Distribution Calculations

If the Fund has excess/surplus claims funds, the Fund Administrator may recommend to the Board of Trustees that a dividend distribution be considered.  If approved by the board, the Fund Administrator then applies to the Michigan Department of Labor and Economic Growth (Regulator) for its approval of the maximum amount of the distribution.  If approved by the Regulator, the Fund can but is not required to distribute all or part of the surplus approved by the Regulator (Reference Article VI of the bylaws for complete details of distributions).

Distribution Calculations

Bank’s Net Claims Fund
Standard Premium * Claims Fund % – Claims

Dividend Calculation
Amount eligible for distribution * bank’s net claims fund % of amount eligible


  • The 2006 claims year has a $600,000 surplus that has been approved to be distributed
  • ABC Bank entered the Fund 01/01/06, paid a $10,000 Standard Premium and had $1,000 in claims in 2006
  • In 2006, 70% of the premium is allocated for the claims fund (30% towards overhead)


For ABC Bank:

Net Claims Fund 
$10,000 X 70% – $1,000 = $6,000

Net claims fund % of amount eligible
$6,000/$600,000 = 1%

$600,000 x 1.0% = $6,000

In this example, ABC Bank would receive $6,000 in distributions for the 2006 claims year.

Note:  Individual bank distributions are calculated independently of all other Fund years without claim carryovers for years in which the total of claims paid/reserved for a bank exceed the individual bank’s claims fund.