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Show Proposed Amendments to the Compensation Law By R. W. SLOAN. HAT objections uliii-h would r-m-in M i . 1 1 ; 1 1 umler tlio iirorotcd Hinrml-I Hinrml-I Hunts tn tho conip'-Msn-tiun l.iw 5 I o put hi pitch fonu that they. (:-n ho vc-aiI ly those jnl frosted (1 used fur rttv-rcnrc, t Jim siubniluing ! rso views ill pnhlislirfl form. h'lo ! I'lMPcd anindiiKut Viy Sena- I - Olson marto coippciiFatiou iribUranre mpulsory with the stnto, fuml, except loro indivitin.'ila woro accorded thf prlv-pn prlv-pn of carrying their own risk-; subject tlio approval of tho industrial conmiiH-m. conmiiH-m. and whiio this proposition wits dc-iU?d, dc-iU?d, nocrt lich-ss another amendment tin? existing law was adopted hy the natn niii:h will effectually prevent any mprnjatlor: competition with tho state Md If it l.eeomefl h'. The amendment i:i qnesiion provides: ''I'liat any slot h company or mntna! relation nijt write uiei c;:rry all r:sks iiivura for wh.rh aptdication nmy nliide to it, and any carrier assuin-a assuin-a risk shall ciirry it to the conclusion the policy no-loci unices cancella tion is reed to by tho Industrial commission d the employer; and. provided that any Hoy written shall he. subject to cali-llatlon cali-llatlon at any time by tho legislature." egislative Cancellation' Scored. Iteferrin- to tho last proviso of the uise first, it 'may bo said the leKisIa-rr leKisIa-rr cannot take its duties very serlously icn it reserves the rijrht to cancel pol-. ieies and to rlctermiuo controversies between be-tween carriers of insurance nnd those purchiisiiiir the inyuranee. If the amend-tllei.L amend-tllei.L as fpioted Cilll he held to be valid and becomes iaw. no eoiivpanv writing business In this state will permit itself to be put In a position where It can ho hampered by such , provision. It is aiiain.-l the whole spirit of safety in insurance. in-surance. " The industrial connnlssion, in the exer-. j ci&c of the astonishing functions accorded It, could direct that all the "rotten" risks be turned over to the stock companies if it wanted to do so. It would make no difference how indifferent any emplover mlcht be to the welfare of his employees, there would bo no protection to tho insurance insur-ance companv unless tho indifferent employer em-ployer himself, with tln c-jr.scnt of the industrial commission or cancellation hv tho legislature, should consent that the company be relieved or the burden this provision of the law impose ', upon it. Parity Basis Declared False. Now, this provision was undoubtedly adopted so the slate fund might not be subject to attack by representatives of stock companies who have declared that the state fund was compelled to take any risk offered it, whllo the stock companies could pick and choose: and, bv the adoption adop-tion of the proviso referred to, it in presumed pre-sumed that the state fund and stock companies com-panies are thereby put upon a parity. This conclusion is absolutely erroneous. V bile the state fund may be compelled to tako any risk offered It at tho rate prf scrilef1, it lias the ritfht of Inspection, and, by reason of il3 iiitlniju'V with the industrial commission, c:in demand that :ui intYrior plant shall be lnit in a safe condition ho as to protect the lives and limbs of the emrloyees. Tt may name tho length of time in -which the alterations altera-tions demanded shall be made, and if these alterations are not mado within tho time specified, it has" the power to close the plant down. Tho amendment as passed by the senate does not and cannot can-not give this power to private stock companies, com-panies, but will compel them to carry any risk offered, at the state rates, to maturity, ma-turity, and the employer can do as he chooses about making the alterations that inspections disclose to bo necessary for the safety of the employees. Such a law is so palpably agrainst public policy and so hopelessly unfair that it must have been adopted without due reflection, and there can be little doubt fiat the senate would be very, glad to rectify so gross and unintentional ail error. Free Competition Denied. As a matter of fact, there' has never been free competition between the state and private corporations for compensation insurance business In this state. Tho compensation com-pensation law directs that premiums collected col-lected bej'ond what is necessary to meet the payment of claims shall be rebated by the state fund to the assured. An attempt was made by a company represented repre-sented by me to do the same thing for its policy holders. The industrial commission com-mission promptly secured the services of the attorney general's office and proceeded proceed-ed to prevent such action by the company I represented. A decision was rendered by the supreme court declaring that the state fund might do this, but that the competing insurance companies could not. There is absolutely nothing it; the law which says they may not, but the court Iliad thft last iruf?.-s and the industrial .commission was in a p-jt. State Rebate Cited. i Tills bing the case, the stale fund has .always pressed its claims i'or iiif-urance j of employers hy slating everywhere and ' on all occasions that it could rebate lo j pt crit or more, whllo the stork com-i com-i jisuii'-a could not. It would be very picas-lint? picas-lint? to have aonie lndh'iflual tshow where fiirii conditions make i'or equal competition. competi-tion. One of the chief, objections to the proposed pro-posed amendment ns it. stands ia the pro-viHirni pro-viHirni rnjulrlnff any company doin,' v:oni-pensation v:oni-pensation bu.sinesa in the aiate to be poa-spss-d of capital and wui'plus of if 600.0'JO. It. n?o rr'inires that mutual airsocia-tion.s airsocia-tion.s whall have net aets above all liabilities lia-bilities of J'JOO.OOO. This is a requirement require-ment that transcends that of any other atato In the union and is absolutely unnecessary un-necessary to the protection of employers In this Htate. Tho solvency of any institution insti-tution is neither its capital nor Its asset.1?, as-set.1?, but the relationship its asyets bear to its liabilities. Thousands of companies with small assets are Infinitely safer than companies with colosal assets, as very sensible business man know.0. The effeot ! of this unheard-of demand by Utah for j larre rapilal will ho to eliminate from I the 'list of companies at present allowed ! to write compensation hi tho stare Of : Utah, the lritrtatc Casually company of Alabama, which I represent. Jt will not touch other companies. Tlio Inter-slate Inter-slate has $U8, 000 cash and surplus and over JToO.OOO in assets more than Is required re-quired by any other state In the union for a company doing general liability and compensation business. " Mutual Companies Included. But far more vital than that, however, is tho question of whether mutual companies com-panies should bo compelled to have "$6u0.-000 "$6u0.-000 net over and above all their liabilities" liabili-ties" beforo they ran transact compensation compensa-tion business in this state. Such a law Is unknown anywhere else. It is a travesty upon tiie purpose of mutual companies. com-panies. Where the subject of compensation compensa-tion insurance is weighed broadly, and with some knowledge of its purposes, mutual mu-tual companies, as well as stato funds, are organied for similar purposes, that is, larprcly to protect the employer ajzainst the extortions sometimes practiced by the federated .companies in demanding more for Insurance than Is necessary. That this state should require $600,000 before . any company can be organled I mutually under its laws to transact busl-! busl-! ness for the benefit and protection of 1 employers in this state is to announce publicly that no local mutual organizations organiza-tions are to b tolerated. It means that! every dollar that goes to mutual companies com-panies shall be sent-out of the state, because be-cause a mutual company cannot be organised or-ganised in this state for the purpose named "without $600,000 above its net liabilities. I know tho contention of the commissioner commis-sioner of insurance is that in order to bo safe there must be a wide spread of risks, necessitating, as he holds, larpe capital;1 but in answer to this I beg to call attention to the fact that the companies com-panies writing business in this state make rates for this state alone, and, if they find it safe, as they have, to write business busi-ness In this' state alone, it certainly does not argue any necessity for preventing the organization of mutual insurance companies in this state in order that they may become safe. State Liability Limited. It must also be borne in mind that the legislature has declared $40,000 would afford af-ford ample protection, since that is the amount, it allowed the state fund, and, while there have been mutteringa about the state being behind the fund, no legislator legis-lator has yet had the daring to propose surh a thing to the others, and the law still stands which declares the state of Utah will not be liable beyond the amount in the fund. "Wc have reciprocal companies on the one sid, California, and on the o titer, Colorado, where $25,000 Is required, this state exacts $100,000. The difference between be-tween tlio reciprocal and mutual is the difference between twecdle-dco and tweedle-dum. ' The prbnosod bill requires' that reserves equal to 65 per cent of the premiums collected col-lected shall be set asido for the purpose of meeting losses. Above this reserve any amount, not lower than $26,000, will afford af-ford ample protection for every possible contingency, provided the reserve is put up. No man can contradict this, because the reserves themselves are presumed to : be ample to liquidate all obligations as j they mature. j Aj,ds Outside Companies. j To demand any such sum as provided in this bill can only operate in the interest in-terest of mutual organizations outside of this state, which will enter this state for the purpose of laklng money out of it; and, as they will be naturally in closer competition with the state fund than straight stock companies, the enactment of this law will make the competition of the state fund keener and the loss of premiums to the state fund much greater. I am not saying the insuranco will not be safe if taken in the outside mutuals, but I do say it will be no safer. .It cannot be safer than it is with mutuals organized within the state for Iho protection pro-tection of employers in the state because be-cause locally organized mutuals are under un-der tho Immediate supervision of the commissioner of insurance of tho state, and the money can be kept in the state, and the reserves can be watched. IThe capital required by mutual companies should not bo in excess of $50,000 at the outside. Other States May Act. Furthermore, the same bill requires that 7 1 per cent or the 65 per cent demanded de-manded as reserve shall be put up in trust in this state with tho commissioner commis-sioner of insurance. Under the retaliatory retalia-tory act just passed by the state of Utah the passage of this act can compel any company organized in this state, before it enters any other state, to have $(300,-000 $(300,-000 capital and surplus. Commissioners of insurance in other states can require each Utah company to put up 65 per cent of their premiums from that other state as a reserve in that other state, and, if such a project should be generally followed, fol-lowed, as may well be looked for. it would mean the liquidation of each insurance i-ompany in Utah, because its assets would be controlled neither by its officers offi-cers nor hy th Utah insurance commissioner. commis-sioner. Tt would moan that the assets of everv company organized in t his state will "be distributed through" the length and breadth in the various stntcs in which the company is doing business and f will be beyond th3 control of the parent company and of the rmmlssionfr of insurance in-surance of tho stato of Utah. This provision pro-vision is so intricate and so frauglit with dmiper that it ranuot hae had the consideration con-sideration to-which It is entitled. j Retaliatory Feature Dangerous. 1 Yhrn it i'- said that undr retaliatory j laws it might involve all Utah organized ' companies in stopping business or being I compelled to liquidate, surely so danger- 1 ous a provision should bo given much j more thought than it has received. Jf ( the act passes as it now stands it will tie up 75 per rent of the per crnt of j the reserve required to be put in the I hands of the commissioner and it cannot ! ho takrn out until this or another legis- j l;hure has enarted a ro isiou by which i tho funds can be distributed. Tlvujirhtlrs.-iy tho lrg'ida t ure has un - ; dm a. ken lo establish an insurance cr.de ; undT thn compensation art and that ran- ' not be dmn:. There arc many oilier fa- , lures nressnry to bo k-gislu'cd upon l.r- : fore a 1 niiL fund, Mich as this, ra n be j made aviLiblc for the payment of rlaitn, , jand. If thr IrpL-kiture forces this monv i I to be put. up m trust with th insurance , ) comruls:-"inr without making mnir provi- ! I sion and wiibont perfecting arrange- j inputs f-r its distribution, jr is going to I Mrar the employees nf thi? s'ate ulthouf , iTncanf of gM'ing thr mrwy for V-hich! i tho compeiua t ion act was created. ; Replies to Argument. : Tn "onelni'Mi I beg to rail nticntk.n (o itlir onlv argument ahancf3 by (ho pro- ' ipiin-iits of Mat" furd inrura nr. Stite j funrirt Ihr.-njghout 'h country pil ijc- ; I cla IT- 1 hey van handle cunpr nsa '.ion ! ImMness mere rroi turn i a by, and with as : ; little I'rietiim :tnd as s;t tisfac tori !y as , : stock i-nin:uii b's. Utah is no exception ! I to this 1 c have beard it from crry ; : "sourer. Smnnu OUi'ji has rif-Iarorj th ! j insurance companies fo be .carters and j should have a monopoly when it can handle han-dle the business anywhere from 3 0 to o0 per cent less than the stock companies can. It is the height of folly for a person claiming to have any knowledge of this business, however much of a Hcold lie may be, or however much of a lunkhead on the proposition, to insist that a mono-rolitlstic mono-rolitlstic state fund is necessary. A rea- son for the demand for a monopoly has never been given because there is no rea- son. If any law will give me a 0 per cent advantage above my competitors I will not need" any monopoly to put them out of business. . Why doesn't the state fund act and put other companies out of ' business instead of howling 1 for a monopoly? mo-nopoly? There is only one answer: they cannot do it and the men who advocate a monopoly neither have faith in their own prophecies nor in tho waitings of the state fund representatives. |