Claims Magazine - Workers’ compensation losses from a major earthquake could exceed those experienced in the World Trade Center disaster, according to a recent study by Risk Management Solutions, a provider of catastrophe modeling services. A repeat of the 1906 San Francisco earthquake, which measured 8.3, could cause as many as 78,000 injuries, 5,000 deaths, and more than $7 billion in workers’ compensation losses if it were to occur today. This compares to workers’ compensation losses of up to $5 billion resulting from the collapse of the trade center’s towers. The terrorist attacks highlighted a need for companies to consider workers’ compensation issues in disaster preparedness planning, said Peter Ulrich, managing director of enterprise risk at RMS. “The Northridge Earthquake in 1994 didn’t generate the same level of attention because there were so few workers’ compensation claims,” he explained.

National Underwriter - A bill that would allow the insurance commissioner to determine whether workers‘ compensation rates are adequate was passed yesterday by the California Assembly. AB 1985, authored by Assemblyman Tom Calderon, D-Montebello, was a measure sought by California Insurance Commissioner Harry Low. It was designed to "stop the overwhelming rate of insolvent insurance companies leaving thousands of employers without workers‘ compensation coverage, and injured workers forced to receive benefits through the California Insurance Guarantee Fund," Mr. Calderon said in a statement with the bill. The measure allows the commissioner to disapprove rates that the department believes would be "inadequate, unfairly discriminatory, or tend to create a monopoly in the marketplace," according to the statement.

Insurance Journal - NCCI Holdings, Inc., delivered its "State of the Workers Compensation Insurance Line" presentation to an estimated 500 insurance executives at the NCCI Annual Issues Symposium (AIS) in Orlando, Fla., claiming the state of the workers' comp market remains tough with early 2001 results indicating one of the year's worst performances in the market's history. NCCI reported a combined ratio of 121 percent for the 2001 workers' compensation insurance calendar year. With a gain of 3 points from the 2000 combined ratio of 118 percent, this year's results mark the sixth straight year of falling combined ratios. During the mid-1990s, the combined ratio for workers compensation hovered around 100 (1994-1997), which is considered excellent for a long-tailed line like workers compensation.

Claims Magazine - The events of Sept. 11, the resulting reinsurance capacity crisis, and an increasingly hard market have kept risk managers working at a frantic pace to place commercial coverage and survive the renewal process. Yet, many of the issues that occupied so much of our focus before September are still very much alive and waiting in the wings. Chief among these issues are ergonomic injuries in the workplace, and the role, if any, that the federal government will play in preventing these injuries. Last spring, labor advocates were dealt a serious setback when the intensely debated federal ergonomics regulation, finally promulgated by the Occupational Safety and Health Administration and signed into law by President Clinton shortly before his term expired, was overturned by a legislative tool called the Congressional Review Act.

Insurance Journal - A new report from Fitch Ratings backs up what many industry experts have reported—2001 was a bad year for the P/C industry, noting an after-tax loss for the first time in history. Fitch, however, sees improved underwriting performance for 2002. Positively, conditions are set for improved results in 2002 as the pricing environment continues to harden appreciably and policy coverage terms and conditions become more restrictive. Fitch feels that the combination of uncertain investment returns thrown together with the poor operating performance in recent years puts the industry in a 'no choice' position that forces the industry to abandon the unsuccessful pricing and underwriting practices of recent years. Fitch concludes that favorable pricing and underwriting trends will likely need to continue for a number of years in order for the industry to produce an operating result that corresponds to an adequate return on capital.

Property and Casualty.com - An overwhelming majority of risk managers say claim service plays a significant role in their decisions to buy property/casualty insurance, according to a survey by the Chubb Group of Insurance Cos. The study, released April 15 at the Risk and Insurance Management Society 40th annual conference and exhibition, also found that in the aftermath of Sept. 11, many companies are concerned with the financial strength and long-term viability of their carriers. Nevertheless, Chubb has determined that an insurer‘s financial stability does not guarantee a high level of quality claim services. The survey results demonstrate that price is not the driving factor in selecting an insurance carrier, said Mark Korsgaard, senior vice president and worldwide casualty claim manager for the Warren, N.J.-based insurer.

Insurance Journal - Three bills (AB 1808, 1809, 2611) geared toward helping employers with workers' compensation have been introduced in the California Legislature, according to the San Francisco Chronicle. Written by Assemblyman Keith Richman, the bills follow legislation signed two months ago by Gov. Gray Davis, that allows more benefits for workers injured while on the job. Richman indicated that employers could see increase up to 40 percent in workers' comp premiums with the new law, along with market forces and inflation. Davis' legislation signed into law Feb. 15 increased workers' comp benefits by $2.4 billion. The bills will be discussed April 24 by the Assembly Insurance Committee.

Property and Casualty.com - ADP Integrated Medical Solutions (IMS), the industry leader in providing end-to-end claims processing solutions to property and casualty insurers, announced today that they are launching a new integrated bill review product, Censeo, to serve both the auto casualty and workers' compensation markets. Censeo, (sen seo (Latin); estimate, evaluate, advise), utilizes the latest technology to effectively audit medical injury claims. The single platform for processing both workers' compensation and auto casualty medical bills can be deployed directly at the client-site, through the Web on an ASP basis, or utilized as part of ADP's outsourcing services.

Claims Magazine - The Colorado Senate has passed a bill requiring that living expenses be paid in rehabilitation claims under personal injury protection provisions in the state’s no-fault auto insurance law. “The additional costs created by Senate Bill 91 would raise auto insurance prices for all Colorado drivers,” said Michael Harrold, northwest regional manager for the National Association of Independent Insurers. “For that reason, we urge the House to reject the measure.” The bill would require that basic personal injury protection motor vehicle insurance coverage include a living expense benefit for those participating in rehabilitative occupational training programs. The living expense benefit would be included in the $50,000 limit for other rehabilitation expenses in the set 10-year period per person for any one accident.

Claims Magazine - Personal Lines Terrorism Exclusions Fail to Win NAIC Endorsements In late January, members of the National Association of Insurance Commissioners came to an agreement regarding how to handle filings for terrorism exclusions on personal lines and automobile policies, with 45 of them deciding not to endorse terrorism exclusions. “It is the sense of the NAIC membership that terrorism exclusions are generally not necessary in personal lines property and casualty products to maintain a competitive market, and they may violate state law,” said Terri Vaughan, NAIC President and Iowa Insurance Commissioner. “However, we recognize that state laws vary in their authority and discretion. Further, there may be unique company circumstances that need to be considered in individual cases. We expect these cases to be limited.”