IND. SUPREME COURT ADDRESSES ATTACK ON COMPENSATION RATING BUREAU

The Insurance Institute of Indiana and the National Association of Mutual Insurance Companies applauded the decision by the Indiana Supreme Court to deny transfer on a case filed against the Indiana Compensation Rating Bureau.

According to the insurance trade groups, in July 2005 the Indiana Court of Appeals found in favor of the ICRB in the case of State Ex Rel. Employers Protective Insurance Company (A/K/A EPIC) v. Indiana Department of Insurance and the Indiana Compensation Rating Bureau.

The ICRB is a quasi-governmental entity with membership comprised solely of insurance companies writing workers’ compensation insurance in Indiana. The primary function of the organization is to file annually new minimum workers’ compensation premiums and rates with the Department of Insurance. The rates are advisory and insurance companies are free to set their own rates.

In the initial trial court case filed by EPIC in 2004, the insurance company asserted it should be considered a “person aggrieved” and therefore entitled to a hearing before the ICRB’s Dispute Resolution Committee regarding the 2004 workers’ compensation minimum premiums and rates, set by the ICRB. In addition, EPIC claimed the ICRB amended its bylaws in an illegal manner.

Both the trial court and the Indiana Court of Appeals found that a “person aggrieved” as it relates to the ICRB, is meant to be an insured with a dispute against an insurance company or the ICRB and that EPIC is not the “person aggrieved” that the legislature intended when crafting the law. By denying transfer of the case, the Indiana Supreme Court effectively ended EPIC’s assault on the ICRB.

Tami Stanton, NAMIC’s state affairs manager, explained that the EPIC frustration with the ICRB stems from its belief the ICRB’s rate recommendations are not high enough.

“Indiana has, arguably, the best workers’ compensation system in the country,” Stanton said. “Premiums for employers are at a responsible and reasonable level. Unfortunately, EPIC has publicly stated they needed the market to provide for higher rates in order to compete.”

With the decision, Insurance Institute President Stephen Williams said the core issue now focuses on past due assessments EPIC has outstanding. The assessments are paid by all ICRB members. That issue is before Department of Insurance Commissioner Jim Atterholt, acting as an Administrative Law Judge. The driving issue in the case is EPIC’s refusal to return Pool premium money it holds in trust, where such funds are eventually used to pay benefits to injured Indiana workers.

“The members of the ICRB come together, through the assessments, to make sure that injured workers in Indiana are protected,” Williams said. “EPIC has more than $200,000 in outstanding assessments that could be helping the families of injured workers.”

Both the Insurance Institute and NAMIC said they expect the department to vigorously pursue the collection of EPIC’s past due assessments.

The Insurance Institute of Indiana is a non-profit state trade association representing property/casualty, health and life companies doing business in Indiana.

Source: Insurance Institute of Indiana