TRENTON, N.J., May 25 – The special fund which pays for workers compensation claims of 22 insolvent insurance companies may run out of money next year, and higher assessments against existing companies are needed. The disclosure was made to the Legislatures budget committees by the state Insurance Department.

The fund is supported by $15.6 million in the one percent assessment of net premiums written by the 120 companies now writing workers comp in the state. It pays for medical expenses and disability of injured workers once covered by 22 companies now insolvent.

There are now 2,300 open claims waiting for payment of about $94 million, according to the report given by department officials to the state budget officials.

The bottom line is that the Workers Compensation Security Fund could be in the hole by $5.7 million in June of 2007 under the current estimates. The department staffers said the current assessment of one percent against existing workers comp companies is not enough to pay the claims, and the Legislature would have to increase the assessments.

No mention was made of how much the assessments would be increased, not only to cover the pending deficit, but also to assure future financial stability of the fund.

The collection of assessments against the existing workers comp companies in the state will bring in $15.6 million but that assessment will not occur until this August.

The estimated claims to be paid in the new fiscal year starting July 1 will be about $36 million.

Based on those figures, the current expenses of $3 million a month would be depleted before May 1, 2007, according to the report.

The department reported that the one percent charge is not sufficient to pay claims at their current level, and in order to increase the assessment, legislation is necessary.