Helena, MT (WorkersCompensation.com) - On Wednesday, Montana State Fund (MSF), the state's largest workers' compensation insurance company, announced a 10% average rate reduction and a $20 million dividend for policyholders. The decision came at the recent Spring meeting of the MSF Board of Directors.
Governor Greg Gianforte had the following to say about the announcement: “This is outstanding news for Montana job creators. As we get our economy going again and Montanans back to work, it's great to see the Montana State Fund reduce compensation rates and announce this dividend for Montana employers.”
MSF has paid a dividend every year since 1999. The additional $20 million brings the total dividends paid to policyholders to $326 million—$220 million of which has been paid since 2015. The 10% rate reduction will bring MSF rate's 52.7% lower than in 2006 (the year of the last rate increase) and 38% lower than 1990 (MSF's first year in operation).
"This is wonderful news for Montana employers. Average workers' compensation rates are continuing their downward trend and safe employers are receiving money back in the form of a dividend. The workers' compensation system in Montana has never been in such good condition," said MSF Board Chairman, Richard Miltenberger.
MSF President and CEO, Laurence Hubbard, had the following to say about the decision: "Last fall, amid economic uncertainty surrounding the coronavirus pandemic, the MSF Board of Directors opted to take a conservative approach when declaring a $20M dividend for policyholders. At the same time, they pledged to revisit their decision in the spring of 2021 to consider an additional dividend. I am excited to announce that the Board has declared an additional $20M dividend payable to policyholders by the end of May. It is our hope that these funds are able to help Montana employers continue to weather the storm of COVID-19."
Dividends are issued to employers are a direct result of better-than-expected investment performance and positive workplace safety results and are not an overcharging of rates. Qualifying employers receive a safety dividend based on premium paid and losses incurred during a given dividend year.
The financial stability of MSF is a positive force in the Montana economy because often, next to their payroll, workers' compensation insurance is the highest expense on an employer's books. Stability and predictability are important for employers, especially small businesses. MSF insures approximately 19,000 small businesses.
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