2023 Ohio Revised Code › Title 41 | Labor and Industry › Chapter 4121 | Industrial Commission; Bureau of Workers' Compensation › Section 4121.125 | Monitoring Performance of System.

Effective:
September 29, 2017
Latest Legislation:
House Bill 27 - 132nd General Assembly
(A) The bureau of workers' compensation board of directors, based upon recommendations of the workers' compensation actuarial committee, may contract with one or more outside actuarial firms and other professional persons, as the board determines necessary, to assist the board in maintaining and monitoring the performance of Ohio's workers' compensation system. The board, actuarial firm or firms, and professional persons shall perform analyses using accepted insurance industry standards, including, but not limited to, standards promulgated by the actuarial standards board of the American academy of actuaries or techniques used by the National Council on Compensation Insurance.
(B) The board may contract with one or more outside firms to conduct management and financial audits of the workers' compensation system, including analyses of the reserve fund belonging to the state insurance fund, and to establish objective quality management principles and methods by which to review the performance of the workers' compensation system.
(C) The board shall do all of the following:
(1) Contract to have prepared annually by or under the supervision of an actuary a report that meets the requirements specified under division (E) of this section and that consists of an actuarial estimate of the unpaid liabilities of the state insurance fund and all other funds specified in this chapter and Chapters 4123., 4127., and 4131. of the Revised Code;
(2) Require that the actuary or person supervised by an actuary referred to in division (C)(1) of this section complete the estimate of unpaid liabilities in accordance with the actuarial standards of practice promulgated by the actuarial standards board of the American academy of actuaries;
(3) Submit the report referred to in division (C)(1) of this section to the standing committees of the house of representatives and the senate with primary responsibility for workers' compensation legislation on or before the first day of November following the year for which the estimate of unpaid liabilities was made;
(4) Have an actuary or a person who provides actuarial services under the supervision of an actuary, at such time as the board determines, and at least once during the five-year period that commences on September 10, 2007, and once within each five-year period thereafter, conduct an actuarial analysis of the mortality experience used in estimating the future costs of awards for survivor benefits and permanent total disability under sections 4123.56 to 4123.58 of the Revised Code to be used in the experience rating of an employer for purposes of premium calculation and to update the claim level reserves used in the report required by division (C)(1) of this section;
(5) Submit the report required under division (F) of this section to the standing committees of the house of representatives and the senate with primary responsibility for workers' compensation legislation not later than the first day of November following the fifth year of the period that the report covers;
(6) Have prepared by or under the supervision of an actuary an actuarial analysis of any introduced legislation expected to have a measurable financial impact on the workers' compensation system;
(7) Submit the report required under division (G) of this section to the legislative service commission and the standing committees of the house of representatives and the senate with primary responsibility for workers' compensation legislation not later than sixty days after the date of introduction of the legislation.
(D) The administrator of workers' compensation and the industrial commission shall compile information and provide access to records of the bureau and the industrial commission to the board to the extent necessary for fulfillment of both of the following requirements:
(1) Conduct of the monitoring described in division (A) of this section;
(2) Conduct of the management and financial audits and establishment of the principles and methods described in division (B) of this section.
(E) The firm or person with whom the board contracts pursuant to division (C)(1) of this section shall prepare a report of the analysis of the unpaid liabilities and submit the report to the board. The firm or person shall include all of the following information in the report that is required under division (C)(1) of this section:
(1) A summary of the funds and components evaluated;
(2) A description of the actuarial methods and assumptions used in the analysis of the unpaid liabilities;
(3) A schedule showing the impact of changes in the estimates of the unpaid liabilities since the previous annual actuarial analysis report was submitted to the board.
(F) The actuary or person whom the board designates to conduct an actuarial investigation under division (C)(4) of this section shall prepare a report of the actuarial investigation and shall submit the report to the board. The actuary or person shall prepare the report and make any recommended changes to the actuarial mortality assumptions in accordance with the actuarial standards of practice promulgated by the actuarial standards board of the American academy of actuaries.
(G) The actuary or person whom the board designates to conduct the actuarial analysis under division (C)(6) of this section shall prepare a report of the actuarial analysis and shall submit that report to the board. The actuary or person shall complete the analysis in accordance with the actuarial standards of practice promulgated by the actuarial standards board of the American academy of actuaries. The actuary or person shall include all of the following information in the report:
(1) A summary of the statutory changes being evaluated;
(2) A description of or reference to the actuarial assumptions and actuarial cost method used in the report;
(3) A statement of the financial impact of the legislation, including the resulting increase, if any, in employer premiums and in current estimates of unpaid liabilities.
(H) The board may, at any time, request an actuary to perform actuarial analyses to determine the adequacy of the premium rates established by the administrator in accordance with sections 4123.29 and 4123.34 of the Revised Code, and may adjust those rates as recommended by the actuary.
(I) The board shall have an independent auditor, at least once every ten years, conduct a fiduciary performance audit of the investment program of the bureau of workers' compensation. That audit shall include an audit of the investment policies approved by the board and investment procedures of the bureau. The board shall submit a copy of that audit to the auditor of state.
(J) The administrator, with the advice and consent of the board, shall employ an internal auditor who shall report findings directly to the board, workers' compensation audit committee, and administrator, except that the internal auditor shall not report findings directly to the administrator when those findings involve malfeasance, misfeasance, or nonfeasance on the part of the administrator. The board and the workers' compensation audit committee may request and review internal audits conducted by the internal auditor.
(K) The administrator shall pay the expenses incurred by the board to effectively fulfill its duties and exercise its powers under this section as the administrator pays other operating expenses of the bureau.