Mr. J. A. CURRIE.

Is this in accordance with the Insurance Act ?

Mr. FIELDING.

A clause in this Bill provides that if in any respect its provisions are found to be at variance with those of the Insurance Act as finally passed, the general Act will prevail.

On section 11-Notice of annual meeting.

Mr. SPROULE.

I think it would be well for us to fix a certain date before which the annual meeting should take place, so that the company could send in its returns to the government at the proper time. We have such a provision in all Railway Bills, and it seems to me we ought to have a similar one in Insurance Bills.

Mr. FIELDING.

The returns must be made at certain dates, and the presumption is that the company will hold the annual meeting early enough to enable that to be done.

On section 15-Distribution of profits.

Mr. SPROULE.

This Bill is a little more definite in regard to what is meant by pro-

fits than another Bill which is before the House. They are here stated to be net profits. I think that in all Bills of this kind, it should be made clear that the policyholder shall be entitled to share in all the profits of the company instead of a portion of the profits; because the insurance companies resort to so many devices to put away their money, which is really earned from the policy-holders, that the participating policy-holder does not share in the profits in the proportion that he should. That is clearly the case in the Canada Life Bill, and I take it that it will be the same in this case. If this company, like the Canada Life, were to set apart a certain portion of the earnings every year as a reserve to strengthen the company, that money would really come from the policy-holders, and would be a portion of the profits in which they would have no share at all. It seems to me that there should be a clear and definite statement of what is meant by the distribution of profits as between the policy-holders and the stock holders.

Mr. FIELDING.

The provisions of this Bill follow precisely the same lines as those of other Bills of similar character, and I would suggest to my hon. friend whether, if he wishes to press his view, he might more properly do so in connection with the general Biil, so that if there be an amendment made, it will apply to all.

Mr. SPROULE.

If I were sure that there would be a general Act passed this session, and that it would contain a clause providing for this, I would have no objection; but it is because of the knowledge I have of the operations of insurance companies and of the difficulties that have arisen in the past on account of the ambiguity of the clauses relating to profits as between policyholders and stock holders, that I mention the matter. When we were dealing with the Canada Life Bill, the solicitor of the company said that it was a very far-reaching Bill. If the law as declared by Sir Robert Finlay with regard to the Canada Life prevails, and were not corrected by parliament, it would affect every life insurance company in the country doing business on the participating policy plan, and the participating policy-holder would properly demand and would be entitled to receive a much larger share of -the profits than he has received heretofore. If we allow the provision before us, which has led to this difficulty, it seems to me that we shall be perpetuating something which has been declared to be veTy defective and not understandable, and I think we should take the earliest opportunity to make it so understandable and clear as to make it impossible for either the public ot the companies or their agents to misunderstand it.

Mr. J. A. CURRIE.

I think it would be entirely contrarv to the spirit of the British

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North America Act, and the jurisdiction of this parliament over civil contracts to have any further clauses of this kind included in insurance company charters. I think that a plain provision that the directors would have the power to make such a division of the profits with the participating policyholders as they might from time to time deem necessary, is all the power we should give them. But in this clause we undertake to limit the division of profits to the profits arising from the moneys of the participating policy-holders, and then we further limit the amount the participating policy-holders shall receive. The insurance agent, in canvassing, can make all kinds of representations to the party he wants to insure. He can represent to him that he is to receive a far greater amount than he possibly can receive under this legislation. The party canvassed takes out a policy believing in these representations. He does not find any provision in the policy or contract itself defining what portion of the profit he is to receive but he believes that it is in the company's charter. Then the innocent insurer who has taken out a policy expecting to get a profit of 90 per cent of the whole profits of the company finds, after he has paid in premiums the requisite number of years, that all he is entitled to is only 90 per cent of the profits on his own money. This is all the return he gets for paying in a heavier premium than the ordinary insurance. It strikes me that in every insurance policy, the proportionate amount of profit to accrue to the policyholder should be clearly stated. As far as this Bill is concerned, we have no more right to limit the amount of profit the policy holder is to receive on the participating policy plan than we would have the right in a marriage contract to limit the amount which the wife is entitled to receive out of the profits of a marriage contract in her husband's property, and declare that she shall not receive more than say 10 per cent. For that reason I would ask that the Bill be held over and be referred back to the Minister of Justice for his opinion as to the legality of that clause. In my opinion there is good ground for considering it an infringement of civil rights since it limits the right to contract.

Hon. W. S. FIELDING (Minister of Finance).

This clause has been in our insurance charters many years, and no question has ever been raised as to the constitutional power of parliament to enact it. Whatever opinion there may be regarding the wisdom of so distributing the profits, no question has been raised as to the constitutional authority of parliament on the matter. Unless the hon. gentleman has reason to think it is advisable, we ought not to treat this Bill differently from Bills of a similar character.

Mr. J. A. CURRIE.

The reason is that this question is a matter of litigation now with companies.

Mr. FIELDING.

Not affecting this company. r:|:%3ll

Mr. J. A. CURRIE.

Why should we put in this Bill a clause which may, inside of six months, be declared ultra vires?

Mr. FIELDING.

I am not aware that in any litigation, the constitutional power of parliament to pass a clause of this kind is raised. There may be litigation as to the meaning of a similar clause in another charter, but I am not aware of any question being raised touching the constitutional authority of parliament to enact such a clause.

Mr. J. A. CURRIE.

This involves a constitutional question. A company enters into a contract with an individual by which he is to participate in the profits. If that be a civil contract, it will be defined according to the civil law of the provinces. Have we the right to limit the scope of the contract and prevent an insurance company from giving more or less than a certain percentage of profits if their contracts should be to the contrary. On several occasions Bills have been before this parliament touching on civil rights. There was one in which the Methodist Missionary Society was concerned. An attempt was made to insert a clause providing that conveyances granting land to that society should contain certain clauses or conditions. This House objected to inserting any clause which would interfere with the rights of the parties to make a civil contract as that was a matter entirely within provincial jurisdiction. I think that we should hesitate before inserting the clause in question. The matter will shortly be decided by the civil courts, and in the meantime I think we should not pass legislation that may be contrary to that finding. I can see no reason why an insurance company should not have the right to distribute its profits to participating holicy-holders in accordance with the contract between them and the company. Leave it to the company to agree to give 10, 20 or 95 per cent of the profits or whatever they like but have that stipulated in the contract. As it is, there is now nothing in the contract, and a man, who has taken out a policy on the faith of representations made to him by an insurance agent, finds there is an Act of parliament limiting his rights and giving him less than he was told he would receive.

Mr. FIELDING.

I am not in charge of the Bill and not particularly concerned in its advancement. If my hon. friend's view be correct, it would be better to discuss it when considering the general Bill, so that

Mr. FIELDING.

whatever we may do will apply, not to one company alone, but to all.

Mr. KNOWLES.

I would be quite willing to acquiesce in the suggestion of the hon member for North Simcoe (Mr. Currie) if I could see any reasonable ground for believing his anxiety well founded. It would be rather presumptuous on my part to give an opinion off-hand on a debatable point regarding constitutional law, but I can see no reason for hesitation in this matter. When we have the power to create an insurance company, surely we have the power to place whatever restrictions we may deem advisable, on its operation. True, the provincial legislatures have jurisdiction in matters of civil contracts, but that must be taken within limits, such as in the case before us where we are asked to create a company and define what powers we shall give it. My hon. friend the Minister of Finance has called attention to the fact that this is the first occasion when objection has been raised to legislation of this kind; and before being asked to hold the Bill over, we ought to have some stronger reasons given for contending that it is ultra vires. Surely the anxiety of one individual is not sufficient reason for holding over the Bill. With all due regard for the valuable opinion of my hon friend, with which he so kindly favours us on frequent occasions, there is no documentary evidence and no seriously considered opinion submitted which would be a justification for our delay in passing the Bill.