Liability Benchmarking and Funding
Liability benchmark contributions and funding are calculated by actuaries using industry benchmarks, agency’s claims experience, assessment of risk exposures and includes an allowance for reinsurance.
The deposit contribution funding process for principal departments and grant agencies is designed to provide agencies with a financial incentive to improve their claims outcome.
Agencies whose claims outcomes for the previous fund year are better than expected are rewarded with a funding surplus. Agencies whose claims outcome for the previous fund year is worse than expected (i.e. claims cost is greater than prediction) are invoiced to pay the funding deficit.
The reinsurance contribution charged to the icare tmf is determined in the reinsurance market and is provided to icare self insurance’s actuaries by brokers. The cost is then allocated to agencies.