Senator Rupp: Examining the Missouri Employers Mutual Insurance Co.

(State Sen. Scott Rupp, R-, has released his weekly column for the week of April 9. The opinions expressed in the column are those of Sen. Rupp and do not reflect the views of the Wentzville Patch. —Ed.)

Last week, the Missouri Senate gave its final approval to one of my bills (SB 856) that would establish a new interim committee to investigate the structure and purpose of the Missouri Employers Mutual Insurance Company (MEM). The company was created by the Legislature in 1993 to promote economic competition in Missouri and lower workers’ compensation premiums for employers (many small businesses couldn’t afford workers’ comp insurance). However, the function of the company has recently come into question, and the interim committee my bill establishes would study whether MEM should be sold, privatized, or have its structure modified.

The final approval of this act follows a recent audit issued by the Missouri State Auditor in February. According to the Post-Dispatch, the report “…criticized the firm for giving out huge severance checks to former executives and hefty bonuses to other employees,” among other points. Another Post-Dispatch article stated that the insurer functions like a private entity, while enjoying a federal tax-exempt status and other benefits that its private competitors don’t have.

The bottom line is that there is a lot of information we need to understand regarding the structure and operation of MEM. We need to closely examine its market value, how the company operates, and MEM’s current purpose. Many questions need to be asked and answered regarding the company, particularly following the report issued by the state auditor. It’s a complex issue, and this committee would get to the bottom of some of these concerns. The interim committee would need to report its findings to the General Assembly no later than Dec. 31, 2012. Final approval in the House and by the governor would make this committee a reality.

Thank you for reading this legislative column, and if you’d like to learn more about SB 856, please visit my Missouri Senate website at www.senate.mo.gov/rupp. As always, don’t hesitate to contact me if I can be of any assistance to you.