L&I News

See more More news releases

Jan. 8, 2010

L&I: Washington's workers' compensation system is sound

TUMWATER – Judy Schurke, director of the Department of Labor & Industries (L&I), said today the state's workers' compensation system is not at risk of going insolvent and that characterizing it as such is wrong.

Schurke said she is concerned that characterizations of a State Auditor's report on the State Fund could lead people to incorrectly believe that the system will soon become insolvent.

"I want to assure every Washington worker that the benefits they need if injured on the job will continue to be available today and in the future," Schurke said. "Businesses also need to know that L&I will continue to provide the insurance coverage that they expect and count on."

She said confusion appears to come from a misinterpretation of the audit when it mentions the probability of "insolvency" in the State Fund. The insolvency mentioned in the audit refers to the contingency reserve, which is like a rainy day fund and which is only a very small portion of the system's current total assets of $11 billion.

"The last thing we need to do is overreact to the possibility that the contingency reserve is low," Schurke said. "In times like these, we need patience and a long-term view."

She said it's important to recognize that some interest groups and lobbyists have seized on the audit as a way to advance their agendas to significantly change workers' comp.

"The fact is, we made a deliberate decision to draw down the contingency reserve in order to keep premiums low and help businesses keep their doors open in this tough economic time," Schurke said.

"This has been done before and this year it's more important than ever that we keep insurance costs as low as possible," she said. "This was the right thing to do and doesn't threaten the long-term financial integrity of our system."

"I understand we're cutting it closer to the edge this year, given the economy," she said. "That's why we are looking intensively at every way to cut costs while still providing protection for injured workers and employers."

Washington's workers' compensation State Fund covers nearly 2.5 million people and 168,000 employers. It provides benefits to injured workers and insurance to employers from costly claims and lawsuits.


For media information: Steve Pierce, L&I, 360-902-5412.

End of main content, page footer follows.

Access Washington official state portal

© Washington State Dept. of Labor & Industries. Use of this site is subject to the laws of the state of Washington.