Regulatory Capture and Efficacy in Workers’ Compensation

32 Pages Posted: 9 Aug 2018

See all articles by Steven P. Clark

Steven P. Clark

University of North Carolina (UNC) at Charlotte

David Marlett

Appalachian State University

Faith Roberts Neale

University of North Carolina at Charlotte

Date Written: September 2018

Abstract

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.

Suggested Citation

Clark, Steven P. and Marlett, David and Neale, Faith Roberts, Regulatory Capture and Efficacy in Workers’ Compensation (September 2018). Journal of Risk and Insurance, Vol. 85, Issue 3, pp. 663-694, 2018, Available at SSRN: https://ssrn.com/abstract=3228195 or http://dx.doi.org/10.1111/jori.12183

Steven P. Clark (Contact Author)

University of North Carolina (UNC) at Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States

David Marlett

Appalachian State University

3054 Raley Hall
Appalachian State University
Boone, NC 28608
United States

Faith Roberts Neale

University of North Carolina at Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States
704-687-7636 (Phone)

HOME PAGE: http://www.belkcollege.uncc.edu/rmi

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