Workers’ Compensation Pool

The Alabama Rural Electric Cooperatives Self-insured Pool is a group fund, which provides workers’ compensation coverage for its participating cooperative members. The success of this program can be attributed to the focus of safety that has been accepted and continues to be implemented by cooperative employees, management and boards of directors.

In its twentieth year, one hundred nineteen (119) claims were incurred during 2013, with costs of $383,089 which produced a loss ratio of 12.68 percent. This was 5 more claims than were incurred in 2012 but $175,945 less in claim cost. Individual claims resulted in cost ranging from $0 (report only claims) to $68,409.

Members of the Pool continued to receive refunds during 2013 resulting from the benefits of previous years’ experience. In 2013, $124,551 was returned to participating cooperative pool members. The total amount refunded to participating Alabama electric cooperatives now equals just over $5.78 million, with another $10.42 million remaining to be returned to Pool participants.

AREA and its member cooperatives established the pool on July 1, 1993, to reduce the overall cost of workers’ compensation premiums. The pool, which has 23 members, was created to enable participants to better manage their risk, provide more efficient service, and ultimately reduce the cost of worker’s compensation insurance. Since inception in 1993, the Pool has recorded 3,210 claims, collected $46,908,435 in contributions, paid $20,966,640 toward claims and still has open reserves on claims of just more than $1.15 million. It also can boast of its low 47.15 percent cumulative loss ratio in a very dangerous industry.