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Thursday, 9 December 1971
Page: 4633

Mr Jacobi asked the Treasurer, upon notice:

(1)   Has his attention been drawn to statements on 26th October 1971 by (a) the New South Wales Minister for Transport, Mr Morris, who accused the Commonwealth Government of toying with legislation to protect motorists against shaky vehicle insurance companies md (b) the Secretary of the Australian Automobile Chamber of Commerce. Mr A. Kelly, who claimed, inter alia, that one company which is doing a significant amount of business has a recent working capital deficit of $300,000 and thai there are indications, particularly in New South Wales and Victoria, that there will be more motor insurance company crashes.

(2)   Has his attention also been drawn to a statement on 27th October J97I by Mr P.Cox. MX. A., that 3 New South Wales motor insurance companies were on (he verge of collapse. but were still collecting premiums as were a significant number of smaller proprietary companies some of which had a paid-up capital of only S2.

(3)   Will he take immediate steps to inquire into (a) the names and the financial position of 'ho companies to which these allegations of impending bankruptcies relate and (b) the position facing policy holders as to coverage and their ability to obtain re-insurance with other companies.

(4)   In relation to (a) Cambridge Insurance Co. Pty Ltd, (b) Mid-Pacific and International Insurance Co. Pty Ltd, (c) East Australian Insurance Co. Ltd, (d) Bonus Benefit Insurances (Underwriters) Pty Ltd, (e) The Oxford Insurance Co. Pty Ltd, (f) Travellers' Insurance Corporation Ltd, (g) Riverina Insurance Co. Ltd, (b) Property Accident Commercial and Executive Insurance Co. Ltd, (i) Motor Marine and General Insurance Co. Ltd, (j) Vehicle and General Insurance Co. (Aust.) Ltd and (k) The Country Traders Mutual Insurance Ltd can he state (i) date of appointment of the liquidator, (ii) total paid-up capital, (iii) total estimated assets, (iv) total estimated liabilities, (v) number of policy holders, (vii Act under which the company was registered and (vii) State or States in which the company operated in each case.

(5)   Has he or his departmental officers had communication with all Suite Ministers regarding their agreement or opposition to Commonwealth legislative control in thi.* field: if so. what were their attitudes.

(6)   If there has been no communication, why not.

(7)   Has he been furnished with a working paper by representatives of the insurance companies setting out their proposals as to controls and supervision necessary to retaliate the industry, If so, when did he receive the submission and will he present it to the House.

(8)   Has his attention been drawn to a statement by the Insurance Brokers Association of Australia on 12 October 1971 calling for control to be established over insurance brokers, either by legislation or through an association.

(9)   Hus his attention also been drawn to a call by the Australian Automobile Chamber . of Commerce on 26th October 1971 for '.he Government to legislate so that all insurance brokers (a) are registered, (b) must be of good name and character, (c) must have adequate insurance experience and (d) must put tip a bond.

(10)   Is it the intention of the Government to legislate for the control, supervision and regulation of insurance brokers; if not. why not.

(11)   Has he had communication with the representatives of both insurance companies and brokers as to their agreement or opposition to the Government's legislative control in this field: if so. what were their attitudes.

(12)   Has he had over 18 months to have a Bill prepared relating to these matters; if so, can he state when the Bill will be introduced.

(13)   Will the Government give consideration to the establishment of a select committee to inquire into and report upon the subject . matter of the Bill during the months between its introduction and the second reading debate.

Mr Snedden - The answer to the honourable member's question is as follows: (1)' and (2) 1 have seen reports of statements along these lines."

(3)   The Insurance Act 1932-1966, which is the only Commonwealth legislation at present applicable to companies carrying on general insurance business, does not empower the Treasurer to make such investigations or inquiries.

(4)   (i) The following information has been obtained - from Press reports and subsequently confirmed by the liquidators concerned: '

(a)   28th July 1970 ..,-...'

(b)   24tb August 1970 ,

(c)   26th October 1970.....

(d)   26th October 1970

(e)   2nd November 1970

(f)   1st December. 1970

(g)   17th December 1970

(h)   . 15th February 1971

(i)   South Australia 1st lune 1971

Western Australia 3rd August 1971 New South Wales 16th August 1971

0)   19th July 1971 (k) 15th June 1971. . (4)(vi)' The following information has- been obtained from the Memorandum and Articles of Association- of each of the companies concerned, submitted in accordance with section 16 of the Insurance Act 1932-1966:

(a)   New South Wales Companies Act, 1961

(b)   Victoria Companies Act 1961 '

(c)   Victoria Companies Act 1961

(d)   New South Wales Companies Act, 1961

(e)   Australian Capital Territory Companies Ordinance' 1962-1969. (f)., Western Australia Companies . Act, 1961- -1970. ' ' '" . ' .', (g) New South Wales Companies Act, 1961 (h) New South Wales Companies Act, 1961 (i) Western' Australia' Companies 'Act, 1961 -

1970' '

(j)   Victoria Companies Act 1961 00 New South Wales Companies Act, 1961.

(4)   (ii), (iii), (iv), (v)' and (vii) The information requested is not available to me. ,

(5)   In his statement of 8tb September 1970, in which he announced the Commonwealth's intention lo legislate for a comprehensive scheme of supervision qf general insurance companies, the former Prime' Minister indicated that he had been in correspondence with the State Premiers on the subject. Since then, there have been a number of meetings _ between Commonwealth and State officials in relation to the proposed legislation. Each Slate has expressed support for the Commonwealth legislating, in this field and is cooperating fully in the formulation of the legislation.

(6)   See (5) above.

(7)   A paper was submitted in January this year by representatives of the insurance companies. However, the paper comprised only an outline of tentative views and has been largely superseded as a result of subsequent extensive discussions that have taken place between Commonwealth officers and representatives df insurance organisations. In these circumstanres, 1 do not think it would be appropriate . for mc to present the paper to the House.

(8)   Yes.

(9)   Yes.

(10)   , (11) and (12) My statement in. the House of Representatives on 9th December 1971 containsanswers to these questions.

(13)   lt would be premature for me to express ;a view on questions of this kind at this stage.

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