WAR RISK POOLS The report of Lord Weir's Committee on
War Risk In- surance has brought to the front the position of those mutual pools which exist to give their members some measure of cover against war damage to their property. The Com- mittee pointed out that these mutual pools are free from public control, and proposed to apply control by prohibiting advertisement. This proposal has been accepted by the Government. I am not surprised that some of the mutual pools feel strongly about it. While admitting the absence of public control and the danger of abuses, they point out that they are ready to submit to reasonable control and that the best among them at any rate steer clear of all abuses.
The kind of abuses which could be indulged in are fairly obvious. The management expenses could be excessive, the assets of the pool could be expended on advertising and funds could be foolishly invested. From any or all of these causes it might be found when the day for settling claims came round, that the assets in the pool were substantially less than the total the members had subscribed. But let us examine an actual case in point. The largest and oldest of the pools started building up its funds two years ago. It already has £200,000 in the pool and if the war lasts three years it will have L700,000 derived out of its annual pre- mium of 7s. 6d. per cent. and representing property to the value of about L150,000,000. The funds have been in- vested in long-dated Government stocks and, although liable to depreciation, they have suffered little so far. Ex- tensive advertising has been conducted but its cost is borne not by the pool funds but by the old-established association which organised the pool and which gains membership through it. There seems to be no abuse here, though a purist would say that Treasury Bills or Bank deposits would be a more suitable investment than War Loan. What is important is that the public should understand that it is not buying an insurance policy, but a participation in a limited pool. Claims will be paid as far only as the pool funds cover them.
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