§ Mr. RHYS DAVIES
asked the Minister of Health the sums paid over to the National Debt Commissioners for temporary investment in accordance with Section 54 (3) of the National Insurance Act, 1911, for the years 1919, 1920, and 1921; the rate of interest earned on these investments; and the method by which this interest is allocated to the various approved societies?
§ Sir A. MOND
The sums paid over to the National Debt Commissioners for temporary investment, in accordance with Section 54 (3) of the National Insurance Act, 1911, were as follow:
Amount. Year. £ 1919 … … … 5,586,030 1920 … … … 6,216,210 1921 … … … 9,427,840
A large part of these moneys is invested in securities of a permanent nature, as it consists of sums which, when the periodical ascertainment is made as required by the Statute, will ordinarily become available under the Statute for permanent investment with the National Debt Commissioners, and no separation is made between the yield of permanent and temporary securities in the income account of the Commissioners. The approximate average rates of interest earned on the investments of the National Health Insurance funds for the years 1919, 1920, and 1921 were 4¾, 4⅞, and 5, 2264W respectively, while the approximate average rates on purely temporary securities were 3¾, 6, and 5¼. Approved societies are credited with interest on the verying balances of their current accounts throughout the year. The rate of interest taken for this purpose for the year 1919 was 4 per cent. The accounts for 1920 and 1921 have not yet been finally closed, and the rate of interest to be credited for these years on current account balances has not yet been determined.
§ Mr. DAVIES
asked the Minister of Health why approved societies have not received any notification of sums redeemed in respect of reserve values since the year 1919; and, having regard to the fact that for these years societies have only been credited with interest at the rate of 3 per cent, whereas if these amounts had been expeditiously transferred to the societies' current accounts one-half would automatically have become available for investment by the societies and could have been invested at 5 per cent, or over, what steps, if any, he proposes to take to reimburse societies for the loss of interest through delay in crediting societies with these sums, which were actually retained by him out of members' contributions?
§ Sir A. MOND
The determination of the sums redeemed in respect of reserve values for any year depends upon two factors, namely:
The actual amount available in any year for interest on and redemption of reserve values cannot be ascertained until the contribution returns, together with the stamped contribution cards for the year, have been received by the Insurance Department and the appropriate deductions made from the contributions. An interval of more than nine months ordinarily elapses between the end of any contribution half-year and the date when the bulk of the contribution cards relating to that period are received by the Insurance Department.2265W
- (1) The amount of reserve value deductions from contributions in the year, and
- (2) The amount of reserve value outstanding for the year on which interest has to be allowed, and the amount available for redemption distributed.
The actual amount of reserve values outstanding at the end of any year cannot be ascertained until the audited returns of Membership Register Alterations for the year have been received in the Insurance Department, and the consequent adjustments of Reserve Value Accounts effected. An interval of more than 15 months elapses between the end of a year and the date of receipt by the Insurance Department of the audited returns of Membership Register Alterations for the year. It will be seen, therefore, that the actual amount of reserve values redeemable for any year subsequent to 1919 cannot yet be determined.
The suggestion in the second part of the question appears to be based on a misapprehension. While there is inevitable delay as explained above, in carrying out the detailed calculations necessitated by the provisions of the Act for determining the actual amounts to be credited to societies in respect of interest on and redemption of reserve values, it is incorrect to assume that there is delay in rendering those credits available for investment by the societies or any consequent loss in interest. In accordance with the regulations made in that behalf, advances to societies for investment are made out of the National Health Insurance Fund immediately after the end of each half-year, and these advances are based on the estimated amounts (including sums to be credited for redemption of reserve values) available for investment at the end of the half-year preceding that in which they are made.