HARRISBURG (WSKG) -- Representatives from Pennsylvania's largest supplier of workers' compensation insurance say some insurers are taking advantage of the system, and they're ill-equipped to stop it.
The State Workers' Insurance Fund--or SWIF--wants legislation that would give it more power to force the companies it insures to pay off their debts.
SWIF was designed as an affordable way for small businesses to give their employees workers' compensation insurance, which Pennsylvania legally requires.
Interim director Andy Thomas described the fund as the "insurer of last resort," because it's legally obligated to write policies as long as the insurer's application is in order--regardless of risk.
Thomas said that often leads to a problem.
Insurers are charged based on their payroll estimates, so sometimes they underestimate to get a lower premium. When SWIF audits a company and they end up owing back debt, Thomas said it's easy for them to just walk away.
"They have the ability to apply for a new federal employee insurance number, they maybe change the name of the company, they apply to SWIF for another policy, and because we are the insurer of last resort--they have paid the premium, they have provided the information--we are then required to write them another policy," he explained.
Thomas said this is the first time SWIF's brought this particular issue to the legislature.
He didn't have any specific recommendations, but said the fund needs "more teeth in requiring insurers to address the debt they have with the state."
No proposals have been made so far. But members of House Labor and Industry Committee--where Thomas made his request--expressed an interest in pursuing the issue.