risk management user group wednesday, january 28, 2004

Risk ManagementRisk ManagementUser GroupUser GroupWednesday, January 28, Wednesday, January 28,

20042004

WelcomeWelcome

Michael L. Hay, CGFM, CPPMMichael L. Hay, CGFM, CPPM

Please hold Please hold questions until the questions until the

end of all end of all presentations.presentations.

Meeting AgendaMeeting Agenda 8:30-8:40 –8:30-8:40 – WelcomeWelcome 8:40-8:55 – 8:40-8:55 – Short Term Special Short Term Special

Events, General Events, General Liability Liability

8:55-9:10 – 8:55-9:10 – Review of SORM 200 Review of SORM 200 Data Data

9:10-9:40 –9:10-9:40 – ClaimsClaims 9:40-10:00– 9:40-10:00– Trend Analysis & Trend Analysis &

Accident Accident InvestigationInvestigation

Meeting AgendaMeeting Agenda 10:00-10:15 10:00-10:15 – Break – Break 10:15-11:00 10:15-11:00 – Life Safety Code 101, – Life Safety Code 101,

2003 Update 2003 Update 11:00-11:15 11:00-11:15 – SORM Fraud Team– SORM Fraud Team 11:15-11:30 11:15-11:30 – Loss, Damage, & – Loss, Damage, &

Destroyed Destroyed Property Property

11:30-12:00 – Questions & Comments11:30-12:00 – Questions & Comments

Short Term Special Events, Short Term Special Events, General LiabilityGeneral Liability

Steven E. Haynes, ARMSteven E. Haynes, ARM

GRS Insurance Services, LLCGRS Insurance Services, LLC

State Office of Risk ManagementState Office of Risk ManagementMaster Short Term General Liability Master Short Term General Liability

Insurance ProgramInsurance Program

Background and PurposeBackground and Purpose

Key Elements of ProgramKey Elements of Program• Outside Users of State Owned FacilitiesOutside Users of State Owned Facilities• State Employees Using Third Party FacilitiesState Employees Using Third Party Facilities

Program HighlightsProgram Highlights• Types of Events AvailableTypes of Events Available• Underwriting GuidelinesUnderwriting Guidelines• Coverages, Limits, and PricingCoverages, Limits, and Pricing

Application ProcessApplication ProcessKey ContactsKey ContactsMarketing MaterialMarketing MaterialSummary and Summary and QuestionsQuestions

SORM 200 Loss Data SORM 200 Loss Data SummarySummary

Sally Becker CPCU ARMSally Becker CPCU ARM

History History

Annual Report to SORMAnnual Report to SORM FY02 – change in data collectedFY02 – change in data collected

– Loss type Loss type – Loss causeLoss cause– Retain from year to year Retain from year to year – Update previously entered dataUpdate previously entered data

February, 2003 – availability to February, 2003 – availability to enter all year longenter all year long

Data – FY02 vs. FY03Data – FY02 vs. FY03OverallOverall FY02FY02 FY03FY03 ChangChang

e %e %

No. of No. of LossesLosses

16361636 18391839 12%12%

OpenOpen 823823 852852

ClosedClosed 813813 987987

Amt. Pd.Amt. Pd. 5,665,1205,665,120 5,193,8335,193,833 -8%-8%

Res/DmdsRes/Dmds 615,379,6615,379,65353

1,048,355,91,048,355,94343

LawsuitsLawsuits 759759 636636 -16%-16%

Automobile LiabilityAutomobile LiabilityFY02FY02 FY03FY03 Change Change

%%

No. of LossesNo. of Losses 382382 363363 -5%-5%

OpenOpen 165165 115115

ClosedClosed 217217 248248

Amount PaidAmount Paid 991,501991,501 524,462524,462 -47%-47%

Avg. Pd./Cld.Avg. Pd./Cld. 4,5694,569 2,1152,115 -54%-54%

Resr./Resr./DemandsDemands

3,255,913,255,9144

1,998,551,998,5511

LawsuitsLawsuits 159159 5959 -63%-63%

InattentionInattention

FY02FY02 FY03FY03 Change Change %%

No. of LossesNo. of Losses 291291 260260 -11%-11%

OpenOpen 124124 8787

ClosedClosed 167167 173173

Amount PaidAmount Paid 799,050799,050 317,604317,604 -60%-60%

Avg. Pd./Cld.Avg. Pd./Cld. 4,7854,785 1,0851,085 -77%-77%

Resr./Resr./DemandsDemands

1,594,941,594,9488

886,693886,693

LawsuitsLawsuits 124124 4242 -66%-66%

BackingBacking

FY02FY02 FY03FY03 Change Change %%

No. of LossesNo. of Losses 3636 3838 6%6%

Amount PaidAmount Paid 45,49745,497 37,96637,966 -17%-17%

Avg. Pd./Cld.Avg. Pd./Cld. 1,8191,819 1,0851,085 -40%-40%

Resr./Resr./DemandsDemands

509,372509,372 1,8251,825

Automobile Physical Automobile Physical DamageDamage

FY02FY02 FY03FY03 Change Change %%

No. of LossesNo. of Losses 135135 290290 115%115%

OpenOpen 1010 6363

ClosedClosed 125125 227227

Amount PaidAmount Paid 227,140227,140 436,667436,667 92%92%

Avg. Pd./Cld.Avg. Pd./Cld. 1,8171,817 841841 -54%-54%

Resr./Resr./DemandsDemands

56,83456,834 216,332216,332

CollisionCollisionFY02FY02 FY03FY03 Change Change

%%

No. of LossesNo. of Losses 104104 183183 76%76%

Amount PaidAmount Paid 187,114187,114 190,903190,903 2%2%

Avg. Pd./Cld.Avg. Pd./Cld. 1,9701,970 1,4141,414 -28%-28%

General Liability (Third General Liability (Third Party)Party)

FY02FY02 FY03FY03 Change Change %%

No. of LossesNo. of Losses 610610 367367 -40%-40%

OpenOpen 380380 215215

ClosedClosed 230230 152152

Amount PaidAmount Paid 921,198921,198 406,325406,325 -56%-56%

Avg. Pd./Cld.Avg. Pd./Cld. 4,0054,005 2,6732,673 -33%-33%

Resr./DemandsResr./Demands 456,981,57456,981,5733

652,382,76652,382,7666

LawsuitsLawsuits 401401 197197 -52%-52%

Employment PracticesEmployment PracticesFY02FY02 FY03FY03 Change %Change %

No. of LossesNo. of Losses 289289 308308 7%7%

OpenOpen 185185 200200

ClosedClosed 104104 108108

Amount PaidAmount Paid 1,232,2701,232,270 2,059,1772,059,177 67%67%

Avg. Pd./Cld.Avg. Pd./Cld. 11,84811,848 19,06619,066 61%61%

Resr./DemandsResr./Demands 114,687,70114,687,7044

8,248,0008,248,000

LawsuitsLawsuits 148148 181181 22%22%

Discrimination - RaceDiscrimination - Race

FY02FY02 FY03FY03 Change Change %%

No. of LossesNo. of Losses 6666 8888 33%33%

Amount PaidAmount Paid 41,00041,000 206,700206,700 404%404%

Resr./Resr./DemandsDemands

00 1,106,751,106,7500

RetaliationRetaliation

FY02FY02 FY03FY03 Change Change %%

No. of LossesNo. of Losses 2828 9898 250%250%

Amount PaidAmount Paid 16,03116,031 1,540,001,540,0000

9506%9506%

Resr./Resr./DemandsDemands

1,100,001,100,0000

4,630,004,630,0000

PropertyProperty

FY02FY02 FY03FY03 Change Change %%

No. of LossesNo. of Losses 7878 118118 51%51%

OpenOpen 1515 2929

ClosedClosed 6262 8989

Amount PaidAmount Paid 720,967720,967 669,089669,089 -7%-7%

Avg. Pd./Cld.Avg. Pd./Cld. 11,62911,629 7,5187,518 -35%-35%

Resr./Resr./DemandsDemands

169,910169,910 212,852212,852

Data by Date of LossData by Date of Loss# #

LossesLossesPaidPaid Resr./Resr./

DemandsDemands

FY98FY98 7171 1,320,1931,320,193 106,458,574106,458,574

FY99FY99 115115 743,620743,620 3,142,6023,142,602

FY00FY00 315315 2,545,9212,545,921 56,609,04656,609,046

FY01FY01 619619 3,011,9743,011,974 73,565,87573,565,875

FY02FY02 12461246 1,603,4451,603,445 542,820,186542,820,186

FY03FY03 10751075 1,354,7221,354,722 880,839,313880,839,313

Total:Total: 34413441 10,579,87510,579,875 1,663,435,591,663,435,5966

Automobile LiabilityAutomobile Liability

# # LossesLosses

PaidPaid Resr/Resr/DemandsDemands

FY98FY98 1414 19,03519,035 8,5748,574

FY99FY99 1515 86,89786,897 00

FY00FY00 5151 140,434140,434 543,032543,032

FY01FY01 109109 398,482398,482 1,100,5941,100,594

FY02FY02 317317 591,728591,728 2,862,1512,862,151

FY03FY03 237237 249,387249,387 740,114740,114

Total:Total: 743743 1,485,9631,485,963 5,254,4655,254,465

Auto Physical DamageAuto Physical Damage

# # LossesLosses

PaidPaid Resr/Resr/DemandsDemands

FY98FY98 11 125125 00

FY99FY99 22 284284 00

FY00FY00 22 1,1601,160 00

FY01FY01 3434 97,54497,544 00

FY02FY02 152152 222,626222,626 70,03670,036

FY03FY03 233233 151,165151,165 102,582102,582

Total:Total: 424424 472,904472,904 172,618172,618

Employment PracticesEmployment Practices

# # LossesLosses

PaidPaid Resr/Resr/DemandsDemands

FY98FY98 1616 235,000235,000 105,750,000105,750,000

FY99FY99 1515 71,00071,000 100,000100,000

FY00FY00 4646 1,812,6221,812,622 00

FY01FY01 136136 416,700416,700 4,483,0004,483,000

FY02FY02 250250 471,817471,817 12,102,70412,102,704

FY03FY03 128128 82,75082,750 500,000500,000

Total:Total: 591591 3,098,8893,098,889 122,935,704122,935,704

General Liability (Third General Liability (Third Party)Party)

# # LossesLosses

PaidPaid Resr/Resr/DemandsDemands

FY98FY98 1616 9,8509,850 700,000700,000

FY99FY99 4343 156,719156,719 3,042,6023,042,602

FY00FY00 139139 207,373207,373 15,821,01415,821,014

FY01FY01 242242 709,614709,614 61,511,78661,511,786

FY02FY02 343343 118,136118,136 517,112,291517,112,291

FY03FY03 180180 69,21169,211 531,919,146531,919,146

Total:Total: 963963 1,270,9031,270,903 1,130,106,831,130,106,8399

PropertyProperty

# # LossesLosses

PaidPaid Resr/Resr/DemandsDemands

FY00FY00 88 10,33210,332 00

FY01FY01 88 578,259578,259 00

FY02FY02 7676 146,381146,381 170,010170,010

FY03FY03 104104 655,084655,084 212,752212,752

Total:Total: 196196 1,390,0561,390,056 382,762382,762

ImportantImportant

UPDATE INFORMATIONUPDATE INFORMATION

512-936-1573512-936-1573

Fax: 512-370-9037Fax: 512-370-9037

Sally.Becker@sorm.state.tSally.Becker@sorm.state.tx.usx.us

Terry G. MyersTerry G. Myers

Director of Claims Director of Claims OperationsOperations

Claims CostClaims Cost

Cost to the Claims Cost to the Claims Fund Fund

vs vs

Per Claim CostsPer Claim Costs

11stst Qtr FY04 Qtr FY04 UpdateUpdate

Medical and Indemnity Medical and Indemnity costs through the end of costs through the end of the 1the 1stst Qtr FY04 Qtr FY04

– Fewer open claimsFewer open claims

– Significantly lower costsSignificantly lower costs

11stst Qtr FY04 Qtr FY04 UpdateUpdate

WCRIWCRI

– Cost of WC Claims in TexasCost of WC Claims in Texas

– Future Comparison with Future Comparison with SORM Claims CostsSORM Claims Costs

Claims Operations Claims Operations ReorganizationReorganization

Realignment of State AgenciesRealignment of State AgenciesHHSCHHSC

Three Indemnity Claims TeamsThree Indemnity Claims Teams

HHSC, TDCJ, ALL OTHERSHHSC, TDCJ, ALL OTHERS

Combined Medical Combined Medical Management with Management with

Medical Only Claims Medical Only Claims TeamTeam

Medical staff and senior adjustersMedical staff and senior adjusters

Eight (8) medical only adjustersEight (8) medical only adjusters

ACCIDENT ACCIDENT INVESTIGATION/TREND INVESTIGATION/TREND

ANALYSISANALYSIS

ON-LINE TRAININGON-LINE TRAINING

Leonard ZolondekLeonard Zolondek

Events & TrainingEvents & Training

Safety PuzzleSafety Puzzle

OVERVIEWOVERVIEW INVESTIGATION PROCESSINVESTIGATION PROCESS

OBJECTIVEOBJECTIVE

WHATWHAT

ROOT CAUSE ANALYSISROOT CAUSE ANALYSIS

TREND ANALYSISTREND ANALYSIS

PROCESSPROCESS

WHATWHAT

Accident Causation Theories 

There are a variety of theories on accident causation that can be grouped into the following categories: •Domino Theories which view accidents in three phases: pre-contact, contact and post-contact.

•Multiple Causation Theories which view causes based on a variety of factors such as man, machine and the environment.

•Psychological/Behavioral Causation Theories which focus on human behavior as the major cause of accidents

•Energy Related Causation Theories which view accidents as a result of energy that is out of control.

ROOT CAUSE ANALYSISROOT CAUSE ANALYSIS

SCIENTIFIC PROBLEM SOLVING SCIENTIFIC PROBLEM SOLVING METHODSMETHODS– Fault Tree AnalysisFault Tree Analysis– http://reliability.sandia.gov/Reliability/http://reliability.sandia.gov/Reliability/

Fault_Tree_Analysis/fault_tree_analysiFault_Tree_Analysis/fault_tree_analysis.htmls.html

– Fish Bone DiagramFish Bone Diagram– http://www.pathmaker.com/resourceshttp://www.pathmaker.com/resources

/tools/cause.asp/tools/cause.asp

ForkliftHits Ladder

Ladder inDoorway

ForkliftCouldn’t Stop

No BarrierSigns

ForkliftBrakes

Defective

Cooking Oil on Floor

ForkliftGoing Too

Fast

BrakeMaintenance

Delayed

HousekeepingInadequate

Speed LimitsNot Enforced

Or

Lack ofPersonnel

NoPolicy

NoEnforcement

NoEnforcement

Fishbone Analysis

LampWon’tWork

Plug/Cord Lamp

LampWon’tWork

BulbPower

Power

Plug/Cord Lamp

LampWon’tWork

Burnedout

Loose

Bulb

Power

Plug/Cord Lamp

LampWon’tWork

BrokenSwitch

MissingSwitch

Corroded

Burnedout

Loose

Bulb

Power

Plug/Cord Lamp

LampWon’tWork

Unpaid Bills

Switches

Storm

BrokenSwitch

MissingSwitch

Corroded

Burned out

Loose

Bulb

Power

Plug/Cord Lamp

LampWon’tWork

Unpaid Bills

Switches

Storm

Dogchewed

UnpluggedBrokenSwitch

MissingSwitch

Corroded

Burnedout

Loose

Bulb

TREND ANALYSISTREND ANALYSIS

IDENTIFY BASIC FACTSIDENTIFY BASIC FACTS

SHOW POSSIBLE SHOW POSSIBLE PATTERNS/TRENDSPATTERNS/TRENDS

ESTABLISH PRIORITIES FOR SAFETY ESTABLISH PRIORITIES FOR SAFETY ACTIVITIESACTIVITIES

ASWG CODESEffective June 1, 1997 the Commission adopted revised Advisory

Statistical Work Group (ASWG) codes for Nature of Injury, Part of Body, and Cause of Injury. These code changes aligned the

Commission's reporting requirements with the International Association of Industrial Accident Boards and Commissions

(IAIABC) Electronic Data Interchange (EDI) reporting standards. The ASWG codes are available to EDI participants through the

IAIABC. If a carrier or trading partner has previously purchased an IAIABC Implementation Guide, the IAIABC will provide a list of all the ASWG codes as an update to the Guide. If you are interested in purchasing an Implementation Guide, you can contact the IAIABC directly at 1201 Wakarusa Drive C-3, Lawrence, Kansas, 66049 or

by phone (785) 840-9103. The IAIABC has also made the codes available via their website at www.iaiabc.org. Once you have

reached their web page, choose the EDI folder and available options will be listed.

Examples of categories to include in the analysis should at least be the following:

A. Department:

B. Job Title:

C. Agent Involved: (ironing press, material cutter, fabric rolls, sewing machine, and clothing bundles)

D. Experience: (1-5 years, 6-10 years, etc.)

E. Body Part: (hand/fingers, back, leg, head/neck, arm and foot)

F. Accident Type: (caught between, struck-by, struck-against, lift/lower, push/pull, etc.)

0

5

10

15

20

25

30

35

FY 01 11 3 2 0 3 2 2 1 2 1 1

FY 00 31 21 11 1 2 0 0 0 0 0 0

Aggr Slip/Fall Misc CutCghting/

BtwnRept

MotionJumping Vehicle Lifting Pushing Sports

CAUSE OF INJURY – FY 01 & FY 00As of August 31, 2001

0

2

4

6

8

10

12

14

16

FY 01 2 1 1 2 1 4 0

FY 00 14 6 2 3 1 4 1

Acute IBP MIMR ITR Ger/Med CAU Extnd

CAUSE OF INJURY BY DEPARTMENT FY 01 & FY 00As of August 31, 2001

AGGRESSION

0

1

2

3

4

5

6

FY 01 0 2 3 0 3 1 2 1

FY 00 5 2 1 1 1 0 0 0

Hskgf FdSvc ITR CSD Rehab Med Rec Acute Maint

CAUSE OF INJURY BY DEPARTMENT FY 01 & FY 00As of August 31, 2001

STRAINS

Break Time!Break Time!

See you at 10:15!See you at 10:15!

Fraud InvestigationsFraud Investigations

Gary Ingram Gary Ingram

Julie HerreraJulie Herrera

Workers’ Comp. FraudWorkers’ Comp. Fraud

Workers’ Compensation Fraud is Workers’ Compensation Fraud is committed when a person(s) committed when a person(s) knowingly or intentionally knowingly or intentionally misrepresents, conceals, or omits misrepresents, conceals, or omits a material fact to either obtain or a material fact to either obtain or deny workers’ comp benefits.deny workers’ comp benefits.

Workers’ Comp. Fraud Workers’ Comp. Fraud (cont’d)(cont’d)

Fraud is committed if a person Fraud is committed if a person knowingly or intentionally:knowingly or intentionally:

Makes a false or misleading statement.Makes a false or misleading statement. Misrepresents or conceals a material fact.Misrepresents or conceals a material fact. Fabricates, alters, conceals, or destroys a Fabricates, alters, conceals, or destroys a

documentdocument Conspires to commit an act described by Conspires to commit an act described by

the events above.the events above.

Fraud Investigative UnitFraud Investigative Unit Investigate allegations of fraudInvestigate allegations of fraud Validate SIBS, TIBS, and Death Benefits infoValidate SIBS, TIBS, and Death Benefits info Validate suspect travel and prescription Validate suspect travel and prescription

reimbursementsreimbursements Assist DA’s and TWCC in prosecution of Assist DA’s and TWCC in prosecution of

fraudulent claimsfraudulent claims Assist the claims adjusters, agencies, and Assist the claims adjusters, agencies, and

claimantsclaimants Assist SORM in obtaining information that is Assist SORM in obtaining information that is

utilized at BRC’s and CCH’sutilized at BRC’s and CCH’s

Useful ToolUseful Tool

EMPLOYEE’S RIGHTS ANDEMPLOYEE’S RIGHTS AND

RESPONSIBILITIES FORMRESPONSIBILITIES FORM

Recent TrendsRecent Trends

MilitaryMilitary

What to do when you What to do when you suspect fraud or abuse.suspect fraud or abuse.

Call SORM’s InvestigatorsCall SORM’s Investigators– Gary Ingram – (512) 936-1450Gary Ingram – (512) 936-1450– Julie Herrera – (512) 936-1521Julie Herrera – (512) 936-1521

Call your SORM adjuster or our main Call your SORM adjuster or our main ##– (512) 475-1440(512) 475-1440

Lost, Damaged, & Lost, Damaged, & Destroyed PropertyDestroyed Property

Patricia O’HaraPatricia O’HaraSystems AnalystSystems Analyst(512) 936-1500(512) 936-1500

peo1@sorm.state.tx.uspeo1@sorm.state.tx.us

BenchmarksBenchmarks

The State Auditor’s Office (SAO) The State Auditor’s Office (SAO) recommended that SORM create benchmarks recommended that SORM create benchmarks for LDD property.for LDD property.

Benchmarks will be based on the Class Code Benchmarks will be based on the Class Code of assets, and an overall agency percentage.of assets, and an overall agency percentage.

An agency should have procedures for An agency should have procedures for safeguarding assets. Risk Managers can safeguarding assets. Risk Managers can contact their agency’s property manager.contact their agency’s property manager.

We should have the benchmarks in place this We should have the benchmarks in place this spring.spring.

Appropriation ReductionAppropriation Reduction The Comptroller was charged by the 77The Comptroller was charged by the 77thth legislature legislature

to reduce an agency’s appropriations by 50% of the to reduce an agency’s appropriations by 50% of the value of lost property, if the percentages are in value of lost property, if the percentages are in excess of the American Society for Testing and excess of the American Society for Testing and Materials (ASTM) standards. This was implemented Materials (ASTM) standards. This was implemented at the end of FY02 and was continued by the 78at the end of FY02 and was continued by the 78thth Legislature in Article IX, Sec. 11.03 of the General Legislature in Article IX, Sec. 11.03 of the General Appropriations Act.Appropriations Act.

*Implementation Guidelines for General Appropriations Act, Art. IX, §9.03, *Implementation Guidelines for General Appropriations Act, Art. IX, §9.03, 77th Leg., R.S. -- Appropriation Reductions for Lost Property 77th Leg., R.S. -- Appropriation Reductions for Lost Property http://www.window.state.tx.us/comptrol/san/fm.notices.date.html/fm02/fhttp://www.window.state.tx.us/comptrol/san/fm.notices.date.html/fm02/fm02-47.htmlm02-47.html

LDD DefinitionsLDD Definitions

Class CodesClass Codes

Disposal MethodsDisposal Methods

Lost Damage & Destroyed PropertyLost Damage & Destroyed Property

Historical Cost vs Depreciated ValueHistorical Cost vs Depreciated Value

Property level vs. Component levelProperty level vs. Component level

LDD ProcessLDD Process

Missing PropertyMissing Property

Stolen PropertyStolen Property

Damaged/Destroyed PropertyDamaged/Destroyed Property

NegligenceNegligence

Useful WebsitesUseful WebsitesSPA Class Codes and Annual Financial Report (AFR) SPA Class Codes and Annual Financial Report (AFR)

Categories:Categories:

http://www.window.state.http://www.window.state.txtx.us/.us/comptrolcomptrol/san/spa/spa_class_codes-/san/spa/spa_class_codes-afrafr_cats.html_cats.html

SPA Disposal Methods for Fixed Assets:SPA Disposal Methods for Fixed Assets:

http://www.window.state.tx.us/comptrol/san/fm_manuals/spa_man/shttp://www.window.state.tx.us/comptrol/san/fm_manuals/spa_man/spa_user2000/spauser_appd1.htmlpa_user2000/spauser_appd1.html

Missing, Damaged or Stolen Property Report:Missing, Damaged or Stolen Property Report:

http://www.window.state.http://www.window.state.txtx.us/.us/taxinfotaxinfo//taxformstaxforms/74-194./74-194.pdfpdf

Useful Websites (cont’d)Useful Websites (cont’d)

State Agency’s Property ManagersState Agency’s Property Managers

http://www.window.state.http://www.window.state.txtx.us/.us/comptrolcomptrol/san/agency_contact_list/spa//san/agency_contact_list/spa/stst__agyagy_spa_contacts.html_spa_contacts.html

State Auditor’s Office ReportState Auditor’s Office Report

http://www.sao.state.tx.us/Reports/report.cfm/rehttp://www.sao.state.tx.us/Reports/report.cfm/report/01-032port/01-032

Questions & Comments?Questions & Comments?

Risk ManagementRisk ManagementUser GroupUser Group

Thank you for attending.Thank you for attending.

See you on April 28See you on April 28thth, right , right here!here!