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Program B: Claims Losses and Related Payments

Program Authorization: R.S. 39:1527-1544

PROGRAM DESCRIPTION

The mission of the Claims Losses and Related Payments Program is to minimize losses and achieve financial stability.

The goal of the Claims Losses and Related Program is to budget a sufficient amount of funds to pay all claims losses, adjusting expenses, and excess insurance costs.

OBJECTIVES AND PERFORMANCE INDICATORS

1. In FY 1998-99, the Claims Losses and Related Program will pay worker's compensation claims at loss dollars equal to or below the industry while providing adequate benefits to state employees.

1 Data were taken form the State Risk and Insurance Management Association's yearly State Risk Management Survey, which was distributed at annual conference held September 13-18, 1997.

2 Louisiana ranked fifth lowest among nine states, with average paid losses per year per full-time employee at $268.69. The southern state average paid losses per year per full-time employee were $256.85. See the table below for additional information.

SOUTHERN STATE WORKER'S COMPENSATION AVERAGE PAID LOSSES/YEAR
STATE

FULL TIME EMPLOYEES

PAYROLL

AVERAGE PAID LOSSES/YEAR

AVERAGE PAID LOSSES/YEAR PER FULL TIME EMPLOYEE

RANK LOWEST TO HIGHEST
ALABAMA

N/A

N/A

N/A

N/A

N/A
ARKANSAS

N/A

N/A

N/A

N/A

N/A
FLORIDA

200,473

$4,900,000,000

$65,000,000

$324.23

7
GEORGIA

115,000

$4,000,000,000

$15,000,000

$130.43

1
KENTUCKY

34,000

$1,200,000,000

$12,500,000

$367.65

8
LOUISIANA

98,524

$2,300,000,000

$26,400,000

$268.69

5
MARYLAND

72,460

$2,900,000,000

$28,000,000

$386.42

9
MISSISSIPPI

35,000

$898,000,000

$5,700,000

$162.86

2
NORTH CAROLINA

N/A

N/A

N/A

N/A

N/A
OKLAHOMA

N/A

N/A

N/A

N/A

N/A
TENNESSEE

72,000

$2,100,000,000

$12,000,000

$166.67

3
TEXAS

165,000

$4,200,000,000

$49,000,000

$296.97

6
VIRGINIA

130,000

$4,540,000,000

$27,000,000

$207.69

4
WEST VIRGINIA

N/A

N/A

N/A

N/A

N/A
AVERAGE

102,465

$3,004,222,222

$26,733,333

$256.85

 

Source: State Risk and Insurance Management Association's 1997 State Risk Management Survey.

2. In FY 1998-99, the Claims Losses and Related Payments Program will pay automobile liability claims at loss dollars equal to or below the industry while providing adequate coverage.

1 Data were taken from the State Risk and Insurance Management Association's yearly State Risk Management Survey, which was distributed at annual conference held September 13-18, 1997.

2 Louisiana ranked second highest among 11 states, with average paid losses per year per vehicle at $247.06. The southern state average paid losses per year per vehicle were $173.00. See the table below for additional information.

SOUTHERN STATE AUTO LIABILITY AVERAGE CLAIMS PAID LOSSES/YEAR
STATE

VEHICLES

AVERAGE PAID LOSSES/YEAR

AVERAGE PAID LOSSES/YEAR PER VEHICLE

RANK LOWEST TO HIGHEST
ALABAMA

7,000

$1,300,000

$185.71

7
ARKANSAS

7,000

$430,000

$61.43

2
FLORIDA

22,981

$3,500,000

$152.30

6
GEORGIA

20,000

$4,000,000

$200.00

9
KENTUCKY

N/A

N/A

N/A

N/A
LOUISIANA

8,500

$2,100,000

$247.06

10
MARYLAND

12,300

$2,300,000

$186.99

8
MISSISSIPPI

N/A

N/A

N/A

N/A
NORTH CAROLINA

33,000

$3,100,000

$93.94

5
OKLAHOMA

9,000

$650,000

$72.22

3
TENNESSEE

N/A

N/A

N/A

N/A
TEXAS

25,000

$600,000

$24.00

1
VIRGINIA

16,000

$1,270,000

$79.38

4
WEST VIRGINIA

9,000

$5,400,000

$600.00

11
AVERAGE

15,435

$2,240,909

$173.00

 

Source: State Risk and Insurance Management Association's 1997 State Risk Management Survey.

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This program is funded with fees and self-generated revenues. Fees and self-generated revenues are derived from premiums billed for insurance provided by this Office and from interest earnings from the self-insurance fund. State and quasi-state entities obtain insurance through the Office of Risk Management.

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

 

DESCRIPTION

 

 

 

 

 

$0

$169,405,206

0

 

ACT 1430 FISCAL YEAR 1997-1998

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$0

0

 

None

 

 

 

 

 

$0

$169,405,206

0

 

EXISTING OPERATING BUDGET - December 10, 1997

 

 

 

 

 

$0

($22,812,948)

0

 

Decrease of funding to prior year levels

 

 

 

 

 

 

 

 

 

 

$0

$146,592,258

0

 

TOTAL RECOMMENDED

 

 

 

 

 

$0

($22,812,206)

0

 

DIFFERENCE (TOTAL RECOMMENDATION AND EXISTING OPERATING BUDGET)

The total means of financing for this program is recommended at 86.5% of the existing operating budget. It represents 64.7% of the total request ($226,440,596) for this program. At the recommended levels, this program has been provided funding to meet anticipated claims payments and other obligations during Fiscal Year 1998-99.

PROFESSIONAL SERVICES

$348,334

 

Medical Review Audits to provide (Medical Utilization Review Program for employees eligible for Workers' Compensation); Precertifications and Examinations of Workers' Compensation Claims and Medical Cost Management

 

 

$166,667

 

Elevator Inspections (Statewide)

 

 

 

$515,001

 

TOTAL PROFESSIONAL SERVICES

OTHER CHARGES

$22,000,000

 

Excess Insurance Costs

$37,000,000

 

Claims payments for Worker's Compensation coverage for State entities'

$1,200,000

 

Contract Adjusting Costs

$85,877,257

 

Claims payments for Medical Malpractice, Road Hazard, Comprehensive General Liability, Personal injury, Auto Liability, Auto Physical Damage, Property Bonds, Crime, Wet Marine, Aviation, and Boiler and Machinery

 

 

 

$146,077,257

 

TOTAL OTHER CHARGES

ACQUISITIONS AND MAJOR REPAIRS

This program does not have funding for Acquisitions and Major Repairs for Fiscal Year 1998-1999.

 

 

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