An avian flu epidemic could have a major impact on the workers' compensation insurance industry, warns Steve Klingel, president of the National Council on Compensation Insurance.

At this point there are more questions than answers, he indicated during comments at his organization's annual meeting here. “How will businesses and the [comp] marketplace and economies react?” he wondered.

Mr. Klingel mentioned bird flu in projections for the workers' comp marketplace as one of the factors that make his prognosis “guarded.”

If there is an outbreak, Mr. Klingel puzzled, “how would it be treated if a worker is infected at work? How many insurers would be involved?”

Later, in an interview, he noted that traditionally when a worker gets sick from the flu at work, it is not a workers' comp claim. However, he agreed with a suggestion that if bird flu comes up in the context of workplace injury claims, it could lead to litigation because of possible disputes over where the illness was contracted.

Such claims, he said, might also involve workers' health insurance coverage.

Mr. Klingel put bird flu in the realm of nontraditional challenges for the industry, which include the threat of terrorist attacks and a medical care crisis that could lead to new forms of health service delivery.

Among the traditional problems for the industry, he cited efforts to pass and maintain workers' comp reform legislation, the need to reduce increases in the residual market and rising medical costs.

In the next round of state legislative sessions, the industry needs to concern itself with reforms to control prescription drug costs, establish fee schedules and coordinate medical treatment utilization, said Helen Westerveldt, president of NCCI's regulatory services, in a briefing on regulatory activity.

She said this year there were more than 4,500 bills introduced in the 50 state legislatures dealing with workers' comp, of which 105 were enacted–most of them dealing with administrative matters.

Ms. Westerveldt said a number of bills have been introduced that would allow for civil court actions and thus breach the legal tradition that makes workers' comp the exclusive remedy for employee injury claims. She added that NCCI is “very concerned” about such proposals.

Special Reports /

Avian Flu Could Spark Major Comp Crisis

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