Document BooObVvOaMdqMY8DderRKXe4

FILE NAME: Insurance Industry (INS) DATE: 1932 DOC#: INS008 DOCUMENT DESCRIPTION: Article from The National Underwriter - Send Out Rules on Disease Coverage December 29, 1932 ^ /Q j ) TH E NATIO NAL UNDERW RITER c Send Out Rules on o/Disease Coverage Procedure and Rating Method in Covering Occupational Hazard Effective Dec. 31 AFFECTS M A N Y STATES Different Treatment Required Under Various Laws Explained in Bul letin on New Program The new occupational disease "hazard weight" program of the National Coun:il on Compensation Insurance filed with -nany states becomes effective Dec. 31, on new and renewal policies only in Illinois, Indiana, Iowa, District of Coumbia, Connecticut, Louisiana, Michi gan, Idaho, Montana, Nebraska, New Mexico, Rhode Island and Alaska, where approval by state supervising authorities s not required. Insofar as Iowa, Ne braska and Indiana are concerned, the alan and rates are advisory only. Bul letins detailing the procedure and rules have been broadcast by the council and die National Bureau of Casualty & Surety Underwriters. Workmen's compensation laws of the various states differ materially in treatng occupational disease cases, some defi nitely covering all such claims, others referring to certain specified diseases ind still others precluding payment of :laims under the compensation act, leav ing any liability that there may be out lined in the common law clause (1-B) bf the standard compensation policy. Different Methods of Treatment Occupational disease coverage is pro vided by the state compensation act or by court interpretation in California, Connecticut, District of C o l u m b i a , Hawaii, Maryland, Massachusetts, Wis consin and under the United States har bor workers' and longshoremen's com pensation act. Occupational disease coverage is not provided either by state law or court interpretation in Alabama, Alaska, Ari zona, Colorado, Delaware, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Montana, Nebraska, New Hampshire, New Mex ico, North Carolina, Oklahoma, Penn sylvania, Rhode Island, North Dakota, Tennessee, Texas, Utah, Vermont and Virginia. Partial occupational disease coverage is provided by law in Illinois, Minnesota, New Jersey and New York, certain spe cified occupational diseases being cov ered by the compensation act and any remaining liability lying in the employ ers liability portion of the policy, or at common law. In Missouri the compen sation act provides an employer may elect to bring occupational disease under the compensation act. Otherwise it is not covered by law. Since occupational disease hazards de pend largely upon raw materials used in a manufacturing process, special pro vision must be made in the chemical and dye stuff rating plan to meet the situation. The National Council sent out a memorandum outlining changes pro posed in the plan to cover this condi tion, various hazards being given haz ard weights in a scale ranging from 2 to 100. H atin g M ethod Em ployed When any of the chemicals shown in the list is employed, the occupational disease loading is determined on the ba sis of a 1 cent loading in rate per unit (CONTINUED ON PAGE 82) Pennsylvania Insurance Men Are Interested in Legislation. PHILADELPHIA, Dec. 28. -- The first Monday in January will find the new Pennsylvania legislature in ses sion. The thought of Commissioner Armstrong was a recodification of in surance laws. To that end he asked various insurance organizations to sug-~ gest laws dealing with their end of the business. - The main question confronting all the organizations is qualification of agents. Views differ. One group of fire and casualty agents wants a law where new agents work under a licensed broker or agent for five years before being permitted to go into business for them selves. This suggestion, however, will naturally meet with much opposition in and out of the business. Fire men are mainly concerned with a qualification law that will keep the non-policy-writing agent in check. It is possible that $25 license fee may be revived. This failed of passage at the last session two years ago but may meet a better fate now in view of legis lators seeking new ways of raising in creased revenue. Agents feel that an increased fee for licenses will keep out of business all except bona-fide insur ance men. ' DEPO SITO RY BONDS The most pertinent subject in Penn sylvania today is depository bonds. Re cent court decisions have aided in that. First was the decision in which the court held that companies cannot cancel bonds on deposits made prior to can cellation notice. Second was the dis missal of the suit brought by the Na tional Surety stockholder in which the court congratulated the company from refraining from being a party to suit and then dismissed the action seeking to enjoin the National Surety from pay ing the state before the state had exer cised its priority rights in closed banks. Companies charge banks the same rates as individuals, said the court. There fore, there should be no discrimination in making the state exercise a priority right before collecting from the com pany. While both court actions were vic tories fpr the commonwealth, the first has greatly perturbed state officials for the state has interpreted the law as be ing one where companies can refuse to accept responsibility on new deposits and where liability of companies de creases as withdrawals are made. The situation from the state view point is grave at this time. On deposit in state banks is some $43,000,000. Soon to come in are large sums from auto mobile licenses. Should companies re fuse to accept added liability by issu ing new depository bonds, the state must find banks having sufficient gov ernment bonds to cover deposits. Fur thermore, withdrawals soon to be made will greatly decrease the amount of $43, 000,000 now bonded fey the companies. Indications are that the state adminis tration will draft a new depository bond law to remedy this situation and it is more than possible that the new law will give companies greater advantages, perhaps permit issuing of cancellation notice on previous deposits. BURG LA R Y LOSS RATIO Unemployment is being reflected in burglary loss ratio. The National Bu reau of Casualty & Surety Underwriters in some cities has made an increase on all inside robbery risks. In others, only on a partial list of risks. In Philadel phia, the increase, which is 100 percent, is mainly on stores connected in some way with food. _The old rate had been $5 a thousand with a minimum premium of $10. . Underwriters say that were it not for inside robbery, burglary business would show a nice profit. But holdups of small stores keep the loss ratio up. New York and Chicago are the worst spots. Philadelphia continues to show pretty good loss ratio. Companies are still being careful in Kansas City and on risks they are taking are not having any the best of it. Underwriters complain also of in creased number of small open stock losses, especially in grocery stores. Losses today, they say, are not as large as they were but are more frequent. Companies are showing increased ten dency toward more careful underwriting but officials do not think the situation will be much improved until the unem ployment situation shows great improve ment. Companies Complete Case in Michigan Definition of Omaha Auto Rate Complaint Good Health Most Elastic LINCOLN, NEB., Dec. 28. -- Cas ualty companies complaining of the rate the Northwest Casualty of Seattle is offering Omaha postal clerks completed their case before Commissioner Herdman with the filing of a brief in which it is contended that the commissioner can fix rates under the broad, general powers of the insurance code. They argue that the insurance business now stands, before the courts, in the same situation as railroads and public utilities and is susceptible to regulation and su pervision in like manner. N ot L eg isla tiv e F u n ction The companies insist that making of rates is not a legislative function, but administrative in character and hence laws lodging power with the commis sioner to make rules and regulations and directing him to interpret, extend and apply those rules against rebating, dis crimination and misrepresentation need not specifically delegate power to fix rates. Attention is also called to the fact that the power to approve or disapprove of policies carries with it the right to determine what constitutes rebating, and it is argued that the fact that the terms and rates appear on the face of the LANSING, MICH., Dec. 28.--A most broad construction may be placed on the term "good health" by a jury, if there is evidence to support it, with out furnishing basis for supreme court action to vacate a judgment under a health and accident policy, the Michi gan supreme court finds in Louis Ligrow vs. Abraham Lincoln Life. The jury found that Ligrow was in "good health" when he took out the policy, although he was taking treat ments at the time, was under care of a physician, and was collecting bene fits from another company at the time when the policy was issued. His physician testified that the ailment was of a temporary character, having noth ing to do with a later illness for which claim was filed, and that he did not consider the earlier indisposition of a sort that would impair the "general soundness of the system" as required under a definition of good health. policy complained against does not re lieve the company from the charge of rebating since it is using a fictitious classification having no reasonable rela tion to the character of the hazard or the risk assumed. Expect C to Accej May Rest Cont< cent Higher Rates ir EXTRA FACT Approved Scale F. Percent Filin) lowanci The 60 stock ar writing workmen' Missouri and affilia Council on Compel expected to accept advance for 1933 Superintendent Th immediate attempt although they did vance in schedule based his ruling i perience of compa: all other rate fact: companies in supp tion. A sked 31 P ei The council had advance for stock c cent for mutuals, panies asked an a for "wage factor," of business becaus and 4.3 percent ext: factor" because of its effects on the cases of incapacity factors were ignore In a letter to 1 "Since workmen's ance in Missouri i: sory so far as th cerned, it is obvior have complete pub confidence, which enjoyed, is on the due in a large mea the carriers themst "I refer particula agreement on a un disagreement has r dispute between tin constitutes rate a grams presented ha by the arguments who have asked tl proval and have t cated by addition: which fail to supp proposals. "1 believe the e: necessary to produi sonable rates, and t increase in Missour disapprove all addit N ew Schedi Missouri has abo under workmen's i will be necessary schedules for all o schedules when fin then be submitted for approval. Wh vance will be 16.8 will not be uniforn classifications. The depression v duced the ranks of Missouri has had compensation prem totaled $6,000,000, . 000, and about $3,2 ures for 1932 are n< further slump in enced. Superintendent has not met with (C O N TIN U ED A JU*i\ December 29, 1932 Ca su a l t y A sso c ia tio n N ew s Seek to Check Racketeering Cleveland C a.ualty A ssociation Takes A ction--C o m p an y S u p p o rt S o u g h t to Check Inimical Legislation CLEVELAND, Dec. 28.--A rack eteermg- wave in Cleveland has stimu- i f t V f t0' actlc?n for insurance men the as,.other interests affected by the destruction of property. The Cleve- and Casualty Association recently held both open and closed meetings. Presi- n L thf ma,tte,r ,of.securing company suph n f fM Ieg,sIatn:e matters at Columaarriissee whbe"ny the \lSaSwUesmaarkeeresxPeccotnevdentoe (W anuar,T and insurance interests wish to be well protected especially in a defensive way A committee has been appointed by the Cleveland body to work with other state association rep- nnaatitf and Charles ^Hair,lriiksa, n NoefwCinAcmin sterdam, Cleveland, and John Gillespie Maryland (rasucilty, Columbus, traveled to New York to meet the company aadnnddt WWd KFariLonSgW, 6getenefrailhemaan--ageriatAiosn discuss1] 16 situation has also been " ^ 6dr ^ h lnsur?nce organizations sociated Industries of Cleveland spoke outside of the casualty field osVuf l n0"SC UrarnaCckt etmeCern oWpietrhatdioanism, storled- problems were d"scusseadnd Considerable Si, b ct'd ,,"" " ,h" "'"'"V Word has been received from some of the casualty companies that they will support the defensive stand of the insur hhaassCeaaopKpneoi-n`lte-d, TahecoCmlemvietltaened oafsstohcrieaetiotno cwoomrkmitwteieth. the Associated In^duusstirriieess" The Cleveland association has taken Ontario Adjusters Elect TORONTO, Dec. 28-- At the annual meeting f the Ontario Insurance Ad- elecLrH.Ap OC,ai 10n- tkese oncers were Travpirr ^ rsident' . G- A. Buchanan, travelers; vice-president, H. R. Magill, Employers Liability; secretary-treasurer, mhfT p ei?an'. Zli.nch; executive comTenn ' R'. Cu/Ls- General Accident; M. Lennox, A. E. Wilson & Co.; J. Mc Donnell, Canadian General, and S. Wil son, Northern. Expect Companies Send Out Rules on to Accept Advance Disease Coverage (CONTINUED FROM PAGE 2) ,, cffifonal,stihem- Stastoem- eas lewaadsingindinceawtesd papers, which looked upon this as adding t arg.9c- hurclen to industry. The St I hhiigXheVr rSattfers &wiillmceoss"t eisntdimusattreyd $`5h0a0t 0th0e0 more a year, and stated that all business s suffermS' and the remedy for insur I raendcueccinogmpeaxnpieensseiss.not raising pprriicceess, bouutt K A N SA S D E A D L IN E JA N . 13 Commissioner Hobbs of Kansas has allowed until Jan. 13 for industries to submit a reply to the application of cas ualty companies for a 35.9 percent ad vance in workmen's compensation rates. The companies filed a new schedule covring all lines and nearly every rate has been increased, on some classifications as much as GO percent. The Associated Industries has filed a protest against the wwiitthhdwUhtei-chf ".tdo c'Somgbaatht eirt.ing information Yorkshire Indemnity Increase President F. B. Martin of the Yorkooff II$$lVon0n,0d0oe0nrll!t1o!ty.tth.aenncOaUpi"tCales oaf nthaeddciotimon pany, increasing the item to $750,000 and the payment of $350,000 additional to surplus account. (C O N TIN U ED FRO M PA G E 20) of hazard weight, subject to regular limitation of 10 percent of manual rate tor the particular code number to which the loading applies. In cases where more than one of the chemicals on the hst is employed, the loading is based on the chemical with the highest hazard weight and an additional loading of 1 cent m rate shall be included in each block of the chemical and dye stuff rat mg plan to provide for dermatitis and other miscellaneous occupational dis eases. Generally for occupational dis ease classifications with specific hazards the manual rates include a loading of 1 cent for each unit of hazard weight, provided that in classifications where the rate is less than 48 the occupational dis- e? oadlng does not exceed 10 percent of the manual rate. The loading may e removed by the bureau having juris diction, providing conclusive evidence is s own there is absolutely no exposure to the specified occupational disease hazard in any individual risk and also that in no case shall the nominal 1 cent oading for miscellaneous occupational diseases be excluded from the rate. Rules governing application of this program for various states have been sent out pending preparation of manual inserts. In Illinois where specified occupa Thirty Years--Through Thick and Thin ) READING, PENNSYLVANIA ,, A Stock Company , . / ,, , Incorporated 1902 _________ Suf't>orlm9 fhe American Agency System ever since ATWELL* VOGEL & STERLING. Inc, ai# . S #Frani'& December 29, 1932 tional diseases are covered by the state d cbmpensation act, the policy coverage ft affecting specified diseases in the act is limited only by provisions of the com c; pensation act. The coverage for risks ti involving no classification shown in the li rate sheet shall be unlimited as respects h occupational disease claims. For risks p: involving one or more classifications, ei two alternative forms of coverage are d available; lc 1. Workmen's compensation and em ir, ployers liability with an endorsement rc entirely eliminating all obligations upon o< the part of the carrier to indemnify the ai employer^ against loss on account of b< claims arising from occupational disease ri under the employers liability clause of ar the_ policy, and, 2. similar coverage obli gating carriers to indemnify against in such claims,_with certain limitations. vi The rates indicated on rate sheets sent sc out provide for standard limits of $5,000 to On each individual claim and, subject to b> that amount per claim, to $25,000 for the tic aggregate of all occupational disease er claims arising during the term of the se policy, not exceeding 12 months. No Ql policy should be written for limits below pc the standard limit. If higher limits are lo; desired, the occupational disease loading tic in the rates will be increased by certain ha percentages: or T able o f L im its it Single Case Limit $ 5,000 10,000 20,000 50,000 $25,000 % 5 25 -A ggregate Lim it$50,000 $100.000 $200,000 % % % 25 50 75 44 73 101 56 88 119 69 103 136 On any single policy only one form of coverage under the employers liabil ity clause is permissible. The occupa tional disease coverage for the entire policy shall be governed by the coverage applicable to the classification or classi fications which carry a specific occupa tional disease loading, this rule applying regardless of whether the coverage elim inates obligation for occupational disease claims or provides for limited coverage either at standard or increased limits. In Illinois the general manual rules relating to minimum premiums apply to risks involving occupational disease cov erage, the minimum premium on rate sheet being calculated to provide occu pational disease coverage when written under the provision of the state act or at standard limits, as the case may be. M ay R em ove L oading In Connecticut, the District of Co lumbia and under the United States longshoremen's act, the occupational disease loading for a specific disease in volved may be eliminated, subject to ap proval of the bureau having jurisdiction, if absolutely no exposure to the specific disease exists in any individual risk. If the indicated loading is removed, there still remains the standard loading in the manual rate covering the general occu pational disease hazard. In Alaska, Idaho, Indiana, Iowa, Louisiana, Michigan, Montana, Ne braska, New Mexico and Rhode Island occupational disease claims are not cov ered by the state compensation act or by court interpretation. The coverage in these states is that previously men tioned in connection with the Illinois rules. The treatment of the risks in volving definite hazards as respects specified occupational diseases involving such classifications as raw materials, processes or products which create dis eases, is as follows: If the policy is endorsed entirely to eliminate all obligation on the part of the carrier to indemnify the employer against loss on account of claims from occupational disease under the employ ers liability clause of the policy, the entire occupational disease loading shall be deducted from the rate for all classi fications on the policy. In case of classi fications whose code numbers are fol lowed by the letter (d) on the rate sheet (requiring special treatment), the amount deducted from each rate shall be 1 cent greater than the specific occupational T H E NATIO NAL UNDERW RITER C A S U A L T Y 33, < disease loading, and for all other classi fications, 1 cent. , . If the policy is endorsed obligating carriers to indemnify against occupa tional disease loss under the employers liability clause, the procedure where higher standard limits is desired, is as previously explained in reference to cov erage, and if no exposure to this specific disease exists in any individual risk, the loading for the disease may be elim inated. Subject to approval of the bu reau having jurisdiction, a supplemental occupational disease loading in an amount determined by the bureau may be added to the rate for any individual risk where the occupational disease haz ard is abnormal. ' Removal of occupational disease load ing from the rates for any risk, as pre- I viously mentioned, is governed by rule, some classifications not being subject to consideration, for removal of loading, by the board or bureau having jurisdic tion, and others being subject to consid eration only upon evidence of entire ab sence of the hazard. These risks shall qualify for removal of loading for one policy period only. Partial removal of loading cannot be allowed for elimina tion of any one occupational disease hazard in classifications loaded for two or more such disease hazards, nor shall it be allowed to cover relatively low percentage employe exposure, or appar ent suppression of hazard by preventive measures. ' _ The occupational disease exposure in any risk covered by classification for which hazard weights are given will be considered as non-existent only when the material or chemical listed as pro ducing such occupational disease is not present, not used or not processed in the risk. Rules on Loading Removal f/ No risks involving asbestosis, anthrax-' infection or caisson disease shall qualify for removal of loading. Risks involving ..silicosis shall qualify for removal only where silica (silicon dioxide) is not pres ent as quartz, either in the process, manufacture or in materials used. Risks involving lead poisoning shall qualify for removal only where no metallic lead, alloy lead, lead compounds or lead ores are used. Risks involving chromium poisoning shall qualify for loading re moval only where no chromium ores or compounds are used or no chromium plating performed. Risks involving ben zol poisoning shall qualify for loading removal only where benzol is not used in any form, either alone or as a con stituent of other materials. Risks involving mercury poisoning shall qualify for loading removal only where no metallic mercury or mercury compounds are used, and risks involv ing radium poisoning shall qualify only where no radioactive substances are ] used. Service Section Knocked Out INDIANAPOLIS, Dec. 38--The sec tion of an act passed by the 1931 Indi ana legislature, providing that out-state defendants in automobile accident cases may be sued through the service of proc ess on the secretary of state, has been held unconstitutional in superior court here, in the case of Robert Fry vs. Cin cinnati, Middleton & Dayton Rapid Transit Company. Automobile insur ance companies had been watching the case closely. The court held that the defendant must be served personally while in In diana or the suit must be filed in a court of the state where the defendant is domiciled. He declared that the title of the law relates only to the financial re sponsibility of truck or automobile oper ators and that financial responsibility does not mean financial liability. T h e n a m e of th e Oklahoma Travelers Association, of America of O k la h o m a City has been changed to the Oklahoma T rav elers Life. R. E. B row n is p resid en t; O sca r J u s tu s , v ic e -p re s id e n t, a n d H . O. Brown, secretary-treasurer. Ships don't come in -- unless they are sent out ^ and sales don't come in today unless you go after them. The need for auto mobile insurance has never been greater than now. Aggressive merchandising is as essential as a proven policy that fits the public's automobile insurance needs. The Illinois National Casualty offers you (1 ) proven, dependable stock company automobile protection secured with rein surance treaties in companies with over twelve millions in assets. (2 ) coverage that protects. (3 ) nation-wide service when and where needed. (4 ) low rates that prospects can afford without sacrificing protection. (5 ) increased volume because 80-90% of all policies renew. Preferred arrangements available for `preferred agents in Illinois and Indiana. Particulars and details furnished upon request. ILLINOIS SERVICE OFFICES KANKAKEE 182 E. Court St. Phone: 90 BELLEVILLE Advocate Bldg. Phone: 740 INDIANA SERVICE OFFICES SOUTH BEND 111 N. Lafayette Blvd. Phone: 4-2146 PERU 29 E. Main Phone: 715 T. H. REITER President HOME OFFICE CHICAGO 540 N. Michigan Ave. Whitehall 6802 S P E C I A L I S T S IN BRANCH OFFICE SPRINGFIELD 524 E. Capitol Ave. Phone Capitol 133 AUTOMOBILE INSURANCE