Sir Patrick Dun's Hospital Bill, 1953. - Insurance Bill, 1952—Second Stage.

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

The main purpose of the Bill is to offer certain additional incentives to exporters to explore possibilities in dollar markets by bringing into operation schemes of insurance against certain risks which are inseparable from the export trade. I do not suppose it is necessary to speak at any length to convince the House that it is desirable that we should expand our export trade to dollar markets. Apart from balance of payments considerations which enter into the question, preliminary exploration of possibilities in these markets has shown them to be quite substantial, and we are anxious to encourage people to go after them, at least to the extent of providing for them the same facilities as exporters in most other countries enjoy.

We have not had here an export credit guarantee system similar to that operated in Britain over a number of years and, in effect, one of the primary purposes of the Bill is to permit such a system to be brought into operation. We set up an organisation called Córas Tráchtála, Teo., to supervise generally the extension of dollar exports and to take all practical measures to that end, including the making of proposals for legislation. That organisation consulted with a group of Irish insurance companies and arranged that the group would initiate a scheme of insurance against ordinary commercial risks incurred by exporters to dollar markets. The risks which that group of insurance companies will cover are those which normally arise in business, that is to say, the risk that the purchasers will not pay or will delay payment, involving the exporter in loss and similar commercial risks. It would not be appropriate for private insurance companies to insure exporters against what are called political risks. Consequently, it has been arranged to have a scheme of insurance against political risks carried out by this group of six insurance companies and underwritten by the Minister for Industry and Commerce, and the main purpose of the Bill is to empower the Minister to initiate such a scheme with that group of insurance companies and bring it into operation.

Political risks, apart from the obvious ones—the danger of war, civil commotion, violent upheavals, preventing the movement of goods or payment for them—are those which arise out of Government action, can celling of import licences, non-renewal of import licences, custom duty variation, imposition of restrictions by Governments on the transfer of funds and similar contingencies of that kind. The scheme may possibly cover, although I do not want this to be taken as definite, the danger of currency depreciation. The aim will be to offer to exporters to dollar markets complete coverage against commercial risks, carried by insurance companies on their own behalf as an ordinary business venture, and against political risks in which the insurance companies will act as agents for the Minister for Industry and Commerce and the Minister will receive the premium income subject to deductions to cover administrative expenses. Under the British Export Credit Scheme there was for a long period of years a substantial accretion of income, the amount secured through premiums exceeding the annual payments. But I notice that in the last few weeks, a Supplementary Estimate was introduced in the British Parliament to make good amounts lost by British importers because of restrictions on payments imposed by one country. That situation does not necessarily involve permanent loss and repayment may be secured sometime, but the private firms involved in the business are being recouped the amounts involved out of the British Export Credit Guarantee Fund.

The practice in Britain has been to vary the premium rate for insurance against political risks, according to the assessment of the risk involved. The scheme will be administered by the Minister for Industry and Commerce as appears in the Bill and he will have responsibility for the details of the scheme. In practice, however, Córas Tráchtála will advise him. Under the arrangement there will be brought into operation a system of insurance against risk which may be incurred by exporters to dollar areas similar to that which exists in most other countries.

It is proposed to go further than that and operate also a joint venture insurance which I propose to explain. A firm proposing to explore possibilities in any dollar market would naturally have to contemplate a rather long-term programme which might involve losses during the first two, three or four years in market development, and the possible recoupment of these losses by the growth of trade in later periods. Most Irish firms limited in size as they are would hesitate to undertake expenditure on market development in these circumstances, because there might be no certainty that the possibilities they saw would ever in fact be realised, and they would have to face the danger that the expenditure which they incurred in market development would never be recovered if the market did not eventually materialise.

It is proposed therefore to operate through Córas Tráchtála a joint venture scheme under which Córas Tráchtála will insure persons undertaking long term market development schemes against ultimate loss in consideration of the payment of premiums. Córas Tráchtála will be something more than insurers in cases of that kind and will have to be satisfied that the particular project in which it is being asked to join is a sound one. It is far more likely that action under that scheme will be taken on the initiative of Córas Tráchtála rather than on the initiative of private firms. Córas Tráchtála have been carrying out market research and have employed expert American market consultants. If they themselves decide that there are possibilities for a particular line of goods, they can approach Irish firms and interest them in this possibility and they can inform them of this joint venture arrangement as well as direct their attention to the prospect of profitable trade.

It would be perhaps unwise for me to attempt to speculate as to the types of goods in respect of which possibilities in the dollar markets are deemed to exist. From the preliminary investigation carried out by Córas Tráchtála a number of commodities were picked out for investigation and a team of American experts was employed to report upon these commodities. The report covered not merely market conditions in America but also changes in production technique, packing and other arrangements necessary in this country. A summary of that report will be published in a few days; the report I understand is in print and will be available shortly for Senators. It indicates commodities in respect of which Córas Tráchtála thought initially there was a dollar market available, and Senators will be able to see the extent to which the American experts agreed or disagreed with the view of Córas Tráchtála. Córas Tráchtála has already undertaken, in conjunction with firms, the sending of trial consignments, some of which proved to be very satisfactory and others less satisfactory, but it is only by experimentation and trial that definite possibilities can be discovered.

It is intended that both these insurance schemes, that is the giving of insurance cover against political risks and the joint venture scheme will be confined for the present to dollar markets. The Bill does not say so but empowers the Minister to operate these schemes generally. It may be that later on the schemes will be extended to other markets. It is thought desirable that they should now be confined to dollar markets in the belief that if they prove to be practicable there they can easily be extended to cover other markets as well. The term dollar markets covers not only the U.S.A. but all countries in respect of which payment of goods must be made in dollars. In fact, as I informed the Dáil, Córas Tráchtála are investigating possibilities in the Canadian market and a survey of that market has just been made. Córas Tráchtála considers that the prospects there are quite good and arrangements are being made for displays of Irish goods in Montreal in connection with the St. Patrick's Day arrangements and also for displays of goods at the Toronto International Fair in June.

The position that will exist after this Bill passes, and the schemes which are contemplated come into operation, is that anybody who proposes to export goods to these dollar markets can if the contract is a long term one link in Córas Tráchtála as a partner in their enterprise prepared to carry part of the losses if they should arise.

There is one other change which the Bill proposes to make. Under the 1936 Act foreign insurance companies were excluded from operating here unless they were established here on the date on which the Act was introduced. The position at the present time is that there is no power to give licences to new foreign companies to engage in insurance business in this country.

In recent years a number of Irish companies have extended their business to external markets and are deriving a substantial premium from those countries in respect of various classes of insurance. In some cases, however, they found that they were prohibited from doing business in some foreign countries because the Governments of those countries refused them permission on the grounds that companies registered in those countries were not permitted to do business here. The Association of Irish Insurance Companies approached the Government to have the law amended so as to permit the granting of licences to foreign companies to do business here under reciprocal arrangements where the Irish companies were satisfied that it would be in their interests to grant that permission to operate here. It is intended in all such cases to consult with the Irish insurance companies on this matter of giving licences to foreign companies to operate.

I have been advocating the introduction of some system of export credits for a great many years and therefore I welcome this Bill. I confess, however, that I am somewhat disappointed, if I understand the Minister correctly, because he gave me the impression that the whole scheme is intended to deal only with the dollar markets. This, of course, is an enabling Bill and I can quite readily understand that the Minister is not in a position to give us all the details at the moment. I do not know exactly what the scheme will be, but as far as the principle of the Bill is concerned, I welcome it and I think the House should unanimously support it.

I do not think that Irish manufacturers should be left in relation to markets other than the dollar markets in the inferior position in which they have been for many years as compared with their British competitors. I think that generally in the matter of extension of exports most manufacturers have found that the total amount of loss taken over a number of years has not proved to be great and I think that has been the experience of the British guarantee State scheme; but the big danger is that if an Irish company has to sell £40,000 or £50,000 worth of goods they find that in an order of that size their big trouble is not in credit restrictions or import licences or political risks, but in the fact that they may have to lie out of their capital for nine, 12 or 18 months. That is the real danger and one of the big handicaps from which firms proposing to export to foreign markets suffer.

I think I have made it quite clear that as far as the latter part of the scheme refers to the operation of Córas Tráchtála it is reasonable that it should deal with the dollar markets, but so far as the general credit export scheme is concerned, I hope the Government will reconsider the whole matter and make provision for exports to other markets. There are considerable possibilities in these other markets and it would be quite a mistake not to take advantage of them and to assume that only the dollar markets are worth catering for.

The Minister made reference to commercial and political risks, but I think he will find difficulty in making a clear distinction between these two. I do not see how these risks can be distinguished between, and I think they should be catered for under one scheme.

As far as the latter part of the Bill and the change in the 1936 Act are concerned, I would be glad if the Minister would indicate if it is proposed to have any arrangements made for vehicle owners who wish to have mutual insurance.

As far as the first part of the Bill is concerned, obviously it has nothing to do with that matter at all. I presume it is being proposed because this Bill does not, incidentally, amend the 1936 Act, and most of us, without expressing any opinion at all, would be very much interested under present conditions in a scheme by which vehicle owners, in so far as they are only insuring their own cars and property, might introduce mutual insurance. I would not even look at this scheme if it were not quite clear in the circular I received that it must be carried out by ordinary insurance. Whether it could be brought in under the Bill or not I have an open mind, but I am quite sure that these people have a bona fide interest in the matter, and I ask the Minister to say a word or two when he is replying, as to its feasibility.

I rise to support this Bill. I have not the slightest doubt at all that all the interests who are doing at present, or hope to do, an export trade, see in it the removal of serious obstacles to their efforts. I join with Senator Douglas in hoping that while the Bill will, perhaps quite wisely, concentrate on the dollar market, it will not exclude the other markets that manufacturers in this country, from my own knowledge, are trying to get into. The inability of Irish interests to get into certain markets is not due to any lack of effort on their part; it is due to the fact that there are very few markets in the world where we can send goods because of barriers set up by various Governments.

Many of the firms doing an export trade to-day are doing it on limited resources. These are even more limited than formerly because of the recently introduced very high interest on bank overdrafts. Now, under the provisions of this Bill, they can insure against risks which otherwise they would have been unable to take, so that the Bill will give a fillip to the export trade and perhaps permit of the export of certain commodities which at present are confined to the domestic market.

I join with Senator Douglas in his references to the circular which every member of the Oireachtas received from people who want to see that motor owners, who wish to develop a scheme of mutual insurance for themselves, be permitted to do so. I heartily agree that nothing should be done which would permit of a breach of the covenant necessary for private insurance. With a huge number of vehicles of all kinds on the road, it is of the utmost importance that everybody using the road shall be fully protected and enabled to get adequate compensation if, in fact, they are involved in an accident. The circular indicated that those sponsoring the suggestion only envisage taking care of non third-party risks. Perhaps the Minister will give an indication of whether he has given any consideration to the matter.

Like Senators Douglas and Summerfield, I am not raising any objection. In fact, I am supporting the Bill, but I also want to press the Minister with regard to this idea of mutual insurance. I was disappointed that the Minister did not make reference to the matter in his opening speech. As I understand the position, the people interested in forming an association which would carry out this mutual insurance of non-third-party risks in connection with vehicles had put this proposition before the Minister and his Department and were informed that the matter was receiving consideration. I feel sure it was an oversight on the part of the Minister that he did not make some reference to that when he was making his opening statement.

The reason I broach the matter in this manner is that I do not want any Senator to suggest that we should take all the stages of this Bill to-day, because if this particular matter is not receiving consideration, and particularly is not receiving favourable consideration, from the Minister or his advisers, I intend to seek an opportunity to put down an amendment so that the matter can be discussed in more detail. I do not want to go into details at this stage, except to say that it does seem that under Section 12 of the 1936 Act the principle of encouraging associations to insure on the mutual principle has been established. The right of the Minister to give licences to such associations in the case of fire risk, for instance, for property owners, is given in Section 12 of the 1936 Act. In fact, it is not merely a right of the Minister; my recollection of the 1936 Act is that in certain circumstances it would be mandatory on the Minister to issue licences.

I do not know whether Section 12 of the Act has ever been operated or if, in fact, such licences ever have been issued, but Section 12, in any event, does at least establish the principle that in certain circumstances people may band together and carry out some method of mutual insurance.

Now, in connection with the references made by Senators Douglas and Summerfield regarding motor vehicle owners, the suggestion is merely that the principle already enshrined in Section 12 of the Act in so far as the owners of property or employers are concerned should now be extended by this amending Bill to deal with the owners of motor vehicles who want to band themselves into an association to cover themselves against risk of loss in respect of their own vehicles. It has been made quite clear both by Senators Douglas and Summerfield that there is no suggestion whatever that the ordinary obligations to insure against third party risks, that is, damaging other people's property, are being interfered with at all.

I urge the Minister to give the matter very serious consideration, and if he does not propose to put down an amendment for the Committee Stage by which this matter might be met, I want to say that an amendment will be put down, if it is in order, so that we can at least give the matter more detailed consideration.

I support this Bill, but I wish to repeat what Senator Douglas has mentioned, that it is merely an enabling Bill. This Bill, if I am right, will not impose any obligation on the Minister to give guarantees. It will merely enable him to do so if he thinks he should. Unless the Minister acts in accordance with the powers which would be given him by the Bill, there is nothing we or any persons concerned in the export trade could do to force him to give assistance.

In passing a Bill of this kind, merely an enabling Bill, and in the form in which Section 2 is drafted, we are giving the Minister exceedingly wide powers. We are putting him in the position that he may in a bad case give a guarantee and may in a good case refuse to give a guarantee or give any help. I think that we should think very carefully before we put a Minister into a position where he may or may not and quite capriciously refuse to give assistance in a case where assistance is very properly deserved.

I want to make it clear that I am not suggesting for a moment that the Minister for Industry and Commerce would act in any way other than in a perfectly fair way. I think we should consider very carefully before we give the Minister the powers and the rights that would be given to him by Section 2 of this Bill without in any way at the same time imposing an obligation on him to give assistance.

As I understand the Bill, Section 2, if passed, will be worked in this way. The Minister will accept advice from Córas Tráchtála in regard to the giving of guarantees. We have been told —the Minister has been quite clear about this—that at the present time at any rate only dollar export trade will be concerned. He has made, it quite clear that at any time, perhaps, trade with the sterling area may also be guaranteed. I would repeat what has been said before that it would be undesirable that we should allow people to think that we are concerned only with dollar export trade. I am sure it is very important that we should concern ourselves very earnestly with that trade, but I think we must not forget that we have sources of trade in the sterling area and in the non-sterling area which is a non-dollar market.

We should not concern ourselves— and I would like to impress upon the Minister that he should not concern himself—too strictly with restricting exporters mainly in regard to the dollar market. We should be concerned with our trade elsewhere in England and other European countries. Section 2 makes provision in regard to people engaged in a business or profession of export. Perhaps, the Minister would tell us exactly in what connection he thinks of profession in this section. It says that:—

"The Minister may make arrangements for giving to, or for the benefit of, persons carrying on a business or profession in the State, guarantees, in connection with the export, manufacture, treatment or distribution of goods—"

I should have thought that we would be concerned only in the giving of guarantees in respect to the export and distribution of goods when exported and not for manufacture and treatment here at the source of origin. Perhaps, the Minister will give us some assistance on that.

In regard to the point raised as to the amendment of Section 12 of the Insurance Act of 1936, I have read these documents. I am sure that most if not all of us have received a copy of the Act. I have a perfectly open mind on the points that have been put forward. Certainly it would seem to me that the Minister should tell us something as to his view when the matter is raised. It may be, indeed, that he should give this power. If he does give this power I have the feeling that nobody will ever seek to apply to be given power to issue that particular form of insurance. Certainly those who would combine for that assurance can have no claim to sympathy should their organisation fail. They will be a mutual insurance society and will have nobody but themselves to blame should their society fail. Therefore, the Minister will have no responsibility should he put into the Act an obligation on him to give that particular certificate to people that carry on that form of insurance.

I would say that we should consider very carefully what power we are giving the Minister in Section 2. We are empowering the Minister to give that person or body whom he may think fit to receive a guarantee to carry on his export trade and at the same time we are not asking him to take on the obligation of giving that assistance. We are giving him the right to do exactly as he wishes without on the other hand imposing any obligation.

I, like the other speakers, welcome this Bill. It is as it were a step-child of the Dollar Export Board of which I had the honour to be a member. As that board dealt purely with hard currency problems, it is quite natural that its proposals would be confined to the dollar area. I think the Minister will remember that the Federation of Irish Manufacturers sent him a memorandum some years ago covering the point in relation to soft and hard currency insurance risks and also covering the suggestion for the creation of an export credit corporation. This latter proposal is something which I should have liked to see coming before us together with this Bill because they are complementary to each other. The Bill does not fill the requirements that would be laid down under such an export corporation but, such as it is, we welcome it. I should like to reinforce the arguments put forward by Senators Douglas and Summerfield that this Bill should apply to areas other than the dollar areas because it will be quite a long time before we will be in a position to develop the dollar area to the extent we would like.

I wonder whether the amount of the guarantee is effective at any particular time? The total amount is limited to £2,000,000. I can visualise the position arising when, at any given time, the amount needed for insurance will be greater than £2,000,000. If this is a risk against political liability, as apart from commercial risk, we shall have to have two sets of premiums to pay. I am not quite clear as to what the exporter will have to pay in regard to the liability which the Minister takes on his behalf. At the moment the Government comes along and says to the exporting public: "We are prepared to guarantee you against political liability up to the limit of £2,000,000." Beyond what is contained in sub-section (7) of Section 2 I do not see it stated how a premium is to be paid, who is to pay it and to whom it is to be paid. If there is such a premium to be paid for a political risk I hope it will not affect the business sales content of the exported article so as to preclude it from the market. If you are paying a premium on a political as well as a commercial risk it would be very high.

I was very glad to hear the Minister talk about insurance against promotional risks. That is one of the propositions that was made by the Dollar Export Board. While I agree with the whole idea behind it, I do not see how it is going to work out nor do I see how it applies at all in this Bill. The idea was that if a firm was enterprising enough to seek a foreign market it would be recompensed for any losses made in research in that foreign market. Candidly, I fail to find in this Bill where such is stated, unless it may be that the Minister has powers himself to decide that such a risk is of the nature of an insurance risk and that consequently it should be treated as such and the cost should be repayable to the promoter. But that is not stated exactly in the Bill, and I would like to hear more on the point.

I agree with Deputy O'Reilly that this Bill gives extraordinary powers to Ministers, but it does not seem that it is giving more extraordinary powers than were given before to other Ministers. I do not see who could make a decision on Section 2 except the Minister. We must have faith that in so far as the Minister can determine—and he is fallible, as we all are—he will decide in a fair way. The House cannot lay down in a statute all the conditions governing an application which the Minister might or might not reject. I am sure Senator O'Reilly as a lawyer will agree that it would be impossible to draft a Bill covering all the points coming under Section 2.

It has been the habit of both Houses to give Ministers extraordinary powers —I am not speaking now on a political level; I do not care what Government is in power—to define the rights and wrongs of a case. The Minister will not misunderstand me, as it is a matter of principle, and there is nothing personal in it. In so far as powers of decision have been given to Ministers under various Acts, what is the use of quarrelling about it now?

Would the Minister let me know, if there is a premium for a political risk, what it would roughly amount to, how it would affect the selling price of the article and what proportion it would bear to the cost; and if he could tell me the same for the commercial risk?

Again, I would like to know if the Minister considers the £2,000,000 sufficient, or if he would ask for a larger amount, and if he would give consideration to the questions raised by Senator Douglas about the outside dollar areas.

As regards the case Senator Summerfield and Senator Douglas mentioned, an insurance scheme for motorists, it seems to me that these people just want to insure their cars for a limited number of risks, and I understand that outside those risks other insurance companies are prepared to take on third party insurance at a reduced rate, which is an important point. I understand that motor insurance firms are losing on the very risks which this group is asking powers to create a company for and that they are not losing as much on third party. If that is so, the Minister might give these persons who want to lose money an opportunity to do so. I do not see how it could be otherwise under Section 12.

This is the first effort by any Government here to make a serious gesture towards firms who want to develop an export trade, and I am quite certain that not alone will Senators appreciate this insurance proposal, but that the manufacturing community will avail of it.

I wish to welcome the Bill, having had some experience as a member of the Irish Fresh Meat Export Committee in exporting to both dollar and sterling areas. I may say that the sterling area tends to show some improvement as a market and sterling, as a currency, has shown increased strength during the last year or two. I would ask the Minister not to put off the question of covering risk to the sterling area if good sterling markets could be got for this country. Other competing countries may strengthen their position in the sterling market, and we may find, when it is desirable to approach this market, that we have foreign companies in a much stronger position.

I was very interested in many of the things the Minister has said. I presume that by political risk he means the imposition of quotas and embargoes and increased tariffs that may not be foreseen when these goods are being prepared or processed for export. There is another risk I would ask the Minister to consider doing something about—this applies particularly to the export of meat—namely, the disease risk. Certain countries, particularly the United States, are very much afraid of disease, such as foot-and-mouth disease, and if there is any suggestion or suspicion that anything like that appertains to a country like Ireland, they would probably put an embargo on immediately. It would be necessary to have that point clarified, to see if it is covered by what the Minister describes as a political risk.

There is another point which I think the Minister ought to cover—it is the period in which these goods are being manufactured or processed for export. He should be able to cover that. By the time these goods are finally manufactured, the firm may find it impossible to export them. I presume that the Minister, in conjunction with Córas Tráchtála, is covering goods leaving an Irish port for a foreign port; but losses may be involved in the manufacturing or processing of these goods and they may have to be diverted at a loss to another country at a later stage. While the Minister is putting this Bill through the House, if he thinks there are any points in the questions I have raised which would be of help to exporters, I would ask him to consider putting in a sub-section covering them.

With regard to mutual insurance, if there are certain groups of individuals who would like to engage in mutual insurance, the Minister should give them any assistance he can. It is a desirable thing, and if they can run it efficiently and can reduce overhead costs, it is all to the advantage of business. Insurance, particularly in distributing trades, is rather a heavy item, and it is tending to become a greater overhead than it was some years ago. If these people by their own efforts can in any way reduce the burden even on their own businesses, they will be doing something to help reduce the overheads and so in some way help to reduce the cost of living.

Senator O'Reilly said this is an enabling Bill, but I do not think he read very carefully the wording of Section 2 to ascertain what it enables the Minister to do. It enables the Minister to make arrangements for giving to persons carrying on business in the State guarantees in connection with the export of goods and sub-section (2) makes it clear that this may include agreements with insurance companies for the reinsurance of guarantees given by them. There is certainly no provision there, nor is it intended there should be, enabling the Minister to decide to whom insurance cover should be given.

The Bill enables the Minister to make arrangements with insurance companies under which they will give insurance cover against political risks to exporters to dollar markets and reinsure these risks with him. The position will be that anybody desiring to get that type of insurance cover will go to this group of insurance companies and negotiate with them. The insurance companies will reinsure the risks with the Minister and remit to him a proportion—90 per cent. or whatever it may be—of the premium income. So far as commercial risks are concerned, the risk will be carried by the insurance companies entirely and the premiums will be fixed and retained by them.

Does the Minister expect that they will be at a similar rate to those prevailing elsewhere?

I should think so. The Senator appreciates that, in Britain, for example, they have from time to time varied the rate according to the circumstances prevailing in particular external markets and sometimes apparently for the purpose of discouraging people from exporting goods to particular markets.

I know that is so.

And presumably the same will be done here. The position will be that both types of insurance cover will be given by the insurance companies—one on their behalf and at premiums fixed by them and the other, as agents for the Minister, or at least under an arrangement by which they can underwrite the risks with the Minister, at premiums to be fixed by the Minister. The schemes have not been worked out in detail. In so far as the extent to which political risks will be covered, I think it is reasonable to say that the scheme will provide for covering every type of risk that experience shows exporters want to have covered. Initially, the scheme will be extended to cover the risks which our experience and the experience of Córas Tráchtála show it to be necessary to provide against, but, as time goes on and as new circumstances arise, the scheme can be extended to cover other risks as well.

May I explain also that it is not intended that insurance cover will be available to manufacturers only? It will be available to any person undertaking the business of trading in goods to dollar markets and the particular wording of sub-section (2) is intended to cover not merely an insurance scheme against the political risks of exporters but also the joint venture arrangement to which I have referred.

I have considerable sympathy with the point of view expressed by some Senators that the scheme should not be confined, even in its initial stages, to dollar markets. Nevertheless, it would be, I think, difficult to initiate the scheme generally at present. I doubt if it will ever be practicable to have such a scheme in respect of trade with Great Britain, or ever necessary, and it is far better to start off on the basis of confining it to dollar markets, and to add other countries as the need becomes apparent and as other possibilities open up. It is because we contemplate the possibility of the scheme being ultimately extended to other markets that the Bill has been framed in its present form so that the extension can be effected without further legislation.

Senator Douglas mentioned the possibility of difficulty arising in distinguishing between commercial and political risks as I have defined them. So far as I am concerned, that distinction will be made very largely by the insurance companies. Anything they are prepared to cover themselves, they will be free to do so.

They never take anything that they can put on somebody else.

They have indicated a reluctance to insure against political risks, mainly, I should imagine, because they cannot themselves assess how great these risks may be and, therefore, in respect of these risks, they want reinsurance with the Government. May I say also that that is the attitude of insurance companies in almost every country? If, however, they want to extend the area covered by their own insurance scheme, there would be no difficulty, so far as the Government are concerned. If they were prepared to give insurance on their own behalf against political risks, the Government would not have to come in at all.

What I really had in mind was the difficulty of deciding, in the case of a firm which cannot get currency, whether it was entirely due to the political action of the Government or to a fault on the part of the firm concerned, and of seeing that the exporter was covered.

In every case, the aim will be to protect the firm here against loss and then to use all the diplomatic and other means open to us to salvage the amount involved.

Senator O'Donnell asked if the £2,000,000 limit fixed in the Bill was not too low. I do not think it is. The Bill provides that the aggregate amount of guarantees outstanding at any one time must not exceed £2,000,000. That would cover a very substantial amount of business—much more than we are doing at present. The view, however, is that if there is such a considerable extension of business that the limit proves too low, it would be as well to come back to the Oireachtas with amending legislation and report that situation.

I have seen this circular sent to Senators about a scheme for mutual insurance of motor-car owners against risks other than third party risks. It is true that the Act of 1936 made possible the granting of licences to mutual insurance associations of two kinds—an association of property owners insuring themselves against fire and of employers insuring themselves against employers' liability. I do not know if the House is aware of our experience in respect of such associations. There were two—one in respect of mutual fire association and one for mutual employers' liability— associations which failed with serious repercussions, and so far as the employers' liability association is concerned, they are not finished yet.

It is my recollection that the provision was made in the Act of 1936 because these associations existed at the time. The general intention of the Act was to provide that no body could embark on this business of insurance against fire, employers' liability or other risk, unless they had a minimum subscribed capital of £100,000 and had made a deposit in the High Court of the prescribed amount as a final guarantee to the people effecting insurance with them that their claims could be met. These two associations to which I have referred were in existence at the time, and they were exempted from this provision and they failed. On that account, I will be slow to consider an extension of the Bill to cover any mutual insurance association without very careful examination.

I am, if anything, still further intimidated by Senator O'Donnell's assumption that this association is going to take off insurance companies a losing end of their business. I just do not believe that—the catch there is too obvious. It is not untrue to say that many mutual insurance associations are run for the benefit of their officials, and, before we extend the Act to permit of a new type coming in, we should examine it carefully. I do not want to be taken as prejudging the proposal made. I feel that we should consider it carefully and give the Association of Insurance Companies ample opportunity of expressing their views on it, and that, if we are going to extend the law in that regard, we should do it as a separate measure. While in no sense indicating a final decision on the matter, I must say that I would resist a proposal to rush through an amendment to the 1936 Act at this stage in this Bill. The matter has not been examined nearly enough, nor have all the interests been given an opportunity of expressing their views upon it.

It was not by reason of an oversight that I did not refer to the matter in introducing the Bill. I was not aware of the intention of Senators to raise it, although I knew they had been canvassed on behalf of those promoters connected with the proposed association. That is all I have to say. We have had certain experience arising out of the 1936 Act which would warn us to go cautiously. The proposal has to be examined very carefully in the light of possible implications and insurance companies must be given ample time to express their views. On that account I would urge the Seanad not to agree to amend the 1936 Act which itself was framed very carefully after a great deal of deliberation and which took a long time to pass through the Dáil and certainly not to amend it by a casual provision in this Bill.

Question put and agreed to.
Committee Stage ordered for next sitting day.