WSI gives joint committee a briefing: $2.2 billion reserves, monopolistic system, and lifetime medical coverage

Tim Wallin, a senior official with Workforce Safety and Insurance (WSI), delivered a detailed overview of North Dakota's workers' compensation system to the joint legislative committee, describing WSI as a constitutionally established, monopolistic provider that holds roughly $2.2 billion in reserves and provides lifetime, deductible‑free medical benefits to injured workers.

Wallin told lawmakers WSI was established in 1919 and operates as a special‑fund agency with no general fund dollars; premiums are employer‑paid. He said WSI covers about 412,000 worker‑jobs and roughly 27,000 employers, and that the agency anticipates about 17,000 claims in the year referenced. “We are constitutionally established,” Wallin said, and identified the system’s advantages: no profit motive, no brokerage or marketing costs, and dividends returned to employers when reserves exceed target levels.

Wallin described WSI’s reserve and dividend practice: the agency is required by statute to maintain reserves equal to 120–140% of discounted reserves; if reserves exceed that range, dividends are returned to employers and are applied as credits against future premiums. He said WSI has paid dividends in 19 of 20 recent years and that the reserves are invested through the State Investment Board according to an allocation WSI sets.

On benefits, Wallin explained WSI pays all medical expenses related to a compensable injury for the life of the claim, with no co‑pays or deductibles. Indemnity benefits replace about two‑thirds of lost wages up to a statutory maximum (Wallin cited a maximum weekly benefit of $1,514 tied to 125% of the state average weekly wage). He said catastrophic individual claims can be very large—Wallin referenced an individual claim the agency is projecting to pay roughly $28 million over its life—and reiterated that those long tails drive the need for substantial reserves.

Art Thompson, WSI’s director, told the committee the agency’s investment allocation is weighted toward low‑risk instruments—bonds and similar holdings—given the long‑duration liabilities. Thompson said recent reserve returns were near WSI’s target range and that the agency works to reduce investment management fees where appropriate.

Lawmakers asked about vocational rehabilitation, dependent allowances, fraud, customer satisfaction metrics, claim acceptance rates, and audit oversight. Wallin said retraining remains the final step of a statutory rehabilitation hierarchy and that the agency continues to provide vocational options when appropriate. He said WSI generally accepts about 90% of claims and that documented fraud cases are rare; the agency averages about 12 death benefits paid per year. On oversight, Wallin and Thompson described internal audits, annual external financial audits, board oversight, and legislative reporting including actuarial impact statements on workers’ compensation bills.

Why it matters: WSI’s structure and reserves underpin how the state finances workers’ compensation; the agency’s investment decisions, reserve targets, benefit levels, and dividend practices affect employer costs and injured workers’ benefits.

What lawmakers may watch: WSI flagged a recent state supreme court decision as likely to generate future statutory clarifications, and the agency said actuarial impact statements will accompany workers’ compensation legislation during the session.