New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-07-25
EMMETT RAPS RADICALS
Insurance Men Hear Views OF
New York Commissioner.
URGES ADEQUATE RESERVES
Discusses Employers Liability
and Workmen's Cpmpensa-
ton Risks in Address.

Spokane, wash, July 24--Delcgates 70
tho forty-third session Of the National In
surance Commissioners, in session here,
listened TO an address, prepared by Will
isra T. Emmett, State Superintendent OF
Insurance for New York, which was read
by II. d. Appleton, his first deputy. Mr..
Emmett declared that the work Of the az
ISOLATION had a direct bearing in stem.
ming the tide OF certain radical agitation
now going forward in the several states.
Ths same tendencies. already far advanced
in England were said by the New Yorker
10 be widely Observable IN America TO-
day.
The address continued, IN part:
Recently many OF the states have
adopted compensation laws, and from
all indications within a short period
all the remaining states will have Some
fo-rn or workmen's compensation law In
rorce. Payments under compensation
insurance company should be able to
ascertain It's completed experience sooner
than under the old laws OF negligence.
Adcquate reserves must be required OF
LOGS or there. will be failures when the
time comes that these claims must ell
bs paid.
There is considerable agitation in the
country with respect to state insurance
for industrial accidents. II by proyid-
ing inadequate reserves there should be
any extensive failures, whereby worklnen
o. their families are deprived Of the COM
nensation to which the courts hold they
are entitled, Il would give 4 weighty ar
surnent for those who advocate state In
s1rsnce. The burden upon the depart
,nents Of the country. therefore. 10 see
70 financially able to carry out their
contracts becomes all the more serious
fu view Of these considerations.
Reviewing the history OF liability loss
reserves" Superintendent Emmet's sd-
drsss told how IN 1901 the State OF Michi-
gan enacted the first liability loss reserve
law, which provided for a minimum re-
serve Of 50 per cent OF the earned pre-
stum In 1903 this law was amended,
hanging the minimum reserve from As TO
% per cent.
The address went OF to state:
New York the same year passed tts
!rst is.w regulating the reserves for
liability business, law also subssquently
modified; In the early yeaT. the business
not until II had been determined with
}ome accuracy that the business OF any
given year required ten years OF more or
ssIying loss PaXIm arF t so,a inc 70 cI ,bo
7ecsssltY Of providing more adequate re-
serVc funds.
The Michigan system vas Criticised by
Insurance Commis.ioner the power 10
Increase tho amount required for reserve
~ he deemed il insufficient. and THIS
This next step In the direction OF definite
reserves was made by the companies in
the Introduction OF law in New hork
ard Connecticut about the year ls,G. Ihis
Tss found 70 be based on wrong premises,
and was superseded the following year
BY a lsw adopted IN New York, accepted
with some variations by Massachusetts
Connecticut, Illinois and Calrcrnia, ana
which remained IN force from that cUe
until tie passage OF the present law.
The method of computing reserves, 1t
was explained, prior TO the passage OF
the present law, required each company
10 set aside reserve snhicient 10
1iouldate all losses outstanding at given
date, based on the company'c own eI-
oeriepce" The address added:
After consultation With the companies,
n was found that the only plan that
would receive, their unanimous support
amended, however, 20 provide Tor Ten1ov-
Inc the authority OF the department TO
feou!re additional reserve. 4 bill was In
trodnced in the Iegslsture. Of New fo ,T,,
s,assed IN the winter OF l9lo-lgll, and SUB
sequently IN number cf other states.
Liability loss reserve laws we're. IN fact,
enacted during 1911 in Connecticut
tleorgia- Massachusetts. hinnesota, Ne"
York. Ohio and Washington, and in
modified form In Pennsylvania.
The address concluded:
II IS going 10 lie difficult matter TO
Hnd a proper average 10 apply 70 work
mems compensation claims which VII.
be based upon business in the thirc.
fourth and nth years prior 20 date OF
Valuation. AS the law is at present,
new company Just entering this business
may, under some circumstances, be re-
.ouired TO put up an Inadequate reserve.
II may he known 10 he doing reckless
Underwriting. paving exorpitant commits
eions, and rushing straight on 20 the
road Of insolvency. And still, az long
as this company puts Up the legal re-
serve. 10 matter how ridiculous II may
be ehoWn 10 be, the state Is PoWerlesa