Call for Central
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Insurance Fund
IMPORTANT recommendations reI garding motor-vehicle insurance are contained in the report of the Committee on Compulsory Insurance, which was appointed in 1936. The Committee's terms of reference were to report on the position regarding the existing law on insurance and the changes desirable in the light of compulsory insurance. The inquiry was set up in consequence of the failure of five companies engaged in transacting compulsory motor vehicle, insurance 'business.
The Committee recommends the establishment of a Central Fund, to which all insurers, licensed to undertake motor-vehicle insurance, would contribute for the purpose of paying, in certain cases, sums due to an injured third party. It is also recommended that no insurance company should be allowed to undertake compulsory insurance business without a licence from the Board of Trade.
To advise the Board of Trade in the licensing of insurers, it is suggested that three advisory committees should be set up to deal with the three cate gories of insurers who would come under, review. Each committee would comprise five members.
On the question of the Central Fund; it is recommended that this Should be a corporate body, capable of suing and being sued, and should be 'managed by a board on which would sit representatives of the licensed insurers, The board should not be subject to Government control.
The purpose of the -Fund would be to pay an injured third party any sum due in cases where an insurance company avoids a policy which it is entitled to avoid, or where the owner of the vehicle has failed to insure altogether. In such cases as the last-named, the Fund would have recourse against the owner of the vehicle.
The Committee's suggestions have been received with favour in insurance circles, and it is felt that the recommendations go a long way -towards meeting a difficult situation. The possibility of a rise in premiums to help pay for the insurers' contributions to the Fund should not, however, be overlooked.