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R EGULATORY C APTURE AND E FFICACY IN W ORKERS’ C OMPENSATION
Author(s) -
Clark Steven P.,
Marlett David C.,
Neale Faith R.
Publication year - 2018
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/jori.12183
Subject(s) - indemnity , compensation (psychology) , business , actuarial science , psychology , psychoanalysis
A BSTRACT We examine changes in workers’ compensation laws from 2003 to 2011 and their effect on insurer performance as measured by loss ratios and claim costs. We study changes to: length of temporary total loss indemnity, penalties on employees who do not comply with rehabilitation efforts, employer or employee choice of physician, and limits on attorney fees. We find differential effects among these reforms with the most robust being changes to limits on temporary total indemnity and penalties for workers who do not comply with rehabilitation efforts. We measure one effect of the political environment and find that appointing authority over the workers’ compensation board or committee significantly affects loss costs. Lastly, we find evidence of regulatory capture in workers’ compensation.