09-A TML Ins - equity returns since 2003-04

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Liability and Property Equity Returns The Pool's Board of Trustees has adopted Equity Return Policies for the Workers' Compensation, Liability, and Property Funds. The policies state that when the following conditions are met at the end of a given year, the Pool will return one-half of equity gained that year. 1. Members' Equity as a percent of net contributions is at least 75 percent, 2. Members' Equity as a percent of net loss reserves is at least 50 percent, 3. Members' Equity increased during the prior fund year, and 4. The increase in Members' Equity is at least $1 million. At the end of 2005-06, the Liability and Property Funds satisfied all criteria for an equity return, triggering returns of $6.7 million from the Liability Fund and $3.2 million from the Property Fund. Members' Equity as a percent of net loss reserves in the Workers' Compensation Fund fell short of the 50 percent required. Therefore, no equity will be returned from the Workers' Compensation Fund. The Pool's Board of Trustees approved the following criteria for returning equity from the Liability and Property Funds. Distributions will be made to Members that; 1. Have participated in the individual Fund for at least one complete year on September 30, 2006, 2. Have a loss ratio for that Fund that is less than 100% since joining the Fund or for the last 10 years for Liability or the last 9 years for Property, and 3. Continue to be a Member of that Fund on April 1, 2007. The equity return calculation also recognizes the length of time a Member has participated in the Fund. Liability The amount of each Member's Liability Equity Return will be a percent of 2005-06 contributions determined as follows: Member's Liability Loss Ratio Liability Equity Return as a Percentage of Member's 2005-2006 Contributions Less than 25% 25% to less than 50% 50% to less than 75% 17% 15% 13% Approximately 2,160 Liability Fund Members will receive some portion of the equity return and 1,870 Members will receive a distribution of 17% plus the longevity factor set forth on the next page. April 2007 -..1"