The explanation of this bill is contained in the explanatory notes attached to it. Its purpose is to restore in force the act incorporating the Wapiti Insurance Company, chapter eighty-four of the statutes -of Canada, 1929, which expired on May 1, 1933, under the provisions of the Insurance Act, and an act respecting the Wapiti Insurance Company, chapter seventy-four of the statutes of Canada, 1931, section 2, and in this way permit the Department of Insurance to issue its dominion licence to a Canadian rather than a provincial company.
This company has had a provincial charter for some time. In 1929 it applied for a dominion charter. It was unable to take out its dominion licence at that time, and in fact was unable to do so at the expiry date two years later. An extension of time was granted by act of parliament in 1931 but owing to the continuance of the depression the company was still unable to make the necessary arrangement to go ahead under dominion charter. It contemplated continuing as a provincial company and operating with a dominion licence only. On taking the matter up with the superintendent of insurance at Ottawa it was suggested that they, should apply for a renewal -of their dominion charter rather than continue as a provincial company. This was done. The reason for the delay in having the bill introduced in the House of Commons was that the proposal for a renewal of their dominion charter had to be approved at an annual meeting of the company, which could not be held until some time in February. The bill has already been before the committee of the senate and received its approval, also the approval of the banking and commerce committee of this house, and the approval of the superintendent of insurance. I understand that the company is now in a position to go ahead and reorganize, and this is merely to reinstate the company under a dominion charter and under the jurisdiction of the Dominion Department of Insurance.
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed.
Foreign Insurance Companies
FOREIGN INSURANCE COMPANIES
Tlhe house resumed from Tuesday, May 28, consideration in committee of Bill No. 14, to amend the Foreign Insurance Companies Act, 1932-Mr. Coote-Mr. Morand in the chair.
On section 1-surrender of policy.
Mr. Chairman, when we were considering this bill or the companion bill last week the Prime Minister (Mr. Bennett) made a statement to the effect that the insurance *companies had expressed a willingness to file with the superintendent of insurance an agreement that the rate of interest on policy loans would not exceed six per cent. Since that -statement was made I have been in consultation with the superintendent of insurance and I understand that the offer of the insurance companies was that if the amendment moved by the hon. member for Mount Royal (Mr. White) was passed, rather than have this bill placed upon the statute book they would give a guarantee that they would not charge any rate of interest in excess of six per cent. At that time I did not know whether any correspondence had been placed in the hands of the Prime Minister other than the letter to which I have just referred, but it was intimated to me to-day that another letter had been written to him. I have not been made acquainted with the contents of that letter and I do not know whether it is in the same terms as the previous one.
This bill, which received a good majority vote in the banking committee, asks for a maximum rate of five per cent. I find myself in a difficult position in deciding whether I should accept the suggestion of the Prime Minister and withdraw the bill in order to secure the concession which the insurance companies have offered. I realize that to those indebted to the companies under a loan which was automatically advanced there would be a very distinct concession -made in that regard. The policyholders who have borrowed under that method would be offered a considerable saving tout at tj?e same time I feel that as the bill has gone so far an opportunity dhould be given to hon. members to indicate their opinion in committee of the whole before it is withdrawn. I should like to have any hon. members who have decided opinions on this matter indicate whether they think the amendment of the hon. member for Mount Royal should be accepted. If possible I should like to see this bill discussed for at least a portion of the hour devoted to private and public bills.
I read very carefully the statement which the Prime Minister made last week and I cannot see that the 'bill as introduced1 interferes with any contract. Mr. Rowell suggested to the committee that in the case of loans made under the automatic advance provisions cf a .policy, the policy itself would be the contract between the borrower and the insurance company. But this bill exempts that type of loan from its operations and I think I am safe in saying that the bill now before us does not interfere with any contract. I believe in most policies the paragraph relating to the rate of interest at which loans may be made is generally worded to the effect that the rate of interest shall not exceed a certain per cent. There is no fixed rate mentioned in the contract, and speaking as a layman I cannot see how this bill could be regarded as interfering in any way with any contract.
I believe the rate of interest now being charged by the companies is so high as to be unfair to the borrower because in effect he is only borrowing his own money. Such a loan is not very much different from a loan made to a savings bank depositor. Such a man may have $5,000 in his savings account which he does not want to touch. He may go to the bank and ask to borrow $1,000 and tell the bank that they can earmark that amount in his savings account and hold it as guarantee for the loan. It may seem strange to hon. members but I know that suoh loans are made by banks to men who have savings accounts which for certain reasons they do not want to draw against. It seems to me that a loan under a policy is very much of that nature, and it does seem that at this time, with the low interest rates prevailing, we should not be doing the insurance companies any injustice if we enacted that the maximum rate they could charge should foe five per cent. I would rather secure the concession which the insurance companies have offered than have nothing at all, but before going so far as to ask the leave of the house to withdraw the bill-I realize that it would call for unanimous consent-I should be glad if any members of the committee who have any opinion to express with regard to the matter would state their views, and if necessary at a later stage I would move that the committee rise and report progress or if it weTe preferred-indeed it would meet my wishes-the committee might take a vote on the amendment of the hon. member for Mount Royal. So far as I am personally concerned, I should then have a much clearer view of the course I ought to pursue.