By Chris Demeter, Senior Loss Control Consultant

Have you ever experienced an eye injury at work or maybe at home while using that new weed whacker? The National Institute for Occupational Safety and Health (NIOSH) reports that every day about 2,000 U.S. workers sustain job-related eye injuries that require medical treatment. Using the right eye protection can lessen the severity or even prevent many of these eye injuries.

Chemicals or foreign objects in the eye and cuts or scrapes on the cornea are common eye injuries that occur at work and even at home. Other common eye injuries come from splashes with grease and oil, burns from steam, ultraviolet or infrared radiation exposure, and flying wood or metal chips.

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By Glenda Moyle, Premium Accounting Manager

Recently I have been contacted regarding our payroll auditors. I am pleased to say that like the stability of the rest of MTMIC services, our auditors have been the same for over 20 years. Our auditors are from The Aprise Group. We recently have been notified by some of our members that there is a company called “CCS” that has been contacting our members concerning WC payroll audits. This company is NOT related to MTMIC or The Aprise Group. Of course, please call me with any questions.

By Megan Brown, Vice President of Sales & Marketing

Effective July 1st, all MTMIC customers will have the ability to submit the required Form 100 through the customer portal. Once all of the fields are completed and the submit button is clicked, the Claims Department receives an email notification that a claim has been submitted. Medical documentation, notes and bills will still need to be submitted as they are currently (via fax, email or mail). We anticipate that MTMIC will have the functionality in place to accept all associated claim paperwork through the portal by the beginning of Fall. If you are interested in submitting the Form 100 through the Portal or have questions, contact Patty Allen at patricia.allen@mtmic.com/blog or (248) 488-1172, ext 1010.

Independent Rating Organizations Looking at Insurance Companies

In the insurance industry there are four well known outside independent rating organizations. These four organizations are: A.M. Best, Demotech, Standard and Poor’s, and Fitch. A.M. Best has been around over 100 years, Demotech 30 years, and Standard and Poor’s and Fitch are commonly known for rating bonds rather than insurance companies. A.M. Best is known mostly for its rating of large, national-type companies while Demotech is known as a technical actuarial-driven rating model with a focus on mid-size and small insurance companies.

Independent rating organizations exist because insurance buyers want assurance from an outside agency that their insurance company has the financial wherewithal to pay claims that might take years to payout. After all, members pay premium with the promise that their insurance company will pay for losses in the future. If the insurance company does not keep the financial reserves it needs, then its ability to pay future claims could be hampered.

MTMIC is rated by Demotech. Each quarter we send them our financial information for their review. Each year, MTMIC Management meets in person with the Demotech analysts for a presentation and Q&A. This meeting was 1 held in early June and Management updated the Demotech analysts on current claims status, workload, loss control focus, and other operational areas.

When Demotech first rated MTMIC, based on our financial condition and claims practices, we received an A rating with the description of “exceptional”. About a week after our June meeting with Demotech, we received a notice that our financial rating was being raised from A, exceptional to A’, unsurpassed. Here is their notice:

“Thank you for the supplemental information provided. This was beneficial in our review and evaluation. Based on our review of the company’s current and recent financial performance, as well as the supplemental information provided, Demotech has assigned a 2016 preliminary financial stability rating of A Prime, unsurpassed. The company has made significant progress leading to the consideration for this rating upgrade. Please note that A Prime, unsurpassed, rating carries a higher standard of financial performance including, but not limited to, consistently reporting positive underwriting and operating results, surplus growth, favorable loss reserve development, liquidity, leverage, RBC, and other financial measures on a future quarterly and annual financial statements.”

This is great news for MTMIC and its members. It shows that the company that you own is in excellent financial condition and that Management has handled their fiduciary responsibilities well. Also know that this upgrade came at a time where dividends of $6 million were paid to members. It is always harder to pay members a dividend and at the same time make sure that the finances of the company provide the stability and growth that is necessary for a financial upgrade. My congratulations to the Management team and the Board of Directors for their strong stewardship that made this financial upgrade possible.

For anyone that would like additional information about this, please do not hesitate to call me. A few of our member companies are involved in the independent rating agency pretty deeply because the jobs they get for on-site work sometimes requires them to show their insurance company independent rating organization detail. We’re happy to help through that process if the need arises.

Until next month, we will celebrate the great news, but also know that this rating was a grade in time and that continued focus is required to keep this new rating. More updates on this and our members dividend program as the year progresses.

Janine Davis and Brianna Egbert will be two of our featured speakers at the October 19th Annual Meeting and will discuss ‘The Benefits of Nurse Case Management in the Workplace: From the Form 100 to a Full Medical Release.’

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By Travis Halsted, Loss Control Consultant

A vast majority of facilities that I visit each year have a welding operation present. Whether it be a large welding area with a plethora of welding cells or a smaller one table welding work station, there are a great deal of potential hazards present whenever welding operations are being completed. This is evident by the $119,803 MTMIC has spent on claims since 2009 that were traced back to welding operations. Of the 82 injuries reported, the injuries range from burns, strains, foreign bodies, inflammation, lacerations, and punctures. As there are a great deal of factors that go into these injuries, one particular item can often be found to be a root cause. In many cases, the lack of proper personal protective equipment was found to play a large role.

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How Does Your Loss Experience Compare?

I am often asked this question by our shop owners, plant manager, or CFO. Some of the shop owners/managers have an inkling of whether they’re better than average, average, or have loss challenges. However, their specific knowledge of other shops is usually vague at best.

I often start my response to this type of question with information on how general insurance industry and MTMIC losses overall are trending. I then move to individual company experience modifications as a specific company indicator. I state, IN GENERAL, an experience mod above 1.00 says your experience is worse than average. IN GENERAL, an experience modification below 1.00 tells me that your experience is better than average. I say IN GENERAL because an experience modification that is above 1.00 because of one loss is different in my mind than an experience mod above 1.00 caused by multiple losses year after year.

An experience mod of 1.00 is meant to be the guidepost of what losses are expected to be given a company’s payroll and classification. So, losses above that expected amount will cause a mod above 1.00 and if your losses are better than what was expected, then the experience mod will be below 1.00. For comparisons purposes, experience modifications we have at MTMIC range from a low of .57 to a high of $3.09. That is, a firm with a $2 rate and an experience mod of .57, their effective workers compensation rate is 1.14. For the shop with an experience modification of $3.09 is, their effective workers compensation rate is $6.18. A significant difference for these shop’s overhead costs.

Sometimes global numbers are helpful, so we took a looked at the track of the experience mods in 2016 compared to 2015. In 2016, 51% of experience mods have decreased. That is, the customer’s loss experience is improving. 26% of 2016 experience modifications are the same and 23% have increased (i.e. member experience has deteriorated).

As you know, we have three field loss control representatives. They are assigned about 270 accounts each. That allows them to spend significant time helping MTMIC members get the best loss control results. I, again, am volunteering them to help you any way we can to reduce your loss frequency. A reduced loss frequency is good for your employees, good for your shop and its costs of workers comp, and also good for MTMIC.

Call me anytime I can help you.

The last two months the staff has been working hard to get the MTMIC member dividends calculated and distributed. We are now nearing the end of that process for this year and as usual, it was great fun delivering checks to our member-owners. A few more pictures of the member delivery process are in this Newsletter. While the member dividend is clearly one of the most important benefits of being an MTMIC member, there are several others. Two of the most important are small case load for focused claims handling and hands on Loss Control Services. Both of those functions are helpful in achieving company results that allow for reduced premium and member dividends.

Today let me tell you about the MTMIC Loss Control services. Many of you probably know much about MTMIC Loss Control because you have a close relationship with your Loss Control Consultant. However, some operating details may be helpful. Consistent staffing and messaging give more predictable insurance results. Regarding staffing, the average MTMIC staff member has been with the company for 18 years. In 2016 we have had NO employee turnover. In 2015 there was NO employee turnover; the same in 2014. In 2013 we had a new hire and it was me. Gary Wood retired and I was hired by the Board of Directors in August, 2013. I remain the shortest tenured employee of the MTMIC staff. I should note that the MTMIC staff remind me of this on a regular basis.

The MTMIC Loss Control staff includes three veteran technicians with varying backgrounds and experience. One is the daughter of a physician, who grew up with a medical and mechanical emphasis, and two come actually from insured members shops overseeing shop safety. They have worked and know shop operations very well. The second strength of our Loss Control department is the focus that the Board of Directors give to this function. After all, if we want to pay member dividends, controlling losses is an integral part of making that happen. In a standard Michigan insurance company, it would be normal for one Loss Control representative to have in the vicinity of 3,000 members to take care of. The MTMIC approach is significantly different. We have one field Loss Control Consultant for every 270 members. Or said another way, each MTMIC Loss Control Consultant could visit all of their assigned accounts by visiting one a day. At the beginning of every year we review loss trends for MTMIC, individual accounts and then determine how many visits we think would be helpful for each member.

Another difference with the large insurance company approach, is that loss control is most often done by webinars, mass mailings, and newsletters. We think that our small, mid-sized shops need more than that. They need someone who will give them the onsite advice and be a sounding board and resource for issues at their shop. Those issues could be the recent accident, employee concern or MISOHA issues. The MTMIC Loss Control Consultant does not think of themselves as an outside advisor but rather an important component to our members shop operation. Just as you do, our/your Loss Control Consultant take their individual shop member responsibilities very seriously. Before closing, any time you see an MTMIC Loss Control Consultant please know that they are three of the states finest. The Loss Control Manager is Ruth Kiefer, and our two Loss Control Consultants are Chris Demeter and Travis Halsted. Until next time, have a safe and productive spring.

More 2016 Dividend Recipients

By Donna Motley, Vice President of Claims

The basic premise of Workers’ Compensation is simple – if an employee sustains an injury at work, medical treatment and when applicable, wage loss benefits, are paid. In exchange for that benefit, the injured worker gives up the right to “sue” the employer. Following are some facts you may not know:

Michigan is a “no fault” state. Translated, that means it does not matter whether or not an employee followed proper procedures, took a short cut or made an unwise decision – they would still be entitled to Workers’ Compensation benefits. However, if an employee had been trained and did not follow proper procedures, or took it upon themselves to take a short cut and an injury resulted, disciplinary action should be taken by the employer. If the same employee is repeatedly injured in the same manner, even after being disciplined for the initial act, we would have a basis on which to deny the claim.

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By Ruth Kiefer, MSc, ARM Loss Control Manager

As the economy is slowly rebounding and we are adding newer equipment to our production floors, you must ensure that you are taking a closer look at the machine guarding prior to the production phase. During my recent MIOSHA Level 1 Training class, I learned a very important point with regards to guarding equipment; if you have two pieces of equipment that perform the same job, the old one must be guarded equal to or better than the new piece of equipment. If it is not, then the violation for machine guarding becomes a SERIOUS and WILLFUL offense.

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On March 7th the Finance Department at MTMIC printed up 604 member checks. The checks totaled $3.5 million. This was the amount that was declared at the February board meeting to be refunded to MTMIC members. Similar to last year, the member’s dividend is made up of two parts. The first part applies to all members that have a current policy with MTMIC, and also was covered with the company as of December 31, 2014. A second dividend was also included in the check calculation. This amount was $2.1 million, and is paid to members with an outstanding claim history. The claim history of members reviewed were from January 1, 2011 through December 31, 2013. With this dividend declaration of $3.5 million, the MTMIC board of directors has returned $6 million in the last two years to MTMIC members. This amount reflects 1outstanding loss control, claims handling, and risk selection of MTMIC members.

Attached to this article are pictures of some of my visits. As I have mentioned before, the best part of my job is showing up at MTMIC members and giving you a check. Between myself and staff, we have now delivered 75% of all of the member checks. We have another week or a week and a half of delivery in front of us. As president of the company, I want to thank the members, the staff, and the board of directors for managing the results of the company to allow this to happen. Nothing reinforces that we are a small member owned, member directed company, than returning profits to our member owners. As I said last year, let’s do this again. I will say the same thing now; let’s do this again next year.

In that vain, while we are very early in the year I can tell you that the January/February results show a continuation of the prior two year results. We still have a 10 months to go – lots can and will happen during this time period; however, we started the year strong and will continue to remain focused to do all we can to make sure this member benefit continues.Thank you again for your support and all the great visits that I/we have had with our members over the last two weeks. We will be doing more of these over the next week or two.

New Day of the Week:
October 19th (Wednesday)

11:00 am – 2:00 pm

Same Location:
The Inn at St. Johns,
Plymouth, MI

Watch for more information to follow.

We are pleased to announce that one of our featured speakers at our upcoming Annual Meeting in October will be:Joseph L. Petrelli, ACAS, MAAA, FCA , President of Demotech, Inc. Mr. Petrelli has more than forty years of progressively responsible property and casualty actuarial and financial analysis experience. He has extensive experience with loss and loss adjustment expense reserve evaluation, product development, and pricing for virtually all property and casualty and title insurance products as well as expertise with loss cost filings, Financial Stability Ratings®, and merger and acquisition valuations.Mr. Petrelli has been employed in the property and casualty insurance industry since 1969. He has been actively engaged in the title insurance industry since 1992. Prior to founding Demotech, Inc., he was employed by a large national property and casualty insurer, a regional property and casualty insurer, and the Insurance Services Office.Mr. Petrelli has the following designations and affiliations:

• Casualty Actuarial Society
• American Academy of Actuaries
• Conference of Consulting Actuaries Education and Training
• St. John’s University (The College of Insurance) – Bachelor of Science in Business (Actuarial Science)
• Ohio State University – Masters of Business Administration

By Chris Demeter, Senior Loss Control Consultant
Have you ever forgot to put on your safety glasses and hammered a few nails into a board? How about sanding that old dresser and not wearing a dust mask? Truth be told, I have before I realized the importance of using the proper PPE.

While PPE use can help prevent injuries and illnesses, engineering controls should be the primary method used to eliminate or minimize hazard exposure in the workplace. However, it may not be possible to eliminate all hazards through engineering design, guarding, or administrative controls. In these cases, the use of PPE is necessary.

If PPE is to be used, employers must implement a PPE program. The program should address the hazards present, the selection of the proper PPE, maintenance, proper use of PPE, the training of employees, and monitoring of the program to ensure its ongoing effectiveness.

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Back in February of 2015, the MTMIC Board of Directors, after reviewing the 2014 company results declared a members dividend of $2.5 million. This dividend was actually two parts: $1.5 million to be paid to members with an outstanding loss ratio and $1 million paid to all members. Checks were issued and delivered in March and early April. If you have read a few newsletters from 2015, you may recall that I wrote about how much fun it was delivering checks and how I looked forward to a “repeat” in 2016.

Well the “repeat” has arrived! I am pleased to report that on February 18, 2016 the Board of Directors completed a review of 2015 MTMIC results. After carefully reviewing company financial results for 2015, they determined that a member’s dividend of $3.5 million would be paid in March of 2016. This is a terrific result for our members and also for MTMIC. The $3.5 million is once again made up of two parts. A member’s loyalty piece of $1.4 million. Last year it was $1 million. Also, a second dividend of $2.1 million for accounts with an outstanding loss ratio. Last year the loss ratio piece was $1.5 million.

Since the board meeting, the staff has been putting together the systems to make sure that all the checks are issued properly and that the distribution process is efficient. We expect to start delivering the checks to members on March 7th. Last year it took about four weeks to complete the process and we anticipate it will be similar this year.

The member dividend is one of the most important benefits of being an MTMIC policyholder. We are not a large commercial company where the profits go to outside investors or other stockholders. Our 824 members receive the rewards from the company operations. Last year while we were pleased with the $2.5 million, being able to increase it for this year will make it even more fun. Like last year, we will take some member pictures for an upcoming MTMIC newsletter. We discovered it was pretty easy for a member to smile once you hand them a check.

On behalf of the Board of Directors, the management team and staff at MTMIC congratulations on having a terrific 2015 year which made this dividend possible. We will see you soon.

As we closed the 2015 accounting year and start work on the 2015 dividend for presentation to the MTMIC Board of Directors in February, it is interesting and helpful to know the company history and culture that history built. MTMIC dates back to 1976 when the Detroit Tooling Association (DTA) took advantage of en
abling legislation which permitted employers in the same industry to establish a group self-insurance fund.

At the time the Fund was formed the cost of Workers’ Compensation was exponentially increasing on an annual basis and becoming a negative influence on the ability of the tooling industry to remain viable in Michigan. The DTA Workers’ Compensation Fund was established to service the needs of the local tooling industry and it soon became the Michigan Tooling Association Workers’ Compensation Fund (MTAWCF) as membership grew outside of the local area.

The Fund was governed by a Board of Trustees representing the tooling community. With their direction, the MTAWCF developed programs which resulted in millions of dollars in reduced insurance premiums while providing dividends to the members of the Fund through effective cost control, improved safety and vigilance against fraudulent claims. Does that sound familiar today?

By 2006 the tooling environment was changing and management attempted to restructure the program to reflect that changing environment. The State of Michigan however would not permit the Fund to broaden the definition of “tooling” to include the many manufacturing operations currently involved; this limited the ability of the Fund to grow and change with its members.

Many months were spent determining the best course. At the end, Management and the Board of Directors agreed that a mutual insurance company would provide a structure similar to the Fund, and allow for the continued success and growth of the group. In 2007 the change was made and MTAWCF became Manufacturing Technology Mutual Insurance Company (MTMIC).

MTMIC is still governed by a Board of Directors elected from among the policyholders. The policyholder body has, as expected, grown to include many aspects of manufacturing and related industries as the growth of the organization has accelerated over the ensuing period. However, the culture from the Fund of effective cost and loss control, aggressive claims management and one on one service for our members carries over to MTMIC today.

Now for the MTMIC management team, back to working on YOUR dividend. More on this member benefit in the next newsletter.

By Donna Motley, Vice President of Claims

What is meant by “late reporting”? Typically, we like to receive notice of injuries (via the Form 100 – Employers Basic Report of Injury) within a week of the occurrence. The earlier a report is submitted, the earlier we can set the claim up in our system. Then, if there are telephone calls regarding medical treatment, we will at least have the basic information. The “basic” information required to set up a claim is the employee’s name, address, social security number and date of birth. Obviously, we need to know the type of injury and body part involved. We also require the employee’s date of hire, occupation and the date the employer was notified of the injury. These are mandatory fields to obtain a claim number. You can submit an injury report without knowing the current medical status, treatment plan or whether or not the employee will be losing time from work. We can obtain that information once the claim has been established.

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