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."
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.
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.
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.
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
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
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."
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.
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
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
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."
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.
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.
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.
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.
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.
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
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
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.
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.
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
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
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.
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.
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.
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.
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.
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,
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
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.
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
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.
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.
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