A Conversation With ... Dennis Smith

MEM is a state-created entity. It was created out of the 1993 workers’ compensation reform act, Senate Bill 251. Among other things in that bill, MEM was created ... in order to alleviate the workers’ comp crisis in the last decade. We have our home office in Columbia (and) satellite operational offices in St. Louis, Kansas City and Springfield. Springfield was opened early in our existence, in 1997. In all the offices, we run about 250 employees.

So is MEM a private company?

It definitely is a statutorily created company; however, the language in the statute says that it will operate as a private mutual insurance company that is owned by the policyholders. Our employees are not in the state retirement system or medical system. After we paid off the original $5 million loan … we no longer have any ties to the state. There is a provision in federal law that allows a state-created entity such as MEM – and there are about 26 states that have (something similar), either a company that insures everyone who cannot get insurance, or they make reasonable provisions to write all policies that come to them – not to pay federal income tax.

Let’s talk about your ties to Springfield and what you did before joining MEM.

Springfield is very special to me, first, because all three of my children were born in Springfield and went through high school, and junior high and elementary school there. My wife was a teacher at Central High School and Kickapoo for almost 25 years. I moved there in 1970. I was originally with Grant Davis Agency, then I purchased the agency from Mr. Davis and it was called Dennis Smith & Associates. Also, I represented Springfield in the state legislature for 16 years – four years as a state representative and 12 years as a state senator. When the session ended at 6 p.m. on May 16, 1994, I handed in my resignation and assumed the presidency of MEM.

How did your knowledge of the insurance industry help you at the state level?

I didn’t realize it at the time, but I had somewhat of a unique qualification for this, since I had been in the insurance business for a number of years and understood workers’ comp. I had been a part of all the reform measures in workers’ comp going back to 1979, and then I certainly had a very deep knowledge of the insurance agency system in the state – our main marketing effort that we use. And certainly it didn’t hurt to have the political connections and the knowledge of the regulatory system in the state of Missouri. All of those things sort of played together to facilitate the development of MEM.

What are some key challenges employers face in the workers’ comp realm?

We no longer have the luxury of just hiring people and not training them … . Worker injuries are a significant cost to an employer. Obviously, there’s the insurance costs – and the more injuries, the higher the insurance costs – but we’ve determined that insurance is only about one-third of the total cost. The indirect costs can be as much as two-thirds of the total costs – hiring a new person, training a new person, all of the things that you’ve got to do to set up a new person to take the place of the injured worker.

How does MEM help employers keep workers’ comp costs down?

One of our premier programs … is WorkSafe. That’s a coined word that is ours. It not only embodies helping our employers develop workplace safety programs, but it also embodies a lot of other components … seminars, training, on-site visits. We have another program that really comes under the umbrella of WorkSafe. It’s called Dimensions (and it’s) is our comprehensive approach to developing a workplace safety program. If an injury occurs, it directs the injured worker to a qualified and knowledgeable medical person or facility that can accurately take care of their problems.

What is the No. 1 thing employers can do to keep workers’ comp costs down and prevent accidents?

Be aware of the conditions and the attitudes in the workplace. It’s as simple as that. They have to be on-site, they have to be engaged. They have to be knowledgeable of how their people work and the attitudes they employ in their work.

Tell us more about your family.

My wife, Carolyn, taught at Hickman (in Columbia), but she’s retired now. My oldest son, Nathan, is in computer software sales up in New Jersey, with his wife and three children. My daughter, Natalie, works for Marsh, a large insurance brokerage company in New York City. David has his wife and a daughter in Columbia ... and he is the government affairs director for Blue Cross Blue Shield of St. Louis.

Interview by Features Editor Maria Hoover. You can e-mail her with suggestions for future installments of this feature at mhoover@sbj.net.[[In-content Ad]]