New Brickstreet Strategies By George Hohmann
This article is by George Hohmann.
Check back tomorrow for my opinion on how a Workers Compensation insurance carrier cannot and should not try to insure out-of-state workers when they are domiciled in a single state.
BrickStreet looks forward to flexibility
by George Hohmann
Daily Mail Business Editor
BrickStreet Mutual Insurance Co. hopes to offer workers’ compensation insurance for all employees of West Virginia-based companies next year, even when some of the employees work out of state, BrickStreet President and Chief Executive Officer Greg Burton said.
Now BrickStreet can only insure a company’s West Virginia employees. It is a problem when a West Virginia firm like a coal company has operations in several states.
The restriction is one of several rules that BrickStreet must follow to receive a federal tax exemption. The restriction — and the tax exemption — end on Jan. 1, 2009.
In a keynote address to the Charleston Rotary Club on Monday, Burton said BrickStreet plans to enter into a contractual relationship with a so-called “fronting company” — an insurance company that already has operations in other states — so it can insure employees of West Virginia-based companies, no matter where they work.
Burton also said that within the next three or four years, BrickStreet wants to offer workers’ compensation insurance in other states. However, the company has no plans to offer other lines of coverage like auto or homeowners insurance, he said.
In addition, Burton said BrickStreet has no intention of “de-mutualizing” — switching from a mutual company owned by its policyholders to a stock company owned by stockholders.
The West Virginia Legislature created BrickStreet on Jan. 1, 2006, to succeed the state-owned Workers’ Compensation Commission. BrickStreet is the sole provider of workers’ comp insurance in West Virginia until July 1, when the market opens to competition.
BrickStreet must now offer workers’ comp insurance to any employer who will pay the premiums. When competition comes, “We’d love to give our competitors the bad ones and we’d love to keep the good ones,” Burton said.
BrickStreet is expecting competition from some of the biggest names in insurance, including Chubb, Erie, Travelers, Hartford and Liberty Mutual, Burton said.
BrickStreet Mutual Insurance Co. hopes to offer workers’ compensation insurance for all employees of West Virginia-based companies next year, even when some of the employees work out of state, BrickStreet President and Chief Executive Officer Greg Burton said.
Now BrickStreet can only insure a company’s West Virginia employees. It is a problem when a West Virginia firm like a coal company has operations in several states.
The restriction is one of several rules that BrickStreet must follow to receive a federal tax exemption. The restriction — and the tax exemption — end on Jan. 1, 2009.
In a keynote address to the Charleston Rotary Club on Monday, Burton said BrickStreet plans to enter into a contractual relationship with a so-called “fronting company” — an insurance company that already has operations in other states — so it can insure employees of West Virginia-based companies, no matter where they work.
Burton also said that within the next three or four years, BrickStreet wants to offer workers’ compensation insurance in other states. However, the company has no plans to offer other lines of coverage like auto or homeowners insurance, he said.
In addition, Burton said BrickStreet has no intention of “de-mutualizing” — switching from a mutual company
owned by its policyholders to a stock company owned by stockholders.
The West Virginia Legislature created BrickStreet on Jan. 1, 2006, to succeed the state-owned Workers’ Compensation Commission. BrickStreet is the sole provider of workers’ comp insurance in West Virginia until July 1, when the market opens to competition.
BrickStreet must now offer workers’ comp insurance to any employer who will pay the premiums. When competition comes, “We’d love to give our competitors the bad ones and we’d love to keep the good ones,” Burton said.
BrickStreet is expecting competition from some of the biggest names in insurance, including Chubb, Erie, Travelers, Hartford, and Liberty Mutual, Burton said.
“We want competition,” he said. “Shame on us if we’ve not been able to provide the service to keep you with us after July 1.”
Burton said BrickStreet’s customer service management – trademarked “BrickStreet 360” – means “everyone at BrickStreet who is going to touch your policy is on one team. We think this makes us unique in the marketplace.”
He said Liberty Mutual might write workers’ comp insurance direct but other companies are expected to offer insurance through agents, like BrickStreet does.
Burton said 18,000 of BrickStreet’s 36,000 policyholders do not yet have an agent.
“If you only remember one thing from this speech, it is this: We encourage you all to get an agent,” he said. Without an agent, employers won’t be able to access all of the offerings in the marketplace, he said.
In response to questions, Burton said all carriers:
* Will start with the same loss costs and must add the same surcharges.
* Must pay the same benefits, which are set by state law.
Used with permission from George Hohmann
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