The headline of an article at WorkCompCentral this morning is “Liberty Mutual to Exit Workers’ Compensation.” That headline is misleading.
UPDATE
WCC revised the headline; it now reads “Liberty Mutual backing away from workers compensation”
While there’s no question the formerly-largest-writer-of-workers’ comp insurance has dramatically cut back, lopping off about a third of its WC premium, it remains the fourth-largest writer, continuing to seek new business in some markets and hold on to existing accounts in many.
Yes, it sold Summit; and its WC business in Argentina; and paid Berkshire to take over several billion dollars in WC legacy claims. Yes the executive ranks are no longer the exclusive domain of former Liberty WC claims handlers and sales folks – far from it. Yes, personal lines is the future of the company.
None of those changes, dramatic as they are, nor all of those changes together, mean Liberty’s dumping WC entirely.
But what if mother Liberty does bid farewell to work comp?
The WCC article contained a passage that – in my view – is inaccurate at best.
There is worry that Liberty Mutual’s dropping out of workers’ compensation could lead to higher costs for employers and result in companies making cutbacks to injury benefits or challenge claims submitted by workers, Ishida Sengupta, director of workers’ compensation at the National Academy of Social Insurance, told the Globe.
“I certainly think it doesn’t bode well,” Sengupta said.
That is totally nonsensical – companies CANNOT make “cutbacks to injury benefits.” This is workers’ comp, and benefits are statutorily determined.
In addition, there’s no logical reason the fourth largest WC insurer’s decision to exit work comp would lead to higher cost to employers or encourage those employers to challenge claims. I’m really surprised that someone from NASI (an organization in which I am a member) said that – if they did.
BTW I asked Liberty’s press people to comment early this am; they haven’t done so as of 4 pm.
Joe
Who is the lead four now in worker’s comp Ins
Tim
Thanks for the question. AIG, travelers, the Hartford and Liberty Mutual.
Joe – you say that companies cannot make “cutbacks to injury benefits.” In most cases that’s true, but special interest groups like ARAWC are working hard to make that option a reality with “opt-out ” legislation in several states currently. A void in the traditional carrier marketplace might make these “alternative” plans more attractive to employers.
Jesse
Thanks for the comment. Your point re emerging opt out efforts is well taken.
That said, there are only 2 states where this is an option today; there doesn’t seem to be much traction for the idea in other states, and any changes will take quite a while and only effect new claims for employers opting out.
I’d suggest that in today’s world the ability of employers to reduce benefits to work comp claimants is essentially non-existent outside of litigated claims and/or the common adjudication process.
Who would you contact to help you, if you’ve signed off for future medical and they won’t even approve physical therapy? All the want to do is see a pain management Dr and give me pain killers! Looking forward to your help.
Thanks,
Steve
Steve
If you’ve settled your claim any future medical cost is your responsibility. As to pain killers, I’d strongly encourage you to find another approach to long term pain management. Opioids just don’t work for most people.
Joe-Is there a government agency that oversees workman comp companies and holds them accountable?
Steve
Thanks for the question. Workers comp is regulated by the states and each state handles comp individually.