1965 Study of Expenses by Size of Risk [Discussion]

Mr. Morison has given his account from the inside of the industry activities relating to the study of workmen’s compensation expenses by size of risk. As a participant he apparently believes that two opposing sides were primarily engaged in a struggle on what and how information was to be developed which would support the then existing premium discounts, rather than in an effort to find out in what degree expenses are affected by the size of the risk. He covers the limitation of general expenses and speaks of "budgetary allowance," i.e., an amount which is included as a budgetary part of the total, irrespective of what actual expenditures may be. He describes the procedures in teleological terms rather than as a straightforward attempt to find out the facts. It is unfortunate that his exposition appears to be one-sided; students of the problem may discover from Moreland Commission Reports’ and elsewhere that reasonable individuals will not be prevented from criticizing a part of the expense allowance simply because insurers term it a "budgetary allowance."