FIRE COVERS.

Auckland Star, Volume LXVII, Issue 195, 18 August 1936, Page 14

FIRE COVERS.

LOCAL AUTHORITIES

BLOCK INSURANCE SCHEME,

ONE TREE HILL OPPOSED

Strong opposition to any block insurance scheme for local bodies, which would mean, in effect, that the local authorities in the Dominion would join and carry tlnir own insurance instead of

insuring with recodified companies, was expressed at las', evening's meeting of the One Trt-e Hill Borough Council. A resolution was passed recording the council's opposition and i! was decided to send the Municipal Association executive a copy of the Mayors report. The suggestion emanated in the form of a circular from the Municipal Association following a remit, proposing a group insurance scheme, which was carried at the municipal- conference in Napier. The Mayor, Mr. I. J. Goldstine, who moved the motion, said tnc risk was definitely too great and was one that members of local .nithovities, as trustees for the ratepayers, should not countenance. The proposal infant, n olljct. that local bodies would co operate ana carry their own insurance?. Mr. Goldstine added that .ertam local authorities in New Zealanl were carrying their own insurance, and Punedin had been doinsr so for many yea-.s and ap;.«rcntly successfully, but he was nevertheless strongly opposed to such a proposal. Disadvantages Outlined. Outlining the disadvantages of municipal fire insurance, Mr. Goldstine said to build up an adequate fund it was necessary to either do so quickly, or have abnormal freedom fiotn losses over the long period required before the mud reached such a figure as would take eaie of a total loss in the hijhe=t valued building. Even when the f;>nd had reached the figure suggested there would be no guarantee that there vouid be a saving to the municipality, because immediately a loss occurred which amounted to more than the premium which would have been paid to the stock companies under ordinary insurance, the municipality wa-: out of pocket. If the fund, as suggested, were to be built up quickly, the burden of the tax required would be so great that it probably could not be borne. 011 th-2 other hand, if a small amount were set aside annually, then one serious fire would not only wipe out the fund, but also would call for further taxation to enable iebuilding to be done. Members of municipal bodies were trustees for the community, and it was quite certain they would not do in their private capacity what was suggested should be done as a municipal body. Another feature to be emphasised was that those funds taxed the present ratepayers for the benefit of posterity. This was opposed to the generally accepted principle of "pay as you go." " With Disastrous Results." Mr. Goldstine cited three examples of municipal insurance funds that had been established with disastrous results. These were in Aalesuiul, Norway, in 1904, in Montreal, Canada, in 1922, and in Hamburg, Germany. Examples of municipal funds having been abandoned were the Melbourne City Council in 1933, the Philadelphia Board of Education, and the Southport Corporation in England.

Mr. Goldstine's remarks were endorsed by members, and the motion was carried unanimously.