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FILE NAME: Insurance Industry (INS) DATE: 1934 Oct 25 DOC#: INS037 DOCUMENT DESCRIPTION: Article from The National Underwriter - Illinois Occupational Disease Act Defined THE INSURANCE FIELD-- (Fir and Casualty Editioii) \tol 62>A Y October 25, $ October The Casualty and Surety Field ;ies vises: "Subsequent to the effective In d u strial Insurers date of thie prohibitive order, I stand ready to confer with company repre P la n n in g Big M eeting ipshire sentatives and agents and thereby Illinois Occupational Disease A ct Defined n Aims reds consummate satisfactory underwriting arrangements." Exercised Rights of Brokers. in addition to being directed at the Annual Session in Florida No vember 19-21 to Consider Many Problems Attorney Ge ne r a l Rul* Against Exclusions Con-C:is tamed in Policies ; I companies the order sets forth with Every phase of industrial under An Insurance harrier in Illinois PLAINT reference to a particular contract writing will be discussed November not, by an endorsement to the stan^'Y that: "Garages and automobile sales 19-21 When the Industrial Insurers ard workmen's compensation polish -5 organizations and their employees lo Conference meets at the Miami Bilt- relieve itself of liability to pay com- j pensatkm for occupational disea**, 'overage cated within the boundaries of New more Hotel, Coral Gables, Fla. Prob enumerated in Section 2 of the Ott. er 1 ; Hampshire have exercised underwrit lems relating to life, health, accident, cupatlonal Disease Act, Attorney G** ^ led ing rights, privileges and prerogatives and casualty insurance will be taken eral Otto Kerner of Illinois held of a licensed agent or broker without up at the sessions, according to an tober 16 in an opinion. : being the holder of a license issued nouncement by Peyton W. Jones, In view of the large number ', by this department." president of the group and secretary claims being >filed under both t , imer John It adds, however, that their acts of the Bankers Health & Life, Ma common law'1 and the occupation | hire pro- would not be illegal if "the sellers re con, Ga. disease, act the companies had soug , policiee in stricted their acts to that of simply A golf tournament, swimming, beach to relieve themselves of the occup* ig of auto purchasing Insurance for their pro parties, riding, deep sea fishing and a banquet will be among the enter tional 1disease liability by an en* dorsement, and legality of this actlOi ncing plan tection, but the acts and practices'' tainment Items scheduled for the was submitted to Attorney Genet ens as an are broader in that insurance is ob delegates. The banquet will be fol Kerner, with the resultant opinio e commis- tained for the buyers of automobiles. lowed by dancing. . . This leaves the compensation comp' 1 assureds It declares: "These acts and prac tices and underwriting processes are Among the leaders who will attend the meetings will be George R. Ken nies In the same unfortunate con- tion with occupational disease claim* .o them of cates, but violative of the laws of this state, and dall, vice president of the Conference and president of the Washington Na piling up at a ruinous rate and wit* apparently no remedy except a chan operations will not he tolerated." tional, Chloago; W. B. Clements, sec In the law. srally and Boston Bank Involved. retary-treasurer of the Conference and superintendent of the Industrial Act - Quoted. ;al agency The specific case concerned In division of the Pilot Life of Greens The opinion cited the fact that 1# oner Sulli- volves the insurance notice issued to automobile buyers by a Boston hank, boro, N. C,, and C. S. Drake, chairman of the Conference executive commit 1923 the Illinois legislature provide that employees in occupations enum d with the which finances car purchases. This tee and president of the Empire Life erated In Section 2 should be placed rit by the notice, it is pointed out, merely noti & Accident of Indianapolis upon the same plane as employee the New Insurance fies the purchaser that fire, theft and Also present as members of the ex ecutive committee will be C. A. Craig, who suffered accidental injuries aris ing out of and In the course of their deductible collision insurance on the chairman of the board, National Life employment. . The amendments al* car exists and that in case of loss the & Accident of Nashville; W. R. removed the right of employees t bank should be notified. La/throp, secretary, Southern Life & bring civil suit in _case of injury. vised that insTuhreanccoemgmraisnstieodnetrhreomugphhassoimzees mthaast Hgeenaelrthal ofcoBuinrsmeli,nghLaimfe; P&. MC,asEusatletys,, pen'Sseactitoionn 2A6cot,f" thteheWorokpmineionn's Csoaml, Nashville; J. R. Leal, secretary, Inter "provides that any employer wW utomobiles rrectly by ter insurance contracts .written out state Life & Accident of Chattanooga; shall come within the provisions & purchases side the state is of doubtful character E. T. Burr, actuary of the Durham Section 3 of the act and any other ance plan in so far as the safety and equity of the gencnl public is concerned. In Life of Raleigh, N. C,, and O. E. Starnes, vice president, Imperial Life employer who shall elect to provide and pay compensation provided for 1 eing given one contract cited by the commission of Asheville, N. C. The executive this het shall, In accordance wit# cars were er it is stated that the automobile committee will meet the evening of sub-paragraph 3, insure his entire protected owner has nothing in his possession November 18. . liability and said sub-paragraph pro icies were to show that there is a policy con vides that all policies, of Insurant* y resident tract in force which can he relied up Long Service Rewarded carriers insuring payment of compen sation under the act shall cover * on to protect the equity of the actual clals, how owner of the vehicle. employees and the entire compensa tion liability of the insured, and that or Sullivan It is further shown that cancella any provision of the policy attempt ruling and tion of the Insurance can be effected ing to limit or modify in any wN , Its proper without extending notice of cancella the liability of. the insurance carried e date has tion to the premium payer. In addi shall be wholly void. d the ques- tion, it is declared that manual rates Section 3 Cited. r the com and regulations are disregarded and uling to he 'Section 3 of the Workmen's Com- that the minimum premium of $5 for to master fire and theft insurance is not ob pensatlon Aot provides that the pro* . visions of the act shall apply auto- ' id. . , that after imatic covIfect. For od of hance conferrtween the Hampshire ruling of work ma t his order insurance eby given lie laws of 'e thie day state auto sd in con purchased ; Are, theft 3 two-page iber 28 ad served. Iowa Federation Elects H. B. W hite to Presidency H. B. White, counsel for the United States Fidelity & Guaranty In Des M oines, has been re-elected president of the Insurance Federation of Iowa John W, Gunn, secretary and trea surer, also was re-elected. Vice pres idents named Includes A. P. Speers, Centerville, Charles J. Schrupp, Du buque, and James H, Bunten, Fran cis R. Korns, Harry E. Rex, A. B. Lorenz and K. G. Ellsworth, all of Des Moines. The following have been appointed to the executive committee: H. B. Carson, Mill Owners Mutual Fire; F. R. Korns, Mark W aterman, Jr., State Automobile; Thomas Watters, attor ney; J. A. Gunn, Employers Mutual Casualty and Chester E. Ford. John T. Hutchinson, secretary of the In surance Federation of America ad dressed the anifual meeting last week. HARRY A. KEARNEY Mr. Kearney last week was ap pointed manager of the Important New York department of the Hartford Accident & Indemnity which takes In the metropolitan area, northern New Jersey, Long Island and southern New York state. He Is one of the outstand ing casualty and surety men of the country and has been in the business more than twenty years. matically and without election to ah employers arid ail employees engaged in any of uie enumerated business* or enterprises * * >*. "When an employer is liable to p*f compensation, whether it be undo* the provisions of the Workmen Compensation Act or by virtue of i#* provisions of Section 16 of the Occo* national Disease Act he nevertheless has elected to provide and pay the compensation provided for In ths Workmen's Compensation Act * * _ and there is only one compensation provided for and that is the compensa tion as provided in Section 16 (b) 1 * the Occupational Disease Act, namelTj if an employee is disabled or dies M reason of an occupational disea* arising out of and in tho course his employment, In one or more of th* occupations referred to in section 1 he, or his dependents, `shall he en titled to compensation In the saw* manner and subject to the sain* terms, conditions and limitations W are now or ihay hereafter be P** 12 TH ftSRANC FIELD--(Fir and Casualty dition) vided by the Workmen's Compensa tion Act for accidental injuries sus tained by employees arising out of and in the course of their employ ment.' " " ' ' Rate Increase for A labam a Is Asked Liability "Void. "If an employer must compensate his employees under the Wlorkmen's Compensation Act for every acci National Council Files for Average Advance of 9.6 Per Cent dental injury which arises out oi and in the course of his employment and the legislature haSj said that the dis ablement due to an occupational dis ease in Section 2 shall be treated as the happening of an accidental in jury," the opinion said- further, "then The National Council on Cdmpensa- tion- Insurance has petitioned the Ala bama insurance department for an average increase of 9.6 per cent over existing manual compensation rates in that state, the revised rates be made applicable to new and renewal the employer must provide and pay compensation -and if he does 90 by taking out a policy of Insurance any limitation in the said policy which seeks to limit or modify, in any way, the liability of the insurance carrier issuing the same is wholly void, it would seem harsh and unreasonable to ;say that the legislature intended to take valuable rights from the em ployees, namely his common law right to action against the employer, and substitute for it a limited recovery under the Workmen's Compensation Act and not give the employees the entire protection that one who re ceived an injury under the compensa tion as would have been entitled to. "I am, therefore, of the opinion that the limitation in the endorsement re ferred to, in so far as it excludes from the operation of the policy the business only. , After determining the required aver age advance in rates, the increase Is distributed by the proposal according to indications of Alabama experience to the three indutetry groups of manu facturing, contracting and all other. The resulting per cent increase asked for each industry group is: Manufac turing, 6.0; contracting, 18.7; all other, 10.7. It is contended that these increases by group will produce over all the average increase of 9.6 per cent which is asked. ' Loss Constants Proposed. There is proposed a system of loss constants to apply to all risks produc ing an annual premium of less than $500, with an offsetting reduction of manual rates. It is contended that the loss ratios of risk* producing less than $500 are on the average much liability of the insurance carrier to worse than the loss ratios of risks pay compensation to employees who which produce an annual premium of are disabled by virtue of any occupa more than that amount. A procedure tion enumerated in Section 2 of the of collecting a loss Constant 'on all Occupational void." t,A m erican Disease Act, is wholly risks with an annual premium less . than $500 is proposed to overcome the RE INSURANCE C9 Robert C. Ream, President 67 Wall Street , New York DECEMBER 31, 1933 CAPITAL - - - - - Surplus - - - - - - Voluntary Catastrophe Reserve - Reserve for Losses - -- Contingency Reserve - - - All Other Liabilities - - - TOTAL ASSETS - - - - Based on Market Values $1,000,000.00 2,180,033.26 500,000.00 1,839,722.28 700,266.34 849,285.74 7,069,307.62 inequality produced by the difference tive Nor in loss ratios between the two classes, location. those with an annual premium of able wli mor than $500 and those producing' owned c less than that sum in annual premium, a 61 pe; The good Patio of the risks in the' It was former class is recognized by an off- austaine setting reduction In manual rates. in Okla The loss constants proposed are: fact tha Manufacturing and contracting, each loss rat $11; all others, $6. . bodily The corresponding percentage re- five yei ductioh in proposed manual rates is: sive, wa Manufacturing, 2.2; contracting, 5.4; in 1932 all other, 3.4. The proposed manual cent rea rates, It is claimed, shall be reduced by the foregoing percentages in or der that the premium collected by using loss constants will not increase the total premium in the aggregate. . By Industry Group. Courtt To i The I Vincent The proposed rates produced on-t-he average an increase over existing basic rates of 6.1 per cent, and the premium produced by such rates to gether with the premium obtained by the application of loss constants pro duces the required average increase of 9.6 per cent, and at the same time, it is claimed, equitably distributes this increase by industry group as in dicated by the Alabama experience for each grotip. In support of the proposed increase of 9.6 per cent In premium, it is con tended that there should be in the rate-making procedure a means for forcing incurred experience upon $1,510 Van Sc servatoi the U: failed carried employ fused t< ure, ho busines fend co $1,2)16 i The ( premiui Astor ( cause 1 than h< which rates are based to reflect con ditions prevalent at the time the rates will apply. Heretofore this has been attempted by means of projection of medical losses and the inclusion of a flat contingency factor of 2.5 points. Substitute Basic Factor. Alber Aiber appoint eral oil fraterm departn It is now proposed to discontinue these methods and to substitute a basic contingency factor of 2.5 points which will vary trom a minimum of .0 to a maximum of 5.0 points, de pendent upon the actual underwrit ing experience for the latest calendar posit a Sparro'. years 1 dent ol of the com pan who re year for the state in question. The actual underwriting experience in Alabama for the calendar year 1933 was such that there is proposed a contingency factor of 5.0 points. The use of a contingency of 5.0 points as proposed, together with the actual indication of Alabama experi ence for policy years 1930, 1931 and 1932, shows that there is needed the requested Increase of 9.6 per cent over present basic rates. Superintendent Charles ill. Greer is making a careful investigation of the proposal with the aid of D. M. Mun, 7arm The the St ton, III tofore the Sb receivii mlssior. angenr state c will be ness, force. head of the compensation department. Action is expected at an early date. W riti C a s u a l t y R e -In s u r a n c e Time Tested jStTRpSS' Time Proven Experienced advice, counsel and co-operation of our Group Department are at your Service in handling-- GROUP DISABILITY LINES For information address-- JOHN T. WAGNER, Manager Group Dept. National Casualty Company W . G. CURTIS, P r e s id e n t Majestic B u ild in g . Detroit, Michigan .................................................................................... .. Companies Declining Old Cars in Massachusetts 6 ne of the complications of the compulsory automobile insurance law of Massachusetts is that the insur ance department is authorized to force a company to write insurance, feven if it desires, for sufficient rea sons, to get oft of or refuse the risk, Some of the companies in that state had decided to refuse to write cars more than five years old, be cause of the heavier loss ratio on the class. Commissioner Merton D. Brown of Massachusetts, has an nouhced that such action will not be permitted, as It would constitute dis crimination. He admits, however, that cancellation will be permitted on old cars if it can be shown that they are not in fit condition to be safely operated on the highways. A Progressive Suret]) and Casualty Company niiiuiiiitnmiiiiiiiiPiHiiiHiniiiimiimimmimmiuwiiiiiitmnitiiiuiiiiHiiiimiiiiiiiinfiniitiiiiiiiiiiiiuiiiiiiiiiitiiiiiiiitiiiiiiiiiiiiiminiimiiiiiimuiiiHiiiiiii'fiiHfiuiiO Increased Auto Rates Approved for Oklahoma The Oklahoma Insurance Board, on October 19, approved a filing by the National Bureau of Casualty & Surety Underwriters, for higher rates in Ok lahoona for automobile bodily injury and property' damage liability, effec The conjun ance i ance 1 Insurai Insura Great dling I mobile Gene M. Jersey eral a the Si New 1 Bartt Johr the P) Hlartfc 1922, h offices with t a mer Societ leaves The has d per . stockh