Despite Approved Filing, MEMIC Decides Against Increasing Rates for Policyholders
PORTLAND, Maine, March 14, 2013 – Maine’s leading workers’ compensation insurer announced today that it will not adopt the rate filing recently approved by the Maine Bureau of Insurance which would have raised workers’ compensation rates by nearly 4 percent across the board starting April 1.
Maine Employers’ Mutual Insurance Company (MEMIC) said that its action creates millions in annualized savings for its approximately 18,000 policyholders in Maine.
“This is the right thing for us to do at this time,” said MEMIC President and CEO John T. Leonard. “While we clearly understand that there is justification to raise rates, based upon increasing medical costs, MEMIC will hold the line on this increase at this time. We know that many Maine businesses are continuing to struggle in this economy and we don’t want workers’ compensation costs to impede economic growth here in Maine.”
The increase of 3.9 percent resulted from an update to the medical fee schedule for workers’ compensation injuries. According to the approved increase, the rates medical providers are allowed to charge under the updated schedule should drive costs higher by 3.9 percent annually.
“We know it’s unconventional for an insurance company to turn down a rate increase, but this is part of what makes MEMIC a special company,” Leonard said. “We’re an independent mutual company, based in Maine, and we’ve built an organization that is strong and able to make this choice on behalf of our policyholders.”
MEMIC insures about 60 percent of the commercial market in Maine. Through its careful attention to workplace safety, the company has helped to drive rate decreases of more than 50 percent in its home state since its formation in 1993. Since that time, lost-time injuries have decreased by about 40 percent.
In November of 2012, MEMIC returned $13 million in the form of dividends to its policyholders. Since 1998, the company has returned nearly $150 million in dividends and excess capital to its policyholders in Maine.
Maine Employers' Mutual Insurance Company (MEMIC) is the parent company of The MEMIC Group and is rated “A” (Excellent) by A.M. Best. The MEMIC Group also includes MEMIC Indemnity Company, also rated “A” (Excellent) by A.M. Best, as well as MEMIC Casualty Company. The MEMIC Group holds licenses to write workers’ compensation in 46 states plus the District of Columbia. The company insures nearly 20,000 employers and their estimated 250,000 employees.