Fault Lines in N.Y. Workers’ Compensation

The debate over payments to the Aggregate Trust Fund is one, although by no means the only, workers’ compensation insurance reform that New York carriers want to see changed.

“We were generally very pleased with the reform law, but a lot of the questions about how much will be saved surround the implementation of it,” said Michael Barrett, legislative representative for IIABNY. “On the whole they have done a very good job. ”

There are several other loose ends when it comes to N.Y.’s workers’ compensation law. Among the bigger topics poised to dominate headlines in 2008:

The end of the Compensation Insurance Rating Board. CIRB, as it’s known, is a nonprofit statistical organization comprised of insurance carriers and the New York State Insurance Fund, which collects loss data and files rates. In 2008, CIRB will assume a smaller role. Although it will still perform underwriting functions, collect data and report the cost of losses, CIRB will no longer determine workers’ comp rates, leaving that function to carriers themselves. The insurance department believes the absence of CIRB-made rates will drive down the price of insurance. That notion will be tested in 2008.

A pool for self-insurers. The workers’ compensation board has recommended ditching the current model for self insurance – where self-insured employers post letters of credit – and replacing it with a guarantee pool. That’s a big pool in New York where there are 435 companies and subsidiaries approved to self-insure in the Empire State, with a total of roughly 525,000 employees. They have about $1.8 billion in letters of credit. Add to that the state’s inactive self-insurers – and their approximately $800 million in security on deposit – and it could be a sizable new guarantee pool.

Topics New York Workers' Compensation Talent