it, as a right, does sometimes reside within the executive of the union. They can make a grant or not, but once the grant is made it applies to the whole of the membership and it is dependent upon the funds existing from time to time. The matter Deputy Dillon is concerned with is to ensure that all members should be treated fairly. I have had considerable experience of the way trade unions manage funds of this kind. I am satisfied of this: that for the one case in which an insured member would get the benefit of the doubt in the case of a private insurance company, he would at least get the benefit of the doubt a hundred times more in the case of the trade union. Funds of that kind, providing for benefits such as I have indicated, are administered in a rather generous manner. The object sought is to pay the member what it is possible to pay him, having regard to his rights in the matter, and that strict legal procedure which is the feature of private insurance companies, in dealing with policy-holders, is not obtruded in the same way as between a privately insured person and a private company. As the Minister said, the way in which matters of this kind in relation to trade unions might be regulated where regulation is necessary, is in a Bill dealing with the trades union legislation. This is hardly a matter that could be brought into a Bill of this kind, which I take it is dealing with insurance different from that in which trade unions are engaged. If the matter was to be dealt with by legislation at all it should be dealt with in a Bill dealing with trade unions.
I am not at all reassured. Beneficence is a very desirable thing. But, dealing with insurance funds, beneficence alone would not be sufficient. While I am prepared to accept that where there is no contract between a person and a trade union they would not come within the scope of this Bill, yet I cannot see there is any reason in excluding cases where there is a contract between the trade union and the person entitled to benefit. Misguided benefit might involve persons in a very great loss, and short-sighted benefits might involve catastrophe.
There is supervision.
The Minister says there is supervision under the Trades Union Act. I do not know what that supervision is. Perhaps the Minister would in the course of the Recommittal Stage give a resumé of the supervision under the Trades Union Acts which he regards as sufficiently provided for in this amendment.
I express no opinion as to the adequacy of the supervision. Trade unions have always been exempted. They were exempted under the Act of 1909, and they are exempted from this Bill because they are regulated on a different footing. Friendly societies are also exempted and their supervision is exercised by the Registrar of Friendly Societies. I think it is desirable that we should leave that position unchanged in this Bill. I have not expressed any opinion as to the adequacy of the supervision under the Trades Union Act.
The Act of 1909 contained an entirely inadequate provision for the inspection of industrial insurance, and it was as a result of that that the Act of 1923 was passed in Great Britain. That Act never applied here, and this Bill differs substantially from the 1923 Act.
In the case of industrial insurance?
Yes. My complaint is that until the Trades Union Act is amended to bring their insurance activities into line with the provisions of the Industrial Insurance Act they ought to be brought under this Bill for the intervening period and until amending legislation is introduced.
Was that done in Great Britain?
I could not tell but I am not prepared to take my lead from Great Britain in everything that is done. I recognise it would be more suitable that the trade union code should be provided for under this Bill, and then trade unions could be lifted out of it and placed back again, when their own code is amended. In the interval I think they should be brought under this Bill.
Amendment agreed to.
I move amendment No. 31:—
In page 7, at the end of the section, to add the following word and new paragraph:—
or
(c) any business which is not an assurance business.
This is designed to remove any possible doubt that the provisions of the Bill do not apply to any class of business which is not assurance business. The amendment is designed to remove any ambiguity.
To exclude the kind of operations to which Deputy Norton referred.
The Bill does not apply to anything which is not an assurance business as so defined.
Amendment agreed to.
Section 6, as amended, agreed to.
Sections 7 and 8 agreed to.
SECTION 9.
I move amendment No. 33:—
In sub-section (1), page 8, line 29, after the word "person" to insert the brackets and words "(otherwise than in the course of reinsurance)".
This amendment is necessary to enable reinsurance to be effected with unlicensed companies to the extent that licensed companies and the reinsurance company are not prepared to provide full reinsurance cover on their own risk, and also to permit reinsurance with unlicensed companies during the period before the reinsurance provisions of the Bill are brought into operation.
Amendment agreed to.
Section 9, as amended, agreed to.
SECTION 10.
I move amendment No. 36:—
In sub-section (2), page 8, line 44, after the word "issues" to insert the brackets and words "(otherwise than in the course or by way of reinsurance)", and in line 50 before the word "issued" to insert the word "so".
The necessity for the first part of the amendment I explained when dealing with the last amendment; the insertion of the word "so" before the word "issued" is merely a drafting amendment.
Amendment agreed to.
Section 10, as amended, agreed to.
Section 11 agreed to.
SECTION 12.
I move amendment No. 42:—
In sub-section (3) page 9, line 58, to delete the word "commencement" and substitute the word "date".
This is merely a drafting amendment.
Amendment agreed to.
I move amendment No. 50:—
In sub-section (5), page 10, to delete paragraph (e) and substitute a new paragraph as follows:—
(e) either such company (if it is incorporated under the law of a country other than Saorstát Eireann) complies with the provisions of Section 274 of the Act of 1908, or such company (if it is a society, association, or other body which is incorporated or otherwise constituted under the law of a country other than Saorstát Eireann) has filed with the Registrar of Companies—
(i) a certificate (certified by the proper officer of the country in which such company is so incorporated or otherwise constituted) of the registration of such company in such country, and
(ii) a copy (similarly certified) of the rules or other instrument defining the constitution of such company, and
(iii) the names of the persons forming the committee of management or other body having the direction or control of such company, and
(iv) the names of the secretary and the trustees of such company and of the persons authorised to sue and be sued on behalf of such company, and
(v) the names and the addresses of one or more persons resident in Saorstát Eireann who are authorised to accept on behalf of such company service of any notices, documents, or legal process.
This amendment is intended to meet cases of insurers not incorporated under the Companies Act, 1908.
Might I ask the Minister if this will also apply in the case of friendly societies and trade unions?
They are exempted from the Act in any event.
This is to prescribe conditions which certain bodies incorporated outside must comply with in order to secure exemption. I take it the Minister is requiring certain outside organisations not incorporated here to supply certain information to him?
And to enable them to carry on business.
Yes, to secure exemption from the rigid application of the Act. Does that requirement extend, for instance, to trade unions who are not now technically registered under the Trade Union Acts here?
Quite. If there was a trade union which carried on insurance business on the qualifying date and desired to carry on business and was prepared to comply with the requirements of the Act, by application for a licence, making a deposit, etc., then there is no reason why they should be excluded from continuing to do it.
That is subject, of course, to the second view which the Minister may take of this when he looks into it?
The second view is on the question whether we should exempt these unregistered trade unions from the provisions of the Act altogether. Any insurer who, in accordance with the provisions of the Bill, can claim a licence is entitled to carry on insurance business if he conforms with the requirements of the Bill in toto.
Amendment agreed to.
I move amendment No. 53:—
In sub-section (6), page 10, to delete all words from the word "assurance" in line 54 to the word "business" in line 57 and substitute the words "one or more than one class of assurance business other than life assurance business and industrial assurance business."
This is a drafting change. We have extended the number of classes of general insurance business to which the Bill applies, and this change is being effected in order to avoid needless repetition.
This goes a good deal further than the amendment to increase the categories of insurance under Section 3, because in Section 3 you inserted amendment No. 3, which increases the categories of insurance business covered by the Bill by five heads, but leaving out marine and live stock and a variety of other types of insurance to which the Minister referred. Amendment No. 53 covers all forms of insurance other than life and industrial assurance business.
A licence is not required to carry on any insurance business except those to which the Bill applies. We said in the original Bill "whenever an application is made by a foreign company for an insurance licence to carry on" certain named types of business, and now we are changing that to read: "one or more than one class of assurance business other than life assurance business and industrial assurance business." There is no change in the purport of the sub-section. There is merely an avoidance of unnecessary repetition of the classes of business to which the sub-section applies.
Amendment agreed to.
I move amendment No. 56:—
In sub-section (6) to delete all words from the word "of" where it firstly occurs in line 63 on page 10 to the word "business" in line 2 on page 11, and substitute the words "than one class of assurance business other than life assurance business and industrial assurance business".
That is the same thing. I just ask for an assurance that it does not operate to widen or contract the section as it originally stood.
No, except consequential upon Section 3.
Amendment agreed to.
I move amendment No. 61:—
In sub-section (9) (a), page 11, to delete all words from the word "of" where it firstly occurs in line 40, to the word "business" in line 44, and substitute the words "than one class of assurance business other than life assurance business and industrial assurance business".
That is the same thing.
Yes.
Is there not needless repetition in the last three lines with the beginning which says "by a Saorstát Eireann Company which at the date of such application carries on neither life assurance business nor industrial assurance business, but which, on the 31st day of October, 1935, carried on one or more than one class of assurance business other than life assurance business and industrial assurance business and did not on the said 31st day of October, 1935, carry on life assurance business or industrial assurance business."
It may not be literature, but I am told it is good law. However, I shall have the draft reexamined.
Amendment agreed to.
I move amendment No. 66:—
In sub-section (9), page 12, to delete all words from the word "assurance" where it secondly occurs in line 1 to the word "business" in line 5, and substitute the words "one or more than one class of assurance business other than life assurance business or industrial assurance business."
This is the same thing.
Amendment put and agreed to.
Section 12, as amended, agreed to.
SECTION 13.
I move amendment No. 68:—
Before Section 13 to insert a new section as follows:—
Whenever an application has been duly made in accordance with this Act by a foreign company which is a society, association, or other body incorporated or otherwise constituted under the law of a country other than Saorstát Eireann for an assurance licence to carry on life assurance business or industrial assurance business, or whenever an assurance licence has been granted to any such company to carry on either or both of such businesses, the following provisions shall have effect, that is to say:—
(a) any alteration in the rules or other instrument defining the constitution of such company and filed with the Registrar of Companies shall be notified to such Registrar within the prescribed time, and
(b) any notice, document or legal process may (save as may be otherwise required by or under any rules of court or an order of a court or judge) be served by being left with or sent by prepaid ordinary post to the persons resident in Saorstát Eireann at the addresses of such persons as specified by such company under this Part of this Act, and
(c) The Registrar of Companies shall, if satisfied that such company has filed with him the matters required by this Part of this Act to be so filed by it, issue a certificate under his hand certifying that such company has so filed the matters which it is so required to file, and
(d) every such certificate shall be prima facie evidence of the matters stated therein and it shall not be necessary to prove the signature of the Registrar of Companies or that he was in fact such Registrar.
The purpose is to require that insurers not having the constitution of incorporated companies shall notify the Registrar of Joint Stock Companies of any alteration in their constitution. It also provides for the service of a process and for the issue of a certificate by the Registrar of the filing of documents to such insurers. It is consequential, in a sense, upon the other amendment changing Section 12.
Amendment agreed to.
I move amendment No. 71:—
In page 12, before sub-section (3) to insert a new sub-section as follows:—
(3) Whenever the Minister grants to a foreign company an assurance licence to carry on one or more than one class of assurance business (other than life assurance business or industrial assurance business) the Minister shall (without prejudice to any other power of refusal conferred on him by this Act) refuse every application by such company for an assurance licence to carry on any other such class of assurance business unless such company on the 31st day of October, 1935, carried on in Saorstát Eireann that other class of assurance business.
This amendment limits the grant of a licence to a foreign company to such class of business as the company carried on in the Saorstát on 31st October, 1935. I think it is desirable to have such an amendment, because since the passing of the Road Traffic Act, 1933, a number of companies made a deposit of £15,000 and commenced to carry on mechanically-propelled vehicle insurance without, however, undertaking any other class of business. If this amendment were not inserted such companies could obtain a licence and could then, if they wished, proceed to do any class of general insurance business provided for in the Bill.
Amendment agreed to.
Section 13, as amended, agreed to.
Sections 14, 15, 16, 17 and 18 agreed to.
I move amendment No. 80:
In sub-section (1) (b), page 15, to delete all from the word "of" where it first occurs in line 12 to the word "business" where it secondly occurs in line 15, and substitute the words "than one class of assurance business other than life assurance business, industrial assurance business, mechanically propelled vehicle insurance business and glass insurance business".
That is consequential on amendment No. 2.
Amendment agreed to.
I move amendment No. 83:
Before sub-section (2), page 15, to insert a new sub-section as follows:
(2) Section 2 (which relates to deposits) of the Act of 1909, as amended or varied by this section, shall apply to every sum which an assurance company is required by this section to deposit and keep deposited in like manner as the said Section 2 applies to the sum which an assurance company is required to deposit and keep deposited under that section.
The purpose is to make it clear that deposits for the purpose of the Bill may, as under the Act of 1909, be made either in cash or securities.
Amendment agreed to.
I move amendment No. 86:
In sub-section (2), page 15, to insert at the end of the sub-section the following word and new paragraph:—
or
(d) an assurance company which on the 31st day of October, 1935, carried on in Saorstát Eireann assurance business other than life assurance business or industrial assurance business and which is not required by the Act of 1909 to make a deposit and in respect of which the Minister is satisfied that the business which such company carries on is wholly or substantially the effecting of insurances against loss of or damage to or in respect of property belonging to, or held in trust for, or used or occupied by or on behalf of a religious organisation or body, including liability to pay compensation or damages to workmen employed by trustees, committees, stewards or other officers or holders of such property.
The purpose is to continue the exemption heretofore enjoyed by the Methodist Insurance Company Limited, the surplus earnings of which are distributed for the benefit of charitable or benevolent organisations within that denomination.
Is that the only organisation affected?
It is, so far as I know.
Amendment agreed to.
I move amendment No. 87:—
In page 15, to add at the end of sub-section (2) the following word and new paragraph:—
or
(d) an assurance company which carries on glass insurance business and in respect of which the Minister is satisfied that such company carries on no other class of assurance business.
The amendment provides an exemption from the obligation to deposit, where the insurer transacts glass business and not any other class of insurance business. That business is small and the necessity for a deposit does not arise.
Are there many companies affected?
There are certain companies who specialise in this class of business and who do no other.
Are there any of them incorporated here?
There are companies incorporated here which do glass business.
Are there any exclusively glass insuring companies incorporated?
I could not answer that straight away, but there may be.
Does that provision not seem to conflict with amendment No. 3 already passed, which makes provision for the inclusion of this business in the Bill?
We are bringing glass insurance business subject to control in all respects as other classes of insurance business, and we are applying the separation of business provisions to glass insurance business, but we do not think there is any public need to require a company doing glass business only to make a deposit in the High Court. If, however, it does any other business as well as glass business, the deposit must be made.
Is the Minister not giving a specially privileged position to that company? In other words, any company incorporated here as an exclusively glass insuring company is allowed to carry on its activities here, to be exempt from the payment of the deposit and to enter into competition with the existing Irish companies. Would the Minister not consider requiring such company to make a deposit of £20,000 if it is going to continue its activities here? There is a particularly strong case for not putting it in a specially privileged position as compared with Irish companies, which, as the Minister has indicated, carry on glass assurance, and which, presumably, could transact this business in the same way as an externally controlled company.
I am informed the only company doing this business here exclusively is an Irish incorporated company. It is the Irish Plate-glass Insurance Company.
That is new information.
In any event, I do not think there is much need for a deposit in such a case.
I think there is a good deal to be said for what Deputy Norton has put forward. This glass business is regarded as one of the choice businesses in the insurance world. The ordinary Irish company or the ordinary foreign company in doing its business has to take the rough with the smooth. A great deal of the business is non-paying, or badly paying, and this class of insurance is considered one of the plums of the insurance business. I think it is very unfair to give special facilities to any one company who specialise in that particular line, and I think that companies doing general business and facilitating the public generally should be considered in a matter of this kind.
But the ordinary company does not have to make an additional deposit in order to do this class of business. If it is doing other classes of general business, it can do this as well. The only question is whether a company doing this and no other business should be required to make a deposit of £20,000. There is certainly no public need for the provision, nor is this concession, if it can be called a concession, confined to any one company. Anybody who gets a licence to carry on in accordance with the provisions of the Bill can confine himself to this class of business if he wishes.
Mr. Bourke
I am not questioning that. I say that it is unfair to companies doing general business.
But they do not have to make an additional deposit in order to do this class of business.
Mr. Bourke
By picking that out, you are skimming the cream off the whole business.
The Minister said that one company was affected by this proposal.
No.
He said that one company did glass insuring business exclusively.
What I say is that I know there is one company doing an exclusive glass business, but we are not limiting the position in a manner which will mean that only one company will do it.
Is not the purpose of this amendment to cater specially for the position of one company which is not carrying on other types of insurance, but is confining its activities to glass insurance?
In such a case, we do not think there is need for the £20,000 deposit.
Is it the purpose of the amendment to cater particularly for the company doing glass business only in respect of which commodity the Minister does not think it is desirable to have a deposit made?
I think that if we were to insist upon a company which is doing plate-glass business only making a deposit, we would put any such company out of business, but that is not the main consideration. Looking at the question from the point of view of the public interest and from the point of view of the circumstances which gave rise to this deposit system at all, there does not appear to be, in relation to a company doing this class of business only, any necessity to require them to make a deposit of a substantial amount with the Accountant of the High Court.
I do not know that the Minister can insist on the ground that it is not desirable from the public point of view. I do not know that it is undesirable from the public point of view that the High Court of this country should have £20,000 of a company's money deposited with it for use in satisfaction of any disputed claims if need be. Can the Minister say how many companies to his knowledge are operating in this country exclusively in the glass insurance business?
I could not answer that straight away. I know of one company, but there may be some others. There are, of course, quite a number doing the business, but not exclusively.
I want to know if the Minister knows any company doing glass business only.
I know at least one.
What is the name of that company?
The Irish Plate-glass Insurance Company, I think.
Has it any existence outside this country?
I do not think so.
It is an exclusively Irish company?
I think so, but I am only giving my recollection of the position.
I should like to know if the Minister has inquired closely into this problem, because two points arise. One is the matter referred to by Deputy Bourke. As general insurance is run in this country at present, what is actually happening is that some profitable branches of general insurance are carrying unprofitable branches to a certain extent. Motor insurance is extremely unprofitable, and it is very largely carried on by insurance companies for the purpose of getting other business. Heretofore, when they could do life and general business, they very often did motor insurance for the purpose of getting into a house with a view to getting O.B. business there, and if you are going to allow special privileges to individual companies who undertake to engage only in those branches of insurance which have been proved by experience to be profitable——
We are only dealing with one class—glass insurance.
If you are going to allow that to develop, I do not see how you can refuse to extend a similar concession to any company which is insuring other small individual risks and which says: "It is inconceivable that at any time we should sustain a loss which would make it necessary to turn to our reserve deposit in court to meet it." They could make a case similar to the plate-glass company's case to get exemption from the operation of the Bill. If that happened, you would leave the general insurance companies carrying all the unprofitable business, and being undercut in respect of profitable risks by the specialised companies who were running very small establishments on advantageous terms. That is one problem to which I invite the Minister's consideration.
The second problem is one the answer to which I do not know myself. I do not know if the Minister's attention has been directed to it. The situation in the plate-glass business is very peculiar because my information is that there is some kind of a cartel which deals with plate-glass, and the terms under which the cartel operates are that plate-glass will not be supplied to any merchant who sells it to a consumer below the fixed price. That was originally done for the purpose of preventing prices being cut by excessive competition. The effect of it has been that the plate-glass distributors got a proviso put into the cartel agreement providing that while they must all get the minimum price fixed by the cartel, they could make a salvage allowance for as many square feet of plate-glass as they could cut out of the window that had been broken. Accordingly, if a plate-glass window be smashed you send to a glass merchant and ask him: “For how much will you put in a plate-glass window to replace this plate-glass window that has been smashed?” He looks at the window and he measures out of that window the square feet of glass that he can credit against his customer's bill and he makes an estimate of the cost of putting in the window. When that person is going away he puts his elbow against the window with the result the remaining part of the glass is broken and the next person who comes to give an estimate will naturally have to give a higher estimate. If that is the case, is it possible for a plate-glass insurance company to derive some peculiar benefit—I will not say through collusion because there is nothing dishonourable or dishonest in the transaction—but is there not a possibility of the plate-glass window insurance company operating in conjunction with plate-glass suppliers or with the cartel, or could any special benefit accrue to a company operating as such that would not be available to the ordinary insurance company? I have no reason to think that there is, but I think the facts that I have mentioned to the Minister should be considered.
Any company operating as an insurance company must make a deposit of £20,000, that is any company which does a business to which the Act applies except motor vehicle insurance for which the deposit is £15,000, but it is not considered necessary in the public interest to require a deposit from a company doing plate-glass business only. As regards the question of the cartel, I am afraid that I do not know much about those arrangements, but Deputy Dillon will be glad to hear that in the next six months we will be able to provide him with Irish plate glass, and the more of that that will be broken the more employment will be given.
Amendment agreed to.
Section 19, as amended, agreed to.
SECTION 20.
I move amendment No. 89:
In sub-section (2), paragraph (b), page 16, line 19, before the word "direct" to insert the word "either", and at the end of the said paragraph to add the words "or, if requested by such assurance company so to do, direct the accountant of the Courts of Justice to transfer to such assurance company or some person nominated by such assurance company so much (if any) of the said investments as will leave the market value of the residue of such investments on the day of such transfer equal to the said full proper amount."
The purpose of this amendment is obvious—it is to permit the transfer of surplus stocks. That amendment will bring the section into accord with Section 22 dealing with the release of deposits.
That explanation is rather too vague.
If that amendment were not there, it might be held that it would be necessary to release or transfer the surplus in cash, whereas the amendment is designed to permit the remission of the surplus in the form of a transfer of securities.
Amendment agreed to.
Section 20, as amended, agreed to.
Sections 21 to 41 agreed to.
SECTION 42.
I move amendment No. 102:—
In page 24, between lines 13 and 14, to insert the following:—"the expression ‘industrial assurance company' means an assurance company which carries on industrial assurance business."
This is an extension of the definition section. The expression "industrial assurance company" occurs frequently in this part of the Bill, and it is considered necessary to insert this definition here.
Amendment agreed to.
I move amendment No. 106:—
In page 24, lines 24 and 25, to delete the words "held by a person who has effected a policy of industrial assurance", and in line 26 to delete the words "such policy" and substitute the words "a policy of industrial assurance".
This is a drafting amendment which makes it clear that the premium receipt book need not be held by the assured person himself. It is often held by a relative so as to be available when the collector calls.
Amendment agreed to.
Section 42, as amended, agreed to.
Section 43 agreed to.
SECTION 44.
I move amendment No. 113:—
In sub-section (2), page 25, line 13, to delete the word "by".
This is a purely drafting amendment.
Amendment agreed to.
I move amendment No. 114:
In sub-section (2), page 25, line 19, after the word "endowment" to insert the words "or endowment assurance".
This is also a drafting agreement.
Amendment agreed to.
I move amendment No. 116:—
In sub-section (3), page 25, line 22, to delete the words "not exceeding" and substitute the word "of" and after the word "months" to insert the words "or more".
This is also a drafting agreement.
What is the difference between an endowment policy and endowment assurance policy?
The Deputy had better not throw a question like that at me just now. I will give him a definition when we come to it.
Amendment agreed to.
I move amendment No. 117:—
On page 25, line 25, to delete the words "for either of the following purposes, that is to say" and substitute the words "under and in accordance with this section", and to delete paragraphs (a) and (b).
This is a drafting amendment.
Amendment agreed to.
Section 44, as amended, agreed to.
SECTION 45.
I move amendment No. 118:—
In sub-section (1), page 25, line 49, after the word "free" to insert the word "paid-up".
This is also a drafting amendment.
As the Bill originally stood, it was exclusive of bonus or free policies, and now it is exclusive of bonus or free paid-up policies?
Yes.
I accept the Minister's word that it is purely a drafting amendment.
Amendment agreed to.
I move amendment No. 119:—
In sub-section (3), page 26, line 2, after the word "pay" to insert the brackets and words "(otherwise than in respect of repayment of premiums paid on foot of and under an endowment or endowment assurance policy)".
This is also a drafting amendment.
Amendment agreed to.
I move amendment No. 120:—
In sub-section (3), paragraph (a), page 26, line 5, to delete the words "issued by such company" and substitute the words "which was effected", and in line 6, immediately after the word "child" to insert the words "and for which such company is liable".
The purpose of this amendment is to make it clear that the provisions are to apply to policies for which the company is responsible, whether those were issued by itself or by another company whose business has been acquired by amalgamation.
Amendment agreed to.
I move amendment No. 122:—
In sub-section (3), paragraph (d), page 26, line 17, before the words "the person" to insert the words "except in the case of a free paid-up policy".
The purpose of this amendment is to make it clear that the requirements of the section are not intended to apply in the case of free paid up policies.
Amendment agreed to.
I move amendment No. 123:—
In sub-section (4), page 3, to delete all from the words "in respect" in line 24 to the words "such child" in line 28 and substitute the words "where such certificate is applied for for the purpose of obtaining payment from an industrial assurance company of a sum of money payable by such company in pursuance of the next preceding sub-section of this section.
This is merely a drafting amendment; it does not alter the intention of the sub-section in any way.
Amendment agreed to.
I move amendment No. 124:—
In page 26, sub-section (4) (c), line 39, before the word "policies" to insert the words "paid-up".
This is similarly a drafting amendment.
Amendment agreed to.
I move amendment No. 126:—
In sub-section (4), page 27, line 5, to add at the end of the sub-section the following—"but shall disregard sums paid or payable on foot of bonus or free paid-up policies or in respect of the repayment of premiums paid on foot of endowment and endowment assurance policies."
This is also a drafting amendment to make the wording of the sub-section accord with sub-section (2).
Amendment agreed to.
I move amendment No. 127:—
In sub-section (5), page 27, line 7, to delete the word "industrial".
This is merely to delete an unnecessary word.
Amendment agreed to.
Section 45, as amended, agreed to.
SECTION 46.
I move amendment No. 128:—
In page 27, to delete line 18 and lines 21 to 30 inclusive.
The effect of this amendment is to validate not only certain classes of endowment policies, but any policy in force at the commencement of the Act which would have been valid if the provisions of this part of the Bill had been in operation when the policy was issued.
I do not quite follow that.
The purpose of the section is to validate certain endowment policies which require validation. Any such policy issued by a company now might be invalid, but it would be valid after this Bill became law, and we are making these policies valid retrospectively. The purpose of the amendment is to validate not only certain classes of endowment policies as in the section, but all policies issued by a company which would be valid under the Bill.
Amendment agreed to.
Section 46, as amended, agreed to.
SECTION 47.
I move amendment No. 130:—
In sub-section (1), page 27, lines 36 and 37, to delete the words "or has issued".
This is put forward because it is not intended that the provision of sub-section (1) should have retrospective effect.
Amendment agreed to.
I move amendment No. 131:—
In sub-section (2), page 27, line 45, to delete the words "with whom such policy was effected" and substitute the words "entitled thereto", and in lines 49 and 50 to delete the words "with whom such policy was effected" and substitute the words "entitled thereto".
This is merely a drafting amendment.
Amendment agreed to.
I move amendment No. 132:—
In sub-section (2), page 27, line 46, before the word "surrender" to insert the word "cash".
Amendment agreed to.
Section 47, as amended, and Section 48 agreed to.
SECTION 49.
I move amendment No. 136:
In page 28, line 33, to delete the words "assets and liabilities" and substitute the words "industrial assurance business".
This is a drafting change designed to express more clearly the intention of the section.
Is the Minister satisfied that that is a better description?
Yes. We went into that with some care, and it was accepted as such by the representatives of the companies with whom the matter was discussed.
I can understand that, but the other point appeared to me to be a strange one. As regards substituting the words "industrial assurance business", what is the corresponding item on the other side of the balance sheet to meet it? Obviously assets.
I do not quite get the Deputy's point.
The Minister is taking out the words "assets and liabilities" and he is inserting "industrial assurance business".
As the sub-section stands, it reads—"The following provisions shall have effect in relation to every valuation...made by an industrial assurance company of its assets and liabilities at any time after the expiration of 12 months..." If the Deputy will examine the section he will find it is more accurate to describe it as a valuation made by an industrial assurance company of its industrial assurance business. It is not merely a valuation of its assets and liabilities, but of its business as such, and that is what the various paragraphs of the section are designed to provide for.
Amendment agreed to.
Section 49, as amended, and Sections 50, 51 and 52 agreed to.
I move amendment No. 138:
Before Section 53 to insert a new section as follows:—
Whenever the Minister is satisfied that an industrial assurance company which is a society, association, or other body incorporated or otherwise constituted under the law of a country other than Saorstát Eireann is unable to deposit with him an industrial assurance valuation within six months after the time when such valuation should be so deposited by such company the Minister may extend the time within which such valuation shall be deposited with him by such company to any period not exceeding twelve months after the close of the period to which such valuation relates.
I was convinced that this amendment was necessary because it is represented that it would be impossible without a complete reorganisation of the administrative system of the companies to which it relates to comply with the requirements of Section 7 of the Act of 1909, which requires the valuations to be deposited within six months. We are making, therefore, the alternative provision set out in the proposed new section.
The Minister's discretion is limited to 12 months now?
Yes.
Amendment agreed to.
SECTION 53.
I move amendment No. 139:—
In page 30, to delete sub-sections (2), (3) and (4).
The procedure with regard to general meetings is governed by the Act of 1908 in the case of incorporated companies and, in the case of those not so constituted, it is provided for in their rules, or other instruments of constitution. I think the proposals set out in sub-sections (2), (3) and (4) are not really necessary.
Amendment agreed to.
Section 53, as amended, agreed to.
SECTION 54.
I move amendment No. 141:—
In sub-section (4), page 31, line 21, to delete the words "be liable on foot of such policy" and substitute the words "not be relieved because such statement is not true from liability on foot of such policy".
This is a drafting amendment, designed to make the meaning of the sub-section clearer.
Amendment agreed to.
I move amendment No. 142:—
In sub-section (5), page 31, to delete all words from the words "such company" in line 25 to the end of the sub-section and substitute the following:—
"and a fraudulent statement in some material particular has been made by the proposer and embodied in such proposal, the following provisions shall have effect, that is to say:—
(a) where such proposal has been filled in wholly by any person so employed, such company shall not be entitled to question the validity of the policy founded on such proposal on the ground of any such statement so made by the proposer and embodied in such proposal, and
(b) where such proposal has been filled in partly by any person so employed, such company shall not be entitled to question the validity of the policy founded on such proposal on the ground of any such statement so made by the proposer and embodied in such proposal unless such statement occurs in some part of such proposal which has not been filled in by any person so employed."
This is the amendment which was suggested by the companies and it is, I consider, a suitable alteration of the Bill. It is designed to limit the application of the sub-sections relating to mis-statements to so much of the proposal as is, in fact, filled in by the company's agent.
So if the company's agent persuades the persons taking out the policy to insert the figures representing the age which are, in fact, not correct, that relieves the company of liability on foot of the policy?
What sub-section (5) provided was that "Whenever a proposal for an industrial assurance policy consists of a form of proposal filled in, wholly or partly, by a person employed by the industrial assurance company to which such proposal is made, such company shall not, unless a fraudulent statement in some material particular has been made by the proposer, be entitled to question the validity of the policy founded on such proposal on the ground of any mis-statement contained in such proposal." We are proposing to change that so as to provide for the circumstances of the case in which only part of the proposal form is filled in by the company's agents, in which case the provision that the company shall not be entitled to question the validity of the policy shall apply only in respect of the part of the proposal filled in by the company's agent.
Amendment agreed to.
I move amendment No. 144:
In sub-section (7), page 31, line 49, to delete the words "or questioned."
It may be necessary to have a question raised in order to provide for the adjustment contemplated by the sub section. Consequently, this is a necessary drafting change.
Will any penalty be imposed by taking that out?
I do not think so.
If this is passed it will probably mean that it will be impossible for an illiterate or semi-illiterate person to be insured, be cause in most of those cases the proposal forms are filled up by the agents of the company. No company will insure an illiterate person and in case of fraud—
The Deputy is now referring to sub-section (5), but if he reads sub-section (5) he will find that it does not operate in circumstances in which a fraudulent statement in some material particular has been made by the proposer. If the company can say that a fraudulent statement has been made by the proposer it can undoubtedly question the policy. If there is not a fraudulent statement, but merely a mis-statement of fact, put in by the company's agent, it is a different question.
Mr. Bourke
Even though it is filled in by the agent?
Yes. If the agent made his statement in consequence of a fraudulent statement made by the proposer, then the company is protected.
Amendment agreed to.
Section 54, as amended, agreed to.
SECTION 55.
I move amendment No. 145:—
In sub-section (2), page 31, line 61, after the word "company" to insert the words "after the commencement of this Part of this Act."
It was never intended that this sub-section should apply to policies issued before the commencement of this Part of the Act, and the purpose of the amendment is to make that clear.
Amendment agreed to.
Section 55, as amended, put and agreed to.
SECTION 56.
I move amendment No. 146:—
In sub-section (1), page 32, line 21, after the word "company" to add the words "on or after the date specified in that behalf in such notice."
Again, it was not intended that this sub-section should be applied retrospectively, and the purpose of the amendment is to make that clear.
Amendment agreed to.
I move amendment No. 147:—
In sub-section (2), page 32, to delete all words from the word "in" where it secondly occurs in line 26 to the end of the sub-section and substitute the words "proposed to be issued by such company on or after the date specified in that behalf in such notice."
The purpose of the amendment is to extend from one to four months the period after which a company receives a proposal during which it may adjust the terms of the policy to record the true age. Representations to the effect that this change should be effected were made by the companies, and I agreed to effect the change as I thought they had made a reasonable case for it.
Could the Minister say briefly what the case was? I should like to hear the reasons given.
I will give the Deputy the arguments if he likes to put down an amendment.
Does not this require a little more explanation?
Sub-section (2) provides that:—
"Whenever an industrial assurance company receives a proposal for a policy of industrial assurance and such proposal contains an incorrect statement of the age of the person whose life is thereby proposed to be assured, such company may, within one month after the date on which it receives such proposal, so adjust the terms of the policy issued or about to be issued in pursuance of such proposal as to make such terms conform to the terms applicable to the true age of such person."
Arising out of their experience, the companies gave a number of illustrations in support of their case that one month was too short to enable them to adjust a mis-statement with regard to age. They suggested a longer period, in fact, than a period of four months. The case made by them appears to me to be reasonable.
The Minister is still concealing the case. Can the Minister say what the case is?
The case is that it is unreasonable to give them only a month in which to effect an adjustment. In order to understand that, it is necessary to have a knowledge of the working of the business and of the circumstances which might arise to make it unfair to have a shorter period provided. It would take a long time to give a number of illustrations; nor could I do so straight away, because I do not claim to have a technical knowledge of the business. On the basis of their case I felt it was reasonable to allow a longer period, nor do I think any injustice will be done to the insured persons by having this additional provision.
Four months is a rather substantial extension.
But remember it is only the period during which the company may correct an incorrect statement.
It may also be utilised for the purpose of disputing a policy on the grounds that the age given is incorrect.
In any event they can only do it within four months, as compared with the existing position. They have only that four months period in which to correct any such incorrect statement.
I think four months is a rather substantial extension of the period, while a month might possibly appear inadequate.
At present they can question a policy when a claim is made under it.
Amendment No. 147 put.
I was referring to amendment No. 149.
I thought there was something rotten in the state of Denmark. I was trying to fit in the Minister's remarks with amendment No. 147.
Amendment No. 147 refers to sub-section (2), Section 56, and not to sub-section (2), Section 57.
The purpose of amendment No. 147 is to make it clear that the requirement under the sub-section is not intended to apply retrospectively.
That means a complete change in the Minister's policy.
Oh no.
As the sub-section stood, the Minister could, by notice in writing, interfere with policies that had been issued by the company, whether issued in the past or in the present. Now he proposes to restrict his interference to policies that are proposed to be issued?
That is true, but it was not intended that this provision of the sub-section should apply to policies issued previous to the commencement of the Act, nor do I think it would be practicable to do so.
Amendment No. 147 agreed to.
I move amendment No. 148:—
In page 32, at the end of the section, to add a new sub-section as follows:—
"(4) Nothing in this section shall authorise or empower the Minister to require an industrial assurance company to alter either the premium payable under or the sum assured by or the date of maturity of a policy of industrial assurance."
The purpose of this amendment is to make it clear that the Minister's powers in relation to proposals and policies shall not extend to such matters as the amount of the premium or the sum assured. It is hardly necessary to have this amendment inserted, but, as the companies expressed certain apprehensions, I thought it better to remove them.
I thought there was a section in another part of the Bill in which the Minister took power to do that.
Only in relation to general insurance. This is industrial insurance.
Amendment agreed to.
Section 56, as amended, agreed to.
SECTION 57.
I move amendment No. 149:—
In sub-section (2), page 32, line 51, to delete the words "one month" and substitute the words "four months."
We have already dealt with this amendment.
Amendment agreed to.
Section 57, as amended, agreed to.
SECTION 58.
I move amendment No. 152:—
In sub-section (1), page 33, line 23, after the word "issued" to insert the words "by such company."
This is merely a drafting amendment.
Amendment agreed to.
I move amendment No. 153:—
In sub-section (1), page 33, to delete all words from the word "terminated" in line 27 to the word "thereunder" in line 29, and substitute the words "handed over or given up to such company by reason of payment of the sum assured, or of the surrender value of such policy, or of the issue of another policy in lieu thereof."
This is designed merely to improve the drafting of the section without making any changes.
Does the Minister consider that the word "cash" is necessary?
I will look into that point.
Amendment agreed to.
I move amendment No. 155:—
In sub-section (1), page 33, line 32, after the word "possession" to add the words "and may be so returned by delivery or by leaving for him at his last-known place of abode."
This amendment is necessary to prevent any difficulty arising as to whether the company had taken adequate steps to return the policy.
Amendment agreed to.
I move amendment No. 156:—
In sub-section (2), page 33, line 35, after the word "issue" to insert the words "by such company."
Amendment agreed to.
I move amendment No. 158:—
In sub-section (2), page 33, lines 42 and 43, to delete the words "owner of such policy, premium receipt book or other document (as the case may be)" and substitute the words "person from whom such policy, book or other document (as the case may be) was received."
The purpose of the amendment is to make it clear that the obligation under the sub-section would refer to the person from whom the policy was received and not necessarily the owner.
Why are the words "premium receipt" omitted before the word "book" in the substituted words?
It has to be related to the context.
The literary skill of the draftsman is dropping out these words.
I do not think it will be called literary.
Amendment agreed to.
Section 58, as amended, and Section 59 agreed to.
SECTION 60.
I move amendment No. 164:—
In sub-section (1), page 34, line 3, before the word "the" to insert the words "the person entitled to such policy shall on such forfeiture become entitled to the free paid-up policy hereinafter mentioned and", and in line 4, after the word "such" to insert the word "forfeited".
This is merely a drafting amendment to clarify the meaning of the section.
Amendment agreed to.
The following Government amendments were agreed to:—
In sub-section (1), page 34, line 6, to delete the words "give a discharge under".
In sub-section (2), page 34, line 12, after the word "endowment" to insert the words "or endowment assurance", and after the word "policy" where it secondly occurs to insert the word "issued".
In page 34, sub-section (2), to delete paragraph (a) and substitute a new paragraph as follows:—
(a) for not less than three years where such policy is issued after the commencement of this Part of this Act and assures the payment of money in connection with the death and funeral of a person other than the person effecting such policy and is either an endowment or endowment assurance policy or is a policy for the whole term of life, or.
In page 34, sub-section (2), to delete paragraph (b) and substitute a new paragraph as follows:—
(b) for not less than two years where such policy is issued after the commencement of this Part of this Act and assures the payment of money in connection with the death and funeral of a person other than the person effecting such policy and is an endowment or endowment assurance policy for an original term of less than sixteen years, or.
In sub-section (3), page 34, line 48, to delete the words "give a discharge under."
In sub-section (4), page 34, line 56, to delete the words "who effected such policy or the person."
In sub-section (4), page 34, line 57, to delete the words "give a discharge thereunder" and substitute the words "such policy".
In sub-section (4), page 34, line 60, to delete the words "such person from claiming" and substitute the words "any claim".
I move amendment No. 174:—
In page 34, before sub-section (5) to insert a new sub-section as follows:—
(5) Where any benefits which are granted by an industrial assurance company under policies of industrial assurance are revised in favour of or to confer further benefits on assured persons with retrospective effect in whole or in part in relation to any such policies which are in force at the date of such revision, the rights of the persons entitled to such policies shall not, in case of forfeiture thereof, be more favourable to such persons than such rights would have been if such benefits had been attached to such policies at the date of the issue of such policies.
The purpose of this proposed new sub-section is to cover cases where an industrial insurance company gives increased scales of benefit and makes the improved benefit apply to existing policy holders and to make such benefit retrospective. As the Bill stands, it gives the existing policy holders greater free policy rights than they would have been entitled to if the benefit attached to a policy from the date of the issue because of the difference in the nett premium which is taken into calculation. It may be as difficult for Deputies to follow that as it was for myself to understand it when the problem was first put to me. The difficulty will be removed if I give an example. If we suppose that a man aged 20 has taken out a policy for a premium of 1d. weekly in which the sum assured is £8. Under the rules of the Third Schedule when that policy has been ten years in force the free paid up policy to which he would be entitled would amount to £1 15s. 6d. If the company altered the benefit so that under a new policy the sum assured for 1d. a week would be £10, the free paid up policy, after it was 10 years in force, would be entitled to £2 4s. 4d. If the company makes the increased benefits retrospective, so that the sum assured under the existing policy was increased from £8 to £10, then the free paid up policy, owing to the method of calculation provided in the Third Schedule, would be £3 5s. 6d. That is to say, the policy holder, in addition to the increase in the sum assured, would have a right to a free paid up policy greater by £1 1s. 2d. than if the improved benefit had been in operation from the outset. The effect of giving such benefit, in addition to increasing the sum assured, might operate to prevent the company making the benefit retrospective to the obvious disadvantage of an existing policy holder. The purpose of the section therefore is to ensure that if benefits were increased and are applied to existing policy holders, the free paid-up policy rights will be no greater than if the increased benefit operated from the commencement of the policy.
Amendment agreed to.
The following Government amendments were agreed to:—
In sub-section (5), page 35, line 1, before the word "thereunder" to insert the word "payable".
In sub-section (5), page 35, to delete all words from the word "of" at the beginning of line 2, to the word "Act" in line 3, and substitute the words "in respect of such policy to".
In sub-section (6), page 35, line 11, to delete the words "give a discharge under".
Section 60, as amended, agreed to.
SECTION 61.
I move amendment No. 178:
In sub-section (4), page 35, line 47, to delete the word "four" and substitute the word "fourteen".
This amendment is put forward because it was intimated that the period of four days originally provided in the sub-section was too short. We propose to increase the period to 14 days.
Amendment agreed to.
Section 61, as amended, agreed to.
SECTION 62.
I move amendment No. 179:
In page 36, line 3, before the word "post" to insert the words "prepaid ordinary", and to delete the words "principal or head office" and substitute the words "registered office in Saorstát Eireann".
This amendment makes a few minor drafting changes.
Amendment agreed to.
Section 62, as amended, and Sections 63 and 64 agreed to.
SECTION 65.
I move amendment No. 180:
In sub-section (1), paragraph (c), page 36, line 47, before the word "Act" to insert the words "Part of this".
This is purely a drafting amendment.
Amendment agreed to.
I move amendment No. 181:—
In sub-section (1), page 36, to delete the word "or" where that word occurs in line 47 at the end of paragraph (c), and to delete paragraph (d).
It is felt that paragraphs (a), (b), (c) are sufficiently comprehensive.
Is it suggested that paragraphs (a), (b), (c), in fact, include (d) with them?
Yes. The existence of (d) might create certain ambiguities which is undesirable. Any of the classes of persons that we felt should have rights under this sub-section are included in (a), (b), and (c).
This is very different. Were any of the persons or classes covered by (d) included in (a), (b) and (c)? Does the exclusion of (d) represent a change of mind on the part of the Executive Council?
No, but a number of questions were addressed to us as to what was meant exactly by paragraph (d), and all sorts of fantastic cases were put up. I think there was a question about a trade dispute, whether it could be referred to arbitration by an inspector appointed by the section. On reconsidering this sub-section it became clear that paragraph (d) was unnecessary and that, in fact, paragraphs (a), (b) and (c) were sufficiently comprehensive to cover all the classes of persons to whom it was intended the section should relate. There is, in fact, no change of decision.
I take it the words objected to as being words of too wide a meaning were the words "any person aggrieved by a decision of such company." I admit that those words are too wide and should go but is it necessary to delete the words "any person claiming through such aggrieved person"?
They are in paragraph (a), which reads:
"(a) any person who has effected a policy of industrial assurance with such company or any person claiming through such person."
The next paragraphs are:—
"(b) any other person claiming under or in respect of a policy of industrial assurance effected with such company or,
"(c) any person claiming under or by virtue of any provision of this Act."
It seems to me that the three paragraphs cover every possible case that could arise.
Frankly, I am not in a position to say that I can envisage the type of person described as "any person claiming through such aggrieved person," but I fancy it was not put in without some good reason.
It is not the aggrieved person but "any person claiming through such aggrieved person."
Should not that portion of the paragraph be added to the end of paragraphs (b) and (c)? Should not paragraph (b) read "any other person claiming under or in respect of a policy of industrial assurance effected with such company or any person claiming through such aggrieved person"?
It is "any person claiming under or in respect of" as well as "any person claiming".
The Minister is satisfied that it is not necessary to add these words to paragraphs (b) and (c)?
No.
Amendment put and agreed to.
I move amendment No. 184:—
In sub-section (6), line 37, to delete all words from the words "and the decision" to the end of the sub-section, and before sub-section (7) to insert a new sub-section as follows:—
(7) Where an appeal from a decision of the High Court under the next preceding sub-section of this section is taken to the Supreme Court by an industrial assurance company, such company shall, whatever may be the result of such appeal or the determination of the Supreme Court thereon be liable for and pay the costs of all parties to such appeal.
It was felt that cases might possibly arise in which an assurance company might be anxious to obtain a Supreme Court decision. As the Bill stands there is no appeal from the decision of the High Court. We propose, therefore, to permit an appeal from the decision of the High Court by an industrial assurance company in cases where the company is willing to accept the liability for the costs of the parties to such appeal whatever the result. The whole purpose of the section is to prevent the cost of litigation being used by an assurance company to deprive a person of his rights. Secondly, an appeal from the decision of the Minister to the High Court can only be on a question of law. In the event of a further appeal by a company to the Supreme Court we shall require that the company will pay the costs of both sides so that an insured person will not necessarily lose in consequence of that.
This introduces a new principle into the law of this country. Is there any precedent for a rule providing that people will be denied access to the Supreme Court except they are prepared to pay the costs, whatever the decision?
Yes. There are quite a number of matters in which the decision of the Circuit Court or the High Court is final.
In certain circumstances, but an entirely different situation arises here. Here, for the first time, you propose that admission to the Supreme Court of Judicature can be purchased only by the payment of costs by the assurance company.
It is a concession.
I can quite see what is in the Minister's mind, but in fact this introduces a new principle into our law. There is no precedent in the existing law for suggesting that a successful litigant in the Supreme Court should be mulcted for the costs of the case. I can quite see a case being made that it is not fair that a person who ordinarily would have an industrial policy of assurance should be dragged from the High Court into the Supreme Court and faced with these enormous costs for the purpose of deciding a point of law, but let the Minister say that he will assist an appeal from the High Court to the Supreme Court by providing that if the insurance company succeeds the State will pay the costs.
This is the companies' own proposal.
The Minister should look at this from a wider point of view than the point of view of an English assurance company. The British insurance companies do not give a fiddle-de-dee what happens the insured litigant. They do not give a snap of their fingers for the Supreme Court. All that they desire is to get into the Supreme Court in order to get a decision on certain matters which will govern their business here. I am not concerned with the question of mulcting a company such as the Prudential Assurance Company. The costs are of very little consideration to a company such as that. The Prudential Assurance Company could spend £250,000 fighting a case in the Supreme Court and they would not miss it. What interests me is that at the instigation of the insurance company, which does not give two straws for the expense in order to get a favourable decision on a point which is going to arise repeatedly in the ordinary course of their business, we are going to introduce into our law a principle that was never heard of before. If the only purpose the Minister has in mind is to convenience the British companies and to provide them with facilities for taking cases to the Supreme Court, let him tell them he will not do it and that it cannot be done.
On the other hand, if you feel that it is desirable that the decision of the Supreme Court should be taken from time to time on matters in connection with the Bill, and that you feel it would be a grave injustice to persons with industrial assurance policies to make them go into the Supreme Court with the insurance company, lay it down that in cases where the insurance company wins in the Supreme Court, the State will pay the cost. There is no danger of having a jury who may be influenced by the consideration that the State can well afford to pay and give costs against the State in every case which comes before them. You will have the judges of the Supreme Court deciding each issue on its merits and where the verdict goes to the insurance company, after all they have only got their rights. The costs are going to be something trivial from the point of view of the State or the point of view of the insurance company but the integrity of the Supreme Court is preserved and that is something about which I am sincerely solicitous. I have pointed out time and again in this House that once you make a breach in a well-established principle to cover a specific evil, you may think you are doing no harm but in 12 months' time that will be quoted as a precedent for imposing a penalty on some other section of the community in some other court. You open the door to evils, the end of which we cannot see, in introducing an amendment of this kind. I urge on the Minister either to abandon it altogether and leave the final decision in the hands of the High Court or, if not, to allow the existing system obtain in regard to appeals to the Supreme Court with this proviso, that the State will pay the cost in cases where the decision is against the insured person and to the advantage of the insurance company.
I should like to say that I am not satisfied that this amendment is an improvement on the Bill. I approach it from a point of view altogether different from that put forward by Deputy Dillon. I can conceive this right of appeal to the Supreme Court being used by the insurance companies as a threat to the insured persons, the threat of delay. We all know what is likely to happen, that if an appeal is taken to the Supreme Court, 12 months, two years or even four years elapse before you get a decision on that appeal. Does the Minister consider that that would be fair treatment for the insured person? As I say, conceivably the insurance company might do that. It may be said, of course, that it is an exaggeration to say that you will wait for 12 months, two years or even longer for a decision of the Supreme Court but it is not. It has happened over and over again. Even at the moment there is one case in which the public are waiting for a decision in the Supreme Court for over four years. I can conceive this new amendment being used very much to the detriment of the policy holder. I would like to hear some further justification for its insertion, and to be assured that the danger that I have mentioned can be provided against. I am sure the Minister will agree that it would not be desirable if an insurance company were able to take advantage of this amendment for the purpose of ensuring delay and of bringing pressure to bear on a policy holder.
The Minister has indicated that he is submitting this new amendment because the insurance companies apparently want it. Of course it is clear on the face of it that the companies want this amendment inserted. The effect of it, so far as they are concerned, is to give them greater power in dealing with the insured person. If there is nothing in the amendment of advantage to the insurance companies, why do they want it inserted, and why did the Minister go to the trouble of drafting it and of introducing this rather unusual principle? The Minister has apparently been convinced by the companies that not only is it to their advantage, but he has gone to the trouble of introducing a rather novel method for the ascertainment of costs. All this is done because the companies want to get from the High Court to the Supreme Court against an insured person.
Not against an insured person.
Possibly against an insured person. The marginal note to the section reads:—
Decision of disputes between industrial assurance companies and others.
Here are some of the matters which may be decided:—
(a) any person who has effected a policy of industrial assurance with such company or any person claiming through such person, or
(b) any other person claiming under or in respect of a policy of industrial assurance effected with such company, or
(c) any person claiming under or by virtue of any provision of this Act, or
(d) any person aggrieved by a decision of such company or any person claiming through such aggrieved person.
Obviously, most of the disputes under this section will be disputes in which the insured person is the plaintiff, and, from his standpoint, the insurance company will be the defendant. The Minister will decide that matter, but if he so desires he may refer it to the High Court for decision, and its decision shall be final and conclusive, and no appeal to the Supreme Court shall lie from such decision of the High Court. That was the Minister's first intention. Now, the Minister has received a request from the insurance companies to amend the Bill so that they can take the dispute from the High Court to the Supreme Court. It is well to point out that it is the insurance company that is given the initiative in the matter. The High Court decision is to be binding on the insured person, but the company can say: "We are not satisfied with the High Court judgment, and we want to take the case to the Supreme Court." In a case such as that the insurance company is being given another opportunity to delay the implementation of the decision as given by the High Court. Under this new amendment the insurance company is being empowered to delay the matter still further. It is being enabled to use its superior financial resources to get behind a High Court judgment, if it possibly can, and in any case to cause the maximum amount of inconvenience that it is possible for a company to cause to an insured person.
From the point of view of the insured person I think this is a most unfair amendment. It introduces a novel piece of cost ascertainment for the purpose of litigation which may go before the Supreme Court. It obviously puts the company in a preferential position as compared with an insured person. If persisted in, I believe the amendment will work out in a disadvantageous manner from the point of view of an insured person. The Minister, I suggest, should leave the Bill as it was drafted originally, and turn down this proposal of the companies, the effect of which will be to enable them to use their superior financial position to deprive an applicant of a judgment which the High Court had given. As Deputy Dillon pointed out, many of these companies will not care what amount of money they spend in costs before the Supreme Court in order to upset what they would regard as a particularly objectionable judgment of the High Court. As it is the company which is empowered to go to the Supreme Court and not the insured person, I think that the amendment, to which apparently the companies attach considerable importance, is very objectionable from the point of view of the insured person and should be rejected.
I find it rather difficult to follow the remarks that have just been made by Deputy Norton. They were directed to show that this amendment is unfair to the insured person. I may be misreading the amendment, but it appears to me to give a right of appeal to the Supreme Court to either party from a decision of the High Court. In so far as it does that it has my full benediction. Under the Constitution and the Courts of Justice Act it is envisaged, if not as a constitutional right, at all events as being practically a constitutional right, that there should be a right of appeal from a decision of the High Court to the Supreme Court in every possible case. Under the amendment as it stands, if I read it correctly, both the insured person and the insurance companies have the right of appeal, but the insurance company has the satisfaction of paying whether "we lose or draw." I may be wrong but that is my reading of the amendment.
Originally, sub-section (6) of this section provided that whenever the Minister referred a point of law to the High Court for decision, the decision of the High Court should be final and conclusive. That provision has been taken away, and instead provision is being made for an appeal from the High Court to the Supreme Court. In other words, as I read this amendment, leaves the Constitution to operate. The Constitution says that wherever there is a decision of the High Court there is the right of appeal to the Supreme Court unless that right is taken away by law. I do not know whether I am reading this provision correctly or not but, if I am right, then it is a good principle that there should be an appeal from the High Court to the Supreme Court. I think that that was intended by the Constitution. If I am right in that—and I think I am —I cannot see how Deputy Norton can make the point that the insured person, under this proposed amendment, will be subject to hardship, because he will have a right of appeal as well as the company. Deputy Norton cannot always rely on the High Court to decide in favour of the insured person as against the company nor can he rely on the Supreme Court to decide in favour of the company as against the insured person. I think that the right of appeal to the Supreme Court is a right which the insured person should have. If it is given under this proposed amendment to the section, then I think it is a good amendment.
And if it is not given?
If it is not given, I think it is a bad amendment. I think everybody should have a right of appeal from the High Court to the Supreme Court, and the cutting down of that right is a bad thing and contrary to the spirit of the Constitution. The insured person should have that right of appeal and, if he had not, I think there would be considerable public demand for it in the space of a few months after this Act came into effective operation. Where the amendment is wrong in principle is where it provides that, whatever the result of the case, one party to the litigation is to pay the cost. Deputy Dillon's point, I think, was that that was bad in principle. In so far as it applies to a big insurance company, it makes no difference, but it is introducing an extremely bad principle. It is a good thing from the point of view of the insured because, if the decision of the High Court is against him, he can go to the Supreme Court at the expense of his opponent. He is on velvet and I do not see why Deputy Norton should have any objection on that point.
My point is that it is only when he is successful in the High Court he can be hauled before the Supreme Court by the insurance company.
Suppose he failed in the High Court, he can go to the Supreme Court at the expense of his opponent.
I suggest that he cannot go there unless the company takes him.
If that be so, I agree with Deputy Norton, but that is not my reading of the section. Perhaps the Minister would tell us what his intention is.
What the amendment provides for is the retention of the right of appeal to the Supreme Court which the Bill, as originally introduced, ruled out. That appeal is permitted but it is provided that if the appeal is taken at the instance of the company, then the costs of all parties, irrespective of the result, must be paid by the company. Whether that is a new principle or not, I am not in a position to argue. In Great Britain, the insurance commissioner may refuse to state a case unless the company concerned agrees to pay the costs of all the parties and that, in effect, brings about the same position as this section proposes to establish. The whole purpose of the provision is to provide a means of determining disputes between insurance companies and their policy-holders which will be cheap and expeditious. At the present time, it is undoubtedly correct that policy-holders are intimidated from pursuing their rights against a company by the fear that, if they get a decision in the courts, they will be involved in certain expense and that, in any event, the company is likely to appeal that decision from court to court to the ultimate tribunal. In order to prevent policy-holders from being intimidated by the fear that that may be the consequence of their resort to the law, we have inserted this section which gives the Minister the right to determine, acting through an inspector, disputes in certain circumstances. It is provided that the Minister's decision shall be final and there can be no appeal unless the Minister, at the request of any party to the dispute, should refer any question of law arising in such dispute to the High Court for decision. The Bill, as introduced, provided that the decision of the High Court should be final, but we are proposing to delete that limitation and to provide for an appeal to the Supreme Court, with this condition attached—that if the appeal is taken at the instance of the company, the company will bear all the costs.
Would not some more words be necessary to make that clear?
Both parties have a right of appeal.
That is not made clear in the amendment.
If the Deputy reads the first part of the amendment he will see that it provides for the deletion of the words in the section which rule out an appeal to the Supreme Court. Those words will not be in the Bill, and what the section says is that where an appeal is taken from the decision of the High Court to the Supreme Court by an insurance company the company will bear all the costs. There is nothing in the Bill to prevent the other party taking an appeal.
There is a gap between the Minister's new amendment and where the deletion starts.
It should be made clear that both parties have a right of appeal.
The section will read: "Whenever the Minister determines a dispute referred to him under this section, such determination shall be final and conclusive and no appeal to any court shall lie therefrom, but the Minister shall, at the request of any party to such dispute, refer any question of law arising in such dispute to the High Court for decision."
The confusion arises from the fact that it is not appreciated that, under the Constitution and the Courts of Justice Act, there is a right of appeal in every case from the decision of the High Court to the Supreme Court unless that right is specifically barred by statute. This provision does not bar that right. In fact, it recognises a right of appeal to the Supreme Court.
I think it is constitutionally preferable that this amendment should be effected, but, from the point of view of this section of the Bill, I do not mind whether the amendment is inserted or the Bill remains as it is. It is better, however, to have the matter dealt with this way, because it is conceivable that important questions of law will arise upon which a company may desire to have a decision from the Supreme Court. I do not think it should be debarred from getting that decision provided it is made clear that the other party to the case, who may be quite a poor person, is not involved in additional cost in consequence of the decision to appeal to the Supreme Court.
There is a lot to be said for the principle enunciated by Deputy Costello, but what I am concerned with is how it is going to work out in practice so far as the policy-holder is concerned. The section, as amended in the way proposed by the Minister, is likely to be abused, and to be abused in such a way as to cause a great deal of hardship to the policy-holder. Without having very much hope of succeeding in the Supreme Court, a company may hold that threat over the head of a policy-holder.
If this amendment is inserted there will be no threat.
If the policy-holder wins in the High Court, if this amendment is carried the insurance company can say: "Very well, we will appeal to the Supreme Court." That person is held up for 12 months, two years, three years or four years before a final decision is taken on the matter. It is not merely a question of paying the costs that is involved. I think the Minister would agree that the insurance companies have some very good, sound reason for insisting on this particular amendment, or at least for putting it up to the Minister that it should be inserted. I am not suggesting that the companies are not entitled to get the same play of justice as the policy-holders, but I do say that it is likely to be abused and that it is conceivable that, if it were never exercised, it can be used there as a threat to the policy-holders by the insurance companies, and that, if they actually do take a case to the Supreme Court, a policy-holder may be kept out of his money for 12 months, two years, three years or four years. That is the aspect of the matter with which I am concerned.
But surely no company is going to involve itself in, possibly, very heavy costs in a legal action merely to keep some policy-holder out of his money? They may be willing to become involved in heavy costs in a legal action for the purpose of getting, say, a decision which may safeguard themselves against expense or may have a bearing on the whole operation of their business, but in that case the question that would arise would be a point of law and, in such circumstances, they have a good case to support their claim that they should be allowed to get the decision of the Supreme Court on the particular point of law involved if they are prepared to pay the costs of all parties to the case.
The Minister said that a company is not likely to appeal and become involved, possibly, in heavy costs, merely to keep a policy-holder out of his money, but if the Minister knows anything about the working of insurance companies—and he ought to know something about it if he were even following the reports of cases in the public Press—he would know that insurance companies go to law on very peculiar cases.
I know at least that this system has worked very successfully wherever it was tried, and I believe it will work successfully here.
For whom did it work successfully?
For the policy-holders.
Who is the Minister's authority for that statement?
I should like to disabuse Deputies' minds of the idea that insurance companies go to law expecting to be financial gainers as a result of legal proceedings. I have yet to hear of a case of an insurance company going to law in matters of this kind where they did not come out financially the losers. No insurance company goes to law merely to get money as a result of the legal proceedings, but to get some point of law finally settled. It is awkward, both for the policy-holder and the company, to have one legal precedent established in one country and another legal precedent established in another country. Accordingly, when such matters come to be decided in the ordinary Circuit Courts, they sometimes do not know how the matter stands, and it is in the interests of everybody that the best legal opinion should be taken in order to get a disputed point finally settled. I think this amendment was introduced for that purpose, and I think it is for the benefit both of the company and the policy-holder that these points of law should be settled.
I think that, if this Section 6 is amended in the way suggested by the Minister, and if the section stops with the word "decision", in line 37, there still seems to be a gap which, I think, ought to be filled in between that word and the beginning of the new sub-section —numbered 7—which he proposes to insert in this section, because it is not at all clear to me, speaking as a layman, that these two sub-sections will hang in such a way as to make it clear to all that the policy-holder is entitled to go to the Supreme Court in the same way as the company is entitled to go to it. Assuming, however, that the policy-holder is entitled to go to the Supreme Court in the same way as the insurance company is entitled to go there, it seems to me, in any case, to be a highly-doubtful benefit to give the policy-holder the right to go to the Supreme Court. He will not require to go to it if he gets a favourable judgment in the High Court, and it is only in the event of being given an unfavourable decision in the High Court that he will desire to go to the Supreme Court. Deputy Costello argues—and the Minister argues now, after hearing the viewpoint of the insurance companies—that it is desirable that there should be an appeal by both the policy-holder and the company, if either so desire, to the Supreme Court. I do not see, however, that there is any advantage in that appeal from the point of view of the policy-holder. It seems to me to be on a par with telling a tramp that the Ritz Hotel is open to everybody. The tramp probably knows that, but he has not the necessary passport to get into the hotel. In the same way, I suggest that it is conferring a doubtful benefit on a policy-holder to tell him that he can appeal to the Supreme Court. The policy-holder may be aware of that, but he is also aware of the fact that it costs money to go to the Supreme Court, and very often he will have to be satisfied and will have to put up with the High Court judgment because he cannot mobilise the necessary cash to take the case to the Supreme Court; whereas the insurance company, every time it loses in the High Court, will be able, by reason of its superior financial position, to take the case to the Supreme Court and, in that way, by a legal process of extended litigation, the policy-holder will be financially worn down. In fact, and in effect, there is no real advantage in letting the policy-holder go to the Supreme Court because, in most cases, he will be unable to go there anyway.
I suggest that, in most cases he will be interested in whether he gets his money or not.
But when the policy-holder gets a decision from the High Court, why should not the company be compelled to recognise that decision in the manner the Minister first contemplated before the companies got at him and convinced him that he should allow the companies to have another round of the courts by going to the Supreme Court? The Minister was quite satisfied that the High Court was a competent body to decide such matters, in the first instance, but in the meantime the companies have got at him and said: "No, the High Court is not qualified to give the decision, so let us go to the Supreme Court." The Minister wants to say that there is a gloss of equality between the insurance companies and the policy-holder because they have equal rights to appeal to the Supreme Court, but in actual fact they have not equal rights. The insurance company, heavily capitalised and wealthy, can go to the Supreme Court with greater ease than can the policy-holder. Deputy Seamus Bourke says that insurance companies do not engage in litigation with the intention of making a profit, but most of us know that insurance companies have written policies for persons—often very poor persons—collected the premiums, and, when the assured person dies, and his or her relatives claim payment of the policy—and very often it is the only means they have of burying the deceased assured person —the companies have gone into the courts to dispute the age of the deceased person as entered on the policy which they wrote themselves. It is constantly before the eyes of members of this House, through the daily Press, that assurance companies have gone into court often to dispossess a relatively poverty-stricken person who claims an interest in a policy which was written on a deceased person's life. If that will happen in the ordinary course of events, where there is merely a sum of not more than £10 or £20 at stake, how much more is it likely to happen where an insurance company has legal people of its own engaged, to whom the company pays retaining fees and where it is quite easy to get these people, during times when they are not very busy generally, to take a case into the courts in the hope of upsetting the claim of the policy-holder? I think that the very fact that the companies have pressed the Minister for this amendment and that he has had to go through the rounds of introducing an entirely new feature, by measuring the costs of proceedings before the Supreme Court, is evidence that this amendment is valuable to the companies. And they can only regard it as valuable because they see in it another weapon against policy-holders.
I think the Minister ought to look into this.
I understood the arrangement was that amendments would be inserted now, and that later Deputies could move to reverse them if they wished to, when we got into committee on the Bill.
I think the Minister ought to look into this matter with a view to clarifying it. If the right does lie with insured persons, I think the amendment does not make that quite clear here. The Minister should insert words, at any rate, to make it more explicit.
The point of view put forward by Deputy Morrissey could be met by the insertion of four or five words beginning as follows:—"Appeal to the Supreme Court shall lie from any such discharge but where an appeal," and so forth. That would make it clear.
I think it will be clear when the Deputy has an opportunity of reading the Bill with the change made in it. It does not mean that an appeal to the Supreme Court is prohibited. When these words go in it is clear that an appeal to the Supreme Court is there.
Would the Minister not take back this amendment and reconsider the position?
If it will satisfy the Deputy I shall hold it over for the next stage.
Apart from holding it over, the Minister should reconsider the whole question of entertaining an amendment of this kind.
If it will expedite matters I shall hold it over.
Amendment, by leave, withdrawn.
Section 65, as amended, agreed to.
SECTION 66.
Amendments Nos. 185 and 186 agreed to.
185: In page 38, line 10, to delete the words "give a discharge under", and in line 13 to delete the word "effected" and substitute the words "is entitled to".
186: In page 38, line 13, before the word "surrender" to insert the word "cash", and in line 15, before the word "surrender" to insert the word "cash".
I move amendment No. 187.
In page 38, lines 14 and 15, to delete the words "at the date of such order".
It is proposed to delete these words because it is considered proper that the valuation provided for should be calculated at the date the policy is surrendered, rather than the date on which the order is made.
Amendment agreed to.
Section 66, as amended, agreed to.
Section 67 to 81, inclusive, agreed to.
SECTION 82.
I move amendment No. 190:
Before Section 82 to insert a new section as follows:—
Every assurance company which effects assurance business (excluding life assurance business and industrial assurance business, but including the renewal of any other assurance business, the original contract for which was entered into before the commencement of this Part of this Act) in Saorstát Eireann shall enter into an agreement with the company whereby such assurance company agrees that, if and so far as it reinsures its assurance business (excluding and including as aforesaid), it will reinsure with the company but subject to the qualification that the company may, in the case of any particular risk, refuse to accept the reinsurance thereof unless such assurance company retains such portion of such risk as the company shall direct.
This amendment is put forward in lieu of Section 82 of the Bill, to which objection was taken, and the drafting of which required revision in any event. The proposed new section differs from the section in the Bill in two respects. Firstly, it does not require the assurance company to reinsure life or industrial business with the company. That was not made quite clear when Section 82 in the Bill was drafted. The proposed new section makes it quite clear. Furthermore, it requires the insurance companies to retain for themselves at any rate portion of the risk they reinsure with the company. The necessity for that will be obvious. The change of the wording of the section proposed in this amendment will remove any objections which were advanced on Second Reading discussion and which were subsequently put forward from other quarters.
Amendment agreed to.
Section 82 deleted.
Section 83 to 87, inclusive, agreed to.
SECTION 88.
I move amendment No. 199:—
In page 43, before the word "abstracts" in line 16, to insert the words "accounts, balance sheets", and before the word "abstracts" in line 18 to insert the words "accounts, balance sheets".
This is purely a drafting amendment.
Amendment agreed to.
I move amendment No. 200:—
In page 43, line 20, immediately after the word "incorporated" to insert the words "or otherwise constituted".
This is also a drafting amendment.
Amendment agreed to.
Section 88, as amended, agreed to.
SECTION 89.
I move amendment No. 207:—
In page 43, immediately after the word "showing," in lines 24 and 25, to insert the words "in respect of each class of assurance business."
This is a drafting amendment.
Amendment agreed to.
I move amendment No. 208:—
In page 43, to delete paragraphs (a) and (b) and substitute the following paragraphs:—
(a) the amounts of the premiums and claims (in respect of liability, loss, or damage to arise (if at all) in Saorstát Eireann) of that part of such assurance company's assurance business which has been reinsured by such assurance company during such accounting year, and
(b) the amounts of the premiums and claims (in respect of liability, loss, or damage to arise (if at all) in Saorstát Eireann) of all assurance business which is reinsured with and is accepted by way of reinsurance by such assurance company in such accounting year.
This amendment is designed to make it clear that the companies will be required, when making the return provided for in Section 89, to state only the total amount of premiums and claims in each class of business in respect of their reinsurance business, and not detailed particulars which might be of a confidential character.
Amendment agreed to.
Section 89, as amended, agreed to.
SECTION 90.
I move amendment No. 210:—
In page 43, paragraph (a), line 42, after the word "amounts" to insert the brackets and words "(under separate headings relating to assurance business in Saorstát Eireann and assurance business outside Saorstát Eireann)".
The purpose of this amendment is to provide that the particulars required to be furnished by Section 90 shall be furnished under separate heads for business within, and business without, the Saorstát.
Amendment agreed to.
I move amendment No. 211:—
In page 43, line 43, paragraph (a), sub-paragraph (i), to delete the words "sums received by way of premium", and substitute the words "premiums credited".
The purpose of this amendment is to secure that in making these returns in accordance with the provisions of Section 90, the total premiums taken credit for, in the revenue account, will be shown as required by the section, and not merely the amount of premiums actually received.
Amendment agreed to.
I move amendment No. 212:—
In page 43, to delete sub-paragraph (ii) of paragraph (a) and substitute the following sub-paragraph:—
(ii) the amount by which the sums received by way of commission exceed the sums paid out by way of commission or by which the sums so paid out exceed the sums so received, as the case may be, and
The purpose of the amendment is to effect a change in sub-paragraph (ii) by providing for the furnishing of a balance figure of commissions instead of requiring separate figures for commissions received and commissions allowed. For various business reasons companies would not wish to have information disclosed as to their commission and no useful purpose would be served by requiring them to give it.
Amendment agreed to.
I move amendment No. 213:
In pages 43 and 44, to delete paragraph (c).
It is proposed by this amendment to delete paragraph (c). Representations have been made that it would be impossible to provide the information exactly without a complete revision of the organisation. The information is not of such vital importance that it would justify the very considerable expense involved and it is proposed to delete the paragraph. Information as to the outstanding premiums taken credit for is retained in paragraph 4 and that is really the material point upon which information is necessary.
Amendment agreed to.
I move amendment No. 214:—
In paragraph (d), page 44, line 5, after the word "premiums" to insert brackets and words "(ascertained as nearly as may be)".
This amendment is necessary because there may be cases where the outstanding balances in the hands of agents, branch offices, or foreign representatives of a company consist of premiums in respect of several classes of business and merely the amount in toto is known for all classes, and the exact allocation to the individual revenue accounts at the date when the accounts are made up may not be possible. The object of the amendment is to allow the companies some latitude in making the allocation by the insertion of the words “ascertained as nearly as may be”.
Amendment agreed to.
Section 90, as amended, agreed to.
SECTION 91.
I move amendment No. 215:—
In page 44, line 22, after the word "exceed" to insert the words "in the aggregate".
That is a drafting amendment. The purpose is to make clear that the required certificate need relate only to aggregate value.
Amendment agreed to.
I move amendment No. 216:—
In page 44, line 23, immediately after the word "assets" to insert the words "after taking into account any investment reserve fund".
This amendment is put forward because it was thought well to make it clear that in certifying the value of investments the existence of any investment reserve fund may be taken into account.
Amendment agreed to.
I move amendment No. 217:—
In page 44, line 25, before the word "adequately" to insert the words "in the aggregate".
Again, this is a drafting amendment to make it clear that the required certificate need only relate to securities and mortgages in the aggregate.
Amendment agreed to.
I move amendment No. 218:—
In page 44, line 26, after the word "values" to insert the words "in the aggregate".
That is the same type of amendment.
Amendment agreed to.
I move amendment No. 219:—
In page 44, line 27, after the word "sheet" to insert the words "after taking into account any investment reserve fund".
That is related to the amendment concerning investment reserve funds.
Amendment agreed to.
I move amendment No. 220:—
In page 44, lines 27 and 28, to delete the words "different from" and substitute the words "in excess of".
The object of paragraphs (a) and (b) is to secure the explanation only in cases where the balance sheet figure exceeds the market values and the amendment is to make this clear.
Amendment agreed to.
I move amendment No. 221:—
In page 44, line 42, to delete the word "are", and to delete all words from the word "correctly" to the end of the section and substitute the words "the aggregate value thereof as shown in such balance sheet is not in excess of the actuary's valuation".
This amendment is put forward because it is considered sufficient for the purpose to have a certificate to the effect that the values of reversions and life interests shown in the balance sheet are not in excess of the actuary's valuation.
Amendment agreed to.
Section 91, as amended, agreed to.
Section 92 agreed to.
SECTION 93.
I move amendment No. 222:—
Before Section 93 to insert a new section as follows:—
Where an assurance company carries on one or more of the following classes of assurance business, that is to say, public liability insurance business, engineering insurance business, glass insurance business, guarantee insurance business, or burglary insurance business, the Act of 1909 shall apply to such company and to such one or more of the said classes of assurance business as is or are carried on by such company but with and subject to the following modifications, that is to say:—
(a) Sections 5 and 6 of the Act of 1909 shall not apply to such company, and
(b) such company shall annually prepare a statement of its assurance business in such form as the Minister shall from time to time direct, and sub-section (1) of Section 7 of the Act of 1909 shall apply thereto as if such statement were a statement required to be made by a provision of that Act prior to the said Section 7, and
(c) Section 32 (except paragraphs (a), (b) and (c) thereof) shall apply to such company with the substitution in the said section of the words "public liability insurance business, engineering insurance business, glass insurance business, guarantee insurance business, or burglary insurance business" for the words "accident insurance business" wherever those words occur in the said section as applied by this paragraph.
I am proposing in this to insert a new section. I think it is necessary to do so. In consequence of the inclusion within the scope of the Bill of additional classes of business, it becomes necessary to apply to these classes the provisions of the Act of 1909, with the necessary modifications set out. Sections 5 and 6 of the Act of 1909 which relate to actuarial reports and abstracts of valuations, are not relevant to these classes of business and should not apply. Secondly, in (b) the provision requires the preparation and furnishing of annual accounts in respect of these additional classes of business in such form as the Minister may direct. Paragraph (c) provides that these additional classes of business shall be subjected to the same modifications of the Act of 1909 as accident assurance business.
Amendment agreed to.
New section ordered to be inserted.
I move amendment No. 224:—
In page 45, to delete sub-section (2) and substitute a new sub-section as follows:—
(2) Where an assurance company carries on life assurance business or industrial assurance business or both such businesses and also carries on any other class of business, except sinking fund or capital redemption business, such assurance company shall keep the assets of its life assurance fund and its industrial assurance fund separate from the assets of such other class of business.
The purpose is to modify the requirements of sub-section (2) so as to relieve life and industrial assurance companies from the obligation to maintain separate assets as between the two classes of business or sinking fund or capital redemption business. In other words, within these three groups of business, life and industrial and sinking fund and capital redemption, the obligation to maintain separate assets does not exist.
What purpose is served by that?
The only purpose served is to make clear what was the intention when the Bill was introduced. It is not considered necessary that separate assets should be kept by a company doing these classes of business only.
In relation to sinking fund and capital redemption business?
That is of a somewhat similar nature.
Does the Minister regard that as of a similar nature?
Yes.
Amendment agreed to.
I move amendment No. 225:—
In sub-section (4), page 45, to delete all words from the word "of" in line 15 to the word "business" in line 19, and substitute the words "class of assurance business other than life assurance business and industrial assurance business", and in line 22 to delete the words "of the said classes" and substitute the word "class".
This is a drafting amendment consequential on amendment No. 3, that is the inclusion of additional classes within the scope of the Bill.
Amendment agreed to.
Section 93, as amended, agreed to.
SECTION 94.
I move amendment No. 226:—
In sub-section (1), page 45, line 25, to delete the word "may", and in line 26, immediately before the word "by" to insert the words "after consultation with such assurance companies as he thinks fit or with any association representing assurance companies, may".
This amendment is to make it clear that the Minister shall, as in practice he undoubtedly would, consult with the companies before making any order under the section.
Amendment agreed to.
I move amendment No. 230:
In sub-section (1), page 45, to delete all words from the word "of" where it secondly occurs in line 29 to the end of the sub-section and substitute the words "class of assurance business other than life assurance business or industrial assurance business."
That is also consequential on amendment No. 3, the inclusion of additional classes of business within the scope of the Bill.
Amendment agreed to.
Section 94, as amended, agreed to.
SECTION 95.
I move amendment No. 232:—
Before Section 95 to insert a new section as follows:—
95.—Whenever a form of proposal for a policy of assurance is filled in wholly in the Irish language every policy of assurance issued in pursuance or as a consequence of such proposal and any other document issued in connection with such policy by the assurance company to which such proposal was made shall, if the proposer so requires, be issued by such assurance company in the Irish language.
This is a new section, the purpose of which is to provide that a person desiring to have his insurance business transacted in the Irish language shall be afforded facilities for doing so.
What is the penalty for infraction of this new section?
What will be the penalty for insisting upon it?
Suppose the company says it will not do any such thing?
I will look up that point. I think there is a general provision for offences against the Act.
What is the point of all this? If a man wants a policy in Irish, will it not be part of his contract? He can say to the company "I will not take out a policy with you unless you give it to me in Irish." What is the point of putting it into an Act of Parliament when it can be a matter of negotiation and contract between the parties?
Did the companies ask for this?
Yes, the external companies particularly.
Did the Britannic Assurance Company ask for this?
The Minister might very well drop this. How did it get in there, and what is the point of it? Surely insurance is a matter of free contract. A person need not enter into a contract of insurance with a particular company unless he gets it in the Irish language. Why put that in the Bill?
I think it is a very useful provision to have there.
I think it makes a farce of the Irish language.
We ought to know what is the penalty if a company refuses to do this for the Minister.
We might make them issue all their policies in Irish.
They are hard enough to understand at present without putting them into Irish.
If you make them pay the policy-holder, we will be satisfied.
Amendment agreed to.
Section 95, as amended, agreed to.
Section 96 agreed to.
FIRST SCHEDULE.
I move amendment No. 233:—
In page 47, line 1, after the word "Minister" to insert the words "for Finance".
This is purely a drafting amendment.
Amendment agreed to.
First Schedule, as amended, agreed to.
Second Schedule agreed to.
THIRD SCHEDULE.
I move amendment No. 234:—
In page 48, line 15, to delete the words "OF INDUSTRIAL ASSURANCE", and in line 16 to delete the word "SUCH", and in line 16, after the word "POLICY", to insert the words "OF INDUSTRIAL ASSURANCE".
This is purely drafting.
Amendment agreed to.
I move amendment No. 235:—
In Part I, page 48, to delete all words from the word "BOTH" in line 18 to the word "POLICIES" in line 20.
This is also a drafting amendment. It deletes certain words which are unnecessary as they are covered by the preceding general heading.
Amendment agreed to.
I move amendment No. 236:—
In Part I, paragraph 3, page 48, line 26, before the word "shall" to insert the words "in respect of which premiums are payable", and in line 28, to delete the word "the" where it thirdly occurs and substitute the word "such", and in line 29, to delete the word "as", and in lines 29 and 30, to delete the words "the value of such policy is required to be ascertained" and substitute the words "the last premium paid thereon became due".
The purpose of this amendment is to make it clear that the relevant date is the date upon which the last premium payable under the policy became due, and to limit the paragraph to policies in respect of which premiums are payable as distinct from free paid-up policies which are provided for in a separate rule.
Amendment agreed to.
I move amendment No. 237:—
In Part I, page 48, before paragraph 4, to insert two new paragraphs as follows:—
4. The age of the person whose life is assured under a free paid-up policy of industrial assurance shall be obtained by adding to the age attained by such person at his birthday next after the date of the issue of the original policy of industrial assurance the number of completed years which have elapsed between that date and the date as at which the value of such free paid-up policy is required to be ascertained.
5. The net premium shall be such premium as at the assumed rate of interest and the assumed rate of mortality and at the age of the person whose life is assured at such person's birthday next following the date of the policy is sufficient to provide for the risk incurred by the industrial assurance company in issuing such policy, exclusive of any addition thereto for office expenses and other charges.
This amendment proposes to insert two new paragraphs, the first of which provides for the case of a free paid-up policy as distinct from a policy in respect of which premiums are payable. The second is brought forward from Part II without effecting any change. It is considered more appropriate that that provision should be included under the heading of "General Rules."
Amendment agreed to.
I move amendment No. 238:—
In Part I, page 48, to delete paragraph 4.
The paragraph is being deleted as being unnecessary.
Amendment agreed to.
I move amendment No. 239:—
In page 48, at the end of Part I, to add three new paragraphs as follows:—
5. The value of a policy of industrial assurance in respect of which premiums are payable shall be taken to be the difference between the present value, as at the date on which the last premium paid became due, of the reversion in the sum assured, including any bonus added thereto, according to the contingency upon which it is payable, and the present value as at the said date of the future net premiums.
6. The value of a free paid-up policy of industrial assurance shall be taken to be the present value at the date as at which the value is required to be ascertained of the reversion in the sum assured, including any bonus added thereto, according to the contingency upon which it is payable.
7. Notwithstanding anything contained in this Schedule, a policy of industrial assurance in respect of which premiums are payable shall not for the purposes of this Schedule attain a value unless and until such policy has been in force for two completed years.
In this amendment, clauses 5 and 6 replace clause 1 of Part II. They are the same as that clause in intention and effect, but make a distinction between policies in respect of which premiums are payable and free paid-up policies. They are being brought forward to Part I because, being rules of a general kind, they are more appropriate to Part I than to Part II. The purpose of clause 7 is to make it clear that a policy of industrial assurance shall not attain a value until it has been in operation for two years.
Amendment agreed to.
I move amendment No. 240:—
In Part II, page 48, to delete paragraph 1.
Clause 1 of Part II is proposed to be deleted because the provisions it contains are now being made in clause 5 and 6 of Part I under the heading "General Rules," as I mentioned in the case of the last amendment.
Amendment agreed to.
I move amendment No. 241:—
In Part II, page 48, to delete sub-paragraph (1) of paragraph 2.
The same applies here. This provision is being brought forward to Part I.
Amendment agreed to.
I move amendment No. 242:—
In Part II paragraph 2, sub-paragraph (2), page 49, line 2, to delete the words "for the whole term of life".
This is a drafting change. It is proposed to delete the words "for the whole term of life" because they are unnecessary in view of the general heading of Part II.
Amendment agreed to.
I move amendment No. 243:—
In Part II, page 49, to delete paragraph 3.
This paragraph is being deleted, because an alternative method of ascertaining the cash surrender value is being put forward in the next amendment.
Amendment agreed to.
I move amendment No. 244:—
In page 49, at the end of Part II, to add a new paragraph as follows:—
5. The cash surrender value of the surrendered policy shall be 90 per cent. of the present value, at the date as at which such value is required to be ascertained, of the reversion in the sums assured (including any bonus added thereto) under the free paid-up policy which the surrendered policy would be entitled to receive, or, if the surrendered policy is a free paid-up policy, to 90 per cent. of the present value at the said date of the reversion in the sums assured (including any bonus added thereto) under such free paid-up policy.
This amendment makes provision in lieu of that contained in clause 3, which has now been deleted. It proposes that instead of the cash surrender value of a policy being taken directly as two-thirds of the policy value, it shall be taken as 90 per cent. of the present value of the free paid-up policy to which the original policy would be convertible under paragraph 4. The effect is that the cash surrender value of whole term of life policies is derived from the free paid-up policy value, thus bringing them into line with the method adopted for endowment and endowment assurances.
Amendment agreed to.
I move amendment No. 245:—
In Part III, page 49, to delete sub-paragraph (2) of paragraph 2.
This amendment is consequential on another amendment, No. 255. Sub-clause 2 of clause 2 of Part III, which is proposed to be deleted because of the provision proposed to be made by amendment No. 255.
Amendment agreed to.
I move amendment No. 246:—
In Part III, paragraph 3, page 49, line 54, before the word "value" to insert the word "present".
This is merely a drafting amendment.
Amendment agreed to.
I move amendment No. 247:—
In Part III, paragraph 3, page 49, line 54, to delete the words "of valuation" and substitute, within the brackets, the words "(as at which such value is required to be ascertained)".
This also is a drafting amendment.
Amendment agreed to.
I move amendment No. 248:—
In Part III, paragraph 3, page 49, line 55, after the word "assured" to insert the brackets and words "(including any bonus added thereto)".
This amendment is being inserted to make it clear that any bonus is to be taken into the calculation.
Amendment agreed to.
I move amendment No. 249:—
In Part III, paragraph 3, page 49, line 58, before the word "value" to insert the word "present".
This also is a drafting amendment, consequential on amendment No. 247.
Amendment agreed to.
I move amendment No. 250:—
In Part III, paragraph 3, page 49, line 58, before the word "date" to insert the word "said" and to delete the words "of valuation".
This also is a drafting amendment.
Amendment agreed to.
I move amendment Nos. 251, 252, 253, 254:
In Part III, paragraph 3, sub-paragraph (a), page 50, line 5, before the word "four" to insert the words "less than five years but not less than".
In Part III, paragraph 3, sub-paragraph (b), page 50, line 7, before the word "three" to insert the words "less than four years but not less than".
In Part III, paragraph 3, sub-paragraph (c), page 50, line 9, before the word "two" to insert the words "less than three years but not less than".
In Part III, paragraph 3, sub-paragraph (d), page 50, lines 11 and 12, to delete the words "one year" and substitute the words "less than two years".
These are all drafting amendments.
Amendments agreed to.
I move amendment No. 255:—
At the end of the Schedule to add a new Part as follows:—
PART IV.
Basis of computation when Parts II and III of this Schedule do not apply.
Where the terms or conditions on which the sums assured by a policy of industrial assurance are payable, whether as originally agreed on or as subsequently varied, are such as to render the method of calculating the amount of the free paid-up policy mentioned in Parts II and III of this Schedule inapplicable, the basis of computation of the amounts of such free paid-up policy shall be such as shall be approved of by the Minister.
The purpose of this is to make somewhat wider provision than was contained in clause 2, sub-clause 2 of Part III for dealing with cases to which the rules contained in Parts II and III might not be possible of application. It is considered that this wider road is preferable.
Amendment agreed to.
Third Schedule, as amended, agreed to.
Fourth, Fifth and Sixth Schedules agreed to.
Long Title agreed to.
I propose to take the next Stage on May 13th, that is six weeks from now. It will give adequate time to Deputies to consider the Bill afresh.
Is it intended to get this Bill passed before the Dáil rises for the Summer Recess?
Yes.
Does the Minister seriously mean that he is going to take this Bill's next stage on 13th May?
We may not get Parliamentary time for it, but I shall be ready to go on then.
No doubt by that time we will be getting the Second Reading of the Finance Bill.
It is quite conceivable that Finance business will occupy all the time during the month of May but we may be able to get an occasional hour or half hour for this Bill. I think Deputies would like to have this Bill reprinted with the amendments that are now passed.
I take it that the Minister is not going to ask the House to deal with the Bill earlier than the 13th May?
That is so.
Has the Minister hopes of getting the Bill through before the end of the summer?
Yes.