OHIO PASSES TORT REFORMS, GIVES WORKERS COMP DIVIDEND CREDIT

Rough Notes, Apr 2005

In January, Governor Bob Taft signed SB 80, the comprehensive lawsuit reform bill, and HB 498, the workers compensation intentional tort bill.

SB 80 places caps of $350,000 on non-economic damages and punitive damages. The law is intended to bring clarity to product liability cases and to establish standards so that damages are awarded fairly and appropriately during trial.

"Ohio lawmakers took another positive step forward by passing legislation that will improve the state's workers compensation system," said Greg LaCost, regional manager and senior counsel for Property Casualty Insurers Association of America. "HB 498 clarifies intentional tort in Ohio's workers compensation system and eliminates double recovery for the same workplace incident."

In December 2004, the Ohio Workers' Compensation Oversight Commission voted to grant the state's private and public employers a one-time 20% dividend on their upcoming bills. This translates to a savings of more than $61 million for public employers and more than $176 million in savings for private employers.

"Ohio has one of the most competitive workers compensation systems in the nation. This dividend strengthens that reputation and further helps to keep the cost of doing business down in Ohio," said Governor Taft. "As Ohio's economy continues to recover, this dividend gives Ohio employers the ability to reinvest in safety and other workplace priorities."

Area news

Young agents hold joint meeting

The Young Agents Committees from the Professional Independent Insurance Agents of Illinois (www.piiai.org), Independent Insurance Agents of Wisconsin (www.iiaw.com), Minnesota Independent Insurance Agents & Brokers (www.miia.org) and Independent Insurance Agents of Iowa ((800) 272-9312) will host the Midwest Young Agents Conference June 16 - 18 at the Kalahari Resort and Conference Center in Wisconsin Dells, Wisconsin. For more information, contact the associations.

Michigan

Workers comp rates drop

In December 2004, the Detroit Free Press reported that the state's Department of Labor and Economic Growth announced that compensation claims and payouts have decreased, prompting an 11.2% drop in the average pure premium rate for compensation in 2005. The pure premium rate, set by a quasi-state agency and based on compensation costs for the year before, is used as a price-setting guide for insurance companies. The report stated that the pure premium rate decline is due in part to well-developed safety programs that reduced losses, more seasoned workers remaining in the work force during job reductions over the past two to three years, and the medical fee schedule adopted by Michigan's Workers' Compensation Agency.

PIP claim amounts rise slightly

According to the Insurance Research Council (IRC), Michigan reported the smallest increase in expenses for personal injuries from auto accidents among four states with no-fault auto insurance regulations over a recent five-year period. From 1997 to 2002, increases in personal injury protection expenses were 2% in Michigan, 37% in Florida, 60% in New York and 122% in Colorado.

Detroit ranks high in auto theft

According to the National Insurance Crime Bureau (NICB), Detroit ranked 10th in the nation in vehicle theft rates in 2003, the most recent year for which data is available. Except for Miami, Florida, all other top 10 cities were in the western United States.

Indiana

Young agents plan annual conference

The Young Agents Committee of the Independent Insurance Agents of Indiana will hold its annual conference May 11 - 13 at Harrah's Hotel and Casino in East Chicago, Indiana. For information, contact Steve Duff at duff@bigi.org.

Illinois

High court rules on UIM stacking

In January, the Supreme Court of Illinois declared that the unambiguous language of anti-stacking clauses in insurance policies prohibited the stacking of underinsured motorist coverage. Its decision came from the consolidated cases of Hobbs v. Hartford Insurance Company of the Midwest and Anheuser v. Prudential Property and Casualty Insurance Company. The two cases were consolidated by the state Supreme Court due to the similarity of issues. In both cases the plaintiffs contended at trial that the language of their respective policies was ambiguous as to the limits of UIM coverage, thus permitting stacking. In both cases the trial court agreed with this argument, and both verdicts were affirmed by the appellate court before the defendant insurers appealed to the high court.