§ Mr. CAUTLEYasked what steps should, in the opinion of the Insurance Commissioners, be taken by unregistered friendly societies, prior to their becoming approved societies, to prevent their existing funds being divided up and dissipated, in view of the fact that Section 72 of the National Insurance Act does not apply to such societies.
§ Mr. WEDGWOOD BENNThe fact that Section 72 does not compel unregistered societies to submit schemes to the Chief Registrar, does not mean that it is desirable, still less that it is necesary, for them to divide up their existing funds. Unregistered societies will be able to use their existing funds to give their members benefits additional to those of the Act, and will in any case require to use them to make provision for their members during the waiting periods laid down in the Act.
§ Mr. CAUTLEYasked the Chancellor of the Exchequer, whether he will direct or advise the Insurance Commissioners to issue a circular to the effect that if any society in an association of small friendly societies, formed under Section 39 of the National Insurance Act, has a surplus on the prescribed valuation, only one-third of the surplus earned in respect of its State section, namely, the section doing the insurance under the Act, is liable to make good deficits of other societies of the association, and that any surplus earned in respect of its own section, namely, the section doing its own business as distinct 1166 from the insurance under the Act, will be under the absolute control of the society, and that under no circumstances will the existing funds of small societies, when associated, be liable to make good deficits of other societies; and whether there could be included in such circular a statement to the effect that it is only the State sections of small societies, and not the societies themselves, which are associated under Section 39 of the Act.
§ Mr. WEDGWOOD BENNThe Commission are issuing free literature in which the effect of the Act is clearly set forth. Meanwhile it cannot be too clearly stated that the existing funds of a society, whether large or small, remain what they were before, namely, the absolute property of the society and its members, and the operation of the Act cannot divert them or any part of them; and that any surplus earned by a society from its operations outside the Act will also remain the property of the society, and no part of it can be diverted to make good the deficits of other societies.
§ Mr. PETOIn view of the fact that the hon. Member says that the funds of the society are exclusively the property of the existing or old members, does he not think it would be unfair to charge on those funds any cost or part of the cost of the preliminary expenses of those societies becoming approved societies and entering into competition with members?
§ Mr. WEDGWOOD BENNI think the question of how the expense of becoming approved societies should be met, is being considered by the Commissioners in the light of what the hon. Member says on the question.