03-29-2012 Council Agenda - Laserfiche WebLink

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What is loss control's role? It is always in the best interest of the city and the group plan to use the safety and loss control services of the service contractor for the plan. Reducing losses and creating a safer working environment not only decreases the city's experience modification factor, but it also helps lower the overall rates for all cities. Under the retrospective rating option, this becomes even more important. Loss control services are provided at no additional cost to the city. Should our city select a rating option? To decide if a retro plan makes sense for your city, one good way to start is to plug your losses from a few past years into the formula to see how your city would have done in those years. There are some important points to keep in mind, though: • Workers' compensation losses can develop adversely. Loss experience that initially looks good can become more expensive by the time those losses are finally closed in the future. • In any one year, a city's losses could turn out to be very different from — and possibly much greater than — the pattern for past years. • A single large loss during the year could be enough to push the city to the maximum premium. Unlike the way the experience modification formula works, large losses are not discounted for purposes of the retro- rating formula. Keep in mind that under a retro formula, the city is retaining risk. Selecting a retro option can be a good way for the city to save money. However, depending on what losses happen to occur, it can also turn out to be more expensive for the city. Your LMCIT Resource Contact Barb Meyer at (651) 215 -4173 or bmever @Imc.org; or Liam Biever at (651) 281- 1212 or Ibiever @Imc.org if you have questions on receiving the retrospective rating form, where to send the form, whether it has been received or the payroll audit. Pete "Fritz 4/10 9 3