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NAME AND TITLE: Terrence D. Delehanty, general counsel and chief legal officer. AGE: 48 TERRORISM AND WORK: Employee deaths and injuries related to the terrorist attacks on Sept. 11, 2001, make that day the biggest workers’ compensation event in history, said Terrence Delehanty, general counsel of the National Council on Compensation Insurance Inc. Boca Raton, Fla.-based NCCI, which collects statistics on workplace injuries and claims for the insurance industry, estimates that carriers and self-insured businesses may eventually pay up to $2 billion for on-the-job deaths and injuries caused by the terrorist attacks. However, the fallout in the workers’ comp field extends far beyond the events of that day, Delehanty said. While property and commercial insurers can write new policies to exclude future terrorism-related claims, providers of mandatory workers’ compensation coverage don’t have that luxury, he said. As a condition of doing business in any state, workers’ comp carriers must offer coverage to all employers in that state — either directly or through a residual market, or “pool,” funded by all insurers. NCCI, which runs the workers’ comp pool and represents its members in rate-setting proceedings in 29 states, is now collecting data to analyze the risk of workplace deaths and injuries related to terrorism, Delehanty said. The anthrax attacks have also had an impact on NCCI. In the panic following the attacks, scores of uninfected employees went to their doctors for testing or for antibiotic drugs. Employers and carriers sometimes picked up the tab. According to Delehanty, though, they did so without clear case law on whether, and under what circumstances, bioterrorism constitutes “a risk causing injury peculiar to the employment, and not one that the general public is exposed to.” WORKERS’ COMP CONSULTANT: National Council on Compensation Insurance Inc., the main subsidiary of NCCI Holdings, is a nonprofit membership organization that provides rating, statistical and data-management services for its 700 insurer members. With 900 employees in 15 states, NCCI collects data on workplace injuries and employer liability to provide “experience ratings” for individual employers, which insurers use to set policy premiums. The company also provides the insurance industry and lawmakers with cost analyses of current and proposed workers’ comp legislation. In 28 states, NCCI represents workers’ comp insurers in rate-setting proceedings before the state insurance commission, compiling and presenting loss-cost information in support of the industry’s rate requests. In these states, the company also manages the industrywide pool that provides coverage for high-risk employers. DELEHANTY’S DOMAIN: Delehanty supervises six attorneys, two paralegals and two secretaries at NCCI’s corporate headquarters in Boca Raton. The in-house counsel each have specific expertise, but Delehanty tries to ensure that they all have experience in multiple areas of the office’s main responsibilities, which include intellectual property, contracts, regulatory compliance, employment law, litigation and general corporate law. PREMIUM FRAUD: Throughout his 12-year tenure at NCCI, Delehanty has battled “premium fraud” by dishonest employers who seek bargain workers’ comp coverage by underreporting their payroll or employee numbers, hiding bad-claim histories through sham corporations or misclassifying high-risk, high-premium workers — like carpenters or roofers — into less injury-prone positions, like secretaries. Delehanty and his staff assist fraud lawsuits by insurers and litigate their own cases on behalf of NCCI-administered statewide insurance pools. The stakes can be high. In 1992, NCCI and two insurers won an $18 million judgment against Transportation Financial Systems Inc., a truck leasing company that had concealed its loss record, misrepresented its employment relationship with drivers, and lied about the cargo its employees were hauling. More recently, Delehanty has lobbied state and federal authorities to bring criminal fraud actions against the most egregious violators. NCCI’s lawyers have assisted prosecutors in understanding the arcana of workers’ comp. These efforts are beginning to bear fruit, said Delehanty. In May 2000, for example, Eugene Crucean was sentenced in an Indiana federal court to a five-year prison term and ordered to pay more than $15 million in restitution to NCCI for misrepresenting the number and job duties of employees and filing false injury claims. Delehanty predicts that premium fraud will be a growing problem for years to come. “With the economy as it is, you can imagine that some employers will be looking to save money any way they can [on workers' comp], even if it means violating the law,” he said. MEMBER SERVICES OR MONOPOLY? Since 1998, NCCI and major workers’ comp insurers have been embroiled in antitrust litigation alleging that the industry’s collaboration in rate-setting matters amounts to illegal price-fixing. According to Delehanty, NCCI has been hit with 14 lawsuits in 12 states alleging federal and state antitrust violations, consumer fraud, RICO Act violations, unfair trade practices, fraudulent concealment and civil conspiracy. Delehanty said that NCCI has been targeted by “professional class action law firms” due to its position as an industrywide membership organization. “[The plaintiffs] needed to have an organization that they could allege was the ‘head of the octopus’ — the place where everyone came together and conspired.” The courts have not seen NCCI as a monopolist cabal, he said. Several claims against the company have been summarily dismissed under the “filed rate” doctrine, which bars damage claims based on an allegedly excessive rate if that rate was lawfully approved by a state regulatory agency. According to Delehanty, claims against NCCI have been dismissed in all but four actions in Arizona, Florida and Kentucky. PRINCIPAL OUTSIDE COUNSEL: NCCI’s main outside lawyer is John Karaczynski at the Los Angeles office of Akin, Gump, Strauss, Hauer & Feld. The Fort Lauderdale, Fla., office of Baker & McKenzie handles employment matters. ROUTE TO THE TOP: The Flushing, Mich., native graduated from Michigan State University in East Lansing in 1978. After receiving his law degree from Thomas M. Cooley Law School in 1982, he returned to East Lansing to become a solo. After five years as a general practitioner with a focus on criminal defense, he went east to enroll in the graduate program of Boston University School of Law, where he received an LL.M. in American banking law in 1989. Delehanty then moved south, going in-house at NCCI to investigate and litigate premium fraud cases. As he rose through the ranks, he continued to litigate premium fraud cases on behalf of NCCI and its members, and became involved in antitrust litigation. He was named general counsel in December 1998. PET PEEVE: Delehanty dislikes outside counsel who spend more time obsessing about billables than learning their clients’ business. FAMILY: Delehanty lives with his wife, Dian, and his son in Del Ray Beach, Fla. LAST BOOK READ: “The Corrections,” by Jonathan Franzen.

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