What Mr. Feder means by this is that the figures indicate that in New York where the payroll of workmen on iron and steel erection is only $2,500,000 as compared with $7,500,000 in Pennsylvania, the Companies in New York are putting iron and steel erectors into less expensive classifications in order to obtain competitive business. Perhaps that is another reason why the State Fund and the Mutuals cannot get any of this business. It is difficult for the Committee to realize that the labor on steel erection in the State of Pennsylvania in the year 1920 amounted in volume to three times the value of like labor in New York State! This view is confirmed by the comparative rates charged by the Bureau Companies for Workmen's Compensation Insurance on labor of that class in New York and Pennsylvania. It will be noted that the rate in New York is $28.99 per $100 payroll. In Pennsylvania the rate is $4 per $100 payroll but the benefits in Pennsylvania are only one-half what they are in New York. Equalizing the benefits by doubling the Pennsylvania rate we have a rate of $8 per $100 payroll for iron and steel workmen in Pennsylvania against a rate of $28.99 in New York. (P. 6488-6489). On Carpentry the rate in Pennsylvania is $2.10 per $100, the benefits being only one-half what they are in New York. Doubling this rate to equalize the benefits the cost in New York should be $4.20 per $100 payroll, instead of which it is $12.16. "These are Workmen's Compensation regulated lines." Says Mr. Feder: "There is no adequate check, it seems to me, made on the correctness of the classifications of these risks. The Superintendent of Insurance as such has no power of revision to that extent. He has no power to reduce the rates". (P. 6439.) Regulation of Workmen's Compensation Insurance alone, however rigid or effective, will not be of the slightest avail unless accompanied by the regulation of all lines of insurance (other than life insurance). The unregulated lines in which there is no competition will simply continue to be used, as they are now being used, as a cover to break the rate on the regulated lines. CHAPTER 16. CONTROL OF STOCK INSURANCE COMPANIES. In the State of New York stock insurance companies have a control under present laws of the following kinds of insurance. Fidelity and Surety Insurance. Credit Insurance. Burglary Insurance. Plate Glass Insurance. Elevator Insurance. Non-assessable Workmen's Compensation Insurance. Non-assessable Automobile Casualty Insurance. The people of New York have purchased different kinds of casualty insurance in the following amounts exclusively from stock companies as shown by the New York Insurance Department Report, Casualty, 1920 (Business of 1919), also 1921 In addition, the people of New York have secured different kinds of casualty non-assessable insurance in the following amounts exclusively from stock companies, as shown by the same report: In addition, the stock companies did a business in steam boiler insurance with premiums amounting to $696,980.78 in 1920. In 1921, amendment of Section 70 permitted the transaction of steam boiler insurance by mutual companies. The effect in New York State on various kinds of insurance is shown by the respective amounts paid by the stock companies to policyholders for losses on the various kinds of insurance during 1920. The foregoing figures are taken from the Spectator Insurance Year Book of 1921, pp. A 346-351 and A 464-481. It will be noted from this table that the return to the policyholder is highest in the case of live stock where there is mutual competition and in the case of sprinkler leakage where there is very active competition by the New England factory mutuals, and in the case of automobile property damage where there is competition by the automobile mutual companies, also in health insurance where there is competition by fraternal and local mutual organizations and more recently by the larger life insurance companies (mutual). There is also a larger return to policyholders in workmen's compensation where there is competition by the mutual companies. There is no competition by the mutual companies in fidelity and surety, burglary and theft, or credit insurance, nor was there any competition in 1920 in steam boiler and fly wheel insurance. The amounts of policyholders' premiums required for each $100 of incurred losses in 1920, as shown by the New York Insurance Report, Part III Casualty, page XLV, were as follows: Premiums Earned to Each $100 Losses Incurred. The savings resulting to the policyholders in the mutual companies appear to be more than one fourth of the premiums and these savings were effected very largely on workmens' compensation insurance where the stock companies have been compelled to reduce their expenses to a much greater degree than in other lines of insurance. New York Ruling Arbitrary.-The ruling of the Superintendent of Insurance of New York that a company cannot transact outside of New York any insurance which it may not transact in New York is not authorized by the New York Insurance Law. The only provisions of the Insurance Law on this question are those parts of Sections 9 and 25 which read: "No corporation or individual shall transact in this state any insurance business not specified in the certificate of authority granted by the superintendent." Sec. 9, Parker's New York Insurance Law, 1920. "A foreign insurance corporation may transact in this state only such kind of business as, under the laws of this state, a like domestic insurance corporation is authorized to transact. "No such corporation shall transact any business in this state not specified in the certificate of authority granted by the superintendent." Sec. 25, Parker's New York Insurance Law, 1920. The Superintendent of Insurance exacts from each company from another state an agreement not to transact anywhere any business for which it may not be licensed in New York. The effect of this requirement is to keep out of New York State a considerable number of substantial mutual companies and also to restrict mutual companies doing business in New York to the transaction throughout the country of only the limited kinds of insurance permitted to mutual companies in New York. This rule is not applied to alien stock insurance companies from foreign countries which quite often combine with casualty insurance, life insurance, and other kinds of insurance which cannot be transacted by such companies in New York. Nor is this rule applied to large stock companies of other states which combine in the same company life and casualty insurance. The result of this rule is that casualty insurance companies licensed in New York and transacting in 1920 a total business of $412,660,055.30 in net premiums, out of a total of about $500,000,000 for the whole United States, are compelled to submit throughout the entire United States to the restrictions imposed by New York in favor of the large stock insurance companies. For three years and more the mutual insurance companies have asked the New York Insurance Department to remedy this situation by abrogating this rule, by removing the restrictions upon the transaction of the different kinds of insurance by mutual companies, by providing for the organization of mutual companies to transact any kind of insurance, and by removing the prohibitions against the issue of non-assessable policies by mutual companies. Instead of providing for the transaction of all kinds of insurance by mutual companies under proper safeguards as has been done in other states, New York has separate and distinct articles providing merely for the transaction by mutual companies of workmen's compensation insurance, liability insurance, automobile liability, automobile fire, steam boiler, and health and accident insurance. These forms, with the exception of the steam boiler and automobile insurance, are confined to mutual companies which already write workmen's compensation insurance. Throughout the entire United States the field has been opened most freely to the transaction of workmen's compensation insurance by the mutual companies. Since the first workmen's compensation laws were enacted, in 1911, the enactment of each such law has been accompanied by some provision for the transaction of this business by mutual |