The MIIA story: 25 years, and counting

This year the MMA and MIIA mark the 25th anniversary of the formation of MIIA.
 
MIIA was formed in response to a real crisis. In the late 1970s and early ’80s, the private insurance industry, notoriously fickle when offering workers’ compensation insurance to cities and towns, had put Massachusetts municipalities in a difficult situation, offering limited products at extremely high premiums. An alternative was badly needed, and thus the MMA began the process to form MIIA.
 
As a 1986 article in The Municipal Forum, an early publication of the MMA, states, “From today’s perspective the idea seems so straightforward – cities and towns can cooperate to provide themselves with better insurance services at the lowest possible cost. …” As with most new ideas, however, it wasn’t easy.
 
First, special enabling legislation was required to allow an insurance “pool” to be formed. The insurance industry strongly opposed the formation of the pool, and the industry’s powerful lobby was ultimately able to block it.
 
MIIA then took a different route and organized a group of towns that would purchase insurance collectively. As the Municipal Forum reported, “This enabled the members of the group to enjoy the benefits of economies of scale and provided a mechanism for a group approach to loss control.”
 
Old Republic Insurance Company, an early leader in the “alternative markets” field of insurance, agreed to work with MIIA. The key factor in securing the Old Republic partnership was the group’s plan to implement a dynamic program aimed at loss control and reducing claims leading to lower premiums.
 
In order for the early program to get off the ground, however, Old Republic required a minimum premium of $1 million as of the program inception date, July 1, 1982. It was a tough challenge, but when July 1 arrived, MIIA had 58 group members and premiums of $1.2 million.
 
Still, there was opposition. The Professional Insurance Agents of New England tried to block the competition that MIIA presented. (MIIA markets its products directly, not through insurance agents.) The PIA filed a civil suit against MIIA and a complaint with the insurance commissioner. After working out a new set of procedures and state requirements with the commissioner, MIIA was off and running.
 
Finally in 1985, MIIA was able to pass enabling legislation allowing the formation of a true insurance pool. And on July 1, 1986, MIIA was in business on its own. Old Republic, a critical bridge to MIIA’s independence, bowed out of the workers’ compensation program.
 
In 1987 MIIA began operation of a property and casualty pool. Since that time, the Workers’ Compensation and Property and Casualty programs have grown steadily. On July 1, 1998, the two pools merged, bringing even greater financial strength to both groups.
 
New Programs
In the late 1980s and early ’90s, health insurance costs were just beginning to show the insatiable budget appetite that has today become a major fiscal issue for cities and towns. In response to this growing concern, MIIA saw another opportunity to serve local governments and, on July 1, 1992, MIIA launched its third major program, the MIIA Health Benefits Trust.
 
The trust started quietly, with just four charter members. In the 15 years since, it has grown to become one of the largest municipal health insurance pools in the country. MIIA constantly fights to hold health insurance premiums down through control of administrative costs and, consistent with the MIIA philosophy, reduced claims through a strong emphasis on wellness.
 
MIIA’s WellAware program has become a major force within the Massachusetts municipal employee community. The WellAware staff organizes and promotes a wide range of programs that promote healthier and more balanced lifestyles, including improved diet and exercise habits, and stress reduction and emotional well being. Today, the Health Benefits Trust is by far the largest of the MIIA entities and continues to leave no stone unturned in its drive to control health care costs and improve the health and well being of its subscribers.
 
Throughout the 1990s the MIIA insurance pools continued their growth and innovation. In 2002, MIIA Property and Casualty welcomed 67 new members due to the failure of a major insurance competitor. The following year, Health Trust membership grew by 25 percent.
 
Today, the three MIIA programs have a membership of nearly 400 public entities, and premiums for fiscal 2007 totaled nearly $280 million.
 
Wellness, MIIA Rewards and many other loss control programs have continued to evolve and improve. Not a day passes without MIIA making significant efforts to educate its members on wellness, health, safety and loss control. MIIA representatives travel throughout the state bringing new ideas every day.
 
In 1982 the driving motivation to form MIIA was the desire to fill a critical need and provide a necessary service. In 2007, that is still the clear and fundamental theme underlying all MIIA operations. It is also MIIA’s biggest competitive edge.
 
The MIIA story continues to build on a solid foundation of innovation and, most importantly, service to members. Governed by a board composed of local officials, MIIA provides quality insurance products at the most competitive price possible. That’s the mission that has sustained MIIA for 25 years and will continue to be the driving force as MIIA steps into the next 25 years.
 
Stan Corcoran (ext. 244) is Executive Vice President of MIIA.