Sitting of 6 March 1923

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.

AGRICULTURAL HOLDINGS (SCOTLAND) BILL. [H.L.]
THE SECRETARY FOR SCOTLAND (VISCOUNT NOVAR): My Lords, I beg leave to introduce a Bill to consolidate the enactments relating to agricultural holdings in Scotland, and to move that it be now read a first time.
Moved, That the Bill be now read 1a.—(Viscount Novar.)
On Question, Bill read 1a; and to be printed.

INDUSTRIAL ASSURANCE BILL. [H.L.]
Amendments reported (according to Order).
Clause 1 (Industrial assurance business):
THE LORD CHANCELLOR (VISCOUNT CAVE)THE LORD CHANCELLOR (VISCOUNT CAVE) moved, at the end of the clause, to insert as a new subsection:—
"(3) When a society or company has ceased to effect industrial assurances it shall, so long as it continues liable on the assurances previously effected, be deemed to carry on industrial assurance business."
The noble Viscount said: My Lords, the point has arisen that certain companies while no longer issuing policies are continuing to receive premiums, and the suggestion might be made that they are not within the scope of the Bill. This Amendment is designed to bring them into the Bill.
Amendment moved—
Page 2, line 31, at end insert the said new subsection.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 17:
Provisions as to valuations.
(3) If in the case of a collecting society or industrial assurance company a valuation discloses a deficiency the Commissioner may if after investigation he is satisfied that the society or company should cease to carry on
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industrial assurance business, award that the society be dissolved and its affairs wound up, or, in the case of a company, present a petition to the court for the winding-up of the company:
Provided that the Commissioner shall not during the first five years after the passing of this Act take action under this subsection if he is satisfied that substantial measures are being taken to improve the financial condition a the society or company.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (3), after "valuation," to insert "whether made before or after the passing of this Act." The noble Viscount said: My Lords, this is a purely drafting Amendment.
Amendment moved—
Page 15, line 18, after ("valuation") insert ("whether made before or after the pawing of this Act").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 20:
Forms of policies.
20.—(1) A policy of industrial assurance issued after the commencement of this Act shall set out the provisions of this Act mentioned in the Third Schedule to this Act, such of those provisions as are contained in Part II of that Schedule being printed in distinctive type, and in the case of a policy on the life of a child under ten years of age shall also set out in distinctive type a statement of the effect of Section sixty-two of the Friendly Societies Act, 1896:
Provided that the policy may, if the Commissioner consents, in lieu of setting out the said provisions of this Act, contain a statement which, in the opinion of the Commissioner, sufficiently sets forth the effect of those provisions.
LORD SHANDON LORD SHANDON moved, in subsection (1), immediately before the proviso, to insert
"and in all cases there shall be set forth in plain language, clear bold type, and coloured ink, on the face of the policy, and in a conspicuous place, the effect of the provisions contained in Part II of the Schedule aforesaid, and the necessity of keeping the society at all times informed of the actual address of the assured."
The noble Lord said: My Lords, although, during the Committee stage of the Bill, the House was good enough to listen to the points which I intended to raise later, some of your Lordships may not have been present, and I should like very shortly to explain the nature of this Amendment and also of the other Amendments which stand in my name upon the

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Paper. Lord Parmoor's Commission reported most strongly with regard to one defect in the law relating to industrial insurance, especially in connection with collecting societies—namely, that a number of poor people and members of the working classes were induced to effect policies and pay their premiums for a large number of weeks, or even months, or years, while not having the facilities that other people have to register their changes of address with the Post Office. As a matter of practice they do not do so, even though they may come technically within the Post Office rules. The practical result is that, though these changes of address are as frequent as ever at the present time, as many people have to find employment far from their original habitat, a company serves a notice of for feiture under the forfeiture sections of the Act simply by sending a letter to the last known address of the insured person. That may be perfectly right in theory, if you are dealing with large policies of insurance, because the insured would look after this point, but these unfortunate people have not sufficient knowledge to protect themselves, or even—and this is a matter of absolute fact—to translate the technical terms of the notice into popular language, and to realise that what it really says is this: "If you do not take some steps to pay up, or if you do not take some steps to communicate with the company and demand a paid-up policy in lieu of this one, you lose all your rights."
The number of lapsed policies is almost incredible. I think it amounts to something like five millions in a year, representing large sums of money in the aggregate, and a loss of a very serious nature to poor people. No doubt there is great difficulty in dealing practically with this point, but in my Amendment I suggest to your Lordships what seems to me to be a practical way of dealing with it. The Bill provides that the policies are to have printed on them the sections relating to forfeiture. Incidentally I may say that there is a slip in one of the schedules, by which the most important section relating to forfeiture—namely, the one which provided that notice should be served at the insured person's house—is placed in the wrong part of the schedule. But that point arises later. Probably each of your Lordships has a policy—I certainly have
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—of which the important condition is printed right across the front of the policy. In another there is a label, with printed matter in red ink, attached to the policy. What I propose is simply this—that on the face of these small policies there should be printed, not a mere technical reference to the question of forfeiture, but in popular language, in clear type and in distinctive ink, a notice of what will happen if these poor people forget to pay the premiums or forget to communicate with the society.
My Amendment says:—
"in all cases there shall be set forth in plain language"—
I say "plain language," because it is no use setting the thing out in technical language, and the matter is not really technical but simply one of giving a plain warning: "You will lose your policy"—
"clear bold type, and coloured ink, on the face of the policy, and in a conspicuous place, the effect of the provisions contained in Part II of the Schedule aforesaid, and the necessity of keeping the society at all times informed of the actual address of the assured."
I do not pretend that that will work a complete cure of the evil, but it will certainly do something to lessen the risk of forfeiture of these policies. No company could object to it. The principle of my Amendment is contained in the Bill itself, but the Bill proposes that the sections dealing with forfeiture shall be printed on the back of the policy only and not be set forth on the face of the policy in a conspicuous manner. In our own policies we have a number of conditions set forth which we may or may not be able to understand, but I am certain that you would not get one working man or one working woman out of a thousand who would understand technical references to the effect of forfeiture on the back of a policy.
I have never suggested that the great bulk of the companies are not honest. I think they are honest, and that they serve a great and useful purpose, but they cannot complain if necessary precautions are taken against the forfeiture of these policies. They have agreed to the principle and they can scarcely object, and I hardly think they will object, to the method of doing it. My Amendment simply goes a little further, and proposes that there shall be set out

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in plain language on the face of the policy, so that the common or garden workman can understand, the fact that he will lose his policy altogether if he neither pays his premiums nor leaves his address with the company.
Amendment moved—
Page 17, line 33, at end insert ("and in all cases there shall be set forth in plain language, clear bold type, and coloured ink, on the face of the policy, and in a conspicuous place, the effect of the provisions contained in Part II of the Schedule aforesaid, and the necessity of keeping the society at all times informed of the actual address of the assured").—(Lord Shandon.)
LORD SYDENHAM: My Lords, this is really a very small matter, but I maintain that it is an important matter. It simply means printing something on the face of a, policy, and it is important because it might have the effect, in a great many cases, of preventing a large number of very poor persons from losing entirely their hard-earned money. As the noble and learned Lord has said, no company could object to this, and I press upon the Lord Chancellor that he will accept this simple and necessary Amendment.
THE LORD CHANCELLOR: My Lords, I quite agree with the noble and learned Lord who moved the Amendment that the question of the lapse of policies is of great importance, and we have done our best in the Bill to deal with it fairly and reasonably. I am afraid, however, that I could not accept this particular Amendment. The hill provides that certain clauses shall be set out on the back of every policy, and that the most important of them, those which provide for lapse and forfeiture, shall be set out in distinctive type. The noble and learned Lord wants to go further, and to say that they shall be paraphrased, practically, in what he calls plain language, and shall be printed in coloured ink. For myself I do not believe in coloured ink. My attention is more readily attracted by bold type in black ink, and I think that that view is shared by many people. Nor do I think it fair to ask companies to use several kinds of ink on millions of policies. But whether it be fair or not, I do not think it is desirable. These clauses are in very plain language, and they state exactly the rights of these policy holders. If you
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leave it to a society to paraphrase them as it pleases, and to use what it calls plain language, you may perhaps shorten the clauses but you will make them less clear, and probably less accurate, and I would rather not embark upon that.
In effect, however, I think the noble and learned Lord will get what he wants under the proviso to Clause 20, subsection (1), of the Bill, which provides that if the Commissioner consents, the policy may contain a statement which, in the opinion of the Commissioner, effectively sets forth the effect of the provisions. I am advised that that is so convenient that nearly all the companies will accept that condition, and when the statement conies to be considered by the Commissioner I am sure he will do his best to see that the conditions are clearly stated. I hope that will satisfy the noble and learned Lord. I should like to meet him, but I think that his particular method would not be to the advantage of the policy holders.
LORD SHANDON: I regret that the noble and learned Viscount does not see his way to accept my Amendment. I still think it might be a feasible method, but in the circumstances it is of no use my pressing it. Accordingly I ask leave to withdraw.
Amendment, by leave, withdrawn.
Clause 23:
Provisions as to forfeited policies.
(5) This section shall not apply in the case of a forfeiture occurring before the expiration of five years after the passing of this Act.
LORD SHANDON LORD SHANDON moved, in subsection (5), to substitute "three years" for "five years." The noble Lord said: The effect of this proposal, I respectfully submit to your Lordships, would tend to greater fairness in this matter of the policies. Subsection (5) says that the section shall not apply in the case of a forfeiture occurring before the expiration of five years after the passing of this Act. I recognise that in the case of certain small companies you cannot start immediately after the Bill becomes law, because they must have some opportunity of creating a reserve against these demands. The stronger companies

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probably might not be affected, but certainly I think the weaker companies would be.
Then comes the question of the number of years. It is true that five years was suggested by the Commission provided over by Lord Parmoor, but I gather, from what Lord Parmoor said in your Lordships' House on the Second Reading, that subsequent consideration has satisfied him that probably five years was not, for the purpose of actuarial calculation, the proper period. I could not pretend to have sufficient, or indeed any, actuarial knowledge on the subject, and if the Lord Chancellor cannot see his way, on the advice of the actuaries, to accept my Amendment, which is to substitute three years for five, I should not, of course, press the proposal. From the discussion which took place I gathered that the Lord Chancellor would consult the Government actuaries and see if it was possible to make the alteration which I now propose.
Amendment moved—
Page 20, line 22, leave out ("five") and insert ("three").—(Lord Shandon.)
LORD ASKWITH: My Lords, the noble and learned Lord, on the last stage of the Bill, alluded to certain Amendments which he was going to propose, but I do not think that he referred to this particular one. The alteration which he proposes would go, in point of fact, to the very root of this Bill as regards some of these smaller companies, and I hope that your Lordships will not accede to it. The reserves of the companies must come from somewhere, and in the present days of competition, and having regard to the fact that since 1870 £20,000 has to be deposited, it is extremely difficult for these small companies to make headway. Their reserves are the securities on which policies are based, and until the reserves are established the payments have to come either out of wages—and I do not suppose the noble and learned Lord will wish that the wages of the collectors, some of whom are not too well paid now, should be reduced—or out of current account, or out of supposed reserves which do not exist. There are the big insurance companies at the present time who give these free policies, and they would not be hit by the noble and learned Lord's Amendment; there are other companies who make a general practice of doing so; and others
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who, for the very reason that they do not give free policies, give better conditions to those who are insured. If a claim were made upon some of these smaller companies that they should grant these policies in the way that the noble and learned Lord suggests before the companies are regularised and fair time for standardisation is given—for which five years is really almost too small a period—then very serious results might happen.
Suppose that these new obligations upon companies had, in early days, been put upon such a company as the Prudential. At a meeting the other day, the present position of the Prudential was alluded to, and mention was made of what the condition of the Prudential was in 1863. In that year there had been premiums of £60,000 and the claims paid were £24,000, investments £11,000, cash at the bank £3,500. But, by piling up reserves and by extending their business, their premiums in this present year have been £24,817,000, their claims paid have been £13,000,000, and their investments have been £146,000,000. Supposing the Prudential, which has been of such great advantage to this country and to many policy holders, had been knocked on the head by having claims put upon it before it had regularised its procedure, then the most serious results would have ensued. Some companies are in the same position as the Co-operative Insurance Companies Society, which only recently had to £35,000 out of general account into its reserve account in order to keep it stable. And it is found, by examination of actuaries, that if persons invested in a society of that kind from the age of eleven to the age of thirty-three—ages which are very usual in respect of policies—the society would not, under four years, be afforded any surplus from which a reserve could be created.
This Amendment would do a most disproportionate amount of harm. It must be remembered that a close consultation has taken place between the representatives of all the big companies, the small companies, the insurance officials, and the Government experts. In view of this, and in view of the arrangement they have reached that five years is the proper number of years in which some regularisation of stability could be obtained, I do not think the terms of the Bill should be altered in this respect.
LORD SYDENHAM: My Lords, compromise is a very beautiful thing, and we, as a people, are supposed to have a very special affection for it. The effect of this Amendment would only be to give the benefit of a, particular clause of this Bill to a number of very poor people two years earlier than is now proposed by the Bill. I understand that the actuaries consider that three years would be sufficient to produce the reserve which is required, and in my humble opinion it would be quite sufficient. I beg the noble and learned Viscount on the Woolsack to make this one small compromise.
LORD PARMOOR: My Lords, when this matter was in Committee I brought forward a similar Amendment to that which has now been proposed by Lord Shandon. I stated then, however, that it was a matter for actuarial computation, and, as the noble and learned Viscount on the Woolsack pointed out, the period of five years was the period which was proposed by the Committee over which I had the honour to preside. Since that time I have had the advantage of being brought into communication with the Government Actuary, through the courtesy of the noble and learned Viscount. I am satisfied that it would not be right to substitute three years for five, and that it is necessary to maintain five years in order that there may be perfect security as regards the policy holders and the assured.
One has to remember that in this clause we are making a compulsory change in the terms of the contract. That is to say, we are introducing surrender value, or the free paid-up policy, in cases of lapse, to which advantage the assured at the present time has no claim. And therefore, though I should very much like to see three years in place of five, I do not think it could possibly be done, having regard to security. It certainly would not affect a company like the Prudential, because, whatever their obligations may be, they always provided a surrender value or a free paid-up policy in the case of these lapses. I wish to say publicly, as is stated in our Report, that not only had we no fault to find with the Prudential Company, but we thought that in this respect they had acted generously towards the assured who had taken out policies with that great society.
THE LORD CHANCELLOR: My Lords, I regret I cannot accept this Amendment. As the House knows, we are doing rather a strong thing. In the case of policies issued without any provision that in the event of the assured being unable to pay the premium he should be entitled to a paid-up policy representing the surrender value, we are inserting a provision to that effect. That is a strong thing to do in respect of a large number of existing and pending contracts, but I think it is a right thing to do, subject to this, that you must give the insurance company a fair chance of complying with the provision. When the House was in Committee on the Bill I promised my noble and learned friend that I would discuss the matter with the Government expert and see whether we could meet him on this point. I have done so, and I am very definitely advised that it cannot be done; that if you insist on these reserves being set aside for three years, instead of five, you may drive many of these societies into insolvency. I do not think that is either a fair thing to do, or in the interests of the shareholders of the different societies. Five years would appear to be the proper period, and I hope that your Lordships will agree to allow the clause to remain as drafted.
LORD SHANDON: My Lords, I do not press the Amendment if it is the view of the actuaries that it cannot be carried out.
Amendment, by leave, withdrawn.
Clause 25:
Transfers from one society or company to another.
25.—(1) A member of or person assured with a collecting society or industrial assurance company shall not, except in the case of—

(a) as respects a collecting society, an amalgamation transfer of engagements or conversion into a company under the Friendly Societies Act, 1896, or this Act; or

(b) as respects an industrial assurance company, an amalgamation or transfer of business under the Assurance Companies Act, 1909, or this Act.

be transferred from the society or company in which he was so assured so as to become or be made a member of or be assured with any other such society or company without his written consent, or, in the case of an infant, without the like consent of his parent or other guardian.
(2) Such consent as aforesaid shall be in the prescribed form and shall have annexed thereto a document in the prescribed form to be furnished by the society or company to which the transfer is to be made setting out the terms of the existing policy, and the terms of the policy to which the assured will become entitled on transfer and the consideration (if any) which has been or is to be paid for the transfer and the person to whom such consideration has been or will be paid; and no such consent shall be valid unless it is witnessed by a justice of the peace whose duty it shall be to satisfy himself that the member or person giving the consent understands the nature and effect of the transaction.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of subsection (1), to insert "and any society or company and any collector or other officer of any society or company concerned in such a transfer shall, if the provisions of this section are not complied with, be deemed to have contravened the provisions of this Act"; and to omit from subsection (2) all words after "will be paid." The noble and learned Viscount said: My Lords, there are two Amendments to Clause 25 standing in my name on the Paper, and perhaps your Lordships will consider them together, as they follow one another. Clause 25 provides that a policyholder in a collecting society or industrial assurance company shall not be transferred from one society or company to another without his consent. That may seem to be a somewhat unnecessary provision against something which could not possibly happen, but it is done every day. Many of these policies are simply handed over by an old society to a new one as the agent is transferred from one employment to another, and it seems only right that the written consent of the holder should be required in every case.
The Bill also provides that the consent shall not be valid unless it is witnessed by a justice of the peace who shall explain the matter to the assured person. It has been suggested to me that that is not an altogether desirable provision because it imposes a very heavy burden upon justices of the peace, and it might deter assured persons from giving their consent. I promised Lord Parmoor, who raised the point, that I would look into the matter and, having done so, I am satisfied that he was right and that although this clause follows the Report of the Committee his second thought is
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better and that those words might well go out. That is the object of my second Amendment to this clause. At the same time, I think the difficulty would be better met if the words of my first Amendment were also added to the clause. That Amendment makes it an offence to carry through a transfer without consent, and I think that might well take the place of the present words and, perhaps, would be better. I beg to move.
Amendments moved—
Page 21, line 22, after ("guardian") insert the said words.
line 31, leave out from ("paid;") to the end of subsection (2).—(The Lord Chancellor.)
LORD PARMOOR: I am very much obliged to the noble and learned Viscount for moving these Amendments, which I think greatly improve the Bill.
On Question, Amendments agreed to.
Clause 27:
Policies to which 4&5 Geo. 5 c. 78 applies.
(3) Every collecting society and industrial assurance company shall within three months after the passing of this Act publish by advertisement and otherwise as the Commissioner may approve, notice of the rights under this section of the owners of policies to which the said Act applied.
THE LORD CHANCELLOR: My Lords, I beg to move the Amendment in sub-section (3) which stands in my name.
Amendment moved—
Page 22, line 31, leave out ("by advertisement and otherwise") and insert ("in such mariner").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 32:
Disabilities of collectors, etc.
32.—(1) A collector of a collecting society or industrial assurance company shall not be a member of the committee of management, or in the case of a company of the board of directors, or hold any other office in the society or company except that of superintending, collectors within a specified area.
(2) A collector shall not be present at any meeting of the society or company.
LORD ASRWITH LORD ASRWITH had on the Paper two Amendments to subsection (2)—namely, to substitute "may" for "shall not," and to insert at the end "but shall not vote at or take any part in the proceed-

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ings of any such meeting." The noble Lord said: My Lords, the subsection at present provides that a collector shall not be present at any meeting of the society or company. I suggest that it shall be altered so as to read as follows:
"A collector may be present at any meeting of the company or society but shall not vote at or take any part in the proceedings of any such meeting."
This clause has excited a good deal of feeling. I fancy it was put into the Bill because it was said that at the meetings of certain companies, where I presume the chairman had not sufficient control, the collectors exercised undue influence upon some of the delegates, or the persons who were concerned in the meeting. That is a matter rather of internal organisation and can only be said to be the case, I think, in a very small number of societies. It was alluded to before Lord Parmoor's Committee. If the clause stands as drafted a collector who was also a shareholder would be forbidden to exercise one of the most ordinary rights that a shareholder possesses, which is not a very good precedent to introduce in regard to the rights of shareholders. It may be said that the collector could appear by proxy, but that is not nearly so satisfactory as being present in person. If the collectors were present they would be able to hear what was said about the business and would take an interest in the proceedings of the company or society with far more active minds than if they were arbitrarily excluded.
In these days, when we hear so much about the necessity of giving working men more interest in the business in which they are concerned; when joint boards are being set up in industry after industry and there is talk of trying to get rid of the class war by uniting all classes in the business in which they are engaged, I doubt whether much progress would be made in that direction by the decision that collectors should not be present at the meetings of the companies in which they are actively concerned. By their presence they become more interested in the company's work without doing any material harm, except in a very few cases. I suggest, particularly in view of the feeling that has been excited among the collectors, that it would be a desirable thing to allow them to be
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present, even though they are prevented from voting or speaking at the meetings in question. I beg to move.
Amendments moved—
Page 25, line 34, leave out ("shall not") and insert ("may").
Page 25,line 35, after ("company") insert ("but shall not vote at or take any part in the proceedings of any such meeting").—(Lord Askwith.)
LORD SHANDON: My Lords, this matter, of course, is one entirely for the noble and learned Viscount on the Woolsack, but I hope that the Government will not accept this Amendment. It merely seeks on the face of it to insert the innocent word "may" in place of the words "shall not." It is very much like leaving out "not" in a Commandment. Following the lines of the Report of Lord Parmoor's Committee, Clause 32 provides that—
"A collector of a collecting society or industrial assurance company shall not be a member of the committee of management, or in the case of a company of the board of directors, or hold any office in the society or company except that of superintending collectors within a specified area."
I gather that a great deal of evidence was given before the Committee as to the necessity of keeping the collectors out of these positions, and the Bill contains a provision to that effect. Most people, even those who, like myself, have not one particle of prejudice against these societies, thought that it was a most valuable provision. By the insertion of the word "may" instead of "shall not" you positively enact that the collector of a collecting society may be a member; that is to say, you provide in an Act of Parliament as a thing that might be done, the very thing that the Committee most strongly reported against.
THE LORD CHANCELLOR: My Lords, in regard to this Amendment, I would point out that it provided by the existing Acts that a collector shall not take part in any proceedings. The Committee recommended that the law should go further, and prohibit collectors from being present at meetings, and that is the effect of the clause as it stands. It is difficult to see why a collector, who can neither vote nor speak, should wish to be present, but I am told that it does happen in many of the societies that the collectors who, of course, are persons of

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influence with the members, come into the room and discuss questions with the members present, and use their influence with them in regard to the questions voted upon. The Committee thought that undesirable, and recommended that we should go a little further than the existing Acts, and provide that persons who cannot speak should also not claim to be present at the proceedings. That is the whole effect of the clause, and I hope that my noble friend will not press his Amendment.
LORD ASKWITH: My Lords, in view of the learned Lord Chancellor's statement I do not propose to press the Amendment here, but I think that probably something more will be heard of the suggestion.
Amendments, by leave, withdrawn.
Third Schedule:

THIRD SCHEDULE:
Provisions of Act to be set out in policies.

PART II.
Section 22. Notice before forfeiture.
Section 23. Provisions as to forfeited policies.
LORD SHANDON LORD SHANDON moved, at the end of the Third Schedule, to insert "Section 40. Notices." The noble Lord said: My Lords, this Amendment is one that perhaps I may hope, with confidence, the Lord Chancellor will see his way to accept. The effect of it is this. The principle in the Bill is that notice may be given by printing in bold type the forfeiture condition, but the principal forfeiture condition is Section 40, which provides for the notice, and is really the most important thing in connection with this question of forfeiture. I suggest that it must have been left out by mistake from Part II of the Schedule. Taking the Schedule with the clause, Part I provides for the notice to be printed, but it would only be printed with the general clauses, whereas I contend that it ought to be printed in bold type with the particular clauses, 22 and 23. Clause 22 informs the man that his policy is liable to forfeiture, and Clause 23 informs him as to what is to happen to forfeited policies. Clause 40, which I would ask to have inserted in Part II, says that a letter may be sent to the
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policy holder's last known place of abode, and that if he is not there he will lose his policy. I hope the Lord Chancellor may see his way to accept this Amendment.
Amendment moved—
Page 35, line 17, at end insert ("Section 40. Notices").—(Lord Shandon.)
THE LORD CHANCELLOR: My Lords, I see no objection to this Amend-merit, and I am prepared to accept it.
On Question, Amendment agreed to.
Fourth Schedule:

FOURTH SCHEDULE.
Rules for Valuing Policies.
1. The value of the policy is to be the difference between the present value of the reversion in the sum assured according to the contingency upon which it is payable, including any bonus added thereto, and the present value of the future net premiums.
2. The net premium is to be such premium as according to the assumed rate of interest and rate of mortality and the age of the person whose life is assured at his birthday next following the date of the policy is sufficient to provide for the risk incurred by the company or society in issuing the policy, exclusive of any addition thereto for office expenses and other charges:
Provided that—

(a) In the case of a policy other than a policy for the whole term of life issued before the person whose life is assured attained the age of ten years, the date of the policy may be assumed to be one year after the actual date, and if it is so assumed, the term of the policy may be assumed to be one year less than the actual term:

(b) In the case of a policy for the whole term of life issued before the person whose life is assured attained the age of ten years, no account shall be taken of any period for which the policy was in force before the anniversary of the date of the issue of the policy next preceding the date on which the age of eleven years was attained:

(c) In the case of a substituted policy, the net premium shall be calculated with reference to such sum as, according to the practice of the society or company for the time being, would have been assured by the premiums payable if the person upon whose life the substituted policy is issued had not been assured with the society or company before the issue of that policy.

LORD SHANDON LORD SHANDON moved to omit from the Fourth Schedule the Rules for valuing policies and to insert "The value of the policy is to be the total of all premiums paid less a deduction from such total at the rate of £5 per centum." The noble Lord said: My Lord, this Amendment is one to obtain greater clearness with regard to the effect of the actuarial calculations which, I honestly confess, I only dimly understand or perhaps misunderstand. The effect of the Bill will be that the holder of a forfeited policy may get a fully paid-up policy, and of course you must calculate what he is to get in that policy. The actuarial language is very precise and very appalling to the uninitiated. I can well imagine an operative plumber, or perhaps someone else without the education which unquestionably the members of that trade get, reading this which tells what is to happen to him:—
"The value of the policy is to be the difference between the present value of the reversion in the sum assured according to the contingency upon which it is payable, including any bonus added thereto, and the present value of the future net premiums."
I confess I should not understand it if were in the position of the operative who, I will suppose, is dimly trying to ascertain what he is to get.
There is, however, under this language undoubtedly some plain thing. It may be that the man will get all his policy, less 5, 10, 15, 20 or 25 per centum abatement. That he would understand at once. An actuary could readily strike an average in the manner in which I say it might be done. In the words of my Amendment it is simply that the value of the policy is to be the total of all premiums paid, less a deduction from such total at the rate of £5 per centum. The actuarial calculations must amount to something like that, or probably more than five per cent. It might in some cases amount to 25 per cent., but I would not hazard an opinion upon such a complex sentence. But if you adopt my suggestion the man will understand at once what he is to get. I should think it would be better to give him all premiums paid, less even 25 per cent.—a thing he will understand—than set him an arithmetical calculation to which few men would be equal, I think, unless they were members of the College of Actuaries. I beg to move.
Amendment moved—
Page 35, leave out from the beginning of line 20 to the end of line 17 on page 36, and insert ("The value of the policy is to be the total of all premiums paid less a deduction from such total at the rate of £5 per centum").—(Lord Shondon.)
LORD PARAMOR: My Lords, I am bound to say that I hope this Amendment will not be accepted. It is true that the form of words proposed by the noble and learned Lord, Lord Shandon, appears to be more easy of understanding by the ordinary reader than the words in the Bill, but this is a matter of actuarial calculation. So far as actuarial calculation is concerned, I saw no difficulty in understanding the Rules for valuing policies. I know that they have been very carefully considered by the Government Actuary, and I think the policy holder is safeguarded in this way. If any question arises as to whether under the Rules for valuing a policy interest of the policy holder has not been properly considered and the actuarial calculation has not been properly carried out, the Bill provides, as I understand, that the matter may be brought before the Commissioner. The policy holder, therefore, would have the advantage of the assistance of the Commissioner in a matter of that kind. This is purely a question of actuarial calculation, which I know has been very carefully considered, and I should deprecate making any alteration.
THE LORD CHANCELLOR: My Lords, I am afraid I cannot possibly accept this Amendment. The words of the Schedule, I think, are clear. They are old words which have been used in other connections. The noble and learned Lord's proposal is that the value of the policy, for the purpose of issuing a paid-up policy, shall he calculated on the premiums paid, less 5 per cent. That really is actuarially impossible, because the value of a policy cannot possibly amount to as much as 95 per cent. of the premiums paid. The premiums paid from year to year on continuing policies go partly to pay expenses which, I am told, are not light. I am also told that if you adopted this principle in a very few years the statutory value of a policy would be much more than the sum assured, and that even the free paid-up policy which a man would get on that basis would be greater than the sum he would got if his policy fell in.

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If this proposal were adopted it would very soon drive all the companies in the country into bankruptcy, and I cannot advise the House to adopt it.
LORD SHANDON: My Lords, I shall bow at once to the view of the Lord Chancellor, who, I am sure, has considered the matter with great care.
Amendment, by leave, withdrawn.

PETROLEUM BILL. [H.L.]
Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF HEALTH (THE EARL OF ONSLOW): My Lords, modern inventions have so increased the importance of petroleum products, and have also so increased the quantity of those products, that legislation is necessary to safeguard in time of emergency the supplies of oil fuel and light petroleum products suitable for naval, military or air purposes, and also to ensure the safety of important works which might be damaged or otherwise rendered ineffective by the ignition of such supplies.
In these circumstances it is proposed to amend the Petroleum Acts, 1871, 1879, and 1881, by substituting a Home Office licence for the licence which is issued by the local authority under the present law. This is done in Clause 1. This Home Office licence will be granted, of course, after consultation with the local authority, and it will only apply to stores of 1,000 tons of petroleum spirit or 5,000 tons of other petroleum, or mixed stores in like proportion; that is to say, one to five. In addition to this provision advantage is taken in this Bill to carry out some of the more important of the recommendations of the Home Office Departmental Committee on Petroleum Spirit which sat in 1910. The penalty provisions are amended; in particular, penalties are introduced for contravening the conditions of petroleum licences. Hitherto, responsibility for breach of conditions of safety has been entirely upon the employer, but now by this Bill an employee who contravenes any conditions which he is required to observe can be dealt with. These conditions must be stated publicly in a notice which is visible in any workshop. A revised scale of fees will be introduced on a scale corresponding with the amount of
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petroleum kept in the store. It is not proposed to revise the scale of fees on a profit-making basis but with a view of paying the expenses of inspection and so forth.
One important provision in the Bill to which I ought to draw your Lordships' attention is that by-laws can be made for the loading of ships carrying petroleum. Up to the present the law only provides for the unloading of ships which carry petroleum. The reason why previous Acts did not deal with the question of loading is, I believe, that it was unnecessary at the time. This difficulty is dealt with and harbour authorities are enabled to make by-laws for the loading of ships. Until such by-laws are made the Bill provides a Schedule specifying certain precautions to be observed, which are adapted from those generally required to be observed in connection with the unloading of such ships. These rules will be enforced as by-laws until the harbour authorities have themselves considered the matter and made special by-laws which may be necessary for their own particular harbour.
To deal with the transport of petroleum by road a second Schedule has been introduced which applies the powers given by the Explosives Act, for regulating conveyance by road, to petroleum with such modifications as may be necessary. The Schedule, which also includes provisions as to reporting and investigating accidents, is of considerable length and the reason for its not being embodied in the Bill is that it simply repeats the provisions of the Explosives Act with the necessary modifications to make it deal with petroleum. Clause 8 of the Bill simplifies the definition of petroleum and substitutes a more convenient term, namely, petroleum spirit for petroleum which gives off an inflammable vapour at a temperature of less than 73 Fahrenheit. The Bill will provide certain useful alterations in the present law with regard to petroleum which will bring the handling of that material up to date in the way of storage.
There is one other point which I think I should mention. Installations for the storage of petroleum other than petroleum spirit do not at present require, as such, to be licensed under the Act of 1871, though, as a matter of fact, all, or almost all, the installations which the Bill would affect are used for both kinds of

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storage, so that in practice few, if any, licences will be needed in the future for establishments which in fact do not need licences now. I understand certain interests which may be affected by the Bill would like a little time for consideration, and I shall be glad to consult with my noble friend Viscount Devonport, who has mentioned the matter to me, with a view to fixing a date for the Committee stage convenient to himself and other noble Lords who may be interested.
Moved, That the Bill be now read 2a.—(The Earl of Onslow.)
VISCOUNT DEVONPORT: My Lords, I have to thank the noble Earl for his promise and to ask him whether he can make it a little more definite. The dock and harbour authorities who are interested in the Bill desire to have full time for consideration, and they have requested me to ask whether my noble friend can agree that the Committee stage shall not be taken until after Easter. That is not a long way ahead now and it would be a great convenience to the Dock and Harbour Association, which is a federation of all the important dock and harbour authorities in the country. They will have to meet and they cannot be called together at short notice. If my noble friend can see his way to defer the Committee stage until after Easter it would be much appreciated.
THE EARL OF ONSLOW: I think I can undertake to do that, but before giving a definite promise I should like to consult my right hon. friend.
On Question, Bill read 2a, and committed to a Committee of the Whole House.
[From minutes of March 1.]

CROYDON CORPORATION BILL. [H.L.]
Second Reading (which stands appointed for Thursday next) put off to Thursday, March 15.
MID KENT WATER BILL. [H.L.]
  GREAT WESTERN RAILWAY (ADDITIONAL POWERS) BILL. [H.L.]
  Committed: The Committees to be proposed by the Committee of Selection.
LICENSING ACT (1921) AMENDMENT BILL. [H.L.]
To be read 2a on Tuesday, March 13.

PARLIAMENTARY ELECTIONS (ALTERNATIVE VOTE) BILL. [H.L.]
Second Reading (which stands appointed for Wednesday, March 14) put off to Tuesday, March 20.
House adjourned at twenty minutes past five o'clock.