CAPE WOMAN SERVES ON STATE BOARD

The five-member board of directors for the new Missouri Employers Mutual Insurance Co., which intends to provide state-backed workers' compensation insurance to those unable to purchase it at a reasonable rate elsewhere, has begun its search for a chief executive officer.

"We hope to have a chief executive officer soon," said Diane Bauman, secretary of the company created by last year's workers' compensation reform law. "Once we have a CEO in place, the process should start moving quickly."

Bauman, who is human resources administrator at Dana Corp. in Cape Girardeau, was elected secretary of the board during an organizational meeting held recently in St. Louis.

The board has a deadline of March 1, 1995, for having the company up and running.

Bauman was one of five board members named by Missouri Gov. Mel Carnahan this year.

Chris Wrigley of Associated Industries of Missouri, who helped draft last year's workers' compensation legislation, is the most recent addition to the board. Carnahan announced Wrigley's appointment Monday.

Others previously named were Bob L. McDonald, chief executive officer and board chairman at Third National Bank of Sedalia; Andrew R. Gingrich of Columbia, president of Missouri Book Store Textbook Exchange Inc., and a certified public accountant; and Albert Reiderer of Kansas City, former Jackson County prosecutor.

All five appointees must be confirmed by the Missouri Senate. Terms for the board members will be from one to five years, and a drawing will determine the length of terms for each member.

Bauman, who was confirmed by the Senate in January, is serving a three-year term.

"We drew lots," she said, adding that the company's policy holders eventually will select new board members for five-year terms, or reappoint the existing members.

Bauman's appointment in the Senate was sponsored by Sen. Peter Kinder, R-Cape Girardeau.

Bauman said she is looking forward to the challenge of organizing the new company.

"We're building it from the ground up," she said. "There's a lot of work to do but I think it will be exciting."

Before beginning her position at Dana, Bauman worked for Mercantile Bank of Cape Girardeau. She is a member of the board of directors of the Southeast Missouri Business Group on Health, the Cape Girardeau Chamber of Commerce, the Vision 2000 community relations committee, the Cape Area Personnel Association and the board of directors of the American Cancer Society.

Reiderer was named chairman of the board during the organizational meeting, and Gingrich was selected treasurer.

Missouri will rely on the board to form an insurance company that will compete in the Missouri workers' compensation industry, Carnahan said after making the appointments.

Under the 1993 workers' compensation law, the company will be able to borrow from the state up to $5 million in seed money, which will have to be repaid with interest.

"I see it as being a very strong competitor to the traditional insurance carrier market," said Wrigley. "The businesses would stand a better chance of getting competitive rates from the mutual than from private carriers."

In other states with a similar operation, the rates are more competitive, Wrigley said.

Jo Frappier, Missouri Chamber of Commerce president, expressed doubts about whether the new company will help improve the workers' compensation system. But he said it will be worth trying.

"We need to try everything we can," Frappier said. "We consistently believe there is a problem with the system and I don't know if starting up another insurance company is going to solve problems.

"The problem lies in the system, the encouragement of litigation and the lack of cost containment, and none of these problems will go away because you create another insurance company," he said.

Carnahan and legislative leaders have said they don't want any changes made this year in the 1993 law and that last year's overhaul should be given a chance to work.

Changes in the workers' compensation law were designed to reduce employers' costs of maintaining their insurance and give them better coverage for their money.

The law also is intended to speed up the processing of injured workers' claims and make sure there are adequate safety programs offered by insurance companies for employers.

Under the law, employers this year began shopping around for the best premium rather than, as in past years, having to pay a rate set by the state.

The annual cost of operating the Missouri workers' compensation system has gone from $200 million to $800 million over the past decade. The entire amount is paid by employers.

Any Missouri employer with more than five workers must provide workers' compensation insurance, except in the construction industry, where one employee is enough to require coverage. Farm workers aren't required to be covered.

(Some information for this story was provided by The Associated Press.)