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14. MMIA CheckMONTANA MUNICIPAL INSURANCE AUTHORITY P.O. Box 1704 -- Helena, MT 59624 406 443-0907 For Immediate Release January 16, 1998 Cities and towns across the state will share a $1.5 million dividend payment that was recently declared by the Board of Directors of the Montana Municipal Insurance Authority. The distribution will be made next week to the 90 municipal governments that are members of the workers' compensation program that was established in 1986 by the Montana League of Cities and Towns. The $1.5 million dividend will be allocated among cities and towns in accordance with a formula that considers premium payments and loss experience. "The dividend represents the favorable balance between premium income and expenses, particularly claims costs", according to Ed Robinson of Helena, who serves as chairman of the municipal insurance program. Robinson attributed some of the savings to recent Legislative changes in workers' compensation laws, but he said, " risk management programs and the commitment of cities and towns to promote safety and protect their employees have been very effective in reducing the cost of claims". This is the second workers' compensation dividend the insurance program has returned to cities and towns in the last 15 months. A payment of $983,000, which also resulted from favorable claims experience, was distributed in November of 1996. Robinson said, "This program has provided workers' compensation coverage to its members for the past 12 years at very competitive rates. It has returned almost $2.5 million in dividends to its members, and it shows the ability of local governments to make public funds work more effectively". A table showing the 1998 and 1996 dividend allocations is attached. Montana Municipal Insurance Authority Workers' Compensation Program January 1998 Pay to the Order of: THE 1j=T C'TV O E FS46.048 Forty Eight Thousand Forty Eight Dollars Workers' Comp Program Dividend Distribution MMIA Board of Directors This is a presentation certificate -not an actual check On Behalf Of The MQNTANA MUNICIPAL INSURANCEAumomn BOARD OF DIRECTORS THE MY OF KAMSPEU is presented with a DIVIDEND DISTRIBUTION in the amount of: $ 8,04 8 Thank you for your continued efforts to provide a safe working'environment for your employees. MONTANA MUNICIPAL INSURANCE AUTHORITY r History: In the mid 19801s, municipal governments across the United States were dramatically affected by an "insurance crisis." Many municipalities either had their liability insurance canceled or experienced substantial premium increases. In 1985, this "crisis" hit most Montana cities and towns, leaving some without liability insurance. In response, the Montana League of Cities and Towns established an ad hoc committee to research the problem and devise a solution. When efforts to work with the conventional insurance markets failed, the League looked at several options including the mechanism of self-insurance. A six -member insurance committee was created, and with the assistance of a consortium of consultants examined a number of alternative solutions. Although the primary focus of the group was a solution to the liability insurance problems, the Workers' Compensation Program was actually the first Program to be implemented (January of 1986). The delay in creating a liability program was due to the unavailability of excess liability insurance and the lack of adequate capital to create a "stand alone" program. The Liability Program was implemented, on a limited basis, on April 7, 1986. Both insurance Programs are available to every incorporated city and town in Montana. Workers' Compensation Program: The MMIA Workers' Compensation Program offers coverage to the statutory limits provided for under Montana law. The exposures are covered by a combination of assets from the risk retention program, including cash reserves, and excess insurance from the conventional insurance market. Program funds are secured with the proceeds of a revenue bond issue, originally sold in September 1990, and refunding bonds, sold in 1993. Proceeds from the bond issues were used to capitalize a loss account for large losses, as well as provide financial options for the program. To further solidify the program financially the Program conducts annual financial anc actuarial audits. There are 91 cities and towns currently enrolled in the Workers' Compensation Program. The Program generates a total annual premium in excess of $4 million. The Program has, and will strive to maintain, rates which on average are below those charged by the Montana State Compensation Insurance Fund (SCIF). Of note, SCIF is one of three alternatives for workers' compensation coverage in Montana. The others being self insurance and purchase of coverage from a private insurance carrier. MMIA Administration: The MMIA is governed by a 13-member Board of Directors. Board membership is comprised of elected and appointed officials from member entities. The six largest entities: Billings, Bozeman, Butte -Silver Bow County, Great Falls, Helena, and Missoula have permanent seats on the Board. Another six seats are occupied by individuals representing smaller communities, population under 20,000, who are elected for rotating two year terms. The thirteenth seat is occupied by an individual appointed by the 12 seated Board Members. No member entity may have more than one representative on the Board. The Board governs each insurance Program on an independent basis. The staff of the MMIA currently consists of four individuals: a Programs Administrator, a Risk Specialist, an Employment Practices Specialist, and an office manager. The Executive Director of the Montana League of Cities and Towns serves as the Executive Director of the MMIA. The MMIA contracts for specialized services including accounting, actuarial, claims, and legal. Contracts for additional services are entered into on an "as needed" basis. As the MMIA's Programs mature the functions of loss control and risk management continue to increase in scope. There are three major challenges that each program encounters. First, is the diversityof the membership. Membership ranges from the City of Billings, the largest city in Montana with a population approaching 100,000, to the Town of Bearcreek, with a population less than 50. The development of coverage and the implementation of risk management programs must be effective, yet not complicate municipal operations at either end of the size spectrum. Second, the geographic size of the state makes it difficult to cost effectively provide the necessary insurance services. Third, and perhaps the greatest challenge is the fact that many member cities and towns 2 have a complacent attitude toward loss exposures. The recognition of potential losses, and encouraging the governing bodies of members to allocate and spend the funds necessary to address these concerns, will continue to be difficult to achieve. The MMIA has placed a great deal of emphasis on the education of its membership. We provide: quarterly newsletters; risk management bulletins; individual and joint training sessions; assistance with personnel and operational policies and procedures; contract reviews; a training video library; job description development assistance; "walk-through" risk management evaluations; etc. 3 Montana Municipal Insurance Authority MONTANA MUNICIPAL INSURANCE AUTHORITY WORKERS' COMPENSATION PROGRAM RATE COMPARISON FY 1997198. CLASS CODE MMIA RATE MACo RATE STATE RATE 7704 FIRE $ 4.01 $ 4.32 $ 3.89 7720 POLICE 4.71 3.94 5.40 8743 ADMIN .60 .76 .56 8810 CLERICAL 1.01 1.12 .49 9410 MUNI MANUAL 5.10 5.70 6.12 9420 MUNI NON -MANUAL 5.10 5.01 5.09 "AVERAGE RATE **Average rate is not payroll weighted. $ 3.42 $ 3.47 $ 3.59 P C) Rnx 7R5 Nalana Montana �;QF9d MnM AAq.nQn7 in MT 1_RM.FZF_Z(1RQ Montana Municipal Insurnace Authority Workers' Compensation Program 1996-98 Dividend Distribution Comparison j 1996 1 1998 i Difference ! City/Town Distribution i Distribution I Between 1996 & 1998 Alberton 1 642 1461 819 Anaconda -Deer Lodge ; 32743 ' 18243 -14500 Belgrade i 6369 1 3362 ! -3007 Belt 1443 1656 213 Big Timber 1225 4750 i 3525 Billings 251413 287957 36544 Boulder 2246 2588 342 Bozeman 21625 76061 i 54436 Bridger 2021 2878 857 Brockton 74 24 i -50 Browning 5502 5420 -82 Butte 106350 163120 56770 Cascade 1110 1328 218 Chester j 2214 2208 j -6 Chinook 4688 I 3977 -711 Choteau ( 1035 4447 3412 Culbertson 1097 1328 231 Circle i 2598 I 1798 j -800 Columbia Falls 6852 10952 i 4100 Columbus j 4834 5387 553 Conrad j 6870 1 11075 4205 Cut Bank 11931 4 16024 ( 4093 Deer Lodge 6323 1 7292 969 Dutton 502 449 -53 Dillon 2430 i 17202 14772 Drummond 210 1505 j 1295 Ekalaka 1254 i 1594 1 340 Ennis 1568 I 1856 288 Fairfield 1615 1845 ; 230 Fairview 2161 2535 , 374 Fort Benton 1356 6178 4822 Fort Peck 1347 1712 365 Forsyth ! 6501 7967 1 1466 Glasgow 6186 13422 ( 7236 Glendive 15436 18259 2823 Grass Range 211 ( 382 i 171 Great Falls 64205 j 164143 99938 Hamilton 4479 i 7815 3336 Harlowton 1811 ! 2029 218 Harlem 234 3704 3470 Havre 41326 44362 3036 Helena 71451 i 119026 47575 Hingham 72 58 -14 Hot Springs 1330 1291 -39 Joliet 1128 1333 205 Kalispell 34805 48048 13243 Montana Municipal Insurnace Authority Workers' Compensation Program 1996-98 Dividend Distribution Comparison 1996 i 1998 j Difference City/Town Distribution' Distribution' Between 1996 & 1998 Kevin 57 i 294 �_ 237 Laurel 9332 I 14782 5450 Lavina I 118 101 -17 Lewistown j 5580 7152 ! 1572 Libby i 4054 13509 j 9455 Lima 393 i 609 216 Livingston j 23856 29731 5875 Malta ! 4435 j 4828 i 393 Manhattan 568 1449 881 Medicine Lake 597 734 i 137 Melstone 389 318 j -71 Miles City j 18799 37283 18484 Missoula 77121 135153 58032 Moore i 220 301 81 Philipsburg 745 ! 5189 4444 Pinesdale 77 68 -9 Plains 1981 2678 697 Plentywood 4244 5036 792 Plevna 222 294 72 Poison 3352 11469 8117 Poplar 3466 4514 1048 Red Lodge 6529 1 6757 1 228 Richey 449 560 111 Ronan 8914 5587 -3327 Scobey 1668 2398 730 Shelby 7141 8143 i 1002 Sheridan 851 i 1037 186 Sidney 14239 i 19696 5457 Stevensville 2916 3755 i 839 Sunburst i 697 1673 976 Superior 1083 1389 i 306 Terry 1315 2709 1394 Thompson Falls 3333 3862 529 Three Forks 2591 3284 693 Troy 1982 2065 83 Twin Bridges ; 757 662 -95 Valier 1550 1019 -531 Virginia City 550 657 107 Westby 175 154 -21 West Yellowstone 4028 6359 2331 Whitefish 8020 35738 27718 Whitehall 2641 2302 -339 Winnett 696 829 133 Wolf Point 8751 13822 5071 TOTAL 983305 1500000