The initial review of each risk will be done by Fuel Marketers Insurance Trust Risk Control Representative to carefully evaluate Trust applicants. After the initial review, the excess underwriter, the Division of Workers’ Compensation and Board of Directors must each approve the member. The goal is to write preferred risks from the majority of our Sponsored Associations; MPCA and MGA.
Applicants to the Trust and Trust members will be required to:
- Provide description of operations.
- Establish and maintain an acceptable return to work and light duty program.
- Establish and maintain a formal written safety program.
- Comply with all reasonable loss control requests.
- Show at least five years prior Workers’ Compensation history.
- Present a current and two prior years experience modification worksheets.
- Agree to comply with audit requirements.
- Comply with OSHA requirements.
Coverage cannot be bound until all of the requested information has been received, reviewed, and approved by the aforementioned parties.
The required down payment of premium must be received prior to coverage being effective.
Exceptions to the underwriting guidelines may be considered by the Trust.
The first step towards reducing Workers’ Compensation costs is educating employers and employees about improving safety in the workplace. The Trust will accomplish this vital educational process through the efforts of providing loss control services.
The Fuel Marketers Insurance Trust program must take an aggressive stand on loss prevention. Fuel Marketers Insurance Trust risk control staff will work closely with members to help promote a safe workplace, which will result in a stable Trust.
Their responsibilities will include:
- Involvement in the screening of future Trust applicants
- Conducting workplace inspections
- Making specific recommendations
This will not be an adversarial relationship, but one of a mutual desire to prevent losses in the workplace. Timetables for implementation of recommended safety measures and programs will also be provided. The risk control representatives are highly qualified to work with your internal loss safety committee in trying to help reduce losses for yourself and the Trust.
Fuel Marketers Insurance Trust will institute a number of valuable educational programs for the members including assistance in setting up internal safety programs and developing safety policy.
Educational programs for Fuel Marketers Insurance Trust members will include periodic special reports as well as an online learning management system. Fuel Marketers Insurance Trust risk control services will also conduct seminars throughout the state on topics such as emergency planning and crisis management, ergonomics and safety in the workplace. In addition to producing educational publications and seminars, Fuel Marketers Insurance Trust will be active in bringing the concerns of the members regarding Workers’ Compensation reform to the attention of the Missouri state government and the media.
Fuel Marketers Insurance Trust risk control representatives will provide the members with the information they need to aggressively pursue increased safety practices and ultimately reduce workers’ compensation costs.
The Fuel Marketers Insurance Trust will offer its members a redefined approach to claims management, through its Third Party Administrator, Cowell Insurance Services, Inc., one that goes beyond the role of processing paperwork, and become actively involved in helping members take a ”proactive” approach to risk control.
Aggressive claims administration services is a key of risk control in the area of Workers’ Compensation claims. Claims that are fraudulent in nature will not be paid. Employer privileges in regards to controlling claims will be maintained.
A preferred provider program will be implemented to reduce the cost of medical care, as well as actively controlling the length of time that an injured worker is away from their job. The desire is to get the employee back into the workplace as quickly as possible.
Cowell Insurance Services, Inc. advocates aggressive ”back to work and light duty programs”. Indemnity reserves will thus be controlled by reducing lost work time for claimants. The Cowell Insurance Services, Inc. program will also help you educate your employees on the benefits that they have available to them if they are injured. By showing an interest in the injured employee and a desire to get that person back to work, unnecessary attorney involvement is avoided, which is one of the fastest growing costs in Workers’ Compensation.
Payment of claims to the injured employee will be prompt and timely. Subrogation opportunities will be actively pursued.
Cowell Insurance Services, Inc. claims professionals will also work with members to ensure compliance with proper reporting and filing procedures. Members will be provided with specific time frames for filing Notice of Injury and other reports. Compliance is required of all members.
Due to our client-oriented approach, we allow our client to control their program while we do the work. This entails a comprehensive ”managed care” approach, designed to attack the claims from a frequency and severity standpoint. Once a claim occurs we will do our best to manage the cost of the claim to minimize the overall expense of the claim.
What if the Pool has a Large Claim or the Pool Claims Fund is exhausted?
A successful self-insurance program must be able to sustain variability in loss experience. Loss experience may deteriorate over a period of time as a result of rapid growth or expansion of operations, changes in management, changes in operations, or lay-offs and cutbacks.
In addition, catastrophic or shock losses will cause fluctuations and thus the potential of catastrophic loss such as occupational disease, explosion causing multiple injuries, etc., must be carefully evaluated. The stability of loss costs is essential to a self-insured pool; therefore, excess insurance becomes an important item in a self-insurance program.
Excess insurance is purchased by a self-insured pool to provide insurance coverage for losses in excess of a stipulated amount. Excess insurance limits the maximum probable fluctuation in loss experience from year to year by allowing the self-insurer to retain the portion of its losses that will not impair the financial capabilities of the organization. The dollar amount at which excess insurance should attach will generally be the amount at which individual losses are infrequent and therefore more economical to pool with other exposures. If the excess coverage is to be structured on an aggregate basis, the attachment point selected should be at a point which is not frequently exceeded by aggregate losses. Other criteria to consider will be the financial strength of the organization. In some instances, tax consequences become a factor because of the tax deductibility of excess insurance premiums. The excess insurance coverage may be purchased on a per occurrence or annual aggregate basis.
Most State regulations require that the Workers’ Compensation pools have excess insurance to protect them from adverse losses. Excess insurance is a form of reinsurance which protects the pool in two ways.
Per Occurrence Excess Insurance
Per occurrence excess insurance is purchased to provide coverage for any loss occurrence which exceeds the stipulated self-insured retention. Because it applies on a per occurrence basis, the definition of occurrence becomes important. Generally, loss resulting from continuous exposure will be said to have resulted from a single occurrence. The self-insured retention will vary according to the loss experience and type of exposure and financial strength of the self-insured pool, but normally ranges from retention minimums of $200,000 up to $1 million per loss occurrence.
Annual Aggregate Excess Insurance
Excess insurance can be purchased on an annual aggregate or stop loss basis. An annual aggregate policy responds to an aggregate loss amount accumulated over the entire policy period. The pool will retain all losses up to the point where the aggregate amount of losses exceeds the stated retention amount.
Annual aggregate, or stop loss excess insurance, is the type of excess insurance most readily accepted by State regulatory authorities. The self-insured retention of an annual aggregate excess policy will generally be greater than the expected losses in the program; per occurrence excess coverage will be required in conjunction with the aggregate coverage.
A pool that has relatively stable historical loss frequency but is concerned about the potential for catastrophic losses may be more inclined to select a per occurrence retention. On the other hand, if the self-insured pool is expanding operations or is experiencing other changes that could lead to an increase in loss frequency, an annual aggregate retention may be more attractive.
An important feature in protecting the integrity of the Trust is the ability to verify the payrolls of the members. Fuel Marketers Insurance Trust has hired an outside auditing firm to conduct physical audits to verify and certify that all payroll information is accurate and correct. The name of the company is Premium Audit Results.
Members will have to verify their payrolls with their federal payroll tax reports.