AASCIF - Second Quarter 2010

New Look, New Address for California State Fund Web Site
State Compensation Insurance Fund, California's largest provider of workers' compensation insurance, launched its redesigned Web site on a new URL in mid-February. The updated site offers a gateway to an enhanced user experience compared to the former site, and provides quicker access to information.

Users can access the Web site by visiting a new domain name that is easy to remember: www.statefundca.com. Visitors to the former URL, www.scif.com, will be automatically redirected to the new site.

These changes are the result of feedback from content owners, and most importantly questionnaires filled out by brokers, policyholders, and claimants.

New Interface
A new, user-friendly interface is the hallmark of the redesigned site, making workers' compensation information, worksite safety materials, online forms, and the upcoming employer seminars easier to access.

The redesigned site also enables a seamless integration with State Fund Online, an electronic tool that provides brokers, policyholders, and group administrators 24/7 online access to claims and policy information.

Responsive to Clients' Evolving Needs
"Statefundca.com gives our stakeholders a better glimpse of our diverse capabilities and long-held tradition of protecting California's businesses," said Jennifer Vargen, communications director for State Fund. "Our objective is to make it easy to do business with State Fund. Now, employees, policyholders, medical providers and brokers have a more efficient online tool that is responsive to their needs."

In addition to a new and improved look, the new site integrates streaming photos on the home page, and updated State Fund news and events.

For the best browsing experience, users and frequent visitors to the site are advised to update any existing bookmarks for their preferred pages on statefundca.com. State Fund e-mail addresses will remain under the scif.com domain.

EDITOR'S NOTE: Established in 1914 by the state legislature, State Fund is California's largest provider of workers' compensation insurance and a valid asset to California businesses. Completely self supporting, State Fund plays a stabilizing role in California's economy by maintaining an open door policy that ensures that all employers have a strong and stable option for their workers' compensation needs.

Come join us to experience Kentucky's breathtaking landscapes and unique, fun-filled adventures during the AASCIF 2010 Annual Meeting on July 25-28, 2010. To learn more about the event, visit www.aascif2010.com.

LWCC Promotes Two to Manager Positions
Louisiana Workers' Compensation Corporation (LWCC) has promoted two of its experienced professionals to managerial positions. Brent Toups is the new Agency Relations Manager and Karen Mouton is the Premium Audit Manager.

Brent Toups was hired by LWCC in 1998 as a Premium Auditor. He joined the company's Agency Relations Department in 2007 as an Agency Relations Representative. Previously, he held the position of Staff Accountant for First American Bank and Trust in Vacherie, LA.

Toups received a Bachelor of Science in Accounting in 1996 and an MBA in 2002, both from Nicholls State University.

Karen Mouton joined LWCC in 1993 as a Premium Audit Technical Specialist. She advanced to Premium Audit Supervisor, then held the positions of Insurance Operations Analyst and Business Analyst before serving as Project Coordinator for LWCC's Project Management Office beginning in 2005. She previously worked at two other insurance companies in Baton Rouge.

Mouton is a Chartered Property Casualty Underwriter (CPCU) and holds Project Auditor (APA) designations.

A new advertisement focusing on LWCC's policyholder dividend began running in selected Louisiana business and agent publications and online venues in March 2010. The ad shows a graphic of a game board similar to Monopoly and features the headline "You collect a dividend for choosing the right workers' comp insurer."

The body copy of the ad points out that LWCC has paid $15 million in dividends to its policyholders for 2009, and $136 million over the past seven years. It also notes that LWCC lowered overall rates by 12.9% in 2009, with an overall rate reduction of 53% since the company began operations in 1992.

The advertisement was produced by ad agency Keating Magee, working with LWCC's Communications Department. Run dates for the ad continue through March and April. Two slightly different versions of the ad were produced to target the agent and prospective policyholder audiences.

MEMIC, MMG Launch Product Affiliation in New Hampshire, Pennsylvania
This new product affiliation gives business owners in New Hampshire and Pennsylvania the opportunity to obtain complete business coverage with workers' comp from MEMIC and a business owner's package from Maine-based mutual MMG. As a result of the agreement, the two companies are working with each other's agency force to grow each company's reach in these states. A web-based interface will allow agents to add a MEMIC quote when they use MMG's extranet to develop a quote for other business lines.

Karl Siegfried Promoted to Assistant Vice President for Lost Control and Safety
In his new role, Karl will oversee all of the MEMIC Group's loss control operations, including its safety training efforts. Siegfried joined MEMIC in August of 2008 as an ergonomist. He was later promoted to Director of Loss Control and, in addition to directing ergonomics programs, led the company's safety effort at the NH-based subsidiary, MEMIC Indemnity Company.

New in 2010: MEMIC Safety Webinars
MEMIC launched its first series of webinars this winter, earning good reviews from customers for the convenience and quality of the offerings. Topics are addressed in an hour or less and the attendee gets the training delivered directly to their desk. Topics include: office ergonomics, back safety, the secrets to great safety committees, and how to help aging workforce avoid injury.

"Our new webinar offerings allow us to provide top-level service to our customers in a professional, innovative and efficient way," said Karl Siegfried, Assistant VP, Loss Control and Safety. "Now, we are looking into the possibility of providing customized webinars for select customers."

John Leonard Elected to NAMIC, Vice Chair of NCCI
In December, MEMIC President and CEO was elected to the Board of National Association of Mutual Insurance Companies (NAMIC). Leonard was also made vice chair of the Board of Directors of the National Council on Compensation Insurance (NCCI). He is serving his second stint on the NCCI Board.

Construction Subcontractor Law Nears Legislative Refinement
A new law in January which assumes that construction subcontractors are employees of the general contractor, unless they pass a 12-part conjunctive test, is expected to be refined, after an outcry from subcontractors. Under emergency legislation (LD 1815), subcontractors would be able to earn an annual and portable "predetermination" document from the Maine Workers' Compensation board that they are, in fact, independent contractors who do no require workers' compensation coverage. While this change will relax the law from its implementation in January, it is still expected that many who formerly considered themselves to be independent contractors will be deemed to be employees under the 12-part test, therefore requiring workers' compensation insurance coverage. A second bill would allow the Maine Workers' Compensation Board to issue a "stop work" order on a construction site if proof of appropriate workers' compensation coverage is not made available to inspectors. At press time, this bill was still under consideration.

Maryland's IWIF Workers Compensation Insurance recently launched a new testimonial video series titled "Viewpoints and Voices." Seven videos in all, each vignette features a customer's or partner's viewpoints on IWIF and their business relationship with IWIF. The videos were created to communicate IWIF's role in Maryland regarding workplace safety, business

partnerships, financial strength, workers' comp expertise, advocacy, injured worker care and community service.

A companion brochure featuring the seven customers and partners was developed and distributed to State legislators and key stakeholders.

To view the videos, visit www.iwif.com.

Thomas J. Phelan, IWIF president and CEO, has been selected for the Leadership Maryland Class of 2010. Founded in 1992, Leadership Maryland is an independent, educational, non-profit organization designed to inform top-level executives from the public and private sectors about the critical issues, challenges and opportunities facing the state of Maryland and its regions. Phelan is one of 52 statewide leaders selected to participate in the eight-month program.

Expanding on a series of industry-specific safety pocket guides, IWIF recently created pocket guides for non-English speaking Hispanic landscaping and commercial kitchen workers. Written in English and Spanish, the free pocket guides use simple language, pictures and visual clues to make it easier for Hispanic employees to learn basic safety practices specific to their industry. Last year, IWIF created a pocket safety guide for the construction industry, and has plans to develop more pocket guides for other industries that have a high proportion of Hispanic workers.

IWIF's Special Investigations Unit (SIU) recovered $2.4 million and referred 40 individuals for prosecution or arrest due to claimant or premium fraud in 2009.

The $2.4 million includes money recovered from claimant and premium misrepresentation and fraud. IWIF recovered $2.3 million from premium avoidance fraud and $167,000 in claimant restitution.

Additionally, the company saved $43 million in claim reserves as a result of false or exaggerated claims.

We are on the Move
Montana State Fund (MSF) employees will be moving into our new environmentally friendly headquarters on June 1, 2010. The 110,000 square foot structure is the culmination of more than 5 years of research and planning. The entire MSF staff will now be housed in one central location. Currently staff is housed in 3 separate buildings. The building will have the distinction of being the only state of Montana structure that is LEED Gold certified. LEED features include: rain water catchment system, lights that will detect the quality of sunlight and adjust the lighting inside the building accordingly, recycled materials used in construction, a raised floor system that will make heating and cooling of the building more effective, and a live green roof that will add to the energy efficiency of the building. LEED is the acronym that stands for Leadership in Energy and Environmental Design and is the Green Building Rating System developed by the U.S. Green Building Council.

WorkSafeMT
Montana has one of the highest injury rates in the nation. Our days lost to injury or illnesses are about 50% higher than the national average. To some this statistic seems only natural because our state has dangerous industries like mining and logging. But in reality, those workers aren't the reason for the high statistic. In fact, all of Montana's workers, from administrative assistants to farmers are injured at a higher rate. To change this alarming trend a new nonprofit WorkSafeTM has been formed.

WorkSafeMT is a partnership of business, labor and state agency leaders, healthcare providers, injured workers, workers' compensation insurers, and Montana citizens who want to raise awareness of Montana's poor safety performance. Montana State Fund is playing a key role in the project. The Chair of the WorkSafeMT Board is Carl Kochman, communications leader at MSF.

"This program is not about how government can force Montanans to reduce the drastic number of injuries in this state," said Kochman. "It's about how private and public entities can work together to engage employers and employees to change their attitudes about safety and offer assistance."

WorkSafeMT has set up a website as a resource for both employers and employees at www.worksafemt.com. It offers informative videos, valuable safety resources, training opportunities and a section to make a public commitment to safety.

At this point WorkSafeMT is funded by the state. However, the ultimate goal of the program is to become self sufficient by securing public, private, and grant funding.

Dividends
The New York State Insurance Fund announced the return of $173,323,008 in dividends for 2009 to approximately 34,025 policyholders in 98 NYSIF safety groups as a reward for an exceptional record of workplace safety and sound business practices. The average 2009 dividend of 29.98% is the largest in recent years, surpassing the 28.20% in 2008 and 27.47% in 2007.

NYSIF Chief Deputy Executive Director Francine James said the performance of NYSIF safety groups demonstrates the importance of a strong commitment to workplace safety and loss prevention, particularly in a struggling economy.

“We were able to increase the dividend and return significant money to our policyholders even in a depressed economy, money that can be used to expand operations, create jobs and help rebuild the New York economy,” Ms. James said. “The dividend distribution underscores the strength of NYSIF’s safety group partners and the work they have done to ensure their groups are on sound financial footing.”

Fraud Savings
NYSIF continues to crack down on workers’ compensation fraud to serve as a deterrent, and to ensure a competitive position in its commitment to cost savings. NYSIF’s anti-fraud program resulted in 154 arrests and $16.6 million in recoveries and estimated savings in 2009.

NYISF is a not-for-profit state agency that competes with private insurance companies for business, employing its own division of Confidential Investigations (DCI) to detect and investigate suspected fraud committed by claimants, policyholders and medical providers.

Since 1995, NYSIF cases have accounted for 1,382 insurance fraud arrests, along with recoveries and estimated savings of $183.1 million.

During that time, NYSIF has established a national reputation for fighting workers’ compensation fraud by working cooperatively with the New York State Insurance Department Frauds Bureau, the Workers’ Compensation Board Inspector General’s Office, local, state and federal law enforcement authorities, and district attorneys in many jurisdictions in and out of state.

Among special investigation units, NYSIF DCI ranks near the top nationally in annual arrests, and in cumulative fraud savings. In addition, NYSIF auditors have established a standard among insurance carriers for conducting premium audits that discourage improper payroll reporting and worker misclassification.

NYSIF investigators, auditors and claims personnel train continually to recognize potential fraud. “There are numbers of red flags built into our training to help us detect possible fraudulent activity by claimants, policyholders, or medical providers with whom we work,” DCI Director Laurence LaPointe said

Recent cases resulting in millions of dollars in savings have included claimants who receive benefits while operating businesses or remain employed in other capacities, the most prevalent type of workers’ comp. fraud.

Other cases involve premium fraud in construction, asbestos abatement and other contracting, including investigations in conjunction with the U.S. Department of Labor, the U.S. Postal Inspector, and local labor racketeering bureaus. Still other cases involve fraudulent provider billing.

The prospects for resuming premium dividend credits to eligible North Dakota employers are promising according to the latest Workforce Safety & Insurance (WSI) Fund Status reports. Last year, because of unprecedented investment losses, premium dividend credits were halted to employers. By law, dividends are required whenever the actuarially established discounted reserves are above 140%. As of January 31, 2010, the latest reporting period available, the fund stood at 144.5% which translates to $35.4 million in available surplus. This would mean qualified employers would see an approximately 20% premium dividend credit for renewal dates that begin on July 1, 2010, assuming investment projections remain positive.

In April the WSI Board of Directors will meet to review their premium rate level recommendations for the upcoming fiscal year which begins July 1, 2010. And then in June the WSI Board will review the Fund status again using updated fund surplus information to make a premium dividend credit recommendation.

Legislative Update:
Recent bills proposed in the Oklahoma Legislature which called for the sale of CompSource to the highest bidder, House Bill 2662 and Senate Bill 2232, were recently withdrawn due to a perceived lack of support for the bills. In conjunction with withdrawing these bills from the legislative agenda, there has been discussion of sending the issue back to the legislative Task Force over the next year to further evaluate the options for privatization of CompSource. Additionally, another piece of legislation, Senate Bill 1996, which calls for a form of mutualization, was passed in the Senate and is now scheduled to be reviewed by the House. CompSource continues to actively monitor the legislative process as this issue unfolds over the next few months.

CompSource is ready for new Medicare reporting requirements:
CompSource has been working with the Centers for Medicare Services (CMS) in preparing for the new data reporting requirements. Strong collaboration and attention to detail between CompSource's information services and claims staff have enabled the company to be fully prepared to comply with the new guidelines. Reporting is required at the end of each quarter. Effective Jan. 1, 2010, CompSource began capturing the needed data and will be ready to report on Jan. 1, 2011, the first reporting quarter.

CompSource appoints Vice President of Insurance Operations
Mark Gruber has joined CompSource Oklahoma as the Vice President of Insurance Operations. Prior to his position at CompSource, he held various executive level positions within the insurance industry and has 17 years of underwriting and operational expertise. Gruber has also been a contributing author to multiple regional industry publications.

SAIF Corporation issues $100-million dividend
Citing solid recovery in the value of investments during 2009, as well as improvements in workplace safety and loss experience, SAIF's Board of Directors declared a $100-million dividend for policyholders on March 10. Affecting approximately 44,000 customers, this dividend is the first since SAIF declared a $60-million payment in December 2007.

"Making workers' compensation affordable means a lot to our policyholders, particularly now," said CEO Brenda Rocklin.

SAIF wraps up annual Ag Safety Seminar series
SAIF Corporation finished its annual free Agricultural Safety Seminar series in March. This year's series, which began in October 2009, taught 1,679 farmers and other ag industry workers about a wide range of topics, including tractor/combine safety and getting ready for an OSHA inspection.

Let by SAIF Senior Safety Management Consultant Kevin Pfau and Kirk Lloyd, founder and president of Risk Management Resources, the 25 seminars were held in 16 communities across the state of Oregon. Five were conducted in Spanish.

Wight 1,679 participants, the 2009-2010 seminars had the second-highest attendance in the 15-year history of the series, besting last year's attendance by more than 100. It is not necessary to be a SAIF policyholder to attend the Agricultural Safety Seminars.

SAIF issues first Corporate Social Responsibility report
SAIF Corporation released its first Corporate Social Responsibility (CSR) report in March. CSRs are issued by companies wishing to describe their corporate citizenship.

SAIF's CSR touches on many of the typical aspects of corporate social responsibility — environment, diversity and inclusion, and community outreach — but unlike many CSRs, SAIF's report emphasizes its advocacy for workplace safety as a key aspect of its social responsibility, saying "Safety is in our DNA."

The report highlights the new Safety Service team, which brings personalized safety consulting to Oregon's small businesses, as a key accomplishment for SAIF in 2009. The report also calls attention to the nonprofit's recent efforts related to diversity and inclusion, employee fulfillment, community outreach, and environment.

To avoid unnecessary paper use, SAIF's 2009 Corporate Social Responsibility report has been published online only at www.saif.com/csr.

Find SAIF on Facebook
Bring workplace safety to social networking, SAIF has created fan page on Facebook.

Featuring safety information, news updates, job openings, company information, and some lighter content, the SAIF Facebook page is designed to build an online community of people who care about workplace safety.

"Businesses of all sizes are signing up for social media," said Rick Hanson, SAIF's director of strategy and brand. "Being on Facebook gives us a way to relate to our customers and employees — not possible through traditional forms of communication. It helps humanize our business."

New claims management system to be launched in 2011
Saskatchewan Workers' Compensation Board will be implementing a new claims management system in early 2011. The new claims system will streamline WCB's claims filing and payment processes. It will span the entire claims process, from the moment WCB is notified of a worker's injury to the final payments or services for the client.

The new claims system is part of WCB's overall IT architecture/infrastructure evolution plan to upgrade its systems with more current technology. The new system will also:

For the rest of 2010, WCB staff and consultants hired on this project will customize the chosen software to meet WCB's specific requirements. Once coding and testing of the new software is complete, WCB's front-line staff will be trained in the new system before it launches in early 2011.

Grants fund free safety courses
Texas Mutual has issued $300,000 in grants to three Texas colleges. The grants will fund free workplace safety courses for employers, their employees and the general public.

Employee wellness program earns national recognition
Texas Mutual has earned recognition from UnitedHealthcare for its commitment to employee health and wellness. Award criteria included executive support for the health program, the presence of wellness champions and innovation in wellness program design.

Texas Mutual's wellness program has seen positive results, which have contributed to below-market increases in the company's health plan expenses the past few years:

Annual report available online
Texas Mutual posted its 2009 annual report, "Promises Kept," in the News & Publications Section at texasmutual.com Last year, the company:

Online enhancements streamline policy, quote payments
Enhancements to Texas Mutual^® online services empower agents to submit direct-draft payments for existing policies and quotes.

The enhancements also benefit policyholders. They can now make online payments on existing policies, and they can submit payments on expired policies for additional premium that resulted from a final-audit adjustment.

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