HC Deb 12 March 1940 vol 358 cc1151-8

Lords Amendment: In page 1, line 17, leave out from "were" to the end of line 19, and insert:

"in force immediately before the first day of September, nineteen hundred and thirty-nine, and in respect of which not less than two years' premiums have been paid (whether before or after the passing of this Act)."

11.27 p.m.

The Attorney-General (Sir Donald Somervell)

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment carries out an undertaking I gave to the Committee that the protection of the Bill should be extended to policies entered into before 1st September as and when two years' premiums have been paid.

Question put, and agreed to.

Subsequent Lords Amendment in page 3, line 14, agreed to.

Lords Amendment: In page 5, leave out Clause 4 and insert new Clause A:

(Determination of protection.)

  1. "A.—(1) Where in relation to any policy of assurance an application for protection has been granted under this Act by the company or society with which the policy was effected, and the company or society is satisfied that the owner of the policy is no longer unable by reason of circumstances arising directly or indirectly out. of the war to pay the premiums on the policy, it may serve a notice in the prescribed form on the owner of the policy to the effect, that his protection will be determined after the expiration of twenty-eight days from the service of the notice, but that an appeal against the notice may be made within the said twenty-eight days by or on behalf of the owner to the Commissioner.
  2. (2) Where an appeal is made in accordance with the notice, the protection shall not be determined pending the decision of the appeal, 1152 and if the Commissioner is satisfied that the notice ought not to have been served, he shall revoke the notice.
  3. (3) Where in relation to any policy of assurance an application for protection has been granted under this Act by the Commissioner, the company or society with which the policy was effected may at any time appeal to the Commissioner for the protection to be determined and if the Commissioner is satisfied that the owner of the policy is no longer unable by reason of circumstances arising directly or indirectly out of the war to pay the premiums on the policy, he shall make an order for the determination of the protection.
  4. (4) Where a notice has been served under this Section and has not been revoked on appeal, or the Commissioner has made an Order determining the protection. Sub-section (5) of Section two of this Act shall cense to apply as respects any default in the payment of premiums falling due after—
    1. (a) the expiration of the period specified in the notice or the decision of the appeal (if any) against the notice, whichever is the later, or
    2. (b) the date of the Order,
    as the case may be, but nothing herein shall be taken to prejudice the making of a further application for protection.
  5. (5) Where in relation to any policy of assurance an appeal is made to the Commissioner and granted by him, whether under this Section or under any other provision of this Act, the policy shall thereafter be treated for the purposes of this Section as a policy in relation to which an application for protection has been granted by the Commissioner and not by the company or society with Which the policy was effected."

The Attorney-General

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment arises out of a suggestion made by the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) that in cases where companies or societies have granted protection, if they are satisfied that the conditions had so changed that the owner of a policy is able to pay the premiums, they shall be entitled to determine the protection, subject, of course, to the right of the assuree to appear to the Commissioner. I said I thought the point a reasonable one. I have looked into it, and as a result this Amendment has been made in the Bill.

11.30 p.m.

Mr. Rhys Davies (Westhoughton)

The right hon. and learned Gentleman ought to be reminded that this Bill was introduced to protect policyholders and not insurance companies. I do not want to go into the promise which he made, but I would point out that this new Clause is of fundamental importance to policy-holders. Clause 4 as it left this House provided that where protection from forfeiture was granted to a policyholder the insurance company must appeal to the Commissioner if it desired to end that protection. Since the Bill went to another place some forces have evidently been at work. If the right hon. and learned Gentleman does not mind my saying so, I do not like these fundamental principles being introduced in another place. If they are to be brought before Parliament, they ought to be submitted to this House of Commons.

The new Clause reverses the procedure. The insurance company can now abolish the protection from forfeiture by giving 28 days' notice to the policyholder, throwing upon the latter the onus of appealing to the Commissioner against the decision of the company. If the insurance company and the policyholder were on equal terms, with equal strength and equal intelligence, I would say that this procedure was correct, but I cannot see an ordinary working man who has received one of these notices from an insurance company making an appeal to the head office in London, where there will be a large staff of well trained solicitors who will be able to put up a case against the ordinary policyholder. Therefore, I think this is rather unfair to the House of Commons. It is too late, of course, to do more than protest now, but I say finally that I think this new Clause violates in essence the principles upon which the Bill stood when it left this House, and I think we are justified in this protest against the action of the Government, who have obviously been induced by the insurance companies to put in, in another place, what they dare not introduce in this House.

11.33 p.m.

Mr. Jagger (Manchester, Clayton)

I feel very concerned about a proceeding which, though it may look perfectly fair to the legal mind, is to my mind grossly unfair. If every semi-blind, semi-illiterate insured person had the same staff of legal experts as the insurance companies have, I should not have the slightest objection to this Amendment. My objection to it is that it changes the onus and I can think of many cases in which the change will lead to a loss of the protection which the insured person had without his understanding that there is some action which could be taken whereby the decision of the insurance company might, perchance, be reversed. I am told that if an insurance company did send a notice to a person who is now serving with the Forces, it would have no effect. I wish the Attorney-General would inquire whether that is the case. I see nothing in the Amendment which would prevent an insurance company from sending these notices to 10,000 men serving with the Forces, and long before they knew anything about them the 28 days would have expired.

11.35 p.m.

Mr. Edmund Harvey (Combined English Universities)

As a layman, reading this Clause I had very much the feelings that have been expressed by the hon. Member for Westhoughton (Mr. Rhys Davies), and I should like to ask for an explanation of Sub-section (3) from the Attorney-General. The Subsection appears to put the insurance companies in an especially privileged position. They can apply to the Commissioner for permission at any time, and if the Commissioner is satisfied that the owner of the policy is no longer unable by reason of circumstances arising directly or indirectly out of the war to pay the premiums on the policy he can make an order for the determination of the protection. There is no provision for the person himself to be informed of this and to have the opportunity of putting his case before the Commissioner. I assume that, under the rules by which the Commissioner will act, notice will be given to the person, and due time and opportunity will be allowed for him to make his case and to put it. It is most important that that should be safeguarded. I regret that the wording of the Bill does not provide that safeguard which should be provided by Parliament. Surely it is not the intention of the Government to take that safeguard away from a person concerned, who, in many cases, will be illiterate and unable to act unless he has his opportunity placed before him very clearly. I hope very much that we may have an assurance from the Attorney-General on this point.

11.37 p.m.

Mr. John Wilmot (Kennington)

In the original form of the Clause some objection was taken to the fact that appeals would be laid before the Commissioner in London and that persons in many thousands of cases would have to come to London. However strong that objection may be when the onus is on the insurance companies, it is very much stronger when the onus is on the individual policy owner.

11.38 p.m.

The Attorney-General

Euclid defined parallel lines as those which, though they might be very close, could never meet. That definition might be applied to the right hon. Member for Hillsborough (Mr. Alexander) and to the hon. Gentlemen who object, because, when the suggestion was made, the right hon. Gentleman said that if I would consider it and the Government would meet it, that would be doing a good service. Having done what the right hon. Gentleman described as a good service, I get little gratitude from the Front Bench opposite—considered as a corporate body.

The point about this new Clause which led us to think it reasonable was that where a society or company had, in the first instance, granted protection, it should have a prima facie right to determine it, with the right of appeal to the Commissioner by the assured. So far as the 28 days' notice is concerned, people in the Forces are capable of being reached by notices. You have the exceptional case of somebody overseas.

Mr. Jagger

Getting leave of absence is not exceptional. There are 1,250,000 men, most of whom are assured.

The Attorney-General

Yes, but there is provision in the Bill for people overseas to leave their interests in this matter in the hands of somebody at home, who can make application on their behalf. So far as the point raised by the hon. Member for the Combined English Universities (Mr. Harvey) is concerned, I can give a most categorical assurance that the Commissioner will not act except where he is satisfied that an applicant's case has been fully put before him.

11.41 p.m.

Mr. Cocks (Broxtowe)

Although the Attorney-General has given us a lesson in Euclid, I would suggest that that particular theorem is not applicable to the House of Commons on questions where party politics are not involved. Where party questions are not involved we desire to meet on grounds of justice. I know that the Attorney-General is very fair-minded, apart from his politics, and I do not know why he supports this particular proposition. Here is a means of protection to persons who are insured because of a change in conditions due to the war. The proposition is that if those conditions have been changed, the protection should be withdrawn. The original proposition was that the onus should be put upon the great insurance companies, as my hon. Friend explained, with all the resources of legal advice and so on behind them. They could appeal to the Commissioner, and if the Commissioner thought they were in the right he could give protection to them. But here the onus is placed upon the individual, who is usually poor, because most people who go in for insurance are poor, not learned in the law, and in many cases uneducated.

As many of us know from our experience with our constituents in connection with other matters during this war, there are various things with which they are unacquainted. They are puzzled by the legal and official communications that they receive. It is only when they write to their Member of Parliament, who takes the matter up with the appropriate Minister, that justice is given to them. As my hon. Friend rightly observed, many of these people may be old or blind, and they may not understand the position with regard to the period of 28 days. An official notice may arrive, and they may take it to somebody, such as the local trade union secretary or to the parson, and ask what it means, in which case they may receive an explanation. If they do not do that, the 28 days may elapse, and it may suddenly be announced that the insurance policy to which they have paid for many years has been abrogated.

I do not see how the Attorney-General suggests that it is a fair plan to place the onus on the individual, who, as I say, is not usually very highly educated, rather than on the insurance company. No harm can be done to the insurance companies by placing the onus on them, because their case will be heard anyhow, and if it is right, the Commissioner will decide in their favour. Even in legal matters a poor man who cannot afford counsel is provided with one for his defence. There is no such provision here. The poor man is left to his own resources. In many cases injustice may be involuntarily done. I appeal to the Attorney-General to abandon this idea and to agree that the working people of this country should be dealt with on the common ground of equity and justice.

11.44 p.m.

Mr. A. V. Alexander (Sheffield, Hillsborough)

I believe that the comments that we have heard have been fairly made. All my public life I have been concerned with the proper protection of the people with regard to civil risks, and many hon. Members may remember the fight we had on the 1923 Bill. In any circumstances, I should hesitate very much to be a party to any fundamental Amendment in the Bill which would seriously prejudice the policy holder. I quite understand the spirit in which my hon. Friends have taken this up. But the more one studies the Clause and the procedure behind it, the less, I think, is the case that can be made against it. None of these cases under the new Clause will actually arise except where policy holders have themselves initiated an application for exemption. Therefore, to say that they are not familiar with the procedure to be followed under the law is beside the point. They will all, in these cases, have made their applications and have received their exemption direct from the company without reference to the Registrar. In such circumstances the companies then say that, if it is found that one of those cases is thereafter, to quote the words of the Clause: no longer unable by reason of circumstances arising directly or indirectly out of the war to pay the premiums, they have given the protection themselves, and they ought to have the right to give notice, provided that they also are under the compulsion to state in the notice the rights of the individual as to an appeal. I hope I have made the position quite plain. I should hate to feel that I had been a party to something which would prejudice the position of the policy holders. I believe, on the contrary, that the law is now being made more workable. If every case of this sort had to go through the Commission at this end, the almost inevitable result would be that a large number of these protections which are given voluntarily would not be given voluntarily.

Question, "That this House doth agree with the Lords in the said Amendment," put, and agreed to.

Remaining Lords Amendments agreed to.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock, Mr. Speaker adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Eleven Minutes before Twelve o'clock.