The Montana State Fund announced Friday that it plans to distribute a $12 million dividend among its policyholders.
It’s the largest annual dividend issued by the state workers’ compensation insurer in the past 15 years it has done so.
The State Fund is a quasi-public state agency that insures over 26,000 employers in Montana. It’s the biggest provider of workers’ compensation insurance in the state.
Around 23,000 of those employers are eligible for a share of the money. They will receive an average of $578, though the money is divided according to each policyholder’s yearly claims and premium.
Mary Boyle, communications specialist, said the State Fund uses the dividend as another way to incentivize safe workplaces. This year’s dividend amounts to just over 7 percent of the total revenue from premiums, she said.
“It gives us pleasure to financially reward our policyholders who have invested time, money and efforts to create a safer workplace for their employees,” said Laurence Hubbard, the fund’s president and CEO, in a news release.
Boyle said the large dividend shows that the workers’ compensation fund is financially viable.
“It’s not a sure thing every year,” she said.
A portion of the premiums collected is put into a surplus account, she said, in case that year’s claims are higher than anticipated. The dividend is issued from the same account, so when claims are low, policyholders get more returned.
Since 1999 the fund has issued a dividend each year, $86 million in total.
“We’ve been able to manage these claims effectively, and at the same time our policyholders have been able to manage this effectively,” she said.
Last year’s dividend was also one of the state fund’s highest at $10 million. Premiums have also dropped over the past few years.
“We have been pushing safety,” Boyle said. “We want to keep Montana’s workers safe.”
In addition to the dividend, the State Fund hosts free employer safety workshops every quarter and oversees a “WorkSafe Champions” program, a yearlong, intensive safety curriculum for interested policyholders.
To be eligible for this year’s dividend, employers must have been a policyholder from July 1, 2010, through June 30, 2011.
Recipients are currently being notified and payments will begin in January, according to the release.