Ohio And North Dakota Monopolistic State Funds
I do not wish to pick on any of the monopolistic state funds. I have passed over commenting on quite a few articles referring to Ohio and North Dakota. However, these two news items were too major to ignore.
North Dakota – A Monopolistic State
The State Fund’s (WSI) reserve levels topped out at $174 million. The Attorney General of North Dakota had commented that WSI is figuring the surplus figures incorrectly. The WSI has refunded quite a large amount of the surplus to the policyholders by way of dividends.
Dividends are another name for refunds to policyholders. They are not to be confused with dividends on investments that are not refunds.
I am of the opinion that a large surplus indicates that the WSI or any carrier is charging too much premium to their policyholders. Instead of receiving a multi-year free interest loan from the policyholders and then refunding it back, it is best to set premium levels at a fair rate. As I see it, there should be a very small amount of surplus in a government-backed agency.
I will cover Ohio tomorrow, as I have to research the situation a little more. A judge has made a ruling against the BWC.
2020 Update – Ohio and North Dakota remain as two of the last monopolistic state funds. North Dakota’s WSI and Ohio’s BWC have not allowed any type of private market competition.
One has to wonder how long they will remain completely monopolistic. Both have experienced extreme difficulties in administering one-source workers compensation insurance.
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