Privatization Update Fact Sheet
BrickStreet Mutual Insurance Company is a private, West Virginia-based
company offering workers’ compensation insurance to West Virginia
A bill signed into law by Gov. Joe Manchin in February 2005 moved the
workers’ compensation management from a state-run system into the private
market. BrickStreet, which officially began operation January 1, 2006, is
owned by West Virginia’s 36,000 businesses.
BrickStreet was designated in legislation to be the state’s exclusive provider of
legally required workers’ compensation insurance for a two and a half year
period. On July 1, 2008, the workers’ compensation market opens to other
This dramatic change to a 92-year-old system was made because the former
system had accumulated unfunded liabilities of more than $3.1 billion. In
2005, West Virginia was one of only five states with a monopolistic state fund.
As part of the transition, the state of West Virginia loaned BrickStreet $200
million, in the form of a Surplus Note, to begin operations. BrickStreet has
made an initial payment to the West Virginia Offices of the Insurance
Commissioner of $15 million toward settlement of the note.
A second payment of $40 million will be paid on July 1, 2008.
Once the Surplus Note is paid in full, if BrickStreet makes a profit, it can pay
dividends to policyholders. However, until the Surplus Note is paid off,
BrickStreet is prohibited by the terms of the note from paying dividends to
The Surplus Note is scheduled to be paid in full in 10 years. But if BrickStreet
has sufficient reserves and makes a profit, with permission from the West
Virginia Insurance Commissioner, the debt can be paid off early.
The interest rate on the Surplus Note increases from its current 1.5 percent to
prime effective January 1, 2009.
BrickStreet 360/Streamlined Team Approach
BrickStreet has introduced a new organizational structure that allows for
enhanced customer service. The structure features eight multi-functional
business teams organized by industry and premiums, including coal,
government, small, large and standard accounts.
This team approach is called BrickStreet 360 and it’s our guarantee to give our
customers an on-site team of adjusters, underwriters, return-to-work
specialists, investigators and risk management professionals, supported by
doctors, nurses and legal advisors. This comprehensive team ensures
expedited, accurate service.
All touch points with the policyholder – underwriting, claims, medical case
management, loss control and premium audit – are brought together under
one director and the claims are processed right here in West Virginia.
Since privatizing the West Virginia workers’ compensation system, BrickStreet
policyholders have experienced an average 27.5 percent decrease in their
workers’ compensation rates.
In the aggregate, between 2006 and 2007, workers’ compensation rates
across the nation experienced a 9.6 percent decrease. For this same time
period, rates in West Virginia decreased by 27.5 percent.
According to a 2006 study conducted by the state of Oregon, privatization has
brought West Virginia’s workers’ compensation rates in line with those across
In 2003, 52,000 workers’ compensation claims were filed. Through November
2007, BrickStreet received 37,880 claims.
The average time between receiving a claim and ruling on that claim has been
reduced to five business days.
Many of BrickStreet’s claims are ruled on within 30 days of receipt, versus 60
to 90 days under the former system.
For 2006 and 2007, BrickStreet’s Special Investigations Unit documented an
estimated $6 million in direct savings to policyholders from actions taken as a
result of their investigations.
To date, BrickStreet’s Special Investigations Unit has referred 141 cases to
the Offices of the West Virginia Insurance Commissioner for possible civil
and/or criminal action.
The Special Investigations Unit received an average of 42 referrals per month
The Safety & Loss Control
BrickStreet operates Safety Source, an online tool available to many
policyholders that provides access to safety audits and check lists, programs
policies and procedures, safety presentations and a resource library.
Since March 20, 2007 more than 340 policyholders registered with Safety
Source and the site cataloged more than 9,000 hits.
New Corporate Headquarters
In October 2007, BrickStreet completed the company’s move to its new
headquarters in downtown Charleston, W.Va.
The new building consolidates operations from three separate leased office
locations into one centralized office, allowing better efficiency and promoting
the 360 Team environment.
Consolidating to a new corporate headquarters will result in significant savings
BrickStreet has regional offices in Wheeling and Martinsburg.