THE ADMINISTRATION OF THE GOVERNMENT LIFE INSURANCE DEPARTMENT.

Observer, Volume 2, Issue 45, 23 July 1881, Page 511

THE ADMINISTRATION OF THE GOVERNMENT LIFE INSURANCE DEPARTMENT.

THE EDITOR OF THE AUCKLAND OBSERVER. Sir, — In a recent letter I criticised the annual report of the Government Life Insurance Department. I now propose, in the interests of the policy holders, to say something about its management and administration. The department is under the control of Mr. ■D. M. Luckie, Commissioner. Mr. Luckie, I believe, was for many years a journalist in this colony. He got into Parliament for a time when <editor ■of ' the Nelson Colonist. His career there was a failure, but being a member -of the House of Representatives naturally favoured his position, and he obtained an engagement on the Southern Cross. Mr. Luckie possesses, in a very high degree, the art of cultivating the good offices and flattering the foibles of men in power. He persistently attached himself to Sir Julius Yogel, and got that gentleman to appoint him editor of the Southern Cross, whose paper it then was. Then, through the influence of some friends, he got attached to the New Zealand Herald, when it absorbed the Southern CroBS, and finally he came down to Wellington. Some few months after his arrival, Mr. Luckie was appointed by the Grey Government to his present position. How Mr. Luckie contrived to get his billet, is easily explained. He persistently " cultivated "all the members of the Ministry, save Sir George Grey, and got them to promise him the remunerative office he was seeking, and his continuous importunity and solicitation was so far successful that the Colonial Treasurer, Mr. Ballance, did certainly give him the appointment. Sir George Grey for a long time refused to ratify it. The appointment wrecked the Grey Government, but what did this matter to . Mr. Luckie ? He had gained his point, and, as he fondly hopes his £SOO a year for life. . Surely this was a lucky journalist indeed. Mr. Luckie possesses very moderate literary abilities, still, such as they were, he might in a legitimate manner have exercised them to advance the interests of the department \mder his control when a special occasion aroße for his doing so. I know that as a rule Civil Servants are prohibited from writing to the Press. But Mr. Macandrew, in explaining to the House of Representatives the motives which induced him to support this appointment, attempted to justify his action by referring to some able articles on life insurance supposed to be written by Mr. Luckie. Personally, I. never heard of the articles before or since, and he .(Mr. Macandrew) was so impressed by these articles that he had come to the conclusion at once that the writer was just the, man to, fill the vacant commissionership. Now I think that when a great opportunity arose such as that of the Kaitangata coal- mine explosion, in consequence of whinh forty families were left unprovided for, the Government would . gladly have accorded Mr. Luckie full freedom of his pen in painting the many lessons to be learnt from that terrible catastrophe — of pointing out to working men more particularly the absolute necessity of making some provision for their wives and families by the means of life insurance. At that time Mr. Luckie received the fol-io-wing letter from the Chief Agent of the Government Life Insurance Department, Otago :— " Government Insurance Office, Dunedin, 20th March, 1879. "The Commissioner, Government Insu. ranee Department, Wellington, Ci Sir, — I have the honour to enclose herewith a 'leader,' taken from the Otago Daily Times of this day's date on the subject of Life Insurance. "Thinking that the present was an opportune time, owing to the recent Kaitangata coal mine catastrophe, I interviewed the editor of the Times (Mr. Ashcroft), and pointed out to him that the sufferers in the accident were as well able to pay for a moderate sum of life . insurance as many of those who were asked (and who, I might say, were morally compelled) to contribute to the fund. " Some short time since it was stated in the papers that the department contemplated

introducing a system by which the working classes would be enabled to make their payments fortnightly. "If this mode of making payments be deemed advisable (or even monthly instalments, which would, I think, be more suitable as being less cumbrous and meeting equally well the exigencies of the working classes), now, I consider, is the time to initiate the system, as the attention of the public is being drawn to the matter. "May I take the liberty of asking you to give me the advantage of your literary ability in writing an article or two on the benefits of the Government insurance Bcheme, more particularly as applied to the working classes. I could readily get them inserted here in the papers most patronized by this class of the community. "Hitherto, so far as the working man is concerned, we have failed in attracting him to join the ranks of our policy holders, and the few we have obtained, I find, allow their policies to lapse on the first pecuniary pressure which they may feel. " There are various reasons why we have not been more successful with this class. "1. It takes up too much time to convince him of the moral obligation to provide for his family. "2. He is not so easy of access as other classes of the people. "3. If an agent approaches him (as he frequently has to do) during his working hours, he is liable to be snubbed, not only by his employer, but by the employe", and which he has a more profitable and agreeable class to operate upon the working-men is liable to be neglected. " Advantage might be taken of the present opportunity of bringing this question prominently before the public by soliciting the cooperation of the Church, the Press, notably of friendly societies, and employers of labour, and vigorous effort on the part of the Department in lowering the mode of payment, in keeping the office open, say, two nights a-week, from 7 to 9, in simplification of the medical examination papers (which, to my . mind, are needlessly cumbrous) in reduction of the medical examination fee to half-a-guiuea for sums not exceeding £200, in giving power to your agents to pay a commission to active members amongst lodges and factories, or to any person who would introduce business to the office without the necessity of appointment as agent, and filling up the proposal, for this frequently takes away their influence, inasmuch as their arguments are looked upon as those of an interested party. " I have hurriedly placed at your disposal these few crude ideas, trusting that you will give shape and substance to them should you deem them worthy of your consideration. — I have the honour to be, Sir, your obedient servant, (Signed) "T. F. McDoxogh, "Chief Agent." The foregoing letter speaks for itself. Why .did not Mr. Luckie take advantage of the splendid opportunity thus afforded of inculcating the duty of insuring their lives upon the working classes. Mr. Luckie remained altogether deaf to the appeal of the Otago agent, and responded neither with Voice nor pen. I contend that it is the duty of the Government to impress upon the working classes, above all others, the necessity of life insurance. It is, however, a fact that the Government Life Insurance Department throws cold water upon this class of bnsiness, because it does not swell up the profits of the office, and further prohibits its agents from taking proposals for any sum less than £200, unles a 12 months' premium is paid in advance, which, in these hard times, prevents many a working man from taking advantage of the Government Insurance scheme. I find that in this respect a private office, the National Mutual Liie Association of Australasia, is performing for the working classes what Mr. Luckie refused to do in response to the letter of the chief agent of Otago, above quoted, viz., taking monthly instalments or premiums from people of small means dependent on wages. I now come to Mr. Luckie's general official actionwhilein controlof the department. Mr. Luckie's first intention , xipon entering upon the duties of Commissioner was to discharge all the chief agents of the department. Mr. Knight, however, told him, that he had better get rid of them singly,' or otherwise they might prove too strong for him. Mr. Knight is my authority for this statement. This advice was acted upon by Mr. Luckie. The first victim selected was Major McMurdo, chief agent, Auckland, who was recalled to Wellington, with a view to his dismissal, and Mr. Clapcott, chief agent, Wellington, was sent to Auckland to put the agency in good working order there. Evidently the gallant Major, like his superior officer, was tolerably proficient in the art of currying favour with men in place, because I find that during Mr. Clapcott's absence in putting matters straight in Auckland, the Commissioner (Mr. Luckie), instead of dismissing Major McMurdo, actually attempted to- appoint him over the head of Mr. Clapcott, his senior in the department of many years, and make him the chief agent for the whole of the North Island. This was at once put a stop to by

the then Colonial Treasurer, Mr. Ballance. The next victim was Mr. George Thorne, jun., chief agent, Canterbury. Mr. Luckie suspended this gentleman and recalled him to Wellington, with a view to having him dismissed. He recommended the "Minister" to do this. The " Minister " replied, "I think, Mr. Luckie, that the power of dismissal is vested in the Commissioner, therefore why do you not exercise it?" Mr. Luckie took the hint, and instead of dismissing Mr. Thorne sent him back to his agency with increased honours and emoluments, and subsequently delegated his own powers as Commissioner for the whole of the South Island to that gentleman. It seems a peculiar proceeding on the part of Mr. Luckie to first try 'to get Mr. Thorne dismissed from the piiblic service, and then to place him in a position of high trust and emolument. Mr. Thorne now "runs" the Government Life Insurance business for the Middle Island, and " runs " it in a very peculiar way. I drew attention in my former letter of the 11th instant, to the number of lapsed policies. These can be easily accounted for. No interest is taken by the agent in collecting renewal premiums, when the policy has been in force twelve months. The third victim was Mr. McDonogh, the chief agent in Otago, who was urgently requested to take temporary charge of the Auckland agency. Mr. McDonogh complied with the request at great pecuniary sacrifice and inconvenience. Mr. McDonogh, like Mr. Clapcott, was told that he was required to work up the business of the department in the Auckland district, and in the course of a year would be recalled to the South, either to Canterbury or Otago. This was simply a 'ruse to get his place for the late Mr. Thomas Birch. Mr. Birch possessed some good qualities, but was utterly unfit for tne important position to which he had been appointed. He was dying by inches, indeed die he did, some five or six months after receiving his appointment, but the appointment and holding office of such a man struck a crushing and almost fatal blow at the interest of the Government Insurance Department in the Otago provincial district. During the six months of the Birch leghne in Otago, the department lost, I am told, in that district, over £100,000 in lapsed policies. ( Now, Mr. Commissioner Luckie, in appointing Mr. Birch to the control of the department in Otago, \vas perfectly aware of the wrong and suicidal act which he was committing. He saw Mr. Birch daily in Wellington, before the appointment was made, became fully cognizant of his wretched ili-health and general unfitness to take charge of the business of the department, and yet he had the supreme recklessness to recommend him to the Minister of the department as a fit and proper person to fill the position of Chief Agent, and make him the successor of Mr. McDonogh, who, by energy and hard work, made the bnsiness in Otago. AVhen Mr. Macandrew last session attempted to defend Mr. Luckie against the charge of incompetency brought against him by Mr. Andrews, M.H.R., he said Mr. Luckie needed no experience in the particular business of life insurance, because he was an "intelligent enthusiast." I fail to perceive where business "intelligence" or "enthusiasm " for the interest of the policy-holders were shown by Mr. Luckie in appointing an utterly unfit man like the late poor Mr. Birch. It is true that the man has gone to his account, but the circumstance does not alter hard facts. De mortuis nil nisi verum. I think it will be gathered from what I have written that Mr. Luckie is not a fit head for the Government Life Insurance Department, and that the administration of it has been fraught with serious evil, which can only end in disaster if allowed to continue. Nor do I think Mr. Luckie possesses any of the qualities which should form the character of a good administrator. The character and tone of Mr. Luckie's mind is essentially weak and vacillating. He is scarcely capable of forming any decided opinions of his own, and if he does form such opinions, of staunchly adhering to them. He is almost completely in the hands of the actuary, Mr. Knight, to whom he usually defers in any important matter, instead of showing either will, purpose, or ability of his own. If Mr. Luckie wants proof of his authority being set aside by the actuary, Mr. Knight, such proof will be forthcoming. Finally, I desire to say that the utter want of method, common-sense, and ability shown by the Board of the Government Insurance Department in dealing with proposals and other matters brought before it, is so great as to be almost incredible. It is high time some independent member of the House should move for the appointment of a select committee to make a full and searching inquiry into the management and administration of the department. I have written these letters under the designation of "A Policy-holder" in the Government Insurance Department, which I actually am, but should a parliamentary committee desire to obtain my evidence I shall be ready and willing to come forward as a public duty to give such evidence in my own proper person. — I am., &c, A Policy-holder.