Up until January 2006 any employer in West Virginia could receive workers’ compensation insurance. All they had to do was pay their premium and they were covered. After January 2006, the Workers’ Compensation Commission was eliminated and everything changed. At that time, BrickStreet Mutual Insurance Company became the only provider of workers’ compensation insurance in West Virginia; they were required to provide insurance to any company that sought to have it. Now the rules are changing once again.
The market is opening again. Over 120 insurance carriers are already on board, writing policies for West Virginia.
BrickStreet will no longer be the sole workers’ compensation insurance carrier. This would seem like good news, but there is a catch: BrickStreet will be letting go of over 1,000 of their current accounts in 2009. These uninsured accounts will be directed to the new carriers, but if they chose not to cover them they will become part of the Assigned Risk Pool.
The Assigned Risk Pool is currently composed of three carriers: American Mining, Liberty Mutual, and Travelers. It is estimated that each carrier will receive every third or fourth policy that is sent to the pool. While it is possible that on some cases an employer could get a lower rate with the Assigned Risk Pool, it seems more likely that they will be paying more for their insurance coverage than they would in the private market.
BrickStreet has stated that the accounts they are dropping in 2009 are their worst accounts. What this means is that they are basing their decision on the employers loss ratio. These accounts usually cost more to maintain than the amount they are paying for their premium. In these cases, it seems natural that these companies will have to pay more for their new workers compensation insurance plans if they are rejected by other carriers and end up in the Assigned Risk Pool.
The National Council on Compensation Insurance (NCCI) will be helping with this process and hope to make it as simple as possible for those employers who will be turned away from BrickStreet in 2009. They offer a website, application for carriers, tools for employers, and even put the employer’s application out to carriers for review.