Oh Noe!

Risk & Insurance, August, 2005 by Cyril Tuohy

The next time Ohio employers see their workers' comp premiums shoot up, they might want to take a closer look at the goings-on in the Bureau of Workers' Compensation. From the looks of it, the bureau is treating some pretty big numbers like, well, loose change.

Since 1998, the board has invested $55 million in bureau funds in rare and valuable coins. Now, it turns out, 121 coins worth a total of $400,000 are missing. And sure enough, the losses triggered an investigation that found more misappropriated coin investments totaling between $12 million and $13 million.

The missing coins were bought by Tom Noe, a coin dealer and politically connected fund-raiser, who was given $50 million to invest on the bureau's behalf.

Has anyone checked the historical rate of return for rare coins lately? Some aren't bad, but others are downright dismal. Couldn't the board have taken that money and just dumped it into a no-load mix of stocks and bonds?

To be fair, the Ohio fund has done some good work over the past few years, particularly in reducing the number of outstanding claims.

Those gains, however, may be in jeopardy because of the amount of dollars paid out in prescriptions with no logical relationship to the work injury of people filing claims, researchers have found.

Already tarnished by the "Coingate" scandal, it would be a real shame for the Ohio fund to see its gains further evaporate by mismanagement.

Cyril Tuohy

Managing Editor

ctuohy@lrp.com