On November 14, 1916, this Department advised you that

"A hoisting engineer, whose duty it is from time to time, to lower men and boys into mines, and to hoist men and boys out of the mines, and also from time to time to hoist coal from the mines, can only be engaged. for a period of eight hours out of each day, even though in any particular day of eight hours' service, he may not be required both to lower men and boys and to hoist men and boys and also coal." 2 Dep. Rep. 2559.

The precise question now is, as I understand it, whether an engineer whose duty it is to hoist men and boys, but who does not hoist coal, may be required to work more than eight hours.

This Act of Assembly was, as its title indicates, intended to provide for the safety of the persons employed in the mines, and to that end it provided that a hoisting engineer should not be so overworked, or continued in his employment so long, that he would cease to be alert, cautious and careful. For that reason the Act provides that an engineer "part of whose duties is to lower men and boys into and hoisting them and coal from the mines," must not be required to work longer than eight hours in any day of twenty-four hours.

The spirit of this Act would be violated if an engineer hoisting only men and boys, and not coal, could be required to work twelve hours, or if an engineer engaged in hoisting coal only on one day should be required to work thirteen or fourteen hours that day and the next day should be required to hoist men and boys and coal, and work eight hours.

If it be a part of the duties of the engineer to hoist men and boys, I am of the opinion that in order to carry out the intention of the Legislature, such an engineer cannot be required to work more than eight hours out of each day of twenty-four hours, even though he may be hoisting coal only on a particular day or hoisting men and boys on another day.

Adjutant General's Department

APPOINTMENTS.

W. M. Silvus, Philadelphia, to be first lieutenant in Medical Corps.

James E. Gee, Monongahela, to be first lieutenant, assigned to Co. A, 10th Infantry.

Robert F. Gordon, Rutledge, to be captain of Company F, 3d infantry.

C. Francis Linn, Monongahela, to be first lieutenant and assistant surgeon, 10th infantry.

Albert L. Byrnes, Philadelphia, to be lieutenant and paymaster, naval militia.

H. M. Righter, Philadelphia, to be lieutenant and assistant surgeon, naval militia.

Thomas W. Rudderow, Philadelphia, to be lieutenant, naval

militia.

James Thurman Strimple, Erie, to be lieutenant and assistant surgeon, naval militia.

Wilbur Endsley Scholl, Somerset, to be first lieutenant of Company C, 10th infantry.

The resignation of Col. George Van Horn Moseley, general staff, U. S. A., as chief of staff of the division, has been accepted.

RESIGNATIONS ACCEPTED.

Lieutenant-Colonel S. W. Gleaves, 1st Cavalry; Chaplain C. M. Miller, 1st Field Artillery; First Lieutenant Guy W. Knight, Company I, 18th Infantry; First Lieutenant Carl H. Conner, Supply Company, 1st Field Artillery.

DISCHARGED.

First Lieutenant J. H. Rickards, Company A. 16th Infantry.

State Insurance Fund

STATEMENT BY THE STATE WORKMEN'S INSURANCE FUND BOARD.

In Connection With the Current Resolution Passed by the House and Senate, Making Inquiry as to the Excess Reinsurance Protection of the State Fund.

A concurrent resolution passed by the House and Senate February 13th called from the State Workmen's Insurance Fund Board information regarding the excess re-insurance protection obtained from the State Fund. The information, stipulated in the resolution, has been forwarded to the General Assembly.

The resolution set forth that: "Reports are in circulation that the Pennsylvania Workmen's Compensation Fund by and with the consent of the Insurance Commissioner of Pennsylvania is underwriting this compensation with the London Lloyd's

"

It is further set forth, in effect, that the sense of the General Assembly is, that the excess re-insurance of the State Fund should be placed with an insurance company licensed to write excess re-insurance in Pennsylvania instead of with a foreign association not so licensed.

The State Workmen's Insurance Fund was a sound carrier for compensation insurance from its inception. On the first day of its operation, it had issued policies for compensation insurance to 5,097 employers in Pennsylvania, whose premiums aggregated $445,940.23, and furnished complete protection to approximately 60,000 employes in all sections of Pennsylvania.

The principal contingency that could impair the resources of the Fund would be a catastrophe, or single accident in which many employes, protected by the State Fund, would be killed or injured in the course of their employment. Such contingency creates what is known in insurance circles as catastrophe hazard and which is recognized by all classes of insurance carriers.

Excess re-insurance is adopted as a precautionary measure in order that assets may not be affected by extraordinary losses so incurred.

The State Workmen's Insurance Fund Board acted under the authority conferred upon it by the General Assembly in 1915 when it incorporated in Act 340, creating the State Workmen's Insurance Fund, the following provision.

Section 14. "The said Board shall have the power to reinsure any risk which they may deem necessary."

The Assistant Manager was instructed to obtain the protection satisfactory to guarantee against an extraordinary demand which might be incurred by reason of a catastrophe.

On November 22nd, 1915, the Insurance Commissioner was asked for a list of authorized companies licensed to transact excess re-insurance business in Pennsylvania.

The Insurance Commissioner replied by letter on November 27th, 1915, as follows:

"Replying to your inquiry of the 22nd instant, permit me to say that at the present time there is only one casualty company authorized to transact business in Pennsylvania for re-insurance only, i. e., The European Accident Insurance Company, Foster & Folsom, United States Managers, 123 William Street, New York."

On December 3rd, 1915, the following refusal to handle the State Funds excess re-insurance was received from that company:

"We thank you for your favor of the 2nd and regret that just at this time, we are not in a position to entertain the offer suggested."

The Insurance Board was unable to place this excess reinsurance with an insurance carrier licensed to transact such reinsurance business in Pennsylvania.

It is known to the members of the Insurance Board that a mutual company or a State Fund cannot obtain excess re-insur

ance protection through licensed stock casualty companies. The stock casualty insurance companies have combined to establish a re-insurance bureau for their own exclusive protection, through the medium of the National Compensation Service Bureau, which protection is extended only to members of the Bureau who contribute two per cent. of their premium writings to the assets of the Bureau to guard against the possibility of a drain on their resources by catastrophe.

In no instance has the State Insurance Board learned of a mutual association or a State Fund, writing compensation insurance, being admitted to this combination, or of having obtained excess re-insurance from any stock casualty insurance company.

Facing these conditions, the State Workmen's Insurance Board obtained excess re-insurance protection from Lloyd's of London, covering the catastrophe hazard, after the members of the Board were satisfied of the reliability and soundness of the placement.

The catastrophe hazard of the State Fund was re-insured for $200,000 in excess of $50,000, which means that any single catastrophe, in which employes were killed or injured, to create claims over $50,000 and not in excess of $250,000, against the State Fund, every dollar in excess of $50,000, for these claims, would be paid by the excess re-insurance facilities and not from the revenues of the State Insurance Fund.

The re-insuring of the catastrophe hazard created a bulwark of stability so that the employes of policyholders of the State Fund could feel certain of the payment of compensation in the event of any mining, industrial or commercial disaster which would cause death or disability to scores of employes.

On January 1st, 1916, the State Fund was confronted with the problem of carrying compensation insurance covering mining operations in competition with a combination of ten of the large stock insurance companies who pooled their interests, as one organization, for the purpose of insuring mining operations, which carry exceptional catastrophe hazards. The State Fund was then the only competitor in the coal mining field against this