Represents Multi-Million Dollar Reduction in Workers’ Compensation Rates
In a decisive move that underscores Maine’s commitment to supporting its local businesses and workforce, the Maine Bureau of Insurance recently approved a substantial rate reduction in workers’ compensation premiums for the Maine Employers’ Mutual Insurance Company (MEMIC), the largest workers’ compensation carrier in the state. This decision marks a significant financial boon for the state’s employers, reflecting the Bureau’s ongoing efforts to foster a thriving business climate.
In commenting on the reduction, Robert L. Carey, Superintendent of Insurance, said, “the Bureau’s property and casualty division worked with MEMIC staff to bring real savings to Maine employers. MEMIC’s initial rate request would have lowered average rates by 13%; but by scrutinizing the numbers and cutting MEMIC’s profit margin, the Bureau approved a more significant average rate reduction of 15.7%. The further rate reduction will mean an additional $5 million in savings for Maine businesses, which they can use to invest in Maine people and Maine businesses.”
A Legacy of Reform and Resilience
MEMIC is the largest workers’ compensation insurer in the state, providing coverage to over 17,500 employers. When it opened in January 1993, MEMIC was one of four companies licensed to sell workers’ compensation insurance in Maine, with the other three poised to exit the state altogether. Injury rates at Maine companies were high, and workers’ compensation costs were the nation’s highest.
In response, the Maine Legislature passed a landmark workers’ compensation reform law, signed by then-Gov. John R. McKernan Jr., creating a private mutual company governed by policyholders. Despite its public purpose, MEMIC received no funds nor guarantees from the State of Maine.
What would become known as “a Maine Miracle” in local media, MEMIC was, and remains, a key force in delivering on the 1993 reforms, with a proven structure that unleashed a vibrant workers’ compensation insurance market by ensuring that there was coverage available for all Maine employers.
“MEMIC continues to be a success story that delivers on its mission of workplace safety, fair treatment of all workers, and a strong Maine economy,” Carey noted. “In addition to lower premiums, MEMIC has consistently delivered multi-million-dollar dividends to its member companies.”
Strategic Reductions Bolster Business
As a result of the move, the decrease in workers’ compensation insurance rates for the state’s largest insurer stands to save Maine businesses over $31 million in insurance costs. This reduction is set to be implemented as companies renew their policies throughout the next year, signaling timely financial relief that could stimulate further economic growth and investment in the local economy.
This adjustment is not merely a routine rate change but a calculated maneuver following in-depth financial assessments and cooperative efforts between the Bureau and the insurer’s team. Initially, a lesser reduction was proposed, but the detailed scrutiny led to a more substantial decrease, allowing for additional savings which local businesses can leverage to enhance their operations and workforce development.
Diverse Impact Across Industries
It’s important to note that the rate reduction varies across different sectors, with the vast majority of insured employees seeing decreases in their premiums. This nuanced approach ensures that the rate adjustments are equitable and reflective of the diverse needs and risk profiles across various industries. However, notes the Maine Bureau of Insurance, while most will benefit from the rate reduction, there will be some businesses that may see rate increases.
