Pennsylvania Counties Workers' Compensation Trust

Description and History

PComp is a workers' compensation program developed by the County Commissioners Association of Pennsylvania (CCAP), in conjunction with PCoRP, the Pennsylvania Counties Risk Pool. Faced with rising costs and few commercial alternatives, counties requested that CCAP form a group workers' compensation program for counties. PComp started operations on January 1, 1993. PComp has been approved by the Pennsylvania Department of Labor and Industry to operate as a self insured workers' compensation pool under Act 44 of 1993.

PComp can provide workers' compensation coverage for counties, and for county-related entities such as nursing homes and county joinders. PComp has forty-seven: thirty-two counties and fifteen county-related entities. County-related entities, for the purposes of membership in PComp, are organizations created and controlled by one or more counties to perform typical county functions. PComp requires a county to be a member before coverage will be provided for the county's nursing home.

Program Goals

The goals of PComp are:
Availability of Coverage: With the cycles of the commercial insurance industry, there have been periods when counties have experienced cancellations and a severe lack of choice when searching for workers' compensation coverage. PComp is designed to be a long term alternative, ensuring coverage is always available for qualified counties.

Stability of Costs: Since workers' compensation exposures can be lifetime exposures, PComp is designed for the long term. Members are required to make an initial three year commitment to the program to help ensure the long term financial stability. To enhance continuity of service, most of our agreements for reinsurance and service provision are for three or more years.

Assertive Loss Control: The success of a workers' compensation program relies to a great deal on controlling and limiting losses. PComp has designed a forceful loss control program which members are required to adopt and implement. Each year members can earn up to a 5% reduction of their premium if they are in compliance with PComp's loss control policies. Seminars and on-site training sessions for county personnel are a regular part of the PComp loss control program. PComp's efforts also target those areas where members have the highest exposure (such as prisons and nursing homes).

Potential For Broad Participation of Counties: Membership in PComp is available to all qualified counties, regardless of population or premium level. To join, counties must meet two criteria: Review and approval by the PComp Board of Directors and by PComp's reinsurers. PComp is a self insured program, and is regulated by the Pennsylvania Department of Labor and Industry.

Cost Savings: By using only county data to establish rates, by retaining and earning interest on the PComp loss fund, and by enforcing an effective loss control program, PComp is designed to provide long term cost savings. PComp's 1993 rates were 5% lower than rates used by commercial insurance carriers.

PComp Advantages

Loss Control Services designed for counties
A rating system based solely on county loss data
Full statutory Pennsylvania Workers' Compensation coverage
Personalized claims service
Governance controlled by participating counties
Loss Fund contributions stay with PComp and generate interest earnings
Potential for future credits on contributions
Designed to be a long term program

PComp Structure

PComp is a Trust created by Pennsylvania counties pursuant to Act 44 of 1993. PComp's structure is similiar to that of PCoRP, CCAP's very succesful property/casualty insurance program. PComp is governed by a fifteen member Board of Directors, with six members selected by the participating counties, two members appointed by the PComp Board, and seven members appointed by CCAP. Each participating county selects a representative to the PComp Board of Delegates, and the Board of Delegates fills the five Board of Director's positions. No county can have more than one representative on the Board of Directors. County related entities, such as nursing homes and joinders, do not receive a Delegate.

PComp's Legal Counsel is Paul Zeigler of the Law Office of Paul L. Zeigler, P.C.

PComp Finances

PComp pays all bona fide workers' compensation claims of employees of members. There is no deductible. The PComp loss fund pays claims up to $500,000 and amounts higher than this are paid by the reinsurer, an A.M. Best "A" rated carrier.

Members pay an annual premium to PComp which is used to:

Purchase specific excess insurance for the program
Fund the PComp loss fund and pay claims
Provide for operating expenses of the program
Pay the PComp service firms

Cost Savings

By using only county data to establish rates, by retaining and earning interest on the PComp loss fund, and by enforcing an effective loss control program, PComp is designed to provide long term cost savings. Initially in 1983, PComp's rates were 5% lower than rates used by commercial insurance carriers, and the spread continued to broaden for several years.

With the workers' compensation insurance market tightening further, employers saw larger double-digit increases and tougher underwriting standards across the country. PComp rates continued to decline until 2001, when members saw the first rate increase of approximately 10%. Losses continue to increase, especially with acceleration in medical costs, raising the rate of inflation on workers' compensation claims costs.

Despite these factors, PComp Trustees announced dividend distributions of $503,865 for 2000, $563,361 for 2001, and $611,298 for 2002. These dividends total $1,678,524 and these dollars would have been lost to commercial insurers if PComp were not in existence.

Since 2003, no dividends have been returned in order to build surplus. PComp remains financially secure and very price competitive with loss control and claim services second to none.

Membership Listing

Counties
Adams County	Fayette County	Lawrence County	Snyder County
Bedford County	Forest County	Mercer County	Somerset County
Bradford County	Fulton County	Mifflin County	Sullivan County
Clarion County	Huntingdon County	Monroe County	Susquehanna County
Clearfield County	Indiana County	Montour County	Tioga County
Clinton County	Jefferson County	Perry County	Union County
Columbia County	Juniata County	Pike County	Wayne County
Elk County	Mercer County	Potter County	Wyoming County
Erie County

County Related Entities
Bedford/Somerset MH/MR	Mifflin-Juniata Area Agency on Aging Inc.
Carbon Monroe Pike MH/MR	Perry County Area Agency on Aging
Central Counties Youth Center	SEDA Councill of Government
Clearfield-Jefferson MH/MR	Somerset County Child Development Program
County Commissioners Association of Pennsylvania	Area Agency on Aging of Somerset County
Columbia County Traveling Library Authority	Union-Snyder Area Agency on Aging
CMSU	Union-Snyder Community Action Agency
Huntingdon-Bedford-Fulton Agency on Aging

Staff Contact Information

For more information contact Karen Cohen, Property and Casualty Manager, at (800) 895-9039.