The Butler County press. [volume] (Hamilton, Ohio) 1900-1946, 1932-07-29
SOLVENCY
OF STATE INSURANCE FUND UNQUEsTIoNED
Explanation of Decreased Surplus and Increased Rates of
Premiums for Workmen's Compensation

and other Ohio newspapers has given
the impression that crisis has been
reached in the administration of the
| Ohio workmen's compensation law
and has provoked inquiry as to the
| solvency of the state insurance fund
| With the sole object of endeavoring
to correct what believe to be erron-
eous impressions resulting from this
publicity, am giving expression to
these few comments.
In the article appearing in the daily
press it was stated that the surplus
in the state insurance fund has
shrunk from $3,OO0,O00 in 1929 to
$750,000. / can see no reason for
alarm over this. The annual state
ment of the industrial commissions
actuary, just issued, shows that this
$75O,0O0 remains to the credit of the
fund after reserves have been set
aside to cover unpaid awards, pending
claims, catastrophe reserves, etc. In
other words, after making allowance
for all possible obligations against
the fund, there is clear unincum-
bered surplus of $750,000.
| have always understood that the
aim of the actuarial system of the
industrial commission was to collect
enough insurance premiums each
year to cover the cost of the injuries
and deaths resulting from the acci-
dents occurring during that year,
plus the amount of the necessary re-
serves, and that the ideal condition
would be one in which the years in
come, from premium collections and
interest on invested reserve funds
would be equal to the years obliga-
tions without leaving either sur
plus or a deficiency.
| fully appreciate that it may be
wise to have a reasonable unincum-
bered surplus as a safety factor. But
it seems to me that some other facts
should be stated in order to give the
public a true picture of the existing
condition. The annual number of in
dustrial accidents has been greatly
reduced since 1929. The actuary's an
nual statement of 1881 shows re-
duction of 17.6 per cent, and the an
nual statement of 1882 shows a fur
ther reduction of 20.1 per cent. In
the Monitor, the official publication
of the industrial commission, July
number, 1882, page CAB, it is stated
that the number of accidents report
ed for May, 1882, "is 915 less than
for the previous month, and 3,96S
less than in May, 1881" 1t should
also be borne in mind that there has
been great reduction in the weekly
rate of compensation paid to injured
workers and dependents of killed
workers on account of accidents oc-
curing during the industrial depres-
sion. | have in mind one case where
the award made to a widow and her
child is $4.86 week. Another case
where a worker who lost his right
eye was awarded 1886 week for
the period provided by the law. In
each of these cases the award would
have been for $1875 week if the
injured employees had worked full
time But, owing to unemployment
caused by the industrial depression,
their earnings for the year prior to
the injury were very low, and the
awards of compensation were based
on the earnings for that year. And
right here let me say that many peo-
pie think it is a narrow and unfair
construction of law which gives to
workers who are permanently dis
abled and to dependents who have
lost their breadwinner, weekly al
lowance of compensation based on the
average weekly earnings during the
period of the worst industrial de-
preston in our history.
But the point want to make here
is that it is absolutely wrong to point
to the reduction of this unincumbered
surplus from $3,O00,000 in 1929 to
$750,OO0 in 1882 as an indication of
the relative solvency of the fund then
and now. Tables were presented
showing that since 1880 the annual
disbursements from the state insur-
ance fund have exceeded the annual
receipts of the fund. But this doesn't
necessarily prove anything as to the
solvency of the fund. The only way
this can be determined is by compar-
ing the cost of the injuries and deaths
resulting from the accidents that
have occurred shince 1929 with the
receipts paid into the fund during
that time. Part of the disbursements
from the fund for 1880 and 1881 in
clude payments of compensation on
account of accidents occurring prior
to 1929. going as far back as 1922
in death cases and even farther back
in permanent disability cases. Taking
into consideration, then, the big re-
duction in the number of industrial
4 L. -. ~,