Benefits of ISCC Dividend Program
ISCC provides its members with substantial financial benefits through dividends, enabling them to undertake numerous initiatives. Many organizations have received millions of dollars in dividends, which significantly support their programming and operations. The success of ISCC is attributed to its excellent management, effective claims handling, and low operating overhead, making it a highly valuable program for its members.
Watch as some of our 2024 dividend recipients share the impact of ISCC’s financial returns on their organizations. Hear firsthand how these funds are making a difference in member organizations across our community.
Calculating Member Dividends
Members earn dividends when the amount of premium paid in a year exceeds the cost of claims and operating expenses.
Class A members dividends are calculated as follows:
Total Surplus Funds for Class A for a given fund year are divided equally (50%/50%) into two funds to calculate members’ earned dividends:
- Fund for Social Distribution (FSD)
- Fund for Incentive Distribution (FID)
The FSD are distributed to each Class A Member proportionate to that Member’s premium. For example, a Class A Member whose net premium represents ten percent (10%) of the total net premium of Class A Members would receive ten percent (10%) of the FSD.
A Class A Member will be eligible to receive a share of the FID if the Member has positively contributed to the Surplus Funds in that year. A Member’s Surplus Contribution is calculated as follows:
- Member’s Surplus Contribution = Member’s Premium – Member’s individual claim experience (paid losses and reserves) – Member’s share of claim handling costs – Member’s pro-rata share (based on member’s premium to total Class A premium) of group expenses, net of investment income.
- If the Class A Member’s Surplus Contribution is positive, the Member is eligible to receive a share of the FID. An eligible Class A Member will receive a share of the FID in the proportion that the Class A Member’s Surplus Contribution bears to the total of all eligible Class A Members’ Surplus Contributions.
- In the event of a shortfall in funds for Class A, all Class A Members will be assessed a share of the shortfall proportionate to their net premium.
Deviations
Policies are calculated using current Massachusetts rates and reduced by a deviation approved for use by the Commonwealth of Massachusetts Division of Insurance. This deviation is above and beyond the premium discount and other pricing benefits afforded by ISCC and has ranged from 10% – 20% since 1995.