Judge says former AIK Comp members responsible for deficit

Judge says former AIK Comp members responsible for deficit

 

Former members of AIK Comp are financially responsible for the failed workers’ compensation fund’s deficit, a judge has ruled.

Franklin Circuit Judge William Graham ruled in Frankfort Tuesday that accusations of fraud and misrepresentation by others do not release members from their obligations.

Under agreements that came with their membership, employers received reduced workers’ compensation rates with the understanding that they could later be retroactively charged for any shortfalls.

The Kentucky Office of Insurance seized control of the Louisville-based fund in August 2004 in light of a projected deficit shortfall of more than $50 million. That shortfall has since grown to more than $97 million.

Last November, about 3,700 employers received special assessments — like a retroactive premium increase — of $58.5 million in an effort to overcome the deficit. The fund no longer provides coverage, but continues to pay medical bills for injured workers.