Day 2 at SAWCA

Wednesday, July 22nd was an action-packed day at the SAWCA 67th Annual Convention. The day began with cyber discussions led by Bary Dalton from Federal Reserve Bank – Richmond, and Susan Gordon from Zurich NA. This session provided insight on the current cyber threats and why this has emerged so quickly in the marketplace. As businesses try to connect to customers, suppliers and other users, they have expanded their potential access points thereby expanding the opportunities for hackers to penetrate businesses information and data systems. The expected insurance growth in cyber and cyber-related insurance will increase from approximately $2 billion in 2014 to more than $10 billion in 2020.

The following session offered a lively discussion on the current trend in alternatives to workers’ compensation. Panelists include Jerry Murphy at AmWINS, John Fervier at Waffle House, Trey Gillespie at PCI and Frank Neuhauser at CSSI. The discussion focused on the increasing trend for states to adopt or consider legislation that would allow employers to “opt out” of the traditional workers’ compensation system. There were some wide-ranging opinions and statistics on this topic. Constitutional challenges to exclusive remedy and a continued regulatory burden in the workers’ compensation system have served as drivers to provide these alternatives to the workers’ compensation system. Generally, it was agreed upon that this push for alternatives, or a more streamlined delivery of care, will continue in the near and distant future.

To end the day, Preston Williams of the Mississippi Workers’ Compensation Division and Steve Novak of Trean Re led a discussion on the self-insurance marketplace.

Issues included the following:

• Mergers and acquisitions, including the impact on the self-insured analysis, runoff and potential collateral issues.
• Continued bankruptcy issues where creditors try to seize collateral posted for the self-insured obligations.
• The approach to PEOs and ASOs.
• Guaranty funds requirements to be named as an additional insured on excess workers’ compensation policies.
• Comparing claim count reports with self-insured data for collateral and security calculations as well as validating solvency of the self-insured organization.
• If public entities should be more closely regulated by the various departments responsible for oversight of self-insureds.

It was noted that the self-insured marketplace seemed to be very stable and is still the most efficient approach to controlling costs for an employer.