Texas Mutual Insurance Company’s will be distributing some $22 million in dividends to qualifying policyholders for 2002 under a plan unanimously adopted by its Board of Directors.
As in previous years, the 2002 plan includes an annual component for qualifying customers whose policies expired in 2001 and a retention component for select, longtime customers.
Texas Mutual, which provides workers’ compensation coverage, noted that its announcement is significant given the current state of the workers’ compensation insurance market. In the past year, some carriers have gone out of business, and others have restricted their coverage, reduced their services, or abandoned Texas business altogether in response to the hardening market.
“We began preparing for the hard market long before the market changed,” said Texas Mutual President Russ Oliver. “Our efforts paid off, and now I’m pleased to announce that, for the fourth consecutive year, Texas Mutual Insurance Company will pay dividends to qualified policyholders.”
An estimated 22,000 policyholders are expected to qualify for at least one component of the plan, which still requires Texas Department of Insurance approval.
“The great thing about these dividends is that in the end, the money stays in our communities and ultimately helps improve the Texas economy,” said Texas Mutual chair Martin Young Jr. “Our dividend plan helps us reward our loyal policyholders whose low claim losses have contributed to our company’s success.”
Young also stated that dividends may reward customer loyalty, but they don’t guarantee it. He also attributed the company’s high retention rate to the company’s employees and their continued dedication to provide outstanding customer service.
According to state law, policyholders enrolled in the company’s insurer of last resort program (START accounts) are ineligible for dividends. State law also prohibits insurance companies from guaranteeing annual dividends; however, Oliver said that the company’s philosophy is to reward its good customers when money is available.
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