MN New Prepayment Option for Assessment Program

St. Paul, MN - Following approval of the WCRA’s Surplus Distribution Recovery Program (Program) in late June, many members expressed an interest in prepaying their Deficient Premiums Assessments in 2009. They were concerned, however, that the Program didn't assure that they would get any of their prepaid assessments returned if the Program was terminated early because of improvements in the WCRA's financial condition. In response to this member feedback, the WCRA Board of Directors has adopted two mendments to the Program.

First, each member has the option to prepay its entire five-year Deficient Premiums Assessment in a lump sum by December 1, 2009 and receive a discount for doing so. As provided in the original Program, members also have the option to prepay their Deficient Premiums Assessments in a lump sum by July 15, 2010 at a slightly smaller discount. Please refer to the Deficient Premiums Assessment Prepayment Calculator on the WCRA website at www.wcra.biz to compute the optional prepayment amounts.

Second, members who decide to utilize one of these prepayment options will receive a pro rata refund of their lump-sum assessment prepayments if the WCRA Board decides to terminate the Program before collecting the full five years of assessments. For example, if the Association's financial condition improves dramatically in three years, and the WCRA Board decides to terminate the Program after three years, members who prepaid their entire five-year Deficient Premiums Assessment amounts will receive efunds equal to the final two years of their prepaid Program assessments.

Members who prepay their assessments should be aware that there may be future adjustments to their Deficient Premiums Assessments that could require modest additional assessment payments. Self-insurer members should also note that the prepayment options do not apply to the Deficiency Assessments, which are based prospectively on each member's annual exposure base. As provided in the original Program, these payments will still be due annually on July 15 of 2010 through 2014.

Source: Workers' Compensation Reinsurance Association