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Thursday, 19 June 1930


Senator RAE (NEW SOUTH WALES) . - I cannot understand the lack of logic that has been displayed by those who oppose this proposal. They have pointed out that there are already ample means for controlling insurance companies. I have not disputed that.


Senator McLachlan - Cannot the Registrar now do everything that the honorable senator would force him to do at the request or demand of any policyholder ?


Senator RAE - It is not a question of whether or not the clause provides the utmost safeguards for the honest administration of the company, but of ensuring that consideration will be given the policy-holders who seek information. Surely it is the policy-holders in the aggregate who make up the company. Throughout the bill there is evidence of a desire to serve the interests of arrogant directors rather than the interests of policy-holders, notwithstanding that it is the latter who provide the directors with their handsome salaries. It is a very cavalier way of treating policy-holders to say that they are disgruntled. I do not ask that details of every £1 expended should be supplied; but I do say that in the law relating to companies there is nothing to compel a company to do more than to present an accurate balance-sheet. There is no provision for an ordinary shareholder or policy-holder obtaining the details of individual items in a balance-sheet.


Senator Herbert Hays - He could get that information at a shareholders' meeting.


Senator RAE - Quite so. He should, but it is frequently refused. Questions asked at annual meetings relating to the affairs of a company are often ignored in a supercilious and arrogant manner.


Senator Herbert Hays - That attitude might be taken up towards a man who is known as a " nark ".


Senator RAE - Whether a man is a " nark " or not is no reason why he should not get the information he requires.


Senator Herbert Hays - At times such a man may be very annoying.


Senator RAE - That does not matter. A man who is financially interested in a company is entitled to information in regard to any item in the balance-sheet. The chairman or the secretary may also be a " nark ". Too often those who are supposed to be the servants of the people arrogate to themselves the position of masters. Frequently a civil answer cannot be obtained from those who are well paid to serve the public. My amendment can do no harm. On the other hand it would supplement all the other provisions intended to secure the honest conduct of companies. Reasonable satisfaction should be. afforded to those who find the money to run these companies, and reasonable opportunity to ascertain the meaning of anything in the balance-sheet or in regard to any financial transaction of a company. All along Senator McLachlan has been most stubborn in resisting any proposal to improve his bill, his idea, apparently, being to make the position of insurance companies as comfortable as possible and to see that no " dog-gone " shareholder can have any say.


Senator McLachlan - Is that not rather unfair to me?


Senator RAE - At any rate the honorable senator has prolonged the discussion of the bill by not showing a reasonable attitude towards amendments. My other proposal may be contentious, but this cannot be so regarded. Every policy-holder in a company is a partner in a business and every such partner should have the right to demand all the information he thinks is necessary in connexion with the working of the company with which he is associated. It is unconscionable that the majority of honorable senators should take up the attitude that the policy-holder is a negligible quantity to be treated with disdain by any arrogant jack-in-office.


Senator McLachlan - The policyholder can look for nothing but information relating to the statutory fund of the company.


Senator RAE - He also has the right to know how the business of the company is going on. If we are to have systematic stonewalling on every proposed amendment we shall approach the Greek kalends before the measure is got through another chamber. If we are to be met by systematic and unreasonable objections in this chamber we shall have to marshal our forces in another place to get a measure of justice. Every balance-sheet should set out the fees paid to directors. In what company's balance-sheet can such information be found? The money of widows and orphans, which insurance companies exist to protect, is spent very largely in fattening people with excessively high directors' fees. But all this information is systematically kept back from the policy-holders. The very company to which I recently referred, which is supposed to be the very essence of purity in commercial administration, publishes an advertisement just before the end of each financial year to this effect: "If you want to share in the bonus of this company this year, insure before the next two months have gone by "^-urging people to insure on the ground that if they hurry up they will share in this year's bonus, whereas under its articles of association, bonuses cannot be issued to it3 policy-holders until they have paid premiums for at least two years. Such are the fraudulent misrepresentations made by some companies who hold their heads high in the commercial world. I feel that the ordinary policy-holder should have an opportunity to get any information he requires in connexion with the company in which he is virtually a partner, and that a little clique of more or less self -elected officials should not arrogate to themselves the right to refuse and treat with disdain any request for information.







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