SIF to assess $60 million for five years

Under a plan approved by the Budget and Control Board on May 9, the unfunded liabilities of the Second Injury Fund, slated to close June 30, would be paid off by assessments of $60 million each for the next five years.

The board would commission an actuarial valuation after the first year and subsequently to ensure it is collecting enough funds. Earlier in the year an actuarial study by KPMG calculated as of June 30, 2013 the Fund would have unfunded liabilities of $346.3 million and cash balance of nearly $91.7 million.

The plan adopted by the Budget and Control Board mirrors the consensus among a panel invited in February to advise the Fund on paying off its liabilities. The panel consisted of representatives from the insurance industry, the South Carolina Self-Insurers Association, the State Accident Fund, the SC Department of Insurance, and the SC Workers’ Compensation Commission.

Legislation passed in 2007 stipulates the Second Injury Fund will be closed as of July 1, 2013, when all remaining obligations and residual activity will be transferred to the Budget and Control Board for an orderly winding down. The self-insurers association was prominent among those agitating for the Fund’s closure. But opposition to the Fund was widespread in the business community and reached a high point in 2005 when the Fund levied assessments totaling $253.3 million.

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Road deaths increased in 2012

Road deaths claimed 34,080 lives in 2012, an increase of 5.3% over 2011 and the first year-to-year increase in traffic fatalities since 2005, according to the National Highway Traffic Safety Administration.

Traffic fatalities had been declining in recent years since reaching a near-term high in 2005. Traffic deaths decreased by about 26% between 2005 and 20011, recording a 60-year low in 2011.

Not surprisingly, traffic accidents are a leading cause of high-severity injuries in workers’ compensation. Moreover, they are pervasive; a study by NCCI published in December 2006 noted even the clerical classification has surprisingly high exposure to traffic accidents.

Among the key findings of that study:

• · Motor vehicle accidents are more likely to result in multiple claims, and severity is higher for motor vehicle claims from multiple-claim events.
  
• · Claims from motor vehicle accidents are more severe than the average workers’ compensation claim; they impact a diverse range of occupations other than just truckers; top diagnoses include neck injuries; duration is more than a third longer; subrogation is significant, with traffic accident claims comprising more than half of all claims with subrogation; and attorney involvement is greater.
  
• · Distracted driving continues to be a leading cause of accidents and near- accidents, and employers can play a big part in encouraging safe practices and procedures.