Kentucky: Governor urges comp insurer to return surplus to small businesses
The governor recently sent a letter to Kentucky Employers' Mutual Insurance, which was created by the General Assembly as part of the overhaul to the workers' comp system in 1994 and provides coverage to more than 20,000 policyholders. Beshear applauded the insurer's success but asked it to consider returning some of the surplus as a premium reduction or dividend to small businesses.
"While most businesses in our state have struggled over these last few years, it appears that KEMI is faring very well financially," Beshear said. "I think it's appropriate and prudent for your organization to consider providing some relief to our struggling Kentucky businesses in these unprecedented fiscal times. Until we find ways to create opportunities for businesses to grow and put people back to work, we will not realize the benefits of an economic recovery."
The governor outlined the state statute -- KRS 342.819 -- that authorizes the board of KEMI to declare a dividend and distribute it in the form of premium discounts, dividends, or a combination to its policyholders. Beshear did not recommend an amount to be distributed and recognized the need for KEMI to keep a certain amount of money in reserve to maintain competitive business practices. However, the governor said it "appears that the current level of surplus is clearly in significant excess of what is necessary to maintain that standard."
Beshear asked KEMI to consult with the Kentucky Department of Insurance to review its surplus levels and determine an appropriate level of dividends.
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April 8, 2010
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