§ [No. 40]
§ After Clause 19, insert the following new clause:
§ Special provision for persons insured under contracts of insurance not evidenced by policies.
§ (".—(1) Where it appears to the Board—
- (a) that a person is a person insured under a contract of insurance with an authorised insurance company which is not evidenced by any policy; and
- (b) that if a policy evidencing the contract had been issued the person in question would have been eligible as a policyholder in respect of that policy for the assistance or protection of the Board under any provision of sections 6 to 16 above (hereafter in this section referred to as "the relevant provision");
§ (2) For the purposes of section (General business expenditure and long term business expenditure) above any expenditure of the Board under this section shall be treated as expenditure under the relevant provision.")
§ Lord BESWICKMy Lords, this clause is designed to enable the Board to provide protection for people who have entered into a contract of insurance with a company, but who have not been issued with a policy. The Bill is drafted to apply to policies evidencing a contract of insurance. However, it is common practice for insurance companies to issue a policy some little time after the contract which it evidences has been entered into. People frequently present a proposal form to the office of an insurance company and are told that their insurance cover starts immediately. This may well create a contract of insurance even though they do not receive their policy for some weeks. A liquidator would be bound to accept such a contract as the basis of a claim in a winding-up, and it is clearly right that people in such cases should be eligible for protection under the Bill in respect of it. This is achieved by the new clause, which I beg to move.
§ Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Beswick.)