Work comp: Special Compensation Fund assessment 'true-up'
Results of the reconciliation and final determination of the 2020 SCF assessment 'true-up'
Minnesota state law (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 2020 SCF assessment liability was unchanged, at $50,405,083, 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 2020 Special Compensation Fund assessment was 5.87%. The rate was determined by dividing the insurer portion of the Special Compensation Fund state-fiscal-year 2018 liability ($50,405,083), by the 2019 designated statistical reporting pure premium reported by all insurers to the Minnesota Workers' Compensation Insurers Association ($859,041,735).
The revised insurer premium surcharge rate applied for the purpose of determining the 2020 Special Compensation Fund assessment was 5.79%. The rate was determined by dividing the insurer portion of the Special Compensation Fund state-fiscal-year 2019 liability ($50,405,083), by the 2020 designated statistical reporting pure premium reported by all insurers to the Minnesota Workers' Compensation Insurers Association ($869,935,392).
|Estimated liabilities||DSR pure premium||Insurer surcharge rate|
|Insurers estimated rate||$50,405,083||$859,041,735||5.87%|
|Insurers revised rate||$50,405,083||$869,935,392||5.79%|
Invoices for additional funds were mailed to insurers Dec. 1, with payment due Jan. 14. Refunds will be processed against 2021 second-half assessment invoices mailed by Jan. 1, 2022.