DANA OFFICIAL NAMED TO NEW INSURANCE BOARD

The human resources coordinator for Dana Corp. of Cape Girardeau has been named by Gov. Mel Carnahan as one of five directors of the newly-formed Missouri Employers Mutual Insurance Co.

Carnahan appointed Diane Bauman of Cape Girardeau to the post last month and recently she was confirmed by the Missouri Senate.

The company was created last year by Senate Bill 251, a workers' compensation reform bill. The bill mandated the Department of Insurance to submit a plan to the legislature to reduce the number of employers insured through the residual market, also known as the assigned risk pool. The mutual insurance company is a key part of that plan.

"This company offers an alternative to the assigned risk pool," said Bauman. "We've got about 41 percent of Missouri employers in that pool now, and it is not designed to do that. It is totally out of line."

Bauman explained that the current assigned risk pool is designed to function as markets of last resort to cover those risks the private insurance industry cannot cover. But with so many companies winding up in the pool, it is no longer functioning the way it should, she said. Many companies have been dumped in the pool and do not belong there, and as a result they are paying higher premiums than they should be paying, she said.

Bauman said employers in the pool now account for 32.2 percent of all workers' compensation premiums paid in Missouri. The formation of the Missouri Employers Mutual Insurance Co. is an attempt to depopulate the risk pool.

Under SB-251, the establishment of a competitive market is mandated, allowing insurers the flexibility to adjust their rates without the approval of the insurance department. It also mandates the development of the residual market depopulation plan to accelerate the return of employers to the voluntary market, where insurers will have the financial incentive to work with employers to control losses.

The first board was appointed by the governor, but in the future members of the board will be elected by the company's policyholders. "This will be a totally separate entity of the state and will be governed by the insurance commission like all other insurance companies," said Bauman.

Terms for the five board members will be from one to five years, and a drawing will determine who gets what length term.

The board held a meeting this week in St. Louis to begin its organizational process. They have a deadline of March 1, 1995, for having the company up and running.

Originally, the board had hoped to have its chief executive officer hired by March 1, but Bauman said that will likely take a little longer. Once the CEO is hired the process should begin moving quickly.

Bauman said the company will be looking for employers paying premiums of less than $10,000 annually in an effort to help small businesses get out of the pool.

The company also will be promoting safety programs for companies it insures and require that they follow certain safety procedures.

"There has to be an emphasis on safety; that's where it starts in reducing claims and premiums," said Bauman.

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

Said Kinder: "She has a varied background in personnel and is highly respected in the community through her civic and professional activities. I was pleased to support her nomination and know she will do a great job for the state of Missouri."

Bauman said she is looking forward to the challenge of organizing the new company. "We're building it from the ground up; there's a lot of work to do but I think it will be exciting," said Bauman.

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.

Bauman has two daughters, Kimberly and Kyla.