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February 22, 2018

Maine employers to see lower workers' comp premiums this year

Photo / Tim Greenway
Photo / Tim Greenway
Michael Bourque, president and CEO of The MEMIC Group, hailed theMichael P. Bourque, president and CEO of The MEMIC Group, Maine's largest and leading workers' compensation insurance company, hailed the 2018 average loss cost approved by the Maine Bureau of Insurance, calling it the largest workers' compensation rate reduction in more than 20 years.

About workers' comp

Workers' compensation insurance pays the medical costs and replacement wages for people injured on the job. Insurance premiums are paid by employers based on the risk of jobs in their workplace. The state mandated line of insurance protects employers from being sued and guarantees that the medical bills and wages of injured workers get paid.

About Maine Bureau of Insurance

The Maine Bureau of Insurance is part of the Department of Professional and Financial Regulation, which encourages sound ethical business practices through regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine.

About MEMIC

The MEMIC Group includes MEMIC Indemnity Company, MEMIC Casualty Co., and parent company Maine Employers' Mutual Insurance Co.; all rated "A" (Excellent) by A.M. Best. As a super-regional workers' compensation specialty insurer, The MEMIC Group holds licenses to write workers' compensation across the country. The group insures more than 20,000 employers and their estimated 300,000 employees, and holds more than $1.3 billion in assets. The group maintains offices in Manchester, N.H.; Glastonbury, Conn.; Albany, N.Y.; Weehawken, N.J.; West Conshohocken, Pa.; Tysons Corner, Va.; and Tampa, Fla.; in addition to its headquarters in Portland. The MEMIC Group was honored as the 2018 Workers' Compensation Insurance Company of the Year by ACORD, the global standard-setting organization for the insurance industry.

Maine Insurance Superintendent Eric Cioppa has approved the National Council on Compensation Insurance Inc.'s 2018 proposed average "loss costs" for Maine, which should result in lower workers' comp premiums for most industries.

Cioppa approved an average loss-cost decrease of 12%.

The new rates will go into effect for new and renewing policies as of April 1, 2018.

"Maine employers' efforts to improve workplace safety, return injured workers to their jobs in a timely manner, and control medical costs continues to pay off," Cioppa said in a news release. "This most recent decrease should result in lower workers' compensation premiums on average across all industry groups."

Cioppa noted that recently filed NCCI loss costs represent a cumulative decrease of 59.5% since the 1992 workers' compensation reform, and that if all insurers fully adopt the decrease, Maine businesses could save an estimated $27 million in the year following implementation.

Loss costs are based on previous and projected losses and benefit payments. NCCI is the advisory rating organization for insurance companies that offer workers' compensation coverage in Maine. NCCI-approved loss costs are available to insurers to reference when filing their workers' compensation rates with the Bureau of Insurance.

Insurers set their own rate levels

The 12% decrease is an average loss costs change, which ranges from decreases of 10.4% to 15.1%, depending on the industry group.

Maine has a competitive market for workers' compensation insurance and each insurer sets its own rate level. Insurers may modify the NCCI loss costs and must select their own expense and profit factor in setting rates.

MEMIC hails announcement

Michael P. Bourque, president and CEO of The MEMIC Group, Maine's largest and leading workers' compensation insurance company, hailed the announcement, calling it the largest rate reduction in more than 20 years.

MEMIC will adopt the NCCI rate recommendation approved by the Maine Bureau of Insurance.

"As we celebrate our 25th year serving Maine, this dramatic decrease in workers' compensation insurance rates is great news for employers and the Maine economy," Bourque said in a MEMIC news release. "The decrease is testament to the hard and persistent work of policyholders and their employees who have reduced the frequency and severity of work-related injuries here in Maine. I think the hard-won compromises to fix the system 25 years ago have proven their value to all concerned, and we look forward to continuing our mission to provide workplace safety service, fair treatment of all workers and support a strong economy."

Both Cioppa and Bourque said that the coming reduction of rates is another example of the benefits of safer workplaces and the prompt-return-to-work for those who have recovered from an injury.

"The efforts made by Maine employers and their employees to work safely continues to pay dividends figuratively and literally," said Bourque. "This past fall MEMIC distributed $21 million in dividends to Maine policyholders in recognition of superior results and we now have returned more than $240 million back into the Maine economy right where it belongs. This rate reduction is further icing on the cake. In addition to workplace safety, the other essential factors that drove these results are effective management of injuries and a focus on return-to-work strategies."

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