INSURANCE DISPUTE.

Auckland Star, Volume LV, Issue 220, 16 September 1924, Page 5

INSURANCE DISPUTE.

LAPSED LIFE POLICIES. COMPANY SUES CANVASSER. REFUXD OF COMMISSION CLAIMED. A life insurance canvasser was defendant in a Supreme Court action recommenced in the Supreme Court to-day, after naving been adjourned since March •28 of this year. On the date of adjournment it was thought that the parties might arrive .at a settlement. The action concerned a claim by the Colonial 'Mutual Life Assurance Company (Mr. :N'6rthcroft), for the sum of £141 7/7, allegedly due by Samuel Fever (Mr. . Leary). The company claimed that ■ the sum was due as a refund of I commission paid by plaintiff company ,on certain policies secured by the j defendant on account of the policies . having lapsed within a certain period. . The defence was that Fever had been 5 engaged on special terms, which absolved him from liability in such , lapses. It was explained that the agent was ; entitled to £1 commission for each ,j insurance paying a weekly premium of . I 1/. but if the weekly payments did not , I continue for 13 weeks the canvasser had to refund the commission. After that "i period, if the premium were paid, he was { entitled to a further 4/. Mr. Xorthcroft stated at the original hearing that defendant had written ii good deal of [ business for the company. The number . of policies had greatly increased, and ' the weekly payments to defendant were ". reduced till tile debit was worked off. The result was that Fever resigned. Counsel admitted that Fever had been paid on a higher basis than that specified in the ordinary contract. Mr. Leary stated that the special agreement of defendant with the company provided that he should receive £l"a week retainer, and £1 for every policy he wrote of 1/ per Week. How- ' ever," he was to draw only on two-thirds of the commission, receiving 13/4 instead of 20/. By this arrangement Fever claimed that *he was not liable 1 for lapses, since the third retained by the company covered lapses. Thus, if he wrote 15 policies he would receive only £10 instead of £13, but he was not to " be liable for lapses at all. Fever was purely a business-getter —what was known in "insurance language"' as a "debit-builder." The term 'debit really meant the agent's connection with policy holders, each of whom owed the • .company a certain sum every week. ■ Thus, as new policies were issued, that ! sum owing grew, and "debit" was built. During the preliminary proceedings . this morning Mr. Leary stressed the 1 point that special terms were endorsed ion the agreement held by defendant, but they were not shown on the company's copy of the agreement. Till September." 1022, defendant was not liable for lapse?, but after that date there was a new agreement under 1 which he received the full 20/ and became liable for lapses. However, he did not undertake liability for 13 weeks Defendant became ill and i could not work. During his absence the ' company did not keep his collecting book "alive" and Fever's connection was • I neglected. Policies were lapsed. Mr. Justice Herdman: Is there an obligation on the company to keep the book alive ? Mr. Leary admitted that it was not in the contract. He contended, however, that the company should have written up business for Fever, to set off against the amounts due to the company i by him in respect of lapses. Mr.-Xorthcroft contended that defend- . ant was liable for lapses. It was absurd to suggest otherwise. If he had not been liable he could have issued ,1/ policies, paid the 1/ himself, and ! then collected 19/ from the eompsi-y i in respect of each transaction. The case is proceeding.