Workmen's Compensation Insurance
Page 28
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MOST traders are-aware that, unlike the unemployment, health and pensions insurance schemes—where the employer's liability ends with the payment of contributions and the stamping of cards—liability to make either weekly (perhaps 30s.) or lump sum (possibly £600) payment is always present under the Workmen's Compensation scheme, in the event of injury by accident• (or industrial disease) happening to any employee covered by the scheme. Incidentally, more employees come within this scheme than under the other schemes mentioned, as non-manual employees up to £350 a year are included, the limit under the other schemes being £250 a year. There is no compulsory State insurance, as under the other schemes, but cover can be obtained with the ordinary insurance companies at moderate premiums. This is doubtless known by many readers, but it is not commonly realized that the premiums payable are adjusted each year, up or down, in respect of any insurance with a company which is a member of the Accident Offices Association (practically all companies are members) by an arrangement made between the Home Office and this Association.
A "loss ratio" of 624 per cent. has been determined, and this means the proportion the amount of the compensation payments made (or set aside), called " losses " in accounts, bears to the amount received for premiums.
If the "loss ratio" exceeds or falls short of 624 per cent. (the difference must, however, be more than half of 1 per cent. for an adjustment) the premiums are increased or decreased to the extent of the difference. The audited accounts for the year 1937 show the loss ratio as 60.3 per cent., the accounts showing losses £3,389,189 and premiums £5,620,279. Therefore there will be a rebate of 2.2 per cent. on any premium falling due between June 30, 1938, and _June 30, 1939. It may be useful to add that the rebates since 1924 have varied from 2.16 per cent. to 14.32 per cent.