Mr. MULTER. There is no doubt about that and my question is whether or not it covers that loss of life and limb. Mr. ELY. As I say, sir, I can only repeat on the highest authority that I have been able to find, that those claims would exist against the employers and would, in turn, exist against their insurance carriers. To meet that, you would at the very most have to reserve to meet all those claims. Mr. MULTER. Are there any court decisions holding that workmen's compensation covers, or does not cover, in such event? Mr. ELY. There are no decisions one way or the other. The statute on its face says that the employer is liable for injuries during the course of employment, period. Mr. MULTER. Let us follow that one step further. In the war effort a bomb is dropped on that factory during the working hours of the day. Have they been hurt during the course of their employment, following the language used in the workmen's compensation law? Mr. ELY. I should think so. Mr. MULTER. As a result of their employment? Mr. ELY. I should think so, sir, yes. Just as though the building fell down in the course of a tornado. Mr. MULTER. You would be just as badly hurt if the bomb dropped on your home. It was the dropping of the bomb that caused the injury, not the work. Some Mr. ELY. Most of these contracts say, "In the course of." one walks in and sets fire to the building; some drunk staggers in and drops kerosene and a match on top of it. Well, this is an enemy instead of a drunk. The man is just as dead or just as maimed and he suffered in the course of his employment. As I say, there is legal argument and what you say would be very persuasive before a court, to attempt to get some legal loophole by statutory interpretation, or what you will, but the fact is that it is not safe to assume. Mr. MULTER. If you include workmen's compensation, why should you not also include a provision to permit the accident insurance companies to come in and reinsure their losses? Mr. ELY. Perhaps that should be done. Mr. MULTER. Accident and health. They are subject to the same dangers. I should think they would want to come in under this too. Mr. ELY. There are two answers to it and one is that accident insurance is voluntary and you do not have the collateral results you have in workmen's compensation where insurance is compulsory. You see, an employer is required either to become a self-insurer, who would be bankrupt in any instance I am talking about, or to insure in a State fund which would be wiped out by a catastrophe of the type I am talking of, or to insure with a private carrier and with losses of the magnitude we are talking about, not only would you drag down the private carrier, you might conceivably wreck their private reinsurers and you would quite conceivably wreck their running mates in a fleet such as the fleet that I represent, where the Indemnity Insurance Co. of North America is a fully owned subsidiary of the Insurance Co. of North America and the bankrupting of the casualty company could well wreck the entire fleet of fire, marine, and casualty companies. event of death or disability, figures that had that bomb dropped in this country the resultant claims for compensation would have amounted to $125,000,000 and that bomb was, mind you, dropped on a city with a population less than half that of the District of Columbia and with a density of population only slightly greater. As the superintendent said at that time, the entire admitted assets of all casualty insurers in the United States would not long remain sufficient to meet the claims arising out of a series of such bombs and that was one of the older type. Mr. MULTER. May I interrupt you, please? Mr. ELY. Yes, sir. Mr. MULTER. A bomb dropped during hostile activities by a foreign government is apt to drop on a factory. Are persons who are killed as a result of that bomb covered by workmen's compensation? Mr. ELY. That is the opinion of the majority of all lawyers to whom I have spoken at the present time. There is no exception in the State compensation laws for damage arising out of war risk and to anticipate what I think may be your next comment, it is conceivable that with sufficiently skilled counsel and in the course of years of litigation, you might be successful in one State in persuading the courts of that State that the legislature did not have in mind this type of risk when they enacted the compensation laws, but taking them on their face, as they now stand, I think it is extremely difficult to find a logical basis to say that those claims could not be met. Mr. MULTER. I agree that you should try to work out some way of insuring against loss of life and personal injury because of such activities. Mr. ELY. That is right. Mr. MULTER. But I do not think that properly workmen's compensation would cover that. I have great doubt as to whether workmen's compensation would cover the situation or does cover the situation. Mr. ELY. I think you will find, sir, as I say I am not speaking of my opinion as a lawyer only, but that of all others that I have consulted that in the present state of the law, those claims could and would be presented. I think perhaps what you have in mind is that perhaps by legislation Congress could change the effect of those laws. That may well be. That is an alternative. It does not seem to me, however, that that is feasible to be done at this time through action by this committee and I think world events make it clear that we are now facing up to an emergency which may bust in our faces at any minute and if we can, here, through the action of this committee and the reactivation of this War Damage Corporation, take a stopgap measure, it may well be, as you say, that later, with a change of the law, it would become unnecessary and it would then cease to function. Mr. MULTER. You would not like to find yourself in the position of paying premiums for reinsurance when the assured would not be able to collect on it? Mr. ELY. Not at the present time. I do not think it is prudent to assume that is the case. Taking the facts as now, the only assumption that we can make is that if the bomb were to drop tomorrow, the damage to the employers and employees would be of the magnitude. that I suggested. Mr. MULTER. There is no doubt about that and my question is whether or not it covers that loss of life and limb. Mr. ELY. As I say, sir, I can only repeat on the highest authority that I have been able to find, that those claims would exist against the employers and would, in turn, exist against their insurance carriers. To meet that, you would at the very most have to reserve to meet all those claims. Mr. MULTER. Are there any court decisions holding that workmen's compensation covers, or does not cover, in such event? Mr. ELY. There are no decisions one way or the other. The statute on its face says that the employer is liable for injuries during the course of employment, period. Mr. MULTER. Let us follow that one step further. In the war effort a bomb is dropped on that factory during the working hours of the day. Have they been hurt during the course of their employment, following the language used in the workmen's compensation law? Mr. ELY. I should think so. Mr. MULTER. As a result of their employment? Mr. ELY. I should think so, sir, yes. Just as though the building fell down in the course of a tornado. Mr. MULTER. You would be just as badly hurt if the bomb dropped on your home. It was the dropping of the bomb that caused the injury, not the work. Some Mr. ELY. Most of these contracts say, "In the course of." one walks in and sets fire to the building; some drunk staggers in and drops kerosene and a match on top of it. Well, this is an enemy instead of a drunk. The man is just as dead or just as maimed and he suffered in the course of his employment. As I say, there is legal argument and what you say would be very persuasive before a court, to attempt to get some legal loophole by statutory interpretation, or what you will, but the fact is that it is not safe to assume. Mr. MULTER. If you include workmen's compensation, why should you not also include a provision to permit the accident insurance companies to come in and reinsure their losses? Mr. ELY. Perhaps that should be done. Mr. MULTER. Accident and health. They are subject to the same dangers. I should think they would want to come in under this too. Mr. ELY. There are two answers to it and one is that accident insurance is voluntary and you do not have the collateral results you have in workmen's compensation where insurance is compulsory. You see, an employer is required either to become a self-insurer, who would be bankrupt in any instance I am talking about, or to insure in a State fund which would be wiped out by a catastrophe of the type I am talking of, or to insure with a private carrier and with losses of the magnitude we are talking about, not only would you drag down the private carrier, you might conceivably wreck their private reinsurers and you would quite conceivably wreck their running mates in a fleet such as the fleet that I represent, where the Indemnity Insurance Co. of North America is a fully owned subsidiary of the Insurance Co. of North America and the bankrupting of the casualty company could well wreck the entire fleet of fire, marine, and casualty companies. Mr. MULTER. We have companies that are insurance and some of those that are writing & insurance are also writing other types that are te bill. Mr. ELY. That is right. Mr. MULTER. They could easily be bankre on to pay the losses on account of the accident an even though the rest of the policies were reinser Mr. ELY. As I say, that is an additional step is far beyond the scope of this committee. thing: There may be ultimately in other plass program developing for compensation for insured or uninsured. I am trying, simply f meeting, to stick to this one particular point. Tha answer to your mention of accident and health and majority or a great number of those policies has clauses in them which are not found in the wormers laws. The CHAIRMAN. I understand that the commis come up in the House first this morning and we w now. If you desire to amplify your statement in any way do so in the record. if we get anything controversial in this bill there to cute of We only have 13 more legislative days before the Cand Mr. ELY. I have here, sir, the necessary copies of Mr. MCKINNON. May I ask one question? The CHAIRMAN. Yes. Mr. MCKINNON. I think you realize, as we all reaza 19 at opening up a complete new vista and aspect on the w In view of what the chairman says, that we only have do you recommend that we hold the whole program, exploration and discussion, or do you recommend a go with this particular coverage and get it through and to the problem that you outline? Mr. ELY. Your question is double-barreled; barrel of whether property insurance should be reacti As to whether it should be delayed in the matter of te All I say is that in answering the second barrel, sizes do, let us meet this new and even more urgent emerge simple technique that you propose to use in meeting certainly do not think that you should delay the enti decide you cannot do the compensation. I would say let us try and do it together. If that am certainly not the dog-in-the-manger type who w can't have candy, neither can anyone else. Mr. DEANE. It has been intimated that to extend controversial and that there are complications. Where will the complications arise? Mr. ELY. I can see no controversy from the ind Last Friday they met in New York and agreed on I have been stating, a subcommittee representing t of Fire Underwriters for Fire Insurance, the Ma Marine Insurers Association, the Association of Casualty and Surety Companies, the Inland Marine Insurance Bureau for the Inland Marine Underwriters, and the Mutual Alliance, which is the other type of insurance, the stock of Mutual, the American Mutual Lines representing all of those types of insurance on the Mutual side of the house. A precise spelling out of those principles is in the drafted bill, included in the copy of my statement. (Membership list and drafted bill referred to above is as follows:) EXHIBIT A MEMBERSHIP LIST, ASSOCIATION OF CASUALTY AND SURETY COMPANIES Accident & Casualty Insurance Co. of Winterthur, Switzerland, New York 7, N. Y. Aetna Casualty & Surety Co., Hartford 15, Conn. American Bonding Co. of Baltimore, Baltimore 3, Md. American Casualty Co., Reading, Pa. American Credit Indemnity Co. of New York, Baltimore 3, Md. American Employers' Insurance Co., Boston 7, Mass. American Guarantee & Liability Insurance Co., Chicago 3, Ill. American Insurance Co., Newark 1, N. J. American Re-Insurance Co., New York 7, N. Y. American Surety Co. of New York, New York 5, N. Y. Bankers Indemnity Insurance Co., Newark 1, N. J. Boston Insurance Co., Boston 2, Mass. Car and General Insurance Corp., Ltd., New York 7, N. Y. Columbia Casualty Co., New York 16, N. Y. Commercial Casualty Insurance Co., Newark 1, N. J. Connecticut Indemnity Co., New Haven Conn. Eagle Fire Co. of New York, New York 7, N. Y. Employers Insurance Co. of Alabama, Inc., Birmingham 3, Ala. Fidelity & Casualty Co. of New York, New York 8, N. Y. Fire Association of Philadelphia, Philadelphia 6, Pa. Fireman's Fund Indemnity Co., San Francisco 20, Calif. General Accident, Fire & Life Assurance Corp., Ltd., Philadelphia 5, Pa. Glens Falls Indemnity Co., Glens Falls, N. Y. Globe Indemnity Co., New York 8, N. Y. Great American Indemnity Co., New York 5, N. Y. Guarantee Insurance Co., Los Angeles 54, Calif. Hartford Accident & Indemnity Co., Hartford 15, Conn. Hartford Steam Boiler Inspection & Insurance Co., Hartford 2, Conn. Hawkeye-Security Insurance Co., Des Moines, Iowa. Home Indemnity Co., New York 8, N. Y. Home Insurance Co., New York 8, N. Y. Home Insurance Company of Hawaii, Ltd., Honolulu, Hawaii, United States of America. Indemnity Insurance Co. of North America, Philadelphia 1, Pa. Insurors Indemnity & Insurance Co., Tulsa 1, Okla. London Guarantee & Accident Co., Ltd., New York 3, N. Y. London & Lancashire Indemnity Co., Hartford 2, Conn. Manufacturers Casualty Insurance Co., Philadelphia 3, Pa. Maryland Casualty Co., Baltimore 3, Md. Massachusetts Bonding & Insurance Co., Boston 9, Mass. Merchants Indemnity Corp. of New York, New York 7, N. Y. Metropolitan Casualty Insurance Co. of New York, Newark 1, N. J. National Automobile & Casualty Insurance Co., Los Angeles 55, Calif. North America Casualty & Surety Reinsurance Corp., New York 7, N. Y. |