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Wednesday, 23 May 1973
Page: 2538

Mr ADERMANN (Fisher) - I do not intend to speak at any length. I commend both the honourable member for Curtin (Mr Garland) and the honourable member for Hawker (Mr Jacobi) on some very provoking thoughts and a very excellent contribution to this debate. This legislation is rather complex. It is a voluminous document. It does break some new ground. The Australian Country Party is supporting these Bills because the previous Government framed legislation which embodied the same intention as this legislation. The Treasurer (Mr Crean) made reference to that fact in his second reading speech. I agree that if these Bills had been introduced separately they would have been somewhat deficient. I think that there is still a lot to be done in this field. This is just a first step. I was interested to read in the Treasurer's second reading speech that other areas of investigation will be undertaken particularly to protect policy owners and to safeguard the community interest in general insurance. I think that these investigations ought to be made and I approve of them.

I will not take up the time of the House in discussing the areas of investigation further because we will have an opportunity to do that at a later stage. Unfortunately all too often in recent years - I think the honourable member for Hawker mentioned 16 companies - there have been cases of insurer failures. These have resulted in loss and hardship and an undermining of public confidence. It is not sufficient to say that the public should be more discerning in placing their insurance business. Quite frankly that is not the answer because there are so many companies and there is so little information about many of them. I feel that in introducing these Bills the Treasurer has taken the first step which is necessary to restore public confidence and to provide adequate supervision and standards for those who wish to establish themselves in the field of general insurance. The system under which we have worked in which virtually any person can pay a small deposit and open an insurance business free from any effective supervision has just not been good enough. This has led not only to the failure of companies but also to disaster, loss and hardship for many policy owners who, in good faith, have done the prudent and wise thing and have insured their property and possessions only to find when they have made a claim that the company has become insolvent or has ceased to operate. So this Bill is a step along the road towards remedying these deficiencies.

I studied very closely the clauses in the Bill. I have gone through the Bill in detail. 1 note that there is to be an insurance commissioner and a tribunal. I think this is good. One aspect of the Bill that I do like is that which deals with the standards of accounting and recording that are to be maintained. This is good because it will provide information and protection, and I endorse those actions of the Treasurer. In addition, proper auditing of those accounts is provided for in the Bill. These are methods of protection, and if a company is honest it has nothing to fear by keeping such records and making such declarations. There are provisions in the Bill for lodging appeals and I think they are adequate. The position of Lloyds Underwriters has been provided for. I was interested in the comments of the honourable member for Hawker. I find myself in agreement with what he said but no doubt as times goes by, as the Treasurer said, there will be more investigation and the points made by the honourable member for Hawker may be caught up in later legislation.

The main provisions of the Bill which must be complied with are detailed in it. The BUI talks about the applicant being a body corporate and, under clause 23, having a paid up capital of not less than $200,000 or, in lieu of that capital, assets of that amount. It also provides that where the body corporate is incorporated in Australia it shall have assets in excess of liabilities of not less than $100,000. To a layman this would seem adequate. I am not able to comment on whether it is adequate but the Treasury is equipped to look into this aspect. In general the Treasurer has stated that the Bill sets out to establish an adequate and comprehensive system of supervision. This is important, it is overdue and it is necessary. I think the Treasurer is right in trying to establish that companies are not likely to go insolvent and leave the premium payer high and dry, suffering not only hardship and loss of premium but also loss of property for which he would receive no compensation whatsoever.

My Party approves these Bills and does not intend to move amendments. We do not intend to speak at length because we do not want to delay the House. We endorse what the Treasurer has done, and the idea he has put forward of making further investigations. There is, however, one caution that I would administer. Investigations into general insurance are to be endorsed but there must never be any endeavour to exercise any sort of socialistic control over insurance company funds because that we would oppose and would not tolerate. In fact, the people of Australia would not tolerate it, as they showed very clearly 23 years ago. This legislation is good. It provides conditions under which new insurance companies are to be established. It does not impose undue fetters on those insurance companies that exist now. There are many reputable companies which have provided excellent service and are financially sound. I support the Bill because I believe it to be a constructve and determined effort to rectify a situation which has caused a lot of worry and damage to public confidence. The Country Party endorses this Bill and the associated Bills and will be voting for them.

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