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I.—B.

-t. KIRKER.]

7. You said you thought that the State undertaking the business of fire insurance would lead to the withdrawal of most of the foreign companies : did you mean if the State undertook fire insurance in competition with the other companies ? —ln competition rates would fall to such an extent that quite a number of companies would withdraw, the business being unprofitable. Under a compulsory scheme of insurance certainly the companies would withdraw. I am not quite certain, but I am inclined to think that my company would cease to do business in New Zealand under a compulsory-insurance system as regards buildings. 8. But it would still be open to you to conduct the insurance of furniture, plant, and chattels? —Why should we ? If it were compulsory that all buildings should be insured with the Government the companies would have three options : the option of putting their price on the contents down to such an extent as to make the rates charged by the Government on the buildings appear ridiculously high to the assured, and thus disgust the insurers ; or they could make the assured pay very much higher rates on the contents of the buildings ; or they could place the country in a dilemma by refusing to do any insurance business at all in the country, thus throwing the onus of insuring contents as well as buildings on the Government, which it would be quite impossible for the Government to undertake. 9. That last course would not profit the companies at all, would it ?—The conditions would be so bad from an underwriting point of view that nothing would be gained by staying in the country. 10. Would not the insurance apart from buildings be enough to keep some companies here ? — I do not think so. 11. Assuming that, as you say, a number of companies retired on the State undertaking fire insurance, do you think it would be possible, by the State competition, for premiums to be reduced to a payable minimum, so that the State and the private companies remaining could keep going together? What do you regard as a payable minimum?—l have already told you that our fire underwriting profit in New Zealand during the last twelve years has amounted to 4-22 per cent., which is £4 4s. Do you think that is too much profit to make ? 12. Of course, I am not here to answer questions. Do you think that the bulk of the companies would not even wait for the compulsory clauses of the Bill to be brought into operation in any district ?—I do not know what they would do at all. 13. Assuming that the State had a monopoly of the business, it would need to provide for reinsurance ?—Certainly. 14. How do you suppose that would be effected if the State obtained a monopoly ?—Eeinsurance by the State would be an impossibility. 15. Why do you say that ?—Because I know that the Government could not reinsure. 16. Why? —I cannot put it any plainer than that. 17. Do you mean that the companies would not reinsure? —Certainly. Why should they ? 18. That is to say that no companies would reinsure the Government, assuming that it was a case of the Government against the companies in competition?—l mean what I say. The Government Fire Department would find it absolutely impossible to effect any reinsurance cover whatsoever. lam able to say that. 19. That would be with any of the companies competing in New Zealand ?—I think I might go as far as to say that it would be impossible for the State Department to arrange reinsurance cover anywhere or with any company, unless the Department was prepared to name a scale of fixed rates which the Government would pay for different classes of risks, somewhat higher than those ruling at the present time ; because for a consideration you can get anything done nowadays. 20. The rates would have to be higher to enable them to do it ?—I do not know that a higher rate would even tempt companies to give reinsurance facilities to the Government; but I think it would only be by a substantial inducement of that kind that the Government could reinsure. 21. Do you know anything about experiments in State fire insurance elsewhere ?—These kinds of fads have been talked about for the last three, or four, or five hundred years. I cannot do better than refer you to Mr. Gray's letter that appeared in the paper the other day, which you no doubt saw. 22. Can you tell us what the present position m in Switzerland ?—No ; all I can tell you is this :so far as my information goes, Mr. Gray has not exaggerated anything in his circular. lam sorry that I have not got the data with me; it is at my head office. A proposal was made in America for some form of State insurance many years ago—some thirty or forty, I think. I did not notice anything about it in Mr. Gray's pamphlet. The Government would have none of it, however, and it was thrown out. 23. A system of State fire insurance was actually in operation in Switzerland for some years, was it not ?—I am not familiar with the circumstances. 24. You do not know the present position there? —No. 25. Mr. Napier.~\ I am sorry that I was not here at the beginning of your evidence ; but I would like to know whether you gave any explanation of the fact that very much higher rates of insurance prevail in the North Island than in the South, particularly so in the Provincial District of Auckland? —The experience of the companies seems to have been, for many years back, that losses were more frequent and heavier in the North Island than in the South, and that is the reason why some time ago the rates were increased in the North Island. 26. Do you think it a fair thing thus to penalise one particular portion of the colony, and to sever the interests of the colony in that respect, instead of averaging the loss over the whole of what I may term the national entity of New Zealand ? —lt seems to me that when you find the culprit you punish him, do you not ? Why should the people of the South Island be forced to pay higher rates than are absolutely necessary to cover the losses there because people in the North Island have more fires than the people in the South ?