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Thursday, 15 August 1974
Page: 962

Senator LAWRIE (QUEENSLAND) -Has the attention of the Minister representing the Minister for Social Security been drawn to the full page advertisements appearing in several papers offering hospital benefits of $1,000 per month, for varying premiums depending on age, by a Sydney company called Oak Insurance Ltd. I ask: Is this company registered under the National Health Act? Is the first two weeks in hospital covered by this company? Is this advertisement likely to mislead people? Is this company partly supported by Australian Industry Development Corporation funds and can the Minister give the Senate any other information about this company?

Senator WHEELDON -My attention has been drawn to this advertisement. In fact, it was drawn to it by Senator Lawrie himself who was good enough to mention that he intended to ask me a question along these lines. The advertisements, which have been very prominent advertisements, on behalf of the Oak Insurance Ltd feature a slogan which says: 'Now you can receive $1,000 a month extra cash when you're in hospital'. Apparently some very generous offers indeed are made by the company to those who would care to subscribe. It was the subject of some critical comment in the Melbourne 'Age' on 6 August when Mr Hutchins, who is the managing director of that company, was interviewed. One of the things which emerged from the article in the Melbourne 'Age'- I cannot vouch for its authenticity but so far it has not been denied, as I understand it- was that the company would be spending $500,000 on advertising in the first year of its operations which would be approximately half the value of the premiums it would receive. As far as I know, the company is not registered as a hospital and medical benefits fund. So far I have been unable to verify whether or not the Australian Industry Development Corporation has subscribed any money to the company or has in any way assisted the company.

The company recently changed its name from the Allstate Insurance Co. Ltd, and it was incorporated in the Australian Capital Territory in 1970. According to the information which I have been able to obtain the Union Insurance Group of the United States holds a 14.9 per cent interest in the company and we understand that it is reinsuring 95 per cent of the policies which are underwritten by the Oak Insurance Ltd. The other interests, apart from the Union Insurance Group of the United States, are Caravan and General Finance which holds 35 per cent of the shares, a Mr Robert Dillon who holds 15 per cent, CIL Brokerage which holds 10 per cent, Wyong Road Holdings Pty Ltd which holds 15. 1 per cent, and the Australian Asiatic Corporation which holds 10 per cent.

Senator Webster - Can you state the capital of the company?

Senator WHEELDON - No. I do not know the capital.

Senator Webster - That would be the interesting point.

Senator WHEELDON -The information I have is that the people and corporations whose names I have just mentioned are the people who hold the shares in that company. If there are others, I have been unable to obtain that information. So far our information is that the people stated are the shareholders in the company. The responsibility for these matters is divided between a number of departments. The Department of Social Security naturally is concerned with it so far as it affects any claim for medical benefits. My Department also has some involvement in matters of insurance and compensation. The Treasurer is responsible for the administration and regulation of insurance companies. The Minister for Overseas Trade is responsible for the Australian Industry Development Corporation. I shall refer those parts of the question which relate to those other departments to the responsible Ministers and as soon as I have a reply I shall see that Senator Lawrie is informed. The only other thing I would say is that obviously a matter such as the matter that has been raised by Senator Lawrie is something which must cause all of us some concern. On the basis of the advertising it certainly seems that claims are being made which at least on the face of it may be rather difficult for the company to meet. I think Senator Lawrie was quite correct in drawing the attention of the Senate to this matter.

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