CHAP. 65.—An ACT to provide a reserve for outstanding liability losses o:
insurance companies transacting the business of insuring any on
ugainst loss or damage resulting from accident to, or injury sufferec
L\, an employee or other person, for which the person is liable.

Approved February 29, 1912.

1. Be it enacted by the general assembly of Virginia, That
the indebtedness for outstanding losses under insurance against
loss or damage resulting from accident to or injuries sufferec
by an employee or other person, and for which the insured is
liable and under insurance against loss from liability on account
of the death of or injury to an employee not caused by the negii-
gence of the employer, shall be determined as follows: Each
corporation which, in this State, writes policies covering any of
said kinds of insurance shall include in the annual statement
required to be filed with the commissioner of insurance a
schedule of its experienee thereunder, in the United States and
foreign countries in the case of corporations organized in the
United States, and in the United States only in the case of
corporations organized outside of the United States, giving each
calendar year’s experience separately, and crediting or charging
each item to the year in which the policy to which it relates was
written, as follows: (1) the earned premiums on all such policies
written during the period of ten years immediately preceding the
date as of which the statement is made, being the gross premiums
on all such policies including excess and additional premiums
and premiums in course of collection, less return premiums and
premiums on cancelled policies, and less the unearned premiums
on policies in force as shown in such annual statement; (2) the
amount of all payments of whatsoever nature made by reason or
on account of injuries covered by such policies written during
said period. This amount shall include medical and surgical
attendance, payments to claimants, legal expenses, salaries and
expenses of investigators, adjusters and field men, rents,
stationery, telegraph and telephone charges, postage, salaries and
expenses of office employees, home office expenses, and all other
payments made on account of such injuries, whether such pay-
ments are allocated to specific claims or are unallocated; (3) the
number of suits being defended, at the date as of which the state-
ment is made, under policies written during said period, except
suits in which liability is not dependent upon negligence of the
insured, and a charge of seven hundred and fifty dollars for each
suit; (4) the number of deaths for which the insured are liable
without proof of negligence, covered by policies written during
3aid period and not paid for at the date as of which the statement
iS made, and a charge of the amount necessary to pay for such
Jeaths; (5) the number of unpaid claims, at the date as of which
-he statement is made, on account of non-fatal injuries for which
-he insured are liable without proof of negligence, covered by
policies written during said period, and a charge equal to the
present value of the estimated future payments; (6) the loss
ratio determined from the foregoing as to each year separately,
using as the divisor the earned premiums shown in item (1),
and as the dividend the amount of payments shown in item (2)
plus the amounts charged in items (3), (4), and (5); (7) the
number of suits being defended, at the date as of which the state-
ment is made, under policies written more than ten years prior
to such date, except suits in which liability is not dependent upon
negligence of the insured; (8) the number of deaths for which
the insured are liable without proof of negligence, covered by
policies written more than ten years prior to the date as of which
the statement is made, and not paid for at such date; (9) the
number of unpaid claims at the date as of which the statement
is made, on account of non-fatal injuries for which the insured
are liable without proof of negligence, covered by policies written
more than ten years prior to such date. |

2. All unallocated payments in item (2) made in a given
calendar year subsequent to the first four years in which a cor-
poration has been issuing such policies shall be distributed as
follows: thirty-five per centum shall be charged to the policies
written in that year, forty per centum to the policies written in
the preceding year, ten per centum to the policies written in the
second year preceding, ten per centum to the policies written in
the third year preceding, and five per centum to the policies
written in the fourth year preceding; and such payments made
in the first four calendar years in which a corporation has been
issuing such policies shall be distributed as follows: In the first
calendar year one hundred per centum shall be charged to the
policies written in that year; in the second calendar year fifty
per centum shall be charged to the policies written in that year
and fifty per centum to the policies written in the preceding
year; in the third calendar year forty per centum shall be
charged to the policies written in that year, forty per centum
to the policies written in the preceding year, and twenty per
centum to the policies written in the second year preceding; and
in the fourth calendar year thirty-five per centum shall be
charged to the policies written in that year, forty per centum to
the policies written in the preceding year, fifteen per centum to
the policies written in the second year preceding, and ten per
centum to the policies written in the third year preceding, and a
schedule showing such distribution shall be included in such
annual statement.

3. Each such corporation shall be charged with indebtedness
for outstanding losses upon such policies determined as follows:
(10) for all suits being defended under policies written more
than ten years prior to the date as of which the statement is
made, except suits in which liability is not dependent upon negli-
gence of the insured, one thousand dollars for each suit; (11)
for all suits being defended under policies written more than
five years and less than ten years prior to the date as of which
the statement is made, except suits in which liability is not de-
pendent upon negligence of the insured, seven hundred and fifty
dollars for each suit; (12) for all deaths for which the insured
are liable without proof of negligence, covered by policies written
more than five years prior to the date as of which the statement
is made, the amount necessary to pay for such deaths; (13) for
all unpaid claims on account of non-fatal injuries for which the
insured are liable without proof of negligence under policies
written more than five years prior to the date as of which the
statement is made, the present value of the estimated future pay-
ments; (14) for the policies written in the five years immedi-
ately preceding the date as of which the statement is made, an
amount determined as follows; multiply the earned premiums of
each of such five years as shown in item (1) by the loss ratio as-
certained as in item (6) on all the policies written in the first five
years of the said ten-year period, using as the divisor the sum of
the earned premiums shown in item (1) for such first five years,
and as the dividend the sum of the payments shown in item (2)
for such first five years, plus the sum of the charges in items (3),
(4), and (5) for such first five years; but the ratio to be used
shall in no event be less than fifty per centum at and after De-
cember thirty-first, nineteen hundred and eleven, nor less than
fifty-one per centum at and after December thirty-first, nineteen
hundred and twelve, nor less than fifty-two per centum at and
after December thirty-first, nineteen hundred and thirteen, nor
less than fifty-three per centum at and after December thirty-
first, nineteen hundred and fourteen, nor less than fifty-four per
centum at and after December thirty-first, nineteen hundred and
fifteen, nor less than fifty-five per centum at and after December
thirty-first, nineteen hundred and sixteen; and from the amount
so ascertained in each of the last five years of said ten-year period
deduct all payments made under policies written in the corres-
ponding year as shown in item (2), and the remainder in the
case of each year shall be deemed the indebtedness for that year;
provided, however, that if the remainder in the case of any
year of the first three years of the five years immediately pre-
ceding the date as of which the statement is made shall be less
than the sum of the three following items for that year at that
date—(a) the number of suits, except suits in which liability is
not dependent upon negligence of the insured, being defended
under policies written in that year, and a charge of seven hun-
dred and fifty dollars for each suit, (b) the amount necessary to
pay for all deaths for which the insured are liable without proof

of negligence, covered by policies written in that year; and (c)
‘the present value of estimated unpaid claims on account of non-
fatal injuries for which the insured are liable without proof of
negligence, covered by policies written in that year—then the
sum of said items (a), (b), and (c) shall be the indebtedness for
that year.
$4. A corporation which has been issuing such policies
for a period of less than ten years shall nevertheless include in
its annual statement a schedule as hereinbefore required for the
years in which it shall have issued such policies, and shall be
charged with an indebtedness determined in the same manner;
but in determining the indebtedness for policies written in the
five years immediately preceding the date as of which the state-
ment is made, the minimum ratios hereinbefore prescribed shall
be used, subject to the same deductions and provisions as in the
case of corporations that have been issuing such policies for ten
years or more.