The PIANY LI RAP and the Buffalo I Day reported upon in this issue are proof that twittering will never take the place of real contact. Same is true of magazines, by the way. Over the past twelve years of Google’s life, there was an 11% growth in magazine readership. The Insurance Advocate has grown by 18% over the past two years and the tempo is upbeat—thanks to you all for your loyalty and interactivity, sometimes a little too forceful, but always welcomed….. We are delighted that there are no Obits this week. Riedman and Decaminada back to back really hurt. We see the pix and stories here again and again as we put the issue to bed…..Some readers have underlined their pleasure with the legal features we have begun to present, notably Sari Gabay’s. She is one sharp woman; so are her columns….Be sure to read Jerry Trupin’s look at the Standard Fire Policy; it’s a meaty look at this war horse….When Hideki Matsui broke his wrist, according to a Yankees’ Opening Day commentator, he apologized to his teammates. Talk about class and ego balance…We are getting our head blown off by the number of responses, requests, views presented to us and general anxiety over the Producer Compensation Disclosure regulation that has plucked long silent strings deep down in agents and brokers. We are a long standing producer “advocate” for sure and try hard to balance all viewpoints in their presentation, placing our own views in a separate location, identified as “opinion”. Watch these pages for both news (see CIBGNY’s statement this issue) and for our viewpoint coming soon.

Now, as we go to press …First Cardinal has just won its case against the New York State Workers’ Compensation Board. The New York State Supreme Court has declared sections of state workers’ comp law “unconstitutional” after two-year litigation. This means that 13 workers’ compensation self-insured groups for which First Cardinal had once acted as third-party administrator received a favorable decision in this important case which relates to a series of assessment billings levied against the selfinsured groups by the New York State Workers’ Compensation Board to help pay for the losses of several unrelated self-insured groups that had defaulted on their workers’ compensation obligations – effectively initiating group-to-group liability. None of the defaulting self-insured groups that led to a nearly $450 million deficit were administered by First Cardinal. Hon. Kimberly O’Connor, New York State Supreme Court Justice, ruled that former Workers’ Compensation Law §50(5)(f) and a newer law §50(5)(g) were an “unconstitutional taking of their [the plaintiffs] private property without just compensation.” Though the 13 self-insured groups closed at the end of 2008 as a result of the weight of the impending assessment payments, new assessments continued to accrue against the former members. In 2007, the 13 groups had an aggregate assessment of $104,000. In 2008, the Board increased those assessments by more than 10,000% to $11.1 million. Prior to their dissolution, the 13 groups were in sound financial shape and had provided workers’ compensation coverage to more than 7,000 public and private employers and their 200,000 employees throughout New York State, according to First Cardinal.“ We are very pleased with the court’s decision to resolve this difficult matter for the former members of the groups we took great pride and care in managing,” said Richard S. Flaherty, President and CEO of First Cardinal. “We felt it was unfair that the 7,000 business owners who participated in these healthy, well-run self-insured groups should have to collectively pay for millions of dollars in unpaid claims for several completely unrelated groups that failed to set their reserves properly,” Flaherty continued. Judge O’Connor’s landmark decision stated: “Guided by these principles and applying the factors eschewed by the United States Supreme Court in reviewing a regulatory takings claim, the Court finds that assessing healthy group self-insured trusts for the workers’ compensation obligations of defaulted, unrelated group selfinsured trusts (GSIT) unconstitutionally imposes significant liability on healthy GSITs, like plaintiffs, which was not anticipated when the trusts were formed and the extent of which is substantially disproportionate to plaintiffs’ past experience in New York’s self-insurance system.” Stephen Younger, Esq. of Patterson Belknap Webb & Tyler LLP, who argued the groups’ summary judgment motion before Justice O’Connor and led the Patterson team working with the Phillips Lytle team out of Albany and Buffalo, said:

“We believe the Court’s decision was well reasoned and adopted our strongest and most clear positions. We are gratified on behalf of our clients and the other healthy self-insured groups in New York State.” The 13 self-insured groups that filed the complaint are as follows:

1. Cooperative Association of Food Enterprises (serving restaurant owners)

2. Contractors Compensation Trust (serving building contractors)

3. THE ELEC-CON Trust (serving electrical contractors)

4. Empire State Transportation Workers’ Compensation Trust (serving school buses, ambulances and ambulettes)

5. Empire State Education Trust (serving private schools and universities)

6. First Automotive Services Trust (serving auto repair shops)

7. Empire State Hospitality Workers’ Compensation Trust (serving hotels, motels, country clubs, golf courses and YMCAs)

8. New York McDonald’s Operators Self-Insurance Trust (serving McDonald’s restaurants)

9. New York Petroleum Associations Compensation Trust (serving petroleum haulers) 10. NYSARC Workers’ Compensation Trust (serving employees of New York State Association of Retarded Citizens)

11. NY Transportation Workers’ Compensation Trust (serving long haul truckers, cross-town truckers and garbage haulers)

12. Retailers Of New York Workers’ Compensation Trust (serving retailers and wholesalers) 13. Selective Safety Trust (serving large over-the-road haulers, movers and warehouses)

The decision may have far reaching implications. Watch the Insurance Advocate for follow up.