In the past I’ve written about the Michigan State Workers’ Compensation Experience Rating Modification. This is the state’s individual promulgated employer experience for every Michigan employer. Here is a couple things I have not shared with you about the experience modification. First, the experience modification was developed by a state nonprofit group called Compensation Advisory Organization of Michigan (CAOM). This agency was set up in 1944 and is funded by a service fee on insurance companies who write workers’ compensation in the State of Michigan. Each insurance company in Michigan is required to submit to CAOM payroll and loss data for each Michigan employer so that the agency can work up the individual employer’s experience modification. CAOM issues over 80,000 experience modifications every year. While MTM shows your experience modification on your policy and then also on the end of your year-end audit, if anyone requests it, we are happy to send you a copy of your individual experience mod worksheet. That worksheet shows the last experience in payroll and claims for three years of your company history.
CAOM has a Board of Governors. This Board has representatives from the State Insurance Department and leading workers’ compensation carriers in Michigan. MTM has the good fortune to be one of those lead carriers and our own Chris Doebler, who has been responsible for the financial reporting of MTM and the former MTA Workers’ Comp Fund for over 30 years and MTM’s CFO since 2013, is the representative for MTM and its members. Having Chris on the Board gives MTM members influence and insight into the Michigan Workers’ Comp Employer Rating System. On behalf of MTM and our members, thank you, Chris, for representing us.
2020 Dividend
Consistent with the last six years, the February MTM Board Meeting was filled with good news for MTM members. Last year the Board approved $4.5 million in member dividends and the dividend this year is the same. Over the last six years the member dividends have totaled $22.5M. Also like last year, there are three major dividend components.
- A dividend was declared as a loyalty dividend in which all members participate.
- A second dividend was declared for Association members that had a three year loss ratio that beats the MTM company loss ratio.
- If a member’s dividend does not meet a minimum using 1. And 2. above, a minimum dividend applies.
These three components are used to calculate the dividend and one check is issued. Interestingly of the known 932 current members, we had 926 number of dividend checks issued. Only a handful of new members with effective dates of January 1, 2020 or after, did not get a dividend check in this cycle.
The member dividend checks are to be printed by March 1 and delivery started immediately. In fact, by the time you get this newsletter we should have already started the delivery process. As I said before, delivering member dividend checks is the best part of my job and I will be on the road beginning March 2nd. In the next newsletter we’ll have some of the member dividend pictures.
One other piece of good news. At the February Board meeting the Board also approved some increased credits and reduced rates. These will automatically apply on your next MTM policy.
Now I will get back to setting my delivery routes. And I will see you soon.
