This amendment of Deputy Bourke's raises, as he has stated, the question of the principle embodied in the section. Beyond partitioning the business of life and general, accident, and all these other kinds of businesses it also raises some other points of detail on the proposal contained in paragraph (b) of the sub-section. I would prefer to deal with the general principle underlying the idea of the partitioning of the two classes of business when speaking on the section as a whole, but I may, in the course of the remarks I have to make on the amendment, make some observations on the general principle. Before I do so, I should like some explanation from the Minister as to the precise significance of paragraph (b) of this sub-section. I confess that I find the sub-section as it stands extremely difficult to construe. So far as I have been able to satisfy myself as to its meaning and intent, the sub-section appears to impose on Irish companies, which have hitherto been carrying on a composite business, the necessity of doing one of two things. They must either, immediately this Bill becomes law, drop their fire and general business, or else apply to the Minister for a licence to carry on fire and general business in conjunction with their life business for the purpose of enabling them to amalgamate with another company and also to transfer their fire and general business to still another company.
Leaving aside for the moment the position of an Irish office which has hitherto been carrying on a composite business, a life and general business, where the company decides to drop its general accident business, let us consider the position where they want to get rid of that business. Under the proposal in paragraph (b) they cannot merely transfer their general and accident business to another company. They must, first of all, amalgamate themselves as a life office with another life office or offices. Then they must find some other company to take over their general and accident business. So that you have this extraordinary position of an existing company carrying on, prior to the passage of the Bill into law, fire, general, accident and life business, and when the Bill becomes law, it can no longer carry on a composite business. It must carry on life and industrial insurance and, either drop the rest of its business, or proceed to amalgamate with another company. If it wants to carry on its composite business for a short time, it can only do so on the conditions laid down in paragraph (b). It must then, not merely carry on its life business, but it must find some other company to amalgamate with to carry on that life business. Then, having found that company, it must still find a third company to take over its general and accident business.
I cannot understand the necessity for this complicated provision. I could understand the Minister saying: "I will not allow a company to carry on a composite business which it had previously carried on; it must elect between carrying on life and industrial business and general and accident insurance." There is no power in this Bill to enable an Irish company carrying on a composite business to elect. It can only carry on life and industrial business. As far as I have been able to ascertain from a perusal of Section 12, an existing Irish company carrying on a composite business cannot elect to drop life and industrial business and carry on general business. It must drop its general business or amalgamate its life business with another company, and then find a third company to take over its general business.
I am quite unable to understand what is the significance of these proposals, what is the meaning of them. Why must an existing composite office, in order to get rid of, or to get more value for its general business have to amalgamate itself with another company in order to carry on its life business in getting rid of its general business? I cannot see the point of that. I do not know what is the meaning of it, nor do I appreciate what the Minister thinks will emerge from these complicated provisions. As a practical proposition, I should say it would be an entirely impossible achievement, and the net result of Section 12 (4) (b), so far as its effect on an Irish composite office, if passed into law as it stands, will be that each of the Irish composite offices will be obliged to drop its general business. They will not be able to sell that business to either of the two existing general offices in the Free State at present because, obviously, neither the Hibernian Insurance Company nor the Insurance Corporation of Ireland will pay anything for an asset which they can ultimately get for nothing by simply sitting down and waiting and doing nothing.
What is to become of the policyholders between the period when the Bill becomes law and the expiration of their policies? The company has no funds. It cannot carry on business; it cannot collect premiums, but, nevertheless, policies exist on which liabilities to a very considerable extent may accrue. Who is to pay these policyholders? Who is to indemnify them against the risk covered by the policies? Suppose I have a policy with an Irish company at present indemnifying me over a period of 12 months against my liability under the Workmen's Compensation Act, and this Bill becomes law, say, next month. I have paid one single premium covering me for 12 months. A workman in my employment meets with an accident in September, as a result of which he is incapacitated for life. Who is going to indemnify me against that liability? The Company with which I am insured cannot do so because they will be put out of business by this Bill when it becomes law. There is no company ready and willing to take over that liability, and, as I understand it, the effect of Section 12 (4) (b) on policyholders will or may be disastrous. Those are matters that I certainly would like the Minister to clear up. As I say, I propose to leave over the general question of partitioning business until we come to deal with the matter as a whole on the section, but assuming for the moment that this sub-section (4) (b) is going to be passed into law, I should like the Minister to direct his attention to the points I have raised and on which I am anxious to obtain information.