Is it true that L&I’s administrative costs increased 28% in the past year?
No. L&I’s paid administrative costs for the State Fund went up 7% between fiscal year 2008 and fiscal year 2009. This figure is based on L&I’s cash flow statements. Q: How do L&I’s administrative costs compare to workers’ comp insurance carriers in other states? A: L&I’s actual “paid” administrative expenses for the past 10 years were 18% of the total benefits paid on claims. This compares with a national average of 68%. This information is according to A.M. Best, a national authority on insurance company performance. Another way to look at it is on the basis of “incurred” administrative expenses – that is, claim expenses actually paid during a period of time plus the change in the company’s estimated future administrative costs for all current claims. A.M. Best publishes incurred administrative expenses for workers’ comp insurers. Those costs over a 10-year period as a percentage of total benefits paid are: • U.S. workers’ compensation industry: 55.4% • L&I: 14.8% Q: Did L&I’s adminis
