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Evaluating
Retro Groups
How much is the group risking?
Contractors Alliance chooses, in advance, a Maximum Premium Ratio
(MPR), which establishes a limit on retro assessments, regardless of how
high claim costs end up. These “risk levels” can be as low
as an extra 5% of Standard Premium (1.05 MPR), or as high as an extra
100% of Standard Premium (2.00 MPR). Many retro participants are so focused
on the potential refunds that they forget about the potential for assessments.
Contractors Alliance takes steps to safeguard against risking more than
the group can afford to be assessed if the group doesn’t perform
well. Our current MPR is 1.10.
How many years has the group been enrolled?
Contractors Alliance has been enrolled since 1990.
What has been the average percentage refund (or assessment)?
The average refund has been 33.8% over the last 5 years.
How are refunds/assessments distributed among group
members?
In group retro, L&I calculates an aggregate refund or assessment
for the group as a whole, then sends one refund check or assessment notice
to the Contractors Alliance; the Contractors Alliance distributes the
refund or assessment among our members. Contractors Alliance distributes
refunds on a merit-rated basis, in which group members end up with a varied
percentage of the group refund (based on performance).
When will distributions be made?
The first retro “adjustment” Contractors Alliance
receives from L&I is in October, which is 10 months after the coverage
period ends. Contractors Alliance provides for a 2nd and 3rd adjustment
in October in successive years.
What are the association membership dues and retro
administrative fees?
Contractors Alliance participation fee is 10% of the group retrospective
rating adjustment.
How are refund dollars being handled?
Contractors Alliance provides group members a written statement
at the time of distribution of refunds or assessments. The statements
are complete and concise and show how the group as a whole performed,
as well as how the member’s share of the adjustment was calculated.
Refunds held in reserve are accounted for with interest accrued returned
to the employer.
What services does the group provide to its members
to promote accident prevention and claims management?
Contractors Alliance has a full time Certified Safety Professional
(CSP) and a full time Associate of Risk Management (ARM) on staff. Educational
and training opportunities are available on a monthly basis for our member
employers. Each member is assigned a claims executive who has a maximum
case load of 75 claims. Upon claim arrival, the client is called and the
facts are verified; at that time, the claims manager discusses and plans
the appropriate plan of action with the employer.
What (if any) underwriting criteria does the group
use?
Contractors Alliance considers number of years in business, experience
factor, past retro “loss ratios”, claim frequency, severity
rates, and loss control programs put in place. Contractors Alliance also
emphasizes educating and motivating our members during the year to reduce
costs for an overall greater performance.
Can the group provide you with references?
Contractors Alliance has an outstanding record of performance
and will provide references at any time.
What is the enrollment deadline?
Contracts and applications must be received no later than the
15th of the month preceding the quarter (June 15, September 15, December
15 or March 15).
When you decide to enroll with Contractors Alliance, you will be asked
to sign three documents:
- An Application for Group Membership, a single-page agreement generated
by L&I on which is printed the Contractors Alliance name and address,
our retro group number, application deadline, coverage period, and general
provisions of enrollment.
- Contractors Alliance contract, which provides details of membership
requirements and administration.
- Contractors Alliance Retro Qualifications Checklist.
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