Oklahoma Insurance Bill Would Change CompSource
A new Oklahoma insurance bill is dangerous to Workers Comp. Oklahoma is near and dear to my heart, as it is my home state. There are many problems with this bill that are not understood by the Oklahoma House.
This could be an insurance disaster in the making. Please see my blog response underlined below. They did not consult a Workers Comp insurance consultant before they passed the bill.
The Oklahoma insurance bill would expand CompSource coverage to out-of-state workers by Janice Francis-Smith
April 24, 2008
OKLAHOMA CITY – Oklahoma businesses will get better service from the state-created workers’ compensation insurer if House Bill 1959 is signed into law, the president of CompSource Oklahoma said Tuesday.
HB 1959, by Rep. Ron Peterson, R-Broken Arrow, would give CompSource the authority to provide insurance coverage for employees who work out of state for an Oklahoma-based company. The Legislature created CompSource to make sure Oklahoma businesses would always have access to workers’ compensation coverage for their employees. The agency operates as a non-profit, self-supporting insurance company for Oklahoma employers.
Current law requires CompSource to provide insurance coverage only for employees who work in Oklahoma. Oklahoma-based businesses that have employees working in surrounding states have to obtain coverage for those workers from companies in those states.
“We had an Oklahoma business that had to go to four or five mechanisms just to find coverage sometimes,” said Terry McCullar, president and CEO of CompSource. HB 1959 will simplify matters for those companies, allowing them to insure all employees with the same company.
“We’re not going to be licensed on all those different states,” said McCullar. “We will have to enter into an agreement with a private carrier. They will actually write the business on their paper, and we will assume the risk. Will it amount to a lot of business, no. But it is certainly a customer service issue. It makes doing business in Oklahoma easier.”
HB 1959 passed easily on its own merits in the state Senate after Lt. Gov. Jari Askins voted to end a skirmish over a proposed amendment to the bill. Sen. James Williamson, R-Tulsa, had proposed an amendment to require Senate confirmation of gubernatorial appointments of judges to the Workers Compensation Court.
Askins voted in her capacity as president of the Senate to break a party-line tie vote, defeating the proposal to add Williamson’s amendment to HB 1959. Once the amendment was removed, the bill passed on a vote of 29 to 19, sending the measure to Gov. Brad Henry’s desk for his signature.
The best way to get the best services without government subsidy is to privatize the state fund through a mutual company and allow it to operate like a real insurance company, beholden, not to political and internal interests, but to its policyholders. Comment By John Thompson.
Privatizing any insurer is always the best way to go. I have commented on that often in my blog.
However, how will Compsource inspect the out-of-state risks? Will they use NCCI? They cannot just blindly write coverage with some type of inspection. What if they have employees in CA? CA will not allow insurance out of Oklahoma. Is Compsource registered to write coverages in these states? Has anyone consulted a WC insurance consultant? What benefits will be paid – based on OK or the other state? This is going to be a complete legal mess.
Legislation by non-WC knowledgeable personnel will end up costing big bucks.
Related: Classifying Construction Risks – WCIRB Great Infographic
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