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Employers' Liability (Insurance Companies) Bill

Volume 180: debated on Wednesday 7 August 1907

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Order for the Second Reading read.

said the object of this Bill was to apply to Employers' Liability Insurance Companies the requirements of the Life Insurance Acts of 1870 and 1872. Those Acts had proved to be thoroughly beneficial in protecting the interests of the public at large. The reason the Government had brought in this Bill was that in consequence of the passing of the Workmen's Compensation Act there had been, and would continue to be, a great increase of business by reason of the expansion of workmen's compensation under the Act of 1904, and they had reason to fear that a correspondingly large number of companies would spring up of doubtful financial stability, and therefore it was felt to be necessary to introduce a Bill that would handicap the growth and development of mushroom companies. The Bill in its present form required that all existing as well as future companies, with some exceptions, should make a deposit of £20,000; but since the introduction of the Bill many representations had been made to the Government by Members of this House and others interested. There were in existence a large number of very bona fide companies that would be most seriously hit if they were to make the deposit retrospective. Many of these companies, he had no doubt, were of a quasi-mutual character, but as they were not fully mutual the Bill as it at present stood would subject them to a deposit of £20,000. He thought it might have been possible to introduce some words that would have exempted these companies from the obligation to make the deposit, but they had come to the conclusion that do it as ingeniously as they might the whole of the companies he was speaking of could not be covered. Nobody knew better than Members of the House how necessary and needful it was that there should be a wide competition in respect of employers' liability insurance, and it would be doing more harm than good if by making legislation retrospective they were to sweep out of the field of competition so many useful companies; and, therefore, the Government had decided to introduce at a later stage an Amendment so as to make the Bill apply to future companies as regarded deposit.

Future companies only as regarded the deposit. He would point out that representations had been made to the Government on behalf of Lloyds and also the underwriters, and they had decided to subject them to exceptional conditions which were clearly set forth and explained in the Bill, and which would follow exactly the precedents of the Life Insurance Acts in respect of not making the Bill retrospective. Now that the Government had decided to do that, he thought all opposition to the Bill disappeared. One never knew until a Bill was printed and circulated what the opposition might be, but he was speaking about the particular interests who found themselves assailed by a Bill of this kind. It would be the last intention of that or any other Government to assail the position of those quasi-mutual companies which were doing most excellent work throughout the country. Under these circumstances he hoped the House would give the Bill a Second Reading, and he could assure hon. Members that in Committee the Government would be happy to give consideration to any case of hardship which might appear to arise out of the Bill. He thought that by such means they would be protecting the future development of mushroom companies and at the same time preserve many companies which were doing most beneficial work at the present time.

Motion made, and Question proposed, "That the Bill be now read a second time."

said he certainly did not rise to oppose the Second Reading. On the contrary he warmly welcomed the introduction of the Bill. He pointed out during the discussion on the Workmen's Compensation Bill last year the necessity of some measure of this sort to protect the smaller insurers against bogus companies. It was certainly his desire that in the more remote country districts they should have protection of this sort. Parliament had cast upon small and sometimes somewhat ignorant employers a very heavy onus, and he thought the least they could do was to protect them as far as they could against travellers and others who went round and asked people to insure in bogus Companies. He had, therefore, nothing to say except in favour of a proposal of this sort, and now that the representative of the Board of Trade had told them that Amendments were to be inserted in Committee he would find there was no difficulty in getting the Bill passed. Certainly so far as he and his friends were concerned the Government should have their assistance, though he would press upon the hon. Gentleman not to go too far in concessions, because he was afraid that by the tone of the hon. Gentleman's speech he was rather inclined to take away safeguards which existed in the Bill. However, those were matters for the Committee stage, and he would reserve his remarks for the Amendments when reached; but he wanted to be quite certain with regard to the date when the Act was to apply. He understood the hon. Gentleman to say that it was not to be retrospective in any respect, with regard either to companies or to underwriters—that was to say, it was only to affect them after the passing of the Bill. He had no doubt that the hon. Gentleman had been carefully into the fact to see whether any mushroom companies had arisen in the last year, because if so, the Bill ought to apply to them.

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said he wished to ask the Government whether they could see their way in Committee to make some amendment in this Bill which would have the effect of removing what was going to be a great misfortune. Insurance companies would not insure certain classes of people on account of the unhealthy or dangerous-character of the trade, refused to insure certain individuals on account of their age or state of health, and he understood from the Secretary of State for Home Affairs that men were now out of employment in consequence of the Workmen's Compensation Act Perhaps the Board of Trade could see their way to introduce into this Bill some I clause by which, in view of the sort of monopoly now given by this Bill to existing insurance companies, the insurance of such men as he had referred to would be covered and the onus thrown upon the whole community. An evil would be thereby removed, and the cost to the country would be so trifling that it would not matter. Now that the hon. Gentleman was giving an advantage to existing companies by removing the competition of new unstable offices he was in a position to make the bargain he now suggested.

said this matter should have his consideration. Bill read a second time, and committed to a Standing Committee.