R.I. Senate Passes Beacon Mutual Bill

January 26, 2006

The Rhode Island Senate on a vote of 34-3 passed legislation to reduce the number of public appointees to the board of Beacon Mutual and free the state’s dominant workers’ compensation insurer to cover out-of-state employees of its in-state accounts.

The measure would also give Beacon Mutual more freedom to set its own rates and offer safety discounts to more businesses.

The legislation will now be sent to the House for consideration.

Similar legislation passed both houses last year but was never forwarded to Gov. Donald Carcieri, who opposed it and who has spoken out against this year’s bill as well. Carcieri opposes the bill because he says it diminishes public oversight of the state’s near-monopolistic workers compensation carrier.

Senate lawmakers and others evidently disagree.

“This is a landmark piece of legislation that is supported by the entire business community,” said the bill’s sponsor, Sen. Roger R. Badeau (D- Dist. 20, Cumberland, Woonsocket).

“Beacon has joined forces with the business community to improve the coverage we provide to Rhode Island employers,” said Joseph A. Solomon, president and CEO of Beacon Mutual. “This legislation will allow Beacon to cover all Rhode Island firms’ workers, and to offer safety discounts that lower premiums.”

The insurer for 90 percent of Rhode Island’s employers, Beacon Mutual is currently governed by a seven-member board of directors, five of whom are appointed by the governor. According to Beacon Mutual, this current rule of a majority of publicly-appointed members keeps it from being able to write workers’ compensation in a number of states that prohibit entry by companies that are “government controlled.”

Badeau’s bill proposes a board of directors with one member appointed by the governor, one by the President of the Senate and one by the Speaker of the House. The legislation also states that Beacon Mutual would be allowed to cover employees of Rhode Island companies who work in other states. To do this, Beacon Mutual will use a wholly owned subsidiary, instead of using a separate company, to cover those out-of-state employees.

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