|The League of Minnesota Cities Insurance Trust |
recently returned $9.5 million in dividends to its members.
It has become a tradition. League of Minnesota Cities (LMC) and League of Minnesota Cities Insurance Trust (LMCIT) staff members enter the event on their calendars as soon as the first email goes out announcing the date and time for the dividend envelope stuffing. I was a bit confused when I first saw the email, but I have since learned that dividend envelope stuffing is one very tangible example of how a not-for-profit insurance pool works for its members.
When the financial books are closed on the past year’s claims, an analysis is done to review losses and determine how much money needs to be held in reserve. Because LMCIT is a not-for-profit entity, if there is any money remaining it is returned to the insurance pool members. The dividend amount is based on a calculation that takes each member’s total premiums and claims activity for all of the years it has been a member of LMCIT. Since 1987, LMCIT has returned more than $242 million from the property/casualty program and $38 million from the workers’ compensation program.
Laura Honeck, LMCIT program coordinator, oversees the process. Staff from all departments arrive early to find the third-floor meeting room set up in a large square with 16 workstations. The checks, cover letters, and envelopes are organized alphabetically by city or entity. The room quickly becomes a whirl of activity as staff verify that the correct check is mailed to the correct city. If someone finishes their stack of envelopes, they pitch in to help someone who had a larger pile or—in my case—was a little slow.
Here are some numbers from the recent dividends sent out from the property/casualty program: a total of $9.5 million was sent to 1,180 cities, joint powers organizations, and special districts. The smallest check was for $10, and the largest check was $122,122. And it was all done in just over 30 minutes.
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