One insurer, Brickstreet Mutual, now dominates West Virginia’s workers’ compensation market but that should change by the end of next summer.
“We are working on being able to open the market to other commercial carriers in July of 2008,” said Commissioner Jane Cline. “We have been meeting with various industry groups to talk about the reforms and changes in our workers compensation system so we can encourage competition in that arena.”
Brickstreet used to be a monopolistic state fund but that changed in January 2006 when it was privatized. Now the state is readying to admit other private insurers into the mix next year.
Cline recalls that the workers’ compensation situation has been a major issue in an interview with Insurance Journal during January’s meeting of the National Association of Insurance Commissioners as part of a series of interviews with 15 state insurance regulators. The complete video interview may be viewed at www.insurancejournal.com/broadcasts.
“West Virginia has had significant problems with respect to workers compensation. We were a monopolistic fund that had a significant unfunded liability. Employers were being asked to pay for the sins of the past and that was a drain on the employers’ fund,” she said “It was also a detriment to economic development because industry would look at our workers’ compensation system and the rates and choose not to locate in West Virginia.”
As part of this privatization process, the state has moved to the National Council on Compensation Insurance class system used by many insurers.
The workers’ compensation market is just one of the areas where West Virginia has tackled problems and where reforms appear to be working, according to Cline. Another is medical liability.
“Ultimately, we ended up establishing a physician’s mutual insurance company; a West Virginia based company that now insures over half of our physicians,” explained Cline.
The medical liability situation continues to improve, Cline noted, with the state approving rate decreases of 5 percent last year and another 10 percent this January.
She also believes personal lines markets are more competitive now than they have been for years.
Cline sees encouraging insurers to do business in her state as part of her job as a regulator.
“[T]he reason I do is because the more competition you have, the more innovative products you have, the better the consumers or the businesses that are buying commercial insurance, that are looking for worker’s compensation insurance; the more opportunity they have to shop and find products that meet their needs. It also helps in the affordability aspect as well,” she said.
For the complete video interview, visit www.insurancejournal.com/broadcasts
Was this article valuable?
Here are more articles you may enjoy.