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Bureau of Insurance Approves Multi-Million Dollar Reduction in Workers’ Compensation Rates for State’s Largest Insurer
The Maine Bureau of Insurance has approved a 15.7% average rate reduction in workers’ compensation insurance premiums for the Maine Employers’ Mutual Insurance Company (MEMIC), the largest workers’ compensation carrier in the state. The rate reduction will save Maine employers an estimated over $31 million in workers’ compensation costs. The adjusted rates will become effective upon the renewal of policies over the next year.
Robert L. Carey, Superintendent of Insurance, noted, “the Bureau’s property and casualty division worked with MEMIC staff to bring real savings to Maine employers. MEMIC’s initial rate request would have lowered average rates by 13%; but by scrutinizing the numbers and cutting MEMIC’s profit margin, the Bureau approved a more significant average rate reduction of 15.7%. The further rate reduction will mean an additional $5 million in savings for Maine businesses, which they can use to invest in Maine people and Maine businesses.”
MEMIC is the largest workers’ compensation insurer in the state, providing coverage to over 17,500 employers. When it opened in January 1993, MEMIC was one of four companies licensed to sell workers' compensation insurance in Maine, with the other three poised to exit the state altogether. Injury rates at Maine companies were high, and workers' compensation costs were the nation's highest.
In response, the Maine Legislature passed a landmark workers' compensation reform law, signed by then-Gov. John R. McKernan Jr., creating a private mutual company governed by policyholders. Despite its public purpose, MEMIC received no funds nor guarantees from the State of Maine.
What would become known as “a Maine Miracle” in local media, MEMIC was, and remains, a key force in delivering on the 1993 reforms, with a proven structure that unleashed a vibrant workers' compensation insurance market by ensuring that there was coverage available for all Maine employers.
The new average rates differ across different industries. The vast majority of Maine employees insured by MEMIC will see rate decreases, but there are some businesses that will see increases.
“MEMIC continues to be a success story that delivers on its mission of workplace safety, fair treatment of all workers, and a strong Maine economy,” Carey noted. “In addition to lower premiums, MEMIC has consistently delivered multi-million-dollar dividends to its member companies.”
The Bureau of Insurance is one of five agencies within the Maine Department of Professional and Financial Regulation (www.maine.gov/pfr). Consumers with questions about insurance matters can obtain information and assistance from the Maine Bureau of Insurance by visiting www.maine.gov/insurance, calling