11. ANALYSIS Employers' Liability policies issued in the State of New Jersey during the years 1919 to 1923 inclusive.(1) GENERAL INSTRUCTIONS All ratios are to be recorded as percentages, computed to two places of decimals. All amounts are to be reported in dollars only. All items requiring reference to previous reports under Schedule "W." must agree exactly with the reports (as previously filed, with corrections, if any), with the Department of Banking and Insurance, Newark office. If the company has not kept a complete record of these reports the necessary information should be obtained from the Department. Anything in the blank which the company does not clearly understand, or which requires interpretation, should be referred immediately to the Department, at 92 Washington Street, Newark. Ñ. J. NOTES PART I. This is a COUNTRY-WIDE exhibit and covers the entire compensation business of the company. Only amounts chargeable to workmen's compensation insurance shall be included. Unless otherwise indicated in these notes, all such amounts shall be determined exactly from the accounts of the company. (1) Report the amount appearing in the annual statement on page 2, column 6, line 8. (2) Companies which reinsure their catastrophe hazard must include the premiums for such reinsurance. (") Companies which accept reinsurance of the catastrophe hazard from other companies must deduct the premiums for such reinsurance. () Report the amount appearing in 1923 Schedule "W" Item 6, otherwise fully explain. (") Unearned premiums must be computed pro rata by months of policy issuance and not on the annual statement basis of 50% of premiums in force at the end of the year. () Total of this item should agree with the amount for workmen's compensation entered in the annual statement, page 3, line 20, otherwise explain fully. ("). Include in this item any contributions made in the form of fees or assessments, or otherwise, for inspections by or the maintenance of inspection, rating or service bureaus, boards or associations. (*) Include in this item amount properly chargeable to workmen's compensation business. (Apportion on basis of 1922 written premiums.) () Include in this item home office solicitation, branch office and agency expenses, salaries and expenses of agents and solicitors and all other acquisition cost properly chargeable to workmen's compensation business. (10) Compute this item as follows: Divide the sum of the underwriting expenses (Items 29, 33, 34, 44, 45, 46, 49, 50 and 51 on page 3 and item 31 on page 5 of the 1923 annual statement, less item 31 on page 5 of the 1922 annual statement and less $.. salaries, fees and all other expenses for payroll auditing all forms of insurance included in the foregoing item) by the total earned premiums (Item 9, page 8 of the annual statement). Apply the percentage so obtained to the earned compensation premiums on the annual statement basis. (Not on the basis of this schedule unless unearned premiums of annual statement are also calculated pro rata.) Enter the result in item 13b. Enter the above computation under Part 1-G. (11) Explain method of estimation employed: (12) Analogous to note (8) for item 11. (13) Analogous to note (9) for item 12b. (14) Report the amount appearing in 1923 Schedule "W" items 15 to 18 inclusive, otherwise fully explain. (14) Report the amount appearing in the 1923 annual statement, page 3, line 5, column 5. (14) Report the amount appearing in the 1923 annual statement, Schedule P. (17) Report the amount appearing in 1923 Schedule "W" item 25, otherwise fully explain. (18) The total of this item must agree with the amount entered in item 1 of this schedule. Accurate figures are desired-if original estimates were subsequently corrected as of December 31, 1922, the revised figures should be reported in this Schedule with an explanation. PART II. This is a NEW JERSEY exhibit. All items refer only, to business written in the State of New Jersey under workmen's compensation and employers' liability policies. (19) This analysis shows losses paid, outstanding and incurred, net premiums written, premiums earned and loss ratios both by calendar years and by policy years, the 1923 business being accumulated to December 31, 1923. The amounts in columns 3, 4, 5, 6 and 7 must reproduce the amounts in column 9 by cross-addition on each line. Each amount in column 8 is obtained by subtracting from the amount on the same line in column 9, the corresponding item for the previous year, found six lines higher in column 9. As a result, the amounts in column 8 represent losses paid, outstanding and incurred, total net premiums written, premiums earned and loss ratios, all during the calendar year indicated. No deduction from premiums or losses is to be made on account of reinsurance ceded or received. Corrected figures for all years up to 1923 Pol. yr. developments should be reported and where these figures differ with those reported in Schedule "W" 1923, an explanation must accompany this report. APPENDIX VIII INSTRUCTIONS FOR THE PREPARATION OF SCHEDULE "Z"-1924 FOREWORD To be of value for any purpose whatsoever, statistics must represent facts. In the preparation of statistics which are to be used in ratemaking it is, therefore, essential that each particular item of the data shall be faithfully recorded by the several contributing insurance carriers so as to reflect the underlying facts which are to be given statistical expression. Furthermore, without uniform interpretation of the meaning of the printed forms (Schedule "Z") used in developing the desired facts, the value of the resultant data becomes very much diminished. It is the duty, therefore, of the actuary or statistician charged with the preparation of Schedule "Z" for him and the assistants under his supervision to have a full and correct knowledge of the printed forms and of their real significance. Such is the purpose of this booklet, which is the result of several years of practical experience with the statistical demands of workmen's compensation insurance. Like all such documents, this booklet cannot be expected to answer every possible question that may be encountered, but, before concluding that it does not cover the particular question which may arise in your mind, be sure you have mastered its contents. Then, if you are still in doubt, address an inquiry to The National Council on Compensation Insurance 151 Fifth Avenue, New York City. GENERAL INSTRUCTIONS 1. A list of states for which experience is to be compiled according to these instructions will be found attached hereto. In some of these states, the official having supervision of rates makes the filing of Schedule Z a definite requirement and the instructions issued by such official should, of course, be observed. In general, however, it is believed that there will be no serious conflict between these and the official requirements. 2. The Schedule Z reports must cover all workmen's compensation policies issued in 1921 and 1922. 3. A separate report must be made for each state and for each year of issue. 4. All reports must be typewritten. 5. Report all payrolls, premiums and losses in even dollars. Count fifty cents and over as an extra dollar and reject the cents if less than fifty. 6. Reinsurance.-No deductions shall be made from earned premiums and incurred losses for or on account of re-insurance ceded. Premiums and losses incurred on account of re-insurance received by the reporting company shall be entirely excluded from the experience. 7. Ex-medical Policies.-Payrolls and premiums in connection with policies providing for the exclusion of medical aid must be segregated and reported separately from payrolls and premiums on full coverage policies. Such segregation is not required for losses. 8. Deductible Average or Excess Coverage Policies.-Experience under policies containing a deductible average clause must under no circumstances be included with that of ordinary policies, but must be reported in a separate schedule. 9. Subrogation Cases.—In all cases of compensation losses where recovery was had under subrogation rights, include each case in its appropriate place on Schedule Z as one accident at a figure equal to the net indemnity paid. 10. Joint Coverage Policies.—In a few cases where a joint employe of several employers is injured, it may be that the Industrial Commission will award the compensation, prorating among the several employers, and in such cases it may be found that the accident is covered under several different policies and in different classifications. In such a case the accident should be reported by each carrying company as one accident and the net amount for which they were held liable be entered in the appropriate column. A special memorandum should be submitted covering each such case and indicating the names of all companies contributing toward the total indemnity, in order that when the entire experience is compiled in the central office the case may be appropriately handled. 11. Manual Classifications.-Insert the actual manual classification under which the business was covered, even though such classification may now be obsolete. Use the standard abbreviations issued by the National Workmen's Compensation Service Bureau. 12. Loss Exhibit.-The "total incurred" losses (the sum of paid and outstanding amounts) shall be reported on Part I, but in addition, if it is so desired, a separation between paid and outstanding losses may be made. 13. Date of Valuation-Exposure.-Payrolls and premiums for both 1921 and 1922 policy years shall be reported as of a date not earlier than December 31, 1923. 14. Date of Valuation-Losses.-Incurred losses for policy year 1921 shall be reported as of a date not earlier than December 31, 1923, and for policy year 1922 as of a date not earlier than February 28, 1924. 15. Individual Case Reports.-An individual report must be filed for every case of death and permanent total, major permanent partial and indeterminate disability included in Part I, using blank forms as indicated. Part II Death. Part III Permanent Total Disability. Part IV Major Permanent Partial Disability. Part V Indeterminate Disability. 16. Sheet Numbers.—Arrange the sheets of each of the several parts for each year of issue in numerical order by manual code number and then number each part consecutively from 1 up. This means that each part must begin with number one. 17. A separate summary of classification experience shall be filed for each state and each year of issue, using for this purpose the ordinary Part I blank. The following information should be given on the summary sheet: A separate summary shall be filed for the "per capita" classifications. INSTRUCTIONS FOR PART I Indeterminate Cases heretofore classed as indeterminate are to be allocated by the carrier to a specific class of injury. (Such cases have heretofore been defined as cases where the data in the file are not adequate to form on the date of valuation a reasonably conclusive determination of the duration or extent of disability and where the case is not assignable with reasonable assurance to Death, Permanent Total or Major or Minor Permanent Partial Disability "'). 1. Incurred Losses.-Report incurred losses on the basis of individual estimates. It is understood of course that where dismemberments and similar cases are subject to definite schedules of compensation, the provision of the law will be followed in calculating the incurred loss, and where any benefit is payable for life such factors as life annuities, interest and probability of remarriage, wherever they apply, will be considered in calculating the present value. 2. Death. On line 1, enter all death cases reported to the company except where it has been established that the company has no liability. Do not include here any deaths of injured workmen resulting from natural causes. The amount entered in column H shall include all paid and outstanding benefits, including burial expenses, payments to the State, and compensation paid to deceased prior to his death, but excluding payments for medical and hospital services, which are to be entered in column J. Enter in column J the total incurred cost of medical and hospital services on fatal cases. 3. Permanent Total.-On line 2, enter in column H the total incurred indemnity loss from cases which have been adjudged by Courts or Industrial |