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 by
Armin Holdorf, New York
The advent of workers’ compensation reform evolving
across the nation in the past 20 years has brought about increased scrutiny
on the effectiveness of the methods used by insurance carriers to control
injury and illness of their insureds. Many states enacted regulatory reform
to limit
workers’ compensation claims costs by regulating the insurance carrier
accident prevention services. Many carriers responded by implementing
specific targeting strategies to effect a lowering of the incidence rate
of their insureds. While the methods differ, the intent is the same, to
lower the incidence rate of injury and illness of employers. The following
case study highlights one State Fund’s methodology for making a difference.
NYSIF, the New York State Insurance Fund, takes a classic approach in
measuring the effectiveness of safety activities and programs. There are
a
number of possible ways to evaluate program success or failure, and many
articles have been written about which approach is best. We have found
that tracking loss ratio and accident frequency over time gives us a fair
picture of an account’s trend. But we have added a twist: a second
level of review from the Home Office. This has two benefits. First, the
review lets us make certain that the loss prevention consultants and line
supervisors select accounts that can benefit from enhanced safety services.
Second, management can review progress centrally, prior to auditing the
district offices.
Selecting Accounts to Service
The key concept for safety work at NYSIF is targeting. This necessitates
a
review at the district office level of the loss prevention consultants’
accounts, to determine which ones are incurring losses that need to be
addressed. The selected accounts undergo a loss analysis that leads to
the creation of action plans for loss prevention. The representative,
working with the policyholder, devises these plans. Goals and dates for
safety performance and improvement are set and periodically evaluated
and reviewed, and Home Office management reviews all targeted accounts
– and their progress – semi-annually.
Policies that are required to participate in New York State’s mandatory
Workplace Safety Program, also called Code Rule 59, are treated similarly
to targeted accounts. These policies have an experience modification greater
than 1.20, and also have an aggregate payroll higher than $800,000. Loss
prevention consultants evaluate the risk and make recommendations that
must be implemented within six months. The servicing representative, who
assists the policyholder in complying, reviews the recommendations. An
action plan is devised for this purpose. After six months the carrier
conducts a survey to see if compliance has been achieved. A 5 percent
penalty is assessed if the policyholder fails to implement all recommendations.
This program tracks affected policies with great scrutiny, and allows
NYSIF to review the effectiveness of its safety services.
Tracking Safety Services
Working with the targeted policyholders, loss prevention consultants
help to structure and maintain effective safety programs. Included in
the loss prevention services are workplace safety surveys, written action
and service plans, safety presentations, safety videos, and workplace
environment testing for noise and carbon monoxide exposure. These safety
services are made available to NYSIF policyholders.
The loss prevention consultants and their supervisors are responsible
for
tracking these accounts’ progress. The following are the loss prevention
representative’s key safety responsibilities:
• Review policyholder operations for hazardous exposures;
• Conduct surveys to identify unsafe behavior and conditions;
• Review loss analysis to identify unsafe acts and trends;
• Meet with clients to analyze findings and set action goals;
• Conduct safety training and presentations;
• Develop innovative ways to better serve NYSIF’s customers.
Action plans for targeted accounts are reviewed and updated as progress
is made in addressing unsafe acts and conditions, training is conducted,
etc. Semi-annually, the district offices prepare information for Home
Office
management. A brief narrative report concerning every targeted account
is
required from each loss prevention consultant. It contains a loss analysis,
describes the services provided in the last six months, and projects what
will be accomplished during the next six months. Loss ratios, claims valuations
and accident frequency are scrutinized for positive and negative changes.
A copy of the action plan is attached, along with the dates of service.
Management Review
Central management conducts periodic audits of district offices to review
field work. Prior to these visits, the semi-annual account reviews are
examined. This allows for an intimate examination of the targeted policies
across the state, as to whether they have met action plan goals. This
review also can indicate whether the loss prevention consultants have
been servicing their targeted accounts according to their needs.
NYSIF’s long-term goal in measuring the effectiveness of safety
activities is to ensure that loss prevention representatives are successful
in reducing policy-holders’ accident frequency. This leads to lower
premiums for employers, lower claims costs and increased policy profitability
for NYSIF, and safer workplaces for New York’s workers.
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