Seanad Éireann debate -
Wednesday, 20 Jan 1943

Vol. 27 No. 8

Exported Live Stock (Insurance) Bill, 1942—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Agriculture (Dr. Ryan)

The Exported Live Stock (Insurance) Act, 1940, came into operation on the 2nd September, 1940, and it applies to live stock—cattle, sheep and pigs—ex-ported from Irish ports. The Act has been very successful. Before it came into operation the rates that were paid to private companies for insurance ranged from 40/- to 67/6 per cent. of the value of the live stock exported, and the insurance at that time only covered the risks from port to port.

A board was set up under the Act which consists of eight members and it is laid down in the Act that at least one of these must be interested in the pig trade. As a matter of fact, the present board is composed of eight members, seven of whom represent the cattle and sheep trade and one the pig trade. The board when they went into business commenced with a rate of £2 per cent. of the value of the animals exported, and they extended the cover, so that the cover was not only from port to port, but also extended to the time the animals reached their destination on the other side, if that period was within 72 hours. They subsequently reduced their rate to 30/- on the 30th January, 1941, and reduced it again to 25/- on the 18th November, 1941. It came down to 20/- on the 25th January, 1942, down to 15/- on the 1st May, 1942, and the present rate is only 10/-. Even though they have been reducing their rate all the time, they had at the end of the year about £187,000 in the funds and they paid claims during that time amounting to about £85,000; so that we can take it that they collected something like £250,000 in premiums during the time that they have been in office. If we were to assume that the insurance rate would have remained even at the lowest available at the time this Act came into operation, we can claim that this board saved the cattle trade about £250,000 during the time they have been in operation.

The Act, as I say, applies only to cattle exported from ports in this State and it does not, therefore, cover cattle exported through the Six Counties of Northern Ireland, and from the ports in the Six Counties. This Bill was brought in principally to cover such exports. The number of persons on the board will have to be increased in order to give representation to people exporting through Northern Ireland, and it is proposed to bring the number up from eight to nine. Advantage has been taken of the introduction of the Bill to bring in some small amendments. For instance, it is proposed that the board now can prescribe minimum rates. The Act was compulsory in this way: that everybody exporting live stock from ports here had to insure with the board. But that was largely evaded by some exporters who put down their cattle at a ridiculously low price. I believe that in some cases cattle were exported which were valued by the exporters at 5/- per head. Now the board will have power to prescribe minimum rates.

Another difficulty that the board were up against was that they made assessments which were final. It was found in at least one case that evidence came to hand later which showed that the board had been wrong, but they had no power to reopen the case. We are now giving them power to reinvestigate claims if fresh evidence is produced. Another amendment that was inserted in the Dáil had reference to an appeal from the Board of Assessors. There was no provision for an appeal in the original Act, but now that minimum rates are being prescribed, the compulsory feature of the legislation is more pronounced, and it was thought advisable to give a claimant power to appeal. That is being provided for now in the Bill, and if a person thinks he has a grievance there will be an appeal from any claim to an arbitrator to be appointed.

There are other small points in this Bill, which are largely put in for administrative purposes and which are not very important in principle. I think, however, that probably all of us here will agree that the board did extremely useful work during their two years of office and that we would be well advised to pass this Bill, enlarging the scope of their operations so as to permit them to insure live stock going through the Northern Counties, and also to give them the other powers that they think they require.

Mr. Counihan

As the Minister has explained very fully the provisions of this Bill, and as I, on behalf of the cattle trade, am in complete agreement with the statements he has made, there is very little need for me to say anything at this stage. I shall move some amendments on the Committee Stage, and the purpose of one of these will be to define the terms of office and the mode of election of the board —to make an alteration in the present system of election. The other amendments will be of a minor nature and, as the cattle trade has already discussed them with the Minister, and as the Minister has promised to accept them, there is no need to discuss them now.

The Exported Live Stock (Insurance) Act has now been in operation, as the Minister has stated, for about two and a half years, and I think I can truthfully say that it has given complete satisfaction to 95 per cent. of the people engaged in the cattle trade. As the Minister has explained, the Act did not make any provision to include cattle shipped through North of Ireland ports, and exporters from the Border counties have been agitating since the Act was passed to have the stock which they shipped through those ports included in the scheme. The National Executive were convinced of the justice of the claims of these people, and we approached the Minister and requested him to introduce this amending Bill. I should like to say now that the cattle trade is very grateful to the Minister and to the officials of his Department for the trouble they have taken in framing this Bill and acceding to our requests. It was very difficult to frame legislation dealing with our stock passing through territory over which we have no control, and I do not know yet how it will work, but if any snags should arise when the Act has been working for some time, then we shall only have to come back to the Minister to find out a way of getting rid of these snags. Belfast and Derry are the natural points for shipping live stock from Donegal and other Border counties to Scotland and the North of England. And the fact that those exporters were so anxious to be included in the scheme is proof that the Exported Live Stock (Insurance) Act is a complete success and that it confers great advantages and benefits on the cattle trade.

It has been suggested that this insurance scheme should operate on the same lines as a private insurance company and that exporters should have the option of insuring at any value they like to put on their stock, and to stand a portion of the risk themselves. Well, all I can say about that is that the people who advocate it do not know anything about the Act, the present Bill, or the cattle trade. If exporters could insure, at nominal values, in fine weather and clear sailing, and then over-insure when there was danger of casualties to their stock, the present premiums would not be at 10/- a head, but would be five times that amount, as they were previous to the passing of this Act, and we would not have £187,000 in a reserve fund at the present time. This is a compulsory co-operative insurance scheme. It is worked entirely for the benefit of the cattle trade. There is no division of profits, and there are no directors' fees, and its success is mainly due to the fact that it has the wholehearted co-operation of, I would say, 95 per cent. of the people engaged in the trade.

There was some discussion on this Bill in the Dáil, and it was stated that the Insurance Board were vindictive and were going beyond their powers in order to victimise some people engaged in the trade—some opponents, as it was stated. On behalf of the board, I should like to repudiate that statement and say that the working of the board has been proved to be completely above board, particularly in view of the fact that it has given complete satisfaction to 95 per cent. of the people engaged in the trade.

Mr. Brennan

There is one point I should like to raise on this Bill. I am glad to know that the Minister has accepted an amendment from the Dáil giving power to claimants to appeal to an arbitrator. I think that important, because it is a well-known practice in insurance that arbitration is almost invariably provided for by an insurance company. If that is so in the case of optional insurance, I think it should be essential in the case of compulsory insurance: that an appeal can be made to an arbitrator in the event of dispute with regard to a claim.

It would appear that the board of this company has done its work extremely well, but even the most perfect of boards and the shrewdest of assessors are liable to make mistakes, and if that principle, as accepted by the Minister in the Dáil, that there should be provision for appeal to an arbitrator, is a sound one, it would appear to me that there should be no reason why, taking into account the fact that this insurance scheme is compulsory, provision should not be made to make this new provision retrospective, and between this and the Committee Stage I should like the Minister to consider the point. I am not speaking from the point of view of the cattle trade. I am regarding this question from its purely insurance aspect. I think that most people would support my view that in any compulsory insurance scheme there should be provision for arbitration, and I think the Minister might consider accepting an amendment to make the provision for an arbitrator retrospective in its effect. That is all I have to say on this Bill.

Mr. O'Callaghan

Senator Brennan has expressed my point of view, and said almost everything I wanted to say. The original Bill provided that the decision of the assessors would be final, leaving no room for a dissatisfied claimant to appeal to a court of law or to a referee. The Minister has been good enough to bring in a provision in the amending Bill providing that the claim of a person who is dissatisfied with the award of the assessor can go before the referee. I think that is a very good feature in the Bill, and I should like to see that provision made retrospective. The matter was debated at length in the other House, and statements were made, I think, impeaching the character of the assessors and of the board of directors. I do not want to associate myself with that in any way. I believe that the board of directors and the assessors did their work to the best of their ability, and according to their lights, but, as Senator Brennan said, there will be mistakes in the best regulated families. Mistakes may have been made in the past, and I think it would be advisable that, where there are dissatisfied claimants, their claims should be referred to the referee. The dissatisfied claimant will have to lodge £10 in each case, and I think that will be sufficient to prevent any fictitious claim being brought forward. On the Committee Stage, I hope to move an amendment along those lines, and I will ask the Minister and the House to give it favourable consideration.

Mr. O'Donovan

At the risk of being slightly irrelevant, I should like to put to the Minister the fact that this scheme originated as a war measure. We have great numbers of casualties amongst live stock within our own boundaries, and, as far as I know, there is very little effort at compensating the owners for losses sustained, but the moment we proceed to export our live stock we endeavour effectively to insure against losses. Within our own territory, losses are sustained in transport, through disease and through loss of carcases subsequent to slaughter. That is entirely inappropriate to this Bill, but I avail of the opportunity to put it to the Minister that it is up to his Department to consider losses sustained by the producer and by the subsequent dealers in the live stock— cattle, sheep, pigs and poultry—within our own territory, apart altogether from the fact that we are now dealing with insurance of live stock which are being exported to another country.

Mr. Baxter

Perhaps the Minister would tell us, when he is replying, whether he has any data to indicate what proportion of our total exports is going across the Border and exported from the Six Counties.

Dr. Ryan

I am afraid I cannot answer the question asked by Senator Baxter, but I will take a note of it and see if I can get some information by the time the next stage is being discussed here in the Seanad. The first point mentioned by Senator Counihan was that he proposes to put down an amendment with regard to the terms of office and method of election of members of the board. The period of office was discussed rather fully in the Dáil. It was also discussed between members of the cattle trade and myself. I should like very much to meet their point, and I think I may succeed in bringing in an amendment on the Committee Stage that will meet it. I agree with Senator Counihan and others who hold the view that it is rather a dangerous prospect to see the whole board going out at the one time. It is possible that there might be some revolution in the cattle trade, and the national executive that would be there at that particular time might be inclined to put the whole board out and put a new board in. That might not be good for the insurance part of the business, anyway, and what I intend to move on the Committee Stage is that, when the five years are up, from that date forward a third of the board would retire each year.

The next point mentioned by Senator Counihan was that it is held by some that exporters should be at liberty to value their own stock at their own discretion. I agree again with the points made by Senator Counihan against that contention. We should look on this as a co-operative insurance company. I think that is the only way we can look at it logically, in order to justify its existence at all. If there are a few in the cattle trade who are not prepared willingly to co-operate, then unfortunately we have to see that they are made to toe the line. If we did not do that, and if certain members of the cattle trade were to be influenced more by the weather than anything else in valuing their stock, it would naturally have the effect of raising the premium all round, because the insurance fund must be built up somehow or other, and those who were playing the game would be paying a little more because the game was not being played fairly by everybody. That, of course, in turn would react upon the producer, because I think we all agree here that the exporter, when buying his cattle at the fair, takes all the expenses into account, including the insurance premium. He calculates the figure at which he can buy those cattle and sell them at a profit. If he has to pay a certain premium, he takes that into account, and if that premium goes up he pays a little less for the cattle. From the point of view of the producer, therefore, it is very important that we should not only try to keep the premium down but keep it uniform for everybody who is buying cattle.

Senator Brennan and Senator O'Callaghan intend, I believe, to put down an amendment to make this arbitration retrospective. I am not so sure about that. I certainly will look into the matter to see if it is possible, but there are two considerations that I must keep in mind. The first is whether it is legally possible. I have never known of a case like this in which it was done retrospectively. In fact I think it would be considered a very bad principle to bring in any retrospective legislation that would detrimentally affect any person or body of persons, and of course it must be argued that this may have a detrimental effect on the funds of the board. But as this is a type of fund that may be looked at as a semi-public one, that consideration would not be so strong as if we were dealing with private individuals. For instance, I think we could hardly agree at all to legislation that might retrospectively react detrimentally on private individuals.

The second point to be considered is whether or not it is fair to the board. We can all, I think, see the point that, when the board has paid a claim, up to this it was final, and they may not— I am not sure—have kept proper records of a claim of that kind when it was finally disposed of, as it was finally disposed of legally up to this Therefore, I want to be sure that the board are in a position to meet any of those cases that have been dealt with if we make this provision retrospective. As I say, I am prepared to investigate both those points to see if the amendment could be met in any way when it is put down by the Senators.

A much bigger point was raised by Senator O'Donovan, namely, the losses sustained by producers and cattle dealers in ordinary farming and dealing transactions. It is a very, very big point. I have no idea as to what the finances of an insurance scheme for live stock in general would be, but I think it would be a very big thing. I am not sure, but my recollection is that the present premium of any of the live stock insurance companies to insure cattle, say, against mortality of any kind is about 5 or 6 or 7 per cent. That is a very heavy premium, and one can see the enormous cost that would be involved if we have to bring in any sort of legislation or any sort of scheme to deal with mortality in general. I think at the moment we have 4,000,000 cattle in the country, which must be worth, as they stand, about £50,000,000. On the basis I have already mentioned, if we were to insure all those cattle against mortality, the cost would be in the region of £2,000,000 or £3,000,000 a year. That is a very big thing to face, a much bigger thing than the scheme under consideration here. I think that is all that arose on this debate. As Senator Counihan said, it is a matter for Committee. The general principle has already been discussed on the Principal Act. It is really an amending Bill and, therefore, perhaps more for discussion in detail on Committee Stage than on this stage.

Question put and agreed to.

Committee Stage ordered for Wednesday, 27th January, 1943.