OhioBWC - Home: Current News

OhioBWC - Home: Current News

Media Advisory: Nov. 20, 2009

BWC Board of Directors Receives Progress Updates on Rate Reform

More than half of Ohio’s private employer premiums dropping $139 million

COLUMBUS – The Ohio Bureau of Workers’ Compensation (BWC) Board of Directors received updates on the bureau’s rate reform efforts at its Actuarial Committee meeting and in today’s full board session. Reports presented to the Actuarial Committee show rate reform is having a positive impact on Ohio’s economic competitiveness. Reform has helped to set rates more accurately, reduce workers’ compensation insurance premiums for more than half of Ohio’s private employers, give employers more options for controlling their workers’ comp costs, and has increased safety requirements.

“Rate reform is proving to be a great success,” said BWC Administrator Marsha Ryan. “This year, more than half of Ohio’s private employers will share in a premium reduction of $139 million. We are also seeing the impact of our lower rates in national comparisons, strengthening Ohio’s position for new investment to our state.”

BWC is examining the competitiveness of its new rates with those of other states. A preliminary report was provided to the board showing Ohio’s rates are now in line with those of most other states. A full report is expected to be presented to the board in early 2010.

The board received a report on the first-year impact of the new, Micro Insurance Reserving Analysis system, or MIRA II. The state-of-the-art Web tool was mandated by the Ohio General Assembly in 2007 and launched in September 2008. It is more accurately calculating reserves, which is having a positive result on the accuracy of employer premiums. This transparent system enables employers to view their experience modifier and reserves and helps them to better calculate their future workers’ comp costs.

The board was also given a status report on the implementation of recommendations from the recent comprehensive study of Ohio’s workers’ compensation system, performed by Deloitte Consulting LLP. An internal team has since been reviewing the 900-page study, is analyzing recommendations and prioritizing recommended changes. To date, 20 recommendations have been implemented with approximately 45 percent of the recommendations expected to be addressed later in this fiscal year, with others to follow.

“The comprehensive study is providing us with outstanding guidance toward the improvement of Ohio’s workers’ compensation system,” added Ryan. “It has been instrumental in our recent rate reform efforts and will continue to aid us on our course toward building a customer-centric, stable and actuarially sound workers’ compensation system.”

In other business, the board adopted governance guidelines. These are updated annually and identify the board’s purpose, composition, responsibilities and procedures. Separately, each of the board’s five committees adopted committee charters which outline their purpose and responsibilities. The actuarial, audit, investment, governance and new medical services and safety committees oversee the board’s operations. The guidelines and charters provide greater transparency to the governance process.

The board of directors also hired Barclays Global Investors (BGI) as a BWC Passive Index Manager for the State Insurance Fund (SIF). BGI will manage the fund’s Long U.S. Government Fixed Income mandate, a portion of the Long U.S. Credit Fixed Income mandate, and a portion of the U.S. Treasury Inflated Protected Securities (TIPS) mandate. BGI responded to a request for proposal posted by BWC on July 2, 2009, and will manage assets of the SIF under the supervision of the BWC Investment Division.

The next BWC Board of Directors meeting will be held Thursday, December 17, 2009 at 8 a.m. in Room 3, Level 2 of the William Green Building, located at 30 W. Spring St., Columbus.

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