-Mike Hammond
A 20 Year Milestone
2008 marks a significant milestone for MVRMA, its 20th
year of operation! MVRMA was incorporated on December 1, 1988 as a
non-profit municipal risk pool under Section 2744.081 of the Ohio Revised
Code. It was formed during the 1980s insurance crisis when cities all across
the country were either unable to obtain insurance or the cost was
exorbitant.
A review of MVRMA's early files documents several
months of study and evaluation prior to its formation. Initially, ten cities
indicated an interest, and eventually, all but one of those cities became
members.
Arthur J. Gallagher & Company (AJG) assisted with the
development of MVRMA's pooling structure. On April 13, 1988, AJG presented a
comprehensive proposal outlining the pooling structure, cost allocation,
insurance coverage and steps to finalize the pooling arrangement. After
several meetings of the steering committee, the project was deemed a "go."
The six charter members were the cities of Beavercreek, Kettering,
Miamisburg, Vandalia, West Carrollton and Wilmington. The first Trustees of
the Association were Stephen Stapleton, Beavercreek; Michael Robinette,
Kettering; John Weithofer, Miamisburg; Bruce Sucher, Vandalia; Tracy
Williams, West Carrollton and Clifford Eveland, Wilmington. The charter
members cited several advantages to the pooling arrangement, the most
important being significantly better and broader coverage.
In April 1990, John Nielsen was appointed Risk
Manager/Administrator of MVRMA and served until 1999. As Assistant City
Manager at West Carrollton, John served on the steering committee and was
one of the major promoters for the development of a risk pool.
Over time, MVRMA has proven to be a solid program.
Careful underwriting and selective membership requirements have resulted in
steady growth. Today, MVRMA has 20 member cities and is considered a premier
regional risk management association. We are fortunate to have well-managed
municipalities that place a priority on cooperative ventures in order to
save taxpayer money.
Today's risk financing and pool exposures are far
different that in 1988. The chart below details how the program has grown.
1988
2008
Members
6
20
Population
144,818
348,100
# Sworn FT Police
207
649
# Other FT Employees
652
2,070
# Titled Vehicles
534
1,891
Insurable Property Values
$64,000,000
$847,418,767
Net Operating Expenditures
$54,753,102
$385,918,674
Premium Contribution
$887,000
$3,997,709
Self-insured retention
$250,000
$200,000 (property)
$1,000,000 (liability)
MVRMA has now closed 12 of its 20 loss years and
returned more than $4 million in dividends to its members. These refunds
represent 47.8% of the money initially contributed to pay claims. As of
December 31, 2007, MVRMA had on deposit $13,903,812 from all funds. The
member equity or total net assets, as of December 31, 2006, was $7,203,587.
The early organizers wanted to maintain the best
possible standards of risk management and risk pooling for all members of
the association. They emphasized training and loss control practices and a
commitment to the concepts of risk pooling and risk sharing. Members were
rewarded for good loss experience and paid more when their loss experience
increased. Those ideas became MVRMA and are as important today as they were
in 1988.
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- Dinsmore & Shohl
Ohio Supreme Court Upholds Neutral Attendance Policies for At-will
Employees
The Ohio Supreme Court recently modified its 2003
ruling in Coolidge, and in Bickers v. Western & Southern Life
Insurance Company upheld the right of an employer with a neutral
attendance policy to terminate at-will employees receiving temporary total
workers' compensation benefits. As such, employment policies which allow for
automatic termination after a maximum amount of leave, or which have point
systems that count days missed against employees, can be applied to at-will
employees without regard to whether the leave or missed days relate to a
compensable injury. To prevail in a wrongful discharge claim, an at-will
employee cannot succeed merely because he or she was terminated for absences
related to a worker's compensation claim. Rather, he or she must now prove
(under the workers' compensation statutes) that he or she was terminated in
retaliation for filing or pursuing a workers' compensation claim.
The employee in Coolidge was a teacher
discharged for absenteeism while she was receiving temporary total
disability compensation for work-related injuries. The teacher was not an
at-will employee--the school district employed the teacher under a contract
governed by Ohio Revised Code Section 3319.16, which affords teachers
protection from termination without "good and just cause." Since the
work-related injury for which the teacher received temporary total
disability benefits caused her absenteeism and inability to work, the
Coolidge Court held that the school district did not have "good and just
cause" for discharging the teacher under the statute. In Bickers, an
at-will employee attempted to use Coolidge in support of a claim for
wrongful discharge after she was terminated for absences related to her
workers' compensation claim. The Supreme Court refused to extend the
Coolidge policy to at-will employees, instead, limiting at-will claims
for wrongful discharge to those based on retaliation under the workers'
compensation statutes.
In so ruling, the Supreme Court recognized that
Coolidge was a "logistical nightmare," which "prevented employers from
managing their workforce to ensure production." It also created an
opportunity for "malingering and abuse in the area of temporary total
compensation," and effectively denied employers the ability to exercise
their at-will employment prerogative by requiring them to hold open the jobs
of injured employees for indefinite periods of time. The rule was
particularly problematic for small employers with few employees who were
unable to shift the duties of an injured employee to other employees.
The Bickers rule re-establishes employer
control over staffing matters because it allows "at-will" employers to apply
attendance policies equally and without exception. At-will employees
terminated according to a neutrally applied attendance policy while
receiving workers' compensation benefits have no common-law cause of action
for wrongful discharge in violation of public policy. Workers' compensation
statutes now provide the exclusive remedy for at-will employees claiming
retaliatory termination in violation of rights conferred by the Workers'
Compensation Act.
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- Craig Blair
2007 in Review
The total number of claims reported to MVRMA in 2007 was 375. Of those
375 claims, 21 were lawsuits, five of which were filed against 2007.
While all of these statistics were higher than normal, they need to be
put in perspective. An increased number of claims can indicate problem areas
that might need to be addressed directly with a particular city or
department or for which additional training should be provided. But, it's
lawsuits that most affect MVRMA's bottom line, and at this point, it's too
soon to predict the outcome of these lawsuits. With regard to total claims
paid, 2007 was not totally out of line when compared to the last few years.
Refer to the chart below:
Year Total
Claims Paid
2003
$1,237,745
2004
$ 729,462
2005
$1,077,702
2006
$1,034,360
2007
$1,045,246
There were 31 open litigation files at the end of 2007, which is fairly
consistent with our history. Our defense counsel had nine suits dismissed
and settled twelve. While settling more claims than were dismissed was an
aberration for MVRMA (historically 65% of our lawsuits are dismissed), there
was only one significant settlement.
Subrogation Report
Subrogation, filing for reimbursement against third parties that damage
city property, is one of the value added services provided by MVRMA. Please
refer to the Subrogation Policy on page 4:04:01 of the MVRMA Handbook
or call our office if you have questions. The chart at the left shows the
history of subrogation activity for the period 1997-2007.
Loss Year
Claims/Year
Avg. Collected
1997-2006
37
$2,230
2007
33
$2,870
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Starr Markworth
Winter Driving Safety
Did you know that 30% of all fatalities in government
services are road related? According to the National Safety Council, 35-44
year-old workers are most likely to die on the road. Since a majority of
city employees fall into that age group, driving safety becomes extremely
important.
From November-April, public service employees must
deal with the unique safety hazards associated with winter road maintenance
and snow plowing. It is important to remember that each loaded snowplow may
weigh up to 50,000 pounds; thus making stopping a difficult task. With a
salt load that is continuously becoming lighter, knowing your vehicle's
stopping capability is a key to safe driving. During rainy driving
conditions, the distance needed to stop safely increases by 50%. But, snowy
surfaces require two times the normal stopping distance, and icy surfaces
require three times the normal stopping distance!
Motor vehicle accidents are the number one cause of
death in winter storms. Before you drive in severe winter weather, please
take the time for a few safety precautions:
l Let your vehicle warm up for a few minutes.
lClean the entire car/truck before you
begin to drive.
l Make sure all lights work and are clear
of ice and/or snow.
l Clean ice and snow off windshield wiper
blades.
lCheck the horn; adjust mirrors and test
brakes.
And, don't be in a hurry. The number one cause of
winter driving accidents is driving too fast.
Please contact me at 937/438-8878 or by email
smarkworth@mvrma.com to get more information or to borrow one of several
winter safety video/DVDs in MVRMA's training library..
Do your part to make this winter the safest yet.
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Employers' Liability
While often referred to as Stop Gap or Coverage B,
this type of coverage is also known as Employers' Liability. In most states,
an employer purchases Employer's Liability as part of its Workers'
Compensation insurance package. However, Ohio is a monopolistic state, and
the only coverage the Bureau offers is the workers' compensation portion of
the coverage that includes payments for medical expenses and disability
insurance for employee injuries, and life insurance. This portion of the
coverage is sometimes referred to as "no-fault" because payments are made on
behalf of the employer regardless of negligence. As a part of this "no
fault" coverage, the employer is generally exempted from liability.
There are, however, some infrequent situations where
the employer can be held liable as a result of injury or death of an
employee, and thus the need for Employers' Liability coverage. In these
situations, the claimant is most often not the employee, but rather a family
member or another employer under subrogation actions. There are five
liability situations where Employer Liability claims can come forward:
1) third-party-over actions; 2) consequential injury
(loss of consortium, loss of services, etc.) to an injured employee; 3) dual
capacity claims; 4) intentional tort claims and 5) claims for injury or
disease not covered by workers' compensation laws. It is probably not
necessary to go into detail for each category but rather summarize by saying
that coverage under these actions is not intended by the Ohio Bureau of
Workers' Compensation. Additionally, there is a situation peculiar to the
State of Ohio referred to as "substantially certain to occur" claims that
can also fall into the Employers' Liability scope of coverage.
As mentioned earlier, in most states, an employer
purchases Employers' Liability as a part of its Workers' Compensation
package. Because this coverage is communally available as a part of most
Workers' Compensation policies, it is for the most part excluded under the
standard General Liability policy forms. Ohio employers must make
alternative arrangements for Employers' Liability coverage.
In the case of MVRMA, the pool General Liability
coverage has had an Employers' Liability exception in place for a number of
years. In addition, as a part of the coverage review that took place in
2007, the liability coverage document was amended to clarify the intent to
provide coverage for "substantially certain to occur" claims.
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MVRMA's three-month Supervisory Training has been very
well received and attended. To compliment this course, we will try to
include helpful management articles from time to time. Following is an
article excerpted from Harvard Business School's
Working Knowledge.
Good managers want to see high levels of
motivation, creativity and performance from the workers in their charge, but
often times it's the little things managers do or don't do that prevent
this. There are three main things managers should keep in mind:
1. People have incredibly rich daily inner work lives
- meaning that emotions, motivations and perceptions permeate their daily
work experience.
2. People's feelings powerfully affect their daily
work performance.
3. Those feelings, the ones that are so important in
terms of daily work performance, are greatly influenced by daily events.
The lesson: People's
moods are highly indicative of whether they will perform well and exercise
creativity at work. Workers in good moods tend to have more flexible and
original thinking.
To prove this lesson, we suggest you:
Try These Tactics:
l Give workers emotional support.
l Monitor workers in a positive way (giving
positive feedback).
l Recognize workers publicly.
l Consult respectfully with workers about
what should be done.
l Collaborate - that means you roll up your
sleeves and get busy doing exactly the same things your workers do.
Avoid These Tactics
l Over- or under-specification of
assignments
l Negatively monitoring a situation (that
means avoid checking in too often or not often enough and holding back any
unconstructive feedback)
l Provide too little problem solving, or
worse, actually create more problems for your workers.
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At the December 17, 2007 Quarterly Board Meeting, the
following actions were taken:
- Approved the Open Claims and Incurred Losses Report
dated November 30, 2007
- Accepted the Claims Audit
- Approved the amended Claim Reporting Policy
- Approved the 2008 Liability Coverage Document
- Approved the 2008 Liability, Crime and Bond renewals
- Approved the 2008 Final Expenditure Budget, PCF and
Objectives
- Approved the Public Records Policy
- Retroactively authorized the Executive Director to
execute a 5-year Depository Agreement with Fifth Third Bank
- Authorized the Executive Director to execute a new
agreement with CompManagement to serve as TPA for the Workers Comp Group
Rating Program
- Reelected the current officers to serve in 2008 as
follows:
Sue Knight, Troy-Pres.
Tom Reilly, W. Carrollton-V. Pres.
Mark Schlagheck, Centerville-Treas.
Julie Trick, Vandalia-Sec'y
- Approved the 2008 Quarterly Board Meeting dates as
follows:
Monday, March 17
Monday, June 16
Monday, September 29
Monday, December 15
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