The OMAG Workers’ Compensation Plan (the Plan) became effective October 1, 1984. The purpose of the Plan is to provide workers’ compensation coverage through CompSource Mutual to participating municipalities in the State of Oklahoma. In that capacity, the Plan is responsible for providing loss control services and certain fiscal activities including underwriting, excess insurance agreements, claims processing, and legal defense for any and all claims submitted to it during the Plan year. A plan year normally begins at 12:01 a.m. July 1, in any year and ends as midnight June 30, of the following calendar year. The Plan, or its designated agent, has a right to audit at all reasonable times such books and records of the participant as necessary to determine the monies owed for benefits provided to the municipality or its employees.
A municipality may apply and enter into agreement with the Plan to participate in the coverages and services that the Plan offers as outlined above. Upon acceptance into the Plan, a participant has the responsibility to pay fees set by the Plan and to pay those fees from funds appropriated for that purpose according to the established payment schedule. In addition, a participant in the Plan is responsible for complying with all requirements of the Oklahoma Workers’ Compensation Act. Participants have a right to the return of any Aggregate Deductible set aside for claims, which have not been paid out as benefits. Additionally, if the Plan returns Aggregate Deductible to a Participant and claims paid later increases so that a refund would not have been due to Participant (or the refund would have been less than actually refunded), the Participant agrees to reimburse the Plan for the difference.
The accompanying report details the funds being held by OMAG for your municipality. These funds represent both current and past plan year participation with the Aggregate Deductible balances in respect to your workers’ compensation policies. CompSource Mutual provides coverage in excess of these respective Aggregate Deductible levels so each participant’s liability for claim losses is limited to these Aggregate Deductible levels. Failure of CompSource Mutual to honor its obligation could result in losses to the Plan. However, OMAG’s evaluation of the financial condition of CompSource Mutual indicates that CompSource Mutual is presently financially sound and will be able to meet its contractual obligations.
Items shown in the letter include:
- Escrow – Typically past refunds or interest earnings left on deposit with OMAG, to be disbursed or applied to outstanding premium balances upon instruction by your governing body.
- Earned interest – OMAG holds certain investments for the Plan’s benefit. These investments yield interest, gains and losses, and dividends. These amounts are accumulated and allocated to Plan participants annually based on the balance of your Escrow and Aggregate Deductible funds.
Items shown on the back of the letter in the table are:
- Year ending June 30 – If the Loss Fund Available is zero for a given year end, it is not shown. The lines shown have a balance in Loss Fund Available.
- Total and Open Claims Counts – These are the number of claims for the given year. If Open Claims Count is more than zero, claims payments may change over time.
- Aggregate Deductible – That portion of premium used to pay claims. The report shows the remaining balance for each year after claims payments and prior year refunds to date. If no balance exists for a year, all funds were used to pay claims or have been previously refunded to the municipality. These balances do not take into account any claims reserves on open claims which might exist at June 30. Those claims reserves will impact the ultimate refund made for a plan year.
- Claims Payments – Payments made on claims through June 30.
- Remaining Aggregate Deductible – Aggregate Deductible less Claims Payments. Never less than zero.
- Refunds to Date – All refunds by OMAG to you through June 30. Some may have been checks written back to you or you might have elected to apply refunds to amounts owed to OMAG.
- Loss Fund Available – Remaining Aggregate Deductible less Refunds to Date.