Back in 2006, my company (Advanced Insurance Management) was commissioned to perform a study looking at how effectively the reimbursements paid by the South Carolina Second Injury Fund translated into lower premiums for employers there. What we found in that study was shocking: over 50% of the time, insurance companies did not perform the needed corrected reporting to NCCI so that the experience modifiers of employers would be reduced to reflect the reimbursements the insurance companies had received.
So in over 50% of the cases examined, employers ended up being overcharged for Workers Compensation insurance, because their insurance companies were taking the reimbursements from the Second Injury Fund and not reporting it to the appropriate rating bureau.
South Carolina enacted new legislation in 2007, in response to our findings, that required insurance companies to certify that they have made the appropriate reporting to NCCI before they actually get the reimbursements. But we wondered what had happened to those employers who had already been overcharged.
We're now working on that, and finding that the insurance industry has done nothing to address the overcharges that occurred. In partnership with the South Carolina Small Business Chamber of Commerce, we're working with individual employers whose insurers received Second Injury Fund reimbursements. So far, we're finding an even higher percentage of overcharges than we found in our original 2006 study.
This leads us to strongly suspect that the problem is not confined just to South Carolina, but instead is likely to have occurred in other states that have Second Injury Funds.
South Carolina employers can find out more here about how to check if they've been overcharged.
Employers in other states can contact us here to find out about how we can check if they've been overcharged. If your company had had any claims reimbursed by a Second Injury Fund in the past five years, it appears likely that you may have been overcharged on your Workers Compensation insurance. If that's the case, we can help correct that.