Privatizing Workers Compensation In Washington State
Workers Compensation is administered on a state-by-state basis
. Currently, the Department of Labor and Industries has a monopoly on Workers Compensation in the state of Washington. Only a hand-full of states rely entirely on state-run programs. Besides Washington; only North Dakota, Ohio and Wyoming allow a state monopoly. In recent years West Virginia and Nevada have moved from a state monopoly and privatized their Workers Compensation systems.Initiative 1082 was introduced by the Building Industry Association of Washington (BIAW). The BIAW has championed legislation and candidates supporting, among other things,deregulation. It is the belief of the BIAW that deregulation in the Workers Compensation field will reduce employer costs. At least in theory, competition in the Workers Compensation market will bring down premiums.
In addition to the BIAW there are a number of supporters of Initiative 1082 who stand to gain from privatization. For example: the parent company of Safeco, Liberty Mutual, has made contributions to this campaignin excess of $250,000.Liberty Mutual stands to earn this donation back quickly from profits in a new Washington market.
Opponents to privatization include the State's numerous labor unions. They are quick to point to the deregulation of the banking industry. Their position is that deregulation in the early 2000s led to the near collapse of the United States banking system. They suggest that privatization will lead to the same problems banks have recently experienced.
The voters in Washington will make the decision on privatization of Workers Compensation on November 2. If privatization is approved there will be a "gold rush" of insurance brokers and insurance companies into the new Washington market. Often a "gold rush" leads to misinformation, inappropriate products, sketchy support and little services.
While CLF, Limited has been in the employee benefit business for over 30 years, we have not been in the Workers Compensation business. In this 30 years we have worked with (and worked for) several multi-state insurance brokers who's expertise include Workers Compensation. When Initiative 1082 passes we will assist our business customers with Workers Compensation through these long-term relationships.
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