THIS CIRCULAR IS OF IMPORTANCE TO YOU Take the time NOW to read it It may save your business from serious loss Do you know that the state fund does NOT INSURE your risk ? Do you know that the liability of a contributor to the state fund is limited only by the FULL AMOUNT OF HIS RESOURCES ? THE TRUTH ABOUT WORKMEN’S COMPENSATION and STATE INSURANCE IN OHIO Issued by Insurance Federation of Ohio ®% 7714-15-16 Hippodrome Bldg. Cleveland January 25, 1915 WORKMEN’S COMPENSATION AND STATE INSURANCE Much has been said and little understood respecting these important industrial factors. The Insurance Federation of Ohio has refrained from any public statement until now, when we deem it necessary to stem the flood of misrepresentation of insurance business and agents in connection with these subjects. Once again, WE REPEAT THE DECLARATION THAT ACCIDENT INSURANCE COMPANIES, THEIR OHIO AGENTS AND EMPLOYES, ARE UNQUALIFIEDLY IN FAVOR OF WORKMEN’S COMPENSATION and are equally opposed to those discarded negligence laws which brought about the necessity for Employers’ Liability. They have for over fifteen years publicly advertised and ad- vocated Workmen’s Collective (Compensation) Accident Policies and have consistently supported the program to do away with the old Employers’ Liability system and re- place it by Workmen’s Compensation. Sensing a change in popular sentiment, certain public officials in Ohio promptly seized the slogan of “Workmen’s Compensation” and through wide publicity confused the public mind into a belief that State Insurance is a necessary adjunct of Workmen’s Compensation, whereas its job creating possibilities and its value in perpetuating a polit- ical machine constituted its chief attractiveness to them. Realizing the weakness of this scheme, they created a virtual monopoly for the State Fund, thereby depriving citizens of Ohio of the right and privilege to meet this burden in the manner best suited to their individual requirements. This likewise de- prived THOUSANDS OF CITIZENS in the State of OHIO engaged in the Insurance business from the pursuit of their legitimate calling in the transaction of a class of busi- ness authorized, licensed and taxed by thé State. Without free and open competition, it is impossible to ascertain which, if any, one plan of Insurance be superior to all others. The test of experience would alone de- termine the survival of the fittest. WORKMEN’S COMPENSATION > is just as much a business proposition as any other element or “cost in production” attendant upon industrial activities. WORKMEN’S COMPENSATION LAWS are intended to establish a sure, ready and definite means for relieving the distress from unpreventable accidents in industry. They are expected to do away with litiga- tion and strife and any law which falls short of full accomplishment in this respect is defective. We believe the Ohio Compensation law should be so amended as to assure the benefits of Workmen’s Compensation for all injuries arising from the industries to which it applies and that the “open liability” left in the law places an unfair and un- balanced burden upon the employer and an unfair and speculative temptation upon the employe which are alike to the disadvantage of both parties. We believe, furthermore, that if statutory amendment will not wholly extin- guish this open risk, the financial credit of employers demands the PRIVILEGE of some form of Insurance against calamity. Uncollected portion of awards account (4) death claims....... $ 9,307.46 Advanced account total permanent disability (1) ............. 10,015.22 } $19,322.68 Credit account Reduction of Rates on account of withdrawal... 5,442.34 Accumulated balance in excess of expenses account of accidents. $13,880.34 The company HAD ALREADY PAID IN PREMIUMS THE SUM OF $47,867.60 from April Ist, 1913, to November 15th, 1914. THIS RULING EXPOSES EVERY EMPLOYER IN OHIO TO THE SHOCK OF A LOSS WHICH EVEN IN A SINGLE CASE MAY RUN INTO MANY THOUSANDS OF DOLLARS. Already several prominent employers in Ohio, recognizing this danger, HAVE PAID THEIR FINAL ASSESSMENTS AND QUIT THE STATE FUND. In several of these cases the amount of such assessment is known to have been upwards of $15,000 each, and with other risks we are reliably informed it has been several times even that large figure. TO EMPLOYERS OF OHIO Do you know that you cannot withdraw from the State Fund without the written consent of the Industrial Commission? Do you know that your business is exposed to a sudden and unlimited risk? Do you know that the premium you pay to the State by no means insures the full possible cost for such Insurance? Would you buy from a private company Insurance covering only the minor cases? Do you know that your liability is limited only by the full amount of your resources? | Do you know that it is expressly provided in the Act that any payments required from you and enforced by the Industrial Commission become a lien on your property? Would your credit be affected if an overhanging liability of $10,000 or possibly $100,000 rests against your business? INVESTIGATE Do you want these conditions remedied, so _ that when you pay your premium, WHETHER TO THE STATE FUND OR TO A PRIVATE INSURER, you may know beyond peradventure of doubt that such premium actually insures the full er ore Oe out Chat such premium actually insures the full cost possible to you for accidents arising within the terms of its protection? If So, IT IS YOUR DUTY AND RESPONSIBILITY TO MAKE KNOWN YOUR WISHES TO THE STATE OFFICIALS, AND PARTICULARLY TO YOUR OWN REPRESENTATIVES IN BOTH HOUSES OF THE LEGISLATURE. WRITE THEM TODAY. THE INSURANCE FEDERATION OF OHIO By E. W. DAVIS, Secretary. We believe that every employe is entitled to know with certainty that the benefits and pensions of the Compensation Act will be paid him or his dependents with- out law suits or delay. WE BELIEVE THAT EVERY RECOGNIZED FORM OF INSURANCE SHOULD BE GIVEN A FAIR FIELD AND NO FAVORS. We believe that those employers of ample financial responsibility, properly se- cured, who wish to carry their own risks, should be freely permitted to do so without penalty or being required to pay a tribute to a State Fund from which they derive no benefit. We believe that the State Insurance Department should exercise intelligent and expert supervision over all insurers, both State and private. We believe that those citizens who want State Insurance should have it. We believe that those citizens who want private Insurance should have it. We believe that those citizens who prefer Mutual Insurance among Ohio em- ployers should have it. : We do not believe in monopoly or favoritism to any one of these plans. We oppose as unjust and indefensible the present practical State monopoly of industrial insurance. PE OHIO INDUSTRIAL COMMISSION charged with the duty of administering the present Ohio Insurance Fund is not so much to be criticised as the law under which it operates. Insurance actuaries and experts are generally agreed that the State Fund has made the error of quoting rates less than the actual cost for meeting their obligations. The State Fund makes no pretense of complying with the full legal reserve requirements imposed by the laws of Ohio upon every other form of Insurance. Consequently, it would not be surprising if the accumu- lation of deferred death and pension cases will create against the Fund A DEFICIT OF STAGGERING PROPORTIONS. This situation is tacitly admitted by the ruling of the Commission under date of October 13th, 1914, and its more recent amendment, setting forth the conditions upon which an employer can determine the definite cost of his Insurance with the State Fund. Stripped of all technical language, the ruling means that the full amount of any death losses or permanent total disability pensions, arising from the risk of any con- tributor to the fund, must be added to his Insurance cost, because the initial premium rate named by the Commission insures and protects the employer ONLY against the minor and more or less inconsequential claims. In short, the State Fund DOES NOT INSURE your risk, but makes a start at it, leaving the FINISH for you to settle at indefinite and unlimited cost, as in the case of a serious calamity. EXAMPLE The following example shows an actual application of this ruling. The figures are taken from the books of one of the largest manufacturing concerns in Cleveland which recently withdrew from the State fund. Upon notification of its intention to quit the State fund the company was re- quired to pay the State Industrial Commission: 1'70089 . . . . 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