Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 19 June 1930

Senator RAE (New South Wales) . - The remarks of the honorable senator in charge of the bill indicate that he entirely misapprehends the position. I did not contend for a moment that the bill allowed any laxity in providing safeguards to policy-holders. I desire to assure that balance-sheets and similar documents, which are frequently obscure, shall be subject to proper investigation. I affirm without fear of refutation that the ordinary company balance-sheet is incomprehensible to the average person, unless he obtains the advice of an actuary. I want this further provision so that the ordinary policy-holder shall have the right to ask for an explanation of what would otherwise be obscure to him. What can create greater confidence in a company than its readiness to explain anything that perplexes the average policyholder or shareholder? I did not want to bring in the name of any company in particular, but Senator McLachlan's refusal of my proposal forces me to do so. I have in mind an annual meeting of the company that is represented as the bright light of immaculate purity, and hailed as something sacrosanct - the Australian Mutual Provident Society. At that meeting a man who had been a policyholder in the company for between 45 and 50 years, and who possessed an alert mentality, wanted to know the meaning of certain items in the balance-sheet. According to his statement he was not even accorded the courtesy of a refusal. He was simply ignored. Some of the items about which he desired an explanation were of considerable importance and he pleaded that the press, of which there were representatives present from' all the Sydney daily newspapers, should make a record of his protest. He distributed to the reporters copies of the protest and although the reporters took a note of them, the editors, perhaps not wishing to offend such a valuable advertising asset, refused to print a line.

Senator Payne - Probably because of lack of space.

Senator RAE - No. The matter was tersely put.

Senator Sir Hal Colebatch - What were his questions?

Senator RAE - Unfortunately, I have mislaid them. One asked how an item of £27,000 was made up, while others referred to matters involving lesser amounts. After providing for practically all that could be specified under separate headings, contingencies, petty cash and so forth, this item of £27,000 came under the heading of general expenses. Another item covered the cost of sending certain officials of the company to London. ThiB man desired to know what expenses were involved in the proposal and what was its object. Still another item dealt with a visit of the chairman of directors to London, where he entertained nearly 200 of the wealthiest titled aristocrats of Great Britain at a big banquet, the expenses of which were charged to the company.

Senator Sir Hal Colebatch - It waa probably a good advertisement for the company.

Senator RAE - This man did not think so. The majority of us not only want a business to be run straight, but desire reasonable provision for those directly interested in it to ascertain whether it is straight, and whether any of its actions demand inquiry. I remind honorable senators that some of the wealthiest of the world's insurance companies have crashed. I do not wish to have the Registrar pestered by disgruntled individuals, but if a policyholder desires certain information the Registrar should be the judge as to whether his question is a fitting one to put to the company or not. I fail to see how my amendment would place any hardship or injustice on those concerned.

Senator Sir GEORGEPEARCE (Western Australia) [8.59]. - I suggest that Senator Rae's amendment is unnecessary. Clause 6 of the bill outlines the duties of the Registrar, paragraph b of that clause providing that he has -

To secure the due observance by every company of the provisions of this act.

Senator McLachlanread the clauses of the bill dealing with the obligations of companies under the measure, so far as they concern the protection of policy-holders. I draw attention to clause 54 (1) which provides that -

Every company shall, if so required by the Registrar, produce to him, or to any person specified by him in writing, at all reasonable times, any books, accounts or documents of the company, and shall permit the Registrar or the person specified to inspect them and to take extracts from them and to examine on oath its officers, agents and servants in relation to its business, and for this purpose the Registrar or the person specified may administer oaths.

Senator Rae - But that does not give the policy-holder any chance to get them.

Senator Sir GEORGEPEARCE.That provision is inserted in order that the Registrar shall have the power to see that the business is being carried on in conformity with the act. That means, among other things, that the policyholders shall be protected. If a policyholder is suspicious that the business of a company is not being conducted in conformity with the act, he should go to the Registrar and make out his case. The Registrar is the servant, not of the company, but of the public. He is there to see that the act is administered properly. He would be the judge of whether or not a prima facie case had been made out.

Senator Raewould make every disgruntled policy holder the judge of his own case. There are some people who think that their function in life is to make themselves general nuisances. In the press the other day I noticed that a judge in one of our courts urged that there should be some way of dealing with persons like one who had just come before him. The person in question had become familiar with the forms of the law and was using them to make herself a public nuisance. She had brought a matter before the judicial authorities twelve times. If Senator Rae's clause were agreed to, any disgruntled person could make the life of the Registrar a burden. If a policy-holder can make out a prima facie case that the funds of a particular society are not being properly used, he should inform the Registrar, who would then institute inquiries. The Registrar will be a public servant, and will occupy a position similar to that occupied by heads of public departments. Should any person in the community have ground for believing that the Government of the day is using public funds wrongfully, it is his duty to acquaint the Auditor-General accordingly. If the Auditor-General thinks that a case has been made out, he at once investigates the matter. Senator Rae's clause is unnecessary. Any person who has a genuine grievance and can make out a prima facie case, can have it investigated by placing the facts before the Registrar.

Senator Rae - It is not a question of believing that something is necessarily wrong, but of being able to obtain information in order to know what is being done.

Senator Sir GEORGEPEARCE.That is a different matter. No policyholder should be entitled to be supplied with details of every item comprising an amount set out in bulk in a company's balance-sheet with the approval of the Registrar and in conformity with the act. In some cases considerable expense and inconvenience would be caused in supplying itemized accounts. We must trust the Registrar to see that the shareholders' interests are protected. I suggest that if the clause is inserted the position of the Registrar will become intolerable.

Suggest corrections