GOVERNMENT INSURANCE BUSINESS.

New Zealand Herald, Volume XL, Issue 12279, 25 May 1903, Page 4

GOVERNMENT INSURANCE BUSINESS.

Tn his late speech at Hamilton on

political topics, the Premier re-

ferred again to the subject of fire in-

surance, and stated that it was still

his intention to introduce a fire in-

surance Bill. His arguments are that the Government Life Insurance

business has been a success, and that therefore the fire insurance

scheme will also be a success. The

life insurance scheme has not been

much of a benefit, as the general opinion is that the Government.! Office does not offer the advantages of the other offices in business in the colony. On that point, however, we shall not dilate. The Premier also | said:— The Government Accident j Insurance was working nicely, and was a break, because private companies could not charge more than did the Government. It was a general leveller. In a State fire insurance scheme the Government would fix the premium at what was safe and payable, and then the private companies would have to come into j line." Now it is a fact that accident insurance is more costly than before the Government entered the field. Every employer of labour knows that. The accident insurance com- ■ panies fixed the rate for the insurance of farm labourers at 10s per cent. The Farmers' Union came to an arrangement with the Commercial Union Company to insure farm labourers at 5s per cent., and they would have continued at that rate and have got the whole of that class ! of labour but for the fact that the I Government Department also came ! down to ss. In this case, therefore, j an outside company lowered the . rate and compelled the Government , to. follow suit. It was not the Go.-! I *

verriment which fixed a low rate and compelled private companies to "come into line." The Government fixed a high rate. It 1 was then, however, found by the Commercial Union that the Government Department having lowered the rate, divided the business to so great an extent as to render their rate unprofitable, and they raised it. The Government Insurance Department immediately followed suit and jumped the rate up to 13s per cent. That is the present rate. There is, however, not the slightest doubt that if there had been no Government Department the rate for accident insurance on farm labourers could have been obtained at much lower rates than those now charged. That has been the effect of the Government entering the business. If the Government Department werts abolished to-morrow insurances on all classes of workers could be obtained at lower rates than they can be obtained at now. The Government Accident- Insurance Department now take care that the rates shall be maintained at a high rate. That is the only effect which it has had upon accident- insurance.