Opposition to back new life insurance law

The opposition will vote in favour of a bill to introduce the contract of life insurance in the Civil Code, Opposition justice spokesman Anglu Farrugia has said in Parliament.

He said the opposition was in favour of the bill because the insurance sector should always be regulated by law in order to pre-empt any speculation or problems of interpretation. There had been cases where insurance companies, acting on unclear court judgments, created problems for the insured or their heirs.

Problems after the passing away of the life assured had also been encountered by charitable organisations and heirs with disabilities. For the first time legislation was considering the need for written consent on the part of the intended beneficiary to be installed as the beneficiary after the death of the life assured.

The choice being made to couples on whether a spouse could retain a life insurance policy outside the community of acquests was a step in the right direction.

Dr Farrugia said Malta was still lagging behind in the area of insuring the lives of employees, even on the part of the government. Various efforts had been made to insure the lives of members of the Police Corps, the Armed Forces and Civil Protection Department as front-runners in dangerous situations: this had first been brought to the fore in the 1980s when members of the police and armed forces lost their lives in the explosion on a patrol boat carrying explosives. The families had received pittances for their tragic losses.

Dr Farrugia said he was sure both parties would be in favour of taking out such life insurance cover for these people.

The Labour MP complained that huge amounts of immovable property were being snapped up by the banks for a fraction of the real value when heirs found themselves in financial difficulties. This was analogous to the example made by Parliamentary Secretary Carmelo Mifsud Bonnici of insurance policies worth thousands of liri being sold for derisory amounts in judicial auctions in the court corridors.

Interjecting, Dr Mifsud Bonnici said the government was working on this very important issue.

Continuing, Dr Farrugia said attention needed to be brought to bear even on group insurance policies. He believed that such policies should become more popular in Malta. Such a group policy would have gone a long way to help the heirs of the dockyard workers who died on board the mv Um el Faroud.

He said the disclosure or non-disclosure of protected data had led to hardships for several bereaved families or victims of traffic accidents, especially in cases where the insuring company became insolvent and families ended up with nothing. Non-disclosure of data could be as dangerous as it could be important.

Dr Farrugia asked if the directive on disclosure of assets held overseas would also apply to those who held undeclared life insurance policies outside Malta.

He also asked how the figure of Lm20,000 on the capping of life insurance for children had been reached.

The opposition, he said, agreed with the uncoupling of life insurance benefits from succession.

One aspect that needed attention was marriages wherein a younger partner married an older one and convinced the latter to institute the former as beneficiary, to the detriment of the original family.

What would happen in the case of a family with natural and adopted children when an insurance policy was surrendered and there was nothing specific on beneficiaries? The benefits should be shared equally by all, including the adopted children.

Dr Farrugia said the beneficiary should never be allowed to disclose any details about the life insurance policy without the specific consent of the policyholder. The latter should have complete control over his or her policy until passing away.

He questioned whether there should be repeated recourse to the courts every time there was a question with regard to a life insurance policy. It was a fact that a policyholder was always the underdog in any litigation with the insurance company.

Concluding, he augured that the bill would constitute another step in the safeguarding of the interests of the Maltese in the ever-growing sector of life insurance.