New Administration Changes = Federalization?
I have received a few questions since the elections concerning any new administration changes that may take place.

In my opinion, there will not be very many changes as long as each state regulates its Workers Compensation system. I do not think that Workers Comp will be under a Federal program any time soon. There would be too much of a backlash if it became a federal system.
This is one of the most appealing times for proponents of federalizing the Workers Compensation system to consider a system that would be overseen by a bureaucracy. With the bailout of AIG and other insurance companies, the federal government would end up owning more of a stake in insurance companies than at any other time in the history of Workers Comp. There may be some rhetoric produced about how that states could not properly oversee their insurance companies, so a federal program would be more appealing.
One main point is that AIG’s insurance operations WERE NOT failing. It was the investment side of AIG that failed miserably. It is my opinion that insurance carriers that are failing should not be bailed out for their insurance operations. As was in the past, the insurance company would go into receivership in each state, and the Insurance Commission would move in to assist or divest the carrier. That model worked. Can one imagine the mess if there was a federal overseer for the state insurance commissions? The term “nightmare” would be a compliment.
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