Frank Knapp Jr., president of the South Carolina Small Business Chamber of Commerce has criticized the American Insurance Association about its response to a Jan. 30 Associated Press story about how much scrutiny the South Carolina Insurance Department and the National Council of Compensation Insurers keep on how insurance companies report information in South Carolina.
The AP story:
“Martin Simons oversaw insurance rates at the state Insurance Department for 12 years. In his testimony filed Friday he said bad statistical data makes it nearly impossible to determine exactly what rate changes are needed in the state’s workers’ compensation system.
Simons testimony in an administrative law case comes as the Legislature discusses overhauling the state’s workers’ compensation system.”
AIA responded:
AIA takes issue with the AP article, “it shows once again the extent to which opponents of workers’ compensation reform will go to defeat a measure that is critical to the health of the South Carolina economy.
“The AP reporter unfortunately relied exclusively on the words of a “hired gun” insurance actuary who is attempting to try a pending workers’ compensation rate filing in the press instead of before an administrative law judge, as the state of South Carolina requires,” Raymond G. Farmer, AIA assistant vice president said. “All with the ultimate goal of discrediting the parties involved in the current effort to pass workers’ compensation reform in the General Assembly.
“The reporter failed to point out that the actuary making these questionable charges is a long-time industry critic who conveniently finds himself on the same side of the issue as the South Carolina Small Business Chamber of Commerce, a group partially funded by the trial bar-who are also vigorously opposing the workers’ compensation reform legislation,” Farmer said. “The National Council of Compensation Insurers has been a frequent target of Mr. Simons, as have the insurers that rely on NCCI’s data to make important business decisions.
“Just as the sun comes up in the morning, Mr. Simons will find a way to nit-pick industry data to build a case for his side, if not workers’ compensation, then some other insurance issue. The bottom line is that insurers will continue to rely on NCCI data. We also believe that the workers’ compensation debate is an important one to South Carolina’s future and deserves to be reported on fairly and completely.”
S.C. Small Business Chamber’s Reply
Feb. 5, Insurance Journal received a response from Frank Knapp Jr., president of the South Carolina Small Business Chamber of Commerce responded to Insurance Journal and said:
“On Jan. 30 the American Insurance Association issued a press release printed in the Insurance Journal. In that release, AIA takes issue with Mr. Martin Simons’ actuarial analysis of NCCI’s proposed 32.9 percent increase in loss cost rates for South Carolina’s voluntary workers’ compensation market.
“While AIA understandably disagrees with Mr. Simons’ conclusion that only a 12.7 percent increase can be possibly justified with the data used by NCCI, AIA assistant vice president Raymond G. Farmer unfortunately also made a statement that called into question the integrity of The SC Small Business Chamber of Commerce. As president and co-founder of the Small Business Chamber, let me set the record straight.
“Mr. Farmer made an a obvious effort to tie the Small Business Chamber’s support for Mr. Simons’ NCCI filing analysis to membership dues the organization has received from trade associations representing attorneys.
“For those not from the Palmetto State, the Small Business Chamber distinguishes itself from other Chambers of Commerce in that membership is either conveyed by individual membership or through trade association membership. Dues for individual business membership are the same regardless of size of the business.
“Likewise, the dues for trade associations are the same regardless of the size of the trade association. This dues structure was intentionally designed to prevent undue influence by any individual member or trade association, a problem faced by other chambers and trade associations.
“The two attorney-related trade association members of the Small Business Chamber account for less than 8 percent of our organization’s revenue. Our 24-member Board of Directors has only two attorneys. The overwhelming funds and Board members are from the non-attorney small businesses in South Carolina.
“The Small Business Chamber supported tort reform legislation that recently passed. Just last year, the Small Business Chamber successfully supported systemic changes in our workers’ compensation system. We support additional reforms that will lower workers’ compensation insurance premiums for small businesses, not raise them unnecessarily as would be the case if the entire reform bill currently being debated in our House of Representatives is enacted. And we certainly support Mr. Simons’ conclusion that a 32.9 percent increase in loss cost rates for South Carolina’s voluntary workers’ compensation market are unjustified.
“Our Board makes decisions based on what is in the best interest of our state’s small businesses, not for any other reasons. To suggest otherwise, as Mr. Farmer has done, impugns the integrity of our entire Board of Directors and our over 5,000 small business members.”
Information about the South Carolina Small Business Chamber should visit its website at www.scsbc.org.
In a related story, a Hartsville, S.C. senator called for hearings Thursday to study whether the state Insurance Department is operating efficiently, that story is also on our site at:
https://www.insurancejournal.com/news/southeast/2006/02/03/65019.htm.
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