St. Paul, MN – The Workers’ Compensation Reinsurance Association (WCRA) recently announced a $600 million surplus distribution to its members and insurer policyholders.
The distribution is the result of excellent investment returns and reductions in loss reserve liabilities from favorable inflation rates, declining claims frequency, and recent legislation. Recent Minnesota legislation was recommended by the Workers’ Compensation Advisory Council and provides cost containment measures to stabilize and reduce future workers’ compensation medical cost trends.
As required by state law, the Commissioners of the Departments of Commerce and Labor and Industry reviewed and approved the $600 million surplus distribution.
The Workers’ Compensation Reinsurance Association (WCRA) is a quasi-public, nonprofit association that provides reinsurance for all insurance companies and self-insured employers licensed to provide workers’ compensation in Minnesota. While the Minnesota legislature created the WCRA in 1979, it is not a state agency and does not receive state funds. It operates independently with a diverse board of directors representing various workers’ compensation constituencies.
In accordance with Minn. Stat. §§ 79.34–.363 and the methodology approved by judicial decisions, it was determined that approximately $383 million will go to insurers; $182 million will be distributed to self-insurers; and $35 million will go to policyholders.
Policyholders are the more than 100,000 employers in the state who had a workers’ compensation insurance policy in 2020. Recipients whose share of the distribution exceeds $15 will receive a check from the WCRA.
The WCRA was created by the Minnesota legislature to improve the system of providing workers’ compensation insurance at fair and reasonable rates to Minnesota employers. In the late 1970s, insurers stopped writing workers’ compensation policies because reinsurance was unavailable or unaffordable. The WCRA offers the broadest coverage in the reinsurance industry, and this superior coverage is provided at the lowest rates to all licensed insurers and self-insurers in Minnesota. No other state or private company provides such comprehensive workers’ compensation reinsurance coverage at such an affordable cost.