After months of testimony and discussion, the Blue Ribbon Commission on the Workers Compensation Fund of Utah finally made some recommendations for changes on how the fund should operate, some of which likely will spark extensive debate during next year's legislative session.
Utah Insurance Commissioner Merwin Stewart, who is the commission chairman, will put the recommendations in writing and make a presentation to the Legislature's Business, Labor and Economic Development Committee later this month.The commission was formed because the Legislature didn't have enough time to study the complicated issue of whether the quasi-public agency (the fund) should continue to operate as is, be allowed to take on some other activities as requested by fund officials or be privatized and compete with other private insurance carriers in selling workers compensation insurance.
One of the major recommendations made during Tuesday's meeting in the Capitol was that the fund be allowed to form partnerships and offer 24-hour insurance coverage or "wrap-up" insurance coverage as long as there is no risk to the fund.
Twenty-four-hour coverage allows one company to sell and administer different types of insurance with different policies as a cost-saving measure, and wrap-up insurance combines workers compensation and liability insurance as a package on large construction projects.
Another recommendation would allow the fund to create a wholly owned subsidiary to sell only workers compensation insurance as a way to offer companies different pricing. For example, the subsidiary could sell workers compensation insurance to companies with good accident records and provide discounts, but companies with bad safety records would be lumped together and have to pay higher premiums.
A third recommendation is to remove from the law a requirement that state agencies must purchase their workers compensation insurance from the fund, thus freeing them to negotiate the best deal with any carrier.
Lane Summerhays, fund president and a commission member, said he was pleased with the votes taken, but added that the Legislature will be taking a long look at the recommendations and they could be changed drastically.
In addition to the above votes, the commission reinforced the status quo by recommending the fund continue being the workers compensation insurance carrier of last resort (the fund can't turn any business away that wants insurance), it will continue operating as a quasi-public corporation and it retains its recently won right to sell insurance in surrounding states.
During Tuesday's meeting, Larry Bunkall, president of the Utah Manufacturers Association, reported on a meeting held Monday in the fund offices attended by representatives of the UMA, Utah Mining Association, the Utah Food Industry Association, the Utah Retail Merchants Association, Associated General Contractors, Utah Petroleum Association, National Federation of Independent Business and the law firm of Parsons Behle & Latimer.
They agreed on several basic concepts, most of which were voted on during Tuesday's meeting, but they didn't agree on allowing the concept of allowing the fund to become a regional fund and sell insurance in other states.
Bunkall said fund officials drafted a bill that would cover the agreed on concepts, but business representatives didn't have time to review it. He urged the commission not to endorse any specific legislation at this time.