Mr. BORDEN moved:

That the committee authorized by order of this House on the 9th of March, to inquire into a proposed amendment of the law respecting the manufacture, sale and distribution of cigarettes, cigarette paper and wrappers, be constituted of the following members: Messrs. Barnard, Broder, Charlton, Cromwell, Kemp, Kyte, Lemieux, MacNutt, Marcil, Morphy, Paquet, Perley, Schaffner, Stewart (Lunenburg) and Turgeon.

Mr. SPEAKER:

I notice that the resolution is not yet moved.

Mr. WHITE:

I may explain that there are two Bills. The one to which the resolution refers is that relating to Civil Service insurance. But the present Bill requires no resolution as it involves no expenditure by the Government. The principal provisions of this Bill are as follows: Greater powers are given the department to deal with insolvent life insurance companies. The amendments in this regard are designed to meet certain defects in the existing Act and in the Winding-up Act relating to life insurance companies. There is also provision to the effect that in the case of contracts entered into between life insurance companies and any of their directors, officers or agents, in the event of liquidation, the liquidator may elect either to continue such contracts or to terminate them, no matter for what time they may have been originally entered into; and, in the event of the liquidator electing to terminate them, the holder of the contract shall be entitled to rank for only three months' time of the contract. This is to meet a difficulty that arose in connection with the Union Life Insurance Company, which I will explain at greater length on the second reading of the Bill. The legal result of the contract in that case was that a very large sum indeed-on account of the length of the contract-would have been payable by the insurance company in respect of damages which would, of course, rank upon the assets of the company pari passu with the claims of the policy holders. There is a further provision of importance, that, in the event of liquidation, the claims of the policy-holders shall he a first charge upon the assets. I think these are the chief amendments relating to life insurance companies which are insolvent or are in liquidation.

In addition, there are certain amendments under which companies are not permitted to invest in the shares of other companies carrying on the same class of business. Companies now holding such shares are required to dispose of their holdings within a certain time. Ten years is the time specified.

There are more stringent provisions as to

the supervison of companies in process or organization, particularly as to the expenses of such organization. A limitation is placed on investments in unsecured bonds in which companies are authorized to invest, and there is a provision whereby the liquidator of a life insurance company may, subject to certain conditions and with the consent of the court, re-insure the policyholders of the insolvent company. That is, of course, in the interest of the policyholders. There is also provision in the case of fire insurance companies that if there should he a twenty-five per cent impairment of the capital the superindentent of insurance may call upon the company to>

make good the deficiency.

Sir WILFRID LAURIER:

I notice the hon. minister mentioned as one of the features of the Bill that in case of liquidation the policy is to be the first claim upon the assets of the company. Is that a departure from the present law?

Mr. WHITE:

I am advised that it is; I think that the claims now rank pari passu upon the assets.

Sir WILFRID LAURIER:

All claims?

Mr. WHITE:

My right hon. friend would hardly expect me to say offhand whether all claims are in that position. I believe they are. This is designed to meet a situation that arose in connection with the Union Life, in which all claims ranked equally with the claims of policy-holders, and to provide that the claims of policyholders shall have the first place.

Sir WILFRID LAURIER:

Would my

hon. friend, on the next occasion when this Bill is before us, be in a position to tell us exactly the law on this point?