CASUALTY ACTUARIAL SOCIETY Spring Meeting June 17 – 20,

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					CASUALTY ACTUARIAL SOCIETY
        Spring Meeting
      June 17 – 20, 2007

  Recent New York Workers
    Compensation Reforms


        Martin G. Heagen
       Vice President & Actuary
               NYCIRB
    CASUALTY ACTUARIAL SOCIETY
         2007 Spring Meeting
Recent New York Workers Compensation Reform


• Pricing Needs

• Major NY WC Reforms

• Pricing Methods/Assumptions

• Summary
    CASUALTY ACTUARIAL SOCIETY
         2007 Spring Meeting
Recent New York Workers Compensation Reform
        Pricing Needs

   Understanding the Law Changes

    Identifying Data Requirements

          Data Sources

         Non-Data Sources
     CASUALTY ACTUARIAL SOCIETY
          2007 Spring Meeting
 Recent New York Workers Compensation Reform
         Major Reforms
Elimination of Special Disability Fund

    Increase in Maximum Weekly Benefit

Caps on Permanent Partial Disability Duration

    Medical-Related Provisions

 PPD Claims Into Aggregate Trust Fund
    System Improvements
         CASUALTY ACTUARIAL SOCIETY
              2007 Spring Meeting
     Recent New York Workers Compensation Reform

   Elimination of Spec. Disability Fund

Actual Assessment Data From State Workers’ Comp. Board

          Relate Assessments to Paid Losses

                Mitigation Factor
      CASUALTY ACTUARIAL SOCIETY
           2007 Spring Meeting
 Recent New York Workers Compensation Reform

Increase in Maximum Weekly Benefit

             Fratello Method

Recognition of Varying Wage Levels by Injury Type

        Increased System Utilization
     CASUALTY ACTUARIAL SOCIETY
          2007 Spring Meeting
 Recent New York Workers Compensation Reform

       Caps on PPD Duration

   % Loss of Earnings = # Weeks of Benefits

Actual PPD Data From State Workers’ Comp. Board

       Distribution of Loss of Earnings

       PPD Settlement Considerations

             Hardship Provision
    CASUALTY ACTUARIAL SOCIETY
         2007 Spring Meeting
Recent New York Workers Compensation Reform

  Medical – Related Provisions

     Pharmacy Fee Schedule

     Networks for Diagnostic Services

      Networks for Prosthetic Devices

      Generic Drugs when Available

     Medical & Impairment Guidelines
     CASUALTY ACTUARIAL SOCIETY
          2007 Spring Meeting
 Recent New York Workers Compensation Reform
Mandatory PPD to Aggregate Trust Fund

           Many Issues

      Discount Set By State

       Effect on Settlement Practices

       Claimant Behavioral Impact

       Savings or Added Cost ???
    CASUALTY ACTUARIAL SOCIETY
         2007 Spring Meeting
Recent New York Workers Compensation Reform

               Summary

       The Devil is in the Details

        Behavior of Claimants

        Behavior of Law Judges

        Behavior of Attorneys

       Effectiveness of Regulations
    CASUALTY ACTUARIAL SOCIETY
         2007 Spring Meeting
Recent New York Workers Compensation Reform




        Questions & Answers




             Martin G. Heagen
          Vice President & Actuary
                  NYCIRB