An International Comparison of Workers’ Compensation

229 Pages·1991·5.341 MB·English

by  C. Arthur Williams Jr. (auth.)

An International Comparison
of Workers' Compensation
Huebner International Series on
Risk, Insurance, and Economic
Security
J. David Cummins, Editor
The Wharton School
University of Pennsylvania
Philadelphia, Pennsylvania, USA
Series Advisors:
Dr. Phelim P. Boyle
University of Waterloo, Canada
Dr. Jean Lemaire
University of Pennsylvania, USA
Professor Akihiko Tsuboi
Kagawa University, Japan
Dr. Richard Zeckhauser
Harvard University, USA
Previously published books in the series:
Cummins, J. David; Smith, Barry D.;
Vance, R. Neil; VanDerhei, Jack L.;
Risk Classification in Life Insurance
Mintel, Judith; Insurance Rate Litigation
Cummins, J. David: Strategic Planning and
Modeling in Property-Liability Insurance
Lemaire, Jean: Automobile Insurance:
Actuarial Models
Rushing, William.: Social Functions and
Economic Aspects of Health Insurance
Cummins, J. David and Harrington, Scott E.:
Fair Rate of Return in Property-Liability Insurance
Appel, David and Borba, Philip S.: Workers
Compensation Insurance Pricing
Cummins, J. David and Derrig, Richard A.:
Classical Insurance Solvency Theory
Borba, Philip S. and Appel, David: Benefits,
Costs, and Cycles in Workers Compensation
Cummins, J. David and Derrig, Richard A.:
Financial Models of Insurance Solvency
The objective of the series is to publish original research and advanced
textbooks dealing with all major aspects of risk bearing and economic
security. The emphasis is on books that will be of interest to an
international audience. Interdisciplinary topics as well as those from
traditional disciplines such as economics, risk and insurance, and actuarial
science are within the scope of the series. The goal is to provide an outlet
for imaginative approaches to problems in both the theory and practice of
risk and economic security.
An International Comparison
of Workers' Compensation
C. Arthur Williams, Jr.
Curtis L. Carlson School of Management
University of Minnesota
~.
"
Springer Science+Business Media, LLC
Library of Congress Cataloging-in-Publication Dala
Williams, C. Arthur, 1924-
An international comparison of workers' compensation/by
C. Arthur Williams, Jr.
p. cm.-(Huebner international series on risk, insurance,
and economic security)
Includes index.
ISBN 978-94-010-5723-3 ISBN 978-94-011-3872-7 (eBook)
DOI 10.1007/978-94-011-3872-7
1. Workers' compensation. 2. Workers' compensation-Standards.
1. Title. II. Series.
HD7103.6W55 1991
368.4'I-dc20 90-20521
CIP
Copyright © 1991 by Springer Science+Business Media New York
Originally published by Kluwer Academic Publishers in 1991
Softcover reprint of the hardcover 1 st edition 1991
AII rights reserved. No part of this publication may be reproduced,
stored in a retrieval system or transmitted in any form or by any means,
mechanical, photo-copying, recording, or otherwise, without the prior
written permission of the publisher, Springer Science+Business Media, LLC.
Printed an acid-/ree paper.
Contents
Preface ix
Acknowledgments xi
1
Basic Concepts and Design Characteristics of Workers'
Compensation 1
National or State Programs 2
Relationship to Tort Liability 4
Security System 6
Employees Covered 8
Compensable Injuries and Diseases 10
Benefits 12
Security System 22
Administration 27
Notes 28
References 29
2
Workers' Compensation Standards 31
International Labor Organization Convention 121 31
ILO Recommendation 121 41
ILO and U.S. National Commission Standards Compared 49
Notes 55
References 56
3
Workers' Compensation Programs Throughout the World 57
Nations Included in This Summary 57
Exclusive Remedy or Not? 61
Employees Covered 62
Medical Expense Benefits 64
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VI INTERNATIONAL COMPARISON OF WORKERS' COMPENSATION
Temporary Total Disability Benefits 65
Permanent Total Disability Benefits 69
Permanent Partial Disability Benefits 73
Death Benefits 77
Sources of Funds and Employer Cost Allocations 80
Maximum Earnings Limits for Contributions 84
Notes 85
References 86
4
Classification of Workers' Compensation Programs 87
Employees Covered 89
Medical Care Benefits 91
Temporary Total Disability Benefits 93
Permanent Total Disability Benefits 96
Permanent Partial Disability Benefits 100
Funeral Grants 104
Widows' Survivor Benefits 107
Sources of Funds and Allocation of Employer Contributions 110
Some Concluding Comments 114
References 115
5
Workers' Compensation Programs in 13 Nations: More Details 117
Federal Republic of Germany 118
United Kingdom 126
The Netherlands 138
New Zealand 143
Switzerland 149
Malaysia 152
Austria 158
Hungary 161
Japan 164
Korea (South) 174
Sweden 178
Union of Soviet Socialist Republics 182
United States 187
Notes 193
References 194
6
Highlights and Conclusions 199
Exclusive Remedy of the Employees Against the Employer 200
Complete Integration into a General Social Insurance System 200
Security System 202
Employees Covered 202
Medical Expenses Covered 202
Lump Sum or Pension Disability and Death Benefits 202
Earnings-Related or Flat Amount Disability and Death Benefits 203
CONTENTS vii
Dependents' Benefits 203
Waiting Period 204
Pension Duration Limits 204
Indexing Long-Term Pensions 205
Funding 205
Flat or Risk-Related Employer Contributions 205
The Most Common Provisions 206
Standards 207
Variations Among Nations 208
Conclusion 208
Index 211
Preface
Until a few years ago I concentrated my attention on workers' compensa
tion programs in the United States and Canada. Because the United States
has 52 programs and Canada has eight, I was exposed to a diversity of
approaches that caused me to believe that few other approaches existed.
Since 1984 I have become more aware of what the rest of the world has
been doing and discovered that my knowledge needed to be broadened
significantly. The trigger action was a 1984 faculty research exchange
agreement between Keio University in Tokyo and the University of
Minnesota that made it possible for me to spend much of my time studying
Japan's workers' compensation program and comparing it with the United
States approaches. Japan's program had several features that I had not
encountered in the United States or Canada. After this experience I
attached considerably more value to and spent more time studying the
Social Security Administration's biennial reports on Social Security Pro
grams Throughout The World, which include workers' compensation
programs. I also presented papers at two meetings of the International
Insurance Society based on my Japanese and Social Security Adminis
tration report research. Many participants urged further study in this area
and offered to send me materials describing their nations' programs.
The result is this study which I hope that readers will find interesting
and worthwhile. Chapter 1 explains the major characteristics of a work
ers' compensation program such as which workers are covered and what
medical care or expense benefits are provided. For each characteristic the
chapter discusses the various ways in which a nation chooses to define
that characteristic. For example, a nation may cover all workers, all
workers except those specifically excluded, or only those workers
specifically included. Chapter 2 describes the minimum standards
ix
x INTERNATIONAL COMPARISON OF WORKERS' COMPENSATION
prescribed for each characteristic in 1964 by the International Labor
Organization and in 1972 by the U.S. National Commission on State Work
men's Compensation Laws. Chapter 3 summarizes in tabular form what
options 136 nations have selected for each of the major characteristics.
Chapter 4 shows how these options vary according to the continent in
which the nation is located, its income status, and its security system.
Chapter 5 describes in more detail the workers' compensation programs
in 13 nations. These nations were selected because they represent a wide
variety of the approaches that have been made to workers' compensation
throughout the world. Chapter 6 highlights the study findings and pre
sents some conclusions based on those findings.
Acknowledgments
The author is deeply indebted to a large number of persons who directly or
indirectly contributed to this study. Space does not permit acknowledg
ment of all these contributors, but the following deserve special notice:
1. The Social Security Administration whose biennial reports on Social
Security Programs Throughout the World made chapters 3 and 4 possible.
2. The International Labor Organization who sent me copies of several
of their conventions and recommendations.
3. The U.S. Department of Labor Office of Workers' Compensation
Programs and similar agencies in most of the remaining 12 countries
whose programs are discussed in chapter 5.
4. The members of the International Insurance Society who partici
pated in the sample survey conducted by the author in connection with
this study.
5. The authors, coauthors, and editors whose articles, chapters in
books, and books are cited throughout this book. Some chapters were
based primarily on the works cited.
6. Kerri Rathburn and Bruce Williams who used their computer skills
to prepare the tables presented in chapters 3 and 4.
7. Several secretaries in the University of Minnesota Carlson School of
Management, Department of Finance and Insurance who converted the
author's handwriting into legible printed pages. Special mention should
be made of Karen Kilgore who not only participated in the first draft but
was solely responsible for the changes made in later drafts. Some of these
changes involved complete reworking of large sections of the study.
8. The administrators of workers' compensation programs in Hungary,
Japan, and several states in the United States with whom the author was
fortunate to visit personally.
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