2007-01-10 CC - Laserfiche WebLink

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Dividend Property/casualty program members will share a $4 million dividend this year. This is quite a bit less than the $12 million we returned last year and the $9 million we returned for three years prior. The decrease in dividend is primarily the result of higher-than-usuallosses and loss development. As it turns out, there were quite a few mid-sized to large losses in 2005-2006. As in the past, we'll distribute the dividend in mid-December. The dividend formula will be the same as we've used for several years. Under that formula, each city's share is proportionate to the difference between the city's total earned premiums and total incurred losses for all years the city has been a member, with large individual losses capped for purposes of the formula. Work comp rates for 2007 Overall work comp rates will remain steady for 2007, although class rate changes may impact cities differently. Every three years, the LMCIT Board reviews and revises the relative levels of premium rates for the various classes of employees. To the extent possible, we set the rates for each class based on LMCIT's own actual loss experience by class for the preceding five-year period. In implementing adjustments to the class rate schedule for 2007, we've imposed a 20% constraint on the amount of increase by which any individual class rate can change. For a city with a typical mix of payrolls, the class rate changes will offset each other to a large extent. However, a special purpose entity member with most of its payroll in one or two classes will see a much bigger effect. This is particularly noticeable for 2007 in the volunteer fire class. But it's important to note that the actual increases for a few classes would have been much greater without the 20% cap. Without the cap, volunteer fire rates based on the actual losses would have increased almost 75%. The following table details the 2007 rate changes for the classifications that cover the bulk of city payrolls. There are a number of other classes that are used more sparingly in cities. It's important to note that most job class rates are shown per $100 of payroll. The rates for volunteer fire (7708 and 7718) are shown per 100 of population. LMCIT % LMCIT Code Description 2006 Chanae 2007 5506 Street 7.04 11 7.80 9402 Sewer, snowplow, etc. 7.04 11 7.80 7380 Ambulance 6.27 -17 5.18 7381 Vol. Ambulance 6.34 20 7.61 7502 Gas Ops 2.42 20 2.89 7520 Waterworks 3.03 20 3.64 7539 Electric or Steam Plant 4.00 -9 3.64 7580 Sewage Plant 4.03 -39 2.48 7610 Cable TV .40 19 .48 2