On November 25, 1996 Senator Roger A. Madigan (R-Bradford), chairman of the Joint State Government Commission, announced the release of the report of the Select Committee to Study the Financial Integrity and Stability of the State Workers' Insurance Fund. The Select Committee was chaired by Senator Gibson E. Armstrong (R-Lancaster). The report's recommendations are the culmination of efforts on the part of the Select Committee, the Commission, and Coopers & Lybrand L.L.P. (C&L), the accounting firm contracted by the Commission.
Two substantive findings cited in the report should compel the General Assembly to consider that further actions be taken on behalf of SWIF. One observation is that primary claims data had not been recorded in a manner that would permit a financial audit. Thus, C&L provided only a disclaimer of opinion on the financial integrity of SWIF. The second observation is that a $326 million shortfall in reserves is looming over time and requires the prompt attention of SWIF and monitoring by the General Assembly.
Senator Armstrong said, "This report is the first step in making sure that SWIF remains a healthy provider of workers' compensation insurance in Pennsylvania. It is essential to Pennsylvania's growing economy that all workers covered under SWIF are treated fairly and continue to be fully protected. Further legislative oversight is necessary to ensure that the financial improvement of SWIF enables its long term survival as Pennsylvania's workers' compensation insurer of last resort."
The Select Committee's report is notable in that it is the first complete financial audit and actuarial analysis of SWIF. Previous actuarial analyses relied on SWIF's own data; the current study tested the extent to which baseline data was substantiated by primary records.
The State Workers' Insurance Fund was established in 1915 as the state operated workers' insurance fund. Its role is that of providing workers' compensation insurance to Pennsylvania businesses and industries that are unable to secure legally mandated coverage in the private insurance market.