2016 Commemorative Edition
Nov 30, 2016


In October, the Department of Labor (DOL) issued a comprehensive report this October addressing the state of workers’ compensation benefits in the U.S. today. The report came nearly one year from the day ten high-ranking U.S. lawmakers urged the DOL to examine the 100-year-old benefit system. The 43-page report sharply criticized the state of workers' comp today, calling into question the fairness of the benefits paid to injured workers around the country.   


At the center of the DOL’s findings were key rulings by the Florida Supreme Court and the Oklahoma Supreme Court, wherein the state high courts deemed portions of their state’s Workers’ Compensation Acts unconstitutional.  The state supreme courts criticized the states’ benefit levels, periods of indemnity, and attorneys fee provisions. The DOL also referenced the Sooner State’s repudiation of the Oklahoma Injury Benefit Option (Opt-Out), which was an alternative to traditional WC benefits.


One of the key tenets of the DOL report was that once a worker becomes injured at work, he or she is likely to return to sub-optimal wages and more likely to rely upon public disability funding. Contemporaneous with the DOL report, the Occupational Safety and Health Administration (OSHA), a division of the Department of Labor, issued its final rule requiring employers to begin reporting workplace accidents electronically in 2017.  In the same rule, OSHA clarified its terse position that employers shall not establish any system that adversely impacts or retaliates against employees who file workers’ compensation claims. 


Among the recommendations of the October report was Secretary of Labor Tom Perez’s call for a blue ribbon panel of experts to establish baseline benefit levels for U.S. workers, a more robust tracking mechanism to evaluate fluctuations in state benefit levels, and a system of triggers to employ federal oversight should states dip below recommended benefit levels.  Then came Election Day. In the early morning hours of November 9thDonald J. Trump secured enough electoral votes to become the 45thPresident-elect.  The GOP candidate, turn presumptive Commander-in-Chief, vocally campaigned on an anti-regulatory position, particularly in the area of labor laws.     



This year, no sector was immune from cyber breach risk. From the Democratic National Committee to major email servers to all domains up and down the eastern seaboard, the cost drain on the U.S. economyrelated to cyber breach issues was significant this year.


In response to such high-profile attacks, a number of governmental bodies moved this year on comprehensive cyber breach reform. Notably, the National Association of Insurance Commissioners (NAIC) issued its model rule on cyber security and breach notification procedures. In New York, the state Department of Financial Services issued ground breaking cyber regulations for the financial services industry, including insurers. And, to protect the nation's vital electrical grid, regulators who oversee the distribution of power across the U.S. promulgated a series of rigorous cybersecurity regulations to protect the grid.



Some of the most significant stories of the year were global in nature. In June, Great Britain voted to exit the European Union in a popular movement called "Brexit". It will take nearly two years to complete England's independence from the EU, but already commentators are predicting a significant impact to the insurance and reinsurance marketplace. Across the English Channel, the irreversible effects of climate change and the delicate balance of the Paris Agreement on carbon emission remains an enduring story of 2016. And in this hemisphere, we tracked the spread of the Zika virus from South America through Central America into south Florida.


In August, the Drug Enforcement Agency released its long-awaited response to a petition to reschedule marijuana from a Schedule 1 to a Schedule 2 drug under the Controlled Substances Act of 1970. The nation's top drug regulators elected not to reschedule cannabis, citing a lack of FDA-approved studies to support the medicinal effects of the drug. At the same time, the drug's populist appeal in the voter's booth continued full tilt throughout 2016. This month, a record number of states voted to legalize marijuana for medicinal and recreational use. In an apparent reversal of public opinion, the medical community at large coalesced to produce stringent utilization guidelines for opioid pain medication as the Centers for Disease Control and Prevention published its first-ever guidance on the prescription of opioid pain medicine.


We witnessed innovation first-hand this year. And, the nation's regulatory bodies worked to keep pace. In September, the Department of Transportation (DOT) released first-of-its-kind guidance to makers of autonomous vehicles. The guidance consolidated 15 of the leading safety principles in the design of driverless technology. The Federal Aviation Administration (FAA) reclaimed the skies from heavy drones as it implemented a new registry service for unmanned vessels. Apart from driverless cars and unmanned drones, innovation affected the very nature of work and labor in an emerging, on-demand economy.


As the calendar gives way to 2017, we have much to be proud of in the risk and insurance industry. We sparked a most important conversation on the direction of workers' compensation. We rolled up our sleeves in record numbers to help the littlest heroes and we gathered to remember some of the biggest. Along the way, this industry extended a helping hand to some of those kids who might need it the most.


This commemorative, 2016 Year-End Edition was made possible by the invaluable feedback of our clients, partners and readers who helped shape the most significant stories of the year. We thank you for your continued support of The Way. Please follow us at #GBTheWay during the week for up-to-the-minute alerts on governmental issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna and Cari Miller directly.


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