West Virginia Record

Sunday, January 19, 2020

Petition would force BrickStreet to act as state agency

By Steve Korris | Aug 29, 2007

CHARLESTON – Workers' compensation insurer BrickStreet Mutual faces a competitive future but can't shake off the baggage of a state agency.

A mandamus petition before the West Virginia Supreme Court of Appeals would force BrickStreet to act as a state agency in deciding an old claim.

BrickStreet directors don't object to deciding the claim, but they object to doing it under a writ of mandamus.

Attorney Thomas Obrokta Jr. of Charleston wrote to the Justices that BrickStreet "is a private entity not subject to writs of mandamus."

Petitioner David Cowan seeks a decision on a total life disability claim. He wants to enforce a 1999 order of the workers compensation commissioner and a 2000 order of the Office of Judges.

The petition reaches the Justices as insurance commissioner Jane Cline recruits insurers to compete against BrickStreet starting next July 1.

Cline plans a forum Wednesday, Sept. 5, at the Town Center Marriott to help insurers get ready to start writing West Virginia policies.

Gov. Joe Manchin and West Virginia legislators shut down the 93-year-old Workers Compensation Commission in 2005.

They authorized creation of a private company that would write all policies in West Virginia for two and a half years.

They wrote that the company "shall not be considered a department, unit, agency or instrumentality of the state for any purpose."

The state retained liability for injuries before June 30, 2005. To cover those claims legislators put $650 million into an account they called the old fund.

They transferred $200 million to the new insurer, "to satisfy and provide for the liabilities that the company is assuming."

They loaned the insurer $200 million, as an initial surplus. The new insurer's directors named it BrickStreet. It opened Jan. 1, 2006.

In addition to running the new fund, BrickStreet administers the old fund under contract with Cline.

In Cowan's petition, attorney Jerome McFadden of Princeton named Cline as first respondent and BrickStreet second.

Cowan did not serve the petition on BrickStreet, but BrickStreet responded.

Obrokta wrote that the 2005 law "made it abundantly clear that BrickStreet is not a governmental agency or body but rather is a private entity."

He wrote that the state would bid out administration of the old fund and would likely transfer it to a party other than BrickStreet.

He wrote that Cambridge Integrated Services administered Cowan's claim as a subcontractor.

"Certainly if the elements necessary for a writ of mandamus to issue were met by the petitioner, this Court could simply order the Office of Insurance Commissioner to direct BrickStreet to act as directed by this Court," Obrokta wrote.

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West Virginia Supreme Court of Appeals