Maine Insurance

What would happen if the law requires any insurance to buy, but nobody wanted to sell it?

This may be done quickly, in Maine, where, after 77 years, the Workers’ Compensation insurance system appears to be dissolved. Its failure would be the first failure of this basic form of social security since the Workers’ Compensation systems were at the beginning of this century.

The collapse could be devastating on local employers, many of whom say they would have to conclude, without the protection Workers’ Compensation their bids, when staff are violated. And Maine, the situation is a nightmare vision of the insurance regulatory authorities Federal Workers’ Compensation systems in more than a dozen other countries observe the costs of rotation out of control and insurers loss record .

In addition to Maine, USA with very difficult, Workers’ Compensation system in California, Kansas, Louisiana, Massachusetts, Pennsylvania, Rhode Island and Texas. Most countries require employers to buy Workers’ Compensation coverage for their workforce. How are the exchange rates

Insurers insist that the central issue of Maine-crisis is the question of whether the regulatory authorities, should premiums on the basis of what it costs to provide insurance coverage - the practice, as in the past - but on what they believe that customers can afford. Insurers say the state regulatory authorities in their efforts to protect the population level, you manage the rising costs of insurance underlying such that Congress has delayed the Federal Republic of budget deficit .

Many people in the insurance sector of Maine striking the authors. The insurance company insurance society on the government, which refuses to Workers’ Compensation coverage, because they say the state for a decade, refused to contribute to higher premiums enough to cover skyrocketing health claims and legal costs.

Recently, two of the three basic colors of enterprises, or for doing business in Maine has officially announced that she would leave at the end of the year. The third, he said, are also abandon before the end of the year, unless the governor and lawmakers do something to reform the system.

For small manufacturers such as JR Maine in Naples, Mich. Future prospects seem daunting. A business-at-Risk

The manufacturer of small pieces of wood already paid $ 12 for every $ 100 of its 30 employees for wages Workers’ Compensation. It is located in a sector that will pay premiums particularly high because of high-risk work. The company owns, Richard Dyke, said he can not afford to pay higher premiums. He said it would close its doors for the period of his report disappeared.

“I did not exposed to this kind of personal responsibility,” said Dyke, “I still think expose workers against the risk.”

Regulatory authorities said, to maintain a tight limit, there are bonuses for the protection of the public insurer “inflated the rate requested. But, as he said from New Jersey to California debate, as much to keep prices in Workers’ Compensation and automobile insurance, insurers are increasingly likely that Maine as extreme example of what happens when the premiums do not cover costs.

Orin Kramer, an economist at Princeton, NJ, USA, specializes in insurance, argued in a paper recently published by an industry trade group that the regulation of the Workers’ Compensation and private auto insurance has been a profound change in the 1980’s. It was then, Mr. Kramer said that in response to sharp increases in the cost of provision by government regulatory authorities insurance began to consider increases on the basis of what the public felt it could bring . Messengers of bad news

Mr. Kramer believes that the worst damage for insurers to the nation from 1987 to 1989, in Maine, where companies in receivables $ 148 for each $ 100 in premiums.

“We are the messengers, to deliver the bad news about what’s happening in society, and often we get killed,” said Czech Grover, a vice-chairman of the Maryland Insurance Group, one of the two companies, announced that it would raise the Maine Workers’ Compensation business on January 1. The other companies who leave the end of the year, Commercial Union in Boston.