In a recent
Workers’ Comp Executive article, RPNA co-managing partner Nick Roxborough was asked to comment on California Insurance Commissioner Dave Jones’ decision regarding Applied Underwriters’ EquityComp Program. Roxborough said he wouldn’t be surprised if Applied Underwriters’ certificate is eventually pulled stating that the decision “effectively kills the program in California as it exists now.” The RPA (reinsurance participation agreement) changed how premiums were calculated and disputes were handled, shifting the risk from the insurer back to the employers, according to the article. Consistent with what Roxborough predicted, last week, the California Insurance Commissioner issued an Order for Applied “to cease and desist from issuance or renewal of workers compensation insurance policies and collateral/ancillary agreements.” Essentially, the cease and desist order, seeks to protect California businesses from being taken advantage of by any unfiled and unapproved side agreements by the various Applied/Berkshire companies.
For decades, RPNA has been leading the charge against unscrupulous practices by workers’ comp insurers, adding to its list of victories a case against Applied Underwriters where the courts ruled that Applied Underwriters can’t enforce the arbitration provision in side agreements that were not filed with the Workers’ Compensation Insurance Rating Bureau (WCIRB). With the March 16 decision in RPNA’s case Luxor Cabs v. Applied Underwriters Captive Risk Assurance Company, RPNA has carved a legal path to invalidate unlawful arbitration clauses so employers can confront their workers’ comp insurers in court.
Applied Underwriters’ EquiptyComp program has been under scrutiny in other states including Missouri, where a lawsuit has been filed by Hillyard Industries after its bills in the final two months roughly doubled the overall cost of the program. You can read more about this case and Roxborough’s expert commentary here. [subscription required]
