As a corollary to these arrangements it was further agreed that the Ministry of Health should act as the agents of the Ministry of Labour in undertaking prosecutions in respect of non-compliance under the Unemployment Insurance Acts, the decision whether or not proceedings should be undertaken remaining, however, with the Ministry of Labour.

Insurance of Persons in the Mercantile Marine,

As was stated in last year's Report, the Insurance Department of the Ministry undertake the collection of the employer's contributions, both for health and unemployment insurance, in respect of seamen neither domiciled nor resident in the United Kingdom.

During the past year the administrative arrangements for the collection of these contributions have been made more efficient and expeditious.

The sums collected in the calendar year were as follows:

It will be observed that, although unemployment in the shipping. industry was very prevalent in 1921, the amount collected in respect of health insurance in that year was larger than in 1920. This is due to closer collection and to an increase in the rate of contribution.

Applications from foreign seamen for decisions as to domicile, affecting liability to both health and unemployment insurance, continued to be more numerous than in previous years, no doubt on account of the prevailing unemployment and the desire to qualify, if possible, for unemployment benefit.

Insurance of Army Reservists and Defence Force,

In order to obviate serious administrative difficulties that would have arisen, on the mobilisation or enlistment of men in the Forces at the time of the national emergency during the coal dispute, if insurance had been under the conditions applicable to serving soldiers, it was arranged that Reservists and men enlisted in the Defence Force should be dealt with in the same way as during Reservist or Territorial training, i.e., that the civilian card should be stamped at the normal rate (10d. a week) by the Army Authorities.

Insurance of Out-workers.

The number of employers of out-workers in England using the unit system has again declined from 1,191 in March 1921, to 1,096 in March 1922.

In any general trade depression the employment of out-workers diminishes at once, as employers give preference, if possible, to their indoor workers, and there is every reason to believe that the contributions paid for out-workers during the last year have been at a

minimum. Thus, whilst the number of the special out-workers' cards requisitioned has not been markedly less than in previous years, it is clear that the cards have been in many cases requisitioned merely in the hope of an improvement in trade conditions and of a consequent increase in the amount of out-work to be given out.

It has not yet been found that there is any demand for a further revision downwards of the units of work, as these units were fixed on a conservative basis. The tendency which is very definitely shown, for example in Trade Board Rates, towards reduction in wages may, however, necessitate a general revision of units at some future date.

Certificates of Exception under paragraphs (b) and (c)

of Part II of the First Schedule to the National Insurance Act, 1911.

The work of scrutinising the existing certificates of exception, in order to ascertain whether the provision for sickness and disablement was equivalent to the increased statutory benefits conferred by the National Health Insurance Act, 1920, was substantially completed by the 31st March, 1921, but a few certificates remained to be considered. In the period under review seven certificates were withdrawn by order of the Minister, and in five cases fresh certificates were issued in substitution for the withdrawn certificates.

Twelve new certificates have been issued during the year, five of which are in respect of persons employed under the Crown. Certificates have also been issued in respect of persons employed for the purposes of the Mental Deficiency Act, 1913. The number of persons covered by these certificates is at present about 1,200, but a considerable increase is expected as full staffs become engaged. Certificates have. also been issued in order to cover the employment of women police.

Exempt Persons.

The number of persons holding certificates of exemption from health insurance on the 1st April, 1922, was 36,819, as compared with 40,154 on the 1st April, 1921.

Of these, 6,380 were certificates granted under the National Health Insurance Act, 1919, on the ground that the holders were remunerated at a rate exceeding £160, but not exceeding £250, a year. In this connection it is interesting to observe that of a total of 28,830 certificates granted under that Act, 23,000 have subsequently been cancelled, mainly on the ground that the remuneration had increased to more than £250 a year. During the past year, however, 515 of these certificates have been revived, owing to the fall in the cost of living and consequent reduction of wages and bonuses, and it is expected that there will be a number of persons who will desire to revive their certificates for this reason.

The examination and adjudication of claims for exemption from unemployment insurance has continued to be carried out by this Department on behalf of the Ministry of Labour. In all, 23,057 certificates of exemption from unemployment insurance have now been granted to persons resident in England, 6,692 cancelled, and 92 revived, leaving a total of 16,457 certificates current.

In addition 20,508 persons holding current certificates of exemption from health insurance have had their certificates applied to provide exemption from unemployment insurance also.

By regulations made on the 28th March, 1922, the amount transferred from the Exempt Persons Fund to the Exchequer in respect of expenses incurred in the administration of benefits to exempt persons has been increased from 1s. 6d. to 5s. in respect of the year 1922 and succeeding years.

The Acts as affecting the Naval and Military Forces of the Crown.

(i) Navy and Army Insurance Fund: Maternity Benefit of Serving Men.

The claims paid in respect of maternity benefit from the Navy and Army Insurance Fund to serving seamen, soldiers and airmen who are not members of Approved Societies amounted for the year 1921 to £16,994, as compared with £19,068 10s. for 1920.

It should be noted that for the first six months of 1920 the rate of benefit was 30s. as against 40s. thereafter.

(ii) Position of Discharged Men.

The legal date of the termination of the War having been determined by Order in Council as the 31st August, 1921, the automatic. admission to benefits from the Navy and Army Insurance Fund of men certified unfit on discharge by the Admiralty, Army Council or Air Council [National Insurance (Navy and Army) Act, 1914 (Session 2) has ceased. As from the 1st September, 1921, the conditions laid down in section 46 (3) (h) of the National Insurance Act, 1911, have again become operative.

The membership of the Navy and Army Insurance Fund as at the 1st January, 1922, was 65,000 as compared with 68,500 at the 31st March, 1921, the figure shown in last year's Report. The decrease in the membership has been less than would normally have taken place,. owing to the operation of the National Health Insurance (Prolongation of Insurance) Act, 1921.

The amount paid in respect of benefits to discharged men, members of the Navy and Army Insurance Fund, for the period from the 1st April, 1921, to the 31st March, 1922, was :

Steps have continued to be taken to give effect to the provision of the regulations which enables notice to be given to a member, as regards whom the Minister is satisfied that the state of his health is no longer such as to preclude him from joining an Approved Society, that he should take steps to secure admission to a Society.

(iii) Accounts of the Navy and Army Insurance Fund.

A statement of account of the Navy and Army Insurance Fund is included in the published accounts of the National Health Insurance Fund. The balance in the Fund at the 31st December, 1919, was £814,614.

Deposit Contributors.

(i) Reduction in number of Deposit Contributors.

Since the publication of last year's Report, the number of deposit contributors has continued to decrease. At the 31st December, 1921, 250,000 personal accounts remained open, 64 per cent. being in respect of men and 36 per cent. in respect of women. The reduction in numbers is due to transfers to Approved Societies (approximately 75,000 applications for transfer were received during the year); to cessation of insurable employment, particularly in the case of men who were insured by virtue of Army Service only, and women war workers ; and to a marked decrease in the number of entrants and in the number of men becoming deposit contributors on discharge or demobilisation from the Forces.

(ii) Benefits of Deposit Contributors.

During the year 1921, benefit payments were made as follows:

(a) Includes 3 payments of Disablement Benefit amounting to £5 13s. 9d.
(b) Includes 6 payments of Disablement Benefit amounting to £13 2s. 11d.

(iii) Cost of Administration.

The benefits of deposit contributors are administered by Insurance Committees, whose expenses in respect of this work are provided, as to seven-ninths, from contributions, and as to two-ninths from the Exchequer. The individual accounts are kept by the Insurance Department, hitherto mainly at the cost of the Exchequer. Since July 1918, a nominal charge has been made against deposit contributors' contributions for central administration, but in view of the urgent need for economy in national expenditure, it has been decided that, apart from the statutory Exchequer proportion, the whole cost of management should be met from contributions. Power has therefore been taken to increase the charge in each deposit contributor's account by two contributions per annum, and in the case of contributors transferring to Approved Societies, to deduct from their aggregated balances a transfer fee. With these further charges the whole cost of administration, at existing rates, will be borne by the Fund.

(iv) Accounts of the Deposit Contributors' Fund.

A statement of account of the Deposit Contributors' Fund is included in the published accounts of the National Health Insurance Fund (see Appendix XVIII, pages 160 to 161 below). The balance at the 31st December, 1919, was £958,733.

Derelict Contribution Cards.

During 1921, 99,000 contribution cards reached the Lost Card Branch of the Department. Most of these related to members of Approved Societies who had surrendered their cards irregularly or failed to collect them from employers on leaving employment. By means of identification marks or other evidence on the cards and by correspondence, nearly 49,000 were disposed of to the correct destination. Unless claimed in the meantime, the remainder will be retained for a year from receipt, and two years from the end of the period of currency, when the contributions represented will be dealt with in the manner prescribed by section 29 of the National Health Insurance Act, 1918, and the cards will be destroyed. Under this provision a sum of £14,000 was written off in 1921 for unclaimed cards of the year July 1918 to June 1919. The percentage of disposals is greatest (exceeding 66 per cent.) when cards are received soon after the expiry of currency: old cards and emergency cards are difficult to place. The number of contribution cards ultimately treated as derelict forms but a small proportion of the total number of cards used.

In addition, 24,000 mercantile marine (foreign-going service) voyage contribution cards were received, and 8,000 were placed with the appropriate Approved Societies. These cards relate to Scotland, Wales, and Ireland, as well as to England, and reach this Department from contributors, from Mercantile Marine Offices of the Board of Trade, from officials at foreign ports, and from Approved Societies to which they may have been surrendered in error. Inasmuch as they bear no identification marks, and inquiries by post often fail to reach the seamen concerned, these cards are more difficult to place in proper course than ordinary cards.

Finance and Accounting Arrangements.

Half-Yearly Stamping of Contribution Cards.

Some 737 employers at present use the arrangements under which, upon payment of appropriate deposits, they are granted permission to defer the stamping of contribution cards until the end of the half year. The number of employed persons included within the arrangements is 653,216. These figures show a decrease of 40 in the number of the employers and 78,715 in the number of employees when compared with the corresponding figures at the date of last year's Report. The reason generally assigned by employers withdrawing from the arrangements was the irregularity of employment under the difficult. economic conditions which prevailed during the year.

Receipt and Issue of Funds.

Security by Approved Societies.

A statement of receipts and payments by Approved Societies and Insurance Committees for the year 1921, based on unaudited returns rendered in connection with applications for funds, is given in Appendix XVII (page 159 below).

A table showing the number of Societies at the 31st December, 1921, which have given security, and the number of cases of reported losses arising out of malversation or misappropriation by officers of Approved Societies, settled or under investigation at the 31st December, 1921, is given in Appendix XX (page 163 below).