Mo. auditor to review state-created insurer
Friday, August 12, 2011
ST. LOUIS (AP) — A state-created company intended to help small businesses get workers’ compensation insurance has agreed to allow a review by the Missouri auditor’s office.
The St. Louis Post Dispatch reported Friday (http://bit.ly/pzomER) that Missouri Employers Mutual Insurance Co. agreed to the review after the auditor’s office threatened to file a public records lawsuit. The insurer is a quasi-public company that was founded by the state in 1993 to help businesses get workers’ compensation insurance at reasonable rates.
Missouri Employers Mutual also agreed to release records such as board minutes for the last two years and a list of its 10 highest-paid employees.
According to the agreement, the state auditor is allowed to conduct a “one-time” review as a compromise until the Legislature or courts clarify the insurer’s legal status and the authority of the auditor to review it.
Previously, the Post-Dispatch has raised questions about spending for executive and board salaries, bonuses and retreats at Missouri Employers Mutual and about the authority of the governor to appoint the majority of its board members.
The insurance company also attracted attention after a former board member was indicted for allegations of embezzlement at a university. In addition, another board member who was serving as the chairman at the time was indicted because of allegations that he defrauded a bank, involving a casino deal. He has pleaded not guilty.
Later, the insurance company’s chief executive — former Gov. Roger Wilson — was placed on administrative leave and then fired without explanation.
The review by the auditor’s office will be the first time it has audited the insurance company’s records. In the past, the insurance company has filed annual report with the state insurance agency that includes information about its finances, premium rates and executive compensation.
Jim Owen, who is serving as the insurance company’s chairman and its interim chief executive, said the state audit is a voluntary effort to demonstrate the transparency of the insurer.
“MEM welcomes this unfettered access and review of our operations and is confident that the results will satisfy our policyholders and demonstrate that MEM is a company that operates with integrity,” Owen said.
Auditor Tom Schweich said an audit would determine whether Missouri Employers Mutual has been financially responsible faster than litigation could.
“It’s my job to ensure that there’s no fraud, waste or corruption among the state’s public bodies,” Schweich said. “There’s been a dispute whether MEM is a public entity, and a lot of allegations have been raised.”
Information from: St. Louis Post-Dispatch, http://www.stltoday.com