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