August 6, 1904

LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

He has the right, based upon the average of his payments, to such an amount of insurance as that average rate will pay. Dpon that basis the rest in the hands of the government is divided ; but while his average payments will give him a policy of $1,460, he can still keep on his $5,000 policy by paying at the same rate as he would pay on the $1,400, or at a rate $1.65 per thousand less than in the Confederation Life, say his age was fifty-two.

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LIB
LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

If when this man's policy is whittled down from $5,000 to $1,460, he has to pay on the $1,463 the same premium that he would have to pay If he made a new application to-day for that amount, I do not see what benefit he gets in accepting that reduced policy. If his policy Is reduced from $5,000 to $1,463, he should only be charged on that amount the premium he would pay at the age of his first application.

(Mr. HEYD. On that basis if you were to take a man at fifty years of age and continue him on the rate at the age when he first applied, where is the money to come from ?

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

The policy has been reduced from $5,000 to $1,400 and the company has not been carrying on its business during all that time for love. He has been paying under the mutual system very heavy assessments in the way of premiums.

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Mr. WM@

ROS'S (Victoria). They were cheating the people.

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

That may be. It maybe a very vile company or not. I have no (personal knowledge, but if the policy- is cut down from $5,000 to $1,460, I do not see why he should not be placed in the position of only being charged the premium on the reduced amount such as he would have had to pay at the age of entry.

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LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

If that gentleman had gone into a strange life company- fifteen years ago and paid the rates which such a company charged, he would have $527 lying to the credit of that particular policy which would enable the premium to be kept down to the price at the age of entry, but as he has not paid any such rate, the-money is not in the treasury. I suppose that every man who has had his life carried for half

what it Is worth for fifteen years thinks the company owes him something because it does not continue that operation. He has had value in having been insured, even though he has not died.

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

I wonder at the hon. gentleman (Mr. Heyd) making such a statement. These people came into the company under representations that their lives would be carried for half what other companies would carry it for. They were told that they would have to pay certain specified assessments,-which, in all human possibility, would not exceed a certain amount. Then the company discontinue that system in Canada and oblige the people who are insured under it to pay, not only all that their lives are worth to carry, but twice, three times-yes, five times as much.

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LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

That is a good synopsis of the condition. Representations were made to the people that certain assessments would be made, which, very likely, would not go up, but which might go up. Everybody who goes into an assessment company takes chances of the assessments going up.

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LIB

William Alfred Galliher

Liberal

Mr. GALLIHER.

But did not the very act of the company in discontinuing the class of insurance cause them to go up 1

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LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

The company, while doing assessment business, were doing it according to the law. But the premiums collected were too small. The assessments had to be increased, and, because of the increase in the assessments, three-quarters of the people dropped out. This leaves a large proportion of people who are likely to die, who have to hang on, and it is for these people that we are working now.

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LIB

Frank Oliver

Liberal

Mr. OLIVER.

At one moment we are told that the company did not get enough money and the next we are told they got too much. The reason the people dropped out was because the assessments were too high. If that is so, the contention can hardly be justified that people who remained in did not pay enough money. They paid too much. And yet they have now to come in at a rate which was not taken into consideration, which was not in expectation in any way. And, if this is necessary, it is because of conditions brought about solely by the acts of the company, nets for which the policy-holders are not responsible.

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LIB
LIB

Peter Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER.

Allow me to make a suggestion. We will carry one section every little while, and so make some progress.

On section 5,

5. After the date of the said license the company shall he subject to make deposit only as provided in sections 7 to 11, both inclusive, of the Insurance Act, and all the assets in Canada 276

shall be applicable to all the insurance liabilities of the company in Canada ; provided that the deposits of the company with the Receiver General of Canada shall not be reduced below the amount at the date of the said license so long as the company is undertaking in Canada new contracts of insurance, and shall in all respects be subject to sections 33 and 34 of the Insurance Act.

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LIB

Frank Oliver

Liberal

Mr. OLIVER.

This section is intimatelly connected with the deposit now held by the government as security for the policy-holders of the company. Under the wording of this section, all the company has to do is to cease doing business in Canada in order to entitle them to draw the last cent of the deposit, leaving the policy-holders to whistle for their money.

Mr. GERVAI'S. I beg leave to move, seconded by Mr. Oliver, that the following be added to section 5 :

Provided also that no such reduction of the deposit as it stands to-day be made for a period of five years from the present time, except for the purpose of paying death claims in accordance with the Insurance Act.

I do not see why objection should be raised to such an amendment as this.

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Some hon. MEMBERS

Carried.

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LIB

Honoré Hippolyte Achille Gervais

Liberal

Mr. GERVAIS.

This is a very important matter. I can tell hon. gentlemen that a good lawyer could make out of this section 5 fifty cases for the Privy Council in England. The section is very 'ambiguous, and it has been made ambiguous purposely. I want to make it clear. Can there be any objection on either side of the House to making this section clear now that we have it before us to deal with ? Surely it is only reasonable to provide that this disposit shall not be reduced for any reason except to pay death claims according to our law relating to insurance companies.

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LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

This section is a most important one. It expresses most clearly the intentions of those who are opposed to this Bill. The very object intended to be secured by the amendment is provided for in this section to the satisfaction of the Insurance Department. The Minister of Finance is here, and he will probably express his own opinion about it. The effect of adopting this amendment would be to throw the Bill back into the hands of the Senate, where, by the efflux of time, it would be killed. That is the effect of the motion-I will not say it is the intention. We have all been in parliament long enough to know that if this House is to close to-night or Mondav night this Bill will be fought in the Senate by the people who have been fighting it for two months. In the interest of the policyholders in this country, whose interests are preserved by the Bill, we should avoid amendment if possible. And amendment can be avoided here, because every idea contained in the proposed amendment is al-

ready covered in the section. If the Bill is killed in the Senate many of these policyholders 'will be forced out through an increase of assessments. How will this benefit them ? And what harm will it do the company ? You cannot hurt the company by preventing the Bill going through. They do not care whether you carry it or not. They will simply levy assessments upon these people, and as long as they do so, these policy-holders will pay. When the thing comes to its finish and there are only two or three policy-holders left, the two will have to pay $500 each to pay the death claim of the third, and when there is only one left he will have to pay his own $1,000. If this amendment carries that will be the ultimate result. It will not protect the policy-holders one hair. This deposit is in the hands of the Receiver General, and cannot be moved by the company.

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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

I have not yet heard anything which empowers the government to pay out this sum of money which is on deposit with them in accordance with the provisions of the Bill.

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LIB

Honoré Hippolyte Achille Gervais

Liberal

Mr. GERVAIS.

The General Insurance Act of Canada will empower the government to do that. Here is the theory upon which the insurance deposits are to be made. When a company starts into the insurance business it has to make a fixed deposit and then this deposit must be increased as new policies are issued. As a matter of fact the Mutual Reserve Fund, if I am well informed, made a primary deposit of $50,000. Then they issued a large number of policies and had to make additional deposits up to the amount of $228,000. They now want under what, we call the theory of this law, to have a new license issued by the Department of Insurance and then they want to be empowered to make a new deposit under that new license. If that is done, as the amount of their policies has decreased in the meantime, they will have to make a deposit only in proportion to the reduced amount of the policies in force. That means practically that these gentlemen will have their deposits within twenty-four hours after the passing of this Act, reducing the amount required to $50,000. They will get a cheque from Mr. Fitzgerald and go back, ns I said, to Long Branch. There is no good reason for passing this Bill. I appeal to the reasoning power of both sides of this House. There is very grave doubt about the drafting of that clause in the Senate. I understand that, if I am well informed, the amendment I am now proposing was agreed to in the Senate. It is a grave thing, it is a grave charge I am making, but lam informed that this clause had been agreed to, and that the proposed amendment of the law was to be inserted but that was not done and it is not in the law. I say now, without making a trial balance, without making up the accounts of the duties and Mr. HEYD.

responsibilities of all the persons concerned, we have an opportunity now to make this law clear and let us do so. Let it be written in this law which is now under the fire of discussion, that from now on nobody will have a right to reduce that deposit until a period of five years has elapsed.

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August 6, 1904