West Virginia Chamber of Commerce Workers Compensation Symposium

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West Virginia Chamber of CommerceWorkers
Compensation Symposium

• Jane L. Cline
• Insurance Commissioner

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Selected Topics

• Management of the Old Fund
• Ensuring the Uninsured Fund remains viable
• Stabilizing and reducing premium rates
• Open Market beginning 2008
• PTD awards

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Employer Enforcement Overview

• OIC has duty of regulating employers
• regarding WC
• Monitoring assure employers are maintaining
  mandatory coverage
  
• Administrative action take action against
  employers in violation of law
  
• Collections Collect fines and money owed to Old
  Fund and Uninsured Fund
  

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Employer EnforcementMonitoring

• OIC monitors states employers to assure
  compliance
  
• Leads obtained from various sources
• Fraud unit
• Complaints from interested entities
• Information from other agencies
• Information from private carriers
• Leads followed up by OIC personnel
  (investigators, credit analysts, attys., etc.)
  

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Employer EnforcementAdministrative Action

• OIC has numerous remedies
• Employer is placed on OICs default list
• Employer is fined up to 10k
• Employers job site posted
• Employers operating license is revoked by other
  state agencies
  
• Injunctive action in Circuit Court
• Employer is liable to Uninsured Fund

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Employer EnforcementAdministrative Action

• Since assuming duties on 1/1/06
• Injunctions have been obtained against
  non-compliant employers both old fund and
  private market defaulters
  
• Employers have entered into repayment agreements
  to avoid injunctions
  
• Employers work sites posted

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Employer EnforcementCollections

• OIC is charged with collecting debts owed to
  funds
  
• Premiums due to Old Fund
• Money owed to Uninsured Fund
• Methods for collections include
• Filing a judgment lien
• Prosecuting a civil lawsuit
• Collecting judgment against bank accounts and
  other assets, forcing sale of assets, etc.
  
• Owners and Officers are equally liable

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Old Fund Claims Management

• OIC responsible for run-off of claims occurring
  before 7/1/05
  
• Estimated liability of 3 billion
• Teams within OIC are identifying types of claims
  and best practices for the handling of these
  claims

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Employer EnforcementHouse Bill 4513

• Passed during 2006 regular session in effect
  since 3/11/06
  
• Significance regarding employer enforcement
• Clarified OIC has same remedies against
  non-complaint employers as former WCC did
  
• Strengthened injunction language for default
  employers now is non-discretionary with judge
  
• Gave OIC ability to waive interest and penalties
  on money owed to Old Fund
  

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NCCI Conversion

• NCCI National Council on Compensation Insurance
• The oldest and largest provider of workers
  compensation and employee injury data in the
  nation
  
• They currently operate in 37 states, entered West
  Virginia this year

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Architecture of NCCI

• Sorting employers and employees by what they do
• SIC codes
• 4-digit industry identifiers
• NAICS codes (since 1997)
• 6-digit industry identifiers

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Architecture of the NCCI (continued)

• Similar to industries, we classify job titles in
  much the same way
  
• Nationally, there are 574 classes of workers
• In West Virginia, there will be about 450 classes
  of workers.
  
• 6 of these will be specific to WV

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Advantages of NCCI

• There were 94 industry codes
• This did not give us specific enough data
• Moreover, since NCCI is national, this will put
  us in step with other states
  
• Also, this makes us more attractive to employers
  with workers in many states

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Reducing Premium Rates

• OIC continues working closely with BSI to assure
  rates are adequate but no excessive
  
• WV employers saw an approximate 15 aggregate
  reduction in WC rates 1/1/06
  
• Further, the OIC approved an overall 10 decrease
  in loss costs for WC rates effective 7/1/06

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Open Market 2008Overview

• WC insurance is now a form of casualty insurance
  in WV
  
• BrickStreet is sole writer of WC insurance until
  7/1/08
  
• On 7/1/08, other licensed casualty companies can
  write WC insurance in WV
  

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Open Market 2008Other Carriers

• OIC in contact with casualty insurance trade
  organizations
  
• Other carriers showing a high degree of interest
  in entering market in 2008
  
• Goal is to foster competition among insurers to
  provide competitive rates
  
• As with all insurance carriers, the OIC will
  monitor WC carriers
  
• To assure financial solvency
• To assure claims are being handled properly
• Rates and Forms

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Open Market 2008Residual Market

• Beginning 7/1/2008, BrickStreet will not be
  required to write WV employers
  
• WV employers that are denied coverage will go to
  the assigned risk pool
  
• These employers will be known as the residual
  market
  
• Assigned risk pool will be in place prior to
  7/1/2008 to cover residual market

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Benefit Reforms

• SB 2013 passed in 2003 with substantial benefits
  reform
  
• The elimination of the rule of liberality
• Elimination of the 5 presumptive impairment
  rating for any finding of OP in a claimant
  
• Elimination of annual adjustments in WC awards
  for claimants for increased standard of living
  
• Permitted the ongoing monitoring of PTD claims by
  insurers or self-insured employers
  

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Benefit Reforms (continued)

• All benefit reforms in SB 2013 are currently
  being aggressively implemented by carriers and
  self-insureds
  
• State Code allows for the review, re-opening, and
  vacating of PTD claims
  

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Summary

• The privatization of Workers Comp will be a
  growth engine for West Virginias business
  climate
  
• We have made significant progress in a short
  period of time and continue to work to make
  improvements to the system.

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• QUESTIONS?

1-888-TRY-WVIC www.wvinsurance.gov
A copy of this presentation is available on
the Offices of the Insurance Commissioner's
website at www.wvinsurance.gov.