Q: The State Insurance Fund has often been compared to a private company within the government. Do you feel this is accurate?
A: To a great extent it does, and must, function like a private enterprise. To accomplish its mission of providing New Yorkers with a stable and secure choice for workers’ compensation insurance at the lowest possible cost, it must operate efficiently and remain competitive with the private marketplace. It has to use the same principles to maintain solvency and its strength, so that it can serve all New Yorkers, including the under served parts of the market that no one else wants. The staff here is professional, talented, dedicated and consumer driven. Without imitating the private sector, we must have the same standards and dedication to service because our competitive existence in the marketplace, our ability to return dividends and remain solvent depend upon it. We believe we have private sector efficiency out of necessity and we set a high standard of measurement.
Q: The State Insurance Fund has been charged by independent agents as a state funded competitor that pays no commissions. How do you respond to the objections made by the independent insurance agents?
A: Ironically, we feel as if we have a competitive disadvantage: that is, that we have to serve all comers in the market and that we have to abide by reporting mechanisms and other accountability strictures not necessarily affecting the private market. For one thing, we service the entire market; in other words, we cannot turn away adverse risk, we must find a way to serve them. Moreover, as a public agency we need to be very strict in our anti-fraud efforts and yet cannot necessarily fund it to the degree we would like. We are governed by a very dedicated board that does not receive compensation and holds the interest of the policyholders first and foremost. We do not have a right to cancel except for nonpayment. In other words, we essentially may look, feel and sound like a competitive private enterprise, but, in fact, the logistics work against us when it comes to our market share and our underwriting. We certainly do not have any unfair competitive advantage.
Q: NYSIF anti fraud efforts have yielded great savings for New York consumers. Will you strengthen this effort? How?
A: We will definitely keep our anti-fraud program as strong as we have in the past, and work to make it even stronger because the value that’s returned to our policyholders in savings and the message we send to consumers by our antifraud efforts distinguish the State Insurance Fund and help us keep our bottom line stable. Our investigative team has provided a stellar service to fellow New Yorkers in their unrelenting anti-fraud efforts. We cannot imagine changing this in any way; in fact, it would best be expanded through public information and through a continued focus upon fraudulent practices, especially in this market which some may be tempted to exploit.
Q: How will the economy affect the State Insurance Fund itself, and its overall results, given the diminished workplace?
A: As a result of the slowdown in the economy, we will need to adjust for a decline in premiums due to job losses and to the other overall market effects. We will also need to compensate for an anticipated decline in our investment income affecting our surplus. Recently, the State Insurance Fund has been directed to lay off personnel from our approximate 2,600 employees. We are doing all that we can to minimize, and, hopefully, avoid lay-offs through attrition and other means. In short, we are prepared for this difficult economy, but do not see any radical reaction to it affecting injured workers or their employers. The current economy may also present the potential for more fraud among employers and employees who are bearing the brunt of economic difficulties. The temptation will be there, and we will do our best to ensure that there are adverse motivators to discourage fraud.
Q: You have met the staff and have begun to acclimate yourself to the State Insurance Fund. Do you see consolidations of any kind in the future—or its opposite—in terms of staffing and office locations?
A: I am quite taken with the professionalism, the knowledge and the overall dedication of the staff, which explains, on the one hand, its low rate of turnover, and on the other, its high productivity. While I have several direct reports––some who report to me and to theboard as well—there are so many people I have come in contact with here even in the few days I have been here, that I find a sense of linearity in the structure but not the kind of rigidities that stand in the way of good communications and good staff relations.
Q: Do you feel the State Insurance Fund is understood by its users; is it appreciated?
A: Public perception is either non-existent for the most part, or somewhat misunderstood. The average person does not know much about the Fund with the exception of people in the insurance industry, including those who participate in safety groups. Most people do not know us well since the majority of our policyholders are insured at policy levels below $5,000. With 187,000 policyholders and a 1.4 billion dollar earned premium we need to communicate effectively with all of our markets and gain respect for our work among every segment of our population—from safety managers whose aggregate impact on us is high, to those who are new participants and at the lowest end of the spectrum. All of them must be treated with compassion and care, and have good reliable information from us.
Q: How many hours a week do you plan to spend doing this?
A: “I am a 24/7 guy. I will get to know the night watchman, and, quite frankly, this will be my life. I have given up my district leadership in Queens, my membership on numerous committees of the Queens Bar Association and numerous other organizations, and am looking to do nothing but this to give it my best and make the Fund the best it can be.
Q: What would you consider to be the benchmarks of your success?
A: In no special order of priority, here are several. For one, I hope to improve the image of the Fund so that the public knows exactly what we do and how we do it. I want to use the tremendous talent and resource available to make the Fund even more competitive and better able to achieve its mission. Next, would be enhancing the solvency of the Fund. Another is the modernization of our IT is a major initiative, as we move from a mainframe to a web based format. We will be keeping some elements of our current systems, but have decided to modernize without using off the self products for the most part. In a buy or build “environment” we have decided to do a little bit of both. Our challenges also include the improvement of our enormous document process, control and retention needs, to making each office, department and process more efficient by making even greater use of advanced technology. In addition, we must provide for succession as the people who have been with the fund for over 30 years begin to retire, and to have their knowledge and procedures in place for all future generations.
Q: What strengths do you bring to the job?
A: Well, I have the ability to lead a team and I do come to the job with insurance, business and legal experience. I have tremendous empathy toward both the injured worker on the one hand, and the employer who needs that worker’s services on the other. There is a balance and I believe I can strike it. To the injured worker, we must provide timely indemnity and medical payments, and, to the employer, we owe reasonably stable rates and an assurance that benefits will be available when needed by using all of the processes at our disposal— to fighting fraud, to our return-to-work programs, and to our streamlining of every department. This is our way of maintaining the stability of the Fund, keeping prices competitive, and serving those who turn to us at every level.