What Is The Problem

There are many challenges that are faced by state-run Workers Compensation programs. The ones that are most prevalent as of now are:

• Solvency
• Fraud
• Mismanagement
• Have To Take All Applicants
• Lack of Accountability
• Not Using Good Business Models
• No Competitive Forces
• No Profit Motive
• Customer Service Issues
• Deficient Claims Handling Service

There are states that have converted or are now in the process of converting their Workers Comp to a privatized system. Nevada has been successful and West Virginia is in the process with Governor Manchin taking the lead to push the system from the State Fund of Brickstreet(c) to an open market as of 07/o1/08. The West Virginia Insurance Commissioner Janet Cline has taken a tiger by the tail and has tamed it for the most part.

California's State Fund (SCIF) was a quasi-state run system as they held an extremely high percentage of the Workers Comp insurance market for many years. Their new Insurance Commissioner Pozner is in the process of cleaning up SCIF.

Up Next - What is the main reason for the problems that State-run Workers Comp programs are experiencing?