Deputy Bruton's amendments are being photocopied at present and will be distributed as quickly as possible.
Private Members' Business. - Insurance Bill, 1987: Report and Final Stages.
I move amendment No. 1:
In page 7, lines 28 and 29, to delete "the address at which that person is known to reside" and substitute "that person's last known address".
I thank the Minister for introducing this matter which I raised on Committee Stage.
Amendment agreed to.
I am awaiting the text of Deputy Bruton's amendment No. 1a.
What about amendment No. 2 in the name of Deputy Michael Keating?
Amendment No. la comes first. I will indicate the amendment to the House. In the third line of the new section 7 inserted in Committee after "authorisations" to insert "and in settling the level of such fees the Minister shall follow as closely as possible the movements of the consumer price index since the last previous occasion on which the level of such fees had been set".
I move amendment No. la:
In the third line of the new section 7 inserted in committee after "authorisations" to insert "and in settling the level of such fees the Minister shall follow as closely as possible the movements of the consumer price index since the last previous occasion on which the level of such fees had been set".
The purpose of this amendment is to get away from the situation where the Minister has complete discretion to increase fees under this Act without reference to movements in consumer prices, as a revenue raising measure. We are asking that such fees be related to movements in the consumer price index. This, I submit to the House, is a reasonable amendment and one which I hope the Minister will accept. It does not constrain him not to increase fees but merely requires that he should do so in line with the CPI.
As I have said already, the intention here is to relate these fees to the costs of supervision. The level of fees payable by any particular company should, therefore, relate to the costs of supervision and the number of companies paying fees in accordance with whatever fee structure is finally set. Any review of the fee structure and levels should take account of these factors and could result in either increases or decreases in particular rates of fees. In these circumstances it might not be appropriate to relate the review of fee structure to movements in the consumer price index, although obviously that could well be taken into account. It is more important that we relate it to the costs of supervision rather than to the consumer price index because the idea behind it is to cover the costs of supervision. That is a more practical way of dealing with it.
If that is the case we should put that in the Act so that there will be some basis by which the Minister will be seen to be acting rather than simply giving him complete freedom to change fees at will.
I do not think it is necessary to do that. The section provides for fees to be paid annually by the holders of authorisation. It clearly refers to supervision. I am satisfied that there is a clear link between the fees and the supervision already provided for in the section.
I will now ask how the amendment stands. I must advise the House — it is hardly necessary for me to do so — that as we are now on Report Stage Members may speak once only, except the mover of an amendment who has the right to reply. How does the amendment stand in the name of Deputy Bruton?
Amendment put and declared lost.
I move amendment No. 1b:
In page 15, between lines 9 and 10, to insert the following:
"(3) The Minister may, by regulation from time to time, increase or reduce the figure of £500,000 referred to in subsection (1) of this section, in line with movements in the consumer price index over the period since the figure was first set.".
Under this section the Minister may set a minimum share capital requirement for companies. This amendment proposes to allow the Minister to increase the minimum share capital requirement in line with the consumer price index by means of an order. At present, as I understand the meaning of section 23, the Minister cannot increase the minimum share capital requirement other than by new legislation. That is unduly rigid and therefore I propose that the Minister should at least be able, by order, to keep the figure in line with inflation. If he wants to increase it more than the rate of inflation, in other words to make a real change in the level of the minimum capital requirement, obviously legislation would be required. He should be capable, by order, of keeping the figure in touch with reality in relation to inflation because it is in line with the original intentions of the House as of this time. Therefore, I propose this amendment as one that facilitates the Minister and I hope he can accept it on that basis.
These figures are in the EC regulations. Were the EC regulations to be altered we could alter these figures on foot of those regulations. That might be a better approach than pinning it to the consumer price index. The Deputy will appreciate that the consumer price index is not really the issue when talking about share capital of a company like this. The main reason one would want to increase these fees almost certainly would have nothing to do with inflation or price increases, but with the supervisory powers and the capital structure of insurance companies. To limit ourselves to altering them in line with the consumer price index would be restrictive. Given the EC situation, I am satisfied that this provision is adequate.
First of all, we are passing Irish legislation here and we should take powers to amend Irish legislation as appropriate in light of Irish circumstances. If we could rely entirely on the EC to do this work for us we would not be passing this section at all and therefore I do not accept that argument. In any event, a change in the EC regulation is something that may be decided in the light of conditions in the market as a whole in Europe. It may be that we in Ireland would wish to make a change in the light of circumstances obtaining here and in that event it is appropriate that we should enable ourselves to keep this figure of £500,000 up to date in line with inflation. That is all this amendment proposes. It does not require the Minister to keep it up to date and in line with inflation, it merely enables him to do it. In any event, I cannot see how a figure of IR £500,000 could be required in an EC rule in the sense that — I may be wrong here — EC rules would be expressed in European units of account.
The exchange rate of the Irish pound to European units of account varies from time to time so a facility to the Minister which enables him to keep the figure in Irish pounds up to date, relative to inflation, might also enable him by regulation to keep it more closely in line with movements in the true value of the figure specified in the European regulations.
On a point of information, in case I misled the House, the Minister can, by regulation, increase the share capital under section 23 (2) which states:
... may by order amend the requirements as to their required value of paid up share value referred to in that subsection.
Lest I gave the wrong impression the Minister can, by regulation, vary the amount. I take the Deputy's point. It is not related to the consumer price index. That is a different item.
I made a mistake.
Amendment, by leave, withdrawn.
I suggest that we take amendments Nos. 2 and 3 together for discussion purposes.
To what section do they apply?
To delete the new section 33 inserted on Committee and substitute the following—
Perhaps we could take amendment No. 3a as well.
We will take amendment No. 3a also if you so wish. They are related. We are taking amendments Nos. 2, 3 and 3a.
I do not think we have seen this amendment. I take it we are talking about Deputy Bruton's amendment.
We are talking now about amendment No. 2 in the names of Deputies Keating and Cullen.
Is this an introduction of the Committee Stage amendment?
Yes, it was amendment No. 30 which we did not deal with.
It is a reintroduction of the amendment which appeared on Committee Stage without any change of wording.
I move amendment No. 2:
To delete the new section 33 inserted in Committee and substitute the following:
33.—(1) It is hereby declared for the avoidance of doubt that an administrator appointed under section 2 of the Insurance (No. 2) Act, 1983, shall have, and shall be deemed always to have had, power to dispose of all or any part of the business, undertaking or assets of the insurer and to carry on any remaining business including the settlement of liabilities for the purposes specified in subsection (3) of section 2 of the Insurance (No. 2) Act, 1983.
(2) Where an administrator shall have disposed of all or any part of the business, undertaking or assets of an insurer, there may, with the approval of the High Court, be paid out of the Fund to the administrator such amounts as are, in the opinion of the High Court, required to enable the administrator to settle the liabilities of the insurer in an orderly manner.".
I do not want to re-hash all the same arguments. I want to deal particularly with amendment No. 2. The same question arises as to why this section is being inserted in that particular form. I hope that the Minister on reflection of the earlier discussion we had this evening may have come around to the view we were trying to put across. The difference between his amendment which was passed this afternoon and our proposed amendment is that I am trying to ensure that the liabilities of the company are settled and that the matter is not left up in the air. The Minister proposed the words "with a view to the orderly completion of the administration". I do not know what the words "orderly completion of the administration" are supposed to mean. I do not know what standing that wording has in law. I do not know what the Minister can enforce with that wording. That wording says nothing and leaves the whole matter hanging in the air. As we said earlier it allows the assets of the PMPA to be sold off and a shell left with no regard to the depositors and those whose liabilities are left with the PMPS. I hope the Minister has had time for reflection and that he will accept what I believe is a very reasonable amendment setting down guidelines, which is what this House should be about, to add the words "to settle the liabilities of the insurer in an orderly manner.". Surely it is desirable that the wording be used as opposed to "the orderly completion of the administration" which means absolutely nothing. I would like to get the Minister's views on that and whether he will accept that amendment.
Earlier we passed a Government amendment which I understood took account of the situation about which the Deputy is concerned, but he may not think so. This amendment appears to restrict an administrator to the settlement of liabilities for the purposes set out in section 2 of the 1983 Insurance Act. As already stated, the intention of the section is to make explicit the administrator's powers to sell the business of the company and to run off any remaining business, including all liabilities, with a view to the orderly completion of the administration. I am quite satisfied that amendment No. 30 which has amended section 33 provides for this orderly completion of any administration to take place. Therefore, I do not think this amendment is required.
Without going into the detail of the discussion we had this afternoon and this morning I would like, nevertheless, to make an appeal to the Minister to consider the amendments before him in my name and in the name of Deputy Cullen. The principle concern here is to facilitate the Government to an extent in having this Bill put into law because there are many things in it of a positive nature. There still remains with us the lingering concern about certain aspects of the manner in which disposals, winding-ups and amalgamations of companies can take place unless there is some explicit safeguard built in. That is what these amendments are designed to do.
I have thought about what the Minister said to us this evening in relation to the concerns which Deputy Cullen and I and, indeed, Deputy Bruton had earlier. I am interpreting the general consolation he offered us in the most comprehensive way possible. He said he did not envisage that there would be any circumstances where a court would dispose of assets. It was never the intention or would not be the intention so to do. He thought it would be right and proper that liabilities would be taken care of. In other words, it seems to me that his policy and, therefore, the thinking of the Government, is that the worst possible interpretation, somebody purchasing, for example, the PMPA will not be drawn. I still believe the Bill would be strengthened and some measure of comfort would be offered to the people who would be hit by this if what I and Deputy Cullen fear occurs if the Bill was amended along the lines suggested. I appeal to the Minister to consider accepting these amendments. Essentially they seek to give reasonable guarantees in the event that a case is proven, guarantees sufficient only to write into law that which the Minister appears to believe will be inevitable, that which he clearly implies is his policy and that of his colleagues, and is the clear underlying concern of other Members in this House.
I should like to say to the Minister that he and many of us are passing through this House and he has an opportunity, as Minister of State at the Department of Industry and Commerce to put his mark on this Bill in a personal way and to rise above — I say this with respect — the conservative advice he would be given by people who are reluctant ever to suggest that an Opposition amendment would be accepted because they have had a chance to reflect carefully on their own drafting. There are Ministers in Government who have had the capacity and the courage to believe that now and again the odd reasonably good idea does emanate from the Opposition benches. The difference between our amendments and what the Minister believes should happen is so slight in terms of the technical change to the actual Bill but so significant in terms of writing into law that which we all want to see achieved, that I suggest he take the responsibility, which is his in law, and exercise the authority which he has vested in him by virtue of his appointment as Minister of State and accept the amendment. He would be doing a good day's work both in establishing his own authority — if I may be so bold as to say so — in the context of this Bill and in ensuring that the people we are concerned about——
Do a Liam Lawlor on it.
It may not be expedient. The Minister has that authority, that flexibility and that power if he so wishes to use it. It is his decision and I do not think it is reasonable for a Minister consistently to advert to the fact that he is advised this and he is advised that. He should stand on his own two feet. It is his job to say yes or no. He should certainly take advice on board but he has to make the decision. Having given this matter some thought since we last spoke about it, I cannot for the life of me see a difference between the terms of the amendment he suggested earlier and what we are now trying to achieve which would do any kind of injury to what the Minister says is policy and practice. We must bear in mind that there are some 6,000 people who decided to put sums ranging on average from £1,500 to £2,000 into what they thought was the PMPA and are presently left high and dry. They can continue to be left high and dry if this amendment is not accepted. I am certain that is not what the Minister wants and certainly it is not what most Members in the House want. I do not believe, therefore, that the Minister should take refuge — and I say this in the nicest possible fashion — in reference to advice he receives or to devices for evading his centrality of decision-making. It is his decision. Up to now I think the Minister has been unduly inhibited or timorous about what he could and should do. I would ask him in the light of events to consider the matter again and consider accepting this amendment, which would do what we all want to see achieved.
My amendment No. 3a reads:
In the sixth line of the new section 36 inserted in committee after "shall" to insert "having had regard to all the liabilities of the companies,".
This amendment requires that a court in respect of the new section 36, which deals with the amalgamation of insurance companies, to take due account of the liabilities of any company that is being amalgamated or is agreeing to an amalgamation. It is a different way of saying the same thing that Deputies Cullen and Keating are saying in their amendment. It is absolutely important for the avoidance of doubt to give assurance to everybody that their existing legal rights are not going to be jeopardised in any way in the Bill to make it clear that the court in agreeing to an amalgamation — and in this case we are talking about the possible sale of the PMPA, but we could be talking about any number of other possible scenarios in the future — must take account of any liabilities of the company being amalgamated. That does not create any new rights for any existing depositors in the PMPS, but simply says that any existing rights prior to the amalgamation must be taken into account by the court agreeing to the amalgamation. To my mind that is eminently reasonable. I do not mind which amendment we vote on but the House must decide on this important issue of principle and the sooner we decide on it the better.
I am intrigued that Deputy Keating thinks I am acting with some courage when I agree with him but that I am acting timorously when I do not agree with him.
The Minister has not acted courageously so far.
That is because I have not agreed with the Deputy all day but that does not mean one is timorous. I would not equate our agreeing on things with courage or timorousness as the case may be. It is important that I should say that to the Deputy.
Deputy Keating's amendment is contradictory because in the first part it agrees with and permits the disposal of all or any part of the business, but then it states "power...to carry on any remaining business including the settlement of liabilities for the purposes specified in subsection (3) of section 2 of the Insurance (No. 2) Act, 1983." The Insurance Act, 1983, which the Deputy refers to in his amendment lays down a duty in regard to a going concern——
On a point of order, the Minister has already spoken on Deputy Keating and Deputy Cullen's amendment. This is Report Stage and I do not know why he is replying to it again.
The right of reply remains with Deputy Cullen.
It is quite obvious from what the Minister has been saying this evening that for whatever reason he will not accept a very simple, logical straightforward amendment. The reason he will not accept it is that in a few weeks the PMPA will be sold off. I can assure him that the reality is that the depositors in the PMPS will be left high and dry. That is why this section has been put in.
It is not about that at all.
These sections were not originally in the Bill. They appeared out of the blue. There was no need for them in the past but there is suddenly a great need for them, and we all know the reason.
It has nothing to do with the PMPS.
Everybody knows what is going on. The Minister will not admit to it, but I cannot see any logical reason for the way the amendments were inserted, other than for that specific reason.
It has nothing to do with that.
Will the Minister accept my amendment?
I can accept Deputy Bruton's amendment, but I cannot accept Deputy Keating and Deputy Cullen's amendment because it has nothing to do with specific companies.
The job is done.
Amendment, by leave, withdrawn.
I move amendment No. 2a:
In page 19, line 50, after "believe" to insert "at or before the time he is conducting the audit".
Certain accountants have expressed a problem about the provisions of the section. This section requires auditors, if they have reason to believe that circumstances exist which could affect the insurers ability to fulfil their obligations to policyholders that they disclose this information to the Minister. The amendment proposes that this would only apply at or before the time of conducting the audit. If an audit had been completed and subsequently an auditor heard something, for instance on foot of a newspaper article, the auditors are concerned that they should not be required to report on that because they fear they would be required to report on a matter that had not come to their notice in the course of conducting the audit but something that came to their notice after the audit had been completed. They are concerned about the wording in the sense that it throws them open to an undue degree of liability and that their auditing fees would have to be appropriately increased because of what they regard as an undue degree of liability for the giving of information to the Minister under section 35. The duty remains but it is only in respect of information they had at the time of the audit or prior to it, but not to information that comes to their attention subsequent to the completion of the audit. I do not want to take a lot of time on this issue. I have explained why I think it is a reasonable amendment and I hope the Minister can accept it.
What is between us on this is that we have taken the view that whenever an auditor is doing work for a client — thus it may be outside the audit time, when preparing taxation proposals, doing management consultancy work or engaged on specific financial assignments — and comes across such information, he should report it. The Deputy's amendment would have the effect of limiting the reporting of it to whenever the auditor comes across it at the time of audit. Perhaps the Deputy would reflect on this because an auditor might, while doing other accountancy work for an insurer, come across some of the information and it would be a pity if he was not able to report it at that time. I do not think there is anything sacrosanct about coming across information at the time of an audit as opposed to coming across it during a management consultancy assignment.
I raised the matter but I do not want to make a big deal about it so I will withdraw it.
Amendment, by leave, withdrawn.
I move amendment No. 2b:
In page 20, to delete line 11 and substitute "he shall report the matter in writing to the insurer without delay, and the insurer shall forward a copy of this document to the Minister within two days of receiving it.".
This relates to section 35.
This is another matter that is of concern to the auditing profession who are worried that they are now required to report directly to the Minister with regard to certain matters rather than to their client. Simply for the sake of form, they want the report to be one that they must furnish to the insurer and that the requirement be placed on the insurer to furnish this to the Minister within two days. It is academic, because it has to go to the Minister anyway. This two day period, which is irrelevant as far as anything is concerned, is simply there to preserve the traditional relationship between the auditor and the insurer.
I do not want to damage that professional relationship unnecessarily but the Deputy is talking about very serious matters, circumstances which are likely to affect materially the insurers' ability to meet obligations to policy holders, material defects in the financial system. This keeps the insurance company from the temptation to talk the auditor out of expeditiously reporting such matters. In practice, the Minister would be informed almost at the same time. Given the seriousness of the matters we are asking them to report — I appreciate the auditors' concern about this matter — we should make the reporting system direct. It would almost be at the same time in any case.
I just wanted to raise the matter because the auditors are concerned. They are a respectable body of men and women but if the Minister does not want the amendment, I will not delay the House on it.
Amendment, by leave, withdrawn.
Amendment No. 3 not moved.
I move amendment No. 3a:
In the sixth line of the new section 36 inserted in committee after "shall" to insert "having had regard to all the liabilities of the companies,".
Amendment agreed to.
I move amendment No. 4:
In page 32, before line 1, to insert the following:
".—(1) The duty of disclosure imposed by law on a person (in this section referred to as `the proposer') proposing to enter into a contract of insurance (whether initially or by way of renewal of an earlier contract) shall be limited to those material facts—
(a) which are actually known to the proposer or which, by virtue of subsection (3) below, he is assumed to know; and
(b) which a reasonable man in the position of the proposer would disclose to the insurer, having regard to the nature and extent of the insurance cover which is sought and the circumstances in which it is sought.
(2) For the purposes of this Act any fact or other matter is material, in relation to a contract of insurance, if it would influence the judgment of a prudent insurer——
(a) in deciding whether to offer insurance against the risks covered by the contract; or
(b) in deciding the premium or other terms on which he would be prepared to offer that insurance.
(3) For all the purposes of sub-section (1) above, the proposer shall be assumed to know of any fact which could have been ascertained by reasonable inquiry and would have been so ascertained by a reasonable man proposing to enter into the contract of insurance in question.
(4) Notwithstanding the duty of disclosure referred to in subsection (1) above, the liability of an insurer under a relevant contract of insurance shall not be affected by the non-disclosure of any material fact if the circumstances in which the contract came into being (or, as the case may be, was renewed) were such that the proposer might reasonably conclude that the insurer was not concerned about the disclosure of that fact.
(5) Any provision of a contract (whether a contract of insurance or not) which purports, directly or indirectly, to enable the insurer under a contract of insurance to avoid the contract on account of, or to rely for any other purpose on, a failure by the insured to disclose any fact which, having regard to the provisions of this section he is under no duty to disclose shall be void.".
This, fortunately, is just a shadow of a series of amendments which I had tabled on Committee Stage — 15 in all. I realised that there would not be time to deal with them all at any length on Report Stage and I reduced the matter as the Minister suggested, to its very basis and I hope the Minister will be able to accept this amendment.
The issue involved here is essentially a very simple one. It might seem complex from the 15 amendments I had down on Committee Stage but the net point is essentially simple. We have reached a stage in our legal development that the duty of disclosure that the man in the street has to insurance companies on filling in proposal forms has gone to ridiculous proportions. The courts themselves recognise that. Something has to be done about it. If a man in the street applies for a fire insurance policy on his home, he is presented with his proposal form which he fills in. He is obliged in that form to warrant that those facts are correct and that every single remote item, no matter how trivial, has been disclosed, and if he slips up on even a trivial matter, he is out. This is not some notional thing. It was highlighted in a case to which Deputy Bruton referred earlier in the day which is reported in the Annual Review of Irish Law 1987 by Byrne and Binchy. It says on page 38 of that report:
In Keenan v Shield Insurance Co Ltd, High Court, 13 February 1987, the plaintiff took out a policy of insurance on his house with the defendant company. The proposal form asked the plaintiff, inter alia, whether he had ever sustained loss or damage by any of the risks or liabilities he wished to insure against. The plaintiff answered no. The plaintiff was also required to sign a declaration at the end of the proposal form by which he warranted that the contents of the proposal were true and complete in every respect, and that no material fact had been suppressed or withheld. In fact, one year previously, there had been fire damage to a pump for which the plaintiff had been paid a sum of money. A fire took place in the house and the plaintiff claimed indemnity under the policy. The company refused to indemnify on the basis that the plaintiff's declaration on signing the proposal amounted to a condition precedent of the insurance contract, and that he was in breach of warranty in failing to disclose the information regarding the payment arising from the pump fire...
What emerges from the judgment is that although the non-disclosure could be described as trivial, as Blayney J held, it was the warranty which proved crucial to the outcome of the case, making the triviality irrelevant...
In the context of a lay person being asked questions when applying for insurance, however, the "feel" of the sentence comprising the warranty is important....
Certainly, the lay person would have no knowledge of the common law obligation arising from the contract of insurance, and while Blayney J stated the the warranty "related to" the common law obligation...
All I am asking in this amendment is to provide what is, a very substantial safeguard for the insurance company. I recognise that there must be an obligation on a person proposing insurance to give the fullest possible information. All I am trying to safeguard is that where the matter is so trivial as to be almost irrelevant, the insurance company should not thereby be entitled to use trivia as an excuse for avoiding the entirety of the policy.
Hear, hear.
That matter was examined in some detail by the English Law Commission in 1980. Their summing up on page 52 of their report can be equally related to the situation here. They said on page 52 of the English Law Commission's report on insurance law:
4.56 A major criticism of the present law, as we have already noted in paragraph 3.20, above, is that an insured may well be unaware that he is under a residual duty to disclose material facts to the insurer when he has answered a series of specific questions in a proposal form, because these could naturally lead him to believe that the questions cover all matters about which the insurer is concerned to be informed. Indeed, the very fact that specific questions are invariably asked in proposal forms, which is their essential purpose, may have the effect of creating a trap for the insured under the present law. We have no doubt that this is a mischief which requires reform for the protection of the insured.
What I am asking for is relatively minor. My amendment contains more than ample safeguards for the insurance company, specifying quite substantial obligations and responsibility for a proposer, but limiting what the insurance company may rely on, to material facts, and disallowing the insurance company from being enabled, as they are now, to rely on trivia and matters of little or no consequence to avoid paying substantial sums of money which in all morality they ought to be obliged to pay. I am beseeching the Minister to favourably consider the urgent need for this amendment. Byrne and Binchy went on to sum up the situation on page 40 of their book where they say:
The Keenan and Curran cases illustrate the quicksand nature of the disclosure requirement in insurance contracts, and point to the extent of the information which must be provided by the insured person. There is good reason for some requirement of disclosure bearing in mind the special risks attached to the insurance contract—
I have provided for those in my amendment.
—and the fact that the insured may have peculiar knowledge of the relevant basis on which the insurance company makes its decision whether to insure.
That is also covered in my amendment. They continue:
But there has been increasing concern expressed that there is too heavy a burden on the insured to disclose information. That would appear to be supported by the outcome of the High Court decision in the Keenan case above. But as yet there does not appear to be any legislative move in this direction.
The House now has a small but tentative legislative move in this direction and I hope the Minister will be able to accept it.
On behalf of the Fine Gael Party, I want to very strongly support the case which has just been made by Deputy Taylor. In view of the time I am not going to repeat the arguments he has made. I had intended to put forward an amendment of this kind but Deputy Taylor has done the job in an exemplary fashion in a most comprehensive amendment. I strongly support him and I urge the Minister to accept the amendment. It is entirely wrong that insurance companies should be using small print and excessively using the uberrimafides rule to prevent the clear intention of the contract into which they entered from taking effect, and therefore I support Deputy Taylor's amendment.
I know of Deputy Taylor's deep interest in this matter and I have given the amendment as much time and thought as I possibly can but I still have some difficulty with it in a number of areas. I have no problem with the objective the Deputy is trying to achieve but some parts of the draft would concern me. By way of background I want to say that this matter originally came to light as a result of a commission report undertaken in the UK some seven or eight years ago. The UK authorities have had seven or eight years to examine this matter and have backed off enacting a comprehensive provision such as the Deputy suggests. We have had only a short few days to consider the implications of this amendment, which is lengthy and complex, even though the net point is a simple one. I am not concerned about the net point but I am concerned at the length of time we have had to consider all the implications of a lengthy amendment to a Bill which we are about to pass, assuming the House agrees to it.
The part of the amendment I have considerable concern about is subsection (4). The last line of that subsection states "...were such that the proposer might reasonably conclude that the insurer was not concerned about the disclosure of that fact". That more or less says that if the person with the policy reasonably concludes that the insured would not be concerned about a fact being disclosed then that fact in itself would not affect him. From my initial examination of the amendment I am concerned that the authority, onus and judgment is left with the proposer to decide whether or not the insured would wish to have known about a fact.
I want to say to the Deputy that I have drafted a short amendment which probably does not meet all his points but it is as far as I can go this evening considering the length of the Deputy's amendment and the proposal in sub-section (4), about which I have genuine concerns, to leave it with the proposer to reasonably conclude that the insured would not be concerned about the disclosure. That is too wide and leaves too much to the individual. My amendment reads:
"Where the Minister considers it necessary in the public interest, and following consultation with the Insurance industry and consumer representatives, he may by Order prescribe Codes of Conduct to be observed by undertakings in their dealings with proposers of policies of insurance and policyholders renewing policies of insurance in respect of duty of disclosure and warranties".
The reason I drafted this amendment is that the UK authority — and I do not make any apology for looking closely at what is done there; they have one of the most sophisticated and developed insurance industries in the western world and they have considerably more resources in their insurance area than we have — did not enact this provision but after discussions with the industry brought in codes of conduct and I am informed that those codes of conduct appear to be working satisfactorily in the UK jurisdiction. Those codes of conduct deal with the extent to which nonmaterial disclosures can be used against a person who had a claim at some other time.
This may not be the perfect solution to what Deputy Taylor wanted to achieve but it goes a considerable distance. His amendment is lengthy, detailed, came extremely late and the new draft — this is not the fault of the Deputy — is literally hours old. I am not concerned about the objective of the amendment but I am concerned about the wording of sub-section (4) which might pose difficulties for us. I would be worried about putting that amendment into our legislation tonight and if the House agrees I am prepared to formally undertake to have discussions with the industry and take power to introduce codes of conduct. I have drafted suggested wording for a new section which I am prepared to put forward now. It might not pin down all corners but it will go a long way and I will give a specific undertaking here this evening to introduce codes of conduct to deal with the specific problem and ensure that something which is not material or frivolous does not subsequently trip up a person who overlooked it and did not think it was necessary at the time. I know what the Deputy wants to achieve and I propose to achieve a similar thing by way of a codes of conduct system. I will not only give that guarantee but I will write my amendment into the Bill this evening. The new section would read: "Where the Minister considers it necessary in the public interest, and following consultation with the insurance industry and consumer representatives, he may, by order, prescribe codes of conduct to be observed by undertakings in their dealings with proposers of policies of insurance and policyholders renewing policies of insurance in respect of duty of disclosure and warranties". I am prepared to put that amendment to the House for its approval and to move on it as quickly as possible. We have some difficulty with the wording in the Deputy's amendment.
Perhaps we should have Committee and Report Stages later in the evenings than we normally do because obviously the Minister is mellowing as the hours go by.
I have taken the Deputy's advice and I am being courageous.
I am glad the Minister listened to something I said today. The Minister began his contribution by saying "the Minister may introduce regulations" but at the end of his contribution he undertook to introduce such regulations. Will the Minister indicate a timescale within which these regulations will be introduced? The problem highlighted by Deputy Taylor is a genuine one; the country is awash with small print and these kinds of documents, and a number of people have suffered very severe hardship.
Is this amendment being included in the Bill?
The Minister is inserting his own section into the Bill.
It will go into the Bill now.
The Minister is making his own amendment to the Bill.
He is putting a section into the Bill.
If the House agrees.
Assuming that the House agrees. Would the Minister go a little further and indicate when such regulations might be——
That is complicating matters.
I want to know whether it is a "may" or a "will".
That is as near as you can get.
I am putting "may" in the Bill, but it is my intention to tackle this issue.
I will take the Minister's word for it.
Would the Minister please clarify the position? Is he moving that section and it will go into the Bill?
Yes, if it is agreed by the House.
Amendment, by leave, withdrawn.
NEW SECTION.
I move the new section 60:
Where the Minister considers it necessary in the public interest, and following consultation with the Insurance industry and consumer representatives, he may by Order prescribe Codes of Conduct to be observed by undertakings in their dealings with proposers of policies of insurance and policyholders renewing policies of insurance in respect of duty of disclosure and warranties.
I thank the Minister for assisting us to the extent that he has even though it does not fully meet what I wanted. At least it is a substantial measure of progress and I am grateful to him for it and to my colleagues here who supported me on this important matter.
Acting Chairman
Deputy Bruton gave notice that he was re-submitting committee amendments Nos. 40 and 41, which are now 4a and 4b. They have not been circulated separately on account of the short notice. The two amendments may be discussed together.
I move amendment No. 4a:
In page 27, subsection 2 (a), line 33, to delete "four" and substitute "three".
These amendments say that an agent shall have up to three agencies for life insurance and three for non-life policies and a broker shall start at five in each case. People will have to have either five or more to be a broker, or three or fewer to be an agent. There will be a gap, but that can easily be bridged by moving in either one direction or the other. It is relatively simple. The Minister's objections are purist and not of great substance.
They are constitutional.
I support what Deputy Bruton has said. We made all these arguments earlier tonight and I am not going to make them again. This answers the Minister's question as to how there can be a gap. There is no reason why there should be. People can be either in one sector or the other, as broker or agent. The choice is theirs. It makes a discernible difference between the two sectors and it is necessary in the context of what is sought to be achieved. I fully support these amendments.
I cannot supprt the amendment because it is important that the numbers be sequential. If it takes five agencies to be a broker, anything below that is an agent. That makes commonsense to me. I am not disposed to opening up a gap like that. I am trying to have a neat line. I do not want to introduce a third area. The matter is complicated enough. I know that Deputies have scoffed at this, but my second point is important and I mention it again. The Attorney General has constitutional worries about removing peoples livelihoods perhaps even further than we are already doing in this Bill. In this Bill we have, perhaps, already considerably reduced the earning power of many agents throughout the country. We should think twice before we go further.
Mr. Bruton
I do not agree.
Question put: "That the words proposed to be deleted stand."
The Committee divided: Tá, 72; Níl, 52.
Tá
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Andrews, David.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Connolly, Ger.
- Coughlan, Mary T.
- Cowen, Brian.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Fahey, Jackie.
- Fitzgerald, Liam.
- Fitzpatrick, Dermot.
- Flood, Chris.
- Flynn, Pádraig.
- Foley, Denis.
- Gallagher, Denis.
- Geoghegan-Quinn, Máire.
- Hilliard, Colm Michael.
- Hyland, Liam.
- Jacob, Joe.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lawlor, Liam.
- Leonard, Jimmy.
- Leyden, Terry.
- Lynch, Michael.
- Brady, Vincent.
- Brennan, Matthew.
- Brennan, Séamus.
- Browne, John.
- Burke, Ray.
- Byrne, Hugh.
- Collins, Gerard.
- Conaghan, Hugh.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- Mooney, Mary.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J. (Limerick West).
- O'Dea, William Gerard.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Roche, Dick.
- Smith, Michael.
- Stafford, John.
- Swift, Brian.
- Treacy, Noel.
- Wallace, Dan.
- Walsh, Joe.
- Walsh, Seán.
- Woods, Michael.
- Wright, G.V.
Níl
- Barrett, Seán.
- Barry, Peter.
- Begley, Michael.
- Bell, Michael.
- Birmingham, George.
- Boland, John.
- Boylan, Andrew.
- Bruton, John.
- Burke, Liam.
- Carey, Donal.
- Connaughton, Paul.
- Cosgrave, Michael Joe.
- Creed, Donal.
- Crotty, Kieran.
- Crowley, Frank.
- Cullen, Martin.
- Deasy, Austin.
- Deenihan, Jimmy.
- Desmond, Barry.
- Durkan, Bernard.
- Farrelly, John V.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Charles.
- Griffin, Brendan.
- Harte, Paddy.
- Hegarty, Paddy.
- Higgins, Jim.
- Higgins, Michael D.
- Howlin, Brendan.
- Kavanagh, Liam.
- Keating, Michael.
- Kemmy, Jim.
- Lowry, Michael.
- McCoy, John S.
- McGahon, Brendan.
- McGinley, Dinny.
- Mitchell, Gay.
- Molloy, Robert.
- Naughten, Liam.
- Nealon, Ted.
- O'Keeffe, Jim.
- O'Sullivan, Toddy.
- Pattison, Séamus.
- Quinn, Ruairí.
- Sheehan, P.J.
- Spring, Dick.
- Stagg, Emmet.
- Taylor, Mervyn.
- Taylor-Quinn, Madeleine.
- Wyse, Pearse.
- Yates, Ivan.
Tellers: Tá, Deputies V. Brady and Wright; Níl. Deputies J. Higgins and Boylan.
Question put and agreed to.
I am now required to put the following Question in accordance with the Order of the Dáil of this day: "That Fourth Stage is hereby completed; and that the Bill is hereby passed."
The Bill, which is considered by virtue of Article 20.2.2º of the Constitution as a Bill initiated in Dáil Éireann, will now be sent to the Seanad.