Out-of-State Agents Blast Massachusetts Paperwork Requirement

October 4, 2010

A trade group for agents in several Northeast states are urging Massachusetts regulators to rethink new paperwork requirements for out-of-state businesses’ workers’ comp coverage.

Massachusetts Division of Insurance last month announced new rules requiring out-of-state businesses to submit additional paperwork to verify their workers’ compensation coverage when doing business in Massachusetts.

The Professional Insurance Agents of Connecticut, New Hampshire, New York and New Jersey said the new requirements are “an untenable mandate” and has requested that the state drop the requirement.

PIA said that the DIA’s Office of Investigation can require an out-of-state business to complete the paperwork at any time, but only a titled insurance company representative may sign the form and there is a 10-day advance notice of cancellation obligation included. This poses significant risk that a small business doing incidental work in Massachusetts may be faced with fines and work cessation despite having appropriate and adequate coverage for its employees, PIA said.

“Very few employers will be able to comply with this requirement, which will result in fines unfairly imposed on employers who do, in fact, have the required coverage in place,” said PIA Management Services President and CEO Kenneth Bessette, in a letter sent to the DIA. “It will create an enormous burden on businesses, their agents and insurers.”

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