STATE FIRE INSURANCE.

Gisborne Times, Volume X, Issue 970, 17 August 1903, Page 2

STATE FIRE INSURANCE.

In moving the second reading of the State Fire Insurance Bill, Mr Scddon said he felt sure that it would receive a favorable reception lat the hands of the House. There Was necessity for the House entering upon the fire insurance business, because the private companies did not provide lor what was required,, and for what they did provide they, were charging abnormally, high rates A combination of the companies, practically those outside of the colony, had the fixed premiums to bo charged, and many of our people must have severely felt the effect* of this arrangement. In certain !orefused to insure risks, which showed liow wrong it was to allow; this combination to exist. , Mr Massey : What about than .accident insurance combination? Mr Scddon : The. New Zealand Government Accident Insurance has no, arrangement whatever with any other company. He went on to say that tho question was asked whether fire insurance business . by, .the State would pay. He thought tho huge profits shown by private companies was a sufficient answer to. that. In the fiacc of the huge profits earned by these companies ho considered the colony ran no risk Whatever of losing money in the venture. It had been urged that a Government Department would not be able to obtain reinsurances, but there was nothing in that . contention. He was assured by an expert whom he had consulted that a Government Department would .have no difficulty in reinsuring under the provisions of this Bill, though there Would have been difficulty if tho Bill had given the Government a monopoly of the insurance business. After explaining the provisions o£ the Bill Mr Seddon said the Commissioner of the Government Life Insurance 'Department had recommended that the Fire Department be placed in charge of a competent general manager, as the Life Deparement already had its hands full. In conclusion, he said the private companies had not met the increasing demands and requirements of the colony, and that there was consequently room for a State Department. Mr Duthie said the risks in fire insurance business were so uncertain and so involved that it was

impossible to foretell tlu.ii. - Much as he disliked combinations, he recognised that they were unavoidable in the conduct of fire insurance >usI iness owing to the exceptional’,C nature of the risks involved. ThcPre--mier had quoted from expert advice, but the House should know mete about this advice before it-plunged into a business of this kind. Mention had also been made of the nuge profits of fire insurance companies, [but the Premier had omitted to tell ■the House that these reserves were the accumulation of 30 or 40 years, ■and if the companies had not-, had these where would have been the se-

curity for the risk undertaken ? Ho

mentioned the case of a company which made four-fifths of its profits, outside of New Zealand. Mr Hogg strongly supported the Bill. Mr Willis considered that all classes would benefit by the Bill. Mr Massey was of opinion that this j new Department was not likely to be worth what it would cost the colony, and I the House should pause before committing I the colony to borrowing a large sum to start the scheme. Any money the,colony could raise at the present time was wanted for the development of the country. This I new Department would mean more power and more patronage to the Government. He was not-inelined to grant that. Mr Taylor felt confident that this expend ment, with care, would result in success. He recognised that it was surrounded with difficulties, but a very large majority-' 6f the people of the colony desired that the Government should grapple with the question.

Mr James Allen pointed out that it had not been shown, and the Premier had not ventured to say it, that a Government • Fire Insurance Department would decrease rates, and in the absence of that assurance there was not justification for the Bill. _ After further discussion, the Jfechnd reading was carried by 33 votes toffijfljgii. • .