Italy’s insurance monopoly

«The Economist», 21 giugno 1911, pp. 1356-1357

With reference to our note on the subject last week, an Italian correspondent writes: – A Bill now before Parliament, brought in by the Ministry of Signor Giolitti, with the object of enforcing a State monopoly of life insurance, is marked by a glaring and contemptuous challenge to all the accepted principles of right. No indemnity is allowed to those whose property, goodwill, and means of life are seized on the pretext of a superior public interest. An article of the Bill expressly declares that the concerns to be expropriated will not be entitled to claim any compensation from the State. They will be bound to keep their present engagements, whereas their clients will be allowed either to keep or cancel their contracts. Once the Bill be passed into a law, no company or concern, either Italian or foreign, will be entitled to underwrite a new policy of life insurance. The business will be managed by the State through the “Istituto Nazionale di Assicurazioni”. Any Italian citizens who should attempt to elude the severe clauses of the new monopoly by insuring their lives through some foreign company will be liable to heavy pecuniary penalties, and, after a previous conviction, also to imprisonment. All this is conceived in the style of a rash and most violent socialism, and the Bill is a discredit to its author, the new Minister for Agriculture, Industry, and Commerce, Signor Nitti. We had expected far better statesmanship from the distinguished professor of the Naples University, who has been a brilliant Parliamentary critic of many Ministerial Bills in these last years. It is still more disheartening to find that this strange and absurd attempt has not provoked an immediate and open revolt in the Ministerial rank and file. It appears that Signor Giolitti expects to have the Bill passed into a law as soon as possible by his faithful majority in Parliament, his special object being to give his Socialist allies in Parliament and in the country some earnest of his intention to start a scheme of old-age pensions, to which, indeed, he proposes to dedicate the prospective profits of the State life insurance monopoly. But, apart from the grave mistake of confounding together two questions quite different and separate, it is by no way certain that the State will get any money at all from the new monopoly. The calculations of Signor Nitti seem to be utterly ungrounded, and there is a legitimate fear that (as has been the case with the railways monopoly) the “Istituto Nazionale di Assicurazioni” will result in a bitter disappointment for the taxpayer. In the meantime, this attempt to suppress the life insurance industry will involve the Government in some serious international misunderstandings. Many foreign companies are at present working throughout Italy in the life branches of insurance, and they have spent much money in order to secure the business of their Italian customers. Whether the letter of existing treaties be infringed or not, undoubtedly the spirit of internationl equity is violated by this insurance monopoly Bill.