The Workers Compensation Rating

“The "members" of the wcribma are insurance companies licensed to write workers' compensation insurance in massachusetts.”

“Each year at the wcribma's annual meeting, the members elect at least nine but no more than eleven member representatives to serve on the governing committee. The elected governing committee members then appoint no fewer than three non-member representatives, consisting of one labor representative, one employer representative and one agent/producer representative, to serve on the governing committee.”

“The members of the wcribma need to approve any proposed amendments to the wcribma's constitution. This would be done at a meeting of the wcribma's membership. Additionally, at each annual meeting, the members of the wcribma are asked to ratify, confirm, and approve all acts of the governing committee during the preceding year. The massachusetts division of insurance approves amendments to the wcribma constitution.”

“The wcribma's budget committee, appointed by the governing committee, reviews a final version of the form 990 prior to actual filing. Members of the external audit and tax firm (currently aafcpas) initially discuss, prepare and review the return with the management team of the wcribma. Once the tax return is fully analyzed and reviewed by the management team, a copy is distributed to the budget committee members in advance of a specified meeting. Subsequently, aafcpa's tax group representatives meet with the management team and members of the budget committee in order to ensure all persons have had an opportunity to ask questions and discuss the content of the tax return prior to the deadline. After the budget committee members complete their review and approve the form, it is sent to the entire governing committee for its review and comment prior to the filing of the form.”

“The wcribma maintains both a conflict of interest policy for wcribma employees and a conflict of interest policy for wcribma officers and members of the governing committee (collectively "policies"). Under these policies, employees, officers and members of the governing committee are required to execute (and submit to the wcribma's general counsel) an annual disclosure statement which states that they received, read, and understand the conflict of interest policy; they understand that the wcribma is a non-profit entity, which must not engage in activities that could jeopardize its tax-exempt status; that the wcribma must be operated for the purposes stated in the wcribma's constitution and the assigned risk pool plan of operation; and that the wcribma must be operated at all times in accordance with antitrust laws. They agree to comply with the policy and disclose any conflicts or acknowledge that they have nothing to disclose which is in conflict with the established policy. Should any change occur in their situation, they shall submit a further disclosure statement covering the same. Once each year, the wcribma's general counsel will also remind employees, officers and members of the governing committee of their obligation to submit a further statement if any change occurs in their situation. If any annual statement contains a disclosure of a conflict, or if a further statement is submitted, the general counsel will follow the procedures set forth in the policies.”

“In accordance with the wcribma's constitution, the governing committee directly determines the compensation of the president. As part of the budget process, the governing committee established a salary administration program to identify and pay the appropriate competitive level of compensation to the wcribma president. The compensation that is established is based on comparable industry data. The program includes annual salary range adjustments to remain current with the market value of the position. At the end of each fiscal year, the governing committee chair and vice chair review the performance of the wcribma president and, along with the full governing committee, establish the new compensation for that position based on market driven salary range data and measured performance. The committee also sets goals and performance measures for the following year. Pursuant to the wcribma constitution, the compensation of all other wcribma officers, as well as all other wcribma employees, is established as part of the annual budget approval process whereby the budget committee reviews and discusses the employee salary administration program which was approved by both the budget committee and governing committee. The budget includes recommendations of any required salary range movements as well as the merit increase guidelines for the upcoming year. The salary administration program is updated annually. The compensation data that is included in the salary administration program for officers is provided by two (2) independent third party compensation consulting firms. These independent consultants conduct surveys of other employers, with an emphasis on employers in the insurance-related industry who are in the northeast, and whenever possible, those with similar revenues to the wcribma. As a result, the compensation of the wcribma's most senior executives is consistent with the prevailing market rates for similar positions. After the budget committee votes to approve the salary budget, including any amendments they may make, it is then presented to the governing committee for review and discussion as part of the full wcribma budget. After review, discussions, and any further amendments, the governing committee votes on the budget.”

“A description of the wcribma's conflict of interest policy and the financial and governing information of the organization are reported in the form 990, and are available upon request.”

“The workers' compensation rating & inspection bureau of massaschusetts (wcribma) is a voluntary non-profit unincorporated association of insurers. Pursuant to the provisions of massachusetts general laws chapter 152, sections 52c, 63 and 65c, wcribma is licensed by the massachusetts division of insurance as the rating organization for workers' compensation insurance in massachusetts; it is the coverage verification entity for the massachusetts department of industrial accidents; and the administrator of the massachusetts workers' compensation assigned risk pool. The wcribma also acts as the statistical agent for workers' compensation data on behalf of the massachusetts division of insurance. The wcribma, which is governed by a constitution and adheres to antitrust guidelines, collects and compiles premium and loss statistics for use in rate filings and various rating plans that are approved by the massachusetts division of insurance. On behalf of its members and subscribers, the wcribma makes and files rates, rules, classifications, rating plans, policy forms and endorsements, and other material pertinent for workers' compensation and employers' liability insurance policies, which are reviewed and approved by the division of insurance.”

“A workers' compensation reform law was passed in massachusetts on december 23, 1991 that required, effective 1992, the wcribma to provide the insurance fraud bureau of ma and the state rating bureau of ma funding to pay expenses as they relate to workers' compensation fraud and rate-making in the commonwealth of massachusetts.”

“Massachusetts general law, chapter 152, section 65c, established a reinsurance pool constituted and comprised of all insurers writing workers' compensation insurance in the commonwealth. In accordance with section 65c, the commissioner of insurance designated the wcribma as the administrator of that reinsurance pool, known as the massachusetts workers' compensation assigned risk pool (pool). The cost that the wcribma incurs to administer this pool is charged to pool members. The amount that the pool members reimburse the wcribma is determined using an allocation methodology, therefore, each expense line of the wcribma is not reduced, but instead a credit against the total expense is identified and booked. The methodology used to determine the pool's share of reimbursable expenses is based on the amount of time that employees spend on pool business as compared to the time they spend on the other functions of the wcribma. That ratio and total wcribma expenses are the two primary factors that result in the calculation of the pool reimbursable expense credit. Excluded from this calculation are expense items that the wcribma would incur even if there were no pool.”

“Reapportionment of prior year excess of income over expense -1,249,278.”

“The organization changed their accounting method from modified cash basis to accrual basis in 2022.”

“The audit committee assumes responsibility for oversight of the audit and the selection of independent auditors.”

“The assets of the wcribma consist primarily of assessments and membership fees paid by the membership and any interest income realized on these monies during the year. Expenses for the operation of the wcribma are netted against revenue annually, and excess collections are returned to the members as "adjustments" to their assessments. Fund balances, capital stock and net worth determinations are not appropriate for wcribma operating procedures. The wcribma is a non-profit voluntary association of insurance companies writing workers' compensation insurance in massachusetts. Line 9 other changes in net assets or fund balances: 2021 fiscal year adjustments of $1,249,278 were on the books as of january 1, 2022. This amount was returned to the membership in 2022. Thus line 9 equals a negative $1,249,278. For the 2022 fiscal year, $754,826 exists on the books as of december 31, 2022 that will be handled in a similar fashion during 2023.”