Workers Comp Insurer Pays No Taxes | Effectivecoverage's Blog

This story comes to us via PC360. ?Missouri created an insurance carrier, the Missouri Employers Mutual Insurance Company. ?While the state is well within their rights to do so, the people who are actually running the insurance carrier seem to only want to be a state entity when it?s convenient for them. ?After the jump, some consideration to Sunshine Laws and taxes, as applied (or not applied) to this company?

The company is tax-exempt at the federal level, which has ?saved [the company] an estimated $50 million since it was created under a 1993 state law, helping it to build a surplus of more than $160 million and become a domiannt workers? compensation insurance provider?? according to PC360. ?They categorize themselves as an independent public corporation. ?To us, this sounds not unlike Fannie Mae and Freddie Mac, and that?s not intended to be a compliment.

More disconcerting, however, is that the carrier believes they are not subject to the state?s open meetings ? ?sunshine? ? law. ?How this logic was arrived at isn?t entirely clear, but if an insurance carrier is able to build a surplus and save the companies which hold policies money because they?re not subject to federal taxation, one would think that the meetings should be open in the same way a school board meeting or most any other government meeting should be. ?They?re not.

We?d go easier on the carrier if they were an insurer of last resort. ?Because they?re not ? they insure business, not individuals ? they don?t have the excuse of ?this is the only way we can possibly underwrite such risk!? ?Instead, the company is spending that money on junkets and severance payments. ?These, the dollars that are supposed to fund your workers compensation. ?Perhaps the reason they?re able to afford to spend money like that is that they?re not subject to multi-billion dollar judgments like other state-run insurers (see, e.g., LA Citizens and the lawsuit they?re currently embroiled in over Katrina claims adjusting.)

There is room for debate here, and room to fill in missing information. ?Anyone who is familiar with the situation is welcome to sound off in the comments. ?We welcome collegial debate.

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Source: http://effectivecoverage.com/blog/?p=958

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