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Alberta

Through its Partners in Injury Reduction (PIR) program the Workers' Compensation Board is distributing more than $15 million in premium refunds to 2,496 companies that maintained good safety records last year. One company alone earned a refund of more than $425,000. "The size of the refund is not the measure of success for these employers - although it's a great bonus to the company," commented audit and underwriting manager James Wilson. "The real success is that every company in PIR has benefited by investing time and money in workplace safety because they recognize that the benefits of protecting their workers are far greater than the premium refunds."

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Arizona

A bill recently moved relatively smoothly through the legislature to extend workers' compensation coverage to firefighters for a number of forms of cancer to which firefighters are especially vulnerable, recognizing that their exposure to smoke makes the causes of these cancers to more likely be industrial, reported the Arizona Republic.

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British Columbia

A low injury rate and high investment returns fueled an operating surplus of $75 million for the Workers' Compensation Board last year. The injury rate, which is the accepted number of time-loss claims per 100 person-years, improved to 4.0 in 2000, down 17 percent from five years earlier when it was 4.8.

Road Rash, a first aid team from the Lower Mainland zone, won first place in the 44th Annual Workers' Compensation Board Provincial First Aid Competition. First aid teams from eight separate zones took part in the contest to demonstrate their preparedness for accidents. The team will now participate in the Anniversary Cup, the world competition held in England each fall. A $6,000 grant from the WCB will cover the team's travel expenses.

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California

Renee Koren was appointed vice president of State Fund. She first joined the organization in 1970 as a clerk and rose rapidly through the ranks. After successful stints in underwriting, human resources and marketing, she became manager of communications in 1992. Two years later she returned to marketing as manager of that department, where she helped State Fund compete under open rating and later developed the new agent-broker program. As a result of these efforts, more than 4,000 brokerage firms are certified to do business with State Fund. She also oversaw the creation of award-winning radio and television campaigns.

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Colorado

The state House of Representatives effectively killed proposed legislation that would have sold off Pinnacol Assurance as a means of raising capital for the state. CEO Gary Pon, in an open letter to the workers' compensation community, expressed relief at the bill's demise saying, "If the bill had passed as proposed, many Colorado businesses would face higher workers' compensation premiums because they have higher risk exposure than most for-profit insurance carriers are willing to underwrite. Colorado would have lost its largest workers' compensation carrier, currently covering 44 percent of the overall market and 72 percent of the small business market."

Pinnacol broke ground on its new headquarters in August. Construction of the 140,000-square-foot building in Lowry is scheduled to be completed by September 2002. Pinnacol has been headquartered on South Colorado Boulevard in Denver since 1991.

Pinnacol Foundation's 2001 Golf Tournament raised more than $44,000 toward providing college scholarships for Colorado youth. The foundation was established in 2000 as a 501(c) 3 not-for-profit organization to aid the children of Colorado workers killed or permanently disabled in a compensable work-related accident. The major sponsors of the event included Pinnacol Assurance, Conning & Company, Staubach Company, Westfield Development and Milliman, USA.

Corinne Mahoney has been appointed as Pinnacol's new communications director.

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Louisiana

A ruling on a workers' compensation case here helped set off a national controversy about the style to be used in writing legal briefs. The question: whether to follow tradition and include citations in the text, or shake off the shackles of the past and place the citations in footnotes at the bottom of the page. Judge Billie Colombaro Woodard wrote an opinion on a workers' compensation case in April, using footnotes. Chief Judge Doucet agreed with Woodard's decision but refused to sign it because he found the new writing style to be tantamount to sacrilege. The dispute rose to the attention of no less than the New York Times, which then explored other instances of disagreement in courts from coast to coast in venues as high as state supreme courts. Proponents for footnotes say the new style makes briefs and opinions more readable to lay people. Defenders of in-text citations object to dismantling a time-honored tradition; in addition, one judge complained that looking up and down the page to match text to footnotes "produced a certain amount of optical indigestion."

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Maine

Gov. Angus King vetoed a bill that would have automatically granted disability benefits to injured workers during full-time rehabilitation. He said the bill, L.D. 1175, deviated from the underlying principle that workers' compensation cases should be decided on a case-by-case basis.

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Maryland

Charles Wancowicz, Jr. joined IWIF as executive vice president of operations. He previously worked at the corporate headquarters of the St. Paul Insurance Companies in Minnesota where he was assistant vice president for financial planning and analysis. At IWIF he will be responsible for finance, policyholder services including loss control and premium audit, underwriting, legal, claims and managed care. His 16-year career includes senior management positions at USF&G, which was acquired by the St. Paul Companies. At. USF&G he was controller for commercial products and workers' compensation, as well as senior manager of premium accounting and budgeting for the F&G Life Company.

Dennis Carroll joined IWIF as general counsel. He came to IWIF from the Maryland Insurance Administration where he served as deputy insurance commissioner and helped manage and direct the operations of the 260-employee regulatory agency. Carroll previously served as assistant attorney general and principal counsel to the agency, and as assistant attorney general and deputy counsel and chief of litigation for the Maryland Department of Licensing and Regulation. Earlier, he worked for the Legal Aid Bureau, the National Senior Citizens Law Center and the Micronesian Legal Services Corporation.

Kim Gentry joined IWIF as claims director. Most recently he was the North Atlantic Region claims manager for Fireman's Fund Insurance Company. In that position, he managed a large staff and was responsible for workers' compensation claims in Maryland, Virginia, Pennsylvania, Delaware and Washington DC. He began his insurance career with Liberty Mutual in 1976 and has held various supervisory positions.

At midyear IWIF has already surpassed last year's fraud recoveries of $3 million. IWIF's new leadership team has waged war on workers' compensation fraud and has identified/recovered $4.7 million in claimant and policyholder fraud to date.

IWIF's accident year combined ratio has declined from 168.7 percent in 1999 to 140.8 percent in 2000, and continued improvements are anticipated for 2001. These results have been achieved despite the hardening insurance market that has caused an influx of new business, much of which was deemed unprofitable by the private market. Factors contributing to the improved financial results include the tightening of pricing and underwriting, upgraded claims administration, continued emphasis on loss control efforts, and IWIF's auditing and fraud investigation programs.

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Missouri

Missouri Employers Mutual Insurance (MEM) saw its market share rise to 16.86 percent in 2000, making it the largest carrier of workers' compensation insurance in the state, according to the state Department of Insurance. The next largest carrier, Liberty Mutual Group, had 8.05 percent while Citigroup had 6.55 percent.

MEM's communications department won the top award, the Sammy, from the Insurance Marketing Communications Association's annual contest. MEM received the award for its iNet EZ-App marketing campaign for its online tool that allows producers to obtain an underwritten quote or submit an application for issue via the Internet 24 hours a day, seven days a week. Forty-five companies from throughout the U.S. and Canada submitted nearly 300 entries.

More than 400 policyholders participated in MEM's WorkSAFE Week 2001 in June. "Survivor II" star Michael Skupin served as MEM's spokesperson at a series of public events and stage shows. The theme for the series of events was, "An Attitude You Can Live With."

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Montana

Two new members have joined Montana State Fund's Board of Directors. Susan Knedler, a business owner from Lewistown, and Derek Grewatz, with Western States Insurance of Missoula, were recently appointed by Governor Judy Martz to serve four-year terms.

MSF's aggressive fraud recovery and prevention program continues to save Montana business owners millions of dollars. Since its inception in 1993, the program has saved policyholders nearly $12 million.

At its May meeting, the MSF Board made several decisions regarding manual rates for the upcoming year. First, the Board voted to adopt the NCCI filed loss costs for July 1, 2001 for MSF classification codes, except those loss-costs for classification codes approved as exceptions by the Board. The loss costs will apply to new and renewal policies with effective dates on or after July 1, 2001. In addition, the Board approved three rate tiers - preferred, select and equitable - and approved loss cost multipliers for each tier. The multipliers are 1.006, 1.048, and 1.100, respectively. MSF has some special classifications for which there are no NCCI loss costs. Loss costs for these classifications are internally developed and approved by the Board. For a small number of NCCI loss-costs, the Board approved deviations from NCCI loss costs.

At its June meeting the Board approved a gainsharing program for MSF employees. An important component of MSF's recent organizational redesign, gainsharing is a form of incentive compensation that rewards employees for above average results by having them share in the additional gain they create. Gainsharing helps create individual "business owners" and co-responsible employees, and gives all MSF employees a stake in the company's success. It also allows employees to share in the gains that are realized from achieving above expected results.

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New Mexico

Warren Smalley, president and CEO of New Mexico Mutual Casualty Company, told policyholders that they are paying 70 percent less for workers' compensation than they would have paid 10 years ago, due to NMMCC's excellent operating results, according to the Albuquerque Tribune. In 2000 the company reduced rates an average of 13.2 percent while writing $30 million in premiums, a market share of 25 percent. "Nine years ago we owed $10 million in debt (revenue bonds) and had 15 employees. Today we have over 100 employees, 25,000 policies in force and we don't owe anybody anything," said Evangeline Tinajero, chairwoman of NMMCC.

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New York

The New York State Insurance Fund Board of Commissioners announced the appointment of Kenneth J. Ross as NYSIF executive director, effective June 28, 2001. Ross, who previously served as NYSIF's first deputy executive director and chief operating officer, began his career with NYSIF as a deputy executive director in 1995. In four years as COO, Ross oversaw the implementation of an organization-wide re-engineering and critical technological upgrades at NYSIF. Before joining NYSIF, Ross was a senior associate with the law firm of Stroock & Stroock & Lavan. His primary practice area focused on real estate and insurance matters.

Reversing a national trend, workers' compensation benefits paid in New York increased slightly as a percentage of wages in 1999, according to a study by the National Academy of Social Insurance. Benefits increased 8.8 percent from $2,556 million in 1998 to $2,782 million in 1999. At the same time the number of workers covered by workers' compensation grew by 2.6 percent. According to a NASI press release, the growth in benefits outpaced the 6.3 percent growth in wages, which led to a rise in benefits paid as a percent of payroll from 0.80 percent to 0.82 percent. Nationally, benefits paid declined as a percent of wages for the seventh year in a row, from 2.17 percent in 1993 to 1.29 percent in 1999.

New York employers will see an overall 1.8 percent decline in their workers' compensation rates in the fiscal year beginning October 1, 2001, the Associated Press reported. The state rejected a proposed 0.4 percent rate increase. The drop in rates results from the flat rates combined with a decrease in assessments.

NYSIF's Division of Confidential Investigations made referrals resulting in 32 arrests in 20 days for an estimated $1.6 million worth of fraud.

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North Dakota

Brent Edison has been appointed as interim executive director and CEO of North Dakota Workers Compensation. He has previously served as vice president of NDWC's Legal and Special Investigations divisions. Prior to coming to NDWC, he was a partner with the Zuger, Kirmis and Smith law firm in Bismarck. NDWC will conduct a national search for a permanent executive director.

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Nova Scotia

A group of widows have stirred up controversy with their demand for retroactive workers' compensation survivors' benefits from 1985 to 1999. These widows, who had remarried prior to 1985, lost the survivor benefits they had been receiving based on the deceased spouses' compensable deaths due to changes in the laws in 1985 and again in 1992. The minutes of the Workers' Compensation Board of Directors meeting note that the government was offering the widows lump-sum payments of $80,000 (rather than continue their monthly pension payments) to settle the cases; the widows declined the offer. The Court of Appeal agreed with the Government in a March 2001 decision that ordering retroactive benefits from 1985 to 1999 would be an impermissible retroactive application of the Charter. The widows plan to appeal their case to the Supreme Court of Canada. A decision may be rendered as soon as early 2002.

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Ohio

High returns on investments and improved workplace safety provided a surplus that would allow the Bureau of Workers' Compensation to return $1.4 billion to Ohio businesses and schools in 2001, according to the Daily Reporter. Additionally, BWC Administrator James Conrad said workers' compensation rates will be lowered 5 percent for the second year in a row. Governor Bob Taft applauded the results, saying, "This money can be directly invested back into Ohio's economy, into jobs and growth instead of insurance premiums. This set of economic circumstances could not have come at a better time."

A member of the state House of Representatives reintroduced legislation that would allow doctors to form unions without breaking antitrust laws. According to the Dayton Business Journal, House Bill 325 would permit doctors to form bargaining units to negotiate reimbursement rates with health insurers. Currently, only doctors employed by hospitals and other businesses such as health insurers can join unions.

Some of Cleveland's municipal employees suffer injuries at 18 times the rate of the average Ohio worker. The Cleveland Plain Dealer analyzed 5,400 workers' compensation claims filed since the end of 1997 and found high rates of injuries for trash collectors, dog catchers, paramedics and laborers. Each of the city 130 trash collectors is injured about once per year on average, as is the case with the average city dog catcher. In comparison the typical Cleveland police officer files a claim less than once every three years. A number of Ohio cities have dramatically reduced their injury rates through increased safety training

By a 4-3 vote the state Supreme Court struck down Ohio's subrogation law in June, ruling that the state cannot lawfully prohibit injured workers from collecting damage awards from civil lawsuits in addition to workers' compensation benefits, according to the Daily Reporter. While the majority's 26-page opinion noted that it is constitutionally permissible for the state to prevent a tort victim from recovering twice for the same item of loss, it disallowed such statutes "where they operate to reduce a plaintiff's tort recovery irrespective of whether a double recovery has actually occurred."

The Bureau of Workers' Compensation recovered $88.6 million in fraud this past year. The BWC referred 256 people to the attorney general for prosecution, according to the Cincinnati Business Courier. This summer the BWC plans to roll out an online Cyber Crime Task Force, the paper reported.

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Oklahoma

The State Insurance Fund changed its name to CompSource Oklahoma effective July 1, 2001, hoping to end confusion about the agency's mission. The address for the web site was changed to www.compsourceok.com. The Board of Managers elected Larry Parman as its new chairman; former chairman Richard Allen was appointed vice chairman; and Bill McKamey was named secretary for a second term.

CompSource Oklahoma declared a $10 million dividend for its policyholders. Nearly $2.3 million from that total, which was originally earmarked for state agencies, is instead being diverted to bail out the Multiple Injury Trust Fund. This will allow the MITF to continue paying benefits to some 2,300 Oklahoma workers until September, when the Legislature can devise a more permanent solution to the MITF's cash flow problems. This is the fourth consecutive year that CompSource Oklahoma has maintained a surplus sufficient to return dividends to its policyholders, totaling more than $62 million. Approximately 17,000 checks were mailed to policyholders on July 17 and 18.

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Ontario

The Workplace Safety & Insurance Board continues to run the most aggressive public relations operation in AASCIF. For instance, in a typical five-week period starting June 1, 2001, the WSIB issued no less than 14 press releases touting safety awareness, small business assistance and legal developments in its "zero tolerance" stance toward fraud.

In the latter category the press releases noted that 18 companies had been ordered to pay a total of $231,800 in fines and surcharges, and that new charges had been filed against nine employers for various violations of workers' compensation laws. Four injured workers had been ordered to pay $28,449 in fines and restitution, and new charges had been filed against three more employees. The WSIB launched its zero tolerance approach to non-compliance in May 1997, according to Linda Lamoureux, director of the Special Investigations Branch.

The WSIB also issued four press releases regarding public appearances throughout the province by Rob Ellis, the father of a young man who was killed in a workplace accident. Mr. Ellis has been working with the WSIB for months to promote safety awareness.

The WSIB also issued releases promoting a summer awareness campaign for young workers, and a "Main Street blitz" in which WSIB experts would visit businesses to give advice on workers' compensation issues.

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Oregon

Under a recently enacted law, out-of-state employers working temporarily in Oregon on public contracts no longer need to obtain Oregon workers' compensation insurance policies if (1) their home-state policies cover the workers they bring into Oregon, and (2) they do not hire any Oregon workers while working in Oregon. Because Oregon changed its law, the State of Washington reciprocated and Oregon employers no longer need to obtain workers' compensation policies in Washington when they take Oregon workers to that state to work on public contracts temporarily. "This is especially significant for Oregon employers engaged in the building trades and wildland firefighting because these industry groups send the greatest number of workers to out-of-state locations," said Carl Wilson, SAIF Corporation's director of marketing and underwriting.

Cathy Rios has been appointed SAIF's public affairs director. She previously handled marketing at Teledyne and a credit union.

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Pennsylvania

The Pennsylvania House unanimously passed a bill classifying hepatitis C as a work-related illness for police officers, prison guards and firefighters, according to the Philadelphia Inquirer. The legislators voted 198-0, agreeing that it should be presumed that the virus was contracted on the job if a member of one of the covered groups is diagnosed with the virus. Hepatitis C attacks the liver and can lead to liver failure.

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Prince Edward Island

The WCB's Client Services Division recently enacted a two-tier system of case management to improve service to injured workers and employers. Cases with either no time loss or a short-term temporary earnings loss are now handled by Tier 1 entitlement managers. A Tier 2 case management team handles more complicated temporary loss cases, led by a case manager. An extended earnings loss manager oversees cases involving pensions or extended loss cases.

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Rhode Island

The Rhode Island General Assembly has enacted changes in the Workers' Compensation Act as follows. More information is available at www.beaconmutual.com and at www.rilin.state.ri.us/.

The method of calculating the payment of benefits to an injured worker who is working at suitable alternative employment has been clarified. The implementation of the 1992 definition of the "gate" or the employee's burden to prove entitlement to more than 312 weeks of benefits for partial incapacity has been delayed pending judicial interpretation of the earlier 1990 definition. The penalties against employers who refuse to take injured workers back to work under the right to reinstatement statute were clarified as well.

The benefits for employees who suffer an occupational hearing loss will be increased, while the employer's ability to apportion against prior employers and the employee for pre-existing or non-work-related losses has been codified. Additionally, procedural changes were made to clarify causation and appropriate treatment.

The universal coverage provisions of 1998 (which drew in employers with one, two or three employees) were changed so that the corporate officer exclusion was eliminated. As of January 1, 2002, all corporate officers will be considered employees subject to some exceptions.

Penalties for failure to post a summary of the Workers' Compensation Act in the workplace and failure to file first reports of injury with the State were increased to $250.

A construction company in Johnston paid a $5,000 fine and $13,000 in restitution for fraudulently underreporting its payroll, according to the Providence Journal.

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Saskatchewan

The Workers' Compensation Board announced it would give $12 million in rebates to some 20,000 employers who have focused on workplace safety programs that have resulted in lower claims costs. The merit award may be as high as 25 percent of the employer's average annual premium. "We are encouraged by the growing interest in WCB-delivered safety education," said CEO Peter Federko. Another 500 employers will be surcharged $3.3 million for claims costs that exceeded their industries' averages.

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Texas

The Texas Workers' Compensation Insurance Fund will become the Texas Mutual Insurance Company effective September 1, 2001. Though it will be a domestic mutual company, it will remain a single-line carrier and may not expand into other types of insurance coverage. Fund President Russ Oliver pointed out that most of the Fund's other statutory mandates remain intact; the law still requires the company to be a competitive force in the marketplace, to guarantee the availability of workers' compensation coverage in Texas and to serve as the insurer of last resort. Regardless of the new name, "our operational philosophy and customer service orientation absolutely will not change," said Oliver. "We will continue to strive to be the model provider of workers' compensation, consistent with our vision."

Texas Mutual will pay approximately $25 million in dividends to more than 20,000 of its policyholders for the third consecutive year. The proposed dividend equals about 8 percent of the Fund'' premiums for the year 2000, according to Chairman Martin Young, Jr..

Texas Mutual announced an agreement with the National Federation of Independent Business to provide two members-only workers' compensation safety groups for construction and retail businesses. The safety groups are designed so that similar occupations can join together to try to lower workers' compensation costs.

Texas Mutual created a scholarship program for surviving family members of policyholder employees who died as a result of workplace injuries. The program will offer up to $2,000 per individual per semester. The program is open to surviving unmarried spouses or children of individuals who died from a compensable injury while working for a Texas Mutual policyholder while the policy was in effect.

A major janitorial company agreed to pay $500,000 in restitution to Texas Mutual when it pled guilty to workers' compensation premium fraud in July. The firm, AM-KO, represented itself as a small operation with only 18 employees, when in fact it also had more than 200 employees in a "shadow company" called Dyna Maint USA. AM-KO said its annual payroll was only $80,000, but investigation revealed it was more than $1.4 million.

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Utah

The Workers Compensation Fund recently accepted applications for its 12th annual Legacy of Learning scholarship program for the families of workers killed in industrial accidents. The program will award more than $75,000 in amounts of $1,000 to $3,000 per student. Since 1990 WCF has awarded 450 Legacy of Learning scholarships, said WCF President Lane Summerhays. WCF will also give two Safe Workplace scholarships worth up to $5,000 each to University of Utah graduate students who enroll in qualified safety and ergonomics or industrial hygiene programs.

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Washington

All workers receiving Washington workers' compensation time-loss or pension benefits received a 3.59 percent cost-of-living increase on July 1, 2001. The benefit increase applies both to State Fund and self-insured employers. Labor & Industries manages the State Fund, which insures about 1.9 million workers for 163,000 employers. The department also oversees about 400 self-insured companies that employ about 800,000 workers.

The Department of Labor & Industries sent out workers' compensation refund checks totaling nearly $68 million to 115 Washington companies and trade associations, reported the Seattle Post-Intelligencer. The refunds were based on companies' ability to provide safety education to their employees, reduce workplace hazards and improve how claims are handled. The state has refunded $978 million since the program started in 1981.

The state Supreme Court ruled that a girl who suffered prenatal injuries when her then-pregnant mother had a workplace injury can sue for damages. The Associated Press reported that the child, now aged 6, suffers permanent mental and physical disabilities due to the loss of oxygen she suffered as a fetus when her mother fell at her place of employment. The state's workers' compensation law in most situations does not allow lawsuits by families and dependents of the injured worker; however, in this case, the unborn child was directly injured in the same accident as the mother.

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West Virginia

In early July the Bureau of Employment Programs filed injunction lawsuits against four employers who together owe more than $137,000 to the Workers' Compensation Division in back taxes, interest and penalties. The injunctions call for the firms to cease business.

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Yukon

The Workers' Compensation Health & Safety Board held a contest this summer for youths aged 12 to 17 years. Designed to draw attention to the fact that more than half of young workers' workplace accidents occur in the first six months on the job, contest participants had a chance to win a stereo system, a portable CD player or a two-way radio set.

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Summer 2001 News
Message from the President
Workers' Comp Cycle
AASCIF Survey
Dim Sum
Sick Building Claims
Eastern, Travelers Balk at MA
Illegal Aliens
North Dakota's 40th Conviction
AASCIF Publications Contest Winners
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Court Expands Views of Sexual Harassment
Medical Miracle or Mirage?
Internal Auditor's Role
RSI Not Necessarily an ADA Disability
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September 11,2001
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