§ MR. PEASE,in the absence of the President of the Board of Trade, asked the Secretary to the Department, Whether his attention has been called to a letter in the "Daily News" of March 13th, signed by one of the special jury in the late trial of "Blake v. The Albion Life Assurance Society;" and whether he proposes, in the interest of the vast body of insurers in this country, to give directions for a more careful supervision of the accounts of Insurance Companies, rendered in pursuance of the Act of 1870, than appears to have hitherto been the case, as shown by the extraordinary facts elicited in the course of the above-mentioned trial?
§ MR. E. STANHOPESir, on behalf of the Department, my attention has been called to the matter in question. The accounts and statements of Assurance Companies rendered in pursuance of the Act of 1870 are deposited at the Board of Trade, and copies of them are deposited by the Board of Trade with the Registrar of Joint-Stock Companies, where they can be inspected by the public. The accounts and abstracts so deposited are laid annually before Parliament. The supervision, which rests with the Board of Trade, does not extend beyond seeing (I) that the accounts and statements required by the Act are furnished in the form prescribed by the Act; (2) that the questions put in the Schedules to the Act are categorically and completely answered; (3) that the answers given do not conflict with one another or with the statements in the accounts; and (4) that, prima facie, no serious items of liability are omitted. The Board of Trade are in no way 1591 responsible for the accuracy of the answers given, or the statements made by the Companies. In 1873, however—that is, shortly after the duty of receiving the accounts of Assurance Companies was imposed upon them by Parliament—the Board of Trade, finding that some of these accounts disclosed a very unsatisfactory state of matters, took the opinion of the Law Officers of the Crown as to whether it was within their powers, under the Life Assurance Companies Act, to require a Company to amend its accounts, so that at least a minimum provision should be made for future management expenses before determining what the surplus of the Life Fund was. This is, of course, a vital point in ascertaining the position of a Life Assurance Company. The Law Officers advised the Board of Trade that they had no such power, and it is a curious circumstance that the specimen instance on which the case was submitted to the Law Officers was that of the Albion Assurance Company. Notwithstanding the limited powers of the Board of Trade, it has been their practice, in cases of manifestly insufficient reserve, to bring this specially to the notice of the Directors, so that in the event of any question arising at a future time, they cannot urge that they signed the accounts in ignorance. In the case of the Albion Company, a correspondence of this sort which took place with the Board of Trade in 1873—the year of their previous valuation—led to the withdrawal of a bonus which had been decided upon. In certain cases where, in the opinion of the Board of Trade, the accounts of an Assurance Company are not such as are required by the Act of 1870, they deposit the accounts under the Act of 1872, which empowers them to lay before Parliament statements purporting to be in pursuance of the Life Assurance Act of 1870.' When they think that such a case ought to be brought before Parliament and the public, they annex to the accounts the correspondence which has passed between them and the Company, and publish the two together in the annual Blue Book. This course they adopt under the advice of the Law Officers of the Crown, who were of opinion that the Board of Trade could not state their reasons more fairly than by setting out the correspondence, and they had determined to adopt this 1592 course with the accounts of the Albion Assurance Company before the action of "Blake v. The Albion Company" was tried.