HL Deb 20 February 1923 vol 53 cc57-75

Order of the Day for the Second Reading read.

THE LORD CHANCELLOR (VISCOUNT CAVE)

My Lords, this is the first of the Bills mentioned in His Majesty's Speech to be brought forward for discussion in this Session of Parliament. I am glad that it should be a Bill which proposes to give protection to persons of small means who badly require protection; and also that it should be brought forward in your Lordships' House, where, I know, there are several members who have given special attention to this matter.

The Bill proposes to deal with industrial assurances. Those assurances, as your Lordships know, are effected partly by assurance companies and partly by collecting societies registered under the Friendly Societies Acts. The business of industrial assurance is defined in Clause 1 as "the business of effecting assurances upon human life premiums in respect of which are received by means of collectors," and it is confined to assurances for which the premiums are received at intervals of less than two mouths. These are quite small policies on the life of a man or his dependents for sums of from £2 to £10 or more, the premium being quite small, a penny or a few pence per week. That is the kind of policy with which this Bill deals. The amount of this business is astonishingly great. I will give an illustration. The total premiums received on 'this kind of policy in the year 1921 amounted to £37,000,000. In that year there were 7,000,000 new policies effected, and the total number of policies then outstanding was from 50,000,000 to 60,000,000. The business, although small in each particular, is yet very large in volume. The fact is that many working men effect more than one policy of this kind.

With so much business it is not unnatural that abuses should have crept in. When I sneak of them I hope your Lordships will understand that I am not referring to well-known and reputable offices, but to abuses which have crept in chiefly in connection with smaller and newer offices. The complaints became so numerous that in the year 1919 the Board of Trade appointed a very strong Committee to go into the matter, the Chairman of which was my noble and learned friend Lord Parmoor. They went into the question, took a great deal of evidence, and made what I believe to be a very valuable Report, recommending certain changes in the law. That Report was accepted in substance by the Government of the day, and a Bill was brought in by my noble friend Lord Onslow in 1921, not in the hope of passing it that year, but in order that it might be con- sidered and criticisms made upon it. That Bill was discussed, and deputations went to the Home Office, which had charge of the matter, from different persons interested. In consequence, certain changes have been made, and the Bill now takes the form which your Lordships have before you to-day. I think I may say that in substance it is an agreed Bill; a Bill which is not only recommended by the Government, but is accepted by those societies which are chiefly interested in the matter and whom we have, of course, consulted. I have every hope, therefore, that it will not meet with any obstructive criticism and that it will have a fair chance of becoming law.

I must tell your Lordships what are the main abuses, the main difficulties with which you are asked by this Bill to deal. In doing that I leave out of account certain smaller matters, and I may remind you that the Bill is not wholly an amending Bill, but it is also a consolidating Bill. The main abuses to which I should like to refer may be classed under four heads. The first is that there is a want of security to the policy holders for payment of the amount insured when the policy matures. An insurance company has to make a deposit of £20,000, which is some security to its policy holders. A collecting society—and much of the business is done by societies of this kind—makes no deposit at all, and a few people with no means whatever have the right to form a collecting society, to register and carry on the business and receive premiums. In such a case there is, in substance, no real security for payment of the amount of the policies when they mature. There is some control by the Registrar of Friendly Societies, but it is of a very limited character and he tells me—I can well understand it—that he is not able to prevent the registration of such societies or exercise control over such concerns.

The accounts of these bodies are kept on all kinds of systems; sometimes on no system at all. Indeed, we find in the accounts of some societies of this kind a very large item representing nothing but past expenditure, while the industrial assurance business is often mixed up with the accounts of some other business. It is plain that the receipts from this industrial assurance work sometimes go to subsidise business of quite another character. Valuations are made, but they are quite inadequate, and the position of the policy holder is in some cases —I still confine myself to some cases—very precarious. I can imagine nothing more lamentable than that a man of small means, having saved and put aside out of his small income premiums which he considers are sufficient to protect and assist his family in case of death, should find that the policy is not paid because of the insolvency of the office. Your Lordships can imagine the terrible results that follow from such a position.

The second abuse to which I would refer is in respect of the issue of these policies through the agents of the kind of society to which I have been referring. The statements in the proposal for a policy are very often filled in by the agent on behalf of the person effecting the insurance. Some of them turn out to be incorrect, possibly through the insured person having been misunderstood or through some carelessness in writing down what he has said. The result may be, and sometimes is, that the policy, having been issued upon a statement which was untrue, is repudiated by the society with which it is effected. In that way many policies are. I believe, forfeited, and it is very hard on the man who has trusted to the agent to make a true statement. There is another rather curious feature. While most of these societies employ their own agents to convass for them, sometimes a special effort is made and a person is employed who is called a special canvasser. He is not a servant of the company, but he is a gentleman with a very persuasive tongue who is employed for a limited time to go from house to house to get all the business he can. He does his best and disappears, and then it may be found that some mistake has been made, some statement which cannot be made good. The canvasser is to blame, not the company, and I believe a difficult position often arises through means of that kind. I do not think that system is a good one, nor that such a method of canvassing should be allowed to continue.

Then there is the difficulty of the lapse of these policies. It is rather astonishing to find how many policies are taken up and afterwards allowed to drop. I suppose the policy holder is over-persuaded in many cases, or is over-confident, and finds afterwards that he cannot keep up the policy. But whatever the reason may be, the number of policies that lapse and are entirely forfeited is very great. It is estimated by the Committee to which I have referred that over 5,000,000 policies lapse and are forfeited every year. That means, of course, that in most cases the premiums paid on them are totally lost to the insurer, though that is not always the case, because some of the better offices allow a surrender value on a lapsed policy, sometimes as of right and sometimes as a matter of discretion. But while some offices do that, others do not, and some provision ought to be made to meet that case.

The fourth category in which I am classing the main abuses relates to transfers, and particularly to transfers of two kinds. First, there is the transfer of a policy on a person's life from one office to another. You will understand that this is often done without the policy holder really knowing or consenting to what is being done. Some capable agent of one company takes service in another, possibly a new society. He transfers not only his ability but his good will. He sometimes persuades insured persons to transfer their policies from one society to another; that is, he takes the policy away from the old office and gives it to the new one, and the insured person, not really understanding where he is, may have transferred his claim from a perfectly good and solvent society to another which may not be so solvent. That is a matter that ought to be watched and regulated. It also happens that an industrial assurance company or society sometimes transfers its whole undertaking and business to another, and with it, of course, its policy holders. The new society may not be as solvent as the old, but there is no check upon that, and the policy holders stand the risk of losing their policies.

These are some, I do not say all, of the points which we think ought to be dealt with at the earliest possible moment, and there are proposals in this Bill for dealing with them. In the first place, control is provided for under a series of clauses, beginning with Clause 2, which provides that the control of all industrial assurance companies and societies shall be in the hands of the Chief Registrar of Friendly Societies, who for this purpose is called the Industrial Assurance Commissioner. There is really no reason why those associations which are companies should come within the control of the Companies Act only while those which are collecting societies come under the Registrar. It is proposed to put them all under one officer. Under Clause 16, if the Commissioner has reason to believe that any offence against the Act is being committed, he is authorised to make an inspection of the books, and so on, to carry out an inquiry, and, if good cause is shown, to dissolve the society, or, in the case of a company, to petition for its winding up.

In Clause 7 we propose that a deposit of £20,000 should be made not only by the industrial assurance companies but also by the collecting societies, and in cases where a company carries on two businesses, one of general assurance and the other of industrial assurance, it must make a separate deposit for the industrial assurance branch. That provision alone should have the effect of weeding out some very undesirable concerns. In Clause 15 it is proposed that societies and companies shall submit their accounts to the Commissioner, and that if they are unsatisfactory he may reject them and require them to be set right. Under Clause 17 it is provided that valuations shall be certified by a public accountant, and be sent to the Commissioner, who, again, may object if it is insufficient. If there is a deficiency in assets compared with liabilities he may dissolve such a society, or, in the case of a company, petition for its winding up. I consider that this last provision, which enables him to put an end to an insolvent association receiving contributions from working men, is one of the most valuable in the Bill.

Dealing with my second head, relating to the issue of policies, it is proposed by Clause 19 that, when a proposal form is filled up by the agent of a society it shall not be capable of being disputed by the Society, with certain exceptions, one of which is actual fraud by the insured man and another a misstatement as to age. In that case the misstatement does not avoid a policy, but it may be corrected, and the policy holder is insured for the amount that is due having regard to his real age. Another exception is a misstatement as to health, which may avoid the policy until the expiration of two years. Then we propose to abolish the special canvasser altogether.

By Clause 23 it is proposed that before a policy lapses notice must be sent to the assured person, and if a policy is allowed to drop then the assured person is to be entitled, according to the practice of the better offices, either to a free paid-up policy for an ascertained proportion of the value of the policy which has lapsed, or to a cash payment equivalent to that part of the surrender value. In no case will the lapse result in the complete forfeiture of the policy. That part of the Bill is, I think, also most beneficial, but in order to enable the companies to adjust their accounts the Bill provides that that clause shall not come into operation until the expiration of five years. I think that when it does operate it will not only give an effective remedy in the case of lapses which are generally the results of misfortune, but will also be a check upon the, reckless issue of policies. There are also provisions with regard to what are known as war bond policies and bond investment business.

Then, lastly, as to transfers of members from one society to another. We propose in Clause 25 that that kind of transfer shall not be made except with the written consent of the assured person, such consent to be given in writing on a form which is prescribed, and to be witnessed by a Justice of the Peace, whose duty it will be to explain to the person signing it the effect of the consent. Then, as regards transfers of whole undertakings, what is proposed in Clause 35 is that before such transfer is made the members shall be notified of what is proposed, with proper details, and the sanction of the Commissioner shall be obtained, thus preventing hole-and-corner amalgamations, or the transfer of a good concern to some new and less reliable society.

There is also this, which I hope may be of value. In Clause 31 of the Bill it is proposed that all disputes between members and societies of this kind may not only he settled by the County Court or the magistrates, but may be referred to the Commissioner, so that they can be decided by him quickly and without expense. That last part is confined to cases involving not more than £25, or a larger sum should both parties consent. I hope that that provision will enable disputes to be settled quickly and fairly by one who has very long experience in dealing with this kind of dispute.

Those are the main proposals contained in the Bill, and I hope and believe that if they commend themselves to Parliament they will be found to provide an effective remedy for most of the evils of which complaint has been made. I feel sure that they will be readily accepted and that effect will be given to them by all societies of good repute and good standing, and that, if so accepted, they will make for the security of the policy holders. I have only one thing to add. I see by the Notice of Motion on the Paper that my noble friend Lord Sydenham thinks it desirable to refer this Bill to a Select Committee. I hope he will consider that proposal again before he makes it. These matters have been treated with the greatest care by the Committee over which the noble and learned Lord, Lord Parmoor, presided. They have been discussed over and over again since that Committee reported, and if the whole matter is sent again to a Select Committee the effect will be to put an end to, or to endanger, the general assent with which this Bill is now received; it may lead to delay and possibly to the total loss of the Bill.

Of course, the Government are most ready and willing to consider any Amendment which may be proposed, but subject to that observation I rather hope that this Bill will be treated as being, in substance, an agreed Bill. Although it may not give to my noble friend all that he desires, I am sure it will be a great step forward in the direction in which he, like all of us, desires to go—namely, that of giving a great measure of protection to a class by whom protection is very sorely needed. I beg to move.

Moved, That the Bill be now read 2a. —(The Lord Chancellor.)

LORD SYDENHAM

My Lords, the past history of this Bill is a little remarkable. There had been previous Inquiries which led to considerable disclosures, but not to any form of action, and then the Committee of my noble and learned friend Lord Parmoor reported on the whole question of Industrial Assurance, most fully and completely, in February, 1920. Some of the revelations in that Report, which I am afraid was not very largely read, were perfectly shock- ing, and the unanimous verdict of the Committee was that:— The need is urgent, and, in the view of the Committee, legislation should be undertaken without delay. In July, 1020, I tried to draw attention to some of the more remarkable features in that Report, and I cited a number of individual cases of very great hardship to extremely poor people, who had lost the whole of their contributions in the form of premiums. I also tried to explain the system of war bonds policies, which had grown up and which appeared to me to be grossly improper, and of which the Government of that time did not seem to be aware, although it was in full operation.

Then I waited until March, 1921, when I begged the late Government to take action. The noble and learned Lord, Lord Shandon, spoke at great length on that occasion, and pressed very strongly for remedial measures on the lines of the Report of the Committee. At length a Bill materialised, and was read a first time in August, 1921. It was a very good Bill on the whole, but it needed a little strengthening in places. Lord Shandon praised it and said that in his opinion it carried out what he rightly called the moderate proposals of my noble and learned friend. Then this Bill was withdrawn, in order, it was said, that there should be full consultation with the companies and an agreed Bill arrived at.

A year and a half have elapsed since that time, and we now have this Bill. I have not yet had time to compare it fully with its predecessor and the Report of the noble and learned Lord and, moreover, I am afraid that it is a very difficult matter for a layman so ignorant of law as the late Lord Chancellor the other day accused me of being, to make the scientific comparison which is necessary in such a case. I will not repeat what I tried to say two and a half years ago, but I desire very briefly to draw your Lordships' attention to the extreme magnitude of the transactions which are covered by this Bill, and, consequently, the extraordinary importance of this Bill to a large number of our fellow countrymen. The existing policies in 1920, when Lord Parmoor's Committee reported, some of which were certainly illegal, amounted in all to £51,000,000. The classes to which this industrial assurance system applies were estimated by that Committee to number £35,000,000 people. In ten years in the case of a single company, the Refuge, 6,426,313 policies lapsed. That company proved a very poor refuge to the unfortunate people who put their money into it. The Committee stated, as I think the noble and learned Viscount has mentioned, that, in all, more than 5,000,000 policies lapse ordinarily in a single year.

These are enormous figures. It is very difficult for our minds to comprehend them. Of course, they do not mean clear gain to the companies, but they do mean dead loss to a very large number of poor people, and they must be stopped. On the other hand, these companies are very rich, and it was shown in the Report of Lord Parmoor that they derive large profits out of their industrial branches, which profits may be applied in order to enable them to give better terms to their other customers. In the year 1918 more than £25,000,000 was paid to these companies in premiums, and the income of the Prudential Company alone in 1920 considerably exceeded £28,000,000.

There is not the smallest doubt that the exploitation of poor people has been proceeding on a very large scale for a very long time. The policies, as I explained some time ago, are often such as would never be accepted by people with any knowledge of business. Only very ignorant persons could be persuaded to take out some policies that I have seen and examined. Of every shilling spent in premiums 6¾d. was said by Lord Par-moor's Committee to be returned as a benefit to the people. That is almost exactly the reverse of what happened under Mr. Lloyd George's famous insurance scheme. Under that scheme everybody was to get ninepence for four-pence; in this particular case what the poor people get is very nearly fourpence for ninepence. In fact, the Post Office Savings Bank offers a much better investment for people of that class, because, at all events, nothing that they put into it is ever lost. And in most cases—the cases of these lapses—it would be far better if those people had put their premiums into a stocking and kept them there. The industrial classes who insure themselves with these companies have no Press. Very few newspapers have taken up their cause, and the reasons are obvious. There is an old adage which requires little modification to make it suit modern requirements: "Sweet are the uses of advertisement." The Labour Party has never championed the cause of their comrades, or pointed out the hardships to which they have been subjected; and there are reasons also to account for that rather curious phenomenon.

I warmly congratulate the Government on having brought this very important matter to a head so shortly after taking office. I have humbly suggested that this Bill might be referred to a Select Committee for this reason. These very powerful, rich companies have been able to negotiate for a year and a half while this Bill was being framed. Their side of the case is perfectly well known, and has, no doubt, been most ably stated. That is quite right. But the Policy Holders' Association has never been heard at all, and unless it is heard I do not think we are quite in a position to understand their feelings and to grasp the full effect of the operation of this Bill when it comes into force.

The war bond proceedings, of which Lord Parmoor's Committee said that a controlling authority must have power to revise them, have never been looked into at all. I think it would be necessary to call two or three witnesses only on both sides to enable a Select Committee to form a strong and reasoned opinion upon this Bill. It is so complicated that I am doubtful whether most of the members of this House could judge it without some guidance of that kind; and I should be only too thankful to get a little evidence on certain points upon which I am in doubt. Of course, as the noble and learned Viscount on the Woolsack said, it would be, possible for us to introduce Amendments if we thought necessary, but it might. be very difficult for us to understand exactly what the effect of those Amendments would be upon the very large class of people who would be affected by them.

I believe that all the great companies are quite reasonable, and willing to make such changes as can be shown to be necessary. Some of them have already, I believe, made, of their own accord, changes of a most salutary character, and it may well be that, as the noble and learned Viscount rather hinted, they slipped quite naturally into methods which led to abuses—methods which they would not now defend—as the system grew to the huge dimensions which we now see. A Select Committee would at least give an opportunity to the policy holders to explain the special form of their grievances, and it would give the companies the power of objecting and protesting against any restrictions which they might think to be unnecessary. But the effect would be, I venture to think, that your Lordships' House would give another proof of the very deep interest it takes in the welfare of our working classes, and of its determination that everything possible should be done for their protection.

LORD PARMOOR

My Lords, I hope with the noble and learned Viscount on the Woolsack that it will not be thought necessary to refer this matter to a Select Committee. All the points to which the noble Lord, Lord Sydenham, has referred were gone into at great length before the Committee of which I had the honour to be Chairman, where the interests of the policy holders and of all other persons concerned, as well as of the large companies, were represented, and it was after a full hearing of all the evidence that could possibly be adduced on both sides—I think we took a whole autumn over the business—that we came to the conclusions which are to be found in our Report.

I have examined very carefully the terms of the Bill and compared them with the proposed reforms which we advocated in our Report, and I have not been able to find a single instance in which a reform which we suggested has not found its place in the present Bill. Of course, the Bill is a complicated one; it must be complicated in a matter of detail of this kind. But I can assure your Lordships, after a very careful comparison of the Report and this Bill, that every matter which we thought ought. to be altered in favour of the poor policy holder is included in this measure. I do not think that my noble friend Lord Sydenham would have any difficulty in formulating Amendments, if he so desired, to make any of those clauses stronger or more effective.

I should like to say one or two words, in addition, upon some matters which were so lucidly touched upon in the speech of the Lord Chancellor. It certainly was a revelation to me when I was Chairman of this Committee to find to what an enormous extent the principle of industrial assurance had been carried out among very poor pepole. The noble Viscount, as I understood him, said that at the time of the last report the amount collected in premiums was not less than £37,000,000.

THE LORD CHANCELLOR

That was in 1921.

LORD PARMOOR

In 1918, the last year for which the Committee had the figures before them, the amount collected was£25,000,000. That is a very large figure indeed; but the figure given by the noble and learned Viscount shows how this business has increased even since that date. It must be remembered that these huge sums are collected in amounts of one penny or twopence each from small householders and other people who effect insurances of this kind. At the time of our Inquiry the average payment perpolicy was only 2½d.Your Lordships will see what an enormous business it must be when premiums amounting to £37,000,000 are collected in sums averaging something like 2½d. per head.

As the noble and learned Viscount has pointed out, and as it appears from the definition—which is the definition the Committee suggested—this business depends on the collection of these small premiums from house to house, with the result, as we found, that an army of agents, numbering something like 70,000, was employed. The Committee desired, if possible, to introduce some better method of remuneration for these agents whether employed by the collecting societies or by the insurance companies; but we found that a new system was being introduced which we hoped might be effective. We thought that if we called attention to the abuses connected with collection we need not make further recommendations. No further recommendations are included in the Bill as it stands; but I desire to say most strongly that, in my opinion and, I think, in the opinion of the Committee, one of the reasons which led to the evils which have grown up in regard to industrial assurance and have caused the undue expenses incurred by collecting societies and insurance companies is the employment of too many of these agents, who can hardly find a livelihood owing to their competition one with another, and are apt to push very far indeed the inducements they hold out to those to whom industrial assurance appeals.

Not only are there these 70,000 collectors in the ordinary sense but the collectors themselves have been in the habit of employing special touts, if I may use the expression, in order that further policies may be taken out by those who have had what I may call very indefinite promises held out to them, but held out in an attractive manner. The result, I think, was not quite, though very nearly, what Lord Sydenham stated. Out of the £25,000,000 collected in small sums from people of the labouring class in 1918 in payment of insurance premiums,£11,000,000 went in expenses. In other words, 5¼d. out of every shilling and only 6¾d. enured to the benefit of the poor people taking out the policies. We had as members of out Committee two gentlemen of great experience: Mr. Robertson, who is the Chief Registrar of Friendly Societies, and Sir Alfred Watson, the Government Actuary, who has great experience in these matters. Both from the evidence we had before us and from the experience they could bring to bear, we were satisfied that there was a grossly extravagant expenditure in this industrial assurance business, and that there ought to be some far better guarantee, if possible, that the people who subscribed these small sums as premiums should have something like an adequate return if the policies fell due in their favour. This expenditure of £11,000,000 was altogether beyond what a business of this really justified.

There is one point to which I think the noble and learned Viscount did not call attention and to which I attach the greatest importance in connection with this Bill. At the present time collecting societies, who do a portion of the business, are under the jurisdiction of the Registrar of Friendly Societies, while the insurance societies are, as regards this business, under the Board of Trade. The result is that there is not only great overlapping but there is no official of high standing who really has this business with which we are dealing under his control and supervision. One of the most important provisions of the Bill is to bring all this industrial assurance business under one head—namely, the Industrial Assurance Commissioner who is, at the present time, the Chief Registrar of Friendly Societies. Not only is that a very great reform in a business of this kind, in which these small policy holders require protection, but it has enabled the powers of the Commissioner to be very largely enhanced.

Your Lordships will find throughout the provisions of this Bill that on very many points power is given to the Commissioner to see that the abuses of which our Report complains are not perpetuated. The noble Viscount on the Woolsack referred to one of them. In a huge business of this nature there are constant disputes, and the poor policy holder is hardly in a position to commence litigation of the ordinary kind against a rich company. The Bill provides that in small matters not exceeding £25 he can ask the Commissioner to settle a dispute. Not only in industrial insurance but in many other directions the position of a poor man against a rich company is often a very difficult one in matters of litigation, and I thoroughly approve of the proposal in this Bill under which such disputes can be and, I hope, in a large number of cases will be decided not through the expensive procedure of the Courts, but in a friendly way by the Commissioner himself.

With regard to the security of the policy holders, that is a matter on which the Committee laid great weight, and, as the noble Viscount has pointed out, that matter is left in the Bill in the way in which the Committee suggested it should be done. At the present time any seven persons, without any security and in many cases without any character, can constitute themselves a collecting society. Being a collecting society, they can start industrial insurance. Under the collection system they can persuade people to insure with them, and those who insure with them have no security whatever for payment in respect of their policies if any payments fall due, because those seven people are a shifting body, constantly transferring their powers to new bodies, and the policy holders have no security that they will ever be paid. The proposal in the Bill is a very simple one. An industrial insurance society at the present time cannot begin business without depositing a security of £20,000. That is a substantial security; and the proposal which the Committee made has been adopted, that a collecting society shall not be able to begin business of this kind without a similar deposit of £20,000 —a security which ought to have been provided long ago. That is just one of those matters which we pointed out ought to be set right without delay. I give every credit to the Government for introducing a proposal of that kind.

There is only one other point about which I should like to say a word or two, and that is the question of lapses. Nothing, I think, struck the Committee more than the extraordinary number of lapses which took place in this industrial insurance. We took the case of one company—the Refuge Company. That is not an exceptional company but one which, might be taken as a test of the whole. It was found that in the ten years from 1909 to 1918, out of somewhat over 9,000,000 policies over 6,000,000 had lapsed. "Lapsed" means that the policy holders—those who had taken out the policies and made payments—lost all possibility of getting any benefit from their assurance. The number of lapses in each year was, in the aggregate, enormous. As Lord Sydenham pointed out, there were 5,000,000 policies lapsing in a particular year.

What is the remedy which this Bill proposes? All the members of the Committee thought that this question was one of extreme importance. First of all, you cannot have a lapse at all without a proper notice is sent to the person insured. In the old days a person who had insured perhaps for a considerable number of years suddenly found his entire benefit taken away from him because, under some default of which he was not cognisant, the policy had lapsed. The first provision made here is that notice must be given to him before his policy lapses in order that he may have the chance to make the necessary payments to put his policy in order. I need not go into detail. The provision is that the person who has subscribed to a policy is entitled either to what is called a surrender value—that is a sum of money ascertained on a statutory basis contained in the Bill itself—which gives him something like 75 per cent. of the premium that he has paid, or to what they call a free paid-up policy—that is a new or substituted policy, giving him 75 per cent. of the advantages which the old policy had given him. Surely that is a most important reform. No one will recognise more than my noble friend Lord Sydenham that of all the complaints made before us the complaint which was most dwelt upon was that these small policy holders, by the process of lapse, which is very often not their own fault at all, lost the entire benefit of their policy, although they had paid premiums for a number of years. This Bill guarantees against that. First of all, it gives them notice before the lapse can take place; and, secondly, it gives them either a surrender value or a free paid-up policy in the place of the lapsed policy.

I think that in every respect this Bill should be supported. We do not make any allegations in our Report against particular companies. The Prudential Company was very much mentioned. The business of the Prudential Company appeared to be carried on in a proper manner. We had officials giving evidence about the Prudential Company on more than one occasion, and it appeared that it was a very profitable business. Their capital was £1,000,000. They were paying dividends of £600,000 a year, and after the war period they were paying what is practically the same. Therefore I do not think it is the least likely that any provisions for the protection of the poor policy holders are likely substantially to affect a business of that kind. But whether that is so or not, no one could have been more impressed than the Committee were with the abuses of the present system, and with the desirability of introducing the very reforms that are contained in this Bill. I hope, therefore, that the Bill will go forward and become an Act at the earliest possible moment, and that your Lordships will not. think it necessary to refer it to a Select Committee.

LORD ASRWITH

My Lords, the speech of the noble and learned Lord is a very strong argument why the suggestion to refer the Bill to a Select Committee should not be adopted. I trust that it may not be referred to a Select Committee. This Bill is a great improvement on the Bill which was introduced by my noble friend Lord Onslow in August, 1921. The arbitrary standard of limitation of expenses is got rid of, and the placing of the industrial insurance business under a Government Department, or under bureaucratic control, is also got rid of. The noble Lord who asked for a Select Committee rather suggested that he had had no time for any scientific examination of the Bill. Although the Bill contains 45 clauses, those who have followed the question of insurance must be familiar with those matters that now appear in this Bill. They are questions that have been debated for years. They were examined before the Committee over which the noble and learned Lord presided. They have been examined by experts and by officials and directors of the insurance companies for months. Last autumn these bodies met together and Came to a unanimous report advocating principles which are all contained in this Bill.

The noble Lord said the policy holders were not considered sufficiently, but in the suggestions of the assurance companies I find it stated that "the pernicious practice of transfer of individual policies from one society to another involving the holders of such policies in many cases, in considerable financial loss shall be prevented, by strengthening the law and by imposing obligations on the person or institution who seeks to obtain a transfer of such a policy." That is provided for in this Bill. Again, the companies agree that "equitable provision should be made to meet the case and protect the legitimate interests of those policy holders who have paid premiums for a considerable number of years, and who are unable to continue their payments." That also is provided for in the Bill. Those are the provisions which specially protect the policy holders.

We have also to consider those many persons who are employed by the insurance companies, and also the business of the insurance companies themselves. It is a mistake to suppose that the lapsing of any of these policies is really an advantage to these insurance companies. It is much more expensive to them to have to spend boot leather and trouble in trying to collect under these policies than it would be if the money were willingly and duly paid. The companies want the money and not to have to spend money in collecting it. The Bill is supported by those who are in the business. They are anxious that the business should be allowed to go on without this hanging over them for years and years, and that the abuses which have been brought forward should be corrected. I have the strongest assurance front the representatives of seventeen different classes of assurance companies who employ officials that the officials are entirely agreed with the management that the assurance business should be allowed to be carried on without the restrictions or further delay which sending this Bill to a Select Committee would mean.

LORD SYDENHAM

My Lords, I am most anxious that there should be no unnecessary delay in the passing of this Bill. The noble and learned Lord, who understands the whole question so well, as Chairman of the Committee has assured the House that every provision he wished to make has been carried out in the Bill, and I therefore do not propose to move that the Bill should be sent to a Select Committee.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

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