INSURANCE.

Evening Star, Issue 11894, 23 May 1903, Page 1

INSURANCE.

Mr C. M. Montefiore, president of tlie Insurance Institute of New Zealand, delivered his presidential "address at tie first meeting of the Institute's session on May 14; and we have received a verbatim report in pamphlet form. It is, in many respects, an interesting and instructive account of insurance conditions and prospects; but we feel bound to take exception to the tone of some of the passages. We do not blame Mr Montefiore for introducing a controversy note: no doubt, controversy concerning insurance matters is more or less in the air: what we deprecate is the irrelevantly anti-Ministerial and antiindustrial spirit which seems to animate portions of the address. We will quote two illustrative passages: " Until a few "days ago it was generally considered that "the report of the Special Committee [ad- " verse to State Fire Insurance] would be " given effect to, and that beyond an "sional electioneering splash, just to keep "up the excitement, the matter would be "at an end. However, a Very Eminent "Personage [the ironical capitals are Mr " Montefiore's] very recently paid a visit "to that large and influential centre of the "Colony, Waimate, and there, amidst the "tussocks and the enthusiastic applause "of the bucolic population, stated that "State Fire Insurance would be brought "into effect" Now, we venture to say that this rhetorical irony is quite out of place. N What have the " tussocks" and the " bucolic population" to do with the matter? The people of Waimate are probably quite as' intelligent, on the average, as the citizens of Wellington, though they may be rather more modest; but, be this as it may, Mr Seddon was speaking, not merely to his immediate audience, but (through the newspaper reports) to the Colony as a whole; and consequently Mr Montefiore's sarcasm is quite pointless. Moreover, his argument does not need the doubtful aid of these "pin-prickings," which, indeed, it may plausibly be contended only serve to weaken its force by a suggestion of personal feeling. Again, referring to the sympathy shown by some of the Labor unions with thfr project of State Fire Insurance, Mr Montefiore ■ says: " I should not for " one moment like to believe that any U"terior motive is behind this friendly act, " even although some ill-conditioned people " state that there is antagonism between "employer and employee, and that the "unions have an idea that such a depart"ment could be utilised against those who "were of the wrong color and who were "not. believed to be charged with the "Sacred Fire of Democracy, as under"standed in this Colony." We believe the suggestion to be unfounded and unworthy; but if Mr Montefiore thinks otherwise, it would have been better for him to say so plainly, instead of indulging in the clumsy and rather disingenuous proviso "I should not for one moment like to believe." We have thought it well to speak emphatically and at some length concerning this unnecessary acidity of tone, which is too characteristic, of a considerable section of the mercantile community, and which does not do a bit of good to their interests, though (in indirect ways) it may tend to do them harm. , In reviewing the present conditions' of insurance Mr Montefiore observes

that there are some legislative restrictions which ought, in justice, to be removed. Some of the companies pay direct taxation in this Colony rmbonting to more thn * half what they have to pay on their business as a whole; "and*there is also tl« "iniquitous special tax upon their mort"gages, all of •which is, to my mind, a "fbrect filching of the funds which are so . "unselfishly and hardly saved by the bread- " winners for the sustenance of those near "and dear to them." The, most interesting parts of the address are ..those which deal with State Fire Insurance, and the effect of the Workers' Compensation law. Mr, Montefiore makes out a telling case ' against the former project, though its advocates would probably say that his argu- " ments were one-sided and inconclusive. He combats the Premier's assertion that the* companies' rates are too high, and dedans that results show them to be barely suflS- ' eient "If rates are so high and business "so good, how is it that only twenty-five "companies are represented in New Zea- " land, as against forty-five in New South "Wales? Also, how is it that so many "companies have withdrawn in the last " decade from operating in Nqw Zealand!" Insurance companies, Mr 'Montefiore observes, are always ready to open new fields if they are likely to be payable. He.believes .that.if the Government were to un- ' dertake Fire Insurance business, -and were to start by fixing the premiums at a lower rate than obtains at present, the first disastrous year would disorganise the finances of the new department, and the Consolidated Fund would be called upon to suppiy the deficiency. Reference is made to the popular delusion that all premiums received may be regarded as profits, some people actually holding that insurance com panies are guilty of criminal conduct when they put aside tie surplus realised during a good year to meet the losses which ar<> sure to come at a later date. Mr Montefiore also alludes sarcastically to the apparent .belief that "men who have made a "life-study of Fire Insurance are appointed "by the large institutions to which they "belong for no other purpose than mere " caprice, and that the whole of those men " have actually no idea of what the risks " of the business really are "—salvation being presumably obtainable by a transfer of all insurance affairs to people'who are sublimely ignorant of the whole subject. Mr Mbntefiore takes a gloomy view of the conditions of that part* of insurance business which deals with employers' liability and workers' compensation. The last year in this department was " a most • disastrous one." Not only -was there an " insane cutting of rates" during the eariv months of the year, but the Arbitration' Court are held to have - handicapped the business by " seemingly determining Ahab " every employee holds a life policy from " the employer." Reference is made to the alleged tendency to bring death or disability from physical infirmity under the "accir dent" category, Snd it is surmised that by-and-bye will die,without an attempt, being made to claim the amount cf three years' wages (within the limits imposed by the Act) for his relatives. Mr Montefiore is of opinion that the only way . in which insurance companies will be abU to indemnify employers against the increasing risks is by getting them to insist upon a medical/examination of all employeesmen in unsound health to be rejected. We have no. hesitation in saying that public opinion would never sanction a restriction of this kind; Mr Monefiore may set his mind at ease as to that. He admits that his proposition will "appear very, hard " upon the unfortunate man who is not in " such [good] health " ; but he would have done well to leave out the following remark—that it " will, I have no doubt, cause "a great outcry amongst those extreme " Democrats who are always so liberal with "other people's money." One does not need to be an "extreme Democrat" in order to recognise that a more practicable and more humanitarian solution of the problem must be found than that which Mr Montefiore suggests. To do him justice, he seems to 'doubt the workableness of his idea. His deduction is not optimistic. "I am most reluctantly being forced tc " the conclusion that the burden of the Act "is being so increased that employers wilj "be unable to pay what will become the "necessary premium." It is asserted that the Labor laws tend to intensify the hardship, and that the employers have reaped no benefit whatever. We should like to have the other side of the question, and to heat the comments of a well-informed and dispassionate unionist on the controversial portions of Mr Montefiore's address. Foi instance, is it true (as Mr Montefiore asserts) that accidents are "usually" caused by " the absolutely criminaf carelessness of the employee"? It is further declared that "a perfect harvest is being reaped by a "certain class of lawyers in the claiming rf "unfair amounts." What do our legal friends say?. Is this a true bill? Finallv it is predicted that in two years' time the claims will average between £150,000 and £200,000 per annum, " which has "to come out of the pockets of "those persons in the Colony who "abe so ill-advised as to ENBEATO". to "caret on industries without which, " after all, the community cannot "to exist." A too characteristic sentence, this last; the situation w not to be saved by petulant pessimism.