Proceedings, Third National Conference Workmen's Compensation for Industrial Accidents

by National Conference on Workmen's Compensation for Industrial Accidents

Mr. Dawson: There are reliable tables by means of which adequate premiums and reserves for annuities to the disabled and to widows and orphans can be computed.

Dr. Allport: I have a copy here of the workmen's compensation act of 1906, the English act, and I think it might not be a bad idea to read you the provision in the English act covering this matter. Of course, the English act started out just as our act must start out if we start out on the basis of compensation. It must be based on a certain proportion of the wage of the individual. When we come to consider the matter of disability, the point that comes up is whether we shall pay a man for a total or permanent disability in a lump sum or whether we shall limit the time in which the payments shall be made. It seems to me as though that is purely an actuarial matter, and that it is something which will adjust itself if any law goes into effect. No employer in England carries his own insurance; it is all carried by some form of insurance, and so the insurance companies will have to work this matter out for themselves, and they are going to be able to do it. The better class of insurance companies have prospered under that class of insurance. The provision in the English law is, briefly, this: It provides for the payment of compensation for disability as long as the disability lasts, and in case of death it provides for payment to the children until they reach a workable age, and for the widow until she marries again. Then there is this provision:

"Where any weekly payment has been continued for not less than six months, the liability therefor may, on application by or on behalf of the employer, be redeemed by the payment of a lump sum of such an amount as, where the incapacity is permanent, would, if invested in the purchase of an immediate life annuity from the National Debt Commissioners through the post-office savings bank, purchase an annuity for the workman equal to 75 per cent. of the annual value of the weekly payment, and as in any other case may be settled by arbitration under this act, and such lump sum may be ordered by the committee or arbitrator or judge of the county court to be invested or otherwise applied for the benefit of the person entitled thereto."

These cases are put into the hands of the court and paid by the court and not by the attorneys, and it is left optional as to whether he will take a lump sum or an annuity.

Dr. McCarthy: Some of the county judges over there with whom I talked told me that they were doing everything possible to keep the lump sums from being paid, because they believe that is a bad practice. There is no agitation over there that I could find in either Germany or England for limiting the time that a man should receive compensation. They understand over there that it has got to fall upon somebody in the end, and you must remember that in Germany and in England, to a large extent, this is done to keep away from the necessity of caring for the poor, and all that sort of thing. You go to any insurance company over there and say, "I have so many people working in my factory under such conditions; what are your rates?" and they will give you the rates and take care of an injured man for the rest of his life.

Chairman Mercer: It has seemed to me sometimes that it might be a good plan to provide for a lump sum settlement, subject to the approval of a court, in case a firm wanted to go out of business, or something of that kind. A corporation might want to dissolve, or the time of its charter might expire, and in that case what is it going to do?

Mr. Dawson: It would go to an insurance company and purchase an annuity to cover it.

Chairman Mercer: Suppose it is a big company that had been carrying its own risks?

Dr. McCarthy: That is an actuarial matter. If it is a mutual company in Germany, there has to be a reserve kept by those companies to provide for the possibility of their going out of business.

Chairman Mercer: It seems to me we might now go to the question of whether we will administer our compensation law through the courts or through boards of arbitration. In New York I notice that they recommend staying under the courts in their present bill.