CHARLESTON -– BrickStreet Mutual Insurance Co. has made its first scheduled payment on its outstanding surplus note to the State of West Virginia.
Gov. Joe Manchin announced earlier this month that the Offices of the Insurance Commissioner received a check from BrickStreet last week in the amount of $5,865,954.62, including principal and interest.
"These payments will go directly to the benefit of the workers' compensation 'Old Fund,' helping to pay back the system's long-term deficit," Manchin said. "As privatization continues to flourish, this places West Virginia on a level playing field with surrounding states to compete for economic development opportunities. I can't emphasize enough how important this process has been for our state's future."
As part of the terms of the surplus note, certain adjustments were made relating to this initial payment, which included accounting for refunded advance deposits, cash receipts and accounts payable for the third and fourth quarters of 2005, as the state transitioned its workers' compensation system to the private market. BrickStreet's surplus note balance now stands at $185 million. The company is scheduled to make its next principal payment of $40 million plus interest June 30, 2008.
"We're committed to paying off the surplus note as quickly as possible," said BrickStreet President and CEO Gregory A. Burton. "We will continue to work closely with the insurance commissioner to make that happen."
Manchin signed legislation in February 2005 to privatize West Virginia's 90-year-old workers' compensation system, one of only a handful of remaining state-run monopolies in the country. A provision of the bill provided BrickStreet with a $200 million surplus note to establish its business practices and begin building adequate reserves to pay claims for injured workers.
BrickStreet opened its doors as a private company just more than 10 months later. The market opens fully to competition July 1, 2008.