Evening star., 1932-09-03
WORKMENS
INSURANCE RATES
MOVE IS EXPECTED
Law Subcommittee Hears
Need of Action at Next
Session of Congress.
AMENDMENT is DESIRED
TO CORRECT "INEQUITIES"
Study Being Carried on as Result
of Protests From Local
Employers.

A move to amend the workmen's
compensation insurance law Of the
District may be made at the next
session of Congress with a view to
lowering the cost both to the employers
and to the insurance companies, accord
ing to current indications.
During an extended discussion OF the
matter yesterday before a fact-f1nding
subcommittee of a joint group called
into being to study reasons for the
recent heavy increase in compensation
insurance rates here, numerous ques-
tions were raised as to the advisa-
bility of amending the law to correct
'ineuuities" and to seek some form Of
regulation of the rates.
No action, however was taken by
the committee after its extended hear
ing of the views of two insurance COM
pany agents regarding the recent boost
in insurance rates in this field. The
committee headed by Walter c. Balder-
ston. will gather additional data re-
garding the cost of compensation in
surance here, from the United States
Workmen's Compensation Commission
and from the District Insurance De-
partment.
When this is completed a report will
be laid before the full joint committee
which is expected to adopt q policy
regarding the general situation.
Protest by Employers.
The study was precipitated as re-
suit of protests from local employers
over the recent decision of the rate
making body of the large national
companies handling compensation in
surance directing that the Washing
ton rates be increased 26.9 per cent
for stock companies and 15.9 per cent
for non-Stock companies.
Yesterdays session Of the fact-finding
committee was called principally to
hear an explanation of reasons for the
rate boost, by A. z. SHIELDING. assistant
actuary of the National Council of
Compensation Insurance of New York,
and W. H. Davis, manager of the Dis
trict of Columbia Compensation Rating
Bureau.
Mr.. Shedding stated that the rate
| increase here and those ordered in
other jurisdictions were the result of
the eXLerience of the insurance COM
panies in handling this form Of the
business. premiums" he said, must
be adequate to pay the losses and ex-
penses."
Unfortunately, he added, the pre-
MUM income has not been sufficient
to cover the necessary expenses and the
benefits paid.
Quoting from the sworn statement
submitted to the national council by
insurance companies, he reported that
in 1929 the underwriting loss nationally
amounted to S16,500,000, in 1880 to
SIG 200 900 and in 1881 to $23,200,000.
In 1929, he said, out of every 500
collected in premiums $71 went to
pay benefits to the insured.
Measure Called Urgent.
In support of the increase in rates
here and in other jurisdictions, he
pointed out that the National Con-
ference of Insurance Commissioners last
June adopted a resolution calling the
rates generally inadequate and urging
that the emergency" warranted an
immediate increase.
The compulsory compensation la
bility law here, in effect for four years,
has produced an experience chart
showing the need of the 1853 per cent
boost in rates. he said.
In answer to questions by members
of the local business group, Mr.. SHIELDING
reported that in 1880 the gross amount
of premiums received by insurance COM
panies handling the compensation
business here amounted to S1,452, 900.
During the same year $970,812 was paid
out to benefit claimants, leaving ap-
proximately $481, ,188 for overhead ex-
penSes.
In 1929, he said, the District of
Columbia loss ratio amounted to 69.8
per cent while in 1880 it arose to 1874
per cent. The preliminary 1881 COM
putations showed it amounted to 72
per cent.
Members of the committee drew
from the expert the statement that in
a comparison of the rates of the IA
States of the country which do not
have Government regulation Of the
compensation insurance rates, the Dis
trict of Columbia rates were the
highest.
Question Of "Truce."
Jerome Fanciulli member Of the
committee, declared Washington en-
ployers were willing to pay proper
and necessary rate, but asked II the
National Council of Insurance Com
panies would be willing to call a
truce on the rate increase until Con-
gress could consider proposed revision
of the present law.
Mr.. SHIELDING replied that he could
not see how that could be done until
the act had been amended, since the
rates could be based only on actual
experience.
Attention was drawn by committee
members to the fact that the national
council consisting of representatives OF
the large compensation insurance COM
panies, set the rate changes to be
adopted by the companies.
Mr.. SHIELDING replied that the
national council had no police pow
err to enforce its rate schedule, but
that it could consider dropping from
its rolls a company which refused to
follow its findings as to rates.
The joint committee of representa-
tives Of 10 or more local business
groups is headed by George c. Haven
ner, chairman of the Law and Legisla-
tive Committee of the washington
Chamber of Commerce.