XN000022-1982-05-19 — Page 3

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WEDNESDAY, MAY 19, 1982

ASSISTANCE FOR INSURANCE POLICY HOLDERS

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THE GOVERNMENT HAS ACCEPTED THAT HOLDERS OF INSURANCE POLICIES FALL INTO THE CATEGORY OF THOSE COMSUMERS WHO BECAUSE OF CIRCUMSTANCES CLEARLY CANNOT PROTECT THEMSELVES AND NEED GOVERNMENT INTERVENTION TO ASSIST THEM, THE SECRETARY FOR ECONOMIC SERVICES, THE HON DAVID JEAFFRESON TOLD THE LEGISLATIVE COUNCIL TODAY.

MOVING THE SECOND READING OF THE INSURANCE COMPANIES BILL 1982, MR JEAFFRESON EXPLAINED THAT UNLIKE MOST CONSUMERS, POLICY HOLDERS WERE NOT BUYING SOMETHING TANGIBLE FOR IMMEDIATE DELIVERY.

+THEY ARE PAYING FOR AN ADVANTAGE INVISIBLE AT THE TIME OF PURCHASE AND FOR DELIVERY AT SOME TIME IN THE FUTURE, IN SOME INSTANCES BEYOND THEIR OWN LIFE TIME. WHAT ARE FOR THEM FAIRLY LARGE SUMS OF MONEY MAY BE INVOLVED. THEY NEED TO BE ABLE TO SATISFY THEMSELVES THAT THE COMPANIES WITH WHICH THEY INSURE ARE LIKELY TO BE IN A POSITION TO DELIVER WHEN THE TIME COMES,+ HE SAID,

MR JEAFFRESON SAID ANOTHER REASON FOR THE GOVERNMENT'S MOVE TO REGULATE THE INDUSTRY WAS A RECOMMENDATION BY THE ADVISORY COMMITTEE ON DIVERSIFICATION,

THE COMMITTEE HAD NOTED THAT A CERTAIN LEVEL OF PRUDENTIAL SUPERVISION WAS NECESSARY AND FEARED THAT UNSCRUPULOUS FINANCIAL OPERATORS MIGHT BE TEMPTED TO MOVE INTO THE INSURANCE FIELD AS PRUDENTIAL REGULATION IN THE FIELD OF BANKING, DEPOSIT-TAKING AND THE STOCK MARKET HAD INCREASED.

MR JEAFFRESON LISTED THE PURPOSES OF THE BILL WHICH WERE.

* TO RESTRICT THE CARRYING ON OF INSURANCE BUSINESS TO

AUTHORISED COMPANIES, LLOYD'S, AND CERTAIN UNDERWRITERS APPROVED BY THE GOVERNOR-IN-COUNCIL ;

* TO FIX THE MINIMUM FINANCIAL STANDARDS REQUIRED OF INSURANCE

COMPANIES BEFORE THEY CAN BE CONSIDERED FOR AUTHORISATION;

* TO IMPROVE THE SECURITY OF LONG TERM POLICY HOLDERS

PRINCIPALLY LIFE POLICY HOLDERS;

* TO REQUIRE ALL INSURANCE COMPANIES TO SUBMIT FINANCIAL

STATEMENTS AND OTHER RELEVANT INFORMATION TO THE INSURANCE AUTHORITY ON AN ANNUAL BASIS;

* TO EMPOWER THE INSURANCE AUTHORITY TO INTERVENE IN THE

CONDUCT OF THE BUSINESS OF INSURANCE COMPANIES IN CERTAIN CIRCUMSTANCES; AND

* TO PROVIDE THAT ANY PERSON WHO THE INSURANCE AUTHORITY

CONSIDERS NOT TO BE A FIT AND PROPER PERSON TO BE ASSOCIATED WITH AN AUTHORISED INSURANCE COMPANY, WILL NOT ACQUIRE A POSITION OF INFLUENCE IN RELATION TO SUCH A COMPANY.

/ON THE RÊĻUIREMENT

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