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The authors of Oregon's statutes that regulate
self-insured workers' compensation trusts
crafted a tried and true operating structure
modeled after that of an insurance company.
Tested over 150 years and adopted by every
State in the Country, the insurance company
model provides for both shareholder value
and protection for covered participants.
So, it is no surprise that trust operations
are more like than unlike that of an insurance
company. Here are just a few of the similarities:
- Receives its certificate of authority
form the State
- Participates in all Oregon WC Programs:
Ded Plan, ERTW, Preferred Worker,
etc.
- Governed by a Board of Directors
- Affiliated with the National Council
on Compensation Insurance (NCCI)
- Purchases reinsurance in the form
of excess-of-loss insurance
- Uses actuarially-based methods to
determine funding needs
- Maintains member-level coverage anniversary
dates
- Secures annual actuarial statements
- Produces an annual audited financial
statement
- Uses NCCI loss costs in determining
classification rates
- Maintains each member's Experience
Modification Factor
Notwithstanding these similarities, trusts
are different in some ways. It is these
differences that set trust participation
apart from the purchase of insurance and
make it such an attractive alternative
for Oregon employers. Here are four major
differences:
- Trusts operate much like a nonprofit
organization
- Members have real input on the merits
of questionable claims
- Capital funding comes from member-employer
contributions
- Trusts are owned and governed by its
members
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