14 & 15 GEORGE 5, CHAPTER 38.

the National Debt Commissioners for temporary investment, pending the ascertainment of the amount available for investment as aforesaid, any sums in the National Health Insurance Fund not required to meet current liabilities.

(2) There shall be credited to the Deposit Contributors Fund, to the Navy, Army and Air Force Insurance Fund, and to the Reserve Suspense Fund interest at the prescribed rate per annum on the sums from time to time standing to the credit of those funds respectively in the Investment Account.

(3) The National Debt Commissioners shall present to Parliament annually an account of the securities in which moneys forming part of the National Health Insurance Fund are for the time being invested.

71. TRANSACTIONS BETWEEN THE MINISTER AND APPROVED SOCIETIES.—(1) Subject to the approval of the Treasury, regulations shall be made with respect to crediting and debiting to the several societies sums received and paid by the Minister on behalf of and to societies, and as to the payments to be made by and to the Minister to and by societies, and those regulations shall, among other things(a) provide for crediting to each society the contributions paid by or in respect of the members of the society after deducting the amounts retained thereout for discharging the liabilities of the Minister in respect of reserve values and for the Central Fund ;

(b) require the Minister, on carrying any sum to the credit of an approved society in the investment account, to pay over to the society for investment, or at the request of the society to retain for investment on behalf of the society, one-half of the amount so credited to the society;

(c) provide for crediting to each society interest at the prescribed rate per annum on the sums for the time being standing to the credit of the society in the investment account;

(d) provide for the discharge of debit balances in such manner as the Minister determines, either by the reduction of the reserve values credited to the society or out of the proceeds of the realisation of securities held by the society or by the Minister on behalf of the society, and out of the sums standing to the credit of the society in the investment account, proportionately:

Provided that, in the case of any society which gives notice to that effect to the Minister, no part of the sums carried to the credit of the society in the investment account shall be paid over to the society or retained by the Minister for investment on its behalf, but the whole amount shall remain to the credit of the society in the investment account, and in such case the regulations made under the foregoing provisions shall apply to the society subject to the prescribed modifications.

(2) Every approved society shall invest any sums paid to the society for investment, and shall for the purpose have power to invest in any investments in which trustees are for the time being by law empowered to invest trust funds, or in any stocks, mortgages or other investments issued by any local authority within the meaning of the Local Loans Act, 1875 (38 & 39 Vict. c. 83), and charged on any rates levied by or on the order or precept of that authority, or in any other investments for the time being approved by the Minister.

(3) Where at the request of a society, the Minister, instead of paying over any sum to the society, retains the sum for investment on behalf of the society, he shall invest the sum in accordance with the directions of the society in any investments in which the society might have invested it had it been paid over to the society, and shall from time to time vary the investments in accordance with the like directions, and shall pay over or credit to the society all sums received by way of interest or dividend on the investments held by him on behalf of the society.

(4) Every approved society shall apply the sums received by way of interest or dividend on investments held by the society or by the Minister on behalf of the society towards the cost of the benefits of the members of the society and the expenses of the administration of those benefits, or otherwise, as may be prescribed.

NATIONAL HEALTH INSURANCE ACT, 1924.

Financial Provisions relating to Approved Societies.

72. ACCOUNTS OF APPROVED SOCIETIES.-(1) Every approved society and every branch of an approved society must

(a) Keep its books and accounts under this Act separate from all other books and accounts of the society or branch, and in such form as may be prescribed, and when required submit them to audit by auditors to be appointed by the Treasury;

(b) Submit to have its assets and liabilities under this Act valued in accordance with the provisions of this Act;

(c) In the event of a surplus or deficiency being shewn upon any such valuation, comply with the provisions relating to surpluses and deficiencies hereinafter contained;

(d) Render such returns as the Minister may require.

(2) The provisions of this Act relating to accounts, audit, valuation and returns shall, as respects the transactions of any approved society or branch thereof under this Act, be substituted for such of the provisions of any Act regulating the constitution of the society or branch as deal with the like matters.

(3) In the case of a society or branch transacting other business (in this Act referred to as "private business") as well as insurance business under this Act (in this Act referred to as state business"), all funds and credits of the society or branch under this Act shall be as absolutely the security of the members for the purposes of this Act as if they belonged to a society or branch carrying on no other business than state business, and shall not be liable for any contracts of the society or branch for which they would not have been liable had the business of the society or branch been only state business, and shall not be applied directly or indirectly for any purposes other than those of state business.

Where there has been established a separate section of a society and that separate section is an approved society under this Act, the expression "society" in this subsection means the society of which the separate section has been established and not the separate section.

73. ADMINISTRATION EXPENSES OF APPROVED SOCIETIES. (1) Subject to the provisions of this section, provision shall be made by regulations for a separate account being kept in respect of every society and branch of a society showing the amount expended on administration by that society or branch, and for limiting the amount which may be carried to that account out of the contributions under this Act, and for requiring any deficiency in that account, if not otherwise defrayed, to be met forthwith by a special levy.

(2) Subject to the consent of the Treasury, regulations may, notwithstanding any other provision of this Act, be made for authorising an approved society, being a society registered under the Friendly Societies Act, 1896 (59 & 60 Vict. c. 25), under the Trade Unions Acts, 1871 to 1917, or under the Industrial and Provident Societies Acts, 1893 to 1913, which carries on private business as well as state business, with the consent of the Minister and subject to any prescribed conditions as to audit or otherwise, either to keep a joint account for the purpose of the administration expenses of both the private business and the state business, or for the purpose of some part of those expenses, or to pay out of the funds standing to the credit of the administration account kept by the society in respect of the state business to the account kept by the society in respect of its private business any sum not exceeding the prescribed amount, upon the terms that all or some part of the administration expenses in connection with the state business shall be defrayed out of the funds standing to the credit of the account kept in respect of the private business, and providing that the provisions of this Act relating to the audit of the accounts of approved societies shall not apply in any such case.

(3) Regulations may be made

(a) imposing on members of any society who fail to pay within the prescribed time any levy which they are liable to pay such penalty by

14 & 15 GEORGE 5, CHAPTER 38.

way of reduction, postponement or suspension of benefits as may be prescribed and providing for the necessary adjustments in the accounts of the society;

(b) extending to branches of approved societies with or without modification the provisions of any regulations made under this subsection

or under subsection (2) of this section with respect to approved societies.

74. VALUATIONS OF APPROVED SOCIETIES.-(1) A valuation of the assets and liabilities arising under this Act of every approved society and of every branch of an approved society shall be made by a valuer, to be appointed by or with the approval of the Treasury, at the expiration of every five years or at such other times as the Minister may appoint, and the times so appointed may be at shorter or longer intervals than five years and at regular or irregular intervals, and may apply to all approved societies or any particular society or societies.

(2) Every such valuation shall be made on such basis as may be prescribed.

75. PROVISIONS AS TO APPLICATION OF SURPLUSES.-(1) The following provisions shall have effect in any case where on a valuation under the last preceding section there is found a surplus which is certified by the valuer to be disposable :-(a) If the society is not a society with branches, the society may submit to the Minister a scheme for distributing out of the surplus any one or more additional benefits among insured persons who are members of the society for the purposes of this Act, and upon any such scheme being sanctioned by the Minister, the society may distribute the additional benefit or benefits in accordance with the provisions of the scheme :

(b) If on the valuation of a branch of an approved society, a surplus is shown in respect of the branch, the branch may, with the approval of the society, submit to the Minister a scheme for distributing out of the surplus any one or more additional benefits among insured persons who are members of the branch for the purposes of this Act, and upon any such scheme being sanctioned by the Minister, the branch may distribute the additional benefit or benefits in accordance with the provisions of the scheme : (c) If at any time after a scheme submitted by a society or branch has been so sanctioned as aforesaid, there is found to be a deficiency in the funds of the society or branch, no additional benefits shall be distributed under the scheme until the deficiency is extinguished.

(2) A scheme made under this section may determine the conditions to be complied with as respects the additional benefits and may provide for the reduction, suspension or deprivation of the additional benefits in the case of members who are in arrears, and if it so provides may make a corresponding modification in any regulations providing for the reduction, suspension or postponement of benefits (other than additional benefits) on account of arrears.

(3) No surplus and no part of any surplus shall be applied either

(a) for the purpose of paying any benefits payable on death or any benefits other than one or more of the additional benefits specified in the Third Schedule to this Act; or

(b) towards making good any deficiency in any other society or branch. (4) Additional benefits shall not, except as may be otherwise prescribed, be distributed among any persons who were not members of the society or branch on the date as at which the valuation was made.

(5) Additional benefits shall be administered by the society or branch of which the persons entitled to the benefits are members, except that where the benefits are in the nature of medical benefit, they shall be administered by and through the insurance committee.

(6) In this section the expression "additional benefits" in relation to any scheme means the additional benefits authorised by the scheme.

76. APPLICATION OF CONTINGENCIES FUND TOWARDS MAKING GOOD DEFICIENCIES [1918, s. 3 (2)–(6)].—(1) If on the valuation of a society without branches a deficiency

NATIONAL HEALTH INSURANCE ACT, 1924.

is disclosed, the sums standing to the credit of the contingencies fund of the society shall be applied towards making good the deficiency, and if no deficiency is so disclosed, or if the sums standing to the credit of the contingencies fund are more than sufficient to make good that deficiency, the sums standing to the credit of that fund or the balance thereof shall, subject to the provisions of this section with respect to small societies, be carried to the benefit fund of the society, but any amount so carried shall not be treated for the purposes of the last preceding section of this Act as forming part of any surplus found at that valuation.

(2) If on the valuation of any society with branches a deficiency is disclosed in the case of any one or more branches of the society, the central authority of the society shall apply the sums standing to the credit of the contingencies fund of the society towards making good those deficiencies, except that, if satisfied that any part of a deficiency is due to any maladministration by the branch in question, the central authority may, with the consent of the Minister, refuse so to make good at all or in part that part of the deficiency.

(3) If on the valuation of a society with branches there are no deficiencies in the case of any of the branches, or if the sums standing to the credit of the contingencies fund are more than sufficient to provide for the total amount of the deficiencies made good under the last preceding subsection, the fund or the balance of the fund shall, subject to the provisions of this section relating to small societies, be apportioned among the several branches in proportion to the amounts paid into the fund in respect of contributions of members of those branches respectively since the date at which the last valuation was made, but where there was a deficiency in the case of any branch the amount so paid into the fund in respect of contributions of members of that branch shall for the purpose of this subsection be deemed to be reduced by the amount (if any) applied towards making good the deficiency.

(4) The amount apportioned under the last preceding subsection to any branch shall be applied and dealt with as follows:

(a) If there was a deficiency in the case of the branch and any part thereof was not discharged out of the contingencies fund of the society as being due to maladministration, the amount shall be applied towards making good that deficiency:

(b) Subject as aforesaid, the amount shall be carried to the benefit fund of the branch, but any amount so carried shall not be treated for the purposes of the last preceding section of this Act as forming part of any surplus found at that valuation.

(5) Regulations of the Joint Committee shall provide, in the case of societies which at the date as at which a valuation is made have not joined an association formed or recognised under this section and have less than one thousand members, for applying pro rata to such extent, not exceeding one-half, as may be necessary, any balances of the contingencies funds of those societies not required for making good deficiencies in those societies under the foregoing provisions of this section towards making good pro rata the balances of the deficiencies remaining in the case of other such societies after the application of the contingencies funds of those societies in accordance with the said provisions, subject nevertheless to the power of the Minister to refuse to allow to be made good either at all or in part any part of any deficiency which in his opinion is due to maladministration:

Provided that the Minister shall exempt from this subsection any society consisting of persons entitled to rights in a superannuation or other provident fund established for the benefit of persons employed by one or more employers, if the employer in addition to the contributions payable by him under this Act is responsible for the solvency of the fund or for the benefits payable thereout, or is liable to pay a substantial part of, or to make substantial contributions to, or substantially to supplement the benefits payable out of, the fund, and this subsection shall not apply to any society so exempted.

(6) Regulations may be made providing for the formation within the prescribed time for the purposes of this section of associations with central financial committees,

14 & 15 GEORGE 5, CHAPTER 38.

and the following provisions shall have effect in relation to any associations so formed and in relation to any such associations which are in existence at the commencement of this Act and were either formed under any enactment repealed by this Act or recognised by virtue of regulations made under any such enactment as associations so formed:

(a) Regulations may be made prescribing the conditions on which and the time within which a society shall be entitled or allowed to join, or having joined, to secede from, any such association, and the manner in which and the conditions on which any such association may be dissolved:

(b) Subject to such adaptations as may be prescribed, this section shall apply as though the association were a society with branches and the associated societies were the branches of the society and the contingencies funds of the associated societies formed the contingencies fund of the society:

(c) Except so far as relates to the power of refusing to allow any part of a deficiency due to maladministration to be made good out of any contingencies fund, nothing in this subsection shall be construed as conferring on any central financial committee any powers of control over the administration of any society:

(d) If at the date as at which any valuation is made the aggregate number of the members of societies in any such association is less than five thousand, those societies shall, for the purposes of this section, be treated in relation to that valuation as if they had not been associated.

(7) If, in the case of a society consisting of persons entitled to rights in a superannuation or other provident fund established for the benefit of persons employed by one or more persons the employer is responsible for the solvency of the fund, or for the benefits payable thereout, he shall not, in the event of a deficiency being disclosed on a valuation of the society be required to make good the deficiency or to make up to their full amount the benefits payable out of the fund except in so far as the contingencies fund of the society is insufficient for the purpose, but save as aforesaid nothing in the provisions of this section shall affect any obligation in relation to such a society undertaken by the employer whereby he becomes responsible for the solvency of the fund or for the benefits payable thereout, or liable to pay a substantial part of, or to make substantial contributions to, or substantially to supplement the benefits payable out of, the fund.

(8) In this section the expression "benefit fund means the fund out of which benefits payable by the society or branch are provided.

77. APPLICATION OF CENTRAL FUND TOWARDS MAKING GOOD DEFICIENCIES.(1) If on the valuation of any society or any branch of a society a deficiency is disclosed, and the sums in any contingencies funds available to make good that deficiency are not sufficient, the Joint Committee, if satisfied that the deficiency is due in whole or in part to an abnormal rate of sickness among the members of the society or branch attributable to the nature of their employment or environment or their physical condition or any epidemic disease, or is due to the rate of sickness being abnormal by reason of the small membership of the society or branch or is due to any other special cause beyond the control of the society or branch, may, out of the Central Fund, make good the whole or part of the deficiency in so far as it is not made good out of the available contingencies funds, and, in the case of a society in relation to which an employer has undertaken any obligation, in so far as it is not made good in accordance with that obligation.

(2) For the purpose of determining whether the claim of any society or branch for relief out of the Central Fund should be granted, the Joint Committee shall, if so requested by the society, or in the case of a branch by the central authority of the society, appoint an independent body, constituted in accordance with regulations made by the Joint Committee, to investigate the circumstances to which the deficiency was attributable, and in determining whether and to what extent relief should be granted out of the Central Fund to the society or branch shall have regard to the report of the investigating body.