FISCAL AFFAIRS 217 



maiming, temporary disability, and hospitalization expenses were included. 

 The policy did not provide twenty-four-hour coverage since it was intended 

 to protect the assureds only against accidents occurring in the course of their 

 OSRD work. The substance of the program was embodied in a Master 

 Policy executed by the company and delivered to OSRD. Individual certifi- 

 cates of insurance were issued by the company to the assureds. The policy 

 became effective October 19, 1942; and it was extended through May 30, 

 1945, at which time the business was transferred to the Indemnity Insurance 

 Company of North America. 



The Master Policy itself was simply a document of convenience incorpo- 

 rated by reference into each individual certificate of insurance. Each certifi- 

 cate was a contract between the company and the individual assured, with 

 the Government and the contractor receiving certain rights (through read- 

 justment clauses, etc.) as third party beneficiaries. 



One of the more difficult specific problems was the determination of a 

 premium which would be reasonably calculated to protect all parties to the 

 transaction. The Government desired to obtain a low premium rate. The 

 company's primary concern at the outset was self-protection. The risks were 

 incalculable on an actuarial basis; the general nature of the assureds' activi- 

 ties was not revealed to the company for security reasons, but its representa- 

 tives were informed that all assureds would be performing extra-hazardous 

 work and many of them would be directly subject to enemy action in combat 

 areas. The possibility of a catastrophe could not be ruled out. 



The agreement fixed the premium at $150 per policy year, later reduced 

 to $100. To protect the Government, a readjustment formula was provided, 

 under which a recomputation would be made one year after the expiration 

 of the Master Policy (to allow time for the disposition of all claims) and 

 "excessive" premiums would be returned to the Government. The precise 

 formula was stated in the Master Policy. To protect the Company, provision 

 was made that when its losses reached a certain figure, it could request 

 negotiations for a higher premium and if the negotiations were unsuccessful 

 after fifteen days, could cancel upon sixty days' notice. 



As originally put into effect, the plan embraced activities in the conti- 

 nental United States and Canada, or within 300 miles of the coasts thereof. 

 The Company refused to grant broader coverage at the outset, preferring to 

 await developments. On March 24, 1943, coverage was extended to the 

 British Isles, Greenland, Iceland, South America, Central America, the 

 West Indies, Hawaii and Alaska, including travel to and from such places. 

 The premium for this foreign coverage was $25 per month. If the traveler 

 were already an assured, the domestic premium was credited and the net 

 cost of the foreign extension was $12.50 per month. Later foreign coverage 

 was extended to additional areas. 



In order to avoid the administrative nuisance of constant monthly re- 



