§ [Nos. 46 to 48]
§ Page 33, line 17, leave out "section" and insert "subsection (1) above"
Page 33, line 18, at end insert—
(2A) Where a person in the course of carrying on any business or profession issues any such invitation as is mentioned in subsection (1)(a) above in relation to an insurance company which is not an authorised insurer in respect of the contract in question he shall, when issuing the invitation, inform the person to whom it is issued that the company is not such an insurer as aforesaid.
In this subsection 'authorised insurer', in relation to a contract of any description, means a person entitled to carry on in Great Britain insurance business of a class comprising the effecting of contracts of that description.
§ Page 33, line 19, leave out 'this section' and insert "subsection (1) above or who contravenes subsection (2A) above".
§ THE EARL OF LIMERICK
My Lords, I beg to move that this House doth not agree with the Commons in their Amendments Nos. 46, 47, and 48 but proposeth an Amendment in lieu. I think it would be convenient to discuss Amendments Nos. 46, 47 and 48 together. I shall be explaining the reason for this procedure later in my remarks. In explaining the purpose of the Amendments, I would first draw the attention of your Lordships to recommendation (xiii) of the Scott Report, and to paragraphs 217 and 218 of that Report, on page 62. The Scott Committee recommended that it should be an offence, unless the prior approval of the Department had been obtained, to sell policies issued by companies not authorised to carry on insurance business here. During the earlier proceedings in your Lordships' House, there was more than one reference to the international nature of insurance business. Our balance of payments derives substantial benefits from foreign business placed in this country. In the light of these benefits and of our traditionally liberal international commercial policy, we are not inclined to go as far as the Scott Committee recommended. However, as matters stand, the policyholder in Great Britain may not be 1590 aware that he is dealing with an insurance company which is not supervised in this country. The Government do not want to impair the right of United Kingdom residents to purchase insurance abroad if they wish—subject, of course, to exchange control considerations—but we think it desirable that they do so with a proper appreciation of the risk which they might be running.
As the Amendments indicate, we propose to do this by requiring a person who issues an invitation in relation to an insurer not authorised to carry on insurance in Great Britain to so inform the potential policyholder. We propose to apply this to all classes of insurance, not only linked life assurance. This will impose a useful safeguard in the interests of the potential policyholder, but will not deny him a freedom of choice which, we think, he should have a right to exercise, just as policyholders in other countries may, sensibly, elect to purchase British insurance.
It became apparent in the consideration of the Bill in another place that the operation of subsection (1) would present difficulties if provision were not made for regulations to deal with the manner and timing of the statement to be made by the intermediary as well as the information it should contain as to the prescribed connection. At a much later stage—too late, in fact, for another Amendment to be tabled in the other House—it became apparent that similar difficulties could arise in the operation of the additional subsection which your Lordships have before you as Amendment No. 47. Accordingly, that new subsection has been redrafted in the Amendment proposed in lieu so as to make it subject to regulations, and the redrafted subsection has been so placed as to make subsection (2) applicable to it also.
It is doubtless unusual to make such a proposal at this stage of a Bill's passage, and in so doing I should like to make two things clear. The first is that the alterations now proposed to the Commons Amendments relate to a subject which was discussed at two stages in another place, the principle of which was not in dispute, so that we are looking at a modification of the mechanics rather than the principle. The second thing is that I have reason to believe that the substitution of the proposed Amendment 1591 for Amendments Nos. 46 to 48 is acceptable both to Mr. Nicholas Edwards, who first raised the matter, and to the official Opposition in another place, so that no procedural difficulties are anticipated such as to delay the coming into force of the Bill. With that explanation, I beg to move that this House (doth not agree with the Commons in their Amendments Nos. 46, 47 and 48, but proposeth in lieu the Amendment as printed on the Paper.
§ Moved, That this House doth not agree with the Commons in their Amendments Nos. 46 to 48, but proposeth the following Amendment in lieu:
Page 33, line 16, at end insert—
(1A) Regulations may be made for requiring any person who, in the course of carrying on any business or profession, issues any such invitation as is mentioned in subsection (1)(a) above in relation to an insurance company which is not an authorised insurer in respect of the contract in question to inform the person to whom the invitation is issued that the company is not such an insurer as aforesaid.
In this subsection "authorised insurer", in relation to a contract of any description, means a person entitled to carry on in Great Britain insurance business of a class comprising the effecting of contracts of that description.".—(The Earl of Limerick.)
§ LORD DIAMOND
My Lords, I am in a little difficulty. On the one hand, I am anxious to save your Lordships' time and therefore not to intervene to say things which are not essential to the debate. On the other hand, I am conscious of the fact that the noble Earl has to speak non-stop and will shortly come to a standstill unless he gets a little rest. It seemed appropriate, therefore, to choose this occasion to allow him a breather, and to say that those of us who have carefully followed the proceedings both in this House and in another place will have no hesitation in accepting what the noble Earl has proposed; namely, the substitution for the Commons Amendments of an improved Amendment. They will do so the more readily if they have observed that those in another place would have been likely to prefer this course had they been (how shall I put it?) even more fully and more accurately informed in debate by the Minister concerned than appears from Hansard. So I have no hesitation in subscribing to what the noble Earl has said as to the likelihood of the acceptability 1592 of the Lords Amendment in another place, and, indeed, in assuring him of its acceptability here.