The head of Nevada’s former monopolistic state workers’
compensation fund said BrickStreet Mutual Insurance Co. has borne a “unique burden” in helping transition West Virginia’s system to a private market.
“I’m very excited for you,” Douglas D. Dirks told a gathering of business leaders during the 2007 West Virginia Business Summit. “Having a new private insurance company in West Virginia is an ambitious goal.”
Dirks is Director, President and CEO of Employers Holdings Inc., based in Reno, Nevada. Eight years ago, he led the transition of Nevada’s state fund into a competitive market. Nevada suffered under the pressures of being a growing state with a $2.2 billion unfunded
workers’ compensation liability.
“We took something of a leap of faith, similar to what you have done in West Virginia,” Dirks said. “… that a private, competitive marketplace could deliver this service better than a monopolistic system.”
Dirks said Nevada’s transition process took four years. West Virginia passed legislation in 2005 and transitioned to BrickStreet less than a year later.
“It’s very complicated and it’s not without difficult issues,” he noted. “There isn’t a book that shows you how to create a private company from a state monopoly.”
BrickStreet continues to work closely with the West Virginia Offices of the Insurance Commissioner, the National Council on Compensation Insurance and others to prepare the workers’ compensation market for full competition in July 2008.
“Almost all of the burden of that transition rests with the incumbent; BrickStreet doesn’t get to just flip a switch,” Dirks said. “BrickStreet has borne a unique burden in this transition.”
Dirks and BrickStreet President and CEO Gregory A. Burton said competition will be a positive force for economic development in West Virginia. Burton said competition drives BrickStreet to improved customer service and performance. Dirks noted that competition
likewise will drive businesses to position themselves as a more attractive risk, with greater commitment to workplace safety and return-to-work programs.
Burton also announced a new customer-focused organizational structure for BrickStreet in which eight multifunctional business teams will address the unique needs of major market segments.
These teams include Coal Industry Accounts, Government Accounts, Small Accounts (less than $10,000 in annual premium), Standard Accounts (three teams, separated geographically, of companies that pay $10,000 to $100,000 in annual premium) and Large Accounts (two teams, separated geographically, of companies that pay more
than $100,000 in annual premium).
Source: BrickStreet Mutual Insurance Co.
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