Yesterday in Boca Raton, the National Council of Compensation Insurance (“NCCI”) was kind enough to invite industry experts from the PEO, staffing, insurance and actuarial sectors of the workers’ compensation industry. Carrier stalwarts AIG, Amtrust, LUA, Sunz and Tower were all represented including PEO expert Jeff Rendel and the General Counsels of ASA, FAPEO and NAPEO. NCCI was kind enough to have 10 senior members of their staff in the areas of compliance, data, actuarial and residual market management. Our hearts go out to Linda — and of course Mona was missed dearly as well.
NCCI’s Chief Economist Harry Shuford, PHD lead the initial discussion by giving some extremely valuable background on their study done last year on how PEO’s impact ratemaking countrywide. The study was fueled by concerns of regulators, public health care providers and the staffing industry. Some of the important takeaways for that part of the session:
- Hundreds of PEO’s were contemplated to include most NAPEO members as NCCI took their names off of the public site and matched to policy information. They are looking forward to a more streamlined process that allows them to ascertain coemployed from non-coemployed business. They also expressed specific interest in identifying staffing accounts so that their performance can also be tracked.
- The results of his study proved out that PEO’s have the same loss ratios as general industry
- The results show that PEO’s do not underreport claims
- The results proved out that PEO’s results on severity claims are the same and in some cases better then general industry
In addition, Harry mentioned that he was asked by regulators to vet the recent “PEO carrier insolvencies”. Long and short of that one:
- One carrier had only one policyholder that went insolvent (Southern Eagle/ACC)
- One carrier had one account that represented 60% of their business – that account was bought (Pegasus)
- One carrier had been operating illegally and other states (Providence)
Conclusion was that the PEO industry was not the cause of these insolvencies.
Even more exciting is the fact that Harry is going to give a presentation at both NCCI’s Annual Issues Symposium (“AIS”) in Orlando…in May and the National Workers’ Compensation Symposium in August… also in Orlando.
…more tomorrow. This was all before the agenda was even discussed. Great meeting and really appreciate the hospitality of NCCI. Hearts out to Linda and sorry we missed Mona – look forward to our next meeting!
