The new director of the fund providing workers’ compensation coverage to 80 percent of Idaho’s employers is predicting a slowdown in growth of the State Insurance Fund.
And, said Drew Forney, there may be an erosion of the fund’s market share.
“The fund will grow but the gains will be harder won,” Forney told legislative budget writers on Monday.
In addition to a flattening of new business expansion as the overall economy slows, Forney said, the fund’s dramatic success under former Andrus administration Director Merle Parsley has led to private insurance carriers deciding to again enter the market.
“And the competition is fierce,” he said, citing a decline in renewals during January from a year earlier.
Forney said the fund will look for increased efficiencies to offset the financial impact of intensifying competition from private insurers. In the past decade, the fund has paid back nearly $179 million to policyholders as dividends to essentially reduce annual premiums by as much as 44 percent.
Last year, the dividend was a record $28.5 million.
But Forney cautioned the Joint Finance-Appropriations Committee that if farm workers are brought under mandatory worker’s compensation coverage, his agency will be under extreme new pressures.
That would add up to 6,000 new policyholders to the nearly 20,000 the fund currently has. Forney said private insurers have indicated they would expect the fund to handle all of them.