PORTLAND, Maine, April 10, 1998 – The nearly 20,000 employers insured by Maine Employers' Mutual will soon be able to secure workers' compensation insurance coverage for their employees who work out of state through MEMIC, the state's largest workers' compensation insurance carrier.

Thanks to the sponsorship and signature of Governor Angus King, a recently passed legislative measure authorizes MEMIC to establish a subsidiary to write workers' compensation in other states. The company previously had been able to provide workers' compensation insurance only in Maine therefore compelling their customers to find other insurance companies to cover their employees who work out of state.

According to John Leonard, President and Chief Executive Officer of Maine Employers' Mutual, "This authorization provides a number of benefits. It also allows us to provide our customers' out-of-state employees the same standard-setting safety training and injury management they have come to expect for their in-state employees. We think that's good for all involved and we deeply appreciate the fact that Governor King and the Maine Legislature have given us their support and clear vote of confidence."

The bill also allows the company to reinsure other insurance companies who wish to "front" for MEMIC in states that MEMIC does not wish to be licensed. This provision, in effect, will give MEMIC's customers access to coverage in virtually all states.

Leonard said the new law is one more measure of MEMIC's positive contribution to improving Maine's once notorious workers' compensation system. He cited five measurable changes that have come about since the founding of the private company.

"The most important development has been the dramatic reduction in workplace injuries that have caused people to lose time from work. Since 1992, there has been more than a 30% drop in loss-time injuries in Maine," said Leonard, "and the employers and employees of Maine as well as our staff at MEMIC can share in the credit for this positive trend."

Leonard said the second milestone is the equally dramatic drop in the cost of workers' compensation insurance. He noted that the overall cost to MEMIC's nearly 20,0000 customers has been reduced by more than 55% in just five years. In 1993, MEMIC collected a total of $169 million; $147 million in insurance premiums and another $22 million in capital contributions that helped fund the company's surplus. By contrast, the company wrote $75 million in insurance premiums in 1997. MEMIC eliminated its unique capital contribution in 1996 and has instituted numerous credit programs to reward safe workplace behavior and effective injury management.

The third change mentioned was the measurably superior treatment of injured workers. According to data from Maine's Workers' Compensation Board, MEMIC is substantially better than its competitors with on-time payments of benefits to injured workers. State law requires that benefits be received within 14 days of a compensable claim. MEMIC's compliance is 46% better than other commercial insurance companies offering workers' compensation coverage in Maine according to the Board.

In addition, MEMIC was a leading supporter of an expanded Worker Advocate Program to ensure that employees have skilled representation when conflicts over benefits arise.

The fourth measure of success, according to Leonard, has been the safety education and training of Maine employers and their employees. In five years, the company has run more than 15,000 television, radio and newspaper advertisements promoting the importance of workplace safety training. They have delivered more than 900 training seminars throughout the state and have made more than 14,000 on-site visits to conduct safety training.

The final measure of success is the financial stability of the five-year-old company. MEMIC was allowed to begin operations without the normal amount of surplus funds required of other insurance carriers. With ten years to accumulate the required surplus, the company believes it will soon be certified by the Bureau of Insurance as adequately capitalized. Leonard indicated that the company hopes to begin returning the capital contribution it collected from its policyholders later this spring. The company collected a total of $47 million and intends to return it over the next several years.

"Though we are a private company, we serve a simple public purpose which is to guarantee that employers can buy workers' compensation insurance in Maine. As one public official indicated, "MEMIC is a case of public policy under-promising, and a private company over-delivering." With the passage of this bill, our opportunity to further exceed those expectations has been measurably expanded." said Leonard.

 

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About MEMIC

A super-regional workers’ compensation specialty insurer rated “A” (Excellent) by A.M. Best, The MEMIC Group insures more than 20,000 employers and their estimated 300,000 employees. Licensed across the country with more than $1.2 billion in assets, The MEMIC Group is a leading carrier in the Northeast with a growing profile across the Eastern Seaboard. Offices are located in New Hampshire, Connecticut, New York, New Jersey, Pennsylvania, Virginia and Florida, in addition to the headquarters in Portland, Maine.