Such a policy-holder as I have described taking the first option under this Bill would get his insurance at about $2 less than he could get it for in an ordinary company. He would probably get $176 of the reserve in the form of a paid up insurance, making in all $1,005. That is his position. Now, while it reduces the amount of insurance he would get, it fixes the price of insurance he .will pay in the future. But if the one choosing the option desires to carry the amount of insurance he has always carried, he can do so by paying the rate specified in the table, it will benefit the policy-holder saving $10 a year on this insurance of $5,000, and also lie will be taken in without a fresh medical examination, if the Bill does not go through and that policy lapses, that man, if he could not pass a medical examination, would be precluded from getting insurance in the future. But, udder this Bill he gets his insurance cheaper than ho could get it anywhere else and he gets it without making it dependent on his passing a medical examination. If a man has consumption, that is a good concession.
It will be reduced to $1,425. But the man does not need to change. If he wishes to cbntinue as he is, he can keep his insurance for $5,000 and probably pay $500 a year. This company has ceased to do business of this class, and the members of that class must pay the- death rate of their class. They are growing less all the time, and the last man will have to pay his own policy. If he chooses to stay he can do so. But, if not he can take this option which, the Insurance Department tell us, is the best that can be done under the cir-cumstanees. We do not deprive a man of
the right to pay his neighbour's death claim and his own. But this gives him the opportunity to get insurance on the level premium plan and as large an insurance as possible.
The hon. member (Mr. Heyd) has stated that this is not a bankrupt institution. Yet we find that the proposition of this Bill is that it shall compound with its creditors on the basis of $1,425 for $5,000. That is a difference of $3,575. I should be inclined to regard a concern of that kind as a bankrupt institution. We, as a matter of fact, are constituting ourselves a bankruptcy court for the purpose of putting the company through. Now, I do not object to putting the company through the bankruptcy court. But I do object to this company being put through the bankruptcy court on a basis of 25 or 30 cents on the dollar and then allowed to go on and do business throughout this fair country of ours.
But does not the hon. gentleman notice that, while it reduces its policy from $5,000 to $1,425, if he accepts the option, yet, nothing is forced upon him, and he has the right to remain as he is with his policy of $5,000. Or, he can keep his policy at $5,000 and pay on the level premium plan, and while the premium under this Bill, age 52 would be about $400 a year, it wrould be less than the man is paying now probably. According to the hon. member for Grey (Air. Sproule) he would be paying about $500 per year. Is it not a relief for a man if he gets his insurance for less money ?
Well, Mr. Chairman, it ^appears that what I have said in regard to this company is altogether too mild. If this option of dropping two-thirds of his insurance is the best that the company can do, it is the duty of this parliament to consider this Bill with a view to winding up the affairs of this company.
I think it is quite possible that parliament could wind them up. At any rate, for parliament to give its sanction to the operation of an institution which, having conducted business in this country for so many years has arrived at the condition that it offers to compound with its creditors on the basis of 25 cents on Mr. HEYD.
the dollar and threatens that if they do not take that offer they will have to continue as they are-which means that they will be robbed of everything-is a most unheard of thing. And, certainly, when we have such a proposition before us, at least parliament should have a reasonable time to consider it and to judge whether we should give our sanction. We are asked to accept what this management has done and then allow it to go on until it is compelled to compound with its creditors again. I submit that the very fact that 40 out of these policy-holders refuse this offer and that 9S of them asked for further information, although the threat was made to them, as stated by the hon. member, is reason why we should pause before taking this step. As the hon. member for East Grey indicates, the choice offered by the company is Hobson's choice-to take what is offered or get nothing at all ; to take 25 cents on the dollar or be robbed completely. I say that such an Act should not be accepted by parliament with the explanations that have been made here. Such a measure should be taken up at a time when it is possible for explanations to be made which v."l enable hon. members to justify themselves to their constituents in allowing the company to pursue its operations. These insurance companies are for the purpose of protecting the widow and the orphan and when it is proven that an insurance company exists on the robbery of the widow and the orphan, for that is what this means, I say that this parliament of Canada should consider how far it is for them to condone such a condition of affairs by assenting.
This, I think, would be a prudent time to get information as to what this company proposes to do with its shareholders if it gets a license. Take the case of a man holding a policy of $5,000 who is now fifty-two years of age. Supposing he elects to remain in at the $5,000 will ihe premium that he would have to pay to file company on that $5,00(4 from the present time out be as small a premium as he will have to pay providing he were a fit subject for insurance in any straight life company. As I understand lie would not be called upon to pay more than he would have to pay in another straight life company.
If this is correct it does not seem to me there should be the objection to the Bill urged by the hon. member for Alberta (Mr. Oliver). In the first place the policy-holder went into a mutual insurance company. It is true he has to pay more than he expected to pay but at all events he has been paying on the basis of a mutual insurance company. Now, he
has this advantage, as my hon. friend from Bast Grey pointed out, and it seems to me it is certainly a case of Hobson's choice because when the new blood that would be naturally coming in from year to year and swelling the receipts of this insurance company, when they were carrying on a mutual insurance, has been cut off, as it eventually will be and when the policy-holders narrow down to a few who are holders of these mutual policies it means that these remaining policy-holders will be paying more than they can afford or more than the amount of the policy in the event of death would amount to. Thus it is to that extent in the interest of these policy-holders, I do not think there can be any question about that. It is in their interest that there should be some means by which their policies will not become practically useless, as they otherwise would. They have this additional advantage that they can be granted that straight life policy, based on their present age, without a further examination. That, I think, is an important feature. If we refuse to pass this Act it may mean that a number of these policy-holders who have rights to-day wil be obliged to abandon them. They will not only have to drop what they have paid but the policy will be gone. There will be nothing for their widows and orphans on the death of the policy-holders. Companies say : We cannot do business on the mutual system any more but we will give you two options, to retain the straight policy ; retaining the original sum, and without a medical examination which might otherwise debar you, and we will not call upon you to pay as much as or at all events any more than you would be called upon to pay in other companies at your age.
I wish to reply to one question of the hon. member for Alberta, as to why the company was not wound up. As long as a company is doing business within the lines of the Insurance Act you cannot close it. The members of a mutual company must raise the money to pay the death claims, and if the amount in the original contract which was in 'this case to which I have referred, $9.95 on every two months, is not sufficient to pay the death claims, the Insurance Act provides that that amount may be increased, and under that clause they are increased from year to year, thus keeping the company alive. Therefore you cannot wind it up as long as it is doing business under the law. If the company ceases to do business they can distribute what is in their hands among the members, but so long as they do Hot want it wound up and are doing business, as a bona fide insurance company you cannot wind it up. With regard to the other question raised by the hon. member for Yale-
Cariboo, I may say that that is a case in poirif. Here is a gentleman with a $5,000 policy who is paying to-day $572.40 and the rate is going up in a manner which if it continues will before another year make the amount he will be paying a great deal over $1,000. If "that man lived five years, notwithstanding that he had paid into this fund for years he would pay more than the whole amount of the money that would be given to his heirs at the time of his depth, but on the other hand, if he dropped out now, he could not get into another company because he would not stand the examination. I know that for a fact, and therefore he would be deprived of the advantage of all the money he had paid in except in so far as it "carried the risk up to this time. Now, he can take a policy under this new system for the average of the amount that the premium will pay or he can pay an additional amount on the same basis and get this $5,000 policy. It is making the best of a bad job.