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WSI has illegally large surplus

BISMARCK - The state's workers' compensation agency is operating with an unlawfully large surplus, an auditing firm reported Wednesday. Workforce Safety and Insurance's financial reserves, plus surplus, as of June 30 was $174.4 million more than ...

BISMARCK - The state's workers' compensation agency is operating with an unlawfully large surplus, an auditing firm reported Wednesday.

Workforce Safety and Insurance's financial reserves, plus surplus, as of June 30 was $174.4 million more than a cap set by law in 2005.

The Legislature that year dictated that WSI needs to keep a surplus of no less than 120 percent of its "actuarially established discounted reserve," and no more than 140 percent of that number. As of June 30, the surplus was $466.8 million, or 164 percent over its discounted reserve.

The reserve is the amount of money WSI needs to keep on hand to pay pending or expected claims.

The news was presented at the WSI board's Audit Committee meeting Wednesday, coming from Rick Awalt, an accountant with Brady, Martz and Associates, P.C., in a presentation on the agency's financial statement, and also from WSI's consulting actuarial, Glenn Evans.

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Audit Committee members noted that the board already enacted a 50-percent premium dividend for employers in June and wondered what more they can do to reduce the non-compliant surplus.

"We don't have the means (to reduce it) other than premium dividends," said member Mark Jackson. "We can't change (injured workers') benefits because they're in the law."

No action was taken.

Cole reports for Forum Communications Co., which owns the Herald.

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