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Show Foundation Survey Reveals Workmen's Compensation Insurance Rates High Insurance rates charged Utah employers for Workmen's Compensation Com-pensation have been higher than necessary, it was indicated in a research report released today by Utah Foundation, the nonprofit non-profit private tax study agency. Payments by employers to the State Insurance Fund have been sufficient to pay all approved benefit claims and provide all reserves required by law, and in addition build a surplus exceeding ex-ceeding four million dollars, the report states. Reduction of rates and a return re-turn to employers of their proportion pro-portion of this surplus are prescribed pre-scribed by law, but have been delayed by absence of adequate accounting records and the complexity com-plexity of the legal machinery, according to the Utah Foundation Founda-tion analysis'. Approximately 155,000 workers work-ers in the state are covered by the jointly administered Work men's Compensation and Occupational Occu-pational Disease Disability programs. pro-grams. These programs provide payments pay-ments to workers injured on the job, and to the dependents of workers killed in the course of their employment. Benefit provisions also apply to workers work-ers who are disabled or die as a result of occupational diseases. dis-eases. Allowances include payments pay-ments for medical, surgical, hospital, hos-pital, and funeral expenses and the purchase of prosthetic devices de-vices when necessary. Cost of the program is borne by the employers of the state. Each must guarantee his employee em-ployee the disability and death benefits provided in the law. An employer may Insure his employees in one of three ways: (1) by carrvina a compensation Insurance policy with the State Insurance Fund; (2) by insuring with a private insurance company; com-pany; or (3) by furnishing annual an-nual proof to the Industrial Commission of financial ability to pay the necessary direct compensation com-pensation to eligible employees: There are approximately 10,-500 10,-500 employees in the state covered cov-ered by the Workmen's Compensation Com-pensation program. Of these, about 4,300 are insured with the State Insurance Fund, over 4,000 are insured with private insurance carriers, and about 65 are self-insured. An estimated 2,000 employers have not reported re-ported to the Industrial Commission Com-mission as the law requires, principally because of a 1949 amendment which extended cov erage for the first time to many employers having only one or two employees. I Analyzing finances of the program, the Utah Foundation report states that benefits paid workers under the programs totaled approximately $2 million mil-lion during fiscal year ended June 30, 1950. This included $816,118 paid by the State Insurance In-surance Fund, about $670,000 paid by private insurers and $550,000 paid by self-insured employers. , Net premiums paid by employers em-ployers for compensation lia-ability lia-ability insurance amounted approximately ap-proximately to $2.4 million during dur-ing fiscal 1950. Of this, $1,330,-791 $1,330,-791 was paid to the State Insurance In-surance Fund, and about $1,-160,000 $1,-160,000 to private insurance carriers. Compensation insurance rates for private insurance carriers are fixed by the State Industrial Indus-trial Commission. Rates for the State Insurance Fund are established es-tablished by the Finance Commission. Com-mission. Rates adopted are determined largely from recommendations made by the National Council on Compensation Insurance. Rates for the State Insurance Fund have, in the past, been uniformly 20 per cent below those for private insurance carriers. car-riers. Despite this fact, the fund has grown rapidly in recent re-cent years, so that as of June 30, 1950, total reserves and surplus of the fund amounted to $7,335,776. This is more than double the amount considered necessary for all reserves. Both the State Insurance Fund and private insurance carriers use a return premium plan for returning part of an employer's premium when his actual losses in claims paid to employees are less than allowed losses. This plan as presently defined, however, applies only to the estimated 3 per cent of the employers in the state whose premiums exceed $1,000 per year. General supervision of the workmen's compensation and occupational disease disability programs is under the State Industrial Commission. Workmen's compensation programs pro-grams are in operation in all of the 48 states. State insurance funds are used in 18 states. Of these, 6 are monopolies in the compensation insurance field, ,11 are competitive state funds as in Utah, according to the I Utah Foundation report. , i |