Assigned Risk Reinsurance Pool
The Indiana Workers Compensation Assigned Risk Reinsurance Pool’s operations are accounted for on a policy year basis. That is, all policies with an inception date in calendar year 200X are considered policy year 200X policies, and all related premiums, losses and expenses are accounted for as policy year 200X business, regardless of when they are collected/paid. A policy year’s operating results evolve over time as policies written late in the calendar year expire and work their way through the final audit process. Consequently, a policy year’s operating results are usually reported on an inception-to-date basis rather than on the basis of transactions occurring during a given time period. Since there are some who prefer to see the transactions that have occurred during the most recent reporting period, the Pool’s Statements of Operations reflect both presentations and show how cumulative data has been affected by recent events.
The Pool’s Statements of Operations are prepared in accordance with statutory accounting principles which differ from generally accepted accounting principles (GAAP), primarily in the treatment of loss reserve discounts and prepaid acquisition and servicing expenses. A financial statement prepared in accordance with GAAP would reflect a discount of each policy year’s outstanding loss reserves to their net present value as of the statement date, and acquisition and servicing expenses paid on written but unearned premium would be reported as a prepaid expense (i.e., an asset) rather than a current period expense. Because a substantial portion of a policy year’s incurred losses will initially be unpaid and a substantial portion of written premiums will initially be unearned, this difference in accounting treatment will result in a substantial difference in the net income reflected on a statutory statement vs. a GAAP statement (with the statutory statement reflecting less net income than the GAAP statement). These differences are especially severe for the first two calendar years of a policy year. Because these differences are timing differences, however, they will eventually disappear, and the ultimate net income of a policy year will be what it actually is – regardless of accounting method.
The presentation of the Pool’s accounts generally follows the annual statement format. Investment income is net of investment expense and reflects income earned on the cash flow of the respective policy year. The investment income earned during a calendar quarter is allocated to a policy year based on that policy year’s prorata share of investable funds during the calendar quarter. The individual member company statements reflect both quarter-to-date and inception-to-date results for both the member company and the Pool as a whole. The summary report reflects the member’s stake in the Pool.
To complete your annual statements for 2005 and thereafter, the Indiana Pool NAIC number is AA-9991414. There is no FEIN for the Indiana Pool that applies for annual statement reporting. Prior to 2005, you would have used the number for the National Workers Compensation Reinsurance Pool (NWCRP) which is AA-9992118.
The Statements of Operations are in PDF format and require Acrobat Reader for viewing or printing.
To view/print the current quarterly Statement of Operations without any member company information, click on the link below:
To view/print the prior year end Statement of Operations without any member company information, click on the link below:
To view/print the current Policy/Accident Year Losses Paid & Case Outstanding chart, click on the link below:
To view/print the combined Premium and Claims distribution charts, click on the link below:
To view/print the list of securities held by the Trust as of December 31, click on the link below and select save: