LCTA Workers’ Comp recently announced its successful conversion from a self-insurers’ fund (SIF) to a casualty insurance company.
LCTA executive vice president Troy Prevot explained that although the process has been involved, the company has assumed all of the previous SIF policies and is ready to take on the new challenges and opportunities. “We got our consent on December 30th, so effective January 1st, 2016 we became LCTA Casualty Insurance Company. The whole process took about a year, but we officially engaged with the Department in the Summer of 2015.”
“After 25 years as the state’s largest SIF, we felt that converting to a casualty insurance company was part of a natural evolution for us in the workers’ comp industry,” Melissa Campesi, LCTA CEO and chairman, said. “The steps we took were to ensure the future of LCTA and to provide an even better product for our policyholders.”
During the conversion process, LCTA worked closely with the Department of Insurance to ensure their conversion went smoothly.
“We appreciate how supportive the Department of Insurance was with our conversion,” Prevot said. “This also gives us the ability to write other types of businesses like municipalities and school systems, and opens up the opportunity to move into other states, which we expect to happen very soon.”
As for the impetus behind the switch, Prevot cites market conditions and security. “The primary reason was the way rates have changed lately,” he explained. “The advantage of being a Fund – especially a heterogenous Fund where you just can’t provide the level of industry-specific services – has been eroded by the pricing environment, so conversion seemed like a good idea. It needed to happen. Also, protection of the policyholder is an important aspect of this step, and now we have the security of being backed up by LIGA.”
LCTA will continue to exclusively write workers’ comp insurance at this point, and notes that it will also continue to pay dividends to policyholders.