MAJORITY REPORT.

CHAPTER VIII.

THE APPROVED SOCIETY SYSTEM.

196. We now turn to consider one of the most important
features of the Scheme of National Health Insurance—the
Approved Society system. Whether we regard the membership of
the Societies, or their number and variety, or the historical position
 which many of them occupy in the field of provident effort,
or the immense sums of money with the administration of which
they are entrusted, we are impressed with the magnitude of the
system and the complexity of the many issues which it presents
for our consideration. We think it will be convenient to discuss
these problems as a self-contained group, remembering that we
deliberately excluded them from our review in Chapters V and
VIL. Accordingly in this Chapter we describe the system, give
the effect of the more important evidence we have received in
regard to it and make certain recommendations for improving
the administrative working of the system, which, in its main
features, should, we think, be continued.

AUTONOMY OF SOCIETIES.

197. In one respect the National Insurance Act of 1911 represented
 a bold experiment in the field of social legislation, inasmuch
 as it sought to devolve a large part of the administration of
a measure enacted by Parliament upon those in whose interests
the Act had been passed. Even a cursory perusal of the Act
would demonstrate that in intention at least the Health Tnsur.
ance Scheme was planned so that it might be administered, not
by the executive departments of the Central Government or by
Local Authorities subject to the electorate at large, but as far
as might be by self-governing bodies created by and answerable to
the insured persons themselves. The Act was thus an experiment
in democracy, no less than in the domain of social betterment,
and a review of the working of the Act would be incomplete if it
failed to recognise this two-fold character of the Scheme. The
bodies by which the Act, so far as concerns the administration of
cash benefits, is administered, are known as Approved Societies.
They are organisations of various origin and differ widely from
one another in constitution and methods of operation. They
are, however, subject in common to two main statutory conditions,
 namely—
(1) That the Society shall not be conducted for profit, and
(2) That its constitution shall provide for ifs affairs being
subject to the absolute control of its members.

198. The Act provides that each Approved Society shall have
control of its own funds derived from the contributions of its