OMAG Retention Program
The purpose of this program is to reward any OMAG member municipality that keeps an eye on safety and loss reduction, and thereby reduces losses and claims. This is a success for your municipality and we want to share this success with you by reimbursing a portion of your premium to you. Our Board of Trustees has approved this plan to reward you for continuing to participate in the Municipal Liability Protection Plan (MLPP) and helping control claims and losses.
This program returns a portion of the MLPP premium based on claims experience. Each year, OMAG sets aside 20% of your liability premium into a special loss fund. The program operates on a 3-year cycle, so, for example, a good claims year in 2017-2018 could earn back a refund, with the first checks issued in 2020.
Here are some examples based on GL/Auto (MLPP) premium:
- City X pays $30,000 in annual premium. OMAG sets aside $6,000 as a special loss fund. At 6/30/2020, there were no claims for the period 7/1/17 - 6/30/18, so OMAG gives City X $6,000 in the fall of 2020.
- City Y pays $20,000 in annual premium. OMAG sets aside $4,000 as a special loss fund. At 6/30/2020, there was one claim for the period 7/1/17 - 6/30/18 which cost a total of $3,000. OMAG gives City Y $1,000 in the fall of 2020.
- City Z pays $3,500 in annual premium. OMAG sets aside $700 as a special loss fund. At 6/30/2020, there was one claim for the period 7/1/17 - 6/30/18 which cost a total of $15,000. City Z does not earn a refund for 2017-2018 premiums in the fall of 2020, but is eligible at 6/30/2021 on the 2018-2019 premium (depending on claims during that period).
Frequently Asked Questions (FAQs):
Question: Doesn’t OMAG have a Workers’ Compensation program that works in a similar way as this MLPP Retention Program?
Answer: Yes! OMAG created this program for MLPP because of the popularity and success of that Workers’ Compensation program.
Question: Do we have to apply our refund to our insurance premium? What can we use it for?
Answer: OMAG does not apply any restrictions on the use of refunds.
Question: What if our policy year isn’t July 1 – June 30?
Answer: OMAG will measure your premiums for your policy that begins in the July 1 – June 30 timeframe against claims incurred for the July 1 to June 30 year.
Question: Why is there a 3-year waiting period before I can get a refund?
Answer: Claims are reported to OMAG over time. Additionally, sometimes claims costs are paid over time and the total cost of a claim is not known right away. Three years allows adequate time for claims reporting, claims handling, and final calculations to be made.
Question: What if my municipality is in the MLPP in 2017-2018 but not in the plan in 2018-2019, and then back in it in 2019-2020. Are we still eligible to receive a refund for 2017-2018 if our claims were low enough?
Answer: No, you must remain in the MLPP continuously to be eligible for a refund.
Question: Will I receive an annual report showing my progress before the three years have passed?
Answer: Yes. Approximately every July starting in 2018, you will receive a report showing every open year’s premium, loss fund, claims totals, and potential refunds.
Question: Who can I contact if I have more questions?
Answer: Brian Holland, Director of Finance & Administration at (800) 234-9461 or email@example.com
Question: Why is OMAG so awesome?
Answer: Great members make for a great organization!