Industrial Assurance.

Part of the debate – in the House of Commons at on 29 March 1934.

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Photo of Miss Eleanor Rathbone Miss Eleanor Rathbone , Combined English Universities

I would like to support what has been said by the three previous speakers as to the possibility of something being done through administrative action to cure this really stupendous evil. Like a previous speaker, I very much regret that we cannot discuss the further legislative action which is so obviously necessary. Much might be done even without legislation. I am particularly struck by the suggestion made by the hon. Member for South Shields (Mr. Johnstone) that there should be local offices of the Insurance Commissioner. Such offices should be in the various districts of London and in provincial cities, and might be of immense value in warning people of the possible snags, and making it less likely that they will become victims of the swindles of insurance societies by putting information before them as to the operations of those societies.

No one who reads this most deeply interesting report will doubt that a great deal of illegal insurance goes on which is not done contumaciously, but is largely the result of the ignorance of the policy-holders. One page of the report contains the statement that the committee estimated that in 1929 at least 200,000 children were over-insured in England. The hardship of over-insurance is that children are insured for a larger amount than is legally claimable, and such over-insurance may be made intentionally by a person who is given an interest in the child's death, but also innocently, and the unfortunate policy-holders lose the benefit of the insurance. A curious case is given in the report where a child had been insured first by its grandmother, and secondly by its mother. The grandmother claimed first and got the insurance, and the mother, although she had borne the whole of the expenses of the funeral and had put in her claim, was unable to receive a penny because the child had been over-insured.

It is not unduly harsh to the insurance societies to say it is obvious that they are not likely to be anxious to draw attention to, or to remedy, a form of over-insurance which is so highly profitable to themselves. All the premiums goes to them, when payments are limited to the legal amount of the insurance. The proposed local office could warn insured persons so that they might know that they were risking a penalty and probably the loss of the money by which they were over-insured. It is necessary to guard working people against the illegal action or unjust administration of the insurance societies. What can be done in that matter is strikingly illustrated by the work of Mr. W. E. Mashford, of Hull, who was alluded to by an hon. Member who spoke previously. Here was this man, not a wealthy man, working from enthusiasm for the subject. Testimony was paid to him by the committee of inquiry, because they gave up two and a half days to hearing his evidence. They were not able to adopt all his recommendations, but they expressed their belief in his sincerity and in the value of his work. The Industrial Assurance Commissioner visited Hull for the purpose of dealing with cases of dispute, and Mr. Mashford brought before the Commissioner, or assisted the policy-holders to bring, 36 cases, of which 21 were won, eight were lost, and six were adjourned. One was not dealt with. Only eight of the 36 were lost.

Here are a few particulars which he gave of the cases: For a widow, whose husband had been killed a short time previously, and whose child had been subsequently born, he reclaimed £30 13s. For another widow he reclaimed 19s. and for another 17s. 6d. For another poor woman who had six children to maintain, he reclaimed £15. For a man whose wife had disappeared, leaving him in charge of three children, he reclaimed £15. For another man, he secured £14, which is the fifth amount, according to Mr. Mashford, secured for this family this year. That is an interesting illustration of the point made in the report that some families hold a very large number of policies. In another case the husband had committed suicide and the widow was a physical wreck. How many people circumstanced as these people are, with burdens of very large young families, are likely to have the legal knowledge to enable them to know when they are being swindled? Why should their protection be left to a private agency? I do not know any counterpart of Mr. Mash-ford in any city, but I hope that some more organisations of the sort will be set up by private enterprise, although this is a thing which ought to be done by the community as a whole.

We are proud of the great mass of our social legislation, but in this respect the ordinary working man or woman has a very poor chance of knowing or enforcing a legal right without the advice and the constant assistance of some authority. Even in such a matter as housing, a provision was recently put into a Bill that local authorities might give advice to persons. That is the kind of thing which occurs only very rarely, but in the case which we are discussing there are 80,000,000 policies operating in this country, a number nearly double the figure of the entire population. The vast majority of those policies involve payments of about 2d. per week, and the average premium is £14 8s. Millions of weekly transactions are involved. Men come round and talk to the woman, because the man is out at work; and they are able to put up any sort of a tall story as to the benefits which she will get out of insurance. If ever there was a case where the ordinary individual needed the protection which only an agent of the community can give, here is such a case.

It is possible for local offices to be set up without any further legislation. Their cost would be recovered over and over again. Who can doubt that the appalling strain upon the resources of the working class involved in this grossly wasteful system of insurance results in large burdens upon the community and upon public assistance and unemployment authorities, hospitals and charities of every kind? It never pays in the long run to allow the resources of the community to be frittered away. Nobody can read this document without feeling a burning shame. I have seldom read a blue book which went more to the heart than this one does. There is an ugly side to it. When we meet again after the Adjournment we shall be considering a Betting Bill. I doubt whether even in that rather sordid and ugly subject there is anything uglier and more sinister than the form of betting upon human life which is dealt with in the report. Where you have people insuring their relatives, sometimes fairly distant relatives, or young men and women getting married and insuring their aged parents, who are already amply insured for purposes of funeral benefit, in a sort of gamble on the possibility of their death, it has a very ugly and sinister sound. A great deal could be done, simply by publicity, to bring the light of public knowledge on to this subject and to deter people from being inveigled into the appalling waste of their resources which takes place through these wasteful, and in many cases illegal, forms of insurance.