OET Decertification Letter to Members - 6/27/14
OET Decertification Letter to Agents - 6/27/14
OET Decertification Letter to WCD - 6/25/14
FAQs Regarding the Decertification of the Oregon Employers Trust

Consistent with SB 1558 the Oregon Employers Trust conducted a vote of the membership regarding decertification. The vote of the membership illustrated that a majority of the Trust members wanted the Trust to continue as a self-insured group.

However, more than one half of the Trust’s membership either cancelled or declined to renew during the past nine months and key trends continued to be negative.   The Board of Directors voted for decertification because; 1] continued insufficient cash flow, 2] the Trust’s inability to meet both current and anticipated regulatory requirements, 3] negative underwriting trending and 4] the one time window to receive support for future claims costs from the Worker’s Benefit Fund. 

The agents and the membership are reminded that the Trust must continue operations for the next five (5) plus years to meet the contractual requirements of the NCCI (rating bureau) for maintaining experience rating modifiers, excess insurer and other vendors.  The Trust must meet regulatory compliance and reporting requirements of the state.  These contractual obligations and functions are in addition to the management of the Trust’s claims and not supported by state authorized funding.

Each OET member continues to be responsible for premiums - contributions, audits and assessments that are owed to the Trust. Late payments will incur interest costs to the member.  If premium contribution, audit or assessment collections require legal action, the member will pay the additional attorney costs incurred by the Trust.

  Q & A

What happens next?



Mechanically the following shall take place:
Workers’ compensation coverage will continue for those members that have not found replacement coverage up to and including August 31, 2014.  Effective September 01, 2014 OET shall be a decertified self-insured group and no coverage shall exist. OET will be in “run-off mode” effective September, 01, 2014 of this year and will continue until all claims have been closed.  The Director of the DCBS has determined that the claims and other administrative functions of the Trust shall remain with Empire Pacific Risk Management, Inc.  Excess coverage shall contractually continue through the end of 2014 even though there will be no exposure for the last four (4) months of 2014.  Contribution – premium audits of individual members will be completed through 2014.  A revised NCCI Affiliation Agreement will be in place so that members experience modifier data can be accurately reported and then promulgated by the rating bureau; 2014-2019.

Although OET will no longer be a certified self-insured group it will still remain as an Oregon corporation with directors and contracted staff to manage those functions beneficial and necessary for all past members.


Why do I need to keep paying premiums?



Each member has an ongoing responsibility to adhere to their contractual obligations to the Trust.


Why should I submit to a payroll audit?



The audit is the final determining measure of the member’s obligation to the Trust based on payrolls by class codes.


Why should I continue my monthly assessment payments if the new law - SB 1558 may cover the ultimate claims liability of OET?



First, SB 1558 was written that the DCBS may provide funds for future-ultimate claims liabilities but SB 1558, does not provide funds for the non-claims liabilities of the Trust. Next, OET has ongoing obligations to the excess insurance company, the membership (NCCI and regulatory), vendors and suppliers that are in addition to the Trust’s claims liabilities. These non-claims Trust responsibilities shall continue for a minimum of five (5) years.


Is there the potential for another assessment?



Under SB 1558 the Department of Consumer and Business Services (DCBS) Director has the ability to both assess the membership and apply civil penalties to unresponsive members.  OET continues to have the ability to assess the membership if there are insufficient funds for continuing operations.


What does the cost of ongoing claims include?



Claims costs include but may not be limited to all the injured worker’s; indemnity benefits, medical benefits, claims related allocated expenses and legal expense.  Claims costs may also include the third party administration for those claims that are currently open or may reopen.  Claims cost may include some of the regulatory reporting of claims as prescribed by the department.


What is the future administrative, regulatory and non-claims cost going to total?



The future incurred costs - ongoing liabilities for non-claims functions of OET are not currently knowable because there are still too many variables.  The future income (assets) of OET are not yet knowable because of the same variables. 

Variables include but are not limited to: accounting, actuarial, administration, audit expense, audits payable, audits receivable, agency commissions – fees, assessments, collections, debt, deposits, specific excess insurance, aggregate excess insurance, excess insurance audit, fiduciary, IT, legal, legal, legal, licensing, NCCI, records recovery, regulatory reporting, regulatory special request, storage, software, suppliers and vendor contracts.