OPERATIONS

Linda M. Hanson
Vice President

OPERATIONS

The requirement for Self-Insureds to begin reporting their workers' compensation data was one reason our Operations staff was extremely busy in 1998. Resulting from our work with the Department of Commerce, Department of Labor and Industry, Workers' Compensation Reinsurance Association and the Self-Insurers Association, we were able to develop a streamlined process for the reporting of this data while addressing the data needs of all parties involved.

Through our involvement in ACCCT, we participated in the release of BEEP 1.5 to our member carriers on July 23, 1998. This version reflects the input of a number of participating carriers and embodies numerous enhancements over the earlier version. (We have already begun work on BEEP 2.0 which promises even greater efficiency). In addition, we have made significant progress in the completion of Spectrum 1.2, our new operational software developed in conjunction with the North Carolina Rate Bureau and the Wisconsin Compensation Rating Bureau. Final deployment is scheduled for mid-summer, 1999.

During the past year, Operations staff also drafted and proposed a plan for reconciliation of past member reapportionment resulting from the old Workers' Compensation Insurance Antitrust litigation. The plan provides a solid resolution, taking into account the impact on each member carrier.

Within MWCIA, we completed a major job description and salary range study, drafted a significant revision to our 401k plan and implemented a new Paid Time Off (PTO) plan X each of which addressed several key employee issues.

On the national front, we remain committed to our involvement with the IAIABC. Among the issues addressed in 1998, we agreed that the need exists for educational opportunities for carriers reporting policy and proof of coverage information. Our exploration into this important area will continue in 1999.

Members of the Operations Supervisory Staff include,
left to right: Penny Sjoquist, Karen Ose, Ora Lowery,
Dorothy Kalinowski, Henry Treptau, and Kim LaHoud.

Experience Rating

During 1998, MWCIA continued its activities in connection with the experience rating of employers. Following is a summary of these activities:

40,982	intrastate experience ratings published, including revisions
23,603	interstate ratings were received and processed
64,585	total ratings processed

The 1998 breakdown of ratings by modification factor is as follows:

	Total Ratings equal to Zero	6,341
	Total Ratings between 0.01 & 0.49	0
	Total Ratings between 0.50 & 0.59	7
	Total Ratings between 0.60 & 0.69	176
	Total Ratings between 0.70 & 0.79	2,994
	Total Ratings between 0.80 & 0.89	10,592
	Total Ratings between 0.90 & 0.99	10,738
	Total Ratings between 1.00 & 1.09	2,683
	Total Ratings between 1.10 & 1.19	2,371
	Total Ratings between 1.20 & 1.29	2,265
	Total Ratings between 1.30 & 1.39	1,184
	Total Ratings between 1.40 & 1.49	684
	Total Ratings between 1.50 & 1.59	372
	Total Ratings between 1.60 & 1.69	212
	Total Ratings between 1.70 & 1.79	155
	Total Ratings between 1.80 & 1.89	79
	Total Ratings between 1.90 & 1.99	55
	Total Ratings greater than 1.99	110

Unit Statistical Plan Data

Unit Statistical Plan data is collected, processed and tabulated for use in developing the classification data within the Association's annual Ratemaking Report as well as for experience and merit rating and for specials studies. Listed below is a four-year summary of this activity.

Policy Year	Year Tabulated & Summarized	Number of First Reports
1-1-94 to 12-31-94	1996	100,149
1-1-95 to 12-31-95	1997	101,659
1-1-96 to 12-31-96	1998	103,376

Merit Rating

Minnesota statutes require that all assigned risks not eligible for experience rating must be subject to a Merit Rating Plan developed by the Department of Commerce. A total of 29,634 assigned risk files were eligible for merit rating in 1998, compared to 26,880 eligible in 1997. The 1998 Merit Ratings were distributed as indicated on the chart below.

Policy Review/Policy Entry

An important activity of the Association is the capture of policy coverage information and the management of the Insurance Coverage Verification System (ICVS). The ICVS function provides the Department of Labor and Industry with computer generated information on workers' compensation insurance coverage and eliminates the carriers' obligations to file notifications of coverage and cancellation with the Department.

Policy review and Policy Entry items were distributed as follows:

	Voluntary Market	Assigned Risk	Total
Policies (paper)	46,883	35,406	48,432
Policies (electronic)	22,126	35,406	57,532
Endorsements (paper)	184,048	802	184,850
Endorsements (electronic)	62,278	146,513	208,791
Cancellations (paper)	21,445	205	21,650
Cancellations (electronic)	5,719	37,008	42,982
Subtotals	331,022	232,960	563,98