Saturday, April 19, 2014
PORTLAND – Maine Employers' Mutual Insurance Co., a workers' compensation insurer, said it decided against raising workers' compensation rates for its 18,000 policyholders in Maine despite the state's approval to do so.
MEMIC, which insures about 60 percent of the commercial market in Maine, said it would not adopt the rate increase recently approved by the Maine Bureau of Insurance. The higher rates would have started April 1.
"This is the right thing for us to do at this time," said MEMIC President and CEO John Leonard. "While we clearly understand that there is justification to raise rates, based upon increasing medical costs, MEMIC will hold the line on this increase at this time. We know that many Maine businesses are continuing to struggle in this economy and we don't want workers' compensation costs to impede economic growth here in Maine."
The rate increase approved by the state resulted from an update to the medical fee schedule for workers' compensation injuries.
"We know it's unconventional for an insurance company to turn down a rate increase, but this is part of what makes MEMIC a special company," Leonard said. "We're an independent mutual company, based in Maine, and we've built an organization that is strong and able to make this choice on behalf of our policyholders."
In November, MEMIC has returned $13 million in the form of dividends to its policyholders. Since 1998, its dividends and excess capital returned to policyholders in the state totals nearly $150 million.
Nationally, the company holds licenses to provide workers' compensation in 46 states, and the District of Columbia. The company insures nearly 20,000 employers and about 250,000 employees.