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In the following tables showing the receipts of the institution it was impossible to present comparable data for the entire period because of a radical change in the form of presentation of the accounts. The first table represents a purely formal receipt account. The actual income of the institution consists mainly of two itemsthe premiums received and the interest on investments. All other revenues were comparatively insignificant, except for 1902 and 1903, when they included transfers from the reserves for the purpose of covering the deficits from operation during these two years.
In the table of receipts for 1904 to 1907 the form of the account has been changed, and the total represents the actual revenue of the institution. In 1907 the premiums were about 95 per cent of the total receipts.
RECEIPTS OF THE NATIONAL ACCIDENT INSURANCE INSTITUTION FOR VARIOUS
YEARS, 1889 TO 1903. (Source: Bollettino di Notizie sul Credito e sulla Previdenza. Data for 1890 and 1895 to 1898 not obtainable.]
RECEIPTS OF THE NATIONAL ACCIDENT INSURANCE INSTITUTION, 1904 TO 1907. (Source: Atti della Cassa Nazionale d' Assicurazione per gl' Infortuni degli Operai sul Lavoro: Bilancio
Consuntivo del 1904, 1905, 1906, and 1907.)
On account of a change in the form of keeping the accounts the expenditures are also shown in two tables. For the years 1889 to 1903 the first table shows the actual indemnity paid during the year, and the reserve computed at the end of the year to cover outstanding claims as an item of expenditure. The gains from operation are also shown as an expense item to balance with the revenue account. For the years 1904 to 1907 an effort is made to account for the actual expenses of the year, the indemnity for claims accrued during the year being shown rather than the indemnity actually paid. For most items comparisons may be made for the entire period. Very interesting are the rapid increases of expenditures for medical help, legal advice, and inspection, which indicate the cost of the efforts to counteract the tendency to fraudulent practices, described in a preceding section. EXPENDITURES OF THE NATIONAL ACCIDENT INSURANCE INSTITUTION, FOR VARI
OUS YEARS, 1889 TO 1903. (Source: Bollettino di Notizie sul Credito e sulla Previdenza. Data for 1890 and 1895 to 1898 not obtainable.)
EXPENDITURES OF THE NATIONAL ACCIDENT INSURANCE INSTITUTION, 1904 TO 1907. (Source: Atti della Cassa Nazionale d'Assicurazione per gl'Infortuni degli Operai sul Lavoro: Bilancio Con
suntivo del 1904, 1905, 1906, and 1907.)
determi- Expenses Taxes on
of inspec- investtration.
tion. ments. injuries.
The preceding tables, giving the receipts and expenditures by years, and further complicated by various bookkeeping accounts, do not furnish a satisfactory basis for any conclusion as to the financial results of the insurance institution. To supplement this, each annual report of this institution contains a table comparing the amount of premiums received with the total expenditures arising during the same year and properly chargeable to the premiums for that year, including the compensation payable for all accidents occurring during the year and the expenses of administration for the same year. As, however, the total amount of compensation payable is not definitely known at the end of the year, and is subject to further changes, the annual statements are subject to subsequent modifications. In the following table the amount of compensation paid for the entire period has been taken from the latest source available and is therefore more accurate, especially for the earlier years. The statement of expenditures has been taken from the original reports as far as available. It was impossible to obtain such data for 1885 to 1888, 1890, and 1895 to 1898.
Until 1900 the premiums not only covered the compensation paid, but left a surplus for meeting the other expenditures, and even permitted the formation of reserves. But taken together the compensation and the expenditures of administration very often exceeded the amount of premiums received, so that evidently the low premiums were possible only because of the interest from the guarantee fund and the accumulated reserves. The proportion between compensation and premiums became quite alarming in 1901, when the compensation exceeded the premiums by 15.71 per cent. Adding the cost of administration, the excess of total expenditures over premiums reached 27.68 per cent in 1901, 23.71 per cent in 1902, and 21.74 per cent in 1903. Thus the premiums were far too low to cover the cost of insurance. The general revision of the rates remedied the situation, while the formation of the obligatory mutual association for the sicilian sulphur mines reduced the amount of compensation paid very materially.
The favorable proportion between the compensation paid and the premiums, and the seemingly large surplus for the last few years are deceptive because due to delay only, many claims for benefits remaining unsettled. For these years, therefore, the amount of compensation payable is nearer to the truth than the amount of compensation paid out for each year up to September, 1908. For 1905 the amount paid out as compensation was $824,589, while the amount payable was computed at the end of the year at $985,383, and it is reasonable to assume that for 1905, as for all the preceding years, the amount eventually paid would be higher than the computed amount due. For 1906 the amount paid out up to September 30, 1908, was $991,407, while the computed amount payable was $1,119,064. Taking these amounts, the proportion of the compensation to the premiums for 1905 is 87.85 per cent, and not 73.51 per cent, and adding the expense account, 104.48 per cent and not 90.1 per cent. For 1906 the proportion is 89.94 per cent instead of 79.68 per cent for compensation alone, and 107.90 per cent instead of 97.65 per cent for compensation and expenses together. For 1907, the last year reported, the amount actually paid was comparatively small; the amount payable was $1,335,393, or 84.15 per cent of the premiums, while the expense account was $263,330, or 16.59 per cent of the premiums. The total cost was therefore 100.74 per cent of the premiums.
COMPARISON BETWEEN PREMIUMS, COMPENSATION PAID UNTIL SEPTEMBER 30, 1908, AND TOTAL EXPENDITURES OF THE NATIONAL ACCIDENT INSURANCE
INSTITUTION, FOR VARIOUS YEARS, 1889 TO 1906. (Source: Bollettino di Notizie sul Credito e sulla Previdenza (1889 to 1903) and Atti della Cassa Nazionale d'Assicurazione per gl' Infortuni degli Operai sul Lavoro; Bilancio
Consuntivo del 1904, 1905, 1906, and 1907. Data for 1890 and 1895 to 1898 not obtainable.)
& Not including taxes on investments, and in some years other minor disbursements, not considered expenses of administration.
The per capita amount of premium and also of compensation have been computed and are shown in the following table. By dividing the entire life of the institution into three periods—that previous to the accident insurance law (1884 to 1898), the period under the law and rates of 1898 (1899 to 1903), and that under the amendments of 1903 (1904 to 1906)-a very interesting contrast is obtained. The average amount of the premium has increased from 84 cents during the first period to $1.70 during the second and $3.12 during the last. The average amount of indemnity paid has not varied very much from these averages, except that for the last three-year period it was considerably smaller, because many claims arising during these years had not been settled.
PROPORTION BETWEEN PREMIUMS AND INDEMNITY PAID OUT BY THE NATIONAL
ACCIDENT INSURANCE INSTITUTION, 1884 TO 1906.
a The numbers here shown include all payments made up to Sept. 30, 1908, for accidents occurring in each year.
THE COMPULSORY MUTUAL ACCIDENT INSURANCE ASSOCIATION FOR
SICILIAN SULPHUR MINES.
The parliamentary commission which studied the bill of 1903 intended to limit its provisions concerning compulsory employers' mutual accident insurance associations to the industry of sulphur mining in Sicily, but the law as passed did not contain the specification, because of the argument that conditions similar to those in that industry might develop in other industries also. As a matter of fact the sulphur mining industry of Sicily was the first to be organized under the law on July 11, 1904.
The difficulties arising out of the application of the law of 1904 to the sulphur mines of Sicily were claimed to be inherent in the peculiar organization of that industry. Small undertakings predominate. When the compulsory association was formed it embraced about 900 employers and nearly 40,000 employees. Subcontracting is very
Often the proprietor divides his sulphur beds among many contractors, and even one sulphur mine may be exploited by several contractors, each having an independent shaft of entry. In addition, the usual method of payment is in piece wages. These factors made the differentiation of the employer and employee and the