The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-10
RATE BASIS FIXED
FOR COMPENSATION
State superintendent Hasbrouck
Takes Massachusetts, Expert.
ence as Foundation.
PREMIUMS TO BE LARGER
But Compensation Will Also IA
Bigger Under the In.
surance Scheme.

ALBANY, June a basis of ,,,......-
rates for insurers of employers ,,,,,.
liability for compensation under tho ,'.
workmehs compensation law. which ,,t,,
erect July i. has been determined u,,,
by state Superintendent OF 1nsur,,..
Frank Hasbrouck.
Mr. Hasbrouck in a statemon, .ss.,.,
to-day said:
The question for determination M.
the adequacy of rates that would lnsu,.
to the Injured workman the pavfn.n, a,
the benefits provided for him under m.
workmen's compensation law and wout
also protect tho solvency of liability com.
panles engaging In the business OF com.
pensation insurance.
AT all the conferences held upon thu
subject GOV. Glynn has Insisted. in In.
Interest Of tho manufacturers and en-.
ployers OF labor OF the State. tina, TN.
new buroen put upon them by this me-,
law should be az light as possible.
This view OF the Governor has had N.
sympathetic support OF the Insurance De.
partment and the effort has been al All
times. while determining what would be
adequate rates, to have these rates a,
reasonable as II was possiblo to make
Insurance carriers.
"of course the large compensation wen
10 injured workmen and 10 the dependents
OF those who are killed--much larger
than provided In similar laws OF any other
State--necessitates a larger premium for
this liability and compensation Insurance
than is necessary in those other States.
Basis for Rate Making.
Differences OF opinion have developed
among such experts as to what Is he
proper basis for New York rates All u
them. however. have agreed that Massa-
chusetts's experience Ia a substantial
basis for rate making in New York
THE principal elements about which
the discussion revolved Itself were. First,
what factor should be allowed for the
incompleted experience OF the MAssachu-
sets outstanding claims. second, what
was the proper factor representing the
difference between the laws of New York
and Massachusetts; and. third. what was
n proper loading for administration and
acquisition expenses.
THE Superintendent, acting In con.
formity with the views Of the Governor.
has determined to reject all conclusions
which appear to he extreme and to adopt
formula for the calculation OF rates
which will produce "A loss ratio OF s6 %
per cent and an expense ratio OF 80 Ia
per cent The conclusions OF the depart
nent as to what will constitute adequate
minimum rates are embodied In the
memorandum which follows:
Schedules OF rates TO be filed by com.
pRnies pursuant TO the provisions OF sec-
ton 81 OF the insurance law In order IA
receive department., approval as to ade-
auRcy must be constructed on the follow
ing basis:
II. Pure premiums as shown by Mas.
sachusetts Schedule Y modified by the ey.
experience on outstanding claims and the
perience In other compensation States and
by the grouping OF analogous hazards in
minor classifications.
80. To such pure premiums should he
added a loading OF at least 8 per cent.
for the purpose or covering incompletoi
catastrophe hazard.
80. For the difference representing ths
greater benefits provided by the New YORK.
law above those of the Massachusetts Law
factor OF should be used as a multi
plier.
~. For administration expenses, ln-
Guiding acquisition, loss adjustments, in
spections taxes and all other expenses
q loading OF 80 Ia per cent. OF the gross
premiums will be required. The depart
ment will not prescribe the manner IN
which the 33 la per cent margin allowed
for expenses shall be distributed by thu
companies II will, however. require that
the companies do not expend greater
amount OF the premium for the purposes
above indicated.