Qualifications for Membership


The Fund Administrator may admit as a Member of the Fund only an employer in the State of Michigan which is financially sound and meets at least one of the following criteria:

a) A provider of Financial Services in Michigan

 Participation Criteria

In addition to the eligibility requirements set forth, all participants in the Fund shall:

  • Have a ratio of current assets to current liabilities of at least one-to-one and positive net worth
  • Have an Experience Modification rate of 1.00 or lower


Applicants will be admitted only upon approval by the Trustees and review by the Department of Licensing & Regulatory Affairs (Michigan Workers’ Compensation Agency) and/or the excess insurance carrier of the Fund.


Plan Year
The MBWCF operates on a calendar year from 12:01 AM January 1 to midnight of December 31. The premium is pro-rated for any participants entering the plan after January 1.  The proration will start from their effective date and go through the last day of December.

Claims Service
Personal contact is a routine part of our Service Agents claim service which insures the professional handling of serious claims. Participants in MBWCF are fully advised of the status of serious claims and litigated cases. Fund participants are routinely provided copies of medical reports, investigation reports, attorney correspondence and written communication from the claims consultant on the status of serious cases. Witnesses are personally contacted to document the true facts to support or deny the allegations of the claim.

The Fund member, along with the Fund, recognizes the employers’ responsibility under the law while at the same time provides constant review to reflect current changes in case development. The claims consultant is available for specific case review of reserves at any time. The high cost of claims activity is monitored and reduced through the use of one or more of the following methods:

  • Thorough investigation
  • Proper use of rehabilitation sources
  • Strict adherence to the law
  • Monitoring of medical facilities
  • Selective guidance in monitoring of defense council
  • Prompt, accurate reporting and advice
  • Personal monitoring of trials
  • Active third-party recovery techniques
  • Sound reserving policy
  • A forceful approach toward non-documented injury cases


The Fund members, Fund and Service Agent work together to maximize savings of claims dollars.

Loss Prevention Services
The Service Agent works with the Trustees and Fund Administrator to trend and monitor accident frequency and severity. The following is a sample of the Loss Prevention services available to MBWCF participants.

  • Loss Prevention surveys to assure compliance with MIOSHA, OSHA and other regulatory agencies.
  • Provide hearing preparation and defense for regulatory agencies, i.e., MIOSHA, OSHA and other regulatory agencies
  • Video tape capabilities to “zero in” on hazardous situations and develop personalized training in hazard identification programs
  • On-site videotaping for supervisory training and potential accident identification
  • Noise surveys – utilizing sound levels, meters and dosimeters
  • Monthly accident analysis and Composite Computer Reports charting accident trends
  • Computer analysis of losses by location, job classification, injury repeaters and other loss analysis statistics.


Overhead Expense

The overhead charge is a percentage of Standard Premium and covers the following expenses:

Administrative Expenses

  • Fidelity Bond Premium
  • Fund Management
  • Attorney Fees Not Pertaining to Claims
  • Accounting Fees
  • Premium Billings


Excess Insurance Premiums

  • Aggregate Excess Insurance
  • Specific Excess Insurance


Service Agent Fees

  • Claims Adjusting
  • Loss Prevention Consulting Data Processing Services
  • Critical Incident Response Services


Excess Insurance
In the event of a catastrophic accident or overall poor claims experience of the participants in a Fund Year, excess insurance policies are purchased by the Fund through a reinsurance company. The individual bank and the Fund as a whole are protected against catastrophic loss through Specific and Aggregate Excess coverage. The specific coverage applies to a single occurrence in excess of a specified amount within statutory limits. The Aggregate coverage pays losses of claims fund in excess of the total standard premium and may be subject to maximum policy limitations.

The Specific and Aggregate coverages assure members that losses cannot exceed a percentage of Standard Premium.

Service Organization
The MBWCF contracts with a service agent to provide the services necessary to administer the Fund in compliance with regulations of the State of Michigan. The Fund’s service agent is an approved third-party administrator specializing in worker’s compensation.

Board of Trustees
The Fund is directed by a Board of Trustees which represents all of the participants. The Trustees are members who understand the needs of the Banking Industry in establishing the policies and operating procedures of the MBWCF.

Operating Procedures, Bylaws, and Indemnity Agreement
All new participants receive copies of the operating procedures, bylaws and indemnity agreement. Upon request, all Fund participants are entitled to receive copies of the audited financial statement for the Fund.

Premium Development

Using the appropriate classification rates, the Manual Premium is calculated based upon the employers estimated payroll. The Standard Premium is the result of multiplying the Manual Premium by each member’s Experience Modification factor.  The Experience Modification factor is calculated yearly in accordance with the National Council on Compensation Insurance Rules.

Surplus Distribution

Claims Fund
A percentage of Standard Premium is placed in a claims fund. When a claim expense occurs, it is paid from this fund. Each fund year has its own separate claims fund. Members with a good loss experience are eligible to receive investment income and claims surplus return more than once for any fund year upon the approval of the Michigan Workers’ Compensation Agency.

The unused portion of the claims fund and reserves for claims not yet paid is invested through the fiscal agent. Surplus claims dollars are returned to the membership when overall experience of the group is good. Only those members with a positive loss fund (claims do not exceed contribution) will share in the return. The amount of the return is proportionate to the contribution and the loss experience of each member. The Michigan Workers’ Compensation Agency must approve all requests for distribution of the surplus claims fund. A percentage of the claims fund is retained for claims not yet reported.

Data Processing Reports

Fund participants are provided with reports to keep abreast of the current loss experience of the group. The reports include:

  • Monthly Claims Summary – For all participants with outstanding claims activity. It highlights by employee name, the type of claim, dollars paid, dollars reserved and, most importantly, current loss ratio. The participant is always aware as to the current financial obligations of their pending claims.
  • Composite Claims Summary – This report is mailed quarterly to all participants. It highlights all activity for the fund year by participant name showing dollars paid, outstanding reserves, total incurred, standard premiums and the overall loss ratio for the entire group.
  • Loss Analysis Reports – This report provides the Trustees and Fund Administrator with a monthly analysis as to claims frequency, severity, type of injury and trending of loss experience in order to properly evaluate the performance of the Fund.