Oklahoma Insurance Department Issues Draft of Rules for "Oklahoma Option"

Below is information taken from OID website that explains the new rules and process to make them final: 

The rules posted below are still in draft form and subject to change at any time. The Department will make its official proposed rules and rule impact statement available for public comment on December 2, 2013. Public comments may be submitted until December 18. On December 19, the Department will hold a public hearing on the proposed rules. If you have any questions or concerns before December 2, please feel free to contact any of the individuals listed on this page.

Draft Rules for Oklahoma Option Download

 

Dan R. Byrd

 Assistant General Counsel

405-522-6330

fax: 405-522-0125

dan.byrd@oid.ok.gov

 

Buddy Combs

Assistant General Counsel

405-522-26335

fax: 405-522-0125

william.combs@oid.ok.gov

 

Brant Cale

Financial Specialist

405-522-2374

brant.cale@oid.ok.gov

  


Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

Governor Appoints 2 new members for new Workers Comp Commission

Oklahoma City attorney Robert H. Gilliland and Denise Engle, workers compensation deputy insurance commissioner, have been appointed to the Oklahoma Workers’ Compensation Commission.

This brings the total Commission Members to 3,  including the previously appointed Chairman, Troy Wilson.  The Senate will be required to confirm each appointee. 

The three Commissioners will develop rules to be in place when the workers comp law takes effect on 2/1/14.  SB 1062 also allows them to create emergency rules if needed.  

Gilliland will serve a four year term and Engle will serve a 2 year term.  Wilson, will serve a 6 year term.   

Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

Oklahoma Insurance Commissioner Presentation - New Work Comp Law

The State of Oklahoma Insurance Commissioner has released his presentation that was done a few weeks ago at various locations around Oklahoma.  It was a good basic overview of the new law (Senate Bill 1062), that goes into effect next year, and was free to attend.

 Click Here to Download

  

Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

Oklahoma State Chamber Joins Work Comp Law Challenge

Senate Bill 1062, passed in 2013 has reduced workers comp rates in Oklahoma starting in 2014 but was recently challenged by the Firefighters Union, Sen. Harry Coates of Seminole, & Rep. Emily Virgin of Norman. Recently the Oklahoma State Chamber has filed a motion to join the lawsuit along with the Oklahoma City and Tulsa chambers of commerce.  

A hearing is set on Nov. 14

Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

Missouri Workers Comp Loss Cost Rates Increase 11.6%

Last Month opponents of the new Workers Comp Law in Oklahoma filed suit to have the law overturned.  Rep Emily Virgin (D) Norman, was quoted as saying, she wanted a system more like Missouri.  About a week ago, NCCI released Missouri results and increased rates in Missouri's loss cost (base rates) by 11.6 percent.  Once the Insurance Carriers apply their multiplier the increases would be more around 15%.   

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Our Oklahoma Law  (Senate Bill 1062), along with other trends in Oklahoma has reduced our rates by 14.6 percent.  The total swing if you compare the two states is around 40% by the time carriers apply their loss costs multipliers.  Based on this knowledge, I think Rep. Virgin should reconsider her challenge.  We can't afford more rate hikes in Oklahoma.  We are running business out of our state and preventing new business from entering our state when we make our workers compensation system expensive compared to other states.  

Click Here for Missouri Powerpoint Presentation from NCCI

Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

Oklahoma Insurance Commissioner releases Opt-Out Forms

The State of Oklahoma Insurance Commissioner has released some initial forms to be used to apply for the Oklahoma Option or Opting out

At this point it is difficult to simply look at the application form and decide what they may be looking at to approve or deny any particular company.  As I laid out in my prior article, there are still a lot of questions to be answered.  Rules are still being formed and will have to be approved to determine what the qualifications are.   

Here they are: 

Qualified Employer Election Form (opt out application) 

Qualified Employer Sample Certificate

Qualified Employer Notice Employers

 

Also find them on our RESOURCES Page along with other good information

Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

Question for Insurance Commissioner Staff about New Opt Out

Here is a copy of a follow up email to a question session put on by the Oklahoma Insurance Commissioner.  So far, I have not received any answers except to say these are all good questions.  Email follows:

I attended the workshops and other things that have been presented on the new law(s).  I will throw out a few things that I think will be important for rule making.  The rules and how the rules are applied will have a huge impact on directing our clients into the programs.  You are charged with overseeing the financial side, which is by far the largest influencer for insurance and risk management transactions.  Here are a few questions I wrote down during the meeting.  I asked a few there and was asked to follow up on them, so here we go:

What type of financial statements will be accepted?  These break down into compilation, review, and Audit.  Most larger companies already do audits but smaller companies may not always do this.  With a compilation or review, there is much less assurance from the CPA as to the accuracy of the information presented.  

  •  Some policies I am told are pay on behalf and some are reimbursement policies.  Will this affect the financial requirements for the companies?
  •  Will OID regulate forms or rates for the “Oklahoma Option” policies?
  •  What constitutes a “Captive”? There are group captives along with single parent captives.  There are also domestic, foreign, and alien.  What will be looked at here?
  • Will there be an AM Best rating requirement for the carriers?
  • Will you ask for loss information to determine and security or insurance requirements?
  • Bonds are almost never used for security anymore because of the risk to the bonding company.  They usually require security also.  Will you be using the federal treasury listing requirements to make sure a “no name” bonding carrier does not supply a bond?
  • How will deductibles/retentions offset any security requirements or financial statement requirements?  

To me there will most decidedly be a loophole created somewhere.  As a first draft, this is almost unavoidable.  That loophole will most likely be where you see the most activity.  For instance if you go self-insured and have to put up a large amount of capital in security, that might be less attractive.  If you allowed that same company to buy a reimbursement policy that was less than the letter of credit and then required no security, that might push them into that market.  I was told at the State Chamber meeting that if you bought a reimbursement policy, you would not have to put up any security.  If this is the case, this would seem to be the first loophole.  Without qualifying what makes up that policy, limits, deductible, etc, I don’t see how this broad statement could be accurate.  Although I am for a free market system, if this is set up wrong, there could be injured workers and no money to pay their medical bills.  I look forward to having a dialog with your department moving forward.  Thanks for the opportunity to weigh in on the new market early in the process.  

 
Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

Hearing for New Workers Comp Law Challenge Rescheduled

The hearing for the new workers comp law change has been rescheduled to November 14th.   

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Oklahoma Supreme Court referee Greg Albert will hear the initial arguments in the lawsuit by state Sen. Harry Coates, R-Seminole, and state Rep. Emily Virgin, D-Oklahoma City. The state legislators and the Professional Firefighters of Oklahoma filed the lawsuit to overturn legislation that did away with the court-based workers’ compensation system and replaced it with an administrative system as well as create an opt-our provision.

Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

New Oklahoma Workers Comp Law Challenged

Sentate Bill 1062, Scheduled to go into effect 2/1/2014 has been challenged by Rep Emily Virgin, D-Norman, Sen. Harry Coates, R-Seminole, and the Professional firefighters association.  The lawsuit claims the bill is unconstitutional.  The hearing could be before the middle of November and will be defended by the Oklahoma Attorney General's office.

Currently 8 of the 9 justices on the State Supreme court were appointed by past Democratic Governors and they have overturned workers comp and tort reforms in the past.  

The court could overturn the entire law and send it back to the legislature or overturn parts of the law they deem unconstitutional.   

Since 12.7 percent of the latest workers compensation rate decrease of 14.6 percent, set to go into place 1/1/2014 was because of Senate bill 1062, this could cause rates to increase or rate decrease to be revised.  

This could be the only challenge to the entire bill, but challenges to individual parts could challenged later. 

We will keep you update as things progresses. 

Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.

Oklahoma Workers Comp Rates to Drop 14.6% in 2014

OKLAHOMA CITY – An annual filing most insurance carriers will use to develop rates for workers’ compensation insurance shows a dramatic decrease in loss costs, Oklahoma Insurance Commissioner John D. Doak announced today. The overall loss cost decrease of 14.6 percent takes effect Jan. 1.

“This is fantastic news for Oklahoma businesses,” said Doak. “Reducing workers compensation costs by enticing new companies to come to the state and allowing current businesses to expand operations can trigger a new wave of economic prosperity. These decreases over a period of time will help to make Oklahoma much more competitive.”

The National Council on Compensation Insurance Inc. (NCCI) is an advisory organization that studies workplace injuries, collects workers’ compensation data, analyzes industry trends and prepares rate recommendations. The NCCI credits most of the decrease to the passage of SB 1062, which makes substantial changes to Oklahoma’s workers’ compensation system. The 14.6 percent projected reductions in loss costs represent the part of a workers’ compensation insurance premium for indemnity and medical payments and associated claim adjustment expenses, not reflecting overhead and profit.

“I commend Gov. Mary Fallin, Speaker of the House T.W. Shannon and Senate Pro Temp Brian Bingman for dedication to improving the state’s workers’ compensation system,” continued Doak. “With their outstanding leadership and belief in pro-growth policies, Oklahoma will continue to thrive.”

The overall average loss cost impact at an industry group level is as follows:

Industry Group Impact

Manufacturing -16.3%

Contracting -16.2%

Office and Clerical -13.4%

Goods and Services -14.1%

Miscellaneous -12.2%

TOTAL -14.6%

Other key observations from the report include lost-time claim frequency continuing to decline across the state, indemnity average cost per case increasing for latest policy year and loss adjustment expenses declining for a lower average than nationwide

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Comment

Chris Moxley

Chris began his career at a Norman insurance agency in 1988 serving as a Branch Manager for 3 years. He joined Professional Insurors in 1995 as a Producer and became Vice-President in 2004, where he overseas human resources and agency operations & technology as well as continuing to manage his client accounts and grow the business. The Agency works with a variety of accounts and Chris specializes in Workers Compensation Risk Management and Insurance. He has worked in Insurance for over 20 years and besides Workers Compensation he has specialized training and experience in the fields of Construction Risk Management and Risk Transfer, Property Management, & Manufacturing.