Workers' Compensation Losses � 12

Workers' Compensation Losses � 12

Texas Workers' Compensation Commission State Risk Management DATE DUE Interim Report April 1994 State Risk Management Interim Report Contents State Risk Management- Summary 1 Assistance to State Agencies 2 Sununary of Losses 4 Issues for Consideration 5 Appendix A - Texas State Agencies Participating in the State Risk Management Program 8 Appendix B - Analyses of Losses by Category of Loss 12 Workers' Compensation Losses 12 Liability Losses 15 Property Losses 18 Unemployment Compensation Losses 19 Appendix C - Texas Workers' Compensation Unit Statistical Report Summary 21 State Risk Management Brief Description Division Location and Function The State Risk Management Division works The State Risk Management Division is located with certain state agencies to identify workers' in the Texas Workers' Compensation Commission. compensation, property and liability risks' to reduce The Division's functions and duties are independent losses. The risk management process' saves the state and separate from all other functions and processes money by protecting state resources. These resources performed by the Commission to regulate the work- include 149,862 state employees, $2.5 billion in ers' compensation system in Texas. capital investments in buildings and $1.6 billion in fixed assets. Basic Duties and Responsibilities The Division collects information on state agency management of workers' compensation, prop- The Division is created by the Texas Workers' erty and liability risks. The Division tracks informa- Compensation Act, Chapter 412 of the Texas Labor tion on claims brought against the state, losses paid, Code Annotated. The Division Director serves as the and methods to reduce risks and losses. 'State Risk Manager' to accomplish the following: The Division reviews state agency risk man- • Identify and evaluate the workers' compensa- agement programs. A written report is provided to tion, liability and property exposures and losses, and each agency, including findings and recommendations. risk management administrative costs of each state Each agency reviewed is required to submit an action agency. plan in response to the findings in the report. The Division monitors implementation of the plan and • Consult with state agencies to develop and provides assistance to the agency as necessary. implement effective, comprehensive risk management programs to reduce exposures and losses. Budget and FTEs • Write risk management guidelines to assist agencies to develop and implement risk management The Division's budget for FY 1994 is programs. $826,189. The Division is funded by interagency contracts or interagency voucher agreements' with • Report to each Legislature regarding the state state agencies. During FY 94, the state risk manage- risk management program. ment program applies to 163 state agencies and fa- cilities. Certain agencies are statutorily exempt'. The Division has 21 full time equivalent (FTE) positions in FY 1994. 1 Assistance to State Agencies The State Risk Management Division assists • Risk Management Seminars and Training state agencies in the following ways: for State Agencies. • Risk Management Program Reviews The Division sponsors and hosts seminars and training sessions for state agencies. These seminars The Division reviews state agency risk and training sessions target agency needs as identified management programs. The review is a comprehensive through the Risk Management Program Reviews, look at risk prevention and control programs in the Safety Program Evaluations, On-Site Consultations, day-to-day operation of the agency. 'Where program and loss experience data. Target audiences range from needs or improvements are identified, state agency executives to personnel performing as recommendations are issued through a formal report additional duty safety officers. Activities for FY 94 to the agency. are as follows: Risk Management Program Reviews are a per- • Liability Seminar - Approximately formance measure for the State Risk Management 300 agency executives, general counsels Division (50 annually). and attorneys, risk managers, human resources managers, other management • Safety Program Evaluations staff are registered for this May 9-10 seminar. The Division evaluates safety programs of state agencies. The evaluation determines if a state agency • Loss Control Seminar - Approximately has a comprehensive, documented employee safety and 200 risk managers and safety officers attended health program. The evaluation validates safety this seminar in October, 1993. program elements and recommendations are made to implement or improve programs where needed. • OSHA Voluntary Guidelines & Train- the-Trainer Seminar - 173 risk managers Safety Program Evaluations are a performance and safety officers attended this April measure for the State Risk Management Division (50 seminar. annually). • Back Injury Prevention - Approxi- • On-Site Consultations mately 100 agency personnel are expected for this June 4th seminar. On-site consultations are informative, educational, training or remedial in nature, and address specific property, liability or workers' compensation • Risk Management Guidelines issues or concerns. • The Division periodically develops and The On-Site Consultations are a performance distributes guidelines to all covered agencies. The measure for the State Risk Management Division (100 guidelines provide the framework for an agency risk annually). 2 management program and consist of four volumes: Volume I, Risk Management Administration - Explains the concept of risk management and outlines the process of risk identification and analysis. Outlines the essential elements to develop, implement, and manage a state agency risk management program. Volume II, Property Conservation - Identifies property exposures and means of protecting facility resources, including buildings and building contents. Volume III, Workers' Compensation Exposures - Provides guidance on developing and implementing the workers' compensation claims administration and reporting process. Outlines the minimum requirements for an agency employee safety and health program. Volume IV, Liability Exposures - Provides guidance on liability issues, including tort liability and human resources liability programs. • Technical and Statistical Reports In addition to providing agencies with ad hoc reports, summary statistics on state workers' compensation, liability, property and unemployment losses are provided to state agencies. • Miscellaneous Assistance Periodic mail-outs of appropriate risk management and safety information. Participation in investigating and resolving reported safety violations. Administering an annual State Agency Safety Awards Program and State Employee Safety Poster Contest. Initiated the formation of a risk managers' association now formally known as the State Agency Risk Managers' Association of Texas. 3 Summary of Losses According to statutory requirements, the • Liability losses6 to the State increased by 56% statewide risk management program covers three basic from FY 91 ($8.3 million) to FY 92 ($12.8 million). categories of loss exposures: state employees workers' Losses continued to increase by an additional 10% compensation, liability, and property. The Division from FY 92 to FY 93 ($14.1 million). has also identified unemployment compensation losses as a significant category of loss. • The reported property losses' to the State decreased each fiscal year from $2.1 million in FY 91 • Total losses to the State for all categories of to $1.1 million in FY 93. loss combined decreased 2.8 percent from $71.4 million in FY 92 to $69.4 million in FY 93. • Unemployment compensation losses to the State experienced a significant increase (28%) from • State employees workers' compensation FY 91 ($5.7 million) to FY 92 ($7.7 million). However losses5 have decreased since passage of the new a 5.2% reduction from FY 92 to FY 93 ($7.3 million) workers' compensation law. A 1.0% reduction of was shown. total workers' compensation payments was experienced from FY 91 ($49.9 million) to FY 92 Appendix B contains detailed information and loss ($49.5 million). A fiirther reduction of 5.1% to $46.9 data by each.category of risk. million was evident in FY 93. Figure S1 : Sumrnary of Losses For FY's 91-93 All Non-Exempt State Agencies 1 1992 1993 1:3 Workers' Comp $49.9 5 $46.9 I•11 LiAgency $8.3 $12.8 $14.1 CI Property $2.1 $1.5 $1.1 IN27/94ployment $5.7 $7.7TWCC $7.3 Seer. Te/CC, State Risk Management Medea AdtttcY Lest Sae, St /27/91. 4 Issues for Consideration Addressing the following issues will improve Department of Transportation are exempt from the and enhance the statewide risk management program. State Risk Management Program. The loss data In some instances, an issue may be appropriately reported to each Legislature by the State Risk Manager addressed through individual agency action, or through presents only a portion of the cost of risk since these interagency cooperation. In other cases, the issue may large agencies are exempt from reporting. Requiring require legislative consideration. these and other exempted agencies to report loss data would enable the State Risk Management Division to • Confidentiality of Claims Data Reported to provide the Legislature with the total cost of risk for the State Risk Management Division all State agencies. Detailed open claims' data reported to the State • Agency Chargebacks for Workers' Com- Risk Management Division regarding state agency pensation Losses claims and losses should

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