Board Approves $23.7 Million Distribution
Posted: Thursday, February 16, 2017
** SPECIAL ANNOUNCEMENT **
Board Approves $23.7 Million Distribution to Members
At its February 16th meeting, MMRMA’s Board of Directors acted to declare a $23,749,971 distribution of excess net assets to current renewing MMRMA Individual and State Pool Members. The Board also approved the 2017 Net Asset Policy Report, including the results of the most recent capital adequacy analysis, which determines the required net asset amount. This will be our eleventh distribution of excess net assets to current renewing Individual and State Pool members. With this distribution, MMRMA has distributed $250,000,000 to its renewing members since 2006. The following table shows a history of these distributions:
This distribution is the largest component of an over $38,000,000 deployment of excess net assets for the benefit of our membership this year. Examples of other uses of excess net assets include:
- Michigan Vehicle Assessments – Excess net assets are used to pay the Michigan Catastrophic Claims Association (MCCA) and Michigan Assigned Claims Plan vehicle assessments for members. It is estimated that we will pay more than $2,900,000 in assessments on behalf of the membership this year.
- Risk Avoidance Program (RAP) Grants – Excess net assets of $1,250,000 are allocated to fund RAP Grants for the upcoming year. RAP Grants are awarded through MMRMA’s Membership Committee.
- Data Breach Coverage – In July 2013, MMRMA began providing Data Breach Coverage to all Individual and State Pool Members. This coverage will continue to be supported with $520,000 in excess net assets.
- No Fault Automobile Coverage – Excess net assets are used to provide members with enhanced no fault automobile coverage. With Michigan having one of the most costly no fault statutes in the nation, this is a significant benefit.
- Coverage for Volunteers – Excess net assets are used to underwrite liability coverage for volunteers.
- Greenstone Insurance Company – In December 2016, MMRMA launched its new captive, Greenstone Insurance Company. As part of the deployment of excess net assets, the Board approved a one-time $10,000,000 transfer to capitalize the company. See the most recent Risk Journal for more information on Greenstone and its long-term benefits to members.
Once again, this is very good news for members and, based on the distribution rules adopted by the Board, most members will receive their share of this distribution following their membership renewal.
MMRMA’s ability to provide these benefits to its members is a direct reflection of strong performance results over a sustained period of time. Many factors contributed to these favorable results, including better than expected loss trends in recent years, member responsiveness to risk control recommendations, good risk management practices by members that resulted in fewer losses, and, most importantly, investment income through June 30, 2016. However, the most central factor that allows MMRMA to deploy excess net assets is the long-term commitment that members have made to MMRMA. Without your loyalty and ongoing support of this fine organization, these benefits would not be possible. Thank you.
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