Workers' Compensation (C) Task Force
December 3, 2007

The Workers Compensation (C) Task Force met on Monday, Dec. 3, 2007.

During the meeting, the Task Force:

• Received the Large Deductible Study Implementation (C) Working Group report stating that efforts continue in drafting its Third Party Administrator (TPA) Guidelines and Guidelines for the Filing of Workers’ Compensation Large Deductible Policies & Programs (Large Deductible Guidelines). The following two remaining matters were mentioned as in need of further attention regarding the draft TPA Guidelines: the amount of oversight that should be required regarding bank accounts held by TPAs for their carriers and whether the reporting of claims denials by a TPA should be required (particularly when precipitated by a recommendation made from an employer for the denial). Also discussed was a proposed drafting change to the definition of TPA, which had been limited to business entities. The new language would broaden the TPA definition to permit through a “grandfather clause” TPA licenses previously issued to individuals and partnerships. Both drafts are becoming mature and may be ready for consideration of adoption by the Working Group and Task Force during the first quarter of next year.

• Received the NAIC/IAIABC Joint (C) Working Group report stating that work continues on its development of a draft Independent Contractor White Paper. Remaining issues pertaining to this draft primarily pertain to minimum premium and/or “if any” workers’ compensation policies, determination of appropriate recommendations, and completion of its two charts—Table 1 regarding state standards for determining independent contractor status and Table 2 regarding state methods of pre-certification.   It was announced that the next meeting of the Working Group will be held in April 2008 during the International Association of Industrial Accident Boards & Commissions (IAIABC) All Committee Conference.

• Received the Professional Employer Organization (C) Working Group report which stated:

• The Guidelines for Regulations and Legislation on Workers’ Compensation Coverage for Professional Employer Organization Arrangements (NAIC PEO Guidelines) were adopted by the NAIC on June 4, 2007. Since that time a substantive change has been proposed to Section 12 of these guidelines which would broaden its scope. The proposed changes to Section 12 were adopted by the Workers’ Compensation (C) Task Force on Sept. 29, 2007 and adopted by the Property & Casualty Insurance (C) Committee on Nov. 14, 2007. The proposed changes now await consideration of adoption by Executive/Plenary during the NAIC 2007 Winter National Meeting.

• A new drafting group of the Working Group has been formed for the purpose of developing a paper to be of assistance to states in implementing the NAIC PEO Guidelines. This is important due to the complexity of the NAIC PEO Guidelines and the number of challenges regulators face in this area. Initial drafting has begun and implementation issues to be addressed are now being identified.   

• The National Conference of Insurance Legislators (NCOIL) adopted its PEO Model Act on Nov. 17, 2007. NCOIL generally integrated into its model suggestions made by the NCOIL PEO Model Focus Group of the Task Force. 

• Received the Settlement Review (C) Working Group report which stated that an amendment to the New York/AIG Settlement has now extended its release deadline from Nov. 30, 2007 to Aug. 1, 2008.

Action Items:

None