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Friday, 16 August 1974
Page: 1061


Senator LAWRIE (QUEENSLAND) - Further to my question yesterday to the Minister for Repatriation and Compensation, in his capacity as Minister representing the Minister for Social Security, about a company known as the Oak Insurance Company, can the Minister give the Senate any further information on this company, as he suggested yesterday he might be able to do today?


Senator WHEELDON -Yes, I can. I have been in touch with the offices of the Treasurer and the Minister for Social Security, both of whom are concerned in this matter. I wish to refer to the specific questions which were asked by Senator Lawrie and also to a question from Senator Baume. Senator Lawrie asked whether the company was registered under the National Health Act. I think that I told him yesterday that I did not believe that it was. In fact, the company is not registered under the National Health Act and is not in any event obliged to be as it does not offer medical or hospital benefits as defined under that Act. However, it has complied with its legal obligations and particularly with the deposit provisions of the Insurance (Deposits) Act.

Senator Lawriealso asked whether the first 2 weeks in hospital were covered by the policies offered by this company. The policy offered by the company contains the following statements:

Forthe purposes of calculating benefits, a period of confinement as a result of injury shall commence on the first day of such confinement, and a period of confinement as a result of sickness shall commence on the day of confinement as shown in The Policy Schedule.

Our understanding is that in relation to sickness the policy schedule in all of the policies which have been so far issued has stated that such benefits begin on the first day of confinement and it is not foreseen that any other provision would be included in future policies. However, should any change take place, it would be highlighted in any advertisements. Existing policies could not be changed.

Both Senator Lawrie and Senator Baume asked me whether the company was partly supported by funds from the Australian Industry Development Corporation. Now, as I think honourable senators would know, when the previous government established the AIDC, the Corporation was established as an independent body and allowed to have the ordinary confidential arrangements with clients that any other business undertaking, whether government or private, would be able to have. It is not required to divulge such details. However, it is public knowledge that the AIDC holds approximately 11 per cent of the issued share capital of Escor Ltd and has voting proxies for a further 29 per cent to 30 per cent of the company's shares which are owned by Bowater-Ralli, the English company. It is also known that Escor Ltd has a wholly owned subsidiary, Freighter Franklin Ltd, which in turn owns Caravan and General Finance, which in turn owns 35 per cent of Oak Insurance Ltd.

There is some other information which I think is interesting with regard to Senator Lawrie 's question. It relates to the benefits which are offered under the policies being offered by Oak Insurance Ltd. The benefits are payable only when the policy owner is in hospital. With regard to the premiums benefit, we find it difficult to make any meaningful comparison with other sickness and accident schemes. The restriction of claims to hospitalisation rather than home confinement allows a much lower premium than a normal personal accident scheme which does not require hospitalisation for the payment of benefits. In other words, as the benefits are considerably less than are being offered elsewhere, it is possible to offer a much lower premium rate. The view of the Treasury is that although the premium rates are low there are no reasons, at least at the moment, for believing that they are unrealistic, given the rather restricted nature of the policy offered. Perhaps I should read the advice given to me by the Minister for Social Security. The Minister said:

It is my understanding that the Company is offering a form of sickness benefit insurance; not hospital insurance. The Company is not offering coverage against the cost of hospital treatment but basically against loss of income which may result from sickness. In relation to the newspaper advertisement which gave rise to the honourable senator's question, I would point out that the Australian Newspapers Council maintains a Code of Ethics in relation to the advertisements appearing in member newspapers. I would therefore suggest that the honourable senator might like to take any question he may have about the advertisements up with the Australian Newspapers Council. Further, it is required to comply with the provisions of the Insurance Act administered by the Depanment of the Treasury. . . .

I hope that this information is satisfactory. Certainly it is the utmost information that we have available at present.







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