AIA Testifies at Maryland Hearing Regarding IWIF

The American Insurance Association (AIA) testified today at a hearing of the Maryland Insurance Administration and recommended that the Injured Workers’ Insurance Fund (IWIF) of Maryland should abide by the same rating provisions as private insurers.

Ken Stoller, senior counsel for AIA, testified that IWIF should be subject to the same rating law applicable to the private market and report its data to the National Council on Compensation Insurance Inc. (NCCI), the rate making organization. This position is a reflection of AIA’s interest in ensuring IWIF’s financial soundness, given that IWIF serves as the residual market and is now a member of the Maryland guaranty fund.

“Where other state funds have not been regulated on the same basis as private insurers, problems have arisen that not only compromised the solvency of those state funds, but also negatively impacted the private market,” said Stoller. “Applying the rating law to IWIF will ensure that rates are adequate for the risks being taken.”

IWIF was created in 1914 in order to provide workers’ compensation insurance to Maryland-based businesses unable to obtain insurance from private carriers. It currently possesses roughly 25% of the market, with the next largest competitor maintaining approximately 12%. Maryland is one of the only state funds in the country that is not required to report loss data to NCCI or use NCCI experience ratings.

Additionally, IWIF is the only workers’ comp insurer in Maryland that is not required to be a member of a rating organization or adhere to the policies of a rating organization.