Font size:
LANSING—Amid flags, balloons, and speeches that included laudatory remarks from Lt. Governor Dick Posthumus, the Accident Fund Company marked its fifth year of operation as a privatized firm on June 14 in Lansing. A wholly owned subsidiary of Blue Cross/Blue Shield of Michigan (BCBSM), it is the largest workers compensation insurance company in the state with a market share of about 13%.
In 1994, the Accident Fund Company purchased the assets and assumed the liabilities of a state agency, the Accident Fund of Michigan, in what was at the time the largest privatization of a public agencystate or localin U.S. history. BCBSM paid Michigan $255 million to acquire the Fund.
Speaking to an outdoor audience at the company's downtown Lansing headquarters, President James Epolito praised the staff and agents of the firm for their "dedication to making this privatization a success story." Lt. Gov. Posthumus noted that since the company went private, the employees are "full participants in the free marketplace" instead of bureaucrats working for state government.
The world's oldest and most respected insurance rating firm, A. M. Best, gives the Accident Fund Company a rating of A- (Excellent), based on its assessment of the company's financial condition and operating performance.
The Accident Fund started doing business in Michigan in 1912, with the state legislature's blessing, but also with a degree of autonomy that allowed it to operate for 80 years as a largely private institution. As a result of a ruling by then-Attorney General Frank Kelley, the state took over the Fund in 1990. The Engler administration almost immediately pushed for full privatization, an idea that was first advanced in a comprehensive study by the Mackinac Center for Public Policy.
