Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1916-02-02


OF the State Workmens Insurance
Fund, issued statement to-day pre-
| sentlng the present status of the Fund
| and explaining the advantages and
/ protection provided to employers who
insure in the Fund.
Mr.. Allen points out that already
! 1000 employers have insured their
! compensation liability in the State
fund and that before the end of the
year premium income will be more
than million dollars. The statement
| follows
The income OF the State Workmens
Insurance Fund for 1916 will un-
/ doubtedly exceed one million dollars.
More than 1000 employers from all
! sections of Pennsylvania have insured
their compensation liability in the
State Fund and at the present time,
the premium income is approximately
| 100000. This volume of business
places the State Fund among the lead
ers of the companies writing this class
| of insurance in Pennsylvania.
Influx of business continues at the
State Fund offices and the corps of
clerks are working extra hours to
meet the enormous demand from en-
ployers for compensation liability pro-
lection afforded by the State.
The financial soundness of the State
! Fund is definitely assured within the
first month of its existence. Virtually
| every class of risk is represented
among the 1000 policies issued, with
a preponderance of exceptionally good
risks. The prediction that the State
Fund would be the dumping ground
for undesirable risks, known in insur-
ance parlance as eats and dogs" has
been completely disproved by the ac-
tual experience of the Fund.
The success of the State Fund has
been achieved in spite. of marked an
tagonism regrettably noticeable in the
/ activities ht1 hNy
ance agents and brokers, who have
constantly argued that the State Fund
could not be successful.
Premium Incomes Compared
As matter of arithmetic, 1t might
be we'll to consider the present status
of the State Fund with the status of
any stock company which may be con-
sidered to have written a proportion
ate amount of insurance. The State
Fund has, as premium income, $780,
600 with which to pay claims. That
aggregate amount more than repre-
sents what competent actuaries have
decided from past experience is ade-
quate to meet all claims accruing from
the classes of employment the sepa-
rate policies cover.
stock company considered as
having written proportionate
amount of business would have
approximately $77S.OOO of premium
InCoHle because the StaCe tunu
may write insurance at 800 of the
rates allowed stock companies. But
the stock company figures on using
only 81 Y % Of the $77S,000 for the
actual payments of claims. The other
421a8o goes for overhead charges,
agents and brokers' commissions on
the securing of business and for
profits.
Thus, the stock company would
have approximately $447,000 to pay
claims from $77S. 900 premium in
come. On the other hand, the State
Fund has 100000 with which to meet
the same claims that the stock COM
pany would figure on paying out of
approximately $4,000. Hence the
State Fund starts with what is prac-
tically surplus Of S253,000
This advantageous condition in fa-
vor of the State Fund is due to the
fact that the Legislature has appro-
priated the funds to pay all operating
costs of the State Fund excepting the
payment of claims. A comparison of
the amount the State Fund has avail
able for the payment of claims with
the amount the stock companies deem
adequate makes it highly probable that
the State Fund will be able to return
to its subscribers at the end of the year
substantial dividends and so afford
them even cheaper insurance than the
initial 1920 reduction provided.
Catastrophe Hazards
Catastrophes cannot impair the
| financial stability of the State Work
mems Insurance Fund. The catas-
| trophe hazard of the State Fund has
been re-insured in excess of $50,
| That means that any single catas-
trophe in which employees were killed
or injured to create claims of say
| S150,000 against the State Fund, every
dollar in excess of $4,000 for those
claims would be paid from other
sources than from the revenues of the
State Workmen's Insurance Fund.
The soundness and security of the
State Fund can be accepted as abso-
lutely established. Unsuccessful in
surance funds operated by one or two
other States are cited as examples of
failure of State insurance, although
the cases are in no sense parallel with
Pennsylvania.
The West Virginia State Fund is
cited as a Fund that became bankrupt
The West Virginia Fund was COM
PEELED by the Legislature to charge a
rate not to exceed $1.Q0 per one hun
dred dollars of annual payroll, even
for the most hazardous risks, That
amount was declared inadequate and
experience has proved it to be made
quate, especially in a coal mining
State.
The Pennsylvania State Fund is
one of the most recent to be estab-
lished and it's creators have had the
benefit of the experience of other
States. BY way of contrast with the
West Virginia State Fund the New
York State Fund may be cited as one
which has been eminently successful
and has paid dividends averaging
2Oq6.
Covers Compensation Liability
Another threadbare argument ad-