Taking Stock

December 2, 2009

Combined Group Celebrates 20 Years of Nonsubscriber Leadership

by Blake Stock, CEO

Last month we celebrated Combined Group's 20th anniversary of providing Texas employers nonsubscriber programs as a smart alternative to the state workers' compensation system.

Twenty years is a milestone which we're pleased to share with you. And it's you, our most trusted agency partners, we wish to thank first and foremost. We strive year-in and year-out to earn your confidence with outstanding market representation and technically sound nonsubscriber administration. Over the decade to come, you'll not only see broadest forms and highest limits, you'll also find continued technical execution of the fundamentals. Those being - 

• strong underwriting;
• expert claims adjusting;
• insightful loss prevention;
• documented safety plans;
• ERISA plan implementation, and
• superior coverage form.

This full-service approach enables Combined Group's agents to provide the best on-the-job injury insurance options available to their clients.

A Little History

When Texas passed its first 'Workmen's Compensation' law in 1913, it did not requite employers to participate in the system. Texas has remained an elective state ever since. However, for the first 75 years, most employers did subscribe because workers' compensation coverage was readily available and worked fairly well.

All that changed during the 1980s, when claims costs began to increase rapidly, although benefits were largely inadequate. To continue participation employers had to go into an assigned risk pool. The pool was subsidized by assessments on the insurance companies writing workers compensation coverage in Texas. As assessments grew, insurance companies were forced to either cease writing coverage in Texas, or to charge ever higher premiums. Texas employers needed a better solution.

The Turning Point

In 1989 the Texas legislature passed the Texas Workers' Compensation Act, which increased benefits, introduced administrative review as an alternative to litigation of disputes, setting up worker health and safety programs, establishing penalties for fraudulent claims and streamlining medical costs.

October 1989 the Combined Group issued its first nonsubscriber policy, a Lloyd's of London form, whereby the nonsubscribing employer transferred workplace injury risk to an insurance company. In 1991, federal and state courts recognized the ability of non-subscribers to use the Employee Retirement Income Security Act of 1974 (ERISA) to formalize their programs and to use the Federal courts as the forum for benefit dispute resolution.


New Policy Forms + Broadened Coverage = Great Value

In 1992, the Combined Group introduced a new nonsubscriber coverage form, using an American insurance company. It provided a choice of Self Insured Retentions as low as $1,000, limits up to $10,000,000 and coverage for legal costs, punitive damages, occupational illnesses, and more. Since then, coverages have broadened and prices have become more competitive, making these policies one of the best values in the insurance industry.

In 1997 Combined was the first to effectively integrate ERISA plans and nonsubscriber insurance coverages, which provides employers a total solution and eliminates reporting and coverage gaps. It stands as a hallmark of the industry today.

In 2007 Combined began offering insurance coverages with limits up to $25,000,000 and weekly disability reimbursement periods to 260 weeks, both of which are best in market today.


More Than One Third Elect Nonparticipation Today

Today, approximately 36 percent Texas employers are nonsubscribers. There are many good reasons for this popularity, including these:

• Use of ERISA plans
• Alternate dispute resolution programs
• Good insurance coverage
• Sophisticated claims-handling techniques
• Advanced IT capabilities
• Substance abuse and drug testing programs
• Improved occupational medicine

Our experience clearly shows when an employer switches from the Texas Workers' Compensation system to become a nonsubscriber, and does it properly, losses from employee injuries typically drop by 80++ percent.

Nonsubscription Specialists Are Not All Alike

Through hard and soft markets, good and bad economic times, the Combined Group has continued to execute the fundamentals that have enabled us to develop an unbeatable service standard.

We know you have choices where you place your business. While other markets come and go, Built To Last is a motto we take quite seriously. We continue our pledge of service to you and your clients for the decades to come.
 

Thank you,

Blake