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Minnesota Department of Labor and Industry

Workers' compensation -- Special Compensation Fund assessment 'true-up'



Results of the reconciliation and final determination of the 2016 SCF assessment 'true-up'

Minnesota Statutes 176.129, subd. 2a, now provides for an adjustment, or "true-up," of the assessment paid by insurers for deposit into the Special Compensation Fund (SCF).

Currently, the commissioner estimates each insurer's share of the assessment using the insurer's earned standard premium from the previous calendar year. The commissioner must later make a final determination of the amount owed based on the insurer's actual earned standard workers' compensation premium for the current year, after those figures become available. The insurer portion of the 2016 SCF assessment liability was unchanged, at $59,839,599, but the designated statistical reporting (DSR) pure premium assessment base increased, which resulted in a decrease to the final insurer surcharge rate.

Insurer premium surcharge rate

The original insurer premium surcharge rate applied for the purpose of estimating the 2016 Special Compensation Fund assessment was 7.0704 percent. The rate was determined by dividing the insurer portion of the Special Compensation Fund state-fiscal-year 2016 liability ($59,839,599), by the 2015 designated statistical reporting pure premium reported by all insurers to the Minnesota Workers' Compensation Insurers Association ($846,334,640).

The revised insurer premium surcharge rate applied for the purpose of determining the 2016 Special Compensation Fund assessment was 6.7474 percent. The rate was determined by dividing the insurer portion of the Special Compensation Fund state-fiscal-year 2016 liability ($59,839,599), by the 2016 designated statistical reporting pure premium reported by all insurers to the Minnesota Workers' Compensation Insurers Association ($886,846,072).

 

Estimated liabilities

DSR pure premium

Insurer surcharge rate

Insurers estimated rate $59,839,599 $846,334,640 7.0704 percent
Insurers revised rate $59,839,599 $886,846,072 6.7474 percent

As a result of this "true-up," 96 insurers owed an additional $3,890,886 in assessment to the Special Compensation Fund and 84 insurers were refunded $3,890,886 in overpaid assessment.

Invoices for additional funds were mailed to insurers by Nov. 15, with payment due Dec. 15. Refunds were processed by Dec. 1.

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