asked the Minister for Industry and Commerce whether he has any proposals to amend section 51 of the Insurance Act, 1936, so as to restrict the amount of premiums payable to the level of benefit which may be recovered.
Ceisteanna—Questions. Oral Answers. - Insurance Act Proposals.
13.
I have had no proposal, from the Committee on Insurance or otherwise, for a change in the law in the sense indicated by the Deputy. He will appreciate that cases where the total of premiums paid exceeds the benefit due under a policy must be balanced against cases when the total of premiums falls far short of the benefit due. I understand that, in the more extreme cases where payments exceed benefits due, insurance companies may be prepared to make some ex-gratia concession. If the Deputy has a particular case of this kind in mind and would care to communicate the details to me I should be glad to have it taken up with the company concerned.
Does the Parliamentary Secretary recognise that in the calculation of premiums the kind of case to which he referred is taken into account, in other words the case in which an insurance company receives only a relatively small amount of premiums and pays out the full amount assured? The Parliamentary Secretary referred to that example of where the insurance companies could lose out. That type of case is taken into account in the actuarial calculations of insurance companies. What is involved here is a situation in which parents of young children may go on paying premiums for many years but be restricted by law to a very small amount that could be recovered. Is it not wrong that people should be obliged to pay premiums when there is no way in which they can increase the amount of benefit available?
In reply to the first part of the Deputy's question, the answer is yes. The Deputy will appreciate that if the practice referred to in the second part of his question were to cease the overall level of premiums would have to be increased, because a potential source of income to the insurance companies to make up the balance in their actuarial calculations would have been removed.
Has the Parliamentary Secretary any information about what change would be involved, and if not, would he make inquiries to see what effect such a change would have?
The Deputy will appreciate that there is a whole range of different policies involved and it would be a very difficult statistical exercise to get the information referred to. I am not certain that it would be a desirable end to achieve in any event, because it is a well accepted principle of insurance that, for instance, if one has accident insurance and does not have an accident, one never benefits from the contributions made. It is of the essence of insurance that one will find in some cases, in respect of some policies, that one will get little or no benefit from the policy by comparison with what one pays in, and that that, by the principle of mutuality, enables the company to pay benefits to people who make small contributions simply because all are covered.
Would the Parliamentary Secretary not accept that there is a very clear distinction between a case in which one insures against accident which may never occur and a case in which one is insuring on a life? Is it not the case that at the point at which a child reaches a certain age there is an upper limit on what may be paid by the insurance company but that premiums must continue being paid? The distinction is that in one case a certain point is reached and there is certainty at that point while in the case of accident one is insuring against unknown risk.
Is the Deputy thinking in terms of payment made on the attainment of a certain age rather than on death?
The section provides that there are limitations in relation to age on payments made on the deaths of children.
There is no certainty as to the time of death.
That is so but until a child has reached a certain age there is an absolute statutory limitation on the amount that may be paid. Should there not be a provision that the payer would not have to pay more than that which could be recovered?
It is a question of balance.
We must have finality on this question.
Perhaps you would allow me to conclude by saying that the benefit to those people in the category mentioned by the Deputy compared with the loss to the general run of people with this sort of policy would have to be considered in the event of there being any attempt to adopt the measure he advocates. I shall have a look at the matter generally but I can give no assurance as to the outcome.