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00 LEAGUE OF CONNECTING &INNOVATING MINNESOTA SINCE 1913 CITIES LEAGUE OF MINNESOTA CITIES INSURANCE TRUST MORE THAN JUST INSURANCE FOR LOCAL GOVERNMENTS The League of Minnesota Cities Insurance Trust(LMCIT)is a cooperative joint powers organization formed by Minnesota cities during 1980—one of the first municipal self-insurance pools in the country. LMCIT provides property, liability,workers'compensation, employee benefit coverages and risk management needs to Minnesota cities. Members contribute premiums to a jointly-owned fund rather than paying premiums to buy insurance from a private insurance company. The funds are used to pay for members'claims, losses and expenses. LMCIT participation varies by program: • The property/casualty program has more than 1,100 members. • The workers'compensation program has more than 900 members. • LMCIT sponsors life, disability and long-term care programs for members. Long-Term Stability and Reasonable Rates The private insurance market runs in cycles. Sometimes insurance is relatively cheap and easy to get.At other times, as in the late 1970s and again in the mid- and late-1980s, insurance became very expensive and hard to obtain. In a"hard"cycle, if insurance companies view cities as undesirable or unpredictable risks, cities may not be able to fmd insurance at all. This happened during the late 1980s to cities throughout the country. Because LMCIT exists, Minnesota cities know they have a stable source of insurance coverage, regardless of private insurance industry cycles. Members can count on competitive rates and may also receive dividends when there are extra funds that aren't needed for member losses, expenses or reserves. If LMCIT's income from premiums and investments is more than what is needed for losses and expenses,the extra funds go back to member cities. Since 1987, LMCIT has returned$221 million in dividends to cities. Cities also rely on LMCIT for its strength and superior member service. To ensure that LMCIT is able to meet its responsibility to pay cities' claims, the Board of Trustees work to ensure the organization is strong and fmancially stable. A conservative approach to rates and reserves, a solid reinsurance program with some of the strongest reinsurers in the world, and regular actuarial reviews all help ensure that LMCIT will remain sound. By conventional insurance industry measures, LMCIT is stronger financially than most insurance companies. LEAGUE OF MINNESOTA CITIES 145 UNIVERSITY AVE.WEST PHONE:(651)281-1200 FAX(651)281-1298 INSURANCE TRUST ST.PAUL.MN 55103-2044 TOLL FREE:(800)925-1122 WEB:W W W.LMC.ORG