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Thursday, 5 March 1942


Mr FALSTEIN (Watson) .- From time to time since I have been a member of this Parliament, I have drawn attention to the fact that the activities of lite assurance companies have been passed over by successive governments without proper regulation. Whereas the present Government has gazetted regulations controlling banking, nothing has been done to regulate these other financial institutions which play an important part in the life of the community, and which make large contributions to government loans. 1 propose to cite a case so shameful that it merits the serious consideration of the Government. It may be considered advisable to bring in legislation to control life assurance companies and their activities, with particular reference to the relationship of master and servant, so i hat persons who peddle life assurance for the companies may be assured of the benefits of workers' compensation. This is the case of a gentleman named Walter Rothwell Archibald, who shared in the Archibald estate. He contracted with the City Mutual Life Assurance Society of Sydney to borrow money on his interest under a will. Altogether, a sum exceeding £3,000 was lent up to the time when Archibald found it necessary to assign absolutely to the assurance company his interest under the will. The assurance company's solicitors were not satisfied that his interest was a vested interest at the time the assignment was made. Therefore, in order to make sure that his interest was not contingent upon his aged mother predeceasing him, it was suggested by the company, and agreed to by Archibald, that he enter into a contract with the company in the amount of .£5,000 against the contingency of his dying before his mother. In consideration of this assurance of £5,000, which was a nonprofit assurance, he was to pay to the company £385 as a single premium. The unexpected happened, and Archibald did not survive his mother. When the estate came to be distributed, Archibald having assigned his interest under the will, an amount of £13,000 was paid to the life assurance company. I have here a photostat copy of the policy for £5,000 which matured on Archibald's death. The company objected to paying the £5,000 on the ground that the premium had not been paid, but here is a deed issued by the responsible directors of the company which sets it out that the premium was, in fact, paid. This matter would have gone to law except that Archibald's widow, who has . two small children, was left without means, and the executor himself, in the event of the action, going against her, would have had to pay the costs.


Mr Menzies - Has the honorable member asked the City Mutual Life Assurance Society for its side of the case?


Mr FALSTEIN - No.


Mr Menzies - Then we can take it that this is a one-sided statement.


Mr FALSTEIN - That is not so. The company has stated that its reason for not paying the £5,000 was because the premium had not been paid.


Mr Menzies - Has the honorable member gone to the company about the matter?


Mr FALSTEIN - No, because I did not want it said that I was using a. bludgeon to force the company to pay before I had made the facts public. I invite the Attorney-General (Dr. Evatt) to order an investigation of the facts of the case.


Mr Menzies - Why did the honorable member not report the matter in private to the Attorney-General?


Mr FALSTEIN - Because this is the kind of thing which is undermining the confidence of men with similar assurance policies who have been called up, or who have enlisted in the fighting services. They do not want their wives and children to be left in the same plight as was the widow of Mr. Archibald.


Mr Menzies - Do not say too much to me, because I have a passion for knowing both sides of the story.


Mr FALSTEIN - I would not have taken up the time of the House at this hour if it had not been for the fact that a few weeks will elapse before the Government will summon Parliament to assemble for a legislative session. I earnestly suggest that in the interval the Government should inquire into this matter and should proceed forthwith to draft legislation which will deal effectively with life assurance companies in the same way as the Labour Government in Queensland has dealt with them.







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