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<br />We've enclosed a 'chart showing your city's share of this year's LMCIT property/casualty <br />dividend, how that compares with your premiums, and what your city's p~ premiums and <br />dividends have beei1. Each city',s share of the total diVidend depends on the city's total premiums <br />and ~osSes for.all the years.the city has been a member ofLMCIT. The longer your city has been <br />a menioei;8iid 'tlicHhore SliliceSsfulyou've been inavoidfug losses' the greater yom: city1s . .', <br />dividend <br /> <br />"Why does LlV[CIT keep returning dividends? Why Dot just reduce the premiums further? <br /> <br />The dividends are a by-product ofLMCIT's conservative financial approach. LMCIT's <br />premium rates are designed with a safety margin, so' they'd cover losses and expenses even if the <br />losses tmn out to be greater than projected. If losses turn out to be at or below projections, that <br />safety margin isn't needed andean be returned to the members. <br /> <br />UI1like a private insurance company, LMCIT is owned and controlled by its member cities. <br />Because it's a non-profit cooperative organi7.ation, ifLMCIT has funds that aren't needed for <br />losses, expenses, or reserves, the only place those funds ean go is back to the member cities. <br /> <br />What about 20051- -~ <br /> <br />.. . . . - 'J.:.MCIT property ana nabiIitY pFemum rates" <br />fonoo $0.20 <br /> G) <br />, $15.00 t, . ---. . . . . $0.15 j <br />, ' .. , , .. . ~. . . . . ~ . . $0.10 I <br />:h $1000' ...... '.. t. .~ <br /> . . - . ....... <br />,,$.:, ',',. . 8 <br />6' " , <br />- $5.00 $0.05 ; <br />fit <br />l. D. <br /> $0.00 $0.00 <br /> '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 02 '03 '04 '05 <br /> 1---- Uabl~ . . .. . Property I <br /> <br />Property/casualty premium rates will <br />be lower for 2005. Losses have <br />g~e~~:r.bee!l ,8ta;~~~, b.ut we've <br />reduce'd i'ei.n.slJt8nee CostS b '. ,. .', . <br />..,~, , . .... y <br />inCreasU1g'the am6untofrlSk iMcIT' ,!. <br />retains. That should save money in <br />the long run, but it could mean more <br />variability in LMCIT's loss costs and <br />in dividends in the future. <br /> <br />Work comp premium rates will increase 7%. The driving factor is medical costs. They've been <br />rising sharply for several years, andthere's little reason to expect that trend to change soon. One <br />positive si~ is ~ ~e numbers Qf empl2X.~ ~juries have been down in the past couple years. <br />If that con~ues, It will help hold future ffrenuums down. <br /> <br />At the end of the day of course, both premium rates and dividends both depend on one basi'! <br />factor: what the losses are. LMClT's member cities have been doing an outstanding job of <br />controlling and avoiding losses. That takes both the support of the city's elected officials and <br />the efforts of your city staff. Your commitment to COli trolling losses pays off for all of us - <br />thank you and congmwations. <br /> <br />Q~eStions <br /> <br />...... ........ . ~'. . --'.- .~:'"_-. .~-...~:; - _. - -.... .- .- <br /> <br />Jf."yo~haye:ahy.questionsaboutyout city:'s share ofLMClT dividends or our premium rateS for <br />2005;'please c~ PeteOTiiti at 651-281,.1265~ or any of the members of the LMCITBoa:rd., . <br /> <br />2 <br />