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Wednesday, 9 March 1932

Mr NAIRN (Perth) .- It is desirable that the law as to insurance generally should be codified as early as possible. This bill is a useful contribution covering one aspect of the insurance problem. The only aspect with which I am much concerned is the position of self-insurers - as to whether they will be liable under this bill in some circumstances to lodge deposits. There are persons and companies which do their own insurance, sometimes entirely for themselves, sometimes in concert with others for their mutual insurance. I know that it is not intended that selfinsurers should be required to lodge deposits, and I believe that the greater number of them will be outside the scope of this measure. Where a company merely establishes a reserve fund to be drawn upon to meet losses of its own property, it is clear that this bill would not affect it. It would not come within the definition of insurance business as set out in the bill.

Mr Scullin - Such a fund would really be an addition to reserves.

Mr NAIRN - Yes, an addition for the specific purpose of insurance. The insurance business contemplated by the bill does not connote insuring one's self, but the giving of an undertaking to indemnify some other party. There are some private insurance schemes in which the insurers do give an undertaking to parties other than themselves. I refer more particularly to certain workers' compensation schemes, in which an undertaking is given to indemnify the worker in the event of injury. Some of those schemes are approved by the Treasury of a State. Deposits have to be lodged with the State Treasurer, and those deposits are available to satisfy the claims of injured workers. I shall cite a typical example. Section 10 of the Workers Compensation Act of Western Australia makes it obligatory on employers to insure, but it contains this exception -

Provided that if an employer proves to the satisfaction of the Minister that such employer has established a fund for insurance against such liability, and has deposited at the Treasury securities charged with all payments to become due under such liability, the Governor may, by order in council, exempt such employer from the operation of this section.

Under that scheme the employer undertakes liability to a person other than himself, namely, his employee. Insurance business is thus defined - " Insurance business " moans the undertaking of liability to make any payment, or to make good any loss or damage, contingent upon the happening of a specified event, and any business in relation thereto . . .

That means, I believe, an undertaking of liability in respect of any person other than the insurer ; thus distinguishing between insurance "business and self insurance. I am certain that the Government does not desire that those firms which have already established schemes of the nature I have indicated, and made deposits with the State Governments, should be required to deposit' £50,000 with the Commonwealth Government. I ask the Minister in charge of the bill to refer this point to his officers, and at a later stage to give the House an assurance that the bill will not affect self insurers.

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