Last night we were discussing two alternative methods of dealing with the latest problem. One of these methods is set out in amendment No. 133 and the other is contained in the Minister's scheme in the Bill. I think it may be appropriate at the moment to point out to the House that the abuse of lapsed policies which this is designed to remedy is an abuse upon which has been built a great deal of the prosperity of the great industrial assurance companies of the world. At the time when vast reserves were accumulated abroad as a result of lapsed policies, it must be borne in mind that that was then a perfectly legal proceeding. But it should be borne in mind also when comparing the state of the Irish companies with the great wealthy British and American companies that these latter companies had the advantage of operating freely without any legislative interference in the matter of lapsed policies while the Irish companies from the date on which they were instituted had to proceed on much more conservative lines and had to allow their policy-holders more generous terms than their more wealthy rivals had been required to give them long ago.
Last night we asked the question how an agent could discharge himself from the guilt of negligence under sub-section (2) of Section 61 if he did not make ten separate calls during the ten-week period which must elapse before the insurance company lapsed the policy for non-payment of premium. Short of getting an express letter addressed to the company from the policy-holder announcing that the latter desired to lapse the policy, I do not see how an insurance agent could avoid going ten times and asking the policy-holder if he or she were not prepared to resume payment of the dividend arrears and the dividend now due. I think, however, from the point of view of the policy-holder that is not as satisfactory an arrangement as if the insurance company were required to send the policy-holder a form of notice giving him the limited time in which to resume payment of dividends and notifying him that unless he did resume payment of dividends within that time that this policy would lapse and that he would not lose the premiums that he had paid before because nobody suggests that that would be the case. On the date of the lapse he would receive a paid-up policy in respect of what he had so far contracted.
I want to urge again that while it is admitted that legislation concerning industrial assurance must have as its prime purpose the protection of the policy-holder, owing to the peculiar character of the policy-holders in such contract, we ought not to allow ourselves to be carried away into doing a substantial injustice to a properly conducted business. When the question of a lapse arises the insurance company must prove to the satisfaction of the responsible authority that that lapse did not take place as a result of any negligence on the part of their agents. If my memory serves me right the policy can be revised over a pretty considerable period. In fact, if the policy-holder alleges that he was willing to pay his premium if the collector were to call for it, the policy goes on indefinitely until the time for its completion. But anyone who is familiar with insurance practice will know that agents habitually change their employment and very frequently an agent who is in the employment of one company now, is in the employment of quite another company in 12 months' time and may have passed to the third company in three or four years' time. When that agent ceases to be employed by the first company he has no inducement whatever to come forward and give evidence on behalf of the employer whose employment he left three years ago and with whom he has now no contract at all. The insurance company alleges that by the implied will of the policy-holder the policy has lapsed. The responsible authority asks for proof and that insurance company says "So-and-so was the agent responsible," and the responsible authority says "Produce that agent." If they go and find him they may find that he may be in some other employment now. They ask him to go down to the court to testify on their behalf. He either will not do it or if he goes to the court he says he has no recollection of the transaction at all, that he was handling thousands of claims and policies at the time—he has no recollection. If it were represented emphatically by the policy-holder that the lapse had taken place as a result of negligence on the agent's part, the latter would not be prepared to deny it.
Does not the House see that unless there is some method whereby the insurance company can establish documentary evidence at the time of the lapse that they did honestly take every precaution to ensure that the policy-holder would be clear in his mind as to what the consequence of withholding premiums was, that their position becomes absolutely impossible and that to establish a lapse against a dishonest policy-holder becomes quite impossible for any company no matter how much the right may be on the company's side? Lastly, I believe in a bold policy where a certain job has to be done, but I believe it is useful to learn from experience. The method set out in amendment No. 133 has had ten years' trial in Great Britain. The method set out in the Minister's scheme has had no trial at all. So far as I am aware, the method which has been tried out in Great Britain, which is probably the greatest industrial assurance country in the world, has been eminently satisfactory and no claims have arisen in respect of policy-holders which have not been properly disposed of. With that evidence before us, would it not be a much wiser thing to adopt the tried and proven remedy for overcoming the abuses which we want to make an end of rather than to adopt something which yet remains to be tried out and which may not, in fact, operate as efficiently as the British plan is operating at the present time and has operated over the last decade?