STATE INSURANCE MONOPOLY

Press, Volume LXXXIII, Issue 25321, 22 October 1947, Page 8

STATE INSURANCE MONOPOLY

EXEMPTION TO BE SOUGHT

DRAINAGE BOARD’S DECISION

On the grounds that claims were now settled promptly and adequately and that the proposal would treble the cost to the ratepayers, the Christchurch Drainage Board last evening decided to seek exemption of local authorities with rating powers from the clause in the Workers’ Compensation Bill providing that all insurance against liability must, after June 1, 1948, be effected with the State Fire Insurance Department.

“If the bill is adopted in its present form, the employees of the board will lose the benefit of the prompt and sympathetic settlements that have been possible through the board’s administration of its own fund, as it cannot be expected that any State institution, and particularly an institution gorged with all the accident insurance business in the Dominion, will be able to give the same service as has been given by the board,” said Mr E. H. S. Hamilton (chairman of the finance committee). “No injured employee of the board has ever had to wait beyond his ordinary pay-day for the normal compensation due to him. “The effect on ratepayers of the proposed change will be that the cost will be at least doubled, and probably trebled, thus adding one more to the list of increased costs that have to be met from taxation. The board’s accident insurance fund was established in 1917 and was given statutory authority by the Christchurch District Drainage Amendment Act, 1923. That act provided that no greater *sum should be set aside in any one year than the amount at current rates which would be payable in that year in respect of the insurance of workers employed by the board, but for some years past it has not been necessary to allocate to the fund more than a fraction of the current premium rates. .! * *^ t 1 _ was i n !916 that the attention of the board was drawn to the fact that previous five years a total of £617 6s 3d had been paid in premiums and £7 5s 6d recovered as compensation. On. February 1, 1917, when the current policies expired, the board established its own fund with an initial capital of £5OO and the first a ™ ual contr ibutions of £125. In i9Zb the annual transfer was increased to £2OO, and in 1938 to £3OO, and these transfers have been ample 'to meet requirements and to provide for fund ” UP an ade<^uate capital

Insurance a “Racket” In principle, said Mr J. E. Jones he agreed that the Drainage Board ’and the City Council should run their own insurance. The schemes were run not for profit, as were those of the insurance companies. Insurance was a “racket,” profits of 40 to 60 per cent, being made. The local bodies paid no directors or shareholders, and ran their schemes to protect the workers. i°cal bodies made an approach, the Government would probably meet them.

Mr W. P. Glue moved, and Mr Jones seconded, that Parliament be asked to exempt local bodies with rating powers from +he compulsory clause. ‘‘The Government v.ill not lose the opportunity of collecting the profits which at present go to the insurance companies,” said Mr D Stock. “I don’t think we will have any effect on them.”

The chairman (Mr H. G. Livingstone) said he would suggest that the Government was open to reason. The present method cost the board £3OO a year and the estimate was that the cost would be £lOOO under the proposed scheme. Out of its present contribution, the board had built up a fund of more than £BOOO. The proposed change would be another unnecessary charge on the ratepayers.