Vol. 203 No. 10
asked the Minister for Industry and Commerce whether he exercised any of the powers given to him by section 46 of the Insurance Act, 1936, to require an explanation of the accounts for the purpose, as is provided by that section, of determining whether the Equitable Insurance Company Limited was solvent or otherwise; if so, the date upon which he sought such an explanation; and, if not, why he did not exercise the powers that were vested in him by such section.
10.
asked the Minister for Industry and Commerce what inquiries he made into the assets of the Equitable Insurance Company Limited; and what steps were taken by him so as to satisfy himself in 1961 and 1962 respectively that he should not revoke the Company's licence under section 20 (2) (b) of the Insurance Act, 1936.
11.
asked the Minister for Industry and Commerce the date on which he granted a licence under the Insurance Act, 1936, to the Equitable Insurance Company Limited, and the exact section, subsection and paragraph of that Act under which it was granted.
12.
asked the Minister for Industry and Commerce if he can state from the information now in his possession the date upon which the Equitable Insurance Company Limited probably became insolvent within the meaning of section 44 of the Insurance Act, 1936.
13.
asked the Minister for Industry and Commerce how he reconciles the replies of 12th June, 1963, about his duties and functions under the Insurance Act, 1936, with the provisions of section 46 of that Act, in relation to the Equitable Insurance Company Limited.
With the permission of An Ceann Comhairle, I propose to take Questions Nos. 9, 10, 11, 12, and 13 together. The Equitable Insurance Company Limited was licensed on 27th March, 1948, under section 12 (11) (b) of the Insurance Act, 1936.
As I indicated in reply to other questions on 28th May and 12th June, the returns submitted by this company since it commenced business were in order and insolvency was not indicated until the returns for the year ended 30th June, 1962, came to hand. Consequently, the question of taking action under section 20 or section 46 did not arise until these latest returns were received. A notice under section 20 was, in fact, issued to the company on 9th May, 1963. I was satisfied, from an examination of the returns for 1962, that the company was insolvent and it was not necessary, therefore, to invoke my powers under section 46. Any proceedings under section 46 would have delayed the presentation of my petition to the High Court to have the company wound up compulsorily.
Did the Minister at any stage ask for any explanation as to the nature of the investment of the £83,000?
I do not know to what £83,000 the Deputy is referring.
The £83,000 invested in the Tower Insurance Company.
The investment represented by the assets of the Tower Insurance Company was shown on the returns submitted each year, including this year, and they were duly certified by a firm of auditors and accountants. Beyond that, I did not inquire because I regarded the investment shown as a proper investment properly represented.
Did the balance sheet not show that this £83,000 was not quoted on the Stock Exchange? Should that not have alerted the Minister?
I do not know that the balance sheet would show that in any event.
I think the Minister will find it did show that, if the Minister investigates it. Will the Minister make the accounts he received available in the Library?
I should like to remind the Deputy that this matter is subject now to the most solemn process of law as a result of my petition to the High Court. I think the best thing to do is let the High Court and the liquidator appointed by the High Court investigate fully the affairs of the company, as is the duty now of both the court and the liquidator.
Is there not in the Insurance Act of 1936 a clear obligation laid upon the Minister for Industry and Commerce, over and above his duty to receive the returns properly certified, to exercise a general surveillance to satisfy himself that an insurance company operating in this country is solvent and in a position to meet legitimate claims against it? Does he feel that, where the event has shown that an insurance company has proved insolvent, to the great loss of a number of individuals in the country, there is something wrong in that the Minister—I speak now, of course, of the Minister of the Department and the Department behind him—did not detect at some stage in the several returns submitted to him the quality of one investment, which constituted the bulk of the assets of the company and which now apparently, it transpires, have no value at all. Surely the Minister feels some obligation on him to tell the House how it came to pass that, exercising his powers under the Act, that fact never transpired or was never brought to his attention?
I should like to remind the Deputy that this company was originally licensed on 23rd March, 1948, as I stated in reply to the original question; that the accounts were submitted to six or seven successive Ministers for Industry and Commerce, including myself; that these accounts were duly audited, as I have stated; that they were examined in the Department on each occasion that they were presented within the statutory time limit involved; and that on their face they showed that this company was solvent and there was no reason to believe, from the presentation or appearance of these accounts, that the company was otherwise than solvent; that I proceeded on the basis that the duly audited accounts were in fact true accounts and it was only when I received the ultimate accounts three days after the end of the statutory period that it was then shown, on examination, that the company was not solvent and I proceeded immediately to exercise my power under the Act.
If the Minister were in a position to say to the House that the asset referred to, which is approximately worth £83,000, was in fact valueless from the time of the first registration and that there was no change in the status of the asset down through the years, would he not agree that that would greatly change the situation, but if it is in fact the case that at one stage that asset had a value and subsequently became worthless but continued to appear as a substantial asset in the balance sheet of the company, that there does appear to be some failure of vigilance on the part of the Minister for Industry and Commerce in not exercising his functions which were conferred upon him by this House to provide against exactly such a contingency as has in fact arisen and which he exercises for the protection, not of the insurance company, but of the unfortunate people who may have claims against it?
The most material aspect of these accounts which convinced me and my officers that the company was insolvent was the appearance for the first time on the face of the accounts of an inordinate loss in marine insurance which was not shown in any of the previous accounts. Without any regard to the value of the asset of the Tower Insurance Company as shown on the balance sheet, it was clear from the loss shown this year as a result of marine insurance that the company was insolvent and it was on that basis I immediately proceeded. As far as the assets of the Tower Insurance Company are concerned, that would be a matter for the liquidator to evaluate and to draw on if any assets are found to be available to him.
Suppose these assets turn out to be utterly valueless, does the Minister feel he has no responsibility for allowing a situation to mature in which the liquidator turns to the largest asset in the liquidated companys balance sheet and discovers in the course of liquidation that the asset is worthless and that the insurance company in fact has been insolvent for a very long time and that if the Minister for Industry and Commerce had adverted to that absence of value in the Tower Insurance asset, he would have detected the insolvency far sooner than in fact he has?
As the Deputy knows, we live in an ordered society and we have certain professional institutions who, having regarded a person as qualified to act, let him act and we accept certificates of duly authorised accountants. That certificate was valid as far as the investment shown by the Tower Insurance Company was concerned and, as I say, it was accepted by myself the year before this and by previous Ministers for Industry and Commerce as showing the true position.
