The Maine Bureau of Insurance has approved a 15.7% average rate reduction in workers’ compensation insurance premiums for Maine Employers’ Mutual Insurance Co. (MEMIC), the largest workers’ compensation carrier in the state.
The bureau said MEMIC’s rate reduction will save employers in the state an estimated $31 million. The adjusted rates will become effective upon the renewal of policies over the next year.
Superintendent of Insurance Robert L. Carey said MEMIC’s initial 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%,” he said.
He said the further rate reduction will mean an additional $5 million in savings for Maine businesses.
MEMIC writes about 66% of the market, according to the bureau’s 2023 annual report, providing coverage to more than 17,500 employers.
Other insurer groups including Travelers, ProAssurance, WR Berkley, Hartford, Liberty Mutual, Zurich, Chubb, Old Republic and The Hanover write from one to four percent each.
The MEMIC decision comes after the approval in March by Carey of an industry-wide average 19% drop in workers’ compensation loss costs. That came in the form of a filing by the National Council on Compensation Insurance (NCCI), the state’s designated statistical agent, which files annual advisory loss costs on behalf of insurers.
Those average advisory loss costs would save Maine businesses an estimated $55 million. But advisory loss costs do not account for what insurers pay for commissions, general expenses, taxes, and contingencies, nor do they account for profits and investment income. Under Maine’s competitive rating law, each insurance carrier determines what to add into premium calculations to cover those items.
The average rates differ across different industries. An individual employer’s final workers’ compensation cost is also based on additional factors such as prior-claims history, safety programs and classifications.
The vast majority of Maine employees insured by MEMIC will see rate decreases, but some businesses will see increases, according to Carey, who was sworn into his post as insurance regulator on February 28.
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Topics Carriers Workers' Compensation Talent Maine
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