Over the last several months I have given you profiles on the MTM Board of Directors, Board Finance and Marketing Committees and staff. It is easy to overlook another integral part of the MTM team, and that is our outside actuary. First let me describe how the outside actuary comes into play in the insurance world. Once a year, as required by state insurance law, all insurance companies must get an outside opinion of its financial condition, specifically evaluations of losses and the adequacy of loss reserves to pay all claims. MTM management, each month and quarter, evaluates our claims cost. In insurance, different than most of our members’ production process, it can take years for us to know the final cost of our product. That is, a workers’ comp claim happens today, and we could be paying on that claim, if it was a disability claim, for months and years. Therefore, the cost of our claims becomes complicated by using estimates on what we know about the claim today, and what we will likely learn about our claims in the future.

While management does this monthly/quarterly review, each year at 12/31 we use an outside actuary to validate or change our estimates. For the last 16 years our outside actuary has been Cecilia LePere. A little bit of background on Cecilia. She graduated from Bloomsburg State University, with a Bachelor’s degree in Mathematics and followed that by getting her Master’s degree in Mathematics from Penn State. She passed her actuarial exams in 1986. She is a Senior Vice President at Casualty Actuarial Consultants, Inc. of Brentwood, Tennessee and has been there for 24 years.

Every 12/31, Cecilia takes all management reports and trending estimates from prior years, to come up with her own evaluation of loss costs as of 12/31. Near the end of January, Chris Doebler, MTM CFO and I meet with Cecilia to review her findings. At the completion of this review, we have an official number to publish to the regulators at the State of Michigan Insurance Department. With this number, we then are able to go to the MTM Board of Directors in February to declare how the year finally gets booked and what member dividend is possible.

For the last three years we have had great news for our members. You may recall that in March of 2015, the Board declared a $2.5 million member dividend. A year later in March of 2016, the Board increased the dividend to $3.5 million, and in March of 2017, the Board of Directors declared another $3.5 million dividend.

To get an early look of each year, we also ask Cecilia to complete a midyear 6/30 abbreviated review. This does not give us a firm number, but does provide information on how the year will likely end. This is helpful to the management team in Board meetings held in August and October, and is also for reporting to our members at the Annual Members meeting in October.

That is the Insurance 101 lesson for the month and shows another side of the MTM business. Cecilia is an important part of our process, and I can report that Chris Doebler and I enjoy working with Cecilia in having a debate about assumptions that go into making the final calculation. The net result to our members is that we have a financially stable company that gets high independent rating agency marks and also allows us to return profits to our members.

By Ruth Kiefer, Loss Control Manager, MSc, ARM

Last year was a record year in the State of Michigan for high fall injuries and fatalities related to those falls. Our policyholders were fortunate enough not to sustain any of the noted fatalities, but we did however, have some severe high fall injuries along with other worker injuries related to slip, trip, and fall hazards. In a collaborative effort to combat these types of injuries, the federal government and our state MIOSHA are making efforts to reduce the amount of injuries and fatalities related to high falls along with addressing slip, trip and fall injuries from poorly maintained production floors.

To accomplish this push in safety MIOSHA will be adopting major changes to their walking-working surfaces and fall protection general industry standards. The new ruling, will also be referred to as Subpart D, and will follow the federal OHSA’s updates to this standard.

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By Donna Motley, Vice President of Claims

I think, as an insurance company, we are automatically given a bad reputation. Most people, at one time or another over the course of years, have had an experience with their insurance carrier, either vehicle or home owners. I am no exception. I would agree with most people that when dealing with a home or auto insurance carrier, there is a huge emphasis placed on damages that equates with “money”. While it is the carrier’s responsibility to make the insured whole, the dollar and cents are watched closely. And I do realize there is a lot of fraud in auto and home owners insurance make this scrutiny necessary.

In Workers’ Compensation, our responsibility is to make the “injured worker” whole. With all the possible variables surrounding a work related injury, how do you place a dollar value on that? There is a book sometimes utilized in the Workers’ Compensation industry entitled “Official Disability Guidelines” – or the ODG. Easily accessible on the Internet, the ODG categorizes by injury and provides the average number of days away from work for that injury, the estimated Indemnity and Medical costs associated with that injury, billing procedure codes, best practices for a return to work (with or without surgery) and suggested restrictions for returning to work based on job duties of the injured worker. In a perfect world, right?

While interesting reading, we at MTMIC do not utilize the ODG. Similarly, medical (treatment) decisions are not based on the “cost” of a procedure. Yes, when a claim is established in our system we have to establish a dollar figure that should cover full treatment until the injured worker is recovered and returned to work. This “reserve” is medical based description of the injury, extent of the injury, taking in to consideration the age of the injured worker, possible co-morbidities and physical skills required to return to work. It is not the decision of the Claims Department for an employee to have a CT Scan vs. MRI – that is the decision of the treating physician. We can make suggestions and ask questions, ask for an explanation and decide to dispute the requested test, but the dispute is based on medical evidence and not dollars spent or to be spent. We do make sure testing or physical therapy is not being performed because “they can”. Before authorization is extended, there has to be a medical basis and is warranted.

I can’t tell you how many times injured workers have accused us of making a decision “just to save money”. Or that we only allow injured workers to treat with a “Workers’ Compensation” doctor. It is true that we will not allow treatment with certain doctors, our decisions are not based on money, they are based on medical outcomes. We handle a lot of claims in our office and are able to witness physicians’ results. We want the best doctor for the injury. No one benefits, physically or monetarily, if the treating physician is not skilled in their practice – not the employee, employer or insurance carrier.

Adjusters are human too! Among our Claims Department staff and family members, we have experienced broken bones, trigger finger, tendinitis and carpal tunnel syndrome. And who did we seek to treat – the same physicians that we utilize for our claimants. If we are personally satisfied with the physician’s results, why wouldn’t an injured worker be satisfied? We tend to utilize physicians that are no nonsense so maybe the injured worker just doesn’t like what the doctor has to say. We are not cold or heartless, our goal is to have the injured worker recover, while at the same time keeping an eye out for fraud!

Harvey and Irma

Harvey and Irma continue to be front page news. Headlines in the paper “Insurance Premiums could Climb beyond Disaster Areas” and “Companies Look to Recoup Billions Paid in Hurricane Harvey and Irma”. This may be a good time for an insurance executive class 101. Reinsurance is insurance bought by insurance companies. A primary purpose of reinsurance is to cover catastrophic events not anticipated in day-to-day insurance operations. At MTM, we know that bad things can happen in our shops. A serious employee injury is something we deal with on a daily basis. But what if there was a shop explosion that seriously injured 10 or 20 employees or a vehicle accident with 5 employees affected. This could dramatically change our loss ratio for the year and the surplus cushion of the company for years to come. So, like most other insurance companies, MTM buys reinsurance.

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All too often we read of crane and rigging accidents that cause death and extensive damage. Crane operators following basic safe hoisting can prevent most crane and rigging accidents. The most important step in any rigging operation is determining the weight of the load to be hoisted. This information can be obtained from shipping papers, design plans, catalogue data, manufacturer’s specifications, and other dependable sources. When such information is not available, it is necessary to calculate the load weight. There are a number of steel weight calculator available online that will help you determine the weight of your load.

Operators must also know the rated capacity of the crane. This is the maximum amount of weight a crane can safely lift. The rated capacity should be marked directly on the beam of the crane. Even though the equipment is suitable for the weight of the load, operators need to consider the following:

  • Will the angle of the rigging devise take away any of the cranes capacity?
  • Operator rigged the load to the center of gravity of the crane and lift line?
  • Are there any sharp surfaces or corners in the rigging that could cause a rigging devise such as a sling to tear? Should padding be used to protect the sling?
  • Will the load be under control along the entire path of the lift?
  • Should a tag line be used to guide the load?
  • Are there any obstructions along the lift path that must be cleared? Can they be moved out of the way?
  • Will the suspended load be clear of all personnel?

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Payroll renewal forms have been sent out to all insureds that have an effective date in January 2018. We are asking for your estimated annual payroll for 2018 which assists in reducing the chance for additional audit money due and the end of your policy. Please complete the form and return it to Glenda Moyle or an additional copy can be requested at Glenda.Moyle@mtmic.com.

Thursday, October 19

11:00 am – 2:00 pm

The Inn at St. John’s

 

It is almost time for the MTMIC Annual Member Meeting and there is still time to RSVP if you haven’t already done so. Invitations went out in the mail a few weeks ago and registration can be emailed to Patty Allen at Patricia.Allen@mtmic.com until October 12th. We have an exciting agenda, great raffle prizes and hope to see you there.

In the last two weeks I attended the Michigan State insurance association meeting, MTM Board meeting, the summer MTM staff picnic, and some MTM member shop visits. After these meetings I was reminded how different and special MTM is.

The insurance association meeting was attended by many fine people. In the group discussions, I was reminded that as good as these people are their master was most often the company stockholders. At the end of the day their products and services are built to reward their stockholders. At MTM with Board and Committee meetings held in our office, staff is constantly reminded that we exist solely because of our members. MTM is not a large or international insurance company, but rather a small group of shop owners who believe in combining their safety efforts to reduce the cost long term of their workers’ compensation insurance.

At the MTM Board meeting with the officers and managers in attendance, we get to hear the discussion and direction from ten Board members who are also MTM members. The personal and fiduciary focus is for what’s best for MTM members at large. Each summer we hold a MTM staff picnic. To change the pace a bit, this year’s picnic was held at the Rod Stewart outdoor concert. Given the age of most staff members, Rod Stewart is an icon. His singing of Forever Young while doing calisthenics (Rod is 72 years old) was amazing. This event also reminded me of the special MTM staff. Nearly all staff members have at least 30 years of experience. Most of that experience is with MTM. As an example, Glenda, who handles premium and endorsement underwriting service questions, has been with MTM for 36 years. Chris, our CFO, 29 years. Donna, VP of Claims, 22 years. Cindy, our Senior Claims Adjustor, 27 years, and our Claims Technician, Marci, 29 years. I could go on but you get the gist.

Last week while I was at the insurance association meeting, I arrived at the meeting hall about an hour early. With that extra time I wandered through the meeting hall and I noticed that a meeting room had an MTM member name on it. Shortly, some management members of that company arrived and I talked with them in the hall. I found out that not only were they having a management update meeting, but they were also celebrating the company’s 90th anniversary. A few days later I was visiting another member and saw in their lobby a sign that they were celebrating their 50th anniversary. MTM is full of these stories. We have history, traditions, dedicated long term staff, a focused Board and loyal members. What a winning combination. Until next time, enjoy the summer.

By Donna Motley, Vice President of Claims

As your Workers’ Compensation carrier, we provide a service. Hopefully, part of that service is to make your job a little easier. In today’s world, everyone is busy. We can help take some tasks off your shoulders. After a work related injury, we can contact the doctor’s office or medical facility and provide the insurance and/or claim information. Any authorization to treat, refer for testing or to another physician, should be provided by our department pursuant to the Workers’ Compensation Act and Michigan Health Care Services Rules. We can contact the injured worker and relay necessary information; and answer the employee’s questions as to “how does this (the compensation process) work”?

In order for us to help “you”, we need you to help “us”. The first and best way to aid in the Workers’ Compensation process is to promptly report the injury to us. The second best way, is to make sure we have complete and detailed information. While I realize sometimes the Employer’s Basic Report of Injury (Form 100) has to be completed in haste, the more information provided, the least likely we are to call or e-mail you with questions or requests for additional information. Please realize, when detailing “how” an injury occurred, what may make perfect sense to you may raise additional questions in our minds. We are not necessarily familiar with your facility, the employee’s work duties, work process, the machines on site or how they operate.

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“Members own and direct” is more than an MTM saying. It is something that we live by daily whether it be a member’s dividend program that in large equated to an average 23.4% of each member’s premium, or as I often say, my bosses as President of MTM are my 10 Board of Directors that own and operate shops like yours. All Board members have shop ownership benefits and challenges like our regular MTM members at large.

In 2016, the Board authorized a Board Finance Committee. This Committee was to give management guidance on investments and company budgets as well as membership input and oversight to the professional MTM insurance managers. This year, the Board authorized a Board Marketing/Underwriting Committee. Like the Board Finance Committee, the Board Marketing/Underwriting Committee is to give membership input and oversight to the MTM insurance managers. This new Committee held 1its first meeting June 20th and is chaired by Board member, Brad Lawton of Star Cutter Company. A second Committee member, Jerry Decker, is also an MTM Board member and President of Precision Boring Company. Two committee members at large are Bob Joly, President of Hancock Enterprises, and Mark Mullen, President of Griggs Steel Company. This Committee’s management liaison is Megan Brown, VP of Sales and Marketing. Also attending the meeting were Kurt Heuser, MTM Chairman of the Board, Chris Doebler, MTM CFO and me.

The Board of Directors and Committee members are available to you at any time and appreciate your feedback. Recently the website, www.mtmic.com, has been updated with photos of the Board of Directors and Committee Members with the hopes that you find it beneficial to have a name and a face for these groups. If you have an idea for MTM, never hesitate to contact one of the Board members, Committee members, or any of the staff at MTMIC. MTM exists solely for the benefit of our 883 member owners.

Until the next time, I always appreciate your input and support. Please enjoy the summer.