THE LATEST BOOST

Observer, Volume XXI, Issue 1178, 27 July 1901, Page 2

THE LATEST BOOST

State Fire Insurance.

The only thing tbat commends the State Insurance Bill to the sympathy or approval of tbe people of Auokland is the higher tariff of premiums maintained against tbis part of the oolony by the oombined insuranoe oompanies. Otherwise, this new departure in State socialism would meet with universal condemnation and execration. It ia an unwarrantable and piratioal interference with private enterprise, and one oaloulated to entail serious loss upon numbers of helpless and deserving people whose money iB invested in insurance shareß. Its compulsory insuranoe olauses are an audacious eneroaobment upon the freedom and liberty of the individual. Also, in point of finance, it is a crude and illconsidered measure, witb '.a strong tendency towards insolvency. Tbe present iaßurance tariff, higher in Auckland than elsewhere, is an unanswerable argument for competition of some kind in the underwriting business. But tbe relief we need is not likely to be afforded by the State Fire Insurance Bill. On tbe one band, we are at the meroy of an insuranoe ring with whioh we are free to insure or not just as it pleases üb. On the other, we are more completely at tbe meroy of a State Department, with which we are compelled to insure, no matter what the rate oharged may be, and whioh has the right to sue for and recover the premiums, just as rates may be sued for and recovered by looal bodieß now. Thiß would be intolerable. Tbe proposal to Beize the busineßß of the existing oompanies is dishonest and wholly indefensible. It is well known that the little all of many widows and orphans and other people of slender resources ia invested in insurance shares. To destroy the value of tbeir small capital, or to interfere witb tbeir paltry incomes, would be a wanton aot of spoliation that the moderate-minded section of the people would not tolerate. Indeed, it is a foregone conclusion that any aggressive interference witb private enterprise in the direction suggested would be emphatically resented by the people, lhe oountry has been dipping its feet oooasionally into the seductive waters of socialism. They are not prepared for th e final plunge yet, and oertainly not for a plunge that is likely to submerge thousands of very deserving and inoffensive people. Tbe financial basis of the scheme is grotesque in its absurd inadequacy. It is proposed to establish the Department, whioh would undertake tbe whole of the fire insurance of the oolony, with a oapital of £250,000. Why, in the first six months of this year alone there were 187 fires, on whioh the oompanies doing business paid claims amounting to £241,000. Even with a good revenue from premiums, it is as likely as not that a run of fires at thia rate for twelve months would land the State Fire Insur-

anoe Company in financial embarrassment. Nor is it likely tbat tbe losses will be on a lower eoale. With a law making it compulsory to insure up to three-fourtbß of the value, incendiary fires would be muoh more frequent than tbey are now. Many exampleß might be given, suoh as tbe oase of Waihi, where oompanies will not insure for one-half, and often for one-third, of the value. Tbere iB no sound reason why the Government should not embark upon the tire insuranoe. buainesa in competition with the existing oompanies. But to create a Government monopoly of the business, to tbe ruin of tbe existing oompanies, and to compel every man in the country to insure for tbree- fourths of tbe value, whether he wishes to or not, and at any rate tbe Department chooses to oharge, would be an arbitrary law without parallel even in Bassia. We talk of enjoying freedom in New Zealand. Why, there is uot a oountry on the faoe of the earth where freedom is being more ruthlessly sacrificed and where the despotism of the law is more crashing than in our own.