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Federalization of Workers Comp – Senator Thinks So

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Senator Thinks of WC Federalization

The Federalization of Workers Comp the Senator was think so.I have been told by many in the insurance industry how I was so far off the mark in coining the phrase the Federalization of Insurance including Workers Compensation. As you read this please remember that the House has already passed a bill creating the Federal Insurance Office. (FIO)

Graphic Of Federal Senator Capitol
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I read a great article in the National Underwriter that Sen. Ben Nelson, D-Neb., is withholding support of financial services regulation. He fears it could unnecessarily regulate insurers. He said he is not backing the bill in its current form believing that certain provisions could regulate insurers on matters unrelated to the financial crisis.

For insurers, the Senate bill creates an Office of National Insurance (ONI), makes systemically risky insurers subject to federal oversight and contains provisions similar to the House financial services reform bill that would modernize and streamline the surplus lines and reinsurance industry by facilitating regulation of such insurers by the state they are domiciled in.

Under the bill, federal oversight, in addition to current state oversight, would be applied to non-bank financial companies that are determined by a two thirds majority vote of the Financial Stability Oversight Council to be subject to prudential supervision by the Board of Governors of the Federal Reserve System.

Graphic Capitol Hill Senator Federalization
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Under the bill, the Office of National Insurance created would have limited powers, such as authority to seek information from state regulators about the health of the industry and particular insurers. The ONI would also have the authority to recommend to systemic risk regulators that a particular institution is insolvent or needs stronger oversight.

The bill would also require that a person with expertise in insurance issues be appointed to the Council by the president.

Is this not the House and Senate agreeing on federalizing the oversight of the insurance industry? If I am not correct, please email me and let me know.

A quick thought – what would be a systematically risky insurance company – all insurance involves an element of a possibly proportionally high risk. Would the National Flood Insurance Program not be a very risky program?

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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:

  • 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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