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 removed and everything changed. At that time, BrickStreet Mutual Insurance Company became the sole provider of workers’ compensation insurance in West Virginia; they were required to provide insurance to any company that wanted to have it. Now the rules are changing once again.
The market is opening up again. More than 120 insurance companies are already on board, writing policies for West Virginia.
BrickStreet will no longer be the only carrier for workers’ compensation insurance. This might sound like good news, but there’s a catch: BrickStreet will let go of over 1,000 of its checking accounts in 2009. These uninsured accounts will go to the new providers, but if they decide not to cover them, they’ll become part of the Assigned Risk Pool. .
The currently assigned risk pool is made up of three operators: American Mining, Liberty Mutual and Travelers. It is estimated that each insurer will receive every third or fourth policy that is submitted to the pool. While it is possible that in some cases an employer could get a lower rate with the allocated risk pool, it seems more likely that she will pay more for her insurance coverage than in the private market.
BrickStreet has stated that the accounts they are removing in 2009 are their worst accounts. What this means is that they are basing their decision on the employers’ loss rate. Typically, these accounts cost more to maintain than the amount they pay for their premium. In these cases, it seems natural that these companies would have to pay more for their new workers’ compensation insurance plans if they are rejected by other insurers and end up in the Assigned Risk Pool.
The National Council for Compensation Insurance (NCCI) will help with this process and hopes to make it as simple as possible for those employers who will be turned down on BrickStreet in 2009. They offer a website, an application for carriers, tools for employers, and even send the employer application to carriers for review.