Workers Comp In Oklahoma – Five Fixes
I wrote five fixes for Workers Comp in Oklahoma to help small businesses. My last post covered Oklahoma’s CompSource. I am under the impression that CompSource will be sold in the future. What could Oklahoma do to help small businesses when there is no insurer of last resort? What would happen if CompSource Oklahoma became insolvent or severely underfunded?
1. Raise the minimum number of employees before an employer has to provide Workers Compensation coverage. Tennessee used to not require coverage unless there were more than five employees. North Carolina and other states only require Workers Compensation insurance if an employer has three or more employees.
2. The insurance risk pool will become the last insurer of resort when CompSource no longer exists. Oklahoma could soften the rates that the risk pool will charge to avoid the sticker shock that employers will incur when CompSource is sold. The rates in some state risk pools that I have examined can be up to 500% more than the regular market.
3. The Oklahoma Department of Insurance could not allow the company that buys CompSource to cherry pick the best clients. An agreement could be made that the employers insured by CompSource would have to be covered for three years.
4. The Legislature could leave CompSource in place and remove its tax-free status. This would remove any advantages in pricing its Workers Compensation insurance.
5. If CompSource is not sold but converted to a private carrier, the amount of reserves should be heavily monitored for weakness. The Oklahoma Workers Comp insurance market would become chaotic if a carrier this large became insolvent.
Any results that have come from Nevada, West Virginia, and other states that have completely opened up their insurance markets have all been very positive.
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