DIVIDEND UPDATE: FAQ now available for SAIF policyholder dividend
Learn more about the dividend declared by the SAIF board on November 9.
For comprehensive, detailed information about the dividend, please review the FAQ below.
Note: On November 19, additional dividend information will be available to policyholders through "Dividend Search" and "Dividend by Policy" on Business Online. Please check back then to learn how to access that information.
Read the original declaration article.
2007 Dividend Questions and Answers
1. Which policyholders are eligible for a dividend?
Policyholders are eligible for a dividend if they were insured with SAIF with policy period ending date(s) from January 1, 2006 through December 31, 2006. The entire policy period(s) ending in 2006 is/are eligible for a dividend, with the exception of those noted in response to Question 2.
2. Which policyholders are not eligible for a dividend?
Policyholders are not eligible for a dividend if they are in default status for nonpayment of premium on declaration day (see ORS 656.560 and 656.526(3)). Also, policyholders without a policy end date within the eligibility period (see answer to Question 1 above) are not eligible for dividends.
SAIF customers who are in the Assigned Risk Plan are not insured by SAIF Corporation but by the Oregon Workers' Compensation Plan designed by the Department of Consumer and Business Services (DCBS) and administered by the National Council on Compensation Insurance (NCCI). SAIF provides coverage and claims handling services for assigned risk customers according to the terms of a contract with NCCI. Because assigned risk customers are not insured by SAIF Corporation and are specifically issued a policy that excludes a dividend participation provision, they are not eligible for dividends.
Finally, under the terms of the declaration issued by the board of directors, SAIF Corporation is not eligible for a dividend.
3. What was the time period used by SAIF to determine dividend eligibility and why?
SAIF calculated dividends on full and partial policy periods with expiration dates from January 1, 2006 through December 31, 2006. If an employer had more than one policy period with the same policy number that ended in 2006, both are eligible for a dividend. Premium from both periods is accumulated and one dividend calculated.
We chose this particular group of policies because these policy period ending dates represent the most recent time period for which virtually all of the policy period premiums are final, either as the result of a final payroll report received or physical audit performed by SAIF Corporation. Under Oregon law, dividends can only be declared on policy periods that have expired (OAR 836-080-0120(2)).
4. How are dividends calculated?
Dividends are calculated as a percentage of standard premium recorded for eligible policy periods on the valuation date or on November 9, 2007. The dividend percentage is applied in accordance with the following schedule.
| Standard Premium Range | Dividend Percentage |
|---|---|
| $0 - $2,500 | 14.93% |
| $2,501 - $20,000 | 13.98% |
| $20,001 - $100,000 | 13.14% |
| Over $100,000 | 12.61% |
Please note: The minimum dividend is $5. No dividend will be awarded under this amount.
5. Why do dividend percentages differ for policyholders of different premium size?
Dividends are calculated as a percentage of standard premium. However, a customer's actual paid premium is subject to a discount based on premium size. The dividend percentages for different premiums bands have the effect of backing out the premium discount and putting all policyholders on essentially the same footing.
6. Why did the board select $60 million as the total dividend amount?
The board, after consulting with SAIF's actuarial staff and the board's independent appointed actuary, determined that a dividend of $60 million can reasonably be paid out while still maintaining a target surplus range that protects the solvency of the Industrial Accident Fund.
7. How and when will dividends be distributed?
Policyholders eligible for a dividend will receive a check in the mail. Checks will be mailed during the week of December 10, 2007.
In some instances, the entire dividend or a portion thereof may be applied to amounts past due. Call the SAIF Corporation Collections section at 800.285.8525 if you have any questions about a dividend that was withheld in part or in full as a result of a past due balance.
8. Can I find out the specific amount of the dividend for my business prior to when the checks are mailed?
Yes. Dividend information will be provided beginning November 19, 2007, in "Dividend by Policy" on Business Online. This screen will identify the eligible premium, policy period(s) included in the dividend, and the amount of the dividend award. It also will show policies that are not eligible for a dividend and explain why.
Beginning December 3, the "Dividend by Policy" screen will show an adjustment to the dividend for any balance that has been demanded but not yet defaulted. Nearly all of these dividend offsets will be on cancelled policies.
9. Why did SAIF pay a dividend instead of lowering rates?
Rates must be sufficient to pay the expected losses and expenses for the prospective period during which the rates are in effect. In order to lower prices, SAIF must be able to reasonably predict the sustainability of either lower expected losses or expenses, or sustained increases to surplus through investment earnings. SAIF's actuaries at this time cannot make such a prediction; therefore, an unexpected and/or temporary increase to surplus may, at the discretion of SAIF's board of directors, be distributed through dividends to policyholders.
10. Will a policyholder get a dividend even if it has switched to another carrier or was insured by SAIF for only a portion of the year?
Yes. If a policyholder meets the dividend eligibility criteria and was insured by SAIF with a policy period expiring in 2006, it will receive a dividend even though it is no longer a SAIF policyholder.
11. Will SAIF credit a firm's account rather than send it a check?
SAIF may credit a firm's account only if that policyholder owes money to SAIF.
12. Is the amount of the dividend considered income?
SAIF Corporation cannot provide legal advice about how a policyholder should treat a dividend for tax purposes.
13. What is the procedure for a dividend check that has been lost or needs to be reissued?
To report a lost check or request reissue, please call the SAIF cashier's office at 503.373.8720. Requests to reissue a check under a different name will require approval by SAIF's Collections section. The requestor may be required to complete an affidavit and indemnity agreement.
If you have additional questions, please visit Business Online or contact your agent or SAIF representative.