Greg Burton, president and CEO of BrickStreet Insurance, speaks Monday to the Rotary Club of Parkersburg about recent and upcoming changes in West Virginia's workers’ compensation insurance market.
Photo by Wayne Towner
Posted February 12, 2008
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Greg Burton, president and CEO of BrickStreet Insurance, speaks Monday to the Rotary Club of Parkersburg about recent and upcoming changes in West Virginia's workers’ compensation insurance market. |
Photo by Wayne Towner Posted February 12, 2008 |
PARKERSBURG — More than two years after West Virginia moved from a state-run workers’ compensation system to an exclusive private provider — BrickStreet Insurance — the state is getting ready to make the next step to a fully open market for
workers’ compensation insurance. | Greg Burton, president and CEO of BrickStreet Insurance in Charleston, spoke about the process to local businesspeople Monday at the weekly Parkersburg Rotary Club luncheon at the Blennerhassett Hotel. BrickStreet is the West Virginia-based private mutual insurance company formed in 2005 to operate the state’s workers’ compensation insurance system. Burton said BrickStreet started on Jan. 1, 2006, as the first phase of privatizing the state 92-year-old, state-run workers’ compensation system. BrickStreet was designated by the Legislature to be the state’s exclusive provider of legally required workers compensation for two-and-a-half years. To date, BrickStreet has been the only private firm offering workers’ compensation insurance in West Virginia. That will change July 1 when the second phase of the privatization process begins and the market opens to other private carriers, Burton said. As of the end of 2007, 10 companies had filed for certificates of authority to allow them to offer workers’ compensation coverage in West Virginia. For those wishing to move away from BrickStreet, Burton said they will need to get an insurance agent to access the new programs. They can use their own agents or go through other insurance carriers that might get involved in the new market. Those who don’t have an agent will remain with BrickStreet as the state’s direct carrier, he said. “BrickStreet’s been successful; we’ve been profitable,” Burton said of the firm’s first two years in operation. BrickStreet had a profit of $70 million for 2006 and the running estimate through September 2007 was about $50 million, which will be finalized by the end of February. Burton said the profits help BrickStreet build up its reserves as a cushion for larger payouts or groups of payouts in the event of large work-related disasters. It will also help BrickStreet pay off the Surplus Note issued by the Legislature to support the newly created firm in 2006, paying back $200 million to the state of West Virginia. Burton believes the shift to privatization for workers’ comp has been a positive one for West Virginia and its residents. There have been bumps in the road, but he believes the process has done well. Overall, rates have gone down an average of 27.5 percent although not everyone has experienced that decrease and some have seen rates go up. The national average rate decrease has been 9 percent for the same two-year period, he said. Burton believes the opening of the market on July 1 will continue that beneficial process as other insurance providers join BrickStreet in providing workers compensation insurance to the state’s employers. “Competition’s going to be good for West Virginia, it’s going to drive down the prices and make everybody ore efficient and make the system more efficient,” he said. “Premiums will go down, which always a good thing, and benefit levels will be able to stay at the same level that they are now.” Burton said the firm has created a new organizational structure, called BrickStreet 360, in an effort to enhance its customer service. The structure features eight multi-functional business teams organized by industry and premiums, including coal, government, small, large and standard accounts. Prior to the creation of BrickStreet, state officials would often hear the workers compensation situation cited as one of the reasons out-of-state employers were reluctant to come to West Virginia, Burton said. “I don’t hear that anymore and I don’t think our people in our economic development groups hear that anymore. They may hear other excuses, but workers compensation has been taken off the table due to the privatization of the system,” he said. By WAYNE TOWNER, wtowner@newsandsentinel.com
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