IWIF declares huge dividend Injured workers fund to pay $10 million to Maryland employers

Inspections come first

December 09, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF

The Injured Workers' Insurance Fund declared a $10 million dividend yesterday to more than 27,000 Maryland employers who are policyholders of the Towson-based insurance company.

IWIF was created by Maryland statute more than 80 years ago to make sure worker compensation was available and affordable to all Maryland employers.

Paul M. Rose, chief executive of IWIF, said the company is sharing "our financial success with our policyholders."

"We don't have shareholders who are looking for quarterly dividends," he said. "IWIF exists for the policyholders."

IWIF will pay $10 million to its clients over the next two years, and begin writing checks in the first quarter of 1998.

The dividend is expected to average 12 percent to 18 percent of a policyholder's annual premium. Some clients will receive thousands of dollars back.

"I think it is wonderful; it is a Christmas present," said Stuart Bollinger, vice president of Michael J. Bollinger Co., a Rosedale-based industrial and commercial roofing company that pays about $100,000 annually in premiums and expects to receive back about $15,000.

Before IWIF makes the payment, it will examine the safety performance of its policyholders during 1997. It will look at the frequency and severity of losses that are reported, and compare them with the premiums paid by the customers.

"Those with zero losses are going to be at the higher end of the scale in terms of the dividend," Rose said. "Those that still have safe workplaces, but maybe had some noncritical losses would be at the lower end of the scale."

Rose said all customers are eligible for the dividend, but only those that have limited losses will receive a dividend payment.

"We think about 80 percent of the policyholders will receive some kind of a dividend," Rose said.

Companies that become policyholders between now and Dec. 31, will also be eligible for a dividend after about 10 months, Rose said.

IWIF can pay the dividend because it is in strong financial shape. Last year, IWIF had a profit of about $5 million, Rose said. He expects profit of $7 million this year, after the dividend is paid.

The company has assets and reserves of about $850 million, and it underwrites workers compensation insurance for more than 20 percent of Maryland employers.

IWIF typically insures small businesses such as restaurants, and riskier clients, such as window washers and businesses that handle asbestos.

In 1990, IWIF was privatized, and ever since it has been looking to build its base of customers.

This isn't the firm's first dividend payment. It has paid dividends on several occasions, including one for about $20 million in the early 1980s, Rose said.

Pub Date: 12/09/97

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