Tag Archives: market news

News coming out of a market. In this case, whatever market the business at hand is currently within. This news can be important and have direct financial impact on your own company.

Construction Practice Group Content, Other, Risk Management, Transportation Practice Group Content, Workers Compensation Insurance

December 14 News From Around the Marketplace

Injured Construction Worker in Queens Gets Record $62 Million Single-Plaintiff Award – N.Y. Post

A construction worker who was injured on the job has been awarded $62 million — the largest lawsuit verdict for a single plaintiff in Queens. The Queens Supreme Court jury unanimously ruled to dole out the money — $20 million for past pain and suffering, $42 million for future pain and suffering and $60,086.27 for previous medical expenses. The employee suffered a traumatic brain injury and other serious injuries in a ­20-foot fall off a roof while working in 2008. At trial 20 witnesses were brought in to prove the construction company did not provide Lin with proper safety ­devices.

New York Construction Company to Pay $380,000 in Back Wages – U.S. Department of Labor

A Wage and Hour Division investigation found that Liverpool, N.Y., employer General Interior Systems Inc. violated the Fair Labor Standards Act by misclassifying more than 300 drywall installers as independent contractors and then failing to pay them overtime. The department won a judgment in U.S. District Court for the Northern District of New York on behalf of the affected employees that required General Interior to pay $380,000 in back wages. Working throughout central New York and the Northeast, the employees put in as many as 60 to 70 hours per week with regularity and were paid straight time for hours worked beyond 40 in a work week.

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Government Funding Bill Rolls Back Trucker Rest Requirements – NPR

The regulation is part of a series of rules that spell out the number of hours that long-haul truck drivers can be on the road. Last year, a rule took effect that required those drivers to take two consecutive nights off after every 70 hours they spend behind the wheel.

Truckers No Longer Have to File No-defect Driver Vehicle Inspection Reports – Bloomberg

In a move expected to save the trucking industry nearly $2 billion per year, pre- and post-trip inspections no longer need to be filed by CMV drivers if no safety defects or mechanical deficiencies are found.

Terrorism Risk Insurance Act Set to Expire After Bill Blocked in Senate – I.B Times

Although Congress will likely reintroduce a new bill aimed at renewing TRIA when it reconvenes in January, the impact of allowing TRIA to expire may be felt by businesses across the country. Insurers may seek to cancel terrorism policies after Jan. 1, 2015, out of fear that a major terrorist attack could occur without a government backstop in place.

Businesses in the real estate, construction and hospitality industries may be especially hard-hit if rates for terrorism insurances increase in the absence of TRIA. Additionally, insurance industry representatives argue that the federal backstop created by TRIA is still necessary for economic stability and to ensure that developers can get affordable insurance for new projects.

New York Vehicle Theft Down for 23rd Straight Year – NICB

From its peak auto theft year in 1990 when 187,591 vehicles were stolen, New York has experienced a significant decline ending 2013 with 15,482 thefts. That’s a reduction of 92 percent since 1990, according to the National Insurance Crime Bureau (NICB).

Workers Compensation Insurance

Recent Ruling Gives NY Workers Comp Trust Employers Hope

On May 2nd the N.Y. Supreme Court issued an important statement relating to the assessments issued to many New York based businesses who are on bended knee trying to pay the significant charges being accrued from their participation in New York’s Self Insured Trusts. In a significant ruling, “Riccelli Enterprises Inc., et al., versus the State Workers Compensation Board,” an appellate court upheld an injunction against state efforts to assess 826 transportation employers that once belonged to a failed self insurance trust.

“This is a significant development in the NY Workers Comp Board’s collection suits,” said Joseph Makowski, a Buffalo attorney who represents 225 employers from eight trusts.” Some other trusts are going to try for injunctive relief.”  Linda Clark, an Albany attorney representing employer clients in ten trusts, said the Riccelli decision will only have persuasive authority on other courts, not binding authority.” That said, Clark revealed the ruling may provide a “path“ for employers to resist the Board’s aggressive collection efforts.

“A lot felt pressured to enter agreements that were beyond their means,” said Clark, a litigator with the firm Hiscock & Barclay LLP. 

A NY Workers Compensation Board spokesperson said the Board has no plans to shift it’s collections procedures in response to the Riccelli ruling.

In the past several years the board has assumed responsibility for most of the 60 some self insurance trusts that sprang up in response to legislation during the administration of Gov. George Pataki, later failing. All the self insurance trusts combined have deficits north of $900 million. The state recently issued $390 million in bonds to pay an insurer to administer the failed trust’s remaining claims and deficits. The NY Workers Compensation Board is looking to employers that were once members of those trusts to foot the final bill. In doing so the board is compelling employers to pay the board calculated assessments or face lawsuits in court.

The trial judge in the Riccelli case, Supreme Court Judge John C. Cherundolo wrote the board’s approach was too strict in a case involving the Transportation Industry Workers’ Compensation Trust. In that 2012 opinion concluded the Workers Compensation Board over stepped their bounds by imparting a “two part scheme of assessment.” First the board argues that it must impose an interim assessment within 120 days. Secondly at an undefined point in the future the board must levy the actual assessment for the entire liability of the group self insurer after a post deficit reconstruction.

Continue reading Recent Ruling Gives NY Workers Comp Trust Employers Hope →

Workers Compensation Insurance

Summarizing Cuomo’s NY Workers Comp Reform

Governor Cuomo announced last week that his administration plans to introduce new legislation to continue to improve the workers’ compensation system and to attempt to provide relief to thousands of businesses.

Cuomo’s goal is to provide the following with this reform:

  • Savings to New York State’s employers
  • Elimination of unnecessary friction in the system
  • Resolving the burden facing employers who are members of an insolvent Group Self-Insurance Trust (“GSIT”)
  • Simplify and reduce assessments on employers
  • Promote system-wide transparency, efficiency, equity, and consistency
  • Create more competition in the insurance marketplace.

Continue reading Summarizing Cuomo’s NY Workers Comp Reform →

Other

Workers Compensation Market Update 2012

As 2012 comes running around the bend heading into the final quarter it’s not too early to begin to look at how the 2013 workers compensation market might look. Referencing the National Council of Compensation Insurers (NCCI), the 2011 preliminary calendar year combined ratio for workers compensation insurers is estimated to be 115 percent, the same as in 2010. This might be considered good news except that these figures represent the highest combined ratio for private workers compensation insurers since 2001, when net written premium for workers compensation insurers actually increased 7.9 percent. Please don’t forget the precipitous fall in workers compensation premium that occurred between 2007 and 2009 when more than 20 percent of written premium evaporated. Thus a minimal increase on a reduced premium base is not as significant as it appears. Private workers compensation insurers saw a small increase in the value of their investment income over the past year, however it was not sufficient to offset vast underwriting losses. For good measure let’s add to the equation the economy’s stalled recovery. The stalling economy may have been the last straw to break the camels back sending pricing rocketing skyward.

In challenging times workers compensation insurance carriers tend to put renewed emphasis on underwriting as they try to make up lost profit on their investment portfolios. What does this mean for the end user/business owner? Many accounts are seeing price increases ranging from 5–20 percent. Small to medium-sized accounts are seeing larger increases than large national accounts. Claims experience is still the number one driving pricing variable determining the percentage of the workers compensation premium increases and what level of retention is offered for those accounts with loss sensitive plans.

Self-insured retentions for excess workers compensation programs are trending higher with most insurers requiring a minimum self insured retention of $500,000, even for accounts with favorable claims experience. In order to mitigate these changes, insureds are using buffer layer policies—an occupational injury policy that provides coverage for most all types of work-related injuries. This permits an insured to maintain the same lower retention level from the prior policy, but it adds to the fixed costs of a self-insured program.

A significant change in how workers compensation rates are calculated, affecting over 75 percent of the jurisdictions occurs in January 2013 when the primary/excess split point threshold in the experience rating modification formula rises from $5,000 to $10,000 per claim (with additional increases in subsequent years). Since primary losses carry more weight in the calculation of an experience modifier than excess losses, this change may have a significant impact on workers compensation premiums, particularly for entities in industries that suffer frequent, minor claims.

At Metropolitan Risk Advisory we believe it’s critical for buyers of workers compensation to proactively approach their next renewal by reviewing their claims histories now. We suggest that all our clients run their loss analysis with frequency so they are apprised how their losses are trending as that will have a significant impact on their workers compensation renewal costs. Further we suggest reviewing loss control and claim services to verify that they are performing effectively and efficiently consistent with the goals and benchmarks you have established. If you haven’t established goals and benchmarks then that’s a different discussion. Begin the renewal process early, compiling in-depth historic premium and loss information supplementing the review of alternative options, such as higher retentions. Prepare a thorough market submission, get all communications from the broker in writing, and keep executive management informed as the renewal process progresses to make the best decisions possible in the hardening marketplace.

Other

Preparing your Business for Possible Disasters

Preparation is the key to good risk management. NY weather patterns are changing and the unexpected is becoming more likely. It pays to allocate time specifically to implementing strategies to minimize business losses.

The events of 9/11 brought home to New Yorkers that America is no safer from terrorist activity than anywhere else in the world. Protecting yourself and your business against the possibility of a terrorist attack and the long term ramifications is no easy task, but you can add specific coverage to your commercial insurance so that you have some financial backup in the event of another attack.

Hurricane Irene was a timely reminder that New Yorkers can’t dismiss hurricanes as something confined to the southern states. It’s not the first time hurricanes have caused damage in the city, so including hurricane and flood insurance isn’t as silly as you might think.

Apart from your insurance coverage, you should set up a disaster plan that all your staff are familiar with, so they know what to do and where to go if you experience a major crisis. Keep important paperwork in an easily accessible place, and a list of emergency numbers so you can get assistance; and also keep clients and suppliers apprised of your situation.

Being organized and prepared means you have courses of action that you can activate if you have to – which means you have a chance of minimizing your losses and increasing the speed of your recovery post-disaster. This is good risk management. NY business owners should consider these kinds of preventative measures as a key part of their business strategy.