Insurers and self-insured face $9 billion in black lung liability


America’s coal industry could decline rapidly as the country shifts to renewable energy, but liabilities of insurers and self-insured companies for black lung occupational disease claims have soared – to about $9 billion and possibly over $14 billion.

That’s according to a recent report from Milliman, the global actuarial and consulting firm. The study authors looked for the first time at the cost of existing and future claims, the payments of which will continue for years.

The report did not name which insurers owe the most. But historically, some of the largest P&C insurers have insured against black lung claims. Most of the claims come from miners in Kentucky, West Virginia and other coal-rich states.

“We just wanted to raise awareness and help develop solutions to protect the financial solvency of non-trust entities on payment of federal black lung liabilities,” said Travis Grulkowski, Milliman actuary and one of the report’s authors.

A little history of the black lung program helps explain the complexities. Since 1969, the federal government has paid a share of miners’ claims for black lung disease, or pneumoconiosis, caused by years of breathing coal dust. In the 1970s, the law was changed, making coal companies more responsible for employee benefits, either by purchasing commercial insurance or self-insuring if approved by a federal agency.

If the mine operator goes bankrupt, the federal trust fund will assume responsibility for the payment of benefits. The trust is financed by a tax on each ton of coal extracted from the ground. As coal consumption has fallen over the past decade, a number of mining companies have gone bankrupt and closed, and tax payments to the trust fund have plummeted, the US Government Accounting Office reported.

But the claims liabilities have only increased.

As miners were laid off, many filed claims for black lung, which by law must be paid for a worker’s life, in many cases.

Changes approved by Congress over the years have also made more workers eligible for federal benefits. The GAO said federal trust fund commitments currently stand at about $5 billion and are expected to reach $15 billion by 2050.


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