Masonry Magazine June 1973 Page. 11
The New MCAA Insurance Program ...
A MUST FOR MASON CONTRACTORS
BY WALTER T. DERK
MCAA Insurance Consultant
Back in January of 1972 the MCAA Board of Directors asked me to look into the possibility of a safety group dividend program for Workmen's Compensation and other commercial liability and property coverages. Since there were several competitive sources for such a program, I felt compelled to fully investigate the marketplace for the best possible plan. Discussions and/or investigations were made with INA, Kemper, Maryland Casualty, Hartford, CNA, Employers Group, and other professional risk-bearers.
Why CNA? First, because of the way they evaluated us. They didn't rely on rumor, hearsay, or what the other insurance companies are doing. They made surveys. They thoroughly investigated the market the membership of MCAA. When they finished, they said, "We regard your membership as the 'cream' of the masonry industry. By and large, they are above average in prosperity, intelligence and imagination. They deserve to be treated accordingly." Nice words, but what about the Plan?
Your Board of Directors approved the CNA proposal for three principal reasons:
1. It offered a viable alternative to the standard Workmen's Compensation approach of providing protection. CNA provides a dividend possibility in addition to fixed premium rates.
2. CNA agreed to work hand-in-hand with MCAA on a broad-based safety program.
3. You will be able to use your existing agent wherever possible.
The MCAA/CNA Safety Group Insurance Plan takes the gamble out of Workmen's Compensation. Each policy holder's original annual premium is his only annual premium. He can do business that year with the assurance that no additional money will be collected by CNA. Yet the plan also makes possible lucrative dividends. All premiums paid by individuals are totaled and go into a pool. At the end of the year the total losses for all pool members plus CNA expenses are deducted from the premium pool. The remainder is remitted in the form of dividends to policy holders on a pro-rata basis through the MCAA Trust. Thus, if the total dividend remaining in the pool is $100,000 and Company A paid in 2 per cent of the total premium pool and Company B paid in 1 per cent of the total, Company A will receive a dividend of $2,000, Company B $1,000. If losses plus CNA expenses amount to more than the total pool, no dividends will be paid-but neither will policy holders be billed for the overage.
The outlook for dividends is favorable, partly because CNA expenses will be limited to 28.8 per cent of the premium dollar, as against an average of 40 per cent for individual policies. In addition, MCAA and CNA have embarked upon a program for improving the safety record of the MCAA membership. At MCAA we are now gathering and sorting information on the Occupational Safety and Health Act. This work is designed to 1) help members avoid non-compliance with the Act and subsequent fines and 2) help members reduce losses due to accident claims.
masonry
• June, 1973
A Safety Information Clearing House also is being established to collect safety information helpful to roofers and to disseminate this data. Hopefully, the fruits of this two-pronged program will be to not only increase dividends but eventually to reduce premiums.
The MCAA/CNA Program offers still other advantages in the area of business insurance. You can buy auto liability, general liability and other types, often up to higher amounts and sometimes for lower rates. Also, catastrophe liability is included in the program. You can buy all the way up to millions of dollars of coverage.
Now, some questions and answers:
Q&A
**Q. Just what is the MCAA/CNA Insurance Safety Group Dividend Program anyway?**
A. It is a nationwide "safety group" of mason contractors who voluntarily participate in a program whereby Workmen's Compensation, liability and property insurance premiums and losses are pooled to make dividends available to those who join.
**Q. Where do the dividends come from?**
A. Reduced acquisition costs, anticipated improvement in accident prevention and claim investigation techniques, and pooled purchasing power of MCAA members as a group. We believe they represent the cream of the crop.
**Q. Is the dividend guaranteed?**
A. No, by law nobody can guarantee dividends. They depend upon future performance, and that's up to you as a group. What we can say is that your Workmen's Compensation premium will not exceed 100% of your Guaranteed Cost premium and that the MCAA program is specifically designed to produce further savings based upon your group's experience.
**Q. How much of my premium dollar is available for losses under an individual plan?**
A. Normally, 59.6% for Workmen's Compensation, 47% to 53% for liability lines.
**Q. So the present "retainer" kept by my insurance company is likely to be 40.4% or more?**
A. Right. Plus any loss dollars you don't use they keep that, too.
(Continued on page 18)