This is a drafting amendment. Although most people assume that the term "friendly societies" covers all societies registered under the Friendly Societies Acts, there is a specific definition of a "friendly society" in those Acts. This definition classifies one group as friendly societies for the purpose of the Acts. There are four other groups variously described—for example, benevolent societies and especially authorised societies. To enable regulations to cover all those societies it is necessary to delete the word "friendly" in section 2 (2) so that the more limited definition of "friendly society" will not be a confining factor in the type of regulation which can be made under section 3.
Friendly Societies (Amendment) Bill, 1976: Committee and Final Stages.
Sections 1 and 2 agreed to.
SECTION 3.
Government amendment No. 1:
In page 2, subsection (2), in line 38, to delete "friendly".
Amendment agreed to.
Section 3, as amended, agreed to.
SECTION 4.
Government amendment No. 2:
In page 3, lines 3 to 11, to delete subsections (1) and (2) and to substitute the following subsections:
"(1) In this section ‘a society to which this section applies' means a registered society of a class in relation to which regulations under subsection (2) of this section apply.
(2) The Minister may, by regulations, require that each society of a specified class or specified classes of registered society operating a loan fund under section 46 of the Principal Act shall, immediately after the first annual general meeting of the society to be held on or after a specified date, have a supervisory committee."
Section 4 previously applied to specially authorised loan societies, namely, only one class of society registered under the Friendly Societies Acts. It has now been decided to make this section applicable by ministerial regulation to other classes of society operating loan funds under section 46 of the Principal Act of 1896. The supervisory committee concept is borrowed from the Credit Union Act, 1966, and was applied to specially authorised loan societies in the Bill as introduced because their objects and mode of operations are considerably akin to those of credit unions.
However, since other societies as well as specially authorised loan societies can in certain circumstances operate loan funds as a secondary activity, it was considered desirable that this aspect of their activity, namely, the operation of a loan fund, could also be controlled in a manner similar to that proposed in the original draft of the Bill for specially authorised loan societies to the extent that a supervisory committee could be required to be created by regulation by the Minister as and when he thought it necessary depending on the scale and type of loan funds operated by other societies apart from the specific category, namely, specially authorised loan societies which are covered in the original draft of the Bill.
It is, in effect, extended to all relevant friendly societies who might operate a loan society, a principle which has already been accepted in the case of credit unions in the 1966 Act and in the case of specially authorised loan societies in the original draft of this Bill. This concept of a supervisory committee is being extended to cover all such eventualities as and when the Minister deems that to be necessary.
Subsection (2) previously stipulated that each society to which the section applies must have a supervisory committee after the first annual general meeting after 1st January, 1977. This particular date was inserted on the basis of the Bill being enacted during 1976. Since this has not happened and the section can now be applied to different classes of society at different times, it is intended to have the operative date under this section specified by regulation rather than in the actual text of the Bill as was originally intended.
Amendment agreed to.
Amendment No. 4 is consequential on amendment No. 3. Consequently they should both be discussed together.
Government amendment No. 3:
In page 3, subsection (3), to delete lines 12 to 14 and to substitute the following:
"(3) At the first annual general meeting of a society to which this section applies to be held on or after the date specified in regulations under subsection (2) of this section in relation to a class of registered society to which that society belongs, and at each third subsequent annual general meeting of the".
In error I dealt with the principle involved in amendments Nos. 3 and 4 at the conclusion of my remarks on the previous amendment. Originally the provision for a supervisory committee was to be made at the first annual general meeting to be held on or after the first day of January, 1977. It is now proposed, in view of the fact that the requirement for a supervisory committee may be brought in by regulation at different times in respect of different categories of society who may operate loan funds, that the date of the annual general meeting at which provision for a supervisory committee would be made should be settled by regulation rather than by provision of the Bill.
Another point I should mention is a further change in the original provision. In the original draft of the Bill the supervisory committees were to sit for terms of one year only and it is now being provided that they will sit for a period of three years. There is a very practical reason for this. The duties of these committees are to supervise the activities of the friendly society in operating their loan funds to ensure that the officers of the friendly society carry out their functions in a manner which is safe from every point of view, particularly from the point of view of people who have financial interests in the society. They are in a sense voluntary auditors. Their job is to keep a detached eye on the activities of the society. This can involve them in what could be quite difficult technical matters, studying of books, examining of officers of the society and so forth. Quite clearly, if the term of office of the supervisory committee was only to be one year there is the danger that people would only have mastered the technicalities of their job by the time their year in office had expired. Therefore, if they were then replaced by somebody else, there would never be a situation in which they would be a really effective and knowledgeable supervisory committee sitting in relation to the society in question. It was felt therefore that a three-year term would be more appropriate. People would get to know their job in the first six months and there would then be two-and-a-half years of effective supervision by them.
This amendment seems to me to be a rather big change on the original. Instead of the supervisory committee being elected at the annual general meeting they would now be elected and would sit for three years. I am concerned with the effect of this in relation to credit unions. It is specified in credit union regulations that the board of directors and the supervisory committee are elected at each annual general meeting.
I should explain to the Senator that this Bill does not apply to credit unions. The Bill applies to societies which carry out activities analogous to those of credit unions. It applies solely to friendly societies. Credit unions are not friendly societies. They are industrial and provident societies.
I see.
Amendment agreed to.
Government amendment No. 4:
In page 3, subsection (5), line 25, to delete "next" and to substitute "third".
Amendment agreed to.
Section 4, as amended, agreed to.
Sections 5 to 7, inclusive, agreed to.
SECTION 8.
Government amendment No. 5:
In page 4, before section 8, to insert the following section:
"The Minister may by regulations amend sections 8, 41, 56 to 58, 62 and 65 of the Principal Act, or any one or more of those sections, so as to increase by such amount or amounts as he think fit any one or more of the amounts specified in those sections."
The Bill as introduced gives the Minister power to alter by regulation only those financial limits which apply to the granting of loans by societies under section 46 of the Principal Act. The present amendment is designed to give the Minister power to alter by regulation financial limits which apply generally to societies. These limits were last increased in 1966. Since then there has been, obviously, significant devaluation in currency and the limits set then are appropriate to be considered for review 11 years later. I might mention the limits in question which were imposed by the Principal Act. Under section 8 of the Principal Act the limit of £52 was set on the amount a friendly society could assure by way of annuity and a limit of £1,000 on the amount a friendly society could assure by way of gross sum. In section 41 of the Act there is a limit of £1,000 on the amount a member, or a person claiming to be a member, may receive by way of gross sum together with bonuses. A limit of £52 is set on the amount a member may receive by way of annuity. Section 56 of the Principal Act sets a limit of £1,000 on the amount a member can dispose of by way of nomination payable on death. Section 57 sets a limit of £1,000 on the amount a society may pay to a nominee. Section 58 provides that, where a member dies intestate and his property in the society does not exceed £1,200, then the society may distribute such property among the persons who appear to be entitled by law to receive it. In sections 62 and 65 there is provision that a friendly society shall not insure a child under five years for a sum exceeding £20 or a child under ten years for a sum exceeding £30.
It is considered that it would be appropriate to allow the Minister to consider the amendment of these various limits. The proposition before the Seanad is that power be taken to do this by regulation. As the Seanad is aware, under section 8 of the Bill as at present drafted any such regulation will be laid before both Houses of the Oireachtas and shall not take effect until a resolution approving of the draft has been passed by each House. In regard to any action to be taken by the Minister under this section the powers sought in this amendment ensure that the matter will come to the House for debate.
I think this is a very sensible provision.
Amendment agreed to.
Government amendment No. 6:
In page 4, before section 8, to insert the following section:
"(1) Section 87 (3) of the Principal Act is hereby amended by the substitution of ‘£250' for ‘twenty pounds' and the said section 87 (3), as so amended, is set out in the Table to this section.
(2) Section 88 of the Principal Act is hereby amended by the substitution of ‘£500' for ‘fifty pounds' and the said section 88, as so amended, is set out in the Table to this section.
(3) Section 89 of the Principal Act is hereby amended by the substitution of ‘£100' for ‘five pounds' and the said section 89, as so amended, is set out in the Table to this section.
TABLE
87. (3) If any person obtains possession by false representation or imposition of any property of a registered society or branch, or withholds or misapplies any such property in his possession, or wilfully applies any part thereof to purposes other than those expressed or directed in the rules of the society or branch and authorised by this Act, he shall, on such complaint as is in this section mentioned, be liable on summary conviction to a fine not exceeding £250, and costs, and to be ordered to deliver up all such property, or to repay all sums of money applied improperly, and in default of such delivery or repayment, or of the payment of such fine and costs as aforesaid, to be imprisoned, with or without hard labour, for any time not exceeding three months.
88. If any person wilfully makes, orders, or allows to be made, any entry, erasure in, or omission from a balance sheet of a registered society or branch, or a return or document required to be sent, produced, or delivered for the purposes of this Act, with intent to falsify the same, or to evade any of the provisions of this Act, he shall be liable to a fine not exceeding £500.
89. A society or branch, and an officer or member of a society or branch, or other person guilty of an offence under this Act for which a fine is not expressly provided shall be liable to a fine of not more than £100."
This is an entirely new matter in the Bill. Its purpose is to make provision to update the fines under Friendly Societies legislation in general. These fines were set in 1896 and clearly given the great extensions since then, they have not a great deterrent effect in 1977. It is now proposed to bring the fines up to date. I might mention that the levels of fines being set in the amendment are similar to those which were introduced in Great Britain in 1974 when they introduced amending legislation to the same Act.
Section 87 of the 1896 Act deals with fraud and misappropriation. The fine for a summary conviction is being increased in the proposed amendment from £20 to £250. Section 88 of the Principal Act prescribes a maximum fine for falsification of documents. It is designed principally to cover omissions, erasures, or false entries of accounts. The maximum fine here is being increased from £50 to £500. Section 89 of the 1896 Act set a maximum fine of £5 for ordinary offences. These would include failure to submit returns or other documents to the registrar, furnishing information which is false or insufficient and so forth. This limit of £5 in the 1896 Act is being raised to £100.
These are maximum penalties. It is not necessary that the maximum penalties should be imposed. Is that the position?
Yes.
We are told that parliamentary draftsmen always have a very good reason for every word they use. Why do the sections as amended read: section 87, a fine not exceeding £250; section 88, a fine not exceeding £500; and section 89, a fine not more than £100?
The Senator has me baffled. I do not know, but I think the meaning of the term is clear in both cases.
Amendment agreed to.
Section 8, as amended, agreed to.
Section 9 agreed to.
Title agreed to.
Bill reported with amendments, received for final consideration and passed.
With regard to No. 2, the Parliamentary Secretary is engaged in the Dáil so I would suggest we might suspend the sitting until 3.30 p.m.
Business suspended at 3 p.m. and resumed at 3.30 p.m.