Worker comp provider earns $153 million

Wednesday, Oct. 28, 1998 | 12:15 p.m.

CARSON CITY -- Employers Insurance Co., formerly called the State Industrial Insurance System, registered $153 million in net income in fiscal 1998, a new financial report shows.

KPMG Peat Marwick LLP said Tuesday the company has assets of $1.3 billion, an increase of $311 million from the previous year.

The injured workers' compensation system, which was near financial collapse in the early 1990s, has accumulated profits of $372 million since July 1, 1995, Peat Marwick reported.

Douglas Dirks, executive officer of Employers Insurance, said the report shows the company is "in better shape than we were a year ago and it tells me we're adequately reserved and with sufficient surplus to compete with private insurance companies beginning in July 1999."

EIC collected $440 million in premiums from an estimated 45,000 employers in Nevada last fiscal year, down $32 million. Dirks attributed that to a 22 percent rate decrease. "Absent the rate decrease we would have been nearly level," he said.

Peat Marwick also reported on the separate fund created by the 1997 Legislature to continue payments on long-term claims. These are claims filed decades ago -- the earliest is 1938 -- by people who are still receiving benefits, or whose survivors are still receiving benefits. It was initially funded with $650 million and that rose in the last fiscal year to $666 million. The increase comes from investment income.

Peat Marwick said the combined two funds paid out $221 million in claims in fiscal 1998, up $9 million from the previous year. It's the first year since 1993 that claims costs have risen. He blamed that on higher medical charges, which are rising nationally.

Starting in July next year, private insurance companies will be able to write workers' compensation policies to cover workers injured on the job.

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