The Daily Telegraph. THURSDAY, AUGUST 23, 1883.

Daily Telegraph (Napier), Issue 3777, 23 August 1883, Page 2

The Daily Telegraph. THURSDAY, AUGUST 23, 1883.

The Hon. Mr Hart, the other day in the r Council, Avanted a return of all the moneys that had been received by the Government Insurance Department on account of lapsed policies. Ho Avas under the impression that these lapsed policies represented a very large sum of money, and added considerably to tlic revenue of the department. He thought, in fact, that those Avho could afford to pay the premiums on their life policies derived a profit from unfortunate ' people who could not afford to continue their payments. He suggested, therefore, that tho amounts paid on lapsed policies should be paid into a separate account, and, to a certain extent, be returned to tho in- '' surers. Tlie Hon. Dr. Grace showed, hoAvever, that as a rule the Insurance Department lost money instead of securing a '■ profit by transactions of this kind. The first cost of obtaining lives for insurance was so largo that usually, speaking in gcnerrl terms, the payment of the first premium did not reimburse the department for the expenditure incurred. He was therefore under the impression that, so far ' from the insurer suffering as a rule by not completing his engagements, the department suffered from the transaction, with * tho insurer who had not gone on with his 1 policy. Referring then to the cost of obtaining lives tho Hon. Sir George Whitmore said the credit of the colony Avas so : good a thing to give to insurers that he tlioim-ht they ought not to bo reduced to ■ touting all over the country, as was done now. This touting Avas carried on to an '' extreme length. A person could hardly get out of a raihvay carriage Avithout somo one rushing up to him and Avanting to tako 1 his life. As compared Avith the Government department private companies carrying on this business Avcrc placed at a very great disadvantage, the GoA'crnmcnt department having so good a security. He therefore did not sec Avhy the Government ' department should strain to push business, or to make the rates lower than those of other offices. They ought not to think so cheaply of themselves, and ho thought they were going a great deal too far in that direction. Bui the Avorst feature of all Avas tho mutual principle iv the Government Insurance Department. AVhat possible justification, he asked, was there for those mutual policies, as they avci-o called '< They avci-o not working tlie institution as a commercial concern. It was conceived and established to give security to persons Avho came out hero without connections, and who had not those avlio could look after the interests of those they loft behind them. This department Avas provided to give them absolute security for their polices. He thought tho business of the department should be confined to that alone. Noav, they might use the national insurance scheme, and that very legitimately, if thoy returned to fair Hues in working the department, and abolished the mutual principle altogether, and gave whatever profits there might be from the department to the maintenance of hospitals in the colony. That, he thought would be a proper Avay to employ the surplus funds, if any, of the institution, and he thought it Avould be held to be generally unobjectionable, because the whole colony Avould derive a direct advantage from sucli an application of the money, and the AA'orkino- of charitable institutions of tho country would be made infinitely more perfect if they had access to these funds. As to the proposal of the Hon. Mr Hart, it Avas one that, if carried out, Avould practically have tho effect of increasing the premiums upon life polices, because if the premiums paid on polices Avhich lapsed Avere returned to the insurers, one great source of profit to the department would be lost. This Avas one ' of the risks; which Insurers took, and he j thought that they ought not to object to | paying for it. In any kind of speculation ; they must not expect to draw all prizes— . they must expect to draw blanks some- \ times; and this Avas just one of the blanks j in insurance business. It folloAved, thero- j fore, that if this source of income were ( taken aAvay the effect would be to raise tho j rate of premium paid by those who fulfilled ( their engagements and kept up their s polices. He took the opportunity of say- j ing that he thought the department was c gradually encroaching too much upon r private pnterprise. Ho thought thero was c an indecency in tljo canvassing going on, t when they considered it was insurance by -, the Government of New Zealand; and lip * thought, moreover, there ought to bo no ? moro of these mutual polices at al]. If persons wanted higher profits, let them go _ to private institutions. r