I would like to hear the case that the Minister has to make against this amendment.
Insurance Bill, 1935—Recommittal (Resumed).
Debate resumed on the following amendment:—
At the end of the section to add a new sub-section as follows:—
(3) Immediately after the end of every year the Minister for Finance shall submit to both Houses of the Oireachtas a report setting out particulars of the transactions which have taken place under this section and the next succeeding six sections of this Act.—(Deputy Norton).
I have nothing to add to what I said on Friday last.
In resisting this amendment on the last day, the Minister said that he thought it was unnecessary. He said that if the House wanted any information Deputies could look at the balance sheets of the amalgamated company, and might also get a copy of the statement of transactions issued by the Minister for Finance as part of the arrangement for recording financial transactions by him. I suggest to the Minister for Industry and Commerce that that is not giving the House the adequate information which I desire in this amendment. We have had the experience that in recent years State moneys have been put into certain industries with calamitous effects so far as the State's investments were concerned. We have had examples of that under the Trade Loan (Guarantee) Act under which money was put into private companies, and we know what has happened both to the companies and to the State moneys. We had another example some years ago when the Industrial Trust Company was established into which the State put a substantial sum of money. Almost the first thing that the House heard of that company was that its shares were quoted at less than a shilling. I think if the House could get information of the kind that I desire in this amendment——
Section 38 provides that it will.
——It does not provide for the kind of information that I want in this amendment. Section 38 deals with the obligation on the amalgamted company to furnish balance sheets, etc. That does not satisfy the purposes of this amendment. The object of my amendment is "that the Minister for Finance shall submit to both Houses of the Oireachtas a report setting out particulars of the transactions which have taken place under this section and the next succeeding six sections of this Act." That is much more than the balance sheet of the amalgamated company. I think we are entitled, when State moneys are being used for the purpose indicated in Section 31 and the immediately following sections, to have much more information from the Minister merely than the balance sheet of the amalgamated company.
Section 38 provides for more information than the balance sheet.
It does not provide for what I want, namely, a full report setting out particulars of the transactions which have taken place under Sections 31 to 36, inclusive; that is, particulars of the moneys that went out of the central fund, what dividends the Minister received on these moneys, if any, and what way the Minister exercised his power as a shareholder, what shares he got, what shares he sold, and, generally, how his transactions stand under these sections.
All that information must be given to the Dáil under the existing law.
I do not think it will be given to the Dáil under the existing law in the manner I suggest. The Minister has not told us in what way it will be given.
All particulars of the issues from the Exchequer, all particulars of the receipts into the Exchequer, and similar information must be furnished under the Finance Acts to the Dáil, and will be so furnished.
Amendment, by leave, withdrawn.
Question proposed: "That Section 30 stand part of the Bill."
Mr. Bourke
Where did the Minister get the figure of £500,000? Is there any particular reason for inserting it?
That is put in as the overriding maximum obligation which the State may undertake. It is probable that that figure may not be reached. The reason it appears in the Bill, is that if it should at any stage become desirable to increase it, fresh legislation will be required, and the Dáil will be consulted in that connection.
Question put and agreed to.
Sections 31, 32, 33, 34, 35, 36 and 37 put and agreed to.
SECTION 38.
(4) If an amalgamated company makes default in complying with any of the provisions of this section, such company and every director, manager and other officer of such company, who knowingly and wilfully authorised or permitted such default, shall be guilty of an offence under this section, and shall be liable on summary conviction thereof to a fine not exceeding five pounds for every day during which the default continues.
On behalf of Deputy Dillon I move amendment No. 92:—
In sub-section (4), line 39, to delete the words "and other officer."
The object is to provide that only responsible officials of the company, who are handling matters like balance sheets and the other documents mentioned, should be made criminally liable. The only point I understand is to fix liability upon the responsible officials, and not to bring ordinary employees into the net of the criminal law.
I think the insertion of words in another amendment makes this unnecessary. The effect of the amendment is that an officer must knowingly and wilfully have authorised and permitted the default in order to be liable, and it must be capable of demonstration against him that the default was committed by him knowingly and wilfully.
Amendment, by leave, withdrawn.
Section put and agreed to.
SECTION 39.
A company shall be deemed to be or have been insolvent for the purposes of this Part of this Act on any particular date, present or past, if the circumstances of such company on that particular date are or were such that if proceedings for the winding up of such company were or had been taken on the said date, the court could, under Sections 129 and 130 of the Act of 1908, hold or have held such company to be, on the said date, unable to pay its debts.
On behalf of Deputy Dillon I move amendment No. 93:—
In line 5, page 24, after the words "present or past" to insert the words "being a date after the commencement of this Part of this Act."
This amendment is merely a drafting amendment to make the section clearer, as far as I understand it.
It is necessary that the section should remain as drafted. The section enables the Minister to deal with a state of insolvency arising before the commencement of the Act, but only disclosed in the accounts relating to the period received after the commencement of the Act. If the amendment were inserted it would prevent the Minister acting on information disclosed by such accounts. If the change proposed were effected, the Minister would, presumably, have to wait until the accounts relating to a period subsequent to the passage of the Act were received, whereas we may get at an early stage, under the Act, accounts relating to a period prior to the passage of the Act revealing, in relation to the company submitting the accounts, a state of insolvency upon which action would have to be taken.
I think the section as it stands might be open to the construction that a company which, at the moment of investigation, was, in fact, solvent, could be declared insolvent in respect of a period when it might have been insolvent before the passing of the Act, but which company had recovered itself in the intervening time.
I shall look into the section and see if there is any possibility of that interpretation being put upon it. The intention is to provide that we can act upon accounts furnished, even though the accounts furnished in the first instance may relate, and probably will relate, to a period preceding the passage of the Act.
It is not intended to go back and look for insolvency, in other words?
No. The accounts for a particular period might not come in for nine months after the year concluded. These accounts might show insolvency existing and on these we would have to act, but the actual period during which the insolvency arose may be the period immediately preceding the passage of the Act. I think the only point that arises is that which Deputy Costello raised, to make it clear that we are not taking power to go back over some period past and gone for the purpose of taking action against a company by reason of some insolvency then existing which has since disappeared. It is not so intended. The intention is only to take action when and as soon as a state of insolvency is disclosed in the accounts.
Amendment, by leave, withdrawn.
Section put and agreed to.
SECTION 40.
The Minister may present a petition for the winding up of an assurance company on the ground that such company is unable to pay its debts within the meaning of Sections 129 and 130 of the Act of 1908.
On behalf of Deputy Dillon I move amendment No. 94:—
In page 24, at the end of line 14, to insert the following proviso:—
"provided that the Minister shall not during the first five years after the commencement of this Part of this Act present any such petition if he is satisfied that substantial measures are being taken to improve the financial condition of the company."
I think the object of the amendment is to provide a period during which the Minister could, if he thought fit, nurse a company that is not perhaps in as healthy condition as the Minister might like it to be; that if he thought, by gentle handling of the situation, it could be brought around, he would have a chance of giving the company an opportunity of getting on its legs during the period mentioned in the amendment.
This is a matter that we discussed to some extent on an earlier amendment. It raises again the question of the proper attitude for the Government to adopt. If there is a company which is insolvent there is surely on the Department of State concerned the responsibility to see that the company does not enter into new liabilities to the public. Although I am naturally anxious to ensure that Irish companies which are say on the border-line at the moment should be given a reasonable opportunity of making good, if they have within them the elements which will enable them to do so, at the same time, we should, on the face of the statute, have power to deal with an insolvent company under this part of the Act if we cannot deal with it under the earlier provisions. The intention would be to ensure that measures had been taken to rectify the position of a company known to be insolvent, or of doubtful solvency, before the Act had come into operation at all. If we do not succeed in doing that, if, for reasons which we cannot see at the moment, it became impossible to rectify the position of a company of doubtful solvency, then when the Act came into operation I think we would have to have power to say that this insolvent company must not enter into new liabilities. It is unfair to the public to allow it to do so.
Amendment, by leave, withdrawn.
Section put and agreed to.
Question proposed: "That Section 41 stand part of the Bill."
Mr. Bourke
There is no limitation on the number of inspectors to be appointed under sub-section (4), and, under sub-section (6), the companies are called upon to pay for the expenses of inspection. I think that is rather rough. In the English Act, I think the companies are called upon to pay only a proportion of the expenses, and I think that to make them pay for something in which they are not interested and which they do not invite themselves is rather hard. I should like an undertaking that there will be some limitation put on the number of inspectors and that we will not have three or four different men going around the country and running up a huge bill against a company which that company will have to meet.
I think this section is in the usual form. It is not intended to have more than the minimum number of inspectors necessary to enable the provisions of the Act to be carried out. I think the Deputy may be assured that there will be no attempt to appoint unnecessary inspectors under the sub-section, but, in sub-section (6) it is not specifically stated that the company must pay. It gives the Minister power to apply to the High Court for an order, which the High Court, if it thinks fit, can make, requiring the company to pay.
I should like to direct the Minister's attention to a point which I raised on an earlier section in connection with the use of the words "apply in the summary manner." It is not a matter I am interested in at all, but it would be better if the matter were cleared up.
I undertook to have that point looked into in connection with an earlier section.
It arises two or three times on this section.
The question of fees would not arise on this.
No, but the question of who you would make a party to the thing would arise.
Question put and agreed to.
Section 42 agreed to.
SECTION 43.
the word "collector" means a person, howsoever remunerated, who makes house visits for the purpose of receiving premiums payable on policies of industrial assurance and includes a deputy of or substitute for any such person, and also includes a person who holds any interest in a collecting book;
It seems to me that amendments Nos. 95 and 96 are covered by amendment No. 14, which dealt with agents.
Mr. Lynch
I am not terribly interested in it, but it did not strike me that amendment No. 95 was covered by any previous amendment. There is no question here of a licence. The proposal here is that the word "collector" be done away with and the word "agent" substituted.
With the same definition of the person?
If the Deputy has any point to make, he may, of course, move the amendment.
Mr. Lynch
I move amendment No. 95:—
In line 16 to delete the word "collector" and substitute therefor the word "agent" and in line 23 to delete the words "a collector" and substitute the words "an agent."
It did not occur to me that this involved the question of a licence. The word "agent" is used occasionally through the Bill.
This part of the Bill relates entirely to industrial insurance, and it is obviously important in relation to industrial insurance that the collection should be carried out by means of a collector calling at the house of the insured person to collect weekly contributions.
Mr. Lynch
Yes, but whether you call him agent or collector makes no difference. I do not know why the word "collector" is retained. I put this amendment down more or less on my own. I do not know that the collectors themselves are terribly keen on it, but, to my mind, the word "collector" conveys the idea of somebody who is going around looking for something for nothing.
The meaning of the word for the purposes of this Bill is as set out in the second sentence of the section, that "collector" means a person, however remunerated, who makes house to house visits for the purpose of receiving premiums payable on policies of industrial insurance, and includes a deputy of, or substitute for, any such person, and so forth. No matter what you call him, so long as you maintain the definition, you get the same result.
Mr. Lynch
Why is there such keenness on keeping that particular name?
It is the one that is in common use.
Mr. Lynch
I do not think that improves it.
Look at all the consequential amendments we should have to make if we made the change now.
Amendment, by leave, withdrawn.
Amendment No. 96 not moved.
Mr. Lynch
I move amendment No. 97.
To delete line 19.
I do not know whether this deletion would secure exactly what I am after. It has been suggested that the practice has grown up in some offices of persons in the managerial end getting hold of vacant books as books fall in to the company, and putting themselves down as the collectors or agents, and then employing another person to make the collections at a much lesser commission than the ordinary commission allowed, and pocketing the difference. I am not quite satisfied that my amendment would succeed in bringing about the abolition of that practice, but it is certainly objectionable that persons, who could in no way be considered collectors, should get hold of books, put themselves down as the nominal collectors, and employ persons at a much smaller wage to collect premiums and pocket the differences. It is very unfair to the ordinary collecting staff.
I want to support Deputy Lynch in that matter, because I understand the practice to which he refers of farming out books does operate pretty extensively, and it is a highly undesirable practice. In that connection I want to direct the attention of the Minister to Section 70 (1), by which the appointment of a deputy to the collector is not allowed. There, neither an industrial assurance company nor any person employed by any such company shall employ any person who is not in the regular employment of such company to procure or endeavour to procure any person to enter into a contract of industrial insurance.
I think there is some misunderstanding, and it is just as well to clear it up. My recollection is that this line did not appear in the Bill as originally drafted. The change was effected at the request of the insurance companies who represented that otherwise the definition of "collector" would be too tight, and that it might sometimes happen that a collector, through illness or other temporary cause, would be unable to carry out his duties, and that the actual work of making the collection over a period might be carried out for him by his wife or some other member of his family, and consequently it was necessary to have a certain loosening of the definition to permit of that being done. That is the sole reason for the insertion of the amendment—to enable in such circumstances the work of the collector to be done by a temporary substitute for him during a period of illness or absence for any period through any cause for which he was unable to do the work himself.
The trouble seems to be to get something between what the Minister is aiming at and what Deputy Lynch is aiming at. I quite agree that if Deputy Lynch's amendment were accepted as it stands, it would probably rule out what the Minister had in mind. I was going to make that point myself, because it fairly frequently happens that an agent, through illness or some other valid reason, may have to get a member of his family or a friend to collect the book for a week, two weeks or three weeks, but while that is so, there is certainly good ground for the statements by Deputy Lynch and Deputy Dillon as to abuses under which books are farmed out, and, where the remuneration is 20 per cent., the person who actually does the work gets 12½ per cent. or 15 per cent., while the person who nominally holds the agency or collectorship pockets the remainder. That is very unfair. Perhaps the Minister would say whether he considers the definition in the section sufficiently wide. I am not satisfied that the definition of "collector" is sufficiently wide. Of course, the person collecting does a good deal more than receiving premiums. If he were to do only that, his remuneration at the end of the week would probably be very small.
Better raise that on the section.
I should like to ask the Minister if he can meet that point, while safeguarding the person who would have to employ a substitute during illness. I realise that it is very difficult.
That is precisely my point. I do not want to toss the ball back to the Deputy. I think it would be very difficult to frame an amendment which would permit the carrying on of a collector's duties by his wife or some member of his family during his illness, while nevertheless ruling out the evil of farming out to which the Deputy has referred. I invite the Deputy and his friends to consider what amendment they would suggest. I am prepared to consider such an amendment if it can be devised so as to serve the two purposes. I think, however, that considerable difficulty will be found in that.
Might I suggest a line of thought which the Minister might consider? If words were inserted to say "without cause stated with the Minister's approval", I could then imagine the collector giving a note to his deputy asking him to act; the deputy bringing it down to the Department of Industry and Commerce at Lord Edward Street and getting a rubber stamp put on it.
If every time a collector got sick in the country, a note had to be stamped by the Department, the number of officials would have to be increased.
We have to consider the question of an agent working in rural Ireland. I do see very great difficulty and evil to be overcome, and I do imagine that some restriction of that kind might meet the situation even if prior approval was not required. Some kind of inspection will become inevitable if the class of persons acting as collectors is to be in any way restricted. If "a farmer"—as we will call the persons farming out books—habitually employs unauthorised persons, those persons could not have a certificate from him that they were collecting within the meaning of the amended sub-section. I suggest that if a collector wanted to appoint a deputy he should be obliged to give him a note or certificate that he was acting as his deputy for cause stated. In the event of somebody being found with a fraudulent note of that character steps might be taken to bring the person who issued it—and it would in fact be the farmer out of those books—to account for having issued a false certificate of the kind suggested.
I shall be only too glad to consider any suggestion.
Amendment, by leave, withdrawn.
Question proposed: "That Section 43 stand part of the Bill."
On the section, I should just like to hear from the Minister if this definition covers a collector in canvassing for and obtaining business? It is not mentioned at all in this particular section.
It covers a collector, I think, for the purposes in connection with which the term "collector" is used in the part of the Bill. It may be that the person who acts as collector also carries on other duties on behalf of the company. "Collector" anywhere in connection with this part of the Bill is the definition of the term which relates to the duties of collector as set out in the Bill.
This section restricts the collector merely to the collecting of premiums.
No. The section does nothing except to define the word. The Deputy has got to relate that definition to some provision of the Bill where a difficulty might arise.
It seems to me that this section defines the work of collector as merely collecting premiums. The collector has far more important duties than merely collecting premiums.
Quite so, but wherever that arises you will find that the phrase used is "every collector and every person employed by an insurance company." There is some such amplification of the phrase used in any sub-section where it was necessary.
In this section it says:
The word "collector" means a person, howsoever remunerated, who makes house-to-house visits for the purpose of receiving premiums payable on policies of industrial assurance and includes a deputy or substitute for any such person, and also includes a person who holds any interest in a collecting-book.
It defines his duties.
It defines the term for the purposes of the Bill only. In other words, we set out there the sense in which that word is used throughout the Bill. Wherever in the course of the various sections we wish to refer to an agent of an insurance company who has other duties to perform, some other phrase is used.
Is it not, to say the least of it, very confusing, because whether you use the word "agent" or "collector" so far as industrial assurance is concerned it means the same thing? Every collector is an agent, and every agent is a collector, so far as I know, where industrial assurance is concerned. It is rather confusing, to say the least of it.
Mr. Lynch
I should like to refer to the definition of "premium receipt book.""Collecting book" means any book or document issued by an industrial assurance company, and so on. The expression "premium receipt book" means any book or document in which acknowledgment of premiums payable in respect of a policy of industrial assurance is entered. I think it would be well to have the words "issued by an industrial assurance company" inserted there after the word "document" in line 26.
I will look into that point, but I think there may be some argument against it. If it is in fact a receipt book, no matter who issues it, it comes within that definition.
Question put and agreed to.
Section 44 put and agreed to.
SECTION 45.
(1) Amongst the purposes for which industrial assurance companies may issue policies of industrial assurance there shall be included—
(a) the insuring of money to be paid for the reasonable expenses in connection with the death and funeral of any of the following persons, that is to say:—
(i) of a parent, son, daughter, grandparent, grandchild, step-parent, step-son, step-daughter, brother or sister of the person effecting the policy, or
(ii) of an uncle or aunt of the person effecting the policy, where such uncle or aunt occupies the position of parent or guardian towards the said person effecting the policy, or
(iii) of a nephew or niece of the person effecting the policy, where such person occupies the position of parent or guardian towards such nephew or niece;
(b) subject to the provisions of the next following sub-section of this section, the insuring of money to be paid on the duration for a specified period of the life of a parent, son, daughter, grand-parent, grandchild, step-parent, step-son, step-daughter, brother, sister, uncle, aunt, nephew, or niece of the person effecting the policy, either with or without the payment of money in the event of the death of such person before the expiration of such period.
Mr. Lynch
I do not think amendment No. 98 is necessary, because I think those persons have an insurable interest already.
That is true. The amendment is not necessary.
Amendment No. 98 not moved.
Can the Minister say what the position is in regard to amendment No. 99?
If the Deputy desires to effect that change the amendment is necessary. I am rather opposed to extending the degree of relationship.
I move amendment No. 99:
In sub-section (1) (a) (i), line 53, before the word "step-parent" to insert the words "children-in-law."
I think there is a good case for the insertion of the amendment. I grant that, generally speaking, this is not a case which would arise very frequently, but one can easily visualise a position in which it would arise. I think very little more need be said in support of the amendment. It affects perhaps a small number of cases, but certainly there would be certain types of cases where it would be necessary.
Would Deputy Murphy tell us what are "children-in-law"? Can the Minister tell us what "children-in-law" are?
I am afraid I will not attempt to define Deputy Murphy's phrase. In any event, I think it would be undesirable to extend the degree of relationship. We might, perhaps, discuss this amendment with Deputy Lynch's amendment No. 100 in which the same principle arises. Deputy Lynch seeks to extend the definition to cover step-brother, step-sister, half-brother, half-sister, son-in-law or daughter-in-law. Under the existing law, policies to insure money to be paid for the funeral expenses of a parent, grand-parent, grand-child, brother or sister, may be issued by an insurance company, and we are proposing in the Bill to extend the permitted range of relationships to stepparents and step-children. In the first place, in relation to Deputy Lynch's amendment, it is unnecessary to give power to assure or validate an existing assurance in the case of half-brothers and half-sisters, since at present the whole blood is taken to include the half blood. They are already within the permitted degree of relationship. I am not quite clear what is meant by "step-brother." If by "step-brother" is meant anything other than "half-brother" then it can only mean children who have no common parent and who are related only because of the marriage of the father of one to the mother of the other, there being no blood relationship at all. I think it would be better not to permit these to insure the lives of one another.
The section, as it stands, provides, in our opinion, a sufficiently wide range of relationship, and there are many reasons why it might be undesirable to permit insurance on the lives of other relatives. Certainly, I think that if we got into the category which Deputy Murphy has in mind when he talks about children-in-law, we would be extending the range of relationship too widely altogether. That also applies to the two classes of "in-laws" to which Deputy Lynch refers in his amendment. Therefore, in relation to the three classes, firstly, it is not necessary to amend the Bill in order to cover half-brothers and half-sisters. Secondly, it is probably not necessary to extend the range to meet his point in relation to step-brothers and step-sisters where there is actual blood relationship between the people concerned, but if he means those who have no blood relationship, then I think the range should not be extended. On the general grounds on which it is desirable to restrict the degree of relationship within which people can insure the lives of one another, I should be disposed to resist any amendment to extend that degree further than we are doing in the Bill.
Mr. Lynch
Of course, I know that it is rather difficult, in the circumstances, to understand what is meant by step-brother and step-sister, and in the ordinary sense in which it is used in my part of the country it is probably more correctly now described as half-brother and half-sister. On this question of having no blood relationship, however, it might be different. I think that such classes would seem to be rather wide apart for insurable interest, but I think that is the same for every son-in-law or daughter-in-law and it might be objectionable if it were the other way around and the son-in-law should have an insurable interest in the mother-in-law. However, I think the amendment should be accepted. There is a case to be made, especially for these poor people who go in for this industrial insurance, who are very often young people living in the house with the old people, and I think a case could be made for their inclusion.
I would suggest to the Minister that it is rather restricted in (a) (ii) of Section 45, where it says: "Of an uncle or aunt of the person effecting the policy, where such uncle or aunt occupies the position of parent or guardian towards the said person effecting the policy." I suggest to the Minister that that might be a little wider because you have up and down the country a position where an uncle or an aunt is probably fairly advanced in years and, perhaps, an invalid, and where the uncle or aunt remains in the house and is maintained by a nephew or niece although they would not be in the position of a guardian to either the nephew or niece. That is quite a common occurrence. The uncle or aunt, as I say, is kept in the house and the responsibility for burying the uncle or aunt, when they die, eventually falls on the nephew or niece as the case may be. I think that is a sort of case which the Minister might attempt to meet.
I think we ought to clear our minds on this point. Deputy Murphy makes a reference to children-in-law. I do not know what that means, but now it seems that a distinction is being drawn between half-brothers and step-brothers or between half-sisters and step-sisters. That is a distinction I never heard drawn before, and I should like to know if the Minister has been advised that there is such a distinction.
I am not drawing the distinction. In fact the phrase in the Bill is "step-brother" or "step-sister," but it is intended to cover only the case of a blood relationship.
Well, suppose a man with a son and a woman with a daughter married. The girl and the boy then become step-brother and step-sister, do they not?
That is the phrase usually used to describe them but, in fact, they would not come within that definition.
They would not? Therefore the daughter would not be entitled to insure her mother's husband?
Quite.
Nor the son his father's wife?
Quite.
But the child of that marriage would have an insurable relationship with the son of the father and the daughter of the mother?
Well, as a matter of fact, I think I would have to work that out on paper before I could answer the Deputy. However, I can say that the general principle is that there should be no insurable interest except where there is blood relationship. That is the limitation in all statutes in connection with this, and I think it would be undesirable to extend the range within which people may insure the lives of one another to cover relationships other than blood relationships of one kind or another.
So that the child of that marriage would be able to insure either of the children of the two parents, and either of the children of the two parents would be able to insure the child of the marriage, but not one another.
Only if the other person occupied the position of parent or guardian. I take it that the child would be a nephew or niece of the elder children.
Well, perhaps the best rule is that, where there is a blood relationship, there will be insurable interest, and where there is no blood relationship there will be no insurable interest.
Quite.
Mr. Murphy
Is the Minister prepared to accept the amendment?
I should be very reluctant to extend the classes of relationships to cover persons who are not blood relations. I think there is a fundamental objection to that and, therefore, I should prefer not to accept it.
Amendment 99, by leave, withdrawn.
Amendment 100 not moved.
I move amendment No. 101:—
In sub-section (1) (a), to delete the word "or" where it first occurs in line 54, and after the word "sister" to insert the words "legally adopted child, illegitimate son or daughter or ward".
I do not know whether the Minister in this Bill has dealt with the question of giving illegitimate children an insurable interest in their mothers, or mothers an insurable interest in illegitimate children.
At present the insurance of illegitimate children by mothers is permissible, and it is not necessary to amend the Bill in that respect. That is provided for even under the existing law.
There is a decision dealing with the insurable interest of illegitimate children in their mothers and by mothers in illegitimate children. I believe it was in a case of Morris v. Britannic Insurance Company. That is possible under existing law in Great Britain and, unless I am misled, that decision was based on the fact that in Great Britain the Adoption of Children Act, 1926, was passed, and in 1930 a similar Act was passed in respect to Scotland. No such Act has been passed in this country.
No; and I would be very reluctant to consider an amendment covering legally adopted children.
Am I to take it that after he has investigated the matter, if the Minister finds, in so far as the insurance of illegitimate children by mothers, or the insurance by illegitimate children of mothers is concerned, this provision is necessary he will take steps to deal with it?
I have looked into the matter and I am advised that the amendment is not necessary. An amendment of the Bill would be necessary to enable people to insure the lives of legally adopted children, but I do not think that change should be effected. Certainly I would be very reluctant to do it without having examined the question in greater detail.
I did not dwell on that, but I direct the Minister's attention to this: That if it is the established law in this country that illegitimate children can insure their mothers, or that the mothers can insure illegitimate children, that is founded on no more solid foundation than that such is the fact in Great Britain. In Great Britain that state of affairs is founded on the decision in Morris v. the Britannic Insurance Company, on which the Cohen Committee of 1932, adverting to that judgment, recommended that explicit legislation should be introduced to legalise that contract, inasmuch as they thought, apparently, that the judgment of the court might not stand the letter of the existing law if carried further. In any case there was a substantial doubt, and they recommended that the substance of that verdict should be incorporated in the law. I suggest, in view of that advice by the Cohen Committee to the British Legislature, it would be wise for us to incorporate the substance of that judgment in this Bill.
I will look into the point. I am advised that the amendment is not necessary to effect the Deputy's purpose, but if, on looking into it, I find amendment is required, it can be taken on the next stage. I think it is quite right that the mother should have the right to insure.
And the Minister will have regard to the reference made in the Cohen Committee's report?
Yes.
Amendment, by leave, withdrawn.
I move amendment No. 102:—
In sub-section (1) (a) (ii), line 57, after the word "guardian" to insert the words "for the time being".
In paragraph 3 an insurable interest is created in:
a nephew or niece of the person effecting the policy, where such person occupies the position of parent or guardian towards such nephew or niece.
I propose to add the words "for the time being". The suggestion apparently is that the insurable interest should exist only for the period during which the person stood in loco parentis to the niece or nephew, and when that relationship ceased, which I suppose would be when the niece or nephew attained their majority, the insurable interest would cease, and that any contract entered into subsequent to the relationship ceasing would be invalid.
The Deputy will appreciate that it would be impossible for a company to know whether such guardianship existed at the relevant time. I think the amendment would put a company in an impossible position.
Will the Minister consider a case where an uncle or an aunt acted as guardian, and at a later period are maintained by the niece or nephew when they might have been a burden on the rates in a county home or be getting home assistance? That is quite a common case in the country, particularly with unmarried persons of advanced years. These people are very often kept at home by a niece or a nephew who accept responsibility for their burial. That is a type of case that the Minister might consider, because it is quite common.
I would be very slow to extend the provisions of the Bill. What we propose to do is to require relationship. The Bill provides that where an uncle or aunt occupies the position of parent or guardian of the persons effecting the insurance, that is legitimate, but if that relationship does not exist, it is not.
How is it to be determined whether there is the relationship of a guardian or not? How is an agent of a company to know that? Surely what will happen is that where a policy is sought to be taken out the agent will be informed by the niece or nephew that the uncle or aunt stands in the relationship of a guardian.
That could not happen where the parents are alive.
The case I have in mind is one where very often the parents would not be alive, and where the niece or the nephew would be maintaining an uncle or an aunt who might not be in the best of health. The uncle or aunt might be unmarried and would be taken into and maintained in the house. How is the relationship of guardian to be established there? Surely documentary proof would not have to be furnished by the person proposing to take out the policy?
There is an obligation on the company to satisfy itself that the case falls under the Act.
It must be remembered that we are dealing with industrial insurance and that the number of persons taking out policies on the lives of uncles or aunts standing in the relationship of a guardian would be very few. As a matter of fact, the majority of the people taking out industrial policies would not know the meaning of the word "guardian." We ought to get down to realities, because the case I mention is quite common. Industrial insurance is engaged in mainly by working-class people and by small farmers. If a niece or a nephew is a minor these people act as guardians, but when a niece or a nephew is of age and take control of their own households the insurable interest ceases, just at the time that it should be effective. I would like the Minister to undertake to look into this matter.
I will undertake to do that, but the Deputy understands my objection to extending the scope of the section.
It is not a question of extending it, because it is not going outside the blood relationship.
If the uncle or aunt is a guardian, then the insurable interest exists.
If they are not guardians?
Then I do not think it should exist.
I think the point I made is much more valuable.
It is quite true that the company illegally might issue a policy under the provisions of this part of the Bill, but in a later section provision is made for dealing with that situation if it arises.
My point is: how are you going to prove under this sub-section whether a person is in that relationship or not? You are dealing with ordinary working-class people and small farmers who go in for industrial insurance.
Am I to understand that I can on one Monday propose to take out a policy on, say, Aunt Matilda, who stands in the relationship of guardian, and that I can on the following Monday propose to take out a policy on Aunt Martha, who stands in the same relationship? Is there to be any standard of proof to establish that these people genuinely occupy the position of guardian towards me? As far as the insurance company is concerned it may be perfectly true that there should be a change of guardianship as between one Monday and another. What standard of guardianship is required?
I could not answer that question straight away. You mean what legal proof must a person produce?
To satisfy the company that they have not issued a policy ultra vires beyond saying that a policy was taken out on Aunt Matilda, who stood in the position of guardian, and that on the following Monday another one was taken out on another aunt, who stands in the same relationship.
There is another objection to this sub-section. This is opening up a new avenue of repudiation of policies by certain insurance companies, if they wish to do so. We know what has been happening with regard to ages. A person may take on an uncle or an aunt under this sub-section, if the person effecting the insurance says in reply to the agent, or if the agent puts on the proposal form, that the uncle or aunt stands in the relation of a guardian, and when the policy matures or comes to be paid, the company may repudiate it on the grounds that the insured person was not a guardian.
There are provisions in the Bill which will prevent that.
I want to suggest to the Minister that there are things done in industrial assurance which you could not possibly provide for in his Bill.
The amendment is really for the purpose of clearing up the position which would arise in the following circumstances:—A person comes into an insurance office and says on a given date "my Aunt Matilda is my guardian." The insurance company then is free to issue a policy of assurance. If three days later she ceases to be guardian and Aunt Martha takes up the running an insurance policy can be taken out in respect to Aunt Martha. Are the two policies legal?
If either aunt is in the position of guardian at the time the policy is taken out, it is a legal policy.
If that is so, the amendment is unnecessary.
Quite.
By what process will it be established that they are guardians? Is it merely by word of mouth?
They will have to produce proof if the matter is questioned.
I have the best advice that the words "for the time being" are required, but if the Minister is satisfied with the section as it stands, I shall withdraw it.
The company must satisfy itself that the state of guardianship exists at the moment of the issuance of the policy.
And question it when a claim arises.
No. I think other provisions of the Bill will deal with that possibility.
Amendment, by leave, withdrawn.
Amendment No. 104 not moved.
Mr. Lynch
I move amendment No. 104:
After sub-section (1) (a) (iii), page 27, line 3, to add a new sub-paragraph as follows:—
(iv) of a legal guardian effecting a policy on the life of a child who is maintained solely by the said guardian without fee or reward."
We inserted something like the converse of this amendment in the case of the Workmen's Compensation Act 1934, I think there is a good case for it. The type of person I have in mind is the person who takes in a youngster who has become an orphan. He may not be actually a blood relation, who would come within the other provisions of the Act, but on grounds of charity or because of friendship with the deceased parents, he takes in the child and rears it without fee or reward of any kind. That is not uncommon, as the Minister is fully aware. It is amongst people like that you will find the greatest charity. I think there is a case for the extension of the principle enshrined in the Workmen's Compensation Act covering such a case.
I move amendment No. 109:—
In sub-section (2) line 13, after the word "shall" to insert the word "knowingly."
This raises a point that has arisen already in connection with other parts of the Bill. The sub-section provides that no industrial insurance company shall insure, or pay on a policy issued under paragraph (b) of the next preceding sub-section, etc. I desire to insert the word "knowingly" in order to afford to the company the defence that they did it unwittingly and that they had no intention of breaking the law. I do not want to elaborate at any great length the underlying argument because it has already been brought to the attention of the House on several occasions on other amendments. I should be glad to know if the Minister would be prepared to accept the word "knowingly" in this case.
I am afraid not. It would be extremely difficult, if not impossible, to prove that the action was done knowingly. If the insurance company issues an insurance or pays on a policy issued under paragraph (b), then I think the provisions of the sub-section ought to apply in any event.
The difficulty is this. This is a restriction on the insurance company insuring, or paying on a policy on the death of a person, any sum exceeding a reasonable amount for the expenses in connection with the death and funeral of such a person. The restriction is against paying a sum in excess of what would be reasonable to discharge the funeral expenses. Suppose that the deceased person has five children, each one of whom takes out a policy on the deceased person's life, each policy being for a reasonable sum, the difficulty immediately arises that the company is paying something in excess of what is reasonable on each of the policies that are paid out upon, after the first policy has been discharged. That is one difficulty where conscious willingness to break the law should be present before the company is penalised. The second difficulty is that an ostentatiously attired person may present himself or herself to effect an insurance, to insure the life of his or her parents for a sum out of all proportion to what is reasonable for the funeral requirements of a person in the station in life of such person.
One can imagine a person whose funeral expenses would be ordinarily discharged by £25 or £30 insuring for funeral expenses of £100—a sum which, for another person living in different circumstances, might be quite reasonable, within the terms of the Bill. When the company has taken all reasonable precautions to ascertain what the requirements for funeral expenses are likely to be, then, I do not think it should be penalised for having, in fact, accepted a proposal or paid out on a policy in excess of the expenses contemplated by the Bill. It is for that reason that I want to insert the word "knowingly," which would imply that the insurance company, recklessly or without making reasonable inquiry, issued what was obviously a fraudulent policy to cover funeral expenses. Unless the word "knowingly" is inserted, the insurance company, no matter what precautions they may have taken in fact, if misled into issuing an illegal policy under this section, would be liable to penalties.
The difficulty in that case would be to prove that the insurance company had acted "knowingly." It would be almost impossible to do that.
Then I suggest the word "wilfully," or "negligently," or some similar word should be inserted. The Minister would then be in a position to make the case in court that, if the most ordinary inquiries had been made, the company would have found out the circumstances of the person who insured.
The question that would arise would be as to whether the sum was reasonable or not, and not whether the company acted "knowingly,""wilfully," or without inquiry.
The difficulty would be to determine what would be a reasonable sum. What would be an adequate sum in a village or in a rural district where the relatives of the deceased had, as the phrase is in the country, "a grave of their own," would be completely inadequate in the City of Dublin, where interment would have to take place in Glasnevin. How is that question to be determined, and by whom?
It will be determined by practice in due course and it is, in fact, determined by practice at the present time.
While I admire the Minister's attempt to get after this question, I do not think that his attempt will succeed. There is nothing to prevent a person insuring either of his parents in four or five different companies for the same amount in each case. A person who might take out a substantial policy with one company might, in order to evade the provisions of the Bill, take out four or five policies with different companies.
The Minister is surely mistaken in saying that this provision is merely designed to prevent an insurance company paying out. It also prohibits the issue of a policy.
Which is an answer to Deputy Morrissey's point.
I am dealing with one point and Deputy Morrissey is dealing with a completely different point.
I am prepared to consider any proposal for tightening up the section in the manner suggested by Deputy Morrissey; but nothing would be achieved by adopting this amendment. The only question that arises is whether evasion of the intention of the section could be effected in the manner in which Deputy Morrissey suggests. It may be desirable that similar provisions to those in Section 46 (1) should be incorporated here, but I hardly think so. However, I shall look into that aspect of the question.
Would the Minister consider the insertion of the words "wilfully" or "negligently" instead of "knowingly"?
Not until I am clear as to what the Deputy thinks such words would mean in that connection.
They would imply that where an insurance company had issued a policy in excess of a reasonable amount for funeral expenses, it would be immediately put upon its proof to show that sufficient inquiries had been made before it fell into that misfeasance.
The company does not commit an offence by merely issuing a policy.
No.
The only question that arises is whether the amount was reasonable or not, and I think the section gives all the elasticity the Deputy desires. The question as to the issuing of the policy does not arise.
£25 might be regarded as the outside limit in a case in which a policy for £100 had been taken out. The company may admit, in the knowledge of the facts later revealed, that £100 is an unreasonable sum. All that would fall for the court to decide would be whether, when the policy was issued, the company took proper precautions as regards inquiry into the circumstances of the person concerned. The company must be in a position to show that they did that.
In the court, the only question would be as to whether the amount was reasonable or not.
That is as the section stands.
And as it should stand.
The company may say that they got this proposal and sent their representative to the residence of the person from whom it emanated. They found that person living in inexpensive surroundings, but they learned that she intended taking the remains of one of her parents to County Kerry and burying them there. The expense would, therefore, be out of the ordinary. Their case might be that they took every prudent precaution to satisfy themselves that this lady was entitled to insure for this sum. It later transpired that the parent was buried in Glasnevin, where the parties had been living, and that the whole expense did not come to £15, so that the insurer had £85 over and above the expense. The insurance company would say: "We admit in the light of the facts that this was an unreasonable sum, but we could not have known that when we issued the policy." I want the court to be able to say that the insurance company committed no fault——
In paying out on the policy?
——that when they issued a policy they felt they were justified in doing so and that the error could not be avoided.
Who is to decide in particular cases what is or what is not a reasonable amount for funeral expenses?
I suppose the court or the Minister.
There is nothing in the section about the court. It is a general prohibition and the whole thing is left at large.
I have been looking for the sanction for the last couple of minutes and I cannot find it, but I am sure it is somewhere in the Bill.
The insurance company is simply left to make up its mind, when issuing the policy, whether the amount is reasonable or not. At the end of the period, when the time comes to pay, somebody else may say that the amount is unreasonable and the company may not have to pay.
Let us assume that a person in the City of Dublin wants to insure his father, who is 65 years of age, for 1/- per week. The sum assured is £35. A person down in the County Kildare wants to insure, say, his father who is such an age at a premium of 1/- a week and the sum to be assured is £35. I suggest it would be held under this section that £35 in Kildare was an unreasonable sum as compared with the same sum in Dublin City. In law it would be held to be very unreasonable. What the insurance company would have to do under this section would be to say: "Very well, take 1/- for a premium in Dublin but the premium in Kildare will have to be 10d. in order to bring in the reduced amount that would be considered reasonable," and the figure would have to be something else in Cork and something else in Limerick and so on. It seems to me that the section deciding what is a reasonable or an unreasonable sum will be a difficult section to work.
The Minister has spoken about cases where the sum might be considered unreasonable. Very well, then let me suppose I insure a nautical uncle for £25. He takes to sea, the vessel sinks in mid-Atlantic and he is never heard of again. Am I not entitled to draw the amount of my policy? Surely if my uncle had sunk in mid-ocean there would be no funeral. Then am I entitled to draw anything for my policy?
"Reasonableness" must depend upon the circumstances at the time the policy was issued. But the policy is not an indemnity policy, and the question of the actual cost of the funeral does not arise.
Is there any similar provision to this in any of the English Acts?
Yes, in the Act of 1923.
The Minister says that the "reasonableness" depends on the circumstances at the time the policy was issued. I submit that the Minister ought to put it into words and so exonerate the insurance companies. What the Minister has said strengthens my argument. He says it would be absurd to suggest that where the company paid out £100 in respect of a funeral which cost only £15 the company did not think they were doing something unreasonable. But the Minister must remember that the company at the time did not know they were doing something which was unreasonable; they did not know that facts existed which would justify them in taking the policy. Suppose that to-morrow I wanted to insure for funeral expenses in excess of what will defray the expenses generally, would it not be natural for me to bring the funeral down to the country whence I had originally come, even though I had not any intention of doing so originally, because that would entitle me to fix the amount of the policy within the strictest letter of the law? Then when the time came to cash in on the death of the person I might conduct the funeral on the most economical lines and still within the law draw the money.
I am afraid it is not a case in which the insured persons will be seeking to increase the amount of their insurance so much as the insurance companies will be seeking to persuade the people to increase.
Oh, no. I do not think this section was to be effective at all in the beginning, but there are certain safeguards between the person taking out an insurance and the company. Certain companies or a certain number of the principal companies will not insure beyond a certain amount without a medical examination of the person to be insured. I suggest that that is one safeguard. I think there are certain companies that will not insure without a medical examination when the person to be insured is 60 years of age—that is to say to insure at a premium that will bring in a sum greater than £20. If that were applied, and it could be applied to all companies, it would be a very effective safeguard. It seems this section cannot be applied effectively at all, and will not in actual operation work effectively. It seems to me the best thing for the Minister is to consider getting something that will enable the persons to insure their parents for a reasonable sum, such as will cover the burial expenses. But burial expenses vary in certain parts of the country. There are parts of the country where the people hold wakes. It is a local custom, and people, no matter how poor they may be, live up to these customs. It is quite well known to the Deputies in rural areas that a wake is the most expensive part, probably, of the burial expenses. Deputies have experience of cases where the corpse is kept for two or three days, taken to the church then, and from the church removed to the cemetery. I suggest that the Minister cannot retain a general section like that which is going to work ineffectively.
That is a thing that the section is not going to do. We are not fixing a statutory limit.
If you are not fixing a statutory limit then you are not doing anything. What is the reasonable amount to allow for a funeral? How are you to make a comparison between two districts or between a city and a town or rural parish? The funeral expenses in the ordinary rural parts of Ireland would not be half what they would be in the City of Dublin, where the relatives would have to purchase a grave, say, in Glasnevin. I would not like to see a section going into this Bill that could not be worked. My principal objection is that it will not be effective.
On this sub-section (2) of section 45 I think I might refer to the Act of 1923. I do not think the Minister was correctly advised when he said there was a corresponding provision to this in the 1923 Act. I do not think such a provision exists at all in that Act. Having searched through that Act for a corresponding provision I came to the conclusion that there could not be such a provision having regard to the words in section 3 in the Act of 1923 which says: "Amongst the purposes for which collecting societies and industrial assurance companies may issue policies of assurance there shall be included insuring money to be paid for the funeral expenses of a parent, child, grandparent, grandchild, brother or sister, and the issuing of such policies shall be treated as part of the industrial assurance business of the society or company." That is the English industrial assurance Act of 1923. There is nothing there about "reasonable" funeral expenses such as is stated in section 45, so that it is quite clear that the Act of 1923 does not contemplate, so far as I have been able to ascertain, any such provision as is contained in sub-section 2 of section 45. I would be glad if the Minister would give me any reference to such a provision. I do not see how Section 3 could be said to contain such a provision. The point made by Deputy Morrissey is a point that also occurred to me— that is that it will not work. There is no standard set down in the Bill as to what reasonable expenses are, and there is no tribunal stated for fixing them, nor is there any machinery by which the matter can be brought to court. I would like if the Minister would tell us if the Act of 1923 deals with that.
We are framing our legislation in the position that we have been able to benefit by the experience of Great Britain during the time while the 1923 Act was in operation there for over ten years. That is why we inserted the words "reasonable provision" relative to this matter. We here are in the position that we can have regard to the interpretation put upon the phraseology in the English Act in some places, and we can propose to have legislation here in a manner contrary to the interpretation put upon the 1923 Act. But, in fact, that section 3 of the Industrial Insurance Act of 1923 can be interpreted as if the words "reasonable amount for expenses" had been there in inserted.
I can assume that is so because, having regard to the decisions on the meaning of funeral expenses apart from the law in connection with industrial assurance, the question of construction would be precisely the same. Really it is not a question of what is a reasonable funeral expense that arises at all; it is, what are funeral expenses. I was anxious to find if there was any express provision in the 1923 Act corresponding to sub-section (2), but I take it there is not.
No.
Therefore, sub-section (2) is an entirely new provision. It appears to me not to have been properly thought out—I am not making a reflection on anybody in that respect. It is quite clear, in the first place, that it is not workable, and, secondly, it is wholly unnecessary. It is introducing a grave element of doubt. Nobody knows what it means or how it will work.
Amendment No. 109, by leave, withdrawn.
Mr. Lynch
I move amendment No. 110:—
Before sub-section (3) to insert a new sub-section as follows:—
No industrial assurance company shall issue by or pay on a policy issued under paragraphs (a) or (b) of sub-section (1) of this section any sum exceeding twenty-five pounds when the person on whose life such policy is being effected is 65 years of age or over at the date on which such policy is effected.
The object of the amendment is to make an attempt to stop the gambling that undoubtedly goes on in regard to the insuring of old lives. I think anybody who knows anything about industrial assurance in Dublin knows that what I am saying is perfectly true. There is a good deal of gambling in old lives. The premiums are pretty high and very often the poor people who make the gamble lose pretty considerably, because the life lasts very much longer than was anticipated and they probably have overpaid the value of the policy; in many cases they have paid in premiums very much more than they can get returned when the person does die.
The main objection to the payment of big sums on old lives is this: It is alleged that some of the big companies are prepared to take on for rather large amounts these old lives in order that they may get into that particular house and so collar all the other insurance business to the exclusion of other companies. That is objectionable and it is something we should aim at stopping. The Saorstát companies are very careful, naturally, and they give fairly strict instructions to their agents and collectors not to take on lives over 65 years if they can possibly avoid it. That keeps them out of a good deal of business they might otherwise get. If another insurance company comes in and is prepared to take, not only the old life for a sum of £20 or £25, but also for £50 or £60, they will naturally be able to get the other business in the house, which is often considerable. I think the amendment would be very good, because it would limit a company taking on for an unreasonable amount a person over 65 years.
I can hardly subscribe to all that Deputy Lynch has said in favour of the amendment. What I have been told is somewhat different. With regard to what may be happening in the City of Dublin, I do not know, but I am acquainted with conditions in the country. The amendment sets out "shall issue by or pay on a policy...any sum exceeding twenty-five pounds..." Certain of the bigger companies in recent years have adopted the policy of giving bonuses or a share of the profits of their total business to industrial policy-holders on policies which have been paid up for a certain number of years. In many cases those particular bonuses have been very valuable. I will give a case in point that came under my notice recently. The sum originally insured for at 1/- a week was £19 16s. The policy had been paid on for a very long number of years. While the face value of the policy was £19 16s. Od., when the claim came to be paid the person received £25 5s. Od. That seems to me to be a case that would possibly be ruled out by this amendment.
I am glad to hear—I hope it is quite true—that the Irish offices are not trying to get business with people beyond 65 years. Like my friend Deputy Murphy, I question it very much; if that is so, it is only very recently it has happened. I was also surprised to hear that the big companies were anxious to take people up to any age, even 80 years. I know the policy of some of the larger companies years ago was that they would not take them even below 65 without a medical examination. I think it is desirable, if it can be provided for, that there will not be gambling in the lives of people who have reached an advanced age. I suggest to Deputy Lynch that there is a danger that his amendment would deprive certain policy-holders of the fairly substantial bonuses paid by certain companies on policies taken out some years ago.
What we are proposing in the Bill is that no industrial assurance company shall insure or pay on a policy issued on the death of any person any sum exceeding a reasonable amount for expenses in connection with the death and funeral of such person. It is impossible and undesirable, in our opinion, to have a specific limitation in respect of any class of persons. The circumstances in any particular case will determine what are reasonable expenses in connection with the death and the funeral. The amount paid under the policy is limited in that way rather than in the manner suggested by the Deputy. The Deputy suggests that in one class of case there should be a maximum of £25, and in relation to other classes you could have, if it were thought desirable, some statutory limit. In our opinion it is better not have a statutory limit. We use instead the words "a reasonable amount," leaving a reasonable amount for expenses in connection with the death and funeral, leaving what is a reasonable amount to be determined in relation to the particular circumstances of individual cases.
Amendment No. 110, by leave, withdrawn.
As regards amendment 108, perhaps the Minister will explain the point that was referred to?
I take it that Deputy Dockrell's point is that there appears at the moment a certain conflict between sub-section (3) and Section 46?
Yes.
In so far as there should be any such conflict, I will arrange to have the drafting of the Bill revised so as to eliminate it. It is proposed to permit, as provided for in Section 46, assurance on lives of children under the age of ten years.
It will be necessary to put in an enabling clause to permit the assurance of children under ten.
It is only implied at the moment.
It would be almost impossible to imply it from Section 46.
On the section, I desire to direct the attention of the Minister to the fact that when coming to examine this question of whether an insurance company will be put under the obligation of deciding for itself what is a reasonable sum, reference should be made to the evidence of the Commissioner of Industrial Assurance in Great Britain before the Cohen Committee, where, speaking from an experience of 30 years as Registrar of Friendly Societies and as the Commissioner of Industrial Insurance in Great Britain, he gave it as his view that to define reasonable expenses was impossible. It was a task that he himself would not undertake to afford a committee any guidance whatever on in devising a form of words which would serve as a reliable guide to anyone who was solicitous to keep within the law. In the light of that evidence, I suggest to the Minister that we should eliminate the words from our Bill. If the Minister makes up his mind that some limitation must be put in, let him take an average figure and put in a fixed limit beyond which the funeral expenses in an insurance policy may not go, but to leave in the Bill an ambiguity of this kind which so authoritative a person as the Commissioner of Industrial Insurance in Great Britain has disowned after careful reflection, would, I think, create in this country a very undesirable and unreasonable situation.
I wish to press upon the Minister the desirability of reconsidering the word "reasonable" in this entire section. I confess that, until I considered the section to-day, I had not really adverted to the full significance of that word "unreasonable." Now, what the courts have in other contexts, and in other connections, determined is the meaning of the words "funeral expenses." The question arose whether a tombstone could be a funeral expenses and, incidentally, the courts held that it was not, but a certain judge then occupying the position of a republican judge in this country held that it would. The point is: what is to be construed by the courts as the meaning of the words "funeral expenses"; whether, for instance, the mourning that is worn by the relatives of the dead persons can be held to come within the definition of "funeral expenses." I think it could not in strictness. It is quite obvious that poor people habitually insure their relatives in respect of the expenses that they will be put to on their deaths. They undoubtedly envisage the expenditure of that money on something which would not be construed by the courts as reasonable funeral expenses or as funeral expenses at all. Anybody who knows, and I am sure the Minister knows it as well as I do, if not better, the City of Dublin is aware that the one thing that the poor people here are keenest upon is a decent funeral. It is a matter of pride with them that they should give a decent burial to their dead. It is a matter of considerable expense to poor people when a death occurs to a member of the family. In the ordinary legal acceptation of the term, the words "funeral expenses" would merely mean for them the coffin, the shroud, the hearse and perhaps one mourning coach, and a court giving a construction to the words "funeral expenses"——
It is not reasonable funeral expenses. It is reasonable expenses in connection with the death and funeral.
The question is, will you leave over for the courts to determine whether that only means funeral expenses? I think it might be capable of excluding a vast variety of things. On the other hand, it is never very easy to anticipate what a court will determine. I think we are all agreed on that what is wanted in a section of this kind is something that will cover what the poor people want when they enter into an insurance policy. Now, they want a number of things that would not, I think, be held by the court to be reasonable funeral expenses, or even to be expenses that would be incurred in connection with a death. Possibly, those words would include the purchase of mourning, but there are other expenses to which those people are put, and necessarily put, in connection with a death, such as the entertainment of relations, travelling and other things. A death always causes considerable expense.
The decision that the Minister referred to when he said that this phrase had been construed in England to mean reasonable funeral expenses was probably the decision which held that a policy for the funeral expenses of a relative was a policy of indemnity— that all that could be got was funeral expenses, and that incidental expenses could not be recovered. In the Cohen Report, that is not the sort of thing that is intended to be covered by such a policy, or what in practice collecting societies or industrial insurance companies, in fact, cover by their policies, and a recommendation is made on somewhat different lines from what is contained in this Bill. It is stated in Section 3 of the Cohen Report:
"The policies have, since the passing of the 1909 Act, been issued on the basis that that Act gave the specified range of relatives an insurable interest in each other's lives up to any amount which would be considered reasonable, not for the expenses of the funeral, but for incidental expenses incurred by relatives in connection with the death and funeral. The offices themselves settled on different amounts which in some cases were fixed for all relatives and in others varied with the degree of relationship of proposer to life assured. In our opinion there is a real demand for a policy to cover the expenses to which relatives may be put in connection with deaths in the family, such as mourning, travelling to the funeral or to see the dying person, or to help in paying for the funeral, or for other expenses connected with the death."
They make a recommendation that there should be a statutory insurable interest conferred in the life of the person insured for a sum payable on death not exceeding, I think, £20. Now, I think that the addition of the words here, in connection with a death, will only give rise to legal proceedings of one kind or another, and that nobody can foretell what construction will be put upon those words by the courts. At the present time we have the matter in our own hands, and therefore why not follow the recommendation of the Cohen Report? I would ask the Minister to drop the words "reasonable expenses," or at all events to try and get the draftsman to devise some words which will give sufficient elasticity to the companies to enable them to cover the vast variety of little petty expenses that poor people are necessarily put to in order to give their dead a decent burial.
I would like to support the suggestion that has been made to the Minister that the retention of this phrase, "reasonable funeral expenses," ought to be re-considered. If it is to be retained, I think it will certainly be necessary if the section is to be clear, and if sub-section (2) is not omitted altogether, that it should be seriously revised. The Minister said, I think, that the reasonableness of the amount was to be judged at the time the policy was issued. That is quite satisfactory so far as sub-section (1) of section 45 is concerned, because under that sub-section it is provided that amongst the purposes for which a policy may be issued, is "the insuring of money to be paid for the reasonable expenses in connection with the death and funeral, etc." That is quite clear, but when you come to read sub-section (2) the words "insure or pay" are put dis-junctively, so that if we read the material words, for the purpose of the point that I am making at the moment, it will be clear, I think, that the reasonableness must be determined when the moneys come to be paid. By doing that this sub-section would read, "no industrial assurance company shall pay on a policy issued under paragraph (b) ... any sum exceeding a reasonable amount for expenses ..." Accordingly, even if the sum were deemed to be reasonable at the time the policy was issued and, if the case put up by Deputy Dillon occurred and the insured person was lost at sea, the insurance company would be flying in the face of this section, as it stands, if it paid any sum whatever. I think, on re-consideration, it will be agreed that so long as the words "insure or pay" remain as they are at present, the insurance company is forbidden, first, to insure for a sum exceeding a reasonable amount for funeral expenses and, secondly, if it has done so, to pay a sum exceeding the amount which turns out to be reasonable.
There may be some ambiguity concerning the actual wording of sub-section (2). I would be disposed to retain the idea of not fixing a statutory limitation upon the amount which may be insured for. There are many reasons why any statutory limit you might determine upon might prove to be unsatisfactory in quite a number of cases. It has been, in fact, emphasised by some speakers that the circumstances of individual cases vary considerably, and the amount which might meet the reasonable expenses incurred in connection with the death and funeral of a person in one part of the country, or in one period of the year, might be very different from the amount required in another case, where the circumstances were altogether different. The two points concerning which the drafting of the section has been questioned are, first, the use of the words "shall insure or pay," bringing forward, as it does, the question of the time at which the amount is to be determined, and secondly the question of the actual amount to be covered, namely, what in fact constitutes reasonable expenses in connection with the death and funeral of a person, because I think that the amount should certainly cover expenses incurred in connection with the illness of the person preceding the death, if there was such illness.
In any event, I think it is desirable that the policy should not be merely an indemnity policy, that it should provide for payments arising in that eventuality, the one purpose we have in view in limiting it being to ensure that unreasonable amounts would not be insured for. I will certainly have the wording of the section looked into, but on the general question of principle which has arisen, namely, whether we should have an indeterminate amount or a statutory limit, my feeling is very definitely in favour of the indeterminate amount.
Before the Minister commits himself to adherence to that principle, I should like to urge one or two further considerations. It occurs to me that, under the proposals as they stand, or that the Minister is inclined to adhere to, neither the insured person nor the companies insuring will know precisely the amount of the policy.
If the amount is in fact determined at the time the policy is issued, that difficulty does not arise.
Firstly, there is nothing in the section to determine that. Secondly, it would be quite impossible to determine at the date of making the policy what expenses the person insuring would be put to when the death arises on which the payment is to be made on foot of the policy. If I insure against the death of my mother, I do not know what expenses I would be put to if she dies in ten years' time. It would be utterly impossible for the person insuring or for the company to say ten years ahead what expense they would be put to ten years hence in connection with the death of the person insured or with the funeral expenses. I think that this section as it stands puts both the policy-holder and the companies in an absolutely impossible position. It will, in effect, render the whole system quite unworkable. In the interest of the policy-holders, those poor people who rely so very much on these policies for funeral expenses, the Minister ought to give the matter some further consideration with a view to seeing if some scheme could be devised. I do not advocate the system of a specified amount which was suggested by the Cohen Committee as, perhaps, a rule-of-thumb method. If, as the Minister says, the expenses of burial vary from country to country and from county to county, and even from family to family, how will it be possible for any company or proposed policy-holder to determine what amount is going to be paid on foot of the policy? It would be quite impossible.
I am rather inclined to the fixed sum for these reasons. The primary purpose of the section, as the Minister pointed out, is to prevent insurance companies thrusting on poor people an insurance policy in excess of what they will ordinarily require. The picture we foresee is an agent coming in and putting £10 or £15 on to the sum originally named by the proposer and persuading him to accept that. If we fix a limit, it may be that in certain cases that will prevent the proposer taking out a policy large enough to meet what he anticipates will be his requirements, but in that event he can take out two policies, one to the maximum amount with the first company and another policy for as much more as he thinks necessary with another company. Therefore that difficulty would be got over.
If the Minister leaves in the word "reasonable" and the principle underlying that expression, as far as I can see the only way in which the proper sum can ever be determined will be by reference to the courts, and that reference will have to be made, as the Bill stands at present, in a very roundabout way, and, having been made, will be of very little value, because each decision would be an ad hoc decision to each given case, as the circumstances of no two people would be identical, and therefore you will never get any rule of thumb. I am in favour of certainty, and I feel, so long as we are satisfied that our principal purpose in the section is to restrict insurance companies, that we may safely fix a maximum sum and set out in the statute that insurance policies for this purpose may be effected for any sum not in excess of £20. If that is done, I believe it will satisfy everybody and prevent any hardship arising out of the Bill hereafter.
I have indicated that I am not very willing to accept that point of view. I have agreed to have the wording of sub-section (2) reviewed, because changes may be necessary there to make clear what was intended. But any consideration I have given to the matter convinces me that it is not desirable to have a fixed maximum sum.
Has the Minister considered the evidence of the Commissioner of Industrial Assurance in Great Britain?
I have considered all the relevant information I could get.
Perhaps between this and the next stage the Minister will look into this evidence afresh in the light of what we have laid before him to-day.
Question put and agreed to.
SECTION 46.
(1) Subject to the provisions of this section, it shall not be lawful for an industrial assurance company to pay or undertake liability, by the issue of a policy or otherwise, to pay on the death of a child, under the age of ten years, any sum of money which, when added to the amount or the aggregate of the several amounts payable on the death of such child by another or other industrial assurance company or companies, exclusive of bonus or free paid-up policies, exceeds—
(a) if such child dies under the age of three years, the sum of six pounds, or
(b) if such child dies aged three years or more but less than six years, the sum of ten pounds, or
(c) if such child dies aged six years or more but less than ten years, the sum of fifteen pounds.
I move amendment No. 111:—
In sub-section (1), line 34, after the word "company" to insert the word "knowingly".
This raises the question again of a company acting with mens rea in slightly different circumstances from those referred to in amendment No. 109. I should be gald to know if, in the special circumstances set out in Section 46, the Minister would be prepared to insert the words “wilfully or negligently”.
I think this is just precisely the type of section into which the words should not go. Under this section it will be possible to prove the commission of an offence, but it would be impossible to prove that the offence was committed knowingly. Having regard to the provisions of the section, I think it should be sufficient to prove that the offence has been committed.
Suppose there is the case of a parent who produces a forged birth certificate?
The question of false statements is dealt with in another section.
The offence set out in Section 46 is to issue an industrial assurance policy on the life of a child under ten years of age. Suppose a parent has two children, one of whom is 11 years and the other eight or nine years, and he brings in the birth certificate of the 11-year-old child, but, in fact, insures the younger child and succeeds in defrauding the company in that way?
We say in this Bill that the question of the age of a person whose life is insured must be fixed when the policy is issued and that, if fixed, it cannot subsequently be questioned. Provisions are made in other sections to deal with that.
I have no objection to that, but at any rate we will deal with that question on its merits when it arises as to whether a policy shall be valid or whether it would be better to wipe it out of existence altogether. That is quite another story, but here we are making it an offence for which the Minister could withdraw the licence of the insurance company.
Oh, no.
It shall not be lawful for an insurance company to issue a policy of this kind. My submission is that we ought to say that it shall not be lawful for an insurance company wilfully or negligently to issue a policy of this kind. If the insurance company is successfully deceived, they will have committed a breach of this Act, and any company which commits a breach of this or the 1909 Act is liable to have its licence withdrawn.
What defence a company may bring forward is entirely a matter for itself, but if you put on the State the obligation of proving not merely that the person committed the offence, but committed the offence knowingly, wilfully or through negligence, it is an impossible burden Proof of that could not be found at all. The only thing we can prove is that the offence was committed.
Surely if an offence has been committed it is prima facie evidence that the person committed it wilfully or negligently, and it is for the person who stands convicted of having committed the offence to rebut the prima facie evidence of guilt by pleading that he took every reasonable precaution to avoid committing the offence, and that, in so far as he committed it, it was the result of an unavoidable accident.
That is not what the Deputy seeks by his amendment. He wants to make it an offence only if the thing were done knowingly. It should be an offence if done at all.
That is the whole point. I want the insurance company to be in a position to say: "Admittedly what has happened is not in accordance with the law. If we consented to that at any time, we would have committed a breach of the law. Our defence is that we have never consented to it and we took every precaution to provide that such a thing should not happen. The fact that it did happen was an unavoidable accident and we admit freely that unless we satisfy the court that the thing was an unavoidable accident which no reasonable person could have foreseen, we stand convicted of an offence under this Act." If, however, they do prove that no reasonable person could possibly avoid this occurrence, I say it is a hardship to provide that they would have committed an offence which renders them liable to have their licence taken from them.
I would not agree. I think that there is less case for the insertion of the words in this section than in any other section. It is much clearer. The possibility of the offence being committed through inadvertence is much less in relation to this section than any other.
I feel that, wherever that probability exists, provision should be made for it.
Amendment, by leave, withdrawn.
I move amendment No. 112:—
Before sub-section (4) (f), to insert a new paragraph as follows:—
Such registrar of deaths shall not issue any such certificate unless there has been produced to such registrar satisfactory evidence of the age of such deceased child."
The object of this is to ensure that in the case of children there should be some evidence of age given to the registrar of births before the issuing of a certificate, because I understand there is a tendency to pretend that children are a greater age than they are in order that they may qualify for greater benefits.
The Deputy's amendment is inconsistent with one of the main provisions of the Bill and on that account, I think, must be rejected. A great proportion of the disputes between industrial assurance companies and their clients arise on the question of the correct age of the assured person, and under Section 59 we are proposing to remedy this by having the question of the correct age of the assured person determined when the policy is issued and not when payment of the sum assured is claimed. It is clearly necessary to have a provision of that kind in the Bill and, if that provision is inserted, the Deputy's amendment is inconsistent with it and I think it is very desirable that the principle of Section 59 should stand.
Amendment, by leave, withdrawn.
Question proposed: "That Section 46 stand part of the Bill."
Might I direct the attention of the Minister to a strange anachronism? He declines to insert the word "knowingly," suggested by me, in amendment No. 111 on the ground that the difficulty of proof would make the section inoperative, but the sanctions attaching to Section 46 are set out in Section 99. If a company were convicted of an offence under Section 46, Section 99 would apply, and sub-section (2) of that section says:
"Where an assurance company has committed an offence under this section, every director, manager, secretary, or other officer of such company who is knowingly a party to the commission of such offence by such company, shall himself be guilty of an offence ..."
The company can commit an offence unknowingly, but an officer or any officer of the company must have knowledge of the offence before he can be made liable for it, so that we have the extraordinary situation in which a director or an officer of the company comes forward and says, "Yes, I issued the policy and authorised payment of that policy," and the company is thereupon convicted of an offence under the Act, while the person who actually did the thing is not guilty of an offence.
Oh, no. The circumstances are different.
An officer of the company comes forward and says, "I issued the policy believing the child to be 11 years of age, and when the time came to pay out, I paid out believing the child was 11 years of age at the time the insurance was effected, and I took every reasonable precaution to ensure that that was so." That officer stands acquitted under Section 99 (2), but then a charge is brought against the company for that, acting through their officer A.B., who has been acquitted of this offence, they did issue a policy and pay out on that policy in respect of a child of less than 10 years of age, and the company is found guilty.
The company is found guilty first.
Whether you find the company guilty first or second does not seem——
First of all, it is determined that an offence has been committed, and then we go on to say that every officer of the company who knowingly participated in the commission of that proven offence is also guilty of an offence. If the Deputy goes back to Section 38, he will find that in somewhat similar circumstances I put in "knowingly and wilfully." The circumstances are obviously different.
The Minister will remember that the part cannot be greater than the whole; and if you are going to judge the whole company to have been guilty of an offence, it seems to me to be extraordinary to pick out bits of the company and, having found that infinitesimal part of the company which is peculiarly guilty—the actual officer of the company who perpetrated the offence for which the whole company is made liable—having found the actual offending party within the company, to solemnly acquit him of any offence and find the whole company guilty of the offence of which you yourself say it would be unfair to convict the officer who is himself responsible. You may say that that is good from the point of view of expediency, but it is very strange law.
It would be very strange law if you had to put in the word "knowingly" in all cases of offences of the kind.
Did I understand the Minister to say, in reply to another Deputy, that Section 46 would be reconsidered with a view to making a positive enactment authorising insurances of this limited type on children under ten years of age?
That is so.
Because all the section does, as it stands, is to create two offences.
Obviously, there is some amendment required because sub-section (5) of Section 45 and the implication in Section 46 appear to be in conflict, and it is intended to remedy that.
Question put and agreed to.
Section 47 agreed to.
SECTION 48.
(3) Every collector of, and every person employed by, an industrial assurance company who assists in effecting a policy of industrial assurance which is illegal orultra vires such company shall, unless he proves that he did not know and could not reasonably have known that such policy was illegal or ultra vires such company, be guilty of an offence under this sub-section and shall be liable on summary conviction thereof to a fine not exceeding five pounds.
I move amendment No. 113:—
At the end of sub-section (3) to add at the end the words "or imprisonment not exceeding six months or to both such fine and imprisonment."
It occurs to me here, Sir, that a very great evil—one of the very great evils of this whole industrial assurance business—was the issuing of policies which the companies and their agents knew to be invalid policies. It is that practice that has given rise to most of the reforming legislation which has been enacted in regard to industrial insurance. Now, this sub-section (3) makes it very clear that, before any person can be convicted, he must know that he was acting illegally or ultra vires, and accordingly I thought it right to point out that, where a person knowingly and wilfully goes out and breaks the law, there ought to be power in the court to commit him to prison if the circumstances of the case would justify such a course being adopted. If you had a collector who had come up several times as having attempted to perpetrate frauds of this character on poor people, I think a case might be made in certain circumstances for sending him to jail, and where the law is perfectly clear, and where a person cannot be found guilty unless it can be proved that he went out with the deliberate intention of breaking the law, I can see no objection to placing within the discretion of the court the right to commit that person to jail.
The only question that arises here, of course, is whether the penalty provided for in sub-section (3) is sufficient. I think that a penalty of £5 is sufficient, and that the added penalties, which the Deputy suggests, are not really required. It is a matter upon which I have no very definite conviction, but I should be indisposed to increase the penalty in the manner suggested by the Deputy.
I do not wish to waste the time of the House but I suggest that where you have a possibility of a recurring offence, and a man coming up before the court constantly, you ought to be in a position definitely to call a halt somewhere. It is not necessary to emphasise that there is no suggestion that imprisonment should be regularly employed, but I have a feeling that such a discretion ought to be left in the hands of the court. However, I shall withdraw the amendment, and perhaps the Minister, between this and the Report Stage, will consider my suggestion and, if it commends itself to him, produce a similar amendment.
It might be possible to provide for a higher penalty in the event of a subsequent offence.
Yes, on a kind of graduating scale.
Yes, where there had been recurring offences.
Quite.
Amendment No. 113, by leave, withdrawn.
Amendment No. 114 not moved.
I move amendment No. 115:—
At the end of the section to add a new sub-section as follows:—
Any person who knowingly gives false information of material fact to an agent or to an assurance company so as to mislead the assurance company into effecting a policy of assurance which is illegal or ultra vires such company, shall be guilty of an offence under this sub-section and shall be liable on summary conviction to a fine not exceeding ten pounds.
The object of this amendment is obvious. It is to put the ordinary person, who walks the insurance company into committing an offence of this kind, in the position also that there should be some punishment for him. It seems unreasonable to impose a penalty on the insurance company for issuing a policy which is illegal or ultra vires and to make no provision for the person who, giving them false information, walks them into that position. I think that perhaps the penalty of £10 is rather high and that a much smaller sum would do, but I think there should be some penalty on persons who, by giving false information to the company or its agents, induces the company to enter into a policy of insurance which is illegal or ultra vires.
If a person knowingly gives false information with a view to obtaining a contract from an insurance company, I suggest that there are sufficient means under the existing laws to enable him to be dealt with, and I do not think it is necessary to have it here.
I think the Minister is mistaken in that. There is no criminal offence there so far as I know. I should like to know what pigeon-hole you would put that offence into. The Minister might draft an indictment, of course, but it might be quashed.
Well, if I find that a person could not be rendered subject to some penalty for giving that false information, I shall consider whether an amendment on these lines cannot be drafted between this and the Report Stage.
I may tell the Minister that I am more keen on this amendment than on the amendment with regard to false information in regard to age.
Amendment No. 115, by leave, withdrawn.
Question proposed: "That Section 48 stand part of the Bill."
Mr. Bourke
On that section, Sir, I just want to ask the Minister why, in sub-section (2), lines 29 and 30, the Minister is satisfied with the cash surrender value of the policy and, further down, insists on a refund of premium. I think that the cash surrender value of the policy should be sufficient in both cases. I think that the other is an unfair penalisation of the company, and I should like the Minister to state his reasons for making the distinction.
I think it is clear that there should be different provisions to deal with the circumstances in which the policy was effected before the commencement of this Part of the Act, and the circumstances in which the policy was issued after the commencement of this Part of the Act. I do not know on what ground the Deputy suggests that the circumstances in both cases are the same.
Mr. Bourke
They are not quite the same, I admit, but I do not see why the company should be penalised.
Question put and agreed to.
SECTION 49.
Question proposed: "That Section 49 stand part of the Bill."
Is there any provision in regard to the separation of industrial funds from ordinary branch life funds?
Yes, on the miscellaneous section.
A question will arise as to the correctness of the terminology employed.
It does not arise on this section.
It refers to life insurance funds and life insurance business. Paragraph (b) reads:—
Where any expenses of management, or any interest or dividend from investments, or any sums on account of depreciation of securities are apportioned between the industrial assurance business and the life assurance business (if any) carried on by an industrial assurance company, the auditor of such company shall, when auditing the accounts thereof, include in his report on such accounts a special report as to the propriety or otherwise of such apportionment, and
The Deputy is referring now to the effect of Section 49. This section provides that there should be a separate fund and separate returns in respect of industrial assurance. If that is the matter the Deputy wants to raise he could do so on this section.
The point I want to make in regard to that is dealt with in Section 96, which deals with the separation of the industrial fund from the life insurance fund. Sub-section (3) reads:
Where an assurance company carries on both life assurance business and industrial assurance business such assurance company shall be under no obligation to keep the assets of its life assurance funds separate from the assets of its industrial assurance funds.
I gather from the general context of the Bill that the effect of the sub-section is to provide that the securities contained in these two funds need not be categorically separated. Is not the word "assets" liable to misinterpretation there? Have not cases arisen in Great Britain in which serious doubt was thrown on the propriety of the word "assets" in that connection? My information is that at a conference of some leading actuaries in London it was suggested that if the word "assets" used in that connection was tested it might very reasonably be held that the sub-section deliberately excluded a company from keeping the assets of the two funds apart, and that that would be the excuse for not maintaining them separately. If these experts are correct in their view, then the effect of the sub-section would be completely to negative Section 49 which we are considering. I am not in a position to say whether the matter has ever been decided in the English courts, or if it has ever been decided here. It is a matter the Minister might look into between this and the Report Stage.
I do not get the Deputy's point. We are providing that separate funds will be maintained, but securities representing the assets of industrial and ordinary life funds have not to be kept separate.
That is, they would be mixed.
We propose to have separate funds and separate returns.
I am informed that there are analogous provisions in the Acts of 1909 and 1923 and that that question has arisen in Great Britain, where the view has been taken in well informed quarters that the form of words used in Section 96 (3) might, if tested, be held as virtually negativing the purpose which Section 49 is intended to serve, that is, the absolute separation of industrial funds from life funds.
I will look into the matter. I do not know how it could arise. If there is any decision or anything which would tend to support the Deputy's fears, I will look into it.
The words could be made more explicit.
Question put and agreed to.
Amendment No. 116 not moved.
Section 50 agreed to.
SECTION 51.
Question proposed: "That Section 51 stand part of the Bill."
This section confers upon the Minister the right to reject a valuation. I take it the section has in mind quinquennial valuations to ascertain what the actuarial position of the company is at the end of any quinquennial period. In the event of the Minister contemplating an objection of this kind, would it be on the advice of his own officials contemplating some such facts as the insurance company's actuaries had under consideration, or would the Minister require to say that the alleged actuaries, acting for the company, had not considered certain facts which they ought to have considered?
The circumstances are set out in sub-section (1):—
(1) Whenever the Minister is satisfied that the provisions of this Part of this Act in relation to any industrial assurance valuation have not been complied with, or that the industrial assurance fund of any industrial assurance company as stated in a valuation balance sheet of such company is greater than the value of the assets available for the liabilities of such fund, due regard being had to the other liabilities of such company and to the said provisions of this Part of this Act, the Minister may, subject to the provisions of the next following sub-section of this section, reject such valuation and may, subject as aforesaid, direct such company to make such alterations therein as may be necessary to secure compliance with the said provisions.
Any Minister will have advice on these matters. It is the Minister takes the decision, namely that the provisions of the Act have not been complied with, or that, in fact, the assets available to the company are less than the fund, having regard to the other liabilities of the company, in which case he rejects the valuation and then it will come into operation.
It would be open to the Minister to reject a valuation if his estimate of the realisable value of the stocks or shares held in the balance sheet differed from that of the insurance company?
Yes.
Question put and agreed to.
Mr. Lynch
I move amendment No. 117:
Before Section 53 to insert a new section as follows:—
Every foreign assurance company carrying on assurance business in Saorstát Eireann shall within two years after the commencement of this Act compile and maintain a complete record including copies of all original proposals in force prior to the passing of this Act and all original proposals effected subsequently to the passing of this Act at the registered office of such company in Saorstát Eireann and such record shall be available for valuation or other purposes.
The object of the amendment is obvious on the face of it. I think there would be some advantage in having such records maintained here, say, in case of a dispute arising between the company and the policy holders or if the Minister wanted to carry out an inspection of the business carried on by the company. I think it would be useful from all these points of view if the companies were obliged to keep those records.
I do not know what advantage would be gained by the adoption of the amendment. I cannot see that the maintenance of these records by foreign companies would serve any useful purpose. It would, undoubtedly, increase the costs for companies doing business in this country, and possibly on that account would reduce their profits or possibly increase the cost of insuring with them to the public. Apart from the fact that it would entail some additional expense for these insurance companies, I cannot see any good reason for requiring them to keep records or what value the records would be, if kept.
Amendment, by leave, withdrawn.
SECTION 53.
Notwithstanding anything contained in Section 5 of the Act of 1909, the first industrial assurance valuation of an industrial assurance company shall be made within two years after the commencement of this Part of this Act or within such longer period after such commencement as the Minister shall in any particular case appoint.
I move amendment No. 118:—
In page 32 to delete all from and including the word "within" in line 4 to the word "appoint" in line 6, and substitute the words "at the end of five years from the date of the last valuation of such industrial assurance company whichever is the longer".
This amendment explains itself. The usual practice of life assurance companies is to conduct their valuations on a quinquennial basis. A valuation is a pretty extensive operation to carry through. Some companies will have had their quinquennial valuation in 1934, others in 1935, and others in 1936. It is suggested in the amendment that instead of the period of two years, or such longer period as the Minister appoints, a definite undertaking would be given that where the quinquennial valuation will come up in the ordinary way, it should be accepted, and so avoid putting the insurance companies to the expense of having an intermediate valuation such as is suggested in this section.
A period of five years might be too long to wait for the valuation of a company. The section provides that the valuation shall take place within two years after the commencement of the Act, but that period may be extended by the Minister. I would prefer to leave the section as it stands rather than accept the longer period suggested by the Deputy. If there is good reason for extending the period, an extension will be granted.
May I take it that it the Minister is approached by a company which he has every reason to know is solvent and properly run, and he is asked to allow the valuation to stand over until the usual quinquennial valuation is being made, he would ordinarily give the company permission to hold over the valuation until then?
If there is any good reason for doing so, an extension will be granted.
Amendment, by leave, withdrawn.
Sections 53 to 55, inclusive, ordered to stand part of the Bill.
Amendment 119 not moved.
SECTION 56.
(5) 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 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
I move amendment No. 120:—
To delete sub-section 5 (a).
This amendment is designed to delete sub-section (5) (a), which is the section which aims at binding insurance companies by policies which have been filled in by their own agents. It appears that in a desire to remedy one abuse we are being tempted to go too far in the other direction. While on the face of it, it appears that if the agent of a company fills up a proposal form and then simply presents it to a person of modest education for his signature and tells him it will be all right, the company should be bound by that, in practice we find that the vast majority of industrial assurance forms would be filled up by the agent because people have a notorious horror of going through the intricacies of proposal forms or anything of that kind. Where an agent is acting in perfect good faith, determined to put down nothing but what he is actually told by the proposer, and where he does in fact put down nothing but what the proposer tells him, it seems to me a hardship that the company should be bound by what was a studied fraud on the part of the proposer. I freely admit that some remedy is necessary for the existing situation, but I do not think that we should go as far as to say that where the proposal has been filled in in the handwriting of the agent, we should preclude all question arising thereafter as to whether the proposer was not himself really the agent of the fraud rather than the agent of the company.
There is no doubt that the practice of proposal forms being filled in by the agent of the company lends itself to many abuses. If this provision in the Bill should operate to induce companies to give explicit instructions to their agents that under no circumstances should they fill in the proposal form, well and good, but I think it is only reasonable and fair that if, in fact, the proposal is wholly filled in by the agent, the company should not be able to question it and should take responsibility for all matters contained in it. They should not be able to question the proposal afterwards. I think that is a fair provision, and one that will be accepted by the ordinary public. It is designed to abolish a practice which lends itself to abuse, and which the provisions of this section will discourage in future.
Let me make an analogy. We frequently come across cases in criminal law where it is highly desirable to inflict the most stringent penalties for certain offences, but, as against that, it is pointed out that to do so would be to put a premium on blackmail. Instead of checking crime by inflicting these heavy penalties, you increase the liability to blackmail. My submission in this case is that if you go too far to remedy the existing abuses, you may create an even worse abuse. That is, you may fix people with notice that if you can persuade an agent to write a proposal for you, you can tell him anything, and if you can get away with it, it is all to the good. Once you get the form signed, you are all right if you can only persuade him to write the answers. Surely the Minister knows that in places like Dublin the people are quick to "twig" openings of this kind. Eighty-five per cent. of the people would be prepared to play fair, but there may be 10 or 15 per cent. who will attempt to make a business out of trying to get agents to write the proposal form and then try to mulct the companies on the basis of what they themselves know to be fraudulent representations. The Minister knows as well as I do that the "chancer" and the "chisler" will always try to set a trap for the inexperienced assistant in business. If the "chancer" wants to avail of this section to carry out a fraud, he will look out for the young agent who is just starting on his career, and he will prevail on him to write out the proposal form in extenso, incorporating in it some fraudulent misrepresentation and binding the insurance company thereby. That seems to me to be manifestly unjust and, what is worse, to be a fruitful source of grave abuse and fraud. This section consists of seven sub-sections and is pretty complex. I am not prepared, therefore, at the moment to make a suggestion to remedy this evil, but I do suggest that the remedy here devised requires reconsideration and revision.
The concrete suggestion Deputy Dillon is looking for is, I think, to be found in the analogous provisions of the Industrial Assurance Act, 1923. In Section 20 (4) of the Act of 1923 the very evil that Deputy Dillon is endeavouring to guard against is covered by the words "except where a fraudulent statement in some material particular has been made by the proposer." If these words were inserted in this section, Deputy Dillon's point would, I think, be met. So far as I know, no exception has been taken to the working of sub-section (4) of Section 20 of the Act of 1923.
I am disposed to think that that section is more stringent than this section. The relevant provision of the 1923 Act has, so far as I know, worked quite satisfactorily, and, on that account, I do not see that there is any ground for complaint against this section.
The section in this Bill differs from the section in the Act of 1923. In the Act of 1923 the words are, "if the proposal form for an assurance policy is filled in wholly or partly"——
There is nothing in this provision about "partly."
The next sub-section deals with that. All the new sub-section does is to split the section of the British Act into two sub-sections, in accordance with the practice of the Parliamentary draftsman's office, with which I happen to be familiar. The Act says: "If a proposal form for an industrial assurance policy is filled in wholly or partly by a person employed by a society or company, the society or company shall not, except where a fraudulent statement in some material particular has been made by the proposer, be entitled to question the validity of the policy."
No matter by whom the mistake in the proposal form has been made.
An exception is made, in favour of the companies if you like, where a fraudulent statement has been made by the proposer in some material particular. That is what Deputy Dillon wants to deal with. Where the proposer makes to the agent who fills the form a fraudulent statement, surely that person ought not to be entitled to take advantage of his own fraud merely because the agent acted as a piece of machinery for registering a particular application which was, in fact, based on fraud. Surely the Minister must see that the omission of the words to which I have referred makes a very serious difference between the present provision and the provision in the Act of 1923. There should not be any objection to the insertion of the sentence to which I have referred in order to prevent the proposer from taking advantage of his own fraud. This House should not stand for anybody getting away with fraud.
I think that the safeguard in the sub-section is one of the most valuable safeguards in the whole Bill, and that it would be very dangerous to interfere with it. The provision to cover the rather unlikely contingencies to which reference has been made has not been outlined. There is much more danger of the policy-holder being defrauded than of the company being defrauded. Very often, in legislation of this kind, prolonged attempts are made to cover cases which are unlikely to arise. That occurred in criminal law measures which went through this House and which are in operation now. It is quite obvious that there was unnecessary crippling of powers which should have been contained in these measures. Every day of the week for a number of years, it is evident from proceedings in the courts that the companies have been in collusion in frauds of this kind and that they have driven unfortunate agents to obtain business by every sort of stratagem. In the event of a legal loophole being available to them to avoid meeting their liabilities, they take advantage of it. I think that that is an important danger which should be adequately safeguarded.
Surely the House is not to take it that Deputy Murphy, of the Labour Party, stands for allowing a person to get away with fraud. I do not care whether the person in question be a collector for an insurance company or a policy-holder, if he be guilty of fraud, then we ought not allow him to take advantage of that fraud. The proposal we make is that the safeguards in the Bill should be left there in the interests of the collector and the policy-holder, but that the sentence I have quoted from the British Act of 1923 should also be inserted, so that the proposer should not be entitled to take advantage of his own fraud. If the proposer works a fraud on the agent, then the agent is the person who will suffer. If Deputy Murphy is looking after the interests of the agent, he will, if he gives the matter the slightest consideration or appreciates our point, agree with our proposal.
This provision does not operate if a fraudulent statement in some material respect has been made. It is designed to deal with a case in which a fraudulent statement has not been made by the proposer. The company must not challenge the validity of the policy on the grounds of an error in the statement, written into the proposal form by an agent of the company. If the whole of the form has been filled up by the agent, then the policy must be accepted as valid.
That is what we are objecting to. Why should a man get away with his own fraud merely because the agent fills up the form for him?
To make the section effective, you must make it watertight.
The British section was watertight, according to you.
In order to prevent a practice which leads to abuse, it is provided that, if an agent fills up the whole of the form, the validity of the policy cannot be questioned on the ground that false statements have been made therein——
Fraudulent statements?
Fraudulent statements. It is only where the whole of the proposal form has been filled up by the agent that paragraph (a) operates.
The Minister does not seem to appreciate our objection. If a person proposing to take out a policy works a fraud on an innocent agent, merely because that innocent agent fills up the form, the company is bound by that policy and the man is entitled, and legally enabled by this provision, to take advantage of his own fraud. That is a principle that has appeared for the first time in the legislation of any country, that we are to allow a man to get away with his own fraud. I protest against any such wording being enacted in anybody's favour.
When that section appears in the Act, the company will instruct their agents against the practice of filling up such proposals.
I cannot see why the Minister could not adopt the form in the section of the Act of 1923 which covers the company against the fraud of the proposer, and which does not enable the proposer of the policy to take advantage of his own fraud. I do not see why, in face of these considerations, we should deliberately set ourselves to put in the hands of God knows whom the power to get away with his own fraud.
It is not putting power in the hands of anyone to get away with his own fraud, but it is wiping out the practice which leads to abuse by the companies of allowing their agents to fill in these forms. This sub-section (a) will ensure that the companies will instruct their agents against the continuance of this practice.
We are putting the cloak of legality on a fraudulent practice.
That is not what we are enacting.
You are allowing a person who is earning his living from the company to fill up a form and the company is rendered liable.
We do not allow him to do it. We are giving him warning that if he fills up the form his company cannot, after a lapse of four months, question it.
What I cannot allow, and what I will vote against, is allowing this sub-section to become law and, in fact, giving, through this House, the opportunity and the right to a person to get his fraud legalised.
But we are putting the responsibility on the company.
Mr. Bourke
Will the Minister not consider the difficulties that will be put in the way of an agent insuring the life of an illiterate person? He will be put in the same position as if he were permitted to insure an illiterate person, and then told that that person can defraud the company.
I think the agent should see that the insured person has the assistance of a literate person.
If the Minister wants to do that, let him enact it accordingly. If the Government has made up its mind that the agent must not fill that form, let the Government say so.
The responsibility must be on the company.
It is contrary to the policy of the Government, apparently, to allow the agents to continue to fill industrial policy forms. This is just on the same line as that by which the Government have brought other matters connected with the industrial policy in the past to an end by their intervention. Would not the Government intervene now and say: "Any policy issued on foot of a form filled by the agents of the company shall render the company liable to a fine of £100"?
We would never hear of such cases.
You will hear of them as often as you will hear of the others.
That may be, but I am dealing with the principle of the thing.
If you do not do that you may check the practice, and as you check the practice you are going to give rise to a body of fraud in the country; you are going to present a situation in which a man can go into court on the basis that he tried fraud and got away with it. He invokes the court to carry his fraud to a successful conclusion. That fraud is going to be made successful by the judgement of the court, which in effect says that the man, who by a fraud got the company to issue a policy based on his fraudulent proposal, is to succeed in that fraud and to do it by the aid of the court. In doing that the Dáil is turning the courts into such a position that they are acting contrary to the laws that hitherto prevailed in this country and in every other country in the world. You will have the position that the criminal will be entitled to come into the court and make the court a confederate in his crime. The Minister is putting a strange principle into the Bill. Surely the Minister cannot hope that the person who sets out to commit a fraud on an insurance company should be assisted by the law to carry his fraud through. I am afraid that that is what this section proposes to do.
During the time that it was my duty to direct prosecutions in this country I had a number of prosecutions in reference to insurance policies where persons gave false ages. These prosecutions were not issued in the interests of the insurance companies. They were issued in the public interest. What happened was this: that not merely were they disposed to put in their wrong age, but when the death occurred they came along and gave the wrong age to the registrar of births and deaths. Then the State stepped in. There were in these cases two offences. There was the giving of the false age to the insurance company. That was a fraud in itself. There was also the statutory offence of giving a wrong age to the registrar of births and deaths and in the interests of the public prosecutions were instituted. Now we are putting a cloak on that sort of illegality.
There is another section that agrees with that. We are enacting that the validity of the policy should not be queried on the question of age after four months.
That does not touch the present issue at all. The principle that we are proposing to embody in this Bill is utterly indefensible. I am prepared to deal with whatever abuse arises in this country through agents improperly filling up these proposals for insurance policies. But that is not the reason why a person who deliberately defrauds or endeavours to defraud the company should be entitled to the cloak of legality to get away with that fraud. I know of no case in this country nor, indeed, in any other country where fraud has been legalised in advance as it is by this sub-section. There is no provision in the British Act of 1923 which corresponds to this sub-section. But in Section 20 (4) of that Act there is a provision preventing the companies from questioning the validity of the policy on the ground of any misstatements contained in the proposal form except in cases where a fraudulent statement in some material principle has been made by the proposer. I want safeguards in this Bill the same as are contained in Section 20 (4) of the British Act, in which provision is made for dealing with a fraudulent statement by the proposer in some particular. I do not want that anybody should get away with his own fraud. I do not want something to be done indirectly, as the Minister proposes to do in this. He says he wants to stop the companies from getting their agents to deal with frauds. Why not stop that? But for goodness sake do not legalise fraud.
Does the Minister realise that, as the section stands, the position would be that the Attorney-General would be empowered to direct a prosecution against the proposer at the same time that in law the policy would stand? In sub-section (5) we are dealing with cases where a fraudulent statement in a material way has been made by the proposer. If a proposer makes a fraudulent statement for the purpose of obtaining a policy and the payment of policy moneys, as the law now stands there is a criminal offence. There may be other statutes under which a criminal charge could be laid. Such a person would be liable to prosecution for attempting to obtain money by false pretences. The situation the House is asked to bring about is that a man who must serve a term of imprisonment for obtaining a policy in that manner is to recover the amount of that policy from the company.
In any event, the objection which Deputy Costello raises to this section is not dealt with by the amendment. The mere deletion of paragraph (a) does not fix the matter.
That amendment only raises the issue.
If the insertion of the words referred to by Deputy Costello in the 1923 Act is made, that meets any point to which I desired to attract the attention of the Minister.
That could be effected by a very simple amendment in the first part of the section. What we want to ensure is that companies are going to take effective measures to prevent their agents filling up proposal forms, because that is the practice which has led to abuse by the companies, and unless the penalty on the company which does not take effective steps in that direction is a severe one, in their anxiety to get business, and in the pressure they put upon their agents to get business, the old evils will reappear.
There is probably a lot to be said for the objection to the section as it stands, particularly the objection put by Deputy Lavery, which would create a rather anomalous situation. As regards whatever amendment that might be necessary, I would have to be careful to ensure that there was no loophole by which companies could revert to the practice of encouraging their agents to proceed in this manner while at the same time escaping the penalties for their misconduct.
There is a wide open door here in the section. I could tell any company at the moment how to get out of that section.
That is the business of a lawyer, I suppose. The particular amendment moved by Deputy Dillon does not meet the point, in any event.
I have directed the attention of the Minister to the fact that the amendment is put down to draw attention to a particular principle underlying the Bill. It is manifest that the amendment is not intended to deal with the whole evil.
If the Deputy withdraws the amendment and reinserts an amendment on the next stage, to insert, say, the word "unless" in line 54, that might meet the point.
May I suggest to the Minister that, as regards inserting the word "unless," all the skill of his parliamentary draftsman will be required, and that it would be probably more efficiently done if he committed that onerous task to his Department?
I will certainly look into the point.
Amendment No. 120, by leave, withdrawn.
(7) Notwithstanding the provisions of this section, whenever a proposal for a policy of industrial assurance which was effected before the commencement of this Part of this Act contains an incorrect statement of the age of the person whose life is assured under such policy, the industrial assurance company which issued such policy may so adjust the terms of the policy, or of any policy which may be issued in lieu thereof, that such terms shall conform to the terms which would have been applicable if the true age of such person had been inserted in such proposal, and accordingly no industrial assurance policy issued before the commencement of this Part of this Act shall be invalidated on the ground that the age of the person in respect of whose life such policy was issued was incorrectly stated in such policy or in the proposal for such policy.
I move amendment No. 121:
In sub-section (7), lines 25 and 26, to delete the words "which was effected before the commencement of this Part of this Act," and in lieu thereof to insert the words "effected either before or after the commencement of this Part of this Act," and in lines 33 and 34, to delete the words "issued before the commencement of this Part of this Act," and in lieu thereof to insert the words "issued either before or after the commencement of this Part of this Act."
I do not know whether it would be better to discuss amendments Nos. 121 and 122 together.
Amendment No. 122 cannot be moved, because it is in effect seeking to delete the operative portions of the section. The Deputy can say all he wants to say on the motion: "That the section stands."
So far as amendment No. 121 is concerned, I think the Minister will agree that what is sauce for the goose ought to be sauce for the gander, and if he is now making certain regulations for the proposer of these industrial policies, the same practice ought to continue as if this Bill had been in force earlier. I accordingly ask the Minister favourably to consider this amendment.
That is a rather naive defence of it. We make two provisions, one dealing with policies after the Bill becomes law, and the other dealing with policies issued before the Bill becomes law. We have a somewhat easier provision for the latter kind of policy. The Deputy wants to have this easier provision applied also in the case of policies after the Bill comes into operation, on the general principle that what is sauce for the goose is sauce for the gander. I am afraid that argument does not take us very far. The whole principle embodied in this section with regard to the admission of the age of the assured is that the question of age should be cleared up in each case at the outset and that it should not be competent for the companies to raise the question of age at any time after four months from the date on which the policy has been issued. That principle is applied to all classes of policies after this Part of the Bill comes into operation. But in respect of policies issued before this Part comes into operation, Section 56 (7) enables an adjustment to be made at any time during the currency of the policy on account of an incorrect statement of age, while it prevents the voiding of policies on the ground of incorrect statements.
The Deputy wants to apply that provision to new policies after the Act comes into operation. I could not agree to that. The point is that four months after the date on which the policy is issued the question of age cannot be raised. All questions in relation to age must be cleared up within that period. That provision is necessary in order to prevent current abuses where companies issue policies in which they or their agents know the age is incorrectly stated and then void these policies on that ground when a claim is made under them. That abuse must be removed and this particular method of removing it is one that appeals to us. We appreciate that an incorrect statement of age may be made by the proposer but the company must clear it up within four months. If it does not, it cannot question the age of the insured person after that.
We are making a further provision in respect of existing policies — it seems only fair we should have a different provision in relation to them. We say about existing policies that a change can be effected by the process set out in sub-section (7) that is, by altering the terms of the policy in such a manner as to bring it into conformity with the correct age. I would not be prepared to extend that method of dealing with the problem to new policies issued after the Bill comes into law. When this measure comes into operation the four months' rule should apply.
The Minister says that this principle that he introduces into this sub-section, and later on into Section 59, is essential in order to prevent abuses; but it appears to me to be analogous to the case where a man takes a sledge-hammer to kill a fly. All he wants to do is to prevent abuses by agents who know the correct age of the person filling up the proposal form. If the agent knows that, it is quite a simple matter to deal with that abuse. But it does not, so far as I can see, justify the introduction of this radical principle into the Bill. The Minister, in this instance, has done what he has done in every other part of the Bill where he has introduced what appears to be a principle. He has gone too far, in the first place, and he has given no real reason for the principle. I want to have from the Minister either on this amendment or on Section 59 what is the underlying reason for the introduction of this new principle. It does not exist in England. I move to report progress.
Progress reported, the Committee to sit again later this evening.