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).

Today we see in BusinessWeek and Forbes articles that say the Ohio governor wants lower workers comp rates for his state.

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.”

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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:

Workers compensation basics

Injury on the job

Filing a claim

In the case of three workers fired from Ohio’s Workers’ Compensation Council, council Director Virginia McInerney has been nothing but consistent: consistently tight lipped.

When last we discussed the case (third item here), McInerney had simply denied all allegations of the workers who complained of wrongful discharge, religious discrimination and harassment, retaliation and age discrimination–and said she couldn’t discuss an ongoing case.

Employer-companies to pick up tab

On August 27, the “three former employees of the council–executive assistant Stephanie Irwin and staff attorneys Kim Finley and Shadya Yazback — signed a settlement that will net them a combined $55,102, according to documents filed with the Ohio Court of Claims,” says a report in The Plain Dealer.

The attorney for the trio gets another 15 grand, bringing the total settlement to about $70,000, which according to the Plain Dealer will eventually be borne by Ohio employers. “The money will be paid out of the council’s budget, which is funded by assessments on Ohio employers who pay workers’ compensation premiums, according to the Ohio Attorney General’s office. The council’s overall budget is $650,000 a year.”

Claims: ‘God to permeate the workplace’

McInerney fired the women in February; in March, they wrote letters to council members and, apparently, to legislators “charging that McInerney told her staff that she was sent by God to her job, that she wanted God to permeate the workplace and that Satan was to blame for obstacles the staff encountered in their jobs. She inquired about their religious beliefs, called them to pray aloud, cited Scripture in her reprimands and asked Irwin to listen to CDs of sermons and take notes on them, they said.”

As we posted in March, an AP story from March 3 quoted “a former staff attorney as writing in a letter that ‘It became increasingly clear that the Director was judging employees not on professional performance but on the quality of their faith, according to her beliefs.’ ”

No change in director’s ‘status’

McInerney retains her job and title as agency director–along with its $102,000 salary.  However, the agency’s chairman, state Sen. Steve Buehrer, released a less-than-ringing endorsement in his post-settlement assessments. From the Plain Dealer: ” ‘The move to settle in this case averts risk and avoids costly litigation.’ While Buehrer’s statement didn’t address McInerney’s future with the board, the lawmaker relayed through an aide that there is ‘no change in the status of her employment.’ ”

However, another legislator has taken aim at the entire council, which itself was created in reaction to a scandal that cost the state’s worker insurance fund $300 million in losses from questionable investments.

State rep wants to gut council

According to an Aug. 30 post at InsuranceNews.net, “State Rep. Dan Dodd, a member of the council, has questioned whether the council is even necessary. In an April blog entry on his website, Dodd [wrote], ‘In this economy, every dollar matters to employers. That is why the Workers’ Compensation Council needs to have its funding stripped before more money is wasted.’ ”

The Plain Dealer reports that “Dodd also sponsored a bill eliminating funding for the council that has cleared the Ohio House and is sitting in the Senate. Lawmakers are not expected back into regular session until after the November election.”

According the insurance trade site, “McInerney, who worked for the Ohio Legislative Service Commission before being hired as staff director, has taught seminars at Vineyard Church of Columbus and also wrote a book in 2003, “Singles Not Separate: How to Make the Church a Family.” Reportedly, she also has appeared on the 700 Club.

She hired a temp worker after firing executive assistant Stephanie Irwin and staff attorneys Kim Finley and Shadya Yazback and has said she is awaiting hiring instructions following the settlement. Laconic as ever about details of the firings, McInerney declined to comment on that aspect but said of the settlement’s resolution, “I have a 21-year track record of dedicated service and hard work for the general assembly. I stand on a solid record, not only of achievements but also with respect to my conduct.”

The awards are follows: $20,688.81 to staff attorney Finley; $22,051.50 to Yazback and $12,363 to staff assistant Irwin. Their attorney, John S. Marshall, will get $15,000.

Court approval needed; no wrongdoing acceded

After announcement of the settlement–which according to BusinessInsurance.com still requires court approval–Finley said that “obviously, we wouldn’t have brought anything forward that was untrue, but the matter has been resolved and we’re moving on with our careers,” according to the Plain Dealer.

In the agreement, the council characterized the settlement as a compromise, acknowledging no wrongdoing on behalf of the council or the director.

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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:

Workers compensation basics

Injury on the job

Filing a claim