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State Run Workers Comp Programs All Have One Main Problem


Monopolistic State Run Workers Comp Programs

State run Workers Comp programs have experienced many problems. The usual State Fund lacks a major component.

Picture of Man Working On Tablet State Run Workers Comp Programs With Employee Benefits On Screen

Workers Comp used to be a very simple process where benefits were paid, forms were filed, and everything was copasetic. My, how those times have changed. Workers Comp soon became a contentious process where attorneys, rehabilitation professionals, and other parties were added into the mix on a large percentage of the claims. The number of litigated or settled files skyrocketed.

The State Funds were not running their programs like a business. They were keeping their Workers Comp analyses very simplistic while companies such as Liberty Mutual(c), and Travelers (c) used very complex analyses to match the complex world that Workers Comp was becoming very rapidly. In other words, the State Funds were running their programs as a program not like a business with a profit motive.

Experience Mods, Classification Codes, Loss Costs, etc. were becoming a very exact science on what insurance carriers charged their insureds. State Funds ran up huge deficits where if the Fund was a carrier in a Rated state, the Insurance Commissioner would have put the carrier into receivership. West Virginia, for example, was running up a huge deficit very rapidly, but now the market is changing to a free-market system.

Not all monopolistic states are in that much trouble. However, I think that over the coming years, you will see a switch to private insurance from the monopolistic states that are in place.

One important note – The California State Fund is a quasi-governmental entity.   SCIF is an insurer of last resort.  However, they still operate as a carrier, not a fund.   They are not a pure Monopolistic State Fund.

Next Up – Monopolistic States Examined

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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