The Chase Sensale Group Logo

WCB Bills Members of Failed Trust Funds

 Work Comp Board Bills Members of Failed Trust Funds:

 

The New York Workers' Compensation Board sent out bills in July to professional truck drivers who belong to mutual workers' compensation self-insurance trusts.

 

Many of the trusts, formed as part of the state's 1990s workers' compensation reform, have become insolvent or indebted because of liability miscalculation, according to a Wednesday article on the website of professional trucking magazine Land Line. The original idea behind the funds was to pool risk and lower premiums, but Hiscock and Barclay attorney Linda Clark told the magazine that the trust managers had little experience with insurance regulations.

 

The board began taking over the trusts in the mid-2000s as more than 20 failed. Then it set forensic accountants to the task of determining actual liability and how much each member of the trusts owed.

 

Dale Watkins, a representative of the Owner-Operator Independent Drivers Association, told the magazine that members of the defunct Transportation Workers' Compensation Trust have reported receiving bills between $14,000 and $33,000. The fund, which had more than 760 members, carried a deficit of $32.6 million.

 

Clark said in the article that the board is recommending trust members sign a memorandum of understanding stating that they'll pay 75% of the bill during the next year and a half. The memorandum would also prevent trust members and the board from suing each other.

 

However, there is New York precedent for taking action against the state in similar matters. In May, the state Supreme Court ruled in the case of Riccelli Enterprises v. New York Workers' Compensation Board that a lower court could levy an injunction against the board's efforts to collect payments from a failed transportation trust.

 

While Clark said in a WorkCompCentral article that the ruling didn't have binding authority, it does provide an option for trust members to resist collection.

Back to news >>>