The Builders and Contractors Associations of Mississippi Self Insurance Trust (BCAM) was created in 1991 through the joint efforts of two construction trade associations, the Home Builders Association of Mississippi and the Associated Builders and Contractors of Mississippi, to provide workers’ compensation coverage. During late 80’s and early 90’s, workers’ compensation coverage had become less available and more expensive in Mississippi due to needed reforms in the benefits structure, benefits adjudication process and the operational structure of the Mississippi assigned risk plan. BCAM was granted authority by the Mississippi Workers’ Compensation Commission to provide workers’ compensation coverage beginning September 1, 1991, as a self insurance group. Over the years, the BCAM SIF annual written premium has fluctuated up and down (with a high of about $42 million) due to changing market conditions, being careful to maintain sound underwriting and pricing judgment. As of 2014, the group’s annual premium had fallen to approximately $10 million, however they maintained a strong balance sheet and a healthy Trust equity.
In 1997, BCAM hired AmFed Companies LLC as their third party administration company. AmFed Companies LLC is part of the AmFed group of companies founded by Billy Roberts in 1993 to help provide solutions to the problems of the Mississippi workers’ compensation marketplace. This group consists of AmFed National Insurance Company, AmFed Casualty Insurance Company (both Mississippi domestic insurance companies), and AmFed Companies LLC (a third party administration company). In addition to writing workers' compensation insurance, AmFed is one of the original companies appointed by the Mississippi Commissioner of Insurance as a Servicing Carrier for the Mississippi Assigned Risk Plan.
On October 1, 2008, the AmFed companies were purchased by Companion Property & Casualty Insurance Group which is a wholly owned subsidiary of Blue Cross Blue Shield of South Carolina.
In 2013, the BCAM Board hired Billy Roberts and Greg McLemore to independently review the operations of the BCAM Trust to identify potential improvements and future directional paths of opportunity. It was determined that, while BCAM had been very successful as a self insurance group, the market place had evolved and operations as a self-insurance group had several disadvantages:
• Lack of an A.M. Best rating. While BCAM was financially sound, the financial information of self insurance groups is not public
information in Mississippi and without an A.M. Best rating, it was easy for competing agents to criticize coverage placement with BCAM,
regardless of its validity.
• As a participant in a self insurance group in Mississippi, joint & several liability agreements had to be executed each year which was not the
case with a fully insured product.
Over the next year, the concept of BCAM purchasing the AmFed Companies from Companion Property & Casualty surfaced as a viable alternative and had the potential to overcome the challenges of the self-insurance market environment.
With the purchase of the AmFed Companies, BCAM would gain the ability to transfer its self insurance trust’s workers’ compensation liabilities, along with the proper corresponding assets, to the insurance company, effectively extinguishing all past participant joint & several liability. The BCAM Board requested that Mr. Roberts and Mr. McLemore resume their former employment positions with these companies and also participate as capital investors in the future operations.
AmFed Holding Company LLC was created to become the insurance holding company and purchaser of the AmFed entities from Companion. The closing date was June 30, 2014 with an effective date of July 1, 2014. Through the contributed capital of BCAM, Mr. Roberts and Mr. McLemore, the Holding Company began operations with a $28 million book value providing $25 million of statutory surplus to the insurance companies. With both BCAM and the AmFed Companies having a consistent track record of very favorable loss development and combined with the experienced management team, it was felt that a favorable A.M. Best rating could be obtained.
Upon completion of the purchase, BCAM purchased, filed and approved, retroactive coverage (effectively a loss portfolio transfer) from AmFed National Insurance Company, transferring all of the former BCAM self insurance trust liabilities in exchange for the appropriate amount of cash and reinsurance receivables to cover the liabilities. Within 2 months of the purchase date, AmFed was awarded an A.M. Best Rating of B++, which is within their “Secure” category.
AmFed currently writes the former BCAM self insured business, along with a broad spectrum of other business, on a fully insured basis. The company is now licensed in 11 states with several additional state applications pending.
AmFed acquired an A- A.M. Best Rating in 2017.