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Most of the foreign re-insurance companies concerned in these judgments are associated members of the Fire Offices' Committee, but it is understood that a difference of opinion exists amongst the British companies as to the necessity for imposing a deposit upon the re-insurance companies. The influential body of agents who represent the foreign companies in London will, in all probability, desire to be heard."
The case against the National Insurance Company of Copenhagen has since been heard in the House of Lords, and Mr. Justice Branson's decision was there affirmed on the 30th April, 1925.
It thus becomes clear that the 1909 Act as it stands does not carry out the intention of its framers, and the question arises whether that Act should be amended so as to carry out that intention, or whether Companies which carry on business confined to Re-insurance business (whether fire, accident or employer's liability) should be left under liability (a) to make the deposit of £20,000 required by the Act, and (b) furnish the returns required by the Act. If it be decided that these Re-insurance Companies need not be required to make the deposit or furnish the required accounts, they may well, we think, be placed outside the Act altogether.
The evidence before us has not led us to think that the public interest demands that these Re-insurance Companies should be required to make the £20,000 deposit or to furnish the statutory returns. Having heard the evidence of Mr. A. J. Collins, who appeared before us as representative of a group of foreign Re-insurance Companies, and of Mr. J. J. Atkinson (General Manager of the Royal Insurance Company, Limited) and Sir Arthur Worley, C.B.E. (General Manager of The North British and Mercantile Insurance Company, Limited) who appeared before us as representatives of the Fire Offices Committee, we find
(i) that the fire, accident and employer's liability re-insurance business is invariably and necessarily done between the various bodies which transact direct fire, accident and employer's liability business and the re-insurance companies;
(ii) that the bodies which contract with these re-insurance companies are fully capable of securing adequate protection for themselves, and ultimately for their policy holders, and often do so by retaining a considerable proportion of the re-insurance premiums, or by requiring a deposit of securities;
(iii) that the £20,000 deposit would be of little or no importance as additional security to those dealing with these re-insurance companies;
(iv) that the statutory returns would, in the case of foreign re-insurance companies, furnish no information of value to a policy holder in a British company, since the returns would extend to the whole of the business done by the foreign companies whether here or abroad, with nothing to indicate the nature or extent of the protection afforded to the British Company with which the policy holder is insured;
(v) that, in the case of a foreign re-insurance company without an office or agency in this country, there would be no means of enforcing either a deposit or returns.
It is to be borne in mind that most of the British Companies which do re-insurance business (Fire, Accident and Employer's liability) also do direct business, and that, accordingly, the question of these re-insurance companies furnishing statutory returns affects British Companies only in the exceptional case of Companies which do nothing but re-insurance business. We think that those Companies which deal with these Reinsurance Companies would, apart altogether from the Act, have no practical difficulty in obtaining all necessary information.
We gathered from the evidence of Mr. W. E. Gray, General Manager of the Employers' Liability Assurance Corporation, Limited, and Mr. R. Y. Sketch, General Manager of the Phoenix Assurance Company, Limited, the representatives before us of the Accident Offices Association, that that Association sees no need for the inclusion of these Re-insurance Companies as such in the 1909 Act.
The conclusion we have reached is that Companies which transact re-insurance business only, whether Fire, Accident or Employer's liability, ought not to be treated as doing these classes of Insurance business for the purposes of the 1909 Act, and that the Act should be amended so as to secure this result.
If the law is altered to give effect to our recommendations in this regard, provision should, we think, be made for releasing their deposits to such Companies of this class as have made deposits under the 1909 Act.
We have not dealt in this interim report with marine re-insurance companies since the Act of 1909 does not apply to them.
No evidence has been brought before us to suggest that Companies (if there be any) which do life assurance business as re-insurers only should be exempted from the 1909 Act, and we do not recommend such an exemption.
3. Establishment and maintenance of statutory funds. 4. Formation, application and investment of statutory
5. Transitory provisions with respect to statutory funds. 6. Provisions as to deposits where statutory funds required to be kept.
Accounts and Periodical Returns.
Audit of accounts.
Balance sheets, accounts, abstracts, and statements required to be prepared.
9. Deposit of returns with Board.
Miscellaneous Provisions as to Insurance Companies, &c.
Extension of 8 Edw. 7. c. 69. s. 274.
11. Provisions as to companies not registered under the Companies Acts, 1908 to 1917.
12. Publication of subscribed and paid-up capital.
Transfer and Amalgamation of Insurance Undertakings. 13. Transfer or amalgamation where statutory funds involved.
14. Returns to be made in case of transfer or amalgamation.
Winding up of Insurance Companies, Insolvency of
Power of Court to reduce insurance contracts. 16. Valuation of liabilities of insurers in liquidation or bankruptcy.
17. Application of surplus assets of statutory funds in liquidation or bankruptcy.
18. Schemes for partial winding up of insurance companies.
Additional circumstances in which insurance companies may be wound up by Court.
20. Liability of directors, &c., in respect of misfeasance in relation to statutory funds.
21. Power of Court to order inspection.
PROVISIONS APPLICABLE TO UNDERWRITERS BEING MEMBERS OF THE SOCIETY OF LLOYD'S OR OF ANY OTHER ASSOCIATION OF UNDERWRITERS APPROVED BY THE BOARD.
22. Applicability of Act to Lloyd's underwriters, &c. 23. Deposits and returns by underwriters.
24. Alternative provisions as to underwriters with respect to certain classes of business carried on by them.
25. Submission, confirmation, and effect of schemes. Miscellaneous provisions as to documents deposited with the Board.
27. Service of notices.
28. Power to make rules.
29. Provisions as to Orders in Council and rules.