Newspaper article THE JOURNAL RECORD

Workers Compensation Fund Is in Trouble

Newspaper article THE JOURNAL RECORD

Workers Compensation Fund Is in Trouble

Article excerpt

Oklahoma's special indemnity fund for workers compensation claims is in serious trouble and must be addressed by the Legislature, panelists on Tuesday told members of the Oklahoma State Chamber of Commerce and Industry.

State lawmakers on the discussion panel also criticized the rates charged by insurance companies, and said the administrator for the state workers compensation court should be given mediation powers to help cut down legal costs.

Without a doubt, workers compensation reform will rival and possibly overtake education reform as the major legislative preoccupation for business lobbyists in the coming months.

At a business legislation forum conducted Tuesday by the state chamber, chairman Bob Berry said workers compensation is the most significant business problem in Oklahoma, and that the issue was the most significant downside to the 1989 legislative session.

The subject was given a D-minus on the chamber's legislative report card, and Berry said the only thing that saved lawmakers from a grade F was the decision to conduct an interim comprehensive study on the state's workers compensation system.

State Rep. Loyd Benson, D-Frederick, said he has authored a bill to raise requirements to access the workers compensation special indemnity fund because it is running out of money.

The fund is used when an employee suffers a second injury whose loss cost is greater than the first injury, and files a workers compensation claim.

House Bill 1488 would require the combined disability for both injuries to be 32 percent before the special indemnity fund would be accessed.The current threshold is 17 percent.

Benson, who chairs the Judiciary Committee of the House of Representatives, said the value of claims has exceeded the amount of money in the fund for about five years.

From 1983 to 1987, he said claims increased by 10 percent a year, so that the fund was almost pyramiding itself. Some $33.4 million in outstanding claims by injured workers have not been funded, he said.

From six million claims filed in 1985, the number is projected to hit ten million this year, Benson said.

State Rep. Mike Hunter, R-Oklahoma City, agreed that the fund is nearing crisis proportions. He endorsed Benson's proposal to raise the entry threshold, and he recommended re-defining the term "physically impaired."

On the positive side, Benson said that workers compensation claims in Oklahoma dropped by 21 percent from 1985 to 1987, and the dollar amount of awards has fallen about 6.4 percent during the past three years.

Yet, State Sen. Vicki Miles-LaGrange noted that workers compensation insurance rate increases totaling some 37.4 percent were authorized between 1984 and 1989 by the State Board for Property and Casualty Rates.

The board this year denied a request for a 14 percent rate hike by the National Council on Compensation Insurance.

If the board-authorized increases totaled 37.4 percent, Miles-LaGrange said about 75 percent of policy holders have found their rates climbing above that, due to "consent-to-rate."

That term describes the practice by insurance carriers of charging a higher rate than that approved by the property and casualty board. They are allowed to do so as long as the policy holder signs a form approving the excess rate and files it with the board. …

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