Page 10 - LARM LIfe Summer 2020

Solid {
The League Association of Risk Management

(LARM), with 170 members,
Stable had a surplus of $9,869,559

Secure and a claims reserve of $5,759,407
as of September 30, 2019.

In the 1980’s, public entities faced an insur-
ance crisis as rates were skyrocketing and
some policies were being cancelled. A study
by the League of Nebraska Municipalities
(LONM) determined that since the availability
of carriers was limited, a group of municipali-
ties should form their own risk management
pool. In 1989, LARM offered an endorsed
insurance program for municipalities.

In 1995, the Nebraska Department of
Insurance (NDOI) granted LARM its Certi cate
of Authority to operate as a risk management
pool. The NDOI currently regulates and over-
sees the operation of risk management pools
in Nebraska. LONM Executive Director Lynn
Rex serves as LARM’s Administrator as
provided in LARM’s Interlocal Agreement.

Loss Reserves Contributions Liquid Assets

to Surplus to Surplus to Liabilities

The Loss Reserves to Surplus Ratio The Contributions to Surplus Ratio The Liquid Assets to Liabilities
shows the ability as a pool to with- shows the exibility of the pool to Ratio shows the liquidity needed
stand adverse claim development. increase retention, increase mem- to pay the existing liabilities. The
The goal is to be less than 100%. bership or return dividends. The industry standard goal is to be
goal of this ratio is to be less than greater than 100%.
The Loss Reserves as of 9-30-2019 300%.
L
were $5,759,407. The Surplus as of LARARM’s Liquid Assets as of
9-30-2019 was $9,869,559. The The Contributions from 2018-2019 9-30-2019 were $23,498,528.
Loss Reserves to Surplus Ratio as of were $8,328,448. The Surplus as of Liabilities were $13,628,969. The
9-30-2019 was 58.5% - well within 9-3-2019 was $9,869,559. The Ratio Ratio as of 9-30-2019 was 172.4%
the industry standard of below as of 9-30-2019 was 84.4% - well which is much higher than the in-
100%. below the goal of less than 300%. dustry standard goal of greater
than 100%.