Document p1v3q8xnzkzxk75o6Rzrk4XD

FILE NAME: Insurance Industry (INS) DATE: 1933 Feb 2 DOC#: INS033 DOCUMENT DESCRIPTION: Article from The National Underwriter - Hazard Weights Plan Is Studied  February 3, 1933 9 CASUALTY AND SURETY SECTION W 3 7 Hazard Weights Urge Greater Recognition Broac /P la n I s Studied of Casualty Trend Factor Buri general Revision of Method of Handling Occupational Disease Expected Before Long hay TAKE OFF LOADING piisatisfaction of Borne Companies with Initial Program in Effect Dec. 31 Is Reported fhe method of "hazard weight" rating occupational disease coverage in work men's compensation undoubtedly before . wiH be changed by the National Council on Compensation Insurance in ^operation with the workmen's com- wtion department of the National Ceau of Casualty & Surety Under, iters, a3 a result of the disinclination number of companies to assume this under the common law sections Estate laws, even though they get an ora premium from loading. The organizations are reported to be diking on a revision which will be bounced in a short time. It is under*r0A that the hazard weight loading fai je taken off all classifications save which state laws require to be ""red against occupational disease fL.<j This will permit optional use /be coverage by companies without Lcessity to unload in case the company not care to assume the risk. It is d to be easier to load the premium the hazard than to unload it. Some A seurede O bjected Another source of objection to load ' was from some insureds, it being f i d that many do not want this covoe All classifications are now loaded 2c'ent per $100 of pay-roll to cover SToccupational disease hazard, particjfrlv from the standpoint of legal ex"Tjl The matter still is under consid- but it appears assured that the Siient loading will be taken off most Sf classifications, to be replaced only '" event the assured desires coverage Shist occupational disease claims. JvLrwise an endorsement probably will fluached specifically excluding all .k claims except those arising from leases specified in statutes. Ita Illinois, for instance, there are 131 (cations specifically loaded under resent rules for occupational dis- ,L hazard, only 41 of which are speciSfin section 3 of the occupational dis . kw as required to be specifically *M*fed The other hazards fall under lion lb, which sets up common law g-lity of the employer. Illinola S itu a tio n C ited There are something over' 800 work *, compensation classifications in all except the 121 classifications jrving only 1 cent per $100 flat load * Heretofore it has been the practice ^faiOBt of the classifications on which NEW YORK, Feb. 1.--Although the factor of trend is projected fre quently in casualty rate discussions and negotiations, it has never gained the rec ognition as an absolute measure that the experience factor enjoys. . A number of the leading executives in the casualty field believe that the trend factor should be universally applied and should be given sound recognition, rather than being a matter of hit or miss. Supervising authorities, who do not have a profound knowledge of the business, perhaps are inclined to believe that the factor of trend is put forward by the companies in an attempt to get something extra and is not seriously ad vanced. . . The trend factor exists in all forms of insurance. For instance, the trend in fire losses has been downward over a period of years because of improved construction, refinements of fire fighting and fire prevention propaganda. The mortality trend, in life insurance, ex cept for current increase because of sui cides among heavily insured persons, has been downward with the conquering of various diseases that formerly attacked the population periodically. The fire and life insurance companies have recognized these factors. The average fire insurance rate has constantly declined, while divi dends of mutual life companies up until the present time, because of current con ditions, have been increased. C naualty T rend Up On the other hand, there are factors in casualty insurance, affecting automo bile liability and compensation, particu larly? that are headed upwards. Be cause the companies have been forced to accept rates based largely on past experience, they have never been able to apprehend anything near a final rate or a rate that is stable over a very few years. The trend factor has mounted so rapidly that experience has fallen down completely as a yardstick. For instance, there is the trend of medical cost. In the prosperous years doctors increased their overhead tre mendously. Nurses were recommended there is no known occupational disease hazard to give this coverage by endorse ment if desired without extra cost. This practice may be continued by some com panies as a matter of service to agents and clients. While there is a small amount of risk involved, the experience shows it is very slight. A claim very infrequently may crop up on these non hazardous classifications. < The endorsement now used to include occupational disease coverage in Illinois, modified to meet requirements in various states, agrees that the policy covers un der paragraph lb ``with respect to occu pational disease arising out of the busi ness operation of the assured covered by such policy and resulting in occupa tional incapacity necessitating cessation of work during the policy period, any thing in the policy to the contrary not withstanding, and subject to the limit of liability hereinafter stated." more frequently. Specialists developed. Hospitalization reigned and hospital charges went up. There were special charges of all kinds. Doctors would charge for hospital calls on the same scale as calls to the home, no matter how many people were seen at one time at the hospital. A tremendous overhead was developed. Bottom Dropped Out Then the bottom dropped out, but the overhead continued on the same basis. Collections became extremely difficult for the doctors, who naturally turned from insolvent individuals for revenue to the insurance company. The doctors were permitted to assess the insurance companies, because injured persons de mand the free choice of physicians. The companies were not permitted the sav ing that comes from the use of panel doctors. In cases of controversy over medical fees, the doctors were not willing to sub mit their cases to arbitration commit tees of the various medical societies, but to the labor departments of the state governments where they found a friend ly ear. The medical trend is therefore an ex cellent example of the fact that the use of experience as a sole yardstick in projecting rates is fallacious. The com panies feel that real recognition should be given to the question of trend. It is a somewhat elusive factor, of course, and it is much easier to base the rates simply on past results. But, although trend may be elusive, it is nevertheless real. Failure to Pay Accident Damages Is Held Immoral MILWAUKEE, Feb. 1.--Local city employes who fail to take out liability insurance on their automobiles show negligence that "comes close to being an immoral act," according to an opin ion of Max Raskin, city attorney, in answer to a petition filed by a local at torney urging the discharge of an em ploye in the city water department be cause the employe went through bank ruptcy to wipe out judgments against him. Under the city rules, the attorney points out, any employe who refuses to pay judgments against him is subject to dismissal. However, the city attorney declared that federal law, which permit ted the city employe to go bankrupt, was superior to municipal law, decreeing discharge. Judgments totaling $6,277 were ordered against the city employe after his automobile ran down a woman and crippled her for life. Possessing no liability insurance, the city employe paid $777 and then went into bankruptcy. Attorney Raskin said that the city employe "should make every effort to pay .the damages" and asserted bluntly that "for a city employe to drive an au tomobile not indemnified for negligent acts comes close to being an immoral action," which alone, he said, warrants severe city discipline. National New Ft ber WORLD Theft of J Insured NEW Y broader foi and larcen. has been National E Underwrite articles of anywhere : an especial demnity n contract oi The bre specified gardless o whom the dition, prt money an< be given present re the person tinue to b theft cove: Lit Rates fo larceny co ises remaii lar city is applicable will be pr the assure territories dence bur( The ann ranges fro $5,000 of for the nei I V, to $3' tively in 1 in excess ply. A sf for insurii BIL In anno National ] of its me abreast of ing rates where sui changes ii have been coverages The new with. "The a world-wid elry or fu $500 of su be less th coverage (CO