Maryland Changes from IWIF to Chesapeake

On October 1st, Injured Workers Insurance Fund (“IWIF”) changed its name to Chesapeake Employers’ Insurance Company.  This comes as a result of legislation passed by the Maryland General Assembly in 2012.

In addition to the name change, Chesapeake Employers’ will cease to be an independent state agency.  It will become a non-stock, not for profit, private insurance company authorized to sell workers comp insurance (only in Maryland).  The Board of Directors for Chesapeake Employers’ will continue to be appointed by the governor of Maryland.

Chesapeake Employers’ is the largest provider of workers compensation insurance in Maryland reflected by its 23% market share in MD, well ahead of any other insurance carrier.  It has assets of more than $1.8 billion and has over 375 employees.  Chesapeake also works with over 1,400 independent agents including The Insurance Shop.

Over 20,000 Maryland employers have their workers comp insurance with Chesapeake Employers’.  The company will celebrate its 100th anniversary next year, and it will continue to be a leader in workman’s comp insurance while working on creating safer workplaces.

Chesapeake Employers’ has numerous non-English language resources, flexible installment payment rates, and competitive rates.  Policyholders have access to 24/7 e-Services, effective claims management, free safety materials, workplace safety services, online injury reporting and a Special Investigations Unit.

Even with the new name, Chesapeake Employers’ will continue business as usual.  Many of the changes will be internal, such as new hires being employees of Chesapeake Employers’ as opposed to the State of Maryland.  Much of the expertise of Chesapeake Employers’ comes from offering one line of insurance in one state.

Chesapeake Employers’  will now have to pay Maryland state tax and property tax whereas it was previously exempt.  One consequence of this conversion is that the State of Maryland will no longer be able to appropriate any of Chesapeake Employers’ surplus.

Recently the State of Maryland authorized a $50 million transfer from IWIF’s prior surplus.  The surplus is no longer vulnerable to transfers by Maryland, so it will be used for financial stability to ensure payment of injured worker claims.  This benefits existing and future policyholders of Chesapeake Employers’.  There has been a significant advertising campaign to educate the public and policyholders about the conversion of IWIF to Chesapeake Employers’ Insurance Company.

Chesapeake Employers’ Insurance Company is unique in that it can be a great fit for both high risk and low risk employers alike.  As a State Fund carrier, it has to provide coverage if no other insurance carriers will, but its rates are very competitive.  With that being said, there are numerous other strong carriers that The Insurance Shop works with in Maryland including The Hartford, Travelers, Employers, AmTrust, Guarantee Insurance Company, Amerisafe and FirstComp.

Many of these carriers offer Pay As You Go workers compensation insurance solutions in certain circumstances.  Comparatively, workers comp insurance rates have risen in Maryland the last few years and even a bit faster than in most of the country.  However, rates in Maryland for workmen’s comp insurance are still below the national average (from the 42nd most expensive state in 2010 to the 34th most expensive in 2012).  Both Chesapeake Employers’ Insurance Company and the other carriers mentioned above contribute significantly to the reasonable workers comp rates in Maryland.

About AJ Schrage

Andrew is a licenced insurance producer with The Insurance Shop. Andrew (AJ) specialized in business insurance products including workers compensation, general liability, and professional liability insurance.
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