Isle workers comp
firm opens doors

The first policies take effect July 20

By Russ Lynch
Star-Bulletin

The nonprofit company set up to offer workers compensation insurance policies to Hawaii businesses that can't otherwise get coverage will have its first policies in effect July 20.

As their policies come up for renewal, employers who used to be covered under the assigned-risk pool are now being told by their insurers that they won't be covered that way any more.

The Hawaii Employers Mutual Insurance Co. is now up and running and has the responsibility for that type of policy, employers are being told.

Steve Hirano, a spokesman for HEMIC, said the new company, owned by the businesses that insure with it, obtained funding through bank loans and is also using reinsurance.

Workers compensation premiums, long the subject of complaint by businesses, have gone down since the state Legislature passed the law last year creating HEMIC. Another factor is some improvements in workers compensation law made by the 1995 Legislature, insurers say.

In his State of the State address in January, Gov. Ben Cayetano said the premiums Hawaii employers have to pay for workers compensation had gone down 27 percent, saving businesses $100 million in annual costs.

However, workers compensation is cyclical and HEMIC is still needed despite the lower rates, Hirano said.

HEMIC was mandated by the Legislature and signed into law by Cayetano, but it is not a state agency and receives no state funds.

It is headed by Robert Dove, president and chief executive officer, formerly of the Texas Workers Compensation Insurance Fund. Dove said about 20 percent of Hawaii businesses are in the assigned-risk pool, which will be phased out as HEMIC picks up their policies.

Dove said HEMIC's rates won't necessarily be the cheapest in the market but they will be competitive.

For more information, employers can call HEMIC at 524-0114.