commonwealth of massachusetts - wcribma · 2015-12-29 · commonwealth of massachusetts division of...

COMMONWEALTH OF MASSACHUSETTS DIVISION OF INSURANCE

Docket No. 15-

) In re: ) APPLICATION OF THE WORKERS' ) COMPENSATION RATING AND INSPECTION ) BUREAU OF MASSACHUSETTS FOR APPROVAL ) OF A GENERAL RATE REVISION TO BE ) EFFECTIVE ON AND AFTER July 1, 2016 ) )

PRE-FILED DIRECT TESTIMONY OF DAVID APPEL

The Workers' Compensation Rating and Inspection Bureau of Massachusetts

("WCRIBMA") submits the following direct testimony of David Appel in support of its

application for a general rate revision to be effective on and after July 1, 2016.

Q. Please state your full name.

A. David Appel.

Q. What are your professional qualifications?

A. I am a Principal and Director of Economics Consulting with the firm of Milliman, Inc.

Milliman is one of the nation's largest independently owned consulting firms specializing

in the areas of risk and insurance. The company operates offices in more than 60 cities

in the U.S., Europe, Latin America, Asia and Australia. Our employees number over

2,600, and our clients number in the thousands. They include insurers, self-insured

entities, Federal and State Governments, private corporations, non-profit organizations,

unions, and many others. A complete description of my academic and professional

credentials can be found in my curriculum vitae, which is attached to this testimony.

Pre-Filed Direct Testimony David Appel

- 2 -

Q. What was your role in the preparation of the current WCRIBMA filing for a general

rate revision?

A. I was responsible for and sponsor the materials in Section VII of the WCRIBMA’s

filing dealing with the estimation of the cost of capital and the use of discounted cash flow

models to derive the underwriting profit provision proposed by the WCRIBMA this year. I

have relied upon the WCRIBMA to provide the underwriting cash flows (for losses,

expenses and premiums) that are used in the discounted cash flow models. To the best of

my knowledge, information and belief, the data and calculations underlying Section VII of

the filing are complete and accurate, and the narrative statements offered in support of

Section VII are also accurate and correct.

Q. Are you familiar with the underwriting profit provision used by the WCRIBMA in

calculating the proposed rates?

A. Yes.

Q. Are you familiar with the statutory standard that must be applied by the

Commissioner in reviewing the rates proposed in the WCRIBMA's current filing – that they

“are not excessive, inadequate or unfairly discriminatory” and that they “fall within a range

of reasonableness”?

A. Yes. That is the standard typically applied by regulators in assessing insurance

rates.

Q. Do you have an opinion as to whether the rates proposed in the WCRIBMA's

current filing satisfy the statutory standard?

A. Yes.


- 3 -

Q. What is your opinion?

A. For the reasons offered in Section VII, it is my professional opinion that if the

actuarial projections of losses, expenses and premiums in the filing are reasonable, then

the proposed rates satisfy the statutory standard because the underwriting profit provision

has been calculated so that the rates will yield a fair return to the insurers who have

invested their capital in the Massachusetts workers’ compensation market.

Q. Do you have anything to add to the text of Section VII of the filing at this time?

A. Yes. While I have concluded that the rates as filed by the WCRIBMA are

reasonable and not excessive, I must also note that I believe that the calculations used

to derive the indicated profit provision are extremely conservative in the sense that they

overstate the income insurers would reasonably expect to earn from the sale of workers’

compensation insurance in Massachusetts. To the extent that income is overstated, of

course, the required rate change will be set too low. There are three principal reasons

for this.

First, the discounted cash flow modes used to derive the underwriting profit

provision in the filing do not reflect the true cost of policyholder dividends. Policyholder

dividends are refunds of premium paid at the end of the policy period (and are frequently

tied to the loss experience of the insured). Dividend payments definitively reduce insurer

income, and should be reflected in the derivation of underwriting profit provisions.

However, in her Decision on 2003 Rates, the Commissioner rejected consideration of

dividends in any fashion, and hence in this year’s model the WCRIBMA has not

considered policyholder dividends in any form. (I understand that previous practice in

Massachusetts had been to simply reflect the reduction in investible funds due to the


- 4 -

payment of policyholder dividends, but not to reflect the dividend expense itself. In this

filing neither the dividend expense nor the reduction in investible funds has been

reflected.)

Second, the WCRIBMA has included a provision for the cost of reinsurance in the

current filing, but its provision is restricted solely to the reinsurer’s expense costs. That is,

it does not consider the true net cost of reinsurance, which includes not only the

reinsurer’s expenses, but also the reinsurer’s required profit. Had the reinsurer’s required

profit been reflected, the required rate change would have been higher.

Third, the WCRIBMA has assumed that all special revenue bonds are tax-exempt,

an assumption known to be untrue. A portion of such bonds – approximately half based on

recent research – are subject to Federal tax, which, if recognized, would reduce the after

tax yield on the investment portfolio. Had a lower after tax portfolio yield been used in the

model, the required rate change would have been higher.

It is evident that each of these assumptions provides a degree of conservatism in

the filing, in that each works to lower the profit provision estimated by the WCRIBMA.

I would add that I have not adjusted the target rate of return to reflect the arguably

greater risk of workers’ compensation relative to the average line of property/casualty

insurance. I note that had I set the target return higher, a higher underwriting profit would

have been indicated as well.

Signed this 14th day of December 2015 under the pains and penalties of perjury.

David Appel

of 19

DAVID APPEL

One Pennsylvania Plaza New York, NY 10119

(646) 473-3000 PROFESSIONAL EXPERIENCE: 1989 to present MILLIMAN, INC.

Principal & Director - Economics Consulting

Responsible for the formation, development and management of a national consulting practice in insurance economics.

1980 to 1989 NATIONAL COUNCIL ON COMPENSATION INSURANCE Economic and Social Research Division 1985 to 1989 Vice President 1983 Assistant Vice President

Responsible for all economic and social research of NCCI

1982 Director of Economic and Social Research 1981 Senior Research Economist 1980 Associate Research Economist 1976 to 1997 RUTGERS UNIVERSITY 1981-97 Associate of the Graduate Faculty, Department of Economics, Newark, New Jersey 1981-93 Teach variety of graduate courses including:

Microeconomic Theory, Industrial Organization, Public Finance 1978-80 Instructor, Department of Economics, New Brunswick, New Jersey 1976-78 Adjunct Instructor, Department of Economics, Newark, New Jersey

EDUCATION: 1980 Ph.D., Economics, Rutgers University 1976 M.A., Economics, Rutgers University 1972 B.A., Economics, Brooklyn College, CUNY Fellow: National Academy of Social Insurance

of 19

PAPERS AND PUBLICATIONS “Comment on Jaffee and Russell” in Deregulating Property-Liability Insurance, J. David Cummins, Editor,

Brookings Institution Press, Washington, DC, 2002

"Dynamic Financial Analysis of a Workers Compensation Insurer", CAS Call Papers Program, 1997 (with Susan Witcraft and Mark Mulvaney) "The Impact of Managed Care on Workers Compensation Claim Costs," in a volume of conference proceedings published by the Workers' Compensation Research Institute, September 1994, (with Philip Borba).

"Health Care Costs in Workers' Compensation", Benefits Quarterly, Vol. 9, No. 4, Fourth Quarter, 1993

"The Transition From Temporary to Permanent Disability: A Longitudinal Analysis" in Workers' Compensation Insurance: Claims Costs, Prices and Regulation, David Durbin and Philip Borba, Editors, Kluwer Academic Publishers, Boston, 1992, (with Richard Butler, David Durbin and John Worrall)

"Leverage, Interest Rates and Workers' Compensation Survival" in Workers' Compensation Insurance: Claims Costs, Prices and Regulation, David Durbin and Philip Borba, Editors, Kluwer Academic Publishers, Boston, 1992, (with Richard Butler, David Durbin and John Worrall)

Benefits, Costs and Cycles in Workers' Compensation, Kluwer Academic Publishers, Boston, 1990, (co-editor with Philip Borba)

"Benefit Increases in Workers' Compensation", Southern Economics Journal, January 1990, (with Richard J. Butler)

"Internal Rate of Return Criteria in Ratemaking", NCCI Digest, Vol. IV, Issue III, September 1990, (with Richard J. Butler).

"Social Inflation in Workers' Compensation: The Phenomenon of Benefit Utilization", Proceedings of the Casualty Loss Reserve Seminar, 1988. Also in Contingencies, Nov./Dec., 1989.

Workers' Compensation Insurance Pricing: Current Programs and Proposed Reforms, Kluwer Academic Publishers, Boston, 1988,(co-editor with Philip Borba)

"Prices and Costs of Workers' Compensation" in Workers' Compensation Insurance Pricing: Current Programs and Proposed Reforms, Kluwer Academic Publishers, Boston, 1988, (with Philip Borba)

“1986 Tax Reform Act: Effects on Workers' Compensation Profitability”, NCCI Digest, Vol. II, Issue II, July 1987 (with James Gerofsky)

"The Propensity for Permanently Disabled Workers' to Hire Legal Services" , Industrial and Labor Relations Review, April 1987, (with Philip Borba)

"Sex, Marital Status, and Medical Utilization by Injured Workers'", Journal of Risk and Insurance, Vol. LIV, No. 1, March 1987, (with John Worrall and Richard Butler)

"The Impact of Workers' Compensation Benefits on Low Back Claims" in Clinical Concepts in Regional Musculoskeletal Illness, Nortin M. Hadler, ed. (Boston: 1986, Grune and Stratton), (with John Worrall)

"Workers' Compensation and Employment: An Industry Analysis" in Disability and the Labor Market: Economic Problems, Policies and Programs, M. Anne Hill and Monroe Berkowitz, eds., (Ithaca:1986 ILR Press), (with James Lambrinos)

of 19

"Some Benefit Issues in Workers' Compensation", in Workers' Compensation Benefits: Adequacy, Equity, Efficiency. (Ithaca:1985 ILR Press), (with John Worrall)

Workers' Compensation Benefits: Adequacy, Equity, Efficiency. (co-editor with John Worrall), (Ithaca:1985 ILR Press)

"Survivorship and the Size Distribution of the Property-Liability Insurance Industry", Journal of Risk and Insurance, October 1985, (with John Worrall and Richard Butler). "Regulating Competition-The Case of Workers' Compensation Insurance", Journal of Insurance Regulation, (with James Gerofsky), June 1985.

"The Wage Replacement Rate and Benefit Utilization in Workers'' Compensation Insurance", Journal of Risk and Insurance, September 1982 (with John Worrall)

"Property Damages", in Joseph Seneca and Peter Asch, The Benefits of Air Pollution Control in New Jersey, Center for Coastal and Environmental Studies, Rutgers University, 1979

WORKING PAPERS

"Workers' Compensation Pricing: The Role of Policyholder Dividends" (with David Durbin)

"The Impact of Lifetime Work on Mortality: Do Unisex Pensions Matter?" (with Richard J. Butler)

"Regulatory Survival: Rate Changes in Workers' Compensation" (with Richard J. Butler and John D. Worrall)

"Framing, Firm Size and Financial Incentives in Workers' Compensation Insurance" (with Richard J. Butler and John D. Worrall)

"Application of NAIC Profitability Models to Long Tailed Lines of Insurance" (with James Gerofsky)

of 19

INVITED PRESENTATIONS Huntington Beach, California, March 11, 2013 CAS RPM Seminar “Risk Loads for Property Catastrophe Covers: Primary and Reinsurer Perspectives” Huntington Beach, California, March 11, 2013 CAS RPM Seminar “The Actuary as Expert Witness” Philadelphia, Pennsylvania, March 20, 2012 CAS Ratemaking Seminar “How Reinsurers Consider Risk Loads and Cost of Capital for Property Cat Covers” Chicago, IL , March 17, 2010 CAS Ratemaking Seminar “Logic, Fallacies and Paradoxes in Risk/Profit Loading in Ratemaking: A Socratic Dialogue” Chicago, IL , March 16, 2010 CAS Ratemaking Seminar “Quantifying Risk Loads for Property Catastrophe Exposure”

Las Vegas, NV, March 10, 2009 CAS Ratemaking Seminar “Using Catastrophe Bonds to Infer Risk Loads/Profit Margins/Reinsurance Costs” Boston, MA, March 17, 2008 CAS Ratemaking Seminar “Using Catastrophe Bonds to Infer Risk Loads/Profit Margins/Reinsurance Costs”

Pinehurst, North Carolina, May 21, 2007

Workers Compensation Insurance Organizations Annual Meeting “Enterprise Risk Management: What Is It and Why Is It Important?”

Salt Lake City, Utah, March 13, 2006 CAS Ratemaking Seminar “Including Reinsurance Costs in Primary Insurance Rates” New Orleans, Louisiana, March 11, 2005 CAS Ratemaking Seminar “Including Reinsurance Costs in Primary Insurance Rates” Philadelphia, Pennsylvania, March 11, 2004 CAS Ratemaking Seminar “The Consideration of Risk Loads and Reinsurance Costs in Primary Insurance Ratemaking”

New York, New York, December 12, 2003 Goldman Sachs Insurance Conference “Interest Rate Changes and Insurance Underwriting” San Antonio, Texas, March 28, 2003 CAS Ratemaking Seminar "The Consideration of Risk Loads and Reinsurance Costs in Primary Insurance Ratemaking" San Antonio, Texas, March 27, 2003 CAS Ratemaking Seminar "Rate of Return Models in Insurance Ratemaking"

of 19

San Diego, California, May 20, 2002 CAS Annual Meeting “The Actuary as an Expert Witness” Tampa, Florida, March 7, 2002 CAS Ratemaking Seminar "Parameterizing Rate of Return Models in Insurance Ratemaking"

Chicago, Illinois, December 10, 2001 NAIC Meeting “The Impact of Proposition 103 in California” Kansas City, Missouri, April 30, 2001 NAIC Meeting “Personal Lines Regulation”

Las Vegas, Nevada, March 12, 2001 CAS Ratemaking Seminar "Parameterizing Rate of Return Models in Insurance Ratemaking" Washington DC, January 18, 2001

Brookings Institution Conference on Insurance Regulation “Auto Insurance Experience in California”

Bermuda, September 14, 2000

Ace Insurance Worldwide Actuarial Conference “Rate of Return Models In Property Casualty Insurance Ratemaking”

Orlando, Florida, June 9, 1998 Florida Managed Care Institute Annual Conference "Issues in Integrated Health Care" Seattle, Washington, July 21, 1997 CAS Dynamic Financial Analysis Seminar "Dynamic Financial Analysis of a Workers Compensation Insurer" Boston, Massachusetts, March 14, 1997 CAS Ratemaking Seminar "Discounted Cash Flow Models in Insurance Ratemaking" East Lansing, Michigan, July 15, 1996 National Symposium on Workers Compensation "Managed Care in Workers Compensation" New Orleans, Louisiana, March 20, 1996 Global Business Research Seminar: Partnerships Between Insurers and Providers "Integrating the Data Systems"

Orlando, Florida, November 15, 1995 Global Business Research Seminar: Documenting Savings From Managed Care "Evaluating Savings From Managed Care"

Orlando, Florida, October 27, 1995 Self Insurance Association of America Annual Meeting "Managed Care in Workers Compensation: A Magic Act or Humbug?"

of 19

San Diego, California, October 16, 1995 Global Business Research Seminar: Documenting Savings From Managed Care "Technical Issues in Measuring Savings From Managed Care" Durham, North Carolina, September 6, 1995 North Carolina HMO Association Annual Meeting "Workers Compensation in North Carolina: Risks and Opportunities for HMO's"

Washington, DC, May 22, 1995 Global Business Research Seminar: Outcomes for Workers' Compensation Managed Care "Measuring and Reporting the Savings"

Orlando, Florida, April 13, 1995

NCCI Annual Meeting "Managed Care in Workers Compensation" Phoenix, Arizona, April 3, 1995 Casualty Actuarial Society Seminar on Profitability "Rate of Return Models - Selecting the Parameters" New Orleans, Louisiana, March 16, 1995 Casualty Actuarial Society Ratemaking Seminar "Discounted Cash Flow Models for Insurance Ratemaking" Orlando, Florida, March 14, 1995 Standard & Poor's Rating Conference "Consolidation in the Property/Casualty Insurance Industry" Minneapolis, Minnesota, October 11, 1994 Casualty Actuarial Society Seminar on Medical Cost Containment "Managed Care and Workers' Compensation" Toronto, Ontario, August 22, 1994 American Risk and Insurance Association Annual Meeting "Current Issues in Workers' Compensation"

Boston, Massachusetts, May 17, 1994 Casualty Actuarial Society Annual Meeting "Standard Of Practice on Profit and Contingency" Hartford, Connecticut, April 20, 1994 University of Connecticut Blue Cross/Blue Shield Symposium "24 Hour Coverage - What Will It Involve"

Atlanta, Georgia, March 10, 1994 Casualty Actuarial Society Ratemaking Seminar "Cash Flow Models for Insurance Ratemaking"

Cambridge, Massachusetts, March 2, 1994 Workers' Compensation Research Institute Health Care Reform Conference "Early Results of the Florida Pilot Project" Phoenix, Arizona, November 15, 1993 Casualty Actuarial Society Annual Meeting "The Use Of Managed Care in Workers' Compensation"

of 19

New York, New York, October 20, 1993 Insurance Information Institute/Reinsurance Association of America Research Conference The Impact of Health Care Reform on Casualty Insurance" Somerset, New Jersey, July 13, 1993 National Symposium on Workers' Compensation "Economic Analysis of Workers' Compensation Issues" Boston, Massachusetts, June 30, 1993 Institute of Actuaries of Japan Special Meeting "Health Care Costs in Workers' Compensation"

Dallas, Texas, June 15, 1993 Stirling-Cooke Workers' Compensation Seminar "Workers' Compensation Medical Costs: Trends, Causes and Solutions" New York, New York, June 3, 1993 New York Business Group On Health "The Crisis in Workers' Compensation Health Care"

Mauna Lani Bay, Hawaii, May 3, 1993 Western Association of Insurance Brokers Annual Meeting "Trends in Insurance Insolvency" Kingston, Ontario, April 28, 1993 Queen's University Workers' Compensation Conference "Exposure Bases for Workers' Compensation: Equity vs. Practicality" Sanibel Island, Florida, March 29, 1993 Workers' Compensation Reinsurance Bureau Annual Meeting "The Use of Managed Care in Workers' Compensation" Baltimore, Maryland, March 23, 1993 CAMAR Annual Meeting "Estimating the Cost of Capital in Insurance Ratemaking"

Philadelphia, Pennsylvania, December 1, 1992 Economic Issues in Workers' Compensation Seminar, "Rate of Return Regulation in Workers' Compensation" Seattle, Washington, October 16, 1992 Casualty Actuarial Society Seminar on Profitability "Risk Based Capital Standards for Property Casualty Insurers" Washington, DC, August 18, 1992 American Risk and Insurance Association Annual Meeting "The Crisis in Workers' Compensation"

New York, New York, May 19, 1992 Executive Enterprises Institute Seminar: Winning Approval of Rate and Form Filings "Determining a Fair Rate of Return for Property/Casualty Insurers" Palm Beach, Florida, April 23, 1992 NCCI Annual Meeting "Is the Workers' Compensation Industry Competitive?"

of 19

Philadelphia, Pennsylvania, March 20, 1992 University of Pennsylvania/Duncanson & Holt Special Seminar "Current Issues in Workers' Compensation" Dallas, Texas, March 12, 1992

Casualty Actuarial Society Ratemaking Seminar "Profitability Models in Insurance Ratemaking: Estimating the Parameters"

Houston, Texas, December 11, 1991 NCCI/NAIC Commissioners Symposium "Rate Adequacy: Solvency and Safety Implications" New York, New York, November 17, 1991 Executive Enterprises Institute Seminar: Winning Approval of Rate and Form Filings "Determining a Fair Rate of Return for Property/Casualty Insurers"

Philadelphia, Pennsylvania, November 12, 1991

Casualty Actuarial Society Annual Meeting "The Impact of Medical Costs on Casualty Coverages" New York, New York, May 17, 1991 Executive Enterprises Institute Seminar: Winning Approval of Rate and Form Filings "Determining a Fair Rate of Return for Property/Casualty Insurers" Kiawah Island, South Carolina, April 15 & 16, 1991 Casualty Actuarial Society Seminar on Profitability "Cost of Capital Estimation: Lessons From Public Utilities"

Chicago, Illinois, March 14, 1991

Casualty Actuarial Society Ratemaking Seminar "The Use of Profitability Models in Insurance Ratemaking"

Orlando, Florida, October 24, 1990, Financial Management Association Annual Meeting, "Current Issues in Insurance Rate Regulation: California Prop. 103 and Pennsylvania Act 6"

New Brunswick, New Jersey, May 18, 1990, Joint Conference on Workers' Compensation, "Current State Issues and Benefit Reforms" Orlando, Florida, May 8, 1990, National Association of Insurance Commissioners Southeast Zone Raters Conference, "Loss Cost Rating for Workers' Compensation" Orlando, Florida, April 3, 1990, Workers' Compensation Reinsurance Bureau Annual Meeting, "Medical Costs in Workers' Compensation: Recent Trends in Cost Containment"

Philadelphia, Pennsylvania, March 15, 1990, CAS Ratemaking Seminar, "Rate of Return Models in Insurance Regulation: Return on Sales vs. Return on Equity" Chicago, Illinois, November 10, 1989, Alliance of American Insurers Research Committee, "Recent Developments in Rate Regulation: California Proposition 103"

of 19

New York, New York, October 5, 1989, NCCI Legal Trends Seminar, "Medical Cost Containment in Workers' Compensation" Philadelphia, Pennsylvania, September 7, 1989, Workers' Compensation Congress, "Medical Cost Containment in Workers' Compensation" Denver, Colorado, August 21, 1989, American Risk and Insurance Association Annual Meeting, "Regulatory Survival: Rate Changes in Workers' Compensation" (with Richard J. Butler)

Hilton Head, South Carolina, April 4,1989,

Workers' Compensation Reinsurance Bureau Annual Meeting, "Prospects for Workers' Compensation in the 1990's" Mountain Lakes, New Jersey, March 29, 1989, St. Clares-Riverside Medical Center, "Stress in the Workplace"

Dallas, Texas, March 16, 1989, Casualty Actuarial Society Ratemaking Seminar, "The Impact of Tax Reform on Insurance Profitability" New Orleans, Louisiana, December 15, 1988, NAIC-NCCI Commissioners School, "A Forecast for Workers' Compensation" Philadelphia, Pennsylvania, November 17,1988, Economic Issues in Workers' Compensation Seminar, "The Impact of Regulation on the Probability of Insolvency" (with John D. Worrall and David Durbin) Boston, Massachusetts, November 14, 1988, American Public Health Association Annual Meeting, "Stress in the Workplace"

Atlanta, Georgia, September 14, 1988, Casualty Loss Reserve Seminar, "Estimating the Cost of Social Inflation in Workers' Compensation"

Reno, Nevada, August 15, 1988, American Risk and Insurance Association Annual Meeting, "Benefit Increases in Workers' Compensation" New York, New York, June 13, 1988, National Association Of Insurance Commissioners Annual Meeting, "Alternative Rate of Return Models for Insurance Regulation"

Syracuse, New York, May 5, 1988, Current Issues in Workers' Compensation Symposium, "Workers' Compensation Stress Claims" Hilton Head, South Carolina, April 22, 1988, Workers' Compensation Reinsurance Bureau Annual Meeting, "A Forecast for Workers' Compensation Insurers"

of 19

Absecon, New Jersey, April 19, 1988, Pennsylvania Coal Mine Rating Bureau Annual Meeting, "The Use of Rate of Return Models in Insurance Rate Regulation" Philadelphia, Pennsylvania, November 17, 1987, Economic Issues in Workers' Compensation Seminar, "The Transition to Permanent Disability Status" (with John D. Worrall and David Durbin)

Charlotte, North Carolina, October 20, 1987, American Insurance Association Government Affairs Conference, "Prospects for Workers' Compensation in 1988"

Minneapolis, Minnesota, September 29, 1987, Minnesota Workers' Compensation Reinsurance Association Annual Meeting, "Economic and Demographic Characteristics of Workers' Compensation Claims"

Airlie, Virginia, July 7, 1987, National Symposium on Workers' Compensation, "Forecasting Workers' Compensation Experience" Santa Clara, California, June 30, 1987, Symposium on Recent Advances in Ratemaking, "Econometric Models of Workers' Compensation Losses" Storrs, Connecticut, May 1, 1987, University of Connecticut Symposium on Current Issues in Workers' Compensation, "Current Research in Workers' Compensation" Philadelphia, Pennsylvania, April 16, 1987, Wharton School Graduate Seminar Series, "Impact of Tax Reform on Workers' Compensation Profitability" Boca Raton, Florida, December 4, 1986, National Association of Insurance Commissioners/NCCI Commissioners School, Panel Discussion on Current Issues in Workers' Compensation

Philadelphia, Pennsylvania, November 7, 1985,

Wharton School, University of Pennsylvania, Graduate Seminar Series, "Litigation in Workers' Compensation"

Vancouver, British Columbia, August 19, 1985,

American Risk and Insurance Association Annual Meeting, "Earnings Loss and Permanent Disability"

Washington, D.C., April 23, 1985,

Washington Conference on the Economics of Disability, "Employment Effects of Workers' Compensation Insurance"

Schenectady, New York, January 18, 1985,

Union University Graduate Business Seminar Series, "The Use of Modern Portfolio Theory in Insurance Regulation"

of 19

EXPERT TESTIMONY San Francisco, California, November 19, 2015 State Farm General Homeowners Insurance Rate Hearing Tallahassee, Florida, October 21, 2015 NCCI Workers Compensation Insurance Rate Hearing Raleigh, North Carolina, October 27, 2014

Homeowners Insurance Rate Hearing Tallahassee, Florida, October 14, 2014 NCCI Workers Compensation Insurance Rate Hearing New York, NY, June 24, 2014 Omar Tigbao and Dorothy Tigbao, et. al.,v. QBE Financial Institutions Risk Services, Deposition New York, NY, March 7, 2014 Thrift Development Corporation v. American International Group, et. al., Deposition New York, New York, January 28, 2014 Cheryl Hall, et. al. v. Bank of America, N.A., et. al., Deposition Santa Fe, New Mexico, November 7, 2013

Biennial Title Insurance Rate Hearing Tallahassee, Florida, October 1, 2013 NCCI Workers Compensation Insurance Rate Hearing New York, New York, July 10, 2013 Larry Arnett and Ronda Arnett, et. al. v. Bank of America, N.A., et. al., Deposition Austin, Texas, April 25, 2013 State Farm Lloyds Homeowners Rate Hearing Tallahassee, Florida, October 4, 2012 NCCI Workers Compensation Insurance Rate Hearing Boston, Massachusetts, May 14, 2012 Massachusetts Workers Compensation Rate Hearing New York, New York, February 17, 2012 Temporary Services, Inc. et. al. v. American International Group, et. al., Deposition San Francisco, California, January 19, 2012 Mercury Insurance Company Homeowners Insurance Rate Hearing

Santa Fe, New Mexico, November 16, 2011

Biennial Title Insurance Rate Hearing

Tallahassee, Florida, October 11, 2011 NCCI Workers Compensation Insurance Rate Hearing

Tampa, Florida, September 13, 2011

Citizens Property Insurance Corporation Homeowners Insurance Hearing

of 19

Raleigh, North Carolina, July 25, 2011 Dwelling Fire and Extended Coverage Insurance Rate Hearing

Tallahassee, Florida, October 6, 2010 NCCI Workers Compensation Insurance Rate Hearing Irvine, CA, April 21, 2010 Eastwood Insurance Services, Inc. et. al., vs. Titan Auto Insurance of NM, et. al. Deposition San Francisco, California, March 9, 2010 Century National Insurance Company Proposition 103 Rollback Hearing Santa Fe, New Mexico, November 18, 2009

Annual Title Insurance Rate Hearing

Tallahassee, Florida, October 29, 2009 NCCI Workers Compensation Insurance Rate Hearing Austin, Texas, September 14, 2009 Biennial Title Insurance Rate Hearing Austin, Texas, April 1, 2009 State Farm Lloyds Homeowners Rate Hearing Santa Fe, New Mexico, November 19, 2008

Annual Title Insurance Rate Hearing New York, New York, November 13, 2008 Georgia Hensley, et. al., vs. Computer Sciences Corp. et. al., Deposition Tallahassee, Florida, October 29, 2008 State Farm Florida Homeowners Insurance Hearing Raleigh, North Carolina, July 1, 2008

Auto Insurance Rate Hearing San Francisco, California, May 5, 2008 GeoVera Insurance Company Earthquake Rate Hearing Tallahassee, Florida, January 23, 2008 Hartford Insurance Group Homeowners Insurance Rate Hearing Boston, Massachusetts, January 9, 2008 Commerce Insurance Group Auto Insurance Rate Hearing San Francisco, California, November 29, 2007 Explorer Insurance Company Automobile Rate Hearing

Santa Fe, New Mexico, November 19, 2007 Annual Title Insurance Rate Hearing

Reno, Nevada, June 14, 2007 Public Hearing Regarding Merger Between UnitedHealth Group and Sierra Health Systems Austin, Texas, May 31, 2007 State Farm Lloyds Homeowners Rate Hearing

of 19

Reno, Nevada, October 26, 2006 Public Hearing Regarding Demutualization of Employers Insurance Group San Francisco, California, August 30, 2006 Hearing on Proposed Title Insurance Rate Regulations Austin, Texas, August 14, 2006 Biennial Title Insurance Rate Hearing

Raleigh, North Carolina, September 28, 2005

Auto Insurance Rate Hearing Providence, Rhode Island, September 27, 2005 Norcal Medical Malpractice Insurance Rate Hearing San Francisco, California, August 23, 2005 Safeco Insurance Company Earthquake Rate Hearing Boston, Massachusetts, April 15, 2005 Massachusetts Workers Compensation Rate Hearing Lawrence, Massachusetts, February 14, 2005

Highground, Inc. v. Mazonson New York, NY, January 21, 2005 NFHA v. Prudential Deposition Austin, Texas, July 13, 2004 Medical Protective Insurance Company Medical Malpractice Insurance Rate Hearing Austin, Texas, December 16, 2003 Biennial Title Insurance Rate Hearing Providence, Rhode Island, November 17, 2003 Norcal Medical Malpractice Insurance Rate Hearing San Francisco, California, September 16, 2003 Century National Proposition 103 Rollback Hearing Austin, Texas, September 11, 2003 Farmers Insurance Exchange Homeowner Rate Rollback Hearing Austin, Texas, September 2, 2003 State Farm Lloyds Homeowners Rate Rollback Hearing Austin, Texas, May 21, 2003 Farmers Insurance Group Settlement Hearing Boston, Massachusetts, April 29, 2003 Massachusetts Workers Compensation Rate Hearing Los Angeles, California, March 12, 2003 SCPIE Medical Malpractice Rate Hearing Raleigh, North Carolina, July 17, 2002

Auto Insurance Rate Hearing

of 19

Tallahassee, Florida, February 25, 2002 NCCI Workers Compensation Insurance Rate Hearing Austin, Texas, February 5, 2002 Biennial Title Insurance Rate Hearing Raleigh, North Carolina, September 24, 2001

Auto Insurance Rate Hearing

Boston, Massachusetts, August 14, 2001 Massachusetts Auto Insurance Bureau Rate Hearing

Austin, Texas, March 6, 2001

Texas Auto Benchmark Rate Hearing

Boston, Massachusetts, August 23, 2000 Massachusetts Auto Insurance Bureau Rate Hearing Austin, Texas, December 7, 1999 Texas Auto Insurance Plan Association Rate Hearing Raleigh, North Carolina, December 3, 1999

Auto Insurance Rate Hearing Austin, Texas, November 3, 1999 Biennial Title Insurance Rate Hearing

Austin, Texas, September 8, 1999

Texas Auto Benchmark Rate Hearing Boston, Massachusetts, August 13, 1999 Massachusetts Auto Insurance Bureau Rate Hearing

Austin, Texas, June 22, 1999

Texas Property Benchmark Rate Hearing Honolulu, Hawaii, December 16, 1998

NCCI Workers Compensation Insurance Rate Hearing

Richmond, Virginia, November 15, 1998 NCCI Workers Compensation Insurance Rate Hearing

Boston, Massachusetts, October 9, 1998 Massachusetts Auto Insurance Bureau Rate Hearing Austin, Texas, May 19, 1998 Texas Auto Insurance Plan Association Rate Hearing

Austin, Texas, April 7, 1998

Auto Insurance Benchmark Rate Hearing

Austin, Texas, February 17, 1998 Property Insurance Benchmark Rate Hearing

Austin, Texas, November 18, 1997

Biennial Title Insurance Rate Hearing

of 19

Tallahassee, Florida, September 8, 1997 NCCI Workers Compensation Insurance Rate Hearing Austin, Texas, April 8, 1997 Texas Auto Insurance Plan Association Rate Hearing Austin, Texas, March 10, 1997 Auto Insurance Benchmark Rate Hearing San Francisco, California, March 4, 1997 Insurance Department Hearing on Rating Factors Raleigh, North Carolina, July 16, 1996

Auto Insurance Rate Hearing San Francisco, California, March 11, 1996 Century National Proposition 103 Rollback Hearing Sacramento, California, January 30, 1996 Hartford Steam Boiler Proposition 103 Rollback Hearing San Francisco, California, January 8, 1996 SAFECO Insurance Company Earthquake Rate Hearing Austin, Texas, December 21, 1995 Residential Property Insurance Benchmark Rate Hearing Clearwater, Florida, December 8, 1995 Florida Windstorm Underwriting Association Rate Hearing Austin, Texas, November 28, 1995 Private Passenger Auto Insurance Benchmark Rate Hearing Austin, Texas, October 31, 1995 Texas Automobile Insurance Plan Association Rate Hearing Sacramento, California, April 18, 1995 California Insurance Department Hearing on Auto Insurance Rating Factors Portland, Maine, April 13, 1995 Workers Compensation Assigned Risk Pool Fresh Start Hearing San Francisco, California, February 6, 1995 Farmers Insurance Group Earthquake Insurance Rate Hearing Austin, Texas, January 6, 1995 Special Hearing on Classification Rules for Automobile Insurance Austin, Texas, December 15, 1994 Residential Property Insurance Benchmark Rate Hearing Austin, Texas, October 4, 1994 Texas Automobile Insurance Plan Association Rate Hearing

Austin, Texas, September 27, 1994 Private Passenger Auto Insurance Benchmark Rate Hearing

of 19

Raleigh, North Carolina, July 19, 1994 Private Passenger Auto Insurance Rate Hearing San Francisco, California, December 22, 1993 Century National Homeowner's Insurance Rate Hearing Raleigh, North Carolina, October 13, 1993 Homeowners/Farmowners Insurance Rate Hearing Tallahassee, Florida, October 4, 1993 Workers' Compensation Insurance Rate Hearing Boston, Massachusetts, September 9, 1993 Automobile Insurance Rate Hearing Austin, Texas, March 4, 1993 Residential Property Insurance Benchmark Rate Hearing Austin, Texas, February 10, 1993 Automobile Insurance Benchmark Rate Hearing Honolulu, Hawaii, November 18, 1992 Liberty Mutual Insurance Automobile Rate Hearing Raleigh, North Carolina, November 13, 1992 Workers' Compensation Insurance Rate Hearing Tallahassee, Florida, October 29, 1992 Workers' Compensation Insurance Rate Hearing San Francisco, California, October 14, 1992 Workers' Compensation Insurance Rate Hearing Atlanta, Georgia, September 24, 1992 Workers' Compensation Insurance Rate Hearing Nashville, Tennessee, May 27, 1992 Workers' Compensation Insurance Rate Hearing San Francisco, California, May 13, 1992 Workers' Compensation Insurance Rate Hearing Los Angeles, California, April 10, 1992 Mercury General Proposition 103 Rollback Proceedings Austin, Texas, January 27, 1992 Texas Automobile Insurance Plan Rate Hearing Austin, Texas, December 17, 1991 Automobile Insurance Rate Hearing Raleigh, North Carolina, December 16, 1991 Workers' Compensation Insurance Rate Hearing

San Francisco, California, October 22, 1991 Workers' Compensation Rate Hearing

of 19

Los Angeles, California, May 23, 1991, Proposition 103 RCD-2 Proceedings San Francisco, California, April 9, 1991 California Workers' Compensation Rate Study Commission Nashville, Tennessee, March 20, 1991 Workers' Compensation Insurance Rate Hearing

Los Angeles, California, March 12, 1991, California Workers' Compensation Rate Study Commission Olympia, Washington, February 26, 1991, House Financial Institutions/Insurance Committee Hearing on Rules for Insurance Regulatory Legislation Olympia, Washington, November 27, 1990, Insurance Department Public Hearing on Proposed Rules for Ratemaking Harrisburg, Pennsylvania, November 12, 1990, Allstate Insurance Company Automobile Insurance Rate Hearing Tallahassee, Florida, November 1, 1990, Scanlan v. Martinez, et.al., Superior Court of Leon County San Bruno, California, October 1, 1990, SAFECO Insurance Group Proposition 103 Rate Rollback Hearing Austin, Texas, July 23, 1990, Texas State Board of Insurance Special Hearing on Investment Income in Ratemaking Harrisburg, Pennsylvania, July 18, 1990, Pennsylvania National Mutual Insurance Company Automobile Insurance Rate Hearing Harrisburg, Pennsylvania, June 28, 1990, Harleysville Mutual Insurance Company Automobile Insurance Rate Hearing Columbia, South Carolina, March 30, 1990, Workers' Compensation Insurance Rate Hearing San Bruno, California, March 19, 1990, California Proposition 103 Generic Hearing Denver, Colorado, December 12, 1989, Workers' Compensation Insurance Rate Hearing Tampa, Florida, October 23, 1989, Workers' Compensation Insurance Rate Hearing Austin, Texas, October 17, 1989, Workers' Compensation Insurance Rate Hearing Los Angeles, California, September 25, 1989, SAFECO Insurance Company of America Proposition 103 Rate Hearing

Austin, Texas, August 29, 1989, Texas Insurance Advisory Association Property Insurance Rate Hearing

of 19

Providence, Rhode Island, April 13, 1989, Workers' Compensation Insurance Rate Hearing Augusta, Maine, January 24, 1989, Workers' Compensation Insurance Rate Hearing Hartford, Connecticut, November 14, 1988, Workers' Compensation Insurance Rate Hearing Tallahassee, Florida, November 3, 1988, Workers' Compensation Insurance Rate Hearing Austin, Texas, November 2, 1988, Workers' Compensation Insurance Rate Hearing Montgomery, Alabama, June 30, 1988, Workers' Compensation Insurance Rate Hearing Augusta, Maine, March 24, 1988, Workers' Compensation Insurance Rate Hearing Austin, Texas, October 27, 1987, Workers' Compensation Insurance Rate Hearing Tallahassee, Florida, October 9, 1987, Workers' Compensation Insurance Rate Hearing Atlanta, Georgia, August 6, 1987, Workers' Compensation Insurance Rate Hearing Augusta, Maine, February 24, 1987, Workers' Compensation Insurance Rate Hearing Tallahassee, Florida, November 14, 1986, Workers' Compensation Insurance Rate Hearing Austin, Texas, November 18, 1986, Workers' Compensation Insurance Rate Hearing

Augusta, Maine, May 28, 1986, Workers' Compensation Insurance Rate Hearing

Tallahassee, Florida, December 6, 1985, Workers' Compensation Insurance Rate Hearing Oklahoma City, Oklahoma, October 10, 1985, Workers' Compensation Insurance Rate Hearing

Austin, Texas, July 23, 1985, Workers' Compensation Insurance Rate Hearing Austin Texas, June 14, 1985, Workers' Compensation Insurance Rate Hearing Tallahassee, Florida, November 18, 1984, Workers' Compensation Insurance Rate Hearing

of 19

Austin, Texas, August 29, 1984, Workers' Compensation Insurance Rate Hearing Portland, Oregon, March 6, 1984, NA IC Public Hearing on Investment Income and Insurance Profitability Tallahassee, Florida, February 25, 1984, Workers' Compensation Insurance Rate Hearing

Tallahassee, Florida, August 18, 1983, Workers' Compensation Insurance Rate Hearing

Austin Texas, July 13, 1983, Workers' Compensation Insurance Rate Hearing Oklahoma City, Oklahoma, March 6, 1983, Workers' Compensation Insurance Rate Hearing

Baton Rouge, Louisiana, March 16, 1982, Louisiana Insurance Commission Public Hearing on Investment Income

Providence, Rhode Island, February 3, 1982, Workers' Compensation Insurance Rate Hearing Augusta, Maine, October 1, 1981, Workers' Compensation Insurance Rate Hearing


Docket No. 15-

) In re: ) APPLICATION OF THE WORKERS' ) COMPENSATION RATING AND INSPECTION ) BUREAU OF MASSACHUSETTS FOR APPROVAL ) OF A GENERAL RATE REVISION TO BE ) EFFECTIVE ON AND AFTER JULY 1, 2016 ) )

PRE-FILED DIRECT TESTIMONY OF CLAUDIA B. CUNNIFF


("WCRIBMA") submits the following direct testimony of Claudia B. Cunniff in support of its



A. Claudia B. Cunniff.

Q. Ms. Cunniff, please describe your current employment and your educational and

professional experience.

A. I am presently employed as Assistant Vice President and Actuary at the

WCRIBMA. I hold a bachelors degree in biology from the College of the Holy Cross. I am

a Fellow of the Casualty Actuarial Society and a member of the American Academy of

Actuaries. Before joining the WCRIBMA in February 2000, I worked for ten years as an

actuary in Massachusetts. My actuarial career began in 1990 at Liberty Mutual Insurance

Company where I focused on ratemaking issues on both personal and commercial lines.

In 1994, I moved to Trust Insurance Group, Inc., where I became a manager and actuary

Claudia B. Cunniff, FCAS, MAAA 101 Arch Street, 5th floor

Boston, MA 02110 (617) 646-7589

PROFESSIONAL EXPERIENCE: WORKERS’ COMPENSATION RATING & INSPECTION BUREAU OF MA, Boston, MA 2/00 – present Assistant Vice President and Actuary

Directs development of rate indication and strategy of filing and approval process Directs preparation of main rate filing and other filings Supports filings with hearing testimony Prepares and directs preparation of informational reports Processes information requests, etc. from members, regulators, etc.

TRUST GROUP, INC., Taunton, MA 8/94-1/00

Manager - Actuary Financial Modeling - Developed pro-forma income statement model and assisted with the

preparation of projected balance sheet and cash flow items Merger & Acquisition analysis - Performed due diligence analysis associated with

various company investment opportunities Corporate Reporting & Reserving - Responsible for coordinating the quarterly/annual

loss reserve analysis, financial booking of company results by component, and Schedule P preparation for all lines of business

Reinsurance Treaty evaluation - Analyzed company reinsurance needs, prepared data for reinsurance pricing negations and provided recommendations to senior management regarding reinsurance purchases

Pricing - Responsible for monitoring the regulatory environment and tracking marketplace activity including preparation of competitor analyses, rate-setting, and pricing proposals

Cession strategy - Developed a sophisticated Massachusetts Involuntary Market cession strategy model incorporating the dynamics of the company and industry

Manager - Led a team of 12 professional and technical staff responsible for profitability studies, statistical reporting, statutory reporting, price setting/monitoring, data compilation and analysis

LIBERTY MUTUAL INSURANCE GROUP, Boston MA 6/90-8/94

Senior Actuarial Analyst - Personal Lines ratemaking Presented actuarial recommendations to Sales, Marketing, and Underwriting Evaluated loss ratios, retention, growth, competition, and legislation by state to be

incorporated in pricing decisions Completed rate indications and provided actuarial support to the field in over 20 states Prepared rate filings consistent with state regulatory requirements Organized training seminars for Actuarial Student Program Actuarial Assistant/Analyst - Commercial Lines ratemaking Implemented Loss Costs and rate filings: Commercial Lines Task Force Prepared actuarial proposals for senior management to aid in rate adequacy decisions Analyzed Involuntary Market mechanisms and results

EDUCATION: F.C.A.S. 1999, M.A.A.A. 2000 College of the Holy Cross, Worcester, Massachusetts, B.A. Biology 1990

Robert McCarthy, FCAS, CFA 101 Arch St Boston, MA 02110 E-mail: [email protected]

PROFESSIONAL EXPERIENCE WCRIBMA, Boston, MA (Mar 2004 – Current) Senior Vice President & Actuary Jan 2012 - Current Vice President & Actuary Mar 2004 – Dec 2011 Responsible for the management of the Actuarial and Data Operations departments. Oversee the collection of data and manage the preparation of workers’ compensation rate filings for the state of Massachusetts. FCCI Insurance Group, Sarasota, FL (Dec 1989 – Jan 2003) Senior Vice President of Decision Support & Chief Actuary Jan 2002 – Jan 2003 Senior Vice President of Investments & Chief Actuary July 2001 – Dec 2001 Vice President of Investments & Chief Actuary July 2000 – Jun 2001 Assistant Vice President of Investments & Chief Actuary Jan 1999 – Jun 2000 Chief Actuary May 1995 – Dec 1998 Early Positions at FCCI Included: Actuary (May 1993 – May 1995), Assistant Actuary (Jan 1991 – May 1993), and Actuarial Trainee (Dec 1989 – Jan 1991) Reserving Responsible for internally generated reserve estimates and quarterly presentation to board. Collaborated with opining actuary on reserves carried in the annual statement. Contact for insurance department examiners and independent auditors. Pricing / Product Development Provided product development with the supporting materials needed for rate filings. Developed and monitored all workers compensation sliding scale dividend plans. Developed the workers comp large deductible product and the rating mechanism used by underwriting. Reinsurance Reviewed quotes and independently developed experience and exposure based pricing. Provided data to reinsurers and reinsurance brokers and served as their technical contact. Developed an automated system for the calculation of reinsurance recoverables. Data Warehouse / Decision Support Identify and analyze data warehouse software options that facilitated data mining and reporting. Developed data warehouse architecture and championed consistent definitions for terms. Responsible for ISO CSP statistical reporting and NCCI Aggregate Financial calls Responsible for the conversion of many Excel and Access based reports to SAS.

EDUCATION

Bachelor of Science Industrial and Systems Engineering University of Florida 1989

Bachelor of Arts Mathematics University of Florida 1989

Bachelor of Science Business Management University of Florida 1989

Fellow of the Casualty Actuarial Society 1995

Chartered Financial Analyst 2007

Masters of Science Insurance Management Boston University 2008

Anthony D. Salido, FCAS, MAAA Workers' Compensation Rating and Inspection Bureau of MA

101 Arch St. 5th Floor Boston, MA 02110

Work experience The Workers' Compensation Rating and Inspection Bureau of MA Boston, MA June 1998 - Present Senior Actuarial Analyst January 2004 - August 2010 Data Operations Director / Actuary September 2010 - Present Directs the collection, editing, and correction of all Unit Statistical,

Policy and Aggregate Financial Call data submitted to the WCRIBMA by its member carriers.

Responsible for the preparation of various sections contained in the WCRIBMA’s rate filings over the last 12 years, including loss development, premiums, benefit level adjustments, trend, expenses, experience rating, retrospective rating, class rates, and F-Class rates.

Maintains the data structures and associated metadata for the Actuarial Department’s Financial Call and Unit Stat plan databases.

Responsible for the maintenance of the nightly batch process that populates the Actuarial Department’s databases, runs the Actuarial Department’s data edits, and creates content for the WCRIBMA’s intranet and web site.

Formalized and directed the process employed by the WCRIBMA for the data reconciliations mandated by the Massachusetts Workers Compensation Statistical Plan. Worked with other WCRIBMA departments and data reporters to explain and/or correct anomalies identified by the reconciliation process.

Developed and maintains Actuarial Department’s intranet site which includes a history of Massachusetts workers’ compensation rate filing activity, reconciliation reports, edit reports, and other content to support the WCRIBMA’s rate filing efforts.

Prepares Circular Letters and Special Bulletins. Responds to information requests from members, regulators, etc.

Education F.C.A.S. 2010, M.A.A.A. 2008

Boston College, Chestnut Hill MA B.A. in Mathematics and Economics 1998


Docket No. 15-

) In re: ) APPLICATION OF THE WORKERS' ) COMPENSATION RATING AND INSPECTION ) BUREAU OF MASSACHUSETTS FOR APPROVAL ) OF A GENERAL RATE REVISION TO BE ) EFFECTIVE ON AND AFTER JULY 1, 2016 ) )

PRE-FILED DIRECT TESTIMONY OF SHARON TENNYSON


("WCRIBMA") submits the following direct testimony of Sharon Tennyson in support of its



A. Sharon Tennyson.

Q. What are your professional qualifications?

A. I am an economist and Associate Professor of Policy Analysis and Management at

Cornell University. Before moving to Cornell, I was on the faculty of the Department of

Insurance and Risk Management at the Wharton School of the University of Pennsylvania.

I have over 20 years’ experience in research related to insurance markets. I serve on the

editorial boards of the Journal of Risk and Insurance and the Journal of Insurance

Regulation. I am a former president of the Risk Theory Society. My particular area of

expertise is in the industrial organization and regulation of insurance markets, and I have

published extensively on these topics. My curriculum vitae is attached to this testimony.

Pre-Filed Direct Testimony Sharon Tennyson

- 2 -

Q. What was your role in the preparation of the current WCRIBMA filing for a general

rate revision?

A. I was retained by Anderson & Kreiger LLP, counsel for the WCRIBMA, to provide an

analysis based on well-accepted economic theory that uses available insurance market data

to determine whether the commission allowance recommended by the WCRIBMA is

reasonable and reflects the actual cost to agents or brokers of the services they provide. I

have completed such an analysis for the WCRIBMA and it is summarized in my report,

reproduced in Section XIV of the WCRIBMA’s rate filing. To the best of my knowledge,

information and belief, the data and calculations underlying my report are complete and

accurate, and the narrative statements offered in my report are also accurate and correct.

Q. Professor Tennyson, what conclusions did you reach as a result of your analysis?

A. It is my professional opinion that the commission allowance recommended by the

WCRIBMA is reasonable and reflects the actual cost to agents and brokers of the services

they provide as producers of workers’ compensation insurance policies in Massachusetts.

Q. Have you explained in your report how you came to these conclusions?

A. Yes.

Q. Does your report contain all the data that you relied upon in reaching these

conclusions?

A. Yes.

Signed this 15th day of December 2015 under the pains and penalties of perjury.

Sharon Tennyson

December, 2015

1

SHARON TENNYSON, Ph.D. Department of Policy Analysis and Management, and

Cornell Institute for Public Affairs Cornell University 292 Caldwell Hall Ithaca, NY 14853 (607) 255-2619

Email: [email protected] Website: http://www.human.cornell.edu/bio.cfm?netid=st96

AREAS OF INTEREST Insurance Law and Economics, Consumer Policy, Regulatory Economics, Household Finance EDUCATION Ph.D., Economics, Northwestern University (Fields: Industrial Organization, Public Finance) B.A., Economics, University of California at Los Angeles PRIMARY ACADEMIC APPOINTMENTS 2013 - Professor, Department of Policy Analysis and Management, Cornell University 1998-2012 Associate Professor, Department of Policy Analysis and Management, Cornell

University 1990-1998 Assistant Professor, Department of Insurance and Risk Management, University

of Pennsylvania

SECONDARY APPOINTMENTS 2014 - Director, Cornell Institute for Public Affairs 2014- Faculty Affiliate, Cornell Institute for Behavioral and Household Finance 2013 - Core Faculty member, Cornell Institute for Public Affairs 2012 - Faculty Affiliate, Bronfenbrenner Center for Translational Research, Cornell

University 2012 - Senior Research Fellow, Networks Financial Institute, Indiana State University 2006-2011 Research Fellow, Networks Financial Institute, Indiana State University 2003-2008 Faculty Fellow, Program on Pharmaceutical Policy Issues, Department of Policy

Analysis and Management, Cornell University 2003-2004 Project Coordinator, Program on Pharmaceutical Policy Issues, Department of

Policy Analysis and Management, Cornell University 2002-2003 Director of Undergraduate Studies, Department of Policy Analysis and

Management, Cornell University 1996-1998 Senior Research Fellow, Financial Institutions Center, Wharton School,

University of Pennsylvania EXTERNAL LEADERSHIP POSITIONS 2011 - Editor, Journal of Consumer Affairs 2011 - International Board of Advisors, SKKU Graduate School of Insurance, SKKU

School of Business, Seoul, Korea

December, 2015

2

2010 - Editorial Board member, Insurance Markets and Companies: Analyses and Actuarial Computations

2005 - Editorial Review Board member, Journal of Insurance Regulation 2004 - Associate Editor, Journal of Risk and Insurance 2003-2004 President, Risk Theory Society (Officer 2002-2005) VISITING APPOINTMENTS July 2011 Munich Risk and Insurance Center, Ludwig Maximilians-Universitat, Munich Feb 2011 Center for Insurance Research, Florida State University April 2000 Department of Insurance and Risk Management, Wharton School, University of

Pennsylvania July 1999 Centre for Market and Public Organisation (CMPO), University of Bristol, U.K. RECENT HONORS AND AWARDS 2014 Winner, 2013 Spencer L. Kimball Writing Award, Journal of Insurance

Regulation Best Article award; “The Effects of Regulatory Reforms in the South Carolina Auto Insurance Market”

2013 Keynote Speaker, 13th Annual Regulatory Affairs Symposium, Insurance Bureau of Canada, Toronto; “Ontario Auto Insurance: Great Expectations”

2012 Winner, 2011 Casualty Actuarial Society Award for Best Article published by the American Risk and Insurance Association; “The Impact of Rate Regulation on Claims: Evidence from Massachusetts Automobile Insurance”

2012 Winner, 2011 Best Feature Article, Risk Management and Insurance Review; “The Impact of Rate Regulation on Claims: Evidence from Massachusetts Automobile Insurance”

2011 Winner, 2010 Best Article, Geneva Risk and Insurance Review; “Incentive Effects of Community Rating in Insurance Markets: Evidence from Massachusetts Automobile Insurance”

2011 Keynote Speaker, American Council on Consumer Interests; “Perspectives on Consumer Protection Regulation”

2010 Winner, 2009 Best Feature Article, Risk Management and Insurance Review; “Do State Cost Control Policies Reduce Medicaid Prescription Drug Spending?”

2010 Keynote Speaker, Louisiana Conference on Insurance Fraud and Vehicle Theft; “The Many Faces of Fraud: Moral, Social and Economic Catalysts” 2010 Keynote Speaker, China International Conference on Insurance and Risk

Management, Xi Ning China; “Issues and Challenges in Consumer Protection Regulation”

REFEREED PUBLICATIONS “Effects of Informational Nudges on Consumer Debt Repayment Behaviors,” with Lauren Jones and Caezilia Loibl, Journal of Economic Psychology 51 December 2015: 16-33. “Directors’ and Officers’ Liability Insurance, Corporate Risk and Risk Taking: New Panel Data Evidence on the Role of Directors’ and Officers’ Liability Insurance,” with M. Martin Boyer, Journal of Risk and Insurance 82(4) December 2015: 753-791.

December, 2015

3

“The Law and Economics of Insurance Bad Faith Liability,” with Danial Asmat, Chapter 12 in Handbook of Insurance Law and Economics, Daniel Schwartz and Peter Siegelman, eds. 2015. “Product Ratings as a Market Reaction to Deregulation: Evidence from the German Insurance Market”, with Stephanie Meyr, Risk Management and Insurance Review 18(1) Spring 2015: 77-100. “The Influence of FDA Advisory Information and Black Box Warnings on Individual Use of Prescription Antidepressants,” with Kristy Parkinson, Joseph Price and Kosali Simon, Review of Economics of the Household 12(4) December 2014: 771-790. “The Development and Regulation of China’s Insurance Market: History and Perspectives,” with Bingzheng Chen, Maoqi Wang and Haizhen Zhou, Risk Management and Insurance Review 17(2) Fall 2014: 241-263. “The Role of Life Experience in Long Term Care Insurance Decisions,” with HaeKyung Yang, Journal of Economic Psychology 42 June 2014: 175-188. “Does the Threat of Insurer Liability for “Bad Faith” Affect Insurance Settlements?” with Danial P. Asmat, Journal of Risk and Insurance 81(1) March 2014: 1-23. “The Effects of Regulatory Reforms in the South Carolina Auto Insurance Market,” with Robert W. Klein and Martin Grace, Journal of Insurance Regulation 32 2013: 1-30.

Winner, 2013 Spencer L. Kimball Writing Award, Journal of Insurance Regulation Best Article award

“Insurance Distribution,” with James I. Hilliard and Laureen Regan, chapter 23 in Handbook of Insurance 2nd edition, Georges Dionne, editor. Springer, 2013. “The Effect of Prescription Drug Withdrawals on the Use of Competitor Drugs: The Case of Vioxx,” with J. Michael Collins and Kosali Simon, Journal of Economic Behavior and Organization 86(1) February 2013: 148-168. “Determination of the Dates of Passage of the Married Women’s Property Acts and Earnings Acts,” with R. Richard Geddes, Research in Economic History Vol. 29 2013: 145-189. “The Effects of Expanding Property Rights on Women’s Economic Activity,” with R. Richard Geddes and Dean Lueck, Journal of Law and Economics 55(4) November 2012: 839-867. “Consumers’ Insurance Literacy: Evidence from Survey Data,” Financial Services Review 20(3) Fall 2011: 165-179. “The Impact of Rate Regulation on Claims: Evidence from Massachusetts Automobile Insurance,” with Richard A. Derrig, Risk Management and Insurance Review 14(2) Fall 2011: 173-200.

Winner, 2011 American Risk and Insurance Association Award for Best Feature

December, 2015

4

Article published in RMIR Winner, 2011 Casualty Actuarial Society Award for Best Article Published by the American Risk and Insurance Association

“Challenges and Approaches to Consumer Protection in the Insurance Industry,” in The Fundamentals of Future Insurance Regulation and Supervision: A Global Perspective, Patrick M. Liedtke and Jan Monkiewicz, editors. Palgrave MacMillan, 2011. “The Effects of Regulated Premium Subsidies on Insurance Costs: An Empirical Analysis of Automobile Insurance,” with Laureen Regan and Mary A.Weiss, Journal of Risk and Insurance 77(3) September 2010: 597-624. “Incentive Effects of Community Rating in Insurance Markets: Evidence from Massachusetts Automobile Insurance,” Geneva Risk and Insurance Review 35(1) June 2010: 19-46 .

Winner, 2010 European Group of Risk and Insurance Economists Award for Best Article published in GRIR

“The Law and Economics of First Party Insurance Bad Faith Liability,” with William J. Warfel, Connecticut Insurance Law Journal 16(1) 2009-2010: 203-242. “State Prescription Drug Policies, Cost Barriers and the Use of Acute Care Services by Medicaid Beneficiaries,” with Hae Kyung Yang, Journal of Consumer Affairs 43(1) Spring 2009: 4-25. “Do State Cost Control Policies Reduce Medicaid Prescription Drug Spending?” with Kosali I. Simon and Julie Hudman, Risk Management and Insurance Review 12(1) Winter 2009: 37-64.

Winner, 2009 American Risk and Insurance Association (ARIA) Award for Best Feature Article, RMIR

“The Emergence and Potential Consequences of First Party Insurance Bad Faith Liability,” with William J. Warfel, Journal of Insurance Regulation 28(2) Winter 2008: 3-20. “The Relationship between Auto Insurance Rate Regulation and Insured Loss Costs: An Empirical Analysis,” with Laureen Regan and Mary A. Weiss, Journal of Insurance Regulation 27(1) Fall 2008: 23-46. “Insurance Fraud and Optimal Claims Settlement Strategies,” with Keith J. Crocker, Journal of Law and Economics 45(2) October 2002: 469-508. “Claims Auditing in Automobile Insurance: Fraud Detection and Deterrence Objectives,” with Pau Salsas-Forn, Journal of Risk and Insurance 69(3) September 2002: 289-308. “Automobile Insurance Regulation: The Massachusetts Experience,” with Laureen Regan and Mary A. Weiss, in J. David Cummins, ed., Deregulating Property-Liability Insurance: Restoring Competition and Increasing Market Efficiency. Washington, DC: American Enterprise Institute-Brookings Institution Joint Center for Regulatory Studies, 2002: 25-80. “Insurance Experience and Consumers’ Attitudes toward Insurance Fraud,” Journal of Insurance

December, 2015

5

Regulation 21(2) Winter 2002: 35-56. “State Curriculum Mandates and Student Knowledge of Personal Finance,” with Chau Nguyen, Journal of Consumer Affairs 25(2) Winter 2001: 241-262. “Regulation, Political Influence and the Price of Automobile Insurance,” with J. David Cummins and Richard D. Phillips, Journal of Insurance Regulation 20(1) Fall 2001: 9-50. “Insurance Distribution Systems,” with Laureen Regan, in Georges Dionne, ed., Handbook of Insurance, Kluwer Academic Publishers, 2000: 709-745. “Efficiency, Scale Economies and Consolidation in the U.S. Life Insurance Industry,” with J. David Cummins and Mary A. Weiss, Journal of Banking and Finance 23(2-4) February 1999: 325-357. “Life Insurance Mergers and Acquisitions,” with J. David Cummins and Mary A. Weiss, in J. David Cummins and Anthony Santomero, eds., Changes in the Life Insurance Industry: Efficiency, Technology and Risk Management, Kluwer Academic Publishers, 1999: 159-186. “Costly State Falsification or Verification? Theory and Evidence from Bodily Injury Liability Claims,” with Keith J. Crocker, in Georges Dionne and Claire Laberge-Nadeau, eds., Automobile Insurance: Road Safety, New Drivers, Risks, Insurance Fraud and Regulation, Kluwer Academic Publishers, 1999: 120-130. “Capital Shocks and Merger Activity in the Property-Liability Insurance Industry,” with Sandra L. Chamberlain, Journal of Risk and Insurance 65(4) December 1998: 563-595. “The Coexistence of Distribution Systems under Price Search: Theory and some Evidence from Insurance,” with Lisa L. Posey, Journal of Economic Behavior and Organization 35(1) January 1998: 95-115. “Rate Regulation and the Industrial Organization of Automobile Insurance,” with Susan J. Suponcic, in David Bradford, ed., The Economics of Property-Casualty Insurance, University of Chicago Press, 1998: 113-138. “Moral Hazard, Adverse Selection and Community Monitored Insurance Programs,” with Neil A. Doherty, in Robert Klein, ed., Alternative Approaches to Insurance Regulation, National Association of Insurance Commissioners, 1998: 97-110. “The Impact of Rate Regulation on State Automobile Insurance Markets,” Journal of Insurance Regulation 15(4) Summer 1997: 502-523. “Economic Institutions and Individual Ethics: A Study of Consumer Attitudes Toward Insurance Fraud,” Journal of Economic Behavior and Organization 30(2) February 1997: 247-266. “Agent Discretion and the Choice of Insurance Marketing System,” with Laureen Regan, Journal of Law and Economics 39(2) October 1996: 637-666.

December, 2015

6

“Moral Hazard in Insurance Claiming: Evidence from Automobile Insurance,” with J. David Cummins, Journal of Risk and Uncertainty 12(1) January 1996: 29-50. “Regulatory Lag in Automobile Insurance,” Journal of Risk and Insurance 60(1) March 1993: 36-58. “Reinsurance and the Liability Insurance Crisis,” with Lawrence A. Berger and J. David Cummins, Journal of Risk and Uncertainty 5(3) July 1992: 253-272. “Labor Market Discrimination, Imperfect Information and Self-Employment,” with Stephen Coate, Oxford Economic Papers 44(2) April 1992: 272-288. “Controlling Automobile Insurance Costs,” with J. David Cummins, Journal of Economic Perspectives 6(2) Spring 1992: 95-115. PUBLISHED ESSAYS AND POLICY BRIEFS How Risk and Insurance Experts View the Effectiveness of Prior Approval and Market-Oriented Rate Regulatory Policies in Auto Insurance, Insurance Research Council, August 2013. Does Ontario Need a New Auto Insurance System? with Mary Kelly and Anne Kleffner, Insurance Bureau of Canada policy brief, September 2012. Long Term Effects of Rate Regulatory Reforms in Automobile Insurance Markets, Insurance Research Council (monograph, 65 pages), March 2012. Consumers’ Insurance Literacy, Policy Brief 2011-PB-06 Networks Financial Institute (www.networksfinancialinstitute.org), July 2011. Rethinking Consumer Protection Regulation in Insurance Markets, Policy Brief 2010-PB-07 Networks Financial Institute (www.networksfinancialinstitute.org), September 2010. Analyzing the Role for a Consumer Financial Protection Agency, Policy Brief 2009-PB-13 Networks Financial Institute (www.networksfinancialinstitute.org), December 2009. State Regulation and Consumer Protection in the Insurance Industry, Policy Brief 2008-PB-03 Networks Financial Institute (www.networksfinancialinstitute.org), February 2008.

Reprinted in Consumer Protection: Diverging Perspectives, G. Radhika, ed., Hyderabad: Icfai University Press, 2008-09

First-Party Insurance Bad Faith Liability: Law, Theory, and Economic Consequences, with William J. Warfel, National Association of Mutual Insurance Companies Issue Brief (www.namic.org), 2008. Efficiency Consequences of Insurance Rate Regulation, Policy Brief 2007-PB-03 Networks Financial Institute (www.networksfinancialinstitute.org), March 2007. Reprinted in The Icfai University Journal of Insurance Law 6(3) 2008: 41-54

December, 2015

7

NON-REFEREED PUBLICATIONS “Consumer Protection in Insurance Markets,” Journal of Financial Consumers 1(1) June 2011: 1-10 (invited article). “Insurer Anti-Fraud Programs: Contracts and Detection versus Norms and Prevention,” Journal of Financial Transformation, Spring 2011. “Bad-Faith Liability for Unfair Claims Settlement Practices in First-Party Insurance,” with William J. Warfel, Pravartak: Journal of Insurance and Risk Management, May 2009. “Moral, Social and Economic Dimensions of Insurance Claims Fraud,” Social Research, 75(4) Winter 2008: 1181-1204 (invited article). “Financial Literacy: A Public Policy Issue -- The Effect of Curriculum Mandates on Student Financial Knowledge,” with Chau Nguyen and B.J. Bristow, Proceedings of the 2000 Annual Conference of the Association for Financial Planning and Counseling, November 2000. “Government Regulation of Insurer Sales Practice,” Market and Public Organisation, University of Bristol, Issue 2, December 1999: 7-10. “The Effect of Rate Regulation on Underwriting Cycles,” CPCU Journal 44(1) Mar 1991:33-45. SHORT ARTICLES IN TRADE PRESS “Bad Faith Lawsuits: Raise Standard of Proof”, with William J. Warfel, Fraud Focus (newsletter published by The Coalition Against Insurance Fraud), Winter 2009. “Curriculum Mandates: A Policy to Increase Financial Literacy?” with B.J. Bristow and Chau Nguyen, Jumpstart Coalition Newsletter, October 2000. BOOK REVIEWS The Liability Maze: The Impact of Liability Law on Safety and Innovation, Peter Huber and Robert Litan, eds., Journal of Policy Analysis and Management, V11, No.4 (Fall 1992): 728-731 WORKING PAPERS IN PROGRESS (drafts available) “Ontario Auto Insurance Reform: A Game of “Whack-A-Mole,” with Mary Kelly and Anne E. Kleffner, provisionally accepted, Assurances. “The Impact of Expanded Insurer Liability for Bad Faith: Evidence from the Royal Globe Doctrine,” with Brian Richman, invited to revise and resubmit to Journal of Legal Studies. “Implementation of EU Intermediary Regulation: Intentions and Unintended Side Effects,” with Christoph Lex and Andreas Richter, invited to revise and resubmit to Journal of Law and Economics. “Credible or Biased? An Analysis of Insurance Product Ratings,” with Stephanie Meyr and Patricia Born, in preparation for submission.

December, 2015

8

“The Airline Passenger Protection Rule: Airline Response for On-Time Performance”, with Sra Chuenchoksan and Andrew M. McClintock, in preparation for submission. “State Regulations, Uninsured Driving and the Cost of Automobile Insurance,” with Mary A. Weiss, in preparation for submission. “Tort Liability and Settlement Failure: Evidence on Litigated Auto Insurance Claims”, with Danial P. Asmat, in preparation for submission. UNPUBLISHED WORKING PAPERS “My Wife is my Long Term Care Insurance: Household Bargaining and the Purchase of Long Term Care Insurance,” with H. Elizabeth Peters and Frances Woolley, presented at the American Economic Association meetings, January 2008. “Trends in State Medicaid Prescription Drug Policies 1990-2004: What are the main policies the states are using?” with Kosali Simon and Julie Hudman, 2005. “Medicaid Crowd-out Of Private Insurance: The Case of Long Term Care,” with Hyojin Kang and Alan Mathios, 2004. CONFERENCE PARTICIPATION Organizational Activities: 2015 Local organizer (host institution), Risk Theory Society 2013 Organizer, Editors’ Roundtable, ACCI annual meeting 2012 Plenary session co-organizer and moderator, panel on Consumer Protection

Regulation, Asia-Pacific Risk and Insurance Association annual meeting 2009 Co-organizer, NAIC-Temple Symposium on Insurance Solvency Regulation 2008 Session organizer, American Economic Association meeting 2002 Program Chair, Risk Theory Society Seminar 1999 Session organizer, CSWEP session, Western Economic Association meeting Research Presentations: 2015 IAFCO First Annual Congress (plenary session speaker), Jeju Korea World Risk and Insurance Economics Congress (discussant), Munich Public Choice Society annual meeting (presenter and discussant) 2014 Public Choice Society annual meeting (presenter and discussant) 2013 Casualty Actuarial Society national meeting (presenter), Vancouver, BC American Risk and Insurance Association meeting (discussant) 2012 National Insurance Council of Canada annual meeting (panelist), Quebec City Risk Theory Society seminar (presenter) American Council on Consumer Interests meeting (presenter) Webinar, National Association of Mutual Insurance Companies (presenter) Asia-Pacific Risk and Insurance Association meeting (presenter) 2011 Allied Social Science Association meeting, session sponsored by American Risk

and Insurance Association (presenter)

December, 2015

9

American Risk and Insurance Association meeting (presenter) 2010 World Risk and Insurance Economics Congress, Singapore (presenter and

discussant) Conference on Insurance Regulatory Reform Issues: A Regional Perspective,

Networks Financial Institute, Indianapolis (panelist) C.D. Howe Institute Conference on Price Regulation and Social Welfare: The

Case of Automobile Insurance in Canada, Toronto (discussant) 2009 National Association of Mutual Insurance Companies Public Policy Summit 2008 American Society of Health Economists meeting (presenter) American Economic Association meeting (presenter) Searle Center Conference on Insurance Markets and Regulation, Northwestern

University (presenter) American Risk and Insurance Association meeting, (presenter and discussant) Insurance Bureau of Canada Regulatory Affairs Symposium, Toronto (presenter) Fifth Insurance Reform Summit, Networks Financial Institute, Washington, D.C. Conference on Empirical Legal Studies (discussant) 2007 American Risk and Insurance Association meeting (presenter and discussant) Casualty Actuary Society Northeast Regional Meeting (presenter) Fourth Insurance Reform Summit, Networks Financial Institute,Washington, D.C.

(presenter) 2006 International Society for New Institutional Economics meeting (presenter) American Risk and Insurance Association meeting (discussant) 2002 Casualty Actuarial Society national meeting (presenter) Insurance Research Council/Massachusetts Automobile Insurers’ Bureau

Conference on Insurance Fraud (presenter) 2001 American Enterprise Institute-Brookings Joint Center for Regulatory Studies

Conference on Property-Liability Insurance Price Deregulation (presenter) American Council on Consumer Interests meeting (presenter) Risk Theory Society Seminar (presenter) Casualty Actuarial Society national meeting (presenter) 2000 Seminar of the European Group of Risk and Insurance Economists (presenter,

discussant) Insurance: Mathematics and Economics meeting (presenter) 1998 Economic Policy Institute Conference on Automobile Insurance (discussant) 1997 Fifth International Conference on Insurance Solvency and Finance (presenter) International Conference on Automobile Insurance, University of Montreal

(presenter) 1996 American Risk and Insurance Association meeting (presenter) 1995 American Risk and Insurance Association meeting (presenter) 1994 American Risk and Insurance Association meeting (presenter) Econometric Society North American Summer Meeting (presenter) Franco-American Economics Seminar (presenter) National Bureau of Economic Research Conferences on Property-Casualty

Insurance (presenter) 1993 American Economic Association meeting (presenter) 1992 American Risk and Insurance Association meeting (presenter) Risk Theory Society Seminar (presenter)

December, 2015

10

1991 American Risk and Insurance Association meeting (presenter) Educational Presentations: 2015 Huebner Foundation Faculty-PhD Seminar, Faculty Panelist 2012 Cornell Cooperative Extension, Family and Economic Resource Management In-

Service, Panelist; “Improving Consumers’ Use of Credit Cards: The Role of Policy”

2012 Casualty Actuarial Society Northeast Regional meeting (CANE), General Session Speaker; “Lessons for Actuaries from Behavioral Economics” (with James Guszca)

2012 Bad Faith and Beyond Conference, Rutgers-Camden Law School, Panelist; “Empirical Perspectives on Bad Faith Liability”

2012 American Council of Consumer Interests Webinar for Emerging Academics; “Publishing: Perspectives of an Editor”

2011 General Session Speaker, Casualty Actuarial Society InFocus Seminar; “Lessons for Insurance Actuaries from Behavioral Economics” (with James Guszca)

2010 Cornell University, Johnson Graduate School of Management, Faculty Panel “Financial Protections in the U.S. and Globally” (Andrew Ross Sorkin visit) 2010 Singapore College of Insurance, Distinguished Visiting Professor Lecture;

“Understanding Consumer Behavior in Insurance Transactions” 2010 Cornell Human Ecology Alumni Association, annual meeting; “Financial

Regulatory Reforms” 2010 National Conference of Insurance Legislators, Institute for Insurance Policy; “The

Cost of Claims Fraud: Who Ultimately Pays?” 2008 National Association of Mutual Insurance Companies, annual meeting;

“Consequences of First-Party Insurance Bad Faith Liability” 2001 Cooperative Extension Conference (ACCEE); “Life is a Risky Business: Making

Insurance Choices Wisely” 2000 Cornell Cooperative Extension Inservice; “Improving Insurance Knowledge of

New York State Consumers” 1996 Minnesota Independent Insurance Agents Association; “The Future of Insurance

Marketing Systems” Other Conference Participation: Moderator, Plenary Session of Best Paper Finalists, ACCI annual meeting, 2014, 2015; Session chair, Public Choice Society annual meeting, 2014; Faculty participant, Insurance Economics Colloquium, Wildbad Kreuth Germany, 2013; Panelist, Editors’ Round Table, Marketing and Public Policy meeting, 2013; Moderator, CAS Spring Meeting General Session, 2013; Panelist, Progrés International Insurance Seminar of the Geneva Association, Geneva Switzerland, Panel on Consumer Protection Regulation, 2012; Panelist, University of Wisconsin Center for Financial Security, Financial Literacy Workshop, 2011; Cornell Cooperative Extension FERM Project Working Team lunch, faculty speaker, 2011; Invited participant, Enterprise Risk Management Institute International (ERM-II), Symposium on Systemic Risk in the Insurance Industry, 2010; Resident academic, annual CEO Conference of Canadian property-casualty insurance companies 2007; Session moderator, American Risk and Insurance Association meetings 2000, 2004, 2006, 2007, 2008, 2015 (WRIEC); Session moderator, American Council on Consumer Interests meetings 2001, 2012, 2013

December, 2015

11

PUBLIC POLICY CONSULTING 2013 White Paper: Commission Allowances in Workers’ Compensation Rates

(consultant to Workers Compensation Rating and Inspection Bureau of Massachusetts)

2012 White Paper: Reforming Ontario’s Auto Insurance System: Research and Recommendations, with Mary Kelly and Anne Kleffner (consultant to Insurance Bureau of Canada)

2011 Expert witness, Michigan Senate hearings on No-fault Insurance; White paper: Excess Costs in Michigan Auto Insurance: Causes and Implications for Reform (consultant to several insurance companies)

2011 White paper: Long Term Consequences of Auto Insurance Rate Deregulation; (consultant to Insurance Research Council)

2008 Expert witness, Massachusetts Special Commission on Auto Body Rates (consultant to the Massachusetts Insurance Federation)

2008 White Paper: First-Party Insurance Bad Faith Liability: Law, Theory, and Economic Consequences, with William J. Warfel (consultant to National Association of Mutual Insurance Companies)

2007 Expert witness, Massachusetts Automobile Insurance Competition hearing; White paper: Evaluating Competition in Automobile Insurance Markets (consultant to The Fairness for Good Drivers Coalition)

2007 White paper: Unintended Consequences of Insurance Price Suppression (consultant to Insurance Bureau of Canada)

2006 Expert witness, Alberta Automobile Insurance hearing (consultant to the Insurance Bureau of Canada)

1995 Expert witness, Maryland State Governor’s Commission on Reforming Baltimore City Automobile Insurance

GRANT FUNDING 2014-2015 Principal Investigator, Cornell Institute for Social Science Director’s

Discretionary Grant, “Supplemental Funding for RTS Conference” 2011-2012 Principal Investigator, Cornell Institute for Social Science Small Grant, “Credit

Card Reforms: Helping or Hurting Consumers?” 2006-2008 Principal Investigator, Program on Consumers, Pharmaceutical Policy and

Health Grant, “Drug Choice, Negative Information and Consumer Behavior” 2003-2007 Co-Principal Investigator (with Kosali Simon), Program on Consumers,

Pharmaceutical Policy and Health Grant, “State Regulation of Medicaid Pharmacy Benefits”

2003-2005 Initiative Team Member (with PAM Dept. colleagues), Merck Company Foundation Program on Pharmaceutical Policy Issues Grant, “Program on Consumers, Pharmaceutical Policy and Health”, John Rizzo, Principal Investigator

2000-2003 Principal Investigator, College of Human Ecology Grant, Cornell University: “Regulatory Issues in Insurance Markets”

1999-2001 Principal Investigator (collaborative research with B.J. Bristow), CSREES Research-Extension Integration Grant: “Insurance Choices: Knowledge, Confidence and Competence of New York State Consumers”

December, 2015

12

1998-2003 Principal Investigator, Hatch Grant, USDA: “Issues in the Regulation of Insurance Marketing and Distribution”

1995-1997 Principal Investigator (collaborative research with Keith J. Crocker), National Science Foundation, Economics Division Grant #SBR95-07768: “Contracting with Costly State Falsification: Theory and Empirical Results from Automobile Insurance”

1995-1996 Principal Investigator, National Association of Insurance Commissioners Journal of Insurance Regulation Grant: “The Effects of Rate Regulation on the Structure of Automobile Insurance Markets”

1994-1995 Principal Investigator, University of Pennsylvania Research Foundation Grant: “Regulation and Industrial Organization in Structurally Competitive Industries: The Case of Automobile Insurance”

1994-1995 Principal Investigator, University of Pennsylvania Research Foundation Grant: “Social Norms in Economic Settings: Consumer Attitudes Toward Insurance Fraud”

1993-1995 Co-Principal Investigator (collaborative research with J.D. Cummins), Financial Institutions Center Grant, The Wharton School: “The Management and Control of Fraud in Insurance Firms”

1993-1994 Co-Principal Investigator (collaborative research with S. Chamberlain), Fishman-Davidson Center Grant, The Wharton School: “The Risk and Efficiency Effects of Insurance Company Mergers”

1992-1993 Principal Investigator, University of Pennsylvania Research Foundation Grant: “The Tort System and Insurance 'Lotteries'”

1989-1990 Principal Investigator, Society of CPCU Grant: “The Effects of Rate Regulation on Underwriting Cycles”

1988-1989 Doctoral Dissertation Fellowship, State Farm Companies Foundation: “Supply Dynamics and Underwriting Cycles in Property Liability Insurance”

1987-1988 Graduate Research Fellowship, Center for Urban Affairs and Public Policy, Northwestern University

PH.D. DISSERTATION COMMITTEES In progress Peter Wissoker (CRP) In progress Sra Chuenchoksan (Economics) In progress Liyuan Cui (Economics) 2014 Lauren E. Jones (PAM) (chair) 2014 José Balmori di la Miyar (PAM) (chair) 2008 J. Michael Collins (PAM) (chair) 2007 Sara Hoda (PAM) 2007 Hae Kyung Yang (PAM) 2007 Ajay Aseem Palvia (Economics) 2005 Sonja Afroz (Economics) 2003 Hyojin Kang (PAM) 1998 M. Martin Boyer (RMI) (chair) 1998 Susan J. Suponcic (Public Policy) 1997 David M. Russell (RMI) 1996 Jweeping Er (RMI)

December, 2015

13

1995 Sung Hun Seog (RMI) 1995 Tracy Shepard Allotey (RMI) 1994 Jeong D. Kim (Healthcare Systems) 1994 Richard A. Phillips (RMI) 1993 Laureen A. Regan (RMI) 1993 Anne E. Kleffner (RMI) 1993 David W. Sommer (RMI) 1992 Lisa L. Posey (RMI) Mentor, Cristoph Lex, visiting Ph.D. student, Ludwig Maximillion University, Spring 2013 Mentor, Maoqi Wang, visiting Ph.D. student, Tsinghua University, Fall 2011 MASTERS’ THESIS COMMITTEES CHAIRED 2014-15 Xiaodi Li, CIPA (thesis) 2014-15 Rafael Morales, CIPA (thesis) 2013 Samir Kiuhan, CIPA (thesis) 2013 Cheng Chen, CIPA (professional report) 2011 Andrew McClintock, PAM (thesis) 2011 Scott Talaga, CIPA (thesis) PROFESSIONAL SERVICE Service to Government and Industry: Member, Consumer Financial Education Committee, The Actuarial Foundation, 2012-2013; Member, Board of Trustees, Elizabeth Ann Clune Montessori School of Ithaca, 2004-2007; Economic Reviewer, Institute for Defense Analysis, 2003-2006; Cornell representative to Board of Directors, Ithaca Community Childcare Center, 2000-2004 (Vice President, 2002-2003; Secretary 2001-2002); Advisor, Consumer Information Task Force of the Coalition Against Insurance Fraud, 1996-1997 Service to American Risk and Insurance Association: Program Committee 1993, 1996, 1997, 2000, 2006, 2007, 2008, 2010, 2013, 2014, 2015; Nominations Committee 1996, 2015; Best JRI Feature Article Awards Committee 1995, 1996, 1998, 2006, 2007, 2008, 2012, 2014; Best RMIR Feature Article Awards Committee 2013, 2014; Best RMIR Perspectives Article Awards Committee 2010 (Chair), 2011; Book Awards Committee, 1992, 1999 (Chair), 2003, 2004 Ad Hoc Reviewing: Journal of Risk and Insurance (assistant editor award, 1996 and 1997), Journal of Economic Psychology, Journal of Financial Stability, Journal of Public Policy and Marketing, Natural Hazards, Review of Economics of the Household, Risk Management and Insurance Review, Geneva Risk and Insurance Review, Management Science, Asia-Pacific Journal of Risk and Insurance, Journal of Consumer Affairs, Journal of Policy Analysis and Management, Astin Bulletin, Journal of Law, Economics and Organization, Journal of Banking and Finance, Journal of Political Economy, American Economic Review, Journal of Law and Economics, Journal of Business Ethics, National Science Foundation, Geneva Papers on Risk and Insurance: Issues and Practice, Journal of Legal Studies, Journal of Insurance Regulation, European Economic Review,

December, 2015

14

Journal of Consumer Policy, International Review of Economics and Finance, Industrial and Labor Relations Review, Journal of

commonwealth of massachusetts - wcribma · 2015-12-29 · commonwealth of massachusetts division of...

Documents