Record High Workmen's Compensotion Insuronce Dividend Distributed to Lumber Xlerchonts Assn. llembers

The story behind the headline is one of successful cooperation by members of the retail lumber industry-cooperation which this year has resulted in the highest Workmen's Compensation Insurance dividend, over $"48,000, to be distributed to Lumber Merchants Association members participating in the Group fnsurance Plan. This represents a dividend of. 46.5/o.

The Workmen's Compensation Insurance Group Pl,an, written through the State Compensation Insurance Fund, was inaugurated in 1946 and offered to members of the Lumber Merchants Association so that they could receive the savings available through cooperative effort. Since 1946 almost $295,000 has been returned to the participating members, which refects an average dividend on their premium of. 38.5o/o-a ' record which is the envy of many industries.

{Jnder the Group Master Policy Plan, each firm's premiums are based on its own accident record independent of the group-this premium is fixed by the Insurance Commissioner and predicated on the firm's past experience; it would be the same whether a firm is insured independently

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Because of the tremendous premium developed through the Association's Master Policv Plan-over $105.000 in 1956-the efiect of a single acciient is much less tiran for an independently insured yard which must absorb the loss from its single premium. Additional operating economies are also effected through non-duplication of the plan's administration.

To more effectively illustrate the savings which participating members have availed themselves of, we would like to cite the example of a "typical" yard covered under the Association's Group Pl,an and contrast their results with an "average" non-participating yard:

The "typical" yard, which would have an annual gross payroll of approximately $38,500 (other than owners and managers), in turn develops an annual Workmen's Compensation fnsurance premium of approximately $800 (2.22% of gross payroll). Over a 10-year period, the yard insured under the Association's Grouo Plan has received an average dividend on its premium ol-38.5/o vs. an historical average of approximately 2O/o for a non-group insured yard developing the same premium.

Jqck POIIEROY (lcfr), exccurivc vice-prcridcnt, Lumber ll/lerchsntr Asrn.; Robeil tlt. WltSOl{ (ccntcr), district rcprerentotiv., Stote Compcnrolion lnruronce Fund, ond (cnncth BUCK, cssiclont monogcr, lllANC through the State Compensation Insurance Fund, through a .private ingurance company, or through a Group Master Policy Plan such as that ofiered by the Lumber Merchants Association.

This premium is currently 2.22% of gross payroll for an average retail lumber yard (the premium was recently increased for all retail lumber yards f.rom 2.08/o). The dividend which is distributed annually to participaiing members is then based on the total claims filed not by the independent firms but by all participating members.

The table below more dramatically illustrates the savings available to the "typical" partilipating yard, assuming the non-participating yard would have approximately the same fluctuation in its year-to-year accident ratio as the participating yard.

The $1,460 additional dividend which the participating member has received is tangible proof of the savings which can be achieved by a thorough and continuing accident prevention program, actively supported by participating Association members, each of whom can be justifiably proud of his success in controlling the seriousness and frequency of injuries in his yard.

No, the story does not end here-the foregoing is but a report of the success which cooperation has achieved in only one area. Other Association programs of cooperation are equally advantagious to those participating. Lumber dealers are grouped for the lumber dealer's welfare !