The Wisconsin state fund that insures local governments’ property finished the last fiscal year nearly $6 million in the red, according to a report released on Nov. 20.
The review from the Legislative Audit Bureau found the fund’s financial position has deteriorated since the state insurance commissioner’s office, which administers the fund, issued a $12 million dividend in fiscal year 2009-2010.
Net losses, including several fire-related losses, and other expenses significantly exceeded net premiums and other revenues in subsequent years, the report found. As of June 30, 2014, the fund had a $703,000 deficit. According to estimates from the insurance commissioner’s office, the deficit had grown to $5.9 million as of June 30.
The review also found claims processing was unorganized and deductibles were improperly applied. The policy administrator didn’t collect past-due amounts due to time restrictions and didn’t charge interest on those amounts because of the calculations’ complexity.
An OCI spokesman didn’t immediately return voicemail messages.
The audit bureau’s review noted that OCI raised rates by 73.4 percent on July 1 and revalued its policies, which will likely result in increased premium collections for some high-value properties. The agency acknowledged the rate increases have led to decreased enrollment.
According to the review, the number of local government units participating in the fund dropped from 983 on June 30, 2014, to 955 on the same date this year.
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