D4.)

LEY,

MAJORITY REPORT.

and this would provide for the small number of transferring
members until it was exhausted. (Kinnear, Q. 652-655. 672-693,
23,729-23.748.)
585. We have given this matter our most careful consideration.
We are satisfied that the present arrangements impose too severe
a penalty on transfer from one Society to another, and should,
therefore, be modified. At the same time, we are impressed by
the arguments put before us by the Ministry as to the dangers
of widespread canvassing for transfers which would be likely to
result from the granting of immediate title to additional benefits
on transfer. We also recognise that the granting of this right
would necessitate the loading of the transfer value, and we are
advised that actuarially this would involve very serious difficulties,
regard being had to the variations in the scales and range of
additional benefits and to the fact that the dates of transfer would
bear no relation to the periods for which the schemes of additional
benefits of the various Societies were current. We have considered
 whether the suggestions put forward by the Ministry and
referred to in the preceding paragraph would provide a reasonable
 solution of the problem, but we have come to the conclusion
that they do not go far enough. We see no sufficient reason for
any change in the present position as regards title of additional
benefits for new entrants into insurance, but in the case of persons
transferring from one Approved Society to another we think that
the title fo participate in all additional benefits—whether cash or
treatment benefits—provided by the new Society should mature
at the end of two years after the date of transfer, and we
accordingly recommend that this change should be made.
586. We are of opinion that the waiting period of two years
will provide sufficient protection against the evil of undue canvassing
 for transfer.
587. We recognise, however, that even with this limitation the
financial position of a Society might be seriously prejudiced if
the number of persons admitted to membership by way of transfer
were allowed to reach a substantial proportion of the total
membership of the Society, unless the transfer values had been
increased to cover the extra liability imposed by the grant of
additional benefits. We are anxious to avoid such adjustment
of the transfer values, partly for the reasons given above and
partly because we cannot contemplate that the Society which a
person leaves should be charged with the value of additional
benefits on the scale given by the Society to which he goes. To
provide a safeguard against this risk, we recommend that the
Minister should be given power to suspend the right of any
Society to accept members by way of transfer if the membership
of the Society has been increased in this way since the date of
the last valuation by more than a prescribed proportion fixed in
accordance with actuarial advice.