INTERNATIONAL LABOUR OFFICE
STUDIES AND REPORTS
Series M (Social Insurance) No. 7
VOLUNTARY
SICKNESS INSURANCE
Collection of National
(Laws and
Studies
Statistics)
GENEVA
1927
PREFACE
This work was prepared for the 1927 Session of the International
Labour Conference, which had to vote upon Draft Conventions
and Recommendations concerning sickness insurance, and which
necessarily had to decide in the first place on the question whether
sickness insurance should be voluntary or compulsory. As it had
done in the case of compulsory sickness insurance, the Office
endeavoured to supply the Conference with the most complete
and exact information possible concerning schemes of voluntary
insurance and the statistics of their working.
It was not deemed expedient, however, to make, as was done
for compulsory insurance, an international comparative analysis
of national schemes of voluntary insurance. The task was, if
not altogether impossible, at least extremely difficult, by reason
of the great variety of voluntary insurance institutions and the
very fragmentary character of the information it was possible to
obtain in the case of certain countries.
The national monographs relate to the following countries:
Argentina, Australia, Belgium, Canada, Denmark, Finland, France,
Great Britain, Northern Ireland, Irish Free State, India, Italy,
Netherlands, New Zealand, Palestine, South Africa, Spain, Sweden,
Switzerland, Uruguay. In each of these monographs an endeavour
has been made to follow the same plan in the analysis of the laws
and the presentation of the statistics: insurance institutions, scope,
benefits, financial resources.
The various monographs exhibit considerable inequality as to
the amount and value of their contents; nevertheless for many
countries, and especially Australia, Belgium, Denmark, Finland,
France, Great Britain, Spain, Sweden, and Switzerland, the sources
available were very complete.
This volume is intended as a complement to the work on compulsory sickness insurance and is indispensable to every reader
who desires to form an opinion of the results obtained by voluntary
insurance throughout the world.
CONTENTS
PAOS
PREFACE
v
GENERAL INTRODUCTION
§
§
§
§
§
xix
1. Historical Development of Voluntary Sickness Insurance
2. Insurance Institutions
3. Insured Persons
4. Financial Resources
5. Risks Covered and Benefits
.
xix
xxv
xxix
xxxv
XLI
ARGENTINA
Sources of Information
1
INTRODUCTION
1
CHAPTER I: The Legal Status and Organisation of the Voluntary Sickness
Insurance Institutions
§ 1. Legal Status
§ 2. Types of Funds
§ 3. Administration' of the Funds
2
2
2
3
CHAPTER I I : Voluntary Sickness Insurance Institutions in Buenos Ayres
§ 1. Funds and their Membership
§ 2. Risks Covered
Sickness Insurance. Benefits
§ 3. Resources and Capital of the Funds
Financial Resources
Capital of the Funds
4
4
4
5
5
5
6
AUSTRALIA
FRIENDLY SOCIETIES:
Acts
Reports
Introduction
§ 1. Registration
Office of Registrar of Friendly Societies
Conditions of Registration
Objects
Rules
Minimum Membership
Statistics of Number and Size of Societies
§ 2. Membership
Terms of Admission
Statistics of Membership
§ 3. Benefits
Sickness and Invalidity Benefits
Medical Benefit
Funeral Benefit
7
8
9
10
10
10
11
11
12
12
13
13
14
15
15
17
20
CONTENTS
VIII
PAGE
§ 4. Financial Resources
Contributions
State Subventions
Investments
Disposal of Surplus
Statistics of Financial Resources
§ 5. Administration
Statistics of Cost of Administration
§ 6. State Financial Supervision
Contribution and Benefit Tables
Maximum Benefits
Methods of Accounting
Inspection
Audit and Returns
Valuation
§ 7. Settlement of Disputes
21
22
22
23
23
23
26
27
27
28
28
28
29
29
29
29
BELGIUM
Acts and Regulations
31
Reports
31
INTRODUCTION
32
CHAPTER I :
Insurance Institutions
§ 1. Legal Structure and Constitution
§ 2. Conditions of Membership
§ 3. Administration of Funds and Societies
Administrative Regulations Common to All Funds . .
Special Provisions Respecting Invalidity Insurance Funds
§ 4. Mutual Societies and State Control
.
§ 5. Relations between Societies
Amalgamation and Federation
§ 6. The Growth of the Mutual-Aid Movement
The Funds and the Risks Covered
Membership of Funds and Societies
Federations of Mutual Benefit Societies
Amalgamation of Societies or Federations
Dissolution
CHAPTER I I :
Benefits and Expenditure
§ 1. Benefits
,
Sickness Benefits
Maternity Benefits
Benefits in Cases of Tuberculosis
Invalidity Benefits
Organisation of the Medical, Surgical, and Pharmaceutical Services of the Recognised Mutual Benefit
Societies . .
§ 2. Expenditure
'.
CHAPTER I I I : Financial Resources and their Management
§ 1. Sickness Insurance
Regulations Governing Financial Resources and their
Supervision
Statistics
•
39
39
41
42
42
44
45
46
46
49
49
50
52
53
53
55
55
56
60
61
63
66
70
72
73
73
75
CONTENTS
IX
PAOE
§ 2. Anti-Tuberculosis Insurance
Financial Resources
Statistics
§ 3. Invalidity Insurance
Regulations Governing Financial Resources and their
Supervision
Statistics
CHAPTER IV: The Position of Foreigners under Voluntary Insurance .
76
76
76
76
76
77
79
CANADA
iNTROnUCTION
80
§ 1. Fraternal Benefit Societies
Conditions for Grant of Dominion Licence
Number and Membership of Societies
Administration of Societies
Risks Covered and Benefits
Financial Resources
Supervision of Financial Stability
§ 2. Provision of Sickness Benefits by Trade Unions
§ 3. Employees' Benefit Schemes
Administration and Membership
Risks Covered and Benefits
Financial Resources
Preventive Measures
DENMARK
81
81
81
82
82
83
83
\ 84
84
85
85
86
87
Acts and Regulations
88
Reports
88
INTRODUCTION
89
CHAPTER I : Insurance Institutions
91
§ 1. Types of Institutions
§ 2. Establishment of Funds
§ 3. Administration of Institutions
General Meeting
Governing Body
§ 4. Supervision of Institutions
§ 5. Relations between the Funds
§ 6. Statistics of Institutions
§ 7. Risks Covered by Institutions
91
92
94
94
94
95
97
99
101
CHAPTER I I : Insured Persons
§ 1. Regular Members
Regular Members without Means
Regular Members with Means
§ 2. Members Not Entitled to Benefits
§ 3. Statistics Relating to Insured Persons
CHAPTER I I I : Benefits and Medical Service
§ 1. Benefits
Sickness Benefits
Maternity Benefit
102
.-
102
102
106
107
107
Ill
Ill
Ill
117
X
CONTENTS
PAGB
§ 2. Statistics Relating to Risks, Benefits, and Other Expenditure
of Insurance Institutions
Statistics of Sickness
Cost of Benefit
Cost of Administration
Total Expenditure of Sickness Funds
§ 3. Organisation of Insurance Medical Service
Medical Service
Organisation of Surgical and Hospital Treatment and
Supply of Drugs
. .
CHAPTER IV: Financial Resources and their Management
§ 1. Financial Resources
Contributions of Members
State Subsidies
Communal Subsidies
Gifts and Legacies
Other Resources
Total Annual Income
§ 2. Financial Management
CHAPTER V:• Judicial Authorities, Offences and Penalties
§ 1. Judicial Authorities
§ 2. Offences and Penalties
Withdrawal of Recognition
Fines
Cessation of Supervision for Unrecognised Funds . .
Loss of Status as Members
CHAPTER V I : Position of Foreigners
117
117
119
120
121
122
123
126
127
127
127
128
131
133
134
135
137
139
130
140
140
140
141
141
142
FINLAND
Law
143
Report
143
INTRODUCTION
CHAPTER I : Insurance
§
§
§
§
§
§
1.
2.
3.
4.
5.
6.
143
Institutions
Legal Status
Constitution of Funds
Administration of Insurance Institutions
Supervision of Insurance Institutions
Statistics of Insurance Institutions
Risks Covered by Insurance Institutions
CHAPTER I I : Insured
Persons
CHAPTER I I I : Benefits and Organisation of Medical Service
§ 1. Benefits and Other Expenditure of Insurance Institutions .
Sickness Benefit
Funeral Benefit
Maternity Benefit
Total Expenditure of the Sickness Funds
§ 2. Organisation of Medical Service
CHAPTER IV: Financial Resources and their Management
145
145
146
147
147
148
151
153
154
154
154
155
156
156
157
159
CONTENTS
XI
FRANCE
PAGE
Acts and Regulations
161
Reports
161
Bibliography
161
INTRODUCTION
CHAPTER
§ 1.
§ 2.
§ 3.
§ 4.
§
§
§
§
5.
6.
7.
8.
CHAPTER
§ 1.
§ 2.
§ 3.
§ 4.
§ 5.
§6.
§ 7.
§ 8.
§ 9.
CHAPTER
§ 1.
§ 2.
§ 3.
161
I: Insurance Institutions and Insured Persons
Legal Status.and Types of Societies
Rules concerning Formation
Conditions of Admission to the Society
Administration
Appointment of the Committee of Management . . .
Disputes Arising Out of Electoral Procedure
Voting by Proxy
Procedure in the Event of Dissolution
Supervision of Activities
Relations between Societies and Federations
The Superior Council of Mutual Benefit Societies . . . .
Statistics of the Mutual-Aid Movement
Number of Societies and Membership
I I : Risks Covered, Benefits, and Costs of Management . . .
Frequency and Average Duration of Sickness
Total Amount Paid in Benefits
Cash Benefits
Benefits in Kind
Relation between Benefits in Kind and Cash Benefit . . .
Maternity Benefits
Funeral Benefit
Administrative Expenses
Distribution of Total Expenditure (Sickness, Maternity, and
Funeral Benefits)
I I I : Financial Resources and their Management
Public Assistance
Privileges Granted to Mutual Benefit Societies Irrespective of their Legal Status
Privileges Reserved to Recognised and Approved Mutual
Benefit Societies
Investment of Funds
Investments in Movable Property
Investments in Real Estate
Financial Statistics
CHAPTER IV: The Position of Foreigners
CHAPTER V: Employers'
Institutions
§ 1. Institutions Run By a Single Employer
§ 2. Collective Employers' Funds of the Equalisation Fund Type
Conditions of Admission
Benefits
Management
Results of Working
167
167
169
171
172
172
172
173
173
174
176
178
179
180
184
184
186
188
190
191
193
194
196
197
199
200
200
201
205
205
206
206
212
213
213
215
215
216
216
217
XU
CONTENTS
GREAT BRITAIN
PAGE
FRIENDLY SOCIETIES:
Acts
Reports
218
218
TRADE U N I O N S :
Acts
Reports
218
218
FRIENDLY SOCIETIES:
§ 1.
§ 2.
§ 3.
§ 4.
§ 5.
§ 6.
§ 7.
§ 8.
Types of Friendly Societies
Societies with Branches
Societies without Branches
Registration
Advantages of Registration
Registry of Friendly Societies
Conditions of Registration
Cancellation of Registration
Unregistered Societies
Membership
Conditions of Admission
Statistics of Membership
Number of Members Both Voluntarily and Compulsorily
Insured
Benefits
Sickness Benefit
Death Benefit
Other Benefits
Statistics of Benefits
Medical Aid
Administration
Statistics of Cost of Administration
Relations between Friendly Societies
Financial Resources
State Financial Supervision
Rules
!
Limitation of Benefits
Accounts, Annual Audit, and Returns
Valuation
Settlement of Disputes
219
220
221
224
224
225
225
228
228
228
228
229 .
231
231
232
232
232
232
234
235
236
236
237
240
241
241
241
242
242
TRADE U N I O N S :
§ 1.
Registration
Statistics
§ 2. Membership
Statistics
§ 3. Benefits
Statistics
§ 4. Administration
Statistics
•
244
245
245
246
246
247
248
248
NORTHERN IRELAND
FRIENDLY SOCIETIES
250
TRADE UNIONS
252
CONTENTS
XIII
IRISH FREE STATE
PASE
FRIENDLY SOCIETIES
253
INDIA
254
ITALY
Acts and Regulations
Reports
255
255
INTRODUCTION
255
CHAPTER I : Insurance Institutions and Insured Persons
§ 1. Legal Provisions, Formation and Character of the Various
Kinds of Fund
Societies Existing de facto, b u t Having no Legal Personality
Societies Recognised in Accordance with the Civil Code .
Workers' Societies Recognised in Accordance with the
Act of 15 April 1886
§ 2. State Supervision
§ 3. Expansion of Mutual-Aid Funds
§ 4. The Mutual-Aid Movement and Fascism
CHAPTER I I : Risks Covered and Benefits Payable
CHAPTER I I I : Fund
§
§
§
§
1.
2.
3.
4.
Resources
Members' Contributions
Employers' Contributions
State Subsidies
Gifts and Legacies
257
257
257
258
259
261
262
262
264
265
265
265
265
268
NETHERLANDS
Act and Regulations
269
Reports
269
INTRODUCTION
269
CHAPTER I : Insurance Institutions
274
§ 1. The Legal Status of Institutions and the Different Types
of Funds or Societies
§ 2. Administration of Funds
§ 3. Unions or Federations of Funds
Federation of General Funds Granting Daily Benefit .
National Federation for the Promotion of Sickness Funds
Unions of Factory Funds
CHAPTER I I : Insured
Persons
§ 1. Conditions of Admission
§ 2. Statistics
CHAPTER I I I : Benefits and Organisation of Medical Service
§ 1. Cash Benefits
274
275
276
276
277
278
279
279
280
281
281
CONTENTS
XIV
PAGE
§ 2. Benefits in Kind
Benefits of the Mutual-aid Funds
Benefits of the Medical Association Funds
Benefits of the Funds Granting Hospital Treatment . .
§ 3. Organisation of Medical Service
The Medical Association
Fees
CHAPTER IV: Financial
§
§
§
§
§
1.
2.
3.
4.
5.
Resources
Members' Contributions
Participation of Employers
State and Communal Subsidies
Donations-, Legacies, and Other Resources
Reserve Funds
284
284
285
286
289
289
289
291
291
292
293
293
293
NEW ZEALAND
FRIENDLY SOCIETIES:
Acts
Reports
INTRODUCTION
295
295
295
§ 1. Registration
295
Registrar of Friendly Societies
295
Conditions of Registration
296
Objects
296
Rules
296
Minimum Membership
296
Statistics of Number and Size of Registered Friendly .
Societies
297
§ 2. Membership
297
Terms of Admission
297
Statistics of Membership
297
§ 3. Benefits
298
Statistics of Benefits
298
§ 4. Financial Resources
299
Investments
299
Disposal of Surplus
299
Statistics of Financial Resources
299
§ 5. Administration
300
Statistics of Cost of Administration
301
§ 6. State Financial Supervision
301'
§ 7. Settlement of Disputes
302
PALESTINE
§
§
§
§
1.
2.
3.
4.
State of the Law
History of the Sickness Fund
Membership Statistics
Benefits
Medical Aid
Convalescent Treatment
Sickness Benefit
Maternity Benefit
Preventive Work
303
303
304
305
306
308
308
309 '
309
CONTENTS
XV
PAGE
§ 5. Administration and Organisation
§ 6. Financial Resources
Revenue
"
Expenditure
3t 0
310
310
312
SPAIN
Acts and Regulations
313
INTRODUCTION
314
CHAPTER I: Insurance Institutions
§ 1. Legal Position and Constitution of Funds
§ 2. The Various Kinds of Funds and their Geographical
Distribution
§ 3. Administration
§ 4. State Supervision
Supervision by the Civil Governor of the Province . .
Supervision by the General Insurance Commission . .
Supervision by the Central Health Commission . . . .
§ 5. Relations between Funds . . .
CHAPTER I I : Insured Persons
317
318
319
319
320
320
320
322
§ 1. Conditions for Admission to Membership
Physical Conditions
Occupational Conditions
Economic Conditions
Moral and Religious Conditions
Legal Conditions
§ 2. Membership Statistics
CHAPTER I I I : Risks Covered
322
322
323
323
323
323
323
326
CHAPTER IV: Benefits
327
§ 1. Cash Benefits
§ 2. Benefits in Kind and Medical Service
§ 3. Cost of Cash Benefit as Compared with Cost of Benefits in
Kind
CHAPTER V : Financial
315
315
Resources
327
328
330
331
§ 1. Members' Contributions
§ 2. Employers' Contributions and Grants
§ 3. Financial Assistance by Public Authorities
331
332
333
SWEDEN
Acts and Regulations
334
Reports
334
INTRODUCTION
CHAPTER I : Insurance Institutions
§ 1. Legal Types of Insurance Funds
§ 2. Constitution of Registered Funds
335
337
337
338
CONTENTS
XVI
PAGE
§ 3. Administration of Insurance Institutions
The Board of Directors
Auditors
General Meeting
§ 4. Supervision
§ 5. Relations between Funds
§ 6. Statistics
§ 7. Risks Covered
CHAPTER I I : Insured
Persons
340
340
342
343
344
345
345
348
349
§ 1. Persons Eligible for Membership
§ 2. Statistics of Insured Persons
CHAPTER I I I : Sickness Benefits and Medical Service
§ 1. Benefits and Other Expenditure of Sickness Funds . . .
Sickness Benefits
Maternity Benefits
Funeral Benefits
Other Benefits
Expenses of Administration
Total Expenditure
§ 2. Organisation of Medical Service
CHAPTER IV: Financial Resources and their Management
§ 1. Financial Resources
Contributions of Members
'
Contributions of Employers
State Subsidy
Communal Subsidies
Other Resources
Total Resources .
§ 2. Financial Management
Reserve Fund . . . .'
Supervision of Financial Stability
Financial and Actuarial Position of the Funds . . . .
CHAPTER V: Judicial Authorities, Offences and Penalties
§ 1. Judicial Authorities
§ 2." Offences and Penalties
CHAPTER V I : Position of Foreigners
349
350
356
356
356
362
364
365
365
366
368
370
370
370
371
373
378
380
381
382
382
383
383
386
386
386
389
SWITZERLAND
Acts and Regulations
390
Reports
393
Other Sources of Information
393
INTRODUCTION: Development of Voluntary and Compulsory Sickness
Insurance
.'
Development of the Activity of Private Funds
Legislative Measures of the Canton
Legislative Measures by the Confederation
Compulsory Sickness Insurance Legislation in the Cantons . . .
394
394
395
395
398
CONTENTS
XVII
ÏAGE
CHAPTER I: Insurance Institutions
§ 1. Legal Status
§ 2. Recognition of Funds
Rights of Funds
Obligations of Funds
§ 3. Development of Recognised Funds
§ 4. Administration . , . ;
§ 5. Unions of Funds or Societies
§ 6. State Supervision
400
400
401
401
402
404
406
411
412
CHAPTER II: Insured Persons
§ 1. Conditions of Membership
§ 2. Number of Insured Persons
414
414
414
CHAPTER I I I : Risks Covered
§ 1. Various Risks Covered by Recognised Funds
§ 2. Sickness Risk
418
418
419
CHAPTER IV: Benefits
§
§
§
§
§
422
1.
2.
3.
4.
5.
Number of Days of Sickness Covered
Cost of Benefits
Cost of Cash Benefits
Cost of Benefits in Kind
Relative Importance of Cash Benefits and Benefits in Kind
422
424
428
429
430
CHAPTER
§ 1.
§ 2.
§ 3.
§ 4.
V: Organisation of Insurance Medical Service
Free Choice of Doctor and Pharmacist
Systems of Remuneration
Restrictions on Free Choice
Prevention of Abuse of Medical Benefit
The Stamp System
System of Fixed Remuneration
System of Reduction of Medical Fees
System of Supervision
Co-operative System
VI: Financial Resources of Institutions
Sources and Amount of Income
Contributions of Active Members (Insured Persons) . .
The Contributions of Passive Members
Federal Subsidies
Cantonal Subsidies
Communal Subsidies
Regular and Occasional Subsidies from Employers . .
Reserves
Investment of Capital
Financial Supervision
VII: Judicial Authorities and Penalties
Judicial Authorities
Penalties
Appeals
431
431
432
432
433
433
433
433
434
435
436
436
436
437
437
440
441
441
443
444
446
449
449
449
450
CHAPTER
§ 1.
§ 2.
§ 3.
§ 4.
CHAPTER
§ 1.
§ 2.
§ 3.
CHAPTER V I I I : The Position of Foreigners
CHAPTER IX: Influence of Funds on Public Health
451
452
it
CONTENTS
XVIII
UNION OF SOUTH AFRICA
PASE
FRIENDLY
SOCIETIES:
Acts and Regulations
Reports
Introduction
§ 1. Registered Friendly Societies
Conditions of Registration
Benefits
Statistics
§ 2. All Friendly Societies (Registered and Unregistered)
Number of Societies and Membership
Benefits
Revenue and Expenditure . . .
. .
454
454
454
455
455
455
456
457
457
457
458
URUGUAY
Sources of Information
INTRODUCTION
459
459
CHAPTER I: The Legal Status of the Institutions
461
CHAPTER I I : The Fraternal Association for Mutual Aid
§ 1. Nature of the Association
§ 2. Management
§ 3. Number of Insured Persons
§ 4. Risks Covered and Benefits
Risk
Sickness Benefits .
Organisation of the Medical Service of the Association .
§ 5. Financial Resources
Insurance Contributions
Other Financial Resources
Accumulated Funds of the Association
462
462
462
463
464
464
464
466
468
468
469
469
GENERAL INTRODUCTION
§ i. — Historical Development of Voluntary Sickness Insurance
MUTUAL A I D IN THE GUILDS FROM THE MIDDLE A G E S
TO THE REVOLUTION
In the Middle Ages the guilds, to which belonged masters and
journeymen of the same craft, often provided for the assistance of
their members in case of sickness and injury. Generally the rules
of the guild prescribed t h a t a sick journeyman should be cared for
at the expense of his master. The guild, however, was concerned
mainly with the protection of the craft and the defence of t h e
economic interests of the masters. The promotion of social solidarity was but a secondary purpose. The harmony of the organisation was often disturbed by disputes between masters and journeymen, chiefly on the subject of wages, and in the fourteenth century
the journeymen began to organise themselves in separate bodies,
known as journeymen's guilds.
The journeymen's guilds, membership of which was confined to
journeymen in a particular craft, attached a much greater importance to mutual aid than did the guilds. Relief in case of sickness,
disablement and death was paid by the journeymen's guild itself
or by a subsidiary fund created and supported by it.
As a rule the benefits were granted in the shape of a loan t o be
paid back by the journeyman when, restored to health, he resumed
his work. The nature of the benefits granted by the journeymen's
guilds is well illustrated by the rules of the Fraternity of Bachelor
Journeymen of Lucerne in 1560:
Every brother who becomes disabled, or falls sick, shall receive the sum
of 314 pfennigs a day if he needs it, but if the Lord restores him to health
and enables him to take up his work again, he shall repay the money. If his
incapacity is prolonged, and if his needs are greater, money shall be lent to
him on security, and if he dies the Fraternity shall recoup itself from his
estate.
XX
GENERAL INTRODUCTION
This simple document shows clearly the nature of the rights and
duties of a journeyman in these provident institutions, and indicates
tbeir concern to come to the assistance of the disabled.
The range of action of the journeymen's guilds, however, remained restricted because their development was hindered by the
State, and especially by the guilds, which, having grown powerful,
fought keenly to defend and increase their privileges, and erected
a complex body of regulations designed to limit the number of
masters and to increase profits rather than to improve the technique
of the craft or secure honest workmanship.
In the eighteenth century the guilds had become tyrannical, and
constituted an obstacle to progress. They were the object of strong
attacks, not only by the journeymen, whose wages they constantly
reduced, but also by consumers, from whom thej- demanded excessive prices. Their unpopularity was such that in Great Britain
their privileges began to be withdrawn from them already in the
middle of the eighteenth century, and this process continued until,
by 1835, when their privileges were formally abolished by statute,
they had practically ceased to exist.
In France they were suppressed at the Revolution, and the
opening of the nineteenth century sawthe disappearance of mutualaid institutions of guild or craft origin.
THE
EFFECT OF THE REVOLUTION, AND THE INTRODUCTION OF
LARGE-SCALE INDUSTRY
The Revolution prohibited the formation of trade associations,
whether of employers or workers, and proclaimed the equality of
all persons before the law and freedom of trade. The relations
between wage-earners and employers were henceforth governed by
the common law, and the individual worker was to settle freely
with his individual employer the terms of the contract of appointment. Such was the essential character of the juridical system,
forgetful of trade solidarity, in which the workers had to face the
great industrial revolution that engendered the immense army of
wage-earners.
A few years after the establishment of equality before the law,
with which trade solidarity was inconsistent, large-scale industry
began to develop.
The machine was substituted for the craftsman's hand labour;
small workshops gave place to large factories, which attracted
GENERAL INTRODUCTION
XXI
hundreds of thousands, and later on millions, of workers from the
country. Thus there was concentrated into the towns an immense
proletariat whose livelihood depended solely upon wages.
Large-scale industry, which developed continually, remained for
a long time unorganised. It did not know how to estimate the
capacity of consumption, and frequently suffered from crises and
overproduction. This anarchy in production aggravated competition, rendered the labour market chronically unstable, and led
to much unemployment, sweating, lowering of wages, and excessive
lengthening of hours of work.
The worker in the big factory, badly paid, unable to save,
weakened by exhausting labour and insufficient nourishment, fell
into destitution when unable to work through sickness. This was
a period of great misery, when there was slowly formed, under the
pressure of suffering, the feeling of solidarity which was necessary
for the achievement of security against the risks of the worker's
life.
THE INDIFFERENCE OF THE " LAISSER-FAIRE " STATE
In face of this distress the laisser faire State preserved an attitude
of indifference. Believing as it did in equality before the law and
economic liberty, it elevated inactivity to the dignity of a doctrine.
Statesmen and Members of Parliament were fully occupied with
political problems; few indeed appreciated the social significance
of the industrial revolution which was going forward under their
eyes. Thus for a long time the public authorities intervened no
further than to distribute bread tickets to the families of workers
who were sick and unemployed.
Nevertheless, towards the middle of the nineteenth century, as
industrialisation became more intense, the conviction grew that
the community itself would suffer in its health, its productive
capacity, and its future by reason of the distress of its producers.
It was then that the first laws for the protection of workers were
planned, though they were in the nature of cautious experiments
aiming merely at mitigating the sweating of women and children.
So powerful still was the doctrine of laisser faire that special labour
legislation was not to be thought of, nor could any responsibility
be placed upon employers even for the compensation of industrial
accidents, save in a few occupations where the risk is especially
great (seamen and miners).
XXII
GENERAL INTRODUCTION
THE EFFORTS OF THE EMPLOYERS
In contrast to this passive and hesitating attitude of public
authorities, private individuals took measures of a bolder character.
Employers, realising that distress breeds a dangerous temper,
guided also by a feeling of social duty and desiring to secure the
services of a labour force which should be stable, healthy, and loyal,
began to organise schemes of welfare and relief. The third quarter
of the nineteenth century witnessed the appearance of numerous
employers' welfare institutions: hospitals, homes, and funds for
pensions and relief.
The work of the employers, however, could not claim to solve
the problem of the insecurity of wage-earners. Their schemes
covered only a small proportion of the working class. Their basis
of organisation, which is the factory, is generally too narrow to
afford adequate cover against the more serious risks, such as industrial accidents, lengthy illness, invalidity, and old age. They
suffer from too great variety of plan and from dispersal of effort.
What is worse, they excited the distrust of the masses and the
opposition of the Socialist Parties, which were rapidly growing up.
The worker and his trade union saw in the employers' generosity
a means of restricting the worker's freedom of movement and
binding him by the ties of material interest, apparent rather than
real however, to the undertaking which employs him. The
Socialist Parties objected to the employers' schemes on the ground
that their one-sided management excluded the workmen, that
they offered none of the educative opportunities which are necessary in a democratic State, that it weakened the will of the working class to emancipate itself, and that after all the benefits offered
were fragmentary and of little value.
THE EFFORTS OF THE WORKERS
The mind of the workers was gradually penetrated by the conception that they existed as a social class. They comprehended that
equality before the law and political and economic liberty left
them defenceless in the new industrial organisation. They discovered that in bargaining between individual worker and individual
employer there is no genuine equality, and that in fact the terms
are always imposed by the employer, who is always stronger because
GENERAL INTRODUCTION
XXIII
he is richer. They perceived that for one who depends for his
livelihood upon wages there is no liberty without economic strength.
Thus they came to regard their interests as distinct from those of
their employers and especially as opposed to those of the owners
of great undertakings. This class feeling led to the creation of
class institutions. The latter took up with the public authorities
a struggle to obtain the right to establish and administer defensive
associations and funds for collective provision against risks to
which all were exposed.
It is a fact that the forbidden trade union sometimes disguised
itself behind a relief fund, which was first of all tolerated and then
recognised; but more often it was the trade union which became
the embryo of the provident fund. From Great Britain, the
classic land of friendly societies, the mutual-aid movement spread
over to the Continent. At the outset mutual-aid societies were
based on trades, like the mediaeval guilds. Whilst, however, a
society's connection with the trade association, from which it
sprang, secured for it the support of trade unionists, the range of
its membership was at the same time restricted, and its financial
resources were limited to the small contributions which the organised
workers were able to pay. Its basis of organisation was not large
enough to enable it to undertake insurance against the inore
serious risks of prolonged illness or disablement. Thus the mutualaid side of trade union activity had a precarious origin, and
remained restricted both in its range of action and in its resources.
Nevertheless, it supplied the foundation of a system which was
later to be developed with the aid of the public authorities.
STATE INTERFERENCE AND THE DEVELOPMENT OF MUTUAL AID
The State was changing its attitude, and during the last thirty
years of the nineteenth century took an increasingly active part
in the solution of problems of labour protection. This new development was due to a variety of causes. In the first place, the
character of the legislators themselves was altering. Elected by
universal suffrage, the Member of Parliament must henceforth
pay careful heed to the needs of the working class, which had
discovered in the voting paper a powerful weapon and which
counted for much in the formation of public opinion. The workers'
unions grew in number and strength; they began to group themselves into trade federations, which made energetic representa-
XXIV
GENERAL INTRODUCTION
tions to parliaments and cabinets. The class sentiment was
spread and fortified by the propagation of Socialist teaching. The
doctrine of State interference acquired wide acceptance, so that
old-fashioned laisser faire found itself hard pressed in the field
of social and economic policy. The public authorities felt the
influence of the unions and the new theories, and were also learning
a lesson of experience. They recognised that absolute liberty in
the conclusion of a labour contract and the prohibition of trade
combination results in victory for the stronger party, who is the
employer. The State no longer considered its task to be limited
to authorising the establishment of schemes of welfare or mutual
aid and to regulating the relations between the managers of such
schemes and the beneficiaries, according to ordinary law. It began
to concern itself also in the organisation of insurance, and after
1880 the countries can be divided into two groups according to
the nature of their efforts in the domain of social thrift.
The first group established compulsory sickness insurance. It
includes numerous countries: Germany (1883), Austria (1888),
Hungary (1891), Luxemburg (1901), Norway (1909), Serbia (1910),
Great Britain (1911), Russia and Roumania (1912), Bulgaria (1918),
Czechoslovakia and Portugal (1919), Poland (1920), Japan and
Greece (1922), Chile (1924), and Lithuania (1925).
Other countries, carrying on the tradition of laisser faire, preferred to encourage the formation of institutions by private initiative, and adopted legislation which granted the mutual-aid movement a special status more favourable than that of commercial
companies or other kinds of association, and provided financial
assistance from public funds.
Legislation of this kind has been adopted in Italy (1886), Sweden
(1891), Denmark (1892), Belgium (1894), Finland (1897), France
(1898), Spain (1908), and Switzerland (1911).
Thus, aided both materially and morally, the mutual-aid movement developed rapidly: thousands of societies were formed,
having in some countries hundreds of thousands, and in others
millions of members. The movement has spread beyond the
frontiers of the old world to South America, Australia, New Zealand,
and Canada, whither emigrants have carried the traditions of their
countries of origin.
In the following pages is sketched a general picture of the working
and present tendencies of voluntary sickness insurance.
GENERAL INTRODUCTION
XXV
§ 2. — Insurance Institutions
LEGAL STATUS
From the legal standpoint voluntary insurance institutions may
be subject to the common law in the same way as the majority
of associations, or to a special and more favourable system intended
to facilitate their growth. The system of the common law applies
in Argentina, India, the Netherlands, Spaia, and Uruguay.
A special system involves the "recognition", "approval", or
" sanction " of the institutions by the State, which grants them
larger rights, imposes on them more definite obligations, and subjects
them to more careful supervision. " Recognition " may be compulsory or optional. It is compulsory in Australia and New Zealand,
and optional in other countries: Belgium, Canada, Denmark,
Finland, France, Great Britain, Italy, Sweden, Switzerland, Union
of South Africa.
The growth of a system of recognised, approved, or sanctioned
societies depends on the advantages they are offered under the
special regulations in return for the obligations and supervision
to which they are subject. The conditions of recognition usually
relate to the obligation to undertake insurance on the mutual
principle, the admission of members, financial balance, auditing,
and the rules for the investment of capital. In some countries the
law goes even further and fixes a minimum membership: 200 in
Denmark, 100 in Sweden (500 for reinsurance funds).
The privileges relate to the extension of legal capacity (the right
to sue and be sued in the courts, t > own and receive legacies, capital
sums, etc.), the exemption from certain rates and taxes, and in
many States the grant of public subsidies. There can be no doubt
that the size of the subsidy is the decisive factor leading to applications for recognition, and in countries where the financial assistance given by the authorities is largest, e.g. Denmark and Switzerland, and to a less extent Sweden, Belgium, and France, there is
the highest proportion of recognised funds. In Italy, on the contrary
where public subsidies are small, infrequent, and irregular, the
iistitutions consider that not much may be gained from State
recognition and continue to carry on their work urder the general
law.
XXVI
GENERAL INTRODUCTION
TYPES OF INSTITUTIONS
In the eyes of the law, insurance institutions may take the form
of either trusts or associations. Trusts are relatively few, and are
used chiefly for the establishment of works funds, whose resources
are derived entirely or very largely from employers. The vast
majority of funds are associations, usually mutual benefit societies,
managed by the members.
More important is the classification of the types of funds
according to the method of recruiting members or the rules determining their membership. In this respect a distinction may be
made between two large groups, that of open funds and that of
closed funds.
Open funds admit all persons who satisfy the conditions of age,
health and income prescribed by the law or the rules of the funds,
irrespective of their status in employment (wage-earners or independent), occupation, politics, or religion. The initiative in setting
up such funds is usually taken by the persons concerned, but they
may also be established by the authorities for the purpose of
enabling any person who wishes to insure to find a mutual benefit
society which he can join. The most usual type of open fund is
the local fund, which limits its activities to a definite area of national
territory, a commune, town, canton or district.
Closed funds recruit their members from among persons working
in one and the same undertaking (works funds), engaged in the
same occupation (trade funds), belonging to the same political
party (political funds) or the same religion (denominational funds),
accepting certain rules of conduct, or having the same nationality.
Works funds and trade funds are to be found in all countries.
The system of political funds is particularly well developed in
Belgium and the Netherlands, where they may literally be said
to form part of the party or trade union machinery. Denominational
funds are rare, except in Belgium and the Netherlands. Funds
whose members accept certain rules of conduct, such as abstaining
from alcoholic liquors, are found in all Anglo-Saxon countries.
Funds based on nationality are to be found in countries where
immigration is important, such as the Italian or German immigrant
funds in South America. Reference may finally be made to the
creation of school funds in France and the juvenile societies in
Great Britain and Australia.
Closed funds are in a position to limit their field of action even
GENERAL INTRODUCTION
XXVII
more narrowly, for they may adopt two or three of the criteria
enumerated above at the same time. Thus in Belgium and Switzerland there are societies formed on a combined trade and religious
basis, and others formed on a combined trade and political basis.
The evolution of the two groups of institutions, open funds and
closed funds, varies with the country. In certain Continental
countries, such as Belgium and Finland, the closed fund type
definitely predominates. Elsewhere, for instance in Denmark,
France, Sweden, and Switzerland, the growth of the open fund has
been much more important, and the closed funds have only a
small membership.
It may be asked whether among so many types of open and
closed funds a definite tendency can be distinguished towards a
certain type of organisation. This seems to be the case. No doubt
the process will vary in the different countries, but wherever
voluntary insurance has made any progress, open funds established
oo a territorial basis are growing more rapidly than other types.
At present the organisation of sickness funds on a territorial
basis is almost complete in Denmark, where there are 1,584 territorial funds as compared with 60 trade funds. Much progress in
this directiod is being made in Sweden (964 territorial funds as
compared with 312 trade funds), and in the present proposals for
legislative reform it has been suggested that the State should
recognise one society only in each territorial area.
In Switzerland the difference in number between the territorial
funds and the trade, political, or denominational funds is less
striking; but as regards membership, the institutions in the first
group have about 835,000 members, and those in the second only
about 218,000. Territorial funds are making marked progress in
Belgium, Finland, and France, though not so rapidly as in the
countries already mentioned. In Spain, on the contrary, there has
beer a fall in the number of territorial institutions by which funds
formed on other bases have profited, particularly the denominational funds, whose membership is five times that of the trade
funds.
This movement in favour of territorial institutions is not peculiar
to European countries. In Australia and New Zealand the societies
are definitely territorial. In Uruguay there is one large institution
for practically all the mutual benefit societies which covers several
departments. An exception should perhaps be made for Argentina,
where the best organised funds are the trade funds, but this exception cannot seriously affect the general tendency.
GENERAL INTRODUCTION
XXVIII
CONCENTRATION OF MEMBERSHIP AND FEDERATIONS
OF INSTITUTIONS
The predominance of territorial funds in itself indicates a tendency towards concentration. This is clearly brought out by the
table below for certain countries, showing the number of funds and
their membership in 1913 and 1925:
Number of funds and membership
1913
Country
Number
of
funds
Australia
(Victoria)
Belgium
Denmark
Finland
France
Great Britain
New Zealand
Spain
Sweden
Switzerland
1,524
3,956
1,528
222
17,273
24,482
717
1,274
1,979
453
1925
Number
Member- Membership
of
ship
per fund
funds
159,741
510,252
795,825
50,846
2,682,698
5,285,676
74,074
143,993
658,148
361,621
105
129
520
229
155
216
103
113
332
983
1,476
3,949
1,647
246
16,577
21,292i
8I71
1,770
1,286
1,141
Member- Membership
ship
per fund
155,378
105
279
1,110,000
908
1,496,485
252
61,949
159
2,628,299
276 1
5,870,2181
112 1
91.3531
225
398,999
695
894,221
1,017
1,160,710
1 Figures for 1924.
The growth in membership is general, but particularly marked
in Belgium, Denmark, Sweden, and Switzerland. Yet there has
nnt been much increase in the number of funds except in Switzerland and Spain, and it has even fallen in Sweden and France;
while everywhere, a particularly important point, the average
membership per fund has risen.
Side by side with this tendency towards concentration of membership there has been a movement for developing the relations between
the funds, which form joint associations entitled unions, federations,
or national conferences, with a view to popularising the idea of
insurance, making recommendations to the authorities on the
drafting of legislation and granting of subsidies, creating institutions
for social hygiene which are beyond the resources of the separate
funds, and concluding collective agreements with doctors or their
associations. Such unions are particularly strong in Denmark (one
union with 1,477,000 members), Switzerland (three federations
with about 900,000 members), Sweden (two unions with 700,000
GENERAL INTRODUCTION
XXIX
members), Belgium (four unions with about 850,000 members),
France (one federation with 2,600,000 members), and Great
Britain.
§ 3. — Insured Persons
CONDITIONS OF ADMISSION
As a rule, insurance funds are free by law to draw up special
rules of admission for their members, and they may, if they like,
accept all persons irrespective of economic situation or else reserve
admission for any particular group. This is the situation to be
found in Argentina, Australia, Belgium, France, Great Britain.
Italy, the Netherlands, Spain, Sweden, Switzerland, and Uruguay.
In two countries, however, Denmark and France, the scope of
the law is defined more narrowly. The recognised sickness insurance
funds may admit only persons in an economically dependent
position whose wages fall below a certain maximum, or economically independent persons whose income falls below a certain
maximum.
Subject to these fundamental regulations, the institutions in
eacb group are free to fix their conditions of admission in their
rules. These conditions were formerly inspired by narrow motives
and a limited conception of provident action, but with the development of sickness insurance they are becoming more liberal. For
financial reasons, however, the funds try to recruit their members
from among the younger elements of the population, for whom
the risk of sickness is relatively low. Sometimes even the desire
to avoid the difficulties due to the non-payment of contributions
leads the funds to choose their members from among the more
docile elements of the population, or among those who share their
views, and especially among the relatively well-to-do sections of the
population. Such a policy compels the funds to impose one or
more conditions of admission, based on physical, economic, or
moral criteria. Finally, to avoid administrative difficulties, nearly
all institutions impose residential conditions.
Physical conditions are imposed in order to select the risks,
and refer to state of health, age, and sex.
With a view to avoiding bad risks, voluntary insurance institutions systematically exclude persons who do not satisfy the
conditions of health required. In practice, voluntary insurance is
not open to persons who most need medical protection, and this is
GENERAL INTRODUCTION
XXX
a serious disadvantage of the voluntary system. In certain laws
(Belgium, Sweden, Switzerland), it is realised how unfair such
measures may be, and an attempt is made to facilitate the admission
of persons whose state of health is not satisfactory. In Denmark,
persons who are unable to work owing to incurable disease must be
admitted by recognised funds, t i e State undertaking to meet the
additional expenditure incurred by the institutions owing to such
membership. From the social standpoint, the Danish method has
yielded excellent results, and shows that the protection of the
chronically sick may be organised within a voluntary sickness
insurance system as well as in one of compulsory insurance. The
question is whether this method is satisfactory in every respect.
In the first place, this function is not, properly speaking, a part
of the work of voluntary insurance because it is not justified, as in
compulsory insurance, by a wide distribution of the risk. Nor is it
the outcome of solidarity between the persons who have insured
voluntarily, but partakes much more of the nature of relief, granted
at State expense within the voluntary insurance system. This is
as much as to say that, the results being the same, the burden to
the State of covering bad risks is heavier under a system of voluntary insurance than under that of compulsory insurance.
The age of admission of insured persons varies as a rule from the
lower limit of 16 to 18 years to the upper limit of 40 to 45 years
of age. There is at present a very marked tendency among mutual
benefit societies to widen these limits. Certain societies, particularly
in Belgium, France, and Switzerland, have taken energetic action
during the last few years to develop the insurance of children by
setting up school insurance funds.
As a rule, sex is not made a special condition of admission. But
very often (except in Switzerland, where this is against the law)
funds which grant men and women the same benefits require the
latter to pay a slightly higher contribution. To some extent this
difference is justified by the higher risk of sickness among women.
The following figures, which are all that are available, show the
proportion of women insured in. voluntary systems:
Country
Australia
Denmark
Great Britain (branchless
societies)
Sweden
Switzerland
Men
Women
482,874
676,410
45,294
740,838
1,826,386
512,073
461,904
319,532
289,997
373,148
GENERAL INTRODUCTION
XXXI
The economic conditions established by the recognised funds in
Denmark and Finland have a social purpose. The object is to
reserve the benefits of insurance to persons who are wholly dependent on their work or whose resources are very small. In Denmark,
insured persons who satisfied these economic conditions when they
were admitted to the fund, but whose economic situation has since
improved, may retain their membership. Sections of the population
which are better off may insure, hut only in the institutions which
are not subsidised by the State.
In these two countries the conditions of admission imposed by
law and the institutions create very definite legal privileges for the
workers. They alone may join sickness insurance funds which are
subsidised by the State. Moreover, in Denmark, it very often
happens that an employer who engages a worker insists on his
proving that be belongs to a recognised sickness fund. The fact
that in Danish towns 91.9 per cent, of the workers are insured
against sickness is clear evidence that in practice the employers
nearly always insist upon membership of a fund. For our purpose,
this fact is of extreme importance, for it throws light on the special
nature of Danish insurance, which theoretically is a system of
workers' voluntary insurance, but in actual fact often becomes
compulsory owing to the action taken by employers.
In Spain, the economic conditions established by the various
institutions have quite another meaning. They are merely intended
to ensure that the candidate will fulfil his obligations to the fund,
particularly as regards the payment of contributions.
Residential conditions require the candidate to reside within the
area of the fund. They are always imposed in Denmark, and as a
rule in the other States (except Great Britain) where the voluntary
insurance system is still in force.
For voluntary insurance institutions the question of residence
raises a very complex problem, for as soon as a member leases
the area covered by his fund the possibility of supervision in case
of sickness disappears, or else the cost involved is too high. Moreover, the relations between the member and tbe institution are in
any case made more complicated. At first, if the members of a
mutual benefit society fell sick when resident outside its area, it
tried to entrust to allied societies the work of supervising such
members. In practice it was found difficult to apply this method,
and in most cases it proved ineffective. The institutions were thus
compelled to introduce a residential clause under which persons
lose their membership when they leave the area of the fund.
XXXII
GENERAL INTRODUCTION
The disadvantage to members of such a clause may be very
serious. It may often happen that a member who has for many
years belonged to one and the same institution is compelled to
leave it owing to a change of residence. If he has passed the age
limit or cannot satisfy the conditions required by the fund in his
new place of residence, he is unable to provide for the future at the
very time when his need is greatest. The public authorities, duly
realising this situation, as also various groups of funds, have
endeavoured to lessen the effects. In Switzerland, the existence
of a right of " free transfer " from one fund to another has very
much simplified the problem. According to this right, funds must
accept as members any persons who have been affiliated to a
recognised sickness fund for not less than a year, and who, in
accordance with its rules, have been compelled to leave the fund
owing to change of residence or occupation, or to the dissolution
of the fund to which they belonged. They must be admitted to
the new fund irrespective of their state of health or age, and no
new entrance fee may be charged. Similarly, an insured person
who benefits by the right of free transfer may not be subjected to a
longer qualifying period nor charged higher contributions than
persons of the same age and receiving the same benefits who join
the fund for the first time. If in spite of this right of free transfer
an insured perso i is unable to join any fund, having satisfied the
general conditions of admission, he is entitled to remain a member
of his fund as long as he lives in Switzerland. Although the right
of free transfer interpreted on these lines does much to reduce the
disadvantage to insured persons of residential conditions, it should
be pointed out that the experience hitherto gained in Switzerland
has given entire satisfaction neither to the institutions, nor to the
members, nor to the supervisory authorities.
Moral conditions, which at present are hardly to be found except
in Spain, are intended to prohibit admission to the funds in the
case of persons who have been guilty of an offence of any kind, or
to withdraw the right of benefit in cases of misconduct. This is
not the place to discuss the equity of such measures, which as
already explained are adopted mainly in case of participation in
political disturbances.
What may be contested, however, is the right retained by a very
large number of funds, especially in Western Europe, of withdrawing the right to benefit if the ill-health of the member is
considered, often without sufficient reason, the consequence of
misconduct. In the first place, this view is not defensible scienti-
XXXIII
GENERAL INTRODUCTION
fically. But secondly, and particularly, it should be made clear
that besides their function of compensation or restoration it is the
imperative duty of the sickness funds so far as they are able to
safeguard public health. An institution which deserts a sick person
suffering, for instance, from a veneral disease is guilty of increasing
the risk of contagion for the healthy population.
There remains the condition of nationality, by which funds aim
at reserving membership for nationals or immigrants of a given
nationality. These conditions are imposed chiefly by the many
immigrant funds in Argentina, Chile, and Uruguay. In Europe
there are very few institutions imposing such conditions. And as a
general rule it may be said that in voluntary insurance institutions,
foreigners and nationals are treated on an equal footing.
These many conditions and means of exclusion, whether adopted
separately, or as sometimes happens, simultaneously, have resulted
— except in Denmark and to some extent in Finland — in the
mutual benefit societies reaching the most varied elements of the
population without, however, covering any one of them entirely.
SIZE AND COMPOSITION OF VOLUNTARY INSURANCE FUNDS
Voluntary insurance has achieved results. It is growing steadily
but slowly, and the statistics show thousands or millions of persons
insured, according to the country under consideration. Absolute
figures are not sufficient, however, to give an idea of the real
extension of the system. For a more accurate view of the work
done and the present situation, it is better to study the proportion
of the persons insured to the total population, as bas been done
in the following table:
Country-
Year
Australia
Belgium
Canada
Denmark
Great Britain
Finland
France
Italy
New Zealand
Spain
Sweden
Union of South Africa
(European population)
Uruguay
(native population)
1923
1925
1925
1925
1924
1924
1923
1924
1924
1925
1925
1924
1925
Insured persons
per cent, of population
.
9.00
14.31
1.00
57.40
13.5
2.00
6.63
2.00
6.70
1.87
11.94
3.00
7.86
III
XXXIV
GENERAL INTRODUCTION
As a whole it must be said that the results are not satisfactory,
except in Denmark and to a less extent in Switzerland. In Denmark
the undoubted success of the system is largely due to the enforcement of several measures intended to raise the level of public
health, and for the rest it must be ascribed to the large proportion
of the costs borne by the State (one-third of the total expenditure
on sickness insurance).
In Switzerland the system of sickness insurance is not, properly
speaking, a voluntary system, but mixed, because the cantons are
allowed by law to introduce compulsory sickness insurance, and
19 cantons out of 22 have made more or less use of this right. It
follows that general conclusions in favour of voluntary insurance
ought not to be drawn from these two examples (Denmark and
Switzerland).
The next question is from what sources the members of the
sickness funds are drawn; whether, in fact, a voluntary sickness
insurance system is one for the workers, comprising the majority
of wage-earners, or a popular system including a large proportion
of independent workers in an economically weak position. As a
rule, the available statistics are insufficient to allow of a reply to
these questions. Most funds do not classify their members by
occupation or social position.
There can be no doubt that in many States workers form a large
proportion of the members of sickness funds. Thus in Denmark
the wage-earners constitute 81 per cent, of the total number
insured, and in Sweden 65 per cent. The corresponding figure for
Switzerland, to judge from recent partial enquiries, is about 60
per cent. These figures are exceptional, however. In France, for
instance, in 1924, the total membership of mutual benefit societies
was slightly over 2,500,000, whereas the number of wage-earners
was about 12,000,000. Moreover, it is certain that the number
of persons in France who hold an independent position in a small
way and are imbued with traditions of thrift and providence,
form a large proportion of the membership of the societies, which
means that probably 15 per cent., at the most, of the wage-earners
have insured voluntarily. In many other cases it is likely that the
participation of the workers is even smaller.
To what should this small membership of the funds be attributed ? To the natural improvidence of man and the preference for
individual thrift among the more well-to-do workers, but also, and
above all, to the insufficiency and precariousness of the resources
of the low-wage workers, who often suffer from unemployment. It
GENERAL INTRODUCTION
XXXV
is a fact that at the present time a large number of workers, chiefly
among those who have family responsibilities, do not earn enough
to pay insurance contributions, although it is among them that
disease and infant mortality are most serious. This situation is
undoubtedly the weightiest objection that can be raised to voluntary insurance. Three States have sought a remedy, Denmark and
Finland by limiting public subsidies to insurance for persons who
are entirely dependent upon their work, and Switzerland by making
the State responsible for one-third of the contributions paid by the
communes towards the insurance of necessitous persons. The
results obtained by the Danish system are definitely satisfactory;
those realised in Switzerland less marked, but nevertheless appreciable. But, and this is the fact of capital importance, everywhere
else the problem has not been solved.
To sum up, it must be stated thta voluntary insurance, in spite
of the tenacious and remarkable efforts that have been made and
in spite of its continuous development, is making only slow progress and, except in two countries, has failed to cover more than
a small proportion of the total population or the working population, and that in particular its benefits do not apply to many
poorly paid persons, precisely those who have the most need of
mutual aid.
§ 4. — Financial Resources
ORIGIN OF RESOURCES
Apart from a very small number of charitable foundations in
which the beneficiaries have no financial burdens, the principal
resources of voluntary insurance systems are derived from members'
contributions. This main source of income is supplemented by
others of less importance, such as voluntary contributions of
employers; State subsidies, which may be regular and permanent,
or else take the form of a single payment; interest on capital;
donations and legacies; receipts from entertainments, etc. All
play a more or less important part in the income of the insurance
institutioas.
The members' contributions are usually fixed by the funds. In
many States the lack of technical means, in particular morbidity
tables, compels the funds to use empirical means in fixing the rate
of contributions. Even though the rules of the fund usually empower
XXXVI
GENERAL INTRODUCTION
the committee to levy an additional contribution in cases of deficit,
the inadequacy of the income of voluntary insurance institutions
often gives rise to serious differences between the administrative
bodies. It has been sufficiently proved by experience how difficult
it is for the committee of a mutual benefit society to succeed in
making the general meeting of the members agree to a rise in the
rate of contributions for which there is no corresponding increase
in benefits.
It must be admitted that under the influence of legislation for
the promotion and supervision of funds, and especially under the
influence of competition between them, appreciable progress has
been made. Rules, however elementary as yet, have been drawn
up by the supervisory bodies, or by federations of funds, for fixing
the members' contributions at a fair rate, based on the daily benefit
granted and the cost of medical attendance and drugs. An attempt
has even been made, sometimes with success, to make mutual
benefit funds draw up technical balance sheets, so that they may
be aware of their future assets and charges, and therefore in a
position to determine in advance the rate of contribution in an
actuarial basis. But although the instructions for drawing up such
balance sheets are usually supplied to the funds by the supervisory
authorities, the great difficulty of applying such a system lies in
the impossibility of making so substantial an addition to the burden
imposed on those who manage the institution, often free of charge.
However this may be, the adjustment of contributions to the rise
in the cost of living and the increase in insurance benefits is at
present only partially effected by voluntary insurance institutions.
As a rule, employers contribute freely to works funds. Sometimes
they voluntarily participate in the cost of local funds, particularly
if the undertaking employs the majority of the working population
in the district or locality, and if the economic interests of this
population are closely linked with those of the undertaking.
In a varying degree, employers' contributions form part of the
resources of mutual benefit societies in all countries where sickness
insurance is voluntary. Thus, although by law they are under
no obligation, employers contribute to the voluntary societies
either by granting a single or periodical subsidy to the institutions
set up by their workers, or by providiig, at their own cost, for the
attendance, medical and otherwise, of the sick, or finally by
affiliating their staff to the collective equalisation funds formed by
a certain number of employers. This participation by employers in
voluntary sickness insurance systems is to be found in Argentina,
GENERAL INTRODUCTION
XXXVII
Belgium, Finland, France, Spain (where it is especially active in
the provinces of Catalonia and Biscay), Sweden, and Switzerland.
It is impossible to give an exact estimate of the value of employers' contributions to sickness insurance. All that can be said is
that where statistics are available from which figures of some
exactitude may be derived, the proportion of employers' contributions to the total income of mutual benefit societies is fairly
modest. In Switzerland, for instance, where the voluntary and
regular participation of employers has been growing steadily
since 1914, it represented barely 3^3 per cent, of the total cost
of insurance in 1925, the last year for which figures can be obtained.
Admittedly, the heads of undertakings grant sums every year,
which vary in amount according to the state of business, but
these uncertain resources can hardly affect the value of tbeir
contribution to the income of the funds. In the limited field of
works funds, the voluntary participation of employers is of greater
importance, although not very considerable. Thus in Switzerland
in 1925 the payments made by employers did not exceed 11.5
per cent, of the total benefits paid by works funds. For other
States sufficiently accurate information on the value of employers'
contributions is not available.
The financial assistance granted by the public authorities to
sickness insurance funds and societies is usually more substantial.
From this point of view, the States may be classified in three
groups, according to the nature of their financial contributions.
The first group includes the countries in which the authorities
do not contribute to the work of the mutual benefit societies. The
income of the institutions is derived from members' contributions,
employers' voluntary contributions, interest on capital, donations
and legacies, and the revenue from entertainments and demonstrations. This is the case in Argentina, Australia (except NewSouth Wales), Canada, Great Britain (where the State subsidises
compulsory insurance), Finland, New Zealand, Palestine, the
Union of South Africa, and Uruguay.
The second group, composed of Italy and Spain, is that in which
the State subsidy takes the form of relief. In these two countries
the authorities do not, properly speaking, subsidise the voluntary
sickness insurance institutions. There is merely a possibility of
obtaining a single lump sum, which is granted only in exceptional
circumstances, and even then only if the competent departments
have sufficient money for the purpose.
Finally, the third group, comprising Belgium, Denmark, France,
XXXVIII
GENERAL INTRODUCTION
Sweden, and Switzerland, is that in which the State contributes
regularly to the sickness insurance institutions. Here the public
subsidy depends upon various factors. For instance, the value
of the benefits, the economic status of members, and sometimes
also the geographical position of the institutions. Various methods
of calculating the State subsidies are used. As a rule the subsidy
is paid once a year to the recognised funds in proportion to the
active membership, i.e. to the number of persons insured. The
rate may vary according to the value of the benefits granted by
the funds, the age and the sex of the members. These " basic "
subsidies are sometimes increased by grants to unions or federations
of funds which take collective action for the promotion »f public
health (Belgium), or to the institutions themselves if they grant
women members maternity benefits (Belgium, France, Spain,
Sweden, and Switzerland). In Switzerland certain geographical
considerations apply, intended to enable the State to grant special
subsidies to institutions for sparsely populated districts, particularly mountain districts, where organised medical service is
especially difficult and costly.
Besides subsidies from the State, the institutions sometimes
obtain financial assistance from the local authorities, but the value
of this assistance is much less. The funds obtain subsidies of this
kind from the communes in Belgium, Denmark, and Sweden; the
communes and departments in France; the provinces and municipalities in Spain; and the cantons and communes in Switzerland.
The granting of these subsidies is often subject to the fulfilment
of certain conditions imposed by the local authorities. The assistance may take the form of regular annual contributions (Denmark,
Sweden, and Switzerland), or merely of certain facilities granted
to the institutions (France), or the free provision of premises for
meetings.
The value of these various subsidies from the public authorities
varies widely from one country to another. It is substantial in
Denmark, where it represents one-third of the total resources of
the funds, and appreciable in Sweden, where it reaches about
20 per cent.,, and in Switzerland where it is 12 to 13 per cent.
Accurate statistics of the assistance granted by the authorities
in France and Belgium are not available, but there can be no
doubt that its value is increasing rapidly, especially in the latter
country.
In European institutions, the interest on capital, the income
from special subscriptions and entertainments, and donations and
XXXIX
GENERAL INTRODUCTION
legacies, form only a small proportion of the total income. The
position is different in Latin-America, where the rate of interest
is very high. In Argentina, for iastance, the interest on capital
and the income from the many entertainments organised by mutual
benefit societies represent a large though unstable proportion of
the income (35 per cent.).
AMOUNT OF FINANCIAL
RESOURCES
In the following table certain figures, showing the average annual
income per insured person for the various countries in which
insurance is voluntary, are compared, giving some idea of the
amounts derived from the sources indicated above.
AVERAGE ANNUAL INCOME PER INSURED PERSON
Country
Argentina
Australia
Belgium
Canada
Denmark
Finland
France
Great Britain
(contribution income)
Italy
N e w Zealand
Spain
Sweden
Switzerland
Union of South Africa
Uruguay
Voluntary
1924
1923
1925
1925
1924
1924
1924
Insurance
$
24.99
£
4.68
Belgian franc 81.85
$
6.40
Krone
31.02
Finn, m a r k 1 4 8 . —
Franc
31.95
1924
1924
1924
1925
1924
1925
1924
1925
Compulsory
France :
(a) Alsace-Lorraine
(ft) Miners'insurance
Germany :
(a) General system
(b) Miners'insurance
Great Britain
Norway
Poland
Serb-Croat-Slovene
Kingdom
Amount in national
currency
Year
£
Lira
£
Peseta
Crown
Swiss franc
£
Peso
Amount in
gold francs
44.80
110.84
20.19
33.17
26.91
19.32
8.66
1.42
24.52
6.94
27.70
24.69
35.86
4.11
4.85
32.52
5.54
159.00
20.59
34.32
35.86
94.16
24.79
r
nsurance
1924
,,
Franc
185.57
139.06
50.29
37.69
1924
,,
1925
1925
1924
Mark
£
Krone
Zloty
58.18
89.69
2.70
66.57
55.00
71.83
110.54
67.50
61.77
54.50
1925
Dinar
434.25
38.37
Average values expressed in national currencies would not of
course be comparable. They have been converted into gold francs,
GENE.RAL INTRODUCTION
XL
but even so it must be admitted that the same quantity of gold
possesses different purchasing power from one country to another
or from one time to another in the same country, especially when
exchanges and prices are markedly unstable. The averages in
gold francs therefore only enable a very rough comparison to be
made between the resources of national voluntary insurance
systems.
However that may be, the table brings to light striking difference
between the ample incomes of extra-European systems such as
those of Australia, South Africa, New Zealand, and Argentina on
the one hand, and the limited means of the European systems. In
general, the income of voluntary insurance systems in Europe is
decidedly small; in the most favourable cases (Denmark, Sweden,
Switzerland), it is not on the same scale as the income of the better
compulsory insurance systems, being very far behind that of the
best and oldest of such systems and less even than that of the
most recent and least developed. The deficiency is particularly
noticeable in Belgium, France, and Italy.
ASSETS
The financial system adopted by voluntary sickness insurance
institutions is that of the annual balancing of costs and income.
This means that they need accumulate reserve funds only for the
purpose of meeting special charges, such as those due to a serious
epidemic.
As a rule the supervisory authorities recommend
recognised funds to institute a reserve fund equal in amount to
the annual expenditure. This proportion was in fact found sufficient
on the occasion of the great influenza epidemic of 1918, when the
expenditure in Denmark and Switzerland amounted to 125 to
130 per cent, of the income for the year. In actual fact, the assets
of the sickness funds are usually well above this level.
Assets
Country
Australia (Victoria)
Denmark
Finland
Great Britain
Italy
New Zealand
Sweden
Switzerland
Union of South Africa
Year
Currency
1925
1925
1924
1924
1924
1924
1924
1925
1924
Crowns
Marks
£
Lire
£
Crowns
Francs
£
£
Total
4,065,808
34,727,653
12,260,929
72,468,582
101,917,195
2,955,340
28,345,194
45,861,503
398,024
Annual
expenditure per
Per
member memher
26.17
24.79
207.39
12.34
93.31
33.80
36.91
39.53
8.23
3.68
23.80
83.50
1.45
19.63
4.84
17.10
30.84
3.21
GENERAL INTRODUCTION
XLI
Except for Denmark, these few figures indicate a marked tendency to accumulate funds. At the same time, the capital invested
in creating and running curative and preventive social institutions
is almost negligible. This very marked inclination to accumulate
large reserves is due to several factors, some of which only are
economic or social: small or fluctuating membership; excessive
number of small funds which dare not or cannot undertake largescale operations; timidity on the part of the administrative bodies,
which are more interested in thrift than in truly creative social
msurance.
§ 5. — Risks Covered and Benefits
RISKS COVERED
The principal object of mutual benefit societies is to insure
against the risk of sickness. Some institutions also undertake,
either separately or simultaneously, insurance against invalidity,
old age, and death. Sometimes again, as in Belgium, the insurance
funds, organised in large federations, cover the heavier risks
represented by the serious national diseases, such as tuberculosis.
While sickness insurance funds are able to work with only a
small membership, invalidity insurance and even old-age and
survivors' insurance institutions, which grant costly benefits
payable over a long period, must have a large membership in
order to secure that financial stability which can only be obtained
by distributing the losses over a large mass of insured persons.
Thus, with their relatively small membership, the mutual benefit
societies are not able to take up these other branches of insurance
except in special cases. For this reason, legislation concerning
voluntary sickness insurance institutions hardly ever permits
them to undertake several branches of insurance simultaneously.
In Finland, the law forbids recognised institutions to engage
in invalidity and old-age insurance: only mutual benefit societies
specially created for this purpose may undertake insurance of this
kind. In Belgium, insurance against old age and death cannot
be directly undertaken by recognised mutual benefit societies:
they must operate through pension funds and the General Provident
and Pensions Fund, which work under the supervision of the State
and are guaranteed by it. In Denmark, invalidity insurance has
become compulsory since 1921; the sickness funds do not act as
XLII
GENERAL INTRODUCTION
insurers, but merely assist in the administration. The case is the
same in Sweden, where the introduction of compulsory old-age
insurance has much reduced the activities of mutual benefit
societies in this domain. In fact, in these countries the efforts
of the mutual-aid movement are concentrated almost entirely on
sickness insurance, maternity being generally assimilated to sickness
for purposes of benefits.
The case is different in those other countries where compulsory
insurance against invalidity and old age has not been established.
The business of covering these two risks must then be performed
by mutual benefit societies, and institutions which insure simultaneously several risks are to be met with in Spain, France, Italy,
and Switzerland. There are not many in Switzerland, where most
institutions confine their activity to sickness insurance; the sickness
funds recognised by the Confederation, indeed, are only authorised
to cover several risks if their operations in other branches of insurance are kept quite distinct from their sickness insurance work,
which is their main activity.
In Argentina, France, and Italy, on the contrary, insurance
against several risks is practised on a larger scale. In France, the
number of persons insured simultaneously against sickness and
old age is larger than that of persons insured only against sickness;
likewise, the school children's societies all have as their principal
purpose the insurance against sickness and old age.
BENEFITS IN GASH
Voluntary sickness insurance, like its compulsory counterpart,
generally grants to insured persons in case of sickness, benefits
both in cash and in kind (medical aid and drugs, hospital
treatment, etc.).
The cash benefits include in the first place the daily allowances,
which account for the greater part of the insurance income. Nursing
benefit, assistance to convalescents and distressed members,
allowances to dependants of deceased members, and funeral benefits
are also provided, but have only secondary importance.
The rate and duration of these benefits are not as a rule prescribed
by law; the Danish, Swedish, and Swiss laws, however, fix a
minimum rate. In other countries the determination of the amount
of benefit is left to the rules of the societies, which establish uniform
rates independent of the wages or income of the insured.
GENERAL INTRODUCTION
XLIII
Similarly, the duration of benefits is prescribed only by the
same three laws (Denmark, 26 weeks; Sweden, at least 90 days;
Switzerland, at least 180 days).
In whatever manner the daily allowances may be calculated, in
the present state of development of the mutual-aid movement they
can only afford insufficient relief to insured persons who are unable
to earn through sickness. This was already true before the war,
but during the last ten years the difference between the cost of
living and the rate of cash benefits has become further accentuated.
This phenomenon is visible especially in those countries where,
during the post-war period, the currency has deteriorated. Nowhere
have benefits been raised proportionately to the index of the cost
of living. It is enough to mention that in Belgium the mutual
benefit societies pay their sick members only three or four francs a
day ; that the case is no better in France where, in 1924, the average
cash benefit per sick person per day was 3.1 francs for all societies.
The same fall in the real value of benefits may be noted, though to
a less extent, in countries where the currency has remained stable,
but where the cost of living has considerably risen. Thus, in
Switzerland, the average value of cash benefits does not exceed at
present the sum of 3 francs per sick person per day.
In a few countries (Belgium, Denmark, Switzerland), the funds
may grant their members, in addition to the benefits prescribed in
the rules, a discretionary relief which generally takes the form of
assistance to persons seriously ill or to convalescents, to enable them
to complete their cure. Nevertheless, these additional benefits do
not appreciably increase the value of the ordinary benefits, so that,
on the whole, it is certain that the cash benefits of voluntary
sickness insurance, much smaller as they are than those of compulsory sickness insurance, are inadequate and without relation to
the cost of living and the rate of wages.
BENEFITS IN KIND
At the present time social insurance can no longer be satisfied to
provide a small cash benefit. It must first of all restore the health
of the sick person as soon as possible, so that he may resume his
occupation. For this reason, in modern systems of compulsory
insurance, benefits in kind are gradually becoming predominant.
This tendency is likewise visible in voluntary insurance, where,
however, the development is less rapid. Mutual benefit societies
XLIV
GENERAL INTRODUCTION
generally grant by way of benefit the payment of the whole or part
of the cost of medical attendance, drugs, hospital treatment, and
sometimes dental treatment.
Besides these regular benefits, some institutions grant additional
benefits, the object of which is usually to enable patients to prolong
their stay in a hospital (Belgium, Denmark, Switzerland) or procure
artificial limbs.
Tendencies in the matter of benefits in kind, whether regular or
optional, are determined mainly by the social outlook of mutual
benefit societies in the several countries. Whereas in western and
southern Europe voluntary insurance has retained an essentially
individual character, in Belgium, Denmark, and Switzerland, on the
contrary, it is exhibiting a clear tendency to protect the family as
a whole. This development, the inspiration of which evidently
proceeds from compulsory legislation, aims at providing healthy
conditions of living for the workers both at home and in the factory.
In Belgium, where voluntary sickness insurance has grown remarkably since 1920, the family medical service alone has cost more
than 50 million francs out of a total expenditure on benefits of
82 million francs. These two figures illustrate well the efforts
which are being made by the Belgian funds to improve their
benefits in kind. By different methods the Danish and Swedish
institutions have likewise obtained good results in the matter of
widening the scope of medical benefit; in Denmark, medical aid is
very frequently provided as an optional benefit to the children of
the insured person, and in Switzerland, schoolchildren's insurance
against sickness has been established on a large scale.
THE
PROPORTION BETWEEN BENEFITS IN CASH AND BENEFITS
IN KIND
It is interesting to enquire what is the relation between the
values of benefits in cash and benefits in kind granted by voluntary
insurance, and to what extent the provision of medical aid and
drugs has been developed.
In order to answer these questions, a table has been compiled
from such statistics as were available, showiag the distribution 'f
the total expenditure of voluntary insurance institutions between
benefits in cash and benefits in kind.
GENERAL INTRODUCTION
XLV
DISTRIBUTION OF TOTAL EXPENDITURE OF VOLUNTARY
INSURANCE
INSTITUTIONS BETWEEN BENEFITS IN CASH AND BENEFITS IN KIND
Country
Australia
Denmark
Finland
France
New Zealand
Sweden
Uruguay-
Year
/
I
/
l
f
i
/
1
1914
1923
1920
1925
1913
1924
1913
1923
1924
/ 1913
I 1924
1925
Benefits
tn cash
Benefits
in kind
Per cent.
Per cent.
40
38
18.5
18.4
61.3
40.2
41.2
34.2
30
88
82
6.7
32
35
68.9
70
24
32.3
40.1
49.2
28
2.3
2.7
90
In the case of Argentina, Spain and Switzerland, the statistics
allow the distribution of the benefit expenditure between cash
benefits and benefits in kind to be calculated, as shown in the
following table.
DISTRIBUTION OF BENEFIT EXPENDITURE OF VOLUNTARY INSURANCE
INSTITUTIONS BETWEEN BENEFITS IN CASH AND BENEFITS IN KIND
V pe aa rr
Country
*
Argentina
Spain
Switzerland
f
I
/
t
1924
1915
1925
1914
1924
1
|
Benefits
in cash
Benefits
in kind
Per cent.
Per cent.
79.86
87.8
75.8
73.3
50.4
20.14
12.1
24.2
26.6
49.5
Conclusion
The foregoing survey, notwithstanding its brevity and deficiencies, will serve to reveal how far voluntary sickness insurance has
proceeded in its development. Through more than five centuries,
XLVI
GENERAL INTRODUCTION
a variety of institutions in turn — craft guilds, journeymen's
fraternities, friendly societies, trade unions and employers' welfare
schemes, have accomplished a great task in organising mutual aid.
At the present day the mutual-aid movement, aware of the
workers' need for protection, is endeavouring to adapt its organisation to the objects it desires to achieve. Mutual benefit societies,
with a view to conserving or increasing their membership, are
rendering their rules more elastic, slackening their conditions for
admission, improving their machinery and widening the sphere of
their activities. Aided by State subsidies and guided by the
supervisory authorities, they are beginning the long and difficult
process of concentration, which will enable them to gather sufficient
membership (so that the good risks will balance the bad) and to
extend their curative benefits.
Nevertheless, in spite of the force of this movement of social
solidarity, freely created by the members, it cannot be considered
as offering a fully satisfactory solution to the problem of workers'
insecurity. Its effectiveness appears to be limited by three
obstacles: small and unstable membership, insufficient revenue
and benefits, dispersal of effort.
The scope of voluntary insurance remains too narrow: a large
section of the wage-earners and the poorer population generally have
failed to join provident institutions. This failure is especially
marked in the case of persons whose earnings are low, and who, by
reason of their precarious livelihood are more subject to disease,
and whose need of insurance against the risk is therefore more
pressing. Moreover, membership of mutual benefit societies is not
constant, but diminishes appreciably whenever an economic crisis
occurs which causes unemployment and reduces wages.
In spite of the financial aid of the State, the resources of voluntary
insurance funds are generally very limited. A general meeting
does not willingly consent to the raising of the contribution. The
inevitable result is that benefits are inadequate and the insured have
to bear the greater part of the income loss and medical expenses.
Lastly, the geographical distribution of voluntary insurance
institutions in any country is far from systematic: there are too
many in the towns and too few in the rural districts. By reason of
their number in certain areas they interfere with one another:
if one grows it is at the expense of another, the stability of which is
diminished, and the dispersal of effort hinders the organisation of a
good medical service and the creation of the necessary curative
establishments.
GENERAL INTRODUCTION
XLVII
The sole effective remedy seems to be to render insurance compulsory. Such was the view expressed by an imposing majority of the
delegates to the Tenth International Labour Conference (MayJune 1927), which based the first international regulation of sickness
insurance on the compulsory principle. Such also is the view of
the mutual-aid movement itself, which, in the majority of countries, in spite of its traditional attachment to the idea of individual
liberty and private initiative, is supporting the principle of compulsion. This support, afforded at the time of the discussion on the
introduction of compulsory insurance, in particular in Belgium,
Italy, Sweden and Switzerland, was recently emphatically confirmed
by the International Conference of Unions of Mutual Benefit
Societies and Sickness Insurance Funds, which met at Brussels in
October 1927.
The Conference has defined its position in the following t e r m s :
The most effective form of systematic provident effort for preventing and
remedying the loss of productive power in the workers consists in compulsory
insurance, which may be usefully supplemented by voluntary thrift.
The management of compulsory social insurance should be entrusted,
under the supervision of the public authorities', to self-governing institutions
administered in the exclusive interest of insured persons and the nation at
large.
Although the mutual-aid movement thus accepts the compulsory
principle, it does not by any means cease its activity: on the
contrary it demands an important place in the administration of
compulsory insurance. Mutual benefit societies desire to be the
exclusive, or at least the principal, machinery for carrying out the
compulsory scheme and to continue at the same time to insure
voluntarily those compulsorily insured persons who wish for
additional benefits and those workers — independent workers or
highly paid wage-earners — who are outside the scope of compulsory insurance.
The final success of this all-important claim appears to depend
very largely on mutual benefit societies themselves and on the
extent to which they are able to organise themselves efficiently.
The essential purpose of sickness insurance is nowadays the
restoration of the health of the insured person or his dependants,
so that benefits in kind must become predominant. There is no
doubt that the satisfactory organisation of medical treatment and
especially the systematic provision and use of medical equipment,
corresponding to the progress in medical science and technique, can
be most easily attained b y concentration of effort on a territorial
basis.
XLVIII
GENERAL INTRODUCTION
It is therefore to this task of unifying and co-ordinating its
institutions that the mutual-aid movement must address itself.
The results which it has obtained in the past, its present vitality
and the devotion of its leaders allow one to hope that it will be able
to accomplish rapidly the necessary work of reorganisation and
that it will be able to undertake successfully, in administering
compulsory insurance, the important and lofty mission to the
honour and responsibility of which it lays claim.
ARGENTINA
Sourees of Information
Communication of the Argentine Government Representative to the
Governing Body of the International Labour Office (January 1926).
Chronicle of the National Labour Department, 1925, p. 1657.
INTRODUCTION
The mutual-aid movement in the Argentine Republic was born
in the latter half of the nineteenth century, but for over 60 years
its growth was restricted by the want of development in the technical organisation of voluntary sickness insurance. An energetic
campaign led by the Government in conjunction with the Argentine
Social Museum and a French expert (1912) resulted in a number
of technical reforms being introduced in the organisation of t h e
mutual benefit societies, and infused a certain amount of life into
the mutual-aid movement, especially in the districts of Buenos
Ayres, Rosario, and La Plata.
Lack of official information on the mutual-aid movement as a
whole has necessitated the division of this study into two Chapters,
the first being devoted to the legal status and the organisation of
the voluntary sickness insurance institutions, while the second,
limited to the results of an official enquiry published in 1925 by the
National Labour Department, deals only with the activity of 55
mutual benefit funds situated in the town of Buenos Ayres.
2
VOLUNTARY SICKNESS INSURANCE
CHAPTER I
THE LEGAL STATUS AND ORGANISATION OF THE VOLUNTARY
SICKNESS INSURANCE INSTITUTIONS
§ 1. — Legal Status
The legal status of mutual benefit societies in the Argentine
Republic is governed by the general provisions of the Civil Code.
A number of schemes have been submitted to Parliament to
provide the mutual benefit societies with a legal status, but up to
the present no enactment has been promulgated. Members'
privileges are therefore determined by the principles and rules of
common law. At the same time mutual benefit societies desiring
to be recognised as corporate bodies are required to submit their
constitution and rules to the Government authorities for approval.
In such instances a special official (inspector of justice) is entitled
to be present at the general assembly of societies held for the
purpose of electing office bearers. This official is entitled to
exercise the supervision necessary to ascertain that the elections
take place in conformity with the rules. The insured persons
may refer disputes of an administrative character to the Ministry
of Justice when such disputes arise in consequence of infringements
of the regulations by the management. If the complaint proves
to be well-founded, the corporate status may be withdrawn from the
defaulting society as a punishment.
§ 2. — Types of Funds
In the Argentine Republic, as in all other States of Latin America,
mutual benefit societies sometimes make nationality a condition of
membership. This peculiarity is due to the importance of the
immigrant population in Latin-American States, which is especially
great in Argentina.
ARGENTINA
3
In 1914 there were 979 mutual benefit societies, of which membership was based on nationality. These included
465
250
172
92
Italian societies;
Spanish societies;
Argentine societies;
French societies.
At the same period there were also 181 funds not imposing a
certain nationality as a condition of membership.
Politically the mutual-aid movement in the Argentine Republic
is divided into three groups of funds. The first and most important
group is composed of associations not concerned with labour
questions. The second group includes occupational associations
founded by workers' organisations, while the third is made up of
establishment funds, the management of which is, as a rule, in the
hands of the staff under the supervision of the beads of the establishment concerned, who are entitled to exercise this privilege in
consideration of the financial aid given by the establishment to the
workers' funds.
The constitution and rules of the mutual benefit societies do not
generally contain any conditions respecting sex or age, which is
equivalent to saying that the funds accept as members men, women,
and children alike.
§ 3. — Administration of the Funds
With the exception of establishment funds over which the
employer exercises the right of supervision, the mutual benefit
funds are managed by the insured persons themselves. A general
assembly of members, or, for large territorial funds, a general
assembly of delegates, appoints from among its members a president,
a treasurer, and assessors, who form the management committee
of the fund. The assembly also nominates auditors, who are chosen
from among the members of the society concerned.
4
VOLUNTARY SICKNESS INSURANCE
CHAPTER II
VOLUNTARY SICKNESS INSURANCE INSTITUTIONS
IN BUENOS AYRES
§ 1. —Funds and their Membership
According to an enquiry made in 1924 by the National Labour
Department, the membership of 55 societies established in Buenos
Ayres was as follows:
STATISTICS OF MEMBERSHIP FOR 1 9 2 4
Number
of
funds
Number of members
Men
AVomen
Children
Total
Average
membership
per fund
55
82,473
44,256
20,563
147,292
2,678
The high average membership of the funds shows that the official
enquiry was confined to the more important and probably the
better organised funds, such as the Mutual Benefit Society of
Argentine Railwaymen, the Workers' Mutual Benefit Association
of Buenos Ayres, which had at that period 8,475 members, and the
Mutual Benefit Society of the " Anglo-Argentina " Tramway
Company, the membership of which included 13,383 men, women,
and children.
§ 2. — Risks Covered
The sphere of activity of the mutual benefit societies is generally
limited to voluntary sickness insurance risks and funeral benefits.
In some cases the institutions grant certain benefits to the survivors
5
ARGENTINA
of deceased members or to persons afflicted by invalidity. But
these two latter risks, which require a developed technical organisation are but rarely undertaken.
SICKNESS INSURANCE BENEFITS
Sickness insurance benefits include medical treatment and the
supply of drugs at home or in a medical institution, and daily
allowances intended partly to compensate for wages lost in consequence of illness.
Some of the institutions assimilate maternity risks to sickness
risks and grant medical assistance to women at childbirth.
On 31 December 1924 the total cost of benefits during the year
was as follows for the 55 societies covered by the official enquiry:
AMOUNT AND CLASSIFICATION OF BENEFITS FOR 1 9 2 4
Total amount
Number of
of benefits insured persons
Nature
of benefits
$
Benefits in kind
Cash benefits
(a) Daily allowances
(6) Funeral expenses
Total
Average cost
of benefits
per insured
person
$
1,717,926
147,292
11.66
345,602
87,748
147,292
147,292
2.35
0.60
2,151,276
147,292
14.61
The relative proportions of benefits in kind and cash benefits
to the total cost of sickness benefits were 79.14 and 20.86 per cent.
respectively.
§ 3. — Resources and Capital of the Funds
FINANCIAL RESOURCES
In order to finance their benefits, the societies raise money
from various sources, some stable, some unstable. Regular sources
of income are represented by the contributions, of active members,
which vary according to sex and age, contributions of honorary
members, the interest on capital, and, for establishment funds,
employers' contributions. Special sources of income include the
6
VOLUNTARY SICKNESS INSURANCE
proceeds from numerous festivals organised by the mutual benefit
societies, donations, and legacies.
REVENUE OF THE FUNDS FOR 1924
»
Source
of revenue
Total amount Number of
of revenue insured persons
S
Insured persons' contributions
Other sources,including contributions from the management of establishments and
from patrons, interest from
capital, donations, legacies
and other sources of revenue
Total
Average
amount
of revenue
per Insured
person
$
2,602,478
147,292
17.67
1,079,329
147,292
7.32
3,681,807
147,292
24.99
CAPITAL OF THE F U N D S
On 31 December 1924 the total capital of the 55 mutual benefit
societies examined in the town of Buenos Ayres was $11,379,799,
or $77.27 per member, which represents a sum equivalent to five
times the amount of the cost of insurance in 1925.
AUSTRALIA
FRIENDLY SOCIETIES
Acts
N E W SOUTH
WALES
An Act to consolidate the Acts relating to friendly societies, No. 46, 1912,
as amended by Acts No. 1,1913, No. 14,1913, No. 56,1916, and No. 38,1920.
Assented to 26 November 1912. Printed in accordance with the Amendments
Incorporation Act, 1906.
An Act to amend the Friendly Societies Act, 1912, No. 26,1922. Assented
to 24 November 1922.
QUEENSLAND
An Act to consolidate and amend the law relating to friendly societies.
Assented to 29 October 1913.
An Act to amend the Friendly Societies Act of 1913 in certain particulars.
Assented to 2 November 1914.
An Act to further amend the Friendly Societies Act of 1913 in a certain
particular. Assented to 30 October 1924.
SOUTH AUSTRALIA
An Act to consolidate certain Acts relating to friendly societies. Assented
to 20 November 1919.
An Act to further amend the Friendly Societies Act, 1919, and for other
purposes. Assented to 7 December 1921.
An Act to further amend the Friendly Societies Act, 1919. Assented to
19 November 1925.
TASMANIA
The Friendly Societies Act, 1888.
The Friendly Societies Amendment Act, 1888.
An Act to consolidate enactments and amend the law relating to trustees,
1898.
VICTORIA
An Act to consolidate the law relating to friendly societies. Assented to
6 September 1915. No. 2656.
An Act to amend the Friendly Societies Act, 1915. Assented to 6 September
1915. No. 2602.
An Act relating to agreements between medical practitioners and friendly
societies or branches thereof and for other purposes. Assented to 4 April
1918. No. 2946.
An Act to amend the Friendly Societies Act with respect to dividing societies.
Assented to 28 November 1922. No. 3198.
8
VOLUNTARY SICKNESS INSURANCE
WESTERN
AUSTRALIA
A n A c t t o consolidate t h e law relating t o friendly societies as amended b y
A c t s N o . 34 of 1904, No. 8 of 1913, No. 6 of 1917, N o . 13 of 1918, No. 3 of
1920, a n d No.48 of 1923. Assented t o 23 N o v e m b e r 1894.
Reports
COMMONWEALTH
Official Year Book of the Commonwealth of Australia, N o s . 9, 10, 11 and 18.
Summary
of Australian
Financial
Statistics,
1915-1916 to 1924-1925.
F i n a n c e Bulletin N o . 16.
First Progress Report of the Royal Commission on National Insurance, 1925.
N E W SOUTH W A L E S
Official Year Book of New South Wales, 1923.
Friendly Societies and Trade Unions.
Reports of the Registrar for the Twelve
Months ended 30 June 1924 and 1925. Report on the Quinquennial
Valuation
of Friendly Societies as at 31 December 1914.
QUEENSLAND
Fortieth and Forty-First
1925 and 1926.
Reports
of the Registrar
of Friendly
Societies,
etc.
and Sixth
Valuations
of
SOUTH AUSTHALIA
Seventh Report of the Public Actuary on the Fifth
All Registered Societies as at 31 December 1914.
TASMANIA
Friendly
Societies.
Report of the Government Statistician
for the Year
1924.
VICTORIA
Victoria Year Book, 1924-1925.
Forty-Seventh
and Forty-Eighth
Annual
and 1926.
Reports
on Friendly
Societies,
1925
Report of Proceedings
by the Registrar of Friendly Societies for the
ended 30 June 1914 and the Eighteen Months ended 30 June 1926.
Year
W E S T E R N AUSTRALIA
AUSTRALIA
9
INTRODUCTION
Sickness insurance in Australia is conducted almost exclusively
by friendly societies 1. These organisations are offshoots of the
English friendly societies and have found a fertile soil in Australia,
where they now possess a membership of over half a million and,
because they also provide benefits for members' dependants, affect
perhaps one-third of the total population.
The type of English friendly society which has become naturalised
in Australia is that of the affiliated order. An order is a mutual
benefit society having a central body and numerous branches,
each serving a district. The central body decides the general policy
of the order and exercises a certain degree of supervision over the
branches, assisting them with advice and usually affording them
financial aid from a central fund to which they all contribute. The
societies, although their primary aim is the provision of benefits,
serve also to promote friendly intercourse among their members.
A spirit of solidarity is maintained by the ritual, of a masonic
character, which accompanies initiation and festivals.
Legislation concerning friendly societies is a matter which falls
within the competence of the States (New South Wales, Queensland,
South Australia, Tasmania, Victoria, Western Australia), all six
of which have enacted laws to secure the good government of the
societies and their financial stability. The laws bear a close resemblance to one another, all of them being originally based upon the
British legislation, and may conveniently be described together.
The laws provide for the compulsory registration of friendly
societies by a State authority and prescribe the risks which they
may insure, the matters to be dealt with in their rules, and the
measures of supervision to be exercised by the State over their
financial administration.
i Very few trade unions have sickness benefit funds, and only 30,000 out
of a membership of 700,000 contribute to such funds.
10
VOLUNTARY SICKNESS INSURANCE
§ 1. — Registration
OFFICE OF REGISTRAR OF FRIENDLY SOCIETIES
In the five mainland States every mutual benefit society is
required to be registered or approved before it can undertake
insurance; in Tasmania, however, registration is voluntary. An
official is therefore appointed in each State to examine whether
the constitution of a society applying for registration is in conformity with the terms of the law. This official is the Registrar of
Friendly Societies in most of the States, but in South Australia
the function is performed by the Chief Secretary, who is assisted
by the Public Actuary.
The duties of the Registrar comprise not only the examination
of the rules of friendly societies, but also the approval of any
amendments to the rules and the supervision of their financial
administration. Moreover, he is required to prepare certain data
for the information of societies, namely, statistics of the working
of societies, death and morbidity rates and tables of payments
to be made in case of death, sickness and old age. In certain
circumstances the Registrar can inflict the sanction of suspension
or even cancellation of the registration, e.g. in case of wilful violation
of the law. In South Australia there is no provision for the registration of societies, but the Act contains a list of societies which are
authorised to undertake insurance, and the Governor has power
to add other societies to the list.
CONDITIONS OF REGISTRATION
In order to be registered a society must comply with the requirements as to objects, rules, and minimum membership. Branches
are defined in the Acts as any group of members of a society who
are under the control of a central body, but have a special fund
administered by themselves or by a committee or officers appointed
by themselves. The situation of branches for the purpose of
registration differs according as they do or do not contribute to a
fund controlled by the central body. In the latter case they are
treated as separate societies. If, however, the branches contribute
to a central fund, then their administration is governed by the
general rules of the society and it is sufficient if these general rules
are registered.
AUSTRALIA.
11
OBJECTS
All societies established for the purpose of providing by the
voluntary contributions and donations of their members' benefits
in certain prescribed emergencies are required to be registered.
The list of benefits differs slightly from State to State, but the
following are to be found in all the Acts:
Payment of a certain sum on the death of a member, his
wife or widow.
Relief or maintenance of members, their wives and children,
in sickness or widowhood.
Provision of medical attendance and medical and surgical
appliances for members and their relatives.
In all the States except South Australia the list of benefits
includes in addition the following:
Fire insurance of the implements of trade of members.
Funeral expenses of a member or his relatives.
Relief or maintenance of members when on travel in search
of employment or in case of shipwreck or loss or damage of
boats or nets.
In practice, however, the objects of approved societies are
generally limited to the provision of benefits in case of sickness
and the payment of a small sum on the death of a member or his
wife.
RULES
The rules of societies and branches must make provision in
respect of certain prescribed matters of which the following appear
to be the most important:
The objects for which the society is to be established.
The purposes for which its funds are to be used.
The terms of admission of members.
The conditions under which the members are entitled to
benefits.
The mode of holding meetings, the right of voting, the
making, rescinding or amendment of rules.
12
VOLUNTARY SICKNESS INSURANCE
The appointment and removal of the committee of management, treasurer, and other officers.
In the case of a society with branches, the composition of
the central body and the control to be exercised by it over
the branches.
The investment of the funds and the keeping of accounts.
The manner of settling disputes between the society and
any of its members.
MINIMUM
MEMBERSHIP
No society may be registered unless it consists of at least 7
persons in New South Wales and Queensland, and 10 persons in
Tasmania, Victoria, and Western Australia. The Acts of Queensland
and Western Australia expressly provide for the cancellation of
registration if the number of members falls below the minimum.
STATISTICS OF NUMBER AND SIZE OF SOCIETIES
TABLE SHOWING THE NUMBER OF REGISTERED FRIENDLY SOCIETIES
AND BRANCHES IN THE SEVERAL STATES IN 1 9 1 4 , 1 9 2 3 , 1 9 2 4
AND 1925.
N u m b e r of societies
Number of branches
State
1914
New South
Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Commonwealth
1924
1923
1924
1925
1914
—
20
36'
| 18
34'
18
35i
182
1,874
17
12
46
17
; 20
; 60*
(17)3
20
60*
17*
578
632 (643)» 643»
209
190
184
1,524 1,469* 1,469* 1,476'
15
| 15
155
155
—
166
164
58'
—
287
1923
1925
2,122' 2,159' 2,214'
546
5452
290
—
3245
3246
5,325
Most of the societies, including all the larger ones, are affiliated
orders. The remainder are purely local societies without branches
i 12 months ended 30 June. 2 6 months ended 30 June, a N 0 figures for year 1924 but
only for 12 months ended 30 June 1925. * 18 months ended 30 June 1924. ¡> 18 months
ended 30 June 1925.
13
AUSTRALIA
and having a small membership. The finances of the branches of
an order and its central body are to a greater or less extent consolidated, so that for the purposes of financial stability the unit may
be regarded as being the society.
AVERAGE NUMBER OF MEMBERS OF A SOCIETY IN 1914, 1 9 2 3 ,
1924, AND 1925
State
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Commonwealth
1914
2,612
3,927
1,969
3,473
1,327
—
1923
6.3141
3,314
4,262
1,233
2,564*
1,306
3,282
1924
1925
6,442*
3,421 3
(4,351)
1,221
2,564*5
1,423
6.4741
3,461 2
4,351 1
3,380
—
2,679
1,4235
i 12 months ended 30 June. 2 6 months ended 30 June, s No figures for year 1924 but
only tor 12 months ended 30 June 1925. * 18 months ended 30 June 1924. M8 months
ended 30 June 1925.
§ 2. — Membership
TERMS OF ADMISSION
The terms of admission are laid down by the rules of each society.
They may relate to the occupation, religion, nationality, diet, sex,
age, or health of the applicant.
There are a number of relatively small societies the membership
of which is confined to employees in a particular undertaking. Some
societies are intended for Roman Catholics and others for Protestants. There are a few societies for persons of German or Irish
descent. Several societies admit only persons who promise not to
drink alcoholic liquor. Most societies are open to both sexes, but
a few are composed of one sex only.
Friendly societies admit as members only persons who are
between certain age limits. The minimum age is in several States
prescribed by law. For example, in New South Wales, Queensland,
and Victoria a person may become a member if he is over the age
of 3; when he is over the age of 16 he may execute all instruments
necessitated by the rules; but only when he reaches the age of 21
may he be appointed an officer of the society.
14
VOLUNTARY SICKNESS INSURANCE
There is no legal maximum age for admission, but the maximum
age ordinarily fixed b y the rules of a society is 45, although some
societies accept members for partial benefits up to the age of 55.
Applicants for membership must be medically examined by the
society's doctor and be certified by him as sound in health.
STATISTICS OF MEMBERSHIP -
The following tables indicate the movement of the membership
of friendly societies and the distribution of membership according
to sex and age.
MEMBERSHIP OF FRIENDLY SOCIETIES IN 1914,
State
1914
1923,
1923
1924,
1924
AND
•
1925
1925
New South 7Wales 6
Queensland
6
South Australia
Tasmania 6
Victoria '
Western Australia
182,325 214,663 1 219,026 » 226,576 s»
52,247 s 59,649
61,571
62,305
65,540
72,454 (74.073)8 74,073 *
23,399
24,660. 24,410
159,741 153,840* 153,840* 155,378 1
19,900
15,590
21,350« 21,350 s
Commonwealth
503,152
540,856
554,270
—
i 12 months ended 30 June. 2 6 months ended 30 June 1925. 3 No figures for 1924
but only for 12 months ended 30 June 1925. * 18 months ended 30 June 1924.
5 18 months ended 30 June 1925. 6 Including juvenile membership. 'Excluding
juvenile membership. 8 Figures for 1916.
DISTRIBUTION OF MEMBERSHIP ACCORDING TO SEX AND AGE
(ADULTS AND JUVENILES) IN
1923
Adults
State
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Commonwealth
Juveniles
Male
Female
182,564
54,663
61,304
22,866
143,053
18,424
15,704
4,986
11,150
1,501
10,787
1,166
16,395
45,294
—
482,874
293
610
The proportion of women to men varies from nearly one-sixth
in South Australia to one-eighteenth in Western Australia. The
AUSTRALIA
15
proportion of women members for the whole Commonwealth was
one-twelfth. The juvenile membership is important only in New
South Wales, where it accounts for nearly one-tenth of the total.
The total adult membership in 1923 was approximately equal
to 9 per cent, of the total population, and to 30 per cent, of the
total number of wage-earners in Australia. In 1914, however, the
proportion of the total population comprised in friendly societies
stood at slightly over ten per cent.
§ 3. — Benefits
Three kinds of benefits are commonly granted by
societies:
friendly
Sickness and invalidity benefit.
Medical benefit.
Funeral benefit.
No society provides an old-age pension or maternity benefits.
SICKNESS AND INVALIDITY B E N E F I T
Conditions for the Receipt of Benefit
Claimants for sickness benefit must produce a medical certificate
of incapacity signed by the society's doctor. They must have
paid their contributions up to date, and in order to obtain full
benefit, they must have completed a period of membership which
varies from one society to another between three and twelve
months : if the qualifying period is not completed, benefit is paid
at half-rate.
Rate and Duration of Benefit
The maximum rate of periodical payments to be made by friendly
societies is in every State prescribed by law:
Per week
New South Wales
£2 2s.
Queensland
£2
South Australia
£3
Tasmania
£1 Is.
Victoria
£3
Western Australia
£3
The rates actually paid, however, are much lower, being generally
the same as were paid before the war. They are fairly uniform
throughout the Commonwealth, and are typified in the following
schedule :
16
VOLUNTARY SICKNESS INSURANCE
Period
Male members
First six months
Second six months
Thereafter
Per week
20s.
10s.
5s.
Female members
Per week
10s.
5s.
2s. 6d.
Thus, the women's benefit is half that of the men's and the rate
decreases in proportion to the length of the illness ; but the allowance
payable after the second six months is continued indefinitely
throughout the duration of the incapacity. This small provision
for invalidity supplements the Commonwealth non-contributory
pension of £1 a week.
A certain number of societies, e.g. in New South Wales and Victoria, allow members, by paying an additional contribution, to obtain
higher sickness benefits ; but this plan has not been entirely successful because the sickness rate among persons who had contracted
for the higher benefits showed a remarkable increase.
How far the ordinary rates of benefit are adequate is best indicated by comparing them with the average rates of wages. The
estimated average adult wage for a full week's work as at 30 June
1924 was £4 14s. 3d. for males and £2 10s. Od. for females.
Statistics of Sickness Benefit
The average period of sick pay per member in 1924 was:
Weeks
New South Wales
Queensland
South Australia
Tasmania
"Victoria
Western Australia
—
1.37
1.79
1.58
1.73
1.02
The average period of sick pay per sick member (duration of
illness) and the proportion of members receiving sick pay were
as follows in 1924:
DURATION OF ILLNESS AND P E R CENT. OF MEMBERS SICK IN 1 9 2 4
State
New South Wales
Queensland
South Australia 1
Tasmania
Victoria
Western Australia
2
i 12 months ended 30 June 1925.
2
Average duration
ol illness
in weeks
Percentage of
members
receiving sick
pay
7.83
9.63
8.60
9.27
7.90
17.46
18.57
18.42
18.66
15.22
18 months ended 30 June 1925.
17
AUSTRALIA
An analysis of the available data relating to the duration of
sickness among friendly society members shows that 7 per cent, of
the cases lasted less than one week, 49 for one week and less than
four weeks, 29 for four weeks and less than thirteen, 7 for thirteen
weeks and less than twenty-six, and 8 over twenty-six weeks.
The total amounts expended on sickness benefit in the various
States during 1914, 1923, 1924, and 1925, and the amount per
member, are shown in the following tables:
TOTAL COST OF SICKNESS BENEFIT IN 1914, 1923, 1924, AND 1925
State
1914
1923
1924
1925
£
£
£
£
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
172,796 230,241 1 247,567 »
249,915 »
37,800
61,720
58,622
65,964 i 76,127
77,984 1
18,787
27,403
26,922
2
155,015 173,387
14,374
17,379
18,705 s 169,879
Commonwealth
464,736
586,257
—
—
i 12 months ended 30 June. 2 Two-thirds of figures for 18 months ended 30 June
1924. s Two-thirds of figures for 18 months ended 30 June 1925. * Figures for 1916.
COST OF SICKNESS BENEFIT PER MEMBER
1914
State
£
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Commonwealth
1923
s. d.
19
14
1 0
16
19
14
0
6
0
0
5
5
18 6
£
s. d.
1
1
1
1
1
1 5
0 8
1 0
2 2
2 6
17 9
1 1 8
1925
1924
£
s. d.
1 2 7
19 0
1 2
£ s.
d.
12
0
1 1 0
0
1 1 11
17 6
—
—
i Cost of benefit in 1916 divided by membership in 1916.
MEDICAL BENEFIT
Beneficiaries
Friendly societies provide medical attendance and medicines not
only for their members, but also for the dependants of members,
viz. wife, male children up to age 16, female children up to age 18,
2
18
VOLUNTARY SICKNESS INSURANCE
widow and dependent children of deceased member, widowed
mother, and dependent brothers and sisters of unmarried members.
No member or his dependants, however, are entitled to medical
benefit if his income at the time of joining the society exceeds a
certain limit laid down in the doctors' agreement. The limit varies
from State t o State: New South Wales, £260 a year; Queensland,
£208 for single and £312 for married men; South Australia, £312;
Tasmania, £208; Victoria, £260 for single and £312 for married
men; Western Australia, £260 for single and £320 for married men.
If he join t h e society at an income below these limits, a member
continues t o be entitled to medical benefit so long as his income
does not exceed in New South Wales £364 a year, in Queensland
£400, in South Australia £450, in Tasmania £312, and in Western
Australia £400.
Medical Attendance and Drugs
The services to be given by a doctor are only such as can be
performed b y a general practitioner, specialist services being paid
for b y private arrangement.
The drugs supplied as part of medical benefit include all those
listed in the British Pharmacopoeia ; patent or preparatory medicines
and surgical appliances must be bought by the member, though
he may obtain them at a reduced price.
Organisation
of Medical and Drug Service
Friendly societies make arrangements wherever possible with
local medical practitioners, such arrangements being generally in
the form of a contract between the individual branch of the society
and the practitioner in accordance with the model form of agreement
accepted b y t h e State branch of the British Medical Association
and the Association of Friendly Societies. The doctor is remunerated
on the basis of an agreed contract rate per member per quarter,
whether the member receives treatment or not. The fee covers
the treatment both of the member and of his dependants.
In some areas friendly societies have adopted another method
of providing medical service. They have associated together for
the purpose of establishing a medical institute where treatment is
afforded by a full-time medical office remployed by the institute ;
but this system is strongly opposed by the British Medical Association.
19
AUSTRALIA.
The arrangements for the supply of drugs to members are usually
made individually by the branches of societies. In urban areas.
drugs are often supplied by dispensaries established by a group
of societies. In the country and small provincial towns, the branches
contract with chemists for the supply of medicines at a fixed rate
per member per quarter.
Statistics of Medical Benefit
The expenditure on medical benefit (remuneration of doctors,
and drugs) and the cost per member in 1914, 1923, 1924, and 1925
are shown in the following tables.
TOTAL COST OF MEDICAL BENEFIT
State
1914
1923
1924
1925
£
£
£
£
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
182,308 269,223 * 280,827 l 288,246 l
59,014
83,404
87,082
35,820 * 74,677
76,848 1
19,732
26,791
27,347
162,211 204,620 2
209,719 1
20,241
23,714
23,026 s
Commonwealth
479,326
682,429
—
—
1
12 months ended 30 June. 8 Two-thirds of figures for 18 months ended 30 June
1924. 8 Two-thirds of figures for' 18 months ended 30 June 1925. * Figures for 1916.
COST OF MEDICAL BENEFIT PER MEMBER
State
1914
1923
1924
1925
£
£
£
£
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
1.00
1.13
0.55
0.84
1.01
1.02
1.25
1.40
1.03
1,08
1.33
1.52
1.28
1.41
1.27
1.08
Commonwealth
0.95
1.26
—
1.04
1.12
1.35
—
i The figures in this table do not represent truly the average annual rate paid for this
service, since many members d o not receive medical attendance from the societies' doctors.
The annual rate paid to medical practitioners varies according
as the district is urban or rural. In the metropolitan areas of the
20
VOLUNTARY SICKNESS INSURANCE
several States the annual remuneration of the doctor per adult
member is as follows: New South Wales, 26s.; Queensland, 24s.;
South Australia, 41s. including medicine ; Tasmania, 20s. ; Victoria,
20s.; Western Australia, 24s. The country rate varies according
to the district, being in sparsely inhabited areas as high as 44s.
Juvenile members and single female members in some instances
are charged lower rates, but in others they must pay the same
rates for medical attendance as an adult married wage-earner.
The number of doctors working under agreement with societies
is estimated at about 1,700, or 40 per cent, of the total number
of doctors in the Commonwealth. The average number of members
for whom each doctor is responsible is about 300.
FUNERAL BENEFIT
Beneficiaries
Friendly societies generally undertake insurance for the payment
of a funeral benefit at the death of a member, and the majority
of members are insured for this benefit. A funeral benefit is also
paid on the death of a member's wife, and in some societies of
that of his child.
Rate of Benefit
No clear distinction is drawn between funeral benefits intended
simply to cover the expenses of burial and lump sum benefits
intended to replace partially the economic loss entailed by the
death of a breadwinner.
The amount which may be assured by a friendly society either
as funeral benefit or in virtue of life assurance is limited by law
in every State. The maxima, which vary widely from State to
State are as follows: New South Wales, £200; Queensland, £200;
South Australia, £100; Tasmania, £100; Victoria, £100; Western
Australia, £300.
The amount of funeral benefit which is, in fact, provided by the
societies also differs greatly from society to society. The minimum
amount for a male member is £20, and the maximum, which is
reached only in a few societies, is £100. The average ordinary
funeral benefit is £35. At the death of the wife of a member £10
or £15 is paid, and at the death of his child, £3 to £5.
Several societies, especially in New South Wales, allow members
to assure their lives up to the maximum legal amount.
21
AUSTRALIA
Statistics of Funeral Benefit
The amounts expended on funeral benefits in the several States
in 1914, 1923, 1924, and 1925, and the cost of funeral benefit per
member were as follows.
TOTAL COST OF FUNERAL BENEFIT
1914
State
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Commonwealth
£
44,446
15,206
32,736*
10,850
31,160
2,600
136,998
1923
£
56,246 1
25,040
32,562
15,124
32,921 *
6,727
1924
£
64,548 1
22,750
1
1925
£
63,302 1
33,751 1
18,772
4,109 8
31,900'
—
168,620
—
112 months ended 30 June. 2 Two-thirds of figures for 18 months ended 30 June 1924.
s Two-thirds of figures for 18 months ended 30 June 1925. * Figures for 1916.
COST OF FUNERAL BENEFIT PER MEMBER
State
1914
s.
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Commonwealth
d.
4 10
5 10
10 0 1
9 3
3 10
2 7
5
4
1923
s.
1924
1925
d.
s.
d.
s.
d.
5 3
8 5
9 0
12 3
4 4
6 10
6 6
4
7
8
5
5
7
9
1
15
5
4
1
3 10
—
i Cost of benefit in 1916 divided by membership in 1916.
§ 4. — Financial Resources
The income of friendly societies consists mainly of contributions,
but partly also of other elements. The latter include entrance fees,
levies, i.e. extraordinary contributions, income derived from
investments, and the donations of members.
22
VOLUNTARY SICKNESS INSURANCE
Only in New South Wales do friendly societies receive a State
subsidy.
The societies possess considerable invested funds.
CONTRIBUTIONS
The funds of societies are divided into two portions, viz. the sickness
and funeral fund and the medical and management fund. The
contribution is shared between these two funds. The part destined
for the sickness and funeral fund varies according to the age of
the member, and ranges from 6d. to Is. per week (Victoria). The
contribution to the medical and management fund generally
remains uniform throughout life, the usual charge being from
8d. to lOd. per week. The total sum contributed by each member
for the ordinary benefits is thus between Is. 2d. and Is. lOd. a
week. A higher contribution may in a few societies be made in
order to secure a larger death benefit.
In certain societies, on the occasion of the death of a member,
a levy of sixpence or a shilling per member is imposed, in order
to provide an additional funeral benefit for his dependants.
STATE SUBVENTION
In virtue of an Act of 1908, the State of New South Wales pays
an annual subvention towards the cost of sickness benefit, medical
attendance, and funeral benefit granted by societies. The subvention
is calculated on the following basis:
Sickness Benefit
The State pays half of the cost of sickness benefit in every case
•where the period of sickness exceeds twelve months, and the whole
cost in such cases if the sick person is a male member aged 65 years
or over or a female member aged 60 years or over. The subvention
may, however, in no case exceed 5s. per week of sickness.
Medical Attendance
The State pays an amount equal to the total contributions
chargeable in each society for medical attendance and drugs in
respect of male members aged 65 years or over and female members
aged 60 or over, provided that rates of contribution in respect of
AUSTRALIA
23
such members may not be different from those chargeable in respect
of younger members.
Funeral
Benefit
The State pays an amount equal to the total contribution chargeable in each society to assure the payment of funeral benefit in
respect of male members aged 65 years or over and female members
aged 60 or over.
INVESTMENTS
For the purpose of providing against unforeseen contingencies,
such as epidemics, the rate of contribution is calculated to produce
a small surplus of revenue over expenditure. The stocks in which
capital funds may be invested are in every State prescribed by
law. Investments must be made either in stocks of the State or
Commonwealth Governments or of municipalities, or in land,
whether by way of mortgage or purchase.
DISPOSAL OF SURPLUS
In South and Western Australia and in Victoria, should a surplus
be disclosed at the quinquennial valuation which is not required
as a reserve for the payment of benefits, the interest in excess of,
4 % per cent, on all capital funds may, with the approval of t h e
competent authority, be applied to any purposes which the society
or branch concerned may prefer, e.g. the building of a meeting hall
or the payment of contributions on behalf of sick or aged members.
The results of post-war valuations have shown that the vast
majority of societies are solvent.
STATISTICS OF FINANCIAL RESOURCES
Revenue and
Expenditure
The following table shows the composition of the total income
of friendly societies in the years 1914, 1923, 1924, and 1925.
24
VOLUNTARY SICKNESS INSURANCE
REVENUE AND EXPENDITURE, 1 9 1 4
Revenue
State
New South
Wales
Queensland
South Australia 1
Tasmania
Victoria
Western Australia
Commonwealth
Expenditure
Entrance
fees, contributions,
levies
Interest,
dividends,
rents
Other
Total
£
£
£
£
496,961
170,002
80,707
30,861
34,915
163,696
64,360
464,008
56,742
8,692
108,224
57,416
1,416,443
Í Figures for 1916.
2
£
612,583
200,863
526,371
140,096
46,906
11,901
48,533
267,344
84,953
620,765
215,325
69,950
467,506
13,280
19,598
90,294
72,564
298,506
161,853
1,886,802
1,491,812
2
Included in interest, dividend, and rents.
REVENUE AND EXPENDITURE, 1 9 2 3
Revenue
State
Entrance
fees, contributions,
levies
£
New South
Wales
Queensland
South Australia
Tasmania
Victoria 3
Western Australia »
Commonwealth
Interest,
dividends,
rents
£
Expenditurs
Other
£
373,650
213,727
146,106
63,841
56,072
215,994
78,118
505,054»
88,750
16,520
187,411
63,248
1,449,791
Total
£
£
875,828
277,568
726,774
215,291
19,142
13,382
103,235
323,886
108,020
795,700
238,849
95,880
603,531
19,716
22,548
105,512
91,368
522,344
214,379
2,486,514
1,971,368
2
1
12 months ended 30 June. a Included in interest, dividends, and rents,
thirds of figures for 18 months ended 30 June 1924.
s Two'
25
AUSTRALIA
REVENUE AND EXPENDITURE, 1924 AND 1925
Rev enue
State
Entrance
fees, contributions,
levies
*
Expenditure
dividends,
rents
Other
Total
£
£
«
*
58,878
920,363
287,488
776,786
216,477
1924
New South
Wales !
Queensland
South Australia
Tasmania
Victoria
Western Australia •
711,058
222,005
—
79,861
—
63,553
150,427
65,483
—
a
—
—.
—
17,608
14,667
112,136
100,724
—
—
—
—
33,463
118,463
100,559
945,568
775,082
21,447
1925
New
South
Wales *
Queensland
South Australia *
Tasmania
Victoria *
732,194
160,801
52,573
—
—
—
222,429
95,889
22,285
340,603
—
—
—
—
518,720
205,695
75,613
. —
800,028
—
247,802
—
572,272
i 12 months ended 30 June. 2 Included in interest, dividends, and rent.
thirds of figures for 18 months ended 30 June 1925. * 12 months ended 30 June.
3
Two-
The amount of the State subsidy in New South Wales in the same
four years was as follows:
1914
1923 1
£23,291
£47,129
1924 »
1925 l
i 12 months ended 30 June.
£51,566
£54,880
26
VOLUNTARY SICKNESS INSURANCE
Accumulated Funds
ACCUMULATED FUNDS OF SOCIETIES IN 1914, 1923, 1924, AND 1925
State
1914
£
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
1,784,931
747,844
1,189,218
241,387
2,644,216
238,374
Commonwealth
6,845,970
1923
1924
£
£
1925
£
2,727,991' 2,871,568'
1,227,043 1,297,852
1,749,332
315,367
326,515
3,838,052 »
349,928
—
3,042,054'
1,334,614
1,842,133'
4,065,808'
378,928
—
—
i At 30 J u n e .
ACCUMULATED FUNDS PER MEMBER IN 1914, 1923, 1924, AND 1925
State
1914
£
£
£
£
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
9.79
14.31
17.81
10.32
16.55
11.98
12.71
20.57
24.37
12.79
13.11
21.08
13.43
21.42
24.87
Commonwealth
13.55
—
1923
1924
13.38
24.92
17.34
—
1925
26.17
17.74
—
§ 5. — Administration
The method of government of each society or branch is decided
by itself, and is laid down in its rules. The ordinary organs of
government are the general meeting of members, the committee
of management, and the officers, who are all elected by the committee. The officers consist of the secretary, treasurer, and also
several trustees in whom the property of the society or branch is
vested. Affiliated orders are organised on the federal principle:
headquarters (which may be situated in England), a regional body,
which is the society for registration purposes, and the local branches.
The regional body (or central body, as it is termed in the Acts)
may retain in its own hands a greater or less degree of rule-making
power, and may to a varying extent centralise the finances of the
branches in consolidated funds.
27
AUSTRALIA
STATISTICS OF COST OF ADMINISTRATION
TOTAL COST OF ADMINISTRATION OF APPROVED SOCIETIES IN 1 9 1 4 ,
1923, 1924, AND 1925
State
1914
£
1923
1924
£
£
1925
£
87,358 139,208 » 145,977 8 145,634 s
45,127
48,023
28,076
44,848
30,538 1 42,877
16,510
16,999
11,880
98,138 2
96,405
78,553
20,384
21,637*
14,709
251,114 362,244
—
—
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Commonwealth
i Figures for 1916. ä Two-thirds of figures for 18 months ended 30 June 1924. s i 2
montas ended 30 June. * Two-thirds of figures for 18 months ended 30 June 1925.
COST OF ADMINISTRATION IN 1914, 1923, 1924, AND 1925
(a) per cent, of total expenditure, and (6) per member
1914
State
(a)
(a)
(6)
s.
New South
Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Commonwealth
1924
1923
s.
d.
(a)
(¡>)
(a)
(6)
s.
d.
1925
d.
16
20
9 6
10 9
19
21
13 0
15 0
19
22
13 4
15 6
14
17
16
9 4
10 2
9 10
18
17
16
12 0
13 4
12 9
17
13 9
20
14
7
22
27
6
21
16
10
0
18
13
4
—
20
—
(6)
s.
d.
19
13
1
18
12
1
17
12
5
3
—
—
§ 6. — State Financial Supervision
The history of friendly society legislation is mainly the history
of increasingly strict State supervision over their activities, and
especially over their financial administration.
Registration is,
as we have seen, compulsory in all States except Tasmania.
28
VOLUNTARY SICKNESS INSURANCE
Registered societies are subjected to State supervision for their
financial administration, in virtue of the provisions to be found
in most of the laws concerning:
contribution tables;
maximum benefits;
methods of accounting;
inspection;
audit and returns;
valuation.
The sanction of cancellation of registration is applied as a last
resort in case of violation of the law and maladministration.
CONTRIBUTION AND BENEFIT T A B L E S
The rules of every registered society, and any amendments
thereto, must be registered, and, since the rates of contributions
and benefits are specified in the rules, the Registrar is able to verify
the actuarial soundness of the rates proposed. The Acts of New
South Wales, Queensland, and Victoria provide that if a society
is warned b y the competent authorities that its rates of contributions
are inadequate, it must adopt adequate rates, otherwise its registration is to be cancelled. In Western Australia likewise the
registration of rules providing insufficient contributions may be
refused, but the Registrar cannot force a society to amend its rules.
He can only make public the fact of the insufficiency.
MAXIMUM BENEFITS
It has already been mentioned that the rates of funeral and sickness benefits are limited by law in every State.
METHODS OF ACCOUNTING
The competent authority (generally the Registrar) in each State
prepares model forms of accounts for societies, which, however,
do not appear to be bound to use them.
AUSTRALIA
29
The contributions for each form of benefit must be kept in a
separate fund, and no transfer from one fund to another may be
made without the permission of the competent authority.
INSPECTION
In all States except South Australia the competent authority
may, upon the application of one-fifth of the members, appoint an
inspector to examine the affairs of a society, or may call a special
meeting to determine any matters which the authority may
submit to it. In South Australia the competent authority may
examine the books of a society whenever it thinks fit.
AUDIT AND RETURNS
In every State it is compulsory for each society, and in several
States for each branch, to have its accounts audited every year.
A general statement in the prescribed form must be furnished
annually to the competent authority showing for each society or
branch its receipts and expenditure as audited in respect of each
benefit, the ages of the members, and their sickness and mortality
experience.
VALUATION
Every five years the assets and liabilities of each society or
branch must be valued by an actuary appointed or approved by
the competent authority (in Western Australia the valuer may be
appointed by the society). The valuation, or the materials for
making it, must be supplied to the competent authority, which
reports thereon to the society and publishes t h e results.
§ 7. — Settlement of Disputes
The manner of settling disputes is one of the matters which
must be provided for in the rules of every registered friendly
society. The disputes for the settlement of which rules must be
30
VOLUNTARY SICKNESS INSURANCE
made are those arising between the society and its members,
officers or branches, or between branches. Awards made in accordance with rules are binding and conclusive on all parties, without
appeal to any court of law.
There are, however, several cases in which recourse may be
had to the ordinary courts, i.e. cases where the parties agree to
do so, cases where the society's rules so provide, and cases where
the society's tribunal does not give its decision in reasonable time.
Except in South Australia and Tasmania, the law prescribes
that unless the rules expressly forbid it the parties may refer the
question to the Registrar (in Queensland the Attorney-General)
for his decision.
The rules may provide that disputes shall be referred not to a
tribunal set up by the society but to an ordinary court of summary
jurisdiction (Victoria, Queensland, South Australia, Western
Australia) or to the Registrar (New South Wales), the decision in
either case being final.
Except in Tasmania, the law of every State provides for cases
where the society's tribunal fails to make an award within a certain
time, generally 40 days, after application has been made for the
settlement of a dispute. In such cases the person aggrieved may
apply to a court of summary jurisdiction (Victoria, Queensland,
South Australia, Western Australia) or to the Registrar (New
South Wales) to hear and determine the dispute.
BELGIUM
Acts and Regulations
GENERAL SYSTEM
Act of 23 June 1894 amending the Act of 3 April 1851 on mutual benefit
societies. (Moniteur Belge, 25-26 June 1894.)
Act of 19 March 1898 amending the Act of 23 June 1894. (Moniteur Belge,
20 March 1898.)
Act of 5 May 1912 granting bonuses to mutual invalidity funds.
Act of 30 July 1923 authorising societies belonging to recognised federations
to amalgamate. (Moniteur Belge, 11 January 1894.)
Act of 3 August 1924 respecting certain legal provisions prescribing the
insertion of Orders or Acts in the Moniteur Belge and amending section 6 of
the Act of 23 June 1894.
Act of 30 March 1926 introducing amendments in the Act of 23 June 1894
on mutual benefit societies. (Moniteur Belge, 18 April 1926.)
Royal Order of 30 July 1913 respecting the provident and invalidity insurance institutions.
Royal Order of 18 March 1920 respecting the organisation of supervision of
the medical and pharmaceutical services of the mutual benefit societies.
Circulars of 20 February 1920, 20 and 27 June 1927, 31 December 1922.
(Ministry of Industry, Labour and Social Welfare.)
SYSTEM PECULIAR TO MUTUAL BENEFIT SOCIETIES UTILISED IN THE
ENFORCEMENT OF THE COMPULSORY INSURANCE ACT
Act of 10 December 1924 respecting insurance against invalidity and
premature death. (Moniteur Belge, 22-23 December 1924.)
Order of 19 November 1925 bringing into operation the provisions of
section 32 of the Act of 10 December 1924.
Reports
OFFICIAL REPORTS ON ENFORCEMENT
Reports on the position of mutual aid, published by the Revue du Travail
du Royaume de Belgique (1922-1927).
UNOFFICIAL DOCUMENTS AND STUDIES
BÉGASSE, J. Les assurances sociales en Belgique. Berger-Levrault, Paris.
1907.
WORKS ON THE MUTUAL-AID MOVEMENT
BARNICH, Dr. La législation ouvrière en Belgique. Brussels, 1912.
DESTRÉE and HALLET, SOUDAN and JANSEN.
Code du travail.
Brussels,
1924.
EECKHOUT, A. Manuel pratique pour mutualistes. Ghent, 1923.
JAUNIAUX, A. L'évolution et les conquêtes de la mutualité belge. Brussels,
1923.
32
VOLUNTARY SICKNESS INSURANCE
THÉATE, Th. Les sociétés mutualistes. Commentary on the Act of 23 June
1894. Van Luithens, Louvain, 1898.
PERIODICALS
Bulletin de la Mutualité. Organ of the National Alliance of Federations of
Christian Mutual Benefit Societies in Belgium.
Bulletin de la Prévoyance et des Assurances sociales. Monthly organ of the
National Union of Federations of Socialist Mutual Benefit Societies.
Le Mutuelliste. Official organ of the National Union of Federations of Nonparty Mutual Benefit Societies of Belgium.
INTRODUCTION
The sentiment of solidarity to which the mutual-aid movement
in Belgium owes its origin first revealed itself among workers and
artisans of the same trade or occupation.
Without going back to the guilds and corporations, it is sufficient
to point out that an occupational mutual-aid movement, uniting
workers of the same trades or engaged in the same occupations,
began to take definite shape in Belgium at the beginning of the
nineteenth century.
This movement extended rapidly with the development of
machinery and vocational specialisation. Industrial conditions
were changed, and large numbers of the workers were called on
to use only a part of their previous knowledge, which had become
of secondary importance with the introduction of machinery;
while many artisans were forced for the same reasons to take up
a new trade. Again, the division of labour opened up chances of
employment for unskilled workers, and large industrial concerns
absorbed the labouring classes resulting from unemployment among
the artisans. New industries sprang up, while others fell into
rapid decay and speedily disappeared. This process of industrial
evolution naturally forced the mutual benefit societies to change
their methods of recruiting members.
The formerly occupational character of the mutual societies
changed, and a strong tendency was evinced for organisation on a
local or regional territorial basis; in a word, the societies were open
to workers and employees engaged in trades and occupations of
the most varied description.
Mutual benefit organisations had, moreover, no definite legal
status. While no control was exercised over their management,
33
BELGIUM
they had no legal personality, and their existence was most
precarious. The first legislative measure concerning mutual
benefit societies was an Act of 3 April 1851, which aimed at allowing
the societies to acquire a recognised status by making application
for recognition to the public authorities.
Although such recognition gave the societies legal standing,
exemption from taxation, and other advantages, not many demands
for it were made.
In his work on the evolution and conquests of mutual benefit
societies \ Mr. Jauniaux lays the blame for this check on the
excessive restrictions imposed on the societies as one of the conditions of legal recognition by the Act of 3 April 1851. According
to the terms of the Act, the sphere of activity of approved societies
was extremely narrow. A society was not allowed to make loans
or to affiliate its members to the Pension Fund guaranteed by the
State ; it might not acquire real estate ; the mayor of the town or a
delegate of the communal council was entitled to be present at the
meetings of the society; the annual accounts had to be submitted
to the communal authorities ; legal personality could be withdrawn
from societies without appeal; the State was entitled to take over
the balance of a society being wound up and to distribute it among
other mutual funds or charitable institutions 2 ; societies were not
allowed to undertake insurance of any risk other than sickness
or to fedeiate among themselves.
In his work on social insurance in Belgium 3, Mr. Bégasse gives
the following information concerning the number and membership
of the approved mutual benefit societies for the years 1850 to 1894:
Year
Number of recognised
societies
Membership of
societies
13
78
220
412
579
2,063
11,680
32,042
53,870
74,843
1853
1866
1886
1891 l
1894 !
i Sickness funds only
1
JAUNIAUX : L'évolution et les conquêtes de la mutualité belge. Libraire l'Eglantine, Brussels, 1923.
2
Ibid., p. 57.
3
MINISTÈRE DU TRAVAIL ET DE LA PRÉVOYANCE
documents sur la Prévoyance sociale.
SOCIALE :
Recueil de
Berger-Levrault et C ,e , Paris, 1907.
3
34
VOLUNTARY SICKNESS INSURANCE
The position of the mutual benefit societies underwent a considerable change as a result of an Act which came into operation on
13 June 1894, and which is still in force. This Act has, however,
been considerably amended (a) by the Act of 19 March 1898, which
restricts the right to receive subsidies from the public authorities
exclusively to recognised mutual societies and their federations,
and defines the position of those associations which hold shares
in co-operative pharmacies trading with the public, (b) by the Act
of 30 July authorising recognised mutual societies to amalgamate,
(c) by the Act of 27 December of the same year respecting the
investments of such societies, (d) by the Act of 3 August 1924
respecting the publication of their constitution and rules, and
(e) by the Act of 30 March 1926 respecting formalities in connection
with legal recognition and approval. The Act of 1894 maleen the
grant of legal recognition conditional upon the pursuit of the aims
limited by sections 1 and 2 and upon certain rules intended to
safeguard the rights of members and third parties, e.g. governing
the procedure to be followed in winding up a fund, etc. The same
Act exempts recognised societies from all administrative supervision, except as regards the elaboration of their constitution and
rules and the control of their financial operations.
The Act of 1894, which covers funds created by workers employed
in the same establishment, funds including workers of the same
occupational category, and funds adopting the form of a general
association of non-occupational character, entitles the societies to
limit their membership to persons holding certain philosophical,
religious, and political opinions.
The fact that a mutual benefit society imposes certain restrictions
of a sectarian, political, or philosophical nature on its members is
not held to be an obstacle to its legal recognition 1.
Similarly, recognition may be granted to mutual societies of
which the constitution and rules state that the quality of membership of a mutual benefit association may be acquired only by
members of some other association, as, for example, a trade union,
political party, etc.
Nevertheless, recognition is not granted, since 1910, to societies
whose rules state that persons losing their quality of membership
of an association or political party—a quality upon which their
admission to the mutual benefit society was conditional—shall on
this account cease to belong to the society in question. Such a
1
BARNICH: La législation ouvrière en Belgique, p. 22.
BELGIUM
35
rule is judged to be contrary to common law as embodying a
restriction of freedom of association. In this connection the
following statement was made by the Minister of Labour in the
Chamber of Representatives on 21 March 1912 1 :
This provision is contrary to common law as it restricts that personal
liberty which is guaranteed by the Constitution. Furthermore, it is unjust,
as it results in depriving members who have fulfilled their obligations towards
insurance of social advantages and of their rights on the capital of the societies,
and this for reasons foreign to the aims pursued by the mutual benefit
societies.
Freedom of association is guaranteed in Belgium by the Constitution.
Therefore private individuals who form associations are entitled to impose any
conditions of admission which they consider opportune, and in particular to
make membership of one society conditional upon membership of some other
association, that is to say, to form associations of persons drawn together by
sentiments of mutual confidence and sympathy, which by their very nature
are likely to act as a stimulus on the work undertaken.
But freedom of association, however widely interpreted, may not be used
as a means to compel members to surrender for the future and for their whole
lifetime their right to leave an association to which they were obliged to
belong on joining the mutual benefit society, or to make them consent to
penal provisions should they desire to leave an association which has nothing
in common with the aims of sickness insurance.
To sanction this would be to approve, contrary to common law and without
any compensation, the expropriation of insurance policies contracted by the
members and of their share in the capital of the funds.
The freedom conferred on recognised societies to form themselves
of persons holding the same opinions, the absence of all administrative intervention by the public authorities, as well as the subsidies
granted by the public authorities, all contributed towards the rapid
development of mutual benefit societies and a constant increase in
the number of recognised societies and federations.
The advantages conferred on the societies b y the Act of 23 June
1894 were the more real in that the Act of 31 March 1898 prohibited
the trade unions from taking part in all schemes of social insurance
and welfare when such activity was not actually in connection
with an occupational risk.
In this manner the various political and trade union groups
found themselves faced by two alternatives in their endeavours
to attach the workers to their organisations, namely, to function
as free associations or to find a formula of organisation which would
guarantee their independence from the State, while allowing them
to benefit from the privileges granted to recognised societies.
In the first case the mutual benefit organisation found itself
deprived of legal personality and was therefore not entitled to
1
BARNICH, op. cit., p. 22.
36
VOLUNTARY SICKNESS INSURANCE
State subsidies, while in the second case, on the contrary, the State
subsidies and the material and moral advantages reserved for
recognised societies strengthened the links binding the members
of the societies to the trade union organisations. Among these
advantages figured a wider right to possess property, fiscal exemptions, etc.
The solution generally adopted by the mutual benefit societies
founded by the Socialist Party and the trade unions consists in
charging an inclusive contribution for membership of the political
or trade union group in question and the mutual benefit society
concerned. This contribution is afterwards split up, one part
going to the political or trade union group, and the other to the
mutual benefit society concerned. The management of the society,
which is quite distinct from that of the political or trade union group
so far as accountancy is concerned, is in fact entrusted to the same
person or the same committee 1 .
While the mutual-aid movement was developing along the lines
described above, the Belgian Government, by a Royal Order dated
31 December 1903, granted subsidies to mutual benefit funds
undertaking reinsurance in case of sickness of long duration and
invalidity. The system of subsidies introduced in 1903 was
gradually developed, the regulations governing the grant of bonuses
were introduced in a Provisional Ministerial Order dated 22 December 1906, and, by an Act dated 5 May 1912, the mutual invalidity
funds (commonly called " reinsurance funds ") were granted
bonuses in proportion to the total amount of contributions received.
Such was the position of the mutual benefit societies in Belgium
prior to the war. At that time (1914) there existed approximately
9,840 mutual benefit societies (including 4,148 sickness funds) with
500,000 members, while the reinsurance funds and federations
numbered 183 with approximately 300,000 members.
After the conclusion of hostilities a measure adopted by the
Belgian Government gave great impetus to the mutual-aid movement.
By a Ministerial Circular dated 20 February 1920, amended
and completed by that of 31 December 1922, a system of subsidies
was inaugurated with a view to allowing the societies to meet the
cost of the organisation of the medical and drug services placed
at the disposal of their contributors and their families. The
payment of State subsidies, based on the number of contributors
1
J A U N I A U X , op.
cit.,
pp.
71 a n d
90.
37
BELGIUM
in each organisation and on the total amount of their contributions,
has had a considerable effect on the membership of the societies,
which increased during a period of five years as shown below:
Year
Membership
1920
1922
1923
1925
554,411
710,829
774,777
884,484
At the same time the Government authorities took steps to
encourage the introduction of a new policy in the mutual-aid
movement; this consisted in basing sickness insurance on the
actuarial principle of large numbers.
The Revue de Travail (published by the Ministry of Industry and
Labour of Belgium) for December 1922 described as follows the
reasons militating in favour of the concentration of the mutual
benefit societies:
It is generally understood nowadays that sickness risks must be distributed
so as to allow the greatest chance of the fulfilment of the obligations undertaken. There is no longer any doubt that the want of security and stability
was a direct consequence of the absence of concentrated effort, and that,
therefore, the dispersion of insured persons over an excessive number of
societies is to be avoided. This dispersion, which arose from a spirit of independence, was based on the argument that it created greater vitality and
prosperity in the unions and a spirit of solidarity among their members. This
theory now appears to have been ill-founded.
. . . Methods have improved. Most of the mutual societies are convinced that a number of their functions do not correspond to actual requirements, and that efforts must be made to realise improved forms of assistance.
These, however, necessitate a larger number of members. It is, moreover, from
the necessity to combine certain risks that the federations have come into
being.
The necessity for concentration is a fact which is more and more recognised
in mutual benefit circles. To achieve this new idea societies whose isolated
existence is unjustified and of which the number of members is limited must
give way to more important groups better able to cover the risks undertaken
in a more uniform fashion. It is therefore necessary to encourage the amalgamation of the societies.
As the Act of 23 June 1894 did not authorise such steps, the
societies in question were obliged, until 30 July 1923, when a special
Act respecting the amalgamation of mutual benefit societies was
promulgated, to pass through the legal formalities concerning
dissolution and the liquidation of their assets. The effects of the
Act of 1923 were seen in the following year. In 1924, 38 amalgamations took place and 58 societies were dissolved by Royal Orders
under the Act of 30 July 1923. In 1925, the number of amalgamations fell to 30, entailing 43 dissolutions, but in 1926 greater use
was made of the 1923 Act: 52 societies were dissolved and 45
amalgamations were effected by Royal Order.
38
VOLUNTARY SICKNESS INSURANCE
The importance of the movement of concentration is further
demonstrated by the fact that the number of sickness insurance
funds existing at the end of 1925 was inferior to the number of
funds existing in 1914 (1914, 4,148 funds; 1926, 3,814 ), and this in
spite of the creation of new funds resulting from the extension of
the movement. On the other hand, the average membership of
the primary sickness funds rose from 125 members in 1914 to
280 members in 1925.
Finally, the extension of the mutual invalidity funds was accompanied by an increase in the number of contributors to the general
invalidity funds, which rose from 300,000 in 1913 to 800,000 in
1925, and in the number of members in the special insurance funds
against tuberculosis, which increased from 39,180 in 1913 to
1,151,274 in 1925.
39
BELGIUM
CHAPTER
I
INSURANCE INSTITUTIONS
§ 1. — Legal Structure and Constitution
The distinctions established by Belgian law in the legal structure
which societies may adopt are founded mainly on the legal relations
between the insured groups and the public authorities. The
sphere of activity and the methods employed t o enlist members
have no influence on the legal structure and constitution of the
societies. Institutions may take the form of a trade union fund,
an establishment fund, a general fund of a non-occupational
character, a mutual society composed of members of the same
political party, etc. Limitations applying to membership have no
bearing whatever on the legal character of the groups.
According as they agree or do not agree to accept Government
supervision (the scope and form of which will be described later),
the institutions function as free societies or as recognised societies.
The free societies are not subject to any form of Government
supervision, and are consequently not eligible for Government
subsidies ; they may sue their members in the courts of law in cases
of contravention of the constitution and rules :
Whosoever is admitted as a member of the association agrees by his
adherence to submit to the rules of the said association and to all decisions and
sanctions adopted in virtue of the said rules. He may withdraw at any time
from the association, without breaking
the rules. Any rule which restricts
this right is held to be null and void 1.
The recognised societies are required to observe certain legal
provisions, relating in particular to the insertion of certain clauses
in their constitution and rules. Section 4 of t h e Act of 23 June
1894 enumerates these clauses as follows:
Title, seat, area covered.
The aims for which the society was founded.
Conditions of admission and withdrawal of the various classes of members
established by the constitution and rules.
1
Section 2 of the Act of 24 May 1921, guaranteeing freedom of association.
40
VOLUNTARY SICKNESS INSURANCE
Methods of nomination and competence of directors.
Scales of contributions and payments to be made by members.
Advantages of the society.
Investment of capital.
Procedure to be followed in the amendment of the constitution and rules.
Manner and conditions of dissolution and liquidation of the society.
As regards the right to legal recognition the Act distinguishes
between:
(a) societies which must be recognised by the Government;
(b) societies which may be recognised by the Government,
recognition in this case not being considered as a right.
This distinction is based solely on the aims pursued by the
societies.
On condition that they conform with the provisions of the Act,
the following societies must be recognised by the Government:
Mutual benefit societies with their seat in Belgium and founded exclusively
for the purposes mentioned in one of the following categories :
(1) To provide contributors and members of their family with temporary
relief in cases of sickness, accident, infirmity or childbirth; to provide
funeral expenses ; to grant temporary relief to the families of deceased
members ;
To facilitate for contributors and members of their families affiliation
to provident, pension and insurance funds of the General Provident and
Pensions Fund guaranteed by the State;
(2) To provide their members with an indemnity in cases of loss or sickness
of cattle or damage to crops caused by accidental circumstances ;
(3) To facilitate for contributors and members of their family, but for no
other persons, by an accumulation of funds, the purchase of articles of
current use or consumption, tools and instruments, domestic animals,
or articles required temporarily or periodically, as, for example, manures
or seeds.
(4) To grant their members loans not exceeding 300 francs (section 1 of the
Act of 25 June 1924).
P r o v i d e d t h a t t h e y c o n f o r m t o t h e provisions of t h e A c t a n d
h a v e t h e i r s e a t in B e l g i u m , t h e following societies may be recognised
by the Government:
(1) Mutual benefit societies founded for several of the purposes mentioned
in the foregoing section.
(2) Mutual benefit societies whose aim is the formation of a separate fund
to help, by the grant of annuities, aged or infirm members, or, after
their death, the members of their families (section 2 of the Act of 23
June 1894).
(3) Federations of recognised mutual benefit societies and national mutual
benefit unions composed of such federations (section 3 of the Act of
23 June 1894).
Whether recognition be prescribed by law or simply subject to a
Government decision, it is essential, in order to obtain it, that the
BELGIUM
41
constitution and rules of the society should contain the clauses
prescribed in section 4 of the Act of 23 June 1924 respecting the
title, aims and contributions of working of the society. The Act
also determines the procedure to be followed in the nomination
of directors, and establishes regulations respecting investment of
capital, the conditions in which funds may amend their constitution
and rules, and the formalities to be observed in cases of dissolution
and winding up of a society.
The formalities attached by law to the recognition of mutual
benefit societies are determined by section 5 of the Act of 23 June
1894, as amended by the Act of 30 March 1926:
A mutual benefit society soliciting recognition shall forward its request to
the Government, accompanied by two copies of its constitution and rules, and
a list of its directors or its founders.
Within four months from the date of the request, the Government is required to notify the society of its decision, stating reasons,
to refuse or grant recognition. The Act contains no mention of
any means of appeal against such decision of the Government.
Legally recognised societies are free, apart from the general
control exercised by the public authorities, to manage their own
property, and they are alone eligible to receive State, provincial,
and communal subsidies. Such societies are incorporated bodies
within the limits of the Act of 23 June 1894. They are legally
responsible for all transactions and engagements made in their
name. Their property is distinct from that of their members, and
they are legally responsible bodies within the limits of the law.
For these reasons, a suit brought against a society is directed
against the society itself, and not against its members personally.
The legal capacity of the mutual benefit societies allows them
to receive gifts and legacies and to lease premises, provided that
such premises are intended to serve as offices or as meeting rooms.
Societies may not acquire or own premises except for such purposes,
and then only on receipt of official permission to do so *.
§ 2. -— Conditions of Membership
All persons having reached the age of eighteen years and having
legal capacity (emancipé) are entitled to be admitted to membership
of a mutual benefit society:
1
Sections 13,14, and 15 of the Act of 23 June 1894, and BAHNICH, op. cit.
42
VOLUNTARY SICKNESS INSURANCE
Minors under eighteen years of age and.not possessing legal capacity are
also eligible for membership, provided that they have the consent of the person
exercising parental authority over them or of their guardian. But they are
only entitled to vote at the meetings of the society on attaining eighteen years
of age or on being granted legal status.
The consent mentioned in the previous paragraph may be given in writing
or received by a delegate of the management of the society, in the presence of
two witnesses who sign with him.
A married woman may affiliate or remain affiliated to a recognised mutual
society, unless her husband objects in writing to the president of the society,
or to a delegate of the management.
Such objection may be waived on the authority of a justice of the peace,
after both parties have been heard or summoned (sections 10 and 11 of the Act
of 23 June 1894).
§ 3. — Administration of Funds and Societies
The legal requirements respecting the administration of the
funds and societies vary largely with the aims pursued by the
institutions. A survey is given below of the general administrative
regulations common to all mutual societies, this being followed
by a summary of the special provisions relating to invalidity
insurance funds. The regulations applying to certain forms of operations undertaken by the funds, the provisions limiting the scope
of the funds, and|the conditions determining the amount of benefits
paid are dealt with in Chapters II ("Benefits and Expenditure ")
and III (" Financial Resources and their Management ").
ADMINISTRATIVE
Nomination
REGULATIONS
COMMON TO A L L
of the Committee of
FUNDS
Management
Section 12 of the Act of 23 June 1894 lays down that the mutual
benefit societies shall be managed by one or several directors,
elected for a fixed period from among the active and honorary
members.
These directors must be of Belgian nationality and have attained
their majority. The Government may, after hearing the opinion
of the Permanent Committee, make an exception as regards the
national status. Directors are chosen by the general assembly
of the fund.
Amendments
to the Constitution
and
Rules
In accordance with section 21 of the Act of 23 June 1894, recognised mutual societies m a y only introduce amendments in their
BELGIUM
43
constitution and rules in conformity with the decisions of the general
meeting held in accordance with the provisions contained in the
constitution and rules in force. In order to be valid, the decisions
of the meeting must be adopted by two-thirds of the members
entitled to vote, and must be approved by the Government, in
accordance with the terms of section 5 of the Act of 23 June 1894,
as amended by the Act of 26 March 1926. Members may vote
on definite proposals in writing.
Dissolution
Mutual benefit societies may be dissolved on a decision of a
general meeting specially convened for the purpose, and composed
of at least three-quarters of the members entitled to vote. In
order to be valid, such decisions must be adopted by three-quarters
qf the members present.
At the request of any party interested, a decision to wind up a
society may be taken by the district tribunal when the society
finds itself unable, as the result of financial difficulties, to meet its
obligations, or when it pursues aims other than those for which it
was granted recognition. When its members cease to interest
themselves in it or in their rights in its property and when, by
reason of the members' indifference or of the war, the society exists
only in name, a Government investigation is made which shows
that the society may be considered as dissolved in fact.
When a society is dissolved and its debts have been settled,
the liquidators are entitled to sequestrate :
(a) sums sufficient to guarantee, for a maximum period of six
months, the continuance of the benefits specified in the rules
to persons whose right to same began prior to the dissolution
of the fund ;
{b) sums necessary to buy back investments made by the
dissolved fund with a view to the provision of annuities
for aged and infirm members and their families (section 2,
subsection 2, of the Act).
In the absence of contrary instructions by the donors or testators,
all moneys left to the fund as gifts or legacies go to the Government,
which is required to allocate them to other mutual institutions of
the same character as the dissolved fund.
Surplus assets must he distributed between the regular members
who, at the time of dissolution, have been affiliated to the society
44
VOLUNTARY SICKNESS INSURANCE
for at least one year. These refunds are to be made in accordance
with the provisions laid down in the constitution and rules, or in
default of such provrisions, proportionately to the contributions
paid by each of such persons since their admission to the fund.
This distribution of funds may not take place before a period of at
least six months after the announcement of the dissolution oi the
society concerned (sections 22-30 of the Act of 23 June 1894).
SPECIAL PROVISIONS RESPECTING INVALIDITY INSURANCE
FUNDS
According to the provisions of the Act of 5 May 1912, the mutual
invalidity insurance funds must fulfil the following conditions in
order to qualify for State subsidies:
(1) Admit active members up to the age of 40 years.
(2) Guarantee for sick and infirm members, and, to the extent
of at least 1 franc per day, the continuance of the benefits
which they have been entitled to receive from the primary
fund for a period of not less than three, and not more than
six, months.
(3) Guarantee the payment of the said benefits to sick and
infirm members up to the age of 65 years.
(4) Guarantee that at least 75 per cent, of the expenditure in
benefits is covered entirely from the contributions of active
members and from interest on capital. This 75 per cent.
will be calculated each year at the discretion of the fund,
either according to the financial results of the previous year,
or on an average result for the previous two, three, four or
five years. During this period funds which have increased
their reserve capital by an amount equal to 25 per cent, of
the total expenditure are exempted from this condition.
In principle, State subsidies are granted only to federations of
recognised mutual societies, but the Government may, on tqe advice
of the Permanent Committee of mutual benefit societies, assimilate
to the federations societies having at least 2,000 members covered
by the invalidity services.
The Royal Order of 30 July 1913 regulates the conditions in
which mutual invalidity insurance societies may be assimilated to
the federations, whose conditions of working have been explained
above.
In order to be eligible for assimilation, a society must, according
to the Order of 30 July 1913:
BELGIUM
45
be recognised as a mutual invalidity insurance fund in accordance
with the Act of 23 June 1914, and have a civil status entirely
independent of the recognised mutual sickness fund (primary
fund), the services of which it continues beyond the first three
or six months' incapacity for work ;
be managed by a committee, of which more than half the members are not persons connected with the management of the
primary society;
guarantee to their members the invalidity pensions fixed by
the Act of 5 May 1912 and the provision of medical and
pharmaceutical treatment, or show that such members benefit
in some other way from this latter service ;
fix the amount of the annual contribution towards invalidity
insurance at 6 francs for each day's benefit for a period of at
least ten years. At the expiration of this period the society
may reduce contributions to less than 6 francs, on authorisation by the Government, the Permanent Committee of
the mutual benefit societies having first been consulted;
have at least 2,000 members under 65 years of age paying the
regular contribution towards insurance against premature
invalidity;
refer all disputes relating to insurance to an independent arbitral
authority.
§ 4. — Mutual Societies and State Control
In virtue of section 19 of the Act of 23 June 1924, as amended
by the Act of 30 March 1926, recognised societies must furnish the
Government every year with :
Accounts of their income and expenditure, drawn up conformably with
the model established by the Government, and closed on 31 December of the
year in question.
They must satisfy all demands for information made by the Government
authorities, the Permanent Committee of mutual benefit societies, and the
committees of patronage.
When a society, after being duly warned by the Government,
does not conform to the provisions of the Act or its approved
constitution and rules, the Government may, on the advice of the
Permanent Committee, withdraw the privileges reserved for recognised mutual benefit funds in virtue of section 8, subsections 1 to 4, of
the Act, namely : exemption from stamp duties and registry fees ;
46
VOLUNTARY SICKNESS INSURANCE
free supply of publications prescribed by law ; free postage of correspondence with the public authorities.
In its work of control and supervision of the constitution and
rules of the mutual benefit societies, the Government is aided by
a Committee attached to the competent Ministry.
This Committee consists of 15 members, including 2 senators
elected by the Senate, 2 members of the Chamber of Representatives elected by the Chamber, a delegate from the competent
Ministry, the Director-General of the General Provident and
Pensions Fund, and 9 members appointed by the Government,
of whom at least 5 are chosen among members of recognised mutual
benefit societies and of whom at least 2 must be actuaries.
The Permanent Committee discusses all questions which are
brought to its notice by the Ministry of Industry, Labour and
Social Welfare concerning the organisation and working of the
mutual associations.
§ 5. — Relations between Societies
AMALGAMATION AND FEDERATION
The relations between the funds or recognised societies are
defined by section 3 of the Act of 23 June 1894, which lays down
the rules governing the federation of societies, and by the Act
of 30 July 1923, which empowers the societies and federations to
amalgamate.
There is, however, a difference of fundamental importance
between the federation and amalgamation as defined by the Belgian laws. This difference, besides affecting the future of societies
federating or amalgamating, applies also to the character of the
society authorised to federate or amalgamate. On the one hand,
federated societies maintain their independence; they may withdraw from the federation every year on giving three months'
notice. Amalgamated societies, on the other hand, lose their
personal rights and are incorporated in the new institution, with
the exception of possible cases where it may be necessary for the
fund to keep its independence even after amalgamation. Furthermore, only societies or federations whose aims are to pro-vide their
members with temporary relief to furnish funeral expenses, and
to facilibate affiliation to provident, pension, and insurance funds
47
BELGIUM
affiliated to the General Provident and Pensions Fund guaranteed
by the State have the right to amalgamate.
All mutual associations covered by the Act of 23 June 1894,
including those forming an autonomous insurance group for the
purpose of providing annuities for their members and their families,
have, on the other hand, the right to federate. A summary is
given below of the main principles governing:
{a) the constitution and working of the recognised federations
of mutual societies;
(b) the amalgamation of recognised societies and federations.
Constitution and Working of Recognised
Federations
Recognised mutual benefit societies may federate with a view
to the reciprocal admission of members who have changed their
place of residence, and with the object of uniting their services
and setting up arbitration bodies for the settlement of disputes
arising between members and the associations:
They may not, however, surrender their autonomy or their right to withdraw from the federation during the year on three months' notice, and must
take the necessary measures to safeguard their interests in case of such event.
Federations thus constituted may be recognised by the Government on condition that they conform to the provisions of the present Act (section 3 oft he
Act of 23 June 1894).
The decision of the Act of 23 June 1894 respecting the recognition
of mutual societies, the fiscal exemptions and other advantages
reserved for such societies, the inalienable character of the benefits
paid by the societies and their exemption from distraint, the
procedure governing the nomination of the administrative council,
the investment of funds, and the introduction of amendments to
their constitution and rules 1 are applicable to the federations of
mutual societies or funds.
The procedure to be followed in dissolving such federations is
defined by the provisions compulsorily included in their constitution and rules, in accordance with section 4, X, of the Act of
23 June 1894.
1
Provisions contained in sections 4-9, 12-15, 18-21, 23, 24, 26-31 of the Act
of 23 June 1894, as amended by the Acts of 27 December 1923 and 30 March
1926.
48
VOLUNTARY SICKNESS INSURANCE
Regulations
Governing Amalgamation
of Societies
As already stated, the Act of 30 July 1923, which lays down
the conditions in which societies m a y amalgamate, applies only
to societies and federations formed for the purpose of providing
their members with temporary relief, funeral expenses, and increased facilities for affiliation to the provident, pension, and
insurance funds attached t o the General Provident and Pensions
Fund guaranteed b y the State.
The decision to amalgamate may be taken only b y a general
meeting of the society convened specially for t h e purpose :
Questions on the agenda, which must be attached to the convocation
addressed to each of the members, must include the following points:
Determination of the obligations and respective rights
(a) of the associations concerned;
(b) of the affiliated bodies.
Destination of capital.
Amendments of rules resulting from amalgamation.
Procedure and conditions governing liquidation.
Prior to any settlement of the questions on the agenda, the general meeting
must take cognisance of the report on the financial situation of the group
concerned.
In order to be valid, decisions of the meeting must be adopted by at least
three-quarters of the members entitled to vote. The ballot may not be secret,
and affiliated members may send their votes in writing.
In order to be valid, decisions of the general meeting must be approved
by the public authorities, which determine the conditions of amalgamation
and, as the case requires, ratify the amendments of the rules or the new
constitution and rules submitted to them.
The amalgamation becomes operative on the fifteenth day after the date of
the Royal Order sanctioning it. Amendments of the rules or the constitution
and rules of the new organisation created by the amalgamation are published
as an appendix in Le Moniteur.
The part of the capital belonging to members who are formally opposed to
amalgamation, and where necessary, sums sufficient to cover for a maximum
period of six months the grant of benefits to which the insured persons are
entitled, must be transferred to a society having the same social aims as the
society which has ceased to exist and nominated by the persons opposed to
amalgamation.
Gifts, apart from those received from the public authorities, and legacies
left conditionally on their being refunded in case of the dissolution of the
society as the result of amalgamation, must be returned to their donors or to
their heirs.
Societies dissolved as a result of amalgamation automatically cease to belong
to the federation to which they were previously affiliated, and are not required
to gt've the three months' notice stipulated in section 3, subsection 2, of the Act of
23 June 1894; but the federation and the societies amalgamating must fulfil
their mutual obligations until the expiration of the quarter in which the Royal
Order sanctioning the amalgamation was signed.
49
BELGIUM
§ 6. — The Growth of the Mutual-Aid Movement
THE FUNDS AND THE RISKS COVERED
The risks which the funds or societies may undertake are enumerated in sections 1 and 2 of the Act of 23 June 1894. These risks
include sickness, maternity, funeral expenses, invalidity (including
tuberculosis), old age, and death (up to a maximum of 300 francs).
Old-age and death risks exceeding 300 francs cannot be undertaken directly by the recognised mutual benefit societies, and
those societies which accept such risks are required to do so through
the medium of the pension and insurance funds affiliated to the
General Provident and Pensions Fund guaranteed by the State.
The following table, which classified the funds in accordance
with the risks covered, is reproduced from La Revue du Travail
de Belgique1.
1914
Sickness insurance
funds, etc.
Societies affiliated
t o t h e State-guaranteed Pensions
Fund
Special societies
Total
1919
1920
1921
1922
1923
1924
1925
1926
4,148 4,221
4,295
4,299
4,176 4,078 4,087 3,949 3,814
5,312 5,316
377
388
5,363
395
5,374
400
5,370 5,361 5,357 5,438 5,440
490
549
552
560
553
9,837 9,925
10,053
10,073
10,095 9,991 9,997 9,947 9,744
Included under special funds are all insuring groups whose
object is:
(1) to facilitate for the members, by accumulated savings, the
purchase of current articles of consumption and labour,
domestic animals, manures and seeds;
(2) to provide their members with loans not exceeding 300
francs; and
(3) to form a separate fund with a view to granting their aged
and infirm members annuities not exceeding 1,200 francs,
and révisable at the end of each financial year.
La Revue du Travail gives no information respecting the number
of sickness insurance funds extending their operations to any risk
1
Revue du Travail du Royaume de Belgique, Dec. 1923, Dec. 1925, July 1926,
and June 1927. Brussels.
4
50
VOLUNTARY SICKNESS INSURANCE
other t h a n sickness properly so called (for example, maternity
risks). B u t the invalidity funds in existence at the end of the
year was given in La Revue du Travail (issues of 31 January 1925
and 30 June 1927) for several years back. The number of these
funds, which, with two exceptions are open to the primary societies
(sickness funds) was shown as follows:
1919
1920
1921
1922
1923
1924
1925
1926
99
111
114
122
127
125
129
135
MEMBERSHIP OF F U N D S AND SOCIETIES
Besides the head of the family paying this contribution, the
mutual benefit societies may insure all persons dependent upon
him.
The obligation to provide medical and pharmaceutical
treatment for near relatives living under the same roof as the
contributor is, moreover, prescribed by the Circulars dated
20 February 1920 and 31 December 1922 respecting the grant of
subsidies to societies which organise medical and drug services.
The beneficiaries of the mutual benefit societies may, therefore,
be divided into two classes, namely, active members entitled to all
benefits, and persons who, as a result of the payment of contributions b y the head of their family, are eligible for certain benefits
notably medical and pharmaceutical treatment.
This distinction obviously refers only to members of sickness
funds and t o certain invalidity funds, and does not apply to members
of societies whose aim is limited to facilitating affiliation to the
State-guaranteed provident, pension, and insurance funds.
Membership
of Sickness
Funds
In 1926 the total number of persons contributing to the primary
sickness funds was 1,200,000, but it should be noted that the
majority of the funds have organised medical and drug services
in favour of the families of insured members.
According to an article by Mr. Arthur Jauniaux, published in
the Social Welfare and Insurance Bulletin of January 1926 1 ,
1
A. JAUNIAUX: " O Ù en sommes-nous dans le domaine des Assurances
sociales ? " Bulletin de la Prévoyance et des Assurances sociales, Jan. 1926.
Brussels.
51
BELGIUM
the report presented to the Congress of the National Union of
Federations of Socialist Mutual Benefit Societiesl, and a report by
Inspector-General Mercier, published in Le Mutuelliste2, the
number of married and single persons contributing to primary
mutual benefit societies guaranteeing family medical benefits was :
Year
1920
1921
1922
1923
1924
1925
554,511
654,576
710,829
774,777
828,432
884,484
During the same period the number of insured persons covered
by family medical benefits, that is to say, the number of contributors
and members of their families, was :
Year
1920
1921
1922
1923
1924
1925
1,144,564
1,690,806
1,846,525
1,948,202
2,085,235
2,209,906
Membership of Invalidity Funds
According to information published by the Bulletin de la Prévoyance et des Assurances sociales and Le Mutuelliste, the number of
persons insured with invalidity funds for the continuation, after
the expiration of their rights to benefit granted by the primary
societies, of a daily allowance until their restoration to health
or their death, has increased continuously since 1913.
INVALIDITY FUNDS
Year
Membership
1913
300,000
1919
455,257
1920
526,382
1921
• . . . 639,157
1922
694,401
1923
738,418
1925
800,000
1926
900,000
i Rapports et statistiques pour le Congrès des 1,2 et 3 octobre 1927. Imprimerie
coopérative Lucifer. Brussels, 1927.
2
" L'Effort mutualiste ". Le Mutuelliste, 15 Feb. 1927. Brussels.
52
VOLUNTARY SICKNESS INSURANCE
Membership
of the Special Anti-Tuberculosis
Funds
The number of persons affiliated to the anti-tuberculosis funds,
which provide their members with treatment and maintenance
in hospital in cases of pulmonary disease, increased from 391,180
in 1913 to 1,151,274 in 1925.
FEDERATIONS OF MUTUAL B E N E F I T SOCIETIES
In order t o remove the restrictions resulting from the local
character of the activities of primary mutual benefit societies,
whose scope is often limited to a small territorial area, and which
have only a small membership, the majority of the societies have
affiliated to federations in which they retain their legal personality
and autonomy.
These federations make it possible for members of their affiliated
societies to obtain the necessary treatment whan they fall ill
outside the area of the society to which they belong. They also
enable the members of the affiliated societies who have changed
their place of residence to affiliate to a new society without completing a qualifying period, or paying entrance fees. They organise
special medical and surgical services, which are beyond the means
of the primary societies, accept invalidity risks, carry out propaganda work, represent the mutual societies in all discussions with
the public authorities, etc.
There are two classes of federations:
(a) District federations, which act as advisers to the primary
societies, and form reinsurance groups in connection with
risks which the primary societies are not able to accept on
account of their restricted membership.
(b) National federations, the duties of which are mainly to
manage, co-ordinate and protect the interests of the mutualaid movement.
District
NUMBER
OF
RECOGNISED
Federations
DISTRICT
FEDERATIONS
IN
OPERATION
AT THE END OF THE YEAR
Year
Number
1910
1911
1912
1913
1914
1919
1920
154
161
165
179
183
199
209
Year
1921
1922
1923
1924
1925
1926
Number
: .
213
226
228
228
228
238
53
BELGIUM
National
Federations
In addition to the district federations there are four national
federations, namely: the National Alliance of Federations of
Christian Mutual Benefit Societies of Belgium, the National Union
of Federations of Non-Party Mutual Benefit Societies of Belgium,
the National Union of Federations of Socialist Mutual Benefit
Societies, and the National League of Liberal Mutual Benefit
Federations.
In January 1924 the Socialist Union included 23 federations with
386,791 members contributing to the sickness services; at the
end of 1925 the same union included 21 federations and 410,286
paying members, and a year later the figures had risen respectively
t o 22 and 437,400.
On 31 December 1923, the National Alliance of Christian Federations comprised 36 federations and 205,670 regular members
contributing to the sickness services; by 31 December 1925 the
number of paying members had increased to 250,501, and a year
later to 279,013.
On 31 December 1925 the National Union of Non-Party Mutual
Benefit Federations of Belgium had an effective membership of
130,000 persons benefiting from the sickness services.
AMALGAMATION OF SOCIETIES OR FEDERATIONS
In order to avoid dispersion and to co-ordinate their efforts,
the mutual societies may amalgamate one with the other, in which
case they lose their individuality and form a single insuring group.
The number of societies or federations dissolved as the result of
amalgamation was 1 :
Year
1919
1920
1921
1922
Number
1
27
50
101
Year
1923
1924
1925
1926
Number
157
73
69
60
DISSOLUTION
The constant development of the services provided by mutual
benefit societies necessitates an ever-greater centralisation of the
societies, whose satisfactory working depends on the working of the
law of large numbers.
1
Revue du Travail du Royaume de Belgique, Dec. 1923, p. 1881, and Dec.
1925, p. 2331.
54
VOLUNTARY SICKNESS INSURANCE
The need for extending the scope of the societies results not only
in the amalgamation of societies which are too small to be able
singly to meet the needs of their members, but also in the actual
disappearance of certain societies which are unable to cope with
overwhelming difficulties and are consequently obliged to dissolve,
in accordance with the Act of 23 June 1894, without their rights
and liabilities being transferred to other societies.
The Government has effected, and is still effecting, careful
investigations with a view to discovering the societies which exist
only in name and to pronouncing their dissolution. Mainly as the
result of these investigations, the number of dissolutions other than
those consequent upon amalgamation has increased, as is
indicated by the following figures:
Year
1919
1920
1921
1922
Dissolutions
77
79
75
73
Year
1923
1924
1925
1926
Dissolutions
109
48
204
about 400
BELGIUM
55
CHAPTER II
BENEFITS AMD EXPENDITURE
The acceptance of risks implies for the mutual benefit societies
the obligation to organise medical and drug services, to provide
cash benefits, and to meet certain administrative expenses.
Sickness insurance implies the provision of benefits in kind
(medical treatment and drugs), which are supplemented, according
to the circumstances, by cash payments intended to compensate
for the consequences of incapacity for work.
The aim of invalidity insurance is to provide financial help.
Maternity insurance only comes into operation occasionally, its
task beii-g mainly the provision of benefits in kind (consultations, baby linen, etc.). Insurance against old age and death is
undertaken by the pension and insurance funds affiliated to the
General Provident and Pension Fund guaranteed by the State.
The mutual societies serve as an intermediary for the collection
and transmission to the general fund of the savings invested in
this branch of insurance.
Although the object of the present study is to consider the
various aspects of sickness insurance, it is necessary to give some
consideration to the benefits and expenditure arising in connection
with maternity and invalidity risks, more especially tuberculosis
risks, the acceptance of which completes the sickness risks and
absorbs an important part of the resources and activity of the
Belgian mutual benefit societies.
§ 1. — Benefits
The study of the benefits provided by the Belgian mutual-aid
movement will include for each risk a summary of the legal provisions for the determination of beneficiaries and of benefits, information respecting the actual conditions governing the grant and
amount of benefits paid, and an analysis of the statistics of the cost
of covering the risks.
56
VOLUNTARY SICKNESS INSURANCE
In the absence of data concerning the whole body of mutual
societies, the statistics of benefits and of the frequency and average
duration of illness will be taken from the records of several of the
more important insurance groups affiliated to the Christian, NonParty, and Socialist Federations.
This study of the rules governing the grant of benefits and the
result of their administration will be followed by a description
of the methods generally adopted b y the mutual societies in the
organisation of their medical, surgical and drug services.
SICKNESS B E N E F I T S
Conditions of Award
Benefits in
Kind
The Ministerial Circulars of 20 February 1920 and 31 December
1922, which embodied the conditions governing the right of the
sickness funds t o State subsidies, stipulate t h a t :
The insured person and his family must be guaranteed medical treatment
for at least two years (Circular of 31 December 1922). The word " family "
is taken to mean persons living under the same roof as the contributor and
includes :
(1) the wife and children under 14 (or 18) years of age, if the contributor
is married; and
(2) his mother, brothers and sisters under 14 (or 18) years of age if he is
single; and
(3) in both cases ascendants over 55 years of age and dependent on the
contributor.
Medical treatment and drugs must be provided free of charge in return for
the payment of a fixed contribution. In order to avoid abuses, however,
societies are empowered to call on the insured person to pay a maximum sum
of:
(a) 0.75 fr. per consultation, or 1.50 frs. per visit, or 25 per cent, of the
doctor's fees;
(b) 0.75 fr. per prescription (made-up preparation), or 1.50 frs. per prescription (to be dispensed), or 25 per cent, of the cost of the prescription.
Societies according their members the free choice of a doctor or chemist
are held to come within the regulations if they refund the sick person a
maximum of :
(a) 2 frs. per consultation, or 4 frs. per visit ;
(b) 75 per cent, of the cost of the prescription, up to a limit of 5 frs. per
prescription.
The majority of the mutual societies grant their members the
right to have recourse to the services of specialists and surgeons.
BELGIUM
57
Cash Benefits
The amount of the daily pecuniary sickness benefit is not determined by any special regulations ; it varies from 2 to 6 frs. per day,
and is generally fixed at 3 or 4 frs.
Statistics
From a report published in Le Mutuelliste of 15 August 1926 on
the results of the year 1925, it appears that the Non-Party Mutual
Benefit Federation of Charleroi included during 1925 approximately
7,600 members contributing for medical treatment and drugs for
themselves and their families.
The total number of persons (contributors and their families)
insured for benefits in kind was 18,927, while the total expenditure
in this connection was 518,107.70 frs. Therefore the average
yearly expenditure during 1925 for medical treatment and drugs
was: 68.17 frs. per contributor, and 27.37 frs. per insured person.
In addition to this the cost of surgical and specialist treatment
was 189,100 frs. for 9,000 contributors and 22,482 insured persons
(contributors and their families) or, on an average, 21.1 frs. per
contributor, and 8.41 frs. per insured person.
It will thus be seen that the Charleroi Federation's average
annual expenditure for benefits in kind during 1925 was 89.18 frs.
per contributor, and 35.78 frs. per insured person.
During the same year the service assuring the payment of a
pecuniary sickness benefit of 3 frs. per day included 8,900 contributors, the total expenditure being 148,124 frs. for 2,113 sick
persons.
The total number of days of sickness benefit granted was thus
49,708, the average duration of sickness being approximately
23.5 days. The average benefits paid per sick person equal
70.57 frs., while the sickness incidence and the cost of benefits per
insured person was respectively 5.58 days and 16.76 frs.
The Federation of Socialist Mutual Benefit Societies of the district
of Dinant Philippeville included, in 1925, 7,257 contributors and
their families entitled to medical treatment and drugs. The total
number of persons covered by this service was 21,727.
During the course of 1925 the total expenditure of the medical
and drug service was 573,087.01 frs., the average expenditure thus
being 78.97 frs. per contributor, and 26.37 frs. per insured person.
During the same year the primary service guaranteed its members
a pecuniary sickness allowance of 4 frs. from the fourth day of
58
VOLUNTARY SICKNESS INSURANCE
sickness and an accident indemnity of 1.75 frs. per day payable,
without a waiting period, during three months. This service,
which covered 7,257 contributors, expended 109,106.25 frs. in cash
benefits to 1,734 sick persons.
The total number of days of sickness benefit was 34,802, the
average duration of sickness thus being 20 days. The average cash
benefits received per sick person was 62.92 frs.
The average sickness incidence and the average cost of cash
benefits per insured person were respectively 4.80 days and 15.03 frs.
The Federation to which the above figures refer have not as yet
organised specialist medical services.
Information is available concerning the total cost per contributor
and per insured person of the general medical services, the specialist
medical services, and the surgical services for the Federation of
Socialist Mutual Benefit Societies of the Charleroi Basin, although
it has not been possible to give exact figures concerning the average
duration of sickness giving rise to compensation.
The membership of the Federation in 1925 was roughly 50,000
contributors, while the number of insured persons entitled to
benefits in kind (family medical insurance) was 85,000.
The amount expended for general medical treatment and drugs
was 1,531,995.97 frs., or 30.64 frs. per contributor, and 18.02 frs.
per insured person.
The total expenditure of the specialist medical services and
surgeries (ear, nose, throat, etc.) was 944,015.91 frs., or 18.88 frs.
per contributor, and 11.11 frs. per insured person.
The total expenditure entailed by the grant of benefits in kind
during 1925 thus reached 49.52 frs. per contributor, and 21.13 frs.
per insured person.
On the other hand, the expenditure resulting from pecuniary
allowances to compensate loss of earning capacity (3.50 frs. per day
for sickness, 2.50 frs. per day during three months in cases of
accident); total, 478,592.20 frs., or an average of 9.57 frs. per
contributor.
On 31 December 1925, the membership of the Mutual Benefit
Federation " St. Michel ", affiliated to the National Alliance of
Federations of Christian Mutual Benefit Societies, included 15,083
persons contributing towards the primary medical service, the
number of insured persons entitled to benefits in kind (contributors
and their families) being 36,829.
59
BELGIUM
During 1925 the expenditure for benefits in kind granted by the
family, medical and drug service, was 551,567 frs., or an average
of 36.57 frs. per contributor, and 15.08 frs. per insured person.
The expenditure of the special surgical and medical service of the
same Federation was 47,445.46 frs. for 8,274 contributing members
and approximately 18,000 insured persons, thus corresponding to
an annual average of 5.73 frs. per contributor, and 2.64 frs. per
insured person.
The total expenditure entailed by the grant of benefits in kind
was therefore 42.30 frs. per contributor, and 17.72 frs. per insured
person.
During the same year the sickness benefit service, which included
15,083 contributors, granted allowances to 1,486 sick persons during
a total of 43,946 days. Its total expenditure in this connection was
283,997 frs.
The total number of days of sickness covered by allowances
was 29.6 days per sick person and 2.9 days per insured person.
The total cost of benefits in kind was therefore 193.Í2 frs. per
sick person, or 6.55 frs. per day, and 18.83 frs. per insured person.
To sum up, the average expenditure resulting from the grant of
benefits guaranteed by the primary and specialist medical services x
in 1925 was as follows:
BENEFITS IN KIND (MEDICAL AND SURGICAL TREATMENT AND DRUGS)
Number of persons contributing to the
family medical
and drug
services
Non-Party Federation of
Charleroi
Socialist Federation of Dinant-Philippeville
Socialist Federation of Charleroi
Mutual Benefit Federation
"St. Michel" of Brussels
1
Expenditure
(in frs.)
Per contributing member
Per insured
person
7,600
89.18
35.78
7,257
78.97
26.37
50,000
49.52
25.13
15,083
42.30
17.72
Excluding the anti-tuberculosis services organised by the funds.
60
VOLUNTARY SICKNESS INSURANCE
CASH BENEFITS
Average number of days
paid
Per contributing member
Non-Party Federation of
Charleroi
Socialist
Federation
of
Dinant Philippeville
Socialist
Federation
of
Charleroi
Mutual Benefit Federation
"St. Michel" of Brussels
Per sick
person
Expenditure
per contributing member
(in frs.)
5.58
23.50
16.76
4.80
20.00
15.03
?
29.60
?
9.57
2.90
18.80
MATERNITY BENEFITS
Maternity benefits granted by the mutual benefit societies
generally take the form of a lump sum, which rarely exceeds 75 francs.
There is, however, a strong movement in favour of the constitution of special State funds called " mothers' funds ".
Besides the grant of a variable lump sum, these organisations
propose to provide, (a) a daily benefit during a period of five to
six weeks (at least one of which will precede confinement) conditional
on the beneficiary ceasing all occupational and domestic work,
(b) a bonus to pregnant women consulting a doctor prior to confinement, and (c) in certain cases an allowance to cover the cost of
baby-linen, etc.
It is stated that this movement is favourably viewed by the
public authorities.
But up to the present it must be admitted that it is only in
exceptional cases that the societies have made any attempt to
guarantee complete compensation for their members in cases of
childbirth.
From reports submitted to the Congress of the National Alliance
of Christian Mutual Benefit Federations of Belgium, held in Brussels
on 19 December 1926, and those placed before the National Union
of Socialist Mutual Benefit Societies \ it would appear that the
societies are at present endeavouring to unite their efforts with those
' Le Mutuelliste, 15 Jan. 1927.
BELGIUM
61
of the National Infancy Scheme which was instituted by the Act
of 5 September 1919. It is thought that this step will result in the
mutual benefit movement becoming one of the principal organs
of the National Scheme, as the subsidies received by the funds
from the Scheme will allow them to extend prenatal consultations
and to develop their medical and drug services so as to secure
medical supervision for children from their birth to the moment
when, going to school, they come under the school medical services.
As a rule, the actual award of maternity benefit is in the hands
of the primary sickness insurance funds, which do not publish
special statistics on the matter.
B E N E F I T S IN GASES OF TUBERCULOSIS
Recognised mutual benefit societies which insure their members
against tuberculosis grant:
(1) treatment in sanatoria and convalescent homes;
(2) benefits and assistance in kind (consultations by specialists,
drugs and restoratives) ;
(3) daily allowances for special diets, treatment, etc.
The report made by Inspector-General Mercier to the Medical
Committee of the medical benefit societies shows that during 1925
the total expenditure of the tuberculosis insurance funds was
1,879,117 frs. As 1,151,274 persons were affiliated to the funds
during that year the expenditure per insured person worked out
at 1.63 frs.
The following details on the working of the fund guaranteeing
treatment in sanatoria and fresh-air cures are quoted from the
annual report for 1925 submitted to the Congress of the National
Alliance of Christian Mutual Benefit Federations:
On 31 December 1925, the total membership of the fund was
440,328 (167,438 men, 123,326 women, and 149,564 children).
During the year under consideration, hospital treatment was
given to:
152 men for a total period of 15,595 days
128 women for a total period of 13,362 days
100 children for a total period of 9,997 days
or to 380 persons for a total period of 38,954 days.
62
VOLUNTARY SICKNESS INSURANCE
The total expenditure for the year 1925 was 362,494.90 frs., but
it should be pointed out that the fresh-air services for children at
the homes of Mount Thabor were inaugurated only on 1 May 1925.
Subject to this reservation, it will be seen that the average
duration of hospital treatment was 102.5 days per sick person,
while the average cost of benefit granted was 953.95 frs. per sick
person, and 0.823 fr. per insured person.
During 1926 the average cost has increased to about 1,359.20 frs.
per sick person and 1.587 frs. per insured person.
For the year 1925, the balance of the tuberculosis fund attached
to the National Union of Socialist Mutual Benefit Federations of
Belgium shows the following figures:
The number of persons placed in sanatoria by the fund, with or
without its financial participation in the cost of maintenance,
was 420, while 32,387 days of treatment were given. The average
stay in a sanatorium was therefore, roughly, 77 dayá.
Of the 420 £ ick persons placed in sanatoria, 308 were admitted
at the cost of the tuberculosis fund. The expenditure in connection
with the maintenance of these persons was 291,033.69 frs., or 944.90
frs. per sick person.
in addition, the fund placed and maintained 160 adults and
186 children in fresh-air homes and rest houses.
The average duration of stay in these establishments was
approximately 49 days for adults and 52 days for children,
while the cost of maintenance for adults was 732.56 frs. per person,
and for children 524.80 frs.
To these expenses should be added the cost of outfit and travelling
expenses for the sick persons sent to sanatoria and " preventoria ".
Average travelling expenses amounted to 15.02 frs. per person
(adult or child), those for outfit being 35.92 frs. per adult and
41.66 frs. per child.
The expenditure resulting from hospital treatment or admission
at the cost of the fund to sanatoria or "preventoria " (fresh-air establishments and rest houses) therefore amounted to approximately:
995.85 frs. for'each person admitted to a sanatorium; 783.50 frs.
for each adult admitted to a " preventorium"; 581.48 frs. for each
child admitted to a " preventorium ".
The total expenditure of the fund for maintenance, outfit, and
travelling expenses in connection with admission of members
(adults and children) to sanatoria and preventoria at the expense
of the fund was 545,472.48 frs.
BELGIUM
63
The average expenditure for each patient was therefore approximately 834 frs.
The remainder of the expenditure of the fund was made up
as follows:
Frs.
Dieting allowances
37,417
Incurability allowances
35,362
Allowances in connection with change of trade
714
Doctors' fees (89,000), salaries of infirmary staff (35,000), drugs,
analyses, etc
127,457
Rents and repairs of consulting rooms, travelling expenses of
medical staff, etc
18,525
Total
219,476
Administrative expenses properly so called, expenditure for staff,
materials, etc., reached 84,926.38 frs.
The total expenditure of the fund was 849,874.86 frs. Benefits,
doctors' fees, and diverse expenditure other than administrative
expenditure, formed 764,948.48 frs., or 1.56 frs. per insured person.
In 1926 the total expenditure of the fund rose to 1,389,814 frs.
The increase of 60 per cent, on the expenditure in 1925 is due partly
to the higher cost of daily maintenance in sanatoria and of administration, and partly to the greater number of days of treatment
(44,851 days in sanatoria in 1926 as against 32,387 in 1925, or 40
per cent. more). To this increase in the number of days of treatment corresponds a longer average duration of sanatorium treatment
(112 days in 1926 as against 77 in 1925 or 50 per cent, longer).
The total expenditure, excluding cost of administration, in
1926 amounted to 1,220,000 frs. on behalf of a membership of 694,115
insured persons, or 1.74 frs. per insured person, being 11 per cent.
more than in 1925.
For the year 1925 the accounts of the Non-Party Mutual Benefit
Federation of Liege show t h a t the tuberculosis fund set up by this
organisation had on 31 December 1925 23,358 members, of whom
8,789 were women.
During the year the total expenditure in benefits granted to
sick persons was 22,062.90 frs., or 0.945 frs. per insured person.
INVALIDITY B E N E F I T S
Conditions of Award
In order to qualify for State subsidies, the mutual invalidity
benefit funds and federations are required t o continue the payment
to their sick and infirm members, at the rate of at least 1 fr. per day,
64
VOLUNTARY SICKNESS INSURANCE
of the benefit previously received by them from the sickness
funds during a period of at least three, and at most six, months.
The annual benefits granted by the mutual societies whose
object is to constitute a separate fund to help their sick and infirm
members are subject to revision every financial year, and may not
exceed 1,200 frs. per person (Act of 23 June 1894, section 2, subsection 1).
The benefits granted by mutual benefit societies forming an
autonomous insuring, group are thus characterised by their precariousness and their limitation to a legal maximum which may
not be exceeded, as the rates are liable to revision every year.
These benefits must be guaranteed for sick and infirm persons
until the age of 65 years (section 3 of the Act of 5 May 1912).
As a rule, however, invalidity benefits vary between 2.50 and
3.50 frs. per day if the insured person has not reached 65 years of age.
Invalidity insurance for persons over 65 years of age is undertaken
by separate funds (special reinsurance funds, old-age funds),
whose benefits rarely exceed 2 or 2.50 frs. per day.
Statistics
According to information received by the International Labour
Office from the Ministry of Industry, Labour and Social Welfare,
provisional figures for the year 1925 show that the total expenditure
of the invalidity funds granting benefits up to 65 years of age was
roughly 5% million frs., for a total membership of close on 750,000.
The number of cases of invalidity resulting in the payment of
benefit was 14,062, the average duration of benefit being 200 days,
and the average amount of benefit for each case of invalidity 389 frs.
The average cost of benefit granted per insured person was therefore
7.35 frs.
The report made by Inspector-General Mercier to the Medical
Committee of the societies gives slightly different figures, the total
amount paid out in benefits during 1925 being estimated at 6,100,000
frs. for 800,000 contributors. This means that the average cost
per head per contributor worked out at 7.62 frs.
The general report submitted to the Congress of the National
Alliance of Christian Mutual Benefit Federations of Belgium
contains the following information regarding the results of the year's
working in 1925 :
During 1925 the invalidity funds included 224,579 members. . . . The
number of persons who received benefits was 2,798 (2,203 men and 595 women).
The total benefits paid amounted to 1,128,464 frs. for 342,092 days of incapacity, while the total expenditure of the funds was 1,396,833 frs.
65
BELGIUM
The average duration of benefit was therefore 194 days, the
average amount per beneficiary 403.30 frs., while the average
oost of benefit per contributor was 5.02 frs.
The accounts of the Federation of Socialist Mutual Benefit
Societies of Charleroi relating to ordinary reinsurance (invalidity
benefit of 3 frs. per day from the fourth month of sickness and payable up to 65 years of age) show a considerably higher cost per head.
The expenditure for benefits was 390,741 frs. for 50,000 contributors,
or an average of 7.81 frs.
According to the accounts of the Federation of Socialist Mutual
Benefit Societies of the district of Dinant Philippeville \ the average
cost of benefits per contributor was 7.75 frs.
The differences in the average cost of benefit per contributor and
in the average duration of invalidity during which benefit is paid
are explained by the fact that the original payments made by the
invalidity funds vary according to whether the primary funds grant
benefits during 3, 4, 5, or 6 months. As invalidity funds are required
to guarantee the continuation, to the extent of at least 1 fr. per
day, of the payments made by the primary funds, the average duration of cases of invalidity and the average cost entailed are naturally
greater when the benefits of the primary funds are of short duration.
The reinsurance fund of the Non-Party Mutual Benefit Federation
of Liege, which, from the seventh month of illness, grants its members, under 65 years of age, an allowance of 2.50 frs. per day in cases
of total incapacity, or 2 frs. per day for men and 0.75 frs. per day for
women in cases of partial incapacity to work, spent 83,640 frs. in
benefit during the year 1925. The number of days of benefit paid
was 35,034, while the membership of the fund was 17,222, including
4,107 women. The average duration and cost of the benefit per
insured person were therefore 2.03 days and 4.85 frs. respectively.
The Mutual Benefit Federation of Charleroi, like the previous
organisation, is affiliated to the National Federation of Non-Party
Mutual Benefit Societies of Belgium. This invalidity fund, which
in 1925 had 11,010 paying members, grants a benefit of 2 frs. per
day to infirm members under 65 years of age. But the average
duration and cost of the benefit per contributor were considerably
higher than in the Liege Federation, being respectively 5.64 days
and 11.30 frs.
i In cases of illness of long duration, this fund grants a sickness benefit
of 3.50 frs. per day during nine months reckoned from the fourth month of
illness, and 2.50 frs. per day from the thirteenth month until 65 years of age.
In cases of industrial accidents, compensation amounting to 1.75 frs. is paid
from the fourth month of incapacity up to 65 years of age.
5
66
VOLUNTARY SICKNESS INSURANCE
ORGANISATION OF THE MEDICAL, SURGICAL AND PHARMACEUTICAL
SERVICES OF THE RECOGNISED MUTUAL BENEFIT SOCIETIES
Belgian legislation contains no provisions relating to the organisation of the medical, surgical and pharmaceutical services of the
mutual funds or societies. Section 21 of the model rules of mutual
sickness funds states that " the medical and drug services shall be
arranged by the governing body ". This body is therefore empowered to adopt what provisions it thinks fit in connection with the
engagement and remuneration of doctors, the choice of doctor by
sick persons, and the settlement of disputes.
Based on information supplied to the International Labour
Office by the National Alliance of Christian Mutual Benefit Federations of Belgium, a description is given below of the provisions generally adopted by the mutual organisations to regulate the freedom
left to sick persons in the choice of a doctor or pharmacist, to determine the share of the medical and drug expenses to be paid by the
insured person, and to fix the manner and rates of remuneration of
doctors and pharmacists. This is followed by a survey of the
organisation of the surgical, tuberculosis and specialist services.
Choice of Doctor and Pharmacist by the Insured Person
In the large centres the system of free choice of a doctor is generally practised. This choice is sometimes limited to doctors who
have concluded an agreement with the mutual organisations. In
the country districts the local doctor is, with rare exceptions, the
only doctor eligible to treat the sick.
In the towns, drugs are generally delivered at reduced prices by
chosen pharmacists.
In the country districts, on the contrary, drugs are delivered by
the doctors in charge of the case, who have the benefit from this
privilege when there are no pharmacies in the neighbourhood.
Beneficiaries' Participation in the Cost of Benefits
The Circulars of 20 February 1920 and 31 December 1922 empower
the funds to demand from their members in addition to contributions the partial repayment of the cost of doctors' visits and prescriptions dispensed (see page 56).
BELGIUM
67
The Circular of 31 December 1922 adds:
It has been found, in the case of societies which have adopted the system
of free choice of doctor, that the strict observance of the provisions regulating
the sum which may be demanded from the sick person in connection with
medical consultations or visits may be onerous when a doctor charging high
fees is called in.
The remedy to this difficulty would appear to lie in the stabilisation of the
amount payable by the societies, in so much as these organisations are entitled
to base their " scales of fees ", according to which their share of the costs
must eventually be established, on the fees generally demanded from the
working classes by the doctors of the neighbourhood.
When drugs are supplied by the doctors themselves members of
the mutual societies are not generally asked to bear a p a r t of the
cost of the prescriptions dispensed.
Methods of Remunerating Doctors and Pharmacists
Until recent years the methods of remunerating medical practitioners were regulated by agreement concluded between the practitioners and the mutual societies. These agreements were generally
based on one of the systems mentioned below:
Panel system covering the medical expenses of the whole of the
members of a group.
System of remuneration by an annual amount which determines
the conditions of treatment per person and per family ;
Direct payment by the affiliated members.
In consequence of the variations in medical fees which resulted
from fluctuations in the currency, it became exceedingly difficult to
conclude such contracts, and at the present time all sorts of arrangements are to be met with. In the majority of cases, however, a
temporary understanding has been arrived at with the physicians,
who generally agree to give their services to the societies at lower
rates than those usually charged for ordinary patients.
Where it has been impossible to come to such agreements, the
insured person deals directly with the doctor without any intervention from his society, which confines itself to refunding a fixed
percentage of the medical expenses incurred (3 to 4 frs. for medical
advice, 3 to 6 frs. for each visit).
68
VOLUNTARY SICKNESS INSURANCE
Fixing of Tariffs and Relations between the Societies and Physicians
With a view to promoting agreement between the members of the
medical profession and the directors of the mutual societies concerning the organisation of medical services, a special Committee was
set up and attached to the Ministry of Industry and Labour by a
Royal Order dated 25 July 1924. This Committee was entrusted
with drafting proposals for the establishment of relations between
the recognised mutual societies and the members of the Belgian
medical profession, especially concerning the remuneration for
medical treatment. At the present moment the Committee has not
yet completed its studies.
In 1922 a drug tariff was established by a sub-committee of technical experts attached to the central committee of the medical and
drug services of the mutual societies. These rates include a fixed
part and a variable part which is based on the cost-of-living index.
Specialists and Surgeons. Action against Tuberculosis
Far from confining themselves to providing their members with
the general medical facilities described above, mutual societies have
made every endeavour to put at their disposal the service of specialists and surgeons and to afford them treatment against tuberculosis.
With the special contributions charged for such purposes the
federations have been able to organise services of specialists, to open
surgeries, to build sanatoria and to provide for their extension.
A number of federations provide their members with allowances
which permit them to call in the services of well-known specialists.
Others, again, have made special arrangements with surgeries and
pay the whole or part of the cost of treatment of their members
in such establishments. Still others have built their own private
medical institutions in order to ensure their members receiving the
requisite treatment. A large number of federations allow their
members who require expert advice or surgical treatment to choose
their physician or surgery, provided that these latter agree to the
rates drawn up by the federation ; others give their members entire
freedom of choice on the understanding that they will pay the
difference between the fees demanded by the physician or surgery
and the rates adopted by the federation. Ordinary surgeries are
as a rule open to all members of societies entitled to make use of the
primary medical and drug services.
The great majority of members of mutual benefit societies, who
a few years ago were a charge on the public surgical and hospital
BELGIUM
69
services, have thus made a great attempt to obtain for their members the benefit of specialist medical treatment through the creation
of their own establishments. Among the medical institutions
founded by the mutual benefit societies should be noted the polyclinic of the Socialist Federations of Charleroi and Louvain, the
surgery "La Mutualité" of Verviers founded by the National Union
of Federations of Non-Party Mutual Benefit Societies of Belgium
with the help of a group of philanthropists, the surgery of the
Federation of Christian Mutual Benefit Societies of Ostend, the
curative establishments of Tribomont and Heyst-sur-Mer of the
National Union of Federations of Socialist Mutual Benefit Societies,
and the sanatorium at Mont-sur-Meuse, belonging to the Christian
Alliance.
Finally, the tuberculosis insurance funds founded by the National
Unions also carry on useful preventive and curative work in
collaboration with the public authorities and the national antituberculosis scheme.
The activity of these funds is directed towards :
(a) the organisation of dispensaries;
(b) the education of their members in anti-tuberculosis prophylaxy by means of lectures, leaflets, visiting nurses, etc.;
(c) the foundation of institutions which enable their members
to obtain treatment in sanatoria, fresh air and rest cures,
special dieting, and efficient treatment by specialists ;
(d) the grant of allowances Avhich enable their members to change
their trade in order to avoid or cure tuberculosis.
(e) The protection of the family of an incurable by isolating the
sick person or by housing his family in specially healthy
conditions.
In the absence of complete statistics it is impossible to give
figures illustrating the importance and the cost of the organisation
of medical and drug services by the mutual societies. It may,
however, be stated that in 1925 the total expenditure of the family
medical and drug services (benefits in kind) was 50,000,000 frs.,
while the sums spent by the anti-tuberculosis fund was 1,189,117 frs.
According to information received by the International Labour
Office from the National Alliance of Federations of Christian Mutual
Benefit Societies and the National Union of Federations of Socialist
Mutual Benefit Societies, the expenditure for special medical and
surgical treatment may be estimated at approximately 4,000,000 frs.
70
VOLUNTARY SICKNESS INSURANCE
It would therefore appear that during 1925 the total cost of
the organisation and working of the medical services of mutual
associations was about 56,000,000 frs.
§ 2. — Expenditure
In addition to the cost of benefits granted to members, the
expenditure of the mutual societies includes expenses in connection
with administration and supervision.
It would seem that there are no statistics, even partial, relating
to the administration of the primary mutual societies. On the other
hand, however, the administrative expenses of invalidity and antituberculosis funds, and their relation to the total expenditure,
may be estimated from the information supplied to the International Labour Office by the Ministry of Industry, Labour and
Social Welfare, and from the report made by the Inspector-General
of the mutual benefit societies to the Medical Committee of the
societies.
According to the documents received from the Ministry, the
administrative expenses of the invalidity funds were 690,855 frs.
in 1925, those of the anti-tuberculosis funds being 133,848 frs.
According to the report submitted to the Medical Committee
of the societies, the allowances and benefits paid amounted to
6,100,000 frs. for the invalidity funds and 1,879,117 frs. for the
anti-tuberculosis funds.
The relation of administrative expenditure to benefits paid would
therefore appear to be 11.325 per cent, for invalidity insurance and
7.122 per cent, for anti-tuberculosis insurance.
The cost of the various branches of insurance undertaken in
1925 is shown in the following table for the whole of the societies :
Total cost
Benefits for loss of working
capacity resulting from
illness
Family, medical and drug
services (general medicine)
Anti-tuberculosis insurance
Special medical and surgical
services
Invalidity
Frs.
19,500,000
Cost per
Insured
person
i'rs.
11.75
Cost per
contributor
ï'rs.
11.75
50,000,000
2,012,965
circa 22.81
1.748
45.45
1.748
4,000,000
(approx.)
6,790,855
8.488
8.488
BELGIUM
71
If, according to this table, one calculates the relation between
the expenses resulting from cash benefits and benefits in kind, it is
to be remarked that benefits in kind form 72 per cent, of the total
expenditure, while cash benefits represent only 28 per cent, of the
total.
The striking difference between the importance of cash benefits
and benefits in kind is due in large measure to the extension given
to family medical and drug services in Belgium. It is to be noted,
however, that even when the relation of one class of benefit to the
other is considered for the insured person alone, it is found that
benefits in kind are responsible for about 66 per cent, of the total
cost of all benefits.
The percentage of benefits in kind to the total expenditure is
obviously still higher when account is taken of the special medical,
surgical and anti-tuberculosis services, which, after all, may be
said to correspond to benefits in kind. In this case the relative
percentages are 74 per cent, for benefits in kind and 26 per cent.
for cash benefits.
72
VOLUNTARY SICKNESS INSURANCE
CHAPTER III
FINANCIAL RESOURCES AND THEIR MANAGEMENT
The rules governing the constitution of financial resources and
the use t o which t h e y may be put vary with the aims of t h e societies.
In the following pages a general survey is made of the rules
common to all recognised funds, this being followed b y an exposition
of the provisions, dealt with risk by risk, and the relevant statistics
peculiar to certain classes of funds and societies.
The resources of the mutual benefit societies include:
Contributions of active members.
Contributions of honorary members.
Employers' contributions towards certain societies (the so-called
employers' mutual societies).
Subsidies received from the State and public authorities.
Gifts and legacies.
Interest on investments.
Most of the active members' contributions and those of honorary
members are not subject to any special regulations. The same
may be said of the employers' contributions, which, however,
must be assimilated to those of the honorary members.
Gifts and legacies form the subject of special regulations which
apply to all societies. In virtue of section 14 of the Act of 23 June
1894, mutual societies may receive gifts and legacies only on
condition t h a t t h e y conform to the regulations relating to such
matters embodied in section 76 of the Communal Act. This section
reads as follows:
All decisions [of the communal council or mutual society] on the following
matters require the confirmation of the permanent deputation of the-provincial
council and the approval of the King:
Donations and legacies [to a commune, a communal establishment, or a
mutual benefit society] when their value exceeds 5,000 frs.
The approval of the permanent deputation of the provincial council is
sufficient when the value of the donation or legacy does not exceed this sum....
The Royal Order which authorises the society to accept a gift
which includes real estate determines where necessary the time
within which such estate must be sold or transferred (section 15
of the Act of 23 June 1894).
73
BELGIUM
Mutual societies are not bound by law to adopt any definite
financial system. Funds constituting an autonomous insuring
group may cover their expenditure by a capitalisation system or by
a distribution of capital or cover system, or again by the system
whereby annual pension costs are met out of annual income.
The funds enjoy entire liberty of action provided t h a t they do n o t
utilise invested capital which forms part of their inalienable
property for the payment of pension costs (Act of 23 June 1894,
section 2, para. 2).
The constitution of reserve funds to cover the various risks
undertaken by the associations and the supervision of the financial
stability of the funds are not covered by any special regulations.
The investment of capital forms the subject of a special ruling
which is applicable to all mutual associations. In this connection
section 18 of the Act of 23 June 1894, as amended by the Act of
27 December 1923, lays down the following conditions:
When the capital of a fund exceeds the twelfth part of the yearly income from
contributions, the excess must, except in the cases mentioned in subsections 4,
5 and 6 hereafter, be deposited in the name of the society in the State Guaranteed Savings Bank, or be invested in Belgian public stock or other securities
guaranteed by the State, or in Belgian provincial, municipal or communal
securities.
At the request of the society concerned, the sums deposited with the savings
bank may be invested in Belgian public stock, which must be inscribed in the
stocks and shares book attached to the passbook of the savings bank.
When securities are acquired they must be deposited within 15 days from
purchase in the name of the society with the credit institution concerned.
Societies are empowered to deposit their funds with co-operative credit
societies of limited or unlimited liability.
They are also empowered to deposit, until the end of any financial year,
the amount of their annual receipts with a credit establishment chosen by
their governing body.
With the approval of the general assembly they may invest a maximum of
25 per cent, of their capital in medical or curative institutions founded for the
treatment of members of recognised mutual societies.
A Royal Order will determine the formalities and conditions to be observed
in depositing and withdrawing the funds and securities of the society (Act of
27 December 1923).
§ 1. — Sickness Insurance
REGULATIONS
GOVERNING
FINANCIAL
RESOURCES
AND
THEIR
SUPERVISION
Contributions
of Active
Members
Belgian legislation makes no stipulations regarding the minimum
rate of contributions t o be demanded from members in order
t h a t the fund or society may be entitled t o State subsidies.
74
VOLUNTARY SICKNESS INSURANCE
Nevertheless, in virtue of a Ministerial Order dated 31 December
1922, recognised mutual societies organising family medical and
drug services must charge a minimum monthly contribution of
50 centimes for the head of a family, married couples, and for
each child of 14 years or older. For children under 14 years of
age and for ascendants over 55 years of age who are dependent
on the head of the family, 25 centimes per month must be paid.
In order not to impose an excessive contribution on large families,
payment is not required for more than two children. In this way,
the minimum contribution for a family composed of the father,
mother, and three children of at least 14 years of age is 1.50 frs.
per month (0.50 for the father, 0.50 for the mother, 0.25 for two
children; no payment being required for the third child).
Subsidies from the State and Public Authorities
Mutual societies duly recognised by the Government, including
at least 25 paying members, and providing medical treatment and
drugs during at least two years for members and their families,
which charge the minimum contributions the scales of which have
been mentioned above, are entitled to a subsidy calculated on:
(1) the number of insured persons, and
(2) the total amount of contributions received.
In the first place the mutual society receives a monthly subsidy
equivalent to the minimum rates of contributions, viz. 50 centimes
for persons aged between 14 and 55 years, and 25 centimes for
persons under 14 and over 55 years of age. Secondly, with a view
to encouraging societies to extend and perfect their medical and
drug services, subsidies are granted, not only in accordance with
the number of beneficiaries, but also in proportion to the importance of the contributions. These supplementary subsidies are
granted when the proceeds from contributions exceed a specified
minimum. They are calculated at the rate of 50 centimes per
franc in proportion to the excess, but in no case may they exceed
the amount of the primary subsidy (extracts from the Circulars
of 31 December 1922 and 20-21 July 1927).
In addition sickness insurance societies receive a subsidy in aid
of propaganda work, publications, etc., which is awarded, in virtue
of the Circular of 20-21 July 1927, on the following conditions:
BELGIUM
75
A subsidy equal to 10 per cent, of contributions is granted
to mutual societies which provide for at least three months
a sickness benefit equal to or greater than 6 frs. a day to such
of its members of the male sex as are over the age of 18, and
which cover at least 90 per cent, of their ordinary expenditure
from the contributions of members.
As a transitional measure for the years 1927 and 1928, no
account is taken of the minimum rate of 6 frs. prescribed by
the Circular, but the subsidy will be reduced from 10 to 5 or
2 per cent, according as the proportion of expenditure covered
by contributions is less than 90 or 75 per cent.
Financial Supervision
No financial supervision is exercised as regards the formation
of reserve capital and the actuarial valuation of the funds of the
mutual societies.
STATISTICS
During the year 1925 the total amount of contributions paid
to the primary sickness insurance funds was:
For pecuniary benefits
19,500,000 frs.
or 11.75 frs. per contributor
For family medical and drug services
29,000,000 frs.
or approximately
13.28 frs. per insured person and
26.55 frs. per contributor
During the same year State subsidies to the family medical and
drug services totalled 14,080,000 frs.
The total income of the family medical and drug services,
including subsidies received from the provinces and communes
and diverse receipts, thus totalled about 45,000,000 frs. Expenditure was 50,000,000 frs. Therefore the deficit during 1925 was
roughly 5,000,000 frs.
In order to remedy this state of affairs and to meet the increased
expenditure resulting from the depreciation of the currency,
mutual societies largely increased their rates of contributions
during 1926. The average contribution of the primary insurance
services (medical treatment and drugs, and pecuniary sickness
benefit) was, during that year, about 5 frs. per month or 60 frs.
per annum per contributor. The State subsidy to these services
76
.
VOLUNTARY SICKNESS INSURANCE
also underwent a change, and increased from 14,080,000 frs. in
1925 to 17,680,000 frs. in 1926, and to 30,400,000 frs. in 1927 \
To this sum, which was granted exclusively for the organisation
of medical and drug services, must be added subsidies to cover
the expenses of first installation, printing of annual reports and
propaganda leaflets; these subsidies amounted to 650,000 frs. in
1925, to 1,000,000 frs. in 1926, and to 3,065,000 frs. in 1927.
§ 2. — Anti-Tuberculosis Insurance
FINANCIAL RESOURCES
Belgian law contains no regulations fixing the amount of contributions which may or must be demanded by the anti-tuberculosis
insuring groups. The Ministry of Industry, Labour and Social
Welfare grants to recognised anti-tuberculosis funds a subsidy
equal to 60 per cent, of the contributions paid by their members.
STATISTICS
According to the report of Inspector-General Mercier, the total
contributions received by the anti-t-uberculosis funds were, during
1925, 1,500,000 frs., or 1.30 frs. per member.
The sums earmarked in the budget for subsidies to these funds
was 700,000 frs. in 1925 and 1,200,000 frs. in 1926 and 1927.
On 31 December 1925 the total capital of these funds was
3,132,734 frs., or 2.72 frs. per insured person.
§ 3. — Invalidity Insurance
REGULATIONS
GOVERNING
FINANCIAL
RESOURCES
AND
THEIR
SUPERVISION
Contributions
of Active
Members
The Act of 5 May 1912, which determines the amount of bonuses
which may be allocated to recognised mutual federations and to
1
Including a special subsidy of 500,000 frs. for maternity insurance societies.
BELGIUM
77
assimilated primary societies whose object is to guarantee benefits to
their members in cases of chronic sickness or invalidity, lays down
that the federations must meet at least 75 per cent, of their expenses
from the contributions of their paying members and interest received
from investments. This 75 per cent, is estimated each year at the
choice of the fund either on the results of the preceding year or on
average results of the 2, 3, 4 or 5 preceding years. The only
societies exempt from this condition are those which, during this
period, have increased their reserve capital by a sum at least equal
to 25 per cent, of their total expenditure (section 3, subsection 4,
of the Act of 5 May 1912).
These provisions only fix the proportion which must exist
between the income from contributions and the expenditure of the
insuring group. But the Royal Order of 13 July 1913, which determines the conditions in which mutual funds or societies may be
assimilated to invalidity insurance federations, states that, in
order to gain recognition and to be entitled to a State subsidy, the
funds must fix their annual contribution towards invalidity benefit
at a minimum of 6 frs. for every franc of daily benefit, and for a
period of at least ten years.
At the expiration of this period the society may reduce its
contribution below 6 frs. only on the authorisation of the Government (section 2, subsection 4, of the Royal Order of 13 July 1913).
Subsidies of the State and Public Authorities
The amount of subsidies granted to invalidity insurance funds
is strictly in proportion to the total of paid-up contributions.
Section 2 of the Act of 5 May 1912 stipulates that " the amount
of subsidies granted to mutual invalidity funds, either by the State
or by any public authority, shall be determined in proportion to
the total contributions paid by effective members during the year
preceding the financial year in question. The subsidy granted by
the State shall be at the rate of 0.60 fr. per franc. "
STATISTICS
According to the report presented by Inspector-General Mercier
to the Medical Committee of the mutual societies, the amount of
contributions paid during 1925 by members of the invalidity funds
amounted to 6,000,000 frs., or 7.50 frs. per member per annum.
78
VOLUNTARY SICKNESS INSURANCE
The amount earmarked in the budget of the Ministry of Industry,
Labour and Social Welfare for subsidies to the mutual invalidity
funds was 2,000,000 frs. in 1925, 2,500,000 frs. in 1926 and 3,000,000
frs. in 1927. The financial system of the mutual invalidity
funds is that of the distribution of income. Nevertheless, the
hinds generally endeavour to form financial reserves, and during
1926 these reserves were 9,913,673 frs., or 12.40 frs. per insured
person,
BELGIUM
79
CHAPTER IV
THE POSITION OF' FOREIGNERS UNDER VOLUNTARY
INSURANCE
The only provision regulating the position of foreigners under
voluntary insurance relates to the administration of the societies,
which must be managed by one or several nominees among the
active and honorary members. These persons must be Belgian
subjects and of age.
Nevertheless, the Government, after consulting the Permanent
Committee, may dispense with the condition concerning nationality.
Neither the regulatory texts nor the model rules drawn up by the
Permanent Committee of the mutual societies contain any provisions
creating a special position for foreigners, who may therefore be
admitted to membership of the societies on the same conditions
as members of Belgian nationality, but cannot participate in the
management unless individually enabled by the Government.
CANADA1
INTRODUCTION
Sickness insurance, unlike life assurance, which has attained a
great development among all classes, is as yet an unimportant
feature of the social organisation of Canada. Individual thrift is
for the vast majority of the population the only method of providing against the economic loss occasioned by illness. It must be
supposed that, in general, wages are sufficiently high and the habit
of saving is widespread enough to render the workers able and
willing to take individually their precautions against this risk.
Whether such is the case or not, the need for insurance has not
hitherto expressed itself either in the founding of numerous or
important private social insurance institutions or in a demand
for the State to establish a compulsory scheme.
Three types of institution, however, exist in Canada which
enable workers or other persons of small means to insure themselves
against sickness. They are mutual benefit societies, trade unions,
and works schemes established on behalf of the persons employed
in a particular undertaking.
§ 1. — Fraternal Benefit Societies
A fraternal benefit society is legally defined as " a corporation
having a representative form of government, and incorporated for
fraternal, benevolent or religious purposes, among which purposes
is the insuring of the members, or the dependent children of the
members, thereof, exclusively against sickness, disability or death,
and includes a corporation incorporated on the mutual plan for
the purpose of so insuring the members or the dependent children
1
Based on information supplied by the Canadian Department of Labour.
81
CANADA
of the members of such a corporation exclusively" (section 1 (2),
hh, of an Act to amend the Insurance Act, 1917, assented to 7 July
1919).
Every society must obtain a licence before it can transact any
insurance business. All foreign (American) societies must obtain
a licence from the Dominion Minister of Finance, and so must all
Canadian societies desiring to transact business in more than one
province. Societies whose operations are confined to a single
province may be licensed by the provincial authorities, but such
societies are unimportant. The information given below relates
only to societies possessing a Dominion licence.
CONDITIONS FOR GRANT OF DOMINION LICENCE
In order to obtain a licence a society must show that it is incorporated under the provisions of Canadian, provincial or foreign
law. It must produce forms of the policies or benefit certificates
which it carries, a financial statement, and, if it has already transacted business (provincial or foreign society), a satisfactory valuation performed by a competent actuary. A deposit of 10,000
dollars is required.
NUMBER AND MEMBERSHIP OF SOCIETIES
The number of fraternal benefit societies at the end of 1925
was 24 (10 being Canadian), having a total Canadian membership
of 214,260 members contracting life assurance and 87,928 members
insured against sickness.
The total population of Canada at the end of 1925 is estimated
at 9,504,700. Consequently less than 1 per cent, of the population
is insured against sickness with fraternal benefit societies licensed
by the Dominion authorities. The inclusion of societies having
provincial licences would not appreciably increase the proportion
insured. .
A wide variety of qualifications for membership is encountered :
sex, religion, race, occupation, singly or together, are the criteria
by which aptness for admission is judged. The following table
classifies 14 societies according to the qualifications for membership.
6
82
VOLUNTARY SICKNESS INSURANCE
Number
of societies
Membership limited to women:
(a) No other limitation
(6) Limited to persons of a particular religion
Membership limited to men, or mainly to men, of a particular
religion:
(a) No other limitation
(6) Limited to persons of a particular race
(c) Limited to persons in a particular trade union
ADMINISTRATION
OF
2
1
3
5
3
SOCIETIES
Administrative officers and committees are appointed or elected
in accordance with the rules of each society, usually by delegates
from local branches assembled at a general meeting held yearly
or every two,, three or four years.
R I S K S COVERED AND B E N E F I T S
The principal risk covered by fraternal benefit societies is death.
Insurance against sickness and invalidity is a secondary purpose
of these societies, since, in order to obtain protection against these
risks, a person must also take out a life policy. If invalidity is
covered, it is combined sometimes with sickness, sometimes with
life assurance, the benefits being of à very limited character. Three
Canadian societies grant funeral benefit as a benefit of sickness
insurance; b u t this benefit is unimportant even in these societies.
No society grants medical or maternity benefits.
The following table shows the classification of societies according to the risks they insure against, the number of members insured,
and the life assurance benefits, at the end of 1925 :
Life assurance
Number
oí
societies
Societies undertaking life assurance
only
Societies undertaking life assurance
and sickness insurance
Total
Number
of members
Amount
assured
Sickness
insurance
Number
of members
$
12
60,584
58,357,575
12
153,676
135,297 464
24
214,260
193,655,039
87,928
87,928
CANADA
83
The most usual sickness benefit is 5 dollars a week. Benefit is
as a rule not paid for the first week. The duration of sickness
benefit is limited to 12, 15 or 20 weeks in any year: three societies
fix a maximum for a whole lifetime, as, e.g., 400 dollars for a person
insuring for a benefit of 5 dollars a week. The total amount of
sickness benefit paid in 1925 was 444,554 dollars, or 5 dollars
per person insured.
The death benefits are on the same scale as those of ordinary
life assurance, being seldom less than 1,000 dollars, and may be
as high as 5,000 dollars. Provision may be made for old age by
endowment, the benefit assured being usually paid in a lump sum,
but sometimes by instalments over a period of ten years.
Funeral benefits are an unimportant feature of the sickness
insurance offered by the societies. The few societies which grant
them pay 50 or 100 dollars. In 1925 the total amount so paid
was 29,657 dollars.
FINANCIAL RESOURCES
The contributions of their members and interest on investments
are the only sources of revenue of fraternal benefit societies.
The average rate of contributions per member in 1925 was
18.15 dollars for life assurance and 5.97 dollars for sickness
insurance.
The total contributions in the same year were : 3,870,079 dollars
for life assurance and 561,913 for sickness insurance.
The total assets of Canadian societies at the end of 1925 were
62,466,848 dollars, and the assets in Canada of foreign societies
were 1,789,455 dollars.
SUPERVISION OF FINANCIAL STABILITY
Societies are obliged by law to maintain reserves to the amount
indicated to them by their actuaries, and to have a valuation of
their assets and liabilities effected annually, and the result must
be reported to the Dominion Superintendent of Insurance. . If the
assets are deficient, a society may be given a period not exceeding
four years in which to reach the required level by reducing benefits
and raising premiums.
84
VOLUNTARY SICKNESS INSURANCE
§ 2. — Provision of Sickness Benefits by Trade Unions
The payment of benefits in case of sickness and death is an
activity of trade unions which is developing year by year. Of the
89 unions having members in the United States and Canada
{" international unions "), 22 provide benefits in case of sickness
through their headquarters for members in both countries alike.
As regards the remaining international unions, many of them
have sickness benefit schemes which are administered independently
by their local branches, their schemes having often been established
before the local body became affiliated with the international
union. Membership of the union and membership of the sickness
benefit scheme are generally conterminous. In the majority of
schemes' there is no medical examination before admission. Both
contributions and benefits are fixed at a flat rate. No medical
attendance is provided.
Information from thirteen of the international unions providing
benefit from their headquarters indicated that in 1925 34,062
dollars were expended on sickness benefit. Moreover, in the
same year 658 local branches disbursed 283,212 dollars on benefits
of various kinds, including 114,311 dollars on sickness and accident benefits.
§ 3. — Employees' Benefit Schemes
At least a hundred large Canadian firms, including several of
the most important industrial and transport undertakings in the
country, are known to possess a sickness insurance scheme covering
the persons employed by them (" employees "). Usually the risk
is carried by the fund itself, but a certain number of firms simply
contract with an insurance company for the insurance of all their
employees ("group insurance"), and in such cases the benefits
are paid by the insurance company.
Information concerning these schemes was obtained in response
to a questionnaire circulated in 1926 to the firms by the Canadian
Department of Labour, whose summary of the replies has been
reproduced here without substantial alteration.
CANADA
85
ADMINISTRATION AND MEMBERSHIP
The affairs of a works scheme are usually managed by a board
of trustees, which is elected annually and is composed of representatives of the employer and the employees.
Membership is generally open to all permanent employees of the
firm. In the case of a few funds, however, the executive staff,
office employees and foremen, or employees receiving salaries above
a certain limit are not admitted at all, or are insured under special
conditions. Employees do not usually come within the scope of
the scheme until they have been in the service of the firm for a
certain period, varying from three months to two years, or even
until their earnings are sufficient to enable them to contribute.
A few funds exclude employees over a certain age and also those
suffering from a chronic disease, unless it is agreed that such
disease shall not entitle to benefit.
The size of the schemes varies widely, for the firms where they
have been set up range from ordinary local businesses, with a
comparatively small number of workers, to the largest industrial
and transport undertakings extending throughout the country
and employing thousands of people.
RISKS COVERED AND BENEFITS
As a rule, the risks covered include all sickness lasting over one
week, together with accidents not compensable under the Workmen's Compensation Acts. Incapacity caused by strong drink,
immoral conduct, or participation in sports does not give rise to
a claim for benefit.
Benefits both in cash and in kind are provided.
The cash benefit is generally proportional to earnings and to
contributions, and is rarely payable for more than 26 weeks;
certain funds pay for a shorter period and others pay even for
a year.
Employees are, in many schemes, free to choose their own
medical assistance. On the other hand, the firms often have a
yearly contract with a doctor, paying a fixed sum per employee,
in return for which the employees are provided with free medical
86
VOLUNTARY SICKNESS INSURANCE
attendance for themselves and often for their families, where a
major operation is required or in case of confinement. Most of the
larger firms have one or more doctors for the purpose of medically
examining their employees and supervising first aid. Such firms
usually possess a first-aid room or even a hospital, especially in
remote districts. Nurses are also provided to attend the sick in
their homes. Two large firms have adopted special schemes for
the treatment of tuberculosis.
Detailed statistics of the cost of benefits are available only for
the Canadian National Railways. Out of 15,876 permanent
employees insured, 3,150 were sick in the course of 1925.
Benefit was paid for 95,408 days, or for 30 days per case. The
cost consisted of the following items:
Sickness benefit
Medical attendance
Hospital treatment
Dollars
47,704
56,002
17,516
121,222
Hence the cost per sick person per day of sickness was nearly
1.3 dollars.
FINANCIAL RESOURCES
The cost of sickness insurance schemes is, in the case of the
majority, borne by the employees alone, but, on the other hand,
there are many where both employers and employees contribute
and also a number where the entire cost is borne by the employer.
Where the employees share in the cost, their contribution varies
with wages: it may be as little as 20 cents a month or as much
as one dollar.
Where the firm assists in bearing the cost, its contribution may
take a variety of forms. It may be equal to one-third or onehalf of the total cost, or it may consist in covering any deficit.
In a great many cases, however, the firm merely furnishes the
machinery — offices and clinical assistance — for administering
the scheme.
The amounts contributed by the firms vary from a few hundred
dollars in the case of a small company to 12,000, 17,000, or 45,000
dollars in the case of large concerns, and even 160,000 dollars in
that of the principal telephone company.
CANADA
87
PREVENTIVE MEASURES
It appears that numerous firms take measures of one kind or
another to educate their employees in matters of hygiene. Thus
pamphlets may be distributed, e.g. in the pay envelope, or the
works magazine will contain regular articles on sickness and
accident prevention. In several firms health and safety lectures,
instruction in first aid and home nursing are given.
A well-known life assurance company issues numerous pamphlets
from time to time which are distributed among their policyholders, who are very largely workers.
DENMARK
Acts and Regulations
Regulation No. 334, of 29 December 1915, concerning the arbitration
committee for the settlement of disputes between sickness funds and doctors. (Lov. Tid., 19-15, p. 1012.)
Regulation No. 14, of 21 January 1916, concerning committees established
in virtue of section 9 of the Act of 10 May 1915, concerning recognised sickness
funds. (Lov. Tid., 1916, p. 25.)
Regulation No. 346, of 20 June 1921, promulgating Act No. 144 of 10 May
1915, as amended by the Act of 6 May 1921. (Lov. Tid., 1915, p. 5.)
Regulation No. 445, of 1 October 1921, prescribing the rules for the supply
of drugs to members of recognised sickness funds. (Lov. Tid., 1921, p. 1562.)
Regulation No. 446, of 1 October 1921, prescribing the rules for the supply
of drugs to members of recognised sickness funds. (Lov. Tid., 1921, p. 1563.)
Regulation No. 25, of 23 January 1922, concerning the sharing and collection of the communal subsidies for persons suffering from chronic diseases, in
virtue of section 13, subsections 3 and 4 of the Act concerning sickness
funds. (Lov. Tid., 1922,. 54.)
Regulation No. 555, of 23 December 1922, concerning the election of the
committee of recognised sickness funds. (Lov. Tjd., 1922, p. 5554.)
Regulation No. 36, of 28 February 1927, concerning the conditions as to
income, means, etc., on which depends as a general rule the right to be admitted as or remain a regular member without means of a recognised sickness fund
and as such to share in the State subsidy. (Lov. Tid., 1927, p. 73.)
Regulation No. 285, of 26 November 1924, concerning the admission to recognised sickness funds of persons, who, without being incapable of work, suffer
from chronic diseases. (Lov. Tid., 1924, p. 1210.)
Act No. 58, of 31 March 1926, amending Act No. 346, of 20 June 1921
concerning recognised sickness funds. (Lov. Tid., 1926, p. 127.)
Reports
Report of the Chief Sickness Funds Inspector for 1915. Copenhagen, 1916.
Idem for 1916. Copenhagen, 1917.
Idem for 1917. Copenhagen, 1918.
Idem for 1918. Copenhagen, 1919.
Report of the Inspectorate of Sickness Funds for 1919. Copenhagen, 1920Idem for 1920. Copenhagen, 1921.
Idem for 1921. Copenhagen, 1922.
Idem for 1922. Copenhagen, 1923.
Report of the Inspectorate of Sickness Funds for 1923 on the State Supervision of Sickness and Burial Funds, etc. Copenhagen, 1924.
Idem for 1924. Copenhagen, 1926.
Idem for 1925. Copenhagen, 1927.
DENMARK
89
INTRODUCTION
The social evolution and industrial development of Denmark
during the second half of the nineteenth century brought into
greater evidence the need of public intervention in favour of the
working class and other persons of small means, whose numbers
were increasing in proportion to the growth of industrial, commercial and transport undertakings.
The progress in the organisation of agriculture, the development
of the co-operative movement, and the penetration of the country
by the social and political ideas of the end of the nineteenth
century — all these influences awakened in Denmark an interest
in social legislation. In particular, the example of the social
insurance institutions created in Germany by Bismarck concentrated Danish opinion on this branch of legislation.
Denmark, however, did not follow the German model, but
established a system of social insurance based on institutions
already existing in the country: mutual benefit societies, public
relief institutions, and charitable societies.
Unlike the German Acts of 1883, 1885, and 1886, the Danish
system is based on the voluntary principle, but is aided by a
State subsidy. Although many amendments have been made in
the principal Act of 1892 on mutual benefit societies, none of them
have threatened the voluntary principle.
The first Act on sickness funds, dated 12 April 1892, came into
force on 1 August of that year. The country already possessed
an extensive network of mutual benefit societies, whose membership
numbered 120,000 in 1885. The Act was replaced by another
dated 10 May 1915, which in turn was modified by the Act at
present in force, namely, that of 20 June 1921, operative on 1 October 1921. This latter amendment was necessitated by the introduction at the same time of the Invalidity Insurance Act of 6 May
1921, according to which every member of a sickness fund deemed
to be without means is compulsorily insured until his sixty-second
year against invalidity.
The Acts of 1892, 1915, and 1921 are all based on the three
following principles: voluntary insurance for all persons without
90
VOLUNTARY SICKNESS INSURANCE
means, subsidy from the public authorities, supervision of institutions by State departments.
• The changes wrought by the amending legislation in the original
Act are noticed from time to time in the course of the study.
The description of the Act of 20 June 1921 and the statistics
of its working consists of six Chapters:
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter
I : Insurance Institutions.
I I : Insured Persons.
I I I : Benefits and Medical Service.
IV: Financial Resources and Their Management.
V: Judicial Authorities, Offences and Penalties.
VI: Position of Foreigners.
91
DENMARK
• CHAPTER
I
INSURANCE INSTITUTIONS
§ 1. — Types of Institutions
The Danish Act considers as a sickness fund any association of
persons who have combined to provide mutual assistance in case
of sickness by means of a specified contribution (section 1).
State recognition can be granted to two classes of funds only:
trade funds and territorial funds.
A sickness fund may be established:
(1) either for a particular trade (commerce, industry or handicraft); in the case of a fund established for the workers in a
particular trade, or for masters, journeymen, or apprentices
in this trade, membership must be open to all workers in the
trade concerned within the district of the fund (sections 4
and 5, para. 1);
(2) or for a particular district, corresponding as a rule to the
boundaries of a commune. Nevertheless, the sickness funds
of Copenhagen may extend their area to neighbouring communes and vice-vtrsa; moreover, if circumstances so require,
the Minister of Health may authorise a fund to extend its
area to two or more districts, or even to the country as a
whole.
With the consent of the Minister of Health, the area of a fund may
be restricted to less than that of a single parish within a commune.
Such content is not required where the parish includes an urban
agglomeration with not less than 1,000 inhabitants, or where the
conditions require a small area (sections 4 and 5, paras. 3 and 4).
Recognition may, moreover, be granted to every sickness fund
already existing in 1892 and then comprising a group of persons
92
VOLUNTARY SICKNESSINSURANCE
engaged in a particular specified vocation or business (section 4,
para. 2).
The Danish Act goes on to provide that sickness funds which
are not recognised by the State can nevertheless place themselves
under the supervision of the Chief Sickness Funds Inspector, in
so far as their activities include the payment of sickness benefit
to their members and are based upon the mutual responsibility
of their members, in return for an annual payment to the Exchequer
the amount of which is fixed by the Minister of Health (section 34,
para. 1). As long as such societies are subject to the supervision
of the Inspector, they are entitled to call themselves " Stateinspected " (section 34, para. 2).
§ 2. — Establishment of Funds
The Act prescribes no procedure for the establishment of funds,
but contains provisions concerning the recognition of funds by the
State. The conditions for recognition are as follows:
(a) it must comply with the Act, and obtain a certificate from
the Minister of Social Affairs acting on the report of the
Sickness Funds Inspector (section 1, para. 1);
(b) it must, as a rule, have at least 200 members. In special
circumstances recognition may be granted to or retained
by a fund with a smaller membership (section 3, paras. 1
and 2).
Recognition, which comports a right to a State subsidy, is
granted and published by the Minister of Health (section 1, para. 2).
It may be refused in a case where there is already in existence a
recognised fund for the trade or district concerned.
Where conditions so require, the Minister of Health may order,
after the Sickness Funds Committee (see below) has reported thereon,
and after hearing the sickness fund concerned and the competent
central association of sickness funds, that two or more funds in the
same district be combined, when this can be done without injury
to the members of the funds (section 3, para. 3).
In order to obtain State recognition, a fund must fulfil the following conditions : it must send to the Chief Sickness Funds Inspector
an application for recognition which should be accompanied by:
DENMARK
93
(1) a copy of the rules of the fund;
(2) a list of members, showing their age and occupation;
(3) a copy of the resolution in virtue of which the application
for recognition was made;
(4) the balance sheet for the last financial year except in the
case of a newly established fund (section 2).
The rules of a recognised sickness fund, which must be included
in or attached to every sickness fund book, must deal with the
following matters:
(1) the name, address, age and locality of the fund ; the admission
of members, their rights and duties, including their rights
and duties in pursuance of the Invalidity Insurance Act;
(2) general meeting, and the governing body and their powers;
(3) the rights and duties of the fund and of the governing body
in virtue of the Invalidity Insurance Act;
(4) the supervision of sick members ;
(5) the system of accounts and audit; the inspection of the
fund; the investment of the property of the fund; the application of the balance, especially in the event of a fund being
wound up;
(6) amendments of the rules (section 29).
On receipt of this application, the Chief Sickness Funds Inspector
proceeds to examine the rules of the fund in order to satisfy himself
that they fulfil the conditions required by the Act. If the Inspector
considers that the fund is in conformity with the legal provisions,
he proposes to the Minister of Health that the fund should be
granted recognition, and this is notified in the official journal
(Staistidende).
Recognition cannot be withdrawn except by the Minister of
Health acting either at the instance of the Sickness Funds Committee,
where the fund has acted in such a way as to affect adversely the
whole system of insurance, or at the instance of the Sickness Funds
Inspector where enquiry has shown that the fund cannot meet
its obligations or is not conforming to the provisions of the Act
(sections 27 and 32).
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VOLUNTARY SICKNESS INSURANCE
§ 3. — Administration of Institutions
According to the Danish Act, the rules of a recognised sickness
fund must contain provisions relating to general meetings and the
governing body and their powers (section 29, No. 2). The Act
contains no other provision concerning the administration of the
funds.
The method of administering funds situated in towns differs in
some respects from that of funds whose headquarters are in rural
parishes. The following is the administrative machinery found
in the great majority of sickness funds:
(1) General meeting.
(2) Governing body consisting of :
(a) t h e chairman;
(b) the vice-chairman;
(c) a certain number of ordinary members.
The situation and powers of each of these bodies are as follows:
GENERAL MEETING
An ordinary general meeting is usually held once a year. All
regular members above the age of 18 are entitled to vote; as a
rule all those who pay a certain annual contribution, including
auxiliary members, possess this right.
The meeting is the final authority for settling all the affairs of
the fund. Its principal functions are as follows:
(a) The election of the governing body and the audit of accounts.
(b) Fixing t h e emoluments of the chairman.
(c) The approval of the accounts and of the report of the governing body for the past financial year.
(d) decisions as to amendments of the rules of the fund.
Extraordinary general meetings may be called whenever the
governing body considers it necessary, or when a certain number
of members demand it.
GOVERNING BODY
The governing body is elected
usually for a period of two years,
that half its number is renewed
is responsible for managing the
of which it appoints.
by the ordinary general meeting
but in any case in such a manner
each year. The governing body
affairs of the fund, the officials
DENMARK
95
Chairman
The chairman, who is elected by the general meeting, represents
the fund with respect to third parties and presides over the sittings
of the governing body; in funds of less importance he also presides
over the general meeting. Often he undertakes to look after the
accounts and in that case acts as cashier.
Vice-Chair man
The vice-chairman is appointed by the governing body and
replaces the chairman when the latter is absent.
Other Members of the Governing Body
One of these generally undertakes the duties of secretary. In
the country the ordinary members of the governing body perform
the duties of local inspectors, each for his own area. All cases of
sickness must be reported to them and it is they who effect the
payment of cash benefits.
The members of the governing body and the officials of a recognised sickness fund are required to keep secret from all persons not
concerned the information respecting the health and economic
situation of their members or of persons applying for admission
which may come to their knowledge in the course of their duties.
Contraventions of this provision are punished by a fine of not
more than 400 crowns (section 32, para. 3).
§ 4. — Supervision of Institutions
The Chief Sickness Funds Inspector supervises the sickness
fundsonbehalf of the State (section 26, para. 1). In a general way the
Inspector supervises the activities of recognised sickness funds,
gives them information and advice, and assists in the establishment
of new funds (section 31, para. 1). He may at any time require that
the books, accounts, etc., of the funds should be submitted to him,
and must at all times be afforded facilities for acquainting himself
with the operations of the funds (section 31, para. 2).
Moreover, the competence of the Inspector extends to the following points:
(1)
He examines the annual accounts sent in by the funds
(section 31, para. 1). The funds, for their part, are required
96
VOLUNTARY SICKNESS INSURANCE
(2)
(3)
(4)
(5)
(6)
(7)
(8)
to forward to the Inspector within a prescribed period their
accounts duly audited and approved by the general meeting,
together with a report on the past year drawn up in the
manner prescribed by the Minister (section 30, para. 2).
Under his direction there must be carried out quinquennially
a thorough audit of the accounts of all recognised sickness
funds; this audit is undertaken by expert accountants and
must be carried out so as to supply the funds at the same
time guidance in their accounting (section 31, para. 4).
He is notified of any change of the chairman of the governing body within one month after the new election has taken
place (section 31, para. 3).
He sanctions every amendment of the rules; an appeal
against his decision may be lodged with the Minister of
Health (section 29, para. 3).
He approves of decisions taken in agreement with the rules
respecting the application of the balance of the fund in the
event of its being wound up. The balance may not in any
case be distributed among the members (section 29, para. 2).
He presents an annual report to the Minister of Health on
the activities of the recognised funds. An extract
therefrom must be published in the manner prescribed by
the Minister of Social Affairs (section 31, para. 5).
He arranges for annual meetings of the delegates from the
recognised sickness funds for the whole country or special
provinces, with the special object of bringing as many
funds as possible under common rules concerning questions
in respect of which the interests of the separate funds affect
each other and in particular the establishment of reinsurance societies and the drawing up of model rules (section 27,
para. 1). In a general way in the course of these meetings,
after the address of the Chief Inspector the delegates
discuss questions relating to insurance against sickness,
invalidity and funeral expenses.
If the Chief Sickness Funds Inspector has reason to think that
the property of a fund has been reduced to such an extent
that the fund cannot be deemed to give proper security for
the discharge of its obligations, he must proceed to a
thorough investigation (section 32, para. 1).
The Danish Act goes on to provide for cases which the Inspector
may refer to the Minister of Health:
DENMARK
(1)
(2)
97
In a case where a thorough investigation conducted by the
Inspector has established the fact that the fund is not in a
position to discharge its obligation or if it is found that the
fund fails to comply with the provisions of the Act or that
its operations are not in conformity with the provisions in
force respecting them, or if the necessary provision and
organisation are lacking and the fund fails to comply in
this respect with the instructions of the Chief Inspector, the
latter may propose to the Minister that he should cancel the
recognition of the fund (section 32, para. 1).
In a case where a recognised sickness fund fails to discharge
in due time the obligations specified in the Act, the Minister
of Health, on the approval of the Sickness Funds Inspector,
may order the representatives or officials responsible for
the omission to perform their duty under the penalty of a
daily or weekly fine (section 32, para. 2).
Lastly, when sickness funds grant, as well as sickness benefits,
other benefits, for example, funeral or old-age benefits, or benefit to
persons permanently incapable of work, and when the rules respecting these matters are included in special rules, a copy of these rules
must be sent to the Sickness Funds Inspector, who must likewise be
informed of other amendments of these rules (section 33, para. 2).
Special accounts must be kept concerning the members covered
l>y this branch of insurance so that the Inspector is able at all times
to acquaint himself with the operations of the fund in this connection (section 33, para. 3).
§ 5. — Relations between the Funds
Sickness funds are entirely free to form federations. Thus, practically all the funds are grouped in organisations called the central
unions. These central unions generally comprise all the funds
in a county, and in certain cases all the funds in a somewhat larger
area. Thus, all the funds in Seeland, exclusive of the Copenhagen
funds, belong to a single central union.
The several central unions are organised in the Confederation
of Central Unions of Sickness Funds.
The duties of these central unions are, roughly speaking, as
follows :
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VOLUNTARY SICKNESS INSURANCE
(1) The negotiations and conclusion of agreements with doctors
and dentists.
(2) Arrangements for the reinsurance of certain types of risk
which would be too heavy for individual funds, such as
expenditure on account of tuberculosis or insane members.
The funds come into contact with one another, not only in their
central unions, but also at an annual meeting of their delegates,
which it is the duty of the Chief Sickness Funds Inspector to arrange.
These annual meetings are intended mainly for the adoption of
current rules, the establishment of reinsurance societies and drafting
of model rules (section 27, para. 1). Every recognised sickness fund
may send to the annual meeting a representative entitled to vote
who is elected by the governing body of the fund (section 27,
para. 2).
The Sickness Funds Committee is a permanent body representative
of all the funds : its chairman is the Chief Sickness Funds Inspector,
and it consists of 11 members elected for a period of four years.
Election takes place by means of written votes (section 27, para. 3).
The Committee is convened by the chairman at least once a year
for an ordinary meeting to enquire into questions affecting the
system of sickness funds. It may also be convened for extraordinary
meetings (section 27, para. 4).
One of the principal tasks of this Committee consists in the
drafting of regulations for the transfer of members from one
sickness fund to another ; the regulations so drafted are binding upon
sickness funds after they have been approved by the Minister
(section 27, para. 5).
In virtue of these regulations, a member who changes his domicile
may transfer his rights to the sickness fund operating at the place of
his new domicile irrespective of his age and his state of health at the
time of the transfer and without being obliged to pay a new entrance
fee (section 27, para. 6). Disputes arising out of the transfer from one
institution to another are decided by the central unions. Appeal
may be lodged against their decisions with the Sickness Funds
Committee.
When the Sickness Funds Committee considers that a fund, without exactly contravening the provisions of the Act, has nevertheless
acted towards its members or towards other sickness funds in such
a way as to affect adversely the whole system of sickness funds, it
makes a recommendation to the Minister as to the advisability
of cancelling the recommendation of the fund in question (section 27,
para. 7).
99
DENMARK
§ 6. — Statistics of Institutions
The reports x of the Chief Sickness Funds Inspector for the years
1915-1925 contain a series of data concerning the number of
recognised funds and their size, the most important of which are
reproduced in the following pages.
The table given below shows the number of different types of
funds and the total number of the members.
NUMBER AND MEMBERSHIP OF THE SEVERAL TYPES OF FUNDS
Number of funds
Membership
Year
Local funds
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1,454
1,469
' 1,468
1,467
1,468
1,465
1,466
1,471
1,575
1,578
1,583
1,584
1,583
Trade funds
Works funds
58
62
62
65
65
63
63
62
51
51
51
50
53
16
16
16
17
17
16
15
15
12
11
10
10
11
795,825
843,422
892,367
943,135
995,766
1,141,950
1,201,106
1,235,169
1,333,065
1,360,301
1.395,223
1,428,935
1,478,541
The figures shown above indicate a slow increase in the number
of local funds between 1913 and 1920; a sharp rise may be observed
in 1921, which is explained by the fact that in 1920 Northern
Schleswig was incorporated with Denmark and 101 local funds
were established there.
The number of trade funds and works funds, which was increasing
between 1913 and 1917, appears to be declining during the second
half of the period under consideration.
It is to be noted that the figures concerning membership refer
only to regular members; they do not therefore refer to honorary
or auxiliary members, nor to those whose right to benefits has been
suspended by reason of the improvement of their economic situation ; similarly, these figures do not cover the children of members.
1
Sygekasseinspektoratets Beretning for 1916-1925 om Statens
Sygekasser, Begravelseskasser m.v.
Tilsyn med
100
VOLUNTARY SICKNESS INSURANCE
The average number of members per fund was as follows in
the years 1916-1925:
AVERAGE
MEMBERSHIP
1916 .
1917
1918
1919
1920
608
639
736
744
793
OF RECOGNISED
FUNDS
1921
1922
1923
1924
1925
..'
809
824
832
861
890
The distribution of funds according to their membership may
be shown as follows:
DISTRIBUTION OF FUNDS ACCORDING TO SIZE AS AT 3 1 DECEMBER
OF EACH YEAR
Size of fund
U n d e r 50
members
50 to 100
100 to 200
200 to 500
500 to 1,000
1,000 to 2,000
2,000 t o 5,000
5,000 to 10,000
Over 10,000
Total
1906
6
109
495
640
119
28
14
5
2
1,418
1911
3
68
326
811
232
51
14
8
4
1,517
1946
37
214
774
404
73
33
9
5
1917
36
179
763
431
90
37
9
5
1,549 1,550
1918
21
151
710
478
117
51
8
8
1919
1
19
137
688
498
128
56
7
10
1920
20
131
686
513
126
55
7
10
1921.
14
132
699
572
141
60
10
10
1925
1
15
103
636
618
179
73
12
10
1,544 1,544 1,548 1,638 1,647
The above table reveals a constant increase in the average
membership of recognised societies. Moverover, it shows that
there was not only an increase in the number of institutions
between 1906 and 1925, but also that, while the number of funds
of less than 500 members are tending to diminish, the number of
large funds (over 500 members) is tending to rise. These two
tendencies appear to indicate that during the period under consideration, the organisation of sickness funds has been gradually
becoming more concentrated.
The average size of funds is not, however, the same in the towns
as in the country. Thus, during the last year for which figures
are available (1925) the membership per fund was 4,217 in the
capital, 2,416 in provincial towns, and only 606 in the rural communes of Jutland and 586 in the rural communes of the islands.
This difference in the average membership explains to some
extent the small number of urban in comparison with rural funds
DENMARK
101
In 1925, 63 recognised funds had their headquarters in the capital
138 in the provincial towns, 581 in the rural communes of the
islands, 830 in the rural communes of Jutland and 35 in the Faroe
Islands.
At the present time there exists in each town, and even in each rural
commune, one or more sickness funds ; it is only in a small number
of isolated rural communes situated in small islands that there is
no opportunity to join a recognised fund. The inhabitants of
these islands are, however, entitled to medical aid, provided by
the State, the county or the commune.
§ 7. —- Risks Covered by Institutions
As has already been pointed out at the beginning of this study
the Act considers as a sickness fund every association of persons
formed with the object of insuring benefits to be provided in case
of sickness in return for a specified contribution (section 1, para. 1).
Recognised sickness funds may nevertheless offer facilities for
private insurance against other risks, such as funeral expenses, old
age, or permanent incapacity for work (section 33, para. 1). Few
funds, however, have taken advantage of this power.
While the funds may thus participate in burial insurance and
invalidity insurance, they cannot nevertheless be regarded as
insurance carriers in respect of these two risks.
It may be observed in this connection that the Act of 7 August
1922 concerning old-age pensions, which organises this branch of
insurance, has nothing to do with sickness funds.
Insurance against funeral expenses is effected by special funds
which often work in close collaboration with sickness funds, but which
are nevertheless considered as distinct institutions. The funeral
benefit funds are regulated by a special Act of 1 April 1905.
The administration of invalidity insurance is, however, in virtue
of the Act of 6 May 1921, entrusted to sickness funds, because this
branch of insurance applies mainly to members of sickness funds.
Although the sickness funds undertake the regional administration
of this branch and for this service receive five per cent, of the
contributions collected, invalidity insurance should be regarded as
a distinct branch, for which sickness funds are not responsible.
Thus, the sickness funds restrict their operations to insurance
against sickness and maternity, to the exclusion of other risks.
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VOLUNTARY SICKNESS INSURANCE
CHAPTER II
INSURED PERSONS
The conditions under which persons are admitted to membership
differ according ss they are to be regular members, i.e. those
entitled to insurance benefits, or members not so entitled.
§ 1. — Regular Members
Among the regular members the Act distinguishes between
regular members without means and regular members with means.
REGULAR MEMBERS WITHOUT MEANS
This class constitutes the majority of the members of recognised
sickness funds.
In order to be admitted to a fund as a regular member without
means, it is necessary to fulfil certain conditions as to residence,
age, health, and economic situation, which are defined by the
Act and the rules of the fund.
Condition
as to Residence
The Act requires that the applicant should reside in the area
of the fund.
Conditions as to Age
As a rule only persons between the ages of 14 and 40 can be
admitted. Nevertheless, an age limit higher than 40 may be
fixed by the rules, but the funds have not taken advantage of this
option (section 6, para. 6).
Although the Danish Act thus establishes a fixed age limit for
the admission of members, which as a rule cannot be exceeded,
yet in certain individual cases exceptions may be allowed. Thus the
DENMARK
103
Act provides that, in the part of the rules dealing with general
meetings, the governing body, and their powers, power shall
be given to the governing body, with the consent of the Chief Sickness Funds Inspector, to admit persons who have passed the age
limit but fulfil in other respects the general conditions for admission to the fund, provided that special circumstances worthy of
consideration are present. If any such person is refused admission,
he may appeal to the Minister of Health against the decision
(section 29, para. 1, No. 2).
Health Conditions
The Act of 1892 did not authorise persons suffering from chronic
diseases to join recognised funds unless the rules allowed it expressly,
and in that case only on condition that the member should not be
entitled to insurance benefits in respect of the chronic disease from
which he was suffering at the time of his admission.
The Act of 1915, however, enabled such persons to become
members, but at the same time maintained the restriction just
mentioned. These provisions were modified by the Act of 1921,
which is at present in force.
This Act required that persons desiring to join a recognised sick
ness fund should fulfil the two following conditions : they must be
capable of work and they must not be suffering from a temporary
disease or from a temporary recrudescence of a chronic disease
(section 7, para. 1).
In virtue of the second paragraph of section 7 of the Act, a
person who cannot be considered as capable of work, owing to the
fact that he suffers from a frequently recurring or incurable disease
or bodily defect, cannot be admitted to a recognised sickness fund.
The Regulations of 26 November 1924 concerning the admission
to recognised sickness funds of persons who, without being incapable
of work, suffer from a frequently recurring disease provide that
persons shall not be deemed to be capable of work if their state
of health requires, or appears to require, prolonged treatment in a
curative establishment, or if their earning capacity is, or is likely
to be, reduced in the near future to such a point that it is justifiable
to consider them as unable to undertake remunerative work or
to contribute to their maintenance by work on their own account
(section 4, para. 1, of the Regulations).
Nevertheless, admission to the fund is authorised for a certain
number of persons suffering from incurable disease. The Act of
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VOLUNTARY SICKNESS INSURANCE
1921 empowers the Minister of Health to publish detailed regulations
concerning the admission of persons 1 suffering from a frequently
recurring disease or bodily defect involving a material diminution
of their working capacity, but who can nevertheless be deemed
capable of work (section 7, para. 3). Persons admitted in spite of
frequently recurring or incurable disease or bodily defect are
entitled to all insurance benefits. The additional cost entailed
on the fund being borne, not by the latter, but by the State and
the commune where the fund is situated.
Economic Conditions
Only persons of the working classes without means, and men
and women in similar economic circumstances, and likewise small
farmers, handicraft workers, and other persons carrying on businesses, officials, etc., may become regular members of a recognised
sickness fund (section 6, para. 1).
Every three years beginning on 1 January 1924, the Minister of
Health issues a notice to the sickness funds and communal boards
containing instructions respecting the returns of income and property and other circumstances (nature and degree of permanence
of the income, debts, number of children) which are, as a rule,
conditions affecting the admission or retention of any individual
as a member of the sickness fund and the right of the fund to a
grant from the State on his account (section 6, para. 2).
This notice must be drafted by the Minister of Health after
consultation with a selected committee (Udvalg) of sixteen members, half of whom are chosen by each House of the Rigsdag in
accordance with the principles of proportional representation
(section 6, para. 3).
The Act thus draws a distinction between wage-earners and
persons working on their own account who are in an economic
situation similar to that of wage-earners.
According to Regulations No. 36, dated 28 February 1927,
issued by the Minister of Health, a person of the working classes
without means is defined as any worker who :
(a) has no other means than those which he earns, with or without the aid of his wife and children, in the service of an
employer ;
1
Kronisk
syge.
105
DENMARK
(b) does not possess capital in excess of the limits prescribed
by special Regulations (see below);
(c) has not during two consecutive years received earnings in
excess of the maximum income ordinarily received by
workers in branches of industry where medium rates of
wages are paid, so that he has not risen above the economic
level of the great mass of the working classes.
The Regulations referred to above consider as being in economic
circumstances similar to those of wage-earners persons whose
income or capital does not exceed the limits prescribed in the
Regulations and who may therefore be assimilated to persons of
the working classes without means.
The limits of income or capital, which vary with the cost of
living, have been prescribed by the Regulations of 22 December
1915, 31 August 1925, and 28 February 1927.
LIMITS OF INCOME AND CAPITAL
Regulations
of 22 December
1915
Regulations
ol 31 August
1925
Regulations
of 28 February
1927
Income limit i
Crowns
(a) Towns of Copenhagen and
Frederiksberg and neighbouring communes
1,800—2,000
(b) Other towns and urban
districts having more than
2,000 inhabitants
1,600—1,800
(c) Towns and urban districts
having 1,000 to 2,000 inhabitants
1,400—1,600
(d) Other parts of the country 1,200—1,400
Crowns
Crowns
3,750—4,175 3,150—3,500
3,325—3,750 2,800—3,150
2,900—3,325 2,600—3,050
2,475—2,900 1,900—2,200
Capital limits
Unmarried persons
Persons having family responsibilities
7,000
11,600
9,700
10,000
16,000
14,000
i These limits are increased by 200 (425, 350) crowns for the first child and 150(325.
275) crowns for every other child under the age of 15 dependent upon the insured person
106
VOLUNTARY SICKNESS INSURANCE
REGULAR MEMBERS WITH MEANS
As a rule only persons without means can be admitted as regular
members, and entrance to recognised sickness funds is closed
against persons with means.
Nevertheless the law makes provision for the case of a person
already belonging to a fund whose income or capital exceeds the
prescribed limit. Every member of a fund whose economic situation
thus improves may remain a regular member on condition that the
rules of the fund expressly permit this. It is for this reason that
the Act distinguishes between regular members without means and
those whose means exceed the limits fixed by Regulations. The
State pays no subsidy to the sickness fund on account of a member
of the latter category, who is therefore required to pay, in addition
to the ordinary contribution, an additional sum fixed by the rules
at an amount at least equal to the public subsidy received by the
fund for every member without means (section 6, para. 4). In the
event of a later change in the economic situation of a member,
so that his income or capital falls again within the prescribed
limits, he recovers his rights as a member without means irrespective of his age and state of health (section 6, para. 4).
Regular members whose economic condition has improved may
moreover avail themselves of two other possibilities:
(1) Instead of remaining regular members with means they may
join a " continuation fund ", that is to say, a State-inspected
sickness society which admits, irrespective of age or health,
persons who by reason of their improved economic situation
cannot remain regular members without means of a recognised sickness fund. Such persons, if they again become
without means, may transfer to a recognised sickness fund
irrespective of age and health, provided they fulfil the other
conditions of admission laid down by the rules of the fund
(section 34, para. 4).
(2) A regular member whose economic situation has improved
may enter the class of auxiliary members, that is to say,
a member whose right to benefit is suspended.
107
DENMARK
§ 2. — Members Not Entitled to Benefits
This group consists of the auxiliary members just mentioned
and honorary members, who are likewise not entitled to insurance
benefits in case of sickness. Anybody may therefore be admitted
as an auxiliary member (section 8, para. 1).
Although they are not entitled to insurance benefits, auxiliary
members who at the time of their entrance fulfil the age and health
conditions prescribed for regular members may join the class of
regular members, irrespective of their age and health, whenever
their income or capital falls below the limit fixed by law. Nevertheless, they cannot receive benefit from a sickness fund before the
expiry of a period of six weeks after they have become regular
members (section 8, para. 2).
§ 3. — Statistics Relating to Insured Persons
The following table shows the number of members of the different
classes described above during the period 1913-1925.
DISTRIBUTION OF MEMBERSHIP ACCORDING TO CLASS
Year
Regular
members
without
means
Auxiliary
members
(section 8,
para. 2) *
Auxiliary
members
(section 28,
para. 1)
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
795,639
843,244
892,198
940,132
990,690
1,136,181
1,194,299
1,227,564
1,324,656
1,351,357
1,384,443
1,417,248
1,464,584
_
—
—
_
—
.—
1,270
1,432
1,694
1,668
1,800
1,875
2,103
2,223
2,442
2,620
2,135
1,853
1,739
1,816
1,851
1,585
1,476
1,764
1,815
866
Members
whose right
to benefit is2
suspended
—
—
4,164
4,841
4,559
5,111
5,938
7,121
7,787
9,412
11,018
14,458
Regular
members
witheafc
means
186
178
169
3,003
5,076
5,769
6,807
7,605
8,439
8,944
10,780
11,687
13,957
i Auxiliary members fulfilling at the time of their admission the age and health conditions
required of regular members.
s Auxiliary members not entitled to the advantages guaranteed by the Act.
s Members who have left the area of the fund or have exhausted their right to benefit, etc.
The data shown in the above table indicate that the vast majority
of the members of recognised sickness funds belong to the class of
regular members without means.. For all classes the number of
108
VOLUNTARY SICKNESS INSURANCE
members shows a constant increase during the period under consideration: in particular the total number of insured persons and
that of regular members without means have doubled between
1913 and 1925.
The distribution of regular members without means according
to sex was as follows during the same period.
DISTRIBUTION OF REGULAR MEMBERS WITHOUT MEANS ACCORDING
TO
SEX
Men
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Women
Absolute
figures
Percentage
380,792
401,809
423,809
446,413
471,012
546,009
574,239
592,124
636,207
647,642
661.615
676,410
698,214
47.9
47.6
47.5
47.5
47.5
48.1
48.1
48.2
48.0
47.9
47.8
47.7
47Í7
Absolute
figures
414,847
441,435
468,389
493,719
519,678
590,172
620,062
635,440
688,449
703,715
722,828
740,838
766,370
Percentage
52.1
52.3
52.5
52.5
52.5
51.9
51.9
51.8
52.0
52.1
52.2
52.3
52.3
This table makes it clear that there was a preponderance of
women in the membership throughout the period under consideration: between 1913 and 1925 women constituted more than half
the total number of regular members without means. The same
preponderance of women is found in the general population
statistics of the country.
During the three most recent years for which statistics are
available the geographical distribution of this class of members
was as follows:
GEOGRAPHICAL DISTRIBUTION OF REGULAR MEMBERS WITHOUT MEANS
1923
Capital
Provincial towns
R u r a l c o m m u n e s in t h e Islands
Rural communes in Jutland
Entire country
255,011
317,177
337,873
474,390
1,384,443
1924
261,108
324,520
347,589
484,031
1,417,248
1925
265,638
335,755
360,598
502,593
• 1,464,584
109
DENMARK
The number of regular members has increased at about the same
rate for all parts of the country; the largest membership is found
in the rural communes of Jutland.
The " Summary Description of the Danish Sickness Insurance
System for Persons of Small Means " 1, by Messrs. V. L. Faber
(late Chief Sickness Funds Inspector) and H. Daniel (Chief of the
Sickness Funds Inspection Department), gives the following
information as to the distribution of the male membership
according to occupation:
Percentage
Day workers
Journeymen and apprentices in crafts
Domestic servants
Commercial and othernon-manual workers
Employers, shopkeepers
and other persons
working on their own
account
Teachers and administrative employees
30.4
Day workers
13.0
45.0
2.8
Domestic servants
Small farmers
30.5
29.3
Craftsmen
19.5
9.5
8.1
4.2
Country
Percentage
Towns
Teachers and administrative employees
1.9
Other persons working
on their own account
5.8
Thus, while in the towns the percentage of employed persons
was 91.9, in the country it was only 69.9, since 35.1 per cent, of
the members were small farmers or persons engaged in some
industrial occupation on their own account.
The proportion insured of the total population appears from
the table given below. The figures show the number of insured
persons as a percentage of the population over the age of 15.
NUMBER OF INSURED AS PERCENTAGE OF ADULT POPULATION
Year
1917
1918
1919
1920
1921
.
.
.
.
.
.
.
.
.
.
Percentage
. 49.8
. 56.5
. 58.8
. 59.5
.59.9
Year
1922
1923
1924
1925
.
.
.
.
.
.
.
.
.
.
.
.
Percentage
. 60.4
.61.2
. 61.9
. 63.2
Thus the number of persons insured has been constantly increasing during the period 1917-1925; for while in 1917 it represented
1
Bulletin of the International Public Health Office, Vol, XII, No. 12, Dec. 1920.
110
VOLUNTARY SICKNESS INSURANCE
hardly 50 per cent, of the adult population, in 1925 it had risen
over 63 per cent.
It should be remarked that the density of the insured population
varies as between the towns and the agricultural areas. Thus in
1925 the proportion of insured persons to the adult population
was 56.6 per cent, in the capital, 66.1 per cent, in the provincial
towns, 61.0 per cent, in the rural districts in the Islands, and
67.1 per cent, in the rural districts in Jutland.
Insured persons represented 57.4 per cent, of the total population of Denmark which (including persons under 15) numbered
3,386,274 on 5 November 1924.
DENMARK
CHAPTER
111
III
BENEFITS AND MEDICAL SERVICE
§ 1. — Benefits
SICKNESS BENEFITS
The Act distinguishes between benefits which subsidised sickness
funds are required to pay to their members and those which they
provide on their own initiative in virtue of their rules.
The sickness funds provide benefits not only for their members
but also for their children, stepchildren, and adopted children
under the age of 15 (section 19, No. 1). On the other hand,
benefits cannot be provided by a fund for members' wives as such.
Regular members are not entitled to benefit from their fund
until six weeks after admission. Nevertheless, benefit must be
paid forthwith in the case of illness due to an accident (section 20,
para. 1). If a member has received sickness benefit for 60 weeks
in all during three consecutive financial years, his right to receive
further benefit from the fund lapses, and he may then, if he so
desires, be transferred to the class of auxiliary members (section 24,
para. 2).
Statutory Benefits
The sickness funds provide their members with benefits in
kind and cash benefits.
Benefits in Kind
The Act requires recognised sickness funds to provide their members with free medical attendance (section 19, No. 1). As a general
rule members are, subject to certain conditions, entitled to choose
among the various doctors resident in the area of the fund or in
the neighbourhood who have concluded a contract with the fund.
112
VOLUNTARY SICKNESS INSURANCE
At Copenhagen only a certain number of the doctors are authorised
to treat insured persons.
The fund must always grant free hospital treatment (section 19,
No. 1). The treatment is generally given in the general ward
of the hospital assigned to the fund. To gain admission to the
hospital the member must be in possession of a medical certificate
or an authorisation from the managing committee of the sickness
fund.
If it is necessary for a member in the exercise of his trade to
reside temporarily outside the area of the sickness fund, and if a
medical certificate is furnished that hospital treatment is necessary for him and that he cannot avail himself of the hospital
assigned to the fund, the fund is nevertheless bound to provide
the same benefit for the member in question as it would have been
bound to provide if the treatment had been granted at the hospital
assigned to the fund. This rule applies also to any child of a
member who is employed as an apprentice, assistant or the like
outside the area of the sickness fund for his home, and who on account
of his age cannot be a member of the sickness fund for the district
in which he is staying (section 19, No. 1).
The Act also requires recognised sickness funds to provide treatment
in a public lunatic asylum (section 19, No. 1). Such treatment
is given under conditions laid down for persons entitled to free
medical attendance. As a rule, public lunatic asylums belong to
the State, except the Copenhagen Asylum, which is managed by
the town.
Persons suffering from tuberculosis may be treated in sanatoria,
which, however, do not belong to insurance institutions.
Danish legislation concerning tuberculosis (Act No. 366 of 30
June 1919) makes provision for the following classes of establishments for the cure of tuberculosis :
Seaside sanatoria, i. e. sanatoria situated at the seaside which
care only for the scrofulous.
Seaside hospitals for the treatment of persons suffering from tuberculosis and for grave cases of scrofula and lupus.
Tuberculosis sanatoria for cases of tuberculosis of the lungs and
larynx, intended especially for patients who are in the early stages
of the disease.
Tuberculosis hospitals, intended for persons suffering from tuberculosis of the lungs or larynx, especially for those who cannot derive
sufficient benefit from treatment in a sanatorium.
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113
Cash Benefits
The Act of 20 June 1921 fixes the minimum rate of cash benefit
at 50 ore a day (section 19, No. 2). The maximum rate of cash
benefit may be prescribed by the rules of the fund either at an
amount proportional to the average daily earnings of all the members
of the fund or according to the average earnings of the individual
member. The benefit is calculated at not more than four-fifths
of the earnings, and the amount paid must not exceed six crowns
a day for members who, according to a medical certificate furnished
at the time of their admission or re-entry to full membership, were
suffering from a frequently recurring or incurable disease or a
bodily defect. Nevertheless, the cash benefit paid to members
to whom an invalidity pension is granted cannot amount to more
than one crown a day. If the ordinary cash benefit is fixed at a
sum less than the above-mentioned four-fifths, members must be
given an opportunity to secure this maximum by means of an
increased contribution, but tbis cannot be done by any member
at a time when he is in receipt of an allowance from the fund
(section 19, No. 2).
Cash benefits must be paid by all recognised sickness funds. The
Act, however, enables sickness funds either to withold or reduce
benefit in certain cases:
(1) In the case of epidemic disease dealt with at the public
expense, cash benefit may be reduced or withheld with the
consent of the Sickness Funds Inspector (section 22, para. 2).
(2) No cash benefit is paid for an illness not lasting more than
three days (section 20, para. 2). The rules of a fund may
prescribe that no cash benefit shall be paid for an illness not
lasting more then seven days (section 22, No. 5).
(3) A member who receives his full income during illness is
not entitled to cash benefit from the sickness fund. If part of
his income ceases, he can receive only such part of the cash
benefit as will not make the total amount of his receipts
exceed his customary income, so that he shall not receive
a larger income during illness than in normal conditions
(section 25, para. 2).
(4) In cases where the illness of a member is caused by an
accident, so that he is entitled to compensation in virtue of
the Workmen's Compensation Act 1 , he cannot receive cash
1
Act of 6 July 1916 concerning accident insurance, amended by the Act
of 28 June 1920.
114
VOLUNTARY SICKNESS INSURANCE
benefit from the sickness fund on the date on which compensation commences and after that date. A member to whom
a daily allowance equal in amount to his average daily earnings is secured in case of accident under an arrangement
made either by him or his employer cannot receive cash benefit
from the sickness fund. If the daily allowance so secured
is less than his earnings, the cash benefit is reduced so that,
in conjunction with the daily allowances from the accident
insurance system, it will in no case exceed the average
daily earnings of the member in question (section 25, para. 1).
Although, except in the cases just mentioned, the payment of benefits in kind is compulsory for all sickness funds, the Act authorises
recognised funds to include in their rules provisions according to
which cash benefit shall not be paid, or that cash benefit at a rate
below 40 ore a day shall be paid, to women members or youths
below 18 years of age who are members of the fund, provided that
the contribution fixed for them is also lower than that for ordinary
members of the fund (section 22, No. 1).
Moreover, the Act authorises funds to reduce the rate of cash
benefit while the member is maintained in hospital (section 22,
No. 2).
Lastly, the rules may provide that no cash benefit shall be paid
in respect of illness due to drunkenness or for illness arising from
a brawl originating with the member himself (section 22, No. 6).
In the same way the obligation of the fund to pay sickness benefit
to a member may lapse if the member in question refuses to enter
a hospital or to submit to the treatment necessary for his recovery
though required by the managing committee of the fund to do so
(section 22, No. 7). The duration of the cash benefit is limited by
the Act to 26 weeks in each 12 consecutive months (section 24,
para. 1).
The right to cash benefit cannot be alienated or pledged; it is
not subject to distraint, execution, seizure in bankruptcy, or other
legal proceedings (section 19, para. 3).
Optional Benefits
A certain number of benefits may, in virtue of the Act, be provided at the option of the fund.
DENMARK
115
Medical Treatment
The practice of Danish sickness funds is tending more and more
to provide members in case of need with the services of specialists.
The conclusion of agreements between sickness funds and the
specialists has become more and more common. In 1925, 1,559
funds were providing their members with specialist treatment.
In order to consult a specialist at the expense of the fund, it
is generally necessary to have a recommendation from the doctor
of the fund or the approval of one of the members of the managing
committee.
Treatment in a Clinic
In cases where members prefer to be treated in a hospital other
than that of the area in which the fund is situated, or in a private
clinic, any fund may contribute to the additional cost entailed
upon the patient. The fund then makes an allowance equal to
the expense which the fund would have incurred for treatment in
the hospital assigned to the fund. In these cases also a recommendation from the doctor of the fund is ordinarily required, or the
approval of one of the members of the managing committee.
Dental Treatment
The rules may provide that the fund shall grant dental treatment in accordance with more detailed rules to be promulgated
by the Minister. The Regulations No. 446, of 1 October 1921
(para. 1), stipulate that dental treatment can only be granted to the
extent that it is necessary for the preservation of the teeth. It
consists of the following elements: treatment of diseases of the
teeth; special treatment of benignant diseases which are directly
connected with toothache ; stopping (in cement, enamel and
amalgam) of teeth and the roots of defective teeth; cleaning and
extracting teeth, as well as administring local anaesthetics as the
treatment requires.
Dental treatment Other than that just mentioned is not provided
by sickness funds. They cannot therefore grant, for example, treatment which consists in fitting, repairing, or renewing artificial
teeth.
In 1924, 1,241 funds were providing their members with dental
treatment.
116
VOLUNTARY SICKNESS INSURANCE
Remedies
Sickness funds may provide remedies for members, but must not
pay more than three-fourths of the cost (section 22, para. 3).
The Act having prescribed that the Minister shall define the
meaning of " remedy ", the Regulations No. 445, of 1 October 1921,
laid down that the following articles could not be considered as
remedies: patent medicines, patent foods, tonics, special diet,
sanitary articles, bandaging material, and articles provided without
prescription. Moreover, funds must not pay for packing and the
delivery of these articles (para. 2 of the Regulations).
In 1925, 1,018 funds made provision in their rules for the grant
of remedies.
Home Nursing
The rules of the fund may decide that it shall provide home nursing in accordance with more detailed provisions to be issued by
the Minister (section 22, No. 11). A Ministerial Circular of 16
February 1918 laid it down that recourse could only be had to
certificated nurses working under the supervision of a doctor.
Stay in a Convalescent Home
The rules may stipulate that the fund shall pay for the maintennance of members in a convalescent home approved by the Minister
(section 22, No. 12). The right to this benefit is subject to the condition that the stay in the convalescent home is recommended by
the doctor of the fund as necessary to complete the medical treatment given either in a hospital or at the home of the person.
Bandages, Massages, Baths
The rules of a certain number of funds grant their members
benefits of this character. In 1925, 329 funds were paying the cost
of massage.
Benefits for Children of Members on Military Service
The rules may contain provision for granting benefit to the
children of members, even if the latter are on military service and
exempt from paying contributions for the duration of their service
(section 22, No. 9).
117
DENMARK
MATERNITY B E N E F I T
The right to maternity benefit does not mature until ten months
have elapsed from the date of admission of the member (section 20,
para. 1). In maternity cases the sickness fund is required to pay the
woman member in question a benefit of not less than one crown
a day so long as she is confined to bed, but not for more t h a n ten
days after childbirth, unless she is entitled to maternity benefit
under Act No. 143, of 29 April 1913, respecting work in factories, etc. x
On the expiry of this period of ten days" the woman is, if she falls
ill, entitled to ordinary sickness benefit. Should medical aid be
necessary during the confinement, it is granted at the expense of
the fund (section 23).
§ 2. — Statistics Relating to Risks, Benefits, and Other Expenditure of
Insurance Institutions
STATISTICS OF SICKNESS
The following series of tables indicates the number of persons
who have received benefit, the number of days of sickness in respect
of which benefit was paid, the average number of days of sickness
per member, and the average duration of a case of sickness.
NUMBER OF PERSONS WHO HAVE RECEIVED BENEFIT
Years
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Men
Women
Children
No d a t a for these ;years
65,598
84,375
83,162
76,883
63,398
87,732
80,143
79,815
80,006
63,558
77,987
83,674
78,245
73,963
93,890
87,545
87,304
90,354
11,537
11,946
13,809
14,247
16,772
14,667
18,341
17,052
19,105
1
Section 29 of the Act of 29 April 1913, respecting work in factories, etc.,
and respecting the inspection of these establishments by the State, prescribes
that women who keep their children with them are entitled to assistance from
the public fund during the first four weeks after childbirth if they do not
resume work in this period.
VOLUNTARY SICKNESS INSURANCE
118
NUMBER
OF DAYS OF SICKNESS IN
RESPECT
OF WHICH
BENEFIT WAS PAID
Women
Men
Year .
at home
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
in hospital
at home
in hospital
Children
in
hospital
No data for these years
1,488,000
1,500,412
1,760,201
1,723,748
1,577,457
1,401,994
2,061,040
1,940,444
1,940,369
1,895,708
479.000 1,431,000
504,187
1,458,565
565,445 1,717,388
634,417 1,818,563
676,690
1,699,596
709,468 i 1,527,907
849,473 2,335,359
900,615 2,245,181
943,175 2,228,711
1,081,608
2,264,605
763,000
785,640
868,553
957,072
1,028,584
1,123,191
1,306,429
1,429,219
1,538,086
1,628,452
381,241
404,042
425,958
452,049
481,267
555,165
598,081
674,607
697,503
760,775
AVERAGE NUMBER OF DAYS OF SICKNESS PER MEMBER IN RESPECT
OF WHICH BENEFIT WAS PAID
AVERAGE
Year
Men
Women
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
4.7
4.7
4.6
4.4
4.4
4.6
4.2
3.9
3.4
4.5
4.3
4.3
4.3
4.4
4.3
4.6
4.4
4.4
4.5
4.5
4.2
3.9
5.2
5.2
5.1
5.2
DURATION OF A CASE OF SICKNESS (iN
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Men
Women
DAYS)
Children
No data for these ;years
30.6
27.6
28.4
29.3
30.7
33.2
35.5
36.1
37.2
35.3
34.1
33.2
34.9
35.6
38.8
42.0
43.1
43.1
35.0
35.7
32.7
33.8
33.1
40.8
36.7
40.9
39.8
119
DENMARK
COST OF B E N E F I T
The following table shows the cost of the various benefits granted
by recognised sickness funds during the period 1913-1925.
)
'ear
913
914
915
916
917
918
919
920
921
922
923
924
925
vu
COST OF BENEFITS GRANTED BY RECOGNISED SICKNESS FUNDS (IN
III
1
II
Cash
benefit
Medical
attendance
2,555,521
2,756,207
2,922,442
2,979,011
3,001,260
3,480,489
3,523,541
4,052,087
4,305,566
7^006,311
6,993,639
6,932,440
6,716,048
3,478,562
3,730,342
4,113,226
4,524,806
4,990,888
6,047,427
7,766,778
10,389,957
12,484,709
12,625,956
12,666,182
10,629,455
14,559,988
IV
Hospital t r e a t m e n t
Local
hospitals
928
1,060
1,161
1,125,684
1,235,058
1,461,414
1,768,414
2,302,116
3,022,211
3,612,901
3,865,865
4,207,501
4,663,360
496
847
112
152,923
165,353
177,534
214,133
264,507
379,279
581,979
661,341
746,350
811,616
142.774
157,680
158,521
198,016
206,980
211,571
198,180
186,241
253,250
422,058
516,192
575,289
629,227
VI
VII
VIII
Dental
treatment
Home
nursing
Drugs
V
Matern- SpecialTuberConvality
Private culosis Lunatic
ists
asyl- escent benefit
clinics sanaums
homes
toria
CROWNS)
19,693
78,595
89,528
27,379
87,169
33,590
68,844
4,578 374,000 267,180
38.430
74,987
8,017 398,238 300,679
44,487
420,523
88,587
8,973 418,897
384,700
59,218
11,874 551,337 537,710 121,450
65,449
183,812
13,230 661,208 716,577
83,192
20.592 878.103 910,787 309,106
198,751
891,749
89.252
1,135,952 1,004,742
891,661
225,001
74;879 872,818 1,181,055 1,423,371
236,627
86,010
1,264,612 1,373,485
260,910
124,090
1,529,395 720,011
250,889
27,734
151,020
326,755
410,694
466,794
509,429
527,027
561,895
UM
The figures given below represent the average cost per member
of the most important benefits granted by the funds.
AVERAGE COST PER MEMBER OF THE PRINCIPAL BENEFITS GRANTED
[ lA
BY RECOGNISED
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
SICKNESS FUNDS (iN
Cash
benefit
—
—
—
—
—
—
—
—
•
5.24
5.11
4.95
4.66
Hospital
treatment
Medical
treatment
1.41
1.52
1.56
1.66
1.72
1.80
1.94
2.35
2.98
3.69
3.96
4.32
4.S1
4.50
4.56
4.75
5.31
5.56
6.13
7.23
9.32
10.55
10.57
10.12
8.49
11.16
CROWNS)
Drugs
2.64
2.65
2.92
2.38
2.30
3.15
3.90
4.59
4.26
4.46
4.33
—
4.71
A
Dental
treatment
—
—
.—•
—
—
—
—.
—
0.75
1.04
0.98
0.50
971,999
1,027,731
1,204,082
1,120,325
1,141,002
1,713,586
2,394,098
2,919,999
3,053,174
3,674,767
3,534,622
3,507,322
4,190,697
>^
X
120
VOLUNTARY SICKNESS INSURANCE
COST
OF
ADMINISTRATION
The data shown in the following table indicate the total cost of
administration of recognised sickness funds and the average cost
per sick person.
TOTAL COST AND COST PER INSURED PERSON OF ADMINISTRATION
OF RECOGNISED
SICKNESS FUNDS (iN
CROWNS)
Year
Total cost
Cost per
insured person
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
661,094
706,689
813,876
1,035,039
1,045,087
1,307,083
1,864,344
2,498,222
3,571,059
3,590,658
3,456,501
3,666,959
4,033,561
0.86
0.86
0.94
1.13
1.08
1.23
1.60
2.06
2.75
2.67
2.51
2.60
2.77
The proportion of the cost of administration to the total expenditure of recognised sickness funds during the period 1915-1925 is
as follows:
COST OF ADMINISTRATION AS PERCENTAGE OF TOTAL EXPENDITURE
Year
1915
1916
1917
1918
1919 .•
1920
Percentage
7.6
8.5
8.2
8.3
9.6
10.1
Year
Percentage
1921
1922 . . . . . '.
1923
1924
1925
11.9
10.1
9.4
10.1
9.8
During the period under consideration the proportion of the
cost of administration to the total expenditure of the funds has
tended to increase. Whereas in 1915 the cost of administration
formed only 7.6 per cent, of its expenditure, in 1921 it had risen
to 11.9 per cent., in 1925 it still represented 9.8 per cent.
121
DENMARK
Nevertheless the proportion of the cost of administration to the
total expenditure varies according as the funds are situated in
rural or urban districts. The following table brings out this
difference for the years 1915, 1918, 1921, and 1925.
COST OF ADMINISTRATION OF URBAN AND RURAL FUNDS AS P E R . CENTAGE OF TOTAL EXPENDITURE OF SUCH FUNDS
Funds
1915
Funds in the capital
Funds in provincial towns
Rural funds in the Islands
Rural funds in Jutland
9.3
8.2
6.1
5.9
1918
1921 1
14.1
12.6
9.5
9.8
10.8
9.1
6.5
6.1
1925
12.6
10.0
8.7
8.0
i The cost of administration of funds in Northern Schleswig represented 15.3 per cent.
in 1921.
Thus, while in Copenhagen and the provincial towns the cost
of administration represented a higher percentage than the average
for all institutions, the rural funds in the Islands and Jutland had
an appreciably lower percentage.
TOTAL EXPENDITURE OF SICKNESS FUNDS
The total expenditure of recognised sickness funds during the
years 1923 and 1924 was as follows:
TOTAL EXPENDITURE OF RECOGNISED SICKNESS FUNDS
Year
1915
1916
1917
1918
1919
1920
Crowns
10,653,277
12,079,101
12,827'100
15,626,180
19,341,530
24,846,742
Year
1921
1922
1923
1924
1925
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Crowns
30,136,051
36,060,234
37,026,339
36,256,144
41,182,665
Throughout the period under consideration the total expenditure
showed a constant tendency to rise, the 1925 expenditure being
four and a half times as high as that of 1915.
The next table brings out the relative importance of the different
kinds of expenditure of recognised sickness funds during the
years 1915, 1918, 1924, and 1925.
122
VOLUNTARY SICKNESS INSURANCE
EXPENDITURE OF SICKNESS FUNDS UNDER VARIOUS HEADS AS
PERCENTAGE OF TOTAL EXPENDITURE
H e a d s of e x p e n d i t u r e
Cash benefits
Maternity benefits
Treatment in local hospital 1
Treatment in other hospitals >
aj^d^prixate-clinics
|
Treatment in tuberculosis
^ establishments
Treatment Jn lunatic asylum
Treatment in convalescent
honies_
__ __
Treatment in the Hald curative establishment
._ :.
Remuneration of general 1
practitioners
.....}Remuneration of specialists J
Remuneration" of dental surgeons
Cost of baths
Cost of massage
Home nursing
Drugs
Bandages, appliances, etc. .
Cost of conveyancer - Other benefit expenditure in respect of sickness
Cost of administration
Other expenditure
Total
1915
1918
1924
1925
27.5
0.8
22.3
2.7
19.1
2.5
16.3
"2.1
10.9
1.5 1
0J3__
12,3
•: 16.7'
38.6
• 32.8
~; "16.1
3
39.02
• 41.7
3.8
0.2
11.3
0.6
0.0 *
7.6
100
0.2
11.0
073"
- 0.-1
0.1
8.3
0.8
100
I 0.7
3
i
1.4
9.7
|„.
10.1
1.8
100
1.8
0.8 3
1.4
10.2
1.1
9.8
1.4
100
i The contribution to the reinsurance fund for the treatment of tuberculous members
forms 0.9 per cent, of the total expenditure in 1915.
2 Including the cost of massage by doctors.
s Including cost of massage by masseurs and masseuses.
* Cost of conveyance beyond 12 kilometres.
The most important items are doctors' remuneration, cash
benefit, cost of hospital treatment, cost of administration, and cost
of drugs.
The total cost of the other benefits does not amount to more
than 4 per cent, of the total expenditure.
§ 3. — Organisation of Insurance Medical Service
Under this head will be examined the organisation of medical
treatment in the narrower sense of the term, and the organisation
of surgical and hospital treatment and the supply of drugs.
123
DENMARK
MEDICAL
SERVICE
The relations between sickness funds and doctors are regulated
by agreements concluded between bodies representing, on the one
hand, sickness funds and, on the other, the medical profession.
Such agreements exist for the following areas : Copenhagen, Jutland
and the islands of Seeland, Bornholm, Laaland, Falster, and Fyen
and its adjacent islands.
During recent years a tendency has appeared to conclude separate
agreements with specialists, in particular ear, nose, throat, and eye
specialists.
Method of Recruiting
Doctors
The method of securing the services of doctors differs according
as the sickness fund is situated within the capital or outside it.
The funds outside Copenhagen have recourse to the service of all
doctors who belong to the central organisation of doctors (Danish
Medical Association). The insurance institutions are in no way
concerned with the appointment of doctors ; in order to be entitled
to treat insured persons a doctor has merely to report himself
to the regional section of the association.
In Copenhagen, on the contrary, the doctors are engaged by
the funds themselves. The town is divided into several areas for
the purpose of medical treatment, each doctor engaged by the
fund being allowed to treat only those insured persons residing
within his area. When a post as sickness fund doctor becomes
vacant the insurance institution must, within the next three weeks,
report it to the sickness fund doctors' association, which in t u r n
informs the medical profession b y a notice published in the
bulletin of the Danish Medical Association.
According to statistical data contained in the report of the Sickness Funds Inspector for 1920, there were in Denmark in 1920
1,183 doctors working for sickness funds, as compared with 1,155
in 1919. They were distributed as follows in the various parts of
the country:
NUMBER
OF
DOCTORS
WORKING
FOR
SICKNESS
FUNDS
Area
1919
1920
Copenhagen
Provincial towns:
Islands
Jutland
Rural communes:
Islands
Jutland
199
213
217
283
217
291
223
233
226
235
124
VOLUNTARY SICKNESS INSURANCE
Remuneration of Doctors
Doctors may be remunerated either by a fixed annual sum or
in accordance with the services which they render. The first
method, known as tariff I, provides the doctors with an income
at a fixed rate per year per insured person, whether the latter had
occasion to be treated or not. Doctors are, moreover, entitled to
special remuneration for certain services specified in the agreement.
" The second method, known as tariff II, consists in paying the
doctor in respect of each individual service rendered. The fees
in this case are calculated according to a scale contained in the
agreement.
The urban funds apply tariff I, while the rural communes as a
rule use tariff II.
Thus in Copenhagen the agreement between the funds and the
medical profession is based on tariff I. The annual remuneration
is at the rate of 9 crowns per member and 18 crowns per family,
irrespective of the number of children. Moreover the doctor is
entitled to additional remuneration if his services are required
at night or on holiday, or if he has to perform a surgical operation
in connection with childbirth.
In Jutland, where tariff I is also in force, the rate of annual
remuneration is 11.70 crowns per member and 23.40 crowns per
family. This rate is, however, adjusted to suit fluctuations in tqe
cost of living as shown by the official index number. Further,
doctors are entitled to special fees in respect of the following
services: treatment in connection with confinement, first-aid in
case of severe contusions, fractures and dislocations, assistance
rendered to colleagues, certificates for admission to lunatic asylums
extraction of diseased teeth, and, finally, any attention which
must be given between 6 p.m. and 8 a.m.
All the agreements based on tariff I contain special provisions
relating to the treatment of members suffering from incurable
disease. In the case of special patients the rate of remuneration
is either largely increased or else replaced by remuneration calculated according to tariff II. Thus, in Seeland the fees of doctors
treating incurable members are increased by 65 per cent. In
Jutland and the islands of Fyen, Laaland, Falster, and Bornholm
medical treatment for such members is paid for in accordance
with tariff II.
When doctors' fees are calculated in accordance with tariff II
they generally receive 3.36 crowns for a consultation at the surgery
DENMARK
125
and 4.2 crowns plus travelling expenses for a visit to the patient's
home. Special rates exist moreover for consultations necessitating detailed examinations, extraction of teeth, surgical operations,
first-aid in case of accident, treatment in connection with confinement, general narcosis and certificates required for admission to
various kinds of hospital. When medical treatment is called for
during the period between 6 p.m. and 8 a.m. or on holidays, these
rates are increased by 50 per cent. In some cases they are adjusted
in accordance with the fluctuations in the cost of living.
According to the report of the Sickness Funds Inspector for 1920,
the total value of the remuneration paid to doctors during that
year was 10,120,577 crowns (4,823,876 at tariff I and 5,296,701
at tariff II), as compared with 7,391,285 crowns (3,504,754 at
tariff I and 3,886,531 at tariff II) in 1919.
Choice of Doctor by the Patient
The method by which the insured person chooses his doctor is
different in the capital and in the provinces. At Copenhagen,
which is divided into several medical treatment areas and where
the doctors are remunerated according to tariff I, -free choice of
doctor does not exist, the insured person being required to have
recourse to the services of a specified doctor.
In the provinces, on the other hand, when the agreement specifies
remuneration at a fixed rate per year per insured person, the
insured person is entitled to choose for the coming year from among
the doctors in practice the one by whom he would like to be
attended. The choice is, however, limited to doctors living within
a distance of 12 kilometres from his home. If doctors are remunerated in accordance with the individual services which they render,
insured persons may choose at any time among all the doctors
domiciled within a distance of 12 kilometres from the patient's
home. Nevertheless, in practice a patient could hardly change
his doctor in the course of an illness.
Settlement of Disputes between Sickness Funds and Patients, Doctors
and Funds, Doctors and Patients
The settlement of disputes between sickness funds and their
members is effected by administrative machinery: it is within the
competence either of the Sickness Funds Inspector or the Minister
of Health. Generally the rules of sickness funds contain provisions
which prohibit such disputes from going before the courts.
126
VOLUNTARY SICKNESS INSURANCE
Disputes which arise between doctors and patients are in the
first instance brought before the chairman of the competent doctors'
association and the organisation of sickness funds concerned. If an
agreement cannot be reached by this method, the matter is brought
before an arbitration council (section 28). This council consists
of six members, three being elected by the central associations of
sickness funds jointly and three by the Danish Medical Association,
the chairman being appointed by the council itself. The decision
of the council is only binding upon the parties if it deals with a
question arising out of the interpretation of agreements. In all
other cases the parties need only accept it if they agreed beforehand to submit to the decision. If there was no such agreement,
appeal may be made from the decision of the council to the Minister
of Health who has the right to refer the matter back to the
chairman of the council when the parties refuse to accept the
decision of the Minister. The chairman of the council must
endeavour to settle the question on the basis of the Minister's
decision. Should he fail to do so, the Minister of Health publishes
his decision.
ORGANISATION
OF
SURGICAL AND
HOSPITAL TREATMENT
AND
SUPPLY OF DRUGS
The sickness funds have taken no special measures with regard to
these matters. Surgical and other treatment is granted to insured
persons in hospitals belonging to the State or the communes, and
drugs are supplied by ordinary pharmacies, which charge the
member a quarter of the value of the medicine on delivery and
send the fund every three months a bill for the remaining threequarters, this arrangement being in accordance with section 22 of
the Act, which prohibits sickness funds from paying more than
three-quarters of the cost of drugs.
Hitherto the funds have confined their efforts to establishing
convalescent homes where insured persons may stay at small
expense after treatment at home or in hospital. There exist three
convalescent homes at present, but several others are being built.
DENMARK
127
CHAPTER IV
FINANCIAL RESOURCES AND THEIR MANAGEMENT
§ 1. — Financial Resources
The financial resources of recognised sickness funds consist of
the following elements:
(a)
(b)
(c)
(d)
(e)
Contributions of members.
State subsidies.
Communal subsidies.
Gifts and legacies.
Other resources.
CONTRIBUTIONS OF MEMBERS
The contribution of the members of a recognised sickness fund
must be fixed at such an amount as appears from existing
experience to be sufficient, when taken in conjunction with the other
ordinary receipts of the fund and the grant from public funds, to
meet the claims upon the fund and to form a reserve fund as
prescribed by the Act (section 12, para. 1).
The rules of a fund may stipulate that any member who receives
all or part of his income during illness shall pay a lower contribution than the ordinary members of the fund (section 22, No. 4).
Moreover, the rules may fix the contributions at a higher rate
for members who, at the time of their admission, are above the age
limit laid down in the rules (section 22, No. 4). The total annual
receipts by way of contributions during the period 1923-1925
was as shown in the following table:
128
VOLUNTARY SICKNESS INSURANCE
ANNUAL CONTRIBUTION INCOME
Year
1913
1914
1915
1916
1917
1918
1919
Crowns
6,250,066
6,628,447
6,995,912
8,143,453
8,798,400
9,154,726
12,078,473
Year
Crowns
1920
1921
1922
1923
1924
1925
17,486,630
22,979,681
25,884,326
26,432,913
26,478,743
26,572,219
The average rate of contribution per member was as follows
during the years 1916-1925:
ANNUAL CONTRIBUTION
PER
MEMBER
Year
Crowns
Year
Crowns
1916
1917
1918
1919
1920
8.68
8.97
9.16
10.21
14.30
1921
1922
1923
1924
1925
17.38
19.04
19.11
18.70
18.37
STATE S U B S I D I E S
Conditions for Grant of Subsidies to Sickness Funds
In order to establish a claim to a grant from the Exchequer for
the past year, each sickness fund must forward to the Chief Sickness
Funds Inspector a return of its expenses during the year on account
of regular members without means (section 17, para. 1).
Further, a register of the members must be attached to this
return, showing to which group each member belongs according
to his economic situation. A similar register must also be forwarded in respect of members who, according to a medical certificate given at the time of their admission or re-entry to regular
membership, are suffering from a frequently recurring or incurable
disease or a bodily defect (section 17, para. 2).
The Chief Sickness Funds Inspector, after examining the reports
and accounts received from the funds, causes the grant due to
each sickness fund for the past year to be certified for payment after
deduction of any advance made to the fund (section 17, para. 5).
DENMARK
129
Rate of State Subsidies
Section 13 of the Act of 10 May 1915 provided that the State
should grant a subsidy of 2 crowns in respect of every person
without means at the end of the year and a sum equal to onequarter of the expenses of the sickness fund for medical aid, hospital
treatment, maternity benefit, and sickness benefit. Nevertheless
the subsidy was not to exceed in the case of maternity benefit
2.50 crowns per person, and in the case of daily sickness benefit
20 ore in the capital, 16 ore in provincial towns, and 12 ore in the
rural communes.
On account of the increase in the cost of living, the State subsidy
was raised by 50 ore per member in 1918 and by 75 ore per member
in 1919. Moreover, in consequence of the influenza epidemic an
extraordinary subsidy of about 334,000 crowns was distributed
during the years 1918 and 1919 among the poor funds.
Since the Act of 20 June 1921, the State subsidy has been
granted to recognised funds under the following conditions:
(1) For each person who at the end of the year was a regular
member without means, a payment of an annual amount
of 3 crowns (section 13, para. 2).
c(2) An amount equal to one-fourth of the expenses of the sickness
fund on account of such members for medical attendance,
treatment elsewhere than at home, daily allowances, maternity
benefit, remedies, dental treatment, home nursing, and maintenance in convalescent homes (section 13, para. 2).
{3) For each person in respect of whom, either at his admission
or on his re-entry as a regular member, a medical certificate
has been given that he suffers from a frequently recurring
or incurable disease or a bodily defect and who at the end of
the year was a regular member without means of the sickness
fund, the State pays, in addition to the amounts mentioned
above, a further sum equal to three-eighths of the amount
by which the average total expenses of the fund per member,
in the case of the persons just mentioned, exceeds the
average total expenses of the fund per member for its other
members (section 13, para. 2). By way of example, suppose
that a sickness fund has 300 ordinary members and 10 members
medically certified to be suffering from a frequently recurring or incurable disease or a bodily defect ; suppose, further,
that the expenses over a given financial year amount to
130
VOLUNTARY SICKNESS INSURANCE
6,000 crowns in respect of ordinary members and 400
crowns for the incurable members, so that the average
expense per member of these two categories are respectively
20 and 40 crowns. Then, apart from the subsidy of 3 crowns
per year for every member without means, such a fund
would receive in addition, in virtue of the provisions mentioned under (2) above, one-quarter of the total expenses, i.e.
1,600 crowns, of which 100 crowns (one-quarter of 400 crowns)
would be payable on behalf of the incurable members.
As has already been stated, the expenses of the fund per ordinary
member amounted to 20 crowns and the expenses per incurable
member to 40 crowns. In virtue of the provisions mentioned in
(3) above, the fund receives three-eighths of the additional expenses
in respect of incurable members, i.e. three-eighths of 20 crowns
or 7.50 crowns. As, moreover, the fund receives for each incurable
member, in virtue of provisions which are detailed below, an
equal sum from the commune, it is entirely reimbursed for its
additional expenditure in respect of incurable members (5 -j- 7.50
+ 7.50 = 20 crowns).
The State subsidy is, as has already been shown, calculated
partly on the basis of the various benefits disbursed by the funds,
so that, for example, the subsidy for the year 1922, which appears
in the balance sheets of the funds for the year 1923, is calculated
on the basis of expenditure incurred by the fund during the year
1922. The total annual amount of the State subsidies and the
amount per insured person were as follows during the period
1913-1926:
TOTAL ANNUAL AMOUNT AND AMOUNT
PER INSURED PERSON
OF
STATE SUBSIDIES (IN CROWNS)
-
Year
Total amount
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
2,592,637
2,764,989
2,936,256
3,448,758
3,716,976
4,308,450
5,978,989
6,937,218
7,961,202
10,469,986
12,274,616
12,659,630
12,435,764
13,700,503
Amount
per insured person
without means
3.26
3.28
3.29
3.67
3.75
3.79
5.01
5.65
6.01
7.75
8.87
8.93
8.88
9.51
DENMARK
131
COMMUNAL SUBSIDIES
Before the Act of 1921 came into force, the law did not require
communes to assist sickness funds by direct cash subsidy. Nevertheless, several communes voluntarily granted such subsidies to
recognised institutions. Others assisted persons in poor circumstances to pay their contributions. The law only required communes
to grant insured persons while ill a reduction of 50 per cent, on the
cost of treatment and free transport up to a certain distance for
regular members without means.
Since the Act of 20 June 1921 came into force, the communal
subsidies to sickness funds have assumed the form both of direct
cash subsidies, such as those granted by the State, and of
reductions on the fees payable in communal hospitals and free
conveyance.
Direct Subsidies
The commune pays to the fund the same subsidy as is paid by
the State, i.e. three-eighths of the difference between the average
expenses of the fund for incurable members and the average total
expenses of the fund for its other members (section 13, para. 2).
Indirect Subsidies
These subsidies are granted to funds in the shape of reduction
on the cost of treatment in the communal hospitals and of free
conveyance of sick persons.
Reduction in Cost of Hospital Treatment
This reduction is granted in respect of each regular member without means of a recognised sickness fund and the children of
members, including adopted children brought up in the family who
are under the age of 15.
The sick person must be treated in a hospital, belonging to the
State, county, market town, or trading station, which is not established specially for a particular category of persons.
If the patient resides in the district for which the hospital was
established and a medical certificate indicates that hospital treatment is necessary, the fund is granted exemption from, or reduction
of, the charges for the period during which the patient is entitled
to benefit from the fund. The payment for this period must not
exceed one-half of the charge fixed for treatment, etc., of other
132
VOLUNTARY SICKNESS INSURANCE
persons in the hospital, including the charge for bandages, extra
attendance and similar payments (section 14, para. 1).
If a regular member without means or one of his children under
the age of 15 is ill while staying temporarily outside the area of
the fund and, in the opinion of the doctor, is in need of hospital
treatment, the hospital for the area in question is bound to grant
to the fund the same reduction of charges as is due in case of maintenance in hospital for members of a sickness fund resident in the
hospital area (section 14, para. 2). When the commune in question
has no hospital of its own, it is required to repay to the fund onehalf of the maintenance of a regular member in the hospital of the
nearest market town or community (section 14, para. 4). If a regular
member without means or one of his children under the age of 15
is admitted to a lunatic asylum, the sickness fund is granted the
same reduction of charges as is always allowed to destitute
patients (section 14, para. 5).
Conveyance of Regular Members without Means
The duties of communes under this head differ according as the
communes are rural or urban. In the country or on the outskirts of
a market town, only a regular member without means who does
not himself own a horse and vehicle is entitled to require the
provision of conveyance by the commune where he resides (both
on his own account and on that of any of his children) for the purpose of fetching the doctor or midwife of the sickness fund or taking
the sick persons to or from the doctor or midwife or a hospital situated within the boundary of the medical district (section 15, para. 1).
Conveyance is granted free of charge for a distance of not more
than 12 kilometres from the residence of the sick person and a
return journey of equal length (section 15, para. 1).
If, on the contrary, a regular member without means or one of
his children under the age of 15 is resident in a town, market town
or the outskirts of a market town within one kilometre of its boundary, he is entitled to free conveyance to the hospital of the area if
the doctor certifies that such conveyance is necessary (section 15,
para. 5). If such regular member is temporarily absent from the
area of his fund and is in need of medical attendance or hospital
treatment, the commune in which he happens to be must grant him
the same facilities for conveyance as the commune is required to
grant to a member of a sickness fund domiciled in the commune,
but not the conveyance from the home of the patient to the doctor
or the hospital and back (section 15, para. 6).
7^
133
DENMARK
The following table shows the total annual amount of the subsistence granted by the communes to recognised sickness funds
during the period 1913-1926. The figures shown relate only to the
subsidy paid directly to the sickness funds. It is impossible to
calculate from the statistics the value of the indirect subsidies.
TOTAL ANNUAL AMOUNT AND AMOUNT PER INSURED
PERSON
OF
COMMUNAL SUBSIDIES (iN CROWNS)
Year
Total amount
Amount
per insured person
without means
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
190,396
205,043
224,738
259,012
318,813
394,633
523,121
611,602
704,147
747,020
916,477
1,016,793
1,008,753
1,030,190
0.24
0.24
0.25
0.28
0.32
0.35
0.44
0.50
0.53
0.55
0.66
0.72
0.72
0.71
1
l
1
1
l
i The communes paid by way of compulsory subsidies on account ot the expenses for
incurable members; 19,948 crowns in 1922; 198,237 crowns in 1923; 239,024 crowns
in 1924; 230,984 crowns in 1925; 254,219 crowns in 1926. The remainder was paid to the
funds by way of voluntary subsidy.
G I F T S AND LEGACIES
The Act does not state the conditions under which sickness funds
may receive gifts and legacies. The amount received under this
head during the period 1913-1925 is shown in the following table.
It includes gifts from private persons and the proceeds of fêtes.
ANNUAL RECEIPTS FROM GIFTS AND LEGACIES
Year
1913
1914
1915
1916
1917
1918
1919
Crowns
51,536
53,388
46,678
48,341
45,704
80,195
89,105
Year
1920
1921
1922
1923
1924
1925
Crowns
82,697
139,106
81,070
57,995
60,174
53,677
134
VOLUNTARY SICKNESS INSURANCE
OTHER RESOURCES
Of the other resources of recognised sickness funds, the chief are:
(1) Interest on capital.
(2) Allowance to sickness funds for administration of invalidity
insurance.
In accordance with the Act of 6 May 1921 concerning invalidity
insurance, every person who is a regular member without means
of a recognised sickness fund is insured against invalidity until the end
of his sixty-second year, provided that he is of Danish nationality
and resides on national territory (section 1 of Act of 6 May 1921).
The administration of invalidity insurance is entrusted to the sickness funds which, in virtue of section 28, para. 2, receive 5 per cent.
of the invalidity insurance contributions to enable them to meet
the cost of administration.
(3) Interest on invalidity insurance capital.
In accordance with a departmental decision, recognised sickness
funds receive not only 5 per cent, of the invalidity premiums
collected, but the interest accruing on invalidity insurance moneys
while in the possession of the funds.
(4) The net profit rising out of the insurance of members with
means.
It has already been noted that every member of a recognised
sickness fund whose economic situation has improved to such an
extent that his income or means exceed the limits prescribed by
legislation can nevertheless remain a regular member of the sickness
fund if the rules of the fund expressly authorise it. As the State
does not pay any subsidy to the fund in respect of a member of
this class, he must himself pay, besides the ordinary contribution,
a special additional premium which is fixed by the rules of the fund
and is at least equal to the public subsidy received by the fund in
respect of members without means (section 6, para. 4). The
advantage which such persons enjoy as regular members with
means consists, apart from their right to benefit in case of sickness,
in the fact that in case their economic situation should alter their
rights and status as members without means are restored to them
irrespective of their age and state of health.
135
DENMARK
(5) Among the remaining resources must be mentioned sums
rising out of reinsurance against expenditure for the treatment of
members suffering from tuberculosis and mental diseases.
The annual total of all the five groups of other resources of
recognised funds during the period 1913-1925 is shown in the
following table.
ANNUAL TOTAL OF OTHER RESOURCES OF SICKNESS FUNDS
(IN CROWNS)
Year
Interest on
capital
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
248,288
273,655
286,470
279,074
288,617
327,623
374,205
392,226
467,349
586,597
719,842
933,519
1,141,918
5 per cent.
of
invalidity
premiums
—
—
—
—.
—
—
—
70,556
298,807
311,311
313,492
325,446
Interest
on funds
belonging
to
invalidity
insurance
Net profit
on
insurance
of regular
members
with means
—
—
-•—
•
74,955
76,793
87,632
106,639
103,796
115,504
127,838
127,455
190,889
237,266
318,199
550,648
531,194
—
—•
—
—
—
—.
—
—
—
•
—
—
31,909
59,195
73,974
80,776
76,236
72,894
55,510
119,559
106,548
79,632
Remaining
resources
TOTAL ANNUAL INCOME
The total annual income of recognised sickness funds was as
follows during the years 1913-1925:
TOTAL ANNUAL INCOME OF SICKNESS FUNDS
Year
1913
1914
1915
1916
1917
1918
1919
. . . .
.
.
.
.
.
.
Crowns
9,407,878
10,002,315
10,577,686
12,285,277
13,272,306
15,381,131
19,171,731
Year
1920
1921
1922
1923
1924
1925
.
.
.
.
.
.
.
.
.
.
.
.
Crowns
25,669,737
32,572,125
38,434,556
41,231,689
42,191,783
42,419,699
The above table indicates that there was a considerable increase
in the annual income of the funds during the period under
136
VOLUNTARY SICKNESS INSURANCE
consideration: the income for 1925 was about four and a half
times the 1913 income.
On the other hand the increase of annual income per insured
person has been less rapid, as is apparent from the next table.
AVERAGE
Year
1913
1914
1915
1916
1917
1918
1919
ANNUAL
INCOME
Crowns
11.82
11.86
11.85
13.03
13.33
13.46
15.96
PER
MEMBER
Year
1920
1921
1922
1923
1924
1925
Crowns
20.78
24.43
28.25
29.53
29.53
28.69
The above figures show the average annual income per regular
member. The figure for 1925 is about two and a half times as
great as that for 1913.
As a percentage of the total recaipts for the years 1915, 1918
and 1925, the amount of each of the different sources of revenue
appears as follows:
SEVERAL SOURCES OF REVENUE AS PERCENTAGE OF TOTAL
REVENUE
Source of revenue
Contributions of regular members without means
Contributions of other members
Entrance fees, fines, etc.
Interest on investments
Voluntary subsidies of communes
Compulsory subsidies of the State
(for 1914, 1917 and 1923)
Gifts, proceeds of fêtes, etc.
5 per cent, of invalidity contributions
Interest on invalidity insurance moneys
Net profit on insurance of members with
means
Other receipts *
. Total receipts
1915
1918
1925
65.0
0.2 1
1.0 )
2.7
2.1
63.3
2.7
62.4 •
0.1 '
0.62.71.8
27.7
0.5
28.0
0.5
0.8
0.8
100.0
100.0
2.1
2.6
29.9 2
0.1
0.8
0.2
0.2
1.2
100.0 '
i These consist mainly ol sums repaid by the reinsurance of fund for the cost of treating
tuberculous members.
2
Including compulsory subsidies of communes.
The most important items are the contributions of regular
members without means and State subsidies. The other resources
137
DENMARK
together represent in 1915 7.3 per cent., in 1918 8.7 per cent.,
and in 1925 7.7 per cent., of the total receipts in the course of
each of these three years.
§ 2. — Financial Management
The financial system adopted is that of annual distribution of
costs, together with the accumulation of a reserve fund.
Section 12, para. 1, of the Act provides that every recognised
sickness fund shall fix the contribution of its members at such an
amount as, when taken in conjunction with the other ordinary
receipts of the fund and the subsidy from public funds, is sufficient,
not only to meet the claims upon the fund, but to form a reserve
fund which, as a rule, should be equal to the average expenses of
the sickness fund during the last three financial years, after
deduction of the State subsidy paid to the fund for the years in
question.
As regards the investment of capital, the Act lays down that the
income and capital of the funds must be kept- separate from the
funds of other associations and cannot be transferred to any other
association by way of loan or gift or used for any unauthorised
purpose (section 12, para. 2).
The rules of each of the funds contain the detailed instructions
for the investment of capital. As a rule they stipulate that the
capital shall be invested in State securities or in land or else paid
into a savings bank on behalf of the sickness fund. The following
table shows the amount of the reserve funds of the sickness insurance system during the years 1915 to 1925.
RESERVES OF RECOGNISED SICKNESS FUNDS
Year
(to 31 December)
1915 . . .
1916 . . .
1917 . . .
1918 . . .
1919 . . .
1920 . . . . '
Crowns
9,644,432
9,535,930
10,561,934
12,004,287
12,803,166
14,779,220
Year
(to 31 December)
1921 . .
1922 . .
1923 . .
1924 . .
1925 . .
.
.
.
. .
.
Crowns
20,134,363
24,439,788
29,053,654
34,727,653
36,865,829
The total property of the fund and the property per insured
person were as follows during the period 1913-1925:
V
138
VOLUNTARY SICKNESS INSURANCE
TOTAL PROPERTY AND PROPERTY PER INSURED PERSON (IN CROWNS)
Year (to 31 December)
Total property
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
8,895,721
9,354,918
9,724,724
10,154,166
11,198,876
12,637,730
13,440,570
15,429,284
20,777,674
25,090,653
29,756,407
35,423,612
37,532.590
Property
per insured person
11.18
11.09
10.90
10.77
11.25
11.07
11.19
12.49
15.59
18.44
21.60
24.79
25.82
The kinds of investment selected by the funds in 1924 and 1925
are indicated in the following table, which also shows their assets
and liabilities in these two years.
ASSETS AND LIABILITIES OF RECOGNISED SICKNESS FUNDS IN
AND 1 9 2 5
(IN
Landed property
Cash in hand
Cash in savings bank
Cash at bank
Stocks and other securities
Contributions in arrear
State and communal subsidies
Total assets
Total liabilities at 31 December
Difference
1924
CROWNS)
1924
1925
666,761
933,948
16,776,292
3,881,164
2,540,325
767,539
13,954^722
39,520,751
1,988,161
695,959
876,929
15,022,739
5,015,527
2,432,600
721,858
12,666,748
37,432,360
2,008,748
37,532,590
35,423,612
DENMARK
139
CHAPTER V
JUDICIAL AUTHORITIES, OFFENCES AND PENALTIES
§ 1. — Judicial Authorities
The Act does not set up special judicial authorities for deciding
disputes which may arise out of its working. Disputes between sickness funds and insured persons are in practice settled by the Chief
Sickness Funds Inspector, an appeal being allowed to the Minister
of Health. Only disputes on the question whether a person can be
admitted as a regular member of a recognised sickness fund in view
of his economic situation or whether a sickness fund is entitled to a
public subsidy in respect of a particular regular member are decided
by a special committee, composed of one member appointed by the
municipal council of the locality in which the person in question
resides, a member chosen by the managing committee of the fund
and a doctor acquainted with sickness insurance matters appointed
by the municipal council for each case as it arises. The member
appointed by the municipal council is the chairman of the committee (section 9, para. 1).
An application may be made to this committee by the person
whose right to membership is in question, by the Chief Sickness Funds
Inspector, the managing committee of the fund, the doctor employed
by the fund, or the competent municipal authority. The taxation
authorities are required to make a statement as to the income
and property of the person in question on receipt of a written
request from the committee (section 9, para. 2).
Appeal against a decision of the committee may be lodged with
the Minister by any of the persons entitled to bring the case before
the committee (section 9, para. 3).
N
140
VOLUNTARY SICKNESS INSURANCE
§ 2. — Offences and Penalties
As has already been stated, the supervision of sickness funds is
carried out by the Chief Sickness Funds Inspector, who is appointed
by the Minister of Health. The Act empowers this official, as
well as the Minister, to inflict certain penalties in case of offences
against the Act. .
WITHDRAWAL OF RECOGNITION
Withdrawal of the recognition can only be ordered by the
Minister who acts either at the request of the Sickness Funds
Committee, which consists of 11 members under the chairmanship
of the Chief Sickness Funds Inspector and is elected for four
years, or at the request of the Inspector himself.
In accordance with section 27, para. 7, if the Committee considers
that a sickness fund, without exactly contravening the provisions of
the Act, has nevertheless acted towards its members or towards
other sickness funds in such a way" as to affect adversely the whole
sickness insurance system, it must make a recommendation to the
Minister as to the advisability of withdrawing recognition from
the sickness fund in question.
Further, in accordance with section 32, para. 1, the Chief Sickness Funds Inspector, finding after thorough investigation that a
fund cannot meet its liabilities or that it is not carrying out the provisions of the Act, may propose that the Minister should withdraw
recognition.
FINES
When a fund does not carry out in due time the provisions of the
Act, the Minister may, on the proposal of the Chief Sickness Funds
Inspector, order the representatives or officials responsible for the
omission to perform their duty under penalty of a daily or weekly
fund. The fines thus imposed are recovered by distraint and
are not included by the managing committee in the expenses of
the sickness fund. They are paid to the communal relief fund for
the place where the managing committee of the sickness fund has
its seat (section 32, para. 2).
Moreover a fine may be imposed on members of the managing
committee and the officials of a fund who do not keep secret
from all persons not concerned information respecting the state
DENMARK
141
of health and the economic situation of members. The maximum
fine for this offence is fixed at 400 crowns (section 32, para. 3).
CESSATION OF SUPERVISION FOR UNRECOGNISED FUNDS
It has already been indicated that sickness insurance societies
not recognised by the Act may come under the supervision of the
Chief Sickness Funds Inspector in so far as the operations include the
payment of sickness benefit to their members and they are based
on the mutual responsibility of members (section 34, para. 1).
During the period that these societies are subject to the supervision
of the Inspector, they are entitled to call themselves "State
inspected" (section 34, para. 2).
The Minister may decide, on the proposal of the Chief Sickness
Funds Inspector, that the supervision of a fund shall cease in the
following cases: if it fails to comply with the conditions laid down
for supervision, or if it cannot be deemed to be in a position to
discharge its obligations, or if its activities are found not to be in
accordance with the provisions in force for such societies, or lastly
if the society fails to comply with the directions of the Chief Sickness Funds Inspector (section 37, para. 3).
Loss
OF STATUS AS MEMBERS
Every person desiring to join the fund must make a bona fide
declaration as to his age, state of health, the amount of his annual
income and his property, and whether he is a member of any other
sickness fund oris provided with benefit in case of sickness in any other
way (section 11, para. 2). If a person has, with intent to defraud,
made incorrect statements in his declaration, he cannot be admitted
to any right of membership; he may be required to refund what
he has received from the sickness fund during the period for which
he was wrongfully a member. Offences against these provisions
and dishonest conduct towards the fund entail loss of membership
rights, and the person in question may also be required to refund
benefits wrongfully received (section 11, para. 6).
142
VOLUNTARY SICKNESS INSURANCE
CHAPTER VI
POSITION OF FOREIGNERS
The Act contains no provisions restricting the rights of foreigners
in the matter of sickness insurance.
In order to facilitate the transfer from a foreign fund to a Danish
fund, the Central Federation of Danish Sickness Funds has concluded
agreements with the corresponding organisations in Sweden and
Norway by the terms of which a person insured in a Swedish or
Norwegian fund is, as soon as he joins a Danish fund, granted
the same rights as Danish insured persons who pass from one Danish
fund to another. The first agreement was concluded in 1911,
each affiliated institution being free to adhere to it or not. The
agreement between the Danish and Norwegian unions, which was
reached in 1925, no longer grants this option to individual funds.
It binds the whole of the institutions of both countries and has
been confirmed by a Convention signed by both Governments on
15 December 1926.
In virtue of Danish legislation (Act No. 67, of 1 April 1912, and
Act No. 308, of 30 June 1922), employers having foreign workpeople are required to provide for them the necessary care in case
of sickness and to defray the cost of their treatment for a period
not exceeding six months. They must insure such workers with
the Mutual Society for the Insurance of Foreign Workers, which
has been approved by the Minister of the Interior for this purpose.
The Society receives a State subsidy of 50 ore per worker per year,
together with one-sixth of all contributions paid, but not exceeding
one crown per insured person. This mutual society, which is
managed solely by the employers, is placed under the supervision
of the Sickness Funds Inspector. During the financial year
1925-1926, it provided for the insurance of about 1,900 workers
and expended 18,800 crowns.
FINLAND
Law
Order of 2 September 1897 on benefit funds. Suomen Asetuskokoelma:
Finlands Föjattningssamling (Finnish Collection of Laws), 1887, No. 35.
Report
Finnish Official Statistics, Labour Statistics.
Helsingfors, 1913-1924.
INTRODUCTION
The Finnish mutual benefit movement is derived from the
medieval guilds and the Orders of 1669 and 1720 on guilds, which
contained provisions on the assistance to be granted to members
of the guilds in the event of sickness and on funeral benefit 1 .
The Order of 1766 on smiths provided that benefit funds for
the workers were to be set up in all iron and steel works. The
moneys of these funds were supplied by the employers and workers
in proportion to the annual output of iron or steel. They paid
benefit in the event of accident, sickness, or invalidity, and were
subject to supervision by the Chamber of Mines 2.
During the period following the abolition of the guild system,
works funds and mutual benefit societies for artisans and workers
were formed. Finally, since 1870, mutual benefit funds have been
organised by the trade unions. In 1889, there were 99 such funds,
of which 37 granted sickness and funeral benefit and old-age and
invalidity pensions, while 48 insured only against the risks of
sickness and funeral expenses, and 14 paid pensions only.
In 1889, the Finnish Parliament submitted to the GovernorGeneral a petition for the appointment of a committee to study
1
Ordning om Skra för handvärckare i Scerige och Finland,
Modée: Publique Handlingar, Vol. I., p. 199.
2
Modée : Publique Handlingar, Vol. VIII., p. 7171.
27 June 1920.
144
VOLUNTARY SICKNESS INSURANCE
the question of State-subsidised compulsory insurance. This committee was to enquire into the possibility of setting up such a
system and its scope and organisation. The Parliament also asked
that if the Government considered that compulsory insurance
could be introduced, the committee should draft proposals for
accident, sickness, and invalidity insurance. A committee was
appointed in accordance with this petition, and in 1892 it submitted
a number of memoranda which served as a basis for the Act of
1895 on employers' liability for accidents and the Order of 2 September 1897 on benefit societies 1. This Order, which governed the
working of mutual benefit societies, is still the basis of the voluntary
insurance system in Finland 2. Under it a network of sickness
iunds and invalidity and old-age funds was set up for artisans,
•workers, and persons in a similar position. Their resources were
derived almost entirely from members' contributions, and they
granted mainly cash benefits for sickness, funeral expenses and
invalidity.
It may be added that there is in Finland a special system for
the benefit of members of the forces, who, in the event of accident
or sickness, are paid compensation out of the Treasury. A new
Act on this subject was adopted in 1925.
The present study will be confined to an examination of the
principal provisions of the 1897 Order and the results of its
administration.
1
2
Collection of Laws, 1897, No. 35.
After the war, the question of reforming the insurance system was
thoroughly examined, the Tanner Government, which came into power on
13 December 1926, having made it one of the chief items of its programme.
During the first quarter of 1927, Mr. J. Helo, Minister of Labour, tabled a
Bill in Parliament for introducing compulsory sickness insurance for manual
and non-manual workers and apprentices whose earnings do not exceed
2,500 Finnish marks a month. This Government Bill provides for the establishment of local funds and allows the formation of works funds with a membership
of not less than 500 persons. The moneys of these funds would be derived
from the equal contributions of employers and workers together with State
•subsidies. The funds would grant sickness, maternity, and funeral benefits.
145
FINLAND
CHAPTER
I
INSURANCE INSTITUTIONS
§ 1. — Legal Status
Under Finnish law, any institution is deemed to be a benefit
society if it grants its members — that is to say, artisans, workers,
and persons in a similar position who contribute to its funds —
daily cash allowances, medical benefit compensation for general
expenses, or similar benefits in the event of the occurrence of the
risk. The scope of such an institution may not be limited to
persons designated by name when it is founded (section 1 of the
1897 Order).
If a fund undertakes both sickness and invalidity insurance, it
must have special rules and separate accounts for each of these
two branches. A similar provision applies if a sickness fund is set
up in connection with a society or institution whose aims are not
confined to insurance alone (section 7). Thus persons who are
economically independent, as well as wage-earners, are able to
found benefit societies.
The existing societies may be subdivided into occupational
and local institutions ; the first may cover either the whole of the
country (engineers' and printers' funds), or a particular area (the
Turku tanners' . society, the Tampere carpenters' society, the
Helsingfors café and restaurant employees' society). In addition
there are certain old-established guild funds dating from the guild
period, which are open to small employers and workers in the
occupation in question.
The large majority of the funds, however, are institutions
attached to an industrial undertaking. They are founded either
by the workers themselves, or by the employers, who contribute
to them by donations or annual subsidies. In certain cases, the
employers' contribution is fixed in proportion to the insured
persons' contributions. In addition to the works funds, there are
also local mixed funds grouping all the workers employed in a given
area. Sometimes membership is open only to trade unionists.
10
146
VOLUNTARY SICKNESS INSURANCE
Although sickness insurance in Finland is purely voluntary,
certain industrial undertakings where the employers have set up
sickness funds require all the persons they employ to join the fund,
so that for them sickness insurance beoomes compulsory.
§ 2. — Constitution of Funds
Any fund which proposes to undertake sickness insurance must
have its rules approved. When the activities of the institution
are limited to a province, approval is granted by the provincial
governor, and otherwise by the Government ; the same authorities
approve amendments of the rules. Approval may not be refused
if the rules or amendments contain no provisions contrary to the
legislation in force (section 9).
The rules of every benefit society must deal with the following
subjects:
(1) The name of the society, its objects, and headquarters.
(2) The conditions of admission and exclusion of members.
(3) Contributions.
(4) The benefits granted to members and their families.
(5) Provident reserves.
(6) The administration of the society, executive committee,
annual meeting, financial supervision.
(7) The administration of the society's assets, its accounts and
budget estimates.
(8) Amendment of the rules.
(9) Winding up of the society and liquidation of its assets.
(10) If the society is attached to an industrial undertaking the
rules must specify the measures to be adopted if the undertaking closes down (section 2).
No fund may be recognised which does not require its members
to pay cash contributions (section 1). A society may be founded
either independently or in connection with another society, association or corporation, provided that its accounts are kept quite
separate (section 7).
If a fund is wound up, its assets, after the payment of the benefits
due to members, may be used only for purposes connected with
the objects of the institution or for the welfare of workers in general.
The law formally prohibits the distribution of the balance between
the persons belonging to the society at the time it is wound up
(section 8).
FINLAND
147
§ 3 — Administration of Insurance Institutions
Benefit societies are administered by a managing committee,
which must submit a report before 31 May each year to the public
supervisory authorities on the work of the society during the past
year, and by supervisors elected either directly by the insured
persons or by their delegate meeting. In societies which receive
employers' contributions the employer has the right to appoint
not more than half the members of the managing and supervisory
committees (sections 6 and 10).
Several funds have also a treasurer, who is responsible for
collecting contributions and is sometimes appointed directly by
the insured persons, but more often by the managing committee,
whether from among its own members or not as the case may be.
In certain employers' funds the treasurer of the undertaking
deducts the insurance contributions from the workers' wages and
transmits them directly to the treasurer of the fund. This method
of deduction from wages in advance is used particularly in societies
where membership is compulsory for all persons employed in the
undertaking.
The rules of certain societies require the members of the managing
committee to visit sick members. Some societies appoint visitors
or inspectors from among persons not on the committee. In
most cases, however, a system of mutual supervision by the
members is adopted, which is facilitated by the fact that the
membership of the funds is small and the waiting period generally
fairly long (6 to 7 days).
§ 4. — Supervision of Insurance Institutions
The supervision of the work of insurance institutions was at
first in the hands of the Office of Industry (section 10 of the 1897
Order). In 1917, when the Office of Social Affairs was set up,
supervision of the funds was transferred to the Inspector-General
of Social Insurance in this Office (Order of 28 December 1917,
Collection of Laws, No. 123). When in 1922 the Office of Social
Affairs was closed down, the work of supervision was entrusted
to the Ministry of Social Affairs and its Insurance Section. Since
that date, all questions connected with benefit societies have been
within the competence of a special inspector in the Insurance
Section (section 3 of the 1922 Order).
148
VOLUNTARY SICKNESS INSURANCE
The functions of this Section include those of examining the
annual reports of the insurance institutions and the minutes of the
annual general meetings to which the reports of the managing
committee and supervisors are submitted (section 10 of the 1897
Order). It must also supervise the work of the funds, keep an
up-to-date record of particulars relating to them, and publish
statistical reports.
If the Insurance Section considers that a fund is not being
administered in accordance with the provisions of the Order and
the rules, it informs the governor of the province in which the
headquarters of the fund are situated. The governor then instructs
the managing committee to submit the matter to a general meeting
of the members. If suitable measures for remedying the defects
in administration are not taken, the supervisory authorities may
prohibit the fund from admitting new members or even from
engaging in insurance (section 11 of the 1897 Order).
If the fund is wound up, the provincial governor must be notified,
and he in turn informs the Ministry of Social Affairs. Notification is also necessary if an industrial undertaking in which an
employers' fund has been set up closes down (section 12).
§ 5. — Statistics of Insurance Institutions
The Finnish statistics deal with two classes of benefit societies,
sickness funds and mutual-aid clubs. The latter are mutual-aid
associations of lesser importance which do not collect regular
contributions from their members. If a member faPs ill or dies,
the club collects a sum, as specified in the rules, which usually
exceeds the cost of the sickness or funeral benefit entailed in
respect of the member in question. The balance is used to cover
the administrative expenses of the club, and if need be to form
a reserve fund. When the fund reaches a given level, usually
exceeding the sum necessary to cover the costs of a case of sickness
or death, no contributions are collected from members for the next
case that occurs.
The statistics given below refer to sickness funds properly
so called and the mutual-aid clubs. They do not cover institutions which grant only funeral benefit, nor benefit societies for
persons in economically independent positions who are not subject
to the 1897 Order.
149
FINLAND
Each of these two classes is subdivided into the following
four groups:
(1) Trade union funds. Institutions set up for the workers
belonging to a national or local workers' organisation.
(2) Works funds. Institutions set up for the workers employed
by one or more undertakings.
(3) Local funds. Institutions set up for all the workers employed
in a given district.
(4) Other funds. Institutions set up for certain occupations
such as café and restaurant employees, messengers, midwives,
telephone operators, and the guild funds to which both
" masters " and workers belong.
NUMBER
OF
SICKNESS
FUNDS
Type of fund
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Total
Trade
union
Works
Local
Other
38
38
36
36
31
30
30
30
29
33
35
36
135
145
148
149
143
144
146
149
150
151
154
153
16
18
16
17
14
18
18
20
22
24
25
25
8
8
9
8
8
8
8
8
9
9
9
9
MEMBERSHIP OF SICKNESS
197
209
209
210
196
200
202
207
210
217
223
223
FUNDS
Type of fund
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Total
Trade
union
Works
Local
Other
3,345
3,451
3,652
3,996
2,020
1,695*
3,206
2,903
4,466
11,773
12,790
6,616
38,949
38,739
39,104
41,786
39,847
35,159
38,271
48,184
43,619
47,806
46,958
45,946
5,089
5,311
5,626
5,870
5,629
5,677
5,699
5,738
5,741
5,717
5,848
5,774
568
567
686
710
726
762
748
704
815
797
757
784
47,951
48,071
49,068
52,562
48,222
43,293
47,924
57,529
54,641
66,093
66.353
59,120
150
VOLUNTARY SICKNESS INSURANCE
NUMBER
OF MUTUAL-AID
CLUBS
Type of club
Total
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Trade union
Works
Local
10
11
10
10
3
3
4
4
4
4
4
4
8
11
11
11
10
8
7
8
8
8
8
8
7
9
9
9
8
8
'9
9
7
11
11
11
MEMBERSHIP
OF MUTUAL-AID
25
31
30
30
21
19
20
21
19
23
23
23
CLUBS
Type of club
Year
Total
Trade union
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1,212
814
. 801
833
247
268
338
338
336
352
336
314
Works
Local
893
1,299
1,333
1,424
1,478
969
852
1,044
959
1,034
1,051
1,022
790
1,308
1,324
1,365
1,293
1,204
1,197
1,180
1,044
1,505
1,485
1,493
2,895
3,421
3,458
3,622
3,018
2,441
2,387
2,562
2,339
2,891
2,872
2,829
NUMBER AND MEMBERSHIP OF ALL INSTITUTIONS
Year
Number of
institutions
Membership
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
222
240
239
240
217
219
222
228
229
240
246
246
50,846
51,492
52,526
55,984
51,240
45,734
50,311
60,091
56,980
68,984
69,225
61,949
151
FINLAND
The above figures show that during the war, 1914-1917, there
was little change in the number and membership of the sickness
funds. The year of revolution, 1918, was accompanied by a heavy
fall in membership. From 1919, however, the membership began
to rise, and during the last two years covered the figures are above
the pre-war level. The membership of the mutual-aid clubs
remained fairly steady during this period. It may be added that
persons insured against sickness form only about 2 per cent, of
the total population of the country (3,105,103 according to the
1920 census).
The average membership per society is relatively small. The
following table classifies the funds with a membership of over
500 persons at the beginning of 1924 according to membership.
DISTRIBUTION OF FUNDS WITH OVER 500 MEMBERS AT THE
BEGINNING OF 1924
Number of funds
Membership
500-1,000
1,000-2,000
2,000-5,000
5,000 and over
Trade union
Works
Local
1
2
11
8
2
1
1
1
§ 6. — Risks Covered by Insurance Institutions1
The large majority of sickness funds insure against both sickness
and funeral expenses, but some insure only against sickness. Apart
from the benefits granted for sickness following a confinement,
maternity benefit is not granted except in one fund, and in this
only since 1923.
The sickness funds are not entitled to grant invalidity and oldage benefits 2. Only the institutions set up for this particular
i Of the funds subject to the 1897 Order in 1924, 212 granted sickness
and funeral benefits, 13 only sickness benefit, 11 only funeral benefit, 18
temporary benefits, and 41 pensions. The particulars given in this Section
relate only to the funds granting sickness benefit.
2
Certain societies, however, which can afford to do so, assist those of
their members who are permanently disabled by sickness.
152
VOLUNTARY SICKNESS INSURANCE
purpose may cover these risks. Thus, at the beginning of 1924,
21 works funds had special funds insuring against invalidity and
old age. Similarly, 11 trade union funds had set up special pension
funds. In practice, however, the subordinate institutions never
include all the members of the sickness fund. In 1924 the total
membership of the pensions funds was only 9,621, of whom 8,451
belonged to works funds and 1,170 to trade union funds.
The following tables show the distribution of the sickness funds,
excluding mutual-aid clubs, according to the risks covered.
DISTRIBUTION OF SICKNESS FUNDS ACCORDING TO THE RISKS
COVERED
Number of funds granting
Year
sickness
benefit
sickness
and funeral
benefit
11
15
13
13
11
12
12
11
12
12
13
13
186
194
196
197
185
188
190
196
198
205
209
209
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
DISTRIBUTION
OF
MEMBERSHIP
OF
TO THE RISKS
SICKNESS
FUNDS
sickness, funeral and maternity benefit
1
1
ACCORDING
COVERED
Membership of funds granting
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
sickness
benefit
sickness
and
funeral
benefit
sickness,
funeral and
maternity
benefit
3,332
3,660
3,628
4,215
2,186
2,245
3,869
4,064
3,856
4,157
4,896
5,187
44,619
44,411
45,440
48,147
46,036
41,048
44,055
53,465
50,785
61,936
61,252
53,681
—
—•
—
—•
—
—
—
—
—
203
252
153
FINLAND
CHAPTER
II
INSURED PERSONS
Benefit societies are open to all artisans and workers and persons
in a similar position (section 1 of the 1897 Order). The Order
contains no limitation of admission based on age or sex, nor do
the rules of the funds fix an age limit. Apprentices are not
admitted as members. Some institutions admit the wives (or
husbands) of members on the same terms as other insured persons.
In principle, honorary members are not allowed, but the rules of
some funds exempt members who have regularly paid their contributions from the payment of further contributions, subject to
certain conditions. Two funds also admit employers, but the
number of employers insured is very small.
The official statistics reproduced in the table below show the
distribution of insured persons by sex.
DISTRIBUTION OF INSURED PERSONS BY SEX
f
Sickness funds
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Mutual-aid clubs
Total
Men
Women
Men
Women
32,768
32,556
32,782
34,218
31,283
27,737
30,229
36,156
33,825
41,404
41,765
37,690
15,183
15,515
16,286
18,144
16,939
15,556
17,695
21,373
20,816
24,689
24,588
21,530
1,931
2,212
2,246
2,377
1,981
1,634
1,516
1,586
1,400
1,783
1,724
1,675
964
1,209
1,212
1,245
1,037
807
871
976
999
1,108
1,148
1,154
50,846
51,492
52,526
55,984
51,240
45,734
50,311
60,091
56,980
68,984
69,225
61,949
VOLUNTARY SICKNESS INSURANCE
154
CHAPTER III
BENEFITS AND ORGANISATION OF MEDICAL SERVICE
§ 1. — Benefits and Other Expenditure of Insurance Institutions
The Finnish sickness funds grant their members sickness benefit,
funeral benefit and, in exceptional cases, maternity benefit.
SICKNESS
BENEFIT
Any person belonging to a sickness fund or mutual-aid club
is entitled to cash benefit if he falls ill. This benefit is granted
only after a waiting period of from two to seven days, and sometimes even of fourteen days. The benefit period is usually two
to four months, but some funds grant benefit for five to six months.
It is unusual for the rate of benefit to be fixed in proportion to the
insured persons' wages, the amount being as a rule fixed in advance.
If the rules provide for several classes of contributions, the rate
of benefit varies with the members' contribution.
Medical benefit is seldom granted and is confined chiefly to the
trade union and local funds. Some of the works funds (in 1923,
87 out of 160) provide for such benefit in their rules.
The two tables below show the morbidity statistics for the
members of the funds and the cost of sickness benefit. They
relate to the sickness funds alone, excluding the mutual-aid clubs.
NUMBER OF CASES OF SICKNESS AND DAYS OF SICKNESS, AND
AVERAGE
>
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
DURATION
OF EACH
CASE
Number of persons Number of days
in receipt
of
of benefit
benefit
11,127
10,078
9,919
11,174
11,610
9,453
9,849
10,269
10,707
12,481
16,028
14,869
278,615
267,308
268,150
309,870
275,766
229,639
229,532
221,083
224,727
267,091
255,499
252,979
Average number
of days of benefit
per case of sickness
25.0
26.5
27.0
27.7
23.8
24.3
23.3
21.5
21.0
21.4
15.9
17.0
155
FINLAND
COST OF DAILY BENEFIT, MEDICAL ATTENDANCE AND DRUGS, AND
AVERAGE COST PER DAY OF SICKNESS
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Cost
of daily
benefit
Cost of medical
attendance
and drugs
Average cost
per day
of sickness
F. mk.
F. mk.
F. mk.
442,311
433,699
442,400
512,935
585,795
686,971
836,209
1,193,940
1,669,426
2,127,945
2,301,556
2,523,891
199,497
176,325
194,081
215,963
269,412
300,249
507,109
990,053
1,358,727
1,717,331
1,875,454
2,298,213
2.30
2.28
2.37
2.35
3.10
4.30
5.85
9.88
13.47
14.40
16.35
19.06
1924 is the first year for which detailed statistics are available
on the cost of medical attendance and drugs. At the end of that
year, out of 223 sickness funds 56 refunded to sick members all
or part of their expenditure on medical treatment and drugs;
5 granted only medical treatment, and 25 only drugs. Their
expenditure under this head was as follows:
F. mk.
782,046
1,073,988
442,179
Doctors' fees
Cost of drugs
Hospital fees
Total
FUNERAL
. . . .
2,298,213
BENEFIT
Funeral benefit is usually paid to the near relatives of the deceased
member who have paid for the funeral, or to any other person
who has undertaken this expenditure. The fund itself may provide
for the funeral, thus expending the sum granted for this purpose
under the rules. The following table shows the number of deaths
among the members of sickness funds during the period 1913-1924
and the total cost of funeral benefit and the cost per death.
156
VOLUNTARY SICKNESS INSURANCE
NUMBER OF DEATHS COST OF FUNERAL BENEFIT AND COST PER
DEATH
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Number
of
deaths
557
586
577
658
652
1,211
805
707
634
820
862
747
Cost of funeral benefit
Total
Per death
F. mk.
31,240
31,809
32,378
36,346
37,436
74,660
50,306
54,458
78,389
133,122
145,062
190,469
F. mk.
56.08
54.28
56.11
55.24
57.42
61.65
62.47
77.03
123.64
162.34
168.29
254.98
MATERNITY BENEFIT
As a rule the Finnish funds do not grant maternity benefit.
Only one institution has paid such benefit since 1923.
TOTAL EXPENDITURE OF THE SICKNESS FUNDS
The following table summarises the statistics of expenditure of
the sickness funds (excluding mutual-aid clubs) and shows:
(1) Cost of sickness benefit.
(2) Cost of funeral benefit.
(3) Cost of temporary assistance granted by certain funds to
disabled members who have exhausted their right to sickness
benefit.
(4) Contributions to pension funds. As already observed, the
employers' funds in particular have set up invalidity and
old-age insurance institutions. Some of the sickness funds
pay to these institutions all or part of their surplus at the
end of the financial year.
(5) Administrative expenses.
(6) Other expenses.
157
FINLAND
TOTAL EXPENDITURE OF THE SICKNESS FUNDS
TemporSickness
benefit
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Funeral
benefit
F. mk.
F. mk.
641,808 31,240
610,024 31,809
636,461 32,378
728,898 36,346
855,207 37,436
987,220 74,660
1,343,318 50,306
2,183,993 54,458
3,028,163 78,389
3,845,276 133,122
4,177,010 145,062
4,822,104 190,469
ary
assistance
F. mk.
7,218
6,604
6,197
8,025
8,326
11,239
28,143
37,391
72,587
40,391
71,859
90,000
Contributions to
pension
funds
F. mk.
50,709
41,807
42,462
46,258
75,615
39,110
98,606
358,073
435,739
597,347
676,341
1,058,546
Administrative
expenses
F. mk.
30,502
34,954
33,884
37,788
45,697
61,501
72,753
120,406
191,383
232,731
256,553
407.960
Other
expenses
F. mk.
37,017
79,925
31,796
30,800
38,691
48,904
114,691
93,337
90,397
109,397
304,145
475,134
F. mk.
798,494
805,123
783,198
888,115
1,060,972
1,222,634
1,707,817
2,847,658
3,896,658
4,958,264
5,630,970
7,044,329
The average administrative expenditure per insured person in
the sickness funds was as follows:
ADMINISTRATIVE EXPENDITURE
Year
1913
1914
1915
1916
1917
1918
Amount
F. mk.
0.64
0.73
0.69
0.72
0.95
1.42
PER INSURED
Year
1919
1920
1921
1922
1923
1924
PERSON
Amount
F. mk.
1.52
2.09
3.50
3.52
3.87
6.95
§2.— Organisation of Medical Service
At the beginning of 1925 90 funds, including over half the
persons insured in sickness insurance institutions (29,000 out of a
total of 59,100) granted medical benefit and drugs. The average
membership of these funds was 365 as compared with 265 in the
institutions whose rules provided only for cash benefit.
As a rule members are allowed a Iree choice of doctor, but if
the undertaking has its own insurance fund, and makes use of
the services of a special medical practitioner attached to the fund,
members must apply to this doctor, except in urgent cases when
a specialist has to be consulted. Twenty-one funds have entered
into agreements with medical practitioners, and some have even
signed conventions with two practitioners.
1
This Section is based on the results of an enquiry conducted in March
1926 at the request of the International Labour Office by Mr. O. Hallstein,
Inspector-General for Insurance in the Finnish Ministry of Social Affairs.
A questionnaire was sent out to the 92 principal funds, and replies were
received from 82.
158
VOLUNTARY SICKNESS INSURANCE
Out of the 29 funds which pay the medical practitioners for
treating insured persons, three grant only half the fees, the remaining half being met by the sick person. In some cases the doctor
is paid by the employer (7 funds) or by the commune (1 fund), so
that the institution has no expenditure under the head of medical
treatment. Expenditure on operations is refunded by 55 funds in
all. Appliances (spectacles, etc.) are granted by only 18 institutions. Six funds only pay for drugs, the employer or the sick
person himself being responsible for providing medical treatment.
The work of the practitioner in charge of the case is not usually
subject to supervision by the fund. In undertakings where the
works doctor also acts as the doctor for the fund, he is to some
extent subject to supervision by the management or undertaking.
The rules of the funds contain no provisions on the settlement
of disputes between funds and doctors or between sick persons
and doctors. Only disputes between funds and insured persons
are as a rule subject to arbitration.
One fund has its own hospital. Five institutions have concluded
agreements with the owners of private hospitals and three with
factory hospitals. All other members of funds are treated in the
public or private hospitals on the same terms as other persons.
The part played by the insurance funds in the field of hygiene
and prevention of disease has hitherto been very slight. Their
work has been confined to distributing literature (four funds),
organising free vaccination (nine funds), inspecting dwellings in
cases of epidemics.
For the funds which answered the questionnaire, the expenditure
on medical treatment, drugs and hospital treatment was as follows :
COST OF MEDICAL TREATMENT, DRUGS, AND HOSPITAL TREATMENT
Doctors' fees (excluding operations)
Surgeons' fees for operations
Drugs
Hospital treatment (hospitals and
sanatoria)
Appliances (spectacles, etc.)
Insurance hospital (belonging to one
fund)
Total
. . .
1924
1925
F. m k .
F. mk.
604,900
61,000
917,800
680,200
55,200
837,500
357,300
300
351,200
900
31,100
25,900
1,972,400
1,950,900
159
FINLAND
CHAPTER
VI
FINANCIAL RESOURCES AND THEIR MANAGEMENT
The financial resources of the sickness insurance funds are derived
in principle from the members' contributions alone. Section 3 of
3 of the 1897 Order lays down that the rate of these contributions
must be fixed in such a way that the income of the institution is
sufficient to cover its expenditure. The assets of the funds may
be used for the expenditure provided for in the rules, administrative
expenses and the formation of a reserve fund (section 7).
The contributions of insured persons are usually fixed. Only
some of the employers' funds (57 in 1924) collect contributions in
proportion to wages (%per cent, of wages in 2 funds, 1 per cent.
in 33, iy2 per cent, in 5, 2 per cent, in 17).
The rules empower the meetings of the members or the managing
committee to levy a certain sum as an additional contribution,
or to raise the ordinary rate of contribution, if the resources of
the institution are not sufficient to cover its annual expenditure.
A certain number of funds (51 in 1924) also obtain employers'
contributions, whether under the rules or as a voluntary payment.
The sickness insurance institutions do not receive State or communal subsidies. In one urban fund alone, formed by the communal employees, a subsidy is granted by the municipality equal
to the total contributions paid by members at the rate of y2 per
cent, of their salary.
The Order contains no provision on the conditions under which
funds may accept donations and legacies, these being usually
defined in the rules.
The following table summarises the statistics of the income of
sickness funds (excluding the mutual-aid clubs) from 1913 to
1924:
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1 VA¿t
1923
1924
ANNUAL INCOME OF SICKNESS FUNDS
Members' Employers'
Donations
Other
contribucontribuInterest
and
tions
tions
legacies
income
F. mk.
F. mk.
F. mk.
F. mk.
F. mk.
636,277
108,096
131,198
15,527
43,366
591,401
103,908
136,377
15,737
62,424
584,667
103,949
132,078
30,773
28,489
671,298
133,645
127,555
65,021
28,738
913,932
211,527
123,978
157,703
30,618
880,168
162,441
147,462
135,972
42,005
1,477,349
309,192
175,338
217,594
87,344
2,942,219
484,580
233,406
318,952
111,758
3,783,188
643,515
399,305
200,988
112,913
OKO O l K
4,774,169
476 561
273 267
243 967
5,441,907
968,574
592^522
328^601
106^961
6,191,494 1,478,110
757,876
200,000
415,912
Total
F. mk.
934,464
909,887
879,956
1,026,257
1,437,758
1,368,048
2,266,817
4,090,915
5,139,919
6.627.179
7Í438¡565
9,043,392
160
VOLUNTARY SICKNESS INSURANCE
The figures in the table below show how the assets of the funds
are invested, a subject on which the 1897 Order contains no provisions. A s a rule, the institutions place their resources in a bank
or savings bank. The Finnish statistics do not indicate separately
the amount of the reserve fund, so that the figures of provident
reserves are included in the total assets.
TOTAL ASSETS OF INSURANCE
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
FUNDS
Bank
deposits
Bonds
and
loans
Deposits
with
employers
Other
assets
Total
F. mk.
F. mk.
F. mk.
F. mk.
F. mk.
1,907,242
2,058,023
2,100,692
2,218,472
2,501,770
2,552,332
2,915,759
3,942,373
4,870,360
5,983,146
7,130,483
8,292,636
500,268
467,705
483,967
462,654
382,777
543,803
539,216
644,471
638,141
891,287
1,048,327
1,199,686
171,943
166,917
201,725
228,607
238,612
222,627
371,112
472,668
822,132
833,962
1,368,189
1,948,278
124,688
108,678
111,698
139,801
115,789
136,433
212,322
259,212
263,832
581,866
772,586
820,329
2,704,141
2,801,323
2,898,082
3,049,534
3,238,948
3,455,195
4,038,409
5,318,724
6,594,465
8,290,261
10,319,585
12,260,929
The following table shows for the period under consideration
the average contribution per member, as also the annual income
and assets per member.
AVERAGE CONTRIBUTION, ANNUAL INCOME, AND ASSETS PER MEMBER
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Average
contribution
per member
Average
annual income
per member
Other assets
F. mk.
F. mk.
F. mk.
13.27
12.30
11.93
12.82
18.95
20.33
30.82
51.14
69.24
72.23
82.01
104.73
19.49
18.93
17.93
19.60
29.82
31.60
47.29
71.11
94.07
100.27
112.11
152.97
56.39
58.27
59.06
58.24
67.16
79.81
82.34
92.63
120.68
125.43
191.25
207.39
per
member
FRANCE
Acts and Regulations
Act of 1 April 1898 on mutual benefit societies, amended by section 61 of
the Finance Act of 31 March 1903 and the Acts of 2 July 1904, 5 December
1908, 1 April 1914, and 15 August 1923.
Decrees issuing public administrative regulations for the application of the
Act of 1 April 1898, dated 14 May 1898, 2 May 1899, 25 March 1901, 14 April
1902.
Orders of 6 November 1918 and 25 March 1921 prescribing the method of
accumulating the subsidies granted to mutual benefit societies.
Reports
Reports to the President of the French Republic on the operations of mutual
benefit societies for 1913, 1920, 1921, 1922, 1923 and 1924. Appendix to the
Journal Officiel for 24 July 1916, 4 August 1922, 21 September 1923,
12 December 1924, 20 January 1926, and 10 April 1927.
Enquiry into employers' sickness insurance institutions, received by the
International Labour Office from the General Confederation of French Production.
Bibliography
A. GOURDIN. Les Sociétés de secours mutuels. Dupont, Paris, 1920.
Paul Louis. Histoire du mouvement syndical en France. Alean, Paris 1922
INTRODUCTION
Sinee the beginning of the nineteenth century, there have been
three distinct phases in the legal status of mutual benefit societies :
during the first, the societies were subject to the common law on
associations and had no special privileges; during the second, they
were subject to the common law, with strict administrative supervision for bodies enjoying certain legal and pecuniary privileges;
il
162
VOLUNTARY SICKNESS INSURANCE
finally, during the third and present stage, they enjoy wide
autonomy with the right to public assistance, subject to supervision
which is limited both as to form and purpose.
Mutual benefit societies were originally placed under the provisions of section 291 of the Penal Code and of the 1834 Act on
associations, and until 1848 they could not be formed without
previously obtaining the consent of the Government. The bodies
so formed led a precarious life. They had no kind of legal personality and the Government authorisation might be withdrawn at
any time.
The 1848 Revolution established the right of association and
assembly, and abolished any preliminary formalities for the
formation of societies. " Until the promulgation of the Decree
of 28 July ", says a Circular of the Minister of the Interior dated
31 August 1848, " mutual benefit societies could not be founded
without ministerial authority. . . To-day such societies are
implicitly classified with bodies for whose constitution no formality
is needed. . . They are not even subject to the influence of the
municipal authorities. . . As the Department for the Interior
has ceased to have anything to do with societies of this kind, any
intervention by the administrative authorities with respect to
the said societies would be contrary to their new status under
the Decree of 28 July. "
Mutual benefit societies thus enjoyed the most complete
independence with respect to the authorities, but they were still
without any kind of legal personality. It is true that certain
forms of personality, as well as some other special privileges, were
granted to a particular type of society, those of recognised public
utility, a class defined by the Act of 15 July 1850, which further laid
down that in future free societies might be dissolved by a decision
of the Government after consultation with the Council of State.
Under the Second Empire, the law, while abolishing the freedom
and independence which mutual benefit societies had enjoyed since
the 1848 Revolution, gave them, or at least some of them, a special
status clearly distinct from that of other associations, philanthropic
bodies, etc.
The Decree of 25 March 1852 restored the provisions of section 291
of the Penal Code and the 1834 Act on associations, made the
formation of mutual benefit societies conditional on Government
approval, allowed the dissolution of such societies by a simple
prefectoral Order, and at the same time created a new class, the
approved societies, which were placed under the supervision of
FRANCE
163
the administrative authorities. These societies were given the
characteristic features of legal personality, and received subsidies
derived from the interest on an endowment fund of ten million
francs produced by the sale of the property of the Orleans family.
They remained, however; under the strict supervision of the
representatives of the Government, and could not even choose their
own president freely, this nomination being reserved for the central
authorities.
The position of societies of recognised public utility was not
very different from that of the approved societies, but they had
wider civil powers.
Finally, the 1852 Decree took a first step in the direction of
widening the aims of mutual benefit societies, in that it allowed
them to pay any surplus available at the end of the financial year
into individual pensions accounts for their members in the General
Old-Age Pensions Fund. This extension was made more complete
by the Decree of 26 April 1856, which empowered mutual benefit
societies to invest available capital in a pensions account with the
Government Deposit Fund (Caisse des dépôts et consignations),
and at their annual general meeting to designate the persons to
receive the pensions so constituted.
Although the system set up by the Decrees of 1852 and 1856
was not entirely abolished until the Act of 1 April 1898, mutual
benefit societies regained during the Republic most of the liberties
and independence which had been withdrawn by legislation during
the Second Empire. A Decree of 27 October 1870 abolished all
intervention on the part of the authorities in the appointment of
presidents, and from 1870 to 1898 the wide tolerance of administrative practice set aside most of the obstacles of earlier legislation 1.
The Act of 1 April 1898 gave mutual benefit societies the charter
which, subject to certain minor changes, still governs them.
Under, this Act, the characteristic feature of the legal status of
these societies is the complete freedom of their constitution. There
are no regulations concerning the method of recruiting members,
the size of the society, or the area they cover; the only formality
required is that the rules and list of managers shall be notified
to the authorities. Ministerial approval may not be refused unless
the rules fail to comply with the law, or to provide for receipts in
proportion to the expenditure involved in the proposed life insurance
transactions of the society.
1
A. GOURDIN: Les Sociétés de secours mutuels. Dupont, Paris, 1920.
164
VOLUNTARY SICKNESS INSURANCE
The administration of all societies is free, and they cannot be
dissolved, except by the law courts when they have departed from
their aims. Administrative supervision of approved societies or
those of recognised public utility is intended solely to secure the
observance of the rules and respect for the provisions of the law.
Finally, the conditions under which mutual benefit societies
may claim public assistance are defined by the law, and the size
of the subsidy is fixed by regulations adopted on the recommendation of a Superior Council, the majority of whose members are
representatives of mutual benefit societies.
Under the system set up by the 1898 Act the mutual benefit
movement made remarkable progress. The number of societies,
which was 4,327 in 1860, rose from 11,000 in 1898 to 18,886 in 1913.
During the same period the number of persons insured in the societies
rose from 494,000 in 1860 to 1,573,000 in 1898 and 3,924,000 in 1913.
The family insurance business of the societies also increased steadily.
For a long time the societies for adults considered that the admission
of women to membership would involve too heavy a burden
owing to the high morbidity of the female population, but by
1913 25 per cent, of the members were women *. The mutual-aid
movement for schoolchildren also made considerable progress after
1898. Thus the school societies, whose membership in 1899 was
220,000, rose in 1913 to 835,000. This general increase in
membership was accompanied by an evolution in the rules of the
societies as to the definition of their scope and the conditions
of recruiting and admission, although it must be admitted that
it is difficult to describe this evolution in detail.
At the beginning of the nineteenth century, the administrative
authorities condemned 2 societies formed purely for trade purposes
and open only to workers in a given trade. Subsequently such
societies predominated, largely owing to the facilities for forming
and working an association which come from the comradeship and
fraternity inevitably established between persons engaged in the
same occupation or working at the same job. The growth of trade
mutual benefit societies was also favoured by the creation of factory
societies, employers' mutual benefit societies subsidised by employers, as well as by the development of the trade unions, some
of which made use of their powers under sections 6 of the Act of 21
1
Percentage calculated from the membership figures of approved mutual
benefit societies and those of recognised public utility.
- Paul Louis : Histoire du. mouvement syndical en France. Alean, Paris,.1922.
FRANCE
165
March 1884 and 40 of the Act of 1898 and founded mutual benefit
societies.
It seems, however, that with the growth of the mutual-aid
movement in small towns, too distant from industrial centres to
allow of the formation of trade organisations, and with the diffusion
of mutual-aid principles in the country, there has been a marked
progress in the formation of societies on a territorial, communal
or inter-communal basis. As a rule the various forms of societies
are combined in central groups, or departmental, regional, or
national unions whose object is to co-ordinate their work and
increase their field of activity.
Great though the growth in the number of mutual benefit
institutions and their membership has been, it has not allowed them
to make any noteworthy increase in their benefits, the rates of which
have always been most moderate.
The average cash benefit granted for sickness by the approved
societies was 1.28 francs a day in 1898 and 1.45 francs in 1913. For
benefits in kind, the average expenditure per sick person rose from
14.60 francs in 1898 to 17.35 francs in 1913. Finally, there was
hardly any change in the average pension from 1898 to 1913;
at the latter date it amounted to about 75 francs a year per person.
The position became considerably worse owing to the economic
disturbances due to the war. Mutual benefit societies have almost
succeeded in re-establishing their pre-war membership, and there
has even been some concentration, for the average membership of
adult societies rose from 206 to 213 in 1923. There has even been
a considerable growth in maternity insurance societies. Yet the
amount of benefit granted is far from having kept up with the rise
in the cost of living. If the index numbers showing the rise in
the cost of living since 1914 are compared with the increase in the
benefits allowed, it will be found that in 1922 the real value of
the average adult benefit for loss of earnings was 61 per cent.
below the value of such benefit in 1913. Taking all sickness
benefits together, the fall in real value between 1913 and 1924
was 50 per cent.
This reduction is obviously much greater for the benefits granted
out of the capital slowly accumulated in the National Old-Age
Pensions Fund or the Government Deposit Fund. The average
annuity paid in 1924 was about 78 francs, or very little more
than before the war, so that for this form of benefit the loss in value
was close on 72 per cent.
The characteristic features of the growth of the mutual-aid
166
VOLUNTARY SICKNESS INSURANCE
movement since the beginning of the last century have been briefly
surveyed above. An account may now be given of the rules
adopted and results obtained by mutual benefit societies with
respect to:
1. Formation, working, and membership.
2. Expenditure on sickness, maternity, and funeral benefits.
3. Distribution of income and financial system.
4. The position of foreigners.
A separate chapter will deal with employers' sickness insurance
institutions.
FRANCE
167
CHAPTER I
INSURANCE INSTITUTIONS AND INSURED PERSONS
§ 1. — Legal Status and Types of Societies
Under French law, mutual benefit societies are free to take the
form of trade union funds, workers' funds, works funds, trade
funds, general societies not limited to a given trade or trades, etc.
The field to which the recruiting of members is limited, and the
qualifications fixed for membership, have no influence on the legal
status of the association.
The conditions laid down for obtaining the advantages conferred
by the Act of 1 April 1898 on mutual benefit societies refer chiefly
to the proposed aims of the organisations. According to the first
two sections of that Act, mutual benefit societies are provident
associations formed for one or more of the following purposes :
providing their full members and the families of the latter with
assistance in the event of sickness, injury or infirmity;
accumulating retiring pensions for them;
taking out individual or collective life, death or accident insurance
policies on their behalf;
providing for the cost of burial and granting assistance to the
parents, widowers, widows or orphans of deceased members.
Subsidiarily, they may organise for their members technical
courses of training and free employment exchanges, and may
grant them unemployment benefit, provided that any expenditure
under these heads is met out of special contributions or income
(section 1 of the Act of 1 April 1898).
An association is not deemed to be a mutual benefit society if,
although it organises some or all of the services specified above,
it grants special privileges to a particular group of its members
to the exclusion of the rest. Mutual benefit societies must guarantee
168
VOLUNTARY SICKNESS INSURANCE
all their full members the same privileges, the only distinction
allowed being that arising out of the contributions paid and the
risks borne (section 2).
Any association whose work is within the limits defined by section 1
of the Act of 1898 and which has claimed the name of a mutual
benefit society has legal personality. It may sue and be sued in
the courts, receive and use the moneys derived from contributions,
transact business, make purchases and sales, lease property for
the installation of its various services, receive gifts and legacies,
construct, acquire and own real estate up to three-quarters of
its assets, sell it, exchange it, and in general engage in any simple
administrative action.
The law distinguishes, however, between three types of mutual
benefit societies : the free societies, the approved societies, and the
societies of recognised public utility.
The free societies differ from the approved and recognised societies
by their complete independence of the public authorities. They
are responsible only to the judicial authorities, before which the
administrative authorities cannot summon them to appear unless
they are to be dissolved because they have departed from their
aims as mutual benefit societies.
Approved societies, on the contrary, are subject to a certain
measure of supervision on the part of the administrative authorities.
They must report to the representatives of the central authorities on
their work and their general and financial situation, and must submit
to any enquiry which may.be considered necessary. In return
for this supervision they enjoy several financial privileges, are
entitled to State subsidies, may invest their capital in the Government Deposit Fund, etc.
The societies of recognised public utility are subject to the same
obligations and are granted the same privileges by the State as
approved societies. The supervision over them is stricter, however,
for their rules must be fixed by a decree of the Council of State after
consultation of the Superior Council of Mutual Benefit Societies
or its .permanent section. On the ground that the privileges,
enjoyed by approved ¿ societies are almost equivalent to those
granted to societies of recognised public utility, the Council of
State is usually not inclined to declare that associations subject
to the Act of 1 April 1898 are of public utility 1 .
Societies of all three types admit members in accordance with the
1
Note by the Section for the Interior of the Council oí State, dated 28 April
1903, and quoted by A. GOURDIN, op. cit., p. 23.
"
FRANCE
16£
conditions established by their rules, and the composition of the
association and the age and sex of its members have no effect on its
legal status. In practice, however, a distinction may be made
between the rules of admission of school societies and adult societies,
Although most school societies are run as approved societies and
do not differ legally from other approved societies, they have in
actual fact certain special features as regards both the benefit
they grant in the event of illness, which is generally limited to a small
cash benefit, and the rules adopted for calculating the subsidies to
which they are entitled.
The examination of the legal provisions governing the formation
and working of the societies, and the statistics illustrating their
growth, may be divided under the three heads of (1) the free
societies, (2) the approved societies and those of recognised public
utility, and (3) the school societies.
§ 2. — Rules concerning Formation
The rules established by law for the formation of mutual benefit
societies refer:
(a) to the contents of the rules of the society;
(b) to the formalities concerning notification of documents
and the authorisation, approval or recognition of the
association.
According to section 5 of the 1898 Act, the rules must define:
(1) The head office, which must be situated in French territory.
(2) The- conditions and methods of admission and exclusion
'
for both full and honorary members.
(3) The composition of the offices and administrative council,
the method of electing their members, the nature of their
powers, their term of office, the conditions for voting at the
general meeting, and the right of members to be represented
at the meeting.
(4) The obligations and privileges of full members.
(5) The rate of members' contributions, whether full or honorary
members, the use made of such contributions, the methods
of investing and withdrawing funds.
170
VOLUNTARY SICKNESS INSURANCE
(6) The conditions of voluntary winding-up of the society.
(7) The bases of liquidation if the society is to be liquidated.
(8) The manner of preserving the documents concerning the
society.
(9) The manner of constituting pensions for which the society
has not assumed definite obligations and the amount of
which is dependent on the society's resources.
{10) The organisation of guaranteed pensions and in particular
the determination of their rate and the age at which
they become payable.
(11) The deductions to be made from contributions for the
special pensions service if, in accordance with the preceding
clause, a part of the contributions of honorary or full members is to be used to constitute a guaranteed pensions
fund, whether in the form of a common fund or of individual
accounts opened in the name of members.
The rules must be adopted by the constituent meeting, which all
the founder-members are asked to attend. The same meeting
appoints the administrators responsible for managing the association
provisionally or definitively.
If the majority of the members of the association are of French
nationality, the society may act as a free society, after carrying
out these formalities, one month after it has submitted to the prefecture or sub-prefecture in which its headquarters are situated a
copy in duplicate of:
(1) its rules; and
(2) the list of names and addresses of all persons who, under
any head, are responsible from the outset for the administration or management of the society.
The prefect transmits one copy of the rules to the. Minister
responsible for the Mutual Benefit Societies Department, who
examines them. When it has been ascertained that these rules are
lawful, the association is placed on the list of mutual benefit
societies kept by the Department, an extract from the rules is
placed in the collection of documents of the prefecture, and any
amendment of the rules or change in the management of the society
must be notified in the same manner.
If the majority of the members are not of French nationality,
the society must apply for ministerial authorisation. "Mutual
benefit societies constituted by foreigners may exist only by
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171
virtue of a Ministerial Order which may be withdrawn at any time "
(section 3, subsection 4, of the Act). The existence of such groups
is therefore precarious. In other respects societies so authorised
do not differ from free societies, so that what is stated of the latter
will apply without change to the societies of foreigners1.
A society which wishes to work under the system of approval must
deposit its rules and the list of administrators in the same conditions
as associations run as free societies. Approval is pronounced by
Ministerial Order and may not be refused except in the two following
cases :
(1) If the rules do not comply with the provisions of the law.
(2) If the rules do not provide for receipts in proportion to the
expenditure involved in the constitution of a guaranteed
pensions fund, or in life, death, and accident insurance.
The approval or the refusal to approve must be given within
three months. In the event of refusal, an appeal may be taken
to the Council of State free of charge and without recourse to a
lawyer.
If the rules of an approved society are amended, a further
application for approval must be made, and no amendment of the
rules may take effect until it has been approved. All the provisions
concerning the notification of the original rules, time limits, and
appeals apply to amendments in the rules (section 16).
An application for approval need not prevent an association
from acting as a free society one month after it has notified its
rules 2.
Finally, mutual benefit societies may be recognised as public
utility institutions by a Decree issued in the form of public administrative regulations. The application for recognition is addressed
to the prefect, accompanied by a list of members and three copies of
the proposed rules of the society.
§ 3. — Conditions of Admission to the Society
Every society is free to determine and lay down in its rules the
conditions and manner of admission of its members, both full and
honorary.
1
A. GOURDIN, op.
2
Decision of the Council of State, 17 March 1911.
cit.,
p.
24.
172
VOLUNTARY SICKNESS INSURANCE
Subject to the fulfilment of the particular obligations laid down
in the rules of association, minors may belong to a mutual benefit
society without the intervention of their legal representatives.
Similarly, women may belong to such societies and form them.
Married women exercise this right without the intervention of
their husbands (sections 3 and 5, subsection 2).
§ 4. — Administration
Mutual benefit societies have full freedom to determine in their
rules the conditions and manner of their administration, provided
that they comply with the provisions of the law concerning the
method of designating the members of the committee of management and their nationality, the settlement of disputes arising out of
electoral procedure, voting by proxy, and the procedure to be
followed in the event of dissolution. The provisions concerning
these various points will be examined below. Legal regulations on
the investment of funds, the acquisition and alienation of property
will be discussed in the Chapter on financial resources and systems.
APPOINTMENT OF THE COMMITTEE OF MANAGEMENT
The members of the committee of management and the officebearers of mutual benefit societies are elected by secret ballot.
They must be adults and of French nationality, of either sex, in
full possession of their civic rights and, in the case of married
women, must have the authorisation defined in the general law.
As an exception, mutual benefit societies formed by foreigners
may choose their administrators from among their members.
DISPUTES ARISING OUT OF ELECTORAL
PROCEDURE
Disputes on the validity of electoral operations must be submitted
within a fortnight of the election to the magistrate competent for
the district in which the society has its headquarters. They aré
introduced by a simple statement to the clerk of the court. The
magistrate decides within a fortnight of such statement free of
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173
charge and informally, all the parties concerned being merely
notified three days in advance.
The decision of the magistrate is final, but it may be referred
to the Court of Cassation provided that the appeal is made within
ten days of the notification of the decision. Such appeal is merely
deposited with the clerk of the court, the defendants being notified
within ten days. It is treated as an urgent matter free of charge,
and the intervention of a lawyer is not required. The documents
furnished by the parties are transmitted free of charge by the clerk
of the local court to the clerk of the Court of Cassation, and the
Civil Chamber of the latter court decides directly. No stamp
duty or registration duty is payable on such documents.
VOTING BY PROXY
If the rules of the association authorise voting by proxy, members
may, when a general meeting is convened, transfer their powers by
private deed, free of all stamp and registration duty. Such deeds
are deposited at the headquarters of the association (section 6,
subsection 1).
PROCEDURE IN THE EVENT OF DISSOLUTION
The voluntary dissolution of a mutual benefit society may be
pronounced only by a meeting convened for the purpose by a notice
stating the object of the meeting, provided that two-thirds of the
members present and the majority of all the members are in favour.
If the society is dissolved by the courts the judgment in question
must appoint an administrator to undertake the final liquidation.
No more contributions, except those due on the day of liquidation,
may be collected.
All books, records, minutes, and papers must be communicated
to the administrator, without displacement unless the court orders
otherwise.
Liquidation is effected in accordance with the rules; it is approved
free of charge by the court on the suit of the Attorney-General
(section 11). If the dissolution of an approved society is voted by
the general meeting in accordance with the rules or ordered by the
court, liquidation is carried out under the supervision of the prefect
or his representative.
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VOLUNTARY SICKNESS INSURANCE
The following deductions are made, in the order given, from the
assets of the society, including the inalienable common pensions
fund placed in the Government Deposit Fund:
(1) The amount of obligations to third parties.
(2) The sums needed to fulfil obligations to full members, in
particular those relating to annuities and. life, death or
accident insurance.
(3) (a) A sum equal to the amount of the subsidies and allowances paid inalienably by the State since the society was
started in respect of the endowment or other funds, such
sum to be paid into the mutual benefit societies' endowment fund.
( b) Sums equal to the amount of the subsidies and allowances
paid inalienably since the society was started by the departments and communes, such sums to be returned to their
funds.
(c) Sums equal to the amount of inalienable donations and
legacies, to be used in accordance with the wishes of the
donators and testators if they provided for the case of
liquidation, or else, if they expressed no wishes, to be
added to the mutual benefit societies' endowment fund.
If after fulfilment of the obligations to third parties and members
the sums remaining are not sufficient to make the payments
specified under head 3 above, such payments are made in proportion
to the sums received respectively from the State, the departments,
the communes and private individuals. Any surplus is distributed
among the full members of the society at the date of dissolution
who are not in receipt of a pension or annuity, in proportion to
their payments since they joined the society, provided that no one
of them receives a sum in excess of his personal contribution.
Any remainder is placed in the endowment fund (section 31).
§ 5. •— Supervision of Activities
Two sets of provisions provide for the supervision of the work
of mutual benefit societies. In the first place, approved societies
and societies of recognised public utility must once a year submit to
the competent Minister a general and financial report in the form
prescribed by the administrative authorities. They are bound to
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175
communicate their books, records, minutes, and accounts of all
kinds to the prefects, sub-prefects, or their representatives, such
communication being effected without displacement except when
otherwise ordered by the Prefect. Contraventions of these provisions are punished by a fine of 16 to 500 francs (section 29).
If the rules of the society are not carried out or the provisions
of the Act are not observed, approval may be withdrawn by a
Decree of the Council of State issued on the reasoned recommendation of the Minister of the Interior, after consultation of the Superior
Council of Mutual Benefit Societies, which must be convened at the
earliest possible date. An appeal against a decision to withdraw
approval may be taken to the Council of State,.and is settled free
of charged without the intervention of a lawyer (section 30).
An approved society which constitutes out of its common fund
a guaranteed pensions fund must submit to the competent Ministry
at least every five years a report on its existing or liquidated
obligations and the corresponding resources, in the manner defined
by the competent authorities. If need be, it must amend its rules
in accordance with the results of such stocktaking.
Further, any mutual benefit society may be prosecuted either
by its members in order to obtain full enforcement of the rules,
which constitute the organic law of the association and must be
respected both by the committee of management and by the
general meeting; or by the Public Prosecutor at the request of the
administrative authorities if the association has departed from its
aims as a mutual benefit society, and if three months after notification by the prefect of the department it persists in not complying
with the law or its rules. The Public Prosecutor institutes proceedings for dissolution by submitting a memorandum to the president
of the court, stating the facts and accompanied by evidence.
This memorandum is notified to the president of the society,
together with the date fixed for the hearing.
The court decides in public on the claims of the Public Prosecutor,
after hearing or duly summoning the president of the society. An
appeal from its decision is allowed. The assistance of a lawyer is
not compulsory, neither in the first instance nor for the appeal.
In the event of a false statement made intentionally, or any
other step intended to conceal an association for another purpose
under the name of a mutual benefit society, the judge has the right
to pronounce the dissolution of the society at the request of the
Public Prosecutor. The administrators and managers are liable
to a fine of 16 to 300 francs (section 10, subsections 3 and 7).
176
VOLUNTARY SICKNESS INSURANCE
As the administrative authorities have no means of supervising
free societies, proceedings for their dissolution may be taken only
on the complaint or denunciation of members of the society or
third parties. Instead of the administrative authorities, as in the
case of approved societies, only the judicial authorities have a right
of investigation.
Finally, mutual benefit societies, whether free, approved or
recognised, must submit during the first three months of the year
to the competent Minister, through the prefects, statistics of their
membership, and of the number and nature of cases of infectious
or epidemic diseases from which their members have suffered.
This cannot be said to be a measure for supervision properly
so called, but is an obligation imposed on the societies to enable
the authorities to follow the growth of the mutual-aid movement
in general, determine the results of the administration of the law,
compile morbidity and mortality tables for members of mutual
benefit societies, etc.
§ 6. — Relations between Societies and Federations
According to section 8 of the Act of 1 April 1898, mutual benefit
societies may establish federations while retaining their individual
independence. The purpose of such federations may be:
(a) The organisation for full members of the benefits enumerated
in section 1 of the Act 1 , for instance, by setting up pharmacies in the conditions laid down by special legislation on
the matter.
(b) The admission of members who have changed their residence.
(c) The payment of pension annuities.
(d) The organisation of mutual insurance against the various
risks for which the societies have undertaken to provide,
for instance, the establishment of pensions and insurance
funds common to several societies with a view to long term
transactions or prolonged illness.
(<?) The organisation of a free employment agency.
Public administrative regulations were issued on 25 March 1901
-concerning the rules to be observed in forming federations. They
1
See a b o v e , p . 167-
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177
may be constituted only by legal persons recognised under the Act
of 1 April 1898, but they are allowed to admit honorary members.
The rules of federations of mutual benefit societies must lay down,
in accordance with the provisions of section 5 of the Act of 1898,
regulations for the working of the association. In particular, they
must define the conditions under which the affiliated societies take
part in the general meeting. Sometimes each society is represented
by a fixed number of delegates, sometimes the number varies in
proportion to the size of the society. The delegates may be either
office-bearers of the affiliated societies or specially appointed
representatives.
A federation is formed after discussion at the general meetings
of the societies, which must approve the proposed federation and
its rules. It is definitely constituted on the date on which the
managers have accepted their office.
Federations of mutual benefit societies may act either as free
associations, as approved associations, or associations of recognised
public utility. They are subject to the same formalities as ordinary
societies with respect to the notification of their rules, approval
and recognition.
According to the Act of 2 July 1904, federations of free societies
and mixed federations of free and approved societies, like the
federations of approved societies, may receive ministerial approval.
The Regulations of the Act of 1 April 1898 concerning the working
of mutual benefit societies, their winding up and liquidation, apply
without change to federations of societies.
The question has arisen whether federations of mutual benefit
•societies may combine in turn to form associations of a third order.
This question was settled in the negative by the Advisory Disputes
Committee of Ministry of Labour.
According to the report on the work of the mutual benefit
societies for 1924, 232 federations in 73 departments had submitted
their statistical reports on 31 December of that year to the
competent administrative authorities. These federations comprised 15,654 societies with 4,542,960 members 1 . The services
organised by the federations with respect to the risks of sickness
and maternity, in particular, consisted of 54 reinsurance funds for
prolonged sickness, 12 maternity insurance funds, and 26 mutual
benefit pharmacies.
The question has also been raised whether mutual benefit societies
1
Including persons contributing to special services other than for sickness
and maternity benefit (pensions, life insurance, etc.).
178
VOLUNTARY SICKNESS INSURANCE
and federations of societies may combine under the Act of 1 July
1901 on contracts of association. In his work on the mutual-aid
movement, from which the above information concerning the rules
and constitution of the federations of mutual benefit societies has
been taken, Mr. Gourdin considers that they have this right,
provided that their aims are wholly immaterial, such as propaganda
for and study of mutual-aid questions, which are allowed by the
Acts both of 1898 and of 1901.
The 1924 report on the. work of mutual benefit societies refers
to the following federations or unions among the organisations
engaged particularly in studying mutual-aid problems and representing and defending the interests of the movement :
The National French Mutual Aid Federation. —: On 31 December
1924 the National Federation comprised 11,312 societies, with
2,620,537 members. Its aim is to assist in forming federations
of societies and to help those affiliated to it either in organising
higher mutual-aid services or in regulating their working. It also
takes an interest in various health questions (cheap housing,
dispensaries, sanatoria).
National Union of Presidents of Mutual Benefit Societies. —
This Union, with headquarters at Paris, is the oldest general
organisation, but cannot strictly be said to be organised in the
form of a federation, as it accepts individual members as well
as the affiliation of societies.
Federation of Pension Societies of France. — This organisation,.
which comprises 66 societies and about one million members,
aims at defending in all circumstances the common interests of
societies undertaking payment of pensions, whether approved or
free, under the Act of 1 April 1898, or of recognised public utility
§ 7. — The Superior Council of Mutual Benefit Societies
The purpose of the Superior Council of Mutual Benefit Societies is
to advise the Minister:
(1)
On provisions contained in Regulations or elsewhere
concerning the working of mutual benefit societies, and in
particular concerning the method of allocating subsidies
and allowances.
(2) On any cases of withdrawal of approval in the event of
failure to observe the rules or the law.
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The Superior Council receives the statistical and financial
reports furnished by the mutual benefit societies, as also their
actuarial reports made at least once in every five years, and any
other documents, (section 35, subsection 5, of the Act of 1 April
1898).
The Superior Council consists of 46 members, 22 of whom
represent the authorities, the Academy of Moral and Political
Science, the Academy of Medicine, the Superior Council of Labour,
Birth Rate and Public Assistance, and the medical associations.
The remaining 24 members represent mutual benefit societies, of
whom six belong to free societies, being elected by the delegates
of these societies in the conditions defined by public administrative
regulations (section 35, subsection 1).
A permanent section is formed of seven members appointed by
the Minister, four of whom must be taken from the elected members
(section 35, subsection 1).
§ 8. — Statistics of the Mutual-Aid Movement
The distinctions between the different types of fund made in the
official reports on the work of mutual benefit societies are based on:
(1) The legal status of the organisation.
(2) The age conditions to be satisfied by members.
(3) The aims of the organisation.
Mutual benefit societies are thus divided from the outset into
free societies and those which are approved or of recognised public
utility. The societies in the latter group are subdivided into
school societies and adult societies.
Finally, the adult societies, whether free for approved, may be
divided into several groups according as they engage only in sickness insurance or combine it with old-age insurance (pensions) or
only in maternity insurance or old-age insurance, or in life insurance,
etc.
The following tables, which make use of the subdivisions
contained in the official reports, show the growth of the various
mutual benefit societies engaging in sickness and maternity insurance, whether separately or together with old-age insurance.
The data are then summarised in a general table giving particulars
applicable to all the societies studied.
180
VOLUNTARY SICKNESS INSURANCE
Although the information contained in the following tables does
not cover all mutual benefit societies, since no account was taken
when they were drawn up of organisations which do not supply the
competent Ministry with reports of their situation, yet they give a
fairly exact idea of the growth of the movement. Associations not
covered by the annual statistics because they have not supplied
the authorities with the necessary information represent only about
10 per cent, of the total registered number of societies and as a rule
they are of little importance.
NUMBER OF SOCIETIES AND MEMBERSHIP
Free Societies
I. SOCIETIES ENGAGING IN SICKNESS INSURANCE
Year
1913
1920'
1921
1922
1923
1924
Number oí members
Average per society
Number
of
societies
Honorary
Full
Honorary
members
Full
members
1,911
1,455
1,392
1,553
1,533
1,536
22,390
15,475
16,248
19,429
19,387
21,830
198,552
139,638
140,967
155,448
162,772
173,958
12
11
12
12
13
14
104
96
101
100
106
113
II. SOCIETIES ENGAGING IN SICKNESS INSURANCE AND PENSIONS
INSURANCE
Year
1913
1920
1921
1922
1923
1924
Number of members
Average per society
Number
of
societies
Honorary
Full
Honorary
members
233
197
185
186
176
186
7,209
5,075
5,242
5,297
5,591
5,669
45,301
31,873
35,171
36,145
46,159
31,149
31
26
28
28
32
30
.
Full
members
194
162
190
194
262
167
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FRANCE
I I I . SOCIETIES ENGAGING IN MATERNITY INSURANCE
Number
of
societies
Year
1913
1920
1921
1922
1923
1924
Number of members
Honorary
Nil.
159
2
2
1
1
1
33
Pull
5
1,026
172
183
216
Average per society
Honorary
members
79
33
Full
members
2.5
513
172
183
216
Approved and Recognised Societies
I.
Year
1913
1920
1921
1922
1923
1924
II.
ADULT SOCIETIES ENGAGING IN SICKNESS INSURANCE
Number of members
Average per society
Number
of
societies
Honorary
Full
Honorary
members
6,970
6,820
6,555
6,740
6,904
7,037
126,066
88,301
102 399
115,932
127,684
137,882
950,690
708,940
855,420
842,877
938,603
1,098,380
18
13
16
17
18
19
Full
members
136
104
130
125
136
156
ADULT SOCIETIES ENGAGING IN SICKNESS INSURANCE AND
"OLD-AGE INSURANCE
Year
1913
1920
1921
1922
1923
1924
Number of members
Number
of
societies
Honorary
8.159
7,934
7,730
8,084
7,872
8,053
291.259
224.976
255,516
287,561
303,443
325,624
Full
1,488.155
1,257,579
1,311,634
1,381,810
1,361,737
1,398,683
Average per society
Honorary
members
35
28
33
36
39
40
Full
members
182
159
170
171
173
173
182
VOLUNTARY SICKNESS INSURANCE
I I I . ADULT SOCIETIES ENGAGING IN MATERNITY INSURANCE
-Year
1913
1920
1921
1922
1923
1924
Number of members
Average per society
Number
of
societies
Honorary
Full
Honorary
members
Full
members
72
74
78
91
91
9,073
15,899
15,594
20,516
19,694
62,801
82,003
89,449
118,845
127,879
126
215
200
226
216
872
1,108
1,147
1,306
1,405
.
School Societies
I. SCHOOL SOCIETIES ENGAGING CHIEFLY IN
SICKNESS INSURANCE
AND PENSIONS INSURANCE
Year
1913
1920
1921
1922
1923
1924
II.
Number of members
Number
of
societies
Honorary
2,185
1,834
1,870
1,889
1,904
1,883
44,867
26,954
28,207
29,382
31,061
30,861
TOTAL NUMBER
Full
835,055
712,451
745,472
763,515
791,841
772,082
Average per society
Honorary
members
Full
members
21
12
15
15
16
16
382
388
398
404
416
410
OF SOCIETIES AND TOTAL AND
AVERAGE
MEMBERSHIP
Year
1913
1920
1921
1922
1923
1924
Average membership per society
Total
number of
societies
Total.
membership
19,458
18,314
17,808
18,531
18,481
18,787
4,009,544
3,283,141
3,595,963
3,742,611
3,927,822
4,143,940
Full
members
Honorary
members
Total
181
159
178
176
185
192
25
20
24
26
27
29
206
179
202
202
213
221
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183
With regard to the membership of mutual benefit societies as a
whole, the above statistics show that the pre-war situation has
been restored. The total membership of the societies at the end of
1913 was 4,009,544. On 31 December 1924 it was 4,143,940, or
about 103 per cent, of the pre-war figure. There has been a slight
rise in the proportion of honorary members, which rose from
12.26 per cent, in 1913 to 13.12 per cent, in 1924. The figures also
indicate a slight concentration in membership. The average
number of members per society was 206 in 1913, and by the end
of 1924 had risen to 221.
This increase in membership was not, however, general, and
certain types of society had not been able, by the end of 1924, to
recover their pre-war strength.
In the school societies the total number insured fell by a little
over iy2 per cent., but there was a fairly marked concentration
of membership, for the average membership per society rose from
382 in 1913 to 410 in 1924.
The approved societies engaging in sickness insurance combined
with pensions insurance have also lost members, the reduction
being 6 per cent. The reduction in membership was accompanied
by less concentration, for the average membership fell from 182
in 1913 to 173 in 1924.
The reduction in membership is much more marked for the free
societies. It amounts to 13% per cent, for those engaging only
in sickness insurance, and exceeds 32% per cent, for those undertaking both sickness insurance and pensions insurance. This loss,
however, has not prevented a slight concentration of membership
from 104 in 1913 to 113 in 1924, in the case of free sickness insurance
societies. The average membership of free societies combining
sickness and pensions insurance, on the contrary, fell during the
same period from 194 to 167.
Only two types of society have raised their membership above
the pre-war level.
The total number of persons insured by approved sickness
insurance societies has increased by 15% per cent., and the average
membership rose from 136 to 156.
Moreover, the membership of approved maternity insurance
societies has grown considerably . Whereas in 1913 it was not worth
while to distinguish them statistically, in 1924 they had 127,879
members, or 1,405 per society.
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VOLUNTARY SICKNESS INSURANCE
CHAPTER II
RISKS COVERED, BENEFITS, AND COSTS OF MANAGEMENT
There are no special legislative or other regulations for mutual
benefit societies with respect to the conditions of granting and the
amount of benefits, the organisation of medical and pharmaceutical
services, and the proportion of administrative expenditure to
benefits and total expenditure, which are the subjects of the
present Chapter.
In the absence of a general study showing the methods actually
adopted by mutual benefit societies, the following account will
be confined to information on the frequency and average duration
of sickness and the expenditure involved in covering such risks,
derived from official statistics.
§ 1. — Frequency and Average Duration of Sickness
The statistics compiled from the reports of the mutual benefit
societies show the number of sick persons who receive benefit in
whatever form and the number of them entitled to cash benefit.
It is also possible to calculate the number of days of sickness in
respect of which cash benefit was paid.
Owing to the absence of figures for the total number of days of
sickness in respect of which benefit, whether in kind or in cash, is
granted, it is impossible to calculate the actual average duration
of the cases of sickness or the real average morbidity per insured
person. All that can be done is to obtain an average per sick
person or insured person of the days of sickness for which cash
benefit is paid. As this average is based on two factors — the
number and duration of the cases of sickness on the one hand, and
the length and strictness of waiting periods on the other — it
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obviously falls below the figure that would be derived from the true
morbidity, which takes into account only the number and duration
of the cases of sickness. The discrepancy will be all the larger
when the provisions of the rules are more severe, and applied with
greater rigour.
NUMBER
OF SICK PERSONS AND AVERAGE NUMBER
OF BENEFIT
I.
Year
1913
1920
1921
1922
1923
1924
OF DAYS
FREE SOCIETIES
Average number of
days of benefit •
Number of
insured
persons
Number of
sick persons
entitled
to benefit
in cash
or in kind
Number of
sick
persons
entitled
to cash
benefit
per sick
person
per insured
person
243,853
171,516
177,164
191,765
209,114
205,323
103,296
46,232
64,356
65,346
57,875
61,819
62,780
32,934
33,669
48,053
52,277
40,388
22.22
21.15
21.76
17.11
14.16
21.33
5.72
4.06
4.16
4.28
3.89
4.19
i Average calculated from the number of days of sickness in respect of which cash
benefit was paid.
II.
Year
1913
1920
1921
1922
1923
1924
Number of
insured
persons
2,438,845
2,029,320
2,249,057
2,314,136
2,419,185
2,624,942
APPROVED SOCIETIES
Average number of
days of benefit *
Number of
sick persons
entitled
to benefit
in cash
or in kind
Number of
sick
persons
entitled
to cash
benefit
per sick
person
per insured
person
790,251
525,084
553,782
588,320
587,750
625,133
432,371
261,117
277,951
301,549
288,324
288,106
21.70
22.88
22.69
22.07
22.41
24.50
3.85
2.95
2.80
2.88
2.67
2.65
i Average calculated from the number of days of sickness in respect of which cash
benefit was paid.
186
VOLUNTARY SICKNESS INSURANCE
III.
SCHOOL SOCIETIES
Year
Number of
insured
persons
Number of
sick persons
entitled
to benefit
in cash
or in kind
1913
1920
1921
1922
1923
1924
835,055
712,451
745,472
763,515
791,841
772,082
97,080
45,112
47,736
53,790
59,004
55,517
Number of
sick
persons
entlited
to cash
benefit
92,744
43,804
46,395
49,900
58,202
52,038
Average number of
days of benefit i
per sick
person
per insured
person
23.46
29.38
27.90
26.50
26.17
27.07
2.73
1.86
1.78
1.83
1.92
1.87
i Average calculated from the number of days of sickness in respect of which cash
benefit was paid.
IV.
ALL SOCIETIES
Average number of days of benefit
Year
per sick person
(a)
1913
1920
1921
1922
1923
1924
(b) Average
1913
1920
1921
1922
1923
1924
Adult
per insured person
Societies
21.80
22.69
22.59
21.39
21.04
23.78
4.02
3.03
2.90
2.98
2.77
2.76
for ¿4.dult Societies and School Societies
Combined
22.24
23.66
23.38
22.21
21.77
24.33
3.72
2.74
2.64
2.71
2.57
2.57
§ 2. — Total Amount Paid in Benefits
The present Section discusses the amount and distribution of the
expenditure on benefits in cash and in kind granted in the event of
187
FRANCE
sickness or maternity and funeral benefits granted to the families
of deceased members of the societies.
Until 1923 the greater part of maternity benefits were paid by the
sickness benefit societies 1, so that they cannot be studied separately.
The totals as well as the averages in the following tables refer,
therefore, to both sickness and maternity insurance. In order
to give some idea, however, of the growth of mutual benefit societies
engaging mainly in maternity insurance, the data for these societies,
although already included in the general statistics for sickness and
maternity insurance, have been shown separately (see page 193).
Further, the total maternity benefit is shown as a separate column
in the tables giving the distribution of the total expenditure (see
pages 197-178). Finally, the expenditure on funeral benefit is
shown separately.
Wherever possible, the averages have been calculated per insured
person and per sick person.
TOTAL AMOUNT OF ALL BENEFITS AND AVERAGE PER INSURED
PERSON (SICKNESS AND MATERNITY BENEFIT)
I. FREE SOCIETIES
Year
Number
insured
1913
1920
1921
1922
1923
1924
243,853
171,516
177,164
191,765
209,114
205,323
Total
benefits
Frs.
3,593,611
3,583,894
4,333,680
5,249,428
5.592,795
6,200,187
Average per
insured person
Frs.
14.74
20.89
24.46
27.37
26.75
30.20
II. APPROVED (ADULT) SOCIETIES
Year
1913
1920
1921
1922
1923
1924
1
Number
insured
2,438,845
2,029,320
2,249,057
2,314,136
2,419,185
2,624,942
Total
benefits
Frs.
27,831,204
32,833,410
39,902,461
45,770,522
48,806,597
54,787,107
Average per
insured person
Frs.
11.41
16.18
17.74
19.78
20.17
20.91
In 1922, the maternity benefit granted by sickness funds formed about
75 per cent, of the total maternity benefit granted by all sickness and maternity
mutual benefit societies. In 1923 this proportion fell to 40 per cent., the
maternity mutual benefit societies paying the remaining 60 per cent.
188
VOLUNTARY SICKNESS INSURANCE
III.
SCHOOL SOCIETIES
Year
Number
insured
1913
1920
1921
1922
1923
1924
835,055
712,451
745,472
763,515
791,841
772,082
Year
Total
benefits
Frs.
1,143,156
801,225
933,292
1,137,219
1,433,730
1,485,133
'
IV.
ALL SOCIETIES
Number
insured
Total
benefits
(a) Adult
1913
1920
1921
1922
1923
1924
1913
1920
1921
1922
1923
1924
Frs.
1.37
1.12
1.25
1.49
1.81
1.93
Average per
insured person
Societies
Frs.
31,424,815
36,417,304
44,236,141
51,019,950
54,399,392
61,078,294
2,682,698
2,200,836
2,426,221
2,505,901
2,628,299
2,830,265
(b) Adult
Average per
insured person
Societies
Frs.
32,567,971
37,218,529
45,179,433
52,157,169
55,833,122
62,563,427
Frs.
11.71
16.54
18.23
20.36
20.70
21.58
and School
3,517,753
2,913,287
3,171,693
3,269,416
3,420,140
3,602,347
Frs.
9.26
12.77
14.24
15.95
16.32
17.37
3. — Cash Benefits
SICKNESS
I.
AND
FREE
Year
Number
of sick
persons
Total
benefits
1913
1920
1921
1922
1923
1924
62,780
32,934
33,669
48,053
57,277
40,388
Frs.
2,222,490
1,787,720
2,357,261
2,773,644
2,977,610
3,218,615
MATERNITY
SOCIETIES
per sick
person
Frs.
35.40
54.28
70.01
57.72
51.99
79.69
Average benefit
per day of 1 per insured
sickness
1
person
Frs.
Frs.
1.59
9.11
2.57
10.42
3.22
13.31
3.37
14.46
3.67
14.24
3.74
15.68
189
FRANCE
II. APPROVED SOCIETIES
Year
Number
ot sick
persons
Total
benefits
1913
1920
1921
1922
1923
1924
432,371
261,117
277,951
301,595
288,324
288,106
Prs.
13,701,857
11,847,681
15,288,541
17,608,618
19,328,233
21,022,105
per sick
person
Frs.
31.69
45.37
55.00
58.38
67.04
72.97
Average benefit
per day of 1 per insured
sickness
1
person
Frs.
Frs.
5.61
1.46
5.84
1.98
6.80
2.42
7.61
2.65
7.99
2.99
8.01
3.02
III. SCHOOL SOCIETIES
Year
Number
of sick
persons
Total
benefits
1913
1920
1921
1922
1923
1924
92,744
45,112
47,736
52,790
59,004
52,038
Frs.
1,105,049
679,962
763,831
926,571
1,161,939
1,218,295
per sick
person
Prs.
11.38
15.07
16.00
17.55
19.66
23.41
Average benefit
per day oí
sickness
Frs.
0.485
0.514
0.573
0.662
0.764
0.842
per insured
person
Frs.
1.32
0.95
1.02
1.21
1.47
1.58
Average benefit
per day ot
sickness
per insured
person
Frs.
1.47
2.04
2.51
2.73
3.07
3.10
Frs.
5.94
6.20
7.27
8.13
8,49
8.56
IV. ALL SOCIETIES
Year
Number
of sick
persons
•
Total
benefits
(a)
1913
1920
1921
1922
1923
1924
495,151
294,051
311,620
349,648
345,901
328,494
587,895
337,855
358,015
399,548
403,802
380,532
Ad ult
Frs.
15,924,347
13,635,401
17,645,802
20,382,262
22,305,863
24,240,720
(b) Adult
1913
1920
1921
1922
1923
1924
per sick
person >
Societies
Frs.
32.16
46.37
56.62
58.29
64,54
73.79
Societi es and
Frs.
17,029,396
14,315,363
18,409,633
21,308,833
23,467,802
25,459,015
School Societies
Frs.
28.97
42.37
51.42
53.33
58.12
66.90
Frs.
1.30
1.79
2.20
2.40
2.67
2.75
Frs.
4.84
4.91
5.80
6.52
6.86
7.07
190
VOLUNTARY SICKNESS INSURANCE
§ 4. — Benefits in Kind
SICKNESS AND
I. FREE
Year
1913
1920
1921
1922
1923
1924
Number
of sick
persons
MATERNITY
SOCIETIES
Average
expenditure
Expenditure on
Medical
attendance
Frs.
103,296
579,230
46,232
669,710
64,356
781,092
56,346 1,004,658
57,875 1,028,676
61,819 1.172.308
Drugs
Frs.
791,892
1,061,380
1,094,930
1,330,065
1,462,635
1,652,929
Prevention and
hygiene
Frs.
65,084
100,397
141,061
123,874
156,335
Total
Frs.
1,371,122
1,796,174
1,976,419
2,475,784
2,615,185
2,981,572
per
sick
person
Frs.
13.27
38.85
30.71
43.94
45.19
48.23
per
insured
person
Frs.
5.62
10.47
11.16
12.91
12.51
14.52
II. APPROVED SOCIETIES
Year
1913
1920
1921
1922
1923
1924
Number
of sick
persons
790,251
525,084
553,782
588,320
587,750
625,133
Medical
attendance
Frs.
6,690,106
9,716,295
11,529,309
13,121,748
14,002,711
15,714,638
III.
Year
1913
1920
1921
1922
1923
1924
Number
of sick
persons
97,080
45,112
47,736
52.790
59,004
55,517
Average
expenditure
Expenditure on
Drugs
Prevention and
hygiene
Frs.
Frs.
7,439,240
515,864
10,753,570
12,305,728
778,883
14,163,672
876,484
14,500,535
975,118
16,818,476 1,322,888
Total
Frs.
14,129,346
20,985,729
24,613,920
28,161,904
29,478,364
33,856,002
SCHOOL SOCIETIES
Average
expenditure
Expenditure on
.Medical
attendance
Frs.
21,216
35,790
52,209
39,151
53,200
62,558
per
per
sick insured
person
person
Frs.
Frs.
17.88
5.79
39.97 10.34
44.45 10.94
47.87 12.17
50.15 12.19
54.16 12.90
Drne-s
wrugs
Frs.
16,891
26,591
23,761
27,529
40,075
37,300
Prevention and
hygiene
Frs.
58,882
93,491
143,968
178,516
166,980
Total
Frs.
38,107
121,263
169,461
210,648
271,791
266,838
per
per
sick insured
person
person
Frs.
Frs.
0.39
0.05
2.69
0.17
3.55
0.23
3.99
0.275
4.61
0.34
4.81
0.35
191
FRANCE
IV.
Year
Number of
sick persons
ALL SOCIETIES
(a)
1913
1920
1921
1922
1923
1924
(b)
990,627
616,428
665,874
697,456
704,629
742,469
Adult
per sick person
1 per insured person
Societies
Frs.
15,500,468
22,781,903
26,590,339
30,637,688
32,093,549
36,837,574
893,547
571,316
618,138
644,666
645,625
686,952
1913
1920
1921
1922
1923
1924
Average expenditure
Total
benefits '
Frs.
17.35
39.88
43.02
47.52
49.71
53.62
Adult and School
Frs.
5.78
10.35
10.96
12.23
12.21
13.02
Societies
Frs.
15,538,575
22,903,166
26,759,790
30,848,336
32,365,340
37,104,412
Frs.
15.69
37.15
40.19
44.23
45.93
49.97
Frs.
4.42
7.86
8.44
9.44
9.46
10.30
§ 5. — Relation between Benefits in Kind and Cash Benefit
SICKNESS
AND
MATERNITY
I. FREE SOCIETY
Year
1913
1920
1921
1922
1923
1924
Percentage oí total benefits
Cash benefits
Benefits in kind
61.85
49.89
54.40
52.84
53.24
51.91
38.15
50.11
45.60
47.16
46.76
48.09
II. APPROVED
Year
1913
1920
1921
1922
1923
1924
SOCIETIES
Percentage of total benefits
Cash benefits
Benefits in kind
49.23
36.08
38.32
38.47
39.60
38.31
50.77
63.92
61.68
61.53
60.40
61.69
192
VOLUNTARY SICKNESS INSURANCE
III.
SCHOOL SOCIETIES
Percentage of total benefits
Year
Cash benefits
Benefits in kind
96.67
84.87
81.84
81.48
81.04
82.03
1913
1920
1921
1922
1923
1924
IV. ALL
3.33
15.13
18.16
18.52
18.96
17.97
SOCIETIES
Percentage of total benefits
Year
Cash benefits
(a)
1913
1920
1921
1922
1923
1924
Societies
50.67
37.45
39.89
39.&5
41.00
39.69
(*)
1913
1920
1921
1922
1923
1924
Adult
Benefits in kind
Adult Societies and School
52.29
38.46
40.76
40.86
42.03
40.69
49.33
62.55
60.11
60.05
59.00
60.31
Societies
47.71
61.54
59.24
59.14
57.97
59.31
The statistics given above indicate a nominal increase in the
expenditure arising out of the occurrence of the risks covered.
This nominal increase in the sums spent on the insured by no
means implies an increase in the real value of the benefits granted.
On the contrary, the fall in the value of money and the rise in the
cost of living have resulted in a nominal increase in the costs of
mutual benefit societies, and at the same time in a general reduction
of the real value of the benefits granted, a reduction which may be
measured fairly accurately by comparing the index numbers of
the cost of living and the coefficients of increase of the nominal
amount of benefits granted.
Such a comparison, based on the average benefits granted by the
adult societies per insured person in 1924, shows that the fall, as
193
FRANCE
compared with the pre-war value, was 61 per cent, for cash benefits
and 50 per cent, for the total benefits. In other words, if the benefits
in 1923 were to have been kept at their pre-war level, the cash
benefits should have been increased by 156 per cent, and the total
benefits by 100 per cent.
The fall in real value is obviously much smaller for benefits in
kind, which very largely take the form of supplies of drugs, and can
be rapidly adjusted to fluctuations in the cost of living.
This discrepancy in the increase in the cost of benefits, the fact
that expenditure on benefits in kind increased more rapidly than
that on cash benefits, partly explains why cash benefits, which in
1913 represented 50.67 per cent, of the total benefits granted by all
adult societies, formed only 39.7 per cent, of that total in 1924.
This difference in the proportion of cash benefits to benefits in
kind may also be explained by the increasing value attached by the
most important and best organised mutual benefit societies to
granting sick members specialist treatment as early as possible,
as well as to all forms of prevention and hygiene.
§ 6. — Maternity Benefits
STATISTICS BASED
ON THE
REPORTS
OP SOCIETIES
ENGAGING
CHIEFLY IN MATERNITY INSURANCE
I. TOTAL BENEFITS AND AVERAGE PER INSURED PERSON
i
Year
Number insured
Total benefits
Average per insured
person
Frs.
1913
1920
1921
1922
1923
1924
II.
Year
1913
1920
1921
1922
1923
1924
71,874
82,003
89,449
118,845
127,879
!
!
i
|
Í
!
BENEFITS IN KIND :
Number insured
—.
448,322
878,419
653,436
2,098,776
1,986,163
71,874
82,003
89,449
118,845
127,879
—
6.24
10.71
7.31
17.66
15.53
TOTAL AND AVERAGE
Amount of benefit
Frs.
—
i-'rs.
—
59,696
94,432
74,073
112,992
120,245
Average per insured
person
Frs.
—
0.83
1.15
0.83
0.95
0.94
13
194
VOLUNTARY SICKNESS INSURANCE
III. CASH BENEFITS: TOTAL AND AVERAGE
Number insured
Year
Average per insured
person
Frs.
Frs.
388,626
783,987
579,363
1,985,784
1,865,918
5.41
9.56
6.48
16.71
14.59
—.
1913
1920
1921
1922
1923
1924
IV.
Amount of benefit
71,874
82,003
89,449
118,845
127,879
RELATIONS BETWEEN BENEFITS IN KIND AND CASH BENEFITS
Percentage of total
Year
1913
1920
1921
1922
1923
1924
cash Benefits
benefits In kind
86.68
89.25
88.66
94.62
93.94
13.32
10.75
11.34
5.38
6.06
§ 7. — Funeral Benefit
The amount and distribution of the benefits covered by the
preceding statistics were calculated without reference to the
societies' expenditure on the funeral expenses of their members.
In point of fact, such expenditure is sufficiently large for its inclusion
among sickness benefits to falsify the averages calculated per sick
person and per day of benefit.
In the absence of statistics of the number of deaths in respect of
which funeral benefit is paid it is impossible to calculate the average
funeral benefit per case. On the other hand, an approximate
average cost of funeral benefit per insured person may be obtained
by taking the total number of full members insured in the sickness
insurance societies, maternity insurance societies, and sickness and
pensions insurance societies, whose expenditure on funeral benefit
covers practically all the expenditure under this head by mutual
benefit societies (in 1924 over 95 per cent, for the approved societies
alone).
195
FRANCE
AMOUNT OF FUNERAL B E N E F I T S
I.
FREE SOCIETIES
Year
Number insured
Cost of funeral
benefit
Average per insured
person
1913
1920
1921
1922
1923
1924
243,853
171,516
177,164
191,765
209,114
205,323
Frs.
190,589
268,399
275,976
247,941
257,359
483,079
Frs.
0.78
1.56
1.56
1.29
1.23
2.35
II.
APPROVED ADULT SOCIETIES
Year
Number insured
Cost of funeral
benefit
Average per insured
person
1913
1920
1921
1922
1923
1924
2,438,845
2,029,320
2,249,057
2,314,136
2.419 185
2,624,942
Frs.
1,759,763
2,264,494
2,488,123
2,523,810
2 339,451
2,561,690
Frs.
0.72
1.12
1.11
1.09
0.97
0.98
III.
SCHOOL SOCIETIES
Year
Number insured
Cost of funeral
benefit
1913
1920
1921
1922
1923
1924
1,143,156
712,451
745,472
763,515
791,841
772,082
Frs.
5,260
61,387
40,488
17,354
15,052
19,857
IV.
Year
1913
1920
1921
1922
1923
1924
Frs.
0.0046
0.09
0.05
0.02
0.02
0.03
ALL SOCIETIES
Number insured
(a)
Average per insured
person
Free and Approved
2,682,698
2,200,836
2,426,221
2,505,901
2,628,299
2,830,265
Cost of funeral
benefit
Adult Societiesî
Frs.
1,950,352
2,532,893
2,764,099
2,771,751
2,596,810
3,044,769
Average per nsu red
person
Frs.
0.73
1.15
1.14
1.11
0.99
1.07
196
VOLUNTARY SICKNESS INSURANCE
iv.
ALL SOCIETIES
Number insured
Year
(b)
Adult
;
Societies
3,517,753
2,913,287
3,171,693
3,269,416
3,420,140
3,602,347
1913
1920
1921
1922
1923
1924
(continued)
Cost of funeral
benefit
Average per insured
person
and School Societies
Frs.
1,955,612
2,594,280
2,804,587
2,789,105
2,611,862
3,064,626
Frs.
0.56
0.89
0.88
0.85
0.76
0.85
§8. Administrative Expenses
The official statistics do not classify the administrative expenses
according to the type of organisation, except for the approved adult
societies. The administrative expenditure for the school societies
and free societies is shown as a total, and no distinction can be made
according to whether the expenditure applies to the risk of sickness,
old age, death, etc. For societies engaging in both sickness insurance
and pensions insurance, it is moreover impossible to determine
with complete accuracy what proportion of such expenditure is
to be charged to each of these two services. The following tables
therefore show only the percentage of administrative expenditure
to total expenses:
(1) for approved adult societies engaging mainly in sickness
or maternity insurance;
(2) for approved adult societies and school societies engaging
in both sickness insurance and pensions insurance;
(3) for all approved societies (adult and school) and free societies.
ADMINISTRATIVE EXPENSES PER CENT. OF TOTAL EXPENDITURE
Year
sickness
insurance
1913
1920
1921
1922
1923
1924
Approved societies
engaging in
sickness insurance
and pensions
insurance
maternity
Adult
School
insurance
Adult approved
societies
engaging
chiefly in
4.50
11.10
10.68
8.05
7.48
7.22
19.32
14.43
24.03
7.53
10.46
5.58
10.73
11.61
9.69
9.34
8.88
5.98
14.44
12.98
12.85
12.85
11.78
All societies
Approved
Adult | School
Free
5.34
10.53
11.22
9.51
9.00
8.56
4.96
18.93
15.93
8.82
8.22
7.29
5.98
14.44
12.99
12.85
12.85
11.78
All
5.34
11.70
11.81
9.57
9.08
8.59
FRANCE
197
§ 9. — Distribution of Total Expenditure (Sickness, Maternity, and
Funeral Benefits)
Although the official statistics merely give the total administrative and miscellaneous expenditure for all free societies and those
approved societies -which engage in both sickness insurance and
pensions insurance, it is possible to determine the approximate
cost to mutual benefit societies of administration and of sickness,
maternity, and funeral benefit. If administrative expenditure
properly so called and miscellaneous expenditure are taken together,
it appears that the percentage of thesevarious items of expenditure
to the total amount is about the same in the sickness insurance
societies and the pensions insurance or funeral benefit societies.
Thus, by dividing the total administrative and miscellaneous
expenditure in each group in proportion to the various forms of
benefit granted by the group, it is possible to calculate the proportion of such expenditure to be charged to each of the forms of
benefit. The sums thus obtained are obviously only approximate,
but the probable error is small, and can in no case exceed 2 per cent.
of the total sought.
I.
Year
Insured
membership
243,853
171,516
177,164
191,765
209,114
205,323
Administrative
and
Benefit
Sickness
A m o u n t
1913
1920
1921
1922
1923
1924
FREE SOCIETIES
Frs.
3,593,611
3,504,035
4,242,710
5,177,281
5,482,579
6,071,578
1
| cení. 1
Maternity
Araount
1
1 cPent.l
Frs.
83.35
75.32
77.71
77.88
77.77
75.20
79,589
90,790
72,147
110,216
128,609
1.71
1.67
1.09
1.56
1.59
Funeral
A m o u n t
l
Frs.
190,589
268,399
275,976
247,941
257,359
483,079
ceat.
4.42
5.77
5.05
3.73
3.65
5.98
expenses
A m o u n t
Frs.
527,017
800,000
850,000
1,150,000
1,200,000
1,390,000
Total
Average
per insured
person
Frs.
4,311,217
4,652,293
5,459,656
6,647,369
7,050,154
8,073,266
Frs.
17.67
27.12
30.82
34.66
33.71
39.32
1 cent
12.23
17.20
15.57
17.30
17.02
17.23
I I . APPROVED SOCIETIES
Administrative
and
Beneflt
Year
1913
1920
1921
1922
923
1924
Insured
membership
Sickness
Amount
Frs.
2,438,845 27,831,204
2,029,320 31,801,224
2,249,057 38,108,459
2,314,136 43,736,275
2,419,185 45,375,338
2,624,942 51,977,592
j ^
1
Maternity
| Amount | ^
Frs.
81.18
81.34
80.41
79.43
78.04
79.28
1,032,186
1,794,002
2,034,247
3,431,259
2,900,515
2.64
3.79
3.69
5.90
4.42
I
Funeral
expenses
j Amount | £enrt
Amoilnt
Frs.
1,759,763
2,264,494
2,488,123
2,523,810
2,339,451
2,561,690
Frs.
4,688,190
4,000,000
5,000,000
6,770,000
7,000,000
8,120,000
5.14
5.79
5.25
4.58
4.02
3.91
Total
Average
per insured
person
Frs.
34,279,157
39,097,904
47,390,584
55,064,332
58,146,048
65,559,797
Frs.
14.06
19.27
21.07
23.79
24.03
24.98
1 c?nt
13.68
10.23
10.55
12.30
12.04
12.39
198
VOLUNTARY SICKNESS INSURANCE
III.
Year
1913
1920
1921
1922
1923
1924
SCHOOL SOCIETIES
Amount
835,055
712,451
745,472
763,515
791,841
772,082
Frs.
1,143,156
801,225
933,292
1,137,219
1,433,730
1,485,133
Sickness
|
Funeral
Amount |
cent
84.77
72.01
78.18
79.27
84.40
80.33
IV.
Year
Administrative
and
Benefits
Insured
member
ship
Number
insured
Frs.
5,260
61,387
40,488
17,354
15,052
19,857
expenses
cent
Amount
0.40
5.52
3.39
1.21
0.89
1.07
Frs.
200,000
250,000
220,000
280,000
250,000
344,000
1
Total
Ppr
1 cent.
14.83
22.47
18.43
19.52
14.71
18.60
Frs.
1,348,416
1,112,612
1,193,780
1,434,573
1,698,782
1,848,990
ALL SOCIETIES
Total
Expenditure
Average per
insured person
fa) Free and
1913
1920
1921
. 1922
1923
1924
1913
1920
1921
1922
1923
1924
Ap¡iroved Adult Societie
Frs.
2,682,698
38,590,374
2,200,836
43,750,197
2,426,221
52,850,240
2,505,901
61,711,701
2,628,299
65,196,202
2,830,265
73,633,063
(b) Adult Societit's and School Societie s
Frs.
3,517,753
39,938,790
2,913,287
44,862,809
3,171,693
54,044,020
3,269,416
63,146,274
3,420,140
66,894,984
3,602,347
75,482,053
Average
per
insured
person
Frs.
14.38
19.88
21.78
24.81
26.02
Frs.
11.35
15.40
17.04
19.31
19.56
20.95
Frs.
1.61
1.56
1.60
1.88
2.15
2.39
FRANCE
199
CHAPTER III
FINANCIAL RESOURCES AND THEIR MANAGEMENT
The regulations governing mutual benefit societies in respect
of other services than that of pensions relate chiefly to the method
of calculating subsidies and the investment of funds.
The conditions under which the societies constitute their funds,
the rates of contributions of full and honorary members, their
financial system, and in general any points not covered by compulsory regulations are determined by the rules. The methods adopted
differ from one society to another, and there is apparently no
systematic survey of the rules most usually observed.
Moreover, the amount and origin of the resources of mutual
benefit societies vary considerably from one society to another,
not only because of the considerable differences in their financial
situation but also because the participation of employers in the
society constitutes an important proportion of the income of
certain societies, while it is completely lacking for others. This
intervention by employers takes the most varied forms, and the
sums thus contributed to maintain the financial stability of the
societies differ widely in amount, and there are no regulations by
which it is possible to determine the extent of such intervention
and its effects. For instance, according to an agreement of 24
December 1926 between the Textile Industry Association and the
Departmental Federation of Mutual Benefit Societies of the Nord,
these Societies receive a subsidy of 40 francs a year for each full
member employed in an establishment belonging to the Association.
In the metal industry two-thirds of the establishments which share
in the expenditure of the mutual benefit societies formed by their
workers and employees grant a variable subsidy of up to 3 per cent.
of the wages of the insured persons. The remaining third of these
establishments pay a fixed contribution. The subsidies granted
by the Midi Railway Company to the mutual benefit societies in
which its employees are insured against sickness are in proportion
200
VOLUNTARY SICKNESS INSURANCE
to wages, like the insured person's contributions. The subsidies
granted by the Est Railway, on the contrary, are equal to the
deficit of the fund, which charges its members a fixed contribution of 1 per cent, of their salary or wages. In most cases, however,
there is no fixed rule defining for a given group of industries the
manner in which employers share in the costs of mutual benefit
societies.
Although the differences in the amount and origin of their
resources interfere with an analysis of the methods usually adopted
to balance income and expenditure, they do not prevent the compilation of a general table of the resources of mutual benefit societies
for covering the cost of sickness, maternity, and funeral benefits.
The reports of the mutual benefit societies give information on
their financial situation which is sufficiently detailed to allow of
compiling statistics of income applicable to all the societies
covering the risks in question. It is thus possible to show:
(1) the conditions in which mutual benefit societies engaging in sickness or maternity insurance may obtain public
assistance ;
(2) the regulations concerning the investment of their
funds ;
(3) the statistics of their resources and the distribution
of the latter.
§ 1. — Public Assistance
The conditions under which mutual benefit societies may obtain
public assistance differ according as the organisation acts as a free
society, an approved society, or a society of recognised public
utility.
PRIVILEGES GRANTED TO MUTUAL BENEFIT SOCIETIES,
IRRESPECTIVE OF THEIR LEGAL STATUS
All mutual benefit societies, whether free, approved, or recognised,
which engage in sickness or maternity insurance may claim various
exemptions from taxes, stamp duties, registration duties, and
transfer duties, as defined in the Acts of 16 September 1871,
25 February 1901, etc.
FRANCE
201
Further, with a view to assisting persons insured under the
Workers' and Peasants' Pensions Act to join mutual benefit
societies, the State grants such societies, in respect of each of
their members insured under the Act of 5 April 1910, an annual
sum of 1.50 francs per person of 18 years or over and 0.75 francs
per person of under 18 years. This grant is used to reduce the sickness contribution of the insured person by a corresponding amount,
and is not given if the said contribution falls below 6 francs a year
for persons of 18 years or over and 3 francs a year for those of
under 18.
Societies which have organised maternity insurance and those
for reinsurance in the event of prolonged sickness are entitled
to certain special privileges in addition to the above grants:
The State shall pay a proportion of the cost of treatment in sanatoria of
members of mutual benefit societies who have belonged for not less than three
years to a mutual benefit society which reinsures its members in the event
of prolonged sickness.
The proportion borne by the State shall be equal to the difference between
the daily hospital fee for treatment in the hospital for the district oí the sick
person and the daily fee for treatment in a sanatorium. (Section 3 of the Act
of 7 September 1919.)
Mutual benefit societies which grant their women members
benefit in the event of confinement, or have organised a maternity
service, may receive State subsidies out of the credit opened in
the budget of the Ministry of Labour and Health for maternity
work and the protection of infants 1 .
Finally, all mutual benefit societies, whatever their legal status,
may receive donations and legacies, communal and departmental
subsidies, etc. State subsidies are reserved to recognised and
approved societies.
PRIVILEGES
RESERVED TO RECOGNISED AND APPROVED
MUTUAL BENEFIT SOCIETIES
The importance of the privileges reserved to approved mutual
benefit societies varies considerably according as the benefits
granted by the society exceed the maximum fixed by the law or not.
The only privileges granted by the authorities to all societies,
whatever the amount of their benefits, are defined by section 18
of the Act of 1 April 1898.
1
A. GOURDIN, op. cit., p. 140
202
VOLUNTARY SICKNESS INSURANCE
On request, the communes shall be bound to supply approved societies with
the premises needed for their meetings and the books and records needed for
administrative and accounting purposes. If the income of the commune is
insufficient to meet this expenditure, it shall be charged to the departments.
If the society covers several communes or several departments, this obligation
shall apply in the first place to the commune in which its headquarters are
situated, and secondly to the department to which such commune belongs. In
towns where there is a municipal duty on funerals, approved societies shall be
granted exemption from two-thirds of the duty on any funeral for which they
must bear the cost in accordance with their rules.
All other forms of assistance granted to mutual benefit societies
by the authorities are strictly reserved to societies which give
none or only some of their members average benefits exceeding
15 francs a day, annual allowances or pensions exceeding
1,080 francs, or capital sums under a life or death insurance
exceeding 9,000 francs (section 28, subsection 1, of the Act of
1 April 1898). If the benefits granted by the society do not exceed
the above maxima, it is entitled:
(1) to exemption from stamp and registration duties on
all documents concerning it. This exemption does not
apply, however, to any transfer of property, usufructs,
or the enjoyment of movable or immovable property,
whether effected between living persons or in consequence
of death (section 19);
(2) to State subsidies.
The system of State subsidies varies according as the subsidy
is an ordinary one in respect of sickness or pension services, or an
extraordinary one for first installation, or relief, or addition to the
interest paid on sums invested with the Government Deposit
Fund.
Special allowances are granted to the societies formed by workers
employed in silk-spinning mills in respect of their sickness benefit.
The special regulations concerning the granting of these various
subsidies are examined below.
Ordinary Subsidies in Respect of Sickness Insurance
These subsidies are regular and compulsory, for they cannot be
refused to organisations which satisfy the necessary conditions.
For adult societies they are calculated in proportion to expenditure
and for school societies in proportion to membership. The manner
in which they are determined was defined by the Orders of
5 November 1918 and 25 March 1921 as follows:
FRANCE
203
Adult Societies, Mutual Benefit Pharmacies,
and Federations of Mutual Benefit Societies
(1) 25 per cent, of special expenditure on maternity work and
infant protection, including birth bonuses so far as the first
300 francs are concerned.
(2) 12 per cent, of the expenditure on the relief of full members
and their families in the event of sickness, and on providing such
persons with services for protection against sickness and prophylactic and hygienic services, including relief to the disabled and
incurable taken out of the unallocated fund.
(3) 6 per cent, of funeral benefits and all sums paid to the
families of deceased full members.
(4) 4 per cent, of the birth bonuses in respect of the part between
300 and 3,000 francs, and of expenditure arising out of any other
services enumerated in section 1 of the Act of 1 April 1898, excluding
those of pensions and annuities and administrative expenses.
If the insurance operations are carried out through the medium
of one or more organisations entitled to the subsidies in question,
these are granted to the higher insurance organisation—being
calculated in the manner stated above—unless an agreement to
the contrary is concluded between the societies concerned and
notified to the Minister of Labour.
Contributions paid to insurance organisations of the second
order, such as reinsurance funds in respect of prolonged sickness,
insurance funds against death, maternity mutual benefit societies,
do not give the right to a subsidy.
Mutual benefit pharmacies organised by approved societies or
approved federations of mutual benefit societies receive a subsidy
amounting to 12 per cent, of the expenditure involved in the free
supply of drugs to full members and their families.
Approved federations of mutual benefit societies are entitled
to the various subsidies referred to above. In addition they
receive a subsidy fixed at 5 per cent, of any expenditure they have
incurred on general mutual-aid propaganda and education.
The total subsidy in proportion to the expenditure on sickness
insurance granted to societies, pharmacies or federations may not
exceed 9 francs per member or 10,000 francs per organisation.
School Societies
Approved mutual benefit school societies receive once a year
the following subsidy:
204
VOLUNTARY SICKNESS INSURANCE
One franc per full member of under 18 years of age provided
that during t h e previous year he has paid a minimum sickness
insurance contribution of 2.50 francs.
In respect of members of over 18 years of age, these societies are
entitled to the subsidies granted to adult societies.
The total subsidies granted annually to school societies may not
exceed the maximum fixed for adult societies, i.e. 10,000 francs per
society and 9 francs per member.
Extraordinary
Subsidies
There are no legal regulations determining the amount of subsidies
which may be granted for exceptional reasons t o mutual benefit
societies. The total credit from which such subsidies must be
drawn is limited, however, by section 26 of the Act of 1 April 1898,
the third subsection of which runs:
Once a year a deduction may be made from the sums payable out of the
endowment fund and the credit intended for subsidies, not exceeding 5 per cent.
of the total assets, which is to be used to grant exceptional subsidies ;
(1) to approved mutual benefit societies which, owing to epidemics or other
reasons of force majeure are temporarily unable to fulfil their obligations;
(2) to approved mutual benefit societies which found or organise dispensaries of social hygiene and for the prevention of tuberculosis under the
Act of 15 April 1916.
Additions to Interest
According to section 21, subsection 7, of the Act of 1 April 1898,
which in this respect maintains t h e provisions of the Legislative
Decree of 26 March 1852, interest at 4 % per cent, must be paid on
the sums deposited by mutual benefit societies in current account
with the Government Deposit Fund.
If the rate of interest paid by the Government Deposit Fund
falls below 4 % per cent., the State must bear the difference between
the minimum guaranteed to mutual benefit societies, i.e. 4 % per
cent., and the rate paid by the Fund. The method of calculating
this rate is defined as follows by the Act of 15 August 1923:
The interest paid by the Government Deposit Fund shall be equal to that
which it derives from its investments during the previous year. The rate shall
be determined at the beginning of each year, after consultation of the Supervisory Committee of the Government Deposit Fund, by a Decree issued on the
proposal of the Minister of Finance and the Minister of Health, Assistance and
Social Welfare.
The additions to interest due from the State are paid to the
societies out of a special credit placed annually at the disposal of
the Minister. In point of fact, the sums involved are very small.
FRANCE
205
In 1923 the difference in the rates of interest was fixed by the
Decree of 30 March 1923 at 0.179 per cent.
Subsidies to Societies Formed by Workers in Silk-Spinning
Mills
The Act of 11 June 1909, which granted bonuses to silk spinners,
laid down that from the total sums so received 6 per cent, should
be deducted to be distributed between the mutual benefit societies
formed by workers in the mills.
A society which wishes to share in this distribution must satisfy
the conditions laid down in the Decree of 26 February 1910, as
amended by the Decree of 30 May 1913. The subsidies, which
may not exceed 75 per cent, of the approved expenditure for'each
society, are granted by a supervisory committee attached to the
Ministry of Commerce and Industry 1.
§ -2. — Investment of Funds
The provisions of the Act of 1 April 1898 concerning the investment of funds relate to:
(1) Investments in movable property.
(2) Investments in real estate.
INVESTMENTS IN MOVABLE PROPERTY
The provisions of the law on these investments apply solely to
approved societies. Free societies enjoy complete independence
as regards the investment of their funds in movable property.
They may acquire any securities they choose, and their capital
may be deposited in a credit institution, a savings bank or with a
private individual. They are subject to no regulations in this
respect.
The investments of approved or recognised mutual benefit
societies, on the contrary, must be made with savings banks, the
Government Deposit Fund, in State securities, Treasury bonds
or other securities created or guaranteed by the State, in stock
of the departments or communes, the " Crédit Foncier " of France,
or the French railway companies whose interest is guaranteedby the
State. Up to one-fifth of the available assets may be invested in
1
A. GOURDIN, op.
cit.,
p.
163.
206
VOLUNTARY SICKNESS INSURANCE
the stocks or shares of approved housing societies, mortgage societies,
shower-bath societies or allotment societies (section 20, subsection 1
of the Act of 1 April 1898). Bearer deeds and securities belonging
to approved mutual benefit societies are deposited with the Government Deposit Fund, which is responsible for collecting interest due,
coupons and reimbursement premiums in respect of such securities,
paying the sums received into the deposit account of each society
(section 20, subsection 6).
INVESTMENTS
IN
REAL
ESTATE
Since the Act of 15 August 1923 all free or approved mutual
benefit societies are subject to the same regulations as regards
investments in real estate. They may own and acquire real estate
up to three-quarters of their assets, and may sell or exchange it.
For such transactions to be valid they must be approved by a
three-quarters majority of an extraordinary general meeting, at
which at least half the members of the society are present or
represented. If the necessary quorum is not obtained, a second
extraordinary meeting must be held in the same form within not
more than three months of the first. The decisions of this second
meeting are valid if adopted by a three-quarters majority of the
members present or represented, whatever that number may be
(section 15 and section 20, subsections 2, 3, 4, and 5).
The regulations to which societies of recognised public utility
are subject with respect to their investments in real estate are
defined for each society by the Decree recognising its public utility.
§ 3. — Financial Statistics
The reports on the work of mutual benefit societies may be used
to determine for each class of society the total income, and average
per member, whether derived from contributions of full or honorary
members, from subsidies, interest on capital, donations and legacies,
etc. On the other hand, for societies engaging in both sickness
insurance and pensions insurance, these reports do not indicate the
distribution of income according as it is used to meet the risk
of sickness or old age. In order to obtain as close an estimate as
possible of the total income used to meet the risk of sickness in this
207
FRANCE
group of societies, it is necessary to deduct from the total income
the sum expended on other services than those of sickness. In
addition account must be taken of any sums placed to reserve out of
surplus income in " unallocated " funds with a view to the subsequent granting of various forms of relief and allowances not directly
connected with sickness, maternity or funeral benefits. This
estimate of the surplus income placed to reserve may be made in
proportion to the annual expenditure on sickness and maternity
benefits on the one hand, and pensions on the other.
The difference between the total income and the total expenditure
plus reserves in unallocated funds for the pensions service will
thus give the total income available for sickness benefit.
By using the data contained in the reports on the work of mutual
benefit societies, it is therefore possible to show for the adult
societies engaging mainly in sickness or maternity insurance :
(1) the amount of the contributions of full and honorary
members ;
(2) the average contributions.
For each group of free, approved, or recognised societies:
(1) the approximate income available for sickness benefits;
(2) the average of such income per contributing member.
The latter particulars will be combined in a general table,
showing the absolute amounts and the average per insured person
of any surplus of income over expenditure. It will be supplemented
by a table showing the percentage of income derived from contributions, calculated for all the funds and risks covered.
TOTAL CONTRIBUTIONS AND AVERAGE PER MEMBER FOR SOCIETIES
ENGAGING MAINLY IN SICKNESS INSURANCE
I.
Year
1913
1920
1921
1922
1923
1924
FREE SOCIETIES
Total contributions
Full members |
H^ora^
Frs.
2,615,412
3,186,988
3,523,120
4,137,303
5,940,917
5,324,936
Frs.
319,985
375,182
494,614
749,482
763,208
756,334
Average contribution
Full
Honorary
member
member
Frs.
Frs.
13.17
14.89
22.82
24.24
24.99
30.44
26.61
38.57
36.49
39.36
30.61
34.65
208
VOLUNTARY SICKNESS INSURANCE
II.
APPROVED
SOCIETIES
. Total contributions
Honorary
members
Frs.
Frs.
8,928,327
1,140,003
10,634,044
1,238,991
13,351,674
1,375,829
15,160,128
1,647,287
15,993,425
1,833,061
18,172,466
2,052,513
Year
Average contribution
Full
Honorary
member
member
Frs.
Frs.
9.04
9.39
14.03
15.00
13.64
15.60
14.20
17.99
14.35
17.04
14.88
16.54
Full members
1913
1920
1921
1922
1923
1924
TOTAL CONTRIBUTIONS AND AVERAGE PER MEMBER FOR APPROVED
SOCIETIES ENGAGING MAINLY IN MATERNITY INSURANCE
Total contributions
Full
I
Honorary
members
|
members
Frs.
Frs.
Year
1913
1920
1921
1922
1923
1924
117,213
168,808
155,240
437,284
386,182
Average contribution
Full
1
Honorary
member
\
member
Frs.
Frs.
6
4.72
3.83
6.33
5.12
1.86
2.05
1.74
3.70
3.01
57,787
75,024
59,756
130,000
100,881
TOTAL AMOUNT AND AVERAGE PER INSURED PERSON OF INCOME
USED
TO M E E T
THE COSTS OF SICKNESS,
MATERNITY,
AND FUNERAL B E N E F I T S
I.
Year
FREE
SOCIETIES
Amount
Average per insured person
Frs.
5,158,700
6,793,012 '
7,819,683
9,176,000
11,950,000
11,100,000
1913
1920
1921
1922
1923
1924
II.
Frs.
21.15
39.60
44.14
47.85
57.15
54.06
APPROVED ADULT SOCIETIES
|
Year
Amount
Average per insured person
j
!
1
i
j
j
1913
1920
1921
1922
1923
1924
Frs.
40,035,590
45,939,876
59,572,554
66,140,551
71,542,178
79,341.018
Frs.
16.42
22.64
26.49
28.58
29.57
30.23
209
FRANCE
III.
J
SCHOOL
SOCIETIES
Year
Amount
Average per insured person
1913
1920
1921
1922
1923
Frs.
1,790,931
2,257,198
2,750,205
3,256,175
2,970,269'
2,369,00o 1
Frs.
2.14
3.17
3.69
4.26
3.75
3.07
1924
i This reduction in the income available for sickness insurance is due not to a reduction
in receipts, but to an increase in the sums devoted to the pensions service. The total receipts
of the school societies rose from 6,589,529 francs in 1922 to 6,934,269 francs in 1923 and
7,225,619 francs in 1924. The sums allocated to pensions service in these three years were
3,333,354 francs, 3,964,000 francs, and 4,856,619 francs respectively.
IV.
ALL SOCIETIES
Average per insured person
Amount
Year
Societies
1913
1920
1921
1922
1923
1924
(a) Free and Approved Adult
Frs.
45,194,290
52,732,888
67,392,237
75,316,551
83,492,178
90,441,018
Societies
1913
1920
1921
1922
1923
1924
(b) Adult Societies and School
Frs.
46,985,221
54,990.086
70.142,442
78,572,726
86.462,447
92,810,018
Frs.
16.85
23.96
27.78
30.06
31.77
31.95
Frs.
13.36
18.88
22.12
24.03
25.28
25.76
TOTAL SURPLUS INCOME AND AVERAGE PER INSURED PERSON
I.
FREE AND APPROVED ADULT SOCIETIES
Year
Annual surplus
1913
1920
1921
1922
1923
1924
Frs.
6,603,916
8,982,691
14,541,997
13,604.850
18.295,976
16,807,955
Average per
insured person
Frs.
2.46
4.08
5.99
5.43
6.96
5.94
Per cent, of
total income
14.61
17.03
21.58
18.06
21.91
18.58
14
210
VOLUNTARY SICKNESS INSURANCE
II.
ADULT SOCIETIES AND SCHOOL SOCIETIES
Year
Annual surplus
1913
1920
1921
1922
1923
1924
Frs.
7,046,431
10,127,277
16.098.422
15.426 452
19,567,463
17,327,965
Average per
insured person
Frs.
2
3.48
5 08
4 72
5.72
4.81
Percent, of
total income
15
18.42
22.95
19.63
22.63
18.67
The increase in the percentage surplus is due to the fact that for
some years mutual benefit societies, particularly those engaging
in both sickness insurance and pensions insurance, are tending more
and more to place in "unallocated funds" the sums left to them
without instructions as to their use.
Formerly the deeds authorising the acceptance of legacies or
donations required the investment of such sums in inalienable
French State securities, or their payment into an inalienable
pensions account. Nowadays such deeds leave the societies free
to deposit the sums in a current account with savings banks or the
Government Deposit Fund.
The administrative practice of authorising the crediting of
donations and legacies in unallocated funds is relatively. recent,
and was dealt with in a note by the Financial Section of the Council
of State of 2 October 1912, and a resolution of the Superior Council
of Mutual Benefit Societies adopted in June 1914.
INCOME FROM CONTRIBUTIONS PER CENT OF TOTAL INCOME
Data for All Funds Whatever the Risks Covered
i.
CONTRIBUTIONS OF FULL AND HONORARY MEMBERS
Approved and
recognised societies
Year
Adult
1913
1920
1921
1922
1923
1924
.
64.59
57.19
57.46
57.50
57.55
56.79
|
All societies
School
Free
societies
Adult
85.06
73.34
70.66
68.47
70.49
68,75
63.60
51.13
53.50
48.96
56.60
51.34
64 45
55.24
56.71
55.75
5675
55.59
Adult and
school
6645
62.08
57.31
56.30
57.34
56.19
211
FRANCE
II. CONTRIBUTIONS OF FULL MEMBERS
Year
1913
1920
1921
1922
1923
1924
Approved and
recognised societies
Adult
58.24
52.30
52.66
52.40
52.05
51.48
AH societies
School
Free
societies
Adult
83.10
71.56
69.73
67.24
69.38
67.44
59.47
48.55
40.97
44.47
49.47
46.75
58.41
51.60
50.45
50.86
51.52
50.49
Adult and
school
60.55
52.48
51.29
51.56
52.30
51.18
212
VOLUNTARY SICKNESS INSURANCE
CHAPTER IV
THE POSITION OF FOREIGNERS
As mutual benefit societies have complete freedom to determine
as they please the conditions of admission of their members, they
may make such admission dependent, for instance, on the nationality of the candidate, but there is nothing to prevent a society
consisting chiefly of Frenchmen from accepting full or honorary
members of foreign nationality and this is in fact the rule followed
by the large majority of societies.
So far as sickness insurance is concerned, the position of members
so admitted does not differ from that of Frenchmen, except as
regards participation in management. According to section 3,
subsection 3, of the Act of 1 April 1898, foreigners may not act as
administrators of the society. One exception to this rule has been
made, however, by the treaty between France and Poland concerning social assistance and welfare. Article 4 of this treaty lays down
that Polish workers and employers living in France who have
joined a French mutual benefit society may belong to the
administrative council on condition that the number of foreign
administrators does not exceed one less than half the total number
of the members of the council.
Finally, foreigners may form their own societies in France on
condition that they are authorised by Ministerial Order (section 3,
subsection 4). Societies formed by foreigners, when duly authorised, are entitled to the privileges granted to free societies (opinion
of the Council of State of 28 December 1899) and may choose their
administrators from among their own members.
FRANCE
213
CHAPTER V
EMPLOYERS' INSTITUTIONS
There are three principal methods by which employers may
intervene in sickness insurance:
(1) By granting a subsidy to mutual benefit societies in
respect of each insured member belonging to the staff of an
undertaking or of a group of undertakings combined in an
association.
(2) By allowing the staff to benefit by services provided at the
cost of the employer alone.
(3) By affiliating the staff to a collective equalisation fund
formed by a certain number of employers.
The intervention of employers in the form of subsidies to mutual
benefit societies has not been dealt with in any general study from
which it is possible to determine the rules generally observed in
fixing the rate of the subsidy or the amount of such subsidies and
the results to which they have led. It is therefore impossible to
analyse separately the extent and effectiveness of the work done
in this direction. They remain bound up with the particulars for
the mutual benefit movement as a whole, and it is impossible to
isolate them.
It remains, therefore, to examine the characteristics of the other
means of intervention by employers with a view to protecting their
sick workers. The account given below is derived from the
" enquiry into employers' sickness insurance institutions " submitted to the International Labour Office by the General
Confederation of French Production.
§ 1. — Institutions Run By a Single Employer
This form of intervention, although less widely adopted than
the protection given by the employers' payment of part of the
contribution charged by mutual benefit societies to cover the risk
214
VOLUNTARY SICKNESS INSURANCE
of sickness, yet applies to an appreciable number of wageearners.
Among transport undertakings, three out of the five main lines
(the Nord, the Paris-Orleans, and the Paris-Lyon-Méditerranée),
representing 251,860 workers out of a total of 370,000, have no
mutual benefit fund, and personally provide medical and surgical
treatment and drugs for those of their employees whose salaries
fall below a certain maximum. This applies also to the Est
Company, for those of its employees who do not belong to the benefit
fund. Moreover, the employees of these companies, as on all the
other main lines, receive their full pay, including the housing and
family allowances, as from the fifth day of sickness, for a period of
120 days. After the 120th day of absence, and for a further period
of 90 days, they are allowed half their fixed salary, but the full
housing and family allowances. At the end of this second period
all or half the salary and allowances may be maintained in
exceptional cases by the director, on the recommendation of the
doctor for undertakings.
Among other transport undertakings, close on a third of those
covered by the Railway Association have organised medical services,
and half of them provide in addition for surgical treatment and
drugs. Three of them provide for hospital treatment. All the
railways affiliated to the Technical Association of Local Railways
grant free medical attendance and pay part of the cost of drug?.
A very small number add the payment of a daily allowance.
In the metal and engineering industries, where the organisation
of mutual benefit societies is the rule, it appears, however^ that
among the undertakings covered by the enquiry, in about 50,
representing 30,000 workers, the employers undertake the full cost
of assistance in the case of sickness, half of them granting a daily
allowance of between 1 franc and the full wages, the other half
granting individual relief of a less definite amount. In addition,
15 establishments give free medical attendance and drugs to their
workers, 8 extend this privilege to the workers' families, 18 grant
medical attendance, and 10 provide for hospital treatment.
Among the hospitals best known owing to their importance and
the value of their technical organisation, reference may be made to
those of Algrange, Briey, Creusot, Godbrange, Hussigny, Micheville, and Mont-Saint-Martin.
FRANCE
215
In the paper industry, about a quarter of the undertakings
covered undertake to pay sickness benefit, representing on an
average 2 per cent, of wages.
In the gas industry about one-third of the works covered,
representing two-thirds of the total staff, pay sickness benefit
without any participation by the beneficiaries.
In the chemical industry it is an exception for the employer to
undertake sole charge for sickness benefit, but occasionally he
pays a sum equal to the full wage for workers and salaried employees
who have been employed for not less than two months, and provides
medical attendance and drugs through the doctors attached to the
works.
In the electrical industry a quarter of the undertakings covered
have themselves organised relief funds paying daily allowances
ranging between half pay and full pay, as a rule from the first day
of sickness, and for a period of two to three months. Some of
these undertakings also provide free medical attendance, and a
still smaller number free drugs and extend this privilege to the
worker's family.
In the food industry one-third of the firms provide their workers
with various privileges, from the payment of full wages during the
whole duration of the illness to the grant of a variable allowance
based on seniority. The repayment of expenditure on medical
treatment and drugs is an exception.
Finally, for employees paid by the month it is a very general rule
to apply a special system, consisting usually in the payment of the
full salary for a period of three to six months, and of half the salary
for a further similar period. The application of this system to the
staff of insurance companies, banks, publishers, and the salaried
employees of industrial undertakings provides an effective form
of protection, which may be supplemented by insuring in a mutual
benefit organisation, whether subsidised by employers or not.
§ 2. — Collective Employers' Fund of the Equalisation Fund Type
Collective employers' funds undertake sickness insurance,
whether directly or through the medium oi mutual benefit societies,
with which they generally conclude agreements with a view to
guaranteeing, by means of individual or collective grants, privileged
treatment for all the persons covered, who may themselves take
independent action for their protection.
216
VOLUNTARY SICKNESS INSURANCE
CONDITIONS OF ADMISSION
The conditions imposed usually include a minimum period of
service of from one to three months. Most funds also demand that
wage-earners shall make an individual application for admission,
although some automatically register the whole staff of the affiliated
establishments.
BENEFITS
In order to prevent the abuses which have been observed when
benefits are granted even for short sicknesses, the equalisation funds
have considered it essential to establish the principle of a waiting
period. This they originally fixed at twelve days, but many funds
have reduced it to eight, and it is possible that further reductions
will take place in accordance with later experience.
For all the funds the benefits include a daily allowance varying
slightly according to the district, but averaging at present 5
francs, and for some of them a participation in medical and surgical
expenses at the rate of 5 francs per visit and 50 to 600 francs per
operation.
Moreover, a growing number of funds, being anxious to encourage
members of mutual benefit societies, grant them an addition to
the daily allowance of between 1 franc and 3.50 francs. Others
make this addition by way of a lump sum subsidy to the mutual
benefit society, and may even go as far as to double the benefit which
would be granted to persons not belonging to a mutual benefit
society.
Finally, apart from participation in the cost of drugs organised
by one fund, reference may be made to several institutions which
grant special benefits to sick members of the families of their
workers.
MANAGEMENT
The payment of sickness benefit by the equalisation funds is
carried out by the affiliated employers in the same manner as the
payment of family allowances.
FRANCE
217
RESULTS OF W O R K I N G
There are at present 26 sickness benefit funds or services in the
following centres: Angoulême, Armentières, Auxerre, Beauvais,
Blois, Brest, Chalon-sur-Saône, Cholet, Elbeuf, Fourmies, Grenoble,
Lille (two funds), Lyons, Paris, Roanne, La Rochelle, Roubaix,
Saint-Etienne, Saint-Junien, Saint-Quentin, Tarare, Thizy, Toulouse, Tours, and Vienne.
In so far as information is available for the organisations, of
which many have only recently started work, the number of
establishments concerned may be estimated at about 1,700,
representing close on 300,000 workers.
GREAT BRITAIN
FRIENDLY SOCIETIES
Acts
An Act to consolidate the law relating to friendly and other societies.
Assented to 7 August 1896.
An Act to amend sections one, sixty-two, and sixty-five of the Friendly
Societies Act, 1896, and for purposes connected therewith. Assented to 29 May
1924.
Reports
Reports of the Chief Registrar of Friendly Societies for the years 1911.
1913, 1914, 1920. 1921, 1922, 1923, 1924.
Guide-Book of the Registry of Friendly Societies and the Office of the Industrial
Assurance Commissioner, 1925.
TRADE UNIONS
Acts
An Act to amend the law relating to trade unions. Assented to 29 June 1871.
An Act to amend the Trade Union Act, 1871.' Assented to 30 June 1876.
An Act to amend the law with respect to the objects and powers of trade
unions. Assented to 7 March 1913.
An Act to amend the Trade Union Amendment Act, 1876, with respect
to the amalgamation of trade unions. Assented to 10 July 1876.
Reports
Reports of the Chief Registrar of Friendly Societies for the vears 1913
and 1924.
Ministry of Labour Gazette, November 1926, pages 398-399, and January
1927, page 5.
GREAT
BRITAIN
219
FRIENDLY SOCIETIES
§ 1. — Types of Friendly Societies
Friendly societies are societies formed mainly by the working
classes for the purpose of affording mutual aid in various emergencies
and principally in case of sickness and death. Societies of this
character have existed no doubt for many centuries, but they did
not become an important feature of social life until the industrial
revolution. Their development proceeded during the nineteenth
century pari passu with the industrialisation of the country.
The introduction of compulsory sickness insurance by the
National Insurance Act, 1911, strengthened the friendly society
movement by entrusting the societies with the work of administering the cash benefits to be provided under the compulsory scheme.
Seven millions, or about half of the number of persons brought into
insurance by the Act, joined friendly societies, the other half being
taken up by the industrial assurance approved societies. Some of
the former, becoming aware of the advantages of insurance, but
finding the benefits of the compulsory scheme rather low, were led
to insure voluntarily for supplementary benefits with their societies.
Others, already insured voluntarily for benefits in excess of those
provided under the compulsory scheme, found themselves unable
to contribute under both, and, in return for a reduction of their
voluntary insurance to the extent of the benefits insured under the
compulsory scheme, were relieved from voluntary contributions to
a sufficient extent to meet all or part of the contributions required
for their compulsory insurance.
Under the Friendly Societies Act the societies are distinguished
according to the form of organisation which they possess:
Societies with branches.
Societies without branches.
A branch is defined as any number of the members of a society
under the control of a central body, having a separate fund
administered by themselves or by a committee or officers appointed
by themselves, and bound to contribute to a fund under the control
of the central body. Large " societies without branches " often
have in fact local branches, but these have no separate funds
under their own control and act merely as agents.
220
VOLUNTARY SICKNESS INSURANCE
SOCIETIES WITH BRANCHES
Societies with branches, which are also known as affiliated orders,
are federally organised bodies, each of which has numerous branches
(variously termed "lodges", "courts", or " tents ") up and down
the country. The rules of branches as to membership and constitution are generally fixed by the central body and tend to
uniformity, but in financial matters the branches of the different
orders enjoy a varying degree of independence. In the case of
the. larger orders there exist intermediate bodies, usually known
as " districts " between the branch and the central body. This
hierarchy of organs of management opens the educational opportunity of bearing office to large numbers of members, the branch
officers being aided by the advice of the more experienced administrators in the district and central body. Each order has its peculiar
secret ceremonial somewhat resembling that of the Free Masons;
this feature, which doubtless had a practical value when freedom
of association did not exist, still serves to maintain the corporate
spirit.
The branches generally undertake sickness and death insurance
by means of accumulative funds1, the death liability being
reassured with the district. The exceptions to this general rule
are, however, numerous and important. In one large order both
sickness and death insurance are centralised 2 in the districts, and
in one other all the death insurances are so centralised and most
of the sickness insurance. In another large order the sickness
insurance is undertaken by the branches while the death benefit is
centralised in the order. Reassurances are usually conducted on
one of three main systems:
(1) By contributions graduated according to the ages of the
members at entry, not altered from year to year, an accumulative fund being maintained.
(2) By equal levies based merely on the number of members
each year, no accumulative fund being maintained.
(3) By the equitable levy system under which the annual levies
are graduated according to the ages of the members at the
time the levies are made, no accumulative fund being
maintained.
1
2
See " sickness benefit " societies, below.
The district then corresponds to a society without registered branches,
i.e. the branch merely acts as agent for the district or society, collecting
contribuí ions and paying benefits on its behalf but holding no benefit fund.
GREAT BRITAIN
221
Sickness insurance is not often reassured. A few of the smaller
orders do not insure sickness benefits, but no separate particulars
are available. In a few orders the funds are divided annually
among the members, but some of these retain an order funeral
fund and divide only their remaining funds. Benefits usually
insured with the branch.
The three largest affiliated orders are the Independent Order of
Oddfellows (Manchester Unity), the Ancient Order of Foresters,
and the Independent Order of Rechabites, each with a membership
of close upon three-quarters of a million ; the last is only open to
persons who abstain altogether from alcoholic liquors.
SOCIETIES WITHOUT BRANCHES
Under this head are comprised a great variety of societies
Their membership may be very small and confined to a single
parish, or it may be half a million scattered throughout the country.
Several types of branchless societies may be distinguished.
Sickness benefit societies, whose principal object is to insure
sickness pay, although often providing other benefits such as
payments at death of member, wife or child, industrial accident
pay or old-age allowances. In this class are included only societies
which have accumulative funds, i.e. the excess of contributions
paid by members during their earlier years are pooled and reserved
by the society to meet the excess of claims over contributions in
the later years of membership. The stability of the society is
therefore quite independent of the number of members at any
particular time. In most societies the contributions are now
graduated according to the age of the members at entry and are
calculated approximately on an actuarial basis. In a few societies
death benefits are augmented by levies. Membership is sometimes
limited to persons engaged in a particular occupation and in a
few cases to persons with similar religious or political beliefs.
Among the more important of the societies in the group are the
Hearts of Oak Benefit Society, having over 400,000 members, and
the Rational Association Friendly Society, which has a membership
of over 100,000.
Sickness and unemployment societies, which are similar to the
sickness benefit societies, but which can only be registered under
a special authority from the Treasury because they also pay
unemployment benefit.
222
VOLUNTARY SICKNESS INSURANCE
Deposit societies, which combine the usual objects of sickness
henefit societies with the features of a savings bank. The surplus
of contributions, after providing for any insurance in respect of
which they are paid, is allocated to the individual accounts of the
members and accumulated by them with such additions as they
may choose to make and may be withdrawn by them as the rules
allow. Should the contributions in any one year be insufficient to
meet the cost of benefits, the deficit is recoverable from the
members' individual accounts. The cost of protracted illness is,
however, chargeable partly to the mutual fund and partly to the
individual account. It is claimed that this system acts as a very
material deterrent to sickness claims. The element of mutuality
is therefore present only to a limited extent. Usually, though not
always, death assurance in deposit societies is supported by a
separate fund on a purely accumulative basis. The National
Deposit Society has three-quarters of a million members.
•Dividing societies, which provide benefits similar to those of
sickness benefit societies but periodically divide among the members
the funds remaining after the satisfaction of all claims at the date
when the division takes place. It is usual to reserve a small fund
to meet any claims accruing after the division. Both benefits are
frequently augmented by special levies upon members. It is
probable that the majority of unregistered societies are of this
type. Included in the group are some societies which make no
provision for sickness benefit.
Juvenile societies, admission to which is open to juveniles whose
membership usually ceases at the age of 21. Almost all the juvenile
societies are formed in connection with affiliated Orders with the
object of securing for the latter a steady flow of young recruits.
Included in the group are some societies which make no provision
for sickness benefit.
Shop clubs, which provide benefits for workmen in connection
with a workshop, factory, dock, shop, or warehouse where membership is made a condition of employment.
Medical societies, which provide medical attendance, medicine,
and appliances but no cash benefits during sickness.
Friendly society asylums and convalescent homes, which provide
institutional treatment for sick or aged members. The two largest
societies in this class are convalescent homes for the use of members
of two of the large affiliated orders.
Collecting societies, which receive contributions collected from
house to house at intervals of less than two months by means of
223
GREAT BRITAIN
paid collectors, insure principally the payment of sums at death.
This type of friendly society, although subject to the Friendly
Societies Act, is more allied by its methods of organisation and by
its interest to the industrial assurance companies. Sickness insurance
is undertaken to a small and decreasing extent in a few collecting
societies, but is insignificant in volume and has been ignored in
the figures in this Report.
Other groups of societies which do not insure benefits during
sickness have been ignored in this Report. They assure principally
sums at death or on retirement, annuities, grants to widows and
orphans and various benefits to miners and others in cases of
accident.
NUMHER AND VOLUNTARY MEMBERSHIP OF EACH TYPE OF REGISTERED
FRIENDLY
SOCIETY
INSURING AGAINST
SICKNESS
IN THE YEARS
1910, 1913, 1924
Number of societies
making returns
Membership
Class of society
1913
1910
1924
1910
1913
1924
Orders and
20,400 20,257 18,25i 2,782,953 2,951,218 3,123,333
branches
1,942
1,241 1,277,185 1,304,282 1,088,512
3,117
Sickness benefit
Sickness and
41
44
36
37,058
50,492
39,774
unemployment
101
Deposit
81
83
381,491
549,517 1,027,042
1
919
Dividing
292,909
328,334
1,335
1,243
445,126
Juvenile 1
737
154,923
95,193
971
908
142,210
Shop clubs
4
6,640
13,798
8
5
4,221
25,953 24,482 21,292
Total
4,940,317 5,285,676 5,870,218
i Includes some societies which do not pay sickness benefits.
INCOME, EXPENDITURE AND FUNDS
(1) Affiliated
Type of society
Affiliated orders
Sickness
Sickness and
unemployment
Deposit
Dividing
Juvenile
Shop clubs
Total
Orders and Branchless
Total
contributions
Societies,
1910
Total
benefits
Cost of
administration
Total
funds
£
£
£
£
3,483,071
1,731,212
3,103,243
1,630,886
525,245
178,900
27,933,973
13,115,704
54,070
628,544
387,786
52,340
10,262
30,471
410,189
358,136
32,981
10,490
11,878
72,024
35,658
12,122
290
368,402
3,497,668
293,945
272,617
1,717
6,347,285
5,576,396
836,117
45,484,026
224
VOLUNTARY SICKNESS INSURANCE
(2) Affiliated Orders and Branchless Societies, 1924
Type of society
Total
contributions
£
£
Affiliated orders
Sickness
Sickness and
unemployment
Deposit
Dividing
Juvenile
Shop clubs
3,470,804
1,944,527
3,419,617
1,614,081
67,096
1,994,525
800,701
47,444
4,908
8,330,005
49,117
1,362,761
713,034
33,905
2,617
7,195,132
Total
Total
benefits
Cost of
administration
Total
funds
£
£
705,849
247,756
40,609,470
18,088,337
25,057
240,984
66,140
13,640
60
1,299,486
740,180
12,218,239
525,171
283,703
3,482
72,468,582
•
§ 2. — Registration
Registration in Great Britain is optional for friendly societies.
Its purpose is to subject them to a certain degree of salutary
control by a State authority and to facilitate their administration.
It does, by regularising the holding and transfer of the society's
property, and by the supervision and filing for public inspection
of accounts and by valuations, secure that the indispensable conditions for the safety of the members' interests shall be fulfilled.
Nevertheless it in no wise guarantees financial stability, since
registration cannot be refused on the grounds that contributions
are inadequate to pay for the benefits promised.
ADVANTAGES OF REGISTRATION
As a society is free to register or not, it is necessary to confer
privileges upon registered societies in order to induce them to
submit to the obligations which registration entails.
The following are the principal advantages of a registered over
an unregistered society:
(1) It can legally hold land.
(2) It can recover any of its property wrongfully taken or misapplied by simple proceedings before a court of summary
jurisdiction.
(3) In case of bankruptcy of an officer, the society bas preference
over other creditors.
225
GREAT BRITAIN
(4) In case of the death or disappearance of a trustee, the
transfer of property to another is effected by simple
procedure.
(5) Its documents are free from stamp duty.
(6) It can obtain valid receipts from parents, of members under
16 and from members between 16 and 21.
(7) Disputes may be legally settled by its own rules.
(8) Its funds are not subject to income tax or corporation duty.
REGISTRY
OF FRIENDLY
SOCIETIES
The Registry of Friendly Societies consists of a central office,
comprising the Chief Registrar and three Assistant Registrars for
England and an Assistant Registrar for Scotland. The registry
constitutes a separate department.
The Registrar exercises functions in respect not only of friendly
societies but of working men's clubs, industrial and provident
societies (including the societies usually known as co-operative
societies), building societies, trade unions, and a variety of other
voluntary associations, as well as of industrial assurance companies
and collecting societies, in the capacity of Industrial Assurance
Commissioner.
The duties of the Registrar in respect of friendly societies are
«chiefly the following:
To register their rules and amendments thereto;
To record amalgamations and dissolutions;
To examine annual returns and quinquennial valuations.
CONDITIONS or REGISTRATION
Since registration is optional and confers privileges, it is only
.-granted if certain conditions are fulfilled by the applicant society.
These conditions may be grouped under three heads:
Objects. Rules. Minimum membership.
Objects
The first condition for the registration of a friendly society is
that it should be established to achieve its objects by the voluntary
•contributions of the members with or without the aid of donations.
15
226
VOLUNTARY SICKNESS INSURANCE
The purposes for which registered friendly societies may be established include the insurance of members and their dependants
against loss in a wide variety of contingencies.
The following table shows the purposes and the beneficiaries
of the various benefits which may be granted:
Purpose
Beneficiary
Relief or maintenance during sickness or other Members
infirmity, in old age (over 50), in widowhood,
when on travel in search of employment, when in
distressed circumstances, in case of shipwreck
in case of loss or damage of-or to boats, or nets.
Relief or maintenance during sickness or other Members' husbands.
infirmity, in old age (over 50), in widowhood,
wives
ÏI
during minority.
children
5)
))
})
,,
5Î
Assuring money to be paid:
on birth
on death
for funeral expenses
during period of mourning
Assuring against fire up to
the value of £15 the implements of trade.
Endowment at any age.
parents
brothers
or
sisters
nephews
or
nieces
orphan wards
orphan
children.
A member's child.
A member
Member's husband,
widow or child
Jews
Member
Members and their
nominees.
The two main purposes are: the relief of members in sickness;
and the payment of a sum of money on death—generally nomore than t h e average cost of burial.
Rules
Societies can be registered either as ordinary or branchless
societies, or else as societies with branches.
A society with branches must, in order to be registered as such,,
have:
(a) a central body;
(b) a fund under the control of the central body to which all
branches must contribute ;
(c) some degree of control over the branches;
(d) some provision for fixing the conditions under which a.
branch may secede ;
(e) branches within the meaning of the Act (see page 219).
GREAT
BRITAIN
227
The law does not fix, however, what shall be the separate fund
of the branch or how shall be constituted the fund under the control
of the central body.
No society is entitled to any of the privileges of registration
until its rules have been registered. In the case of a society with
branches the rules, both of the central body and of each branch
must be registered; moreover, it is necessary for all amendments
and rules to be registered likewise. Registration is only refused
if the rules are contrary to the law.
The Friendly Societies Act of 1896 prescribes that the following
matters are to be provided for by the rules of societies registered
under the Act :
1. The name and place of the office of the society.
2. The whole of the objects for which the society is to be established,
the purposes for which the funds thereof shall be applicable, the terms
of admission of members, the conditions under which any member
may become entitled to any benefit assured thereby, and the fines
and forfeitures to be imposed on any member, and the consequences
of non-payment of any subscription or fino.
3. The mode of holding meetings and right of noting, and the manner
of making, altering, or rescinding rules.
4. The appointment and removal of a committee of management (by
whatever name), of a treasurer and other officers, and of trustees, and,
in the case of a society with branches, the composition and powers
of the central body, and the conditions under which a branch may
secede from the society.
5. The investment of the funds, the keeping of the accounts, and the
audit of the same once a year at least.
6. Annual returns to the Registrar of the receipts, funds, effects, and
expenditure and numbers of members of the society.
1. The inspection of the books of the society by every person having an
interest in the funds of the society.
8. The manner in which disputes shall be settled.
9. In case of dividing societies, a provision for meeting all claims upon
the society existing at the time of division before any such division
takes place.
A n d also in t h e case of friendly a n d c a t t l e i n s u r a n c e societies:
10. The keeping separate accounts of all moneys received or paid on account
of every particular fund or benefit assured for which a separate table
of contributions payable shall have been adopted, and the keeping
separate account of the expenses of management and of all contributions on account thereof.
11. (Except as to cattle insurance societies.) A valuation once at least in
every five years of the assets and liabilities of the society, including
the estimated risks and contributions.
12. The voluntary dissolution of the society by consent in a friendly society
of not less than five-sixths in value of the members, and of every
person for the time being entitled to any benefit from the funds of the
society, unless his claim be first satisfied or adequately provided for;
and in a cattle insurance society by consent of three-fourths in number
of the members.
13. The right of one-fifth of the total number of members, or of one hundred
members in the case of a society of one thousand members and not
exceeding ten thousand, or of five hundred members in the case of a
228
VOLUNTARY SICKNESS INSURANCE
society of more than ten thousand members, to apply to the Chief
Registrar, or in case of societies registered and doing business exclusively
in Scotland or Ireland to the Assistant Registrar for Scotland or Ireland,
for an investigation of the affairs of the society, or for winding up
the same.
The rules of a branch bear a general resemblance to those of a
society, b u t comprise in addition provisions relating to its separate
fund, its contribution to a central fund under the control of the
central body, and the control of the central body over the branch.
Minimum
Membership
No society may be registered unless it consists of at least seven
members, b u t does not lose its rights as a registered society if the
membership falls below this minimum. No amendment to a rule,
however, can be made without the signature of three members.
CANCELLATION OF REGISTRATION
The Registrar may, with the approval of the Treasury, cancel or
suspend the registration of a society if he has proof t h a t it was
registered b y mistake, or exists for an illegal purpose, or has
wilfully violated the law after warning from the Registrar, or has
ceased to exist.
UNREGISTERED SOCIETIES
It is known t h a t a number of unregistered friendly societies are
in existence. No particulars of them are available, but it is
improbable that their membership is large in proportion to that
of the registered societies.
§ 3. — Membership
CONDITIONS OF ADMISSION
The law imposes no condition of the admission of members,
but only requires t h a t the conditions shall be defined in the rules.
Minors may be members, but special provisions regulate their
situation. Children may be admitted from birth; but until the age
of 16 all t h e instruments are executed on their behalf by their
parents. Above the age of 16 a minor may execute instruments
himself. Not until he is 21, however, may a member become an
officer of a society or be elected to its management committee.
229
GREAT BRITAIN
The conditions actually laid down in the rules of societies vary
widely. The only stipulations which are almost universal are that
the candidate for admission shall be in good health and not above
a specified age, which is usually from 40 to 45. The membership
of some societies, in particular the large affiliated Order of Rechabites, is confined to persons who abstain from alcoholic liquors :
some societies again exclude persons engaged in hazardous occupations: the limitation of membership to persons engaged in a
particular occupation is confined mainly to small societies. In
1910 the members of 970 out of 5,553 Dranchless societies in the
United Kingdom were mostly of the same occupation. Societies
exist which are only open to persons of a particular religion or to
women or to juveniles.
The introduction of compulsory sickness insurance in 1912
caused the membership of friendly societies to increase by several
millions. Some members contribute only for the voluntary benefit
provided by the society, some only for State benefit, and some for
both.
STATISTICS or MEMRERSHIP
Voluntary Membership
Particulars of the total membership of orders and friendly
societies have been given in the table on page 223.
Distribution of Membership by Sex
BRANCHLESS SOCIETIES (ADULTS ONLY), 1 9 2 0
Type of society
Sickness
Sickness and unemployment
Deposit
Dividing
Shop clubs
Males
Females
Total
997,407
38,813
509,292
278,739
3,135
35,931
1,126
215,960
65,355
1,160
1,033,338
39,939
725,252
344,094
4,295
No later information is available.
It was estimated in 1910 that in the affiliated orders about
53,500 members out of 2 y2 millions were females. No later information is available, but as in some orders wives are now separately
insured as members, the proportion is probably now slightly higher.
230
VOLUNTARY SICKNESS INSURANCE
Distribution of Membership by Age
(1)
FIVE LARGE SICKNESS BENEFIT SOCIETIES
Valuation age
group i
0-20
21-25
26-30
31-35
36-40
41-45
46-50
51-55
56-60
61-65
66-70
71-75
76-80
81-85
86 a n d over
Total
Number
of members
1911
1924
49,408
37,591
61,528
72,728
64,768
56,056
41,322
25,613
21,026
15,101
9,224
3,662
1,104
363
92
97,977
43,726
41,182
44,062
50,502
59,960
59,764
54,374
42,594
26,316
16,416
10,398
5,097
2,070
364
459,586
554,802
Percentage of total
membership
1911
10.8
8.2
13.4
15.8
14.1
12.1
9.0
5.6
4.6
3.3
2.0
.8
.2
.08
.02
100
1924
17.7
7.9
7.4
7.9
9.1
10.8
10.8
9.8
7.7
4.7
3.0
1.9
.9
.4
.07
100
i " Vaiuiicion age " may be reckoned to be a hall-year above true age.
(2)
SIMILAR INFORMATION FOR A LARGE DEPOSIT SOCIETY
Valuation age
group
0-20
21-25
26-30
31-35
36-40
41-45
46-50
51-55
56-60
61-65
66-70
71-75
76-80
81-85
86 a n d over
Total
Number
of members
1914
1924
86,707
51,706
57,057
53,975
47,969
30,802
17,497
10,771
5,869
2,732
1,018
323
163
48
13
184,698
86,686
82,891
74,983
73,064
59,357
45,162
26,291
14,296
8,531
4,290
1,661
486
127
50
366,650
662,573
Percentage of total
membership
1914
1924
23.6
14.1
15.6
14.7
13.1
8.4
4.8
2.9
1.6
.7.3
.1
.04
.01
.00
27.9
13.1
12.5
11.3
11.0
9.0
6.8
4.0
2.2
1.3
.6
.2
.07
.02
.01
100
100
GREAT BRITAIN
RELATION
TO TOTAL POPULATION
231
OF VOLUNTARY MEMBERSHIP
INSURED AGAINST SICKNESS
1913
1924
12.8 per cent.
13.5 percent.
COMPULSORY
MEMBERSHIP
The total compulsory membership of branchless friendly societies
and of affiliated orders in 1920 was 6,741,000.
NUMBER OF MEMBERS BOTH VOLUNTARILY AND
GOMPULSORILY
INSURED
There is no means of arriving at even an approximate estimate
of the number of persons who are insured at the same time voluntarily and compulsorily. Information is, however, available for one
of the largest societies to the effect that in 1923 269,000 out of a
voluntary membership of 743,000 were insured as voluntary
members only, and 402,000 out of a State membership of 885,000
were insured as State members only. Thus nearly 500,000 were
insured both compulsorily and voluntarily by that society.
§ 4. — Benefits
It has been seen above that the purposes for which friendly
societies may be registered include the provision of sickness, invalidity, old-age, and funeral benefits, and benefits for dependants
and survivors. Sickness, invalidity, and death, however, are the
only risks insured against by the vast majority of societies, including all important types, except death and burial societies, which
provide death benefit only. In 1910 nearly all the affiliated orders
and 5,230 out of 5,972 branchless societies in England and Wales
undertook sickness insurance.
The rate of benefit which may be paid by any society is limited
by law: if an annuity, it must not exceed £52, and if a lump sum
£300. Moreover, no person insuring himself in more than one
society may claim aggregate benefits exceeding these limits. To
guard against abuses arising from the assurance of infant lives,
the amount payable on the death of a child under the ages of 3,
6, or 10 years is limited to £6, £10 and £15, and may not be paid
except to the child's parents.
Information regarding the conditions for the receipt of the
/
232
VOLUNTARY SICKNESS INSURANCE
different benefits and the amounts and duration of benefits is
very scanty. The rules of the societies are so various that it is
not possible to generalise concerning them.
SICKNESS BENEFIT •
Sickness benefit generally takes the form of a weekly allowance
which is generally reduced in amount at the end of a certain period.
Thus, a benefit of £1 a week for 26 weeks might be followed by 10s. a
week for another 26 weeks, and thereafter 5s. a week indefinitely.
DEATH BENEFIT
Death benefits are payable on the death of a member, his wife or
children, and are usually of fixed amount. They may either be
intended to cover the usual funeral expenses or be large enough
to be considered as life assurance benefits. Statistics of death
benefits refer only to lump sum payments and not to allowances
to survivors.
OTHER BENEFITS
The benefits provided by friendly societies other than for sickness
and death are not separately distinguished in the published statistics: they are simply grouped as "other benefits". This group
includes the surplus distributed by dividing societies as dividend,
the sums withdrawn by members of deposit societies, and the cost
of medical aid, old-age allowances, annuities, accident relief,
widows', and orphans' allowances, and in Jewish societies benefit
during confined mourning.
STATISTICS OF BENEFITS
1910
Type of society
Affiliated orders
Sickness
Sickness and unemployment
Deposit
Dividing
Juvenile
Shop clubs
Total
1
2
3
Sickness
Sums at death Other benefits
£
£
2,197,098
1,177,977
486,795
215,184
163,714
90,690
19,452
6,277
16,124
30,862
2,371
924
3,655,208
752,260
Not separated.
Includes £158,324 deposits withdrawn.
Includes £211,426 divided among members.
£
419,350
237,725
30,471 1
230,351 2s
236,584
11,158
3,289
1,168,928
233
GREAT BRITAIN
1913
Type of society
Affiliated orders
Sickness
Sickness and unemployment
Deposit
Dividing
Juvenile
Shop clubs
Sickness
Sums at death
Other benefits
£
1
£
1
£
Particulars not available.
1,191,736
211,536
202,094
10,508
3,183
23,262
250,807
22,165
323,119
138,828
41,006
279,858
11,080
1,515
11,836
2,960
357
984
Total not available.
1
2
i Includes deposits withdrawn.
2
Includes amounts divided among members.
1924
Type or society
Sickness
£
Affiliated orders
Sickness
Sickness and unemployment
Deposits
Dividing
Juvenile
Shop clubs
' Total
2,499,220
1,089,822
9,189
517,831
193,587
8,593
1,753
4,319,995
Sums at death Other benefits
£
597,867
251,554
5,332
56,067 1
76,187
2,199
286
989,492
£
322,530
272,705
34,596
788,863 32
443,260
23,113
578
1,885,645
i Deposits repaid at death are included as " Other benefits " not as " Sums at death ".
2 Includes £542,425 deposits withdrawn.
3
Includes £400,513 divided among members.
It is not possible, from figures of total cost which relate to persons
of all ages, to form any sound conclusion as to whether the cost of
sickness benefit is on the whole increasing or decreasing. At each
valuation, however, the experience of a society is examined in
comparison with the experience of a large body of members (usually
the whole membership of a large order). Where successive valuations are made on the basis of the same experience, and no alteration
of benefits has been made, a comparison of the successive results
definitely discloses the extent of the improvement or otherwise.
This condition only obtains in a comparatively small proportion of
societies and branches, but the following figures relating to 157
societies with about 52,000 members, and fulfilling the above
conditions, may be taken as typical and form the best evidence on
the subject at present available :
234
VOLUNTARY SICKNESS INSURANCE
" Actual " relates to the cost of sickness in the society under
examination.
" Expected " is the cost on the basis of the rate of claim in some
large order.
Cost of sickness
claims
Five years ended
Actual
1
Expected
1
Percentage
of actual
to expected
claims
£
£
1911 or 1912
1916 or 1917
1921 or 1922
106,637
124,573
104,745
104,779
124,094
127,689
1913
1918
1923
37,587
34,744
34,366
33,368
32,774
33,713
82
113
106
102
1914
1919
1924
89,704
74,802
77,130
92,902
89,681
95,925
97
83
80
102
100
It is known that during the war and immediately afterwards the
claims for sickness benefit were exceptionally light, probably owing
to a large extent to the high wages and low unemployment rates
then prevailing.
The figures in the table slightly overstate the benefit to the
societies of the lower cost of sickness, since the improved vitality of
the population as a whole results in a larger number of members
surviving to later ages when sickness claims are naturally heavy.
When the period covered by the experience is short, however, the
error so introduced is only slight.
MEDICAL AID
The provision of medical aid by friendly societies is now on a
smaller scale than before the introduction of compulsory insurance,
since the majority of those who received medical aid in virtue of
their voluntary insurance are now entitled to it as State-insured
persons.
Two alternative methods of organising medical service are open
to a friendly society: either it may contract with a medical practitioner working part time to treat its members at a fixed rate per
head of membership (at present about 10s.-12s. a year), or it may,
in conjunction with other societies, establish a medical institute,
i.e. a building where one or more practitioners, a dispenser and a
235
GREAT BRITAIN
nurse are employed full time to treat the persons contributing to the
institute.
Medical aid is still provided by many societies and notably by
juvenile societies and medical societies for persons who are not liable
to compulsory insurance. To some extent the medical institutes
provide medical aid for State-insured persons, being reimbursed
for their expenditure on such persons out of national health insurance funds. There are numerous convalescent homes available
for the use of members which are either owned by societies or
supported by their subscriptions.
The number of friendly societies providing medical aid is not
known, nor is the number of members entitled to this benefit.
Membership of Medical Societies
The membership of medical socieities, i.e. societies which provide medical benefit only, and their expenditure on benefit, fell
by half at the introduction of compulsory insurance. Nevertheless,
they have been able to maintain their strength since then without
further diminution.
Year
Membership of medical
societies
Expenditure on
medical aid
1910
1913
1924
329,450
138,578
138,380
55,106
33,587
117,502
£
§ 5. — Administration
The method of government of friendly societies is not prescribed
in detail by the law, but, as has already been stated, the rules must
provide for the holding of meetings, the right of voting, the manner
of making rules, the appointment and removal of the committee
of management, the treasurer and other officers and the trustees.
It is clear, therefore, that the machinery of a friendly society consists of: firstly, a general meeting either of members or of delegates
elected by members ; secondly, a committee of management elected
by the general meeting ; thirdly, a treasurer, secretary and auditors,
236
VOLUNTARY SICKNESS INSURANCE
and, finally, one or more trustees who must be appointed by the
general meeting and whose function is to hold all the property
of the society for the benefit of the members.
The constitution of a branch is generally similar to that of a
branchless society. The central body of an affiliated order is
composed in the manner directed by the rules. In some cases the
general meeting of the delegates forms the central body and in
others a committee of management consisting only of certain
officers.
The work of administration comprises the collection of contributions and the awarding of benefits, the keeping of accounts,
the investment of funds and the settlement of disputes.
STATISTICS OF COST OF ADMINISTRATION
AVERAGE COST OF ADMINISTRATION PER MEMBER IN 1 9 1 0 AND 1 9 2 4
Average cost
per member
Absolutely
Type of society
Orders and
branches
Sickness
Sickness and
unemployment
Deposit
Dividing
Juvenile
Shop clubs
Total
Cost as per cent.
of contributions
1910
1924
1910
1924
£
£
s. d.
s.
d.
525,245
178,900
705,849
247,756
3 9
2 10
4
4
11,878
72,024
35,658
12,122
290
25,057
240,984
66,140
13,640
60
836,117 1,299,486
6
3
2
1
0
—
5
9
5
7
5
1910
1924
6
7
15.1
10.3
20.3
12.7
12 10
4 8
3 2
1 11
0 4
22.0
11.5
9.2
23.2
2.8
' 37.3
12.1
8.3
28.7
1.2
—
—
—
RELATIONS BETWEEN F R I E N D L Y SOCIETIES
The law does not envisage the creation of federations of societies
other than those which are in the form of affiliated orders; but
these, it must be noted, have originated not in the union of previously
existing societies but in the expansion of a single society over a
•wide area, whereby it became necessary to set up branches.
Apart from the affiliated orders there are federations of friendly
societies concerned with the protection of the interests of the
GREAT BRITAIN
237
particular class of society federated, but not with the provision of
benefits. The most important of them is the National Association
of Registered Friendly Societies, to which fifty-four societies
belong.
§ 6. — Financial Resources
The revenue of friendly societies consists mainly of the voluntary
contributions of members together with interest on the funds
accumulated therefrom (see tables on pages 223-224). So far as
voluntary insurance is concerned no contributions whatever are
received from public funds. Registered societies derive a benefit from
exemption from income tax on the interest on investments, but it
is only in years when the rate of tax is high that this is considerable.
In some societies a little further income is received by way of
charitable donations and honorary subscriptions; formerly when a
larger proportion of the insurance was undertaken by small village
societies receipts from this source were much larger than they
are at present, the local gentry who were interested in the welfare
of the members of a society being much more directly concerned
than they can be with the large societies which at present undertake
most of the insurance. A small income is also derived from fines
for infraction of rules.
In the sickness benefit societies (and the sickness and unemployment societies) the sufficiency of the future contributions, together
with the accumulated past contributions (funds), to provide the
benefits promised in respect of all existing members is tested at
least once in every five years by an actuarial valuation. The
society may either appoint an actuary to make the valuation or
send to the Registrar the materials for making the valuation. In
the latter event, which very seldom occurs, the Registrar appoints
an actuary to make the valuation and communicates the result
to the society. In the actuary's report on his valuation, the society
receives expert advice as to its future financial policy.
The following table shows the combined results of the latest
valuations of all societies in the classes affected, and may be taken
as substantially representing the general position of these societies
as at the end of 1924, although actually some valuations are
received each year. Similar figures for previous years are not
available.
238
VOLUNTARY SICKNESS INSURANCE
LATEST VALUATIONS COMPLETED BEFORE THE END OF 1 9 2 5
Type
of
society
Number
of
valuations
Number
of
members
Present
value of
benefits
Affiliated orders 1
Sickness benefit
Sickness and
unemployment
13,584
1,181
2,631,481
1,145,007
69,517,206
38,673,855
18
37,109
942,447
96,239
7,302
Total
14,783
3,813,597 109,133,508
7,159,463
6,254,965
Surplus
Deficiency
£
£
£
1
6,102,573 4,295,830
960,651 1,951,833
Including a few small juvenile, etc., societies.
On the whole there is a small surplus of funds and the members
therefore have reasonable security for the benefits promised to
them. It should be remembered, however, that, except in the large
orders, the surpluses cannot be set off against the deficiencies,
and the societies in deficiency must find their own remedies or be
prepared for the consequences of not doing so. In the large orders
branches are usually valued individually, and a small portion of
each valuation surplus is collected by the order to form a fund
for relieving branches seriously in deficiency. When the valuation
of a society discloses a serious deficiency, the actuary usually
suggests what reduction of benefits or increase of contributions,
or both, would be necessary to remove the deficiency, and in a
large proportion of cases these alterations are made without delay.
Similarly, when the valuation shows a surplus, the benefits may be
increased or the contribution rates decreased, but there is a natural
tendency to preserve intact a reasonable proportion of a valuation
surplus to provide a margin of reserve against possible future
adverse experience.
The Registrar cannot force a society or branch to alter its rates
of contribution or benefit, but he may upon the application of
one-fifth of the members, or a smaller proportion in the case of
large societies, investigate the affairs of a society. If the rates of
contribution are found to be insufficient, the Registrar may decide
to dissolve the society immediately, or he may first give it the
opportunity of amending its rules.
In the deposit societies the member's security is of a different
nature. In these societies the contributions are usually much
higher than in the sickness societies, and only a part of the cost
of sickness benefit is chargeable to the mutual fund, so that, although
the balance of unexpended contributions is each year transferred
GREAT BRITAIN
239
to individual accounts, only in a year of heavy sickness payments
in which the number of new entrants is small in comparison with
the size of the society is an actual deficit likely to be experienced
in the mutual sickness fund. When such a deficit is incurred, it is
met by charges on the individual accounts of the members. In the
large deposit societies, funeral benefits are usually separately
insured in a mutual accumulative fund, which is subject to valuation
every five years.
In the dividing societies the contributions are also usually
higher than in the sickness benefit societies. In very few of these
societies, however, is any appreciable amount of reserve kept in
hand after division, and practically the whole cost of sickness
benefit in any one year consequently has to be met from the contributions of the same year. Unless therefore, the membership is
maintained by new entrants to replace members who die or otherwise leave the society, the relative age of the members tends to
increase, and, owing to the consequent increasing cost of sickness,
the remaining members are compelled to increase their contributions
or disband the society. In a few dividing societies a separate
funeral fund on an accumulative basis is kept.
In juvenile societies sickness insurance is of a temporary character,
and the rates of contribution in proportion to the benefits granted
are usually so high that no question of the stability of a society
is likely to arise. Moreover, the term of membership being usually
quite short, the failure of a society would not inflict any serious
loss on any one member.
Shop clubs are usually of an accumulative character and subject
to valuation, but from their nature it is obvious that their financial
resources are usually bound up with those of the firms of employers
concerned.
In societies with mutual accumulative funds the sufficiency of the
funds to meet the object for which they have been collected determines a society's stability, and the manner of investment of those
funds becomes a matter of great importance. In registered
friendly societies funds may be invested by the trustees in certain
types of securities prescribed by law, viz :
Post Office Savings Bank or trustee savings banks.
Government stock.
National Debt Commissioners.
Land and erection of buildings.
Municipal and Colonial stocks.
British and Indian railways.
240
VOLUNTARY SICKNESS INSURANCE
No information is available for years later than 1910 on the actual
distribution-of friendly society funds among these various forms of
investment, and it is known that the proportions have been much
altered since that date largely on account of the various War Loans
since issued. During the present housing shortage large sums have
also been advanced to members, on security, to enable them to
purchase houses for their own occupation.
In some of the affiliated orders investment funds are maintained
either by the order or districts in order to avoid the difficulty of
investing in small amounts.
No statistics are available to show the interest earned on the
investments of all friendly societies, but in large sickness benefit
societies, holding between them £10,759,320 of the total of funds of
£18,088,337, the average earnings in 1924 amounted to 4 3 / 4 per cent.,
and this is probably very close to the amount earned by the affiliated
orders as well as the remainder of the sickness benefit societies.
It is usual in making valuations to assume a slightly lower rate of
interest than the current yield. The following figures show the
proportion of the latest valuations of sickness benefit societies made
at various rates of interest.
Rate of interest
nse.r]
2%
3
3Í4
3!/ 2
4
4%
Percentage of total number
of valuations
3
25
1
33
37
_ 1
100
The average rate of interest assumed was, therefore, slightly in
excess of 3 % per cent, per annum.
§ 7. — State Financial Supervision
The supervision exercised by the State, in the person of the
Registrar, over the conduct of the affairs of friendly societies and
branches is designed simply to secure honesty of administration :
the imposition of actuarially sound methods of working is not
within the Registrar's competence. In practice, however, the
questions necessarily arising out of the registration of rules and
filing of accounts and valuations are conducive to a much closer
supervision then seems involved at first sight.
GREAT
BRITAIN
241
RULES
| f All rules are examined by the Registrar in order to see t h a t in all
respects they conform with the law. Financial provisions are
examined by an actuary, and societies proposing to register unsound
rates of contributions and benefits are warned of their danger
before registry of the rules. The Act provides that tables of
contributions for annuities-certain must be certified by an
actuary approved by the Treasury before registry, but otherwise the
Registrar has no power to insist on a society promising reasonable
benefits in return for the contributions it proposes to collect.
Advice given by the Registrar is, however, usually followed.
LIMITATION OF B B N E F I T S
No friendly society may contract for t h e assurance of an annuity
exceeding £52 a year or a lump sum exceeding £300.
ACCOUNTS, ANNUAL A U D I T , AND R E T U R N S
The rules of a society or branch must provide for t h e keeping
of accounts, but no form is prescribed. Societies are, however,
bound to keep the accounts of their private and State insurance
business altogether distinct. Moreover, separate accounts must
be kept of all contributions received in respect of any particular
benefit or group of benefits for which a separate contribution is
paid. One of the principal objects of this arrangement is to
facilitate the discovery of errors in the rates of contributions for
different benefits.
A society is also bound to keep a separate account of administration expenditure and of the income provided for it.
A registered society (but not a branch) may also make loans to
its members (but not to strangers) out of a separate loan fund
formed by contributions or deposits of its members, on their
personal security with or without sureties.
The distinction between " separate accounts " and " separate
funds " should be observed, as it is important.
The accounts of a society or branch must be audited at least
once a year. The employment of a professional auditor is optional,
16
242
VOLUNTARY SICKNESS INSURANCE
but is strongly recommended by the Registrar. A society must send
its accounts as audited, and a society with branches must send the
accounts of its branches, to the Registrar every year. The accounts
must be rendered in the prescribed form. They are examined by
the Registrar, and if found unsatisfactory explanations are called
for and must be furnished. If a society fails to send in its annual
return or the return is falsified, the society or the officer who is
responsible under the rules is liable to be prosecuted. The Registrar
detects every year a certain number of cases of embezzlement and
misapplication of funds. Every registered society and branch
must keep a copy of its last annual balance sheet and of the last
quinquennial valuation, together with any special report of the
auditors, always hung up in a conspicuous place at its registered
offiee.
VALUATION
Every society and branch is bound to furnish a valuation unless
it obtains exemption from the Registrar. Exemption is only
granted when the operations of the society render a valuation
unsuitable, e.g. in the case of dividing or deposit funds, when the
assurance is of a temporary nature, e.g. in the case of juvenile
societies, or when the number of members is considered too small
for application of the law of averages. Public valuers are appointed
t y the Treasury, and may be employed by the societies at specified
fees. Although their employment is not compulsory, the majority
of the valuations are entrusted to them.
§ 8. — Settlement of Disputes
The rules of every society and branch must provide for the settlement of disputes between itself and a member or an officer, and if
it is a branch between itself and another branch or the central
body. The procedure is left entirely to the determination of the
society or branch. The decision arrived at in accordance with the
rules is conclusive and not subject to appeal and is enforceable by a
county court.
Recourse may, however, be had to other jurisdictions in certain
cases. In the first place the rules may simply provide that disputes
shall be referred to a court of summary jurisdiction; secondly,
GREAT BRITAIN
243
in all cases, unless the rules expressly forbid it, the parties may by
mutual consent refer the disputes to the Registrar ; finally, a dispute
may be brought before the ordinary courts in case the society's
procedure is ineffective. Thus, if the rules do not contain any
direction as to disputes, or no decision is given by the society's
tribunal within 40 days after a member has applied for it, he may
apply to a county court or a court of summary Jurisdiction to
hear and determine the matter.
244
VOLUNTARY SICKNESS INSURANCE
TRADE UNIONS
Although the principal objects of workers' trade unions are the
regulation of relations between workmen and masters and the
imposing of restrictive conditions on the conduct of business, yet
they may undertake, as a subsidiary function, the provision of
benefits in various emergencies. They therefore fall to be included
among the voluntary social insurance institutions of Great Britain.
Since, however, their legal status is largely determined by their
industrial activities, which are outside the scope of this study, it
can only receive mention in so far as the provision of benefits is
concerned; the facts and statistics of the industrial and political
work of trade unions are disregarded. In many respects, and
especially as insurance institutions, trade unions are treated by
the law somewhat like friendly societies.
§ 1. — Registration
For trade unions as for friendly societies registration is optional.
Recourse is had to the same authority: the Registrar of Friendly
Societies. The privileges which are acquired by a trade union in
consequence of registration are generally similar to those conferred
upon registered friendly societies, e.g. the holding of land and,
in unions restricting their provident benefits within the limits of
those defined by the Friendly Societies Act, exemption fromin come
tax (though not stamp duty).
Trade unions applying for registration must state their objects
precisely, submit their rules (which in the matters of administrative
machinery and holding of property resemble those of friendly
societies) and must have a minimum membership of seven.
A registered union is obliged to send to the Registrar an
annual return of its assets, liabilities, income, and expenditure.
There is no definition of a branch in trade union legislation,
nor is there any requirement that a branch of a trade union should
be registered. It is open to branches of trade unions to apply for
registration as separate unions if they so desire.
245
GREAT BRITAIN
STATISTICS
Registered and Unregistered Trade Unions
Statistics are collected with respect to registered unions by the
Registrar of Friendly Societies and -with respect to unregistered
unions by the Ministry of Labour ; only for the former class, however,
is information concerning benefits and finance available.
NUMBER AND MEMBERSHIP OF REGISTERED
UNIONS AND O ï
ALL
UNIONS
Year
(end
of)
1913
1923
1924
1925
All unions
Registered unions i
Number oí unions
reporting 2
Membership
(thousands)
Number of
unions
603
583
578
578
3,220
4,414
4,501
4,492
1,269
1,163
1,159
1,144
Membership
(thousands)
4,135
5,413
5,534
5,522 '
i Including employers' associations which numbered 68 in 1913 and 91 in 1925, and had
a membership of 15,000 In 1913 and 44,000 in 1925.
» Excluding Irish unions.
From the above table it is apparent that four-fifths of the whole
membership belongs to registered unions and that the unregistered
unions are generally small.
§ 2. •— Membership
The only condition of admission which is prescribed by law is
that a member must have reached the age of 16. Trade unions
exist for almost every industry, and their membership usually
consists solely of wage-earners of both sexes.
246
VOLUNTARY SICKNESS INSURANCE
STATISTICS
DISTRIBUTION
OF
MEMBERSHIP
BY
INDUSTRY
IN
Registered
unions i
(in thousands)
Industry
Mining, quarrying
Metals, machines, implements, conveyances
Textiles
Clothing
Papermaking, printing
Building, decorating
Transport
Commerce, finance
Agriculture, horticulture
Woodworking, furnishing
Other manufactures
National and local government
/>
Teaching
Miscellaneous
)
General labour
AH
unions
(in thousands)
816
938
665
244
148
145
332
644
219
682
626
168
207
334
1,048
222
47
67
83
334
196
82
5,522
488
1,235
1
\
4,492
Total
1925
i Including employers' associations, which had a membership of 44,000.
DISTRIBUTION
OF
MEMBERSHIP
Sex
Male
Female
Total
BY
SEX
IN
1923
Registered
unions
(in thousands)
All
unions
(in thousands)
4,000 (approx.)
400
4,597
816
4,400
5,413
The registered membership is equivalent to 27 per cent and the
total membership to 33 per cent of the employed population aged
16 and upwards in 1921.
§ 3. — Benefits
The benefits granted by trade unions are of two principal types :
Trade benefits.
Friendly benefits.
247
GREAT BRITAIN
Trade benefits consist on the one hand of unemployment benefit
and assistance to travel in search of work or to emigrate, and on the
other hand of dispute benefit, payable in case of strikes and lockouts.
Friendly benefits consist mainly of sickness and accident benefit,
funeral benefit, and also (but of little importance save in a few
instances) superannuation benefit.
Trade unions may be approved societies for the purpose of
National Health Insurance, and in that capacity they administer
the State sickness and invalidity benefits for their members.
Further, if they pay unemployment to their members in virtue
of private or voluntary insurance, they may also at the same time
administer the State unemployment benefit, which is paid out
simultaneously. Owing to the depletion of the funds of unions
through the long industrial depression, many of them have been
obliged to discontinue the provision of private unemployment
benefit and therewith the administration of the State benefit.
No information at all is available concerning the benefits
provided by unregistered unions, and from the Registrar's reports
only statistical information concerning the benefits of registered
unions. Trade unions have not hitherto been required to submit
their benefit funds to valuation, and as a general rule they
do not rely on the maintenance of separate funds or the
accumulation of adequate reserves to ensure their stability.
STATISTICS
EXPENDITURE ON BENEFITS IN 1913, 1924 AND 1925
1924
1913
Benefit
Total
Total
Total
Per
Per
Per
(thous(thous(thousands of £) member ands of £) member ands of £) member
£
£
Unemployment, etc.
Dispute
Sick a n d accident
Funeral
Other (including
superannuation^
1925
£
507
446
704
149
0.18
0.16
0.24
0.05
3,139
1,1 88
819
304
0.71
.24
0.19
0.07
4,524
313
789
318
1.02
0.07
0.18
0.07
520
0.18
984
0.22
1,053
0.24
2,326
0.81
6,437
1.46
7,000
1.57
248
VOLUNTARY SICKNESS INSURANCE
§ 4. — Administration
The administration of trade unions is organised in a manner
analogous to that of friendly societies, being conducted by means
of a general meeting, a committee of management, secretary,
treasurer and trustees. Some of the unions have branches, but as
a rule the conditions for the receipt of benefit and its amount are
decided by the union as a whole, the benefits being paid out of a
central fund.
There are national federations in connection with the larger
industries, and one inter-trade federation — the General Federation
of Trade Unions, composed of 120 unions having an aggregate
membership of 711,000. This organisation and the largest trade
union federations are unregistered. Certain federations not only
serve to strengthen the bargaining power of their constituents but
also accumulate funds for the provision of benefits, e.g. dispute
pay, especially in the textile industry. •
STATISTICS
Cost of Administration
The cost of administration varies widely and also represents
varying proportions of the total expenditure or income according
to the number and value of the benefits provided.
COST OF ADMINISTRATION ABSOLUTELY, AS PERCENTAGE OF TOTAL
E X P E N D I T U R E , AND AS AMOUNT PER MEMBER IN 1 9 1 3 , 1 9 2 4
AND 1925
Year
Absolute
(in thousands of £)
Per cent, of total
expenditure
Amount per
member
£
1913
1924
1925
1,120
3,232
3,196
31
31
30
.39
.73
.72
249
GREAT BRITAIN
EXPENDITURE
UNDER VARIOUS HEADS IN 1 9 1 3 , 1 9 2 4 , AND
(IN THOUSANDS OF
Year
Trade
beneflts
Friendly
beneflts
1913
1924
1925
954
4,327
4,840
1,143
2,110
2,160
AVERAGE
ANNUAL
Political
fund
CONTRIBUTION
AND
Administration
Grants to
federations
PER
Total
1,120
3,232
3,196
206
668
352
7
215
114
1925
£)
MEMBER
IN
3,660
10,552
10,662
1913,
1924
1925
£
1913
1924
1925
1.42
1.84
1.49
TOTAL FUNDS ABSOLUTELY AND PER
MEMBER
1924 AND 1 9 2 5
AT END OF 1 9 1 3 ,
1
Year
Absolutely
(£1,000)
Amount per
member
1913
1924
1925
6,441
11,434
12.556
2.02
2.56
2.82
1
The figures exclude the funds of employers' associations, which amounted in 1913 to
£36,000, and in 1925 to £160,000.
NORTHERN IRELAND
The following figures are taken from the reports of the Registrar
of Friendly Societies for Northern Ireland for the year ended
31 December 1926.
In respect of income and expenditure no adjustments have been
made to eliminate transfers between branches and districts.
F R I E N D L Y SOCIETIES
MEMBERSHIP
Number of members
1921
12 societies
128 branches
4,670
11,075
1922
1923
1924
1925
4,530
10,333
6,904
10,448
6,431
9,991
6,389
12,045
BENEFIT FUNDS
(a)
12 societies
128 branches
8 districts
Income
Contributions
oí members
ana levies
during 1925
Interest
on
investments
Other
income
Total
income
1925
£
11,745
10,962
2,550
£
8,759
1,771
1,577
£
5,699
1,300
50
£
26,203
14,033
4,177
NORTHERN
(b)
12 societies
128 branches
8 districts
251
IRELAND
Expenditure
Sickness
pay
Sums at
death
£
134
6883
1193
£
884
1,454
1,473
Annuities Miscellaneous
to
benefits
and
other
dependants
expenand
diture
pensions
£
£
9,814
1,976
225
4,946 1
•10
200
Total
expenditure
1925
£
12,808
13,508
2,876
i Includes £2,251 for medical aid, £765 for distress benellt, and £1,568 for levies to
district and central funds.
MANAGEMENT FUNDS
(a)
Contributions
of members
and levies
during 1925
Income
Interest
on
investments
£
1,307
3,743
777
12 societies
128 branches
8 districts
(b)
Salaries
and
wages
etc.
£
457
1,386
369
12 societies
128 branches
8 districts
£
87
114
153
Other
income
Total
income
1925
£
591
1,438
268
£
1,985
5,295
1,198
OtheT
expenses
Total
expenditure
1925
£
773
3,266 1
663
£
1,613
5,461
1,268
Expenditure
Rent,
printing
postages,
stationery,
etc.
£
383
809
236
i Includes £608 for medical attendance and medicine and £1,003 for payments to
district and central funds.
LIABILITIES AND ASSETS AS AT 3 1 DECEMBER 1 9 2 5
Assets
Liabilities
12 societies
128 branches
8 districts
Amount
of
benefit
and
reserve
funds
£
231,834
51,126
38,461
Amount
Other
of
manage- liabilities
ment
funds
£
£
2,059
576
1,938
2,515
63 11,087
Investments
Investments
in
Governin
ment
other
securities
securities
Other
assets
Deficiencies in
benefit
and
management
funds
£
209,614
31,836
35,962
£
2,802
3,426
3,095
£
66
810 »
115
£
21,987
19,507
10,439
i Includes £9 representing deficiencies in funds administered by district.
Statistics relating to valuations are not available.
252
VOLUNTARY SICKNESS INSURANCE
TRADE UNIONS
GENERAL STATISTICAL TABLE FOR 1 9 2 5
Number of unions furnishing
returns
Membership at 31 December
1925: Males
Membership at 31 December
1925: Females
Income during year:
From members
other trade unions
other sources
Expenditure during year:
Unemployment, travelling
and emigration benefit
Dispute benefit
Sickness and accident
benefit
Funeral benefit
Superannuation benefit
Other benefits
To other trade unions and
federations
Management expenses
Other expenses
Funds and liabilities,
31 December 1925:
Funds
Other Liabilities
Assets at 31 December 1925:
Cash in hand
Cash at bank
Investments in Government securities
Investments in municipal
securities
Other investments
Other assets
Textile
unions
Other
unions
All
unions
10
8
18
3,114
3,336
6,450
6,834
1,291
8,125
£
6,956
106
1,009
£
6,374
143
322
£
13,330
249
1,331
2,414
26
1,286
16
3,700
42
726
731
805
468
1,296
555
322
125
2,022
1,286
1,127
593
187
3,219
—
188
2,015
—
375
5,234
,—
25,892
—
9,880
1
35,772
5
495
12,693
239
6,185
734
18,878
6,488
2,017
8,505
5,800
384
33
1,410
—
34
7,210
384
67
IRISH FREE STATE
FRIENDLY SOCIETIES
The legislation in force is the British Friendly Societies Act,
1896. The friendly society movement has little importance in the
Irish Free State, except perhaps in Dublin.
Funeral benefit is the principal benefit granted. The most
common type of society is the dividing society, which divides its
balance among its members at the end of each year.
Statistics
No statistics relating to the Irish Free State have yet been
published. However, in the Provinces of Ireland which now constitute the Free State, there were in 1913, 136 branchless societies,
of which 103, having four-fifths of the total membership, were
dividing societies. The total number of members of branchless
societies was 50,946, of whom 48,660 were in Dublin; the female
membership amounted to 16,157.
In 1910 there were, in the area now constituting the Free State,
100 branches of affiliated orders with a membership of 7,386. The
total number of members of friendly societies and branches before
the war in the area of the present Free State was therefore about
58,000, or less than 2 per cent of the population.
INDIA'
Insurance for the workers against physical risks is very little
developed in India at the present time. At least, the official information on the subject would lead to this conclusion, although this
information is admittedly incomplete. The only institutions are
21 trade unions and works funds, having a total membership of
less than 100,000.
The movement is strongest among railway workers, who have
seven funds with a membership of 27,500, and postal workers,
who have four funds with a membership of 5,200; two general
labour unions have a total membership of 23,000. The principal
benefit is a lump sum payable at death or on retirement.
The scale of these benefits may be illustrated by a few examples.
Thus the Bombay Postal Union, with 1,250 members, grants
50 rupees in case of death, and the Bombay Presidency Postmen
and Lower Grade Staff Union in the course of six years has paid
2,000 rupees in 74 cases of death or retirement, i.e. about 27 rupees
per case. The members contributions constitute the sole source
of income of all the funds except two, to which the employers
also contribute.
1
Information supplied by the Government of India.
ITALY
Acts and Regulations
Act No. 1037, dated 5 June 1850 (sole section, relating to associations whose
objects are of a moral nature).
Civil Code, section 2 (Act dated 23 June 1854).
Act No. 3828, dated 15 April 1886, relating to State recognition of workers'
mutual-aid funds.
Royal Decree, dated 4 January 1920, establishing the conditions to be
fulfilled by mutual-aid funds desirous of obtaining a State subvention ( Gazzetta
Ufiiciale, No. 19, 24 January 1920).
Reports
FEDERAZIONE ITALIANA DELLE SociETA DI
le Società di mutuo Soccorso. Milan, 1909.
MUTUO
SoccoRso. Manuale per
INTRODUCTION
Although the need for some system of aid in case of sickness,
premature invalidity, or death had been sharply felt since the middle
of the nineteenth century, more especially among the populations
of Lombardy and Venetia, it was only after the accomplishment of
national unity (in 1870) that it became possible to establish a legal
basis for mutual-aid institutions.
An early Bill, drafted as a result of the deliberations of the
Consultative Commission of the Welfare and Labour Institute, was
submitted to Parliament on 9 June 1877. This Bill having been
thrown out, Mr. Miceli took the opportunity in 1880 of introducing
another, which received the approval of the Senate. It was,
however, subsequently withdrawn, when a third Bill (that of
Mr. Berti, a Member of the Chamber of Deputies) wassubmitted.
The latter, introduced in 1883, was passed by t h e Chambers after
256
VOLUNTARY SICKNESS INSURANCE
amendment in various respects, when it finally became, and has
since remained, the fundamental Act (No. 3818 of 15 April 1886)
relating to the legal personality of workers' mutual-aid societies.
There are no official periodical reports in existence on Italian
mutual-aid operations. An official enquiry on the subject was
undertaken in 1926; the results of this, however, have not yet been
published. Consequently, the present monograph has had to be
limited to a description of the legislative provisions relating to the
organisation of funds, together with a few statistics.
ITALY
257
CHAPTER I
INSURANCE INSTITUTIONS AND INSURED PERSONS
§ 1. — Legal Provisions, Formation and Character of the Various Kinds
of Fund^
Mutual-aid societies of three different kinds may be constituted
or may exist :
(a) Societies existing de facto, but having no legal personality.
(b) Societies recognised by Royal Decree, in accordance with
the Civil Code.
(c) Workers' societies set up in accordance with the provisions
of the Act of 15 April 1886 relating to the legal recognition
of mutual-aid societies.
SOCIETIES EXISTING " DE FACTO " , BUT HAVING NO
LEGAL PERSONALITY
To constitute a society de facto on the basis of the right of association necessitates fewer formalities than any other kind. The working of a society so constituted is, moreover, free of any supervision
on the part of the authorities; and it enjoys complete liberty of
action. There are simple rules to which foundation members are
required to append their signature, and to which all new members
must adhere; and by these rules relations are established between
the various members and the society to which they are affiliated.
The rules are drafted upon unstamped paper and are registered
free of charge; and this is the only legal formality which the new
society is called upon to fulfil. It should be pointed out, however,
that a mutual-aid society constituted on these lines may neither
own property, inherit, nor take legal proceedings in its own
name; and the only way in which it can obviate this difficulty is by
17
258
VOLUNTARY SICKNESS INSURANCE
acquiring civil personality and accepting the supervision of the
authorities.
SOCIETIES RECOGNISED IN ACCORDANCE WITH THE
CIVIL CODE
The provisions laid down to regulate the legal position of mutualaid societies recognised by Royal Decree are the same as those
which, in general, apply to all institutions of public utility.
Section 2 of the Civil Code lays down that all legally recognised
institutions whose objects are of a moral nature, and all communes,
provinces, public, civil, and ecclesiastical institutions are to be
considered as legal persons ; they are to enjoy civil rights in accoordance with the law and cusioms observed so far as concerns public
right. These legislative provisions are completed by the sole
section of the Act of 5 June 1850, which may usefully be cited:
Establishments and all institutions having the character of a " moral body ",
whether of an ecclesiastical or of a lay nature, cannot acquire real estate unless
the authority of the Government has previously been obtained. Such
authority is conferred by Royal Decree upon receipt of a favourable opinion
from the Cabinet.
Gifts made between living persons and testamentary dispositions in their
favour are null and void unless ratified by the State as aforesaid.
The procedure to be followed in order to obtain State recognition,
which will have the effect of conferring the right to appear in court,
to possess property, to inherit, etc., is laid down in sections 11 and
12 of the Regulations of 1897 established by the Welfare Committee :
A request for legal recognition must be addressed to the Minister for Agriculture, Industry and Commerce 1 , and must be accompanied by the following
documents:
(1)
A copy of the minutes of the deliberations of the general meeting, with
a note of the special reasons which have decided the society to apply
for legal recognition.
(2) A list of names of members of each category; such list, in the case of
insured members, to indicate their age and the number of years
during which they have been members of the society.
(3) Three copies of the society's rules and internal regulations, with one
copy of the minutes of the general meeting at which the rules at
present in force were approved.
(4) A statement showing the financial position of the society at the time
when the request is submitted with adequate indications regarding
the administration and investment of the society's funds.
(5) A balance sheet for the last period of operation, a statement showing
the position of the society's funds during the last five years, and the
budget for the current period of operation.
(6) Any other information relating to the economic and moral position of
the society, with a report showing that its resources are sufficient
to meet its obligations.
1
Now the Minister for National Economy.
259
ITALY
The Social Welfare Committee is required to give an opinion
upon the request for legal recognition put forward by the society.
State recognition of a mutual-aid society involves an obligation
on the part of the latter to submit to the competent Minister an
annual statement and a properly drawn up quinquennial balance
sheet, together with any statistical information which the said
Minister may see fit to request.
W O R K E R S ' SOCIETIES RECOGNISED IN ACCORDANCE
WITH THE ACT OF 15 A P R I L
1886
As has been shown, the mutual-aid funds of whatever kind m a y
obtain legal personality by Royal Decree; but only the workers'
mutual-aid funds can claim State recognition in accordance with
the Act of 15 April 1886.
In order to arrive at the status of recognised funds, the workers'
mutual-aid societies are required to insure payment of an allowance
to their members in case of sickness, incapacity for work, or old
age; or to come to the assistance of the family of a deceased member
(section 1 of the Act).
Further, mutual-aid societies may collaborate for the purpose of
educating their insured members and members' families ; they may
assist their members to acquire tools, and may undertake any other
task coming within the competence of a welfare institution. I n
such cases, however, the expenditure involved and the means
available to meet it must be specifically mentioned in the annual
budget. With the exception of administrative expenses, the funds
of the society may not be appropriated to any other purposes t h a n
those laid down in the rules b y way of benefits (section 2).
Further, the rules of a mutual-aid society must specify:
(a)
(b)
(c)
the address of the society;
the object for which it is formed ;
the conditions and manner of admission, resignation and
exclusion of members;
(d) the rights and duties of the latter;
(e) the regulations laid down for the investment and administration of the society's funds ;
(/) the procedure to be followed in order to render valid t h e
general meetings, elections and decisions taken;
(g) that minutes must be taken of the general meetings, meetings of executive officials, and sittings of the supervisory
committee;
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(A)
(i)
(/)
VOLUNTARY SICKNESS INSURANCE
the constitution of executive committees and of a supervisory
committee, whose functions and powers shall be duly
indicated;
the persons who are to act as the society's representatives
in legal matters and in dealing with third parties;
any special conditions which may become operative in case of
dissolution of the society, or which may entail modification of the rules (section 3).
The request for registration of a society must be submitted to the
Registration Office of the Civil Court ; it must be accompanied by
a duly authenticated copy of the articles of association and the rules.
The Court, after having ascertained that the conditions laid down
in the Act have been duly complied with, orders the rules to be drawn
up and published in accordance with the conditions and usages
prescribed in section 91 of the Commercial Code. These formalities
accomplished, the society acquires legal personality (section 4).
State recognition confers certain advantages upon a workers'
mutual-aid fund 1. Nevertheless, it will be seen that these privileges, which are very restricted in comparison with the obligations
which recognition makes incumbent upon workers' funds, are
limited to (a) exemption from payment of certain taxes ; {h) the
right to legal assistance in the courts; and (c) in some specific
cases, to a State subvention.
Mutual-aid societies may be freely organised in so far as no legal
provisions exist to the contrary. Their administration rests with
themselves.
The members of the committee or other organ of a society must
be active members. They are the society's mandatories, appointed
on a provisional basis; and they cannot be called upon to furnish
a guarantee unless this is required by a special provision incorporated in t h e rules. They are jointly and severally responsible
for the fulfilment of t h e duties entailed by their mandate, for the
1
(a) Exemption from stamp and registration duty, accorded to cooperative societies by section 228 of the Commercial Code.
(b) Exemption from payment of the tax on insurances, and the movable
property tax, established by section 8 of the sole text (No. 4021) dated 24
August 1877 of the Acts relating to taxation of revenues derived from movable
property.
(c) Assimilation to works of piety in the following respects: (i) legal
assistance, (ii) exemption from stamp and registration duty, and from the
schedule in force relating to legacy duty or taxation of gifts from one living
person to another.
(d) Exemption from sequestration and seizure in respect of sums due and
payable by the society to its members (section 9).
ITALY
261
correctness of statements made in the society's reports, and for the
enforcement of the rules. This responsibility does not attach to
those mandatories who cause their dissent from the opinion of the
majority to be immediately recorded in the minute book and who
at once inform the supervisory officials of the fact, in writing.
Further, administrative officials who, by reason of justifiable
absence, have taken no part in the decision for which the society's
representatives are to be held responsible are considered as being
free of responsibility therefor.
Apart from their civil responsibility, the administrators, managers,
supervisory officials, or liquidators of a mutual-aid society who
have knowingly made false statements concerning the position of
the society or have voluntarily withheld, wholly or partially, facts
relating to the said position in the reports or balance sheets of the
society, or in a report submitted to the general meeting or to the
Court, are liable to a fine of 100 lire, without prejudice to the right
to inflict heavier penalties, as provided for by section 5 of the Penal
Code.
If there is any good reason to suspect the administrators or
supervisory officials of a mutual-aid society registered according
to law of having been guilty of gross irregularity in the performance of their duties, the Civil Court may be notified of the facts by
not less than one-twentieth ol the total number of the society's
members. Should the accusation prove to be well-founded, the
Court proceeds in conformity with the provisions of section 153 of
the Commercial Code (prosecution procedure), except as regards the
guarantee required by the plaintiffs (section 6).
§ 2. — State Supervision
Societies registered under the Act of 15 April 1886 are placed
under State supervision. They are required by this Act to forward
to the competent Minister, through the intermediary of the mayor
(Sindaco) of the commune in which they are established, a copy
of their rules and annual report. They must also communicate to
the Minister any information of a statistical nature which may be
asked for (section 10).
Should a mutual-aid society contravene the provisions of the
Act which relate to the utilisation of its funds (section 2), the
Civil Court, at the request of the Public Prosecutor or of any member
of the society, calls upon the latter to comply with the provisions
of the said section within a period not exceeding fifteen days.
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VOLUNTARY SICKNESS INSURANCE
Should the society fail to take the required steps within the
period stipulated, the Civil Court may summon the society's
representatives and may proceed to order it to be struck off the
register of legally recognised societies.
§ 3. — Expansion of Mutual-Aid Funds
According to the most recent general statistics issued by the
Ministry of Agriculture, Industry and Commerce, there were in
existence, at the end of 1904, 6,259 mutual-aid societies, of which
97.6 per cent, undertook the insurance of their members against
sickness.
Since then, the mutual-aid movement would not seem to have
progressed to any great extent. It is, however, extremely difficult
to form a definite opinion in regard to the matter, in view of the
fact that, since 1905, the official figures relating to mutual-aid
funds cover only the legally recognised societies, and the total of
these is of course much below the number of societies existing de
facto. The number of funds established in accordance with the
provisions of the Civil Code and recognised by Royal Decree was
61 in 1912 and 68 in 1922; that of the workers' societies recognised in
accordance with the Act of 1886 was 2,038in 1912 and 2,314 in 1922.
It will be observed that the information available in regard to the
different local organisations all tends to show that the mutual-aid
movement has aroused varying degrees of interest in different parts
of the country. Vigorous and active in the north, the movement
is much less developed in the central districts ; while in the south
of Italy it may almost be said to be in jeopardy.
The provisional results of the enquiry now being conducted by
the Government show that there existed in 1924 5,909 societies
with a total membership of 1,058,191.
§ 4. •— The Mutual-Aid Movement and Fascism
At first, the mutual-aid funds were grouped in two large national
associations. The first of these, known as the Italian Federation
of Mutual-Aid Societies (Federazione italiana delle Società di mutuo
soccorso), was set up in 1901; and the majority of the funds were
affiliated to it. The sectarian funds, however, were affiliated to the
second national association, the Mutual-Aid and Social Insurance
Confederation. A certain number of societies were unwilling to
ITALY
263
he affiliated to either of the associations referred to; and it was
suggested by the National Association of Go-Operative Associations that the dissenting societies should form a third federation of
their own. This suggestion was not accepted.
The essential task of the Italian Federation of Mutual-Aid
Societies was to spread the practice of sickness insurance. For a
long time the Federation's representatives supported the principle
of voluntary insurance subsidised by the State. Nevertheless, from
the time of the first important demonstration of Italian mutual-aid
principles after the war — i.e. the National Social Welfare Congress,
held at Vicenza, 4-6 December 1920 — onwards, the Federation
abandoned this principle in favour of compulsory sickness insurance,
with the reservation that this should only be applied concurrently
with the mutual-aid system.
After a difficult period from 1920 to 1924, owing partly to the
severity of unemployment which was at that time very widespread
and partly to its political bias, the Federation's membership fell
from 881 funds, with nearly a million insured members, to 208
funds, whose total membership was 94,586. On 14 November 1925
the Federation of Mutual-Aid Societies was formally dissolved.
The mutual-aid societies set up by occupational groups and
affiliated to the Italian Federation of Mutual-Aid Societies (in
particular the Printers' and Lithographers' Federations, the
Federation of Photo-Engravers, and the Federation of Bookbinders
and Paper Workers, etc.) were also dissolved. A complete transformation took place, both from the technical point of view and
from that of organisation, in the mutual-aid funds belonging to
these federations, after which they recommenced operations as
welfare funds attached to, and under the management of, the
Fascist unions. The same position arose in respect of local groups,
such as the Federazione Lombarda Mutua Interne di Milano, the
administrative organs of which were suppressed and replaced by a
commissary. Finally, these groups were incorporated with the
Fascist social movement. The various organisations have now
been re-grouped as a National Institute of Mutual-Aid and Welfare
(Instituto Nazionale délia Mutualité e délia Previdenza), the head
office of which is in Rome. It is attached to the Confederation
of Fascist Corporations.
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VOLUNTARY SICKNESS INSURANCE
CHAPTER II
RISKS COVERED AND BENEFITS PAYABLE
The mutual-aid societies' operations include the insurance of
various risks, more especially those of sickness, maternity, and
invalidity. Some of the institutions also provide assistance for
necessitous aged persons and unemployed workers.
Sickness insurance is, however, the principal branch of activity
of the mutual-aid funds; indeed, the information published in the
Mutual-Aid Societies' Handbook, published by the Federation in
1909, goes to show that at that time 97.6 per cent, of the funds were
undertaking sickness insurance.
The benefits paid by these societies to sick members are almost
always in money, in the shape of a fixed daily allowance. The
payment of benefit in kind (medical attendance and supply of
drugs) is much Jess frequent; it would seem, however, that at the
present time considerable efforts to introduce such benefits are being
made in Fascist mutual-aid circles.
The period during which benefit is payable varies from 60 days
in the case of some funds to 180 days in the case of others. The
latter period was that most frequently adopted in 1909. From
information given in the Handbook referred to above, it would
appear that in the case of a small number of funds, 15.1 per cent.
of the total, there is no limit to the period during which benefit
may be paid.
The figures given, however, which in any case could not be taken
as precise, have of course undergone considerable modification
since then. A large number of the funds have by now been
modernised and have substituted a time-limit for the previous
total benefit limit.
In 1924 the total amount of benefits paid under sickness insurance
was 20,769,329 lire, representing a cost of 19.63 lire per member to
the institutions.
ITALY
265
CHAPTER III
FUND RESOURCES
The resources of the various funds are made up of members'
contributions, employers' contributions, and State subsidies,
together with interest on property, gifts, and legacies.
§ 1. — Members' Contributions
Members' contributions form the principal part of the mutual-aid
societies' income. In 1904, the proportion of this item to total
receipts was 63.30 per cent., representing at that time an average
annual contribution of from 10 to 12 lire per member. Official
information on this point is, however, completely lacking, so that
it is impossible to supply further details.
§ 2. — Employers' Contributions
At the present time, certain undertakings employing large
numbers of workers bear the entire cost of sickness insurance for
their staffs. Regarding the total amount contributed by employers
to the whole of the recognised funds, there are no data available
from which even approximate information could be given.
§ 3. — State Subsidies
The conditions upon which State aid may be granted are laid
down by a Royal Decree, No. 23, dated 4 January 1920, establishing Regulations for the allocation of State subsidies to mutual-aid
funds. In accordance with its provisions, the Minister for National
Economy may grant subsidies to funds legally recognised by
decision of the Court, as laid down by the Act of 15 April 1886, and
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VOLUNTARY SICKNESS INSURANCE
to institutions having acquired legal personality by Royal Decree.
State subsidies may also be granted to associations which are merely
mutual-aid societies de facto, but only on condition that their
economic activities are devoted solely or mainly to the objects laid
down in sections 1 and 2 of the Act of 15 April 1886. The subsidies
are allocated so far as the special resources of the Ministry for
National Economy permit (Act of 4 January 1920, section 1). In
principle, the support afforded by the Italian Government to
mutual-aid funds is of the nature of assistance rather than of a
subsidy; and State assistance may only be granted to a society
requesting it under certain strictly defined circumstances and
conditions.
For example, State aid can only be granted when, owing to
circumstances which cannot be imputed to maladministration,
a society has suffered the loss of a part of its property, such loss
being sufficient to jeopardise the existence of the society, or having
rendered it impossible for the society to continue its operations
without recourse being had to extraordinary means (supplementary
contributions, etc.). It is further stipulated that losses suffered by
a society applying for State aid must not be due to the appropriation of moneys to objects other than those authorised by the rules,
nor must such losses be attributable to serious actuarial error at
the time of the technical organisation of the said society.
State aid may, however, be granted to a mutual-aid fund which
has extended, or proposes to extend, its operations to cover new
objects of a social nature, provided that the latter are among those
mentioned in the Act of 15 April 1886, sections 1 and 2, or that the
fund is still in the initial stage of operation. A fund requesting
State assistance in the latter case must have obtained legal recognition by decision of the Court in conformity with the Act of 15
April 1886 or by Royal Decree (Act of 1 January 1886, section 2).
A State subsidy can in no case be granted to societies which fail
to respect the provisions of legislation in force or the rules, or, in
the case of societies recognised by decision of the Court or by Royal
Decree, the provisions laid down by the Ministry entrusted with the
distribution of subsidies.
In all cases proof must be forthcoming that the society keeps its
administrative expenses within bounds which are commensurate
with its operations and social objects. No one society may receive
a subsidy for more than two years in succession, except in special
cases for which due justification is forthcoming (Act of 4 January
1920, section 3).
ITALY
267
Societies desirous of receiving a subsidy are required to forward
to the Ministry for National Economy an application signed by
the president or by the person acting in that capacity, and stating
the purpose for which the subsidy is requested. The application
must be accompanied by a report, duly approved by the administrative committee, explaining the reasons which have led to the
making of the application, or, in the case of a newly constituted
society, the programme to be carried out, the means available for
the purpose, and any other information which may assist in determining the genuineness and vitality of the society. The report must
also contain information and data relating to the size and strength
of the institution, its working, the results arrived at, and, briefly,
all particulars bearing upon the general position of the society and
the reasons for which it is felt that the application should be given
due consideration (Act of 4 January 1920, section 5).
The application must also be accompanied by a declaration to
the effect that the information given is correct or by an opinion
formulated by the Social Welfare authorities. If, however, the
Social Welfare Institute is not represented in the district in which
the society's headquarters are situated, the application may be
accompanied by an opinion formulated by the prefect or sub-prefect
of the locality, or by the communal or provincial labour office. The
Ministry for National Economy reserves the right to prosecute any
enquiry which it may consider useful for the purpose of allocating
subsidies, even to the point of sending inspectors to the headquarters
of the society which has made application. In such case, the society
must place its books, registers and documents at the disposal of the
inspector, and must furnish any explanations which may be required
(Act of 4 January 1920, section 6).
If the Minister considers that the funds available are insufficient
to satisfy all the applications received, preference is given to societies
whose headquarters are situated in provinces where the need of
mutual aid on these lines is most severely felt (Act of 4 January 1920,
section 7).
The amount of an annual subsidy made to a mutual-aid society
may not in general exceed 500 lire. When once the application
for a grant is acceded to, however, the Minister has complete liberty
to vary the amount according to the sums at his disposal and
the needs of the different societies (Act of 4 January 1920,
section 4).
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VOLUNTARY SICKNESS INSURANCE
§ 4. — Gifts and Legacies
The conditions under which funds and societies may receive gifts
and legacies are laid down in section 8 of the Act of 15 April 1886.
The gifts and legacies which a society has received or receives for
a definite object, and which are of a perpetual nature, must be
kept distinct from other funds of the society. The revenues from
such gifts or legacies must be employed in accordance with the
instructions of the testator or the person making the gift. Should
the society go into liquidation or lose its legal personality, gifts and
legacies in its possession must be disposed of in accordance with the
regulations in force for works of piety (Act of 1886, section 8).
In 1924, the total revenue amounted to 25,952,704 lire or 24.52
lire per insured person. At the end of the same year, the accumulated funds of mutual-aid societies were valued at 101,917,195 lire or
96.31 lire per insured, and equivalent to five times the expenditure
in 1924.
NETHERLANDS
Acts and Regulations
The Act of 22 April 1855 concerning the right of association and assembly
(Staatsblad, No. 32).
Netherlands Civil Code, sections 1690-1702, 1638, (c) and (y).
Reports
There are no recent official documents in the Netherlands giving a complete
survey of the work of the many voluntary sickness insurance institutions.
The only sources of information on the manner in which the risk of sickness is
covered in that country are the annual reports on collective agreements
published by the Central Statistical Office and certain parliamentary documents.
In view of this shortage of official material, the International Labour Office,
with a view to preparing a general study on the working of sickness insurance
in the Netherlands, applied firstly to Mr. W. H. A. ELINK SCHUURMAN, Lecturer
at the Rotterdam Commercial College, and secondly to the Netherlands
Government, employers' and workers' organisations, and the insurance institutions themselves. The following among others supplied information: the
Ministry of Labour, Commerce and Industry; the Netherlands section of the
International Association of Industrial Employers; the Netherlands Federation
of Trade Unions; the Roman Catholic Workers' Federation; the Netherlands
Federation of Christian Trade Unions; the Federation of Intellectual Workers'
Unions.
The present study is based on this very fragmentary information received
directly by the Office and on the data collected on the spot by Mr. Schuurman.
It does not claim to furnish a complete and accurate description of the operations of the Dutch institutions, but only to serve as a basis for further studies on
the same subject.
INTRODUCTION
Relief funds for sick workers were known in the Netherlands
as early as the fifteenth century. The first reference to t h e m
dates from 1490 and relates to a union of journeyman bakers in
Groningen which was called a ghilde in the manner of the day and
in imitation of the employers' organisations. The chief object of the
early workers' organisations was to watch over in common the
spiritual interests of their members. This side of their work was
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VOLUNTARY SICKNESS INSURANCE
stopped by the Reformation, since when they devoted themselves
entirely to mutual aid.
After the Reformation these workers' ghildes may be classed
with the so-called knechtsbossen, which were principally mutual-aid
institutions 1.
These knechtsbossen could not be founded without the permission
of the communal authorities, who also exercised general supervision
over the administration of their resources, and in the case of
certain associations even reserved the right to appoint administrators. Even now in certain towns the choice of the administrators
of some very old institutions must be sanctioned by the communal
authorities, in spite of the changes in public and communal law
depriving the communal authorities of the right to supervise
associations.
In the history of the mutual-aid movement in the Netherlands,
the era inaugurated by the State Constitution of 1798 was of predominant importance. The adoption of the principles of the
French Revolution put an end to the sovereign power of the municipalities by establishing the administrative centralisation of the
State. The consequence was the abolition of anything which by
nature had some connection with the guilds, or by name might recall
the existence of guilds, whether those of employers, of workers,
or of both employers and workers.
It was soon realised, however, that this went too far, and the
prohibition was withdrawn to the extent that former members
were allowed to continue the business of the funds for the sick
and aged, although the admission of new members was prohibited.
A reaction against this prohibition soon set in. On various occasions when the Constitution was amended (Batavian Republic,
Kingdom of Holland, French domination), the people expressed a
desire for the re-establishment of the old associations. Until
the end of the French domination (1814), the Government hesitated
to take any measures in this direction. A Royal Decree of 1820
was a definite move in a new direction. The old guilds and bossen
were still prohibited, but the communal authorities began to encourage the formation of new mutual sickness insurance associations.
Their attempts were not very successful, however, and after the
1
The word knechtsbos literally means " worker's box ". The word bos or
bus means " money box ", the contents of which were devoted particularly to
the relief of sick members. It has become a synonym for sickness relief funds.
NETHERLANDS
271
failure of the 1820 Decree the authorities abstained from any
further action until the end of the nineteenth century.
The movement for the establishment of sickness insurance funds
made no progress until after 1860. Most associations were formed
in the country. The most active provinces were those of South
Holland and North Holland, where there are many urban centres,
and that of Groningen, which was at all times an excellent field for
the various forms of mutual insurance. The provinces of Limberg
and North Brabant, the poor and sparsely populated province of
Drente, and that of Utrecht, a province which is backward as
regards agricultural technique, were least important from this
point of view.
The chief aim of all these societies was to provide daily benefits
in cash. Societies granting medical benefits were formed mainly
in the large towns. Reference may be made, for instance, to the
Rotterdam Society and the Amsterdam General Sickness Fund,
which are still in existence.
It was not until 1901 that the Government and public opinion
began to consider the legal regulation of sickness insurance. This
movement led to the adoption of the Compulsory Insurance
Act of 1913, which was to apply to all wage-earners except domestic
servants, and entrusted the administration of the system to official
institutions to be set up throughout the country. The Government
which came into power in 1915 considered that the new legislation
was so impracticable that it refused to enforce it. Sickness insurance therefore remains as in the past the business of the mutualaid funds.
In addition to the benefits granted by these mutual-aid funds,
sickness benefit is also paid: (1) under the Civil Code; (2) by the
trade union funds ; (3) by works funds ; (4) by commercial companies.
Under an amendment to the Civil Code introduced in 1909, any
employer is bound to continue the payment of wages in the event of
the worker's illness (" of a relatively short period ", according
to the Act), unless the sickness is caused intentionally or by the
immorality of the worker or is due to a physical defect concerning
which the worker intentionally gave false information when the
contract of employment was concluded (section 1638c). In addition, the Code prescribes that the employer must grant workers
living with him medical assistance and treatment during the period
of the contract of employment, but for not more than six weeks,
unless other provision is made (section I638y). As no penalties
are attached to these provisions, many contracts concluded during
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VOLUNTARY SICKMESS INSURANCE
the first years after the amendment of the Code explicitly departed
from the Regulations in question. Only later were employers'
associations formed for mutual insurance against the risks borne by
them owing to the amendments to the Code, for agriculture in the
province of Groningen, for the building industry at Alkmaar and in
other parts of North Holland.
Subsequently, when collective agreements were being concluded
the trade unions succeeded not merely in having these provisions
applied, but even in inducing employers to accept larger obligations.
On 1 June 1926 there were 706 collective agreements securing
sickness benefit for 232,539 workers (6 per cent, of the workers were
entitled to not more than 50 per cent, of their wages, 74.2 per cent.
to 51-75 per cent, of their wages, and 21.7 per cent, to over 75 per
cent, of their wages).
The provision made by the trade unions for their members developed on the same lines. From 1918 to 1922 there was considerable
progress in the work of the unions. Thus the Netherlands Federation of Trade Unions (Nederlandsck Verbond van Vakvereenigingen)
granted 412,000 florins as sickness benefit in 1922, compared with
284,000 florins in 1918.
In addition, according to an enquiry made in 1911, there were
before the war 567 sickness funds attached to industrial undertakings
and comprising 92,000 persons; whereas the general funds and trade
union funds merely grant cash benefit, several factory funds also
give medical benefit.
Side by side with mutual insurance institutions, certain commercial undertakings engage in insurance for profit. The 1911 enquiry
did not cover these undertakings unless they supplied cash benefit.
They usually took the form of a limited company and often ran
sickness insurance as a subsidiary branch of life insurance. The
1922 Act on life insurance companies prohibited running these two
branches of insurance at the same time, and in consequence certain
companies definitely gave up their sickness insurance business,
while others transferred it to new limited companies specially
formed for the purpose.
The undertakings which confined themselves to giving medical
benefit were studied in a report for 1895 drawn up by a committee
appointed by the Maatschappij tot Nut varit Algemeen (Society for
the Common Weal). This committee collected information on
543 institutions, including 198 insurance societies granting
medical benefit, of which 27 were run by private persons and a few
i y limited companies.
NETHERLANDS
273
To sum up, there are in the Netherlands general workers' funds
granting as a rule only cash benefit; trade union funds whose
activities have widened since the transformation of occupational
organisations into firmly established national federations; factory
funds granting either cash benefits alone or also benefits in kind, and
making progress largely owing to their small costs of administration.
Finally, there are commercial companies which insure mainly
for medical treatment.
The following Chapters will deal with some of the aspects of
voluntary sickness insurance in the Netherlands (institutions,
insured persons, benefits, financial resources), although the existing
statistics are still very incomplete.
274
VOLUNTARY SICKNESS INSURANCE
CHAPTER I
INSURANCE INSTITUTIONS
§ 1. — The Legal Status of Institutions and the Different Types
of Funds or Societies
From the legal point of view the Netherlands insurance institutions may be classified as follows:
(1) Mutual insurance societies.
(2) Co-operative societies.
(3) Societies governed by the Civil Code (sections 1690-1702)
and the Act of 22 April 1855 on the right of association
and assembly.
(4) Foundations.
(5) Funds belonging to a private person or a limited company,,
all of them being run for profit.
Mutual insurance was recognised in 1838 by the Commercial Code.
In 1864 a special Act expressly declared that it was not subject
to the legal formalities imposed on other societies desiring to obtain
legal personality, and in 1898 the Court of Cassation took a decision
to this effect.
Co-operative societies are founded by authentic act and recorded
in a special register.
A society combining insurance with other activities must take
the form of a society governed by the Civil Code and the Act of 22
April 1855, and it cannot obtain legal personality unless the Government approves its rules. As a matter of fact such approval is not
refused unless the society fails to respect the provisions of the law.
The form of " foundations " often chosen by factory funds is
not governed by the Civil Code.
Until recently the authorities were satisfied to examine the
rules of societies subject to the Civil Code and the Act of 1855 and of
limited companies, and therefore intervened only when these
NETHERLANDS
275
institutions were formed. Since 1918, when the commercial register
(Handelsregister) kept by the chambers of commerce was started,
all the above institutions must be notified by their managements
and recorded in the register. This rule is not always observed,
however, and many chambers of commerce have not yet taken
steps to enforce it.
Institutions set up for purposes of sickness insurance are not
bound to comply with any financial or accounting conditions,
except those very flexible conditions to which limited companies
are subject under the Commercial Code. Very few commercial
undertakings, however, which engage in sickness insurance have
taken the form of a limited company. It may be added that the
Commercial Code does not require them to publish the results
of their work.
A characteristic feature of the organisation of voluntary sickness
insurance in the Netherlands is the complete separation of the
institutions granting cash benefit from those granting only medical
benefit. The former are to be found mainly in the country and have
very few members in the large towns. The funds granting medical
benefit, on the contrary, are highly developed in the important
urban centres, where they can profit by the presence of many
doctors, among whom insured persons may make their choice.
The larger the town the greater the possibilities of this kind.
A sickness insurance fund in a rural commune cannot offer its
members so wide a choice. The supervision of the sick is, however,
more difficult in towns than in the country, and abuses on the
part of the latter are more easily discovered in a small commune.
Funds granting medical benefit insure not only the wage-earner,
but also his family, whereas funds ' granting only cash benefit
usually exclude the families of insured persons.
Another distinction between the two types of institutions is that
insured persons can join only one fund granting medical benefit,
whereas they may join several funds granting cash benefit.
There are no general statistics of the total and average membership
of the insurance institutions of these two types.
§ 2. •— Administration of Funds
The funds are administered by the meeting of the members and a
management appointed by the meeting. The meetings are held
as a rule twice a year, sometimes four times, and occasionally
276
VOLUNTARY SICKNESS INSURANCE
only once. The rules of most funds give the members the right to
convene an extraordinary meeting whenever they think fit.
The provisions of the rules as to management vary considerably.
As a rule the work of the members of the management is not paid.
Their term of office expires, in rotation, after a few years, but
retiring members are immediately re-eligible. In many societies
those members of the management who have no specific functions
are responsible for supervising the sick. A few more important
societies employ paid officials for visiting the sick. It is the ordinary custom to keep women out of the management,
After much trouble the federations of funds granting cash benefit
have succeeded in exercising considerable and useful influence on
the organisation of the funds. They have drawn up model rules
and issued suitable account books. They have also obtained
certain powers recognised in the rules of the funds. Thus, the
management of the federation receives the agenda of the members'
meeting and may be represented at the meeting. Often the reports
of the management after approval by the general meeting are also
transmitted to the federation, which has power to make its observations to the management, and such observations must then be
communicated to the meeting. If there is a dispute between a
member and the management, the leaders of the federation appoint
a referee to settle the dispute in agreement with the referees
designated by the parties concerned.
§ 3. — Unions or Federations of Funds
The principal unions and federations of funds are:
(a) The federation of general funds granting daily benefit.
(b) The National Federation for the Promotion of Sickness
Funds.
(c) The unions of factory funds set up by the Association of
Catholic Employers in the Textile Industry, and the Association of Tilburg Woollen Manufacturers.
FEDERATION
OF
GENERAL
FUNDS
GRANTING
DAILY
BENEFIT
The best-known federation of funds, the Federation of Sickness
Funds (Nederlandsch Verbond van Ziekenkassen), was formed
NETHERLANDS
277
in 1921 to protect the movement against schemes for transferring
sickness insurance to official bodies.
Its organisation is simple. It comprises 370 funds granting
daily benefit (general funds and works funds). On 31 December
1925, 304 funds belonging to it had a total membership of 55,066.
This association was originally a federation of ten provincial
unions. The original purpose of the oldest unions, founded in
1905 and 1912, was to facilitate the transfer of members from one
fund to another in case of change of residence, irrespective of their
age or state of health. Since then its scope has been much extended.
It engages, for instance, in propaganda for making the rules of the
affiliated funds uniform, especially as regards the duration and rate
of benefit. Its standard rules make provision for insuring the full
wage for a maximum benefit period of 26 weeks, with the possibility
of reduced benefit during an additional 52 weeks.
NATIONAL FEDERATION FOR THE PROMOTION OF SICKNESS F U N D S
The National Federation for the Promotion of Sickness Funds
(Landelijke Federatie ter Behartiging van het
Ziekenfondswezen),
founded on 4 November 1913, comprises sickness funds which
grant medical benefit. At present it has 20 affiliated associations
with about 200,000 members. These funds pay to the Federation
an annual contribution of 0.015 florins per member. It was originally founded to counteract the Netherlands Association for the
Advancement of Medicine (Nederlandsche Maatschappij ter Bevordering der Geneeskunst), which in 1913 had declared itself in favour of
the establishment of special funds administered by doctors;
and from the first it has indefatigably defended the interests of
the sick. The hostility which at first marked the relations between
the Federation and the Medical Association has gradually disappeared, and the two bodies are now in-close and normal touch.
On several occasions the Federation has intervened with the
authorities. It has undertaken enquiries and tried to induce the
affiliated funds to adopt uniform rules. In addition, it has persuaded the affiliated funds not to negotiate directly with medical
practitioners on the appointment of the latter. During the last
few years the Federation has paid particular attention to combining
the different funds in one and the same town into a single large
association, for the purpose of increasing benefits.
278
VOLUNTARY SICKNESS INSURANCE
UNIONS OF FACTORY F U N D S
Two federations recently founded admit only the factory funds
in a given industry. The first was set up by the Association of
Catholic Employers in the Textile Industry (Vereeniging can
Katholieke Werkgevers in de Textielnijverheid), the members of
which are owners of factories in 20 communes; the second by the
Association of Tilburg Woollen Manufacturers (Vereeniging van
Tilburgsche Fabrikanten van Wollenstoffen).
These two organisations decided to open an insurance fund in
each affiliated undertaking. All the workers are bound to belong
to the factory fund. The management consists of members elected
by the workers from among themselves, with a representative of
the employer as president. Half the expenditure is met by the
employer and half by the workers. The sickness benefit is equal
to 70 per cent, of wages, and the workers have the right to insure
themselves for the remaining 30 per cent. The maximum benefit
period is fixed at 26 weeks a year. Each member undertakes to
participate in the mutual supervision of the sick.
The rules also provide that after leaving the factory the worker
retains his right to sickness benefit during three months, subject
to certain conditions. Involuntary unemployment may last for
12 weeks, and the right to benefit does not expire until the end of
this period, unless the connection with the factory has been
broken.
If a factory closes down and the fund has to be wound up, the
reserve fund of the Federation may be used, if need be, to continue
the payment of benefit to sick members. For this purpose the
funds pay one per mille of the wages of their members into the
reserve fund.
On 31 December 1926 there were insurance funds in 35 factories
affiliated to the first association (4,469 workers), whose reserve
fund amounted to 5,000 florins. At the same date the second
association had 39 funds with 4,764 members.
NETHERLANDS
279
CHAPTER II
INSURED PERSONS
§ 1. — Conditions of Admission
The funds granting only daily benefit usually admit " persons
of either sex belonging to the working class or whose social position
may be regarded as similar to that of a worker". This formula
allows of the admission of non-wage-earners in an economically
weak position.
The institutions in this group admit men and women on the same
terms, although until lately the rules of many societies excluded
women. To judge from a survey published by the National Federation of Sickness Funds (Nederlandsch Verbond van Ziekenkassen),
it may be estimated that women form only 10 per cent, of the
total number of insured persons. In the funds granting only medical
benefit, the two sexes have the same right.
The minimum age of admission varies in funds granting only
cash benefit between 14 and 18 years; funds granting medical
benefit usually fix an age above which young members must pay
the full contribution, such age being as a rule 16 years, but sometimes 17 and 18 years. Often the rules lay down that a young person who has reached a specified age must, while living at home,
join the same fund as the head of the family.
The rules of the funds granting cash benefit also fix a maximum
age of admission, as a rule at 45 years, and sometimes at 40 or
50 years.
Admission is conditional on good health, but few funds granting
only cash benefit require members to undergo previous medical
examination. In many institutions, the management has the right,
in certain cases, to demand such examination and to make admission conditional on the result. The provisions on age limit and state
of health do not apply to persons who can prove that they were
insured in another fund which they have had to leave owing to
280
VOLUNTARY SICKNESS INSURANCE
a change of residence, provided that the fund in question is affiliated to the same federation. There are several federations of this
kind, by far the most important of which is the National Federation
of Sickness Funds.
In a few cases, admission is limited to persons belonging to a
specified religious sect.
§ 2. — Statistics
For the greater part of the population of the Netherlands, it is
a matter of custom to join a sickness insurance fund granting
medical benefit. There are very few persons who, although able
to pay the contribution, have not yet joined a fund. The membership of the funds granting medical benefit may be estimated at
1,250,000\ namely:
(1)
712,472 persons belonging to 58 funds which were covered
by a recent enquiry of the Medical Association. The provisional results of this enquiry have been used for the present
Report.
(2) 312,714 persons belonging to 70 institutions, consulted
for the purpose of this Report
(3) 133,000 persons belonging to the Rotterdam funds, with
about 200,000 insured members in all, of whom only 67,000
were ipcluded in (2).
(4) About 100,000 insured persons in factory funds, of whom
only 8,000 were included in (1), (2), and (3) above.
Thus, out of a total population of 7,500,000, one-sixth are insured
in institutions granting medical benefit.
It is not possible to determine the proportion of adult members
to children. The ten Amsterdam funds granting medical benefit
included, in 1925, 266,805 adults and 118,852 children (a proportion
of 2 % to 1), according to the provisional results of the enquiry
made by the Medical Association. The corresponding funds for
the coal mines included 49,936 adults and 47,550 children (a proportion of 1.04 to 1) among their members.
There are no recent statistics for determining the number of
persons insured in institutions granting cash benefit.
1
Mr. Blink Schunrman's estimate.
281
NETHERLANDS
CHAPTER III
BENEFITS AND ORGANISATION OF MEDICAL
SERVICE
§ 1. — Cash Benefits
Official statistics 1 give an idea of the amounts paid in benefit
to the workers under collective agreements. The following table
shows the number of agreements containing provisions for sickness
benefit and the absolute and relative number of workers covered
by such provisions.
NUMBER
OF
COLLECTIVE
AGREEMENTS
ON SICKNESS BENEFIT
Date
1
1
1
1
1
January 1920
January 1922
June 1923
June 1924
June 1925
CONTAINING
AND NUMBER
PROVISIONS
OF BENEFICIARIES
Number of
collective
agreements
Number of
workers
Number of
workers per cent.
of total number
covered by the
agreements
643
641
596
730
676
166,239
202,929
205,775
245,371
233,601
61
79
86
86
88
On 1 June 1925, 88 per cent, of all the workers bound by collective agreement (265,425) were entitled to sickness benefit. The
following table shows the amount of benefits received.
1
Statistiek van Nederland: Overzicht van den onwang en den voornamnste n
inhoud der collectieve arbeidsovereenkomsten op 1 Juni 1925.
The Hague
Dec. 1925.
282
VOLUNTARY SICKNESS INSURANCE
AMOUNT OF BENEFIT GRANTED UNDER COLLECTIVE AGREEMENTS
(1 JUNE 1925)
Benefit per cent.
of wages
Number of
collective
agreements
Number of
workers
Number of
workers per cent.
of total
Not more than. 50
51 to 75
Over 75
Not specified
20
465
173
18
24,371 i
177.558 a
24,501 a
7,171
10.4
76.0
10.5
3.1
Total
676
233,601 *
100.0 •
i 1,413 on 1 June 1926. a 172,496 on 1 June 1926. 3 50,470 on 1 June 1926.
* 224,379 on 1 June 1926, of whom 8,160 were not entitled to benefit at the rate fixed in
advance.
The following table gives the maximum benefit period.
PERIOD
OF BENEFITS GRANTED
UNDER
COLLECTIVE
AGREEMENTS
(1 JUNE 1925)
Maximum benefit period,
in weeks per year
6
13
26
Over 26
Not specified
Total
Number of
workers per cent.
of total
Number of
collective
agreements
Number of
workers
7
417
83
74
95
289
140,803
9,884
58,310
24,315
0.1
60.3
4.2
25.0
10.4
676
233,601
100.0
On 1 June 1925, 43 agreements, applying to 585 undertakings
with 46,992 workers, provided that the cost of benefit should be
divided between employers and workers. In most cases, however
(633 agreements applying to 14,755 undertakings with 186,609
workers), the agreements contained no provisions of this kind
or else stated that the employers alone should bear the cost.
The above particulars on the benefits received by sick workers
may be supplemented by the following data on the benefits granted
283
NETHERLANDS
by insurance institutions founded by the Social-Democratic and
Protestant workers' organisations.
The first table gives the amount of benefit granted by the
insurance institutions of the unions affiliated to the Netherlands
Federation of Trade Unions {Nederlandsch Verbond van Vakvereenigingen).
DAILY
BENEFIT
GRANTED
BY
INSTITUTIONS
ATTACHED
TO
THE
NETHERLANDS FEDERATION OF TRADE UNIONS
Number of
workers
insured on
1 July
1925
Trade union
1
Glass and p o t t e r y workers
Diamond workers
Typographers 2
Lithographers 3
Building workers *
Painters
Cabinet makers and upholsterers »
Tailors and dressmakers
Miners 6
Textile workers
Bakers and confectioners 7
Butchers
Cigar workers 8
Shop assistants a n d clerks »
Hotel a n d r e s t a u r a n t workers
6,300
4,831
1,194
13,400
4,800
4,500
2,900
1,800
7,900
4,300
900
3,600
7,000
600
Maximum daily
benefit
Cost of
benefits
in 1925
Florins
Florins
2
1
5
Limit n o t fixed
—
3 h o u r s ' wages
3 w e e k s ' contribution to t h e
union
0.80
0.75
0.50
1.20
0.75
90% of wages
4.50
1.50
9,327
90,420
58,722
14,676
31,652
24,810
28,228
6,546
4,555
18,210
7,804
1,959
113,950
10,541
1,992
i This union is incorporated with the Union of Factory Workers.
The average benefit in 1925 was 2.36 fl. a day.
JThe collective agreement requires workers to insure for 50 per cent, of their wages in a
workers'
fun d ; the remaining 50 per cent. Is met by the employer.
1
Benefit is paid by the union fund to all members who do not receive benefit under the
collective agreement: as a large number of workers are covered by the agreement the union
fund has few sick people to pay for.
5
In 1924 the benefit averaged 1.80 fl. a day per sick person.
6 The insurance fund was formed in 1924.
7
The average benefit is probably slightly over the authorised minimum, i.e. 0.35 11. a day
8
Number of workers bound by collective agreements : on 14 Oct. 1925, 13,000; on 1 June
1926,
5,500. After the expiration of the collective agreement the insurance still remains
!
in force.
9
Wages are still paid in case of illness. Very little benefit may be paid as a supplement.
2
3
The following table gives the corresponding data for the insurance institutions of the unions affiliated to the Netherlands
Federation of Christian Trade Unions, a Protestant organisation
(Christelijk Nationaal Vakverbond in Nederland).
284
VOLUNTARY SICKNESS INSURANCE
WEEKLY BENEFIT PAID BY THE INSTITUTIONS ATTACHED TO THE
FEDERATION OF CHRISTIAN TRADE UNIONS
Membership
o n ! July 1926
Union
Insured
members
Maximum weekly
benefit
5,72o1
18 times the
weekly contribution 2
Florins
Building workers
5,720 !
Diamond workers
38
38
2,300
350
5,700
1,000
60
1,130
350
178
1,000
35
1,537
900
Wood and furniture workers
Clothing workers
Agricultural workers
Cigar workers
Insurance agents
Food and drink
Food and drink workers 3
2
15
12
12
90% of wages
12
10.20
i
i On 31 Dec. 1926.
23 In 1926, 1.70 il. a day on the average.
In a communication oí 1 Dec. 1926 the Agricultural Workers' Union stated thai liie
benefit had been doubled and raised to 12 fl.
§ 2. — Benefits in Kind
BENEFITS OF THE MUTUAL-AID FUNDS
For many years the sickness insurance funds have undertaken
to provide persons of small means with medical treatment. The
necessitous were able to count on public assistance, but persons
who without being necessitous had very small means were left
to their fate. This was the origin of the mutual sickness insurance
funds, in which the medical profession finds its chief employment.
According to the 1925 report of the Chief Public Health Inspector (Verslagen en Mededeelingen betreffende de Volks gezondheid,
November 1926), the number of persons entitled to such benefit
in nine provinces with 758 communes, of which 318 had no fund,
was as follows on 1 January 1924.
NETHERLANDS
NUMBER
OF PERSONS INSURED
BY
285
FUNDS
GRANTING
MEDICAL
BENEFIT (EXCEPT SOUTH HOLLAND AND ZEALAND)
ON 1 JANUARY 1924
Province
North Holland
Utrecht
Friesland
Groningen
Drente
Overijssel
Guelders
Limburg
North Brabant
Number of
communes
Population
onl Jan. 1923
129
54
43
57
34
54
112
119
156
1,336,286
359,038
390,417
374,258
216,896
440,069
653,679
467,640
723,757
758
4,962,040
Insured persons :
NTumhpr
NumDer
|1
P e r cent
of
p o p u l a t-i o n
588,612
70,814
19.886
40,800
23,846
126,344
129,831
101,697
70,355
1,172,185
44.0
19.7
7.7
10.9
11.0
28.3
19.9
21.7
9.7
23.6
In all this territory the number of persons entitled to medical
benefit in the case of sickness form 23 per cent, of the population,
a proportion which rises to 30.2 per cent, if only the population
of the communes with sickness insurance funds is taken into account.
To these figures should be added the members of the railway
funds and tramway company funds. The former have about
100,000 members, but the membership of the latter is not known,
although in any case the figure cannot much affect the data given
above. This percentage is much influenced by the high figures
for the province of North Holland, where 44 per cent, of the population is insured ; this figure being influenced in turn by that for the
town of Amsterdam with 52.9 per cent, of the population insured.
Similarly, the figure for the province of Overijssel is above the average, being 28.3 per cent., owing to the large number of insured
workers in the industrial district of Twente.
BENEFITS OF THE MEDICAL ASSOCIATION FUNDS
In 1913, the medical profession began setting up sickness funds
administered by doctors with a view to defending professional
interests. These funds at first took the name of " departmental
sickness funds of the Medical Association ". To-day they are
known as Association Funds (Maatschappijziekenfondsen). The
doctors of the funds as a rule receive a fixed salary. The Alkmaar
286
VOLUNTARY SICKNESS INSURANCE
fund pays them 3.50 il. a year per adult insured person, and 1.16
fl. per child, while the dispensing chemists receive 3.00 fl. a year
per insured person.
All these funds admit any member of the Medical Association,
and sick persons insured in the fund have the right to choose their
doctor. The forty existing funds have all the same rules, at least
as regards their principal provisions. The management of the
fund consists of a certain number of doctors and dispensing
chemists, together with persons elected by the insured members.
The doctors and chemists, known as " participants ", elect
their representatives on the management at meetings specially
convened for the purpose. Insured persons who are of age meet
once a year for the purpose of choosing from among themselves a
certain number of " representatives ", this number varying according to local circumstances. The latter in turn elect from among
their own number as many delegates as the doctors and chemists.
The management shares out the various duties among its members,
it administers the finances of the fund, and may appoint a salaried
administrator and subordinate employees. The general meeting,
which is held at least once a year, consists of all the participating
doctors and chemists and the representatives of the insured persons.
BENEFITS OF THE FUNDS GRANTING HOSPITAL TREATMENT
With a view to obtaining material for clinical studies, needed
for teaching purposes, the hospitals of certain university towns
have always been prepared to treat sick persons free of charge, even
those who live in neighbouring communes and are not in a state
of want. In 1923 the Leyden University Hospital departed from
this custom, and this led to the foundation in many neighbouring
rural communes of societies for providing insured persons with
hospital treatment. At about the same date other hospitals stopped
giving free treatment. By the end of 1926 the province of South
Holland, in which Leyden is situated, alone had about 60 of these
societies, and during that year the Leyden University Hospital
treated 688 patients on behalf of 63 societies.
To some extent these societies make up for the fact that the sickness insurance funds do not all provide for hospital treatment.
They also accept members who do not belong to the working
classes, but whose income has been reduced in consequence of the
war. In actual fact in many communes independent persons very
287
NETHERLANDS
generally join such societies. The formation of the societies is
particularly marked where there are no sickness funds.
Struck by the influence of the new movement on the institution
under his management, Dr. W. H. Mansholt, Director of the
Groningen Municipal Hospital (Algemeen Ziekenhuis) published
in November 1926 a study on the organisation and methods of
these bodies. His report covers three provinces with the University
of Groningen as a centre, namely, those of Drente, Friesland, and
Groningen. The following table is reproduced from the report.
GRONINGEN
DAYS
COMMUNAL
OF TREATMENT
HOSPITAL!
CLASSIFIED
NUMBER
OF PATIENTS AND
ACCORDING
TO INSTITUTIONS,
AND PERSONS
Public relief and
church charities
PerNumber
centage
Year
Í Patients
1913 { Days of
[
treatment
Í Patients
1920 \ Days of
I
treatment
Í Patients
1923 \ Days of
[
treatment
Í Patients
1925 { Days of
[
treatment
Private persons
Number
Percentage
Funds granting
hospital treatment
PerNumber
centage
1,896
48.4
1,509
38.5
29
0.7
65,412
55.3
32,970
28.0
542
0.5
2,067
43.6
1,975
41.6
150
3.2
88,502
52.5
53,218
31.5
3,522
2.1
2,123
43.0
1,974
40.0
326
6.6
89,387
53.4
50,977
30.5
7,112
4.3
1,820
31.3
1,924
33.1
1,537
26.5
82,659
47.7
51,694
28.0
30,329
16.4
Year
Slate accident
insurance
PerNumber
centage
J
Miscellaneous
Total
Number
Percentage
Number
, q l o I Patients
l y l d
I Days of treatment
86
3,569
2.2
3.0
396
651
10.1
13.2
3,916
118,144
1920 \ P a t i e n t s
/ Days of treatment
64
2,452
1.3
1.4
488
20,981
10.3
12.5
4.744
168,675
.q9q
\ Patients
) Days of treatment
52
1,692
1.0
1.0
462
18,112
9.4
10.8
4,937
167,280
4nor I Patients
ly
^ ° Í Days of treatment
60
2,142
1.0
1.2
474
18,006
8.1
9.7
5,815
184,830
ly
ó
288
VOLUNTARY SICKNESS INSURANCE
The foundation of the new funds raised the total percentage
of sick persons treated on behalf of funds to 26.5, while at the same
time the number of patients treated on behalf of the public relief
authorities fell from 43 per cent, to 31.3 per cent. Another effect
of the formation of these societies was to bring down the number
of persons treated in hospital on their own account and to increase
the total number of patients and days of treatment. The hospital
was given 140 new beds to meet the new requirements, and the
number of patients would have been even larger if circumstances
had allowed. The creation of the new funds thus made it possible
to transfer to hospital sick persons who would formerly have been
treated at home.
A certain uniformity has already been established in the rules
of these societies. The members usually insure for admission to
the third (lowest) class in the hospital for a maximum period of
one month. No provision is made as a rule for admission to lunatic
asylums or sanatoria. In general the insurance also provides for
the transport of the patient.
According to Dr. Mansholt, the period of treatment in hospital
when all the members of the family arc insured may be estimated at
800 days per thousand members. The 41 societies established
in the province of Groningen, which have formed one federation
(31,000 members), spent 3 fl. per day of treatment in 1924 including travelling and other expenses. On this basis the annual
expenditure per thousand members may be estimated at 2,400 fl.
The rates of contribution still vary considerably, ranging from
1 to 3 fl. a year. The following table shows the number of these
insurance societies in the various provinces, or at least of the
societies whose addresses were known at the time of writing this
report.
FUNDS
GRANTING
HOSPITAL TREATMENT
Province
Number
of funds
Drente . .
Friesland .
Guelders .
Groningen
Limberg .
Overijssel
32*
17 *
10
. 74*
5
12
AT THE END OF 1 9 2 6
Province
Number
of funds
North Brabant
North Holland
Utrecht . . .
Zealand . . .
South Holland
8
14
7
2
65
X
i The figures marked with an " * " are taken from Dr. Mansholt's report; the others are
based on information received from the hospital managements.
NETHERLANDS
289
§ 3. — Organisation of Medical Service
THE
MEDICAL ASSOCIATION
The Medical Association has a great influence on the organisation of the other sickness insurance funds which grant only medical
benefit. It is the duty of this Association (1) to watch over and
protect the prestige of the medical profession, (2) to defend their
material interests, and (3) to watch over the satisfactory relations
between patients and doctors.
In 1914 it founded a defence fund to which all doctors working
for insurance funds or societies had to pay 2 per cent, of their
income from this source. The sums thus accumulated were used
to compensate doctors who might be deprived of their income.
The Medical Association also succeeded in introducing a single
contract for all the sickness insurance societies in any one town,
thus achieving a hitherto unknown degree of uniformity : uniformity of fees, of contributions, of income limits, and of the maximum
number of families treated by each doctor.
Contracts of this kind had been entered into with the sickness
insurance societies of Rotterdam, Utrecht, and other towns.
Collective agreements have been drawn up which may be accepted
by workers' societies as well as by commercial insurance companies.
This collaboration has been carried out without any kind of official
intervention. It goes so far that the contracting parties have set
up a joint executive body to settle questions of common interest.
The number of doctors working for insurance funds was 2,550
on 1 January 1927, including 2,250 members of the Medical
Association and 300 non-members. In addition there were 1,060
specialists, of whom 880 were members of the Association and 180
non-members.
FEES
An ordinary medical practitioner receives from the sickness
insurance funds a fixed sum per family in his care. The table below
shows the fees paid by certain of the more important funds, in
particular the mutual benefit societies affiliated to the National
Federation for the Promotion of Sickness Funds.
19
290
VOLUNTARY SICKNESS INSURANCE
FEES OF DOCTORS AND DISPENSING CHEMISTS OF THE
SICKNESS
INSURANCE
FUNDS
AFFILIATED
TO THE
PRINCIPAL
NATIONAL
FEDERATION FOR THE PROMOTION OF SICKNESS FUNDS
Doctors' fees
Seat of institutions
Chemists' fees
Per
member
Per
family
Per
child
Per
member
Per
family
Per
child
Florins
Florins
Florins
Florins
Florins
Florins
Amsterdam (2 funds)
Rotterdam
4
4.25
8
8.50
The Hague
Haarlem
Utrecht
Delft (2 funds)
Schiedam
Appingedam
Weesp
Enschede
Deventer
Gouda
Leerdam
Leyden
Anna Pavlovna
Arnhem
Zutphen
3.75
3.75
4.32
3
4
4
3
3
2
4
4.25
3.25
3
3
3
7.50
8.60
8.64
6
8
8
6
6
4
8
8.50
6.50
6
6
6
1
4.70
8.10
0.59
Including
drugs
•—
Special chemists
—
2.60
5.90
—
—
2.74
5.45
—
3
1.80
3.60
1.80
—
2.75
5.50
—
Including drugs Including drugs
3
1.71
3.42 I 1.71
3
Special chemists
2
Special chemists
—
3
| 6
1 —
—
Special chemists
2.25 i 4.50 | —
—
Including drugs
3
3
6
—
0.60
2.60
5.20
0.52
•
2.35
4.05
—
This survey covers 17 localities, including the five largest towns
in the country. In 11 of these localities doctors receive a fee varying between 3 and 4.32 fl. per member, and double the amount
per family. The fees for children granted by the Amsterdam and
Zutphen funds are respectively 1 and 0.60 fl. per child. In five
localities the fee per child is the same as for an insured person
without family, paid in addition to that due in respect of the
parents. In one locality, that of Haarlem, the fee per family is
1 fl. more than the fee for two separate persons. In every case the
sum paid for children over 16 years of age (sometimes 18 years)
living at home is the same as that in respect of an adult member.
The only exception to this rule is that of Arnhem, where for children of this age the doctor receives only half the adult fee.
NETHERLANDS
291
CHAPTER IV
FINANCIAL RESOURCES
§ 1. — Members' Contributions
The most important source of income of the funds is the members'
contributions, the only exception being that of certain works
funds.
For the funds granting only cash benefit it is impossible to decide
with any exactitude the total amount received in contributions or
the contribution per member, especially as many institutions do
not collect contributions during the winter.
The only information available relates to the annual contributions paid by persons insured in the institutions attached to the
Netherlands Federation of Christian Trade Unions, a Protestant
organisation. The following table gives the figures for 1 July
1926.
AVERAGE ANNUAL CONTRIBUTIONS PAID BY PERSONS INSURED
THE FUNDS OF THE NETHERLANDS
IN
FEDERATION
OF CHRISTIAN TRADE UNIONS
Union
Annual contribution
Factory and transport workers
Typographers
Wood and furniture workers
Clothing workers
Agricultural workers
Cigar workers
Insurance agents
Florins
2 y¿ per cent. oí wages
14.75
12.30 1
6.50
6.00
27.60
12.00
i 1924 figure.
The contributions paid by members of funds granting only
medical benefit vary according as the institution is situated in
the country or in a large town. In the latter case adult members
pay 0.25 il. a week and as an exception 0.30 fl. Children pay no
292
VOLUNTARY SICKNESS INSURANCE
contributions as a rule, but occasionally a maximum of 0.05 fl.
a week is fixed. This in Amsterdam for instance, which had a
population on 1 January 1926 of 718,000, the ten funds had 266,905
adult and 118,862 child members (total membership 385,767)
and received 3,777,300 fl. in contributions, or about 10 fl. a head
per annum.
According to the information given for 17 localities, the total
annual contributions paid by persons insured in the funds affiliated
to the National Federation for the Promotion of Sickness Funds
are at present as follows:
CONTRIBUTIONS
AFFILIATED
OF PERSONS INSURED
IN THE PRINCIPAL
TO THE NATIONAL FEDERATION
OF
SICKNESS
FUNDS
FOR THE PROMOTION
FUNDS
Contributions
Seat of institutions
illllöLCIUtttll
ytVVU
Rotterdam
The Hague
Haarlem
Utrecht
Delft (two funds)
Schiedam
Appingedam
Weesp
Enschede
Deventer
Gouda
Leerdam
Leyden
Anna Pavlovna
Arnhem
Zutphen
lliUUû]
Per
member
Per
family
without
children
Florins
Florins
ne
¿J
50
48
50
50
50
48
40
40
40
21
24
25
25
25
24
20
20
20
21
25
30
21
16
30
14
50
60
42
32
60
28
Per
family
with
children
Florins
Per
child
Florins
Per
person
of 16-18
years of
age
Florins
5
54
50
56
50
5
40
40
5
15
50
60
42
32
5
3
15
§ 2. — Participation of Employers
Employers pay no contribution to funds granting only medical
benefit, except in the case of certain works funds which provide
both cash benefit and medical treatment. On the other hand,
employers make some contribution to the resources of a certain
NETHERLANDS
293
number of funds granting only cash benefit. According to information supplied by the International Association of Industrial
Employers (Netherlands section), employers pay a certain proportion of the contributions in some cases, and in others undertake
to provide medical treatment or pay the compensation due under
the Civil Code ; or, finally, they may subsidise funds whose
resources are inadequate.
§ 3. — State and Communal Subsidies
So far the State has never subsidised sickness insurance funds.
In a few isolated cases a communal council grants the local sickness
insurance fund a subsidy for a specified period ; thus the commune
of Lekkerkerk (South Holland) pays the local insurance fund 1,000
florins.
§ 4. — Donations, Legacies, and Other Resources
Deeds of gift or legacies to sickness insurance funds are governed
by the general provisions of the Civil Code. In any case, income
of this kind is exceptional.
Societies which formerly circulated subscription lists in workshops and factories with a view to improving their unsatisfactory
financial position have now given up this procedure. Income derived
from the interest on invested capital is of little importance. At the
end of 1925 the assets of the 304 societies affiliated to the
Federation of Sickness Funds amounted to 1,012,000 fl., which gives
15-16 fl. a head among the 64,400 members. The interest on the
invested part of these assets can only be an insignificant sum.
§ 5. — Reserve Funds
There are no legal regulations dealing specially with the constitution of reserve funds. To judge from the fragmentary information available, there is no uniformity in the figures concerning the
reserve funds of the various institutions. For instance, the fund
of Stork Brothers, engineering firm at Hengelo, which had a membership of 2,100 on 31 December 1925, had a reserve fund of 59,988
fl. or 28.50 fl. per member. The fund of the De Scheide Building
294
VOLUNTARY SICKNESS INSURANCE
and Construction Works at Flushing, which had 1,656 members,
had a reserve fund of 54,893 fl., out of which disablement and oldage pensions had to be paid. The staff fund in the Koninklijke
Stoomwurverij at Niljverdal with 1930 members had a reserve fund
of 93,499 fl., or 48 fl. per member.
The reserve funds of 304 local sickness funds affiliated to the
National Federation of Sickness Funds, with an aggregate membership of 55,066, amounted in all to 840,000 fl. on 31 December
1925, or 15 fl. per member. It seems as a rule that the smaller the
membership, the larger is the reserve fund, this being the method
by which the societies protect themselves against too large fluctuations in their income. According to the information given by
Mr. Schuurnian, the reserve fund in 1915 of the ten smallest sickness funds in North Holland averaged 23 fl. per member, and that
of the ten largest about 4 fl. per member.
NEW ZEALAND
FRIENDLY SOCIETIES
Acts
An Act to amend the law relating to friendly and certain other
No. 12 of 1909. Assented to 24 December 1909.
An Act to amend the Friendly Societies Act, 1909. No. 5 of 1911.
to 21 October 1911.
An Act to amend the Friendly Societies Act, 1909. No. 64 of 1915.
to 11 October 1915.
An Act to amend the Friendly Societies Act, 1909. No. 56 of 1922.
to 31 October 1922.
Reports
societies.
Assented
Assented
Assented
Annual reports by the Registrar of Friendly Societies for the years 1923,
1924, and 1925.
New Zealand Official Year Book, 1915.
INTRODUCTION
Sickness insurance in New Zealand is provided for the workers
by their friendly societies, which are associations for mutual aid
modelled upon the English societies. The legislation is likewise
based upon the British Act of 1875. The societies are almost all
affiliated orders, i.e. federations of branches having a central
body and a central fund. The branchless societies are principally
works funds and dispensaries supported by other societies.
§ 1. — Registration
REGISTRAR OF FRIENDLY SOCIETIES
The registration of friendly societies is optional, but it appears
that every important society has in fact become registered in order
to avail itself of the privileges which registration entails.
296
VOLUNTARY SICKNESS INSURANCE
A Government official, styled the Registrar of Friendly Societies,
is entrusted with the duties of registering and supervising friendly
societies.
CONDITIONS OF
REGISTRATION
A friendly society applying for registration must satisfy the
Registrar in three respects:
Objects.
Rules.
Minimum membership
A registered affiliated order must register all its branches.
OBJECTS
The principal object for which a registered friendly society
exists is the insurance of its members and their dependants against
various contingencies. A wide range of contingencies may be
insured against, but those for which provision is made on an
important scale are sickness and death only. The objects of
branches must be identical with those of the society.
RULES
The rules of a society and of its branches must deal with certain
prescribed matters including objects, use of funds, terms of
admission, government, making of rules, investment of funds,
and settlement of disputes.
MINIMUM
MEMBERSHIP
A society cannot be registered unless it has at least seven members.
297
NEW ZEALAND
STATISTICS
OF
NUMBER
AND
SIZE
OF
REGISTERED
FRIENDLY
SOCIETIES
NUMBER OF REGISTERED SOCIETIES AND BRANCHES AND
MEMBERSHIP OF BRANCHES IN 1914,
Year (end of)
1914
1923
1924
1925
1923,
1924,
and
AVERAGE
1925
Number of
societies and
branches
registered
Number of
branches making
returns
Average
membership
of branches
918
927
962
717
774
782
817
103
109
112
112
§ 2. — Membership
TERMS OF ADMISSION
The terms of admission are settled by the rules of each society.
In the absence of positive information one may suppose that they
are generally of the same character as the terms in force in British
and Australian societies, i.e. there would be an age limit of 40 to
45 years, a requirement of good health and, for some societies, a
condition as to abstinence from alcoholic liquors or as to religious
belief, or again as to employment in a particular works — the last
condition would not apply to affiliated orders but only to works
funds. The law enables minors under t h a t age of 16 to be admitted
as members, their parents acting on their behalf. Until he reaches
the age of 21 a member may not become an officer of the society.
STATISTICS OF MEMBERSHIP
Membership ol registered friendly societies in 1914, 1923, 1924,
and 1925:
Year
Membership
1914
1923
1924
1925
74,074
84,228
87,433
91,353
The membership in 1924 represented 6.7 per cent, of the popuation.
298
VOLUNTARY SICKNESS INSURANCE
§ 3. — Benefits
The principal benefits provided by friendly societies consist of
sickness benefit, funeral benefit, and medical attendance for members and their dependants. No details other than statistical are
available concerning the cash benefits, except that a society is
prohibited by law from paying an annuity in excess of £52 a year
or a lump sum exceeding £300. With regard to medical attendance
likewise, there is no information except as to cost; it may be
observed, however, that among the registered societies are sixteen
entitled "united friendly societies' dispensaries", whence it appears
that a group of societies or branches in the same locality unite to
establish their own dispensary.
STATISTICS OF B E N E F I T S
TOTAL COST AND COST PER MEMBER OF SICKNESS, FUNERAL, AND
MEDICAL BENEFITS IN 1914, 1923, 1924, and
Sickness
Year
Total
cost
1914
1923
1924
1925
Funeral
1925
Medical
Cost per
member
Total
cost
Cost per
member
Total
cost
Cost per
member
£
£
£
£
77,812
103,407
98,360
104,148
1.05
1.23
1.13
1.14
£
70,416
109,488
115,307
122,726
0.99
1.30
1.31
1.34
0.36
0.34
0.32
30,257
29,090
28,192
£
AVERAGE DURATION OF SICKNESS PER SICK MEMBER AND PER
MEMBER, AND AVERAGE COST OF SICKNESS BENEFIT PER SICK MEMBER
PER WEEK OF SICKNESS IN 1923, 1924, AND 1925
Duration of sickness
Year
1923
1924
1925
per sick member
9 weeks 5 days
11 weeks 2 days
. 11 weeks
per member
Cost of benefit
per sick member
per week
2 weeks
2 weeks
2 weeks
£
0.66
0:64
0.65
NEW ZEALAND
299
§ 4. — Financial Resources
The income of friendly societies is derived from the contributions
of members and interest on investments. In accordance with the
requirements of the law, the contribution is divided into two portions,
which are paid into separate accounts for sickness and funeral
benefit on the one hand, and for medical benefit and management
expenses. No information is available as to the rates of contributions commonly adopted. It is evident from the statistics shown
below that to an important extent the funds of societies are centralised under the control of the central body.
INVESTMENTS
There are no reserves other than the balances of the sickness and
funeral fund and the medical and management fund. These balances
in so far as they exceed current requirements, may be invested,
The nature of the investments is prescribed by law : stocks of the
New Zealand Government and municipalities, and land.
DISPOSAL OF SURPLUS
A society which has been found at its last actuarial valuation
to possess a surplus may, with the consent of the Registrar and the
Official Actuary, apply as much as can be safely used to the increase
of benefit, the reduction of contributions, the provision of superannuation benefits, and certain other purposes»
STATISTICS OF FINANCIAL RESOURCES
INCOME AND EXPENDITURE OF REGISTERED FRIENDLY SOCIETIES
IN 1923, 1924, AND 1925
Income
Year
Contributions
Interest
Repayments
to branches
hy central
bodies
1923
1924
1925
£
309,212
325,931
345,980
£
132,756
143,389
153,017
£
43,815
44,342
42,711
Other
receipts
£
37,877
91,812
59,171
Total
£
523,660
605,474
600,879
300
VOLUNTARY SICKNESS INSURANCE
Expenditure
Year
1923
1924
1925
Payments
by branches
to central
bodies
Cost
of administration
Other
expenditure
Total
£
£
£
£
£
243,152
242,757
255,066
82,556
100,684
108,019
Benefits
15,521
35,684
76,677
42,917
43,686
45,808
AMOUNT OF CONTRIBUTIONS AND OF BENEFITS PER
1923, 1924,
AND
384,146
422,811
485,570
MEMBER IN
1925
Year
Contributions
Benefits
£
£
1923
1924
1925
3.55
3.73
3.80
2.88
2.77
2.80
ACCUMULATED FUNDS AT END OF 1 9 2 3 , 1 9 2 4 , AND 1 9 2 5 ,
ABSOLUTELY AND PER MEMBER
Accumulated funds
Year
Absolutely
£
1923
1924
1925
2,747,952
2,955,340
. 3,136,237
Per member
£
33.63
33.80
34.33
§ 5. — Administration
The mode of government of societies and branches is left entirely
to their rules. It is merely required that the rules should fully
cover the matter, prescribing the mode of holding meetings, the
right of voting, the manner of making rules, the appointment of
the committee of management, the treasurer, secretary, and
trustees. As has already been stated, almost the entire membership
of friendly societies is comprised in the branches of affiliated orders.
301
NEW ZEALAND
STATISTICS OF COST OF ADMINISTRATION
COST OF ADMINISTRATION OF REGISTERED FRIENDLY
SOCIETIES,
ABSOLUTELY, PER MEMBER, AND AS PER CENT. OF TOTAL
EXPENDITURE IN 1923, 1924, AND 1925
Cost of administration
Year
l
Absolutely
1923
1924
1925
1
Per member
Percent, of total
expenditure
£
£
£
42,917
43,686
45,808
0.58
0.52
0.50
11.2
13.6
9.4
§ 6. — State Financial Supervision
Over the financial management of friendly societies which
choose to be registered a stringent control is exercised by the
Registrar, who is assisted by the Official Actuary.
Tables of contributions and benefits cannot be approved unless
found to be satisfactory by an actuary. The rates of benefits are,
as already mentioned, subject to maximum limits. Separate accounts
must be kept for benefits and management expenses, the transfer
from one to the other being allowed only with the consent of the
Registrar and the Official Actuary. The Registrar or the Official
Actuary may at any time inspect the books of a society or branch.
Every year its accounts must be audited by a person selected by
itself who, if the Registrar so requires, must be a public auditor,
and the audited accounts must be submitted to the Registrar.
Finally, every five years at least, the assets and liabilities of the
society or branch must be valued or the materials for making
a valuation must be sent to the Registrar. The latest annual
return and the latest valuation must be publicly exhibited at the
office of the society or branch.
302
VOLUNTARY SICKNESS INSURANCE
§ 7. — Settlement of Disputes
Provision must be made in the rules of each society for the settlement of disputes between itself and its members or branches. The
decision arrived at in accordance with the rules is final. Nevertheless,
if the parties consent, the matter may be referred to the Registrar
for decision instead of to the society's tribunal. Moreover, the rules
may provide that all disputes shall be brought before a magistrate's
court, and this course is always open as an alternative should the
society's tribunal fail to render a decision within forty days after
application has been made to it by the person aggrieved.
PALESTINE
§ 1. — State of the Law
The law of Palestine contains no provisions relating to sickness
insurance, whether compulsory or voluntary.
The only sickness fund existing in Palestine is that of the General
Organisation of Jewish Workers (Koupatk Holim), which is
recognised in practice by the authorities but does not possess legal
personality.
§ 2. — History of the Sickness Fund
Already before the war when Jewish workers, mainly engaged
in agriculture, were beginning to organise, there was established
among other cultural and social institutions for the Jews a sickness
insurance fund under the name of Koupatk Holim.
The Fund at that time had only a few hundred members, and
its function consisted merely in providing the insured with medical
treatment and drugs. Two important factors have been responsible
for the rapid growth of the Sickness Fund since the war, and
especially since 1921:
(a) The foundation of the General Organisation of Jewish
'Workers in Palestine, which comprised in a single body all
the Jewish workers in Palestine, whether trade unionists
or not (March 1921).
(6) The large immigration of Jewish pioneers which began at the
rate of thousands a year in the middle of 1920.
One of the characterisitc features of the Palestine Sickness Fund
is its close connection with the organised workers' movement in
Palestine. Since the establishment of the General Organisation
of Jewish Workers, the Sickness Fund has operated as one of the
304
VOLUNTARY SICKNESS INSURANCE
institutions of the Organisation, its management being responsible
to the higher authorities of the Organisation, viz. the General
Meeting of Jewish Workers in Palestine, the council and the
executive committee, and its membership being confined to
members of the General Organisation.
A tendency has manifested itself recently to widen the scope of
the Fund, to give it greater independence, and to strengthen the
co-operative element in its machinery. As the scheme stands at
present, groups of organised workers, although not members of the
General Organisation, can be insured by the Sickness Fund of the
Organisation and enjoy the advantages of membership of the Fund.
The supervision of the Fund by the executive committee of the
Organisation, which is elected by the General Meeting of Jewish
Workers, and the moral and material aid afforded to the Fund by
the Organisation and all its institutions have enabled the Sickness
Fund to develop itself and widen the field of its activities as respects
both quantity and quality.
The influence of the second factor — the mass immigration of
Jewish pioneers — will easily be appreciated. The great majority of
skilled workers and pioneers coming to Palestine with the assistance
of the Zionist Organisation join the Sickness Fund immediately
after their arrival. The Zionist Organisation pays the entrance fee
usually required by the Fund on behalf of immigrants who are
without means. The increase in the membership of the Fund is
therefore proportional to the immigration into Palestine.
§ 3. — Membership Statistics
From being a few hundreds before the war, the membership
of the Fund grew during the first two years of the new Jewish
immigration (from the middle of 1920 to 1922) to 5,746". At
the end of the subsequent years, the membership was as follows :
1923
1924
6,600
8,100
1925
1926
12,750
15,364
According to the rules of the Fund, the family of the insured
person, viz. his wife and children, are entitled to the benefits of the
Fund. Exact figures of the total number of persons protected
by the Fund are not available, but they may be estimated at
between 25,000 and 30,000.
305
PALESTINE
It should be observed that a certain number — perhaps 20 per
cent. — of the members of the General Organisation do not belong
to the Sickness Fund, although according to the rules of the
Organisation all its members are required to belong to the Fund.
In this respect there is a difference between the urban workers
and rural workers. Nearly 100 per cent, of agricultural workers
who are members of the Organisation also belong to the Sickness
Fund, whereas only 68.7 per cent, of the organised urban workers
are insured. The reason is simple: the rural workers feel the
necessity for the Fund more than urban workers because they have
no other means of getting medical treatment and live under
unhealthy conditions. Among the urban workers those who fail
to insure themselves are those who work and live under favourable
hygienic conditions. The proof of these statements is found in the
table given below.
DISTRIBUTION OF URBAN MEMBERSHIP OF SICKNESS FUND ACCORDING
TO OCCUPATION
Members of
General
Organisation
Occupation
Public works and construction
Agriculture and horticulture
Metals and electricity
Carpentry and woodworking
Food
Building
Non-manual
Teachers
Transport and communication
Paper and printing
Clothing
Medical
Liberal professions
3,540
555
1,160
824
317
2,025
972
274
406
271
689
240
223
Members of Fund
Number
Per cent.
3,521
424
674
466
173
1,098
456
128
183
110
259
75
27
99.5
76.4
58.1
56.5
54.5
54.2
46.9
46.6
45.0
40.6
37.6
31.2
A O
A
14. 1
§ 4. — Benefits
The benefits provided for its members by the Sickness Fund
consist of the following elements:
(1) Medical aid.
(2) Convalescent treatment.
(3) Sickness benefit.
(4) Maternity benefit.
(5) Preventive work.
20
306
VOLUNTARY SICKNESS INSURANCE
MEDICAL A I D
The principal feature which distinguishes the Palestine Fund
from similar institutions in most other countries is its tendency to
provide medical treatment by means of its own establishments
and its own staff.
During the four years 1923-1926 the Fund has set up hospitals
and " sick rooms ", urban and rural dispensaries, convalescent
homes, and pharmacies in which are engaged medical staff (doctors,.
nurses, pharmacists, etc.) of about 150 persons.
The explanation of this development is to be found in the
peculiar difficulties of providing medical aid in a country whichr
like Palestine, has only recently been colonised. In particular
may be mentioned the settlement of agricultural workers in localities
without parish or government medical service; the frequent
necessity for medical aid arising from the climatic conditions and
the endemic diseases of Palestine, forcing the Fund to provide
a well-developed medical service corresponding to the needs of
the insured (medical aid during road-building, drainage work, etc.,
bed accommodation during the unhealthy season); the special
responsibility which must be borne by a fund in a country destitute
of legislation on sickness insurance; and finally the absence of a
stable relationship between the Fund and the private and public
medical institutions existing in Palestine.
This last question is now the object of particular attention by the
Fund, which is endeavouring to arrange for the permanent cooperation of all the medical institutions in the country.
More than half the annual budget of the Sickness Fund is
allocated to medical aid, as is apparent from the following figures.
EXPENDITURE ON MEDICAL AID
Year
Expenditure
Percentage
of total budget
£E
1922-1923
1923-1924
1924-1925
1925-1926
14,376
18,731
24,742
33,482
54.8
63.3
59.2
60.6
Medical aid comprises treatment by a general practitioner or
specialist, home nursing, hospital treatment, dental treatment,.
and the supply of drugs.
PALESTINE
307
Dispensaries
There are two kinds of dispensaries belonging to the Sickness
Fund : urban and rural.
The urban dispensaries are at Jerusalem, Tel-Aviv, and Haifa.
In 1925-1926 they had a staff of 9 general practitioners, 17
specialists, 7 nurses, and other employees. They spent in that
year £E9,024 and gave 280,255 consultations, which thus cost,
on the average, 3.2 piastres each.
The rural dispensaries are scattered throughout the country.
Their number has grown from 34 to 49 between 1923 and 1926.
In 1925-1926 they employed 27 doctors and 22 nurses, and their
expenditure was £E8,239.
Hospitals and Sick Rooms
Since the beginning of the new colonisation (1922-1923), and
even before, at the time when the preparatory work on the land was
being carried out, the Sickness Fund set up temporary sick rooms,
which, although simply equipped, were nevertheless of the greatest
service, as they gave first-aid at the place of work. During the
summer season, sick rooms were also installed at centres which
had a special need for a reserve of beds: Tel-Aviv and PetahTikvah.
During 1925-1926 the Sickness Fund maintained permanent
hospitals at Ain-Harod and Tiberias, and sick rooms at PetahTikvah and Hederá. The number of beds in these, establishments
was 122 in the summer of 1926.
The cost of hospital treatment works out at 32 piastres a day.
Treatment is also provided gratuitously, or at low cost, to members of the Sickness Fund, by the hospitals of " Hadassa", an
organisation of women Zionists in America.
No arrangements for dental treatment have yet been made.
Supply of Drugs
The principal pharmacies are at Tel-Aviv, Haifa, Jerusalem,
Ain-Harod, and Petah-Tikvah. In the country the pharmacies are
attached to the dispensaries. In 1925-1926 the urban pharmacies
made up 131,550 prescriptions at an average cost of 1.7 piastres
each.
308
VOLUNTARY SICKNESS INSURANCE
CONVALESCENT TREATMENT
The frequency of illness in Palestine, the large number of
infectious diseases, and the endemic diseases of malaria and papataci, which reduce the patient's working capacity for a long while,
rendered it expedient to provide convalescent treatment. In 1924
a home with 30 beds was built, which accommodated 417 patients
in 1926. The construction of another home is being proceeded
with.
SICKNESS BENEFIT
The Sickness Fund pays its members a maintenance allowance
during sickness in cases where they do not continue to receive their
wages. Unlike the sickness benefit provided under most insurance
schemes, the benefit in Palestine is not proportional to wages, but
varies with, the type of sickness and the family responsibilities of
the patient. The Sickness Fund provides for three classes of
benefit.
The first class is awarded after a grave illness, when the patient
needs a rich diet — for example, after typhus and pneumonia.
The second class is awarded in the case of internal diseases
which are not dangerous.
The third class is awarded in the case of slight external diseases.
The heads of families receive an additional allowance of 50 per
cent.
As from 1925-1926 the sickness benefit has been fixed at the
following rates of daily benefit (in piastres) :
First class
Unmarried_persons
Heads of families
Second class
Third class
Town
Country
Town
Country
Town
Country
12
18
10
15
10
15
9
13.5
8
12
8
12
Workers who are entitled to their wages during sickness do not
receive the sickness benefit; persons employed on agricultural
establishments do not receive any allowance while working in
these establishments, but elsewhere they receive the ordinary
maintenance allowance.
The proportion of the benefit to the wage is lower in the towns.
309
PALESTINE
If one assumes that the wages for a day's work is 15 piastres in the
country, then the sickness benefit equals 55 to 60 per cent, of the
wage of the unmarried, and 100 per cent, of that of the head of a
family. If the daily wage earned in the towns is estimated at 25
to 30 piastres, then the sickness benefit represents 26 to 40 per cent.
of the wage of an unmarried person and 40 to 60 per cent, of that
of the head of a family. The expenditure on sickness benefit
has been as follows:
Year
Cost
1922-1923
1923-1924
1924-1925
1925-1926
4,469
3,506
4,492
4,923
Days of sickness
£E
33,854
44,414
47,769
MATERNITY B E N E F I T
The Sickness Fund also makes provision for maternity benefit.
Women members of the Fund receive during confinement:
(i) a maintenance allowance for fourteen days;
(ii) medical aid and drugs;
(iii) attendance of a midwife.
The wives of members of the Fund receive only medical aid and
attendance of a midwife.
It is obvious that two weeks' maintenance allowance is insufficient. This benefit will be extended as soon as circumstances
permit.
The Sickness Fund is endeavouring to arrange for women to be
treated during their confinement in the maternity wards of
hospitals, especially those of " Hadassa".
During 1925-1926 the Sickness Fund spent £E1,340, or 2.42 per
cent, of its total income, on maternity benefit.
PREVENTIVE WORK
The Sickness Fund devotes special attention to the needs of
pregnant women and new-bom children. An active propaganda
is carried on by doctors in the towns and in the centres of the rural
310
VOLUNTARY SICKNESS INSURANCE
colonies. The doctors of the Sickness Fund take an important
part in the work of preventive sanitation as members of sanitary
commissions, and by assisting the authorities responsible for
sanitary inspection.
§ 5. — Administration and Organisation
At the head of the Sickness Fund is a central body consisting
of three members elected by the General Meeting of Jewish Workers
in Palestine or by the council of the General Organisation of Jewish
Workers in Palestine. In connection with this central body,
there works a medical section under the direction of the chief
medical adviser of the Sickness Fund, as well as a medical council
composed of five members (mostly district doctors), which acts in
an advisory capacity on all questions of medical work. The headquarters of the Fund are situated at Tel-Aviv. For purposes of
local administration, seven district offices, assisted by the district
doctors, have been established. The directors of the district
offices are appointed by the central body. The district offices are
at Tel-Aviv, Petah-Tikvah, Jerusalem, Hederá, Haifa, Afuleh, and
Tiberias. The administrative staff of the Fund in the central
body and in the districts numbered 34 persons in 1926. The
Sickness Fund also employed in that year 66 doctors, 14 chemists,
63 nurses, 5 sanitary men, and 48 cleaners and cooks.
§ 6. — Financial Resources
REVENUE
According to rule No. 3 of the constitution of the Sickness Fund,
as approved by the second General Meeting of Jewish Workers in
Palestine, the sources of the revenue of the Fund consist of the
following items :
(i) contributions of members and entrance fees ;
(ii) extra contributions of co-operatives and employers;
(iii) subsidies from the Zionist Organisation and other public
institutions ;
(iv) miscellaneous gifts.
311
PALESTINE
The following tables show the receipts derived from different
sources from 1922 to 1926, as well as the proportion of the total
revenue represented by the income from each source.
REVENUE OF THE SICKNESS FUND FROM 1922 TO 1926 (iN £E)
Source
Contributions of members and
co-operatives
Zionist Organisation
Employers
Miscellaneous receipts
Total
Contributions of members and
co-operatives
Zionist Organisation
Employers
Miscellaneous receipts
Total
1922-1923
1923-1924
1924-1925
1925-1926
14,912
9,322
1,270
435
25,939
16,998
11,667
1,234
443
30,342
20,611
11,300
3,748
367
36,026
30,978
17,299
3,806
971
53,052
Per cent.
Per cent.
Per cent.
Per cent.
57.4
35.9
5.0
1.7
100
56.0
38.5
4.0
1.5
100
57.3
31.4
10.3
1.0
100
58.4
32.6
7.2
1.8
100
Contributions of Members
Members are required to pay monthly contributions at the
following rates :
Monthly wage
£B
Up to 6
6.01 to 8
8.01 to 12
12.01 to 18
18.01 to 22
Over 22
Contribution
Piastres
15
20
25
30
35
2 per cent.
of wages.
Married members earning over £E6 a month pay five piastres
more if they have no children. Heads of families (wife and children),
however, pay the same contribution as unmarried members. The
great majority of members pay the minimum contribution, and the
average contribution in 1925-1926 was 17.4 piastres.
Extra Contributions of Co-operatives and Employers
The workers' co-operative urban and agricultural establishments
pay a contribution for the members employed by them in addition
312
VOLUNTARY SICKNESS INSURANCE
to that paid by the members themselves. This extra contribution
amounted in 1925-1926 to £E7,716, or 14.4 per cent, of the total
receipts. The scale of this extra contribution, except for agricultural establishments, is as follows: three per cent, of the wages
of workers who are not entitled to pay during sickness, and who
consequently receive sickness benefit from the Fund ; and 15 piastres
per month in respect of every worker who is entitled to pay during
sickness.
The agricultural establishments paid until 1924-1925 10 piastres
per month per member as an extra contribution. From 1925,
however, the extra contribution was reduced to 5 piastres.
Most of the important employers have consented to pay extra
contributions on the same scale as the workers' industrial establishments — i.e. three per cent, of wages, or 15 piastres per month for
members not drawing sickness benefit. The extra contributions
of employers amounted to 7.2 per cent, of the total receipts in
1925-1926.
EXPENDITURE
EXPENDITURE OF THE SICKNESS FUND FROM 1922-1923 TO 1925-1926
(IN £ E )
Object of expenditure
Medical aid
Convalescent treatment
Sickness benefit
Administration and
organisation
Miscellaneous
Total
Medical aid
Convalescent treatment
Sickness benefit
Administration and
organisation
Miscellaneous
Total
1922-1923
1923-1924
1924-1925
1925-1926
14,376
1,472
4,469
18,190
908
3,822
24,743
3,464
4,829
33,483
4,541
5,166
3,600
2,321
4,417
2,265
5,155
3,561
7,564
4,502
26,238
29,603
41,752
55,256
Per cent.
Per cent.
Per cent.
Per cent.
54.8
5.6
17.0
61.5
3.1
12.9
59.3
8.3
11.6
60.6
8.2
9.4
13.7
8.9
14.8
7.7
12.3
8.5
13.7
8.1
100
100
100
100
SPAIN
Acts and Regulations 1
Act of 30 June 1887 respecting associations.
Act of 28 January 1906 respecting agricultural syndicates (providing for the
compulsory establishment of mutual-aid funds).
Act of 30 August 1907: colonisation of thinly populated areas (providing for
the compulsory establishment of mutual-aid societies).
Act of 27 February 1908, relating to the establishment of the National
Welfare Institute (cf. The National Welfare Institute Bulletin, Vol. IV, p. 918).
Royal Decree of 20 November 1919 extending the powers of the National
Welfare Institute to cover all questions relating to social insurance.
Royal Decree of 3 January 1920 respecting the working of the Central
Maritime Credit Fund and the organisation of mutual aid in case of sickness and
invalidity.
Royal Order of 9 February 1921 relating to the obligation incumbent upon
Landed Proprietors' Co-operative Associations to set up mutual-aid societies.
Royal Order of 31 March 1925 to provide for the organisation of a Central
Health Commission to exercise supervision over the working of mutual-aid
funds.
1
As no official reports upon their working have hitherto been published by
mutual-aid societies undertaking voluntary sickness insurance, the International Labour Office requested the National Welfare Institute to supply materials for a monograph on voluntary sickness insurance in Spain. The Institute
undertook an extensive enquiry, not yet completed, the first results of which
were communicated to the International Labour Office with a view to the
Tenth Session of the International Labour Conference. The information
contained in the present study, as the Institute pointed out in a covering letter
to the Office, constitutes a first attempt on the part of official institutions to
grasp the real value and scope of the tasks of social insurance and welfare
effected on mutual lines; and it seems probable that the completion of the
enquiry will yield much better results than those arrived at during a cursory
provisional examination.
The information taken from the reports of the Institute is that relating to
sickness insurance ; the data relating to invalidity and life insurance may be
utilised for the purpose of other studies on these branches which the International Labour Office hopes to issue.
314
VOLUNTARY SICKNESS INSURANCE
INTRODUCTION
THE ORIGINS AND DEVELOPMENT OF SICKNESS INSURANCE
In Spain, the practice of mutual aid goes back to very distant
times. As in the case of most European States, it evolved from the
formation during the Middle Ages of societies (some of whose
articles of association are dated as early as 1328) which have
retained the characteristics of trade associations. For a long time
these societies were able to preserve the spirit of the old corporations
(gremios) known as " craft-guilds " and " brotherhoods ". These
exerted themselves to develop the professional qualities of their
members, to inculcate respect for civic duties and to cultivate in
them the feeling of solidarity. These institutions (some of which
had already existed for several hundred years), though vigorous,
desired above all to preserve their own peculiar character; and they
accordingly limited the field of their activities to certain groups
engaged in a particular occupation.
For practical purposes, it may be said that the mutual-aid movement acquired its present character as from 1850; and it was at that
period that mutual-aid societies began to be set up in the shape of
local funds, as opposed to mere trade funds. They were founded
in great numbers, but the membership in some cases was much too
insignificant, and many of them had a very short life.
In 1887 an Act was passed relating to associations in general,
in accordance with which their legal basis took definite shape.
The system under which they at present exist is one of absolute
freedom. In 1919 the co-operation of the National Welfare Institute
(Instituto Nacional de Precisión) was accorded to them by law.
During the period 1915 to 1925, to which the enquiry of the
National Institute relates, the spread of mutual aid has principally
affected the Province of Barcelona, where the expansion of industry
has naturally entailed the setting up of insurance institutions.
SPAIN
315
CHAFFER I
§ I. — Legal Position and Constitution of Funds
No special legislation to regulate the operation of voluntary
sickness insurance exists in Spain. Insurance institutions are
therefore only called upon to comply with the legal requirements
applying to associations in general. That is to say, their activities
are restricted only by police regulations.
The Act of 30 June 1887 respecting associations, together with
the Regulations for its application, were promulgated in accordance
with Article 13 of the Constitution, by which the right of association
is guaranteed to Spanish subjects. The general provisions of the
Act are applicable to all associations. Section 1, however, specifically lays down that the provisions of the Act apply to " mutual-aid
societies, welfare and protection societies and to producers', credit
and consumers' co-operative societies ".
The system thus permits the formation of all associations whose
object is voluntary insurance, upon the sole condition that their
rules are not in disagreement with the provisions of the law relating
to the constitution of societies.
On the other hand, there are certain institutions which come under
a special system of their own; the most important of these is the
National Welfare Institute.
The Institute was set up in accordance with the Act of 27 February
1908, its objects being to provide for the establishment and
extension of popular insurance in general; it has also to undertake
the compulsory old-age insurance introduced by the Act of 11 March
1919, and, further, to see that the principles of mutual aid are
duly respected by societies for mutual sickness assistance, etc.
By a Royal Decree dated 20 November 1919 the powers of the
National Welfare Institute were extended to cover all measures
relating to insurance and welfare as affecting physiological risks x .
1
For the purpose of constructing its plan of action the National Welfare
Institute convened two National Congresses; the first of these, held in Madrid
in March 1917, had to consider the question of social insurance in general; and
316
VOLUNTARY SICKNESS INSURANCE
The agricultural syndicates, co-operative settlement societies,
school mutual-aid societies, and fishermen's assistance funds are
among the institutions coming under a special system.
The Act of 29 January 1906 relating to agricultural syndicates
provides that a society applying for official recognition as an agricultural syndicate must set up " mutual-aid services for the benefit
of old and disabled workers respectively engaged in agriculture or in
stock-raising ". Official recognition has the effect of exempting
these syndicates from payment of taxes and ensures to them, free
of charge, the willing collaboration of officials representing public
authorities.
So far as co-operative settlement societies are concerned, the
Act of 30 August 1907 relating to the settlement of thinly-populated
areas provides that a co-operative society shall be established, to
which all the settlers in a colony shall belong. This society is to
provide assistance in case of sickness (section 8 of the Act, and section 95, subsection 12, of the Regulations for its application,
dated 23 October 1918). A similar obligation is imposed upon the
co-operative societies formed by the proprietors of holdings resulting
from the parcelling out of private estates (Royal Order dated
9 February 1921).
School mutual-aid societies are compulsory for all elementary
national schools. In accordance with their rules sickness insurance
and popular life insurance are included among their essential objects
(Royal Order dated 11 May 1912).
The credit institutions for seamen and fishermen (Pósitos
marítimos and Pósitos de Pescadores), whose object is the assistance
and protection of those workers in particular, undertake sickness and
invalidity insurance on mutual lines.
A " mutual-aid fund " may be legally constituted, as provided
by the Act of 30 June 1887 relating to associations, by submitting
to the Civil Government of the Province the rules and contracts
or agreements by which the fund is regulated. These documents
must indicate precisely the style and object of the society, its address,
and the system by which it is administered and its accounts kept,
and must define the manner in which its funds are to be disposed
the second, held in Barcelona in November 1922, had to deal with sickness,
invalidity, and maternity insurance. The deliberations, speeches and documents of these two Congresses have been published in three volumes. Cf. also :
The National Welfare Institute and the Funds Collaborating With It, a work
published on the occasion of the Seventh Session of the International Labour
Conference, 1925.
317
SPAIN
of in the event of the society being dissolved. The formalities
must be complied with by the founders at least eight days prior
to the definite constitution of the society; and if no opposition is
offered by the authorities within this period, the fund is legally
recognised. A duplicate of the articles of association must be
deposited with the authorities, by whom it is duly registered, a
special file being kept for each society. The legal status of the
new society is established by the registration certificate.
§ 2. — The Various Kinds of Funds and their Geographical Distribution
The funds or societies are of many different kinds. There are
trade union funds, works funds, occupational funds, sectarian funds,
and general funds. The following table shows that general funds
predominate; it also shows the relatively considerable importance
of the sectarian and occupational funds and the insignificant number
of trade union funds and works funds.
DISTRIBUTION OF MUTUAL-AID FUNDS ACCORDING
TO THEIR CHARACTER
Year
Trade
union
lunds
Works
funds
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
66
69
71
nr.
78
87
88
89
90
93
95
30
32
40
44
46
53
59
63
64
67
69
Occupa- Sectarian General
tional
funds
funds
funds
181
192
200
209
221
230
236
247
265
275
284
208
221
234
244
245
248
251
253
258
260
278
722
733
762
773
789
798
815
858
840
849
868
Unspecified
Total
109
92
102
107
114
119
125
133
168
189
190
1,316
1,339
1,409
1.451
1.493
1,535
1,574
1,643
1,685
1,733
1,784
The funds are by no means evenly distributed over the various
regions; the Province of Catalonia alone possesses three-fourths
of the total number, as will be seen from the following table.
318
VOLUNTARY SICKNESS
GEOGRAPHICAL
Region
Leon
Catalonia
Guipúzcoa
Viscaya
Aragon
Asturias
Galicia
Santander
Andalusia
(Western)
Salamanca
Valencia
Ala\a
Navarra
Andalusia
(Eastern)
Estramadura
Murcia-Albacete
Canary Islands
Old Castile
Valladolid
Palencia
New Castile
Madrid
Totals
DISTRIBUTION
INSURANCE
OF MUTUAL-AID
FUNDS
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
7
935
8
969
9
1,000
10
1,032
10
1,050
10
1,065
10
1,085
11
1,102
13
1,122
13
1,140
15
1,156
49
54
22
18
22
53
57
22
18
22
61
58
25
18
23
64
58
26
18
26
72
58
27
20
29
78
60
29
20
30
79
64
29
20
30
82
65
29
20
30
83
65
34
21
30
84
65
37
23
31
84
66
44
23
33
35
12
52
4
3
39
11
55
4
4
41
13
59
4
4
44
13
61
4
4
46
13
65
4
4
46
14
69
5
5
51
15
71
5
6
56 .
15
76
6
6
64
15
79
6
6
67
15
82
6
6
72
16
83
6
6
1
7
3
3
9
3
3
9
3
3
9
3
3
9
4
3
9
5
5
9
6
5
9
6
5
9
7
5
9
7
6
9
7
•
21
22
22
24
24
26
26
26
26
26
27
19
5
5
20
6
7
21
10
8
21
10
8
21
10
8
21
10
9
21
10
H
21
10
53
21
10
64
21
10
75
22
10
85
1,274
1,332
1,391
1,438
1,477
1,514
1,553
1,628
1,680
1,722
1,770
It will be noticed that the totals shown in the first table are
slightly in excess of those given in the second. This is due to
the fact that certain funds cover more than one category, and
are thus included twice, e.g. a fund which is both occupational
and sectarian in character is included under both these headings.
3. — Administration
Although no provisions for the administration of mutual-aid
funds are laid down by law, their organisation is practically the.
same in almost every case. Each fund, as a rule, possesses two
organs: (a) a general meeting, and (b) a committee of management.
(a) The general meeting. — This consists of all members of the
fund who are in posesssion of their civil rights. Its principal
duties are to approve the statutes, rules and accounts and to elect
the members of the committee of management.
(b) The committee of management. — Any person affiliated to the
fund and possessed of civil rights is eligible for membership to the
committee of management ;<and a member elected to the committee
is liable to a fine if he declines to serve. Usually the position is
to an honorary character; re-election of the committee takes place
annually.
SPAIN
319
As a general rule, the committee includes a chairman, vicechairman, secretary, treasurer, and several assessors, one of the
latter being chosen to fulfil the duties of sickness inspector (visitor).
Certain disciplinary powers are conferred upon the chairman, and
most frequently upon the sickness inspector also, for the purpose
of applying sanctions to malingerers or members refusing to obey
the doctor's orders.
§ 4. — State Supervision
Sickness funds constituted in accordance with the provisions
of the Act relating to associations are subject to State supervision
exercised by the following authorities:
(a) the Civil Governor of the Province.
(b) the General Insurance Commission.
(c) the Central Health Commission (which is now in process of
organisation).
SUPERVISION BY THE CIVIL GOVERNOR OF THE
PROVINCE
Sickness funds may not be authorised to undertake insurance
until a duly authenticated copy of their rules has been submitted
to the Civil Governor of the Province (section 38 of the Act of 14
May 1908 and section 73 of the Regulations for its application, 1912).
Further, the civil authorities must be kept informed of any change
of address, or alteration made in any of the rules. They must also
be duly notified of the place and date of general meetings. Upon
the request of the Governments, the civil authorities may examine
the list of members, especially those exercising any special function.
The said authorities must be notified concerning the election of
the committee of management, and kept informed of the financial
position of the fund, the sources from which its income is derived,
and the manner in which this is employed. At the close of each
administrative year a copy of the fund's balance sheet must be
forwarded to the Civil Government. During periods of disturbance
all these formalities must be meticulously observed, as must
any other additional obligations.
Any infraction of the provisions of the Act relating to associations
may be punished by the infliction of a fine upon the members of
the committee of management by the Civil Government of the
Province. If the case is one in which the infraction is considered to
320
VOLUNTARY SICKNESS INSURANCE
constitute either an illegal act or a crime, the Civil Government may
suspend the activity of the fund. Nevertheless the society may
not be dissolved except in pursuance of an order issued by the
judicial authorities.
SUPERVISION BY THE GENERAL INSURANCE COMMISSION
The supervision exercise by this body is limited to ascertaining
by surveillance of their working that the mutual-aid funds are not
undertaking any class of operation in respect of which private
insurance companies hold a monopoly. Should any fund be found
to have undertaken such operations, the responsible managers are
liable to a fine which may amount to one hundred pesetas in respect
of each infraction.
SUPERVISION BY THE CENTRAL HEALTH COMMISSION
This Commission, which is attached to the General Directorate
of Public Health, was created by Royal Order dated 31 March 1925,
its organisation being carried out in accordance with Royal Orders
dated respectively 9 and 22 May 1925, and 12 January, 10 February
and 2 March 1926. The insurance funds, insured persons, doctors,
and pharmaceutical chemists are all represented on the Commission.
Moreover, each Province is represented by its own particular
section; the latter has to watch over all undertakings which, in
consideration of a fee, undertake to supply medical attendance or
drugs in case of sickness or accident. Supervision is exercised on
these lines for the purpose of ensuring the provision of medical
and cognate services provided for in the rules. The Commission
may, upon either its own initiative or receipt of a complaint,
proceed to effect any inspection which it may consider needful;
in case of infraction, it is empowered to inflict punishment by
way of fines amounting to from 25 to 500 pesetas. In case of a
second offence, the amount of the fine may be doubled.
§ 5. — Relations between Funds
There is no
funds to form
or federations
ments of the
legal provision in existence to limit the right of the
unions or federations among themselves; but unions
so formed must of course comply with the requireAct relating to associations.
SPAIN
321
There are, however, very few unions or federations of mutual-aid
funds, though certain federations of trade union funds do exist.
These are closely bound up with the unions to which they belong.
There is one large insurance fund federation in the Province of
Barcelona. There 641 funds, with a total membership of 166,894
insured persons, affiliated to it in 1924.
Steps are at present being taken in several Provinces to set up
new federations.
21
322
VOLUNTARY SICKNESS INSURANCE
CHAPTER II
INSURED PERSONS
§ 1. — Conditions for Admission to Membership
All persons fulfilling the conditions laid down in the rules may be
admitted as members of a fund.
The conditions for admission to membership may be of a physical,
occupational, economic, moral or religious, or legal nature.
PHYSICAL CONDITIONS
The physical conditions to be fulfilled by candidates for membership of a mutual-aid fund relate to the sex, age, and state of health
of the applicant. In most cases, women are admitted on the same
conditions as men; and equality in this respect is carried so far
that it becomes extremely difficult to establish statistics showing
the proportion of the two sexes among insured persons belonging
to a " mixed " mutual-aid fund.
In regard to the question of age, it will be remarked that all the
funds (with the exception of the school mutual-aid funds) stipulate
a minimum age of admission varying from 10 to 20 years, and a
maximum age-limit which may be anything between 35 and 60
years. Usually, the right of admission to membership is limited
to persons of not less than 16 and not more than 40 to 45 years
of age at most. An applicant for membership of a fund must
submit a medical certificate to the effect that he is in a satisfactory
state of health. A preliminary medical examination is required
in every case, and a vaccination certificate is frequently called for.
Applicants suffering from chronic diseases are not admitted. Moreover, before a new candidate for membership is definitely admitted
a qualifying period (usually three months) must elapse, during
which he must have remained free of any sickness or disease.
323
SPAIN
OCCUPATIONAL CONDITIONS
Conditions of this nature are only imposed by occupational
or trade union funds, which require that candidates shall be engaged
in or belong to a particular occupational group.
ECONOMIC
CONDITIONS
An entrance fee is demanded by the great majority of funds.
Some funds require, in addition, that the candidate shall show that
he possesses sufficient means of subsistence.
MORAL OR RELIGIOUS
CONDITIONS
A candidate for membership of a fund is usually required to be
of good conduct, respectable, and to submit a certificate to the
effect that he has never been sentenced for crime, etc. This is
considered to include such offences as taking part in political
disturbances or failure to fulfil civil or social obligations.
Sectarian funds admit to membership only those persons
professing the religion indicated in their rules.
LEGAL
CONDITIONS
A member must submit proof that he is resident within the
territory to which the fund's operations are limited. Foreigners,
married women, and minors may be admitted.
§ 2. — Membership Statistics
The total number of members affiliated to mutual-aid funds, as
at 31 December 1925, was 398,999. The insured persons, distributed
over various Provinces, are principally recruited in Barcelona and
Madrid.
324
VOLUNTARY SICKNESS INSURANCE
DISTRIBUTION OF INSURED PERSONS BY REGIONS
Region
Catalonia
Guipúzcoa l
Vizcaya
Aragon
Asturias
Galicia
Santander
Andalusia
(Western)
Salamanca
Valencia
Álava
Navarra
Andalusia
(Eastern)
Estremadura
Murcia-Albacete
Canary Islands i
Old Castile
Valladolid
New Castile i
Madrid
Totals
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
192
825
779
914
711
842
782
776
823
990
695
1.4
81,017 125,216 164,894 182,248 186,411 195,155 206,409 222,697 237,403 243,389 246,8
5,104
7,600
3,574
5,372
6,098
6,172
7,617
3,896
6,520
5,987
9,992
7,931
5,155
7,436
6,206
8,201
8,280
4,281
6,650
6,381
12,292
8,019
4,368
6,684
7,903
16,345
7,806
4,450
6,681
8,382
15,153
8,505
4,443
6,643
8,772
13,513
8,936
5,766
6,399
10,054
13,683
9,085
6,492
6,142
9,341
14,044
9,131
6,812
7,375
9,879
15, fi
12,5
8,7
7,9
11,5
4,561
1,851
15,997
6,603
1,866
16,524
1,717
366
6,931
1,942
17,329
1,716
366
6,709
1,985
17,679
1,713
418
8,345
1,995
18,108
1,593
438
8,647
1,953
26,215
1,836
438
9,085
2,327
26,543
1,745
521
10,033
2,301
23,557
2,682
635
10,245
2,318
20,858
2,657
637
11,091
2,348
22,304
2,624
627
15,5
3,4
26,6
3,1
8
599
224
982
226
1,079
240
1,060
238
1,542
1,429
1,780
1,530
135
1,660
1,653
128
1,493
1,834
105
1,360
1,754
118
1,282
1,886
3,137
1,976
4,021
1,859
4,062
1,996
4,190
2,110
4,657
1,984
5,102
2,221
4,892
1,976
4,794
2,058
4,669
2,071
4,771
2,319
2,a
2,3
1
6,6
2,S
6,188
8,670
8,872
9,662
11,773
14,317
17,083
20,441
22,896
25,075
26,1
—
—
l,ii
143,993 198,953 245,989 262,630 278,320 303,640 318,321 338,144 352,7301366,065 397,1
1
i No precise information available.
From the figures given it is evident that general funds and
sectarian funds are the most numerous. Next in order come the
occupational funds, works funds, and, finally, trade union funds.
The 20,156 members of the school mutual-aid funds are included
in the number of msured persons quoted for 1925. No information
is available in regard to this category for the period prior to that.
date.
The figures quoted cover only the actual members of the funds
referred to.
In view of the fact that the employment of young persons (minors)
is in many industries prohibited by law, such minors constitute
only a very small group of insured persons. Many of the funds,
however, make provision for the supply of medical attendance and
drugs in case of illness to the families of their members.
According to the information available, persons insured with
mutual-aid funds represent 1.87 per cent, of the total population,
which (according to the last census taken) numbered 21,338,381
individuals. The percentage given, however, is, according to the
National Welfare Institute, manifestly below the actual proportion.
325
SPAIN
DISTRIBUTION
OF
INSURED
PERSONS
OF
ACCORDING
TO•CHARACTER
FUND
Year
Trade
union
funds
Works
funds
Occupa- Sectarian
tional
funds
funds
General
funds
Unspecified
School
funds
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
12,248
13,144
14,309
14,890
16,402
25,371
25,854
22,678
19,915
21,230
22,573
8,505
11,418
12,826
13,249
15,574
18,720
18,055
20,289
21,313
21,923
25,228
26,130
31,285
36,900
39,541
44,509
53,013
54,078
56,673
59,179
62,958
64,617
71,849
101,567
128,757
139,190
147,213
151,824
158,013
166,469
172,300
180,256
186,964
21,954
27,574
31,145
30,748
30,935
30,641
32,076
33,108
33,414
33,552
34,048
20,156
28,204
40,050
46,079
50,228
53,823
58,754
62,914
68,615
74,159
76,813
77,601
Owing to the lack of more precise information, it is impossible
to compile occupational statistics of insured persons. However,
the great majority of them belong to the wage-earning classes,
although a certain very small number of salaried workers and
craftsmen are included. In agricultural fdistricts the idea of
insurance is still far from widespread.
326
VOLUNTARY SICKNESS INSURANCE
CHAPTER III
RISKS COVERED
Mutual-aid funds generally undertake to cover by insurance the
risks of sickness, invalidity and old age, as well as life risks. The
following table shows that their activities, are mainly devoted to
sickness insurance.
DISTRIBUTION
Risk
Sickness (money
benefit)
F u n e r a l expenses
Maternity
Iiivaiidity
Old age
Life
Medical attendance
Provision of
drugs
Widows'
insurance
Orphans' insurance
Other insurances
Unspecified
1915
OF INSURED
P E R S O N S A C C O R D I N G TO R I S K
COVERED
1916
1918
1923
1917
1919
1920
1921
1922
153,393 205,297 233,989 254,705 272,308 293,139 304,950 391,914 339,992
32,993 39,780 42,078 41,725 44,825 45,950 46,182 47,516 48,770
10.317 10.609 in 135 13 141 14,140
4,894
6,636
8,328 10,207
87,640 90,268 97',570 1Ô2[768 109^634 117,109
53,513
13,383 75,353 82,338 18,482 19,605 19,853 20,719 21,828 24,489
82,743 16,433 18,434 145,373 159,040 174,573
186,007 203,680 219,109
112,956 133,593
42,336 48,090 63,951 63,808 70,129 73,374 68,086 70,404 71,779
1924
351,910
52,663
15,155
120,830
27,101
226,413
75,431
35,890 41,639
45,418
45,352 49,275
51,977
49,169
50,466
51,058 54,971
11,473
12,389
12,406
12,223
12,799
12,371
12,595
12,911
12,918
1,337
2,299
869
1,319
4,831
884
1,340
6,166
882
1,388
11,168
882
1,393
12,605
1,064
1,373
16,661
1,294
1,868
18,007
1,284
1,871
18,765
1,245
1,870
1,876
21,038 22,664
1,264
1,302
13,086
A a rule, the workers themselves prefer to insure against sickness
and invalidity, while the employers endeavour to protect their
workers' families by means of life insurance. The relative importance of sickness insurance in comparison with that of other risks
is also shown by the proportion of expenses involved ; e.g. in 1925 the
expenses incurred by the funds per insured person were distributed
as follows:
Risk covered
Sickness
Invalidity
Old age
Life
Pesetas
10.45
0.65
0.29
. 1.05
327
SPAIN
CHAPTER IV
BENEFITS
Insurance benefits are as follows : (a) free medical attendance and
supply of drugs in case of sickness, or free hospital or sanatorium
treatment, etc.; (b) a daily cash benefit intended to replace in
part the wage lost. These two benefits may, of course, be combined;
but it is of interest to observe that the two kinds are not
equally popular in all Provinces, e.g. in Catalonia insured persons
show a decided preference for the daily cash benefit, whereas in
Madrid insurance benefit almost always includes the provision
of medical attendance and drugs.
§ 1. — Cash Benefits
The daily cash benefit in case of sickness only becomes payable
after a waiting period of three days; as a rule, such benefit is not
payable over a longer period than one year.
COST OF SICKNESS BENEFIT (IN PESETAS)
Region
Old Castile
Vizcaya
Santander
Albacete
Álava .
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia
(Western)
Andalusia
(Eastern)
Valladolid
Salamanca
Catalonia
Totals
1915
1916
26,306.54
127,897.65
9,837.55
1917
1918
25,374.55
133,177.90
9,833.00
20,252.50
272,937.77
125,499,37
27,247.55
38,929.20
213,786.55
17,684.25
28,417.60
400,185.12
114,833.71
28,872.10
6,596.50
32,958.65
33,444.80
822.00
5,234.25
1,179,602.40
652.00
4,661.50
1,223,804.65
1,300.00
4,703.50
1,604,775.25
1,668,230.52
1,794,358.16
2,265,142.69
15,713.00
113,344.95
8,476.30
19,816.25
206,796.02
70,969.25
21,384.25
5,636.75
20,003.75
236,998.23
77,982.12
27,367.27
5,888.25
20,435.10
1919
1920
6,872.25
28,591.51
141,667.52
13,222.75
15,094.00
511,378.12
87,049.83
24,210.45
4,977.25
25,177.25
193,179.15
14,692.60
12,006.10
340,227.36
89,420.55
28,214.26
5,143.75
64,740.21
39,938.65
52,180.10
1,498.60
1,049.25
6,224.75
4,800.25
1,804,480.95 1,155,732.60
2,726,525.29 2,027,712.18
3,614.70
5,009.50
1,059,581.10
1,828,446.42
(Table continued on following page.)
328
VOLUNTARY SICKNESS INSURANCE
COST OF SICKNESS BENEFIT (IN PESETAS)
Begion
1921
1922
26,947.45
24,812.10
255,725.14
389,917.20
19,898.00
18,634.66
2,193.00
779.00
13,432.50
14,119.90
306,841.72
453,214.69
93,665.25
95,270.50
33,544.50
25,018.55
5,508.31
604.19
7,832.75
8,839.75
42,412.25
36,057.20
242.75
45.25
2,091.00
1,725.75
5,314.75
5,178.00 2,146,263.92
2,236,276.24
1,162,059.50 1,330,614.55
Old Castile
Vizcaya
Santander
Albacete
Álava
Asturias
Valencia
Aragon
Navarra
Galicia.
Andalusia (Western)
Andalusia (Eastern)
VaUadolid
Salamanca
Catalonia
Totals
(continued)
1923
28,600.40
275,283.26
19,838.60
1,912.06
23,064.40
345,012.15
100,010.40
35,622.45
12,774.64
10,013.80
56,178.25
153.55
2,898.00
4,235.26
2,851,015,03
1,935,417.82
1924
1925
27,634.60
28,156.25
362,981.01
442.609.04
19,530.00
21,384.95
1,331.55
1,663.50
30,661.25
41,587.90
390,957.94
423,894.03
104.157.85
123,049.70
32,903.35
42,412.55
10,412.27
6,416.03
10,304.25
11,230.00
56,843.90
73,745.40
60.00
179.50
2,908.50
2,681.70
4,122.25
5,281.00
3,013,624.44
3,159,771.07
1,958,815.72 1,934,939.52
§ 2. — Benefits in Kind and Medical Service
In principle, benefits in kind become payable as from the first
day of sickness; as a rule, they may be continued during an
unlimited period.
At the present time, the question of medical services attached
to the funds is passing through a transition period. An official
organisation is to be set up to consider the matter. It would be
inexpedient here to enter into details, interesting though they are,
relating to this branch of insurance ; the following table, however,
shows the total sums paid out by the funds in respect of medical
attendance and supply of drugs.
COST OF MEDICAL SERVICES (IN PESETAS)
Region
Old Castile
Vizcaya
Santander
MurciaAlbacete
Álava
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia
(Western)
VaUadolid
Salamanca
Catalonia
Totals
1915
1916
1917
40.00
22,663.95
7,804.25
40.00
24,413.93
8,387.50
40.00
31,984.50
10,487.25
30,798.25
6,745.52
4,515.20
32,577.22
7,976.91
4,603.20
6,152.00
3,175.00
700.00
523.00
4,589.38
87,706.55
98,262.14
1918
1919
1920
40.00
46,677.65
13,673.05
40.00
50,503.10
15,834.30
40.00
60,670.80
30,611.93
35,672.55
7,750.05
4,426.20
49,317.00
8,655.44
4,738.20
46,347.90
9,442.85
4,919.20
4,716.00
4,785.00
6,008.00
6.802.50
68,461.21
20.093.01
6;607.20
7.091.00
7.G51.00
800.00
371.50
6,724.88
7,537.00
750.00
575.00
4,751.45
7,040.00
550.00
674.50
6,925.31
6,613.00
625.00
912.50
6,522.46
108,759 —
144,299.15
148,562.81
9,791.00
432.00
1,202.50
7,354.15
212,354.80
(Table continued on following page.)
329
SPAIN
COST OF MEDICAL
Totals
(IN PESETAS)
1922
1923
1924
1925
40.00
66,870.81
34,417.66
500.00
350.00
74,508.86
23,685.55
7,249.20
773.75
7,688.00
6,465.00
839.00
1,462.50
8,446.31
40.00
72,039.40
36,942.73
800.00
350.00
88,026.65
26,117.59
7,579.20
3,960.30
7,036.00
13,026.50
234.00
1,537.50
9,260.62
40.00
87,588.49
45,980.66
1,125.00
170.00
98,205.60
25,361.20
7,256.20
4,687.40
8,480.00
13,366.50
365.00
1,436.25
10,244.56
40.00
105.040.98
49,108.00
1,275.00
170.00
100,570.10
30.275.14
9,471.40
4,375.15
9,540.00
14,147.50
374.00
1,458.75
10,997.06
3,880.00
92,781.61
81,501.82
854.00
170.00
106,468.10
33,729.37
11,420.80
4,034.50
10,229.00
15,846.40
400.00
1,657.50
17,034.92
233,296.64
266,950.49
304,306.86
336,843.08
380,008.02
COST O F D R U G S S U P P L I E D
Region
Old Castile
Vizcaya
Santander
Murcia-Albacete
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia
(Western)
Salamanca
Totals
(continued)
1921
Region
Old Castile
Vizcaya
Santander
Murcia-Albacete
Álava
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia (Western)
Valladolid
Salamanca
Catalonia
SERVICES
(IN
1917
PESETAS)
1918
1919
1915
1916
1920
80,523.72
7,475.85
94,365.68
7,717.90
98,086,55 140,363.91 146,671.95 178,814.82
8,953.35 10,901.75 12,422.60 18,633.01
42,654.26
3,110.00
1,650.00
64,269.49
3,148.40
1,683.00
73,773.89 137,959.83 155,167.77 131,699.46
4,252.50
7,769.65
3,359.40
3,785.80
1,880.00
2,773.00
2,277.00
1,720.00
4,953.66
5,415.38
4,208.05
7,521.21
7,675.29
5,913.63
1,864.55
399.00
4,624.20
439.00
8,126.00
422.00
12,238.40
670.00
37,947.09
651.55
38,866.37
923.20
142,631.04 181,663.05 198,649.24 315,787.60 367,095.05 384,897.14
Region
Old Castile
Vizcaya
Santander
Murcia-Alb a cete
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia (Western)
Salamanca
Totais
1921
i
1922
1923
1924
1925
1,205.00
235,811.10 165,343.78 179,571.35 232,882.38 275,774.86
31,295.28 32,028.58 34,772.90 35,148.23 39,877.91
286.65
643.25
830.70
865.25
305.10
197,569.74 129,575.61 185,079.67 207,968.75 216,288.50
10,564.65 11,375.80 16,338.85 19,554.40 33,268.55
2,154.00
2,279.40
1,970.53
2,212.40
5,272.03
422.55
6,075.35
3,995.65
6,201.55
4,431.00
5,370.34
7,146.70
5,536.88
8,483.38 10,572.65
33,042.84 25,745.17 33,834.21 34,334.57 40,715.42
987.82 377,393.68
1,042.71 548,718.24
990.98 466,784.39
1,067.33 628,921.87
1,250.85
517,504.97
There is a tendency on the part of large insurance organisations
to establish hospitals either on their own account or in collaboration
with other funds. Less frequently, arrangements are made with
the authorities of public or private hospitals for institutional
treatment of fund members.
330
VOLUNTARY SICKNESS INSURANCE
§ 3 . — Cost of Cash Benefits as Compared with Cost
of Benefits in Kind
The proportions of cash benefits and of benefits in kind
respectively, expressed as a percentage of the total amount of
insurance benefits paid out for each year, is as follows:
Percentage distribution of total benefits
Year
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
In cash
In kind
87.87
• 86.50
88.05
85.62
79.72
75.94
74.86
76.64
78-71
77-29
75.80
12.13
13.50
11.95
14.38
20.28
24.06
25.14
23.36
21.29
22.71
24.20
Although the proportions of cash benefit and benefit in kind
varied unceasingly during the whole of the period under review, the
tendency towards the latter form is sufficiently evident. Evolution
in the matter of insurance is so slow, however, that insured
persons in general still prefer cash benefit to the guarantee of medical
attendance and supply of the required drugs; while the funds, for
their part, favour cash benefit rather than benefit in kind because
the administration of the latter is so much more intricate.
331
SPAIN
CHAPTER V
FINANCIAL RESOURCES
§ 1. — Members' Contributions
The greater part of the funds' resources is derived from members'
contributions. The amount paid by each member varies according
to the risks insured against, the amount of benefit or lump sums
provided for, social surroundings, etc. The table below shows the
amounts contributed to the funds by their members.
MEMBERS' CONTRIBUTIONS (IN PESETAS)
Region
Old Castile
Vizcaya
Santander
MurciaAlbacete
Álava
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia
(Western)
Andalusia
(Eastern)
Valladolid
Salamanca
Catalonia
Madrid
Totals
1915
1916
1917
1918
1919
1920
21,748.95
235,458.36
105,408.55
30,577.60
265,486.70
204,027.04
29,822.60
267,873.72
114,936.16
30,388.20
296,463.87
140,370.82
.35,634.10
332,823.25
160,968.86
37,989.93
563,566.47
195,388.44
520.50
20,601.10
197,650.83
153,239.60
38,058.20
43,654.95
906.25
22,627.90
232,642.16
159,588.57
40,745.95
44,475.00
1,443.00
22,479.30
255,474.11
166,394.28
41,792.15
44,970.75
3,354.25
22,546.50
347,950.16
152,221.96
49,159.00
52,030.45
8,360.50
20,421.50
379,757.44
185,527.25
52,243.00
51,943.65
21,826.75
21,735.75
490,333.58
220,776.75
54,268.90
54,678.70
30,137.65
38,765.05
52,702.15
57,598.85
99,773.00
101,370.77
1,104.00
1,152.00
3,190.85
2,284.70
2,936.30
6,491.45
9,091.10
13,254.85
13,201.45
13,687.70
13,009.00
14,584.69
1,947,915.27 2,339,696.95 3,099,866.83 2,372,788.34 2,259,993.03 2,453,018.60
2,804,589.06 3,393,946.02 4,113,727.45 3,540,817.70 3,603,837.88 4,236,030.78
Region
Old Castile
Vizcaya
Santander
Murcia-Albacete
Álava
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia (Western)
Andalusia (Eastern)
Valladolid
Salamanca
Catalonia
Madrid
Totals
1921
1922
1
1923
1924
1925
46,061.25
41,105.15
41,185.75
43,948.90
45,456.10
777,638.69
931,796.71
883,244.24
614,536.79 553,709,47
290,364.74
320,126.25
390,176.71
347,816.36
265,967.25
29,915.90
27,233.52
30,533.60
29,572.32
27,129.26
61,388.00
64,415.50
73,395.00
66,548.50
23,662.50
353,473.73 457,876.21
540,922.75
516,020,07
421,465.15 229,842.17 231,638.30
258.984.85
252,549.05
225,524.23
77,267.45
72,648.55
90,681.85
80,222.20
65,776.10
55,253.50
64,475.00
106,259.90
88,476.25
713.45
127,598.91
144,279.28
219,429.47
175,614.49
54,556.45
1,312.35
1,004.00
5,764.50
1,680.90
115,163.90
2,690.65
4,895.70
6,118.25
6,843.65
1,136.45
30,852.33
39,027.69
42,080.36
39,402.18
3,196.80
2,872.439.51 3,792,157.48 4,023,198.32 4,292,229.61
33,805.27
1,321,080.00 1,651,350.00 1,981,620.00 2,245,950.00
2,637,120.02
4,530,858.77 6,048,374.46 7,692,715.07 8,538.264.63 9,280,384.81
332
VOLUNTARY SICKNESS INSURANCE
§ 2. — Employers' Contributions and Grants
Apart from the contributions paid direct by their members'
thé funds sometimes receive grants from persons by whom these
members are employed. In large industrial centres important
undertakings make grants in the form either of lump-sum payments
or of regular contributions to funds in which their staffs are insured.
These employers' contributions facilitate the spread of insurance
and render it more efficacious. Especially is this the case in respect
to large transport undertakings (railways) and metal industries
in the Asturias, Vizcaya, and Santander regions.
The following table shows the proportion ol employers' contributions to the total amount of expenditure in respect of voluntary
insurance :
EMPLOYERS'
CONTRIBUTIONS TO MUTUAL-AID FUNDS (IN PESETAS)
Ortfrin«
Old Castile
Vizcaya
Santander
Murcia-Alb acete
Álava
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia
(Western)
Valladolid
Salamanca
Totals
Region
Old Castile
Vizcaya
Santander
Murcia-Albacete
Álava
Asturias
Valencia
Aragon
Navarra
Galicia
Andalusia ( W e s t e r n )
Valladolid
Salamanca
Totals
19Í0
4,035.50
13,102.95
816.00
1,250.00
118,025.75
9,476.50
1,773.35
2,808.00
1,273.00
167.00
1916
1917
lyis
1919
1920
3,904.75
3,868.25
3,714.25
3,672.85
9,051.50
16,498.70 105,676.80 104,585.05 27,270.16 77,018.55
794.00
1,354.00
2,127.00 14,853.79 21,773.80
12.00
1,227.50
1,268.00
1,233.00
1,203.50
1,208.50
154,188.32 163,812.40 248,974.93 278,732.73
9,606.00 10,594.00 11,255.00 11,140.65 383,855.52
1,862.00
2,053.35 36,142.50
1,742.85
1,786.60
3,208.35
2,559.00
2,201.00
2,117.00
2,666.50
2,313.00
1,582.00
1,582.00
1,582.00
8,997.81 10,850.99
136.80
100.00
100.00
126.00
198.00
139.50
155.00
394.00
128.00
152,728.05 191,878.62 292,259.55 378,488.23 350,813.84 545,769.51
1921
1922
1923
1924
1925
7,363.00
7,156.50
7,982.50
6,948.75
6,818.05
31,538.85 69,763.15 101,131.27 112,573.70 81,687.60
44,823.32 43,876.14 41,336.85 47,858.00 58,781.71
3,258.40
3,177.52
3,601.63
3,476.95
3,416.66
977.00
1,001.50
1,138.00
1,077.00
1,082.00
310,315.31 193,704.35 273,915.32 315,600.24 329,358.89
43,671.27 38,795.89 39,315.39 39,171.20 26,125.29
6,589.64 10,946.30
3,437.10
6,367.50
6,143.45
3,587.32 22,098.85 38,138.80 54,472.18 21,810.10
1,304.00
1,324.00
2,174.00
1,670.00
1,320.00
3,308.49
3,135.15
7,370.40
7,363.89
6,638.66
89.80
89.80
136.80
136.80
89.80
483,485.72
29,943.60
28,710.65 574,954.18
23,709.22 419,924.10
24,644.83 546,990.41
27,644.16 620,860.08
SPAIN
333
§ 3. — Financial Assistance by Public Authorities
Finally, a part of the funds' resources are derived from financial
assistance provided by the State and public authorities. Although
the State, as such, has not established a general sickness
insurance system, it encourages this social duty by including in the
budget a sum varying from 35,000 to 75,000 pesetas for distribution
among mutual-aid funds of a working-class character which undertake to supply medical attendance and drugs for the benefit of their
members. The allocation of the money is effected by means of a
competitive arrangement under which all funds fulfilling the conditions imposed, and in need of assistance, are enabled to put forward their claims. The number of funds subsidised by the State
fluctuates considerably, but does not exceed about one hundred.
On the other hand, however, the Act of 8 March 1924 relating
to municipal organisation lays down that it is one of the duties
of a municipal council " to facilitate the establishment of sickness,
invalidity, and maternity insurance by appropriate means of an
economic character ". Further, the new Act dated 20 March
1925 relating to the organisation of provincial administration
requires provincial deputies " to encourage all social institutions,
more especially the funds attached to the National Welfare Institute
and the mutual-aid funds ". In accordance with these provisions,
a large number of municipalities and Provincial Governments,
especially those of important centres, have set aside various sums
in their budgets for the purpose of affording assistance to the
sickness, invalidity and maternity insurance funds.
In addition to direct revenues as described above, many of the
funds have a certain amount of indirect income, such as interest on
sums representing excess of ordinary receipts over expenditure,
gifts, legacies, and so on. Their resources are also increased at
times by the holding of entertainments, bazaars, and lotteries.
It has not, however, been possible to establish statistics for the
whole country showing the receipts from such special and uncertain
sources.
SWEDEN
Acts and Regulations 1
ACTS
Act of July 1910 concerning sickness insurance funds. 8.F., 1910, No. 77;
A.B., 1910, p. 534.
Act of 29 June 1912, to amend the Act of 4 July 1910 concerning sickness
insurance funds. S.F., 1912, No. 189; A.B., p. 207.
Act of 6 May 1921 to amend section 2 of the Act of 4 July 1910 concerning
sickness insurance funds. S.F., 1921, No. 211.
Act of 9 October 1923 to amend section 91 of the Act of 4 July 1910 concerning sickness insurance funds. S.F., 1923, No. 365.
Act of 11 June 1926 concerning reinsurance funds. S.F., 1926, No. 217.
DECREES
Decree of 23 December 1910 concerning the registration of sickness insurance
funds. S.F., 1910, No. 150.
Decree of 31 December 1912 concerning the Committee on Social Affairs.
S.F., 1912, No. 384 ; A.B., p. 236.
Decree of 30 June 1913 concerning State subsidies to sickness insurance
funds granting maternity benefits. S.F., 1913, No. 136; A.B., 1913, p. 788.
Decree of 30 June 1920 containing instructions for the Department of Labour
and Social Welfare. S.F., 1920, No. 544.
Decree of 11 October 1920 concerning State subsidies to sickness insurance
funds. S.F., No. 689.
Decree of 2 December 1921 amending section 2 of the Decree of 11 October
1920 concerning State subsidies to sickness insurance funds. S.F., No. 695.
Decree of 2 December 1921 amending section 3 and section 5, Note 1, of
the Decree of 30 June 1913 concerning State subsidies to sickness insurance
funds granting maternity benefits. S.F., 1921, No. 696.
Decree of 31 December 1921 concerning questions arising out of State subsidies to sickness insurance funds. S.F. 1921, No. 845.
Reports
Swedish Official Statistics.
1911—1912
1913—1915
1916—1918
1919—1921
1922—1924
.
.
.
.
.
Insurance.
Registered Sickness Funds.
K Socialstyrelsen, Stockholm,
1915
1920
1921
1922
1926
1
Abbreviations : S.F. = Soensk Författningssamling; A.B. = Annual
of Labour Legislation, published by the Belgian Labour Office.
Bulletin
SWEDEN
335
INTRODUCTION
The earliest traces of mutual assistance in Sweden date from the
Middle Ages, when there were guilds which granted relief to their
members in case of sickness or death. None of these has survived.
Mutual-aid institutions, as they now exist, with the exeption of a
few which date from the seventeenth century, are of recent origin.
The movement in favour of sickness insurance reached its height
during the years 1870 to 1875, with the foundation of numerous
associations known as Hundramannajöreningar (associations of one
hundred persons) and of societies and clubs partly for the purpose of
social celebration and partly for mutual assistance.
The development of the movement in Sweden was greatly assisted
by the Socialist movement in the last quarter of the nineteenth
century, in its various forms of trade unionism, prohibition, and
religious unorthodoxy.
The growing industrialisation of the country also affected the
development of mutual institutions; the foundation of the first
great industrial undertakings involved the formation of a number of
employers' relief funds for cases of sickness and death.
Legislation on the subject of social insurance in Sweden dates from
1884, when S. A. Hedin introduced in the Riksdag a Bill concerning
the appointment of a Workers' Insurance Commission. The work
of this Commission resulted in a first Act concerning sickness benefit
societies, on 30 October 1891. This Act provided for the voluntary
registration of societies with not less than twenty-five members and
with rules complying with the law. Registration gave the funds a
legal status, and the right to a State subsidy towards the expenses
of administration ('Förvaltningsbidraget), which has since then been
increased upon two occasions.
The Act was found to be inadequate on account of the weak
financial position in which it left the very numerous small sickness
funds throughout the country. At the proposal of the mutual-aid
institutions, the Swedish Parliament introduced new legislation on
this point. The new Act of 4 July 1910 concerning sickness insurance funds still remains the legal basis of the Swedish mutual
insurance societies.
It is based on the principle of voluntary insurance and leaves the
336
VOLUNTARY SICKNESS INSURANCE
initiative in the formation of insurance institutions to the insured
persons themselves. Under certain circumstances, funds may be
granted subsidies from the national treasury, and sometimes from
the communes, in order to cover the risks provided for by the Act,
namely, sickness, maternity, and funeral expenses.
A number of investigations and proposals for the reforming of the
present system of voluntary sickness insurance have been made.
In 1925 the Finance Commission subjected the question to detailed
examination. On the basis of the conclusions of the report of the
Commission, the Government introduced into the Riksdag two
Bills to amend existing legislation. The Swedish Parliament, after
discussing these matters, decided to appoint a special Commission
composed of experts and representatives of employers and workers
to consider the problem of amending the Act of 1910.
The report of this Commission, which was finished late in 1926,
favours a system of voluntary sickness insurance, comprising two
classes of recognised funds, primary funds and district funds; it
suggests an extension of the period of benefits and requires the
institutions to provide insured persons with medical attendance and
maternity benefits. On 8 March 1927, the Government introduced
two Bills, which in general correspond with the proposals of the
experts. Passed with a few amendments by the Upper House of the
Riksdag, the Government's proposals, as amended by a Parliamentary Committee, were thrown out by the Chamber of Deputies
on 25 May 1927.
The following pages give an analysis of the principal provisions
of the Act of 1910, and of the Acts and Decrees by which it has been
amended or supplemented; and also statistics as published by the
Department of Labour and Social Welfare.
The legislation and its results as shown by statistics are discussed
under the following heads :
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter
I:
II:
III:
IV:
V:
VI :
Insurance Institutions.
Insured Persons.
Sickness Benefit and Medical Service.
Financial Resources and their Management.
Judicial Authorities, Offences and Penalties.
Position of Foreigners.
SWEDEN
337
CHAPTER I
INSURANCE INSTITUTIONS
§ 1. — Legal Types of Insurance Funds
A mutual sickness benefit fund is defined as any association the
object of which, excluding any commercial exploitation of insurance, is to provide its members with assistance both in case of
sickness and for funeral benefit (section 1).
Funds may also carry on any other activities which are not
clearly foreign to their undertakings under section 1 (section 2).
Although the Act contains no provision for maternity benefits, the
funds are in practice required to grant allowances to women who are
about to become mothers.
In addition .to the ordinary sickness funds (Sjukkassor) there
are funds known as reinsurance or continuation funds (Fortsattningskassor), the purpose of which is to provide sickness benefits
for members of the ordinary funds exclusively or partly during the
period in which such members are no longer entitled to assistance
from the ordinary fund on account of the benefits which they have
already received (section 1, para. 2, sections 107-115).
The formation of these continuation funds is due to the fact
that in 1910, when the Act which is still in force was first passed, a
number of funds granted their members relief only for a very short
period; a new class of funds was thus superimposed on the ordinary
funds, to provide assistance for insured persons when the period of
benefits provided by the ordinary sickness funds had expired.
Only registered sickness funds enjoy a well-defined legal status
and are entitled to State subsidies, but the Swedish Act does not
make registration compulsory.
Since the State cannot exercise supervision over funds which are
not registered, and it has been impossible to compile statistics
concerning them, only registered funds will be considered in this
Report.
With reference to the organisation of the funds, a distinction is to
22
338
VOLUNTARY SICKNESS INSURANCE
be made between " general " funds, which are open to any person
complying with the conditions of age and health laid down in the
rules, and " closed " funds (Slunta), in which membership is limited
by special conditions, determined by the regulations. Certain
funds accept only members of one sex, persons belonging to a given
occupation, working in certain stated undertakings, or persons
belonging to a temperance society, religious or otherwise, who have
pledged themselves to abstinence, etc,
Membership in both these types of funds is generally voluntary;
among the " closed " funds, however, there are a few compulsory
insurance funds, membership in which is determined either by contract between the workers and employers in certain undertakings,
or by the fact of membership in a given society.
The general funds may be limited to a given locality, usually a
town or parish (local funds, Lócala sjukkassor) or may cover the
whole country through the medium of local branches (national
funds, Rikssjukkassor).
§ 2. — Constitution of Registered Funds
As already mentioned, the Act distinguishes between registered
and non-registered funds; detailed regulations are provided only in
the case of the former.
Any society which desires to become registered must have not
less than 100 members, with rules and a committee in accordance
Vfith the provisions of the Act. In exceptional cases registration
may be granted to a society with less than 100 members, but in no
case to one with less than 25 members (section 4).
A reinsurance fund may be registered only if the number of members is at least 500; in exceptional cases registration may be granted
to reinsurance funds with less than 500 members, but in no case to a
fund with less than 200 members (section 108).
Application for registration is made by the management of the
fund, and must show the names of the directors, the name, nationality and domicile of their deputies, and names of persons entitled
to sign for the society, jointly or severally, if other than the
directors (section 5, para. 1).
The application for registration must be accompanied by two
copies of the rules of the funds, a copy of the minutes of the
meeting at which the rules were adopted and the directors elected,,
SWEDEN
339
information concerning the number of members and their composition by sexes and by occupations, and the undertakings entered
into by societies, establishments, or persons to contribute to the
fund (section 5, para. 2).
The rules of the fund must show:
(1) the name of the fund;
(2) whether the fund is confined to sickness insurance or also
grants allowances for funeral expenses ;
(3) the area covered by the fund;
(4) the place of the head ofñce of the fund;
(5) conditions of membership ;
(6) the nature of sickness benefits and the extent and amount of
funeral expenses and also the time and circumstances in
which the allowances are payable ;
(7) the amount of fixed expenditures or the basis on which they
are calculated;
(8) the method of determining contributions, the method of
adopting resolutions concerning them, and the basis on
which contributions are distributed;
(9) composition of the board of directors and its method of
making decisions;
(10) the method of investing funds not needed for current
expenses and the method of maintaining guarantees;
(11) the method of disposing of money which is not to be paid
into the fund, by reason of special authorisation of the
inspectors (section 25) ;
(12) the method of supervising the management of the fund ;
(13) the frequency of general meetings ;
(14) the method of convening general meetings and communicating with members ;
(15) the method of liquidation in case of dissolution of the fund
(section 6).
The name of the fund must contain the words " sickness fund ",
and if funeral expenses are granted this must also be indicated
(section 7, para. 1).
Registration entitles the fund to receive State subsidies.
Registered funds have the right to acquire property, to enter into
agreements, and to appear before the courts or other authorities
(section 3, para. 1).
Funds which are not registered may not acquire rights, enter into
obligations, or appear before the courts or other authorities (section
105, as amended by the Act of 29 June 1912).
340
VOLUNTARY SICKNESS INSURANCE
If the fund fails to register its board of directors in the proper
manner, the members or creditors of the fund or any other person
whose rights are involved in the representation of the fund by a
definite person, and likewise the inspectors, are authorised to apply
to the courts or judges for an order for the liquidation of the fund
(section-61).
The fund will also enter into liquidation :
(a) when the number of members, which was at the time of registration not less than 100 (500 in the case of a reinsurance
fund), falls below 100 (or 500) and the inspectors do not
think fit to authorise the fund to continue to exist with less
than 100 (or 500) members and that number is not recovered
within three months ;
(b) when the number of members falls below 25 (or 200), either
when the inspectors have granted the authorisation mentioned above or when the fund has been registered with less
than 100 (500) members, and remains below 25 for three
months ;
(c) if circumstances arise which, under the regulations, put an
endfcothe existence of the fund (sections 62 and 14).
§ 3. — Administration of Insurance Institutions
The administration of insurance institutions is carried on through
the following bodies: the directors, the auditors, and the general
meeting.
T H E BOARD OF DIRECTORS
Composition
Each fund has a board of directors composed of at least three
members (section 27, para. 1).
The board of directors is elected by the general meeting of the
fund for a period of not more than five years; the regulations may
however provide that the board of directors or a part thereof shall
be appointed in some other way (section 28, para. 1, and section 29),
for example by the employers.
The members of the board of directors must be Swedish citizens
and resident in Sweden (section 28, para. 2).
SWEDEN
341
It is usual to elect as many substitutes as there are members of
the board of directors.
If an elected member of the board of directors resigns before the
expiration of the period for which he was elected and there is no
substitute, the other members proceed immediately to elect a new
member. Nevertheless, when authorised by the regulations, the
election may be postponed until the expiration of the period for
which the member was elected, provided that the remaining
members of the board of directors form a quorum (section 30).
Competence
The board of directors is responsible for the administration of the
business of the fund in accordance with the Act (section 27, para. 2).
The board of directors and those members who have power of
attorney may personally or by deputy act in the name of the fund
in relations with other parties and represent the fund before the
courts and other authorities. Any limitation of the powers thus
bestowed on the board of directors or certain members thereof,
except where otherwise regulated by the Act, is void in dealings
with other parties not aware of such limitations (section 21).
In any dealings with the fund, the board of directors and the
members thereof who represent the fund are required in their
administration of the business of the fund to comply with the
special provisions laid down in the regulations or by the general
meeting, or, in matters concerning members of the board, by the
board of directors itself (section 32, para. 1).
The board of directors and its members are not required to comply with decisions of the general meeting which are in conflict with
the Act or the regulations (section 32, para. 2).
If the rules authorise the board of directors to hold meetings
without the presence of all the members, the board may not adopt
any decision until all the members have as far as possible had an
opportunity to take part in the discussion (section 34). Except
when otherwise provided in the rules, the decision of the board of
directors shall be constituted by a resolution supported by the
majority of votes.
In case of an equal division the president has a casting vote
(section 35, para. 1).
Members of the board of directors may not take part in discussions of agreements between them and the fund. They may not
take part in discussions concerning agreements between the fund
342
VOLUNTARY SICKNESS INSURANCE
and other parties if they have an interest in the matter which might
conflict with that of the fund (section 35, para. 2).
The representative of the fund may not alienate the real property
of the fund without the authorisation of the general meeting
(section 39).
At least a month before the general meeting, at which the report
of the auditors is to be presented, the board of directors must submit
to them a report signed by all its members (section 42).
Members of the board of directors who cause prejudice to the
fund by infringement of the Act or of the regulations, either intentionally or through negligence, are completely responsible for any
loss incurred (section 43, para. 1).
AUDITORS
Composition
The work of the board of directors and the accounts of the fund
must be scrutinised by at least two auditors (section 45, para. 1).
The auditors are elected by the general meeting of the fund ; but
the rules may provide for a different method of election (section 45,
para. 2).
No person who is employed by the fund or by the board of
directors may be an auditor (section 45, para. 3).
The period of office of the auditors may not expire before the
next regular general meeting of the fund, nor exceed two years
(section 45, para. 4).
If an auditor resigns before the end of the period for which he was
elected and there is no substitute, the board of directors must
immediately proceed to elect a new auditor (section 45, para. 5).
Competence
The auditors must verify as accurately as possible the receipts of
the fund and examine its books, accounts and other documents;
information required by the auditors in connection with the
management must not be refused (section 46, para. 1).
The supervising authority (Socialstyrelsen) may instruct one of
its officers to co-operate with the auditors of the fund in their scrutiny of the management and accounts (section 91, para. 4, of the
Act of 9 October 1923).
SWEDEN
343
In carrying out their duties the auditors are required to comply
with the special provisions adopted by the fund so long as they do
not interfere with the powers assigned to them by the Act and are
not in conflict with the Act or with the rules of the fund (section 46,
para. 2).
At the general meeting of the fund the auditors submit a signed
report of their examination, together with the report of the board
of directors (section 46, para. 3).
The auditors have the right to convene a special meeting of the
fund if such procedure is rendered necessary by the results of their
scrutiny (section 50, para. 2).
Any auditors who insert in a report or in any other document
submitted to the general meeting of the fund information which
they know to be incorrect, or knowingly fail to comment on such
information found in documents examined by them, or are guilty
of negligence in carrying out their duties are completely responsible
for any loss involved for the fund (section 47).
GENERAL MEETING
The right of members to a voice in the management of the business of the fund is exercised at the general meeting. Nevertheless,
the rules may provide that certain business, not assigned by the Act
to the general meeting, may be dealt with in other ways (section 48,
para. 1).
No member may take part, either personally or through a representative or as representative of another party, in a discussion of any
matter connected with a contract between himself and the fund;
no member may take part in the settlement of a matter arising out
of a contract between the fund and a third party when he has an
essential interest in the matter which might be in conflict with the
interest of the fund (section 48, para. 2).
In certain special cases the Swedish Act lays down the majorities
required for the adoption of a resolution, e.g. in amending the
regulations or adopting new grounds for excluding persons from
membership, etc. (sections 57 and 58).
In principle, and in the absence of provision to the contrary in the
rules, each member is entitled to take part in the business of the fund,
to vote and to delegate his vote to another member. No member
may vote as delegate for more than one other member. A decision
of the fund is constituted by a motion which has received a
344
VOLUNTARY SICKNESS INSURANCE
majority of the votes; in case of equal division in elections, the
matter is settled by drawing lots ; in other matters the president
has a casting vote (section 49).
The board of directors or the auditors may convene a special
meeting of the fund if they deem it necessary (section 50).
If the board of directors fails to convene the regular general
meeting of the fund in the manner laid down, the meeting is
immediately convened by an inspector, if requested by a member
(section 51, para. 1).
The rules of the fund may provide that the powers of the general
meeting shall be exercised by persons specially elected for that
purpose. In such a case a meeting of these persons is regarded as
a meeting of the fund. Such persons may not delegate their votes
at the meeting to other persons (section 53).
§ 4. — Supervision
The enforcement of the Act and the supervision of. the work of
sickness insurance funds are within the competence of the Department of Labour and Social Welfare (Socialstyrelsen) and its representatives. The department is divided into six sections, one of
which is specially concerned with all questions connected with
sickness insurance. The Committee on Social Questions, composed
of experts and representatives of workers and employers, acts as an
advisory body to the Department (Decree of 30 June 1920).
The inspection service is required to keep a register of sickness
insurance funds, containing all the information submitted for
purposes of registration (section 81 of the Act).
It is also responsible for seeing that the business of the fund is
transacted in accordance with the Act and the rules and generally
corresponds to the object of the fund. The inspection service
provides advice and information not only in connection with the
formation of the fund and the drawing up of the rules, but also in
connection with the conduct of its business. If infringements of
the Act or the rules are observed, the fund must rectify the matter
or take the necessary steps for amendment (section 93).
The board of directors of the fund is required to submit to the
inspection service each financial year within two months of the
report of the auditors to the general meetings: (1) the reports of
SWEDEN
345
the board of directors and auditors, together with a copy of the
minutes of the resolutions adopted by the general meeting in connection with them; (2) a statistical summary of the business of the
fund for the past year.
Inspectors have the right to call for additional information at any
time, to scrutinise the accounts and other documents of the fund, to
require an inventory of the property of the fund, and to attend the
general meeting (section 91).
§ 5. — Relations between Funds
In several cities in Sweden in which sickness insurance exists on
a large scale there are central associations for the purpose of
promoting the common interests of the funds and encouraging the
practice of insurance.
Such central associations are to be found at Stockholm, Upsala,
Linköping, Norrköping, Malmö, Helsingbörg, Gothenburg, and
several other cities.
There are also in Sweden two large general federations of sickness
insurance funds. Membership in these federations at the end of
1924 was as follows: General Federation of Swedish Sickness
Insurance Funds, 405,279 ; Central Administration of Large
Insurance Funds, 197,933.
§ 6. — Statistics
The number of funds speedily increased from 1892 to 1909, but
began to diminish after the Act of 1910. In 1911 there were 1,969
funds registered under the old Act of 1891, and 247 registered under
the Act of 1910. A transitional period of five years, 1910 to 1915,
was provided for registration of funds under the new Act ; at the
end of this period the old Act became obsolete (sections 116 to 118).
The decrease in the number of funds after 1910 was largely due to
the amalgamation of small funds with larger ones, brought about by
the registration rules laid down by the Act of 1910. Some funds,
however, ceased to be registered, since they did not fulfil the
conditions required by the Act.
The total number of ordinary sickness insurance funds and
continuation funds and their membership (at the close of the years)
from 1892 to 1925 are shown in the following table :
346
VOLUNTARY SICKNESS INSURANCE
NUMBER AND MEMBERSHIP OF REGISTERED FUNDS
Total of insurance funds
and continuation funds
Year
Funds
1892
1900
1909
1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
221
1,443
2,424
2,400
2,190
2,037
1,949
1,883
1,255
1,278
1,284
1,284
1,284
1,291
1,289
1,281
1,269
1.264
1,254
1
Members
'
Funds
1
_
—
—
—•
24,735
260,163
581,958
591,315
587,167
595,576
609,253
625,046
572,133
608,995
646,602
692,265
722,211
738,154
727,999
728,004
742,365
768,040
802,070
2,216
2,063
1,979
1,914
1,276
1,302
1,309
1,312
1,313
1,323
1,321
1,313
1,302
1,297
1,286
Members
—
•
—
•
—
628,151
637,049
658,148
674,864
624,253
665,969
710,396
763,216
794,548
816,849
807,156
807,547
826,586
857,382
894,281
i Provisional data.
Except for the years 1915 and 1921, there is a constant increase
in the number of members throughout this period; this increase,
combined with a decrease in the number of insurance institutions
marks a movement towards concentration, which made itself felt in
the organisation of Swedish sickness insurance from 1910 to 1924.
The average membership of funds was 313 in 1912, 340 in 1913,
365 in 1914, 463 in 1915, 480 in 1916, 506 in 1917, 542 in 1918, and
607 in 1924.
The following table shows the distribution of Swedish insurance
funds according to territorial extent.
TERRITORIAL DISTRIBUTION
1918
Local funds i u r b a , n
I rural
N a t i o n a l funds
Total
478
776
30
1,284
1922
'
1923
1924
483
767
31
471
767
31
462
770
32
1,281
1,269
1,264
347
SWEDEN
The figures for the years 1918 and 1922 to 1924 show a decrease
in the number of local funds and an increase in the number of
national funds. The figures shown above are, however, not absolutely reliable, since the rules of funds and statistics submitted by
them do not always show precisely whether the fund is national or
local.
The following table shows the number of funds of certain types,
trade union funds, works funds, occupational funds, etc.
TYPES OF FUNDS WITH MEMBERSHIP
1923
1918
Funds
Trade union funds
Works funds
Occupational funds1
Miscellaneous
31
206
73
974
1
.
Members
13,257
70,927
22,798
585,283
Funds
I
Members
30
202
74
964
13,529
70,941
25,764
632,131
i Occupational funds admit only persons belonging to a given occupation or group of
occupations, but they are generally attached to a trade union or other occupational corporation. The membership is purely voluntary, as in other funds. A person who has been a
member of the fund for five years (or two years if he is over 45 years of age) may not be
excluded if he gives up his occupation or employment (section 11). Occupational funds may
be local or may cover the whole Kingdom or a large portion of it. For example, at Stockholm and other large cities there are funds for cabinet-makers, tailors, dressmakers, masons,
etc. Funds covering a larger territory exist for agricultural workers, woodworkers, printers,
commercial travellers, customs employees, etc.
During the last three years for which statistics exist, 1922 to 1924,
the number of continuation or reinsurance funds was 32, 33, and 33
respectively with 79,543, 84,221, and 89,342 members.
The following table shows the relative size of registered insurance
funds.
DISTRIBUTION OF MEMBERSHIP, 1 9 2 1 t o 1 9 2 4
1
Number of registered funds
Number of members
50 members or less
51 to 75
76 to 100
101 to 150
151 t o 200
201 to 300
301 to 400
401 t o 500
501 to 700
701 to 1,000
1,001 to 2,000
2,001 t o 5,000
Over 5,000
Total
1921
1922
1
1923
1
1924
39
83
92
262
182
203
125
79
84
51
36
23
17
43
84
88
250
170
210
122
80
91
48
34
24
17
40
78
101
252
168
204
129
77
88
41
36
23
19
46
74
102
245
156
209
127
78
85
43
42
23
20
1,276
1,271
1,256
1,250
i Information is not available for 13 funds in 1921, 10 funds in 1922, 13 funds in 1923,
and 14 funds in 1924.
348
VOLUNTARY SICKNESS INSURANCE
§ 7. — Risks Covered
The risks covered by Swedish sickness insurance funds are sickness, maternity, and funeral expenses. Every fund is required to
cover the risk of sickness.
The following table shows the number of funds, with membership, covering these three risks in 1918 and 1923.
FUNDS COVERING SICKNESS, MATERNITY, AND FUNERAL EXPENSES
Risks covered
Year
Sickness
1918
1923
1918
1923
1918
1923
Maternity
Funeral expenses
Funds
1,284
1,269
405
478
1,180
1,170
Membership
671,757
722,986
153,093
201,198
570.987
619,920
The following table shows the number of persons whose insurance
respectively covers sickness, funeral expenses, and both risks.
NUMBER OF PERSONS INSURED FOR BOTH SICKNESS AND FUNERAL
BENEFITS AND FOR EITHER OF THESE BENEFITS
Number of persons insured against
Year
sickness and
funeral
expenses
1922
1923
1924
1925
588,444
600,541
618,521
640,679
1
sickness
119,788
112,445
130,086
142,006
i Provisional data.
funeral
expenses
19,772
19,379
19,433
19,385
Insured women
entitled to
maternity
benefits
189,395
201,198
213,944
228,400
SWEDEN
349
CHAPTER II
INSURED PERSONS
§ 1. — Persons Eligible for Membership
In principle the right of belonging to a fund is not limited by any
considerations of age, sex, or health. Nor does the Swedish Act
impose any financial qualifications on persons desiring to join a
sickness insurance fund.
As mentioned above, however, such conditions may be imposed
by the rules of the fund. The only restriction laid down by the Act
is that it prohibits any person from belonging to more than one fund
at the same time. Members of a fund which is in liquidation or
bankrupt may belong to another fund (section 12, para. 1). Any
person who belonged to more than one fund at the time when the
Act came into force, on 1 January 1911, is entitled to continue to'
belong to such funds in spite of the provision of section 12 (section
116). The number of persons belonging to more than one fund
becomes smaller each year; in 1924 it was 25,922. Any person who
is discovered to be illegally a member of more than one fund is
required to remain in the fund to which he originally belonged and
is excluded from the fund subsequently entered (section 12, para. 3).
In pursuance of the Swedish Act, the rules of the fund may not
provide that the number of members shall not exceed a certain
limit, nor may they stipulate that the occupation of a given position
shall involve an obligation to enter the fund on the part of a person
who already belongs to another registered fund (section 8).
The fund may not accept or retain members who confine their
insurance to funeral benefits. The fund may, however, provide in
its rules that the husband or wife of a member may enter the fund
for the purpose of the funeral allowance only, and likewise that a
member who is not entitled to benefit by the fund for certain
specified diseases may continue to belong to it for the purposes of
funeral allowances (section 9). The number of persons profiting by
350
VOLUNTARY SICKNESS INSURANCE
the provisions of section 9 in 1924 was 19,433 (750 men and 18,683
women). Any member may leave the fund at any time by giving
notice in writing. No member of the fund may be expelled for any
other reason than those laid down in the rules or in the Act (section
11, para. 1).
The rules may not provide for the expulsion of a member on his
reaching a given age or because his health has become bad and he
has already profited by sickness benefits to a given extent. No
clause may be inserted in the rules providing for the expulsion of a
member who has belonged to the fund for one year on the ground
that he has left the territory covered by the fund and gone to another part of the Kingdom, or for the expulsion of a member who has
belonged to the fund for five years (for two years, if he has reached
the age of 45) on the ground that he has ceased to belong to any
other society, has left a given position, or ceased to do certain work
(section 11, para. 2).
§ 2. — Statistics of Insured Persons
The following table shows the number of men and women registered as belonging to sickness insurance funds for the period 1910
to 1925. The figures are those for the end of the year in question.
DISTRIBUTION OF MEMBERS BY SEX
Year
1901
1905
1910
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Men
2
224,177
329,161
443,382
394,121
416,763
440 531
468,673
481,827
486,943
473,805
469,222
475,381
490,588
512,073
Women
69,310
105,647
147,933
178,012
192,232
206,071
223,592
240,384
251,211
254,194
258,782
266,984
277,452
289,997
Percentage of
women in
relation to total
membership
23.6
24.3
25.0
31.1
31.6
31.9
32.3
33.3
34.0
34.9
35.5
36.0
36.1
36.2
Percentage of
women in
relation to the
adult female
population
3.8
5.6
7.5
8.7
9.3
9.8
10.6
11.3
11.6
—
—•
—
—
i Information Is not available for 21, 16, 46, 18, 9, 5, 7, 7, 10, 13, 10, 13, 14, 16 funds
respectively
for the years referred to (1901, 1905, 1910, 1915-1925).
2
Provisional data.
351
SWEDEN
During the period under review the proportion of female members
has constantly increased. When the Act of 1910 came into force,
women formed only a quarter of the membership of the funds,
while in 1924 they represented over one-third of the total membership. The percentage of insured women in relation to the total
female population similarly increased from 1901 to 1920.
It has already been pointed out that, although the majority of the
funds accept men and women as members indiscriminately, there
are in Sweden a certain number of funds confined to one sex.
The following table shows the number and size of such societies.
FUNDS ACCEPTING MEMBERS OF BOTH SEXES AND FUNDS ACCEPTING
MEMBERS OF ONE SEX
Funds accepting members
of both sexes
Year
1915
1921
1922
1923
1924
ONLY
Funds accepting
men only
Number
of funds
Male
members
Female
members
Number
of funds
987
1,071
1,071
1,057
1,056
347,868
437,112
133,891
439,709
456,646
165,992
240,578
244,986
254,032
264,580
215
172
167
168
163
Members
46,253
36,693
35,331
35,672
33,942
Funds accepting
women only
Number
of funds
35
33
33
31
31
Members
12,020
13,616
13,796
12,952
12,872
It appears from these figures that the number of funds confined to
one sex tends to decrease in favour of the common funds, membership in which shows a constant increase during the period under
consideration.
The following table shows the distribution of members by age for
the years 1921 and 1924.
352
VOLUNTARY SICKNESS INSURANCE
DISTRIBUTION OF MEMBERS BY AGE
Percentage
Year
Number
Under
20
years
20 to
29
years
30 to
39
years
40 to
49
years
50 to
59
years
Over
60
urban
1921
{ 1924
270,215
288,189
3.5
3.5
17.8
17.2
25.1
24.4
23.1
23.5
16.3
16.3
14.2
15.1
rural
1921
| 1924
170,150
175,849
6.0
5.8
19.9
19.4
22.5
21.9
21.2
20.8
15.8
16.0
14.6
16.1
National
funds
c 1921
I 1924
268,172
284,569
5.1
3.8
23.6
22.1
26.5
26.1
21.7
22.6
13.6
14.2
9.5
11.2
1921
{ 1924
708,537
748,607
4.7
• 4.2
20.5
19.5
25.0
24.5
22.1
22.6
15.2
15.4
12.5
13.8
Type of fund
Local funds
Total
The chief group is that of persons from 30 to 39 years of age,
which forms about 25 per cent, of the total; next come that of
persons between 40 and 49 years (22 per cent.) and that of persons
from 50 to 59 years (15 per cent.). The percentage of persons over
60 is about 13 per cent, and that of children still less.
At the end of 1924 the number of insured boys under 15 was 1,561,
or not quite 3 per cent, of the number of male persons insured. The
number of girls was 1,268 or 0.5 per cent, of the female persons
insured. The total number of insured persons under 15 was therefore 2,829 or 0.4 per cent, of the total number of insured persons;
the number of young persons from 15 to 19 years of age was 28,263,
or 3.8 per cent, of the total number of insured persons.
The current official statistics do not show any information as to
the occupations of insured persons. However,the special investigation into the economic conditions of insured persons and their
distribution b y occupations which took place at the end of 1924
showed the proportion of wage-earners in the t o t a l 1 .
The following table gives a summary of the figures concerning
the occupations of insured persons :
1
See His Majesty's proposal to the Riksdag, No. 117, 1926, p. 226. Appendix G, p. m., containing statistics relating to registered insurance funds. See
" Occupation of Members ".
353
SWEDEN
DISTRIBUTION OF INSURED PERSONS BY OCCUPATION AT THE END
OF 1924
Men
Women
Total
Percentage
•
I. Agriculture, fishing, and
forestry
Farmers and agricultural
workers
Children of farmers and of
agricultural workers (living with their parents)
Fishermen
Forestry workers
II. Industry and Crafts
Industrial workers
III. Commerce and transport
Commercial employees, restaurant and hotel employees, postal, telegraph
and telephone employees,
railway and tramway employees
Clerical employees in private offices
Drivers, coachmen, chauffeurs, longshoremen, and
transport workers
Seamen
IV. Public servants and professions
Clerical and military employees, and teachers
V. Domestic work
Persons employed in domestic work, including wives
and other women without
definite occupation
VI. Persons who have ceased to
follow their vocation, etc.
Persons who have ceased to
follow their vocation,
and widows without definite occupation
VII. Miscellaneous persons not
coming under any of the
above classes, and persons
of unknown occupation
Total
61,638
5,177
66,815
9.4
5,279
2,410
9,081
5,495
103
46
10,774
2,513
9,127
1.5
0.4
1.3
259,376
37,760
297,136
41.8
39,872
15,384
55,256
7.7
7,391
4,928
12,319
1.7
17,270
3,968
17
64
17,287
4,032
2.4
0.6
7,746
6,377
14,123
2.0
145
139,252
139,397
19.6
8,135
13,660
21,795
3.0
45,550
15,765
61,315
8.6
467,861
244,028
711,889
100.0
23
354
VOLUNTARY SICKNESS INSURANCE
The category of wage-earners comprises the agricultural workers
in group I and also groups II and III (although a number of persons
in these two groups are independent workers, artisans, waggoners,
etc.), making a total of 407,280 persons (342,704 men and 64,576
women), or 57.5 per cent, of the total number of insured persons.
To this figure should be added a considerable number of agricultural workers appearing under the heading " Independent farmers ",
a large part of group VII, and some in group V who are employed at
paid labour. In round figures the number of wage-earners may be
estimated at 65 per cent, of the total number of persons insured in
the sickness funds.
The following table shows the percentage of the population
insured during the period 1911 to 1920 (end of the year). The first
column shows the percentage of the total adult population (i.e. over
15 years of age) belonging to the funds; persons insured in two or
more funds at once are thus counted several times. The second
column shows the percentage of the total adult population insured;
persons insured in more than one fund are counted only once.
PERCENTAGE OF ADULT POPULATION (OVER 15) BELONGING TO FUNDS
AND PERCENTAGE OF INSURED PERSONS
Year
Percentage belonging
to funds
Percentage insured
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
15.2
15.2
15.3
15.5
15.9
14.7
15.5
16.5
17.0
17.2
13.2
13.2
13.5
13.9
14.4
13.6
14.5
15.6
16.1
16.4
From this table it appears that the percentage of the adult
population benefiting by insurance shows a tendency to increase,
passing from 13.2 per cent, in 1911 to 16.4 per cent, in 1920. At the
end of 1924 the percentage of the total Swedish population
(6,036,118) insured inordinary sickness insurance funds was 1.1.94
per cent.
Swedish statistics also show the proportion between the number
of insured persons in each age group and the total population of the
same age.
355
SWEDEN
PERCENTAGE
IN RELATION TO TOTAL POPULATION BY AGE GROUPS
IN 1924
Aap eroiin
Age group
Percentage
insured
Age group
P
~
g e
d
40 to 49 years
25.9
Under 15 years
0.2
50 to 59 years
22.1
15 to 19 years
4.9
60 to 69 years
17.8
20 to 24 years
12.2
70 to 79 years
10.7
25 to 29 years
18.0
80 years and over . . . .
5.Ü
30 to 39 years
22.9
Thus nearly 26 per cent, of the population between 40 and 49
years of age are insured; about 23 per cent, between 30 and 39 and
22 per cent, between 50 and 59. The proportions of insured
persons under 30 and over 59 are relatively much smaller.
356
VOLUNTARY SICKNESS INSURANCE
CHAPTER III
SICKNESS BENEFITS AND MEDICAL SERVICE
§ 1. — Benefits and Other Expenditure of Sickness Funds
SICKNESS
BENEFITS
Regulations Governing Sickness Benefits
Assistance in case of sickness is the only type of benefit required
on the part of insurance funds by the Swedish Act. Such assistance
may not be granted to persons other than those belonging to the
fund for the purpose of receiving benefits (section 15, para. 1).
The obligation of the fund to grant sickness benefits may not be
limited on the ground of the nature of the illness beyond the extent
laid down in the rules, which may provide merely that no grant
shall be made for diseases deliberately contracted by the member or
resulting from an Act involving criminal liability (section 15,
para. 2).
Under the Swedish Act invalidity resulting from old age is not
regarded as illness (section 15, para. 2).
Except where otherwise provided in the rules, a fund is not
required to grant sickness benefits unless the illness involves an
essential reduction in working capacity. A member who is entitled
to benefits continues to receive them so long as ability to work is
essentially reduced or until the end of the period laid down for
benefits (section 15, para. 5).
Amount of Benefits
When increased morbidity or a higher death-rate arising from a
particular disease is ascertained to exist in the territory of a fund,
the general meeting may decide that for a definite period no
allowances shall be granted for that disease, or allowances shall be
reduced by a fixed proportion, or funeral expenses shall not be
granted in cases of death caused by that disease or shall be reduced
by a fixed proportion. Such a decision is not valid unless approved
by the inspector (section 18).
SWEDEN
357
Sickness benefits must comprise at least hospital treatment, or
medical or pharmaceutical assistance, or a fixed cash allowance,
which must not be less than 90 ore when the member is arranging
for his own treatment (section 15, para. 3).
Gash benefits must be fixed at the same rate for all members of the
fund insured against sickness, or if the fund is divided into sections
(section 19) for all members of the same section. The rules may,
however, provide that cash benefits may vary according to the
income of the insured person ; in that case, the rules must lay down
the method of calculating income (section 15, para. 4).
Duration of Benefits
Benefits taking the form of hospital treatment or medical and
pharmaceutical assistance must be granted with the least possible
delay (section 16, para. 6).
Gash benefits are not granted unless the illness lasts at least three
days, but may then be granted with effect from the beginning of the
illness; they must be granted not later than the seventh day of
reduced working capacity, or the date of declaration if the rules
provide that the grant of cash benefits involves a declaration and
such declaration has been made not later than the seventh day
(section 15, para. 7).
The duration of benefits is not less than 90 days for each period
of twelve months. The rules may, however, provide that when an
illness or series of illnesses recurring before working capacity is
recovered have already involved the granting of benefits foi* a
period not exceeding 90 days, benefits shall not be continued by
reason of such illnesses (section 15, para. 8).
In any fund in which the duration of benefits exceeds the minimum fixed by the Act, the rules may provide that the excess period
may be reduced in a definite manner. Such provisions may not
involve a reduction of benefits in cases of accident x.
When a member by reason of illness is entitled, in pursuance of
the Act or of an agreement, to receive compensation or assistance
from another person, exclusive of State assistance, the rules may
provide that he shall not be entitled to sickness benefits or that his
right to such benefits shall be reduced by a fixed proportion.
If the rules of the fund do not require a medical certificate to be
attached to applications for membership, no benefits may be granted
1
Members who suffer accidents are entitled to benefits for the sixty days
following the accident (section 15, para. 8 (2)).
358
VOLUNTARY SICKNESS INSURANCE
for illness or death within sixty days of affiliation. This provision
does not apply if the illness or death is due to an accident occurring
after affiliation, or if the member is required to join the fund on
account of appointment to certain duties (section 17, para. 1).
If the rules provide that no benefits shall be granted for a definite
period after affiliation, such period may not exceed 120 days.
No such provision may apply to illness resulting from accidents
occurring after affiliation (section 17, para. 2).
Statistics of Morbidity
The following series of tables shows the morbidity of insured persons belonging to registered insurance funds.
The figures show the number of cases of illness, the number of
cases per hundred insured persons, the average duration of illness,
the number of days of illness for which cash benefits were paid, and
the average duration of benefits.
NUMBER OF CASES OF ILLNESS
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925 1
Men
Women
151,985
158,153
155,344
153,290
145,326
243,467
185,098
158,313
134,786
181,638
148,501
167,712
179,315
40,909
43,765
46,966
47,327
43,953
70,734
62,703
60,988
54,107
73,312
61,737
70,161
78,109
Total
192,894
201,918
202,310
200,617 .
189,279
314,201
247,801
219,301
188,893
254,950
210,238
237,873
257,424
NUMBER OF CASES PER HUNDRED INSURED PERSONS
Year
Men
1901
1905
1910
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925 !
30.5
28.3
30.7
40.0
37.7
33.9
53.7
39.0
32.7
28.2
38.7
31.6
34.9
35.8
i Provisional data.
Women
25.3
22.3
23.1
30.3
28.4,
24.5
36.4
29.6
27.0
23.3
31.0
25.6
27.8
29.5
359
SWEDEN
NUMBER OF DAYS OF ILLNESS FOR WHICH CASH BENEFITS WERE PAID
Year
Men
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
192'i
1925 !
Women
3,313,593
3,475,096
3,342,775
3,304,771
3,188,960
4,603,112
3,966,582
3,585,732
3,362,938
4,027,644
3,699,896
3,995,000
4,233,501
1,190,332
1,280,292
1,353,935
1,393,279
1,299,079
1,755,998
1,756,222
1,786,653
1,751,043
2,147,658
2,043,691
2,270,289
2,443,037
Total
4,503,925
4,755,388
4,696,710
4,698,050
4,488,039
6,359,110
5,722,804
5,372,385
5,113,981
6,175,302
5,743,587
6,265,289
6,676,538
NUMBER OF DAYS OF ILLNESS PER HUNDRED PERSONS
Year
Men
Women
Average
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
705.4
730.8
788.4
812.6
744.2
1,015.7
836.2
740.5
704.5
857.6
787.4
830.3
846.3
665.7
688.1
733.5
836.5
723.6
904.4
828.3
790.3
754.4
909.4
848.0
898.8
924.2
694.4
718.8
771.7
819.5
738.1
982.3
833.8
756.3
720.8
875.0
808.0
853.9
873.2
1
AVERAGE DURATION OF BENEFITS (NUMBER OF DAYS FOR
WHICH BENEFITS WERE PAID)
Year
Men
Women
Total
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925l
21.8
22.0
21.5
21.6
21.9
18.9
21.4
22.6
25.0
22.2
24.9
23.8
23.6
29.1
29.3
28.6
29.4
29.6
23.8
28.0
29.3
32.4
29.3
33.1
32.4
31.3
23.3
23.6
23.2
23.4
23.7
20.2
23.1
24.5
27.1
24.2
27.3
26.3
25.9
i Provisional data.
360
VOLUNTARY SICKNESS INSURANCE
Cost of Sickness Benefits
The following table shows the cost of sickness benefits for the
years 1922-1925.
COST OF SICKNESS BENEFITS PAID BY ORDINARY FUNDS
(IN CROWNS)
Sickness benefits
Hospital treatment
Medical fees
Pharmaceutical
expenses
1922
1923
1924
1925
12,425,451
11,623,281
12,848,351
13,937,600
23,210
311,268
22,740
304,495
24,593
333,958
31,941
371,426
105,958
97,289
111,408
112,351
The figures do not include the cost of benefits paid by continuation funds. The cost of such benefits is compared with the cost of
benefits paid by ordinary insurance funds for the years 1924-1925
in the following table.
COST OF SICKNESS BENEFITS PAID BY THE ORDINARY INSURANCE
FUNDS AND
CONTINUATION
FUNDS IN
Year
1924
\ 1925
1924
Hospital treatment
! 1925
1924
Medical fees
\ 1925
1924
Pharmaceutical expenses j 1925
Sickness benefits
1924-1925
Ordinary
funds
12,848,351
14,007,171
24,593
31,941
333,958
371,426
119,408
112,351
1
(iN
Continuation
' funds
311,661
314,780
1,543
1,157
8,750
8,764
42
CROWNS)
Total
13,160,012
14,321,951
26,136
33,098
242,708
380,190
111,408
112,393
i Provisional data.
The largest item is the daily cash allowance. Hospital treatment,
medical fees, and pharmaceutical expenses play a relatively small
part in the budgets of Swedish funds.
This fact also appears from the following table showing the number of institutions granting respectively cash benefits only, and both
cash benefits and treatment.
361
SWEDEN
N U M B E R OF F U N D S G R A N T I N G
CASH B E N E F I T S O N L Y
G R A N T I N G B O T H CASH B E N E F I T S A N D
Ordinary funds
AND
THOSE
TREATMENT
Continuation funds
Year
Funds granting
cash benefits
only
Funds granting
cash benefits
and treatment
1918
1921
1924
997
995
951
280
281
299
Funds granting
cash benefits
only
Funds granting
cash benefits
and treatment
1
1
2
26
31
31
The 951 ordinary funds granting cash benefits only in 1924 comprised 587,657 persons or 78.5 per cent, of those insured, while the
299 remaining funds had only 160,950 members. The 31 continuation funds which paid cash benefits only had 82,005 members, or
91.8 per cent, of the total membership of institutions of that class.
The cost of sickness benefits per person insured for the period
1901-1924 appears from the following table.
AMOUNT OF B E N E F I T S P E R I N S U R E D P E R S O N (IN C R O W N S )
1919
7.06
1920
7.51
1921
8.63
1922
14.29
1923
13.94
1924
12.69
1925 l
17.91
i Provisional data.
1901
1905
1910
1915
1916
1917
1918
15.41
14.18
13.89
17.61
16.35
17.51
18.32
The amount of daily sickness benefits paid has varied in the
following proportions:
A M O U N T OF S I C K N E S S B E N E F I T S P A I D BY I N S U R A N C E F U N D S U P T O
3 1 DECEMBER 1 9 1 6 , 1 9 2 1 , AND 1 9 2 4
Precentage of membership
insured for sickness benefits
Amount of daily
sickness benefit
Less t h a n 1 crown
1
„
1.50,,
2 crowns
2.50 „
3
„
4
More t h a n 4
Percentage of wages
Total
1916
1921
1924
1.9
33.5
19.7
27.3
2.8
11.7
2.7
1.4
25 5
16.1
27.1
3.2
17.4
8.1
0.7
0.5
100
0.8
18.9
15.1
30.4
3.6
18.0
10.7
1.9
0.6
100
0.4
100
362
VOLUNTARY SICKNESS INSURANCE
The percentage of members insured for benefits at the rate of less
than 1 crown, 1 crown, and 1.50 crowns has thus diminished during
the period under consideration, while there is an increase in the
proportion of persons receiving a daily sickness allowance of 2, 2.50,
3, 4 crowns and over. In 1924, 86 per cent of the members received
allowances of 1 to 3 crowns a day and only 12.6 per cent. 4 crowns
or more. The number of insured persons whose allowance is calculated in proportion to their wages is insignificant throughout.
The figures in the above table refer to funds granting benefits in
the form of medical fees and pharmaceutical expenses as well as
those granting cash benefits.
NUMBER OF FUNDS GRANTING MEDICAL FEES AND PHARMACEUTICAL
EXPENSES IN ADDITION TO CASH BENEFITS, NUMBER OF MEMBERS
AND AMOUNT OF BENEFITS
Number of
funds
Number of
members
Amount of
benefits
(in crowns)
Funds granting medical fees
only
1922
1923
1924
174
178
181
56,802
60,911
67,089
231,195
209,261
248,169
1922
1923
1924
27
25
31
10,626
10,919
10,566
28,173
27,731
38,334
1922
1923
1924
T o t a l 1922
1923
1924
70
75
76
271
278
288
24,414
31,790
30,198
91,842
103,620
113,853
156,563
164,792
158,442
416,131
401,784
444,945
Funds granting pharmaceutical expenses only
Funds granting medical fees
and pharmaceutical expenses
MATERNITY BENEFITS
Benefit Granted by Funds
The Act of 1910 contains no provisions concerning maternity
benefits. Such benefits are, however, regarded as coming within
the scope of insurance institutions, which receive state subsidies for
this purpose (Decrees of 30 June 1913 and 2 December 1921).
The conditions under which the State subsidises insurance funds
granting benefits to insured women in case of maternity will be
discussed in Chapter IV, " Financial Resources and Their Management ". Funds desiring to benefit by such subsidises must grant a
363
SWEDEN
cash allowance of not less than 90 ore a day for a period of not less
than fourteen days, or alternatively medical fees. Persons desiring
to benefit by such allowances must have been insured in the fund
uninterruptedly for not less than 270 days before confinement.
The number of funds granting maternity benefits is rather small.
NUMBER
OF
REGISTERED
FUNDS
GRANTING
BENEFITS
IN
CASE
OF CONFINEMENT AND NUMBER OF WOMEN INSURED IN THEM
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
2
Number of
registered funds i
Number of
women insured
70
145
213
375
396
405
455
462
462
476
478
486
497
52,163
73,736
92,351
118,789
127,988
144,967
171,728
181,609
187,121
189,395
201,198
213,944
228,400
i Certain funds granting benefits in cases of confinement have not paid them for a
number
of years (see Report on Registered Insurance Funds, 1922-1924, pp. 10 and 20.
2
Provisional data.
Maternity Statistics
The following table shows the number of cases of confinement and
the number of days for which benefits were paid.
NUMBER OF CASES OF CONFINEMENT AND PERIOD
OF BENEFITS GRANTED
Year
Number
of cases
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925 !
1,882
3,146
4,088
5,007
5,925
6,712
7,591
10,535
10,125
9,620
9,500
9,356
9,244
Number
Number of days Average period
of confine- Number of days
for which
of maternity
for which
ments
benefits were
per 100
benefits granted
benefits
women
paid per
(in days)
were paid
100 women
3.6
21.5
40,430
77.5
4.3
74,383
100.9
23.6
4.4
99,890
108.2
24.4
4.2
129,030
•108.6
25.8
4.6
157,994
123.4
26.7
4.6
181,791
125.4
27.1
4.6
208,724
126.8
27.5
5.9
298,374
168.7
28.3
5.5
287,375
156.1
28.4
5.1
270,959
143.1
28.2
4.7
275,604
137.0
29.0
4.4
272,382
127.3
29.1
4.2
278,802
126.0
30.2
i Provisional data.
364
VOLUNTARY SICKNESS INSURANCE
Cost of Maternity Benefits
The cost of such benefits granted during the years 1913 to 1924
was as follows:
TOTAL COST AND COST PER INSURED PERSON OF MATERNITY BENEFITS
(IN CROWNS)
Year
Total cost
Cost per day per
person insured
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
42,647
76,051
102,649
132,661
162,569
187,152
215,335
308,632
298,688
284,764
301,931
309,058
313,010
0.82
1.03
1.11
1.12
1.27
1.29
1.31
1.74
1.62
1.50
1.50
1.44
1.42
1
i Provisional data.
FUNERAL BENEFITS
In pursuance of the Act of 1910 Swedish insurance funds may not
insure merely against funeral expenses; nevertheless, any fund may
in its rules stipulate that the uninsured husband or wife of a member
niay be insured for funeral expenses only, and also that a member
no longer entitled to benefits for a particular disease or for sickness
in general may continue to be insured against funeral expenses only.
With these two reservations, benefits for funeral expenses may be
granted only to the legal heirs of a deceased person previously
insured against sickness.
The maximum amount of funeral benefits was fixed at 200 crowns
by the Act of 1910 (section 2), and increased to 500 crowns by the
Act of 6 May 1921.
In pursuance of section 106 as amended by the Act of 29 June
1912, non-registered insurance funds may not grant funeral benefits
amounting to more than 300 crowns if they have over 100 members.
The expenditures of registered funds in funeral benefits for the
years 1913 to 1924 were as follows :
365
SWEDEN
COST OF FUNERAL BENEFITS
Years
1913 .
1914 .
1915 .
1916 .
1917 .
1918 .
Crowns
740,186
758,899
760,447
728,249
777,122
233,559
Year
1919
1920
1921
1922
1923
1924
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Crowns
953,339
934,719
911,960
1,009,635
973,286
1,073,557
During the years 1919 to 1924 the expenditure per member for
funeral expenses amounted to 1.63,1.54,1.49,1.66, and 1.60 crowns
respectively. For the years 1919 to 1921 the average payment per
death was about 138, 138, and 141 crowns respectively.
The increase was due to the amendment of 6 May 1921, which
extended the maximum funeral benefit from 200 to 500 crowns.
OTHER BENEFITS
As a rule the benefits already mentioned (sickness, maternity
and funeral expenses) are the only ones granted by funds. There
are, however, certain Swedish funds which in particular cases grant
assistance to convalescents (Skania, Gothenburg, and Stockholm)
and to sick persons in their own homes (Tralleborg, Malmo, and
Gavie).
EXPENSES OF ADMINISTRATION
The expenditure of registered insurance funds (excluding continuation funds) for administration during the period 1913 to 1914
were as follows:
TOTAL COST AND COST PER INSURED PERSON OP ADMINISTRATION
(IN CROWNS)
Year
1913''
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
'
Total cost
Cost per insured
person
805,756
833,407
781,763
932,732
1,077,254
1,377,138
1,774,738
2,030,111
2,083,005
2,078,610
2,101,092
2,206,798
1.24
1.26
1.28
1.63
1.77
2.13
2.58
2.86
2.94
2.95
2.96
3.01
366
VOLUNTARY SICKNESS INSURANCE
The proportion of the expenses of administration to the total
expenditure during the same period was as follows:
PROPORTION OF ADMINISTRATION EXPENSES TO TOTAL EXPENDITURE
OF REGISTERED INSURANCE FUNDS
Year
Per cent.
Year
Per cent.
1913
1914
1915
1916
1917
1918
8.9
8.5
8.0
9.3
10.7
9.3
1919
1920
1921
1922
1923
1924
12.7
14.6
15.1
12.4
13.4
12.9
The proportion has increased considerably during the period
under consideration, rising from 8.9 per cent, in 1913 to 12.9 per
cent, in 1924.
The following table compares the cost of administration per
person insured in the various types of funds from 1922 to 1924.
COST OF ADMINISTRATION PER INSURED PERSON
(IN CROWNS)
Year
1922
1923
1924
Local funds
Urban
Rural
3.50
3.46
3.42
1.54
1.51
1.54
National
funds
Total of
ordinary
funds
Continuation funds
3.27
3.35
3.49
2.95
2.96
3.01
0.70
0.69
0.63
The cost of administration is thus twice as high in urban funds as
in rural funds. The cost of administration of continuation funds
is only about one-quarter of the average cost of ordinary insurance
funds.
TOTAL EXPENDITURE
The total expenditure of ordinary insurance funds and continuation funds and the expenditure per insured person for the years
1911 to 1924 are shown in the following table:
367
SWEDEN
TOTAL E X P E N D I T U R E
O F O R D I N A R Y I N S U R A N C E F U N D S AND
C O N T I N U A T I O N F U N D S , AND E X P E N D I T U R E
P E R INSURED
PERSON
(IN CROWNS)
Year
Total expenditure
Expenditure per
insured person
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
7,638,001
8,409,607
9,064,410
9,754,849
9,751,966
10,235,817
10,207,858
15,013,217
14,258,020
14,217,088
14,037,456
17,107,836
16,080,604
17,521,544
12.17
13.36
13.98
14.75
16.02
16.28
15.25
21.00
18.80
18.05
17.80
21.79
20.28
21.35
The following table shows the relative amounts of the various
items of expenditure of ordinary insurance funds for the years
1913 to 1915, and 1922 to 1924.
AMOUNT OF VARIOUS ITEMS OF EXPENDITURE OF ORDINARY
INSURANCE FUNDS AS PERCENTAGE OF THE TOTAL
EXPENDITURE
Sickness benefits
Hospital treatment
Medical fees
Pharmaceutical expenses
Maternity benefits
Funeral expenses
Expenses of administration
Other expenditure
Total
i
1913
1914
1915
1922
1923
1924
79.3
80.0
80.5
74.2
0.2
Í 1.9
74.1
0.2
1.9
75.1
0.2
1.9
2.2
2.2
1.9
1 0.6
0.5
8.2
0.8
7.8
1.1
7.8
1.7
6.0
0.6
1.9
6.2
0.7
1.8
6.3
8.9
0.9
8.5
0.7
8.0
0.7
12.4
3.0
13.4
1.7
12.9
1.1
100
100
100
100
100
100
The most important items are the sickness benefits, which
account for about three-fourths of the expenditure, and the cost
368
VOLUNTARY SICKNESS INSURANCE
of administration, which is about one-ninth. The other benefits,
funeral expenses, hospital treatment, medical fees, pharmaceutical
expenses, etc., amount only to 12 per cent, of the expenditure of
ordinary insurance funds.
§ 2. — Organisation of Medical Service
As a rule the Swedish funds do not grant their members any other
benefits than those described above. In case of sickness, insured
persons, who, as already mentioned, form about one-sixth of the
adult population of Sweden, use the general health establishments
of the Kingdom.
The International Health Year Book, 19241, gives the following
information on such establishments in Sweden for 1923:
HEALTH
ESTABLISHMENTS
IN SWEDEN
Establishments
Genera! hospitals
Infirmaries (with a maximum of 24 beds)
Hospitals attached to asylums
Private hospitals and private nursing homes
Children's hospitals
Seaside sanatoria
Hospitals for contagious diseases
Í State
Anti-tuberculosis establishments I Province
[ Private
Lying-in hospitals
Asylums for iucurables
Mental hospitals and lunatic asylums belonging to the State
Establishments for cripples
Järvsö leper institutions
IN 1 9 2 3
Number
Number
of beds
91
78
24
24
14
6
233
4
59
8
18
18
13,665
1,260
3,987
584
918
842
6,395
458
4,721
381
640
1,011
17
3
1
10,430
172
34
The total number of health establishments in 1923 was 598, with
45,498 beds. The number of physicians on 31 December 1924
was 2,060; the number of midwives was 2,977, including 1,764
district midwives, 67 midwives in lying-in hospitals, and 692
private midwives.
1
L E A G U E OF N A T I O N S , H E A L T H O R G A N I S A T I O N : Annuaire
tional, 1924. Rapport sur les progrès réalisés
publique de 22 pays, p . 456. Geneva, 1925.
sanitaire
dans le domaine
de
interna-
l'hygiène
SWEDEN
369
The number of nurses employed by the provinces in 1924 was
254; the communes employed 488, and the dispensaries 227; to
these must be added 1,113 private nurses not included in the
above figures.
The funds which grant their members benefits in the form of
medical treatment do not, as a rule, employ special physicians,
but in some cases funds or groups of funds have entered into
agreements with particular physicians or associations of physicians.
When such an agreement is made with an association of physicians,
the insured persons are entitled to choose from among the practitioners belonging to the association. The physicians are then paid
according to the scale of charges laid down by the agreement.
The great majority of funds have taken no steps to organise
surgical or hospital treatment. Some have arranged for reduced
charges in hospitals or clinics. Only a few isolated funds have
formed their own clinics for the treatment of unimportant injuries
and accidents.
Medicines are provided for insured persons by the licensed
pharmacies.
The Swedish funds also carry on an extensive educational campaign and, through the medium of their publications, participate
in the general work of prophylaxis and hygiene.
24
370
VOLUNTARY SICKNESS INSURANCE
CHAPTER
IV
FINANCIAL RESOURCES AND THEIR MANAGEMENT
§ 1. — Financial Resources
The resources of Swedish registered sickness insurance funds are
derived from :
(a)
(b)
(c)
{d)
(e)
contributions of members ;
contributions of employers;
State subsidy;
communal subsidy;
other resources.
CONTRIBUTIONS OF MEMBERS
The Swedish Act distinguishes between ordinary contributions
and supplementary contributions.
In pursuance of section 20, para. 1, ordinary contributions are not
to be fixed in a uniform manner for all members. In determining
the amount of t h e contributions, attention is paid to differences
between members connected with the right to benefit, the risks
run, and the rules laid down in accordance with section 21 1.
Contributions fixed with a view to providing sickness benefits or
funeral expenses are calculated in such a way that together with
the other receipts of the fund for the same purpose, t h e y will be
1
If the rules of the fund provide that membership is limited to persons
employed in a given undertaking and the employer in question has made
provisions or has entered into precise engagements which to an appreciable
degree affect the fixed contributions or the allowances paid by the funds,
the same rules may provide that a member who continues to belong to the
fund after leaving such employment may be liable to increased contributions
corresponding to the advantages accruing to him from the contributions and
engagements of the employer (section 21).
371
SWEDEN
sufficient to cover the current expenses of the fund for benefits,
cost of administration, and formation of a reserve fund (section 20,
para. 1).
Money received for the purpose of providing sickness benefits
and funeral expenses may not be used for any other purposes except
for the formation of the reserve fund (section 20, para. 2). If a
member resigns, or is expelled, from the fund or dies, the fund is
entitled, in default of provision to the contrary in the rules, to claim
not only the contributions for the period in which the event in
question took place, but also the contribution due for the whole
period up to that date (section 13).
The fund may also require from its members supplementary
contributions. Money derived from this source may be used only
for the purpose of making up a deficiency in certain receipts: if
supplementary contributions are required under the rules they may
not be increased, unless the receipts of the fund earmarked for
sickness benefits and funeral expenses are insufficient (section 20,
para. 3).
The following table shows the amount of regular and supplementary contributions received by insurance funds during the years
1913-1924:
CONTRIBUTIONS
RECEIVED BY ORDINARY INSURANCE FUNDS AND
CONTINUATION
FUNDS (IN CROWNS)
Year
Regular
contributions
Supplementary
contributions
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
7,178,201
7,649,839
7,598,745
8,512,954
9,231,201
10,310,278
11.585,286
12,564,044
13,032,356
13,680,070
14,164,193
15,023.145
250,621
202,900
100,770
52,130
46,546
82,873
939,112
534,922
265,653
47,647
35,206
81,088
These figures show a constant increase in the income from regular
contributions and a considerable variation in the amount of supplementary contributions, which reached their maximum in 1919 after
the influenza epidemic. The number of funds which required
372
VOLUNTARY SICKNESS INSURANCE
supplementary contributions from their members was 212 in 1919,
72 in 1922, 69 in 1923, and 64 in 1924.
The average contribution per member to ordinary insurance
funds is shown in the following table :
AVERAGE CONTRIBUTION PER MEMBER TO ORDINARY FUNDS
(IN CROWNS)
Year
1901
1905
1910
1915
1916
1917
1918
Amount of
contributions
-.
8.86
9.54
10.80
14.05
14.60
14.92
15.64
Amount of
contributions
Year
1919
1920
1921
1922
1923
1924
16.58
17.37
18.03
19.04
19.55
20.09
For the purpose of comparison of the total amount and the
amount per member derived from contributions of insured persons
in ordinary sickness insurance funds and continuation funds, the
following table gives the necessary information for the years 19231924.
TOTAL AMOUNT AND AMOUNT PER MEMBER OF CONTRIBUTIONS OF
INSURED PERSONS TO ORDINARY INSURANCE FUNDS AND
CONTINUATION FUNDS (iN CROWNS)
Year
1922
1923
1924
Ordinary funds
Total
|
Amount
amount
| £>er member
13,435,381.95
13,901,055.29
14,737,725.25
19.04
19.55
20.09
Continuation funds
Amount
Total
per member
amount
244,687.72
263,136.59
285,420.09
3.09
3.20
3.29
CONTRIBUTIONS OF EMPLOYERS
The Swedish Act contains no provisions on this point.
The employers' contribution, which may take the form of regular
subscriptions or that of special grants, nevertheless forms a considerable part of the resources of works insurance funds.
The following table shows the number of funds which received
373
SWEDEN
contributions from employers during the years 1913 to 1924 and the
amount of such contributions.
NUMBER
OF ORDINARY FUNDS RECEIVING CONTRIBUTIONS FROM
EMPLOYERS, AND THE AMOUNT
Year
Number
olfunds
Amount
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
174
173
125
119
130
135
133
116
101
94
103
101
Crowns
214,386
200,272
177,524
191,374
200,201
358,950
344,900
366,830
296,121
279.347
266,469
270,037
Since 1913, the number of funds receiving subsidies from employers has noticeably decreased, while the total amount received
from such sources has not increased to any great extent.
STATE SUBSIDY
The Act of 1891 provided for State subsidies towards the expenses
of administration of registered sickness insurance funds; these
subsidies were afterwards increased. In 1900 the State granted a
subsidy of 1.50 crowns a year for each of the first 100 members;
1 crown for additional members up to a total of 300; 0.50 crown
for further members up to a total of 2,600, and 0.25 crown for members in excess of 2,600.
The Act of 1910 increased the contribution of the State towards
the cost of insurance.. The Royal Decree of 4 July 1910 provided
for a subsidy of 1 crown for each member to all insurance funds, 25
ore for each member to continuation funds and 50 ore for members
of insurance funds belonging to more than one fund. The State
also granted 25 ore for each day of sickness, excluding Sundays,
for which the fund had granted during the previous year a cash
benefit of not less than 90 ore for hospital treatment in a special
establishment, with a minimum of 50 ore and a maximum of 2
374
VOLUNTARY SICKNESS INSURANCE
crowns for sickness insurance funds and a maximum of 50 ore for
reinsurance funds. The State also granted an allowance amounting to one-fourth of the expenditure of the funds in medical fees
and pharmaceutical expenses.
The present conditions of the granting of State subsidies are
given below.
A distinction should be made between the regular State subsidies
to registered insurance funds and special subsidies granted during
the years 1918 to 1922.
Regular State Subsidies
Under Swedish legislation the State grants subsidies to funds
insuring against sickness and funeral expenses and additional
subsidies to funds insuring against maternity.
Subsidies to Funds Insuring against
Sickness and Funeral Expenses
In pursuance of the Decree of 11 October 1920 concerning State
subsidies to sickness insurance funds, as amended by the Decree
of 2 December 1921, State subsidies are granted to registered sickness insurance funds under the following conditions:
o.
(a) 2 crowns per member to ordinary funds; 50 ore per member to continuation funds. The subsidy for members who
in pursuance of section 116 of the Act of 1910 are simultaneously affiliated to two or more registered funds is 1 crown
only.
(b) 25 ore for each day of incapacity, excluding Sundays, for
which the fund in question has paid during the previous
year a cash benefit of not less than 90 ore, or for which the
fund in question has paid the hospital expenses of the patient.
This part of the subsidy must on 31 December of the
previous year amount to not less than 50 ore and not more
than 2 crowns per member for ordinary funds and not more
than 50 ore per member for continuation funds.
(c) An allowance equal to one-fourth of the expenditure of the
fund during the previous year for medical and pharmaceutical
benefits to insured persons, with a maximum of 1 crown
per year per member for ordinary funds and 25 ore per year
per member for continuation funds.
SWEDEN
375
The portion of the State subsidy which is fixed in proportion to
the number of members is not granted for persons insured against
funeral expenses only, those whose sickness benefit is less than the
minimum fixed by the Act of 1910 concerning persons contributing
to their maintenance by labour, and persons whose sickness benefit
exceeds 8 crowns a day.
Subsidies to Funds Insuring against Maternity
State subsidies are granted to sickness funds insuring against
the risk of maternity (confinement benefit) in accordance with the
Decree of 30 June 1915.
Under section 1 of the Decree, registered sickness insurance funds
which by their rules grant benefits in case of confinement to female
members insured against sickness may receive State subsidies on
the following conditions:
That the confinement benefit comprises either a minimum
cash payment of 90 ore per day or accommodation in a maternity home during a fixed period corresponding to the time of
confinement and not less than 14 days.
That the confinement benefit is granted only to women
members of the fund who have been insured against sickness
in a registered sickness insurance fund, in pursuance of the
Act of 1910, for a continuous period of 270 days immediately
preceding confinement.
That the rules of the fund include no provision conflicting
with the object of the fund or its social purpose.
That the fund has not knowingly or through negligence
given incorrect information in the application for subsidy.
The subsidy granted by the State amounts to 60 ore for each
day for which confinement benefit was paid by the fund during
the previous year, or, if the fund has not been registered during
the whole of the previous year, for that part of the year during
which it was registered. The subsidy may not be granted for days
for which sickness benefits were paid nor for more than 42 days
in respect of each confinement, and is conditional upon cessation
of paid work by the member during this period. The amount
actually granted by the State in the form of subsidies to ordinary
registered funds insuring against risks of sickness, funeral expenses,
and maternity, and the proportion of these amounts to the
total receipts and expenditure is shown by the following table.
376
VOLUNTARY SICKNESS INSURANCE
AMOUNT
OF
STATE
SUBSIDIES
Year
Crowns
8,723
40,364
234,592
372,597
479,419
1,501,765
1,537,285
1,613,702
1,629,107
1,990,148
2,039,834
2,551,906
2,796,585
2,458,914
2,766,541
1892
1895
1900
1905
1910
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
TO
ORDINARY
FUNDS
Percentage of
receipts
Percentage of
expenditure
2.9
5.3
7.9
7.2
6.1
14.2
13.7
13.4
11.9
12.4
12.1
15.0
15.2
13.3
14.0
3.2
6.4
9.6
8.3
6.9
15.0
15.3
16.2
10.2
14.1
14.6
19.1
16.5
15.6
16.2
The above table shows the difference between the amounts
granted by the State before and after the Act of 1910 and the
constant increase in the contribution of the State during the period
1910 to 1924.
The Act of 1910 and the Decrees of 1920 and 1921 likewise
increased the proportion of the State subsidy to the total receipts
and expenditure of registered funds; this proportion in the last
year under consideration (1924) was 14 per cent, and 16.2 per
cent, respectively.
The subsidies granted by the State to continuation funds and
their proportion to the total receipts of such institutions are shown
in the following table.
STATE SUBSIDIES TO CONTINUATION
FUNDS
Year
Total
Percentage
of receipts
1916
1917
1918
1919
1920
1921
1922
1923
1924
Crowns
29,194
33,979
34,681
36,022
39,345
59,085
63,314
66,853
69,061
12.6
13.3
11.7
10.6
10.7
14.4
15.2
15.2
14.6
377
SWEDEN
The amount of the State contribution per insured person is
shown in the following table.
STATE
CONTRIBUTION
PER
MEMBER
TO
REGISTERED
SICKNESS
INSURANCE FUNDS (iN CROWNS)
Year
Ordinary funds
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1.36
1.91
2.34
2.41
2.67
2.67
2.53
2.88
2.86
3.69
3.91
3.45
3.78
Continuation
funds
—
—
—
0.53
0.55
0.51
0.50
0.51
0.25
0.80
0.81
0.80
Special State Subsidies ~
In addition to the subsidies described above, the State has
contributed to the work of sickness insurance during the post-war
period by special subsidies to lighten the burden incumbent upon
sick persons and women in childbirth, as a result of the high cost
of living. From 1918 to 1922 the Riksdag voted special credits
in their favour, which, unlike the subsidies described above, were
granted directly to members already in receipt of benefits from the
funds in which they were insured, by reason of sickness or confinement. Such subsidies were granted only for the period during
which the persons concerned were entitled to benefits from the
funds.
They were paid to the persons concerned by the various insurance
funds, by anticipation and in the form of supplementary benefits
for sickness or confinement, the fund being reimbursed in the
following year from public revenue.
Special State subsidies were calculated at the rate of 50 ore a
day, including Sundays and holidays, for the period for which the
fund concerned had paid allowances of not less than 90 ore as
sickness or confinement benefit. In case of confinement, the person
concerned was entitled to the State subsidy from the date on which
378
VOLUNTARY SICKNESS INSURANCE
the benefit began; in case of sickness, the State subsidy began on
the eighth day of the period for which benefits were provided by
the fund; this waiting period was extended to 14 days in 1922.
No such subsidy was granted to members of the fund who were
already in receipt of a daily allowance exceeding 4 crowns (8
crowns in 1922). The special subsidy has not granted for days of
sickness for which the persons concerned received benefits under
the Act of 18 June 1916 concerning industrial accident insurance.
The following amounts were paid by the State to sickness insurance
funds in the form of special subsidies :
SPECIAL
STATE
SUBSIDIES
IN
1919-1924
(iN
CROWNS)
Year
Ordinary
funds
Continuation
funds
1919
1920
1921
1922
1923
1924
1,243,271
1,735,437
1,615,968
1,756,005
1,327,742
94.450
• 29,593
48,858
51,058
57,727
66,562
102
COMMUNAL
SUBSIDIES
There is no provision in the Act for communal subsidies. The
contributions of communes are purely voluntary and depend
entirely on the communal authorities. They are generally granted
in one of the following forms:
(1)
(2)
(3)
(4)
(5)
An annual amount to each insurance fund in the commune.
An annual amount for each member of insurance funds in
the commune.
An annual amount for each member of one of the funds
in the commune.
A fixed sum for each day for which sickness benefit has been
paid by a fund or funds.
A fixed sum for each day of incapacity of a member.
The amount of communal subsidies during the period 1912 to
1924 is shown in the following table.
379
SWEDEN
COMMUNAL SUBSIDIES (IN CROWNS)
Ordinary
funds
Year
Continuation
iunds
124,609
154,670
182,486
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
151,507
165,720
188,645
219,984
267,218
294,968
278,050
281,877
269,265
264,516
32,308
38,170
43,632
45,137
66,831
67,938
74,971
79,933
75,823
82,494
The number of funds benefiting by such subsidies are as
follows.
NUMBER
OF
Year
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
FUNDS
RECEIVING
COMMUNAL
Ordinary
funds
SUBSIDIES
Continuation
funds
5 20
5 29
385
391
411
412
446
441
437
426
417
419
11
15
19
17
19
18
17
19
16
17
The communal subsidy per person insured during the period
1912 to 1924 was as follows :
380
VOLUNTARY SICKNESS INSURANCE
COMMUNAL SUBSIDY PER MEMBER OF FUNDS RECEIVING
SUCH SUBSIDIES (IN CROWNS)
Year
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Ordinary
funds
Continuation
funds
0.20
0.24
0.28
0.81
0.69
0.71
0.67
0.93
0.88
0.95
1.01
0.92
0.95
0.28
0.29
0.31
0.34
0.39
p.42
0.39
0.40
0.38
0.36
The following table shows the proportion of communal subsidies
to the total receipts of registered funds..
COMMUNAL
SUBSIDIES
AS PERCENTAGE
OF
TOTAL
RECEIPTS
OF
FUNDS (IN CROWNS)
Year
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Ordinary
funds
Continuation
funds
1 4
1 6
1 7
1.8
1.5
1.6
1.6
1.7
1.8
1.6
1.6
1.5
1.3
16.8
16.5
17.0
15.2
19.7
18.5
18.2
19.2
17.2
17.4
O T H E R RESOURCES
Among the other resources of funds the most important item
is interest. The amount of interest is shown in the following table.
381
SWEDEN
INTEREST ON THE FUNDS OF SICKNESS INSURANCE
INSTITUTIONS
AND CONTINUATION FUNDS (iN CROWNS)
Ordinary
funds
Year
Continuation
funds
519,279
560,700
597,031
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
516,199
534,814
612,986
775,719
646,394
778,684
883,454
851,365
899,852
1,160.039
4,322
6,209
8,769
12,739
13,002
17,899
22,010
20,305
23,530
29.378
Other resources of funds include entrance fees, receipts from
fêtes, gifts, legacies, fines, etc.
TOTAL
RESOURCES
The total annual resources of registered sickness funds and continuation funds are shown in the following table. The figures do
not include the special State subsidies granted during the period
1918 to 1922 and paid during the period 1919 to 1924, since these
grants cannot be regarded as regular resources of Swedish funds.
TOTAL RESOURCES
AND RESOURCES PER
MEMBER OF
INSURANCE FUNDS AND CONTINUATION FUNDS (IN
ORDINARY
CROWNS)
Year
Total
resources
Resources
per member
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
8,270,539
8,986,507
9,930,168
10,661,567
10,339,226
11,447,077
12,382,953
14,022,916
16,305,951
17,083,258
17,889,369
18,550,372
18,845,395
20,262,539
13.17
14.27
15.31
16.12
16.99
18.21
18.50
19.62
21.50
21.69
22.69
23.63
23.76
24.69
382
VOLUNTARY SICKNESS INSURANCE
The following table shows the proportions of the receipts of
insurance funds from different sources during the years 1913-1915
and 1922-1924:
PROPORTION OF RECEIPTS FROM DIFFERENT SOURCES
1913
Regular contributions 72.3
Supplementary con2.5
tributions
12.5
State subsidy
1.6
Communal subsidy
5.6
Interest
Employers' contri- | 5.5
butions
Other sources
100
1914
1915
1922
1923
1924
71.8
73.5
74.1
75.5
74.5
1.0
14.2
1.8
5.0
4.5
0.3
15.2
1.6
4.7
Í 1.5
0.2
13.3
1.5
4.9
1.5
3.1
0.4
14.0
1.3
5.9
1.4
2.5
1.9
14.5
1,7
5.6
4.5
100
'
100
1 2.6
100
100
100
The insured persons themselves thus contribute about threefourths of the cost of insurance, the State subsidy represents about
one-seventh of the total receipts, while contributions of communes
and employers, and interest, etc., form only about one-ninth of
the total.
§ 2. — Financial Management
The Swedish sickness insurance funds are managed on a system
of annual distribution of costs together with the formation of a
reserve fund.
There are very few legal provisions concerning the financial
management of the funds. Nothing is laid down beyond the formation of a reserve fund and supervision of the financial stability
of registered funds.
RESERVE FUND
In pursuance of section 23 of the Act, when the accounts of a
fund are balanced, the sums not required for sickness benefits
and funeral expenses, together with the unused residue of supplementary contributions, must be paid into a reserve fund. The
capital and interest of this fund may be used only in case the receipts
of the fund are not sufficient to cover its obligations. In practice
these funds form the major part of the amounts shown in official
statistics as the capital of insurance funds (see page 385).
383
SWEDEN
At the request of the management of the fund, the inspection
service authorises the suspension of payments to the reserve fund,
as provided by the Act, when in the opinion of the inspection
service such payments may be suspended without endangering
the ability of the fund to meet its obligations. If such authority
is granted, the inspection service is required to take care to withdraw it as soon as it appears desirable to do so (section 25).
SUPERVISION OF FINANCIAL STABILITY
The inspection service lays down special regulations governing
the methods of accounting of insurance funds, supplementing
those to which the funds are subject in pursuance of the Decree
of 4 May 1855 concerning commercial book-keeping and accounts.
Accounts must be balanced annually (section 22, para. 1).
Accounts must be kept in such a way as to show the amount
of the reserve fund (section 22, para. 2).
If the receipts of the fund earmarked for sickness benefits and
funeral benefits are not sufficient, the board of directors must
immediately make a statement to that effect to the inspection
service, showing the steps taken or proposed to be taken on a
definite date. The inspection service must then instruct the fund
as to the steps to be taken according to the circumstances
(section 24).
FINANCIAL AND ACTUARIAL POSITION OF THE FUNDS
The assets and liabilities of registered ordinary funds and continuation funds on 31 December of the years 1922-1924 was as follows :
ASSETS AND LIABILITIES OF FUNDS ON 3 1 DECEMBER 1 9 2 2 - 1 9 2 4
(IN CROWNS)
Type of iund
Assets
Ordinary funds
Continuation funds
Total
Liabilities
Ordinary funds
Continuation funds
Total
1922
1923
¡924
24,441,605
657,357
26,965,561
728,662
29,668,933
793,559
25,098,962
27,694,223
30,462,492
1.285,149
6,744
1,237,558
5,178
1,323,759
6,018
1,291,893
1,242,736
1,329,537
384
VOLUNTARY SICKNESS INSURANCE
The following tables show the details of assets and liabilities on
31 December 1924.
ASSETS ON 3 1 DECEMBER 1 9 2 4 (iN CROWNS)
Cash on hand
Bank deposits
Credit accounts with employers
Stocks and shares
Bills receivable
Special State subsidies
Contributions due
Real estate
Furniture
Miscellaneous
Total
Ordinary
funds
Continuation funds
Total
760,113
19,960,580
710,716
3,946,319
3,724,106
125
136,225
231,511
170,130
29,109
26,592
682,090
29,668,933
793,559
786,705
20,642,670
710,716
3,961,829
3,740,037
125
137,224
262,511
175,604
45,072
30,462,492
15,510
15,931
999
31,000
5,474
15,963
LIABILITIES ON 3 1 DECEMBER 1 9 2 4 (IN CROWNS)
Ordinary
funds
'
Loans
Treasurer's advances
Guarantee funds
Due to members for the previous
year
Funds (other than the reserve
fund)
Miscellaneous
Total
Continuation
funds
Total
67,316
61,625
339,351
2,500
214
69,816
61,839
339,351
25,171
251
25,422
767,912
62,364
2,404
649.
770,316
63,013
1,323,739
6,018
1,329,757
The capital of ordinary funds and of all funds (including continuation funds) for the period 1901-1924 is shown in the following
table.
385
SWEDEN
CAPITAL
OF ORDINARY
FUNDS
AND
OF
CONTINUATION FUNDS) (IN
ALL FUNDS
(INCLUDING
CROWNS)
Year
Capital of ordinary
insurance funds
1901
1905
1910
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
4,976,407
8,120,299
12,601,208
11,408,265
12,455,647
14,576,666
13,417,132
15,487,304
18,183,598
21,992,285
23,156,456
25,728,002
28,345,194
Capital of all funds
including continuation funds
—
—
11,523,339
12,618,742
14,814,708
13,734,811
15,897,537
18,687,777
22,597,569
23,807,069
26,451,487
29,132,735
The following table shows the capital per member of ordinary
funds and of all funds (including continuation funds) :
CAPITAL PER MEMBER OF ORDINARY FUNDS AND ALL FUNDS
(INCLUDING CONTINUATION FUNDS) (IN CROWNS)
Year
1901
1905
1910
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
Ordinary funds
16.96
18.68
21.31
19.94
20.45
22.54
19.38
21.44
24.63
30.21
31.80
34.65
36.91
All funds (including
continuation funds)
—
—
18.46
18.95
20.85
18.00
20.01
22.88
28.00
29.48
32.00
33.98
25
386
VOLUNTARY SICKNESS
INSURANCE
CHAPTER V
JUDICIAL AUTHORITIES, OFFENCES, AND PENALTIES
§ 1. — Judicial Authorities
Except when otherwise provided, the competent tribunal to
hear disputes is the court of first instance in the place where the
fund is situated (section 102).
If the rules provide that disputes between the fund and the board
of directors or certain members, or between the fund and any of
its members, shall be settled by one or more arbitrators, this
provision shall be regarded as a compromise (section 104).
Failure to make the necessary declaration for registration
involves prosecution before the court of first instance of the place
where the fund is situated (section 103).
If no proceedings are taken against the board of directors with
reference to the period covered by the auditors' report within one
year of the submission of the report to the general meeting, the
board of directors is regarded as freed from responsibility.
Nevertheless, proceedings may subsequently be begun by the
fund against a member of the board of directors in connection with
his official acts, provided that the alleged act is illegal and has not
been expressly mentioned in the instrument of release (section 54).
Proceedings against an auditor for the insertion of incorrect
statements in a report or other document submitted to the general
meeting, or for negligence in the exercise of his duties (section 47)
may not be begun after the lapse of two years after the auditors'
report has been submitted to the general meeting, except when the
prosecution relates to a misdemeanour (section 55).
§ 2. — Offences and Penalties
The following persons are liable to a fine of from 25 to 1,000
crowns :
(a) Any member of the board of directors or any other person
who knowingly makes incorrect statements in the declaration
submitted for registration.
SWEDEN
387
(¿>) Any member of the board of directors or any liquidator who
knowingly makes incorrect statements in documents submitted to the general meeting and concerning the business
of the fund.
(c) Any member of the board of directors who knowingly uses
the resources of the fund for a purpose for which they should
not be used.
(d) Any auditor who in his report or in any other document
submitted to the general meeting knowingly inserts incorrect
statements concerning the business of the fund, or deliberately neglects to draw attention to such incorrect statements
in a document submitted for his verification.
The above penalties are not to be imposed if a more serious
penalty is provided for the offence in the Penal Code (section 97).
Any member of the board of directors is liable to a fine of from
5 to 300 crowns (section 98) if he :
fails to report immediately to the inspection service when the
resources of the fund earmarked for sickness benefits and
funeral expenses are insufficient (section 24, para. 1);
fails to register immediately alterations in the composition
of the board of directors or the list of persons having power of
attorney (section 38);
refuses to furnish the auditor with information requested
concerning the management (section 46, para. 1);
fails to draw up minutes of the decisions of the general
meeting or to put them at the disposal of the members within
four weeks of the meeting (section 48, para. 4) ;
fails to submit immediately for registration decisions
amending the regulations of the fund (section 59, para. 1);
fails to register the liquidation of the fund in case of bankruptcy, having been the last representative of the fund (section
79, para. 1);
fails to forward to the inspection service within two months
of submission the report of the auditors to the general meeting,
the reports of the board of directors and auditors, and the
statistical summary provided for in section 91, para. 1 ;
fails to inform the inspection service when the membership of
the fund has become less than 100 (section 92).
388
VOLUNTARY SICKNESS INSURANCE
The same penalty is provided for liquidators who fail to carry
out the obligations imposed on them by the Act (section 68,
section 69, para. 2, section 76).
The amount of fines imposed under the Act reverts to the public
treasury (section 99).
SWEDEN
389
CHAPTER VI
POSITION OF FOREIGNERS
The Swedish Act places no restrictions on the right of foreigners
to belong to sickness insurance funds. The funds are voluntarily
formed groups of individuals and the admission of aliens depends
on the particular rules of each society.
Foreigners are, however, not allowed to participate in the management of funds. Section 98, para. 2, stipulates that only Swedish
subjects resident in Sweden may be members of the board of
directors. Section 67 imposes the same conditions on liquidators.
SWITZERLAND
Acts and Regulations
FEDERAL
LEGISLATION
Federal Act of 13 June 1911 respecting sickness and accident insurance,
{Collection of Federal Laws (C.F.L.), 1912, No. 9, p. 351.)
Order No. I of 7 July 1913 on sickness insurance, respecting the recognition
of sickness funds and the drawing up of their balance sheets.
Order No. II of 30 December 1913 on sickness insurance, respecting the
grant of federal subsidies.
Federal Resolution of 19 December 1912 respecting the establishment of
the Federal Social Insurance Office.
Circular of the Federal Council to the Cantonal Governments, dated 12 April
1915, respecting the documents necessary for the grant of a federal subsidy
to the sickness funds.
Circular of the Federal Council to the Cantonal Governments, dated 4 July
1916, respecting the composition of the cantonal arbitration courts in connection with sickness and accident insurance.
Resolution of the Federal Council, dated 3 July 1916, respecting the grant
of extraordinary federal subsidies to sickness funds on behalf of women members.
Federal Resolution, of 10-20 December 1918, respecting the grant of an
extraordinary federal subsidy to sickness funds to meet supplementary expenses
incurred by the epidemic of influenza. '
Federal Act of 9 October 1920, amending the Act of 13 June 1911 respecting
sickness and accident insurance. (Legislative Series, 1920 — Switzerland 7.)
Federal Resolution of 21 December 1923 respecting the grant of an extraordinary federal subsidy to the recognised sickness funds. (C.F.L., 1924,
No. 29, p. 453.)
Resolution of the Federal Council of 10 October 1924 respecting the grant
of an extraordinary subsidy to the recognised sickness funds. (C.F.L., 1924,
No. 27, p. 39.)
Collection of decisions adopted by the Federal Council and by the Department of National Economy respecting the enforcement of sickness insurance.
Decisions No. 1 to 180 (published by the Federal Social Insurance Office.)
Circulars of the Federal Social Insurance Office to the recognised sickness
funds, Nos. 19 to 55.
SWITZERLAND
CANTONAL
Appenzell
391
LEGISLATION
(Outer Rhodes)
Sickness Insurance Act of 30 April 1916 and 30 April 1922.
Administrative Regulations for the enforcement of this Act, dated 30 May
1924.
Regulations of 23 May 1919 respecting the reassurance fund for public
sickness funds, amended on 13 October 1926.
Resolution of the Landgemeinde of 30 April 1922 respecting the cancellation
of section 4, para. 1, of the Act of 30 April 1916.
Appenzell (Inner Rhodes)
Order respecting sickness insurance, dated 29 November 1920.
Constitution and rules of the public fund, dated 20 January 1921.
Constitution and rules of the public sickness fund of the districts of Appenzell, Schwende, Rute, Schlatt-Haslen, and Kouten, promulgated on 29 January
1921.
Constitution and rules of the public sickness fund of the district of Oberegg,
promulgated on 29 January 1921.
[As the Order of 29 November 1920 has not yet come into operation, the two
public sickness funds have not yet been instituted.]
Basle Town
Sickness Insurance Act of 19 November 1914, amended by the Acts of
10 October 1918 and 23 February 1922.
Act respecting the public sickness insurance of the Canton of Basle Town,
dated 12 March 1914, amended by the Acts of 10 October 1918 and 23 February
1922.
Act respecting insurance funds of 10 October 1918 and 23 February 1922.
Orders of 11 July 1914, 2 December 1919, and 1 December 1920 respecting
insurance contributions.
Order respecting compulsory sickness insurance, dated 10 August 1920.
Resolution of the Legislative Council respecting unemployment insurance
in cases of sickness and accidents, dated 13 May 1922.
Resolution of the Legislative Council respecting Administrative Regulations,
dated 7 October 1922.
Berne
Compulsory Sickness Insurance Act of 4 May 1919.
Order respecting compulsory sickness insurance of 28 October 1924.
Fribourg
Sickness Insurance Act of 6 March 1919.
School Sickness Insurance Act of 20 December 1919.
Regulations of 20 June 1921 respecting mutual school insurance.
Geneva
Act respecting compulsory school sickness insurance of 11 October 1919,
amended 29 June 1921, and then cancelled and replaced by the Act of
22 December 1924.
Constitution and rules of the Genevese cantonal school sickness insurance
of 24 February 1925, amended 29 April 1926.
392
VOLUNTARY SICKNESS INSURANCE
The Grisons
Sickness Insurance Act of 8 April 1923.
Order of 23 May 1914 respecting the " R.U.V.G. ".
Lucerne
Act of 2 March 1915 on the enforcement of the Federal Sickness and Accident
Insurance Act.
Act of 4 March 1925 respecting the revision of the Act of 2 March 1915 on
the enforcement of the Federal Sickness and Accident Insurance Act.
St. Gall
Compulsory Insurance Act of 28 May 1914, amended by the Act of 28 November 1919.
Regulations of 15 April 1921 respecting guarantee committees attached to
the recognised school and poor funds.
Schafjhouse
Act of 5 December 1926 respecting compulsory sickness insurance.
Schwyz
Cantonal Act of 12 September 1917 respecting the enforcement of the
Federal Sickness and Accident Insurance Act.
Orders of 14 December 1918 and 28 February 1919.
Solothurn
Act of 21 January 1917 respecting the enforcement of the Federal Sickness
and Accident Insurance Act.
Ticino
Codified text of the Act of 10 June 1918 respecting sickness insurance.
amended by the Acts of 19 January 1922 and 25 March 1922.
Legislative Decree of 6 November 1922 amending section 7 of the abovementioned Act.
Regulations of 28 May 1923 bringing into operation the Act of 10 June 1918,
in application of the Federal Sickness and Accident Insurance Act.
Thurgau
Compulsory Sickness Insurance Act of 24 April 1926.
Uri
Order of 7 April 1914 and Resolution of the State Council of 4 November
1921 respecting the enforcement of the Federal Sickness and Accident Insurance
Act.
Decree of 5 February 1916 respecting the conditions of admission and
exclusion of persons subject to compulsory insurance and insurable by the
public sickness insurance fund.
Vaud
Act of 31 August 1916 founding a children's sickness insurance fund for the
Canton of Vaud.
Act of 28 November 1918, amending and completing the Act of 31 August
1916 and the Act of 17 November 1924, introducing section 8a in the Act
respecting the organisation of a children's sickness insurance fund for the
Canton of Vaud, of 31 August 1916, amended on 28 November 1918.
SWITZERLAND
393
Regulations respecting the organisation and administration of the children's
sickness insurance fund for the Canton of Vaud, dated 7 November 1916.
Resolution of 29 September 1920 making children's sickness insurance
compulsory for all children attending school.
Resolutions of 29 September 1923 and 27 September 1924 fixing the contributions of members of the children's sickness insurance fund for the Canton
of Vaud for the financial years 1924,1925 and 1925-1926, amended by a Resolution dated 20 October 1925 for the financial year 1926-1927.
Constitution and rules of the children's sickness insurance fund for the Canton
of Vaud, fixing the general conditions of insurance, dated 27 February 1922.
Valais
Decree of 15 March 1922 on children's sickness insurance.
Zurich
Act of 6 June 1926 respecting the enforcement of the Federal Sickness and
Accident Insurance Act (replaces the Act of 10 December 1916).
Sickness Insurance Act of 15 March 1926.
Zug
Compulsory Sickness and Accident Insurance Act of 23 October 1916.
Reports
Reports of the Federal Council to the Federal Assembly on its management
(Department of National Economy, Federal Social Insurance Office) (for the
years 1913-1925).
Other Sources of Information
GUTKNECHT, A. Commentary on the Federal Sickness and Accident Insurance
Act. Zurich, Orell Füssli, 1912.
Switzerland — Its Economy and Social Legislation. Article published by
the FEDERAL DEPARTMENT OF NATIONAL ECONOMY for the Thirteenth Session
of the Governing Body of the International Labour Office at Interlaken, July
1922.
Volkswirtschaft, Arbeitsrecht und Sozialversicherung der Schweiz. Im
Auftrage des Schweizerischen Bundesrates, herausgegeben vom EIDGENÖSSISCHEN VOLKSWIRTSCHAFTSDEPARTEMENT.
Verlaganstalt Benziger
& Co.
A.G., Einsiedeln, 1925. (This work will also appear in French.)
NIEDERER, E. Das Krankenkassenwesen der Schweiz und das Bundesgesetz
von 13. Juni 1911. Zurich, 1914.
HÜNERWADEL, H. Die besondere Stellung der Gebirgsgegenden in der
Krankenversicherung und in der Krankenfürsorge. Zurich, Verlag der Schweiz.
Krankenkassenzeitung, 1923. (French edition published by the Federation of
Mutual-Aid Societies of French-Speaking Switzerland, Geneva, Imprimerie
Centrale, 1923.)
Die Krankenversicherung in der Schweiz, 1914-1923. Zurich, Verlag
der Schweiz. Krankenkassenzeitung, 1925.
394
VOLUNTARY SICNESS INSURANCE
INTRODUCTION
Development of Voluntary and Compulsory Sickness Insurance
In Switzerland, as elsewhere, the sickness insurance institutions
owe their origin to the guilds and mutual-aid funds set up by the
brotherhoods so numerous towards the end of the Middle Ages and
at the beginning of modern times. A good example of this is the
communal compulsory sickness fund of the Town of Lucerne, which
was organised in 1914 on the lines of the workers' sickness fund, but
whose activity dates back to the year 1560, when it was created
by the " Brotherhood of Bachelor Journeymen ".
It is impossible here to trace all the various phases through
which sickness insurance in Switzerland has passed, and therefore
we will confine ourselves to the discussion of the more important
stages 1 , which are as follows :
(a)
(b)
(c)
Development of the activity of private funds.
Legislative measures by the cantons.
Legislative measures by the Confederation.
DEVELOPMENT OF THE ACTIVITY OF PRIVATE F U N D S
The growth of mutual-aid societies embracing a locality or
merely a single undertaking has been almost parallel with the
development of industry. For a long time the action of the
sickness funds was purely private, and State participation in
their affairs was limited to measures of supervision which scarcely
ever went beyond the control exercised by the public authorities
over all associations. Alone the Canton of Glaris had included in
its legislation certain provisions to the effect that all foreign
workers leaving the canton had to show proof t h a t they had fulfilled
their obligations towards the relief funds.
1
In Volkwirtschaft, Arbeitsrecht und Sozialversicherung der Schweiz, published
in 1925 by the FEDERAL DEPARTMENT OF NATIONAL ECONOMY, very complete
information is to be found on the origin and development of social insurance
in Switzerland, especially in Vol. I, pp. 625 et seq., contributed by Dr. GIORGIO,
Director of the Federal Social Insurance Office.
SWITZERLAND
395
Nevertheless, the need for protection against the daily risks of
life, protection which would be more efficacious than public relief,
made itself felt, and the activity of the mutual-aid societies revealed
the possibility of a more rational organisation of sickness insurance.
LEGISLATIVE MEASURES OF THE CANTON
When, during the years 1880-1885, the movement in favour of
insurance had really taken root, the cantonal authorities showed
their interest in a number of ways. The Cantons of Schaffhouse
and Aargau in 1885, Soleure in 1887, and Lucerne in 1889 included
provisions in their Constitutional Charters whereby the communes
were required to encourage the foundation of sickness assistance
funds.
In the Canton ot Obwald the State Council, by
an Order dated 10 February 1896, made it compulsory for those
employing workers and apprentices to insure such persons against
the economic consequences of illness. As a matter of fact, these
provisions had but little influence on the general development of
sickness insurance, but in the Cantons of Appenzell (Outer Rhodes),
Geneva, and St. Gall, the legislative action taken was more efficacious. In Appenzell (Outer Rhodes), by an Order dated 22 March
1887, and in St. Gall, in virtue of the Act of 10 January 1885, the
constitution of sickness funds was made obligatory, these provisions remaining in force until superseded by the Federal Act
(St. Gall, 1914; Appenzell, Outer Rhodes, 1906).
In the Canton of Geneva the Government, by an Act dated
27 February 1903, recognised the right of insurance funds submitting
to State supervision to receive a cantonal subsidy.
It is this form of voluntary insurance, aided financially and supervised by the State, that is, encouraged by federal legislation.
LEGISLATIVE MEASURES BY THE CONFEDERATION
It was during the discussion of the question of the substitution of
an insurance system for the " civil responsibility of manufacturers"
that it became evident that it was necessary to introduce sickness
insurance simultaneously with accident insurance.
The constitutional basis of this important social reform, which
was unanimously accepted by the two Chambers (National Council
396
VOLUNTARY SICKNESS INSURANCE
and the Council of the States), was ratified by referendum on 26
October 1890. The text adopted was as follows:
The Confederation shall introduce, by legislation, sickness and accident
insurance, taking into account existing relief funds. It may declare these
forms of insurance compulsory either generally or for certain classes of persons
only.
During the following year the Department of Industry requested
Dr. Forrer, one of the most eminent members of the National Council, to draw up a Bill respecting the enforcement of the law on the
above-mentioned constitutional basis.
In 1896, a Bill respecting sickness and accident insurance based
on the principle of compulsion was submitted to the Chambers.
After long discussion this text was adopted on 5 October 1899 in the
National Council by 113 votes against 1, with 12 abstentions, and
in the Council of the States unanimously with one abstention.
Although the Federal Chambers had shown themselves in favour
of the idea of compulsory sickness c and accident insurance, they
could not prevent the people from deciding otherwise. A referendum was demanded and held on 20 May 1900. By an enormous
majority — 341,914 votes against 148,035, and all the cantons
except that of Glaris — the Swiss people repudiated the scheme
advocated by its representatives.
On the morrow of this referendum, which reduced the results of
ten years' studies, parliamentary work and individual efforts to
nought, the task before the Government appeared particularly
difficult
How was it possible to explain that a nation which had accepted
the principle of insurance by a majority of 200,000 votes should
reject the Bill introducing it ? It was necessary to ascertain
whether this was due to a change of public opinion or to discontent
with the method of applying the principle.
Without doubt both these factors were partially to blame, but
the main reason for this check would appear to lie in the fact that
the Swiss people saw in the new measures an attempt to restrict
their freedom. It should perhaps also be pointed out that, in
criticising the result of the referendum, it is essential to remember
that at the period in question social insurance was in a very incomplete stage, and that the • population were more easily attracted
by simple measures for the protection of human life. The prevalent
desire at that time was for a system of State subsidies which in one
form or another would assure a considerable reduction in the cost
of medical and pharmaceutical treatment for the classes concerned.
SWITZERLAND
397
Be this as it may, Government circles gradually became convinced that it was necessary to abandon the idea of entrusting the
Confederation with the organisation of sickness insurance. This conviction led to the idea of public sickness insurance carried out by
the mutual-aid societies, the part played by the State to be confined
to providing subsidies and technical advice for the private institutions. Doubtless, the Federal Chambers would have preferred a
more rational plan of sickness insurance to this somewhat liberal
conception, but the necessity of safeguarding the principle of compulsion in accident insurance obliged them to act with great
prudence and to make concessions. In 1906 the Department of
Industry presented the Federal Chambers with a second draft,
which was a sort of compromise between the Government proposals
and the popular conception of social insurance. According to
this draft the Confederation was entrusted with the organisation
of compulsory accident insurance, while the application of sickness
insurance was maintained on the basis of mutuality, Government
action being limited to subsidising and exercising a hind of
supervision over sickness insurance institutions set up by private
initiative.
Parliamentary debates on this subject lasted nearly five years.
Finally, on 13 January 1911, the Bill was adopted by the National
Council, and submitted on 4 February 1912 to a popular referendum.
This time the Bill was accepted by a small majority — 287,565
votes against 241,416 — mainly on account of well-organised
propaganda in favour of the Government proposal, the country
thus being endowed with a sickness insurance scheme which came
into operation on 1 January 1914.
Both in spirit and in the results of its application, the federal
Sickness Insurance Act is an exact embodiment of the political
regime of the country 1.
Although the enforcement of the federal Sickness Insurance Act
is legally in the hands of the federal authorities, in practice the
powers of jurisdiction left to the cantons in this respect are wide,
as the Act empowers them to legislate on the same subject.
1
Switzerland is a federative State. According to the Federal Constitution,
legislative rights are divided between the federation and the cantons. In so
far as the Confederation has not been declared exclusively competent to legislate in a given domain, this right belongs to the cantons. Bui immediately the
Confederation intervenes by a federal law in a given domain, the matter in
question is governed by federal legislation unless the cantons have been
definitely empowered to intervene within certain limits.
398
VOLUNTARY SICKNESS INSURANCE
In fact, although section 1 of the federal Act states t h a t the
Confederation encourages voluntary insurance against sickness by
granting subsidies to the sickness insurance funds which satisfy
the necessary conditions, section 2 stipulates t h a t the cantons may
(a) declare sickness insurance compulsory either generally or for
certain classes of the population, and (b) establish public funds or
delegate such powers to their communes. The two essential
reservations made by federal legislation in connection with the
powers of the cantonal authorities are that the cantons must take
into consideration the relief funds existing on their territory and
t h a t they m a y not compel the employers to pay contributions *.
After being hostile for a long time to the idea of compulsion in
connection with social insurance, public opinion seems to have
changed to a large extent. A study of the facts shows that the
legislative action of the cantons in favour of compulsory social
insurance, at first timid, has in the course of time gained strength,
and this is confirmed by the recent adoption of important new
Acts on compulsory sickness insurance in the Cantons of Schafîhouse
and Thurgau.
COMPULSORY SICKNESS INSURANCE LEGISLATION IN THE CANTONS
Although the federal Act gives equal rights to insured persons
belonging t o public funds and those belonging to voluntary
societies, and although it grants benefits to insured persons of both
sexes and children, the same cannot be said of the legal provisions
established b y the various cantons in connection with social
insurance, these varying from one canton to another.
As, according to the terms of section 2 of the federal Act, the
cantons m a y declare sickness insurance compulsory, either generally or for certain classes of the population, and as it is lawful for
them to delegate these powers to their respective communes, it is
quite natural that the legislative measures of the various cantons
differ to a considerable extent.
The Cantons of Appenzell (Inner and Outer Rhodes), Vaud,
Basle Town, St. Gall, Thurgau, and Zug 2 have introduced compul1
It is easily conceived that in order to lessen for the~working classes the
detrimental effects of the system of voluntary insurance," the Swiss legislator
has made every endeavour to safeguard the principle of compulsory insurance
which he was unable to introduce on a federal scale.
" In the Cantons of Thurgau and Zug the Acts are not yet in operation.
SWITZERLAND
399
sory sickness insurance covering a more or less important part of
the population, while the Cantons of Berne, Grisons, Lucerne,
Schaffhouse, Schwyz, Ticino, Unterwald (Nidwald and Obwald),
Uri, and Zurich have delegated their powers to their communes,
which have themselves introduced legislation respecting compulsory
insurance.
Lastly, schemes of compulsory sickness insurance for children
of school age are applied on a cantonal basis in the Cantons of
Fribourg, Geneva, and Vaud, and on a communal basis in the
Cantons of Solothurn and Valais 1.
This consideration of the scope of federal and cantonal sickness
insurance legislation leads to the conclusion t h a t the Swiss conception is not a workers' but a popular insurance scheme, which is
partly voluntary, partly compulsory, and of which the beneficiaries
belong to all classes of the employed population.
1
Bills respecting compulsory sickness insurance have been drawn up by
various cantons, as for example: (1) Aargau: Bill for the introduction by the
canton of compulsory insurance for certain classes of adults, with authorisation
for the communes to make insurance compulsory for children attending school,
and for certain classes of persons not covered by cantonal measures. (2) Basle
Country: Bill for the introduction of compulsory sickness insurance and the
foundation of public funds.
400
VOLUNTARY SICKNESS INSURANCE
CHAPTER I
INSURANCE INSTITUTIONS
§ 1. — Legal Statuts
The private sickness funds and funds undertaking sickness
insurance combined with invalidity, death, and survivors' insurance
have their legal basis in the provisions of Chapters 2 and 3 of the
Civil Code of 10 December 1907, relating to associations (sections
60-79) and foundations (sections 80-89).
Private funds may also be organised as co-operative associations,
in virtue of the terms of sections 608-715 of the Civil Code.
In addition to private funds there are two other groups of
institutions, namely:
(a) Funds of public institutions and corporations (e.g. the fund
established by a commune for its salaried employees and
workers).
(b) Public funds, which are founded in virtue of decisions of the
competent authorities of the cantons, districts, and communes. The constitution of these funds is based on the
provisions made in this connection by the cantons, or, on
the authorisation of the cantons, by their districts or communes (section 2).
The institutions undertaking sickness insurance and founded on
the above basis become " sickness insurance carriers ", according
to the terms of the federal Act of 13 June 1911, and as such are
recognised by the Confederation as sickness funds. The federal
Act respecting sickness and accident insurance is, in its first part
relating to sickness insurance, an Act for the provision of subsidies.
It endeavours to achieve its object, which is the development of
sickness insurance by the Confederation, solely by subsidising the
sickness insurance institutions and defining the conditions on which
the grant of subsidies depends. Not only do these conditions oblige
the funds to utilise federal subsidies in a certain specified manner,
but they also govern conditions of membership, the payment of
benefits, etc. The federal subsidy is therefore a kind of financial
help granted to the sickness funds which undertake insurance
in accordance with conditions laid down by the Confederation.
SWITZERLAND
401
This is equivalent to saying t h a t a sickness fund is not obliged t o
conform to the terms of the Act, and if it refuses a federal subsidy
the Act no longer applies to it. But it must conform to the Act
if it desires to benefit from federal subsidies. The right to a subsidy
is formally established by the act of recognition, by which the fund
declares itself ready to submit to the legal provisions. In order
to ensure that these provisions be respected, the Confederation
reserves the right to exercise supervision, and has set up the
Federal Social Insurance Office, which is responsible for the
enforcement of the federal Act of 13 June 1911. The funds are
entitled to surrender federal recognition, which, moreover, may be
withdrawn from them if they do not fulfil their legal obligations.
§ 2. — Recognition of Funds
Recognition by the Federal Council gives certain rights and
entails certain obligations for the sickness funds.
RIGHTS OF F U N D S
The recognised funds are entitled to financial aid from the Confederation (see Chapter VI, § 1). They are exempt from taxation
— with the exception of taxes on real estate — and are freed from
duties on all documents drawn up for the funds.
The recognised sickness funds are legal persons having complete
freedom of organisation and not requiring to register with the Commercial Registry Office. As regards their legal status, sickness funds
may be formed as " foundations " or " co-operative societies " or,
again, as " associations " \
The sickness funds may, on
1
According to sections 80-89 of the Civil Code the object of a foundation
is the allocation of property for a special purpose. It is a legal form which
is frequently adopted by large undertakings which have founded sickness
insurance funds in favour of their employees from their own resources.
According to the Code of Obligations, Chapter XXVII, sections 678 to 715,
a co-operative society allows the insured persons themselves to assume the
management.
According to sections 60-69 of the Civil Code, associations are formed by a
group of not less than three persons. They may have political, social, religious,
charitable, etc., aims, but not an economic one. They acquire legal personality
from the moment their constitution expresses their willingness to be organised
in a corporate manner.
Whereas the co-operative form is generally adopted by open mutual-aid
societies, that of the association is more suited to the purpose aimed at by
funds of a private, professional, denominational, or political character.
26
402
VOLUNTARY SICKNESS INSURANCE
b e i n g officially recognised, d e m a n d t o be s t r u c k off t h e books of t h e
C o m m e r c i a l R e g i s t r y Office. Recognised i n s t i t u t i o n s registered
w i t h t h e C o m m e r c i a l R e g i s t r y Office benefit from a r e d u c t i o n in
t a x e s o n all t r a n s a c t i o n s e n t e r e d i n t h e ledgers of t h e R e g i s t r y
Office d u r i n g t h e d u r a t i o n of t h e i r recognition.
OBLIGATIONS OF
FUNDS
R e c o g n i s e d sickness funds a r e r e q u i r e d t o fulfil t h e following
conditions :
(1) They shall have their seat in Switzerland.
(2) They shall not treat Swiss citizens less favourably than other insured
persons.
(3) The system of operation of the sickness insurance shall be mutual.
(4) They shall offer full security for the fulfilment of their engagements.
(5) In addition to sickness insurance they may undertake other insurance
business, provided that it is not of a commercial character.
(6) They shall be required to accept as members all Swiss citizens who
comply with conditions of admission. They may not require a Swiss citizen
soliciting membership in a fund in his place of residence to belong to any
particular religious faith or to any particular political party if there is no other
fund whose general conditions of admission he fulfils.
(7) Funds shall admit to membership persons of both sexes on the same
terms, but this provision does not apply to funds of a trade, a trade union,
or an undertaking to which only persons of the same sex belong. Insurance
benefits shall not vary according to sex unless the contributions show a
corresponding variation.
(8) Funds shall grant the right of free transfer, i.e. they shall accept as
members any insured person who has been a member of a recognised sickness
fund for a period of at least one year without an interruption of more than
three months and who is obliged, according to the terms of the fund's constitution, to leave it on account of a change of residence, occupation or employer^
or because the fund is dissolved or loses its position as a recognised fund.
Admission shall be granted regardless of the state of health of the applicant and
the age limit, and no new entrance fee shall be charged. Again, persons
transferring their membership shall not be obliged to undergo a qualifying
period nor pay contributions in excess of those which the fund collects from
every new member of the same age for the same benefits.
(9) If an insured person having this right to transfer leaves the district
in which his fund is situated or changes his occupation or employer, and finds
no other fund in which he fulfils the general conditions of admission, he shall
be entitled to remain a member of his fund as long as he remains in Switzerland.
A works sickness fund shall in similar circumstances not be entited to exclude
any insured person who has been a member for over five years and who on
this account has lost the privilege of free transfer, as long as such person
remains in Switzerland.
(10) The funds may not exclude any member for religious or political
reasons.
(11) The funds shall guarantee minimum benefits for their members,
i.e. necessary medical treatment and drugs or a daily allowance of not
less than one franc for each day of complete incapacity for work and for at
least 180 days during a period of 360 consecutive days. When a fund
guarantees only three-quarters of the medical treatment and drugs, it shall be
required to provide them for at least 360 days during a period of 540 con-
SWITZERLAND
403
secutive days. The funds shall provide medical treatment and drugs from the
first day of illness, if such illness has been reported in conformity with the rules
of the fund, and a pecuniary sickness benefit from the third day of sickness at
the latest (waiting period). The length of membership required by a fund
before its members become entitled to sickness benefit (qualifying period)
shall not exceed three months. Before the age of fourteen years children may
be insured only for medical treatment and drugs.
(12) The funds shall provide the same benefits as are granted to sick persons
for a lying-in woman during her confinement and for a period of at least six
weeks following childbirth, if at the time of her confinement she has been a
member of a recognised fund for at least nine months without an interruption
of more than three months. If, however, such person continues to work
during the period of assistance, the amount of her earnings may be deducted
from her allowance. Further, if a mother is still nursing her child four weeks
after the expiration of the period of assistance, the funds shall allow her a
nursing benefit of at least 20 francs.
(13) The funds shall grant the members who are insured for medical
treatment and drugs entire freedom to choose a doctor from among those
practising in their locality or neighbourhood. The same shall apply to pharmacists. They may limit this choice only by concluding agreements with certain
doctors and pharmacies. If such an agreement i£ entered into, doctors who
have practised regularly for at least one year in the district embraced by the
fund and managers of pharmacies practising their trade in the said district
shall be entitled to treat insured persons while ill. Voluntary funds working
in mountainous districts where communication is difficult and the population
is sparse and which have entered into an agreement with certain doctors,
assuring to the latter an allowance for travelling expenses, may not prevent
other doctors adhering to the agreement.
(14) With the exception of the public and compulsory funds, societies
may not entrust a hospital with the provision of medical treatment and drugs
for their members.
(15) The funds may entrust the medical treatment of their members
only to doctors and pharmacists holding a federal degree or to persons possessing
scientific diplomas who are authorised by the cantons to practise as a doctor
or to conduct a pharmacy.
(16) If a fund, for serious reasons touching his professional conduct, contests
a doctor's or pharmacist's right to treat its members or to provide them with
remedies, it shall be the duty of the Arbitration Court, set up in virtue of
section 25 of the federal Act, to determine as to his exclusion and to fix the
duration thereof.
(17) The funds shall be required to take all the necessary steps to see
that their members are not insured with more than two recognised sickness
insurance funds.
(18) In case of accidents, the funds shall be required to give their assistance
to the compulsory accident insurance services *.
(19) The funds shall use their resources for the purposes of insurance only
(20) Insured persons shall not be personally responsible for the engagements of the funds.
(21) Once a year the funds shall be required to balance their accounts in
accordance with instructions issued by the Federal Council through the Federal
Social Insurance Office, to submit them to that authority, and to correct when
required all errors in the said accounts (section 32).
(22) The funds shall be required to issue to each member a certificate of
membership in conformity with an official model.
The above obligations are embodied in the constitution and
1
Up to the present the Federal Accident Insurance Office has made no call
in cases of accidents on the services of the recognised compulsory sickness
insurance funds.
404
VOLUNTARY SICKNESS INSURANCE
rules respecting the rights and obligations of members. The
constitution and rules of funds must be submitted for approval to
the Federal Council or to the Federal Social Insurance Office,
the same applying to all amendments made to the said constitution
and rules after the recognition of the fund.
§ 3. — Development of Recognised Funds
"When in 1903 the preliminary investigations concerning the
introduction of a federal insurance scheme were carried out in
Switzerland, there were already in existence some 575 mutual
insurance societies and foundations with a membership of 130,000,
which aimed at providing their members and beneficiaries with
sickness insurance benefits.
Again, the so-called " combined " funds, i.e. funds accepting
several risks, such as sickness, invalidity, old age, and death,
numbered 1,237 with a membership of 303,000 K Of these 1,812
institutions, only 453 were recognised by the Federal Council
during the first year of the enforcement of the Act, that is to say,
between 1 January and 31 December 1914.
The difference between the number of sickness funds existing in
1903 and that of recognised funds in 1914 is explained by the
fact that in the early days the sickness funds showed some hesitation
in joining the new scheme. Gradually, however, this feeling of
mistrust vanished, and by 31 December 1926 the number of
recognised funds which had already requested official recognition
had increased from the 1914 figure to 1,337, which is equivalent
to saying that at present the number of unrecognised funds forms
but a small proportion of the total number. Although there is no
means of verifying the fact, it is highly probable that a large
number of funds included in the 1903 census have been dissolved
or have amalgamated with others.
Since the introduction of the federal Act the number of recognised
sickness funds and affiliated bodies has continuously increased, as
may be seen from the following tables.
1
The number of persons insured in the two groups undoubtedly increased
between 1903, when investigations were made, and January 1914, when the
federal Act came into operation, but as there was no census of insured persons taken immediately before its introduction it is impossible to give any
precise figures.
405-
SWITZERLAND
TOTAL NUMBER OF RECOGNISED FUNDS AND THEIR MEMBERS
Year
Number of recognised
funds
Number of members
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
453
535
711
777
825
891
946
959
969
972
1,000
1,017
361,621
428,879
530,329
629,927
721,452
842,611
968,748
984,572
1,023,057
1,052,087
1,112,460
1,160,716
CLASSIFICATION
OF
RECOGNISED
FUNDS
ACCORDING
TO
THEIR
CHARACTER
1 1914 1 1915 1916 1917
1. Public funds
2. Open funds
Closed funds :
3. Works funds
4. Trade funds
5. Trade denominational funds
6. Trade political
funds
7. Political funds
8. Denominational
funds
Totals
19181 1919 | 1920
1921 1 1922 1 1923 I 1924 1 1925
254
303
446
489
523
143
420
155
448
161
451
163
457
162
456
166
464
168
471
142
41
161
51
184
61
204
62
219
61
243
63
255
64
263
61
268
58
273
58
289
58
295
59
8
10
10
11
11
11
11
11
11
11
11
11
1
3
1
3
1
3
1
3
1
3
1
3
1
3
1
2
1
2
1
2
1
2
1
2
9
10
4
6
6
7
7
7
9
9
9
9
453
535
711
777
825
891
946
959
972
972
1,000 1,017
Official reports thus classify the funds in eight groups, of which
the most important are the open funds, i.e. funds which anyone
may join irrespective of his religion or politics, provided that he
fulfils the health conditions required. Next in order of importance
come works funds and trade funds, which, as their names show,
are open only to the staff of the same undertaking or members
of the same trade. Public funds, which are as a rule founded by
the cantons or communes, constitute another important class of
funds. As regards societies of a denominational or political
character, these show but little development and represent as a
406
VOLUNTARY SICKNESS INSURANCE
whole but a small percentage of the insured population (5.18 percent. in 1914 and 7.21 per cent, in 1914). A certain amount of
caution must, however, be observed in giving statistics relating
to the development of insurance institutions. In fact, the duty
of the Federal Social Insurance Office in connection with the
recognition of funds has a double character. On the one hand,
while the Federal Office endeavours to extend recognition to the
largest possible number of funds which satisfy the terms of the
federal Act, on the other, the policy of supervision compels the
Office to favour measures of concentration or amalgamation in
regard to the smaller funds. The consequence of this is that
the aim of the Federal Office is to cut down the number of funds
and to increase their average membership.
As a rule when the membership of funds soliciting federal
recognition is below 100, the Federal Office requires them to
amalgamate with a fund already recognised. During the period
1914-1925 the number of funds amalgamating for these reasons
was 53.
The process of centralising the sickness funds, initiated by the
Federal Office, has been continued ever since the introduction of
the federal Act, and a comparison between the figures for 1914
and 1925 demonstrates that the number of funds has increased
by 224.5 per cent, and their membership by 320.9 per cent.
§ 4. — Administration
The administration of recognised sickness funds varies according to the activity of the institution and the legal form adopted.
The administration of local private funds, i.e. funds operating
on a limited scale and generally constituted as co-operative societies,
is as a rule very simple. Their administrative bodies consist of:
(1) A general meeting.
(2) A managing committee.
(3) Auditors.
The general meeting is composed of persons enjoying civil rights
or of legal representatives. The ordinary general meeting is held
at the seat of the fund not later than three months after the
expiration of the financial year; an extraordinary general meeting
is held every time that the managing committee considers it
necessary, or that one-tenth (co-operative societies) or one-fifth
SWITZERLAND
407
(mutual-aid societies) of the members make the necessary request
in writing, stating the agenda, to the managing committee. In the
majority of local funds, the general meeting must be convened
by the managing committee at least ten days beforehand, and
the agenda must be indicated.
The duties of the meeting are as follows:
(1) To request recognition in conformity with the federal Act,
or to surrender it.
(2) To hear the annual report of the committee and to approve
the accounts.
(3) To nominate or dismiss the members of the managing
committee and auditors.
¿4) To determine the members' contributions and, where necessary, their contributions to the administrative expenses.
(5) To dissolve existing insurance combinations and to create
others.
(6) To sanction agreements with other funds or unions of
funds respecting free transfer, adherence to agreements and
amalgamation, both with the authorities and private persons, with a view to the admission of whole groups of
insured persons.
(7) To determine the remuneration of the employees of the
fund.
(8) To decide appeals against the findings of the committee.
(9) To revise the constitution or dissolve the fund in accordance
with the provisions of the Act.
(10) To establish and to amend the rules.
(11) To nominate the honorary members.
The managing committee, which generally consists of a president,
a vice-president, a treasurer, a secretary, and one or more assessors,
has as a rule to take decisions concerning the admission or exclusion of active and passive members, the classification of members
in insurance categories and the permission to transfer into higher
classes. Further, the managing committee is competent to conclude agreements with doctors and pharmacists, to nominate
medical referees, to lodge appeals with the arbitration tribunal
concerning the exclusion of doctors and pharmacists, to direct and
supervise business matters, to nominate sick visitors and provide
them with the necessary instruction, and establish the duration
of their services; to exercise supervision over members reporting
408
VOLUNTARY SICKNESS INSURANCE
themselves to be ill; to draw up annual reports and accounts, as
well as all documents necessary to obtain federal subsidies ; to
enforce decisions of the general meeting, and to conduct all business
which does not come within the competence of the other administrative bodies of the fund.
The managing committee represents the fund in all business with
third parties and the courts, the signature of the committee being
generally given by the president and the secretary, who sign
together, or, in their absence, by their representatives. It is
extremely rare among local private funds that the rights of the
managing committee are delegated to an administrator, and such
funds are almost always managed by the members of the committee
in return for a small remuneration.
The auditors are appointed by the general meeting for a period
of one year; their duty is to audit and approve the annual accounts,
and for this purpose they have the right to examine all documents
belonging to the fund. They are required to submit their reports
to the general meeting.
In addition to the administrative bodies properly so-called, a
large number of funds have set up a special service of sickness
visitors. In funds with a small membership these duties are
generally entrusted to members of the managing committee and
more especially to the assessors.
The organisation of works funds having a certain amount of
independence in regard to the undertaking is similar in many ways
to that of the local funds. But it should be mentioned that
contributions are generally collected by the undertaking itself,
which deducts them from wages.
A large number of undertakings have entrusted their accounting
service with the administrative work of their funds. A certain
amount of difference is to be seen between the organisation of local
funds and that of central funds, i.e. institutions whose sphere of
activity extends over a greater area, as, for example, several cantons
or even for the whole territory of the Confederation.
The administrative bodies of such institutions consist of a
delegate meeting, a central committee, the auditors, and the
various branches.
The delegate meeting of such funds is composed of a number of
delegates proportionate to the number of members in the various
branches. To all intents and purposes the duties of the delegate
meeting are the same as those of the general meeting of local
funds. In a number of central funds, however, the powers of the
SWITZERLAND
409
delegate meeting are restricted by the member's right to be consulted. This right is exercised only on questions of importance,
such as the revision of the constitution and rules or the liquidation
of the fund, when the members send their votes in writing.
The powers of the central committee of such funds are more
or less identical with those of the managing committee of local
funds, with the one difference that the administrative work properly
so called is entrusted to special officers or to an administrator.
The large central funds employ a paid staff. The branches ot
central funds are purely administrative bodies and act to some
extent as agencies, but each of them has its own organisation, which
resembles that of the local funds and includes a general meeting of
the branch, a branch committee, and auditors.
As regards the public funds, which have no legal personality
but which depend on a communal, territorial, or cantonal organisation, the organisation differs widely from that of the funds formed as
co-operative societies or associations, and the same may be said for
the funds, few in number, which have the character of a foundation.
The administrative expenses, which as a rule amount to about
10 per cent, of the value of the benefits paid to the insured, are
generally drawn from the ordinary resources. At the same time,
however, a considerable number of funds have made provisions in
their constitution and rules for a maximum supplementary contribution of 1 franc per member per year to cover part of their
administrative expenses.
It is also interesting to note that the public funds show the
smallest expenditure for administrative purposes, this being due
to the fact that they are often managed by communal or municipal
officials free of charge. The same may be said about works funds,
in which the administration is carried out by and at the cost of the
employers.
The amount spent in administration and its relation to the
expenditure in benefits is shown for the various classes of fund„ in
the following table :
COST OF ADMINISTRATION (iN F R A N C S ) 1
Class of fund
Public funds
Other open funds
Closed funds :
W o r k s funds
T r a d e funds
T r a d e denominational funds
T r a d e political
funds
Political funds
Denominational
funds
1915
1916
1917
580,461
690,044
116,567
107,255
1918
1919
1920
1921
866,116
1,160,525
437,075
1,156,334
522,113
1,438,758
524,94
1,515,06
138,312
131,773
179,435
155,354
254,715
206,702
293,567
297,843
417,070
408,212
371,02
367,72
4,984
4,128
5,232
6,371
10,485
1*2,607
12,29
201
29,879
287
38,038
290
41,021
884
48,283
1,057
95,775
866
120,634
93
150,15
19,475
66,322
85,890
144,807
37,361
35,889
Total of administrative expenses
Total benefits paid
Percentage of administrative
expenses in relation
to benefits paid
876,708
10,173,815
8.61
1,038,471
11,866,113
8.75
182,91
1,266,923
1,743,802
2,378,026
3,065,067
14,274,794
24,752,416
20,867,775
28,681,479
11.39
10.69
8.88
7.04
3,125,05
29,173,76
10.71
i No information is available concerning the cost of administration of sickness funds for 1914, the
became effective.
SWITZERLAND
411
§ 5. — Unions of Funds or Societies
Mutual sickness funds, including the so-called closed funds, are
grouped in three federations:
(1) The Association of Swiss Sickness Funds (Konkordat
Schweizerischer Krankenkassen), with its seat and permanenl
secretariat in Soleure.
The Association is made up of the following sections: (a) The
cantonal federations of sickness funds of German-speaking Switzerland, (b) the centra] associations of these federations, and (c) funds
whose sphere of activity is not confined to any one canton but which
extends over several cantons or the entire territory of Switzerland.
At the end of 1925 the Association included 2,937 sections, with
884,376 members. These sections were grouped in seven federations and twenty-five central associations.
The object of the Association is to popularise sickness insurance
in various ways. It aims at extending insurance and protecting
the interests of the funds in all questions respecting doctors, pharmacists, hospitals, and the foundation of social institutions. It
represents the funds in all business with the federal authorities
and is at present discussing the question of the extension of the
right to free transfer.
The Association of Swiss Sickness Funds has played a very
important part in the development of sickness insurance in Switzerland. Although favouring the idea of a compulsory system of
subsidised sickness insurance, the Association has always given its
support to subsidised voluntary insurance, holding, as it does, the
opinion that the latter form of social welfare work is well calculated
to promote the idea of sickness insurance among the population,
to make them understand the benefits it brings, and thus to facilitate
the development of compulsory insurance.
Recently the efforts of the Association, which is strongly in favour
of direct participation by the sickness funds in all anti-tubercular
measures, have had a successful result. By taking up and advocating the proposal of the Federal Insurance Office to insert special
provisions in the new federal Act on tuberculosis permitting the
sickness insurance funds to co-ordinate their services with those of
the public authorities and private social welfare institutions, the
Association has shown, with a conviction borne of experience, that
the insurance institutions cannot neglect any problems connected
with the protection of public health.
412
VOLUNTARY SICKNESS INSURANCE
(2) The Federation of Mutual-Aid Societies of French-Speaking
Switzerland (Fédération des Sociétés de Secours mutuels de la
Suisse romande), in Lausanne, includes, as is shown by its name, the
federations of sickness funds and individual sickness funds constituted in the Cantons of Fribourg, Geneva, Neuchâtel, Valais, Vaud,
and in the Bernese Jura. The objects of ^the Federation are
identical with those of the Association.
At the end of 1924 the number of insured persons grouped in the
Federation was 123,627, but this figure has since greatly increased.
The policy of the Federation of Mutual-Aid Societies of FrenchSpeaking Switzerland differs in various respects from that of the
Association of Swiss Sickness Funds. The Federation has always
been in favoui of protecting the interest of the mutual-aid societies
by increasing federal subsidies. Up to the present, its efforts
appear to have met with success, as on several different occasions
the Federal Council has decided to grant supplementary subsidies
to its affiliated sickness funds.
(3) The Federation of Sickness Funds of the Canton of Ticino
(Federazione Ticinese délie casse malattie), with its seat in the
Canton of Ticino, includes federations of sickness funds established
in the canton and, in a general way, pursues the same aims as the
other two federations.
The general meetings of these groups of funds are composed of
delegates from the funds.
These institutions, which unite practically the whole of the
recognised funds, have a great influence on the development of
sickness insurance in Switzerland, as well as on the policy followed
by legislative measures. As a matter of fact, it is among the
members of the federations that members are found for the extraparliamentary committees nominated by the Federal Council for
the study of problems of social insurance, whether in connection
with the elaboration of new laws or simply for the amendment of
the existing law.
§ 6. — State Supervision
In virtue of the federal Sickness and Accident Insurance Act,
control over the recognised funds is exercised by the Federal Social
Insurance Office, which is situated in Berne and represents the
Federal Council for this purpose.
The supervision carried out by the Federal Social Insurance
Office is of both a judicial and a financial order.
SWITZERLAND
413
The provisions governing the supervision of the financial organisation of the funds are embodied in sections 28, 32, 33, and 34 of
the federal Sickness and Accident Insurance Act 1 .
Legally, the Federal Social Insurance Office is required to take
steps to guarantee that all conditions in connection with federal
recognition are observed by the funds. In carrying out this
supervision the Federal Office devotes special attention to the
following questions:
The principles of mutual aid.
Equality of the sexes.
Minimum benefits.
Use of the terms " doctor " and " pharmacist " in the sense
determined by the Federal Office.
The calculation of the duration of benefits.
Legal provisions respecting confinement.
Free choice of doctor.
Further, the Office must see t h a t the members of the funds do not
lose their rights by an arbitrary enforcement of the rules, especially
when it is a question of the right belonging to each Swiss citizen to
become a member of a fund whose general conditions of admission
he fulfils.
Finally, the Federal Office is entitled, of its own accord or on
complaint, to take action against all contraventions of the provisions of sections 3-28 and section 32 of the federal Sickness and
Accident Insurance Act.
1
These sections read as follows :
The funds shall use their resources for the purposes of insurance only
(section 28).
Once a year the funds must balance their accounts conformably to the
instructions given by the Federal Council and submit them to that
authority. The Federal Council may require the correction of errors
in the accounts (section 32).
The Federal Council may, of its own accord or on complaint, and after
warning, punish by a maximum fine of one hundred francs every fund
that violates the provisions of sections 3 to 28 and 32.
In the case of persistent violation and after ineffectual warning, the
Federal Council may decree the withdrawal of recognition.
The withdrawal must be decreed against every fund that no longer
offers the necessary security to its members and fails to adopt the measures
required by the Federal Council for the maintenance of its solvency
(section 33).
Notice of the surrender of recognition by a fund must be communicated
to the Federal Council in writing; it takes effect three months after the
date of its communication.
In the case of surrender or withdrawal a new recognition may not be
granted within two years at the earliest (section 34).
414
VOLUNTARY SICKNESS INSURANCE
CHAPTER II
INSURED PERSONS
§ 1. — Conditions of Membership
The recognised sickness insurance funds draw up their own
conditions of membership. The only exceptions to this principle
are those provided for in sections 5 and 6 of the federal Sickness
and Accident Insurance Act. According to section 5 admission
to a fund must not be refused to a Swiss citizen if he fulfils the rules
of the fund in question. Again, and in conformity with section 6,
funds admitting both sexes must admit each on the same terms.
With the exception of these two provisions, the sickness funds have
entire freedom to decide what obligations they may impose on their
members. Federal recognition may not be refused to a fund which,
in virtue of section 3 of the federal Act, makes membership dependent upon belonging to a certain undertaking, trade, or political
party. Denominational funds may also require their members to
profess a certain religious faith. At the same time rules limiting
the admission of persons to denominational and political funds may
not be construed to the prejudice of an insured person of Swiss
nationality professing another belief or belonging to another political party and soliciting membership in a fund, if in his place of
residence there is no other fund whose conditions of membership he
fulfils. As regards admission of foreign nationals to the recognised
sickness funds, readers are referred to the Chapter devoted to
this question 1 .
§ 2. — Number of Insured Persons
During the first twelve years' application of the federal Sickness
and Accident Insurance Act (Part I), the membership of the
recognised funds increased from 361,621 persons on 31 December
1914 to 1,160,716 on 31 December 1926. Such a remarkable
increase in the sphere of activity of the funds shows to what extent
sickness insurance answers the requirements of the working population.
1
Chapter VIII, p. 451.
SWITZERLAND
415
In order to convey an exact idea of the social value of sickness
insurance, it would be well to differentiate between the wageearning and non-wage-earning classes, as well as between the
numbers covered by voluntary and by compulsory forms of
insurance. Unfortunately, however, available statistics are not
complete enough to allow such comparisons to be made.
The following table (pages 416-417) classifies the insured persons
in accordance with the different types of funds.
It will be noticed that it is the open mutual-aid societies which,
since 1914, show the largest membership and this has been so during the whole of the first twelve years of application of the Insurance
Act. From 1919 the figures published in the official reports
demonstrated the continuous progress realised by the public funds,
which occupy the second place in the classification. Next in order
of importance come the works funds and then the trade funds,
political funds, denominational funds, and, finally, the institutions
having a trade and denominational or trade and political character.
The effects of the policy of centralisation, begun in 1914 and pursued
unceasingly, are also to be seen in the table.
0 0 - J Oí CU*-CO
w ^ ^ w w w
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Works fun ds
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Trade pollomin
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as percentage of
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Average number
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as percentage of
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ft
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1919
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as percentage of
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Closed funds :
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Tr adepo litical fun ds
Tr litical funds
Po no min ational f i nds
De
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of members per
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as percentage of
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-3CsK> t o osen
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F u n d membership
as percentage of
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members
Î O ï O O O O t O
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r
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»-»•h*.
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Number of
members
Average number
of members per
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as percentage of
total number of
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?
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© t o
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O
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Average n u m b e r
of members per
fund
F u n d membership
as percentage of
total n u m b e r of
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to
h ^ W ©
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eooo
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Average number
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Fund membership
as percentage of
total number of
insured persons
418
VOLUNTARY SICKNESS INSURANCE
CHAPTER III
RISKS COVERED
§ 1. — Various Risks Covered by Recognised Funds
The activities of the recognised funds may be limited to sickness
insurance or extended to other branches of social insurance
(invalidity, old age, or death).
A large number of funds (514) devoting their activity wholly
to sickness insurance grant funeral benefit to the family of a deceased
member, in addition to the usual benefits in case of sickness.
Other funds, much less numerous, undertake sickness and invalidity
risks (51) or insurance against sickness, invalidity and death (55).
In addition to these three main insurance combinations some
institutions accept liability for survivors' insurance and old age.
The following table shows, however, the relatively small importance
of multiple-risk insurance. Of the 1,017 funds existing in 1925,
902 undertook only sickness insurance, for it is impossible to consider the grant of funeral benefit as a separate branch of insurance.
CLASSIFICATION OF FUNDS AND INSURED PERSONS ACCORDING TO RISKS COVERED
Insured persons
Funds
Risks covered
1903
575
1,136
Per cent.
31.73
62.69
|
1925
388
51
1
514
55
5
68
3.75
4
0.23
10
0.55
14
0.77
1
1
1
5
0.28
1,812 1 0 0 . 0 0
1,017
1903
Per cent.
Per cent.
128,906 2 9 . 7 8
3 8 . 1 5 Sickness
5.01 Sickness, invalidity
¡
1925
384,883
164,930
Per cent.
33.15
14.21
Sickness, invalidity,
1,170
0.10
widows, orphans
502,623 4 3 . 3 0
Sickness and death 251,911 58.21
Sickness, death and
5.41
100,266
8.64
invalidity
Sickness, death and
3,301
0.49
0.28
old age
Sickness, death, in
162
0.02
0.10
7.38
validity, old age 31,941
Sickness, death, wi327
0.07
dows and orphans
Sickness, death, invalidity, old age
3,349
0.29
0.10
2.18
widows, orphans 9,464
Sickness, old age
2,599
0.61
and invalidity
Sickness, old age
82
0.01
0.10
widows, orphans
Sickness, old age,
invalidity.widows
orphans
7,650
1.77
1 0 0 . 0 0 Summary
432,798 1 0 0 . 0 0 1,160,716 100.00
0.10
50.54
SWITZERLAND
419
The number of funds insuring their members only against sickness
was larger in 1925 than in 1903 (1925, 38.15 per cent.; 1903, 31.73
per cent.), as was.the number of persons insured (1925, 33.15 per
cent.; 1903, 29.78 per cent.).
It will be noticed that the different insurance combinations met
with in 1925 are very different from those in usage in 1903. Survivors' insurance, which is a very heavy risk from a technical standpoint, was accepted by fewer funds in 1925 than in 1903. It is to
be presumed that a number of funds undertaking this risk have not
solicited federal recognition on account of the large reserve fund
required by the Federal Social Insurance Office.
The most usual combination practised is insurance against accident and death. The number of funds guaranteeing such benefits
as well as the number of persons covered was, in proportion to the
total number of funds and persons insured, smaller in 1925 than in
1903, while, on the other hand, the system of sickness insurance
combined with invalidity risk showed an increase. It is possible
that this fact is the result of the payment of federal subsidies. The
funds which before the introduction of the federal Act had arranged
for technically adequate contributions were able to prolong the
period of benefits on account of federal subsidies. Whereas the
public funds limit themselves to the payment of sickness benefit
in cases of invalidity, the open funds pay a small invalidity indemnity. Invalidity insurance is as a rule practised by the open funds
of French-speaking Switzerland.
§ 2. — Sickness Bisk
The liabilities undertaken by sickness insurance institutions
include two types of benefits •— in cash and in kind — which may
be taken up either together or separately. In Switzerland there
are therefore three groups of funds : the first guaranteeing the payment of benefits in cash and in kind to its members; the second
insuring only benefits in kind; and the third providing only cash
benefits. The following table classifies the insured persons in these
three groups according to sex, age, and the risk covered.
420
VOLUNTARY SICKNESS INSURANCE
CLASSIFICATION OF INSURED PERSONS IN THE VARIOUS GROUPS OF FUNDS IN
ACCORDANCE
WITH SEX, AGE, AND RISKS COVERED
(INCLUDING
ONLY
INSURED PERSONS TAKEN INTO ACCOUNT FOR CALCULATION OF FEDERAL
SUBSIDIES)
Number of members insured
Class of fund
For medical and pharmaceutical
treatment
Men
Public f u n d s :
I n 1923
In 1924
In 1925
Open funds:
In 1923
In 1924
I n 1925
W o r k s funds:
I n 1923
In 1924
I n 1925
Trade funds:
In 1923
I n 1924
In 1925
Trade d e n o m i n a tional funds :
In 1923
In 1924
I n 1925
Trade political
funds:
In 1923
I n 1924
In 1925
Political funds:
In 1923
I n 1924
In 1925
Denominational
funds :
In 1923
I n 1924
I n 1925
Total
I n 1923
In 1924
In 1925
medical and pharFor loss of earnings For
maceutical treatment
only
and loss of earnings
Women
Children
Men
55,078
59,947
63,294
72,568
79,720
84,511
100,281
112,693
112,739
1,063
1,060
1,030
659
648
628
22,237
22,043
22,829
33,342
34,551
35,826
22,639
30,344
32,872
46,116
55,257
58,999
69,446
80,587
64,368
117,338
115,395
116,226
51,040
56,000
58,197
53,583
58,411
64,164
42,035
48,679
55,107
13,251
14,169
15,049
6,247
5,795
6,043
5,904
6,037
7,087
5,664
5,982
5,549
5,044
4,973
4,855
47,565
52,456
57,064
21,968
23,438
1,001
1,012
1,142
651
684
930
480
1,101
756
43,384
42,813
45,133
4,589
4,166
4,317
11,245
10,415
9,841
1,144
737
780
4
44
2
4,026
1,929
1,542
1,654
392
2,600
489
790
841
953
139
142
145
48
49
59
41
63
79
26
36
49
1
1
1
91
93
89
3
1
1
1,154
1,371
2,467
73
98
19,225
1,119
1,120
1,123
1,298
1,266
1,215
8,319
8,428
8,627
15,191
15,761
16,083
3,920
792
4,599
9,430
10,896
11,895
3,072
2,738
2,782
2,636
175
2,277
5,844
6,983
7,637
7,017
8,977
10,284
130,697
147,708
157,628
185,640
211,448
216,119
173,570
170,651
173,498
—
—
826 •
1,000
1,057
3,400
4,019
3,727
96,247
110,584
117,202
'
—
—
—
Women
—.
—
—
Men
Women
O E OA C
65,658 1 149,674 120,837
69,828 159,670 132,286
71,978 171,204 143,542
•
421
SWITZERLAND
CLASSIFICATION
OF INSURED
PERSONS IN THE VARIOUS GROUPS
IN ACCORDANCE WITH SEX, AGE, AND RISKS COVERED
OF FUNDS
(continued)
Number of members insured
Recapitulation of number
of insured persons ¿ in
each group:
In 1923
In 1924
In 1925
For medical and
pharmaceutical
treatment
For loss oí
earnings only
For medical and pharmaceutical treatment
and loss of earnings
412,584
469,740
490,949
239,228
240,479
245,476
270,511
291,956
314,746
The above table shows that during the years 1923-1924-1925,
and as far as adults were concerned, that the majority of insured
persons are insured both for medical and pharmaceutical treatment
and for a daily cash benefit, which replaces to some extent the loss
of earnings. Next in order of importance are those insured solely
for medical and pharmaceutical treatment, and, finally, those
insured only for cash benefits.
The development of school insurance has resulted in an increase
in the number of persons belonging to the second group, i.e. those
covered only by benefits in kind. On 31 December 1925 the
number of children in Switzerland covered by sickness insurance
was 216,119, a modest but regular increase being maintained in
comparison with preceding years.
422
VOLUNTARY SICKNESS INSURANCE
CHAPTER IV
BENEFITS
The benefits granted by insurance funds to their members in
case of illness may include:
(a) Indemnity for loss of earnings.
(b) Total or part payment of doctors' expenses.
(c) Total or part payment of pharmacists' expenses.
(d) Payment of expenses or treatment in a medical institution.
(e) Convalescent benefits.
(/) Nursing benefits.
(g) Funeral benefits.
§ 1. — Number of Days of Sickness Covered
The data published by the Federal Social Insurance Office
respecting the operations of the recognised sickness insurance fund;invariably differentiate between two groups of institutions. The
first group includes all sickness funds which grant benefits for
180 days within a period of 360 consecutive days, and the second
those providing relief during 360 days within a period of 540
consecutive days.
Information concerning the number of days' sickness benefit
granted per person per year is available only since 1917, and is
shown in the following table:
423
SWITZERLAND
NUMBER OF DAYS FOR WHICH BENEFIT WAS PAID
Year and group
Number of
insured persons
Men
1917:
1st
2nd
1918:
1st
2nd
1919:
1st
2nd
1920:
1st
2nd
1921:
1st
2nd
1922:
1st
2nd
1923:
1st
2nd
1924:
1st
2nd
1925:
1st
2nd
•Women
Women
Number of
days' illness
per insured
person
Men Women
Number of
days' illness
Men
group
group
193,900
121,297
79,148
29,580
1,448,790
1,054,765
723,976
310,075
7.47
8.70
9.15
10.48
group
group
181,650
99,052
82,112
32,198
2,207,351 1,108,074
1,398,925
473,140
12.15
14.12
13.49
14.69
group
group
196,349
109,525
101,711
48,140
1,666,978 1,022,442
1,003,217
573,263
8.49
9.16
10.05
11.91
group
group
204,168
109,937
101,871
41,913
1,431,318
940,490
883,369
390,251
7.01
8.59
8.67
9.31
group
group
190,149
153,899
107,123
66,256
1,460,101
1,451,162
993,360
738,269
7.68
9.43
9.27
10.66
group
group
143,879
145,490
96,046
74,160
1,045,099
1,360,837
865,129
725,579
7.26
9.35
9.01
9.78
group
group
175,595
172,229
106,167
78,166
1,317,008 1,013,967
1,618,633 820,862
7.50
9.40
9.55
10.50
group
group
183,759
168,129
122,725
83,574
1,386,093 1,142,079
1,529,303 873,278
7.54
9.10
9.35
10.41
group
group
During 1917 the average number of days' sickness benefit
granted varied from 7.47 days for persons belonging to funds
granting relief lasting six months, to 8.70days for those affiliated
to funds granting benefits for one year. In 1918 these figures
were respectively 12.15 and 14.12 days, being almost double the
figures for the previous year. This sharp increase was a result
of the epidemic of influenza which raged in Switzerland during
1918.
From 1920 onwards the situation was more stable, and the
morbidity statistics for the year 1917 (7.47 and 8.70) and 1925
(7.54 and 9.10) show but a slight difference in the frequency and
duration of the sickness affecting insured persons. The second
point to be noticed in the above table is the difference in sickness
incidence between the two sexes. In point of fact, while the
424
VOLUNTARY SICKNESS INSURANCE
incidence of working females is 50 per cent, greater than that of
males, that for non-working women is only 20 to 30 per cent.
greater.
§ 2. — Cost of Benefits
In estimating the value of the liabilities which the sickness
insurance institutions have had to meet since the introduction of
the federal Act, indemnities for loss of earnings, assistance granted
to convalescents, funeral expenses, assistance granted to indigent
insured persons, and nursing benefits have all been reckoned as
cash benefits.
It may perhaps be thought that it would have been more logical
to consider nursing benefits, the purpose of which is purely one
of social hygiene, as benefits in kind ; but if this interpretation were
accepted, it would be extremely difficult not to include likewise
under benefits in kind assistance granted to convalescents.
Everything considered, it appears preferable to accept as a
criterion of benefits in kind only the expenses arising from direct
medical intervention, such as doctors' expenses, the cost of drugs,
the cost of curative treatment in a medical institution, the cost of
prophylactic measures, and expenses incurred for other curative
treatment.
While there is but little difference for the two sexes in the
average number of days' sickness between 1917 and 1925, this
is far from being the case in regard to the average cost of insurance.
In the works funds guaranteeing benefits for a period of six months,
Ihe average expenditure in benefits in kind per insured person
increased from 8.80 francs in 1926 to 24.40 francs in 1925, while for
women insured with such institutions the cost of benefits paid
increased from 12.31 to 26.50 francs during the same period.
For the other funds, that is to say, for mutual-aid funds open to
all irrespective of trade, religion, political opinions, etc., and for
the closed funds of a trade, denominational, or politicalc haracter,
the difference in the value of the benefits in kind paid was as follows :
Men
Women
1916
Francs
8.23
12.58
1925
Francs
15.61
24.33
Although this increased expenditure is explained partly by the
" increased cost of living ", to use a term which covers at one
and the same time higher doctors' fees and the increased cost of
425
SWITZERLAND
pharmaceutical products and hospital treatment, it is absolutely
certain that the increase in the average cost of sickness insurance
indicates a constant increase in the real value of the benefits
granted.
This statement is confirmed by the figures given in the following
table.
TOTAL AND AVERAGE COST OF BENEFITS GRANTED PER INSURED
PERSON (IN FRANCS)
Year
Total cost
Average cost
per insured
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
7,503,291
10,173,815
11,866,113
14,274,794
24,752,416
20,867,775
28,681,479
29,173,764
31,040,627
30,223,160
34,045,181
35,799,397
20.75
23.72
22.37
22.66
34.31
24.76
29.61
29.63
30.32
28.73
30.60
30.84
Percentage
increase in
comparison
with 1914
14.30
7.80
9.20
65.30
19.33
42.70
42.80
46.10
38.50
47.40
48.60
Altogether, the benefits paid by the sickness insurance institutions
increased from 7,503,291 francs in 1914 to 35,799,397 francs in
1925. This represents a great increase in the general expenditure
of the insurance institutions, but one which is quite in keeping
with the development in the number of insured persons, which,
as we have already remarked, increased from 361,631 in 1914 to
1,160,716 in 1925.
When the average value of benefits granted per insured person
is considered for the years 1914-1924, an increase is to be observed
which, if it is not exactly constant, is at least noticeable and
appreciable.
Briefly put, the average increase in the benefits paid in 1925,
as well as in the benefits granted in connection with medical and
pharmaceutical attendance, when compared with 1914 amounts
to 48.6 per cent. This increase is, however, compensated for by the
regular development of the resources of the funds, which, on an
average per insured person, increased from 22.77 francs in 1914 to
35.86 francs in 1924, or by 57.5 per cent.
426
VOLUNTARY SICKNESS INSURANCE
AVERAGE
COST
OF
DIFFERENT
BENEFITS
PER
INSURED
PERSON
IN THE VARIOUS CLASSES OF FUNDS (IN FRANCS)
Year
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Public Open Works
funds private funds
funds
16.58
21.04
23.85
22.26
21.93
22.17
22.03
20.12
17.45
18.06
24.55
20.77
22.98
24.62
24.96
23.97
26.89
27.84
35.61
38.60
40.41
76.05
49.55
63.75
61.98
61.86
55.36
59.04
57.76
Trade Trade
Trade denompolitfunds inationical
al
funds
funds
Denom
Polit- ¡nationAll
ical
al
classes
funds funds
22.12
23.67
23.37
40.36
28.45
36.56
30.02
38.89
36.67
36.05
39.10
26.05
24.96
27.23
40.23
28.71
30.97
36.37
45.94
41.83
41.61
32.47
12.04
15.51
18.69
39.34
21.48
21.44
21.11
24.26
23.66
25.12
26.18
9.98
9.74
18.64
37.67
18.53
37.33
24.22
36.64
43.60
32.34
36.73
25.40
22.62
18.58
27.10
22.12
22.56
23.15
27.39
27.85
28.80
28.79
20.75
23.72
22.37
22.66
34.31
24.76
29.61
29.63
30.32
28.73
30.60
30.84
Without going into considerations of detail, it is necessary here
to draw attention to one of the characteristics of the Swiss sickness
insurance scheme, this being the very great difference in the average
value of benefits provided by the various classes of funds.
In 1915 the works funds spent on an average 35.61 francs per
member, the politicai funds 26.05 francs, the denominational
funds 25.40 francs, the trade funds 22.12 francs, and the open private
funds 20.12 francs, while the average for the trade denominational
and the trade political funds was respectively 12.04 francs and
9.98 francs.
If we take as a point of comparison the average value of the
benefits paid in 1925 by the whole of the funds, that is to say,
30.84 francs, and if we calculate the percentage of that average
value represented by the benefits paid by each class of institutions,
we obtain the following figures, which show the great differences
between the expenses of the various funds in this respect, although
it should be added that there was a greater tendency in 1924
towards unity than was the case in 1914:
In 1925 the average value of benefits provided by all categories of funds
was 30.84 francs = 100.
W o r k s funds
T r a d e funds
T r a d e political funds
Political funds
D e n o m i n a t i o n a l funds
O p e n m u t u a l benefit funds
T r a d e denominational funds
P u b l i c funds
Index No. of
value of benefit
187.3
126.8
119.1
105.3
93.4
90.3
84.9
71.4
SWITZERLAND
427
As regards the average value of benefits provided by the various
classes of funds, it may be useful to give the following explanations
regarding the works and public funds, which constitute the two
extremes.
The high rate of benefits paid by the works funds in relation
to tbe other groups may be said to be due essentially to the
fact that these institutions have ao their disposal as a rule not only
a higbei contribution than is generally required in other classes
of funds, but al>o voluntary contributions from employers, which
are often very considerable and which naturally do not prejudice
the subsidy received from the Confederation or, as the case may be,
from the cantons. These resources permit them to provide their
members with benefits in kind and in cash considerably higher
than those generally granted by mutual benefit societies. It
is not out of place, moreover, to mention here that sickness incidence
is higher in these funds, a fact which is probably explained by the
generosity shown by these funds towards their members 1.
As regards the public funds, the low average of benefits per
insured person is explained by the fact that these institutions,
created by the canton or the commune for insurance of schoolchildren and certain classes of adults, only provide benefits in kind.
Be this as it may, the above table shows a great want of unity
in the payment of benefits, as the difference between the percentages
of the two extremes in the average value of benefits per person
exceeds 115. Such a state of affairs naturally required some explanation. In the first place this may be explained by the diversity
of the institutions recognised as competent to practise sickness
insurance, as it is a peculiarity of the Swiss scheme that each group of
institutions is free to have its own conceptions on the rôle of
social insurance. But the variety of institutions and conceptions
only constitute one of the elements of the problem.
Two other essential explanations would appear to lie, on the one
hand, in the geographical situation of the country and, on the other,
in the general character of sickness insurance. As a matter of
fact, Switzerland, by its conformation and its territory, is in quite
a special position when the application of social legislation of
general interest is in question. Socially speaking, it is not difficult
to imagine that the requirements of the working population of the
urban districts, which are already considerably different from that
of the rural workers, are not at all comparable to those felt by the
1
We believe it to be a fact that the majority of the establishment funds
are constituted on a co-operative basis and managed by the insured persons
themselves without any direct interference from the employer.
428
VOLUNTARY SICKNESS INSURANCE
population in the mountainous regions. Thus it is logical that
measures of protection, and the cost resulting from such measures,
vary according to the groups of population, in order that the risks
and resources of the various funds may be adapted to them as far
as possible.
The third and last cause is to be sought in the broad, popular
character of the insurance scheme, which is not confined to one
group or category of the population, such as wage-earners, but
covers, on the contrary, all classes. Open to the employee,
the artisan, the agricultural worker, as well as to the industrial
worker, and its Bphere of influence extending to both sexes and to
children, the Swiss social insurance scheme is thus required to
satisfy a large number of interests and requirements which justify
to a certain extent the absence of uniformity in the benefits granted.
§ 3. — Cost of Cash Benefits
In Switzerland the value of cash benefits is rather small in proportion to the wage rates. As a general rule, the funds grant an
allowance varying from one to five francs per day for loss of earnings
due to illness. A number of large funds, of which the organisation
is highly developed, accord larger benefits, but the average daily
value of allowances does not exceed three francs.
The following table, which shows the average scale of benefits
per insured person for the various classes of funds, is of great
interest on account of the marked differences in the average value
of the allowances granted to the sick by the different classes of funds.
AVERAGE COST OF CASH BENEFITS PER INSURED PERSON (IN FRANCS)
Year
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Trade
political
funds
Political
funds
Average
Deno- cost per
mina- person
tional for the
funds whole
of the
funds
20.51
18.92
19.79
29.31
19.43
19.88
20.98
23.81
23.06
23.18
14.96
21.89
17.39
13.76
18.20
13.68
12.08
11.46
12.85
11.86
12.35
13.18
Public Open Works
funds private funds
funds
Trade
funds
Trade
denominational
funds
12.87 24.26
11.09 26.74
10.67 26.61
14.14 53.8913.92 32.78
14.64 42.49
15.04 38.33
14.90 38.95
14.27 33.08
16.35 35.86
16.51 33.90
20.76
22.25
21.90
38.35
25.77
32.23
27.31
34.98
32.35
31.61
34.84
11.95
9.97
15.35
8.38
16.67 14.44
34.01 •24.38
17.84 10.63
16.93 19.35
16.26
8.08
19.09 17.10
18.25 19.91
21.28
15.06
21.12
13.60
1.61
1.94
3.53
1.79
1.64
1.64
1.67
15.22
16.59
15.30
15.08
23.41
14.96
16.90
15.66
15.53
14.26
15.45
15.42
429
SWITZERLAND
But, as has been shown in the preceding Chapter, these differences are explained by the fact that the public funds, whose cash
benefits represent barely 9.5 per cent, of the general average for
all funds, were set up mainly in the interests of social hygiene.
They cover certain groups of the population (including children)
for whom benefits in kind, such as medical and pharmaceutical
treatment, are of capital importance, but for whom the grant of
of cash benefits is in no way justified.
On the other hand, the trade and works funds, which cover
only wage-earners and which are managed in almost every case
by the workers themselves, provide cash benefits comparable with
the wages lost during the period of illness.
As regards the average cost of cash benefits per insured person
for the whole of the funds, it is to be observed that with the
exception of the year 1918 (epidemics), there is but little difference between the figures for 1914 and those for 1925, this being
due to the fact that the efforts of the funds have in general always
been directed towards the development and organisation of benefits
in kind.
§ 4. — Cost of Benefits in Kind
The average rates of benefits in kind, which are highest in the
trade, works and public funds, showed a marked increase during
the period between 1914 and 1925. At the end of 1925 their
average cost, considering the funds as a whole, had increased by
279 per cent, in comparison with 1914.
AVERAGE COST OF BENEFITS IN KIND PER INSURED PERSON (iN FRANCS)
Year
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Public
funds
Open
private
funds
Works
funds
Trade
denominational
funds
14.96
19.19
20.32
20.48
20.29
20.53
20.36
7.25
6.64
7.39
10.42
6.85
8.35
9.59
10.05
9.69
10.74
11.33
11.32
12.85
13.79
22.16
16.77
21.96
23.64
22.91
22.27
23.18
23.86
0.09
0.15
2.02
5.33
3.64
4.51
4.84
5.17
5.40
3.83
5.06
Trade
political
funds
Political
funds
Average
per
Deno- cost
person
mina- for
the
tional
whole
funds
of the
funds
1.36
4.20
13.29
7.90
17.97
16.14
19.53
23.69
17.28
23.13
5.54
6.04
7.43
10.92
9.28
11.09
15.39
22.13
18.76
18.42
17.51
3.50
5.22
4.81
8.89
8.44
10.48
11.69
14.54
15.99
16.45
15.61
5.53
7.13
7.07
7.58
10.90
9.80
12.71
13.97
14.79
14.46
15.15
15.42
"S
430
VOLUNTARY SICKNESS INSURANCE
§ 5. — Relative Importance of Cash Benefits and Benefits in Kind
The relative importance of the amounts paid in cash benefits
and benefits in kind is shown for the various years in the following
table. In this connection it should be noticed that up to the
introduction of the Act (1914), the activities of the sickness funds
were mainly directed towards the payment of cash benefits, which
at that time represented 73.34 per cent, of the total payments
made, the expenses for medical treatment being only 26.66 per
cent.
The value of the two kinds of benefits, however, completely
changed under the influence of the federal Act. Whereas the
proportion of cash benefits paid fell from 73.34 in 1914 to 50 per
cent, in 1925, benefits in kind increased from 26.66 per cent, in
1914 to 50 per cent, in 1925, thus indicating a distinct change
towards a system of social insurance in which benefits calculated
to safeguard health were to play a more important part than those
granted to compensate for loss of wages.
RELATION BETWEEN CASH BENEFITS AND BENEFITS IN
KIND
Percentage of the total cost of benefits
Year
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Cash benefits
Benefits in kind
73.34
69.93
68.38
66.85
68.23
60.34
57.08
52.86
51.19
49.66
50.49
50.00
26.66
30.07
31.62
33.45
31.77
39.66
42.92
47.14
48.81
50.34
49.51
50.00
SWITZERLAND
431
CHAPTER V
ORGANISATION OF INSURANCE MEDICAL SERVICE
The organisation of the insurance medical service is based on
co-operation by the funds with doctors and pharmacists. The
fundamental principles of this co-operation have been established
by legislation.
§ 1. — Free Choice of Doctor and Pharmacist
The obligations imposed on doctors by the legislator require
medical practitioners to keep to the tariffs which have been fixed
for sickness insurance, to accept the collaboration of a second
doctor, and to submit to the supervision of a medical referee when
required by the fund. These obligations are offset in the first
place by the guarantee of the free choice of a doctor, which may
be restricted by the funds only in certain specified cases. Further,
physicians have the right to present their claims in all discussions
respecting the establishment of scales of medical fees. Finally,
the constitution of an arbitration tribunal, in which both parties
are equally represented, gives members of the medical profession
ample protection against the demands of the sickness funds which,
according to doctors, are a danger to their professional interests.
Again, it should be noticed that, according to the legal provisions,
the only persons who may be recognised as doctors and pharmacists
are those in possession of a State diploma, or who are authorised
by the cantonal authorities to practise their profession in virtue
of a certificate of professional capacity.
The free choice of a doctor or pharmacist is guaranteed by law.
This means in effect that each member of a fund may have recourse
to a doctor or pharmacist practising in his place of domicile or
in the neighbourhood. In establishing this principle, however,
the interests of both the insured person and the doctor have been
safeguarded.
432
VOLUNTARY SICKNESS INSURANCE
§ 2. — Systems of Remuneration
The remuneration for treatment given to members of the sickness
funds by doctors and pharmacists is fixed on a basis of cantonal
tariffs, drawn up by the cantonal authorities after consultation
with the funds and the professional associations of doctors and
pharmacists. These tariffs determine the minimum and maximum
fee which must and may be claimed for each consultation, visit,
and special intervention, as well as the supplementary allowances
granted for distance, etc. In drafting these cantonal tariffs and
in their application, the cantonal authorities are required to take
into consideration local conditions and circumstances, as well as
the allowances which funds may have undertaken to pay.
All the members of the same sickness fund come under the
same regulations as regards medical treatment. Doctors and pharmacists may not require the sick person to pay fees higher than
those laid down by the cantonal authorities.
§ 3. — Restrictions on Free Choice
In pursuance of sections 16 and 19 of the federal Sickness and
Accident Insurance Act, the funds are entitled to make contracts
with physicians or associations of physicians on the basis of fixed
rates, and to entrust the treatment of insured persons exclusively
to them.
Such contracts must be submitted for approval to the cantonal
Governments concerned. All physicians who have practised
regularly for at least one year in a district embraced by the fund
may, if they so desire, enter into such contracts, but no such
waiting period is required from pharmacists.
When, in mountainous regions where communication is difficult
and the population is scattered, public funds founded for the
enforcement of compulsory insurance conclude contracts with
certain doctors, assuring to the latter an annual allowance, they
are entitled to exclude other doctors from the contract. Again,
the free choice of a doctor or pharmacist is limited by the fact
that when the state of health of a sick person necessitates his
removal to a sanatorium or other medical institution, treatment
is given exclusively by the staff of the institution concerned.
SWITZERLAND
433
§ 4. — Prevention of Abuse of Medical Benefit
Various methods are used by the funds to prevent abuse of the
medical treatment afforded by the funds. These methods are
described below.
THE STAMP SYSTEM
A method frequently used by the funds consists in making the
insured person responsible for the payment of a part of the doctor's
fees and the cost of drugs, this practice being sanctioned by section
13 of the federal Act. The sum payable by the sick person may
not, however, exceed one-fourth of the total expense incurred. As
a rule this system is applied by means of stamps, a certain number
of which are bought by the insured person at the beginning of his
illness. These stamps are delivered against payment at the same
time as the sickness certificate forms. According to information
furnished by the Cantonal Sickness Insurance Fund of the Canton
of Soleure, the stamp system gives satisfactory results.
SYSTEM OF FIXED
REMUNERATION
The second method used is to fix the remuneration of medical
practitioners at a certain lump sum. This amount is determined
by the number of insured persons in the district and the benefits
provided for, and is calculated in the light of previous experience
and the existing cantonal tariffs. The authority for this procedure
is to be found in a decision taken by the Federal Council on 24 June
1913.
SYSTEM OF REDUCTION OF MEDICAL FEES
This system, which is applied by the public sickness fund of the
Canton of Basle Town, is based on a contract concluded between
the fund and the doctors' association. In principle this contract
allows the fund to reduce the total amount of doctors' fees if the
medical treatment given by the doctors to sick members exceeds a
certain limit. This limit is fixed as follows: the total amount of
doctors' fees is divided by the number of insured persons treated.
The management of the fund this obtains the average cost of treatment per insured person. Continuing this calculation, the fund
then divides the various doctors into groups (general practitioners,
specialists, etc.). If the total fees of a doctor exceed the average
28
434
VOLUNTARY SICKNESS INSURANCE
fees established for his group, and if the excess is 10 per cent, above
the average, a reduction of one-fourth to one-half per cent, may be
made by the fund on the excess amount. The management of the
fund also establishes the average cost of drugs prescribed per
sick person. When the bills for pharmaceutical products exceed
the average cost per person by more than 20 per cent., the fund is
entitled to reduce the cost of such prescriptions for the year in
question by one-eighth or one-fourth.
Again, in order to avoid the possibility of malpractice by physicians (as, for example, when a doctor visits a sick mother and
examines her children with a view to increasing his number of
consultations), the administration of the public fund establishes
the proportion between the number of members of a family treated
at the same time and the total number of sick persons. With the
help of the information thus obtained and the knowledge of the
doctor's professional activity possessed by the fund, the management may make a reduction if the number of visits or consultations
afforded by a doctor to members of the same family exceed the
average number by more than 20 per cent. This deduction may
vary from one-tenth per cent, to one-fourth per cent, of the sum in
excess of the average amount.
All these deductions are made, on a proposal of the medical
referees of the fund, by a medical committee set up by the doctors'
association. Each case is examined separately.
The Department of Public Health of the Canton of Basle Town
considers that this system, the efficacy of which depends entirely
on the composition of the above-mentioned committee, does not
give all the desired results. At the present time, the abuse of
medical treatment constitutes a very heavy item of expenditure
for the fund. The management of the Department of Public
Health is endeavouring to promote an agreement between the
sickness fund and the doctors, which, while based on the payment
of doctors by consultation or visit, will allow the fixing of a lump
sum per insured person or per case of sickness.
SYSTEM OF SUPERVISION
In the Canton of St. Gall, the relations between doctors and
sickness funds are governed by an agreement concluded on 22
December 1920. As a check on doctors' fees and abuses of medical
treatment, the administrative rules, embodied in an appendix to the
agreement published on 15 April 1921, provide for the constitution
SWITZERLAND
435
of a Cantonal Supervisory Committee, composed of fourteen
members (seven regular members and seven substitutes). Three
of the regular members represent the doctors, and three the funds.
The president of the Committee is nominated by the Council of
State. This Committee examines all matters common to doctors
and the funds, and acts as a conciliation chamber in cases of disputes between the doctors and the funds. In this double capacity
the Cantonal Supervisory Committee is competent to exercise
control over doctors' fees. This control may apply to a single
doctor or to the whole of the members of the medical faculty.
No action is however, taken by the Committee unless at the
request of a fund, the entire procedure being clearly defined in
sections 5, 6, and 7 of the Administrative Rules of 15 April 1921.
The Department of the Interior of the Canton of St. Gall is
satisfied with the results of the work of the Supervisory Committee.
Although abuses by the doctors and by sick persons have not
ceased, as in reality the deductions made by the Committee are
extremely small, there are nowadays no crying cases of fraudulent
practice.
CO-OPERATIVE SYSTEM
A special and somowhat uncommon system is met with in the
town of Winterthur l . In accordance with an agreement concluded between the sickness funds of Winterthur and the doctors,
the latter have set up a co-operative association which is responsible
for the supervision and payment of doctors' and pharmacists'
bills. The sickness funds pay the doctors' co-operative association
that part of their contributions which is earmarked to meet the
cost of benefits in kind.
According to the opinion of both parties concerned, this system,
which was already in operation before the promulgation of the
federal Sickness and Accident Insurance Act, would appear to be
giving good results. The doctors are highly satisfied that disputeo
respecting medical fees are settled by an organisation managed by
the doctors, while the funds consider that the association is bound
to take firm measures with doctors guilty of abuses in view of the
fact that the local medical faculty has to be content with the
amount paid by the funds to the association to cover the total
cost of medical fees.
1
Canton of Zurich: 26,580 inhabitants.
436
VOLUNTARY SICKNESS INSURANCE
CHAPTER VI
FINANCIAL RESOURCES OF INSTITUTIONS
§ 1. — Sources and Amount of Income
The financial resources of the funds and mutual-aid sooieties
include :
• (a)
(b)
(c)
(d)
(e)
(/)
(g)
The contributions of active members (the insured persons).
The contributions of passive members.
Federal subsidies.
Cantonal subsidies.
Communal subsidies.
Regular or occasional subsidies from employers.
Gifts, legacies, interest, etc.
CONTRIBUTIONS OF ACTIVE MEMBERS (INSURED PERSONS)
The contributions of active members constitute the real basis
of the resources of the sickness funds, except in the case of certain
foundations in which the founder sometimes bears the whole
financial responsibility of the insurance institution. This contribution is based on the principle of equal benefits for equal contributions. Indeed, paragraph 2 of section 6 of the federal Act states
that " insurance benefits shall not vary according to sex unless
the contributions show a corresponding variation ".
Thus, although women's sickness insurance is considerably more
costly than that of men, the funds are required to grant both
sexes the same benefits for the same contribution.
This is the reason, as we shall see later, why the legislator grants
the sickness funds a higher federal subsidy for women than for
men. As to the actual amount of the contribution, this is fixed
on an average at 10 francs per annum for each franc of indemnity
guaranteed in case of sickness.
437
SWITZERLAND
The rate of this contribution is calculated on a basis of the
average duration of sickness, which varies for the population of
Switzerland from nine to ten days per annum. As, on the other
hand, the cost of benefits in kind (medical and pharmaceutical
treatment) is estimated at 3.50 francs for each day's incapacity
for work, it may be said that, as a general rule, the rate of t h e
average contribution works out as follows:
First example. — When a person is insured for an indemnity
for loss of earnings amounting to 4 francs per day (without medical
or pharmaceutical treatment), his contribution to the fund amounts
on an average to 40 francs per annum.
Second example. — When a person is insured for:
(a) medical and pharmaceutical treatment at
3.50 francs per day's illness, the contribution = 3.50 francs X 10
=
and (b)
35 francs
a daily sick benefit of 10 francs, i.e.
10 days X 10 francs
= 100 francs
His total annual contribution
= 135 francs
As each fund fixes its own rates of contributions, it goes without
saying that the above figures are merely a general average for the
whole of the funds. The rate of contribution may be more or
less reduced according to the income from interest and other
special sources at the disposal of the various funds (as, for example,
the voluntary subsidies received by establishment funds from
employers).
T H E CONTRIBUTIONS OF PASSIVE MEMBERS
These contributions vary to a great extent from fund to fund.
They are generally low, and form only a small part of the income
of the funds.
FEDERAL
SUBSIDIES
The financial aid granted by the Confederation consists of a
regular annual subsidy calculated on the following basis:
(a) 3.50 francs for insured children up to and incliudng the year
in which they attain the age of fourteen years;
438
VOLUNTARY SICKNESS INSURANCE
(b) 3.50 francs for insured male persons ; and
(c) 4 francs for insured female persons, when the fund guarantees
for both sexes medical and pharmaceutical treatment or a
daily cash benefit for loss of earnings of at least 1 franc
per day;
(d) 5 francs when the fund guarantees both medical and pharmaceutical treatment and a daily cash benefit for loss of
earnings of at least 1 franc per day.
These subsidies are increased by 50 centimes for members to
whom the fund guarantees the payment of sickness benefits for
at least 360 days in a period of 540 consecutive days.
Further, the Confederation pays the sickness funds an allowance
of 20 francs for each confinement, this grant being increased to
40 francs for each woman who is entitled to the nursing benefit
granted to mothers who nurse their children for four weeks after
the expiry of the period of assistance (sections 35 and 14 of the
federal Act).
In certain cases supplementary federal subsidies are granted in
addition to the above-mentioned basic subsidies. These include
subsidies known as " mountain subsidies ". It is, as a matter
of fact, a very important problem in Switzerland, where the
population of mountainous districts is considerable, to ensure the
enforcement of social and economic legislation in such regions
in order to avoid depopulation, as it will readily be seen that
measures in connection with social hygiene and insurance which
are adequate in industrial and even in agricultural countries are
no longer so when applied to persons whose conditions of existence
are so exceptional.
As Dr. Gutknecht points out in his notes on the federal Sickness
and Accident Insurance Act, the cost of calling in a doctor is frequently
very high in mountainous districts, with the result that either a
doctor is not summoned, or when he is it is too late. In certain
mountainous districts the doctor's visit is likely to cost from 20
to 40 francs, and even 60 francs, on account of the distance to be
covered and the difficulty of communication.
The federal legislator has therefore endeavoured to help the
population subjected to such difficult conditions by promoting the
idea of sickness insurance through the grant of special subsidies
to sickness funds in the sparsely populated districts.
The supplementary subsidies granted in such cases by the
SWITZERLAND
439
Federal Council are determined for each fund separately, and
amount to a maximum of 7 francs per member per annum
(section 37).
The desire to provide gratuitous medical treatment, which is
the fundamental aim of sickness insurance in Switzerland, has
obliged the legislator, faced with the lack of insurance institutions,
to encourage the realisation of this principle through action by the
cantons and the communes in wild and less accessible districts.
For this purpose the Confederation grants such cantons, for their
own use or for their communes, " subsidies in favour of institutions
which desire to lessen the cost of treatment for sick persons or
confined women " (section 37).
Some explanation must here be given of what is intended by
this general formula. In the first place, the purpose of section 37
is to ensure that sick persons are visited regularly and, with this
aim in view, to provide communal allowances for doctors, midwives, and nurses. The subsidies granted also aim at organising
more or less rapid means of communication between the sick persons and the doctors (for example, installation of telephones, provision of transport facilities for physicians, etc.). The subsidies,
which are granted according to the density of the population
concerned, and which may not exceed the total sums supplied by
the cantons, communes, and the insured persons themselves, may
not amount to more than 3 francs per inhabitant. It should also
be pointed out that this form of subsidy is granted only in exceptional cases, as in practice it is contrary to the principles of
insurance.
When the idea of insurance becomes more widespread, it is by
ordinary subsidies and not by special grants that the Confederation will help the population of the mountainous districts of the
country.
Another method used by the Confederation to encourage sickness insurance is the payment of a federal subsidy to institutions of
compulsory insurance. In the summary of federal legislation given
in this study, emphasis was laid on the desire of the Government
to leave the cantons and the communes free to introduce sickness
insurance as a compulsory measure. But from the moment that
the Confederation encouraged voluntary insurance, it became highly
probable that the cantons would hesitate before accepting new
responsibilities, unless they were sure of being granted some
compensation in return. Again, it was to be feared that without
440
VOLUNTARY SICKNESS INSURANCE
a federal subsidy to compulsory insurance, the poorest classes
of the population, that is to say, those most requiring the introduction of a sickness insurance scheme, would be prevented from
taking advantage of the Act.
To avoid this, the legislator has decreed that the Confederation
will refund to tbe cantons or communes one-third of the contributions in respect of indigent insured persons (section 38).
The extent of the financial support granted by the Confederation and described above has been further increased during the
first twelve years' enforcement of the Act by the grant of supplementary federal subsidies to the sickness funds.
During 1919 a special subsidy of 1,000,000 francs was granted
to the sickness funds, which, at that time, were particularly hard
hit by the epidemic of influenza.
Again, the constant increase in the cost of insurance and the
obvious desire on the part of the population of Switzerland to have
better safeguards against sickness have appeared to necessitate
a.revision of the federal Act of 1911.
The report of the Committee nominated to study this question
was negative as regards the introduction by the Confederation of
compulsory sickness insurance, but affirmative concerning the
grant of further special federal subsidies (Federal Orders of 20
December 1918 and 14 February 1920) amounting to 2,878,069 francs,
to compensate partly for the fall in the real value of the federal
subsidies. A special subsidy of 490,358 francs was also granted
towards the cost of women's insurance (Federal Order of 3 July
1918).
The grant of special federal subsidies for the years 1924-1926
was based on two demands made by the three central federations
of sickness funds, namely, the Association of Swiss Sickness Insurance Funds, the Federation of Mutual-Aid Societies, and the
Federation of Sickness Funds of the Canton of Ticino. These
demands were supported in the Federal Chambers by a motion
and a resolution.
CANTONAL SUBSIDIES
A certain number of cantons likewise grant subsidies to the
sickness funds in favour of compulsory insurance, or with a view
to encouraging voluntary insurance. The amount of these subsidies differs considerably from one canton to another.
441
SWITZERLAND
COMMUNAL SUBSIDIES
Communal subsidies are generally granted in connection with
the sums paid by those communes which have been authorised
to introduce compulsory insurance and which have to provide
two-thirds of the contributions of indigent insured persons.
REGULAR AND OCCASIONAL SUBSIDIES FROM EMPLOYERS
The federal Act has freed employers from all payment of
contributions in connection with compulsory and voluntary insurance. In connection with compulsory insurance introduced by
the cantons, section 2 of the federal Act states that the cantons may
oblige employers to supervise the payment of contributions by
their employees compulsorily insured with the public funds, but
employers are in no way compelled to pay contributions themselves.
Thus, from a legal point of view sickness insurance does not entail
any charge on the employers. Nevertheless, a number of employers,
for reasons of a social character, have considered it necessary to
organise sickness insurance schemes for their employees, or to
facilitate the introduction of some such scheme either by accepting
the responsibility for its cost or by granting regular subsidies or a
lump sum to help the sickness fund of their undertaking. The
importance of these voluntary contributions to sickness insurance
is to be seen in the following tables.
SOURCES AND AMOUNT OF INCOME OF THE VARIOUS INSTITUTIONS : TOTAL
AMOUNTS AND AMOUNTS PER INSURED PERSON FOR THE YEARS 1 9 1 4 - 1 9 2 2
Amount of income (in francs)
Sources of income
1914
Contributions of insured
persons
Contributions of passive
members
Cantonal subsidies
Communal subsidies
Employers' subsidies
(o) regular
(b) occasional
Federal financial aid towards sickness insurance
Total from various sources
|
1915
7,321,774
8,225,099
12,143
70,751
5,712
13,092
359,855
17,236
1916
1917
191S
9,868,317 11,830,613 14,523,188
31,952
430,863
30,964
15,610
618,562
121,045
18,548
882,700
424,068
425,559
38,434
496,957
519,708
617,501
527,606
72,984
123,853
349,284 1,098,538
(1,564,661 1,886,654 2,300,852 2,675,678
361,621 ]
168,880
83,040
110,360
114,000
77,480
(
31,860
46,560
87,200
8,235,994 10,864,784 13,049,231 15,964,772 20,486,581
Number of insured persons
361,621
428,879
530,429
629,927
721,452
Average income per insured person
22.77
25.33
24.61
25.34
28.40
442
VOLUNTARY SICKNESS INSURANCE
SOURCES AND AMOUNT OF INCOME OF THE VARIOUS INSTITUTIONS
(cOHtd.)
Amount of income (in francs)
Sources of income
1919
Contributions of i n s u r e d persons
Contributions of passive m e m b e r s
Cantonal subsidies
C o m m u n a l subsidies
E m p l o y e r s ' subsidies
(a) regular
(b) occasional
Federal financial aid t o w a r d s sickness insurance
Total
1920
1
1921
1922
24,238,879 26,507,412
19,827
19,922
1,489,970
1,554,112
728,413
394,623
25,811,533
17,197
1,507,312
428,025
691,788
1,009,920
(3,130,535
\
211,800
[
96,600
921,685
830,985
3,695,037
304,020
140,920
964,212
466.025
3,875,813
349.800
178,280
1,018,340
113,716
4,007,503
353,320
184,720
various
sources
25,625,328
32,369,736
34,310,199
33,441,666
of insured
persons
842,611
968,748
984,572
1,023,057
30.41
33.41
34.84
from
Number
18,432,459
20,617
1,527,217
504,392
|
Average income p e r insured person
32.68
AVERAGE AMOUNT OF INCOME PER INSURED PERSON PER ANNUM
IN THE DIFFERENT CLASSES OF FUNDS (iN FRANCS)
Classes of funds
Public f u n d s :
1923
1924
1925
Open f u n d s :
1923
1924
1925
E s t a b l i s h m e n t f u n d s : 1923
1924
1925
Trade f u n d s :
1923
1924
1925
Trade d e n o m i n a 1923
tional funds: \ 1924
1925
Trade political funds : 1923
1924
1925
Political f u n d s :
1923
1924
1925
D e n o m i n a t i o n a l funds :1923
1924
1925
Total :
1923
1924
1925
Federal
subsidy
Other
resources
4.64
4.52
4.41
4.43
4.34
4.32
3.85
4.15
4.05
2.98
3.23
3.16
4.22
4.32
4.24
3.05
3.04
3.39
6.32
6.28
5.06
5.31
5.37
5.27
20.01
19.91
20.02
26.96
27.25
28.68
58.04
58.34
59.95
46.62
46.88
47.86
30.62
31.90
32.07
34.46
35.90
36.71
44.63
43.71
31.97
27.91
29.50
30.52
24.65
24.34
24.43
31.39
31.59
33.00
61.89
62.49
64.00
49.60
50.11
51.02
34.84
36.22
36.31
37.51
38.94
40.10
50.95
49.99
37.03
33.22
34.87
35.79
4.41
4.39
4.31
30.61
30.87
31.55
35.02
35.26
35.86
Total
SWITZERLAND
443
§ 2. — Reserves
The federal Sickness and Accident Insurance Act (Part I)
contains no formal provisions respecting the formation of reserve
funds by the recognised sickness insurance institutions. The only
legal stipulation on this point is embodied in section 3, para. 3,
which states that the funds must offer full security for the performance of their contracts. Although, as a matter of fact, the very
first condition of recognition is the guarantee of full security to
their members, the funds have only to adopt rates of contributions
which will allow them to meet their financial liabilities in order
to satisfy this condition. Therefore the Federal Social Insurance
Office does not require funds soliciting federal recognition to prove
the existence of financial reserves established according to the
technical methods usually employed in insurance. As a rule when
the Office is consulted it merely advises the sickness funds to
accumulate sufficient reserve capital to meet one year's average
expenditure.
Each fund manages its own business, but the Federal Office is
required to see that the resources of the fund are used only for
purposes of insurance.
It is to be noticed in this connection that, guided by the model
constitution drawn up by the Federal Office, and with a view
to safeguarding their reserve capital, the majority of the recognised
funds have included in their constitution and rules the following
clause :
The reserve capital of each fund must be invested in easily realisable
guaranteed securities. When it is necessary to draw on the reserve capital,
contributions must be increased so as to allow the reconstitution of the
initial capital within a maximum period of three years.
During the period between 31 October 1914 and 31 December
1925 the total reserve capital of all funds increased from 9,632,569
to 45,861,503 francs. This increase in capital was progressive
except during 1918, when a slight fall in the reserves of the funds
was noticeable. This decrease was a direct result of the epidemic
of influenza, which not only hindered the development of the funds,
but also resulted in a number of them being closed down.
As a result of the measures advocated by the Federal Office,
the funds most affected by the influenza epidemic and whose
financial stability appeared difficult to re-establish, amalgamated
with other institutions. When considering the results of the
444
VOLUNTARY SICKNESS INSURANCE
epidemic of 1917-1918 on the assets of the sickness funds, it should
be pointed out, however, that the grant of special federal subsidies
to the funds, and a general increase in the rates of contributions,
allowed the funds, taken as a whole, to reconstitute their capital
reserves in the space of one year.
RESERVE
CAPITAL
Year
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
OF
RECOGNISED
SICKNESS
Number of funds
INSURANCE
FUNDS
Total assets of the funds
at the end of the
financial year
453
535
711
777
825
891
946
959
969
972
1,000
1,017
Francs
9,632,569.37
12,361,081.47
15,275,414.08
17,344,596.17
13,100,786.15
19,615,079.08
23,353,625.94
28,324,724.32
30,746,472.31
35,837,084.82
40,294,054.01
45,861,503.27
§ 3. — Investment of Capital
The Federal Social Insurance Office requires sickness funds to
invest their capital in easily realisable guaranteed securities, and
more especially in bonds issued by the Confederation, the cantons,
and first-class credit institutions, in first mortgages, etc. When the
capital of a works fund is invested in the undertaking concerned,
suitable guarantees must be given. In exceptional cases a certain
portion of the total assets of a works fund, which may not exceed
20 per cent., may be invested at interest in the undertaking without
any other guarantee being offered. In virtue of this decision,
the Federal Office allows other classes of funds to invest up to
20 per cent, of ,their total assets in bonds, co-operative society
shares, and especially guaranteed short-time loans to third parties.
In no case may the funds invest their assets in undertakings
which do not guarantee limited liability and whose capital is not
fully paid up. In cases where it is possible partially to limit
the liabilities or the subsequent calls on capital, the amount
which may be invested by a fund is limited to 20 per cent, of
the total assets of the fund concerned.
445
SWITZERLAND
ASSETS POSSESSED BY 1,017 RECOGNISED SICKNESS INSURANCE FUNDS
ON DECEMBER 1 9 2 5 (IN FRANCS)
Class of funds
Public funds
Other open funds
Closed funds:
Establishment funds
Trade funds
Trade denominational
funds
Trade political funds
Political funds
Denominational funds
Total
Classes of funds
Public funds
Other open funds
Closed funds :
Establishment funds
Trade funds
Trade denominational
funds
Trade political funds
Political funds
Denominational funds
Total
Bonds issued by
the Confederation, Swiss
Federal
Railways,
cantons and
communes
Cash in hand
and amount in
postal cheque
accounts
Balance
in banks and
savings banks
228,059.57
1
(,.(,»
739,728.42
3.49
1,664,928.33
48.75
5,796,095.91
27.35
16,687.55
0.08
786,025.35
23.02
10,173,650.55
48.01
240,920.08
1.67
270,271.92
3.87
1,903,791.20
13.22
971,927.05
13.91
1,858,829.23
12.91
23,090.35
0.33
7,250,662.74
50.35
3,223,533.54
46.14
18,633.47
4.43
381.00
9.46
260,019.38
37.88
15,792.34
2.15
67,752.93
16.13
3,145.40
78.10
131,762.60
19.19
193,216.85
26.29
1,773,806.18
3.71
10,732,620.27
22.43
1,898,607.13
3.97
21,969,984.88
45.93
Other bonds
(private banks,
electrical
enterprises)
Loans
guaranteed by
mortgages
Ordinary loans
and other
investments
Real estate
349,784.76
10.24
2,444,576.84
11.54
163,876.60
4.80
1,325,361.12
6.26
1,957.00
0.06
170,510.57
0.81
25,000.00
0.73
190,000.00
0.90
1,663,495.40
11.55
861,951.00
12.34
1,259,559.20
8.75
1,335,873.97
19.12
74,249.60
0.51
95,908.55
1.37
17,000.00
0.12
70,000.00
1.00
72,103.20
17.17
500.00
12.41
118,000.00
17.19
51,500.90
7.01
11,500.00
2.74
20,000.00
2.91
86,946.69
11.83
1,000.00
0.13
189,435.00
25.77
5,561,912.10
11.63
4,203,117.58
8.78
343,625.72
0.72
491,435.00
1.03
1
1
Percentage of total assets.
Assets with
e mployers
250,000.00
59.52
113,925.00
16.59
172,137.70
23.43
446
VOLUNTARY SICKNESS INSURANCE
ASSETS POSSESSED BY 1,017 RECOGNISED SICKNESS INSURANCE FUNDS
ON DECEMBER
1925
(IN FRANCS)
Sums
invested in
medical
institutions
Other
assets
Liabilities
Total assets
655,557.29
3,415,069.42
100
21,188,726.58
100
Class of funds
Public funds
Other open funds
Closed funds :
Establishment
funds
Trade funds
4,860.00 190,577.81
!0.14
5.58
155,342.10 176,773.52
0.73
0.83
91,403.00
0.63
41,558.40
0.60
Trade denominational funds
Trade political
funds
Political funds
Denominational
funds
Total
41,192.40
0.29
91,738.89
1.32
115,476.06
30.60
0.01
136.53
42,766.80
6.23
1.00
0.03
49.65
0.01
3,213.50
0.44
21,703.95
2.95
339,143.80
0.71
996,501.39
13,068.50
(continued)
Net capital on
31 December
1925
2,759,412.13
20,192,225.19
14,401.102.55
1Ó0
6.985,853.67
100
14,285,626.79
420,020.20
100
419,883.67
4,027.40
100
686,523.43
100
4,027.40
192,300.95
6,972,785.17
494,222.48
1,776.49
734,996.93
100
733,220.44
522,067.82 1,974,817.21
1.09
47,836,320.48
100
45,861,503.27
i Percentage of total assets.
§ 4. — Financial Supervision.
The recognised sickness funds may use their resources for the
purpose of insurance only (section 28), that is to say, they may not
spend their moneys in political or religious propaganda or use them
for any purpose other than insurance.
The funds are required to balance their accounts once a year
conformably to the instructions given by the Federal Council and
submit them to that authority. The Federal Council may require
correction of errors in the accounts.
In virtue of section 26 of Order I respecting sickness insurance,
the Federal Council has delegated this right to the Federal Social
Insurance Office.
In order to ensure adequate supervision of the financial stability
of the sickness insurance funds, the Federal Social Insurance
SWITZERLAND
447
Office makes a simultaneous audit of the annual accounts and the
technical balance sheets submitted by the recognised funds. These
documents must be drawn up on the provided forms and in accordance with instructions issued by the Federal Social Insurance
Office. In order to guarantee the greatest possible unity in the
methods of accountancy adopted 'by the funds, the Federal Social
Insurance Office has drawn up model rules, the adoption of which
has rapidly become general, and which contains the following
provisions respecting the organisation of accountancy methods.
The accountancy system adopted must contain separate income
and expenditure accounts for the various classes of insured persons
and must facilitate the drawing up of the yearly accounts. According to the model provided for in the Order of the Federal Council
of 7 July 1913, the following headings must be included:
Income
Active members' contributions, separately for each insurance class.
Subsidies from passive members.
Entrance fees.
Fees for transfer from one class to another.
Federal, cantonal, communal and employers' subsidies.
Refunds.
Interest.
Levies on assets.
Special sources of income, gifts, etc.
Fines.
Expenditure
(1 Benefits for loss of earnings, separately for each insurance class.
(2 Doctors' expenses.
(3 Pharmaceutical expenses.
(4
Other therapeutical expenses.
(5,
Cost
of visits to the sick.
(6
Cost of treatment and maintenance in medical institutions.
(7
(8
Convalescent relief.
(9
Nursing benefits.
(10
Death benefits.
(11
Refund of contributions and entrance fees.
Administrative expenses (including cost of co-operation with unions of
(12
(13 funds).
(14 Commission.
Investments.
Other expenses (assistance to indigent active members, expenses for
measures).
Noprophylactic
distribution
of profits is made to the members of the
(l
(2
(3
(4
(5
(6
(7
(8
(9
(10
funds.
Contraventions of the rules laid down by the Federal Council
for the financial security of the funds do not as a rule entail severe
penalties, and no penal proA^sions are in force in this connection.
448
VOLUNTARY SICKNESS INSURANCE
The position is, however, entirely different in the case of intentional
misrepresentation concerning the condition of a sickness fund whose
accounts and other reports must be submitted to the Federal Council.
Section 40 of the federal Sickness and Accident Insurance Act
contains a penal provision applicable to this case (see Chapter VII,
§ 2, page 449).
SWITZERLAND
449
CHAPTER VII
JUDICIAL AUTHORITIES AND PENALTIES
§ 1. — Judicial Authorities
Disputes arising between the funds and doctors or pharmacists
are settled by an arbitration court. The cantonal Governments
nominate the arbitral authority and regulate the procedure. In
nominating the court of arbitration care must be taken to ensure
to each interested party an equal number of representatives
(section 25 of the Act). In order to avoid the inevitable complications which would arise from the necessity of creating this authority
through legislative channels or even by constitutional revision,
the legislator has preferred to entrust the nomination of the arbitral
authority and the regulation of procedure to the cantonal Governments and not to the cantons. The arbitral authority which is
set up once and for all may be nominated by the cantonal authorities among the courts already existing.
The private litigations of the funds among themselves or with
their insured members or third persons come within the jurisdiction
of the ordinary courts unless cantonal legislation and the rules of
the funds (the latter in so far as they relate to the controversies
of a fund with its insured members) ordain otherwise (section 30
of the Act).
There is no appeal from decisions taken b y the Federal Council
in pursuance of the federal Sickness and Accident Insurance Act
of 13 June 1911.
§ 2. — Penalties1
Officers of the fund who intentionally misrepresent the conditions
of the fund in their financial accounts or other reports designed for
1
With the exception of warnings no penalties have so far had to be applied
in pursuance of section 33 of the federal Sickness and Accident Insurance
Act, which entitles the Federal Council to inflict a fine or to withdraw recognition from a fund which contravenes the provisions of the Act. It has likewise
been unnecessary to apply section 40 of the Act. (See also Chapter I, § 6:
" State Supervision", p. 412.
29
450
VOLUNTARY SICKNESS INSURANCE
the information of the federal authority are liable to a maximum
fine of 500 francs or to imprisonment not exceeding three months,
or to both. In case of repetition within three years subsequent
to the last conviction, the fine may be increased to 1,000 francs and
imprisonment to six months. Suit is brought by the cantonal
authorities, on complaint of the Federal Council, and the general
provisions of the Federal Penal Code of 4 February 1853 are
applicable.
§ 3. — Appeals
The decisions of the cantonal authorities are communicated in
writing to the Federal Council, which may have recourse to amendment or appeal conformably with sections 158 et seq. of the Act
of 22 March 1893 (section 40 of the Act).
SWITZERLAND
451
CHAPTER VIII
THE POSITION OF FOREIGNERS
Legally, the question of foreigners in the sickness insurance
scheme may be defined as follows :
(1) Sickness insurance funds founded by foreign nationals may
be recognised on the same terms as those set up by Swiss citizens.
(2) A rule excluding Swiss citizens from membership of a
foreigners' fund is contrary to the conditions governing recognition.
(3) A rule excluding foreigners from membership is not deemed
to be contrary to the conditions required for federal recognition.
(4) Only Swiss citizens are entitled to make use of section 5 of
the federal Act, whereby recognised funds may not refuse affiliation to an insured person who fulfils the general conditions of admission. This is equivalent to saying that even if he fulfils the required
conditions a foreign national may be refused membership as such.
(5) But if the insured foreign national is in possession of a free
transfer certificate, his right to membership may not be gainsaid,
and he may join a fund even when the constitution and rules of such
fund exclude foreigners from membership. Thus, the right of free
transfer applies equally to Swiss nationals and to foreigners, and
all recognised funds are bound to conform to the provisions of the
Act respecting this privilege.
(6) The funds are entitled to classify the insured foreign nationals
in the lowest categories of insurance, or, in other words, to insure
them only for the minimum benefits provided for by the federal
Act. In all such cases the contribution of the insured person must
be reduced to correspond to the risk covered and the value of the
benefits guaranteed.
Such is. legally speaking, the position of foreigners under the
scheme of voluntary insurance. From a practical point of view,
however, these differences have but little influence on the position
of the foreigner participating in the Swiss sickness insurance scheme,
as almost all the recognised funds are open to foreigners on the
same conditions as for Swiss citizens.
452
VOLUNTARY SICKNESS INSURANCE
CHAPTER IX
INFLUENCE OF FUNDS ON PUBLIC HEALTH
It is obvious that sickness insurance must have beneficial effects
on public health 1.. In Switzerland, as elsewhere, its enforcement
leads to prompt attendance by a doctor and where necessary to
prolongation of treatment. The assurance of prompt and requisite
medical treatment, two factors of the utmost importance for the
maintenance of a high standard of public health, can be given to
certain classes of the population only by the existence of a sickness
insurance scheme. The usefulness of insurance in this respect,
which is, of course, proportionate to the scope of the scheme, is
undeniable, and its value in Switzerland may be judged when it is
stated that of a total population of 3,800,000 about 1,160,000
persons, or 32.68 per cent, of the total population, are insured with
the various institutions.
The introduction and development of children's insurance and
the allocation of benefits to nursing mothers have had most happy
results on the general state of health of the working classes. At
the same time it must be admitted that the efficiency of the sickness
insurance scheme is limited to some extent by the smallness of the
value of the benefits and by the fact that people in poor health
and in straitened circumstances find great difficulty in taking part
in voluntary insurance. These difficulties are, however, being
largely overcome by the introduction in a number of cantons and
communes of compulsory insurance for indigent persons, and by the
efforts made by the cantonal and communal authorities to provide
improved measures for the protection of public health (foundation
of medical institutions such as hospitals, homes and sanatoria).
If national plagues are taken to mean those diseases which affect
a large number of people and cause depopulation to a varying
extent, then the most important may be said to be venereal diseases,
syphilis, alcoholism, and tuberculosis.
1
At present statistics on the morbidity of the population of Switzerland
are wanting, but information based on data supplied by the large sickness
insurance institutions is being prepared. (Communication from the Federal
Social Insurance Office).
SWITZERLAND
453
As regards the treatment of persons affected by venereal diseases
and syphilitics, the Swiss sickness insurance funds are generous,
as, besides recognising the right of such persons to medical treatment and the supply of drugs, many of them take steps, through the
doctor in charge of the case or through their medical advisers, to
prevent treatment being prematurely interrupted.
The measures adopted by the sickness funds to combat tuberculosis merit special attention.
At present the anti-tuberculosis. institutions in Switzerland
include :
(1) Surgeries.
(2) " Preventoria " and sanatoria.
(3) Hospitals.
(4) Curative establishments.
Although these establishments are really financially dependent
on the more important public and private institutions of social
hygiene, several sickness funds and important federations of funds
play their part in the maintenance of sanatoria. It is true that the
growth of the social insurance medical services properly so called
is restricted by the legal provisions respecting the financial soundness of the funds. The total capital invested by the funds in curative establishments (excluding the investments by federations of
funds) may be estimated at 339,144 francs, a really small sum in
proportion to the total assets of the sickness funds.
Nevertheless, the work done by the sickness funds in connection
with social hygiene is extremely valuable, as in reality numerous
institutions are able, on account of their organisation, to place
their members in curative institutions where they receive competent medical treatment on terms compatible with their material
situation.
In the near future the measures taken by the sickness funds to
combat tuberculosis will be considerably improved. At the request
of the Association of Swiss Sickness Funds, the committee appointed
to report to the Federal Chambers on the proposed Government
Bill respecting anti-tuberculosis measures has included in the draft
a section which stipulates that the Federal Council is empowered
to grant federal subsidies to the recognised sickness funds which
provide supplementary benefits for tuberculous persons, provided
that tha amount of such benefits be definitely fixed by the rules.
UNION OF SOUTH AFRICA
FRIENDLY SOCIETIES
Acts and Regulations
Friendly Societies Act, No. 5 of 1892, Cape of Good Hope.
Regulations made under section 10 of the Statistics Act, No. 38 of 1914,
and section 2 of the Statistics Amendment Act, No. 5 of 1919.
Reports.
" Friendly Societies in the Union ", in Social and Industrial Review, May
1926.
Information supplied by the Government of the Union of South Africa.
INTRODUCTION
Friendly societies are the only institutions in South Africa which
provide the workers and other persons of small means with insurance
against incapacity and death. The oldest society, established in
connection with a church in Gape Town, was founded as long ago
as 1847; but although the necessity of insurance is evident, and
this means of meeting it has been before the public for eighty years,
surprisingly little advantage has been taken of the opportunity.
Friendly societies are associations for mutual aid set up by
private initiative. They are not compelled to submit their rules
or administration to State supervision, but they may do so voluntarily by registering under the Friendly Societies Act, No. 5 of 1892,
Cape of Good Hope. Thus it comes about t h a t from a legal standpoint there are two groups of societies: the registered and the
unregistered. All societies are, however, obliged to furnish annual
statistical returns to the Office of Census and Statistics. The
Registrar of Friendly Societies in addition collects separate statistics
of the operations of registered societies.
UNION OF SOUTH AFRICA
Thus for
conditions
relating to
there is no
societies in
Union.
455
registered societies a brief description is given of the
required for registration, and the special statistics
them are quoted. For unregistered societies as such
information, but they are included with the registered
the statistics covering all the friendly societies in the
§ 1. — Registered Friendly Societies
CONDITIONS OF REGISTRATION
Under the Friendly Societies Act, No. 5 of 1892, Cape of Good
Hope, it is lawful for any number of persons not being less t h a n ten
to form a friendly society. The objects of a friendly society are
defined as follows :
(a) The relief or maintenance of members and their families in times of
sickness or bodily infirmity.
(b) Providing for medical attendance and procuring medicines for the
persons mentioned in (a).
(c) Insuring a sum of money to be paid on the birth of a member's child
or on the death of a member or for the funeral expenses of the husband,
wife or child of a member.
(d) Any purpose which shall be authorised by the Governor as a purpose to
which the facilities and powers of the Act ought to be extended; provided that no member shall contract for an annuity exceeding £30 per
annum except with the special consent of the Registrar, who may allow
an annuity not exceeding £60 per annum to be contracted for, or any
other contingency exceeding £200.
The Act provides for the appointment of a Registrar of Friendly
Societies to supervise the operations of registered societies. In
order to be registered, a society must submit its rules and any
amendments thereof to the Registrar. The rules must provide for
efficient government. The scales of contributions and benefits are
subject to actuarial investigations before they are approved, and
every five years at least the assets and liabilities must be valued.
BENEFITS
Most registered friendly societies provide both sickness benefit
and death benefit. The scales of contributions and benefits do not
differ widely from one society to another, and the following may be
taken as typical :
Age
18-25
26-30
31-35
36-40
Weekly contribution
s. d.
1 6
1 8
1 9
2 0
456
VOLUNTAUY SICKNESS INSURANCE
Benefits
£2 per week for first 8 weeks of sickness.
£1 per week for second 8 weeks of sickness.
3s. per week for remainder of sickness.
£50 in case of death.
There are two or three societies which provide a death benefit
only. They have members scattered throughout the Union and
they have no machinery for dealing with sickness cases.
The societies which provide sickness benefit also give medical
attendance and medicines. Certain of these societies also pay for
additional sickness benefits such as the cost of operations, fees
of specialists, supply of spectacles, extraction of teeth, and surgical
appliances.
STATISTICS
Registered societies number 23 and form 28 per cent, of the total
number of friendly societies in the Union. Their membership is
7,000, and represents 16 per cent, of the total membership.
The registered societies providing death benefit only have a
membership of 3,500.
Those providing sickness benefit and medical benefit as well
have 3,500 members also.
The income from contributions in 1924 was £16,270, and the
income from investments £6,125.
The expenditure in 1924 included the following items :
£
Sickness benefit
3,510
Death benefit
2,936
Medical benefit
1,200
Salaries
2,000
Bearing in mind t h a t only 3,500 are insured against sickness, one
sees t h a t the cost of sickness benefit per member in 1924 was £1
and the cost of medical benefit was 7s.
The total worth of the registered societies is about £150,000, the
investments being distributed as follows :
£
Municipal stock
72,300
Government stock
39,950
Buildings
18,000
Union Loan Certificates
11,206
Post Office Savings Bank
2,561
British War Loan
2,105
Mortgage Bonds
1,753
The actuarial valuation of assets and liabilities shows that all
societies except one (which only became registered after being
established 50 years) are in a sound financial position.
457
UNION OF SOUTH AFRICA
§ 2. — All Friendly Societies ( Registered and unregistered)
NUMBER OF SOCIETIES AND MEMBERSHIP
In virtue of regulations made under the Statistics Acts of 1914
and 1919, all societies, lodges, clubs, and other associations established primarily for granting financial assistance to members or
their dependants in case of incapacity, death, unemployment, or
other contingencies, but not insurance companies, are required to
furnish annual returns as to their objects, membership, revenue
and expenditure, and investments.
The total number of societies funishing returns in 1924 was 83,
the average membership being about 500. The following table
shows the movement of the membership since statistics were
first collected in 1919:
Year
Admissions
Membership at end
of each year
1919-1920
1920-1921
1921-1922
1922-1923
1923-1924
8,266
6,630
6,402
4,875
4,302
42,351
44,695
42,993
44,444
43,456
It will be seen from the above table that the membership exhibits
a tendency to decrease. The membership in 1920-1921 represented
2.9 per cent, of the European population or, if it can be assumed that
non-Europeans are also among the members, 0.6 per cent, of the
total population.
BENEFITS
Sickness benefits, including both invalidity pay and medical
attendance, were paid out as follows:
Year
| Number oí cases
Weeks
Amount
24,062
14,378
21,957
19,424
22,041
61,372
70,802
63,077
60,388
66,919
£
1919-1920
1920-1921
1921-1922
1922-1923
1923-1924
8,972
9,967
8,646
8,450
9,249
458
VOLUNTARY SICKNESS INSURANCE
The death benefits granted during the five years are shown in
the following table:
Year
Number of cases
Amount
1919-1920
1920-1921
1921-1922
1922-1923
1923-1924
470
516
474
483
525
31,660
39,422
43,831
34,159
36,935
£
R E V E N U E AND
EXPENDITURE
The sources of income of friendly societies consist of entrance
fees, contributions of members, irregular levies, and interest upon
invested funds. The following table shows the total funds, revenue,
and expenditure since 1919 :
Revenue
Expenditure
Year
Total funds
£
£
£
1919-1920.
1920-1921.
1921-1922.
1922-1923.
1923-1924.
281,235
311,793
335,202
366,372
398,024
160,335
173,178
174,827
174,331
178,609
123,588
143,330
141,943
138,770
139,459
The distribution of revenue between contributions, levies, and
interest (including entrance fees) has been as follows:
Year
Contributions
£
£
£
1919-1920
1920-1921
1921-1922
1922-1923
1923-1924
133,822
121,619
114,773
127,512
133,384
2,092
11,169
33,171
19,062
18,299
24,421
40,390
26,883
27,757
26,926
Levies
Interest, etc.
The cost of administration absorbs about 10 per cent, of the
total annual revenue.
URUGUAY
Sources of Information
Annual Report of the Fraternal Association for Mutual Aid for 1925, presented
to the Ordinary Meeting of the Association in March 1926.
Official communication from the Labour Office.
INTRODUCTION
The mutual-aid movement first appeared in the Republic of
Uruguay in about 1860. It is divided into two fairly distinct
branches, the first formed by natives of the Republic and the second
by immigrants. In the case of the latter, the movement has led to
the creation of a certain number' of insurance societies, the most
important of which are those formed by immigrants coming from
Spain and from Italy. These institutions are now of a powerful
character, on account both of their financial position and of the
size of their membership. The reciprocal agreements concluded
between the insurance societies catering for immigrants of the same
nationality, set up in the various States of Latin America, allow
foreign workers to remove from one State to another without losing.
their insurance benefits.
As regards the native mutual-aid movement, this is exceedingly
interesting in its form and its special character. Whereas in those
States where the system of voluntary insurance obtains, the insured
persons are, as a rule, distributed over a large number of insurance
societies, the membership of which are often very small, in Uruguay
the organisation of voluntary mutual sickness insurance rests on a
totally different basis, i.e. on the principle of concentrating all
insured persons in a single institution.
Such a method of organisation has arisen out of the special needs
to be met. In the first place, the organisation and the application
of methods of sickness insurance offer greater difficulties in a State
in which the density of the population—very low in general,
460
VOLUNTARY SICKNESS INSURANCE
i.e. 7.99 per square kilometre—varies considerably from one
department a to another. Such a distribution of population
increases the cost of insurance very greatly and makes it very
difficult for societies with small or fluctuating membership to exist
at all.
To this first difficulty, due to the distribution of the population,
there must be added others arising in the economic and social
spheres. It is found that the financial resources as well as the
habits and conditions of life of the dwellers in the agricultural
districts differ at all points from those of the population of the
capital.
Consequently, the expenses as well as rates of
insurance are bound to vary according to locality, and such adaptations are only feasible if the risks are widely distributed. Such are
the essential features which explain and justify the highly unified
organisation of the native mutual-aid movement in the Republic of
Uruguay.
From 1900 onwards, the progress of the native movement has
been rapid and constant.
*
*
The scarcity of documentary information in regard to the
mutual-aid movement as a whole, particularly in regard to those
societies composed of immigrants of a single nationality, has
compelled us to divide this survey into two distinct chapters: the
first, of a general nature, dealing with the legal status of insurance
institutions; the second being limited to the activities of the
" Fraternal Association for Mutual Aid ", the development of
which is of particular interest.
1
Unit of administration.
URUGUAY
461
CHAPTER I
THE LEGAL STATUS OF THE INSTITUTIONS
The mutual-aid societies have their legal basis in the civil
legislation dealing with societies and associations in general.
Recognition by the State is not indispensable. Nevertheless
the most important of the societies have applied for recognition by
the Government as legal entities. In this way the rules and regulations of the Asociación Española primera de Socorros mutuos de
Montevideo * were approved by the Government on 24 April 1891,
and subsequent alterations to the rules have also received the
approval of the executive power by Decrees dated 4 April 1897,
5 July 1909, 24 November 1913, and 21 May 1920.
Government recognition is accorded to mutual-aid societies after
consideration of the rules of the society applying for it. This
recognition gives to the society the advantages of legal entity,
that is to say, the rights of purchasing and selling and that of
bringing an action in the law courts. On the other hand, it brings
with it various obligations, notably those of submitting any alterations made to its rules to the authority responsible for the approval
of such rules, and of accepting the supervision of the police, particularly in regard to the conduct of elections. It should also be noted
that recognition gives no claim to financial assistance from the
State.
1
Spanish Immigrants' Insurance Society.
462
VOLUNTARY SICKNESS INSURANCE
CHAPTER II
THE FRATERNAL ASSOCIATION FOR MUTUAL AID
§ 1. — Nature of the Association
The Asociación fraternidad de Socorros mutuos, which is at
present the strongest of the voluntary institutions for social
insurance, is a non-specialised " open " society: it accepts any
persons who come up to the standard of health laid down in its
rules, and it carries on its activities in various districts of the
country. At the present time the Association is carrying on
insurance work in various provinces and localities, notably those of
Montevideo, Las Piedras, San Ramon, Canelones, La Paz, Minas,
Florida, Durazno, and San José.
§ 2. —Management
The management of the Association is vested in an executive
committee elected by the ordinary meeting of the Association and
from among its members. The executive committee delegates a
portion of its functions to the administrative staff of the Association,
which consists at head quarters of one general director, one manager,
one inspector of branch offices, one chief clerk, one financial
secretary, and one chief accountant, with 23 clerks.
The supervision of members registered as sick, which appears to
be fairly strict, is entrusted to a special staff composed of employees
having special qualifications enabling them to exercise the necessary
care over the sick persons whom they have to visit during such
periods.
The administrative staff of the departmental branch offices,
with the exception of those of San José, Florida, and Minas, where
there are seA^eral employees, consists of a single agent for each
branch.
463
URUGUAY
3. — Number of Insured Persons
The membership of the Association is in three categories,
distributed in 1925 as under :
1st category:
2nd
,,
3rd
„
Men (socios)
Women (inscritas)
Children (inscritos)
51,107
57,936
8,211
Total number of persons entitled to benefits .
117,254
The following table gives, together with the area and population
of various departments, the percentage of the population insured
at 31 December 1925 for each province and for the country as a
whole.
GEOGRAPHICAL DISTRIBUTION OF INSURED PERSONS, 1925
Departments
and
districts
Area
in
square
miles
•*
256
1,834
5,525
4,673
4,819
2,688
Density
of
Population
population
per square
mile
442,500 1,738.85
132,862
72.44
64,226
11.62
72,315
15.47
78,984
16.39
69,542
25.87
Number
of
insured
43.162
3.919
10,039
16,749
8,611
21,462
4.599
3,045
Montevideo
Canelones
Durazno
Florida
Minas
San José
Las Piedras
San R a m o n
La P a z and remaining
Departments
52,415
634,524
12.12
4,779
Uruguay
72,210
1,494,953
20.70
116,275
Per cent.
of
insured
persons
per
square
mile
9.75
2.85
15.65
23.16
10.20
32.40
7.78
The distribution of insured persons, set out not only according
to their place of abode, but also under the headings of men, women
and children, shows the extent to which the Association has been
successful in appealing to those for whom it caters :
464
VOLUNTARY SICKNESS INSURANCE
DISTRIBUTION OF MEMBERSHIP ACCORDING TO LOCALITY, SEX, AND
AGE TO 3 1 DECEMBER 1 9 2 5
Male
adults
Locality
»
|
Montevideo
18,156
22,424
Other departments and
districts :
Las Piedras
San Ramon
Canelones
La Paz
Minas
Florida
Durazno
San José
1,482
1,142
2,254
1,380
3,811
6,876
3,995
12,031
2,708
1,792
1,578
2,087
4,577
8,467
5,919
8,384
51,127
57,936
Total
dieren
Total
3,193
43,773
409
111
87
310
523
1,406
1,125
1,047
8,211
4,599
3,045
3,919
3,777
8,911
16,749
11,039
21,462
117,274
§ 4. — Risk Covered and Benefits
RISKS
While sickness insurance is not the only kind of business undertaken by the Association, it is and has been its principal object.
The benefits paid to widows and orphans of deceased members,
together with the allowance made to his family for funeral expenses,
are not, properly speaking, separate branches of insurance, but
simply supplementary benefits, which, because of their limited
importance, do not require a special technical form of organisation.
The percentage value of pensions to widows and orphans, together
with funeral allowances, amounted in 1925 to 3.21 of the total
benefits paid out.
SICKNESS BENEFITS
To cover sickness insurance risks, two types of benefits are
provided —• benefits in kind (medical and dental treatment,
medicines and appliances, and hospital accommodation) and
benefits in cash (daily allowances intended to compensate in
part for wages lost through illness).
The amount of the benefits in kind is quite remarkable. The
total value of these benefits granted to insured persons, as well
as to their wives during confinement, in the form of medical,
surgical and dental attention, and in-patient accommodation (in
465
URUGUAY
hospitals, sanatoria, and convalescent homes), represents 90 per
cent, of the total cost of insurance.
BENEFITS EXTENDED DURING 1 9 2 5 , ACCORDING TO THEIR
NATURE
Total cost
Nature of benefits
Percentage of
total benefits
Pesos
Sickness benefits in kind
Sickness benefits in cash
Other benefits in cash: pensions to
widows and orphans and p a y m e n t
of funeral expenses
Total
492,763
37,079
90.02
6.77
17,551
3.21
547,393
100.00
The figures given in regard to the total cost of benefits require
certain explanations. The dual character of the medical system,
in the first place, including, as it does, the right to treatment either
by one of the private doctors with whom the society has concluded
agreements, or by a doctor belonging to the medical services set
•up and maintained by the Association itself, and the impossibility,
in the second place, of calculating in each individual case the cost
ol the various forms of attention given to a sick person by the
medical services of the Association, make it necessary to calculate
the cost of benefits in kind including the total cost ot these services.
It follows, therefore, that the figure given as the total cost of the
benefits in kind includes the sums paid to private doctors, chemists
and hospitals, etc., by the Association, as well as the cost of maintaining the actual medical services of the association.
AMOUNT AND DISTRIBUTION OF BENEFITS ACCORDING TO LOCALITY,
AGE, AND SEX,
1925
Insured
persons
Montevideo :
Men
Women
Children
Other localities :
Men
Women
Children
Country as a whole
Total
amount
Average per
insured person
Pesos
Pesos
18,136
22,424
3,193
203,468
249,071
16,635
11.22
11.10
5.21
32,971
35,512
5,018
117,254
29,819
44,472
3,927
547,392
0.94
1.25
0.78
4.67
30
466
VOLUNTARY SICKNESS INSURANCE
There is no very striking difference between the average amount
of benefits paid to insured persons of the female and of the male sex.
The disproportion between the average amount of the benefits
paid out in the capital and in other districts, however, is very
remarkable. This is due, in the first place, to the fact that the
local branches only exceptionally provide their members with
benefits in cash, and that the proportion of cases of sickness reported
and of benefits granted is distinctly lower in the country than
in town. Further, it will be seen from the following paragraph
that the organisation of the medical services in country districts
is on a much less elaborate scale than that existing in the city of
Montevideo.
ORGANISATION OF THE MEDICAL SERVICE OF THE ASSOCIATION
The insured members of the Association have not the free choice
of doctor or chemist. They are obliged either to avail themselves
of the services of those members of the medical profession with
whom the Association has concluded an agreement, or else to make
use of the medical services belonging to the Association itself.' The
technical staff paid by the Association consists, therefore, of private
doctors seeing patients in their own houses in different parts of
Montevideo, and of doctors, assistants, and nurses attached to the
various medical services of the Association. These services include
one large hospital and two sanatoria, as well as half a score of
dispensaries and clinics attached to departmental branch offices.
The principal hospital has, in addition to its dispensary and its
histological and physiological laboratories, an X-ray room, three
operating theatres, five wards, one lying-in ward, and special
accommodation for convalescents. It may be useful to give a
sketch of the composition of the technical staff of the principal
medical services of the Association and of the work accomplished
by them.
467
URUGUAY
MONTEVIDEO,
Radiographic Department
Staff:
1925
Pharmaceutical Department
Staff:
4 persons, including
1 doctor and 2 assistants
Work done:
X-ray photos. • 955 cases
X-ray examinations . . . 2,177 „
Radiotherapy .
536 ,,
Special treatment 6,974 „
16 persons, including
1 chief dispenser and 9
qualified assistants.
Work done:
Number of prescriptions
. made up during the year:
For insured persons:
Men . . . . 30,373
Women . . . . 51,416
Children . . . .
5,718
Other members of
their families . 7,109
Total
Maternity Department
Staff:
6 persons, including 2 doctors
Work done:
Number of cases . . . 348
Number of days in-patient
treatment
2,203
.
. . 94,616
Analytical Laboratories
Staff
4 persons, including 3 qualified chemists
Work done :
Number of analyses . .15,412
Hospital, Sanatorium, and Maternity
Staffs
Staff:
33 persons, including 1 principal medical officer, 2 deputy medical
officers, and 7 medical assistants.
Work done;
Number of cases given surgical treatment:
(a) Montevideo
(b) Departmental branch offices
Total
688
79
767
Number of patients :
(a) Montevideo
(6) Departmental branch offices
Total
997
86
1,083
468
VOLUNTARY SICKNESS INSURANCE
On 31 December 1925, the sums invested in the various medical
services of the Association represented a capital value of about
660,000 pesos.
§ 5. — Financial Resources
The resources of the Association consist principally of the
insurance contributions of its members and of the interest on
accumulated funds.
INSURANCE
CONTRIBUTIONS
On 31 December 1925, the total sum paid in contributions
during the financial year amounted to 569,009 pesos.
CONTRIBUTIONS
Categories of insured persons
according to age, sex, and locality
Montevideo :
Men
Women
Children
Other d e p a r t m e n t s :
Men
Women
Children
Whole State
RECEIVED IN
Number of
persons
1925
Total
receipts
Receipts per
head
18,136
Pesos
240,145
Pesos
13.24
22,424
3,193
246,565
19,971
11.00
6.63
32,971
35,512
5,018
117,254
30,279
29,708
2,341
569,009
0.95
0.84
0.46
4.85
The averaga rate of contribution for the whole of the insured
persons, which amounts to 4.85 pesos, approximates very fairly
to the sum paid by persons insured under the best European
systems of voluntary insurance.
A close relation will also be seen to exist between the average
amount of the contributions payable in the departmental branches
and the average cost of insurance for the same departments, as
follows.
469
URUGUAY
RELATION BETWEEN THE AVERAGE AMOUNT OF CONTRIBUTIONS PAID
AND BENEFITS RECEIVED PER INSURED PERSON IN 1 9 2 5
Montevideo :
Men
Women
Children
Other departments :
Men
Women
Children
Contributions
received
Benefits
Difference
between •
contributions
and benefits
Pesos
Pesos
Pesos
13.24
11.00
6.63
11.22
11.10
5.21
+ 2.02
— 0.10
+ 1.42
0.95
0.84
0.46
0.94
1.25
0.78
+ 0.01
— 0.41
— 0.32
paid
Comparison of the amount of contributions received and of
benefits provided shows a credit balance in the case of men, both in
Montevideo and in the other departments. The insurance of
women, on the other hand, is carried on at a loss throughout the
whole of the insurance system, i.e. both in Montevideo and in the
other departments. Lastly, the insurance of children produces
a credit balance in Montevideo and a debit balance in the departments.
Taking a more general view, it may be said that the comparison
between receipts (contributions) and benefits provided shows that
the system of insurance works out at a loss in the provinces while
a credit balance is obtained in the capital.
In 1925 the deficit on insurance in the departments absorbed
42 per cent, of the credit balance produced by the working of
insurance in the department of Montevideo.
OTHER FINANCIAL RESOURCES
The other financial resources of the Association consist of fees
received from outside persons for the use, under certain conditions,
of its medical services, and of interest on investments.
ACCUMULATED FUNDS OF THE ASSOCIATION
The accumulated funds of the Association amounted, on
31 December 1925, to the sum of 549,629 pesos, which is equivalent
470
VOLUNTARY SICKNESS INSURANCE
to 46.87 pesos per member. The actual increases per annum
for the years between 1915 and 1925 are shown in the following
table.
ACCUMULATED FUNDS
Year
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
Amount of
accumulated
funds
Amount of
annual
increase
Pesos
Pesos
268,057.72
309,544.20
359,180.06
374,828.88
395,155.93
434,208.02
493,615.55
518,788.30
527,429.66
528.060.71
549,626.12
31,093.73
41,486.48
49,635.86
15,648.82
20,327.05
39,052.09
59,407.53
25,172.75
8,641.36
631.05
21,565.41
Percentage
increase
11.59
13.40
13.82
4.17
5.14
8.99
12.03
4.85
1.64
0.12
4.08
Apart from the assets represented by the medical services of the
insurance organisation (buildings and equipment), the funds
of the Association are almost entirely invested in mortgage
securities.