CLAUSE 3—(Effect of certain contracts of insurance). (Hansard, 13 April 1934)

§ Mr. G. NICHOLSON
I beg to move, in page 4, line 15, after "insured," to insert: or on the ground that the answer to any question required to be answered by the insured in making any proposal for the contract is false or incomplete, and any admission or agreement whereby the said liability under the principal Act was established against the insured shall be binding on the insurer notwithstanding that it was made or entered into without his authority. The purpose of this Amendment is, firstly to cover the situation where an inaccurate answer has been given by the insured on some question which could not well be considered a material fact, but which is by the terms of the policy, made the basis of the contract of insurance; and, secondly, to prevent the insurer evading liability on the ground that the insured has admitted liability to a workman without the consent of the insurer.

§ Mr. G. NICHOLSON
I beg to move, in page 4, line 20, to leave out, "to the insured."
These words are unnecessary and a little confusing, as the only payment which the insurer will have to make is a payment to the workmen to whom the right of the employer has been transferred under Section 7 of the principal Act. I do not think the House will wish me to go into Section 7 of the principal Act, but I will do so if they so desire.

§ Mr. G. NICHOLSON
I beg to move, in page 4, line 23, to leave out "falling, due to be made," and to insert: outstanding at the time of, or becoming payable. This is another drafting Amendment. Under the Bill as it stands the insurer 655 would not be liable to indemnify the workman in respect of a payment of compensation outstanding at the time when the employer's rights pass to the workman under Section 7 of the principal Act. This Amendment makes the insurer liable in this case as well as in the case where the payment of the compensation falls due after the employer's rights against the insurer have passed to the workman.

§ Mr. G. NICHOLSON
I beg to move, in page 4, line 24, to leave out "or any dependant of the workman."
There is no sinister purpose behind this Amendment. The words proposed to be omitted are unnecessary. Sub-section (3) of Section 48 of the principal Act says that any reference to a workman who has been injured shall, where the workman is dead, include a reference to his legal personal representative or to his dependants, etc., and this provision applies for the purposes of the Bill by virtue of Clause 4 (2).

§ Mr. G. NICHOLSON
I beg to move, in page 4, line 30, to leave out from "Act" to the end of the Clause, and to add: the insurer becomes under any liability to pay compensation which he would not have been under but for the provisions of the last foregoing sub-section, the capitalised value of that liability shall be deemed to be a debt due to the insurer from the insured, and the capitalised value of the liability shall—

(a) if it is a liability to pay the whole or any part of a lump sum, he taken to be the amount of that lump sum or of that part thereof, as the case may be; or

(b) if it is a liability to pay a weekly payment, be taken to be the amount of the lump sum for which the liability could, if redeemable, be redeemed under section thirteen of the principal Act."

(6) There shall be included among the debts which—

(a) under section thirty-three of the Bankruptcy Act, 1914, and section one hundred and eighteen of the Bankruptcy (Scotland) Act, 1913, are, in the distribution of the property or assets of a bankrupt, to be paid in priority to all other debts; and

(b) under section two hundred and sixty-four of the Companies Act, 1929, are, in the winding up of a company, to be paid in priority to all other debts; and
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(c) under section seventy-eight of the Companies Act, 1929, are, as respects a company registered in England in whose case either a receiver has been duly appointed on behalf of the holders of debentures of the company or possession of any property of the company has been duly taken by or on behalf of the holders of such debentures, to be paid in priority to any claim for principal or interest in respect of the debentures;

the amount of any debt which, by virtue of the last foregoing sub-section, is due from the bankrupt or the company, as the case may be, to an insurer."