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MEM wins lawsuit for second time on appeal

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1997 was a big year for Missouri Employers Mutual Insurance as MEM triumphed for a second time in the lawsuit originally brought against it in fall 1995 by Landmark Legal Foundation.

The lawsuit, which argued the law that created MEM in 1993 was unconstitutional, was dismissed by the Cole County Circuit Court in 1996, according to a news release from MEM. Landmark Legal Foundation then filed an appeal.

The appellate court ruled Nov. 25, 1997, in favor of MEM, upholding the original judgment.

"Landmark's lawsuit is nothing more than sour grapes," said Dennis Smith, MEM president and chief executive officer, in the news release issued after the second court victory. "MEM is here to serve Missouri employers. We helped bring competition back into Missouri's workers' compensation market, lowering premiums and setting service standards."

Smith added that, from his company's perspective, the central issue of the case was not so much MEM's constitutionality as its success in the marketplace. Less than a year after its startup in 1995, MEM grew to be the state's largest work comp insurer.

MEM's market share was reported at 16.6 percent in November 1997. The next closest single insurer had 6.7 percent of the market.

"The lawsuit was just a ploy to stop us. A ploy the high court justices rejected once and for all," Smith said.

MEM is required by law to meet certain criteria in providing work comp coverage in the state, including giving preference to small businesses, working with all Missouri insurance agents, developing creative and innovative ways to provide coverage and developing workplace safety programs, according to the MEM release.

"We've accomplished our mandates with great financial success without costing taxpayers a single dollar," said Dale Newton, MEM's chief financial officer and vice president of finance, in the release. "We are well within the guidelines established by the Department of Insurance and have exceeded all initial projections. Our earned premium revenue is higher than initially projected, losses are lower than assumed, and operating and financial trends are positive."

Meanwhile, the final judgment on the Landmark lawsuit was not the only major event of 1997 for MEM. In August of last year, the company announced a restructuring, elevating its loss-prevention department and more clearly focusing its safety services, according to an MEM press release.

Robert C. Gibson, formerly MEM's vice president of administration, was named head of the loss-prevention department, reporting directly to President and CEO Smith.

Gibson served MEM as vice president of administration since the company's inception. He has 23 years of experience managing human resources, facilities and training, which gives him a strong background in safety and security issues.

Smith characterized the restructuring as "The next step in MEM's growth and development." After two years of steadily building its business and focusing on eliminating workplace accidents, "we're taking advantage of the oppor-tunity to heighten the (loss-prevention) department's visibility, which will result in even safer workplaces for more Missouri employers," he said in the release.

In addition to the promotion of Gibson, MEM announced Rod Smith, former vice president of claims, is now vice president of policyholder services and underwriting.

Taking Rod Smith's place as vice president of claims is Tim Jackman, formerly general claims manager, according to MEM.

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