The labor world. [volume] (Duluth, Minn.) 1896-current, 1920-02-07
OHIO. fund plan =.
IS MONEY Saver
Miles n. Dawson, Insurance Ac-
tuary, Knocks Claims Of
Private Companies.
fCeRtinued FROM Page ~

class and Of 10 per cent the first and
third year and 141a per cent the sec,
ond year in the coal mine class. The
total savings, including the surplus
umulated for the protection Of the
fund, were in excess OF 80 per cent
of what the premium would have
been at insurance company rates.
1t Is Competitive.
This is competitive state fund.-
i. e., 1t is but one Of the agencies
through which the taxes upon en-
ployers for this public purpose are
collected and disbursed, the other
agencies being self-insuranee or in
surance in a stock or mutual COM
| pany. Nevertheless it's expenses of
| management for 1918 were slightly
less than 10 per cent of its premiums.
Since it charged 30 per cent of the
insurance company rates, it's manage
ment expense therefore amounted to
9 per cent of the stock company pre-
miums. This is about one-fourth of
the rate Of expense of management of
! the stock insurance companies.
New York State Fund.
II have just finished an actuarial
investigation of New York state fund,
up to June 80, 1919. as part Of my
work as counsel and actuary to g.
commission appointed by the COVER
nor to investigate the operation of the
workmen's compensation law. I
found the New York fund possessed
of adequate claim and other reserves,
with a surplus of $1.170,479.s4 Or
1874 per cent over all liabilities.
THE New York state fund has
charged rates of premiums ranging
from 1-3 per cent to 20 per cent
lower than the rates of premiums of
the insurance companies, saving the
| insured employers $2,255,000 in this
| way. It has also returned to them in
dividends $1,749,62a. The total saw
and in dividends have been $4,000,-
623. as compared with the cost in
stock insurance companies. which is
| 20 per cent of the insurance company
premiums.
! THE expense Of management Of the
New York state fund in 1913 were
TX per cent Of it's premiums, which
| were 85A per cent of the rates of
| premiums in the insurance companies,
so that the expenses were about 6k
per cent of the insurance company
premiums. This is about one-sixth
the rate of expenses of management
of stock insurance companies.
Loss to Employers.
For 1913 the New York state fund
premiums were $3,992,67S, with COM
hined loss and expense OF ~ per cent
LOT the corresponding premiums in in
suranGe companies, as against 81 per
| cent in mutual insurance companies,
! 81 per: cent in participating stock
companies, and 81 per cent in non
participating stock companies.
II compute the loss to New York
! employers insured in stock insurance
companies, during the tour and one
half years operation of the work.
mems com pensation law, at $1s,000,-
900, as compared with the cost Of the
same insurance in the state fund. AS
passed on to the consuming public,
this represents, of course, a much
greater loss-this, also, in years Of
! great stress and economics for us all.
"A feature, moreover, which should
not be lost sight of is this: The opera
ton Of competitive stock company in
eurance continued to divert from
| really essential and useful occupations
a large number Of able men; who were
paid about $10,500,0oo for their serv-
ices in the four and one-half years
ending Dec. 81, 1918. to the futile
work of inducing employers, who
We're required by law to insure the
payment of compensation in some
! way, to insure "in my company" in
stead of ''in his company" 1t also
caused the expenses of the New York
state fund to be much higher than
would have been necessary had all
compensation been collected and dis
bursed by it, as was done in Ohio.
For Employers and Employees.
"Fromthe foregoing it is clear that
even ilf competition with insurance
companies state funds can save en-
ployers insured in them from one-
fourth to one-third the insurance
company rates; and that when the
state fund Is the exclusive mode Of
Insurance.. the saving may be In
creased to 40 per cent or more.
I'm addition to (not in reduction
of) these savings, there are aubstan-
tial benefits to injured employees and
their dependents, under the state
funds, in fairer settlements. Under
| the direct settlement law in New
York, happily now repealed, the de-
putty commissioner in charge Of work.
mems compensation testifiea that
nearly or quite $5,7o0.000 has been
lost to injured employees and their
dependents by under payment of COM
pensation by insurance Companies and
! self-ipsurers, His computation Ia
based upon the results Of a. large num-
her Of investigations resulting in
awards of about $4,000 additional.
and all direct settlement cases are
to be investigated.
Insurance Company Competition.
AN attempt ia being made on be-
half of the insurance interests to d.
vert attention from these NEST aignifi,
cant facts, by directing it to the
"holding-up'' of small numbe Of
! 1~jx