Bill to help insurance deregulation draws support from business

Kiley Russell

Tuesday, Feb. 16, 1999 | 3:33 a.m.

CARSON CITY -- Nevada retailers said Tuesday they back a bill that helps restructure the insurance system providing coverage to companies for on-the-job injuries suffered by workers.

There are only two ways now for Nevada companies to get a worker compensation policy: buy it from the state-run Employers Insurance Company of Nevada or self-insure, an option mainly for big employers.

Advocates of AB44 said the bill will make it easier for small and mid-sized businesses to join self-insurance associations when the state opens the industry to competition in July.

"This bill is very, very important for self-insurance groups. Without it, I don't think we'd be able to be competitive (after competition starts)," said Mary Lau, chief of the Retail Association of Nevada.

"This bill helps competition because all small employers can actually look at all the options out there - at the state system, private insurance companies or the self-insurance associations," Lau added.

Self-insurance associations are groups of businesses that leave the state insurance system and pool their resources to develop their own industrial insurance programs.

Current law says a company can join an association only if it has at least $15,000 in premiums to offer the group or $500,000 in assets. A company seeking to join would also have to pay for an independent audit of their financial assets - at a cost of up to $7,000.

The requirements force businesses that can't afford the premiums or that don't qualify for a self-insurance program to stay with the state-run system.

AB44 would allow companies to join a group without having to guarantee large premiums or prove a significant amount of assets - and the group would be able to do its own assessment of a company's financial viability.

AB44 also allows self-insurance associations to set their own criteria for who could join. The criteria would have to be submitted to the state insurance commissioner for approval and the association making the request would have to have at least 15 members, be at least three years old and have $5 million in net worth.