The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1927-02-26
PEOPLES FORUM i
SCATTEKGOOD'S REPORT
ANALYZED
Blsnarck, n. D.,
February %, 1927.


Editor Tribune:
Over the signature Of Mr.. c. T..
Scattergood two members of the
Workmcn's Compensation Bureau are
sending broadcast statement that
LEAVES OUT just enough to make
it deceptive. May |, therefore, be
permitted to call attention to one or
two items. He speaks of Il growth
in Excess Assets but stops with
the period covered by our Seventh
Annual Report. This report, while
presumably ending June 30, 1926, ac-
tually covered calculations to Janu-
airy ], l926. 1t also, as. tabulated by
Mr.. Scattergood, is very incomplete.
Look over this tabulation, which |
have already submitted to many peo-
pie, including Governor Sorle:
Cash on hand OBSERVATION-DISCLOSURES.
Claims Reserve, Awards Made, but
Payable in Future .....
Reserve Required by Reason of Re-
| duction in Interest Rate ......
| STATUTORY SURPLUS .........
! Premiums, Paid, but not yet earned
J Unpaid Dividends, Ordered hut not
! Yet Paid Out. ............. .....
Claims for Injuries Already Incurred,
but not Reported ..
CATASTROPHE RESERVE ........
Total Liabilities ...........
! LEAVING A BALANCE OF EXCESS
OR SAFETY" SURPLUS OF. -.
! If Mr.. Scattcrgood's figures
should be accepted, then the Bureau
| IL In Tt,t,. L.,
about Sl50,0O0.00 to be paid in divi-
dends when we come to adjust rates,
July /, 1927.
My statement now is: That there
are probably only four 60 and not
to exceed eight tsl classificatons
that can have a dividend this year;
and the total amount of such divi-
dendS can not be over S25, 900 90
and not to exceed $50.000.00 if the
Legislature gives the Bureau power
to invest its permanent funds in
| bonds.
There is yet more serious OMIS-
SION, however. Mr.. Scattcrgood
after much 'hemming and having.
acknowledged that he could use no
other accident table than the one
had used. namely. the American Ac-
cident Table. Having admitted that,
he thereby admitted that at the date
Of our last annual report we were SO
deaths l32ft below normal accident
experience.
Thirty-ninc deaths, at an average
present value cost Of $4,000 which he
also admts) makes a total Of S234. 900
In other words, instead Of a Safety
Surplus of $2l0.27466 on January !,
1926, we had REALLY safety SUR
! plus of approximately S35,O0O.OO tthc
loss figure for permanent totals be-
ing slightly above normal, otherwise
there would have been no safety
! Surplus on that date).
! The expense ratios figured by him
are SO preposterous, and he has
changed his theories and statements
SO often. that it is hardly necessary
to say much. This. however. should
be said: That during the first thre,
years Of the operation of the Bureau
/ tand this is simply statement of
/ fact and not criticism of the Blu
| reau's action) the rates of premium
! charges in IA number of classified
/ tions were fixed at more than 1906
above the rate necessary to be
charged. In addition, the Bureau
charged against every Risk coming
into the Fund in those three years
an additional $24 (24es) for ever,
$1,000 of premium paid. Hence, il
Ey0i1 overcharge on rates, and ther
fhdd u sur-charge of 24n, there il
bound to be low expense ratio
The only safe and satisfactory guide
to expense ratios is as first stated
| by Mr.. Scattergood, namely: ratio oil
expense to compensation benefits
| paid out. On that basis the average
| for the seven years runs 24ec to 26M
and by years it ran as | have hereto
| fore stated.
/ Mr.. Scattergood reports that ths
North Dakota schedule of benefit.
is only 28M above that of Minnesota
How does that figure compare witt
| his specific admissions?
The actuary admitted that the av
erage present value cost of dealt
I in Minnesota was $4,000. (His frs
figure on this was $4,000 He ais.
! stated that the average presen
value cost Of death was $4,000 i,
North Dakota Are we $3.50 or ar,
we 5Ofe higher?
The actuary admitted that the av
erage present value cost Of a perma
nent total disability was $4,000 il
Minnesota and $4,000 in North Da
kota. Is this $3.50 or is it 1857
above Minnesota?
| Now, do little figuring on you
own account. The MAXIMUM pay
ment in Minnesota for a psrmanen
total disability lis 9l0y0O6 n N,y0i
viii figure out the PRESENT VAL
UE OF THIS MAXIMUM Of $1,000