Newly discovered documents obtained by Workers’ Comp Executive reveal that the Workers’ Compensation Insurance Rating Bureau (WCIRB) is violating both the letter and spirit of the agreement it signed with the California Department of Insurance 16 years ago. WCIRB continues to violate the agreement by denying the public, employers, the Legislature, the executive and regulatory branches of government, and other interested parties access to the information it uses to make its policy and rate recommendations for the insurance commissioner. It has even denied members of its own governing board access to meetings.
As the Insurance Department’s one and only designated statistical agent, as well as the one and only licensed rating bureau, WCIRB is a private company in control of a monopoly. It is appointed by the Insurance Department to work on the public’s behalf.
Nearly 16 years ago it agreed to curtail its secrecy practices and to conduct much of its operations in the public realm. But departmental instructions or orders, signed agreements and assurances aside, it remains common practice to this day to withhold information from the public. It was ordered to make data and meetings open and public by then-Commissioner John Garamendi. Robert Mike, its current president even signed an agreement promising the Insurance Department that it would make meetings open and information available to all interested parties. A link to that agreement is provided below.
Under the terms of a 1994 Committee Openness Proposal and the ratifying memorandum of understanding (MOU), WCIRB was required by the department to sign an agreement to make all written materials available to the public if it was providing those materials to its governing, actuarial, and/or classification and rating committee members for discussion in a meeting. Yet such materials, including PowerPoint slides, data briefs and other reports and presentations made by WCIRB staff to the committees are rarely provided to public members in attendance.
It is important to note that Workers’ Comp Executive has had its award-winning San Francisco-based editor Brad Cain consistently present at many, if not most, of these meetings for the past few years. Both he and Bess Shapiro tell us WCIRB has commonly refused to provide him materials, to allow him to take pictures, or to record audio or video of the proceedings.
WCIRB’s most recent Classification and Rating Committee meeting is a prime example of these repeated, egregious violations.
The committee’s July 27 agenda included six items on the public agenda, each of which related either to a staff document or a report from the manual subcommittee. Brad says these included proposals to carve out a new classification for land surveyors from the current consulting engineers classification, as well as a proposal to boost the wage differential for the dual-wage classifications maintained by WCIRB. Both stories we covered in the current paid-subscriber edition.
Brad’s request to Jack Hannan, WCIRB’s public information officer, for a copy of the reports and documentation being reviewed by the committee was denied. As a result, the public, the industry, the Legislature, and regulatory and executive branches of government are less informed and do not get a chance to analyze the dataor methodology, to comment, or to clearly understand how the end result was derived. We can report that something happened, but not why or what data were used to reach the conclusions. Thus others are prevented from testing the data.
In fairness to the WCIRB, Brad reports that the actuarial committee is “pretty good” about handing out most materials.
The latest violations also illustrate how WCIRB works in general. It violates the spirit of its agreement with the department by delegating much of the underlying work to individual subcommittees or special committees not named in the MOU or Committee Openness Proposal. WCIRB’s strict word-by-word reading of the memo is interpreted for secrecy and against transparency. Therefore, it doesn’t notice these critical meetings nor does it allow the public to attend.
In the case of the C&R committee, members were dealing with several reports prepared by or previously vetted by the manual subcommittee. Because these committees are not mentioned in the Committee Openness Proposal, WCIRB maintains a closed-door policy for its meetings. The end result is a sanitized version of an issue brought for public discussion and action at one of the standing committees, while much of the real debate and decision making takes place at the subcommittee or special committee level to the exclusion of all the interested and affected parties.
By its actions, WCIRB management demonstrates the literal analogy of foxes guarding the henhouse. Its governing board is made up of insurance executives from companies it analyzes plus a couple of public members. Management has placed its governing board members in the untenable position of either backing management policies or becoming the foxes.
But management doesn’t stop there: It has figured out how to keep the public members of its governing board in the dark as well. Here’s how they do it:
It’s not just the general public that is excluded from these subcommittee meetings. One of the two employer representatives appointed to WCIRB governing committee has asked for access to the claims subcommittee and was denied admittance to the meeting. That same member was also relegated to sit in the WCIRB lobby along with our reporter while the C&R committee met in executive session. Many of the same people who sit on the governing committee sit on the subcommittees and therefore have access to the underlying data not provided at the higher – public – levels.
The MOU notes that the general public can be barred from these executive sessions but is silent as to any limits on other committee members attending. But WCIRB maintains that its constitution gives it this authority. WCIRB explains: “The WCIRB’s Constitution provides that a member of one WCIRB committee may attend a meeting of another committee only if the other committee is not meeting in executive session or the committee believes that the nonmember’s participation will assist the committee in its deliberations.” In other words, it can hide information from director-level people.
The bureau also has changed how it runs its C&R committee. Whereas it used to open in executive session and then proceed to the open meeting, it has now reversed the order.
It appears that the change is a response to information that Workers’ Comp Executive obtained while talking directly with carrier representatives who were waiting to appear before the committee on a disciplinary matter they were called for.
The committee now starts in open session, and when that is completed. it takes a break before going to closed session. As one WCIRB official noted, the change eliminates the need for anyone to wait around in the lobby during executive session. This also allows a carrier facing disciplinary action to come and go without any members of the public and/or media learning their identity.
And the notion of public meeting also appears to have limits. While the MOU is silent on the question of audio and video recordings during the public meetings, WCIRB has set policy that use of these recording devices is not allowed, but observers question why the public would be permitted to attend a public meeting and jot down notes but not be permitted to record the meetings.
Given the impact some of these discussions and decisions may have on employers’ rates, experience modifications, and their ability make decisions about their workers’ comp coverage, the department may want to rethink its Openness Proposal to bring in the light of day.
Here is a link to the MOU.
Here is a link to the story about public members Bruce Wick and Art Levine being excluded.
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