Law Times

PAGE 8 FOCUS ON Report seeks to remove politics from premiums Personal Injury Law WSIB funding review T BY JUDY VAN RHIJN For Law Times since March 30, but the public has yet to see it. However, in an- ticipation of a much faster public release, the report' he much-anticipated Workplace Safety and Insurance Board funding review has been before the board Arthurs, conducted a webinar on April 12 that gave Ontario Bar Association members a sneak peek at what' s author, Harry In previous speeches, Arthurs had fl agged that he'd be address- s to come. ing six topics — funding, premi- um rate setting, rate-group clas- sifi cation, occupational disease claims, experience-rating pro- grams, and indexation of partial disability benefi ts — and he didn't deviate from that path. However, there were some surprises. Ar- thurs seems determined, for ex- ample, to take the politics out of premium rate setting. "He recognized that a good deal of the WSIB's troubles are a result of heavy-handed govern- ment interference, especially in premium setting, tolomeo, chairman of the work- ers' compensation section of the " says John Bar- tipping point in a range of 20 per cent that will move upwards over time. He described anything in that range or above as the "com- fort zone. cent, the sooner you get rid of the unfunded liability, meo. "Th is proposal recognizes that the system is designed to deal with ebbs and fl ows. If you have a bad year, the board is not going to say that they have to cut workers' benefi ts." While employer groups have "Th e closer you get to 100 per " says Bartolo- " always been aware that the move to fuller funding would increase premiums, many are supportive of fi nancial reform. "Premium rates have to go up, 'Employers are aware that there will be short-term pain for long-term gain,' says Stephen Roberts. OBA. "Professor Arthurs wants to make rate setting as indepen- dent as possible. important step in the right direc- tion. "It recognizes that premium Reach one of the legal and business markets in largest Bartolomeo thinks that's an " rates have been turned into some sort of political game, Law Firm LLP notes that politi- cians never want to change the rates because they're concerned Stephen Roberts of McTague " he says. Canada! about the eff ect it will have on the people voting for them. "Profes- sor Arthurs proposes that there will be a chief actuary who will determine what premium rate will meet the target. Th e recom- mendation will be made straight to the board of directors. Th ey can accept it, reject it or refer it to the actuary council for further advice. scenario, employer and worker advocacy groups will also be out of the equation. In terms of the fi nancial pic- " Roberts notes that in this classifi cation, Arthurs is clearly of the opinion that there are too many groups, a situation that causes confusion and promotes rates shopping. In recommend- ing a revision of the current structure, he suggested reducing the 154 classifi cations now avail- able to 60. "Employers would want to do that to save costs," says Bartolomeo. But Roberts, who generally represents employers, feels there's "But at the end of the day, there will be lower premium rates be- cause they will have got rid of the unfunded liability and be closer to full funding. Th ey will not need a substantial part of the premium to be paying off debt. Employers are aware that there will be short-term pain for long- term gain." On the topic of rate-group " says Roberts. ture, Arthurs said the WSIB needs to look towards full fund- ing, not 100 per cent but cer- tainly close to it. At present, the WSIB has only 54-per-cent fund- ing. Th at leaves the unfunded li- ability — the diff erence between payments for future benefi ts to workers and funding received from business — in the vicinity of $14 billion. Arthurs had two proposals on With more than 250,000 page views a month, canadianlawlist.com captures your market The all-new canadianlawlist.com features: — A fresh new look, designed for improved user experience — Effective new ways to reach the legal market — Gold and silver advertising packages For more information contact: Colleen Austin at 416-649-9327 or toll free at 1-800-387-5351 colleen.austin@thomsonreuters.com www.lawtimesnews.com CLL Online ad - 1/4 pg LT.indd 1 2/15/12 1:38 PM how to attain that: one that re- duces the unfunded liability over a 20-year period and another less aggressive projection over a 25- year timeline. Under one model, premium rates would average $2.52, a jump from the current levy of $2.36. Under the other proposal, they' cent funding as a "tipping point" under which there' chance that market factors would make it diffi cult for the board to get out from under its unfunded liability. Bartolomeo describes this as the "doom-and-gloom scenario. a Arthurs identifi ed 60-per- s a one-in-20 d average $2.76. rates have to remain above the corridor " Arthurs proposed system in which nothing tremendously wrong with the current groupings. "It is a bit more form-fi tting and specifi c as it is. A more general sector is likely to attract higher premiums because it will include businesses with higher risks." Th ere' Arthurs' treatment of experience rating systems such as CAD-7 and the NEER that are designed as employer incentive programs off ering premium adjustments in return for fewer claims. He merely noted that there are abus- es of the system and pointed to the need for reviews and adjust- ments. "Experience ratings are meant to prevent accidents and to encourage people to return to work," says Roberts. "But profes- sor Arthurs says that they should only stay in place to the extent that they accomplish those goals; otherwise they should be elimi- nated." While employers are relieved s more polarization over May 7, 2012 • Law TiMes that the system is remaining as it is for the moment, workers' representatives are disappointed that Arthurs didn't make a pro- posal for abolition. "I suppose he See Lawyer, page 13 Online Print and in

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