Current Problems in Compensation Insurance

In order to provide some basis for discussion, a list of current "problems" had been prepared in advance, divided into two main categories, those which we, as actuaries, might be able to do something about, and those which might be interesting to talk about with no action expected. The first session devoted its time to the first category, concentrating largely on means of handling risks under $500. These risks produce comparatively little premium, but create annoying statistical problems. In New York, for example, the risks under $500 constitute 85% of the total number of risks, but develop only 15% of the premium. A new law, effective in 1962, extending coverage to employers with one employee, is expected to add 50,000 new policies to the 400,000 already in existence. Although doubt was expressed as to the accuracy of this estimate, the problem of auditing and preparing unit reports on small policies still remains.