Image via WikipediaThe American International Group (AIG), the huge insurance company that the US Government bailed out financially, is still hard pressed to raise funds to cover on going claims. AIG has announced that it will need to raise another $4.1 Billion dollars to cover such costs as primary and excess workers' compensation claims and asbestos liability claims.
AIG's long and troubled history was the subject of investigative reporting in the Academy Award nominated film, Inside Job. The Many factors have impact on an insurance company's solvency including the ability to collect premiums in a down economic cycle, the investment of the premiums collected and colateral bad investments the have a massive economic impact of the financial worth of the company in general.
Workers' compensation claims continue despite a low employment cycle. Latent diseases, such as asbestos related lung cancer, asbestosis and mesothelioma, may be dormant for decades before manifesting into a chronic and terminal medical condition.
The industry continues to struggle on how workers' compensation should be employed to insure industries and employers from these condition. Originally the workers' compensation acts did not cover occupational conditions such as silicosis or asbestosis. In the 1950s acts were amended, at industries insistence to bring these occupational conditions under the umbrella of coverage and shield employers from civil lawsuits. With the expansion of products liability claims, based on the intentional concealment of information of the hazards of these conditions, as well as low economic recoveries from struggling workers' compensation systems put the boat back into the bottle, "the longest running tort", asbestos litigation, was born.
Industry continues to try to put the genie back into the bottle, which is reflected in the latest attempt in Missouri to bar liability claims against employers and co-workers. One of the incentives of a workers' compensation program is to prevent industrial accidents, but the system continues to struggle both economically and procedurally in achieving that objective.
The need for AIG to raise additional cash to pay claims raises a concern as to whether premium dollars to pay claims are being adequately protected in the first place, and whether those premiums ared being directed to injured workers and victims of occupational illness. Instead of trying to figure how to further restrict the payment of benefits, perhaps more attention should be paid to making a safer workplace by banning asbestos use, and providing more convenience access through universal medical care.