If employers in New York State ever needed more evidence that the real enemy to rising workers’ compensation costs is insurance companies, not injured workers, they need look no further than the recent 1.6 billion dollar AIG bid rigging settlement with Attorney General Eliot Spitzer.
Bottom Line – besides rigging bids to boost their exorbitant profit margins at the expense of employers, AIG cheated the New York Workers’ Compensation Board out of millions of dollars that had to then be made up higher employer premiums. All the while, AIG’s now ousted CEO Maurice “Hank” Greenberg collected a tidy $29,000,000 compensation package in 2003. As of 2005, Greenberg has a net worth of 3.2 billion. If I’m a New York employer with AIG as my workers’ comp carrier, I’m mad as hell. Guess what? The other workers’ compensation insurance company CEO’s are not too far behind.
Funny – Governor Pataki and the Business Council of New York State don’t mention these facts when they complain about employer workers’ compensation costs. They always blame the injured worker. Do New York employers know that the Business Council has it’s own side business as a workers’ compensation “third party administrator” – First Cardinal? How much does the First Cardinal CEO make? How much money does the Business Council make on this cozy little relationship? Hmm…
Hopefully, employers in New York State will wake up to the fact that workers’ compensation insurance companies are making money hand over foot in New York. Every day, more workers’ compensation insurance companies enter the New York market because of the lucrative profits. It’s gotten so ridiculous that even State Funds from other states are coming into the New York market. Does the New York State Business Council have a response? I’d like to see it.
The only thing more ridiculous is the Governor’s assertion that rising workers’ comp costs had something to do with the demise of Delphi upstate. No credible business analyst would back such a silly proposition. The fact is, Delphi was cooking the books and was tanking with it’s parent, General Motors. Iowans may fall for silly charades like this, but not New Yorkers, or our State Senators. Insurance company profiteering in the New York workers’ compensation market is the big problem for employers in New York State. Period!