Beacon Mutual to repay $7M to policyholders in April

WARWICK – The Beacon Mutual Insurance Co. will repay about $7 million to eligible policyholders next month, based on criteria developed by the R.I. Department of Business Regulation.
The distribution – required by a consent order Beacon entered into with the DBR on July 27, after the agency released the results of its Market Conduct Exam (READ MORE) – will compensate certain customers the DBR considers to have been overcharged. The payments will go to about 10,000 businesses that had policies with Beacon for at least six months, starting between October 2005 and September 2006.
“For the past several months, we have worked diligently to ensure that the calculation of the distribution formula is in accordance with the criteria developed by the DBR,” James V. Rosati, Beacon’s president and CEO, said in a statement late yesterday. “Distribution checks – and letters to our policyholders explaining the process – will be issued by April 30th.”
The insurer originally was supposed to complete the distribution by the end of March. But earlier this year, Beacon told the DBR it could not calculate the amount due certain customers until it had data from the validation of shared earnings plans as of March 31, and the DBR agreed to give the insurer another month.
“I want all of our policyholders to know there will not be a rate increase related to the issuance of the distribution,” Rosati said.
Beacon Mutual, the state’s largest workers’ compensation and commercial property insurer, “remains a financially strong and stable company,” he added. “Our primary goal is to provide value to our policyholders through competitive pricing and unmatched loss prevention and claims service.”
The Beacon Mutual Insurance Co. – established by legislation enacted in 1990 by the R.I. General Assembly, as the State Compensation Insurance Fund – is the largest writer of worker’s compensation insurance and commercial property casualty insurance in Rhode Island. Additional information is available at www.beaconmutual.com.