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Wednesday, 18 November 1959

Mr HAROLD HOLT (HigginsTreasurer) . - by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to amend the Life Insurance Act 1945-1958. The original act, which came into force on 20th June, 1946, set up in Australia a comprehensive code of laws for the conduct of life insurance business and provided a measure of protection for policy-holders. It replaced six different State acts and its introduction has been accompanied by a period of stability and growth in the Australian life insurance industry.

The three amendments now proposed have been the subject of careful examination by the Insurance Commissioner. They are, in brief -

(a)   to allow life insurance companies to pay claims without production of probate or letters of administration where the amount insured does not exceed £1,000, instead of £500, as at present,

(b)   to allow a special policy to be issued in place of one which has been lost, without the expense of advertising the loss where the sum insured does not exceed £500, instead of £200, as at present, and

(c)   to provide a small increase in the minimum rates of surrender value laid down in the act.

The Government is satisfied that the first two proposals, when implemented, will ensure sneedier service to claimants under small policies. As regards the third proposal, the act provides at present that where a policy-holder surrenders his policy prior to maturity, the surrender value he receives shall not be less than the amount calculated in accordance with the sixth schedule to the act. These minimum values have not been increased since the act came into force on 20th June, 1946.

A major result flowing from the life insurance act has been a general improvement in the strength of the industry. This improvement, together with the higher interest rates currently being earned, have resulted, in most instances, in improved benefits for policy-holders in other directions, for example, bonus rates.

In order to preserve equity between policy-holders who discontinue their contracts and those who retain their policies until maturity, a moderate increase in the minimum surrender value basis is warranted. Where more than the minimum surrender value is already paid, and this occurs in many cases, no alteration in the rate of payment will occur. However, some additional benefit will now be available in those cases where the payment is based on the minimum provisions of the act. I commend this bill to honorable members.

Debate (on motion by Mr. Calwell) adjourned.

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