According to the New York State Attorney General’s office, the state of New York has entered into an agreement with four insurance groups to return excess collections received for surcharges on worker’s compensation policies.
How the Overage Was Created
As a matter of law, the Worker’s Compensation Board collects annual fees from worker’s compensation insurers. The workers compensation insurers then pass on the fee to their policyholders through the payment of premiums.
For the past ten years, the Workers Compensation Board and workers compensation insurers have utilized different formulas to determine the amount of the annual fee due, leading workers compensation insurance companies to charge their policyholders more than the annual fee paid out to the New York Workers Compensation Board.
The differing formulas used to compute the amounts resulted in insurers overcharging their policyholders. These insurers include ACE, Zurich, Pennsylvania Manufacturers and CNA and their member insurance companies and subsidiaries.
As time passed the amount of the surcharges grew but it was only through amendments of the law in 2009 and 2010 that the state had the right to recover the excess amounts collected by insurers.
The companies entering into reimbursement agreement include the ACE companies, a subsidiary of the Swiss ACE Ltd. Group. The ACE insurers include Pacific Employer’s Insurance Co., and ACE American Insurance Co. The ACE companies are returning $70 million as part of the agreement.
Another insurer, the Zurich companies, a subsidiary of the Zurich Financial Services AG, will return $37.5 million. The Zurich companies involved include Northern Insurance Co. of New York and the American Zurich Insurance Co.
Other companies in the agreement include the Pennsylvania Manufacturers Companies, which will return $5.9 million. Pennsylvania Manufacturers Companies affected include the Manufacturer’s Alliance Insurance Co., the Pennsylvania Manufacturer’s Association Insurance Co and the Pennsylvania Manufacturer’s Indemnity Co.
Another party to the agreement is the CNA companies, which are under the CNA Financial Corp, and who have agreed to return $5.75 million to the State of New York. These insurers number fourteen all in all; amongst them are Buckeye Union Insurance Co. and the National Fire Insurance Co. of Hartford.
With the cooperation of the four companies, the grand total of reimbursed surcharges collected will reach $120 million; this amount is believed to be the tip of the iceberg.
Attorney General Andrew Cuomo lauded the full cooperation that the companies extended during the investigation. He further praised the companies for doing the responsible thing in agreeing to a resolution to the overcharging disputes with the State government. Cuomo also encouraged other insurers to follow this course of action advising that those who refuse will be dealt with accordingly by law.
The work-injury lawyers at The Strom Law Firm, LLC proudly seek justice on behalf of employees injured or killed on the job who work for private companies, as well as employees working for local county, city, and state government.
Whether your case involves obtaining benefits for a denied workers comp claim, helping you obtain medical treatment, negotiating a fair and equitable settlement for your on-the-job injury, or even pursing a claim against a third party who caused and/or contributed to your workplace injury, the workers compensation lawyers at the Strom Law Firm, LLC represent injured workers at all stages of the workers compensation claim process, including initial hearings and appellate proceedings.
The Strom Law Firm, LLC understands the impact that a work-related injury or death has upon you and your loved ones. The most important thing you need to focus on is a speedy recovery. You need an advocate who will seek justice on your behalf.
Contact one of the workers comp attorneys at the Strom Law Firm, LLC for a free consultation to discuss your legal rights. 866-490-2847. You may also reach us by completing the case evaluation form at the top right of this page.