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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance explores the challenges presented by today's business and economic upheaval, as well as the hardening insurance market, and what it means for the captive insurance industry.

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Captive Insurance May Be Affected by Oklahoma Workers Comp Developments

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March 16, 2016

Since workers compensation coverage is an inherent part of many captive insurance companies, we have been interested in following the developments in Oklahoma.

A brief refresher is in order. Published reports say Oklahoma has been ranked as one of the most expensive workers compensation states in the country. In 2013, determined to do something to reverse this trend, the legislature approved and the governor signed SB 1062, a sweeping reform that not only changed how claims disputes were resolved but also allowed employers in the state to "opt out" of the workers compensation system entirely. Only Texas had a similar statute on its books.

However, even before the ink was dry on the new bill, opponents of the change, including the Advisory Council on Workers’ Compensation, argued some of the provisions of the bill were unconstitutional. With a recent ruling by the Workers’ Compensation Commission, the opt-out provision of the new law has been challenged and threatens to undo the changes made to the system.

Dan Holden, manager of corporate risk and finance for Daimler Trucks, N.A., has written an article for Risk & Insurance that explores this turn of events. Titled "Oklahoma's Pretzel Logic," the March 2, 2016, piece explores the case that resulted in the recent ruling and provides his insights as a risk manager. Those involved with captives with workers compensation exposure would benefit from reading the article. As the cost of workers compensation claims continues to escalate and the claims tail grows longer, we would do well to at least understand the alternatives being proposed and the resistance to change on many levels.

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