HC Deb 04 July 1966 vol 731 cc41-3
Mr. Peter Walker

(by Private Notice) asked the Minister of Transport what action is proposed with regard to the position of those motorists who are insured with the Fire, Auto and Marine Insurance Company.

The Minister of Transport (Mrs. Barbara Castle)

I am issuing a Press statement today confirming that motorists insured with this company should, in their own interests, take out fresh policies with other insurers immediately.

Mr. Walker

We are grateful to the right hon. Lady for that statement. In view of the fact that a great deal of personal disaster could occur to individuals who find themselves uninsured, would the right hon. Lady endeavour to ask the company to circulate an individual notice to each motorist informing him of the position? [Interruption.] The First Secretary of State suggests that nationalisation is the solution to this problem.

Secondly, would the right hon. Lady consult the President of the Board of Trade about bringing in urgent legislation to ensure that companies cannot operate as motor insurance companies with issued capital as little as £50,000? May I draw to her notice that five of my hon. Friends and I endeavoured to introduce a Private Member's Bill called the Insurance Companies (Share Capital) Bill, which sought to increase the amount from £50,000 to £250,000? As there are a number of companies operating with very small capital, would the Government give facilities for this Bill to be brought into operation?

Mrs. Castle

On the first part of the hon. Gentleman's question, application for leave to petition for winding up is before the court this afternoon. In view of this, I am not sure that the company would be permitted to circularise its clients. Secondly, I am already considering with my right hon. Friend the President of the Board of Trade what further safeguards are needed to protect motorists against default by insurance companies.

Mr. Roebuck

Is my right hon. Friend aware that these motorists would not be in this unfortunate position if they were insured with the Co-op?

Mrs. Castle

Yes.

Mr. Grant

In view of the fact that by Statute companies of this kind have to file their accounts with the Board of Trade, surely some responsibility must rest upon the President of the Board of Trade. When were these accounts filed and what did they reveal?

Mrs. Castle

My interest in the matter is to see that motorists are properly insured under the compulsory insurance requirements of the Road Traffic Act, 1960. The other points raised by the hon. Member are for my right hon. Friend the President of the Board of Trade.

Mr. Arthur Lewis

My right hon. Friend said that she is giving further consideration to what can be done. Among these points, will she give serious consideration to the excellent interjection by the First Secretary of State? Is she aware that we on this side of the House would support her unanimously if she were to ask for extra time for the nationalisation of this industry?

Mrs. Castle

All the interjections have been duly noted.

Sir J. Hobson

Can the Minister tell the House whether the Motor Insurers' Bureau will meet any claims and, if so, which?

Mrs. Castle

Under the agreement between the Motor Insurers' Bureau and the Minister of Transport in 1946, claims for death or personal injury to third parties as defined in the Road Traffic Act, 1960, will be met in full by the Bureau for accidents up to the date of the winding up order, because all those claims are still valid up to the winding-up order, though whether they can be met is a different matter. The Motor Insurers' Bureau under the agreement of 1946 will meet those claims for third party injury or death, though, of course, they have the right to recover any payments they make from the policy holder. But I believe that they will operate in the full spirit of that agreement as far as it goes.

Mr. Bessell

Will the right hon. Lady make representations to her right hon. Friend the President of the Board of Trade to encourage insurance companies voluntarily to form an indemnity fund to prevent a recurrence of this sort of trouble?

Mrs. Castle

The agreement between the Motor Insurers' Bureau and the Minister of Transport is a form of indemnity provision. Admittedly it covers only those items for which there is compulsory insurance. Whether it is possible to go any further than that is for the insurance companies to decide.