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Oklahoma Insurance Bill Allow CompSource to Cover Out of State Risks

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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 is not understood by the Oklahoma house.

Drawing of Umbrella Oklahoma Insurance Bill And Heart
StockUnlimited

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.

Picture Of Oklahoma Insurance Bill City Downtown
Wikimedia – Urbanative

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 of 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.

Judges Chair Oklahoma Insurance Bill Court Room Picture
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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 their 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.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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:

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  • Bloomberg Business News
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  • Risk & Insurance Magazine
  • Insurance Journal
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