In view of the Minister's policy of having a single Irish company, is this a necessary section or is it for the purpose of allowing the person to transfer from a foreign company to the Irish company, or from the Irish company to a foreign company?
Insurance Bill, 1935—Recommittal (Resumed).
Debate resumed on Section 63.
This section is intended to eliminate a certain abuse in connection with transfers, by which people, in effecting the transfers, put themselves at a disadvantage. The whole purpose of the section is to provide that, where such a transfer takes place, the person so transferred shall sign a consent, which, in fact, means that there will be brought to his direct notice the changes which are going to be effected in his insurance— the difference between the policy he is lapsing and the policy he is taking out.
I was stating, in answer to the Minister's point, when we adjourned consideration of the Bill, that this matter had been investigated by the Cohen Committee in England. Though they do not say so, it is well known that the use of the word "transfer" is not really applicable to these cases at all.
That is so.
What happens is that a person who is insured in one company ceases to insure in that company and goes off to another. The recommendation of the Cohen Commission states:
"If an effort is made to induce a policy-owner to transfer from one office to another, the office in which he is assured is the best advocate of the reasons against his transferring, and if they receive due notice of an intention to transfer, the matter may sefely be left at that. We recommend that the present section be repealed and a new section substituted requiring a society or company when it receives a proposal for a policy, the premiums under which are to replace the premiums under a policy in another society or company, to send by post a written notice to the latter society or company within seven days of the signing of the proposal. The notice, which should be in a prescribed form, should give particulars of the proposal and of the policy under which the payment of premiums has ceased, or is to cease, on the issue of the new policy. It should be made an offence if notice is not duly given or a policy is issued within 14 days of the service of the notice."
We have, in all this, to remember that we are dealing with people who are not, because of their lack of education, either capable of paying, or are not sufficiently interested to pay, attention to the rather technical details of some of these forms. We have to protect those people. The alert and vigilant people will look after themselves. The Minister's proposal is to make the man who has been insured in one company and who is going off to another company, sign a consent. I suggest that that is not much good. He has already been induced by the agent of the second company to make the transfer. Whether or not it is an accurate case, it must be a good case that has been made to him. It is, at least, one which has persuaded him to make the change. Surely, the best way to balance the activities of the agent trying to get the man transferred is to put on the alert the agent of the company from which the insured person proposes to go. That is the proposal in the Cohen Report, and it is a far better proposal than the proposal here. Make it requisite that notice be given by the proposed transferee company to the transferor company and leave them to get after the matter. If the insured person, in the end, decides to transfer, he will have had the impact on him of two officials—one telling him that he is going into a far better land and the other telling him that he is far better off where he is. He will get an intensive education in the actual points at issue and, if he makes his choice after that happening, it must be agreed that he has had far more freedom of choice, after knowledge, than he would have under the Minister's proposal. The proposal in the Bill merely requires the man's signature which can be easily got.
I stated already that I was not very much concerned whether we adopted the proposals set out in the Bill or the recommendations of the Cohen Committee. We must remember, however, that the Cohen Committee was making a recommendation bearing upon conditions in Great Britain—conditions in which the provision set out in Section 63 of the Bill had been embodied in the existing law and had been there since 1923. No transfers can take place there because the free paid-up policy provisions are in operation. We are only effecting that change here. When the free paid-up policy provisions are in full operation here there will be no such thing as a transfer because, when the policy lapses, the insured person will get a free paid-up policy for a certain amount.
The Minister is not correct in stating that there will be no such thing as transfers. They will take place under more restricted circumstances.
That is so. I am disposed to think that we should have the more elaborate provisions set out in Section 63 in operation here. The recommendation of the Cohen Committee was based on the contention that it was no longer necessary, in the circumstances in Great Britain, to have these more elaborate provisions and they suggested a simpler method of dealing with this problem. There is no legal way of preventing a person lapsing his policy with one company and taking out a policy with another company. What is desirable is that the advantages and disadvantages should be brought to his notice. I think the section in the Bill is better than the proposal of the Cohen Committee but the balance of argument, I admit, is slight. If there is any strong feeling that the Dáil should adopt the recommendation of the Cohen Committee rather than the proposal in the section, I shall be pre- pared to discuss the matter on the next Stage. I feel, however, that it is better to keep these more elaborate provisions, for the present at all events.
Will the Minister put down some proposal which will enable us to have the matter discussed?
I shall either arrange to have an amendment circulated or give intimation to Deputies opposite, so that they may raise the matter if they wish.
Would the Minister have any objection to stating whether the companies asked for this provision or whether it is his own idea?
I do not know what the attitude of the companies to the section is at all. We adopted this provision because some control in relation to these so-called "transfers" was necessary. The provisions in the 1923 Act in Great Britain seem to meet the point to some extent, and we adopted practically the same provisions as they have in their statute in Great Britain.
The Minister has not come to any decision in his own mind against these transfers?
We cannot stop them, because they are not real transfers. The policy-holder in one company allows his policy in that company to lapse, and he pays the premiums to another company. He gets a new policy in the other company in consideration of his premiums. That is what is known as a transfer. There is no legal way of ending it. The change is made because of the representations, very often exaggerated representations, of the agent of another company. The policy-holder will lose by making the change, and it is found desirable to have some provision that the exact consequences of the change will be brought to his notice. He should know what are the consequences to himself of these changes. Deputy Morrissey referred to the case where the agent transfers from one company to another and endeavours to bring all his clients with him.
That is the sort of case that arises.
Yes, that is one of the usual cases that arise, and this is to ensure that the policy-holders will be informed of the effect of the change on themselves.
And take it with its consequences to themselves.
I think that the provisions of Section 63 are better than the proposals of the Cohen Committee recommendation. The only advantage of the Cohen Committee recommendations is that they are less elaborate than this, and provide merely that notice must be sent to the company that is losing the policy.
And that the transfer cannot be effected until a certain period has elapsed. Nobody knows whether the transfer section will apply. What does it transfer?
Sub-section (4) provides that—
the transferee company shall within 14 days after the consent required by this section has been signed, furnish to the transferor company a copy of such consent and a notice of the proposed transfer....
Supposing that one company says: "This is not a transfer; this man lapsed his policy with another company and he is taking out a new one with us; we do not want the man's consent." Unless there is some definition of what a transfer is it is not clear to me how it can be made work.
With either arrangement there will have to be some such definition.
We are not opposing on the undertaking by the Minister to have the amendment circulated or an intimation to us that the amendment will not be made so that we may have it in time to enable us to put down an amendment ourselves.
Section 63 agreed to.
SECTION 64.
Whenever an industrial assurance company pays a claim arising under a policy of industrial assurance, such company shall send by prepaid ordinary post from its registered office in Saorstát Eireann to the person to whom such claim is paid a statement setting forth the gross amount payable in respect of such claim, the amounts of all deductions made from such gross amount, and such particulars of every such deduction as may be necessary to explain clearly the grounds on which such deduction was made and the manner in which the amount therof was calculated.
I move amendment No. 144:—
In line 4, after the word "assurance" to insert the words "and any deduction is made from the sum assured other than in respect of arrears of premiums owing upon such policy."
The object of the amendment is to insure that the policy-holder is quite well aware of what deductions are being made. If the Minister can see his way to accept this he will be given the advantage of saving a certain amount of unnecessary detail. I quite agree with the rest of the section. Of course the policy-holder is quite well aware of what premiums are in arrears and he will understand the deductions for the arrears.
I am afraid I could not agree to this amendment. It is important that the policy-holder should be informed from the head office of the company what amount he is to receive so that if the amount actually paid to him does not agree with the amount stated by the head office he can raise the matter with the head office. Circumstances have arisen in which unauthorised deductions have been made. The Cohen Committee report also referred to the matter.
Surely the policy-holder will know himself whether he is in arrears with his payments or not. It would be apparent to him on the face of this document that all that had been deducted from him were sums other than the premiums in arrears about which he knew himself. Would the Minister consider putting in words in the notice to the effect that "the amount of the deductions which do not include the arrears of premiums are as follows"? The provisions of this Bill adequately protect the policy-holders in reference to that.
The Cohen Committee report stated that cases have come to light in which claims had not been paid in full sometimes. The section merely provides that where the company pays a claim, the company can send notice to the person to whom the claim is paid, set forth the gross amount to be paid, the amount of the various deductions, and particulars of the deductions, and explain clearly the grounds on which the deduction were made. That is a clear definition, and it only complicates the notice to leave out of the deductions such matters as arrears of premium. There is no reason why the policy-holders should not get a clear statement of the amount to be paid.
The only object of Deputy Dockrell's amendment is to leave out the arrears of premiums. Everything else is stated. The man himself would know that he was in arrears with his premiums, and he would know the amount of these arrears. I know that there are a number of deductions made every day. Incidentally, they will not be made any more, but there are deductions made of which the policy-holder should be informed. By looking at his assurance book he will know how many weeks he is in arrears.
The purpose of the section is to give the policy-holder a clear statement so that he will know that he is getting what he is entitled to get.
Amendment No. 144, by leave, withdrawn.
On behalf of Deputy Dillon I move amendment No. 145:—
In line 7, to delete the word "payable" and substitute the word "paid."
That would defeat the object of the section. It is intended that the claimant should be able to raise the question when the amount actually paid to him differs from the amount of the policy and the amount that he had expected to receive.
Amendment, by leave, withdrawn.
Section 64 put and agreed to.
SECTION 65.
Question proposed: "That Section 65 stand part of the Bill."
On this section there is the phrase:
...including an illegal policy and a policy which is ultra vires an industrial assurance company.
There are societies as well as companies and the definition of an insurance company includes societies. It includes "societies" with the addition in the definition section page 8 which reads:
the expression "assurance company" means a company (whether registered in Saorstát Eireann under the Companies Act, 1908 to 1924 ...) which carries on any assurance business, and the said expression unless the context otherwise requires, includes a society, association or other body which is incorporated or otherwise constituted under the law of a country other than Saorstát Eireann and carries on an assurance business.
Is it possible to have "societies" incorporated or otherwise constituted under the law of Saorstát Eireann?
It is not.
Question put and agreed to
Section 66 agreed to.
SECTION 67.
(1) Whenever any dispute arises between an industrial assurance company and any of the following persons (in this section referred to as the applicant), that is to say:—
(a) any person who has effected a policy of industrial assurance with such company or any person claiming through such person, or
(b) any other person claiming under or in respect of a policy of industrial assurance effected with such company, or
On behalf of Deputy Dillon, I move amendment No. 146:—
In sub-section (1) (b), line 47, to delete the words "person claiming" and substitute the words "person legally entitled to claim."
I think there is only a small point involved. Whether it is worth making or not, I do not know. Deputy Dillon's intention appears to be that somebody who has a real interest in making the claim should be the only person to the dispute.
But one of the matters in dispute may be whether a particular claimant is legally entitled to claim in respect of a policy. That may be one of the matters in dispute and, therefore, I suggest that it is better to leave the provision as it stands.
If you pass the words "person claiming" instead of "person legally entitled to claim," does that mean that the industrial assurance company can take up the dispute with a person just because he claims, although they might be pretty certain he was not entitled to claim?
The question may arise whether a particular claimant is legally entitled to claim in respect of a policy.
Supposing it is not that matter but something else, it may be beneficial for a company to take as the other party to the dispute a person who claims, although they know that person is not entitled to claim—a sort of collusive dispute.
The person entitled to claim would be claiming in respect of a policy, if he brings the matter forward for determination.
Supposing a dispute has arisen and it is engineered as between the company and somebody who claims, although he has no right to claim, and suppose that dispute is resolved, can the whole matter be reopened when the person legally entitled comes along?
Certainly.
Amendment No. 146, by leave, withdrawn.
(2) Any such dispute as is mentioned in the next preceding sub-section of this section may, before any application has been made to the Circuit Court in regard thereto, be referred by the industrial assurance company and the applicant jointly to the Minister for determination or, where the validity of a policy of industrial assurance is not in dispute and neither fraud nor misrepresentation is alleged, be so referred by either the industrial assurance company or the applicant.
I move amendment No. 147:—
In sub-section (2), line 5, to delete the word "validity" and substitute the word "legality."
It is a small point, but it seems to me that where there is a dispute "legality" should be the word.
Perhaps the Deputy is correct in saying that it is a small point, but I am not so sure that he is. I think the term "legality" is wider in its connotation than "validity" and it might increase the number of disputes that would come under the section. I would like to have an opportunity of looking further into the matter. It may be there is not much difference between the two phrases. It may be that the phrase should be "legality," even if it is a wider term. On the other hand, on examination it might appear better to leave the Bill as it stands. If the Deputy will leave the matter over, I will give it further consideration.
"Legality" is used in the British Act.
Amendment No. 147, by leave, withdrawn.
On behalf of Deputy Dillon, I move amendment No. 148:—
To add at the end of sub-section (2) the words "and in every such case a statement of the nature of the claim shall be delivered to the other party to the dispute at least 14 clear days before the hearing."
This amendment provides that where a dispute arises, the person who is claiming should serve a notice, which may be informal, on the other party to the dispute, setting forth the nature of his claim and the facts and submissions on which he grounds the claim, before the matter should be referred to the Minister. It is only right the other party should know what the alleged dispute is. There may be many cases in which spurious disputes may be raised, but, taking it that the section is passed, I think only disputes of a bona fide character should be dealt with, and, before such a dispute becomes caught in the machinery of the section, the other party should have some idea what it is all about. That is the object of the amendment, which provides that in every case a statement of the nature of the claim shall be delivered to the other party.
I think that is what Deputy Dillon has in mind, but I think he has moved his amendment to the wrong sub-section. It is probable most of the matters referred by the applicants to the Minister can be settled by correspondence with the parties concerned. It is only where an inquiry is necessary, under sub-section (5), and the inspector who is appointed for the purpose gives notice under paragraph (b) to the parties concerned, that any such question will arise. If the Deputy were to move to insert in paragraph (b) an amendment to ensure that at least 14 days' notice will be given at that stage, then I think a case could be made for it.
Has it not also application to this——
At that stage it is desirable to keep the matter informal, because in this country, as was the experience in Great Britain, the great majority of disputes will be settled informally by way of correspondence without any of the procedure contemplated later. It is only where a dispute cannot be settled in that way that an inspector will be appointed and that formal measures become necessary. At that stage there might be a case for requiring a period to elapse after the serving of the notice before other action would follow. I think that period should be provided in sub-section (5) (b) rather than in sub-section (2).
I suggest that it might be put in both. Let me speak on the amendment to the section to which it is at the moment related. In order to get the point clear, sub-section (3) has to be looked at as well as sub-section (2). The point in sub-section (2) is that if there is a dispute, before there is an application to the Circuit Court, both parties may agree in referring the matter to the Minister, and in certain circumstances either party may refer it to the Minister. Once it has been referred, whether properly or not, once that step has been taken there cannot be a submission or an approach to the Circuit Court for the determination of that dispute. Surely it is proper if one party is moving to refer the dispute to the Minister, and the right of approach to the court is then blocked from the point of view of the other party, that he should get notice of that?
So he will. We will write to the party saying we got this complaint from the other party, and making proposals for resolving the dispute either by referring the party to a previous decision or the general practice or something of that kind. In the great majority of cases informal effort to settle a dispute will be made, but it is only where that fails that the question of appointing an inspector, holding an inquiry and sending formal notice will arise.
I am not in touch with Deputy Dillon in relation to this amendment, but I am taking it on the words he has used. He says "in every such case a statement of the nature of the claim shall be delivered." Why is he precise in requiring a statement of the nature of the claim? So that the party without whose assent the matter has been referred to the Minister may decide whether or not it falls inside the exceptions—that it does not come inside the exceptions which preclude it from going to the Minister.
It is not at that stage he would resolve it.
Let us take it that there is a dispute between A and B. A contends the dispute is in relation to a particular matter and he says, "On my own I will refer it to the Minister." B says it is not a matter properly referable to the Minister.
If the Minister proceeds to determine the dispute, an appeal from his decision upon the legal question involved can be taken.
It is by way of an appeal instead of still keeping the matter informal. If B gets notice he may say that the essence of the claim is such and such, and it is therefore outside the type of matter that may be referred to the Minister except by consent. B wants to go to the Circuit Court. Why not permit that to be done still in the informal way? Sub-section (5) may need this as well.
It is quite possible that in the majority of disputes a settlement will be effected in a couple of hours or a day or two, where it lends itself to the informal approach and, therefore, it is undesirable to have the 14 days requirement. It is only where a settlement by these informal means cannot be secured that the rest of the section comes into operation and the matter gets out of the informal plane on to the formal plane. At that point adequate notice to serve documents and so forth is undoubtedly called for. I prefer to keep the preliminary stages entirely on an informal plane, and not to have any requirements that would postpone action for 14 days.
Why should not the second party, in the case contemplated by sub-section (2), have the right informally to say to the Minister: "That is not really one of the matters that should be referred to him at all"?
The dispute cannot possibly be settled without the consent of the other party except there is the inquiry contemplated under sub-section (5). If we cannot get the consent of both parties to a settlement, then we have to go ahead and carry out the inquiry. The experience in Great Britain is that in the great majority of cases disputes lend themselves to this informal treatment and are settled in that way. There should be nothing, I think, in the way of a fortnight's delay before attempting to secure it.
Take two parties to a dispute. One may make up his mind to go to the Circuit Court and makes all arrangements to do so. Suddenly, he is met with the statement that the other party has forestalled him by sending the dispute to the Minister as being one inside the exceptions clause —and then sub-section (3) swings in. In that case he may not go to the Circuit Court.
But the Minister may not accept the dispute as coming within sub-section (2), in which case it cannot be determined in this way. If the Minister does accept it, then it is because he is of opinion that the dispute is properly referable to him.
And properly referable to him by one party without agreement?
May I make this suggestion. If you take out the words "14 clear days before the hearing" and substitute words which will result in one of the disputants getting a statement of the nature of the claim and notification that the matter has been referred to the Minister, that would meet my point. A case such as this may arise. An industrial company, or claimant, may refer the matter to the Circuit Court. The other party forestalls him by referring it to the Minister. The Minister would ordinarily notify the person who had intended to go to the Circuit Court that he must stay his hand pending the Minister's decision as to whether the Minister would take the matter under his own jurisdiction or not. When the Minister has made up his mind to communicate to the second party, I would ask him to send a copy of the nature of the claim to the person whom he was staying from going to the Circuit Court.
My suggestion was that I was prepared to consider the insertion of the 14 days requirement under paragraph (b) of sub-section (5). When the matter in dispute has gone as far as that, it is on the formal plane, and notice of intention to each party is probably required, but at the earlier stage I think the Minister should be free to try to effect an informal settlement of the dispute by agreement between the parties as soon as possible. In the majority of cases it is probable that he would be able to get that. It is only where he cannot get that agreement that a formal determination would be given.
If the Minister takes it under his own jurisdiction, I take it that what will happen is that he will appoint an inspector?
Quite.
If the Minister will consider putting in a substantially similar amendment in connection with sub-section (5) that will meet my point.
I will look into it.
Amendment, by leave, withdrawn.
I move amendment No. 149:
In sub-section (4), line 14, to delete the word "may" and substitute the word "shall."
The word "may" leaves a discretion to the Minister. I think it should be made mandatory on him to cause an inquiry to be held.
"May" means "shall" in this sub-section as in the earlier one. It is impossible to foresee the circumstances under which a dispute referred to the Minister would not be determined by him in accordance with the provisions of the sub-section.
Does the Minister mean that if at any time anybody refers a dispute to the Minister he has got to determine it?
I cannot see the circumstances under which the Minister would refuse to do that if the dispute were properly referable to him.
But if it is not?
Well, then he will not do it. "May", in effect, means "shall." It means that in the case of any dispute properly referable to him he will determine it.
It means "shall" with reservations.
Will the Minister have to signify his refusal to settle the dispute before a person can go to court, or, if the dispute is referred to the Minister and he sits back and says: "Well, I may settle this and there is no reason why I shall settle it," in a case like that, is the dispute to remain suspended like Mahomet's coffin?
No. In practice, the Minister will do it, and that is why we are enacting the section.
I would again remind the House that, in connection with the civil servants' dispute in which it was provided that the Minister "may" settle certain points and refused to do so on the grounds that he had not time, mandamus proceedings were taken against him in the courts. In that case the courts held that "may" amounted to "shall" within a reasonable time. Are we to assume that it is in the Minister's mind that "may" in this context means "shall" within a reasonable time?
Certainly. I do not think that the Minister will be anything slower in giving his decision than the Supreme Court.
Be careful now.
Amendment, by leave, withdrawn.
I move amendment No. 150:-
In sub-section (4), line 16, after the word "him" to insert the words "being a practising barrister of not less than five years' standing."
a matter that has arisen on a number of other Bills in connection with questions giving rise to the production of evidence, the weighing of evidence and of comparing the comparative value of statements made by claimants. It has been deemed desirable to take such matters out of the hands of civil servants and to put them into the hands of persons with judicial experience. This amendment was incorporated in the Pigs and Bacon Act when similar arbitrations were under consideration. I suggest to the Minister that it is a desirable amendment to insert in this Bill. It may be necessary to provide that the practising barrister conducting inquiries of this kind should have an assessor to assist him when matters in reference to actuarial calculations arise. Otherwise, I think the amendment is all right.
I think it is better to leave the Minister free in the selection of a suitable person. I think he can be relied on to select the person who would be best able to determine the disputes coming up. It may be that the most suitable person to deal with these matters would be somebody with experience in relation to insurance matters or the carrying on of an industrial assurance business, or a civil servant, an officer in the Department of Industry and Commerce, who had been dealing with these matters previously. I think it is better to leave the Minister free. I know it has been the practice in a number of Acts to put in a condition such as this, but I think that recently the tide has turned in the opposite direction. I have noticed in a number of enactments passed in Great Britain and Northern Ireland and in other Parliaments that provisions of this kind in previous Acts are being repealed, and that a freer hand is being given to the Minister in each case.
That is because the system of bureaucracy is approaching its zenith in England and we want to stop that here. From my experience I am perfectly satisfied that officials in Departments of State would do their best to keep professional men out of matters of this kind.
If the amendment were moved by a trades union representative I could understand that.
It is moved by a trades unionist. Deputy Dillon is a barrister and a member of the Bar Library.
I think the Minister is making a mistake. I yield to no one in my admiration for the permanent officials of the Departments of State within their respective spheres, but, like all other men, they have their shortcomings, and one of these arises from the fact that they are withdrawn to a certain extent from contact with their fellow beings; in fact, they are bureaucrats, and as such very often take extremely——
We have several barristers of four or five years' standing.
I know that well.
You have several B.L.s but no barristers.
We have barristers exercising statutory functions.
I went to discuss the packing of eggs with a civil servant in the Department of Agriculture, and I found he was a barrister. That did not qualify him to deal with the question of whether eggs should be packed on their broad or narrow end. One finds barristers in the most extraordinary places in Government Buildings, but these are barristers gone astray.
A Deputy
No.
They have turned their back on their profession and have devoted themselves to doing invaluable work for the State. Let no note of levity involve any disrespect for the services they render the community. My desire is to bring in a person ordinarily engaged in judicial business for the purpose of hearing claims which, by another sub-section of this section, are sent to the courts of the country, thereby admitting that in certain circumstances——
On a question of law only.
In certain circumstances this section says that the contesting parties can go to the Circuit Court. If one of them proposes to go to the Circuit Court and the other wants to go to arbitration, as the more expeditious and economical method of settling the dispute, he can stay the Circuit Court proceedings by referring the matter to the Minister. I do not want to remove all judical atmosphere or judicial habit from the person who is going to decide this between the parties. Suppose you have a dispute between an industrial assurance company and a claimant, the company may have been in contact with the Department time and time again in the ordinary course of business. Rightly or wrongly, they may feel that the officials of the Department are unfriendly to them owing to some dispute which may have been dragging on about another matter. Suddenly a policy-holder precipitates this procedure upon them, and they have to go to arbitration, believing that the responsible official who is called upon to arbitrate goes into the arbitration with the preconceived notion that this is a slippery insurance company, or something of that kind. The Minister must realise, if he is going to delegate the work to someone in his Department, that common gossip in the Department will be present in that person's mind. If an insurance company has a good or a bad reputation, that must weigh in the mind of the person called upon to consider the respective claims of the policy-holder and the insurance company. If the insurance company has a reputation for high rectitude, the case would begin with the profound conviction in the mind of the assessor or arbitrator that there is no justice in the claim, because this company is a decent company and does not try to put quick ones over on the people. If, on the other hand, the Department feels that this is a company that had to be watched or checked or rebuked in the past, the official deciding the claim will say: "There must be something in it; this company has been giving trouble for years; it is very fortunate that we have a concrete case that we can go into." I say that such considerations should not operate in the mind of the person called upon to arbitrate under this section. Therefore, I want an external lawyer brought in.
There is nothing in the amendment about an external lawyer.
It says a practising barrister of five years' standing.
I knew it was there.
They are immune from all these influences and considerations?
They are coming to the inquiry with a detached mind. They do not know the facts; they know nothing of the two parties.
The Deputy may take it for granted that whoever acts in these disputes will probably be the same person for them all. It is most improbable that the Minister will appoint different inspectors for different disputes.
It ought to be a person who has nothing to do with the administration of the Act. It ought not to be a person who has been in contact with either of the parties to the dispute in previous years.
It may not be. It may be an official from the Attorney-General's office, or the legal adviser to the Department. I think the Deputy can rely upon it that the Minister will appoint somebody with the necessary qualifications to do the job properly, but the Minister should have a free hand.
The Minister's views of what the necessary qualifications are may not coincide with the views of the House. Every other Minister has accepted the view I have put forward.
I know that the Department of Finance has never accepted that view.
For a different reason.
They do not want to pay a decent fee.
The Minister's Department is the only Department affecting the trade or commerce or business of the country which declines, in the case of arbitration between two citizens where the duty devolves upon him to appoint a nominee, to choose somebody who shall not be in ordinary touch with the every-day business of the Department and further declines to choose somebody who will have experience in judicial matters in order that the evidence will get proper and fair consideration.
The Minister in interjecting a remark during Deputy Dillon's speech said that the intention was that there should be a person appointed more or less permanently to do this work.
That is more probable than that a separate person will be appointed for each case.
That is a matter I had intended putting a question upon in connection with the section. I have an absolutely open mind on the subject. I repeat that I object to this section in toto. Assuming the section goes through, and it will go through, I think the machinery set up should be the best possible. I have no doubt that the Minister will, in his own interest, endeavour to get a person whom he thinks will do the job as well as it can be done, but if you consider the machinery set forth to determine these disputes you will find that the Minister is the final arbiter. He is the person who decides, and decides on the report of the inspector. The report will probably be in a document. Possibly, although it is not stated in the Bill, that will be supplemented by an oral interview with the Minister. It may, or it may not be. At all events, the fact that the report is a good one or a bad one is of vital importance to the Minister to enable him to make up his mind.
When an inspector is hearing the parties on both sides, if he is a man who is not conversant with the ordinary practice in court where witnesses give evidence, he will not be able to tell whether a particular witness is or is not telling the truth. Where a question of fact has to be determined, the Minister will not be able to determine that fact, because he will not be able to determine it from some document. The person who determines it is the person who sees the witness. The inspector who investigates and makes the report will be under the obligation to make up his mind as between the two parties. The Minister may reject that if he likes. Under the section, he could ignore the whole thing and say: "Although you believe A.B. I think, on reading your report, that you ought to have believed C.D." That is still open to the Minister and it is one of the objections to the section; but for the purpose of my argument at the moment, what I am pressing on the Minister is that some person should be appointed who has had experience of determining questions of fact. An advocate in the ordinary course of his day's work sees witnesses, cross-examines them and examines them; he hears judges giving their decisions and making up their minds as to which person is telling the truth, and in that way, merely as an advocate, he gains sufficient experience to enable himself to know with a very considerable amount of accuracy whether any given witness, whether he is for him or against him, is telling the truth.
Most of these decisions will be either pure questions of law or questions of fact. If they are pure questions of law, it makes precious little difference because they would probably go to the court, but if they are pure questions of fact, it is of most vital importance that people who are accustomed and trained to deal in facts should be in a position to sift the wheat from the chaff. Trained people are better able to do that than untrained people, and even the best civil servant, in my view, as a practising barrister, has no proper qualifications for doing that. He is hopeless at that, in my view, and I say that without any disrespect to any of the officials. Even a barrister who has practised and has gone into a sheltered occupation in the Government service loses touch, loses his sense of the realities of life and of the realities of a case operating in court, and, mind you, there is a considerable difference between a case running in court and as it appears on paper. While I am supporting this amendment of Deputy Dillon's, I am not doing it at all in the interests of my own profession. The amount of money to be made out of this, from the point of view of my profession, would be absolutely negligible. I am doing it from the point of view of the interests of the parties who are forced to take up this method of determining disputes, and they ought to get the best possible method of having those disputes determined and the best people to determine them for them. It is in their interests that I am pressing this amendment. I think a practising barrister whose daily duty is to deal with these questions of fact is the best person to do it.
I am still of opinion that it is better to leave the Minister free of any such condition. It is certain that he is going to get a person who has all the necessary qualifications. It is inconceivable that a Minister would entrust this work to somebody on whose recommendations he is not prepared to place the fullest possible reliance. On the general question as to whether we could get persons other than barristers competent to do this work, I think we can. Deputy Costello, I am sure, appreciates fully how far this kind of procedure has gone in relation to a number of matters.
In the case of unemployment insurance, for instance.
In respect of unemployment insurance, I am sure that about five times a week I determine the question whether a particular occupation is insurable or not.
And there is an appeal from you to the umpire, who is a barrister.
Not on that matter. There is an appeal to the courts, but since I came into office, I do not think there has been a single appeal. It is, perhaps, a tribute to the wisdom of the judgments given. The procedure is precisely the same here. There very frequently is, and, in fact, in every case I think there must be, an inquiry. An officer interviews the parties, hears evidence, and very often the evidence of the parties is in very violent conflict, as to the nature of the work a particular person had to do, and particularly whether it was agricultural work or partly some other class of work. On his report, setting out the facts of the employment as he saw them, and the evidence of the different parties, a decision is made.
Very frequently, after consulting the Attorney-General's Department.
After consulting the legal adviser to my own Department.
And, subsequently, the Attorney-General's Department.
That happens on occasion. In relation to that Act, a position has been reached where every case that comes up has had a precedent — a similar case has arisen before and a similar decision can be referred to. That will arise in relation to this Act at some stage, too, and simplify the procedure, but I do not think that any difficulties have arisen, and I am sure there are other Acts in respect of which the same procedure is in operation. The limitation of the Minister's power to the selection of a person who is a practising barrister is, I think, undesirable, although, in fact, the person appointed may come within that description.
But surely the effect of this will be that, if the Minister does not have a trained legal investigator, the unfortunate legal adviser in his Department, who, to my own certain knowledge, is over burdened with work, will have an additional burden placed upon him, because he will be constantly consulted, both by the inspector, probably during the course of the investigation, and certainly by the Minister, when the report comes in and before he reaches his decision. I think the Minister will probably find that he will have to increase his legal adviser's staff and the staff of the Attorney-General's Department, but certainly he will have to get legal advice from his own legal adviser and the Attorney-General's Department on practically 99 per cent. of the cases that arise under this section.
That may be quite true of the first series, but after a time we will have cases repeating themselves in type almost continuously.
Well, I am glad I am not in the Attorney-General's Department at the moment.
The Deputy may be again.
Amendment, by leave, withdrawn.
Amendment No. 151 not moved.
(6) Whenever the Minister determines a dispute referred to him under this section, such determination shall be final and conclusive and no appeal to any court shall lie therefrom, but the Minister shall, at the request of any party to such dispute, refer any question of law arising in such dispute to the High Court for decision and the decision of the High Court thereon shall be final and conclusive and no appeal to the Supreme Court shall lie from such decision of the High Court.
I move amendment No. 152:
In sub-section (6), line 36, after the word "law" to insert the words "or of fact."
What is the Minister's view on this amendment?
I would prefer the Deputy to vote against the section, because it comes to the same thing.
I am afraid, under the circumstances, it would not leave very much of it, but if the Minister were inclined to accept my last amendment, suggesting that arbitration should be conducted by a barrister of five years' standing, I would have no scruple about withdrawing this amendment. In the existing circumstances, when I do not know who is going to be the arbitrator, or what the nature of the arbitration is going to be, because that will largely depend on the personality of the person conducting it, I feel that there ought to be an appeal to a court of law, so that a judicial person may have the facts and the law in any case where one of the parties thinks it necessary to appeal from the decision of the arbitrator.
The whole purpose of the section is to give the Minister the final decision on questions of fact where a dispute is referred by both parties, or, in the particular circumstances described, by one of the parties. The range of cases where a dispute can be referred by one party is limited. If it is referred by both parties, it is evident that they are willing to accept the Minister's decision on the facts as final.
I admit, if the Minister had accepted the amendment as to the appointment of a barrister, I should have no hesitation in withdrawing this amendment. However, under the circumstances, I withdraw it with great reluctance.
Will the Minister consider between now and Report Stage changing the actual wording of this sub-section? The provisions as they stand at the moment are that the Minister shall, at the request of any party to such dispute, refer any question of law arising in such dispute, etc. I suggest that he should insert there that an appeal should lie from the decision on a question of law. If the sub-section stands, I can see that there will be a considerable amount of wrangling as to what is and what is not a question of law. One party to the dispute will ask the Minister to refer that to the court. The Minister will say, having consulted his legal advisers, already overburdened, as I have said: "Is this a question in law which I am bound to determine or send forward?" and there will be a considerable amount of trouble and worry to all parties, whereas, if the suggestion I make is adopted, it would be left to the court to decide whether a particular thing brought to the court is or is not a question of law.
You do not want to make that too easy. The whole purpose of the section is to give the type of person who does industrial assurance an opportunity of getting a determination of any dispute that may arise between him and his company, without being intimidated by the possibility of costs arising on appeal altogether out of proportion to the value of the policy. Therefore, I think we should have the wording of this sub-section so cast that an appeal will not take place unless there is genuine ground for it; in other words, that the principle of appeal will not be used by insurance companies merely to intimidate policy-holders from availing of the section by involving the first applicants under the section in undue costs.
Amendment, by leave, withdrawn.
(8) Whenever the Minister orders under this section any costs and expenses incurred by one person to be paid by another person, such costs and expenses shall be taxed and ascertained by a taxing-master of the High Court on the requisition of either the person to whom or the person by whom such costs and expenses were so ordered to be paid, and the amount of such costs and expenses, when so taxed and ascertained, shall be recoverable as a simple contract debt in any court of competent jurisdiction by the person to whom such costs and expenses were so ordered to be paid.
I move amendment No. 153:—
In sub-section (8), line 49, after the word "shall" to insert the words "unless the amount thereof shall be determined by the Minister at the request of the parties."
I think this is a very good amendment. To be sending these cases to the Master of the High Court to be taxed when neither party wants to go there, and when both parties are prepared to accept the Minister's taxation of the costs, would seem to be a peculiar idea, and I think that this amendment is a very sensible suggestion.
But sub-section (7) empowers the Minister to order the costs and expenses incurred by any person of appearing or being represented at any inquiry held under the section to be paid by any other person who appeared or was represented at such inquiry, and sub-section (8) merely enables any persons, if they so desire, to have the costs and expenses taxed and ascertained. I think the question of cost is adequately covered by the previous sub-section.
All I want to ensure is that, if both parties come to the Minister and say that they prefer to have the costs taxed by the Minister instead of going to the High Court, it will be possible for the Minister to do so, and to bind the costs by his taxation if there is prior agreement to submit to him. Is that done here?
Well, not quite—not in that form, certainly. It says in sub-section (7) that whenever the Minister determines a dispute referred to him under this section, he may, if he thinks proper to do so, order the costs and expenses to be paid, and so on.
There is nothing in the sub-section to preclude agreement between the parties whether as a result of an agreement between themselves or leaving it to the Minister.
I think it would be better to leave it as it is. I looked into the matter, and it seemed to me that, having regard to sub-section (7), the matter of costs is adequately dealt with.
Very well. I shall withdraw the amendment.
Amendment No. 153, by leave, withdrawn.
(9) Whenever a dispute is referred to the Minister for determination under this section, there shall be paid by the applicant to the Minister such fee as shall be prescribed by regulations made by the Minister under this section with the consent of the Minister for Finance, and the due payment of such fee shall be a condition precedent to the determination of such dispute by the Minister.
I move amendment No. 154:—
At the end of sub-section (9) to add the words "provided that no fee so prescribed shall exceed the following scale:—Where the claim does not exceed £10, 5/-; where the claim does not exceed £25, 10/-; where the claim does not exceed £50, 20/-, with an additional sum of 10/- for every additional £50 or part thereof."
This is the sub-section referring to the payment of fees, and the amendment provides that no fee prescribed shall exceed the scale which is set out in the amendment. I think it is a rather good amendment. I think it is self-explanatory, and that there is no need to waste the time of the House. What is the Minister's view about it?
I think it is better not to fix the amount of fees in the Bill. It may be found necessary from time to time, in altered circumstances, to vary the amount of the fees, and it is better to leave it as it is in sub-section (9) so as to avoid the necessity for future legislation on that point. The sub-section is set out in the usual form, and says that the fee shall be prescribed by regulations made by the Minister under this section with the consent of the Minister for Finance. If the Deputy fears that this section will be used for the purpose of getting unduly large fees, he can be reassured on that point, because any attempt to do so would defeat the whole purpose of the section.
I agree. However, if the Minister is prepared to say that the Orders made for the purpose of prescribing the fees in connection with this section are being laid on the Table of the Dáil, I think that would overcome the difficulty.
The idea is to keep the fees as low as possible. The fee shall be prescribed by the Minister for Industry and Commerce with the consent of the Minister for Finance.
Well, I do not press the amendment.
Amendment No. 154, by leave, withdrawn.
Question proposed: "That Section 67 stand part of the Bill."
I wish to register a protest, Sir, against Section 67 on principle, but subject to that the section is agreed to.
Question put and agreed to.
Section 68 agreed to.
SECTION 69.
I move amendment No. 155 standing in the names of Deputies Keyes and Pattison:—
To delete sub-section (2) and substitute the following sub-section:—
(2) No person (other than a director, a member of the committee of management, the secretary, an assistant secretary, treasurer, auditor, actuary or a person employed in a professional capacity) employed by an industrial assurance company shall attend or be present at any meeting of such company.
Sub-section (2) of Section 69 says that a collector employed by an industrial assurance company shall not attend or be present at any meeting of such company, and the first sub-section specifies other restrictions in relation to collectors. Perhaps the Minister will explain the reasons for the section as contained in the Bill.
I can see no reason why officers and employees of the company other than collectors should be prohibited from attending at meetings of the company, but the peculiar position of collectors as intermediaries between the company and the company's policy-holders makes it undesirable that they should be present at the company's meetings. That objection, however, does not appear to apply to the indoor staff of the company.
I am not particularly interested in this except from a commercial point of view, and I would like to ask the Minister what his view of a meeting is. I would have thought that he meant by that a board meeting because, as it appears, it would practically prevent a collector attending at the premises of the company and talking to several of the officials. As I say, it is from an industrial point of view that I am wondering if the Minister does not mean a board meeting.
Why should not a collector attend a meeting of the company?
Because it is held that a collector, being an intermediary between the company and the policyholder, should not be present at the annual meeting of the company; that he occupies a peculiar position in relation to the company, and it was held that it was undesirable that he should be present. We are carrying into this law provisions that have been in operation already. Perhaps the situation which occasioned them may be in course of modification with the passage of time, but it is probably desirable to retain them at present.
Was this brought over from the British legislation?
From the Collecting Societies Act of 1896.
Oh, I see.
That Act has been repealed by the Bill, but we are carrying forward this provision.
In that event, Deputy Dockrell's question will have to be answered because, according to this, it would seem that collectors could not attend any meeting. Is this a prohibition against attending a collectors' meeting, let us say, or a general meeting of the company?
A general meeting of the company.
That is not very clear, is it?
Yes, a meeting of the shareholders of the company.
Is a meeting of a board of directors of a company a meeting of the company?
No, that is a meeting of the board of the company. It is set out somewhere and I am trying to find it for the Deputy.
It is defined elsewhere?
I think so. What constitutes a meeting of a company is dealt with in Section 64 of the Companies Consolidation Act, 1908.
Amendment, by leave, withdrawn.
Section 69 agreed to.
SECTION 70 (4)
References in this section to regular employment shall include regular part-time employment as well as regular whole-time employment.
I move amendment No. 156:—
To delete sub-section (4).
The purpose of this amendment is to delete the reference to part-time employment. It is felt that in the reorganisation of the business, having regard to the position of the employees of the company, they ought to be fulltime employees and that arrangements should be made accordingly.
The effect of the sub-section is not what the Deputy intends. The effect would be to allow a part-time employee to employ another person to do a matter that is prohibited by the section. Sub-section (1) reads:—
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 assurance with that or any other industrial assurance company.
In sub-section (4) we merely define what is regular employment. It is clear that whatever prohibition should apply against regular employees should apply also against employees who are part-time employees.
Mr. Murphy
Will the Minister endeavour to meet what is behind the amendment?
I know what is behind the amendment, but that would relate, possibly, to another type of Bill than the one we have before us, dealing with the regulation and conduct of insurance companies in relation to policy-holders. A conditions of employment Bill relating to the insurance industry would have to be framed differently.
Mr. Murphy
You will not lose sight of it?
We have a very ambitious programme in relation to conditions of employment.
Amendment, by leave, withdrawn.
Reference to "collector" appeared originally in Section 43. Sub-section (2) of Section 70 says:—
Every person (other than an industrial assurance company) who employs another person to procure or endeavour to procure any person to enter into a contract of industrial assurance with an industrial assurance company shall be guilty of an offence under this sub-section and shall be liable on summary conviction thereof to a fine not exceeding £10.
Section 43, however, says that "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 of or substitute for any such person, and also includes a person who holds any interest in a collecting book.
The word "collector" in Section 70 deals only with a person in regular employment.
Suppose a person solicits business or induces a person to enter into insurance with an industrial assurance company?
The Deputy is confusing two things. The term "collector" is commonly used to describe an official of an insurance company. We are using the term "collector" in this Bill only where we mean what exactly is the definition of the word "collector." Undoubtedly it is applied generally to certain persons employed by an insurance company. The word "collector" nevertheless is not used because we do not mean it in the sense defined here. We mean an agent of the company.
How far does sub-section (3) operate? It says:
Every person not in the regular employment of an industrial assurance company who procures or endeavours to procure any person to enter into a contract of industrial assurance with such company shall be guilty of an offence under this sub-section and shall be liable on summary conviction thereof to a fine not exceeding ten pounds.
Does that mean that if I say to someone that it would be a wise thing to take out a policy with a company I commit an offence?
I do not think so. I do not think the phrase "procures or endeavours to procure" would cover advice given. It certainly would not cover advice given by a solicitor or bank manager.
Why?
Because the words used in the Bill have a different meaning.
It astonishes me. Supposing I go to a person and say that I think it would be a wise thing to take out a policy of insurance to provide expenses which are likely to accrue, and tell that person that he would be well advised to go to So-and-so, am I not trying to procure business for an insurance company?
Not necessarily.
Speaking personally of what will happen, people will come to me and tell me the facts and ask what they ought to do. In certain circumstances, I may advise them that the best thing to do is to take out an insurance policy and to pay 6d. a week so that they will have a nest-egg to meet contingencies when they arise. If I tell them they had better see So-and-so, ordinarily I would name a certain insurance company. That would amount to an inducement to take out an insurance policy, and it seems from this sub-section that it would make me liable on summary conviction to a fine not exceeding £10. If that is so I object most strenuously to the section.
The whole purpose of the section is to prevent misrepresentation as to the advantages to be secured by insuring with a particular company, by persons not agents of the company. If they are agents of the company there are other means of dealing with them. It is quite clear that the provisions of the section will not operate to render liable to a penalty a person who gives friendly advice. That is different from procuring any person to enter into a contract.
I am afraid the construction of the sub-section is open to the interpretation given it by Deputy Dillon. It may be far fetched but it may happen. Perhaps a person might in his own interest advise a person to go to a particular insurance company, saying that that company in his view is the best company to trust with money.
The same phrase is used in the British Act of 1923, and I am certain no such interpretation was put upon it.
Yet, it may be put on it here.
I claim the right as a free citizen of this State to go to my neighbour and to say that I prefer A B to C D company, and I decline to be made liable on summary conviction to a fine of £10.
You are getting near the point on which certain abuses arose.
Let us be clear on this. Can I go to my friend and invite him to take out an insurance policy with A B company, the office of which is in O'Connell Street, and the agent for which lives at the north side of the city? If I cannot do that I say that I ought to be free to do so.
I am not saying that the Deputy is not free to do so. What we are endeavouring to do is to prevent a person who is not in the regular employment of the company canvassing for business with that company.
Surely we ought to know what our liabilities are in that regard. I would be interested to know what is the evil which the Minister apprehends could arise?
There is so much misrepresentation as to the nature of the cover provided by an insurance policy, the view as a whole is that only persons who are authorised to do so by companies selling policies should canvass persons to take out these policies.
Do you mean to say that a citizen of this State cannot advise a neighbour to take a policy with an insurance company without committing an offence? If any such proviso is in the British Act of Parliament the sooner it is taken out the better. It seems to me to be an absolutely extravagant interference with the normal activities of society to attempt to legislate in such a direction.
Some very gross scandals arose out of the practice of allowing persons not under control of companies to sell insurance for these companies.
That is not what the sub-section says. It is not a prohibition of persons, not in the employment of the companies. The sub-section says that a person may not "procure or endeavour to procure any person to enter into a contract of industrial assurance" in any such company. I say that that can be interpreted to mean that you cannot advise a person to take out a policy in a particular company. I object to such a sub-section strenuously. If there are terrible abuses arising, which nothing but this section can correct, the Minister should tell us what they are.
The section is designed to prevent assurance with any company being sold by a person who is not in the regular employment of that company, subject to its control and acting as its agent.
It goes beyond that.
It does not go beyond that. It is similar to the provision in the 1923 Act in Britain and it is designed to achieve the same purpose. It has been the law there for the last 13 years.
Let us take this case. I live in a small country town in which there are three insurance agents for three different companies. A neighbour of mine is approached by the three agents and that neighbour comes in to me and says: "I am bothered by Pat So-and-so, Tom So-and-so and Jim So-and-so, to take out an insurance policy with them. What should I do?" I say to him: "If I were you I would take out a policy with Jim So-and-so. He represents the best company and you should deal with him. If I were taking out a policy I would take it for so much and I would advise you to deal with Jim." In my opinion that advice renders me liable to prosecution for having procured a person to enter into a contract of industrial assurance.
I am afraid the section does not provide for that.
But it does.
It might.
Surely my advice in that case does amount to procuring a person to enter into a contract of industrial assurance with Jim? See what is going to happen. The other two insurance agents in the town who know the provisions of the law are going to come to me and say: "We shall soon civilise you."
I hope the Deputy will advise his friend to insure with an Irish company.
It is all right for the Minister, who lives in the comfortable purlieus of the City of Dublin, to scoff at this, but the agents of the other two companies can come to me and say: "The advice you gave amounts to a criminal offence. If that happens again we shall prosecute you." Surely, this section puts it in the power of any agent in the country to do that.
I do not think it does.
It is not what the Minister thinks. We are now making a law, and it is what the courts may think hereafter. Such a case as Deputy Dillon envisages might come before the court, and it might be held hereafter by some unreasonable court to be an offence. Apart from that point, I should like to know what are the abuses against which the section is aimed? Are they abuses tried on behalf of the company?
Yes.
If that is so, I take it the companies carry out the abuses through other people. There is a method through this section of allowing the company to do their evil work and get out of the consequences of the section.
I do not think so.
Suppose the companies appoint him at ld. per year?
Then he is a regular employee under the company's control.
If they appoint him part-time at ¼d. per year?
He is a man who is under their control.
The effect of the section is that everybody who is not under the company's control is liable to assault by the regular agent. Everybody who is under the company's control runs free of the section, so that everybody with malice in his mind, by taking a retaining fee of ¼d. per year, evades the section, while everybody who acts in perfect good faith can have the section invoked against him.
If an agent induces some person to take out a policy by gross misrepresentation, the company cannot say: "He is not employed by us; we have no responsibility for what he said." That is what the section is intended to provide against. The company cannot do that under this section.
Section put and agreed to.
Section 71 ordered to stand part of the Bill.
SECTION 72.
Question proposed: "That Section 72 stand part of the Bill."
This section brings us to Part VI of the Bill. I wish to make a few remarks in regard to it, and perhaps if they are not in order on this section, you, a Leas-Chinn Comhairle, will call me to order. This is a very controversial section. I take it that the ideal solution of this reinsurance problem would be that all the companies should join together. I think that the Minister has said so himself. I understood that certain proposals were made to the Minister. Perhaps if the Minister could tell us before we start to debate the section, how far any proposals have been made, and whether they met with his approval or not, it would save time. I take it that it is agreed by everybody that if there could be some form of agreed measure, under which all the insurance companies would join together, it would be the ideal solution.
I am not in a position to make any statement on that matter and I think we should enact Part VI of the Bill. I have stated already, that if proposals which will achieve the purpose aimed at in Part VI of the Bill, without the necessity of bringing that Part into operation, are put forward, and operated, I am prepared to consider leaving Part VI of the Bill inoperative. I think, however, we should have Part VI enshrined in the Bill, capable of being brought into operation, in case no proposals should be submitted or, if submitted, that they should prove unworkable or unacceptable.
Perhaps I went too far in saying that we should not discuss Part VI. What I intended to ask the Minister was whether he was in a position to say how far the proposals had gone. Certainly I took it from his remarks that the door is not yet closed on proposals and I wish to know if the proposals are still being considered. I do not wish to press him to make any statement if he does not feel in a position to do so, but I take it from his remarks that the door is not yet shut on that solution of the matter. I suppose there is nothing left to us but to go on with Part VI. I take it from his remarks that the matter is at the moment under consideration, but perhaps I should not ask him to say anything more on that.
Is the Minister going to give us any further statement on this general question of reinsurance? So far as my information goes, the power to establish a reinsurance corporation ought not to be granted to him at all. I am informed that Part VI of the Bill is completely unworkable and futile. So far as I am aware, the whole principle of reinsurance depends upon a system of reinsurance treaties. The foundation upon which a reinsurance treaty stands is that the moment any given company signs a cover note, the stipulated percentage of the risk is simultaneously covered by the parties to the reinsurance treaty. Unless that were so, an insurance company taking a risk for £100,000 and intending to distribute 80 per cent. of that risk — which might be assumed to be the fair average of the distribution of fire and accident risks—if they had to wait to negotiate an ad hoc treaty for that risk might encounter a catastrophe. Disaster might overtake them in respect of a risk which was quite beyond their capacity to bear before they had time to pass on the four-fifths of the risk which they intended to dispose of. For that reason. the treaty system has been adopted by all insurance companies. A company knows, the moment a cover note is issued to secure a person in respect of fire or accident risk, that the liability of the reinsurers is opened to the share of that risk that it has been previously agreed to pass on. Under Part VI of the Bill, the proposal is that the Minister shall establish the Reinsurance Company of Ireland and that every Irish company should then be obliged to open negotiations with the company.
Every company—not every Irish company.
Every licensed company. The company is to open negotiations with the Reinsurance Company of Ireland ad hoc for each risk.
No.
Either ad hoc or by treaty.
Enter into an agreement with the reinsurers.
Is it understood that the nature of the agreement which is to subsist between the reinsurance company and the companies operating in Ireland will be of the nature of a reinsurance treaty such as is already in operation between tariff companies?
Certainly.
There is provision in the Bill empowering the company to consider a proposal and to accept a part, or all, or none of it.
Perhaps the Deputy would read Section 84.
What of Section 84?
Deputy Costello suggests that we might deal with this question more effectively on Section 84. I do not want to anticipate discussion. My submission is that, according to the concluding paragraph of Section 84, the company may, in the case of any particular risk, refuse to retain such portion of the risk as they shall direct.
No, those are not the words of the section. The section says:—
refuse to accept the reinsurance thereof unless such assurance company retains such portion of such risk as the company shall direct.
In other words, the company which is reinsuring the risk must retain a proportion of it.
What proportion?
Such proportion as the company shall direct. The reinsurance company will carry on its reinsurance business in the ordinary way.
Let us not get into the habit of contradicting one another across the floor of the House. I shall put my case and the Minister can then reply to it.
Will this question not be debated on Section 84?
It may, but, on the question whether this reinsurance corporation should be set up at all or not, I make the case that certain facts emerge which make it undesirable that it should be set up. I say that the lines on which the Minister proposes to run this corporation strike at the whole basis on which treaty reinsurance is run. The foundation of treaty reinsurance is that, at the beginning of the treaty period you know that, in respect of every risk you take, the treaty amount of the risk will be taken up by the reinsurance companies. The moment you introduce an element enabling any one of the parties to the reinsurance treaty to say, in respect of a given risk: "We revoke our undertaking and will not take the treaty-agreed share of that risk unless you are prepared to undertake further commitments," then the whole foundation upon which treaty reinsurance is built collapses. The very essence of that arrangement is that, at the moment of the writing of the cover note, the reinsurance is effected, even though the party taking the reinsurance knows nothing of the nature of the original risk.
I object to the establishment of this corporation, further, on the ground that a later section provides that every contract of reinsurance shall be guaranteed by the Government but it will be open to nobody to sue the Government to recover the amount of the guarantee. Since the word "guarantee" was first incorporated in the English language was there ever a guarantee of that character? "I will guarantee to pay you something but I make the proviso that you must not ask me to fulfil my guarantee." The use of the words in such a context makes the English language meaningless. I heard no indication from the Minister of the ground on which he defends these proposals and unless and until the Minister is in a position to give us some information on these fundamental objections to the establishment of a reinsurance corporation, I do not see how he can ask the House to vote for the establishment of the corporation at all.
The Deputy's objections to the proposal are based on a complete misconception of the provisions of the Bill. The Bill is intended to provide, and does in fact provide, that the reinsurance company will transact its business on ordinary commercial lines—as reinsurance business is transacted by other companies, that is, not by accepting separate risks but by making comprehensive treaties with insurance companies. The provisions of Section 84 in that respect are quite clear. They state that—
every assurance company which effects assurance business ... in Saorstát Eireann shall enter into an agreement—
these are the words the meaning of which Deputy Dillon does not understand—
with the company whereby such assurance company agrees that, if and so far as it reinsures its assurance business ... it will reinsure with the company, but subject to the qualification that the company may, in the case of any particular risk, refuse to accept the reinsurance thereof unless such assurance company retains such portion of such risk as the company shall direct.
What reinsurance treaty ever contained that proviso?
It is not uncommon.
Does any reinsurance treaty contain such a provision?
I am quite certain that there are reinsurance treaties with that proviso.
No such reinsurance treaty exists.
In a reinsurance treaty the reinsurance company provides that it need not accept a reinsurance risk unless the company which wrote the risk retains some portion of it.
A particular risk?
That contingency is always provided for. The agreement which the reinsurance company may make with an insurance company may contain that qualification—that reinsurance cover will not apply to a risk in respect of which the company that wrote the risk does not retain the stipulated portion thereof. That all relates to the agreement. It is contemplated that there shall be agreement for reinsurance with each company—an agreement of the ordinary kind which will afford the necessary reinsurance cover forthwith to another company writing insurance business in the Saorstát.
The Minister, I think, has not stated the exact effect of the reinsurance treaties.
I suggest that having got thus far we might take matters in order and deal with Section 84.
I object to giving those powers to the corporation at all.
It is much more regular to deal with Section 84.
Why not say much more convenient?
I am afraid the Minister said something about Section 84 with which we do not agree. However, I suppose that can wait.
It is now perfectly clear that we are not going to finish the Insurance Bill to-night.
Clear to whom?
Well, it is pretty clear that we will not. There are still 30 amendments to be disposed of and on these there is a great deal of controversial matters. We could not get through Part VI quickly if there is going to be a general discussion on these matters.
The amendments to Section 84 inevitably give rise to discussion on the section. There are at least half a dozen amendments which would require separate decisions.
It is suggested that on Section 84 we should have a discussion on the amendments and then a general discussion on the section.
All these amendments, and the various points arising out of them, should be discussed first.
Yes, and then a discussion as to whether or not the reinsurance company should be set up.
Sections 72 to 81 put and agreed to.
SECTION 82.
(2) For the purposes of this section—
(a) inspection shall include taking copies of or making extracts from books, accounts and documents, and
(b) a demand for inspection shall be deemed to have been duly made by an officer of the Minister if such demand is made verbally at an office of the company to any bookkeeper or other member of the clerical staff of the company at such office.
I move amendment No. 157:—
In sub-section (2) (b), line 20, to delete all words after the word "demand" to the end of the paragraph, and substitute the words "is presented in writing by the officer of the Minister to the manager, secretary or other equally responsible official of the company."
The purport of the section is to provide that the officer appointed by the Minister may enter the premises of a company at any time and there demand to make an inspection of all books, accounts and documents held by the company, and the section states that a demand for inspection shall be deemed to have been duly made by an officer of the Minister "if such demand is made verbally at an office of the company to any bookkeeper or other member of the clerical staff of the company at such office." That is the most mandatory section I have yet seen in any Act. If we are to maintain a shadow of the fiction that a man's house is his castle, how can we pass that section? Here we have a public servant endeavouring to force his way into your premises——
Into the premises of the Reinsurance Company.
Why I object to this principle is that, as sure as any Deputy of this House is a foot high, this section will be quoted as a precedent to justify officers of the Department of Agriculture in climbing up to the top of my chimney, and it will be pointed out that what was good enough for an insurance office here in the City of Dublin is good enough for Pat Murphy down in the bogs in the country.
If the State ever took on the same responsibility for the Deputy as we are taking on for the insurance company, we should have these powers.
All I ask now is that we should do some repairs to this shattered fabric of a man's castle and require the Minister to present in writing to the manager, secretary, or any other responsible official of the corporation a demand for inspection. In fact, that is what will happen. It is unthinkable to imagine that notice will be given to a clerk or junior officer sitting in an outside office. I want this principle to be observed.
And I want the other principle observed, that when we are taking over responsibility for the Reinsurance Company, we should have these powers.
Let us not waste 20 minutes discussing this matter.
I want to preserve the other principle—that is, that when the State has taken such a wide degree of responsibility for these companies, it should have the widest possible power to inquire into their affairs.
I do not press the Minister, but I ask whether he will bring in something on the Report Stage to alter this section in the way I suggested.
Amendment, by leave, withdrawn.
Sections 82 and 83 agreed to.
SECTION 84.
Every assurance company which effects assurance business (excluding life assurance business and industrial assurance business, but including the renewal of any other assurance business, the original contract for which was entered into before the commencement of this Part of this Act) in Saorstát Eireann shall enter into an agreement with the company whereby such assurance company agrees that, if and so far as it reinsures its assurance business (excluding and including as aforesaid), it will reinsure with the company, but subject to the qualification that the company may, in the case of any particular risk, refuse to accept the reinsurance thereof unless such assurance company retains such portion of such risk as the company shall direct.
We are withdrawing amendment No. 158.
Amendment not moved.
The following amendments stood on the Order Paper:—
159. In line 28, before the words "assurance company" to insert the words "Saorstát Eireann."—(Fionán Lynch.)
163. At the end of the section to add a new sub-section as follows:—
Whenever any foreign assurance company effects any assurance business in Saorstát Eireann (including the removal of any such business the original contract for which was entered into before the commencement of this Part of this Act) such company shall not reinsure the whole or any part of such business with any person until either such company has entered into an agreement with the company to cede to it not less than a moiety of such business, or the company has refused to accept the reinsurance or any portion of the reinsurance of such business.—(Fionán Lynch.)
Mr. Bourke
I do not know what the point of amendment No. 159 is.
It is related to amendment No. 163. The proposal is that every foreign company should offer to the company at least half of its business. The amendment will not be accepted. I think the reinsurance company will have to transact its business in accordance with the usual practice of reinsurance and I would be disposed to resist amendment No. 163.
Amendment No. 159 not moved.
Mr. Bourke
I move amendment No. 160:—
160. To delete all words from the word "but," line 36, to and including the word "direct," line 39, at the end of the section and substitute the words "33? per cent. of every risk which it underwrites.—(Seamus A. Bourke.)
Section 84 seems to me to make it obligatory on the insurance company to reinsure with the reinsurance corporation. At the same time, it gives that corporation power, if it so desires, to select the portion of the risk which, in each case, it will take. A provision of that kind would, in my opinion, make it impossible to continue any reinsurance treaties. In fact, it would create havoc in the whole reinsurance business of the country. To my mind, it reverses the whole idea at the back of reinsurance, because it enables the reinsurance company to decide what portion of the risk it will take rather than give the original company the liberty of deciding what portion of the risk it will lay off. It is really putting the insurance company in the position of being a reinsurance company for the reinsurance company.
Every insurance company has its own books to balance. It is, in that respect, more or less in the position of a bookmaker. Every bookmaker has to balance his books. If he finds he has too much money on a particular horse, he has to lay that money off with another bookmaker. If this Government, which seems to be travelling rapidly in that direction, ever arrive at the stage where they are going to make it compulsory for all the bookmakers in Ireland to lay off their bets with one particular bookmaker and, at the same time, gives that bookmaker the liberty to decide what portion of the risk in any particular case he will take, then we will have the betting business pretty much on a level with the reinsurance business. If a particular bookmaker finds he has £1,000 on the favourite more than he can carry, he goes to the official Government bookmaker to lay off the £1,000 and he is told he can lay off only £200 and carry the remainder of the risk himself. Another bookmaker may have £500 too much on an outsider and he attempts to lay it off and is told he can lay off only £100. That is the type of position the insurance companies will be placed in under this section.
Every company has to act according to its own books. In one case, a company may be prepared to retain 80 per cent. or 99 per cent. or, in some cases, 100 per cent. of the risk and in another case they may not be anxious to retain more than 5 per cent. There are cases where the risk is exceptionally great and from a general standpoint the company is forced to lay off the bulk of it. Even in the case of acquiring business from one particular firm, the business of that firm is often divided into a great many lines. Take the case of the Great Southern Railways Company. The insurance company getting that business would probably have over 100 different lines. In one particular line, such as labourers' cottages, the company would be prepared to take all that risk. In the case of other lines it would not set out to take any more than 5 or 10 per cent. and it wants some insurance institution which will enable it to lay off the particular risk that it is not suitable to retain. If it is not given those facilities the company cannot carry on. If that company is compelled to go to the official reinsurance company first of all and allow that company to pick and choose what it desires to take, then it is unreasonable to expect that they will be able to get any other reinsurance company to cover that business and they may have to carry the risk themselves.
The amendment I suggest permits that a fair proportion, one-third, should go to the reinsurance corporation. It gives them a fair proportion of the business and, at the same time, while not giving the Minister the privilege of picking and choosing, it still leaves it open to the various companies to enter into reinsurance treaties with other reinsurance companies. I submit that it is a favourable provision all round, both from the point of view of the reinsurance company, the ordinary companies, the policy-holders and the public at large.
The Deputy's amendment would be, of course, impracticable. I do not think we could require the reinsurance with the company of such a fixed proportion of risks as the Deputy suggests. I may say at once that it is intended that the reinsurance company to be established under this part of the Bill, if it is brought into operation, will operate as any other reinsurance company, except in so far as the Act will provide that every company doing insurance business in the Saorstát will be required to enter into an agreement with it for the transaction of reinsurance business. It may, perhaps, relieve the minds of some Deputies if I say that amendment No. 116, in the name of Deputy Costello, is, in my opinion, unnecessary, although if the Deputy thinks otherwise and presses that the amendment should be inserted, I am prepared to do so. I think it is unnecessary, but I would be prepared, if the contrary opinion was strongly held——
It is quite strongly held; we hold that view very strongly.
I am quite prepared to agree to that and, similarly, to the other amendment in Deputy Costello's name, amendment No. 161 which, I think, is intended to clarify the intention of the section and which would clarify it, in my opinion, if inserted. By intimating my willingness to accept those two amendments, I perhaps convey to Deputies better than I could do otherwise, the intentions as to the mode of operation of the reinsurance company. It is possible that this part of the Bill may not be operated if alternative proposals for meeting the desires of the Government are put forward by the companies and brought into operation. In fact, from many points of view, it is obviously desirable that the State should stay out of this business if it can get its object achieved in any other way. Our object is to provide that the greatest possible proportion of every risk written in the Free State will be retained here to the limit that the resources of the various Irish organisations dealing with insurance will permit. That can be accomplished by means of such machinery as this part of the Bill proposes. It could possibly be accomplished by other means, and if other means are preferable to the companies and are put forward in a manner acceptable to us, we are quite prepared to contemplate leaving this part of the Bill inoperative.
But the essential purpose of this part of the Bill, the idea behind the establishment of the reinsurance company, is to ensure that some proportion of every risk written by a foreign company in the Saorstát will be retained here, either by the reinsurance company or by some Saorstát company to whom the reinsurance company has passed on that risk, so that to the limit of the combined resources of all the Irish offices in operation the risk will be retained here to whatever extent is found practicable. I have stated there are other obvious methods of accomplishing that end than those proposed in the Bill, but that would involve the voluntary co-operation and participation of all the companies concerned. If that cannot be procured, then the same end can be met by means of these reinsurance proposals.
I reiterate that the reinsurance company of Ireland, when established, will operate in the ordinary way, entering into agreements with the various companies operating here, agreements of the ordinary kind negotiated between these companies and the board of the reinsurance company in accordance with the circumstances of the concern or the circumstances existing at the time. I do not think any difficulty will arise in that regard. It is certainly not intended to create any undue difficulties for the companies doing this class of business here other than the difficulties inevitable in the changes necessary to give effect to the desire of the Government in this connection.
It goes some distance to meet a number of the objections that we had to Section 84 to find that the Minister intends to accept amendments Nos. 161 and 164 in my name. At the same time I would like to ask the Minister if he is still definitely of the opinion that the last four lines of the section are absolutely essential:
Subject to the qualification that the company may, in the case of any particular risk, refuse to accept the reinsurance thereof unless such assurance company retains such portion of such risk as the company shall direct.
I am informed that a proviso such as that is not usual in treaty arrangements. It would not be reasonable, of course, that the reinsurance company should be forced to accept every reinsurance policy on the terms that are dictated to it by the companies, but at the same time it should not be in a position itself to dictate the terms on which it will accept reinsurance proposals. I would like to know from the Minister if he still adheres to the idea that this proviso is absolutely essential. I accept, of course, his statement that his idea is that this reinsurance company should operate on the same business lines as ordinary reinsurance companies do at the present moment.
That is intended, but a reinsurance treaty at the present time between one company and another is a voluntary arrangement. To a certain extent, that voluntary element is being removed from the relations between companies licensed to do business here and the reinsurance company of Ireland because it says that there shall be an agreement. In these circumstances I think it is necessary to have the qualification to which the Deputy refers which is designed to prevent a company, having a reinsurance agreement with the reinsurance company, writing all sorts of bad risks, passing the whole of those risks on to the reinsurance company and retaining none itself. The object of this provision is to ensure that that cannot happen, and that the reinsurance company, if it has good reasons for doing so, can, in relation to a particular risk, refuse to accept the reinsurance unless a stipulated proportion of the risk is retained by the company writing it.
The Minister's very frank statement has helped to clear the air a good deal. Having signified his intention to accept our amendments, I suppose we may as well tell him now what we think is wrong with Section 84.
Might not the Deputy postpone discussion till the section is put?
I am simply following the example of the two previous speakers. I really do not know where we are.
The Deputy may continue.
The Minister says that the words in the last four lines of Section 84, quoted a moment ago by Deputy Costello, have the effect of creating treaty obligations with other insurance companies. That is where we join issue with him. We deny that. The Minister says that he wishes to prevent insurance companies handing over the whole of very bad risks to the reinsurance company while retaining none themselves. It would be absurd if that were allowed, and such a thing is not contained in any of our proposals. If the Minister is going to proceed along treaty lines, I think the way that operates is that while a company can discard a portion of the risk, it must keep at least 1/15th of it. If the Minister made a provision of that sort, a company would know how it stood. It would know that it could not lay off the whole of its risk with the reinsurance company, and therefore would not write it. That would be a business-like arrangement, and it is what prevails at present. But what you cannot have is a case like this: A fire starts in some big business concern and continues burning for three days. During all that time the insurance company may be fighting with the reinsurance company as to whether it held £1,000 or £10,000 of the risk involved in that case. Would not that be a beautiful position for a small insurance company to be in, to be told by the reinsurance company when the premises were well alight: "You are on for £9,000 of this risk, because you know we could not take it on." I think the Minister should realise that companies dealing with a reinsurance company must know where they stand—that they can have certain risks placed without any nonsense. If the Minister agreed to take out this proviso, he would find that there was no intention on the part of any Deputy to suggest that an insurance company should be allowed to plant the whole of a risk on the reinsurance company, retaining none itself. If that could happen it would be absurd. But I think the Minister can see that his proposal will not do either.
I suggest to the Deputy that he is misreading the section. All that it provides is that each company shall enter into a reinsurance treaty of the ordinary kind under which immediate reinsurance cover will be provided in all cases except one.
What is that?
The case where a company writing a risk retains none of it itself.
I suggest that the proper way to meet that would be to set out in the Bill the percentage that a company is to retain, or at any rate, take out of the Bill the proviso that the reinsurance company can refuse portion of a risk.
The reinsurance company will make such arrangements as it thinks proper with a company, subject, of course, to the conditions laid down in the section.
There is the historic case of a reinsurance company refusing to acknowledge a £9,000 risk with a company when insured premises were well alight. That is the sort of thing that I do not want to happen here, and the Minister can quite easily get over his objection to it by saying they shall retain such portion as may be agreed upon, or something like that.
That will be stipulated in the agreement. There is no question of that being discussed after the claim has arisen, because it will be provided for in the agreement between the company and the reinsurance company.
It is not in the section.
The section refers to an agreement to be made.
Giving them provisos to override the agreement according to the Bill.
It provides that an agreement shall be made, subject to certain qualifications. This agreement will provide for these things.
Must these qualifications not be written into the agreement as a necessary term of it? In every agreement there will be, either expressly or by force of the Statute, terms that the company may refuse, when a particular risk is received, to accept.
Unless the company writing the risk retains the stipulated percentage thereof.
It may be 99 per cent.
Whatever the reinsureance company fixes in its negotiations with each company. It will be provided for in the agreement.
I do not think the section as it stands means that. Certainly it does not make it clear.
The Minister's statement left nothing to be desired so far as approaching this as a business-like transaction, that this should be carried out as a commerial undertaking. But, if this section contained some such provision as that the insurance company shall retain some portion, a minimum portion, of the risk, not exceeding such-and-such a percentage, that would leave the insurance company dealing with the reinsurance company in a position to say, "I have carried out my part of the bargain, now you carry out yours." A large number of people appear to have fallen into the same error as I did in reference to the last few lines of this section, namely, that it gives the reinsurance corporation the right to do something that was never in any ordinary reinsurance treaty. We are dealing with a Government-backed or Government-owned company, according to this section, whose officers will be cold-blooded and will say, "I cannot go beyond the provisions of the Act; there is your section of it, read it." I appeal to the Minister to make that portion of it right, as it is a very important section.
I understood the Minister to say that the meaning of the qualification was that the particular risk proportion to be retained was to be provided for in the insurance treaty, the treaty agreement. Surely the concluding words of the section as it stands do not mean that: "Unless such assurance company retains such portion of such risk as the company shall direct." As I read the section, as it stands, it will be competent for the company, no matter what terms are in the agreement, when a particular risk offers, to say in respect of that particular risk: "You must retain 50, 70, 80, 90 or any other percentage." But, if the intention is that portion of the risk to be retained should be fixed in the insurance treaty, then surely another form of words must be found to make that clear. The concluding words, "as the company shall direct," must go and be replaced by some such words as "as provided by the agreement."
It is clear that the only difference between us is as to whether the section, as drafted, has the same meaning which I have given in describing it. I am prepared to have the drafting of the section revised, because it possibly could be made a little clearer at the expense of being made a little longer, and it is no harm to have it longer if it is clearer. The intention is that the qualification in the final part of it shall be related to the agreement, and that, when the terms of the agreement between the company and the reinsurance company are being effected, the circumstances under which the reinsurance company will not be responsible for reinsurance, because of the failure of the company writing the risk to retain a reasonable proportion of it, such proportion as is fixed, will be clearly stated. We have to deal with two novel features in relation to these reinsurance treaties. The reinsurance treaties will be similar to the ordinary treaties made every day voluntarily between two companies, except for the two new features introduced by this Bill. One is the provision which requires every company licensed to do this business here, and, doing it, to reinsure with this company and, in consequence of that, I have to prevent the situation rising in which the company will write all sorts of doubtful and bad risks and pass the whole of them on to the reinsurance company.
I repudiate that portion.
I agree. The whole purpose of this section is to provide for these two points, to provide that each company shall reinsure with this company, and, secondly, to provide, in consequence, that the company writing the risk shall exercise the usual precautions to prevent unduly bad risks being written. I am prepared to consider the drafting of the section to ensure that the intentions in that regard are fully carried out. In any event, the intimation that I am prepared to accept amendments Nos. 161 and 164, in Deputy Costello's name, makes clear what the intention is. These amendments, in my opinion, are not necessary, except for the purpose of clarification, but as they are pressed for the purpose of clarification, I am prepared to accept them. They will, I think, help also to clear up the intentions in relation to this section.
The ideal thing would be to redraft the section.
It will probably be necessary, in any event, as we are incorporating the provisions of these two amendments in the name of Deputy Costello.
Possibly redrafting the section to make it clear will be better than incorporating the amendments.
What I am thinking of doing is to get the section redrafted to incorporate the amendments.
Mr. Bourke
My idea in putting down the amendment is that I am assured that companies which have very good reinsurance treaties think that, when this compulsory reinsurance is put in, they will be left in the position that, when they go to the reinsurance company and are turned down on several lines of business, they will find themselves high and dry and cannot get cover. If the Minister guarantees that that will not take place, or if it can be provided for in any way, I am satisfied.
Definitely that will not take place.
Mr. Bourke
That is the one danger in the section.
It is definitely intended that it will not take place. So far as the Saorstát companies are concerned, these agreements will be reciprocal agreements, and involve the passing of business in both directions, that is from the company writing the risks to the reinsurance company, and from the reinsurance company accepting the risks from other companies on to the Irish companies.
Amendment, by leave, withdrawn.
It is better to leave over amendments Nos. 161 and 164 and I shall have the drafting looked at by the draftsman.
Amendment No. 161 not moved.
The following amendment was on the Order Paper in the name of Deputy Dillon:—
(162) provided no assurance company shall be compelled to reinsure with the company on terms less favourable than those enjoyed under treaties entered into before the passing of this Act.
I think that amendment would be much too rigid altogether. It would not provide for circumstances in which conditions other than those now prevailing might exist. The company, as I said, will have to transact its business on ordinary reinsurance lines and should not be unduly hampered by rigid statutory provisions of that kind.
I will not move it. It can be put down again when the new draft is introduced.
Amendment not moved.
Amendments Nos. 163 and 164 not moved.
Question proposed: "That section No. 84 stand part of the Bill."
I see in this section the words—
excluding life assurance business but including the renewal of any other assurance business, the original contract for which was entered into before the commencement of this part of this Act.
It occurs to me that in the preliminary stages it might be very desirable to let many of the short term risks run on. The valuing of them up to a certain point and inviting the reinsurance company to come to terms about something that was half expired would be an exceedingly awkward and difficult matter to carry out. I should like to ask the Minister how far the running of short term risks could be availed of to straighten out a very awkward part of the business. I realise, of course, that some of these risks are not short term, and that they would have to be provided for, but the Minister can quite easily see that, in the case of a 12 months' risk, of which six months had expired, the simplest thing would be to let it run on. Would that be illegal under the section?
No, the compulsory provisions operate only in respect of assurance business effected in the Saorstát after the commencement of the operation of the Act. That includes the renewal of any assurance business, the original contract for which was entered into before the commencement of the Act. Until that business comes up for renewal, the compulsory provisions of the Act do not apply.
The running of the risk until the next renewal is not illegal under this.
No, there is no compulsory obligation to effect a reinsurance of that risk with the reinsurance company. It could be done voluntarily of course.
What is the Minister's idea of renewal—is it a new premium?
Yes, the ordinary meaning of the word. Most of these risks are insured on an annual basis and are renewed from year to year.
The acid test would be that it was a renewal and that money was passing?
I presume so.
Question put and agreed to.
Progress reported; Committee to sit again on Tuesday.