Texas Mutual Wraps Up $155M Dividend Distribution

On November 8, 2011, Texas Mutual began distributing about $1.5 million in workers’ compensation dividends among approximately 2,800 new policyholders. The early-qualifier dividends represent the final component of Texas Mutual’s $155 million 2011 dividend distribution...MORE.

How dividends benefit policyholders
In reponse to agents' requests, we designed this tool to help you explain your clients' dividend earning potential to them.

What is a dividend?
A dividend is a monetary reward for policyholders who share our commitment to preventing workplace accidents and helping injured workers return to productive employment. Texas Mutual has two dividend programs: individual dividends and group dividends.

How are Texas Mutual dividends different?
When publicly owned corporations pay dividends, they distribute a portion of company earnings to their stockholders. All stockholders receive a dividend based on the number of shares they own. When Texas Mutual Insurance Company returns dividends, we reward specific policyholders based on customer loyalty and claim loss history.

How can employers improve their chances of qualifying for a dividend?
Employers can improve their chances of qualifying for dividends by preventing accidents and launching a return-to-work program.

Are dividends taxable?
They could be, depending on the employer's situation. Employers should consult their tax professional.

Are dividends guaranteed?
No. Dividends are based on performance and are not guaranteed. The Texas Department of Insurance must approve all dividend plans.

Can I access my company's dividend history?
Registered Texas Mutual^® online users can review their dividend history on our website. To become a registered website user, click here, and complete the online application.

Key term: loss ratio. An estimate of expected payments for reported and unreported claims, expressed as a ratio to earned premiums

Individual dividends: beyond the basics
The individual dividend plan includes a general dividend, a special dividend and an early-qualifier dividend.

General dividend
The general dividend includes an annual component and a retention component:

Annual component. The annual component rewards current policyholders who had acceptable loss ratios for the policy that expired in 2010.
Retention component. The retention component rewards current policyholders for up to five consecutive years of acceptable loss ratios with us, ending with the policy that expired in 2010. Longtime policyholders may have received increasing individual dividends because of the retention component.

Special dividend
The special dividend is a discretionary award based on Texas Mutual's outstanding financial results in 2010.

Early-qualifier dividend
The early-qualifier-dividend is our response to agents who asked us to shorten the dividend cycle for new policyholders. We plan to distribute early-qualifier dividends in November. We will send agents more details, including a list of their qualifying clients, in advance. To qualify:

The employer must have a policy that expired between January 1, 2011 and June 30, 2011.
The policyholder must have an in-force policy on October 15, 2011.
The loss ratio on the policy must be in the acceptable range.

Group dividends
Policyholders who join a safety group can participate in our group dividend program, as well as our individual dividend program. Group dividends are based largely on each group's overall loss ratio.

NOTE: Past dividends are not a guarantee of future dividends, and the Texas Department of Insurance must approve all dividend plans.