Guarantees to Back Policies

Sun (Auckland), Volume I, Issue 213, 28 November 1927, Page 8

Guarantees to Back Policies

INSURANCE DEPOSITS BILL NOT TO STIFLE COMPETmCK

! (THE SUE S Parliamentary * £p V\ f-LLINGTON, Saturday The passage of the InsjraL Companys Deposits Bill through the House of rT b £ sentatives is not I kel> to be entirely smooth one. in sp te of th? assurance of the Minister r rk th * of the Bill (Hon. F. J. Ro?,*?* Attorney-General), that nothinou the measure is intended to s'a. ; competition or do anything ‘ u „ friendly as far as Lloyd’s are ccr' j cerned. “Vi’e have no objection .to I_i, v ,- doing biu-inesa r New ZealandMr. Rolli ston. ;n moving th e ; reading of the t .-day. j come the compctitim if they C aro ’ j come but we do ask that they 4^ The measure was discussed until , o’clock, when the House adjourn* | until 1 o clock on Monday aiternoat j The Minister explained that it ... : been the law for the last 30 years” ! m ' ,re tha ‘ British and foreign • writers should lodge with the ihiwl Trustee a deposit as a guarantee* Stood faith and for tr.e protection u : policy holders. The classes of insurance h respect of which deposits were required were fire, employers’ liability and workers’ compensation, and other classy which would include moior-car risks, j etc. No deposits were required m respect of life and marine nsurance The deposits asked for by tbe Bill were those fixed by the legislation of the session of 1921-22. The proposal in the Bill did not in any way inter, fere with dairy produce insurance which came under thi marine classt fication. The deposit would be re. quired from the person who signed the contract note. In regard to the difficulty of obtaining deposits from each oi the membri of Lloyd’s who might be concerned a carrying New Zealand insurance risk* the Minister produced a policy far £20,000, bearing the signature of U 4 individual underwriters, who each undertook to bear stated fractions of the risk. Some of the fractions were one fifty-seventh, two three hundred and twentieths, and one forty-second. Next year, on the same policy there might be the signatures of 600 different underwriters. The Minister said that the legislation was not hasty, ft came before him and the PostmasterGeneral at the end of last session, and since then the fullest inquiries hid been made, not only with Lloyds agents, but with others interested. Mr. Rolleston said that an undertaking given by the Prime Minister that the proposals would be submitted to Lloyd’s committee in London had been honoured. That committee had

approved of the principle of the legis- ' lation and the only point in aisput* was the amount of the deposit. Th* ! Minister said that if any member could convince him that the deposit should be any lower than that required of other insurance interests in New Zealand he would be prepared to consider the matter. There would be no hardship on the agents as the deposit* would be practically at call. Th* Government would pay interest at 51 per cent, and the only cost to th* agents would be the difference between that rate and the rate—probably about 6 per cent.—at which they borrowed i the amount of the deposit. Thus lb* cost would be only about £3OO or £4OO. The Minister added that in the interests of the people of the Dominion, of Lloyd’s, and of the agents themselves, the legislation was desirable. PLEA FOR STATE INSURANCE Mr. H. E. Holland, Leader of the Opposition, said that if the Government was prepared ,to make the State fire insurance a monopoly it could reduce premiums by 50 per cent What the agents were complaining of wai not that £20,000 should be paid, bat that it should be paid five times over. The Attorney-General: That is not the case. Mr. Holland said he did not think the* requirement of a £20,000 deposit was the remedy. Both lire and Ufa insurance were profitable forms of exploitation. Even those competing with the State department were making immense profits, and if our own State offices were not in existence the position would be vastly different from what it was now. Indeed, it was t question whether our own State insurance offices were not acting in combination with the insurance combine. The Hon. W. Nos worthy: That is net so. Mr. Holland quoted dividend figures which he said showed that the jug British companies had been making huge profits. He had seen a statement that the State Office in New Zealand had saved New Zealand insurers £4,000,000 in 20 years. He admitted tie difficulty of dealing with the underwriters who were acting as agents lor Lloyd’s, seeing that they were not a company. He suggested that the be left over until the beginning of ne» session. By making insurance a State monopoly the Government could ren* der a service to this country t.a would have far-reaching effects. At , present the companies had a grip the farmers and the business community. Mr. Nosworthy denied that was any combination between t Government and the companies, £ Government on the other rand Ef done a great deal for the I WP 1 * regard to insurance in New • As to Lloyd’s, the Government made an effort to do the right Mr. L. G. Sullivan. Avon, saMjJS Lloyd’s had offered the Christchurcn City Council a 50 per cent, redncw»» on the rates they had previously *** paying to the State. He a^“ e ” rt a te . he was much impressed by the s* 3 ment made by Mr. Rolleston ana only question in his mind now f r whether the .2 20.000 deposit aske was not too much. The Prime Minister said tW* one deposit would be re< l «-as spect of all Lloyd s agents. Tn«« ' no intention to make each ag®nt 1 for a separate deposit of £ IO.PW- _