I have been in West Virginia all week, attending the All Committee Conference of the Southern Association of Workers’ Compensation Administrators (SAWCA). One of the better panels this week was comprised of insurance carriers who discussed many of the challenges they have operating across 50 states in this heavily regulated industry. I’ve heard a lot of weird and wacky things over the years, but some of the things I heard during this session really surprised me.

When speaking of the unique reporting requirements and information demands that some of the states have, one participant spoke about a letter they received from a state workers’ compensation regulatory agency “out west.” The letter was inquiring about their company’s board of directors. 

Specifically, the agency was demanding to know the sexual orientation of all of the board members at their company.

Talk about a completely useless and stupid question. I immediately assumed it was California that wanted to know. I later discovered that I was correct with that assumption. The panelist explained that they did not believe that information to be relevant, but the state apparently disagreed. 

Another interesting point discussed was the request an insurer received from a coastal state, asking them to provide a copy of the Disaster Recovery Plan that they would deploy in the event their office was destroyed by a hurricane. The presenter told the audience that their response was to tell the regulatory body that their offices were in the upper Midwest and didn’t think that a hurricane would be a likely threat. The state politely acknowledged the improbability of an event such as that but informed them that they still wanted a copy of that Hurricane Disaster Plan.

If you ask a really stupid question, you have no right to expect an intelligent answer.

I wonder if insurers based in Phoenix are required to have a “snowmageddon” disaster plan established, or if offices in Colorado must have a plan to address rising sea levels. 

The problem with the first question is that it incorporates social engineering that is not part of an agency’s overall mission. Asking a specific question about the sexual preferences of a company’s board is merely satisfying an agency’s politically correct (and likely misguided) drive for diversity, but the information probably has no bearing on the regulated products being offered by the company. I also doubt the agency could adequately cite any statutory authority they have to even pursue that question.

The latter question, about hurricane preparedness in the upper Midwest, is more indicative of a common problem in workers’ comp. We are an industry that tends to approach issues with a cookie cutter, one size fits all mentality, when the reality is that many issues are personalized and unique. Vendors of late have seen similarly broad requests related to cyber security issues, having to address very specific data handling protocols even when they don’t have access to the data their customers wish to protect. 

Sometimes an injection of a little common sense would make everyone’s life a little bit easier.

In the absence of that, however, stupid questions are bound to be part of our operational future. As long as we are prepared to provide equivalent answers, it will probably be considered business as usual. 

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A Question for Readers: As long as we are discussing stupid questions, I have one for you. Another comment during this session related to the “worst state to deal with” has piqued my curiosity on how the industry views that topic.

If you are a workers’ comp professional who works for a carrier, employer or TPA, what in your view is the most difficult state to deal with from a regulatory and reporting perspective? 

If you care to respond, please email me at info@workerscompensation.com, using the subject line “Worst State.” Tell me the state you find most demanding or unreasonable, and why. All responses will remain absolutely confidential.

Thank you.

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