ASSURANCE COMPANIES (AMENDMENT). (Hansard, 8 December 1937)

§ Mr. Jagger

I beg to move, That leave be given to bring in a Bill to prohibit the granting of rebates of premiums to any persons in connection with the issue of contracts of insurance, to amend the law relating to life assurance companies, and for other purposes connected therewith. This Bill is designed to bring about a small reform in the business of insurance in this country. Legislation on the lines proposed has already been passed in the Dominion of Canada and is working satisfactorily. This is a small Measure which does not propose to make any revolutionary change in the position of assurance and insurance. It is designed, first, to protect the more reputable insurance companies against a form of unfair competition in which some of the less reputable companies indulge; second, to put an end to what has become a measure of unfair competition between various classes of traders because of their ability to get their assurances effected on more advantageous terms in some cases than in others; and, third, and more important, to protect the interests of the many thousands of assurance agents and brokers whose legitimate and honourable calling is disadvantageously affected by the kind of thing which this Bill is designed to put an end to. It consists of only three operative Clauses, and it applies to all those assurance companies which are covered by the Act of 1909. The first Clause makes it an offence for a company to make any kind of rebate or sharing arrangement of the customary agent's or broker's commission between the company and the insured. The second Clause makes it an offence for an officer or solicitor or employé of the company to make such offers to the insured. The third Clause makes it an offence for the insured knowingly to accept these illicit commissions.

It may be news to many hon. Members that abuses such as this Bill is designed to prevent exist to any considerable extent, but I am certain there are hon. Members who have actually been approached at one time or another by officials of assurance companies and offered the inducement of a nominal agency which would entitle them to the 397 agent's or broker's commission on condition that they transferred their insurance business to those particular companies. The evil is a rapidly growing one and, in my view, if not checked, may ultimately lead to certain of the assurance companies attaching much more importance to getting transfers of business from other companies than they attach to the business of seeing that their companies remain stable and sound financially. At a recent annual conference of the organisation which embraces assurance agents and brokers it was stated that in one inspector's area in one particular assurance company, out of a list of 200 agents only 10 had taken any other business to the company than their own business. A more recent development is that assurance companies persuade the heads of large firms and corporations to bring systems of collective insurance before their employés, and it is exceedingly difficult for those employés, approached by the employer to take out insurance policies, to decline to do so, and there are hundreds of clerks and others paying insurance premiums which they can ill afford to pay and would never have undertaken had it not been for that kind of pressure. Briefly, this Bill is designed to remedy a relatively new but a rapidly growing evil in the insurance world, and I commend it to the House.