CHARLESTON - One hundred and ten insurance companies will compete for workers' compensation premiums of West Virginia employers starting July 1, according to state insurance commissioner Jane Cline.

She said 21 of them didn't previously sell any kind of insurance in West Virginia.

A single company, BrickStreet Mutual, currently provides workers' compensation coverage throughout West Virginia.

In 2006, BrickStreet replaced the West Virginia Workers Compensation Commission, a state agency that had covered employers since the adoption of workers compensation law.

The Legislature authorized creation of BrickStreet and granted it a monopoly for two and a half years.

Throughout the transition, Cline has walked a fine line between getting BrickStreet off to a good start and urging others to compete against it.

Now the monopoly approaches its end, and the eager response of insurers reflects a smooth transition.

"We are very optimistic that in July our employer community will begin to have the opportunity to have a competitive marketplace available to them," Cline said.

"We believe that competition will drive companies to superior service to employers and their employees that need their benefits because they have been hurt on the job," she said.

Overall rates have dropped 30 percent in the transition, she said. "That's a huge benefit for employers," she said.

Rates for some employers increased, she said, because for a long time other employers had subsidized them.

"Home builders saw significant increases," she said, "but their rates are still lower than rates in four of five nearby states."

She said rates increased in the oil and gas industry, too.

To get rid of subsidies and achieve lower rates, Cline and consultants expanded the number of job classifications from 94 to more than 500.

"In the old system," she said, "some people were in the same classification with no similarity in risk."

On the free market, she said, employers may face steep premiums or rejection.

"We continue to explain that if you can't pay the premium, no one will write you a policy," she said. "You will wind up in the residual market."

She said employers can apply for the residual market if two insurers reject them.

She said some will wind up in the residual market because no one wants to take a risk on their line of business.

She said the residual market will also take businesses with a history of costly claims, those without safety programs and some new businesses.

She said BrickStreet will act as insurer of last resort until Jan. 1.

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