Something good is coming to most of our customers’ mailboxes at the end of March. For the third year in a row, Pinnacol is distributing general dividend checks to employers in every county in the state.
“Pinnacol is in a position to provide these dividends because of our careful stewardship of our customers’ premium dollars, as well as our customers’ commitment to their employees’ health and safety,” said Phil Kalin, Pinnacol president and CEO. “Pumping $50 million back to our customers will help them invest in the people, processes and technology to keep up in Colorado’s fast-moving economy.”
For more information on the 2018 dividend, take a look at the Frequently Asked Questions below, or contact a customer service representative at (303) 361-4000 or (800) 873-7242.
What is a dividend?
A dividend is a portion of a mutual insurance company's surplus, paid to stockholders.
Because we don't have stockholders, we return a portion of our surplus to our customers that earn it through their commitment to workplace safety and effective claims management.
Why don't you lower your rates instead of paying a dividend?
In 2018, we did both: lowered rates and paid a dividend. But rates and dividends are two very different calculations that occur under unique circumstances.
Rates are based on future projections; dividends are based on past experience. Our ultimate goal is rate stability year after year, so we set prices based on the best information about the future. But we wait to pay dividends until results from the previous period are available.
Will you pay a dividend again next year?
We don't know for sure. Dividends can be impacted by policyholder claims costs, catastrophic events, the performance of our investment portfolio, even the economy. None of those factors can be predicted with perfect accuracy.
What are the criteria for receiving the general dividend?
- The policy has an expiration date between June 2, 2016, and June 1, 2017
- The customer is in good standing
- In most instances, the underwriting program or individual policy has a loss ratio better than 71.3 percent. Different circumstances apply to special programs.
How is the general dividend determined?
The general dividend is determined based on premium size and loss ratio, factors that contribute to our underwriting performance and, ultimately, surplus.
How much general dividend money should I expect to receive?
Dividend amounts vary based on each underwriting program's or individual customer's premium amount and loss ratio. The average customer general dividend being paid in 2018 is $944.
When will I receive my dividend check?
General dividend checks will be mailed to qualified policyholders on March 27, 2018. But you can see how much you're set to receive before then by signing up for the policyholder portal. Once you're in, you can take care of other business like:
- Make payments with a credit card or set up recurring payments
- Report an injury online
- Access policy information and claims history
- Manage billing notifications
Is the dividend taxable?
Because the general dividend is a return of premium to the customer, we don't issue a 1099 for the dividend. If you have tax questions related to your general dividend, you should consult with your tax advisor.
Why not credit my premium instead of sending me a check?
A check gives customers more control over how to use this money; however, checks less than $25 will be applied to the policyholder's account.
I've filed very few claims with Pinnacol. Why didn't I receive a general dividend?
There are a few reasons why you might not have received a general dividend:
- Dividend amounts are based on each policyholder's contribution to surplus through both premiums paid and loss ratio. So if you or your underwriting program does not have a loss ratio better than 71.3 percent, you will not qualify for a dividend. Or if you're a member of a safety group program that does not have a loss ratio better than 71.3 percent, you won't receive a general dividend, regardless of your claims history.
- If you owe Pinnacol money, the dividend amount will be applied to the outstanding balance in most circumstances.
- Customers with a non-compliant audit will not receive a dividend.
I participate in one of Pinnacol's alternative-pricing programs. Am I eligible to receive a general dividend?
Yes. Policyholders that participate in our alternative rating programs such as Large Deductible Programs and Group Large Deductible Programs are eligible to receive general dividends. The group and the individual policyholder must have contributed to surplus to be eligible.
Participants in the Safety Group Dividend Program or Individual Loss Control Dividend Program are eligible to receive both their program and general dividends.