Market Trends for West Virginia – October 1, 2012
By: Mary Jane Pickens
NCCI’s George Ortiz announced on August 15, 2012, that the West Virginia Offices of the Insurance Commissioner advised NCCI that the proposed overall average workers’ compensation loss cost level change of -9.1% and -14.3% decrease in the assigned risk rates have been approved as filed. The changes are effective as of November 1, 2012.
As noted in NCCI’s previously released summary of the filing, the two primary drivers for the lost cost level change are (1) that West Virginia claims experience has significantly improved in calendar-accident year 2011, and (2) NCCI employed West Virginia-specific data in determining Loss Adjustment Expense provision, particularly the Defense and Cost Containment Expense (DCCE). The Loss Adjustment Expense is the cost of adjusting losses, excluding the amount of the loss itself.
In the old West Virginia Workers Compensation System rates were calculated on 94 classifications and employer’s premiums were calculated by using the classification with the highest rate associated with that employer’s payroll. In July 2006 the NCCI classification system was implemented in West Virginia and advisory costs for 477 classifications were filed. Because of the changes in the classification system NCCI did not have the statistical data to use its standard method of calculating loss costs. Previous filings for West Virginia utilized loss costs filed with regional states. With the 2012 filing NCCI implemented its standard classification ratemaking methodology. The NCCI classification system more accurately reflects the overall cost of losses and expenses associated with each type of risk.
The latest loss cost filing reflected average changes by industry groups as follows:
Office & Clerical -10.5%
Goods & Services - 4.1%
This resulted with an overall loss cost level change of -7.6%.
The residual market provides coverage for employers that are unable to obtain coverage in the voluntary market. The policy count grew in the residual market grew 50 %, from 885 to 1,325. Much of the growth in the residual market policies was from volunteer fire departments. Currently 381, or 14.2%, of the residual market are volunteer fire departments. Premium volume in the residual market increased from $7.4 million in 2010 to 10.4 million in 2011.
In 2011 the Offices of the Insurance Commissioner issued a Request for Proposal for servicing carriers. As a result of the competitive bid process the weighted average servicing carrier allowance decreased from 25.42% of net premium to 21.21%. This change was the major contributor to the decrease in the expense provision for the assigned risk rates. The three servicing carriers are American Mining, Guard and Travelers.
NCCI reported in its 2012 Filing Summary that this year marks the seventh consecutive overall average loss cost level decrease filed in West Virginia since the conversion from a Monopolistic state fund to private competition. With the approval of NCCI’s filing, the cumulative impact of loss cost level changes since NCCI’s 2006 is -40.4%.
Mr. Ortiz reported that an official circular will be released shortly and additional information will be available onwww.ncci.com.
West Virginia Supreme Court of Appeals – Case Law Update October 1, 2012
By: Dill Battle
The September 2012 Term of the West Virginia Supreme Court of Appeals convened on September 5, 2012. The Court has not produced a published decision in this term. However, the Court has issued 14 Memorandum Decisions under the revised rules of appellate procedure. The case update discusses several cases.
Compensability of Psychiatric Conditions
The Court addressed the denial of a psychiatric consultation to determine the compensability of psychiatric conditions in Maynard v. WVOIC and Dillard Smith Construction Co. (No. 10-1120)(W. Va. 09/18/2012). The Court applied the recent case of Hale v. WVOIC and Rockspring Development, Inc., 724 S.E.2d 752 (W.Va. 2012). The Maynard Court repeated its instructions inHale that a three-step process must be followed when a claimant is seeking to add a psychiatric disorder as a compensable injury in his/her workers’ compensation claim: (1) the claimant’s treating physician refers the claimant to a psychiatrist for an initial consultation; (2) following the initial psychiatric consultation, the psychiatrist is to make a detailed report consistent with the procedure described in W.Va. C.S.R. § 85-20-12.4; and (3) the claims administrator, aided by the psychiatrist’s report, is to determine whether the psychiatric condition should be added as a compensable injury in the claim.
In another case applying theHale decision, the Court in Jones v. WVOIC and Trumbull Corp. (Nos. 11-0293 and 11-0867)(W. Va. 09/14/2012), found that claimant was entitled to an initial psychiatric consultation because possible symptoms of depression did not manifest until 2009, thus a 2006 evaluation was premature on the issue of possible compensable depression related to chronic pain from physical injuries suffered in 2003.
Compensability - Intoxication
In Paynter v. WVOIC and Wendy’s International, Inc. (No. 11-0333)(W. Va. 09/14/2012), the Court affirmed the Board of Review’s Order affirming the Office of Judges decision that affirmed the Claim Administrator’s order rejecting a claim for benefits due to claimant’s intoxication. The Court agreed that the claimant was not entitled to workers’ compensation benefits under W. Va. Code § 23-4-2(a) because a swab test taken by Wendy’s was positive for benzodiazepines and opiates.
Apportionment of Preexisting Impairment – Carpal Tunnel Syndrome
In Canaday v. WVOIC and Kokosing-Frucon, LLC (No. 11-0065)(W. Va. 09/18/2012), the Court addressed apportionment of preexisting impairment in a carpal tunnel syndrome case. The Court found that while the claimant suffers from certain risk factors for the development of carpal tunnel syndrome, the medical evidence fails to establish any evidence of carpal tunnel symptoms prior to the work-related injury. While W. Va. Code §23-4-9b provides for apportioning impairment awards for pre-existing conditions, there is no evidence establishing that the claimant’s carpal tunnel syndrome is a preexisting condition sufficient for this statute to apply. Therefore, pursuant to Davies v. West Virginia Office of Ins. Comm’r, 227 W.Va. 330, 708 S.E.2d 524 (2011), the claimant is entitled to a 6% permanent partial disability award for each affected hand.
Statute of Limitations – Permanent Partial Disability Benefits
In Lovas v. WVOIC and Consolidation Coal Co. (No. 11-0288)(W. Va. 09/14/2012), the Court affirmed the decisions of the Board of Review and Office of Judges that a claimant’s request for additional permanent partial disability benefits was time barred by W. Va. Code§23-4-16(a)(2). Claimant argued that permanent partial disability in relation to dysphagia had never been evaluated or litigated. The evidence showed that the claimant’s initial permanent partial disability award was received on November 22, 1999, and that claimant did not apply to reopen a claim for an additional permanent partial disability award within five years of the date of the initial award.
For further inquiries regarding West Virginia law contact Mr. Battle at (304) 340-3823 or at email@example.com.