HL Deb 25 May 1948 vol 155 cc998-1005

7.3 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Nathan.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD HOLDEN in the Chair.]

Clause 1 agreed to.

Clause 2:

Power to insure life of parent or grandparent for up to £20; and prohibition of alienation of such insurances.

(2) Such a society or company shall not in exercise of the power conferred by the pre-ceding subsection insure to be paid to any person on the death of any one of his parents or grandparents any sum which (either taken alone or when added to any sum or sums insured to be paid to that person on that death under any other relevant insurance or insurances taken out by him) exceeds twenty pounds, and shall not, by virtue of or in connection with any insurance effected in exercise of that power, pay to any person on the death of any one of his parents or grandparents any sum which (either taken alone or when added to any sum or sums paid to that person on that death by virtue of or in connection with any other relevant insurance or insurance taken out by him) exceeds twenty pounds:

Provided that there shall be excluded for the purposes of this subsection, any sum insured to be paid, or paid,—

  1. (a) by way of bonus other than a guaranteed bonus;
  2. (b) by way of repayment of premiums; or
  3. (c) under a free paid-up policy which is in force as such at, or has been applied for or claimed before, the passing of this Act

THE MINISTER OF CIVIL AVIATION (LORD NATHAN)

I beg to move the first Amendment on the Paper. Perhaps I may be allowed to speak on this Amendment and the next following Amendment at the same time. Their object is to deal with the limit on the amount that may be insured. What is prohibited by the first of the Amendments, the one I am now moving, is the entering into of a contract for more than the limit which is set in the Bill—£20. I beg to move.

Amendment moved— Page 2, line 38, after (" not ") insert (" in effecting an insurance at any time ").—(Lord Nathan.)

On Question, Amendment agreed to.

LORD NATHAN

The second of the Amendments to which I have just referred is designed to show that the term "insured" in line 42, refers not to the actual moment of making the contract but to the continuous process of keeping the risk covered. I beg to move.

Amendment moved— Page 2, line 42, after (" sums ") insert (" for the time being ").—(Lord Nathan.)

On Question, Amendment agreed to.

LORD NATHAN moved, in subsection (2), to delete all words after "exceeds twenty pounds, and," and to insert: where an insurance has been effected in exercise of that power, shall not—

  1. (i) by virtue of or in connection with that insurance, pay to any person any sum which exceeds twenty pounds when taken alone, or
  2. (ii) by virtue of or in connection with that insurance, pay to the person by whom that insurance was taken out any sum which exceeds twenty pounds when added to any sum or sums paid to him, on the death on which money was thereby insured to be paid, by virtue of or in connection with any other relevant insurance taken out by him, or
  3. (iii) if any payment has been made on that death by virtue of or in connection with that insurance to the person by whom it was taken out and has not been repaid, pay to him on that death, by virtue of or in connection with any other relevant insurance taken out by him, any sum which exceeds twenty pounds when added to the amount so paid and not repaid, or when added to it and to any sum or sums paid to him on that death by virtue of or in connection with any other relevant insurance or insurances taken out by him."

The noble Lord said: Whereas the Amendments which the Committee have just passed refer to the making of the contract and the amount to which the contract of insurance may be made, this Amendment re-writes the second limb of Clause 2 (2) limiting the amount that may be paid. For instance, if a person having over-insured his parent, died leaving the policy to a person who was not a child or grandchild of his parent, the person to whom the policy was left could be paid on the parent's death more than could legally have been paid to the original proposer of the policy. This is what we want to stop. On the other hand we do not wish to prevent a person who has insured his father for not more than £20, and who has also inherited a policy for not more than £20 on the same life, being paid on both policies. It has been difficult to find a form of words which does what is intended in both respects. It is believed and hoped that the words appearing in the Amendment answer the purpose. I beg to move.

Amendment moved— Page 2, line 44, leave out from (" and ") to the end of line 5 on page 3 and insert the said new words.—(Lord Nathan.)

LORD LLEWELLIN

If I remember rightly, there was some discussion on this at an earlier stage of this Bill when this point was raised—I think by myself, amongst other peole. The point has been as suitably met as it can be by the Amendment moved by the noble Lord, and we are glad to welcome it.

On Question, Amendment agreed to.

LORD NATHAN

This Amendment is required to provide that the First Schedule, containing the arrangements for enforcing the £20 limit, shall take effect from the same date as Clause 2 which imposes it. It is really a formal Amendment. I beg to move.

Amendment moved— Page 3, line 14, after (" effect ") insert (" from the expiration of one year from the day appointed as aforesaid.").—(Lord Nathan.)

On Question, Amendment agreed to.

LORD NATHAN

This and the next are, I think I may say, no more than drafting Amendments. I beg to move.

Amendment moved— Page 3, line 17, after (" is ") insert (" for the time being ").—(Lord Nathan.)

On Question, Amendment agreed to.

LORD NATHAN

I beg to move the next Amendment.

Amendment moved— Page 3, line 18, leave out (" a person ") and insert (" the person by whom the insurance was taken out ").—(Lord Nathan.)

On Question, Amendment agreed to.

Clause 2, as amended, agreed to.

Clauses 3 to 5 agreed to.

Clause 6 [Prohibition of insuring money to be paid on death of a child under ten]:

LORD NATHAN moved to add to the clause: (3) In subsection (2) of section thirty-nine of the Government Annuities Act, 1929 (which provides that a savings bank insurance may be granted, if the amount does not exceed five pounds, to a person not under the age of eight years) the word ' ten ' shall be substituted for the word ' eight,' and paragraph (h) of subsection (2) of section fifty-two of that Act (which requires a payment on the death of a child under ten years of age to be made subject to the provisions of section sixty-two to sixty-seven of the Act of 1896) is hereby repealed. The noble Lord said: This Amendment makes ten the minimum age of insurance in the Government Annuities Act, 1929, so as to be consistent with the minimum age for insurance by friendly societies, industrial assurance companies, and trade unions. It is little more than a drafting Amendment. I beg to move.

Amendment moved— Page 5, line 29, at end insert the said subsection.—(Lord Nathan.)

On Question, Amendment agreed to.

Clause 6, as amended, agreed to.

Clause 7 agreed to.

Clause 8 [Premium receipt books]:

LORD NATHAN

This is also little more than a drafting Amendment. It makes the procedure for making regulations under Clause 8 (as to premium receipt books) formally consistent with that for making regulations under Clause 14 (as to audit). I beg to move.

Amendment moved— Page 6, line 5, leave out (" under Section forty-three of the Act of 1923 ") and insert (" by the Commissioner, subject to the approval of the Treasury signified by statutory instrument which shall be subject to annulment in pursuance of resolution of either House of Parliament ").—(Lord Nathan.)

On Question, Amendment agreed to.

Clause 8 as amended, agreed to.

Clauses 9 to 19 agreed to.

Clause 20 [Change of designation of "public auditors" to "approved auditors"]:

LORD NATHAN moved to add to the clause: (2) No person shall be qualified to be appointed an approved auditor under Section thirty of the Act of 1896 or under Section seventy-two of the Industrial and Provident Societies Act, 1893, unless he is a member of one or more of the following bodies, that is to say,—

Provided that—

  1. (a) the preceding provision shall not affect the qualification of a person who is an approved auditor at the passing of this Act, for the purpose either of his existing appointment or of any subsequent appointment under either of those sections;
  2. (b) notwithstanding that provision, where a person who is not such a member or an approved auditor at the passing of this Act was appointed in accordance with the rules of a registered society for the purposes of the audit of the accounts of the society made in the years nineteen hundred and forty-eight and nineteen hundred and forty-nine and in each subsequent year (if any) as respects which the option conferred by Section twenty-six of the Act of 1896 to submit accounts for audit to persons so appointed was exercisable by the society, the Treasury may, if they think fit, appoint him under the said Section thirty for the purposes only of audit of the accounts of a society in accordance with whose rules he was appointed as aforesaid; and
  3. (c) notwithstanding that provision, the Treasury may, if they think fit, appoint under the said Section thirty a person who is not such a member or an approved auditor at the passing of this Act, if they are satisfied that it is necessary for them to do so for giving effect to the purposes of Section 1 fourteen of this Act."
The noble Lord said: I ought perhaps to have said that I understand all interests concerned have been consulted in regard to these Amendments and that the Association of Industrial Assurance Companies and Societies consider this a good Bill with these Amendments, mention that because in this particular question the professional societies have also been consulted.

This Amendment deals with the qualifications of persons to be appointed by the Treasury to be approved auditors (hitherto called "public auditors") to audit the accounts of friendly societies and industrial and approved societies. It is the settled practice of the Treasury to appoint only persons with recognised qualifications, but as the Statutes now stand, they have a free hand to appoint anyone. When the Bill was considered in Committee in another place, an Amendment was moved to confine future appointments to members of the bodies named or of the Institute of Chartered Accountants in Ireland. This was resisted on the grounds that (a) it was not necessary to order the Treasury to follow their settled policy, and that (b) to do so might make it difficult to bring into effect Clause 14, which limits the scope of audit by persons who are not approved auditors, if the Treasury could not in the interim period appoint a few persons of long experience but lacking the formal qualifications required. The Amendment was accordingly withdrawn. The professional bodies concerned have continued to press for it, representing that the point (b) can be met by enabling the Treasury to appoint unqualified persons where necessary to expedite the bringing of Clause 14 into effect. There are three provisos. The first secures the position of those who are already approved auditors when the Bill receives the Royal Assent, notwithstanding that they have not the qualifications now to be recognised. The second proviso enables the Treasury to make appointments to approved auditors from certain "sitting" lay auditors, and the third proviso enables the Treasury to approve appointments of auditors with lesser qualifications if it is found by experience that the number of societies in question becomes too large for the available numbers of properly qualified auditors. I beg to move.

Amendment moved— Page 16, line 8, at end insert the said subsection.—(Lord Nathan.)

LORD LLEWELLIN

I understand that the professional societies, at any rate those named in this Amendment, are quite satisfied now with what has been done. I think their whole ambition has not been particularly to benefit their own members, but to raise the standards of qualifications of persons undertaking the duties of auditors. I did not know what the noble Lord meant by "lay auditor."

LORD NATHAN

He is a member of a friendly society who acts as an auditor but who does not possess the professional qualification required for membership of the societies named.

LORD LLEWELLTN

The sort of people who are appointed in a small branch of the British Legion to audit the accounts—and they do it very well. This clause meets a proper request put forward by these societies and I am glad that, though the Government resisted it in another place, they are now prepared to meet this by the Amendment proposed.

LORD SALTOUN

The societies have asked me to say that they much appreciate the way the Government have treated them in this matter and in the helpful conversations that have preceded this. They feel that the exceptions made are those which should reasonably be made in the circumstances. I should like to add that this is a thing which I have long wanted to see, and I hope it will put an end to what I think has been a very wrong practice.

On Question, Amendment agreed to.

Clause 20, as amended, agreed to.

Clauses 21 and 22, agreed to.

Clause 23 [Interpretation]:

LORD NATHAN

This Amendment simply defines "policy" to include other instruments of insurance. I beg to move.

Amendment moved—

Page 16, line 31, at end insert— (" (b) the expression ' policy ' includes any contract of assurance, and for the purposes of this Act the date of the making of any such contract shall be deemed to be the date of the issue of a policy.")—(Lord Nathan.)

On Question, Amendment agreed to.

Clause 23, as amended, agreed to.

Remaining Clauses agreed to.

First Schedule [Death Certificates in connection with Payments Referred to in Subsection (2) of Section Two]:

LORD NATHAN

This is a drafting Amendment. I beg to move.

Amendment moved— Page 18, line 6, leave out from (" not ") to (" except ") in line 11, and insert (" by virtue of or in connection with any relevant insurance of money to be paid on the death of a parent or grandparent of the person by whom the insurance was taken out, pay to that person on the death any sum not excluded for the purposes of subsection (2) of section two of this Act by the proviso thereto ")—(Lord Nathan.)

On Question, Amendment agreed to.

LORD NATHAN

This Amendment is consequential. I beg to move.

Amendment moved— Page 18, line 19, at end insert (" and on receiving any repayment of a sum so paid by virtue of or in connection with an insurance effected in exercise of the power conferred by subsection (1) of Section two of this Act the society or company shall cause to be indorsed on the certificate a statement showing the repayment ").—(Lord Nathan.)

On Question, Amendment agreed to.

LORD NATHAN

This Amendment is consequential. I beg to move.

Amendment moved— Page 18, line 22, leave out from (" company ") to the end of line 32 and insert (" of a sum which exceeded the limit of twenty pounds imposed by paragraph (ii) or (iii) of that subsection in consequence of the addition as thereby required of another sum paid by another such society or company, or of two or more other sums so paid, and which would not have exceeded that limit apart from such addition, it shall be a defence for the society or company charged to prove—

  1. (a) that the sum in respect of which they are charged was paid in accordance with paragraph 1 of this Schedule; and
  2. (b) that the certificate produced disclosed no payment by any other society or company of any sum or sums required by the said paragraph (ii) or (iii) to be added, or disclosed such payment but only to an amount insufficient to cause the sum in respect of which they are charged to exceed the said limit ").—(Lord Nathan.)

On Question, Amendment agreed to.

First Schedule, as amended, agreed to.

Second Schedule to Fifth Schedule agreed to.

Sixth Schedule [Repeals]:

LORD NATHAN

This Amendment is consequential. I beg to move.

Amendment moved—

Page 26, line 20, at end insert—

(" 19 & 20 Geo. v. c. 29. The Government Annuities Act, 1929. In section fifty-two, in subsection (2), the word ' and ' at the end of paragraph (g) and paragraph (h) ")

—(Lord Nathan.)

On Question, Amendment agreed to.

Sixth Schedule, as amended, agreed to.