With indicated workers’ comp rates to go up by double digits for 2010, maybe it is time for Washington to go three-way for its workers’ comp insurance.

Claims have been declining, but so has the premium base and investment income. However, the lost time days has climbed to a whopping 257 days on average. If statistics are to be believed, most if not all of these people will never return to work of any kind. At 90 days time loss there is a 50/50 chance of the worker ever returning to work. Most other jurisdictions also have been experiencing a decline in claims and premium, but their time loss duration has also declined. There are only three other states that are monopolistic, North Dakota, Ohio and Wyoming as well as two territories, US Virgin Islands and Puerto Rico. There are 13 option states. The remaining 34 states are private. Washington is the only state that bases their premiums on hours worked rather than a percent of payroll.

One year ago West Virginia privatized its workers’ comp insurance system. West Virginia Insurance Commissioner Jane L. Cline says her state’s one-year old privatized workers’ compensation system is offering better claims administration, lower costs for employers and better treatment of injured workers. Since the switch, Cline says that claims handling has improved such that:

• Claim protests have fallen 68 percent.
• The overall appeals process has been streamlined resulting in claims disputes being resolved in a shorter period of time.
• Claimants have received better claim management by claims adjusters having fewer claims to manage.
• The unfunded liability on “old fund” claims has dropped from $3.1 billion to $1.5 billion.
• The open workers’ compensation market, which celebrated its first anniversary July 1, is also performing well, according to Cline. As of June 30, 2009:
• Overall premiums have dropped 30.3 percent, or more than $150 million.
• 198 different workers’ compensation insurance companies have filed rates and forms.
• Of those 198 companies, 154 have active workers compensation policies in the voluntary market.
• There are 120 policies in the residual market representing premium of about $1.9 million.
• More than 90 percent of all claims are ruled upon within the first 30 days.

(Source: Leonard Gilroy, Reason Foundation)