Recently in Texas, ACE American Insurance Company, a workers’ compensation insurance carrier, was slapped with a $250,000 fine for failing to pay state-ordered death benefits. Typically, fines go directly to the state’s general fund, but $100,000 of this fine must be donated to the nonprofit organization Kids’ Chance, a scholarship fund for the children of injured or killed workers. The fine is said to be the largest of its kind in Texas history.
Leaving two children behind, Crystal Davis’ husband was killed on the job in 2012. ACE American failed to make death benefit payments to Davis. Even after the state insurance regulator later ordered the company to pay, the money was late and the full interest payments were not made for a year.
Ms. Davis and her family will not receive any of the $250,000. She considers the fine to be a slap on the wrist rather than a true deterrent for the insurance industry.
“Big companies feel like they can do whatever they want, and 250 seems like a drop in the bucket to me,” she said to The Texas Tribune.
ACE American has committed similar failures in the past, including refusal to make payments or making payments severely late. In the past four years, it has paid more monetary penalties than any other insurer.
Though workers’ compensation is a state-based law, these incidents happen across the U.S. The system is stacked unfavorably against injuredworkers and their families. A $250,000 fine for a company that reported close to $1 billion in income the last financial quarter is a not a huge deterrent for future bad behavior. There must be a change in the laws in order for this humanitarian act to favor injured workers. Too many families suffer financially after a work injury. Insurance companies should not be permitted to get away with such egregious actions that leave families in poverty.
