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ICASARRUS COU~I <br /> NORTH CAROLIN~q <br /> <br />MEMORANDUM <br /> <br />To: <br /> <br />From: <br /> <br />Date: <br /> <br />Subject: <br /> <br />Board of Commissioners <br /> <br />Blair Bennett <br /> <br />November 27, 2002 <br /> <br />Status Report on Workers' Compensation Fund <br /> <br />The decision was made beginning July 1, 1994 to become self-insured for Workers' <br />Compensation. The sharp increases in insurance premiums for Workers' Compensation and the <br />moderate claims history we had experienced were the factors leading us to make the decision to <br />become self-insured. This decision was not taken lightly, realizing that becoming self-insured <br />carried a liability risk to the County. However, considering all these factors, we did elect to <br />become self-insured. This year again, the risk/reward scenario had a positive outcome, as <br />evidenced in the attached report. <br /> <br />For the fiscal year we actually paid out $212,844.04 in claims. These payments were allocated <br />back to the particular year in which the claim actually occurred. Those allocations were as <br />follows: 1998 - $85.57, 1999 - $17,590.24, 2000 - $39,801.90, 2001 - $63,099.56 and 2002- <br />$92,266.77. Notice this year (FY 2002), that the interest earned on the Workers' Compensation <br />Fund nearly paid the claims for the current year. Also notice that we now have a cash balance <br />reserve amounting to $1,979,432. If we were paying annual premiums for workers' <br />compensation to an insurance company based on our payroll of $34,462,290, our premium would <br />likely be approximately $1,500,000 versus we are only setting aside about $473,000 in fiscal <br />year 2002. Now after eight years of experience with the self-funding program, we are planning <br />on having an actuary study to be completed during 2003 to help us determine the cash reserve <br />needed to fully fund this program. <br /> <br />Compensation Claims Solutions, our claims administrator, located here in Concord, has done an <br />excellent job of actively working and monitoring the claims to return injured employees back to <br />work as quickly as possible. Also, Everette Arnold, our insurance consultant, has been invaluable <br />by offering advice and experience from his years of being in the self-insurance business advisory <br />capacity. We will continue to monitor this fund and its claims closely, and hope that its success <br />will continue. <br /> <br /> Finance Department <br />P.O. Box 707 · Concord, NC 28026-0707 · 704-920-2104 <br /> <br /> <br />