CASUALTY ACTUARIAL SOCIETY Spring Meeting June 17 – 20, 2007 Recent New York Workers Compensation Reforms Martin G. Heagen Vice President & Actuary NYCIRB

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Pricing Needs Major NY WC Reforms Pricing Methods/Assumptions Summary Recent New York Workers Compensation Reform

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Pricing Needs Recent New York Workers Compensation Reform Understanding the Law Changes Identifying Data Requirements Data Sources Non-Data Sources

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Major Reforms Recent New York Workers Compensation Reform Increase in Maximum Weekly Benefit Caps on Permanent Partial Disability Duration Elimination of Special Disability Fund Medical-Related Provisions PPD Claims Into Aggregate Trust Fund System Improvements

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Elimination of Spec. Disability Fund Recent New York Workers Compensation Reform Actual Assessment Data From State Workers’ Comp. Board Relate Assessments to Paid Losses Mitigation Factor

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Increase in Maximum Weekly Benefit Recent New York Workers Compensation Reform Fratello Method Recognition of Varying Wage Levels by Injury Type Increased System Utilization

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Caps on PPD Duration Recent New York Workers Compensation Reform % Loss of Earnings = # Weeks of Benefits Actual PPD Data From State Workers’ Comp. Board Distribution of Loss of Earnings PPD Settlement Considerations Hardship Provision

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Medical – Related Provisions Recent New York Workers Compensation Reform Pharmacy Fee Schedule Networks for Diagnostic Services Networks for Prosthetic Devices Generic Drugs when Available Medical & Impairment Guidelines

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Mandatory PPD to Aggregate Trust Fund Recent New York Workers Compensation Reform Many Issues Discount Set By State Effect on Settlement Practices Claimant Behavioral Impact Savings or Added Cost ???

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Summary Recent New York Workers Compensation Reform The Devil is in the Details Behavior of Claimants Behavior of Law Judges Behavior of Attorneys Effectiveness of Regulations

CASUALTY ACTUARIAL SOCIETY 2007 Spring Meeting Questions & Answers Recent New York Workers Compensation Reform Martin G. Heagen Vice President & Actuary NYCIRB