BrickStreet is poised to make a scheduled $40 million loan payment to the state of West Virginia on July 1, just as the workers' compensation insurance market opens to competition.

In addition, BrickStreet has asked the Insurance Commissioner for approval to pay an extra $50 million to $60 million toward BrickStreet's debt to the state by the end of the year. To create the new private company in 2006, the state loaned BrickStreet $200 million in the form of a surplus note.

The current balance is $185 million. If BrickStreet's proposal is accepted, the company will be able to reduce the balance by more than 50 percent.

President and CEO Greg Burton said that while BrickStreet must make sure the company's decisions are based on sound actuarial practices, paying off the surplus note early is beneficial to everyone. Once the note is completely paid off, as a mutual insurance company, BrickStreet may be able to return a portion of the profits to policyholders in the form of dividends. And early payoff of the note can help eliminate the Old Fund liabilities of the state faster, which improves the state’s overall business climate.

According to Burton, the current interest rate on the 10-year note is 1.5 percent. The terms of the note call for the interest rate to increase to the prime rate on January 1, 2009. The proposed extra payment would be made closer to the time the interest rate increase is scheduled.