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coverage could help avoid litigation in cases where the city may be at fault, and it also provides some protection for people donating their time and effort to city projects. Volunteer accident coverage provides blanket coverage for all city volunteers working under city direction and control, such as coaches and instructors in recreation programs, or volunteers working on city- sponsored festivals or celebrations. The cost of volunteer work comp coverage is based on the city's population, with a basic annual charge of $.10 per capita subject to a minimum premium of $150 and a maximum premium of $1,500 annually. The charge to add volunteers working on a construction project is $300 per project. For more information, refer to the "Accident Coverage for City Volunteers" memo and the "Covering the City's Volunteers" memo. Premium options LMCIT work comp members have a number of premium options as well as an option to close- out retro coverage from previous years. Members also have the option of using a managed care provider for the medical management of employees injured while at work. Regular premium Under the regular premium option, the City's premium is calculated based on City payroll, by class. The premium is then adjusted by an experience modification factor, which reflects the City's previous loss experience. In the experience modification process, claims in the oldest three out of the past four years are considered. In other words, the most recent past year is not considered. If a city chooses the regular premium option, premium payments are the City's only responsibility or liability. The regular premium option is a "fully insured" option for the City to elect. Retrospective rating Under LMCIT's retro- rating plan, a city's final premium costs reflects its own, actual loss experience for the year. Cities with standard premiums of $25,000 or more can if they wish select one of three retrospective options, so that each city may select the amount of risk it wishes to retain. Retrospective rating is a form of risk retention. The final premium under a retro is a function of the city's own losses, so a good safety program is important if you're using a retro. With good loss experience, a retro can save the city significant money over the long run. Of course the city is also subject to possible premium increases if it experiences a lot of injuries or a single big loss. Cities that select a retrospective rating option pay a deposit premium to LMCIT at the beginning of the agreement period. Six months after the end of the agreement year, the city's premiums are adjusted up or down based on the city's actual incurred losses for that year. That adjustment is repeated annually until all claims from the agreement period are closed. - 4 - - 2 7 -