2019 JLT Re NWCRA Facility - Reinsurance for WC State Pool Obligations

YOUR COMMITMENT

Your company has committed to reinsure its pro rata share of the liabilities for loss and related expenses for the National Workers Compensation Reinsurance Association’s residual market policies.

YOUR RESULTS

Historically, the residual market for Workers Compensation has run at a combined ratio in excess of 100%, operating at a loss in each of the last 20 years. These results are shown on your annual statement as a liability to the National Workers Compensation Reinsurance Association (NWCRA). Moreover, these results can be quite volatile year to year, often due to large loss activity in the applicable state’s pool.

JLT RE’S SOLUTION

JLT Re provides a reinsurance product (Facility) that is designed to address the financial uncertainty of NWCRA participation. The Facility is offered exclusively to companies participating in the NCCI residual market reinsurance arrangements. The Facility was first implemented in 1998, and we are celebrating 22 years of providing clients with a unique residual market solution.

PROTECTION FOR RISKS YOU CAN’T UNDERWRITE

  • The Facility provides 100% quota share reinsurance of a company’s liabilities incurred for participation in the NWCRA
  • A ceding commission is provided to cover the mandatory expenses associated with residual market risks
  • Full terrorism cover is provided
  • Quota share limit is well above the highest recorded pool result
  • Coverage includes insolvency protection for any assumption of liabilities incurred due to the insolvency of any NWCRA participant
  • The Facility is backed by reinsurers with A.M. Best ratings of “A” or higher

WHY DO COMPANIES BUY?

  • Stability of results – The Facility allows companies to book a relatively certain result on business:
  • They do not underwrite but are obligated to assume
  • That is usually excluded from traditional reinsurance agreements
  • Ceding commissions – Offset a significant portion of pool expenses
  • Profit commission – Allows cedants to share in better than expected pool results
  • Predictability of cost – Underwriting benefit for minimal planned economic cost
  • Legacy concern about residual market results

IN GOOD COMPANY

The Facility is designed to provide benefits for carriers of all sizes and there are no minimum premiums.
Many companies, from national stocks to local mutuals, benefit from the JLT Re Facility.

JLT RE’S EXPERTISE

JLT Re is a leading expert in placing treaty reinsurance for workers compensation clients. Our dedicated practice group has unparalleled experience in workers compensation underwriting, pricing, product design, claims and legislative support.

Jardine Lloyd Thompson Group plc (JLT) is an international group of risk specialists and employee benefits consultants and one of the largest companies of its type in the world. JLT offers a distinctive choice to clients and partners through our combination of independence, scale and specialism.

CONTACT

To participate in the JLT Re Facility or to obtain further information such as the specific contract provisions as well as pro forma financials that detail how the Facility is expected to perform for your company, please contact the JLT Re Residual Market team. 

John C. Shea | T: 1.860.269.6970 | E: john.shea@jltre.com

Paul M. Topoleski | T: 1.215.309.4544 | E: paul.topoleski@jltre.com

Aaron D. Bueler | T: 1.206.303.9347 | E: aaron.bueler@jltre.com

 

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