Around AASCIF

Pinnacol Assurance was one of only five insurance companies nationwide named to CIO Magazine’s prestigious “CIO 100” list. This award is based on information technology “agility” – the ability to adapt quickly to changing business conditions.

Pinnacol Assurance recently hosted its first two “Settlement Days.” During these claims settlement events, attorneys, judges, interpreters, and Pinnacol personnel gather to negotiate claims, close them, and issue payments all in one day. Pinnacol closed 109 cases and released almost $2 million in claim reserves during the December events.

In December, after reaching its long-term surplus goal, Pinnacol Assurance assumed management of its $1.5 billion portfolio from the state treasurer. We plan to pay general dividends to eligible policyholders in 2005 for the first time in more than 20 years.

The Special Investigations Unit (SIU) at IWIF had a record year in 2004, boasting 27 claimant arrests/referrals for administrative action. Through their vigilant efforts, the SIU recovered more than $100,000 in hard claims money and $22 million in claim soft dollar reserve takedowns. The unit also billed $4.4 million in premium fraud and collected $3.8 million. The unit also identified and collected $3.2 million in bad debt.

People on the move include George Matthews, who was recently promoted to executive vice president of Marketing, Strategic Planning and Business Development; Timothy Michels, Esquire, who was promoted to executive vice president of Claims; and Rona Finkelstein, Esquire, who was promoted to vice president of Legal Services and Human Resources.

Premium volume grew 18 percent in 2004. RBC surplus grew 20.5 percent. A weekly record high of 60 percent of new claims came to SFM online in early February. Year-to-date online reporting average is 55 percent.

Timeliness of first action on claims hit a record high in 2004 and once again topped all other major insurers in Minnesota. Action on a claim—payment or denial—must be taken within 14 days of the employer’s knowledge of the claim in Minnesota, so good performance on this benchmark reflects SFM’s ability to get employers to report claims promptly, as well as SFM’s ability to respond timely. SFM makes both of those things happen on claims 93 percent of the time.

Best says the rating reflects MEM’s improved capitalization, good operating profitability and strong market profile. An A.M. Best news release attributes MEM’s good operating performance to knowledge of the local marketplace, relationships with hundreds of local producing agents, competitive pricing, and strong service standards and levels.

“Earning an A.M. Best rating is an evolutionary move for MEM as we celebrate our 10th anniversary and continue to lead the Missouri workers’ compensation market,” says MEM President and CEO Dennis Smith. “It is quite an accomplishment for a company that began with a $5 million start-up loan to build the financial strength to earn an excellent financial rating in just 10 years.”

NYSIF is aggressively marketing disability benefits insurance. New programs offer lower rates through upfront discounts and year-end dividends. NYSIF DB also is part of an initiative by Governor George E. Pataki called Strategic Planning for Upstate Resurgence (SPUR) aimed at specific areas and industries. To lower the cost of doing business, NYSIF offers SPUR accounts DB insurance at a base cost of $50 with no further cost if there are no claims.

NYSIF Division of Confidential Investigations continued to crackdown on workers’ compensation fraud with 121 arrests and estimated savings of $19 million in 2004.

NYSIF Claims Director Ed Hiller was elected to a two-year term as New York Claim Association President. NYSIF named Dep. Executive Director Stephen Nelson as Director of Strategic Technology and Planning, and Sr. Trial Attorney Mike Miliano as Compliance Officer.

Century Center opened its doors in June 2003. The total project cost nearly $12 million. Century Center features 286 state-of-the-art geothermal wells and 216 heat pumps for heating and air conditioning. High-efficiency heat recovery ventilation units utilize exhausted air to heat or cool fresh air. The building uses an automated energy management system and low-voltage lighting control system to help maintain a pleasant working environment and low energy costs.

Utilizing these energy saving systems has enabled Century Center to have an annual utility operating cost of $.91 per square foot for electricity and natural gas. The national average for an office building in the United States is $1.52 per square foot for electricity and natural gas, according to Platts Research & Consulting.

Among the key injury provisions:

• A $15 million dollar revolving education loan fund for qualified injured workers.
• Increases "Guardian Scholarships" amounts for spouses and children of workers killed on the job.
• Provides more choices and options for injured workers who have temporary disabilities during their healing process.
• Caps "Temporary and Total Disability" payments at two years with five years of additional payments for "Temporary Partial Disability."
• Changes the "Permanent and Total Disability" definition moving from a subjective to an objective standard.
• Establishes an interim legislative "Workers' Compensation Review Panel" to listen to injured workers' issues about the law as it applied to their cases.
• Recalculates the "Additional Benefit Payable" before the social security offset to provide more dollars to those injured workers receiving this post-retirement benefit.

Among the key employer provisions:

• Broadens and expands existing safety-discount, safety education, safety incentives and matching safety grant programs.
• WSI is prepared to commit up to $35 million dollars for multi-year safety initiatives.
• Waives the $250 medical assessment for work injuries that are reported by midnight of the following business day.
• Allows WSI to set up an annual procedure for those asserting independent contractor status.

BWC’s new auto adjudication to fast track claims determination is an electronic process for reviewing information on the First Report of an Injury, Occupational Disease or Death (FROI). The system will automatically allow claims that meet certain conditions, freeing BWC staff to work with claimants who have more severe injuries.

Multi-discipline customer care teams will serve as a single point of contact for employers. The teams will coordinate care for injured workers, streamline management of employers’ workers’ compensation programs, coordinate medical treatment, and focus on injury prevention.

The new model also emphasizes helping employers with the Big 3: frequency, severity and lag time in claims. The goal is to reduce workers’ comp costs for employers and make Ohio a more fertile ground for new business development.

BWC believes the best claim is the one that never happens. The new model emphasizes loss prevention strategies to help prevent injuries. When accidents do happen, BWC’s loss control strategies will help resolve claims quickly and provide injured workers with the care they need promptly.

BWC expects the new business model to be fully operational by 2006, but it has begun phasing in parts of the model as it completes them. Results so far look promising.

Having one central location will improve interagency communications and operating efficiencies, which translates into more efficient service to CSO policyholders.

CompSource implemented a new check printing system for mailing checks to recipients. The new system creates an explanation of benefits (EOB), a check and an envelope all rolled into one, thus improving production and saving time and money.

Spearheaded by the Saskatchewan Safety Council, Safe Saskatchewan’s goal is to reduce the $1 billion in economic losses felt each year in this province due to preventable injuries.

The program was created to increase awareness, change attitudes and reduce the risky behaviours that cause injuries believed by experts to be entirely preventable. Safe Saskatchewan’s message is that unintentional injuries are a growing social issue requiring action at the individual, community and sectoral levels. Its focus on public attitude change makes it unique in Canada.

Based on information in a report prepared by SmartRisk, a national non-profit organization dedicated to injury prevention, Saskatchewan’s injury hospitalization rate is twice the Canadian average, and the death rate is 1.4 times higher.

Partners participating in Safe Saskatchewan will see the effectiveness of their own safety programs increase, as ongoing messaging changes people’s minds about the kinds of risks they are willing to take.