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Thursday, 17 November 1938

Mr ANTHONY (Richmond) . - An obligation rests upon me to answer some ofthe statements of the honorable member for East Sydney (Mr. Ward).

If his proposed new clause allowed the board an option to undertake insurance risk if it desired to do so after it had explored the whole situation, I could regard it with more favour. But it seeks to make it mandatory for the board to undertake risks which it might not be in a position to carry. The main principle of insurance is the . distribution of risks. Life assurance companies provide a case in point. On the whole range of their business, they may make a profit, but in respect of particular cases they make a heavy loss. An individual may insure his life to-day and die to-morrow. This would involve the company in loss, but the company would make up the deficiency by the premiums it received from persons who live for 50 years or so after they insure their lives. The Apple and Pear Board, if it undertook insurance risks at the inception of its operations, might suffer heavy losses in respect of the first two or three shipments of fruit it sent overseas. That would permanently injure its financial status. Reference has been made by the honorable member for East Sydney to my recent remarks respecting the profits of the State insurance office ofNew South Wales. I pointed- out that, in connexion, with its workers' compensation risks, the State insurance office had made a profit of about £350,000 ; but its profits were made principally during the first three or four years of its operations. In that period it accumulated profits of more than £500,000, but in the depression years it suffered a loss of £189,000.

Mr Ward - That was after the Stevens' Government took the workers' compensation business away from it.

Mr ANTHONY - I was fair to the Lang Government the other night. Tonight I want to be fair to the Stevens' Government and also to the officers of the State insurance office. The reason why losses were suffered in the depression years, during which period all public companies engaged in similar operations suffered losses, was that injured persons were tempted to remain on the funds for a longer period than was absolutely necessary, as they knew that after they went off the funds their incomes would cease because their jobs would be gone.

Mr Ward - That would be impossible with the supervision that was exercised.

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