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2006 E&S Loss Control Management Forum

2006 E&S Loss Control Management Forum. E&S Loss Control Management Forum Law and Regulation Update November 15 , 2006. Law and Regulation Update. Topics -- State Activities Congressional Activity OSHA Update Liability for Loss Control Activities.

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2006 E&S Loss Control Management Forum

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  1. 2006 E&S Loss Control Management Forum

  2. E&S Loss Control Management ForumLaw and Regulation UpdateNovember 15, 2006

  3. Law and Regulation Update • Topics -- • State Activities • Congressional Activity • OSHA Update • Liability for Loss Control Activities

  4. Law and Regulation UpdateState Activity • States With LC Activity 1999-2006 • Year Number of States • 1999 3 • 2000 5 • 2001 14 • 2002 7 • 2003 8 • 2004 5 • 2005 5 • 2006 11

  5. Status # Bills # States Proposed 17 11 Enacted 5 4 Law and Regulation UpdateState Activity • 2006 States with Loss Control Activity Proposed v. Enacted

  6. Law and Regulation UpdateState Activity • TENN H.B. 2578 and S.B. 2568 • Would require premium-based drug-free workplace credits given equally over the company’s premium payment schedule • Status – Failed to Pass

  7. Law and Regulation UpdateState Activity • OK House Bill 1439 • Employers Using OK DOL’s Safety Pays Consultation Service would receive a $1,000 taxable income exemption • Status – Failed to Pass

  8. Law and Regulation UpdateState Activity • OK Chapter 1, Laws of 2005 • Employers are allowed an income tax credit equal to 50% for eligible workplace modification expenses • Effective July 1, 2006

  9. Law and Regulation UpdateState Activity • Kansas House Bill 2202 • Would direct Commissioner of Insurance, after consultation withWC insurers, to develop a system of premium discounts for any employer who voluntarily requests a workplace safety consultation • Status – Failed to pass

  10. Law and Regulation UpdateState Activity • MA House Bill 4779Current Law -- MCLA 152 § 53A (16) • Commissioner of insurance establishes standards for employers that could significantly benefit from loss control programs • Standards may include the insured’se-mod, class codes, payroll levelsand lost workday rate

  11. Law and Regulation UpdateState Activity • MA House Bill 4779 (Continued) • Purpose -- competitive WC rates • “Standards” language replaced with loss cost-based regulation • Insurers must employ cost control programs “acceptable to the Commissioner” • Reduce “unnecessary health costs”

  12. Law and Regulation UpdateState Activity • MA House Bill 4779 (Continued) • Commissioner may disapprove rate filings where — • Insurer fails to demonstrate cost control programs, or • Where parts of filings are deemed excessive • Status -- Pending

  13. Law and Regulation UpdateState Activity • Utah House Bill 150 • Amends Safety Program Law • Effective May 1, 2006

  14. Law and Regulation UpdateState Activity • Utah House Bill 150 • “Eligible employer” Definition -- • Procures work to be done wholly or in part by a contractor including:    • Employees • Subcontractors and employees

  15. Law and Regulation UpdateState Activity • Utah House Bill 150 • Eligible employer workplace accident and injury reduction program must require -- • Documented review at least semiannually showing how program procedures are met, and

  16. Law and Regulation UpdateState Activity • Utah House Bill 150 • Written contractor agreement giving employer the right to – • Control work • Terminate contract • Remove contractor, subcontractor or employee • Require use of safe equipment • Inspect equipment • Require repair or removal of equipment employer determines not to be safe or appropriate

  17. Law and Regulation UpdateState Activity • Rhode Island Current Law – • Regulation No. LIV • Requires each WC insurer to filean annual report with the Directorby May 15 annually • Report to include loss prevention services offered and expenses

  18. Law and Regulation UpdateState Activity • Rhode Island House Bill 5962and Senate Bill 544 • Would repeal annual report requirement • Status — Pending

  19. Law and Regulation UpdateState Activity • NE Current Law -- Statute 48-446Workplace Safety Consultation Program -- • DOL workplace inspections and consultations for compliance with OSHA Standards • Referral to Federal OSHA • Employee-based fee schedule

  20. Law and Regulation UpdateState Activity • NE Legislative Bills 656 and 1237 • LB 656 -- Assess WC insurers ¼ of 1% of DWP to fund Workplace Consultation Program and DOI administration • LB 1237-- Provide appropriated funds for safety inspections in addition to current program funds, and matching grants for workplace safety, education and training programs • Status -- Failed to pass

  21. Law and Regulation UpdateState Activity • Hawaii House Bill 1802 • Would have required WC insurers to provide premium credits for employer return-to-work programs that the state certifies to be effective • Status -- Failed to pass

  22. Law and Regulation UpdateState Activity • Hawaii House Bill 3076 • Current law requires certified safety and health professionals to -- • Certify that an employer has an effective safety and health program, and • Qualifies for a WC premium reduction • Bill would repeal this provision • Status -- Deferred

  23. Law and Regulation UpdateState Activity • New York Senate Bill 7089 • Increases WC premium credit from5% to 10% for eligible employerswith a Safety Incentive Plan • Status -- Held at sponsor’s request

  24. Law and Regulation UpdateState Activity • CA Assembly Bill 3058 • Currently, Labor Code §6354.7 requires the Commission on Health, Safety and Workers Compensationto offer a worker safety and health education and training program • Employer and worker advisory board guides the content of teaching methods, curricula and materials

  25. Law and Regulation UpdateState Activity • CA Assembly Bill 3058 (Continued) • Requires the CHSWC to add small businesses emergency preparedness training to its worker occupational safety and health training and education program • Status: Law, January 1, 2007

  26. Law and Regulation UpdateState Activity • Texas House Bill 2017, effectiveApril 1, 2007 Re-numbers but does not Repeal these mandates — • Art. 5.06-4 Loss Control Services -- Commercial automobile liability insurance [New Section §1952.058] • Art. 5.15-2 Loss Control Services -- Professional liability insurance for hospitals [New Section §1903.003]

  27. Law and Regulation UpdateState Activity • Texas House Bill 2017, effectiveApril 1, 2007, Re-numbers but does not repeal • Art. 5.15-3 Loss Control Information • Professional liability insurancefor insureds other than hospitals • General liability insurance • Medical professional liability insurance for insureds other than hospitals • New Section §1903.051

  28. Law and Regulation UpdateState Activity • Texas House Bill 7 -- • Effective 2005 • Major WC reform bill • Reduced insurer LC mandates

  29. Law and Regulation UpdateState Activity • Texas House Bill 7 --Items Awaiting Action • DWC to • Provide incentives for overall compliance • Link regulatory outcomes with performance-based oversight • At least biennially, assess performance of insurance carriers against regulatory goals established by the DWC

  30. Law and Regulation UpdateState Activity • Texas House Bill 7 --Items Awaiting Action • DWC policies to • Place carriers into regulatory tiers based on performance – poor, average, or high • Focus regulatory oversight on poor performers • Develop regulatory incentives to promote greater overall compliance

  31. Law and Regulation UpdateCongressional Activity • Pending Legislation • HR 739 -- (extend deadline foremployer response) • HR 740 -- (increase ORC to 5 legally-trained members) • HR 741 -- (court “deference” to ORC) • HR 742 -- (litigation cost recovery) Status -- Died in Senate

  32. Law and Regulation UpdateCongressional Activity • Senate Bills 2065 and 2066 -- OSH Act • Employers to establish comprehensive safety and health management systems • Encourages DOL Cooperative agreements with employers • Voluntary safety and health audits, and alcohol and substance abuse testing programs using qualified professionals • Status -- In Committee

  33. Law and Regulation UpdateOSHA Ergonomics Program • Current Emphasis • Guidelines • Outreach, assistance and alliances • Targeted enforcement

  34. Law and Regulation UpdateOSHA Ergonomics Program • Industry-specific guidelines 2003 • Nursing homes 2004 • Retail Grocery • Poultry processing 2005 and 2006 • None

  35. Law and Regulation UpdateOSHA Ergonomics Program • Alliance programs -- printing industryOSHA and Graphic Arts Coalition Alliance • 24 E-tools to date • E-tool (“stand-alone,” interactive, Web-based training tool specializing in occupational safety and health topics) • Process screens describe currently- identified trouble areas and possible solutions • Printing industry has high MSD rate

  36. Law and Regulation UpdateOSHA Ergonomics Program • E-tool Disclaimer • Not a new standard or regulation • Creates no new legal obligations • Tool is advisory, informational,and intended to assist • Outside information provided, butno guarantee of accuracy, timeliness, relevance, or completion

  37. Law and Regulation UpdateOSHA Ergonomics Program • E-tool Disclaimer (Continued) • Employers -- • Comply with OSH Act hazard-specific safety and health standards • Provide workplace free from recognized hazards likely to cause death or serious bodily injury under Section 5(a) (1), the Act’s General Duty Clause • Cited for violating GDC if recognized hazard and do not take prevention or abatement steps

  38. Law and Regulation UpdateOSHA Ergonomics Program • 2006 Targeted Inspection Plan • Unannounced, comprehensive inspections of 4,250 high-hazard worksites • Site selection based on injury and illness data over the past eight years

  39. Law and Regulation UpdateOSHA Ergonomics Program • 2006 Targeted Inspection Plan(Continued) • Primary site list – DART rate (“Days away from work, restricted work activity, or job transfer”) of 12 or higher (per 100 full-time workers), DAFWII (“Days away from work, injury and illness”) of 9 or higher, and some sites not responding to the 2005 data survey

  40. Law and Regulation UpdateOSHA Ergonomics Program • 2006 Targeted Inspection Plan(Continued) • Secondary list – DART rates between 7 and 12, DAFWII between 7 and 9 • 2004 National incident DART rate for private industry was 2.5, and national DAFWI rate was 1.4

  41. Law and Regulation UpdateOSHA Ergonomics Program • 2006 Targeted Inspection Plan(Continued) • Primary List includes nursing homes and personal care facilities in the top 50% of rated establishments • Inspections focus mainly on ergonomic hazards relating to resident handling, exposure to blood-borne pathogens and other infectious material, exposure to tuberculosis, and slips, trips and falls

  42. Law and Regulation UpdateOSHA Ergonomics Program • 2006 Targeted Inspection Plan (Continued) • OSHA will randomly inspect 175 workplaces (with 75 or more employees) with low reported injury and illness rates based on national incident DART and DAFWII rates to check the actual degree of compliance with OSHA requirements

  43. Law and Regulation UpdateOSHA Ergonomics Program • 2006 Targeted Inspection Plan (Continued) • OSHA says plan • Maximizes use of inspection resources • Focuses efforts on providing most benefit to workers and employers

  44. Law and Regulation UpdateOSHA Ergonomics Program • 2001-2005 Enforcement History – • 14 Ergonomics-related GDC Citations

  45. Law and Regulation UpdateOSHA Ergonomics Program • 2001-2005 Enforcement History – • Fines Per Establishment Types Cited ($140,000 total)

  46. Law and Regulation UpdateInsurer Inspection Liability • Workplace Safety Inspection Immunity Laws -- • 15 States have immunity statutes • 16 states impose mandates on insurers to either • Maintain or provide LC services • Provide mandatory notice to customers • Provide mandatory consultations • 6 states have both mandates and immunity statutes • 11 states impose mandates but do not have immunity statutes • 9 states have immunity statutes but do notimpose mandates

  47. Law and Regulation UpdateInsurer Inspection Liability • Station Nightclub Fire Background -- • February, 2003 fire destroyed the Station Nightclub in West Warwick, RI • Sparked by on-stage pyrotechnics during rock band performance • 100 dead, 200 injured

  48. Law and Regulation UpdateInsurer Inspection Liability • Station Nightclub Fire Background -- • 250 plaintiffs filed actions, naming100 defendants in U.S. District Court for the District of Rhode Island • Essex Insurance Co., Multi-State Inspections, and High Caliber Inspections named as defendants

  49. Law and Regulation UpdateInsurer Inspection Liability • Station Nightclub Fire Asserted Bases for Insurer liability -- • Inspections performed innegligent manner • Restatement (Second) of Torts, Section 324A • RI Statute 27-8-15

  50. Law and Regulation UpdateInsurer Inspection Liability • Station Nightclub Fire Negligent inspection -- • Inspections performed innegligent manner • Inspectors should have recognized that competent performance of inspections was necessary for the protection of third persons

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