Vol. 160 No. 10
I move amendment No. 1:—
In sub-section (1), lines nine and ten, to delete "and a managing director."
This amendment is followed by amendments Nos. 2, 3, 4, 7 and 8. They would all be consequential. Possibly, with the permission of the Chair, we might discuss the effect of all these amendments together?
Yes.
The purpose of these amendments is to put before the House a point of view which has occurred to me and which has been submitted to me by certain people who were concerned with the constitution of the board. As the Bill reads at present, under Section 5 the board would consist of a chairman, a managing director and three ordinary members. The point of view has been put forward with regard to boards of this type that a more effective and more efficient organisation would be acquired by having a board with a chairman and a manager and not a managing director.
There are quite obviously two points of view on a matter like this. I do not purport to be in any way particularly experienced or to have any special knowledge as to which is the better arrangement. It seems to me, however, that the main disadvantage in an organisation of this description of having a managing director is that you will have one person on the board of directors who, by reason of the fact that he is also responsible for the day-to-day running of the insurance corporation and by reason of the fact that he is the only person who is in day-to-day contact with all the facts and all the figures and statistics on which the running of the insurance organisation exists, will have too great a preponderance in the policy-making of the board. In other words, whilst it may be desirable that the man who is ultimately responsible for the day-to-day administration of the organisation should have a say in policy, that is outweighed by the danger that, notwithstanding even a good board or a board of strong personalities, you will end up in a situation in which he is running the thing on his own.
My suggestion in these amendments is that the board will remain without the manager as a member of it, that it will have the responsibility for policy decisions and that then the manager will have the responsibility of carrying out the decisions. That has got the undoubted advantage that the ultimate responsibility for the running of the insurance corporation will rest on the board—and it will rest on five people. Under such circumstances, there can be no danger of a manager, no matter how forceful or efficient he may be, as it were, controlling both the policy and administration. His function will be to administer and to administer in accordance with the policy laid down by the board.
It would, of course, in the ordinary way be obvious that he would have audience of the board and his views would be considered carefully by the board. It seems to me that the method which I suggest is inclined to be, for this particular type of organisation, more efficient and less likely to lead to the organisation being run by one person, which would not be desirable. If it were a question of running a profit-making organisation, possibly the managing director system is wise, but in this case I think possibly the proposal I make would be more desirable. It is not a matter of tremendous concern or principle, but I would ask the Minister to consider the possibility of doing more in that way or considering the possibility of framing this section so that the board could decide on either method, but certainly not to tie them down to having a managing director on the board.
I can see that in relation to a matter of this kind there are two points of view. I have had some examination made as to the practice adopted in relation to similar types of boards over the years and, frankly, there does not appear to be any settled practice. In relation to some boards there is a managing director and in relation to others, such as Fógra Failte, or An Bord Iascaigh Mhara, there are managers. The one matter that does impress me in relation to what Deputy Finlay has said is the fact that there may be some merit in keeping the policy-making part of the board's activities divorced and separated from its administrative work. If there is a managing director who runs the board in a full time capacity he, in effect, will become also the policy maker for the board because his prestige inevitably will be so great that his views would sway the members of the board. Unless any other Deputies have views on this matter, I think the best thing I can do is to consider the matter further between this and the Report Stage.
The whole question seems to be whether the chairman would be whole-time.
I would not imagine so.
If he were whole-time, it is quite obvious you would have two heads and it would then be better to have the manager system. If his position is such that he can give constant attention to the organisation but would not have the actual administration of the organisation, then it seems to me that you would want at the board somebody who is fairly constantly in touch with the work as a whole. Whether the chairmanship and managing directorship could be put together and have the other persons as a council is another point. In general I would be in favour of having, not a managing director, but a manager. A great deal would depend on the position of chairman.
I shall consider it between this and the Report Stage.
I move amendment No. 5:—
To add to the section the following new sub-section:-
() A member of the board shall hold office on such terms (other than the payment of remuneration and allowances for expenses) as shall be fixed by the Minister at the time of his appointment.
The purpose of this is to add a sub-section. Deputies will see, in the section as it stands, that in sub-section (3) the term of office of a member of the board shall be such period not exceeding five years. But there was no provision in the section referring to the terms upon which a director may be appointed. For instance as the section stands at the moment, when it obviously was not intended, the Minister could not provide for part-time or whole-time directors and the purpose of the amendment is to give that power and to make it clear that on appointment the Minister may define terms upon which a director may hold office.
Has the Minister no idea at the moment what he wants? Does he want them whole-time or part-time?
It would be part-time. So far as my present intention is concerned, I think there would be part-time directors and a whole-time manager and the chairman I imagine will be part-time.
Is it the intention that the board will determine the remuneration of the directors?
No, the Minister will determine that. It is provided for in the Bill.
Would it be possible for the Minister to have his mind made up fairly definitely on the Report Stage so that we will know the details of remuneration and so on?
I could not deal with remuneration then but I could deal with the question of whether the members of the board will be part-time or whole-time.
In the selection of members of the board, is it the Minister's intention to select some one person who will have actuarial qualifications, or will the appointment of actuaries be a separate matter?
I could not say that. It would not be necessary in any event.
If the Minister thinks that no actuarial qualifications are necessary is he not indicating that the scheme, as now propounded, is in fact going to be nothing more or less than a piece of Civil Service administration?
The Deputy should not forget that there has been a great deal of investigation with regard to the possibility of this form of health insurance, the possibility on economic grounds. It has been fully examined over a period of 12 months and a most valuable collection of material has been presented to this House. It is available in the report of the advisory body and in collecting and accumulating that matter actuaries and other matters were considered. The machinery established under this legislation will be available already, the material dealt with, collected and put together in that report.
The board will probably employ actuarial assistance?
Of course. From time to time, undoubtedly.
Can a member be removed for any reason whatever?
Yes.
It is very doubtful. It is hard to know what is the better thing to do.
It is very hard to find precedents with regard to that. It is the usual provision.
The usual provision is that they are in for a definite number of years. I do not know the position with regard to the E.S.B. I remember we had some case long ago for that. It is nearly always a matter for the Dáil when that happens.
I am told that Section 7 is similar to the section in the Tourist Traffic Act, 1952, the Sea Fisheries Act, which establishes An Bord Iascaigh Mhara, and the Opticians Act. In the case of Bord na Móna and the E.S.B., the power of removal rests with the Government.
Would it not be better to have it with the Government? There will always be the suggestion that if a member of a board is removable by the Minister directly, the board is under the Minister's thumb and that its independence to a large extent is interfered with. I know there is a difficulty on the other hand that if somebody is quite unsatisfactory and you want to get a satisfactory person in his place you have to wait for a period of five years. You have to choose between two evils so to speak. I think it would be safer if a matter like that was a governmental action and that a member be removable by the Government.
I think there is a lot in that, but I am not quite sure. Here the directors are appointed by the Minister. However, I will consider it.
If there was a fixed period of office and if the person was removable only by the Government, it might give the board greater security and independence.
I will consider that.
The Minister made an analogy between this board and the Fisheries Board. There are two differences, I think, that should be noticed. One is that the period of appointment in the Fisheries Board is two years. This provides for a period of five years. There is another very important difference and it is that the board administers the powers conferred by the Act in the matter of the Fisheries Board. Here the Minister is taking powers under Section 4 to specify what benefits may be granted by the board. I think these are two important differences which do not make the analogy as precise as the Minister seems to think it is.
In any event, I will consider what Deputy de Valera says.
I move amendment No. 6:—
In line 14, to delete "not be present during any discussion by" and substitute "take no part in any deliberation or decision of".
This amendment deals with a matter raised on Second Reading by, I think, Deputy Barrett. Section 10 of the Bill, did not prevent a member of the board taking part in a decision relating to a contract in which he is interested although it did prevent him from taking part in a discussion upon the contract. It is more usual in the case of statutory powers to refer specifically to a decision as well as a discussion. The amendment is for the purpose of bringing it more in line with the usual practice. The purposes of the section are better achieved, I think, by the amendment.
I think this is an important section because it is one of the sections which, in fact, determine the amount of the premium. Section 4 of the Bill says:
"The board shall so fix the subscriptions provided for by schemes under this section that taking one year with another the revenue of the board from subscriptions together with its other revenues (if any) shall be sufficient, but only sufficient (as nearly as may be), after the board has made such allowance as it thinks proper for reserves, depreciation and other like purposes, to meet the charges (including repayments of loans to the Minister) properly chargeable to revenue."
I assume that the capital charges on the sum of £25,000 will not be excessive. In fact, as I indicated, when speaking on the Money Resolution, it is doubtful whether the board will be called upon to repay and that this so-called loan will not turn out to be a grant. It is very difficult to see this scheme being a success as sub-section (4) of Section 4 is to determine the basis upon which the payments are to be made. It is very relevant, therefore, in connection with Section 13 to bear that in mind, because among the charges which will naturally fall to be defrayed out of the premium income will be the amount to be paid by the board to its officers and servants out of the funds at its disposal.
The House will note that this is left entirely to the discretion of the board. Again, we are going to set up here a sheltered employment which is not going to be subject to any control by the Government or by the House in so far as the financial implications of that employment are concerned. I do not want the Minister to get up and allege in his usual way that I want the Government to run this board. I do not because I think the Government would make as much a mess of the affairs of this company as it did of the country. Having regard to the Minister's obligations to the Oireachtas and to the policy-holders, if any people do take out insurance policies under this scheme, he should exercise some sort of control over the manner in which the board will spend the funds which it secures.
There is nothing in this section to show the Minister will do that and we are probably going to be faced with the situation in which, whenever a statutory undertaking like C.I.E. or the E.S.B. cannot pay their way because, among other things, they have to meet the charges for the remuneration of their employees, then the Dáil is going to be asked to come in and save this company from collapse.
The plea will be made that the Dáil is asked to come in on behalf of premium holders. What in fact will happen is that they will be asked to come in here on behalf of the employees of this company and to subsidise the officials of this company. I suggest the Minister should consider whether, in order to ensure that the company is being operated efficiently and economically, the scale of remuneration at least in the formative years of the company will be subject to some sort of supervision or veto on his part. I am certain that that veto would not be unreasonably exercised, but so long as the company owes money to Dáil Eireann, to the Government or to the Central Fund, surely there is a case for ensuring that the affairs of the company will be administered as economically as possible and that we will not have the demoralising spectacle we have in the case of other public bodies of ex-civil servants and others being paid salaries which are not at all commensurate with the salaries paid to civil servants in the service or even to members of the Government for directing the affairs of the country, indeed salaries which bear no relation to the remuneration which would be given in ordinary private employment for the same sort of work.
I have considered this matter. I am aware, as was pointed out by some Deputies already, that if this Bill is subject to criticism it certainly is liable to criticism on the grounds that it has been thought necessary to retain ministerial control in relation to quite a number of matters dealt with by the board. That is unfortunate but it has been found necessary because the object of the board, the conduct of health insurance, is largely a new venture which must be experimental for some time. Being a new venture it is dealing with a matter of deep interest to the people and a matter in respect of which the Minister for Health has a deep responsibility.
That refers to the activities of the board in carrying out what will be their statutory obligation. The section that Deputy MacEntee has questioned refers to the internal working of the board, its employment of servants and officers to carry out its statutory undertaking. To my mind it would be quite wrong that there should be Civil Service control over the employment and over the discipline—because that would be entailed—of the officers and servants of the board. It would be quite wrong, in my opinion, and it would also be exceptional, because in relation to no other board I know of is it suggested that the Minister, who may be responsible to the Dáil for the board, exercises any scrutiny or power in relation to its purely internal matters.
I agree, of course, it is obvious that any of the necessary expenditure of the board must have some effect on the premium the board will find it necessary to charge. That is perfectly obvious. That matter was taken fully into consideration by the advisory body in considering what premiums might be charged. In fact the percentage they considered, the percentage of 30 per cent., is perhaps erring very much on the generous side in relation to the administrative expenses.
I would draw Deputy MacEntee's attention to the fact that in Sections 19, 20 and 21, safeguards are provided in a proper way to ensure that this board will not act in any irresponsible manner in relation to its expenditure. It must keep accounts. It must have its accounts audited by duly qualified auditors. The Minister must table here in the House the yearly accounts and audit of the board. In addition, the board must make an annual report, and finally, the board is under a statutory obligation to furnish the Minister with any information he may require with regard to its proceedings.
I think those provisions are wide enough to ensure that the members appointed to this board will operate the machinery envisaged here with common sense and with the idea of making the scheme a success. I am quite certain they will do so. I have no reason for thinking otherwise and I do not propose to consider the improbable. The men appointed to this board will be asked to carry out their statutory obligation and I am quite certain they will be interested in doing so. With the provisions in Sections 19 to 21 care is taken to ensure that the proceedings of this new board will be subject to general scrutiny, that their financial affairs will be examined yearly and that the resulting information will be available to Deputies. If it is found that the board is acting irresponsibly and not doing its job, there is provision in the Bill for dealing with that and the Minister for Health will be responsible to the Dáil to ensure that that will be done.
The Minister has just told the House that he has very definite powers of control in relation to this board but that these powers of control relate only to the external affairs of the board. In that connection he has referred us to Sections 19 and 20. May I dispose of those first of all? He says it will be seen from Sections 19 and 20 that great care has been exercised in order to ensure that the proceedings of this company on its financial side will be kept under careful scrutiny. One would think we were having novel provisions, in the formulation of which a great deal of midnight oil was burned, included in this Bill for the first time. The contrary is the case. These are the usual provisions which appear in most of the Acts of the Oireachtas, in fact, in all the Acts of the Oireachtas in which it is proposed to set up, under the authority af the Oireachtas, boards to engage in undertakings which involve the expenditure of funds to be provided by the Oireachtas, and in many cases involve the expenditure of funds which are not provided by the Oireachtas but by the general public. An instance of that is the Irish Racing Board. We get the accounts of that body and they are made available to us.
The point I am getting at is that I want to show how ill-considered many of the privileges in this Bill are when the Minister is driven to refer to Sections 19 and 20 in order to show that this Bill has not been hurriedly drafted and with the idea of giving the public the impression that it has been carefully considered and not that it is being introduced by him for no other purpose than as a piece of election propaganda. Sections 19 and 20 appear in every Act of this Oireachtas under which a statutory or a semi-statutory body has been set up. They appear in the E.S.B. Act, in the Bord na Móna Act, in Córas Tráchtála, in Córas Tionscal and in a whole caucus of legislation of that sort.
We are now asked to believe that the mere fact that Sections 19 and 20 have been included in the Bill indicates that a great deal of thought has been given to ensure that the affairs of the board will be efficiently and economically administered.
The Minister has also said that he has endeavoured in this Bill not to interfere in the board's internal administration of its affairs and that he proposes only to try to control the board in relation to its acts in regard to its relation with its policy holders. But what about Section 15? That is the section which follows almost immediately after Section 13. Section 15 says:—
"The board may, with the approval of the Minister, make a scheme (in this section referred to as a pension scheme) for the provision of pensions or gratuities or pensions and gratuities, for or in respect of such officers and servants of the board as it may think fit and any scheme so made shall be carried out by the board."
Sub-section (2) of the same section says:—
"The board may, with the approval of the Minister, at any time by a subsequent pension scheme (in this sub-section and in subsequent sub-sections of this section referred to as an amending scheme) amend a pension scheme or a previous amending scheme, and any such amending scheme may be expressed to operate retrospectively."
Is not the formulation of such a pension scheme and the making of provisions for pensions and gratuities an internal matter for the board? The Minister has seen fit to take control of such matters.
In relation to Section 13, which is the really important section, the Minister has not taken any such precautionary steps in relation to the conduct by the board of its affairs. I wish to make my position quite clear in this matter. If this was an undertaking which was firmly established, which had proof given of its success and proof that it was being efficiently administered, I would be the first member of this House to decry any attempt on the part of the Minister or of the House to interfere with the internal administration of the company. This board is still almost entirely in its conceptual state. All we know about it is that it is going to have five directors, an actuary and a staff. We have no idea as to what the benefits or what the premiums will be or how much the board is going to charge in respect of its benefits.
If the Bill goes through the House the board will only be in its early formative stages. There is only the germ of an idea here and how long that germ is going to be in the gestation stage we have no evidence. All during that period of gestation, the board is going to have a free hand in relation to the expenditure of money placed at its disposal by the Oireachtas. When the scheme is being formulated, the Minister, in his own interests and in the interests of the public, ought to take some care to regulate the manner in which the board will determine the salaries to be paid to its officers and its servants. The board should not be given a free hand in the initial years.
The Minister has also said, and I am now going back to Section 4, that he does not propose to interfere with the internal affairs of the company. If that is so how is the Minister going to operate Section 4? Section 4 says:—
"The board shall make and carry out a scheme of voluntary health insurance for defraying, to such extent as the Minister may from time to time specify, the cost to persons paying subscriptions to the board in respect thereof, and to dependents of such persons, of such medical, surgical, hospital and other health services as the Minister may from time to time specify.
"The board may make and carry out such other schemes of voluntary health insurance as it may think fit, subject to the consent of the Minister in regard to the scope and extent of the benefits."
In view of what the Minister has said, that is a position which must be related to the provisions which are contained in Section 13. So far as I can see, the Minister has not taken any power to regulate the position of the board or to say to them that they pay such and such benefits. Having regard to sub-section (4) of Section 4, it does not appear as if the board is compelled to formulate a scheme of premiums and relate such a scheme to the benefits which the Minister shall specify. If that position is to be allowed to continue I think it will be highly detrimental to the scheme. The premiums will bear no relation to the benefits and the scheme will not be the success which we would all like it to be.
I think, therefore, that the Minister ought to give some further consideration to the provisions of Section 13 between now and the Report Stage and at least take the power to compel the board to submit the salaries which it proposes to pay to its officers and servants for the approval of the Minister. That is done in relation to other insurance societies and I think it is a very salutary obligation to have imposed on them because it did mean, among other things, that there was a general degree of uniformity on the basis of equality as between those who were compelled to be members of the societies on the one hand and those who were the servants of the societies on the other hand.
I am quite prepared to consider any suggestion by any Deputy, provided it is made in a reasonable manner. I have known Deputy MacEntee for a long time and I always find it difficult to know whether Deputy MacEntee is attempting to be helpful or behaving as a hatchet man. Yesterday, Deputy MacEntee was kind enough to suggest that my object in appointing this board was to put my friends and relations on it.
I did not say a word about the Minister's relations.
I can assure the Deputy that he did say that.
I said "pals".
The Deputy said "friends and relations".
That is not so.
He did and I heard him say it.
I recollect what I said. I said: "pals of the Minister" and then I went on to say "friends and relations of the pals"—not of the Minister. I did not suggest that for a moment.
I take it from what the Deputy has just said that he did not intend to say that but, certainly, that was the impression I got.
I did not want to convey that impression to anybody.
Of course, that was Deputy MacEntee yesterday, not being helpful. I do not know whether Deputy MacEntee is still playing the rôle of hatchet man here to-day or not but what would Deputy MacEntee as a hatchet man say if Section 13 of the Bill said: "The board shall, with the consent of the Minister, appoint such officers and servants as they think proper"? Deputy MacEntee would say: "Look at this. This is an effort now that the Minister will appoint actually the servants of the board".
I can see that a case could be made, although so improbable as scarcely requiring consideration; but, testing all these things by improbabilities, I can see that the board, if it appointed an undue number of officers and servants, might conceivably put the expenses so high that the resulting premium might not sell. That, I consider to be entirely improbable, but I suppose it could happen if people behaved in a very irresponsible manner. Certainly, I would be prepared to consider that possibility between this and Report Stage, but I would ask Deputy MacEntee if the provisions of Section 19 are in similar Bills, does that fault them? If, in previous legislation, successive Ministers in different Governments have found provisions such as are contained in Sections 19 and 20 to be necessary, is not that the greatest proof that they have considerable merit? Remember that under Section 19 of this Bill the public can see each year what element in their premium is attributable to administrative costs and the board is under a statutory obligation to sell its policy. That is the effect of Section 4. If, in fact, the board is not selling its policy—and from its yearly accounts it is clear that it is not selling because its administrative expenses put the premium too high—it means that the board is not doing its job and that would be a very proper ground for the Minister or the Government to remove the board.
But, on the assumption that Deputy MacEntee is trying to be helpful, I will certainly have this matter further examined between now and Report Stage. If I felt that it might be necessary to provide some ministerial scrutiny or examination in relation to officers and servants, I think it should only be for the initial period, such as, for example, the period during which a loan may be provided by the Minister. We will be coming to that later, but I will examine it from that point of view.
I do not think it has been suggested from this side of the House that there should be control after the initial period during which the board would be liable to repay the advance to the Government. One of the things I am uneasy about, particularly with regard to sub-section (2), which reads:—
"An officer or servant of the board shall hold his office or employment on such terms and conditions as the board from time to time determines."
is that these terms and conditions might include provision for a pension or gratuity or some such thing on retirement from the position. I believe that "with the Minister's approval" is not anything like as wide as the Minister himself now suggests. One of the things that the Minister should guard against is any provision for a pension or gratuity for the officers or servants of this board until it is proved that the scheme will work. One of the reasons why I approve so much of this Bill is that it is trying to put into effect the principle of co-operation between people. If these servants and officers are given straight away the privilege of a guaranteed pension and gratuity, these pensions and gratuities have to come out of the premium moneys that will be received and cannot come out of any other fund. The original loan has to be repaid over a period, so that any provision for gratuities or pensions will have to come out of the premium money and it is the belief expressed by Deputy Hillery and others, who have experience in these matters, that it will take a wholehearted effort on the part of everybody inside and outside this House if the scheme is to be a success and that it will take at least five years before we can know definitely one way or the other whether the scheme will be a success or not.
For that reason and because it is a matter of co-operation, the people who are employed as officers or servants of this board should be told straight away that they are asked to co-operate in an effort to put voluntary insurance on a sound footing in this country and that they will not be given pensions or gratuities until it has been abundantly proved that a satisfactory scheme has been devised and that it shows every sign of being permanent. If what the experts say is true and it will take three to five years as a minimum period before we know one way or the other, it is no great hardship on the people who, in the meantime, as Deputy MacEntee said, will be given fairly fat remuneration out of moneys provided by this House, to be asked to forgo the prospect of a pension or gratuity on retiring until such time as they have done the work which will make it permanent.
Admittedly, the people who may be appointed might be taking a slight risk in that matter—I do not think so—but if we are to succeed in establishing the principle in the Bill, we must look at it from the co-operative point of view and not from the point of view from which too many people seem to be looking at life nowadays, that is, that if they are not secure in a position they will not take it. There is far too much of that atmosphere in this country at the present time. We should do nothing to encourage it.
I would be inclined to agree with Deputy Flanagan's general principle. Section 15 would prohibit the creation of any pension or gratuity scheme except with the approval of the Minister, which would probably be sufficient safeguard unless—and this is the point I would like the Minister to consider; it is really only a drafting point—it were considered that sub-section (2) of Section 13 should read, "on such terms and conditions except conditions of pension and gratuity". Reading Sections 13 and 15 together, almost certainly, the only power of the board to grant a pension or gratuity to a servant or an officer is under Section 15 and you could not read Section 13, having regard to the terms of Section 15, as meaning that, under that section, without the approval of the Minister, a pension or gratuity could be given. That is a question of drafting. I may be wrong about that. Perhaps the Minister would consider whether it is necessary to put some special proviso in Section 13, preventing it being operated as a pension or gratuity section.
I should like to put another point of view to the Minister in that regard. If you appoint people who are entirely inexperienced and who have had no previous contact with this type of work, that is one thing but, if you want to get experienced people working this scheme from the very start, who may have established positions, whose experience would be beneficial in operating this scheme, I think some provision must be made for pensions or gratuities. I do not think we will get the best type of candidate if you impose restrictions of that kind at the very outset. Such people are not likely to transfer from established positions. Undoubtedly, in a scheme such as this, it is essential to get experienced people and every inducement should be held out to them. That is just another point of view but all points of view should be considered when we are dealing with a new project.
I am quite conscious of the fact that, in order to get this scheme working successfully, certainly the manager or managing director will have to be a man with particular qualifications.
That is right.
It would suggest itself that he would need considerable managerial experience in business, particularly in insurance business. Obviously, a man who would be considered as suitable might already be in a position which he could not forfeit unless there were some particular safeguard for him. That is inevitable. I think that would appeal to the good sense of most Deputies. As Deputy Finlay has said, in relation to Deputy Flanagan's fears, it might be more relevant to consider that in regard to Section 15, but the general pension scheme will require ministerial approval and, of course, would not go into operation unless, in fact, the board could afford it. "Affording it" means that the board's administration must be such that it can put on offer a policy of health insurance at a premium so low that it will sell and be attractive to a large number of people. The effect of a pension scheme on the finances of the board would have to be considered very carefully and I would not imagine that it would be possible to have a general pension scheme until the insurance scheme is pretty well established. However, that is a matter that we might consider again.
The Minister said that he has taken power to remove the board, but once the board has created a superstructure of administrative costs, he would have created a position which he could not readily alter. He has given himself power in Section 4 to prescribe benefits. The income of the board will certainly be affected by the administrative costs. The Minister's decision on benefits must be related to the income of the board and, if the income of the board is, in turn, affected by an unduly high scale of administrative costs, is not the power that the Minister has taken in Section 4 greatly reduced and, quite apart from a pension scheme, in giving independence to the board, will not the Minister have in fact adversely affected the chance of a scheme of voluntary health insurance recommending itself to the public?
The Minister seems to have a doubt in the back of his mind as to the genuineness of the adherence which we have expressed to the principle of voluntary insurance. We are perfectly genuine in saying that we wish well any scheme of voluntary health insurance and we feel that it is a pity that there should be any fault in the mechanism which is being provided to give effect to it which might obstruct it for a very long time and it is that consideration we want the Minister to take into account.
It is on Section 13 and, as I say, I will consider that between now and the Report Stage.
Is it not a fact that there is an initial period of four or five years in which nobody can be certain as to the permanence of this scheme and that during that period you have to build up a suitable staff in the hopes of success? You cannot enter into a definite contract for the future. In the first four or five years it seems to me that you might have to give higher remuneration over the initial period, instead of the usual thing, a superannuation scheme, and so on.
Therefore, I think you will have to deal with the scheme in two parts, the initial tentative period of four or five years in which you may have to give larger salaries than would be usual, and endeavour to attract into the service the people that are necessary to make it a success, and then deal with permanency afterwards.
I agree with Deputy Finlay that you cannot properly bring in Sections 13 and 15 together, but the point I was making was that Section 15 should be taken out altogether for the very reasons that Deputy de Valera has given. This matter, in any event, is a matter of psychology. The board is going to be under an intolerable burden from its employees, during the period when the staff think the insurance scheme is going well. After two years, they will be saying: "What about Section 15? What about the other provisions? What about gratuities, bonuses, etc.?" I think that should be taken out altogether until the Minister is satisfied that the scheme has achieved a permanent basis. As has been pointed out, we want to know how things will work out. We may have to give more by way of salaries to the officers and staff. If this section is included, it will be waved in front of the board and the Minister by the servants of the board and constant pressure will be put on, whereas, if it is cut out altogether, Section 13, with the amendment that an officer or servant of the board shall hold his office or employment on such terms and conditions as the board, with the approval of the Minister, from time to time determines, would settle the whole thing. Cut out all reference to pensions, gratuities and so forth. That would be a better approach and, as Deputy de Valera said, it would be far more realistic.
What the Minister has said and what has been said by Deputy MacCarthy and others emphasises the need for the Minister to exercise some sort of control over the remuneration, terms and conditions of employment which the board may offer to its officers and servants. Now, it may be difficult to attract the person of a particular calibre whom the board envisages as being essential to direct and head its organisation. If that is the case, that will put a degree of temptation in the way of the board which may have repercussions elsewhere.
Some of us have had experience over the past three or four years of the way in which some statutory bodies bid against those engaged in private undertakings for persons of a particular type. What happens then is that the highest bid, which is offered by the statutory undertaking with very little responsibility to anybody for the manner in which it spends public money, immediately becomes the standard of remuneration in other undertakings. While everybody appreciates that it will be necessary to get a man of the essential capacity to initiate and formulate the scheme, nevertheless, in trying to get that man, there should be some regard to the needs of the general body of the taxpayers who, themselves, have to try to keep their businesses afloat and to earn a profit which they have, of course, to share with the State and the community through the operations of the corporation profits and income-tax.
That is one of the reasons why I am really concerned that the Minister in the early stages of this company, certainly during the first five years of its operation, should require the terms and conditions to be subject to his approval. That, at least, would be one of the ways in which his position as Minister would be safeguarded. I hope that between now and the Report Stage the Minister may see his way to include a proviso of that sort.
I think we are discussing Section 13 and Section 15 together.
We are accepting Section 13, on the understanding that the Minister will look into the matter between now and the Report Stage to see if he can provide some safeguard.
On the general terms of the section itself, it seems to me very probable that it could be construed to permit the board to operate in either of two ways—through a whole-time servant employed throughout the entire week and paid a salary or through a part-time servant employed part of the week and paid a salary. Probably in its early stages the board would want to do what so many insurance companies do, namely, get together with other companies for the purposes of claims investigation, claims settlement or selling insurance. These companies employ agents who act as agents for more than one company in different lines of insurance. It seems likely, though not absolutely certain, that the board would from time to time find it convenient to use the existing insurance organisation of an ordinary company for one particular function or one particular branch of its functions.
An obvious example is the question of settlement of claims. In this type of insurance, they will not be of great difficulty since it is really a question of vouching more than anything else. It is not like unliquidated claims in accident insurance. One can conceive where, in a particular area, there might be a certain amount of health insurance—not a tremendous lot perhaps— and it would suit the company to engage in a contract with an existing commercial company and ask that company's inspector in that area to look after its interests for, say, six months or three months. In such circumstances, I do not think the inspector would become an officer or servant of the board.
Put in the word "agent" and that will cover it.
It probably would. I ask the Minister to consider some amendment to cover that position. I am not suggesting it should be done. I am not suggesting it will be done, but it does seem to me that there is room for something to be done along the lines I have suggested.
I thoroughly approve of Deputy Finlay's submission in connection with this section. If the section were to include "agents of the board", that might cover what Deputy Finlay has in mind. Obviously, we should do everything we can to encourage the board to reduce the cost of collection of premiums, settlement of claims investigation or anything else. All these things involve expense and, if we can do anything to cut down expense, then we should do it. I think the Minister will find this suggestion well founded. The board will have the goodwill of existing companies, because, as I have already said, they do not themselves engage in this kind of insurance except on a very limited scale. The board would not, therefore, be in competition with them. Cooperation on the lines suggested by Deputy Finlay would help to keep down expenses and make the premiums attractive.
I have always had it in mind that the board would as far as possible make use of the existing machinery, well established and widespread throughout the country, for the collection of premiums and so forth. I had not adverted to the point raised by Deputy Finlay or Deputy Flanagan that possibly under Section 14 there might be a suggestion that the board might be precluded from using, by agency agreements or commission agreements, other bodies or organisations, and I shall have it examined from that point of view. I am anxious that the board should have that power and I shall clear that up.
On this section we had some discussion, as was inevitable, on Section 13. I just want to make my position clear with regard to that. It is always the belief that when you are introducing legislation of this kind you should try to provide for all possibilities. You may, of course, know that some time later amending legislation may have to be passed but you still try when establishing a board of this kind to give it whatever powers are felt to be necessary. For that reason, Section 15 provides the board, subject to the conditions set out in the section, with the power to provide a pension scheme for its staff.
I think Deputies will appreciate that the staffs of all these semi-State boards, just as the staffs in the State service do, enjoy and are entitled to enjoy the benefits of a pension scheme. Naturally, the pension scheme that will be operated by this Health Insurance Board will be such scheme as it can afford because it will be related to whatever finances it has available having provided health insurance on terms that will sell to the public. As I indicated, it may be some time before it is possible to provide the staff with such a scheme but I think it would be quite wrong if it were then necessary to come back to the Oireachtas with a proposal to amend this Bill when it becomes an Act in order to give the board power which, in fact, we should give them now.
They cannot exercise this power without the approval of the Minister and, as I have indicated in relation to a number of matters already discussed, care will be taken by me and also, I believe, by the board, to ensure that whatever expenditure they engage upon will not have any harmful effect upon the success of the scheme. Accordingly, before a scheme would be approved I, or any other Minister for Health, would have to be satisfied that it would not jeopardise the discharge of the main statutory functions of the board.
Is not the whole difficulty, as I mentioned already, that the Minister cannot possibly sanction a scheme for superannuation until this tentative period is passed and it is clear that the work can continue? I do not know what the extent of the staff that might be necessary will be but it is obvious that you cannot enter into a permanent contract during a period that is altogether tentative.
I think that is so.
Would not the amendment I suggested on Section 13 cover the position, and have Section 15 deleted?
If I delete Section 15 to give them power I shall have to come back and amend.
No, if we say "an officer or servant of the board shall hold his office or employment on such terms and conditions as the board from time to time determines." I think that will cover the whole thing without all this long rigmarole.
No, I am told it would not. I am told that in relation to a board of this kind, if they are to have a specific power such as that required to provide the pension scheme, it must be contained in the Bill itself. You must arm them with the power to do these things. It could not be implied merely from power to employ servants or officers on terms they may determine, but I do agree with Deputy de Valera. It is quite correct that this scheme could not be considered as a possibility until the board is established, and we can all well understand that there will be a probationary or trial period which under the Bill is thought to be five years. It might be shorter, of course. It might be that in two or three years' time the scheme would be well established, but certainly, until it is established, a pension scheme could not be operated.
Employees in ordinary insurance companies do not have any pensions or gratuities——
Yes, they do—a number of them do, at any rate, have pension schemes.
Have they?
A number of them have.
I was not aware that the ordinary agents have such schemes.
I would not know that.
Yes, they have.
There is an established practice in some cases—for example, in the vocational schemes— where if the employees are taken into established service after a period of temporary whole-time service, they can get credit for half that period for pension purposes, and I am sure the board would be able, when they devise their scheme and when they are assured of the success of their work, to give retrospective effect in the same way. This provision, as I have indicated, is already established for certain workers in regard to their temporary whole-time service.
The object of this section is to enable the board to start. It gives power to the Minister to provide such a sum of money as may be necessary for the initial expenses of the board, the expenses of equipping premises, engaging staff, drafting the schemes and so on. It is obviously necessary that the board should have some fund on which to start preparing a scheme for sale to the public.
It was suggested by a Deputy yesterday—and unfortunately it was headlined in one morning paper to-day, and I want to correct the impression that may thereby have been given—that the purpose of this £25,000 was to provide payment for the directors of the board. Of course that is not so. The £25,000 is to cover the general initiation expenses of this board and Deputies can well appreciate the kind of expenses that would be involved. The starting of a new board, engaged upon a very important public activity, will have a whole variety of necessary preliminary expenditure that must be met from somewhere. Here it is proposed that it be met by an initial loan to the board which will have to be repaid, and I do not think it is unreasonable. I particularly do not think it is fair to suggest that the object of it is to make enormous payments to directors. It is not, and I hope no Deputy will think that is so.
Is there any provision made in case this may not be a success? I need hardly say that I, like the other Deputies, would wish it to be a success. However, supposing it is not, what provision is made with regard to those who would have paid premiums? Has any thought been given to the problem of winding up?
The insurance contract is an actuarial contract. That is inherent in insurance.
I see.
What is the purpose of having two sections—one to cover preliminary expenses, including the expenses of establishment, the other to include initial losses?
I think we could consider both of these sections together. With regard to the second loan, or the loan to cover initial losses, I hope in fact that loan will never be called upon. However, it is there as a power in the event of the board offering a scheme to the public and having the ill fortune of running into bad risks, say, in its first two years, or incurring a loss which might be evened out over a longer period. If it had that ill fortune in the initial years its income would not be sufficient to meet the calls upon it and the object of Section 17 is to empower the Minister to help the board over that hump. I hope it will never be called upon. If the board get a fair break it should not be called upon. The first loan will be needed because it will start the board off.
This is a usual provision. It provides only for temporary borrowing such as would occur in any business organisation—temporary borrowing from a bank or otherwise. It is usual to have it in schemes of this kind.
I do not know whether the Minister would consider extending that to the extent of permitting the board, with the approval of the Minister or the House, to issue share capital in the form of debentures— otherwise, to borrow on an other than temporary basis. It is not easy to see at present why it should be necessary to do this, but it is quite easy to see how there could be such a form of borrowing because the public might be quite willing to subscribe to it on a fixed debenture basis as distinct from a profit sharing basis. It would not affect the non-profit earning basis of the organisation. Circumstances might arise in which the board would run their business all right provided they were backed up by a certain amount of capital which the public might be prepared to subscribe in the manner I have suggested.
What assets does the Deputy suggest would secure such borrowings?
Presumably the board must secure considerable assets.
That is all right but the Minister is providing in another section that the board's income taking one year with another, will just balance out.
I do not mean profits. I am talking about assets. Presumably the board will have a considerable amount of physical assets.
The board will get two sums of £25,000, the disposal of which is being provided for specifically in the terms of these two sections, as the Minister has explained.
I appreciate that but it might be desirable that the board would have the power to borrow on the lines I have suggested, subject to the control of the House and of the Government.
It is a question of whether £50,000 is enough at this stage.
On the basis of investigations that it has been possible to make I am advised that £25,000 is, in fact, more than generous. There was a commercial company that engaged in this form of business and it had a loss over a period of two years which was very much smaller than the provision here made for the initial losses of this board. I think this board can operate more advantageously because it has available that experience as well as other matters. I think it should be adequate.
This is a provision made for the accounting and the auditing of the financial affairs of the board. Again, as I indicated earlier, the audited accounts will be available for examination by Deputies so that a full and close public scrutiny may be exercised over the financial affairs of the board.
I move amendment No. 9:—
Before Section 22 to insert the following new section:—
(1) The Minister may, in his absolute discretion, grant or refuse to grant to any person a licence (in this Act referred to as a health insurance licence).
(2) The Minister may from time to time attach to a health insurance licence such conditions as he thinks proper.
(3) Where the holder of a health insurance licence does not comply with a condition attached to the licence, he shall be guilty of an offence and shall be liable on summary conviction thereof to a fine not exceeding £40 together with, in the case of a continuing offence, a further fine not exceeding £2 for every day on which the offence is continued.
(4) Subject to the next following sub-section the Minister may, in his absolute discretion, revoke a health insurance licence.
(5) The Minister shall, at least 21 days in advance, give notice of his intention to revoke a licence to the holder thereof.
This amendment and amendment No. 10 might be considered together. As I indicated on the Second Reading, I felt it would be necessary to provide in this legislation for a control over the number of bodies engaged or proposing to engage in this form of health insurance. The position is that there is a limited market available for this class of insurance. It is limited by a number of factors but it is large enough to provide, I think, a worthwhile service. However, it is not so large that it could bear unlimited competition. Up to the stage at which the advisory body, having examined this problem carefully over a period of 12 months, issued their report, the position was that no commercial insurance company in this country was prepared to provide this form of cover for the people. One company had provided it for a short period of, I think, two years, but it found it uneconomic and pulled out. Accordingly, when the Advisory Body reported, there was, in effect, no cover of any kind being provided or proposed by any company entitled to operate insurance in this country.
Since the introduction of this Bill, I became aware that it was reasonable to believe that an outside syndicate which, for a particular reason, was entitled to carry out this type of health insurance in this country proposed to use the material collected and contained in the Advisory Body's report and to put such a scheme of insurance on offer here. If it did so, it might well mean that, by the time this board was in operation, a fair portion of the limited market available would have disappeared and this board then would start its activities under considerable disadvantage. I felt that that was not a prospect conducive to the success of the scheme. I felt it would be regrettable if this form of insurance were operated or controlled not only without public scrutiny through our Parliament here but also from sources outside the country. Accordingly, as I indicated, I propose to safeguard that position and the purpose of these amendments is to carry out that intention.
I shall now deal with both amendments together. It will be provided in amendment No. 10 that, in effect, no body or organisation may carry out health insurance here without a licence from the Minister for Health. Care is, however, taken to safeguard the position of a whole variety of existing insurance schemes which, in effect, do not interfere with the market intended for this body. These schemes are set out in amendment No. 10. First of all, the prohibition would not apply to benefits provided by a Minister of State, a trade union or society registered under the Friendly Societies Acts. That would refer to the health insurance, say, carried out by the Department of Social Welfare. It would also refer to the activities of some 30 friendly societies which disburse sickness benefit of one form or another to their members. Certain trade unions also carry on a form of sickness benefit or sickness insurance. It is not intended that any of that class of insurance should in any way be interfered with.
Secondly, it is proposed to exclude from the prohibition "a contract which is attached to or dependent on a contract of assurance on human life and under which the assurer has no right of cancellation and which also provides for the payment of moneys in case of sickness, injury or disease of the insured...."
That class of contract is a contract which is provided by some insurance companies whereby you assure your life but, added to the life assurance, there is provision for certain payments in the event of sickness or accident, as specified in the policy. It is not proposed to interfere with that class of insurance.
It is not proposed to interfere with "a contract of insurance under which benefits are payable in respect of sickness, injury or disease of an amount calculated by reference to the duration of the sickness, injury or disease and not to the nature or cost of any hospital, medical, surgical or other health service, provided in respect of the sickness, injury or disease..."
That is a particular form of insurance under which a person can insure, under a contract provided, for a certain weekly or other payment to him if he has an accident or gets sick but the payment has no reference to his hospital or medical expenses. It is a contract for a fixed weekly payment if a certain contingency arises.
It is not proposed to interfere with "a contract of insurance against or otherwise in relation to any accident causing or being a contributory cause of sickness, injury or disease to the person insured thereunder or to any other person under which benefits are also payable in respect of such sickness, injury or disease..."
These exemptions are insurance policies which also provide cover against the medical and hospital expenses arising from the accident. Cases in point are ordinary insurance policies, motor insurance policies and employers' liability or public liability policies. Again, it is not proposed to interfere with such forms of insurance.
Lastly, the prohibition will not apply to any contract of insurance made before the passing of the Act. In other words, if anyone has taken out a contract of health insurance, as defined here, with any insurance company entitled to engage in the business here, such contract will not in any way be interfered with. As I indicated, the prohibition with regard to health insurance is provided for in amendment No. 10.
In amendment No. 9, there is the machinery with regard to licences. It is provided that the Minister may, in his absolute discretion, grant or refuse to grant to any person a licence to carry on this form of insurance. There is a provision that the licence may contain conditions and, if the licensee does not act in accordance with these conditions, he will be guilty of an offence. There is provision that a licence granted may be revoked at any stage.
Generally, the effect of the two amendments would be that the activities of the new board would be safeguarded. The market would be retained for them without interfering with the kind of smaller schemes that have traditionally been in operation. I feel that, if power of this kind were not provided, the idea of health insurance could not possibly operate because this board, operating on limited funds—as I think it should operate—would at best find itself engaged in a sort of cut-throat competition with large syndicates controlling large moneys outside the State and the end, I think, would be the disappearance of this kind of scheme and this kind of experiment.
I have quite naturally an aversion to monopolies of different kinds. I think, generally speaking, competition is desirable and initially I was disposed to provide for competition in relation to this form of insurance also. On closer examination I was compelled to the view that, if these safeguards were not provided, the whole idea of health insurance would fail, with results which I do not think would be desirable. I am moving both amendments.
I appreciate, generally speaking, the necessity for the amendments. Whilst one is normally very reluctant to see a monopoly I think the Minister has made a case justifying it in this instance. The Minister may be able to give us some information on amendment No. 10. I do not know if it is intended to terminate the existing provision for health and medical service provided by some firms for their employees. Under the terms of this amendment I think it would be out for ordinary employees to contribute to a fund in the firm unless it was registered as a friendly society.
An example is C.I.E. which has a scheme where, apart from any pension or gratuity scheme, a weekly contribution is made by an employee and in return he gets the cost of medical expenses defrayed. In amendment No. 10 I think that would be prohibited. I presume it would be a matter of licensing. I know the Minister has power to license them. It may be possible to contrive an amendment covering such benefits provided by an employer for his employees, as a result of payment by the employees, and being a scheme which continues only so long as the employment continues.
Another matter, and I may be wrong, is in regard to sub-section 3 of paragraph (b) of sub-section (3) of the new section, in other words sub-section 3, (b) with "three" in Roman numerals. The Minister has mentioned that it is the intention to save from the prohibition such provisions for medical, surgical and hospital insurance, as is already contained in accident contracts, including motor accident contracts. That sub-section reads:—
"a contract of insurance against or otherwise in relation to any accident causing or being a contributory cause of sickness, injury or disease to the person insured thereunder or to any other person under which benefits are also payable in respect of such sickness, injury or disease, or"
As far as I am aware the commonest form of comprehensive motor insurance provides for hospital expenses being paid to the insured for any injury caused to him whilst he is driving a car and for any hospital or surgical attendance required by that injury. It also provides for about five specified types of injury benefits but it does not provide for any general injury or general sickness or incapacity benefits. In other words, the normal scheme provides that if you lose an eye or a limb you get certain fixed payments. In addition to the two or three injuries I mentioned, is included a great number of injuries not coming within that class, for which hospital expenses are paid up to about £20 in most policies. Under this sub-section, I do not think that form of insurance will be lawful any longer. I am not making a drafting point but I think there is no doubt that it would be out, but I know the Minister intends to leave in the existing form of policies. I would ask the Minister to have that point considered.
The sub-section referred to is intended to exclude any form of motor insurance policy in respect of the cover it provides arising from an accident. But if a company offers, as some of them do, a policy which also covers the cost of ill-health, not arising from an accident, it must be licensed.
I appreciate that. I am only doubting that the section has that effect. I think it goes further.
I will have to examine it, but Deputies will understand clearly that any form of policy, whether it is included in a motor insurance policy or not, providing cover, otherwise than arising from an accident, must be licensed because it would be engaging in health insurance, but I will have the other matters examined.
I gather from what the Minister says that he may have to license certain people who are carrying on business of this type. If he licenses them, he has very drastic powers in regard to withdrawing the licences. In fact I think it would be too drastic. I know that there is a good deal of existing legislation in which Ministers have power to withdraw licences, but I think that power is always dependent on an offence being committed. The Minister has absolute discretion. I would like the Minister to look into the question and consider it before the next stage. In amendment No. 9, sub-section (4), the Minister has absolute discretion to withdraw a licence. I think if the Minister inserted the words "where a person is convicted of an offence" it would be quite all right, but it is a rather frightening thing that the Minister should have power to withdraw a licence in a commercial operation of this kind.
The Deputy would suggest that the withdrawal should only be exercised——
Where the person has been convicted of an offence.
I move amendment No. 10:—
Before Section 22 to insert the following new section:—
(1) Subject to the provisions of this section, it shall not be lawful for any person to provide by means of insurance or otherwise, in consideration of the payment by any person of a subscription or premium, benefits to defray the whole or part of the cost incurred by the person paying the subscription or premium of any medical, surgical, hospital or other health service unless the person providing the benefits holds a health insurance licence for the time being in force.
(2) Every person who acts in contravention of this section shall be guilty of an offence and shall be liable on summary conviction thereof to a fine not exceeding £100 together with, in the case of a continuing offence, a further fine not exceeding £5 for every day on which the offence is continued.
(3) The prohibition effected by sub-section (1) of this section shall not apply in relation to:—
(a) benefits provided by the board, a Minister of State, a trade union or a society registered in the State before the passing of this Act under the Friendly Societies Acts, 1896 to 1953, or
(b) benefits provided under:—
(i) a contract which is attached to or dependent on a contract of assurance on human life and under which the assurer has no right of cancellation and which also provides for the payment of moneys in case of sickness, injury or disease of the insured,
(ii) a contract of insurance under which benefits are payable in respect of sickness, injury or disease of an amount calculated by reference to the duration of the sickness, injury or disease and not to the nature or cost of any hospital, medical, surgical or other health service, provided in respect of the sickness, injury or disease,
(iii) a contract of insurance against or otherwise in relation to any accident causing or being a contributory cause of sickness, injury or disease to the person insured thereunder or to any other person under which benefits are also payable in respect of such sickness, injury or disease, or
(iv) a contract of insurance which was made before the passing of this Act.
(4) This section and the next following section shall come into operation on such day as may be fixed therefor by Order of the Minister.
I move amendment No. 11:—
Before Section 22 to insert the following new section:—
(1) It shall not be lawful for any person to pay, as consideration for the provision of benefits of the kind specified in sub-section (1) of section * of this Act, a subscription or premium to or to accept any such benefits from a person who is acting in contravention of that section.
(2) Every person who acts in contravention of this section shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding fifty pounds.
I move amend ment No. 12:—
Before Section 22 to insert the following new section:—
The Insurance Acts, 1909 to 1953, shall not apply in relation to—
(a) the board,
(b) a person who pays a subscription to the board,
(c) a scheme under Section 4 of this Act, or
(d) a contract of insurance made after the passing of this Act under which insurance is provided solely against the whole or part of the cost of any medical, surgical, hospital or other health service.
