Liberty Mutual hunts more damages from AIG workers’ comp case
Yesterday we covered, among other things, a potentially huge workers’ comp rate in California and discounted rates offered to members of the National Federation of Independent Business (NFIB).
Governor’s goal: 4 per cent reduction
From BusinessWeek: “Ohio’s governor wants the state to lower the premiums employers pay for workers’ compensation by 4 percent for a total cut of about $65 million a year.”
From Forbes: “Gov. John Kasich’s office said the goal is to reduce the cost of doing business in Ohio and make the state more competitive. His proposal was submitted Thursday to the board of the state Bureau of Workers Compensation. If adopted in May, employers would first see premium changes in February.”
Rates determined by sector and claims history
According to the Cleveland Leader, “Presently, rates for specific businesses are determined by the industry that it is in and its claims history. Steve Buehrer, BWC Administrator and CEO, said that the goal is to reduce costs for all employers in Ohio, and one of the factors in the decision to reduce rates is a trend of decreasing claims frequency and positive investment returns.”
Texas high court says state immune from worker-comp retaliation suits
In Texas, the state Supreme Court delivered a setback to workers who are improperly fired in retaliation for filing workers’ comp claims.
An April 29 piece at Business Insurance says, “The state of Texas, including its political subdivisions, is immune from workers compensation retaliation lawsuits, the Texas Supreme Court ruled Friday.
Terminated ‘shortly after’ workers’ comp filing
“According to the decision in Travis Central Appraisal District vs. Diane Lee Norman, Ms. Norman went to work for the district as a probationary employee in January 2006. She was terminated six months later, shortly after filing a workers compensation claim, and sued for retaliation under Texas’ workers compensation statute.”
Opinion reverses earlier ruling
An Austin American-Statesman article says, “An earlier Supreme Court ruling said state law waived sovereign immunity, which protects government from being sued over most issues, for claims under the Texas Anti-Retaliation Act.
“But Friday’s opinion held that recent changes in law stripped the sovereign immunity waiver for cities, counties, school districts and other local governments.”
‘Ruling weakens employee protection’
A Statesman blog adds: “Plaintiffs lawyers say the ruling weakens employee protection and gives local governments free rein to fire workers’ comp recipients without proper cause.
Attorney says workers still have ‘ADA Act and grievance procedures’
“But Jennifer Powell, who argued the case on behalf of the appraisal district, said fear of lawsuits has kept governments from firing workers’ comp recipients for legitimate but unrelated reasons. Employees who believe they were improperly fired can still seek protection under the Americans With Disabilities Act and internal grievance procedures, Powell added.”
Liberty Mutual fights AIG settlement
Liberty Mutual is fighting a proposed settlement in the AIG workers’ comp premiums case. A Bloomberg piece in The Boston Globe says, “American International Group should pay more than $1.5 billion to rivals to settle a lawsuit alleging the insurer cheated industry-funded pools that cover injured workers, Liberty Mutual Holding Co. said.
Liberty seeks more than triple AIG agreed to
“The proposed damages are more than triple the $450 million that AIG agreed to in a preliminary settlement advocated by seven insurers, including Travelers Cos. and Ace Ltd. in January. The higher payout is justified because the settlement didn’t account for the full scope of AIG’s underreporting of premiums, Liberty Mutual’s Safeco and Ohio Casualty subsidiaries said in federal court documents filed in Chicago.”
Was under-reported amount $2 billion–or $6.1 billion?
Marketwatch reports that “Liberty Mutual is challenging a key component of the proposed settlement, arguing that AIG had underreported its workers’ compensation premiums by $6.1 billion, instead of the roughly $2 billion outlined in the settlement agreement.
“The putative class-action case–and another lawsuit that preceded it–concern payments insurers are required to make, based on their market share, to support state-mandated pools for workers’ compensation coverage. The state pools cover workers who can’t get coverage from the private sector.”
AIG calls proposal ‘a desperate attempt’
Business Insurance weighs in with a look at both perspectives:
In a statement, Liberty Mutual called the proposed settlement “detrimental to the class of over 500 insurance companies victimized by AIG’s admitted wrongdoing.”
Judge Gettleman is scheduled to hear Liberty Mutual’s challenge to the settlement in June, sources said.
The insurers that agreed to the settlement are: ACE INA Holdings Inc., Auto-Owners Insurance Co., Companion Property & Casualty Insurance Co., Firstcomp Insurance Co., Hartford Financial Services Group Inc., Technology Insurance Co. and Travelers Indemnity Co.
AIG said in an emailed statement, “The settlement before the court is fair and reasonable, and Liberty’s opposition is the latest in a long line of desperate attempts to derail a settlement supported by the 50 state insurance departments and the other insurance companies in the litigation. We are confident that the settlement will be approved despite Liberty’s repeated efforts to prevent the parties from reaching a resolution.”
“Liberty has made this claim to regulators, experts and other insurance companies and been rejected by them all.”
Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources: