Delaware Workers’ Comp Rates Decline December 1st

Employers in Delaware will experience another decrease in workers compensation rates effective Dec. 1.

Comp rates will decline an average of 7.3% for the residual market and about 10% for the voluntary market, according to a statement by Delaware Insurance Commissioner Trinidad Navarro on Monday.

“I am delighted to approve yet another decrease in workers’ compensation rates in Delaware and even happier to see a double-digit average decrease in the voluntary market,” he said in the statement.

For the second year in a row, all actuaries reviewing the comp rate filing agreed that another rate drop was warranted, he added.

Original Article 


AmTrust Seals Negotiation to Go Private and More – Timeline of How We Got Here

Quarter 1 2018

Since the 2018 tax breaks took effect, the controlling family of AmTrust Financial Services (NASDAQ:AFSI) has made moves to buy back shares and to eventually become no longer a publicly traded company.  This factor played along with the decreased value in shares from the 2015 high of $33.54 to the end of 2017 low of below $10.

On March 1st, AmTrust announced that they would be offering $13.50 in cash for each share of AmTrust common to the shareholders who are not affiliated with the Karfunkel-Zyskind Family.

This was rejected by shareholders and AmTrust Financial Services shareholder Arca Capital commends shareholders for rejecting Zyskind/Karfunkel family’s “absurdly low” $13.50 per share offer for taking AFSI private and suggest that $22 is “fair value.”  The second rejection after January’s initial proposal of $12.25 per share.

Billionaire investor Carl Icahn, who owns a 9.4% stake in the company, had strongly opposed the go-private deal and sued AmTrust and the controlling family, accusing them of trying to take the insurer private at the wrong time and the wrong price.

Quarter 2 2018

Earlier this month, though, the Zyskind/Karfunkel family agreed to raise their price to $14.75 per share, a deal that Carl Icahn supports. AFSI was up to $14.50 in premarket trading that day (6/7/18).  A move that secured the support of Carl Icahn. “By raising the merger price to $14.75, over $100 million of incremental value has been created for public stockholders,” Mr. Icahn said Thursday.

Mr. Icahn also demands that AmTrust changes the record date in advance of any vote to allow shares to vote that were purchased between April 5, 2018 and May 21, 2018.

That date would allow Carl Icahn, who who amassed a 9.4% stake in AFSI between April 26, 2018 and May 17,  2018, to vote on the going-private proposal.

The revised offer, however, failed to appease another shareholder opposed to the deal — Arca Capital (4.2% shareholder). The firm reiterated that it sees $22 per share as the “fair value” for AmTrust.

“We are ready to sit down and negotiate with Barry Zyskind, George Karfunkel, Leah Karfunkel and Stone Point Capital to negotiate a fair deal in good faith with an offer in excess of $22 per share,” Arca Capital Chairman Pavol Krupa said in a statement. “If no deal can be reached, we are very happy for AmTrust to remain public.”



The take out bid of $14.75 was voted on this morning by AmTrust’s outside shareholder and was approved with 67.4% of their vote.

The vote passed with the support of 79.8 percent of common voting stock backing the deal, while the public shareholders – the 45 percent of the shares not connected to CEO Barry Zyskind or his wife Leah Karfunkel’s family –  voted 67.4 percent in favour.

In the statement today the carrier said the deal, which values it at around $2.95bn, is now expected to close in the second half of this year subject to regulatory approvals.

Icahn, whom was originally a dissenter, will make about $30 million on an investment of about $240 million in AmTrust stock and forward derivative contracts. That’s a better than 12% gross return on about a month’s work.


A.M.Best changes AmTrust’s financial strength from A to A- but changes outlook to stable.  Last year AmTrust was placed under review when adverse loss development was noted on their book from 2010 to 2014.  This negative outlook was changed after Best’s review concluding on July 3rd and Best noted AmTrust’s stength on it’s balance sheet.  This news did not impact AmTrust’s move to go private.

–PEOCompass will continue to update you with news regarding AmTrust’s potential merger as it happens.



Massachusetts Lowers State Assessment Cost for 4th Straight Year

The Baker administration said Wednesday that businesses will pay an assessment of 3.83 percent on their insurance premium, as compared with the current 4.56 percent. The new assessment rate will go into effect on Sunday, when the state’s 2019 fiscal year begins.

While, this news is great for Massachusetts employers, this does not address the state’s overall low rates that are driving carriers out of the state.

Under state law, businesses have to provide workers’ compensation insurance to their employees to cover them for injuries or illnesses suffered on the job. The assessments on businesses help fund the state’s Department of Industrial Accidents, which oversees the workers’ comp. system.

When Gov. Charlie Baker took office in January 2015, the assessment rate for workers’ compensation was 5.8 percent of employers’ premiums. It’s fallen every year since. The biggest drop during Baker’s term came last year, when the rate dropped by nearly a fifth.

The new 3.83 percent rate is the second-lowest rate in the past decade, behind the 3.34 percent that businesses paid the state in the 2014 fiscal year under Gov. Deval Patrick. The highest rate this decade came during the 2010 fiscal year, when it rose up to 7.22 percent.

Administrations typically seek to lower the rate as much as they can, while maintaining the workers’ comp. fund’s financial stability.

FBI Issues Malware Warning Aimed at Internet Routers

If you haven’t got anything better to do this Memorial Day weekend, consider spending time with your home Internet router. Actually, your government needs you to, to help fend off a major international cyberattack.

According to a blog post from Cisco’s cyberintelligence unit Talos, known devices impacted by the “VPNFilter” malware include manufacturers Linksys, MikroTik, Netgear and TP-Link.

Talos said the malware can allow hackers to steal website credentials as well as render a router unusable, cutting off access to the Internet.

Then on Wednesday, the Federal Bureau of Investigation warned consumers to reboot their Internet routers and install new software patches, to fight this nasty new malware attack called VPNFilter that has so far infected about half a million devices in more than 50 countries, including the United States. VPNFilter can be used to steal data, or to order routers to “self-destruct,” knocking thousands of Internet-connected devices offline.

That’s a big ask on the part of the government. While routers are as commonplace as PCs, hardly anybody knows how they work, or how to update their software. Most of us don’t even protect them with passwords, much less know how to log onto a router to download and install software updates. I can’t remember the last time I did, and I enjoy that kind of thing.

There’s no shortcut here: Look up your router’s brand, model and serial numbers, figure out its default password, log onto its internal control software, and download a patch from the company’s website. Easy enough, right?


Ohio’s Monopolistic State Fund approves $1.5 Billion Rebate

The Ohio Bureau of Workers’ Compensation’s board of directors approved a $1.5 billion rebate on Thursday.

The bureau will mail checks to roughly 180,000 Ohio employers this summer, according to a statement.

It attributed the ability to provide the rebate to “healthy investment income, falling claims and prudent fiscal management.”


This news comes exactly one month after the rebate was proposed.

The rebate equals 85% of the premiums paid for the policy year that ended June 30, 2017, or calendar year 2016 for public employers. It would follow $1 billion rebates issued in 2013, 2014 and 2017, and a $15 million rebate in 2016 for counties, cities and other public employers, according to the release.

Of the $1.5 billion, an estimated $48 million would go to schools and $111 million would go to local government entities. That’s on top of $402 million in rebates those public taxing districts have received since 2013 — $125 million for schools, $277 million for others — according to the release.

Twisting and turning movement captured real-time by wearable device

Employee education and training is a critical part of risk management practices.  Being able to see exactly where each individual employee needs correction in their lifting techniques is all the more important.  This new device will send the employee’s data directly to the employer’s app to capture their movements just like personal use fitness apps have been doing for years now.  With correction and education, this can lead to high risk Workers’ Compensation industries, becoming more moderate.  Insurers and insureds alike should quickly take up this new product and add it to their line of loss control measures to help make the work place safer.

-David Campbell


SAN ANTONIO — Employers and their insurers may have found a missing link in solving the mystery of the Monday-morning workers compensation injury.

Wearable technology can now track and measure movement to gauge the time and extent of a soft-tissue injuries, presenters told attendees at the Risk & Insurance Management Society Inc.’s annual conference Wednesday in San Antonio.

Serving as the twisting, bending and golfer-simulating Guinea pig, Lance Ewing, executive vice president for global risk management and client services at Katy, Texas-based Cotton Holdings Inc., showed attendees how a belt-like device can show how fast he’s moving, where he’s moving, how much force is involved and more.

A screen to the left showed digital snapshots that had the appearance of a hospital heart monitor displaying movement in real time. Mr. Ewing, in a twisting motion, told attendees that such activity — occurring in virtually every industry from retail to manufacturing — can be a source of lower back pain, a sore spot in workers comp, he said.

“Employees do this all the time, a lot of twists and turns … office employees, plant workers,” Mr. Ewing said, demonstrating. “If I have to pick up a large object and I don’t bend at the knees, it will data-mine what I am doing. This monitors what employees do every day.”

Eric Martinez, founder and CEO of Clemson, South Carolina-based Modjoul Inc., who brought to the market the device Mr. Ewing was demonstrating, said if employers can know what and when the employers are lifting or moving incorrectly in ways that cause lower back pain and injuries, they can help eliminate the issue with better training.

“A lot of employers are asking, ‘How do I get rid of the twist in my workforce?’” Mr. Martinez said. “That’s when the training opportunity comes into play.”

Such a WiFi-enabled device can track and store the information for the employer, giving risk managers and workplace safety supervisors a more accurate picture of unhealthy movement. If a person lifts a box from the floor while bending at the waist, versus squatting as the more appropriate technique, the belt will know and either inform the employer or vibrate so as to nudge the worker that he or she is moving dangerously, Mr. Ewing explained while demonstrating.

Another pro is that wearable technology can provide employers a “black box reading” three minutes before and three minutes after a claimed injury, said Mr. Martinez. The information, similar to what is gathered when airplanes experience incidents, can tell the employer when the employee had done something inappropriate or had jerked his or her body, as an example to show that some sort of impact or injury had occurred, said Mr. Martinez.

While targeting fraud is one objective, “advocacy and prevention” for workers and their injuries is at the heart of wearable technology, Mr. Martinez said.

“We say, ‘We are not trying to get you fired,’” he said, adding that the technology can help develop better-movement plans for workers, for example. “Ultimately, it’s we want to say that after you have been working for this company for 35 years, you won’t have this aching back situation.”

Approved WC Legal Fees up 36 percent in 16-17, what will the 17-18 fiscal year look like?

Injured workers racked up nearly $186 million in approved legal fees in 2016-2017, a 36 percent increase from the previous year, a state report on the workers’ compensation insurance system shows.  This is with the Castellanos v. Next Door Company ruling, which repealed restrictive attorney fees caps, only being in place for 7 out of 12 month in the 16 -17 fiscal year.

In all, attorneys’ fees in the workers compensation system totaled nearly $440 million during the 2016-2017 fiscal year. The majority — nearly $254 million — were forked out by employers defending workers’ compensation claims.

Issued by the Office of the Judges of Compensation Claims, the 2016-2017 annual report notes that $185.6 million in approved legal fees for injured workers is the highest amount paid in nearly a decade and is attributable to a 2016 Florida Supreme Court ruling.

“Clearly, there is a trend suggested of increasing claimant attorneys’ fees in the wake of (the ruling),” the report, released last month, notes.

The report shows that in 2016-2017, more than $75 million in hourly fees were approved for claimants’ attorneys, a nearly 200 percent increase from the $25.8 million in hourly fees that were approved the previous year.

During the same period, the report shows that fees paid to workers’ compensation attorneys under legislatively approved fee caps decreased about 31 percent.

It is the second consecutive year that legal fees increased for injured workers and employers and reverses what had been a five-year trend of lower legal costs for both sides in workers’ compensation cases.

Workers’ compensation is a no-fault system meant to protect workers and employers. It is supposed to provide workers who are injured on the job access to medical benefits they need to be made whole. Those who are injured for at least eight days also are entitled to indemnity benefits, or lost wages. In exchange for providing those benefits, employers generally cannot be sued in court for causing injuries.

While the system is supposed to be self-executing, injured workers hire attorneys when there are disputes over the amounts of benefits they should receive.

Florida businesses faced some of the highest workers’ compensation costs in the country in the early 2000s. Business interests argued that attorney involvement — legal fees in the aggregate totaled $427 million in fiscal year 2002-2003 — was the reason for the high costs.

The Legislature responded by passing a sweeping rewrite of the workers’ compensation system in 2003 that, among other things, tied the recovery of plaintiff attorneys’ fees to percentages of the amount of recovered benefits. The law was tweaked in 2009 to make clear that workers’ compensation judges were precluded from awarding additional hourly fees for plaintiffs’ attorneys.

But in a 2016 ruling known as Castellanos v. Next Door Company, the Florida Supreme Court ruled that the restrictive fee caps violated injured workers’ due process rights and authorized judges to award fees outside the fee schedule if adhering to it yielded unreasonable results.

Business interests lobbied the Legislature earlier this year to, at a minimum, limit the hourly rates that attorneys could charge. But lawmakers did not approve a change.

Despite the marked increase in legal costs for 2016-2017, the report notes that when adjusted for inflation, aggregate attorneys’ fees in Florida workers’ compensation have decreased by more than $100 million over the past 14 years.


Insured Deadlines for Liquidating Guarantee Insurance Company

  • GIC’s insurance policies are cancelled effective December 27, 2017, unless otherwise terminated prior to that date; and
  • The claims filing deadline for filing claims in the GIC receivership proceeding is on May 28, 2018.

Florida’s fund will only pay claims for policies written in Florida. For other states where Guarantee did business “the processing and payment of pending workers’ compensation claims will be made in accordance with the statutes of each of those affected states,” a spokesman said.

Gurantee was licensed to sell worker’s compensation insurance in forty states and the District of Columbia, and wrote business in thirty-one states and the District of Columbia at the time of liquidation. 

Guarantee had approximately 8,600 active policies as of November 13, 2017, including 1,250 in Florida. Based on its 2016 annual report, the company wrote $279.9 million in gross premiums in 2016.

Guarantee was majority owned and founded by Steven Mariano, who also founded Patriot National Inc., a publicly traded insurance services company that counted Guarantee as one of its biggest customers. Mariano resigned from Patriot in July amid a falling stock price and shareholder lawsuits.

According to the Florida Office of Insurance Regulation, Guarantee Insurance Company’s board consented to being placed in receivership on November 13.

In a Nov. 17 letter to Florida’s Chief Financial Officer Jimmy Patronis, regulators determined that Guarantee had insufficient assets to pay all outstanding obligations. According to the letter, GIC’s actuary asked the company to increase its reserves, which caused the company to go from a $42.18 million surplus to a deficit of $236,775.

POLICY CANCELLATION:  GIC wrote workers’ compensation insurance policies.  Although licensed in forty states and the District of Columbia, the company had in-force policies in thirty-one states and the District of Columbia.  Under the liquidation order, all GIC policies are cancelled effective December 27, 2017, unless otherwise terminated prior to that date. 

PREMIUM ISSUES:    In accordance with Section 631.155, Florida Statutes, all premiums and unearned commissions you collected on behalf of GIC must be accounted for and paid directly to the Department within 30 days.  No agent, broker, premium finance company or other person may use premium monies owed to GIC for refund of unearned premium or for any purpose other than payment to the Department. Violation constitutes contempt of Court.  You have the right to appear before the Court and show cause if you feel that you are not required to account to the Department.

Premium Refunds/Unearned Premium: 

Guaranty Associations will pay covered unearned premium claims pursuant to each state’s applicable statutes after the Department completes its processing of the policy records, conducts any premium audits, and sends the unearned premium records to the applicable Guaranty Association.

CLAIMS ISSUES (FOR LOSSES INCURRED PRIOR TO 11/27/2017):  All policyholders should be informed that the deadline for filing claims in the GIC receivership is May 28, 2018.  Information regarding the method for filing a claim in the receivership proceeding will be available on the Department’s website,

With the entry of the liquidation order, the guaranty associations of the states where GIC wrote business are activated to help pay outstanding covered claims of those states’ GIC policyholders.  The processing and payment of pending claims will be made in accordance with the statutes of each of the affected states.  Some states exclude claims of high net worth insureds and claims under large deductible policies.  These claims will become the responsibility of the policyholder.  Contact your state guaranty association for additional details.

PLEASE NOTE REGARDING ALL CLAIMS PAYMENTS:  The Department is currently gathering claim files and claims data in order to forward the information to the appropriate Guaranty Associations. Please contact GIC using the contact information below to check the status of an existing claim and/or to file a new claim. The Department’s website,, will be updated once the transition is completed. At that time, new contact information will be posted to assist policyholders in filing a new claim or in following up on a pending claim.

Consumer/Claims Calls:

Until further notice, consumers with questions regarding GIC should contact the company as follows:

Guarantee Insurance Company – Direct Contact Information:

General Information:  800-948-2651 (toll free) or 954-556-1600 (main phone)

Claims (all States):  GIC Client Service Center: 1-877-886-4334 (toll free)

If you have any non-claims related questions regarding the receivership, please contact the Department using the “Contact Us” form at or by calling (850) 413-3081 or toll free at 1-800-882-3054. Additional information regarding GIC and the receivership process will be available soon on the Department’s website,  Copies of the Liquidation Order and other relevant information will be available on the Department’s website.

Your anticipated cooperation and assistance in these matters is greatly appreciated.

Section 631.341, Florida Statutes

631.341 Notice of insolvency to policyholders by insurer, general agent, or agent. —

(1) The receiver shall, immediately after appointment in any delinquency proceeding against an insurer in which the policies have been canceled, give written notice of such proceeding to each general agent and licensed agent of the insurer in this state. Each general agent and licensed agent of the insurer in this state shall forthwith give written notice of such proceeding to all subagents, producing agents, brokers, and service representatives writing business through such general agent or licensed agent, whether or not such subagents, producing agents, brokers, and servicing representatives are licensed or permitted by the insurer and whether or not they are operating under a written agency contract.

(2) Unless, within 15 days subsequent to the date of such notice, all agents referred to in subsection (1) have either replaced or reinsured in a solvent authorized insurer the insurance coverages placed by or through such agent in the delinquent insurer, such agents shall then, by registered or certified mail, or by e-mail with delivery receipt required, send to the last known address of any policyholder a written notice of the insolvency of the delinquent insurer.

(3) The license, permit, or certificate of authority of any person, firm, or corporation which fails to comply with the provisions of this section is subject to revocation as otherwise provided by law.

(4) If such person, firm, or corporation is not licensed or permitted or the holder of a certificate of authority under any section of this code, such person, firm, or corporation, or the officers and directors thereof, are, upon failure to comply with the provisions of this section, guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or by a fine of not more than $5,000.

History. —s. 750, ch. 59-205; s. 15, ch. 70-27; s. 809(1st), ch. 82-243; s. 24, ch. 83-38; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 68, ch. 2002-206; s. 16, ch. 2015-180.