Director, P&C Product Marketing
The recent news about the AIG agreement to resolve the underreporting of workers’ compensation premiums underlines the need to have proper administration and reporting solutions in place to fulfill state filings. The multi-state investigation looked at AIG’s filings from more than a decade ago (1975 – 2006). The penalty was $100M plus an additional $46.5M in taxes and assessments for misreporting over $2B in workers’ comp premiums in Pennsylvania. This is on top of the $343M fines paid for similar errors in 2006 in New York. This could have all been avoided with proper solutions and subscriptions to bureau reporting solutions.
Today and a decade ago, workers’ compensation solutions exist on the market that can collect the required data for proper filings through reporting entities to the state departments of insurance. StoneRiver has two workers’ comp policy and claims management solutions that collect the required premium, jurisdiction, class codes, financials, and more. Our solutions have dozens of customers and are leaders in the state insurance fund and carrier markets.
These solutions can interface to the reporting entity of choice for a customer. These can include ISO’s wcPrism®, Ingenix ROES, or NCCI. Combining the advanced processing capabilities of StoneRiver’s PowerSuite® or WCMS solutions with the reliable reporting services of a third-party would have helped AIG and any carrier to collect the data and avoid the severe penalties of misfiling billions of dollars of workers’ comp premium as the incorrect line of business. Having the right solutions in place would have cost a fraction of the penalties incurred by AIG and could have minimized, if not prevented, the misfilings.
The nearly half-billion dollars in fines that AIG has incurred in recent years is small compared to the amount of premium they processed at their zenith. However, similar fines and penalties, even proportional, for smaller carriers can be devastating and have a dramatic negative impact that could lead to bankruptcy. Carriers need to look closely at their solutions and reporting services to be sure they are doing all they can to properly report information back to the states.
Additional information about StoneRiver’s workers’ comp solutions can be found in the Solutions section of www.StoneRiver.com.