Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 30 November 1983
Page: 3110

Mr JACOBI(8.03) —I commend the honourable member for Mitchell (Mr Cadman). His proposal certainly needs and deserves a careful study by the Government. As I understand it, it will need to be looked at by the Treasurer ( Mr Keating), by the Minister for Housing and Construction and the Minister Assisting the Treasurer (Mr Hurford) and certainly by the Attorney-General ( Senator Gareth Evans). I wish to make a couple of comments in relation to what the honourable member said. I think he is correct. There needs to be more adequate disclosure of the position of insurance companies, be they general insurance companies or life insurance companies. I think there has been a totally inadequate disclosure for the policy-holding public as to the viability or otherwise of insurance companies. In fact honourable members might look at the 164 lengthy questions I have on the Notice Paper. I commend to my colleagues opposite questions 34 to 39. In fact it was the Department of the Treasury, in a submission to the Law Reform Commission, which suggested that there be more appropriate and adequate disclosures to enable the insuring public to be in a better position to make an assessment of a company's viability or otherwise, or whether they ought to take out policies with a particular underwriter.

The other thing that I commend to the Minister in the brief period that I have is the obvious question of the need for fit and proper persons provisions, the obligation of principal officers to certify certain documents, particularly forms within the general insurance area. If the United Kingdom Policy Holder Protection Act is not acceptable by Treasury-regrettably I do not think it is-we ought to move to a winding up of companies which is what I proposed as a private member. Finally, in speaking to the matters my colleague opposite raised I think this is long overdue.

In regard to the collapse of Bishopsgate Insurance Australia Ltd, one of the deficiencies was the question of the investment advisers. The Companies Act needs to be tidied up. My personal view, which is set out in the question, is that we ought not to wait for the Ministerial Council for Companies and Securities to do that. I think the Government ought to put an appropriate provision in the Insurance Act, particularly the general Act, to ensure that the same provisions and surveillance of insurance advisers to general companies are vetted by the Life Insurance Commissioner. In that way we will not get into the position we got into with Bishopsgate.

Mr Cadman —You have the problems of workers compensation.

Mr JACOBI —Exactly. I agree with the honourable member. But as all honourable members know, that is principally a problem for the States. It is not an area in which we would legislate. We had the problem with Northumberland, as honourable members would remember, when it collapsed in South Australia where there are no nominal defendant provisions. We had to go through that problem. I do not think there is any doubt at all that the legislation regrettably is far too weak. The tragedy is that we have to wait for a disaster such as Bishopsgate before legislators really do anything about it. I agree with the honourable member for Mitchell. I commend to the Minister the amendment proposed by my colleague opposite, the honourable member for Mitchell and ask the Minister to look seriously at it.