NU Online News Service, June 16, 3:20 p.m. EDT
The Self-Insurance Institute of America Inc. (SIIA) criticized a New York task force report calling for the end of the group self-insured trust workers' compensation program in the state.
The Simpsonville, S.C.-based self-insurance association said the report's recommendations are an overreaction to the negligent operation of some New York self-insured trusts.
New York Governor David Paterson formed the Task Force on Group Self-Insurance on June 30, 2008 after 15 group self-insured trusts became insolvent through 2007 and 2008, creating a combined deficit of $498 million. The report, sent to the governor earlier this month, states that the risks inherent in the group model outweigh the benefits, and it calls for the group self-insurance program to be terminated by the end of the year.
But Mike Ferguson, chief operating officer of SIIA, said, "Clearly there were some New York SIGs that were operated in a negligent way, but we believe the task force recommendation is an overreaction. The industry is prepared to work with the state to develop a new regulatory structure which would greatly reduce the possibility of future failures and also assist the state in addressing the financial deficit associated with the failures."
SIIA said legislation passed in 2008 was designed to ensure that group self-insured trusts in New York have increasing financial stability and accountability, and that the legislation was aimed at ensuring proper group administration and transparency among the groups' key agents.
"SIIA supported this legislative initiate and now calls on the New York Legislature and governor to give the new laws a chance to work by implementing the appropriate rules and regulations," the association said.
It added, "As the task force correctly points out, the group self-insurance model is reliant on the good faith legal compliance of trustees, administrators and their key agents. The industry agrees with that conclusion and is prepared to comply with the enhanced regulations that will be forthcoming."
A call last week to the governor's office was referred to the state Workers' Compensation Board. A spokesman there said it was his understanding that legislation is being drafted in the wake of the task force report, but he could not say what might be contained in the legislation at this time.
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