Monopolistic Ohio Overcharges
Monopolistic Ohio and its Workers Compensation bureau had been the center of controversy a few years ago with a few questionable investments. A judge recently ruled that The Ohio Bureau of Workers Compensation (BWC) overcharged insureds $845,000,000.
The average refund payable per each employer is $3,254.00. The overcharges occurred over many years.As expected monopolistic Ohio BWC is appealing the decision. The basis of the judge’s decision was that there were two Ohios for Workers Comp coverage. The two groups were:
- A group of preferred companies that were allowed to pay lower rates
- All other covered companies in Ohio that were possibly subsidizing group #1.
Actually, there are a few major carriers writing preferred policies in certain states. Virginia allows this type of preferred policy.
Of course, the Experience Modification system (Mod) would naturally split these groups into many risk groups. The policy Discounting Structure would also break up groups that would have each employer being responsible for its own Mod and discounts.
Group #2 may have possibly been a Risk Pool of sorts. The group seems too large to have been analyzed as a Risk Pool.
The BWC released a figure for Group #2 ‘s higher premiums. The BWC paid out $1.26 for every $1.00 written in Workers Compensation premiums. The BWC did not provide any numbers for the allegedly safer group.
Article provided by James J Moore, AIC, MBA, ChFC, ARM. All articles are original content. Check out the full website at www.cutcompcosts.com.