ACTUARIAL ANALYSIS OF THE

ACTUARIAL ANALYSIS OF THE MISSISSIPPI STATE AGENCIES SELF-INSURED WORKERS' COMPENSATION TRUST AS OF JUNE 30, 2008 August 19, 2008 Mr. Richard Self Trust Administrator Mississippi State Agencies Self-Insured Workers' Compensation Trust 901 Woolfolk Building, Suite B 501 NW Street Jackson, Mississippi 39202-4021 RE: Actuarial Analysis of the Mississippi State Agencies Self-Insured Workers' Compensation Trust as of June 30, 2008 Dear Mr. Self: Madison Consulting Group, Inc. is pleased to enclose a copy of the above captioned report. We have enjoyed working on this project and hope you find it satisfactory. Please call if you have any questions or comments. Sincerely, Mark Crawshaw, Ph.D., FCAS, MAAA MC/agd Attachments ACTUARIAL ANALYSIS OF THE MISSISSIPPI STATE AGENCIES SELF-INSURED WORKERS' COMPENSATION TRUST AS OF JUNE 30, 2008 PURPOSE Madison Consulting Group, Inc. was requested by the State of Mississippi to perform an analysis to support recommendations as to reasonable funding levels for the Mississippi State Agencies Self-Insured Workers' Compensation Trust (the Trust). Specifically, we were requested to estimate the Trust's liability as of June 30, 2008 for losses associated with claims occurring prior to July 1, 2008. This report, including the attached exhibits, sets forth a summary of our analysis. DISTRIBUTION AND USE This report has been prepared for the internal use of the management of the Trust in their determination of reasonable reserve and funding levels for the self-insured program. It is our understanding that this report may be distributed to the State's auditors and may become a public document. It is requested that all distributions of this report be made in its entirety. Any other use or distribution is not authorized without our prior consent. CONDITIONS AND LIMITATIONS It is our understanding that the Trust has provided workers' compensation coverage since July 1, 1990 to participating state agencies. The population of participating agencies has varied from year to year but, in each year, has included the vast majority of agencies except the 1 Institutes of Higher Learning (IHL). Prior to being self-insured, state agencies were insured through traditional commercial insurance policies. This report addresses only those liabilities of the Trust associated with covered accidents occurring on or after July 1, 1990. It does not address liabilities, if any, associated with prior insured periods. As the Trust has been operating for a period of time, the appropriateness of considering the feasibility of adopting a self-insurance program of this type is beyond the scope of this report. However, it is important to note certain implications inherent in self-insuring workers' compensation exposure. The first, and most important is that self-insurance, unlike commercial insurance, does not result in a transfer of risk. Thus, if actual losses exceed funded amounts, the difference must be paid by the self-insurer. As a consequence, the self-insurer is exposed to greater fluctuation in financial results than a similar entity with a commercial insurance program. Excess, or catastrophe, insurance can help to reduce the adverse impact on financial results of unusually large losses or an unexpectedly long series of small losses. The second major consideration is that there is a potential for significant variation of actual results compared to expectations based on historical experience. In particular, changes in the social and legal environments may result in differences between the historic and future loss profiles. The third major consideration for a self-insured program of this size is that even if the historical experience proves to be a good indication of average future emergence, the year to year fluctuations in the averages may be substantial. The loss amounts presented in this report have been aggregated by fiscal accident period. For example, fiscal year 1990-1991 includes all incidents occurring between July 1, 1990 and June 30, 1991. The Trust has purchased commercial excess insurance (on an occurrence basis) to 2 limit its exposure to large losses. Exhibit A-XII provides a summary of the primary self-insured retentions under these contracts. In this analysis, it has been assumed that the commercial excess insurance will remain in effect and will be fully collectible. However, Madison Consulting Group has performed no analysis of, and formed no opinion of, the financial condition of the Trust's excess insurers. The liabilities estimated in this report reflect the Trust's primary self-insured retention only. The reserve and funding estimates do not include any provision for the contingency that the Trust's excess policies may, under unusual circumstances, be exhausted. The funding recommendations contained in this report provide for workers' compensation losses (including allocated loss adjustment expenses). They do not include any provision for associated excess insurance premiums, overhead expenses, administrative expenses or similar items. Funding recommendations are presented both at ultimate value and discounted to present value at alternative investment yield rates of 5.0% and 4.0% per annum. The discounted funding recommendations reflect the time value of money and the lag between the time a claim is incurred and the time it is fully paid. The yield rate of 4% has been provided as it represents an estimate of a prudent discount rate considering current economic conditions. The yield rate of 5% has been provided for comparative purposes. Risk Margin Actuarial reserve or funding rate estimates for the Trust's self-insurance program are subject to inherent variability. parameter/model risk. This variability stems from two sources: process risk and Process risk is the risk that actual results will vary from actuarial central 3 estimates based on random chance. Parameter risk is the risk that the actuarial methods underlying the estimates do not accurately represent the true characteristics of the risk. For example, suppose a coin is flipped ten times. The estimate of the expected number of heads is five, assuming the coin is fair. Process risk is the risk that the actual number of heads will be more or less than five due to random variability in the coin flipping process. Parameter risk is the risk that the coin itself is not fair (i.e., the probability of achieving heads is less than or greater than 50%). If the Trust were to follow a strategy of funding its programs based on our central estimates, significant year-to-year fluctuations in indicated fund contributions would likely result. To mitigate these fluctuations and to stabilize year-to-year financial results, management may wish to maintain a margin in the fund balance. In this report, funding indications are shown both on a central estimate basis (based on long-term averages) and also at higher probability levels. (For example, funding at the 90% probability level means that it is estimated that funds will be sufficient to cover liabilities in nine out of ten years). These alternative estimates can be utilized by management to determine an appropriate margin. The central estimate should be considered the minimum acceptable funding level. Based on our experience with similar programs, a more conservative and, in our opinion, more reasonable funding level is between the 70% and 90% probability levels. We emphasize that the range of values discussed above are based on a statistical model that measures only the process risk involved with the Trust’s reserve and funding estimates. We have not analyzed any potential parameter/model risk inherent in our underlying estimates. In our experience, in a small program such as the Trust’s, process risk accounts for the majority of the associated inherent variability. 4 Data Sources In the analysis, we have relied, without audit or verification, on the following sources of data provided by the State: • • • • historical loss data evaluated as of June 30, 2008; payroll data; data already provided for our previous analyses; and, expense and other financial information through June 30, 2008. Finally, it should be noted that the development of funding recommendations for workers' compensation losses involves the projection of future contingent events. Therefore, no guarantee can be made that the recommendations contained in this report will prove to be adequate or not excessive. We have, however, utilized methods and assumptions that are in accord with accepted actuarial standards, and we believe the conclusions reached are reasonable. 5 RECOMMENDATIONS AND CONCLUSIONS Based on our analysis we make the following recommendations and conclusions: Central Estimate as of June 30, 2008 The estimated undiscounted central estimate for unpaid workers' compensation claims as of June 30, 2008 for all covered accidents occurring between 7/1/90 and 6/30/08 at the Trust's primary self-insured retention is $42.752 million. This amount has not been adjusted to reflect the Mississippi Workers Compensation Administration expense fund assessment. The present value of this liability at a 5.0% annual interest rate is estimated to be $36.440 million and $37.533 million at a 4% annual interest rate. Exhibit I provides a summary of these amounts, as well as alternative estimates at various probability levels. We understand that the Trust had assets of approximately $23.7 million at June 30, 2008. This compares to indicated liabilities at the same time of $37.5 million (i.e. $37.5 million for claims discounted at 4% (see Exhibit I) plus $0.0 million for premium refunds due and premiums received in advance). On this basis, there is a deficiency in the Fund of $13.8 million (=$23.7 $37.5). Corridor Deductible As part of its commercial excess insurance coverage for fiscal year 2005/2006 thru 2007/2008, the Trust is subject to a $500,000 corridor deductible. That is, the Trust is responsible for the first $500,000 of losses for any claims that go over the self-insured limit of $1 million in each fiscal year. To date (i.e. as of June 30, 2008), the largest claim for these three fiscal years has an 6 incurred values of approximately $286,515. In this analysis, we have estimated the liability for the corridor deductible to be zero as there are no claims for any of these three fiscal years that are projected to pierce the self-insured limit. Reconciliation to Previous Reserve Estimate Exhibit II provides a reconciliation of the reserve estimate as of June 30, 2008 to the reserve estimate as of June 30, 2007 contained in our previous report. This reconciliation indicates that there has been a decrease of approximately $1.05 million in estimated ultimate losses as compared to our previous estimates. Interim Reserve Schedule Exhibit III presents recommended unpaid loss amounts (see Column (5)) for future quarterly valuation dates. This exhibit has been prepared to facilitate planning and preparation of quarterly interim financial statements. To verify the reasonableness of the interim recommendations, a "cross check" calculation is also presented on Exhibit III based on case reserves. In the event of substantial (i.e., greater than 10%) divergence between the crosscheck calculation and the recommended unpaid loss amounts, it is suggested that we be contacted to review the data in more detail. The schedule on Exhibit III was developed based on the assumption that no major changes occur to the program. Any such changes (e.g., change in retention level, change in population insured, change in claims management procedures, change in case reserving philosophy, etc.) should be immediately reported to us so that appropriate adjustments can be made. In 7 addition, it is recommended that the schedule be used on an interim basis only and that a full study be conducted at least annually. Future Funding Our analysis indicates that the costs of the program per $100 of payroll are currently approximately as follows: Expected Estimated Future Claim Costs (Exhibit IV) Overhead Expense (Exhibit V) Interest Income Credit Total $1.65 0.20 -0.08 $1.77 The selection of $1.65 for future claim costs is based on the Trust's current experience and excludes experience of the Mississippi Department of Corrections and the Bureau of Narcotics which exited the Trust effective December 31, 2004 and February 28, 2005, respectively. 8 ANALYSIS The procedure utilized in this analysis is generally similar to that used in our previous studies and was as follows: (i) Ultimate retained losses for each self-insured period prior to July 1, 2008 were estimated using a variety of projection methods. Paid losses through June 30, 2008 were subtracted from the ultimate retained loss estimates in (i) to determine the Trust's projected central estimate as of June 30, 2008. The central estimate was discounted to present value using assumed interest discount rates of 5.0% and 4.0% per annum and a payout pattern based on the Trust's own experience. A statistical model was utilized to estimate reserves at various probability levels. Each of these steps is discussed in more detail in the remaining sections. (ii) (iii) (iv) Projection of Ultimate Retained Losses Losses were projected utilizing five projection methods, i.e.: • • • • • reported loss approach; paid loss approach; unreported loss approach; unpaid loss approach; and expected loss approach. 9 Reported Loss Approach Exhibits A-V, Sheet 1 summarizes the application of the reported loss approach in projecting the Trust's losses. In this method, aggregate reported losses (i.e., paid losses plus claim examiner's case reserve estimates for open claims) for each fiscal accident year are projected to an estimated ultimate value by multiplying actual losses by a loss development factor. The loss development factors utilized on these exhibits are based on the Trust's own experience. Paid Loss Approach Exhibit A-IV, Sheet 1 summarizes the application of the paid loss approach in projecting the Trust's losses. This method is similar to the reported loss development approach except paid losses are used in lieu of reported losses. Again, the Trust's actual loss development experience was used. Unreported Loss Approach Exhibit A-VII summarizes the application of the unreported loss approach in projecting the Trust's losses. In this method, expected unreported losses are estimated by multiplying an initial estimate of ultimate losses by estimated percentages of ultimate losses remaining unreported (based on the Trust's reporting patterns). Ultimate losses for the Trust are then estimated as the sum of actual reported losses and estimated unreported losses. An important component of the expected unreported approach is the initial estimate of expected loss. In the analysis, this was estimated based on actual payroll and selected loss rates which reflect the Trust's long-term historical loss experience (see discussion of expected loss approach). 10 Unpaid Loss Approach Exhibit A-VI summarizes the application of the unpaid loss approach in projecting the Trust's losses. This method is similar to the unreported loss approach except that unpaid losses are estimated and added to the paid losses to obtain the estimated ultimate losses. Expected Loss Approach Exhibit A-VIII, Sheet 1 summarizes the application of the expected loss approach to projecting the Trust's workers' compensation losses. In this approach, an initial estimate of expected ultimate losses is determined by multiplying actual payroll by an expected loss rate per $100 of payroll. In the past, workers compensation industry data was used to calculate the initial estimate of expected losses. Currently, we are moving away from using industry data to calculate expected losses and feeding back into the analysis results from the prior year’s funding and budget studies. In order to check the reasonableness of the selected expected loss rates and to be sure the Trust is in balance, Sheet 2 of Exhibit A-VIII provides a comparison of loss amounts expected to be reported (based on the selected expected loss rates and the selected reporting pattern) and the actual reported losses as of June 30, 2008. This comparison shows that, on average, the actual reported losses are approximately 4% higher than what would be expected. An analysis based on paid losses was also performed (see Sheet 3) with similar results. We do, however, note that there is year to year fluctuation and in various years, the actual results are greater or less than 4%. Selected Ultimate Losses Exhibit III provides a summary of the results of the projection methods. Based on these projections, ultimate retained losses are selected. 11 Development of Indicated Reserves Exhibit A-II summarizes the determination of the indicated reserve. On this exhibit, the reserve is calculated by subtracting from the selected ultimate retained losses all the losses that have been paid on claims through the reserve evaluation date for each self-insured period prior to July 1, 2008 as of June 30, 2008. These amounts, together with the statistical model described on Exhibit A-XI, forms the basis of the reserve recommendations shown on Exhibit I. General The payroll is an important component of the loss projections. Any change in payroll amounts could cause a change in reserve estimates. In particular, any significant change in actual 2007-08 payroll from that which has been projected should be reported to us so that estimates can be adjusted accordingly. Finally, in order to keep this report reasonably concise, the source documents and any interim calculations have not been included. We will be pleased to provide any or all of these documents as requested. 12 Exhibit I STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST SUMMARY OF ESTIMATED RESERVES AS OF JUNE 30, 2008 ($000'S OMITTED) Probability Level Undiscounted Reserve Discounted Reserve at 5.0% 4.0% 90% $ 47,455 $ 40,448 $ 41,662 70% 44,890 38,262 39,410 Central Estimate 42,752 36,440 37,533 Note: The ''Expected'' values are from Exhibit A-I. The remaining values reflect the statistical model described on Exhibit A-XI. The funding recommendations reflect loss and allocated loss adjustment expenses only and do not include any allowance for overhead expenses. Exhibit II STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST RECONCILIATION OF EXPECTED UNDISCOUNTED RESERVE ESTIMATES AS OF JUNE 30, 2007 AND JUNE 30, 2008 ($000'S OMITTED) 1. Expected Reserve as of 6/30/07 (a) $ 40,772 2. Estimated Required Fund Contribution for Fiscal Accident Year 7/07 - 6/08 (b) $ 15,800 3. Amounts Paid in Fiscal Year 7/07 - 6/08 Net of All Recoveries (c) $ 12,770 4. Change in 6/30/07 Estimates of Ultimate Losses Net of Recoveries (d) $ (1,050) 5. Expected Reserve as of 6/30/08 (e) [(1) + (2) - (3) + (4) + (5)] $ 42,752 Notes: (a) See Exhibit I, Sheet 1 of prior report. (b) See Exhibit A-III. (c) Provided by the State of Mississippi. (d) Based on Exhibit A-III and selected ultimates from prior report. (e) Reconciles to Exhibit I. Exhibit III STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST SCHEDULE OF RECOMMENDED UNPAID LOSSES THROUGH JUNE 30, 2008 NET OF ALL RECOVERIES EXPECTED PROBABILITY LEVEL ($000'S OMITTED) Anticipated Evaluation Actual Case IBNR Reserve (a) Reserve (b) Date (1) (2) (3) 6/30/2008 $ 9/30/2008 12/31/2008 3/31/2009 6/30/2009 9/30/2009 19,601 $ 23,151 23,450 23,749 24,048 24,345 24,644 Total (c) (4) Anticipated Unpaid Losses (d) (5) 42,752 42,941 43,130 43,319 43,508 43,697 Test Ratio (e) (6) 1.000 $ 42,752 $ To calculate reserves at 4.0% discount, multiply by 0.8779 Notes: (a) Reserve values (net of recoveries) should be entered as they become available. (b) Based on reporting pattern on Exhibit A-V. (c) [(2) + (3)] (d) Based on payment pattern on Exhibit A-IV. (e) [(4) ÷ (5)]. If the test ratio is less than 0.900 or greater than 1.100, contact the actuary. Exhibit IV STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST REVIEW OF AVERAGE WORKERS' COMPENSATION NET LOSSES PER $100 OF PAYROLL IMPLIED BY SELECTED LOSS ESTIMATES Accident Period (1) Selected Ultimate Losses (a) ($000's) (2) 4,650 4,792 4,612 7,250 7,200 7,500 7,200 10,400 10,000 13,500 14,800 15,100 13,700 16,500 13,500 12,000 14,500 15,800 Payroll (b) ($000's) (3) $ 397,236 467,244 488,642 539,268 611,792 656,621 675,720 706,273 752,087 808,869 827,461 822,657 849,854 887,390 843,146 796,958 881,752 969,591 Implied Loss Per $100 of Payroll Pure Percent Premium (c) Change (4) (5) 1.171 1.026 0.944 1.344 1.177 1.142 1.066 1.473 1.330 1.669 1.789 1.836 1.612 1.859 1.601 1.506 1.644 1.630 ---12.4% -8.0% 42.4% -12.4% -3.0% -6.7% 38.2% -9.7% 25.5% 7.2% 2.6% -12.2% 15.3% -13.9% -5.9% 9.2% -0.9% 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Notes: (a) See Exhibit A-III. (b) Provided by the State of Mississippi. (c) [(2) ÷ (3)] x 100 Exhibit V STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST REVIEW OF HISTORICAL OVERHEAD EXPENSES EXPRESSED AS A RATE PER $100 OF PAYROLL Accident Period (1) 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Excess Insurance (2) 0.047 0.047 0.050 0.048 0.033 0.028 0.025 0.021 0.000 0.052 0.096 0.175 0.194 0.173 0.204 0.082 0.065 Other Overhead (3) 0.162 0.172 0.158 0.151 0.145 0.160 0.163 0.136 0.131 0.138 0.136 0.155 0.107 0.122 0.141 0.112 0.115 Change in Accural for Prepaid Expense (4) n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 0.091 -0.020 -0.009 Total Overhead (5) 0.209 0.219 0.208 0.199 0.178 0.188 0.188 0.157 0.131 0.190 0.232 0.330 0.301 0.295 0.254 0.214 0.189 Notes: Rates derived from data supplied by the State of Mississippi. 7/01-6/02, 7/04-6/05 and 7/05-6/06 other overhead excludes the transfers to the budget contingency fund. 7/05-6/06 thru 7/07-6/08 reflect the change in accural for prepaid reinsurance premiums. Exhibit VI STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST REVIEW OF AVERAGE WORKERS' COMPENSATION LOSSES PER CLAIM IMPLIED BY SELECTED LOSS ESTIMATES Accident Period (1) 7/90 - 6/91 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Selected Ultimate Losses (a) Claim ($000's) Count (b) (2) (3) $ 4,650 4,792 4,612 7,250 7,200 7,500 7,200 10,400 10,000 13,500 14,800 15,100 13,700 16,500 13,500 12,000 14,500 15,800 Implied Loss Per Claim Percent Severity (c) Change (4) (5) 2,492 2,341 2,058 2,851 2,818 2,971 2,850 3,685 3,706 4,675 4,738 5,101 5,046 5,777 5,391 4,975 6,202 7,201 ---6.1% -12.1% 38.5% -1.2% 5.4% -4.1% 29.3% 0.6% 26.1% 1.3% 7.7% -1.1% 14.5% -6.7% -7.7% 24.7% 16.1% 1,866 $ 2,047 2,241 2,543 2,555 2,524 2,526 2,822 2,698 2,888 3,124 2,960 2,715 2,856 2,504 2,412 2,338 2,194 Notes: (a) See Exhibit A-III. (b) See Exhibit A-X, Sheet 1. (c) [(2) x 1,000] ÷ (3) Exhibit VII STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST DEVELOPMENT OF ESTIMATED PAYOUT OF RESERVES AS OF JUNE 30, 2008 Accident Period (1) 7/90 - 6/91 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total 7/08 - 6/09 7/09 - 6/10 7/10 - 6/11 7/11 - 6/12 7/12 - 6/13 Undiscounted Reserve (a) (2) $ 168 0 0 349 374 333 441 666 815 1,409 1,419 1,961 2,263 3,840 3,762 5,109 7,740 12,103 42,752 17,000 17,850 18,743 19,680 20,664 $ $ 6/09 (3) 84 0 0 70 62 48 98 121 125 188 237 357 485 1,011 903 1,352 2,141 4,202 $ 11,484 $ 4,760 $ $ 6/10 (4) 84 0 0 70 62 48 49 121 125 188 158 267 323 606 752 902 1,482 2,185 $ 7,422 $ 4,250 4,998 6/11 (5) 6/12 (6) 6/13 (7) 6/14 (8) 6/15 (9) 6/16 (10) 6/17 (11) Amount Paid in Accident Period Ending (b): 6/18 6/19 6/20 6/21 6/22 (12) (13) (14) (15) (16) 6/23 (17) 6/24 (18) 6/25 (19) 6/26 (20) 6/27 (21) 6/28 (22) 6/29 (23) 6/30 (24) 6/31 (25) 6/32 (26) 6/33 (27) $ Total (28) 168 0 0 349 374 333 441 666 815 1,409 1,419 1,961 2,263 3,840 3,762 5,109 7,740 12,103 $ 42,752 $ 17,000 17,850 18,743 19,680 20,664 $ $ 0 0 70 63 47 49 61 126 188 158 178 243 404 452 751 988 1,513 $ 5,291 $ 2,210 4,463 5,248 $ 0 70 62 48 49 61 63 188 157 178 162 303 301 451 823 1,009 $ 3,925 $ 1,530 2,320 4,686 5,510 69 63 47 49 60 63 94 158 178 162 202 226 301 494 841 $ 3,007 $ 1,020 1,607 2,437 4,920 5,786 62 48 49 61 63 94 79 178 161 202 150 225 329 504 $ 2,205 $ 850 1,071 1,687 2,559 5,166 47 49 60 63 94 79 89 162 202 150 150 247 336 $ 1,728 $ 510 892 1,124 1,771 2,686 49 61 62 94 79 89 81 202 151 150 165 252 $ 1,435 $ 340 536 937 1,181 1,860 60 63 94 79 89 81 101 150 150 165 168 $ 1,200 $ 255 357 562 984 1,240 62 94 78 90 81 101 75 150 165 168 $ 1,064 $ 170 268 375 590 1,033 $ $ 93 79 89 81 101 75 75 165 168 926 170 178 281 394 620 $ $ 78 90 80 101 75 75 82 168 749 170 178 187 295 413 89 81 101 76 75 82 84 $ 588 $ 170 179 188 197 310 80 102 75 76 82 84 $ 499 $ 85 178 187 197 207 101 76 75 83 84 $ 419 $ 85 89 188 197 207 75 76 82 84 $ 317 $ 85 89 94 197 207 75 83 84 $ 242 $ 85 89 94 98 206 82 85 $ 167 $ 85 90 94 98 103 84 $ 84 $ 85 89 94 98 103 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 85 90 93 99 103 $ 89 94 98 104 $ 93 99 103 $ 98 104 $ 103 $ 0 Notes: (a) See Exhibit A-I, Column (4). Prospective periods calculated based on future loss rate of 1.65 and payroll trend of 5.0%. (b) Based on payment and reporting patterns on Exhibit A-IV and Exhibit A-V, respectively. Exhibit A-I STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST SUMMARY OF RESERVES AS OF JUNE 30, 2008 ($000'S OMITTED) At 5.0% Rate of Return At 4.0% Rate of Return Total Total Total Case Unreported Undiscounted Discount Discounted Discount Discounted Reserves (a) Losses (b) Reserves (c) Factor (d) Reserves (e) Factor (f) Reserves (g) (2) (3) (4) (5) (6) (7) (8) 62 $ 0 0 164 168 82 185 205 363 831 679 983 825 2,308 1,431 2,225 3,580 5,510 106 0 0 185 206 251 256 461 452 578 740 978 1,438 1,532 2,331 2,884 4,160 6,593 $ 168 0 0 349 374 333 441 666 815 1,409 1,419 1,961 2,263 3,840 3,762 5,109 7,740 12,103 42,752 0.9412 0.9459 0.9403 0.9370 0.9257 0.9110 0.8981 0.8859 0.8736 0.8602 0.8482 0.8349 0.8312 0.8323 0.8370 0.8410 0.8479 0.8650 $ 158 0 0 327 346 303 396 590 712 1,212 1,204 1,637 1,881 3,196 3,149 4,297 6,563 10,469 36,440 1.0000 0.9730 0.9552 0.9449 0.9356 0.9247 0.9150 0.9058 0.8961 0.8850 0.8749 0.8634 0.8602 0.8612 0.8648 0.8683 0.8741 0.8882 $ 168 0 0 330 350 308 404 603 730 1,247 1,241 1,693 1,947 3,307 3,253 4,436 6,766 10,750 37,533 Accident Period (1) 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total $ 19,601 $ 23,151 $ $ $ Notes: (a) Provided by the State of Mississippi. Losses are net of all recoveries. (b) Selected ultimate losses on Exhibit A-III minus reported losses on Exhibit A-V, Sheet 1. (c) [(2) + (3)] (d) See Exhibit A-IX, Sheet 1. (e) [(4) x (5)] (f) See Exhibit A-IX, Sheet 2. (g) [(4) x (7)] Exhibit A-II STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST DEVELOPMENT OF ESTIMATED UNPAID LOSSES AS OF JUNE 30, 2008 ($000'S OMITTED) Accident Period (1) Selected Ultimate Loss (a) (2) Paid Undiscounted Losses (b) Reserve (c) (3) (4) 4,482 4,792 4,612 6,901 6,826 7,167 6,759 9,734 9,185 12,091 13,381 13,139 11,437 12,660 9,738 6,891 6,760 3,697 $ 168 0 0 349 374 333 441 666 815 1,409 1,419 1,961 2,263 3,840 3,762 5,109 7,740 12,103 42,752 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total 4,650 $ 4,792 4,612 7,250 7,200 7,500 7,200 10,400 10,000 13,500 14,800 15,100 13,700 16,500 13,500 12,000 14,500 15,800 $ 193,004 $ 150,252 $ Notes: (a) See Exhibit A-III. (b) Provided by the State of Mississippi. Losses are net of all recoveries. (c) [(2) - (3)] Exhibit A-III STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST DEVELOPMENT OF SELECTED ULTIMATE LOSSES AS OF JUNE 30, 2008 ($000'S OMITTED) Accident Period (1) Paid Loss Approach (a) (2) Reported Loss Approach (b) (3) Unpaid Loss Approach (c) (4) 4,659 5,005 4,860 7,187 7,186 7,583 7,266 10,351 9,911 13,137 14,689 15,043 13,984 16,167 14,012 11,954 14,414 15,743 193,151 Unreported Loss Approach (d) (5) $ 4,626 4,891 4,715 7,175 7,120 7,413 7,157 10,232 9,927 13,509 14,840 15,264 13,708 16,890 13,431 11,864 14,892 16,182 193,836 Expected Selected Loss Prior Approach (e) Report (f) (6) (7) $ Selected Ultimate Loss (8) 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total $ 4,684 $ 5,008 4,843 7,281 7,236 7,633 7,259 10,561 10,067 13,409 15,013 15,097 13,644 15,977 13,409 10,819 13,425 14,977 190,342 $ 4,635 $ 4,888 4,704 7,206 7,134 7,430 7,152 10,317 10,006 13,671 15,030 15,322 13,500 16,899 13,057 11,349 14,672 16,333 193,305 $ 4,112 $ 4,650 $ 4,650 4,958 4,792 4,792 5,167 4,612 4,612 5,505 7,350 7,250 6,324 7,300 7,200 6,824 7,550 7,500 7,347 7,200 7,200 7,906 10,400 10,400 8,245 10,000 10,000 10,677 13,300 13,500 11,998 14,800 14,800 14,643 14,800 15,100 15,722 14,200 13,700 16,860 16,000 16,500 15,598 14,300 13,500 13,947 12,500 12,000 15,431 14,500 14,500 15,998 - n/a 15,800 187,262 - n/a $ 193,004 $ $ Notes: (a) See Exhibit A-IV, Sheet 1. (b) See Exhibit A-V, Sheet 1. (c) See Exhibit A-VI. (d) See Exhibit A-VII. (e) See Exhibit A-VIII, Sheet 1. (f) See Exhibit A-III of the June 30, 2007 study. Exhibit A-IV Sheet 1 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST PAID LOSS APPROACH DEVELOPMENT OF INDICATED ULTIMATE LOSSES AS OF JUNE 30, 2008 ($000'S OMITTED) Accident Period (1) Selected Paid Development Losses (a) Factor (b) (2) (3) 4,482 4,792 4,612 6,901 6,826 7,167 6,759 9,734 9,185 12,091 13,381 13,139 11,437 12,660 9,738 6,891 6,760 3,697 1.045 1.045 1.050 1.055 1.060 1.065 1.074 1.085 1.096 1.109 1.122 1.149 1.193 1.262 1.377 1.570 1.986 4.051 Indicated Ultimate Losses (c) (4) $ 4,684 5,008 4,843 7,281 7,236 7,633 7,259 10,561 10,067 13,409 15,013 15,097 13,644 15,977 13,409 10,819 13,425 14,977 190,342 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total $ 150,252 $ Notes: (a) Provided by the State of Mississippi. Losses are net of all recoveries. (b) See Sheet 2 and Sheet 3. (c) [(2) x (3)] Exhibit A-IV Sheet 2 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST PAID LOSS APPROACH DEVELOPMENT OF INDICATED ULTIMATE LOSSES AS OF JUNE 30, 2008 NET OF ALL RECOVERIES ($000'S OMITTED) Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Valued as of (Months) 48 60 72 3,736 3,944 4,233 5,586 5,355 5,698 5,407 8,461 7,478 9,355 11,277 10,554 10,301 11,409 9,738 3,899 4,326 4,431 6,103 5,744 5,990 5,621 8,904 8,173 10,307 12,181 11,513 11,039 12,660 4,177 4,512 4,590 6,416 5,921 6,319 5,757 9,261 8,528 11,037 12,853 12,482 11,437 12 1,337 1,459 1,828 2,075 1,992 1,943 2,209 2,838 2,425 3,455 4,210 3,297 3,316 3,785 3,402 2,860 3,306 3,697 24 2,596 2,940 3,345 3,729 3,928 3,957 4,275 6,201 5,125 7,165 7,136 7,309 6,916 7,835 6,950 5,585 6,760 36 3,287 3,520 3,994 4,592 4,920 5,157 5,092 7,467 6,611 8,234 9,675 9,283 8,926 10,110 8,660 6,891 84 4,246 4,554 4,626 6,509 6,012 6,446 6,082 9,399 8,805 11,685 13,053 13,139 96 4,266 4,721 4,627 6,570 6,201 6,743 6,261 9,599 9,013 11,925 13,381 108 4,321 4,736 4,592 6,625 6,449 6,808 6,385 9,634 9,107 12,091 12 1.942 2.015 1.830 1.797 1.972 2.037 1.935 2.185 2.113 2.074 1.695 2.217 2.086 2.070 2.043 1.953 2.045 24 1.266 1.197 1.194 1.231 1.253 1.303 1.191 1.204 1.290 1.149 1.356 1.270 1.291 1.290 1.246 1.234 36 1.137 1.120 1.060 1.216 1.088 1.105 1.062 1.133 1.131 1.136 1.166 1.137 1.154 1.128 1.124 Period to Period Factors 48 60 72 1.044 1.097 1.047 1.093 1.073 1.051 1.040 1.052 1.093 1.102 1.080 1.091 1.072 1.110 1.071 1.043 1.036 1.051 1.031 1.055 1.024 1.040 1.043 1.071 1.055 1.084 1.036 1.017 1.009 1.008 1.014 1.015 1.020 1.056 1.015 1.032 1.059 1.016 1.053 84 1.005 1.037 1.000 1.009 1.031 1.046 1.029 1.021 1.024 1.021 1.025 96 1.013 1.003 0.992 1.008 1.040 1.010 1.020 1.004 1.010 1.014 108 1.007 1.001 1.000 1.014 1.023 1.006 1.025 1.003 1.009 3/3 5/5 3/5 3-$ 5-$ Selected Cumulative Note: 2.014 2.039 2.053 2.017 2.042 2.040 4.051 1.257 1.266 1.269 1.260 1.268 1.265 1.986 1.135 1.142 1.140 1.135 1.142 1.140 1.570 Average Development Factors 1.091 1.058 1.043 1.091 1.058 1.035 1.091 1.056 1.034 1.091 1.059 1.041 1.091 1.059 1.035 1.091 1.377 1.058 1.262 1.038 1.193 1.023 1.024 1.023 1.023 1.024 1.024 1.149 1.009 1.012 1.011 1.010 1.011 1.012 1.122 1.012 1.013 1.013 1.011 1.012 1.012 1.109 Based on data provided by the State Of Mississippi. Exhibit A-IV Sheet 3 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST PAID LOSS APPROACH DEVELOPMENT OF INDICATED ULTIMATE LOSSES AS OF JUNE 30, 2008 NET OF ALL RECOVERIES ($000'S OMITTED) Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Valued as of (Months) 156 168 180 4,375 4,792 4,612 6,820 6,791 7,167 4,385 4,792 4,612 6,889 6,826 4,451 4,792 4,612 6,901 120 4,350 4,743 4,593 6,715 6,595 6,849 6,542 9,664 9,185 132 4,355 4,745 4,595 6,774 6,672 6,894 6,623 9,734 144 4,362 4,773 4,612 6,801 6,739 7,065 6,759 192 4,478 4,792 4,612 204 4,480 4,792 216 4,482 120 1.001 1.000 1.000 1.009 1.012 1.007 1.012 1.007 132 1.002 1.006 1.004 1.004 1.010 1.025 1.021 144 1.003 1.004 1.000 1.003 1.008 1.014 Period to Period Factors 156 168 180 1.002 1.000 1.000 1.010 1.005 1.015 1.000 1.000 1.002 1.006 1.000 1.000 192 1.000 1.000 204 1.000 216 3/3 5/5 3/5 3-$ 5-$ Selected Cumulative Note: 1.009 1.009 1.009 1.009 1.009 1.010 1.096 1.019 1.013 1.012 1.019 1.013 1.010 1.085 1.008 1.006 1.005 1.008 1.006 1.008 1.074 Average Development Factors 1.005 1.001 1.002 1.000 1.003 1.004 1.002 1.000 1.002 1.004 1.002 1.000 1.006 1.001 1.002 1.000 1.004 1.004 1.002 1.000 1.005 1.065 1.005 1.060 1.005 1.055 1.005 1.050 1.000 1.000 1.000 1.000 1.000 1.000 1.045 1.045 Based on data provided by the State Of Mississippi. Exhibit A-V Sheet 1 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST REPORTED LOSS APPROACH DEVELOPMENT OF INDICATED ULTIMATE LOSSES AS OF JUNE 30, 2008 ($000'S OMITTED) Accident Period (1) Selected Indicated Reported Development Ultimate Losses (a) Factor (b) Losses (c) (2) (3) (4) 4,544 4,792 4,612 7,065 6,994 7,249 6,944 9,939 9,548 12,922 14,060 14,122 12,262 14,968 11,169 9,116 10,340 9,207 1.020 1.020 1.020 1.020 1.020 1.025 1.030 1.038 1.048 1.058 1.069 1.085 1.101 1.129 1.169 1.245 1.419 1.774 $ 4,635 4,888 4,704 7,206 7,134 7,430 7,152 10,317 10,006 13,671 15,030 15,322 13,500 16,899 13,057 11,349 14,672 16,333 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total $ 169,853 $ 193,305 Notes: (a) Provided by the State of Mississippi. Losses are net of all recoveries. (b) See Sheet 2 and Sheet 3. (c) [(2) x (3)] Exhibit A-V Sheet 2 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST REPORTED LOSS APPROACH DEVELOPMENT OF INDICATED ULTIMATE LOSSES AS OF JUNE 30, 2008 NET OF ALL RECOVERIES ($000'S OMITTED) Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Valued as of (Months) 48 60 72 4,299 4,567 4,775 6,647 6,622 6,791 6,133 9,915 8,860 11,107 13,161 12,629 12,086 13,590 11,169 4,268 4,733 4,728 6,972 6,430 6,891 6,224 10,061 8,947 11,356 13,509 12,870 12,224 14,968 4,326 4,710 4,672 6,841 6,681 7,027 6,318 9,921 8,998 12,203 13,650 13,545 12,262 12 2,556 3,595 4,099 4,759 3,575 3,967 5,336 8,669 6,267 8,366 10,067 7,099 6,561 7,881 8,459 7,442 8,143 9,207 24 3,808 4,356 4,948 5,421 5,236 5,963 6,396 9,265 7,988 9,909 10,419 10,047 9,278 11,383 9,728 7,892 10,340 36 4,566 4,504 4,731 5,900 6,096 6,813 6,292 9,643 8,377 10,509 12,219 11,010 11,481 13,000 10,491 9,116 84 4,503 4,971 4,661 6,865 6,977 6,896 6,385 9,758 9,293 12,376 13,677 14,122 96 4,587 4,844 4,680 6,830 6,816 7,120 6,495 9,749 9,352 12,615 14,060 108 4,552 4,850 4,641 6,859 6,833 6,877 6,628 9,812 9,392 12,922 12 1.490 1.212 1.207 1.139 1.465 1.503 1.199 1.069 1.275 1.184 1.035 1.415 1.414 1.444 1.150 1.060 1.270 24 1.199 1.034 0.956 1.088 1.164 1.143 0.984 1.041 1.049 1.061 1.173 1.096 1.237 1.142 1.078 1.155 36 0.942 1.014 1.009 1.127 1.086 0.997 0.975 1.028 1.058 1.057 1.077 1.147 1.053 1.045 1.065 Period to Period Factors 48 60 72 0.993 1.036 0.990 1.049 0.971 1.015 1.015 1.015 1.010 1.022 1.026 1.019 1.011 1.101 1.014 0.995 0.988 0.981 1.039 1.020 1.015 0.986 1.006 1.075 1.010 1.052 1.003 1.041 1.055 0.998 1.004 1.044 0.981 1.011 0.984 1.033 1.014 1.002 1.043 84 1.019 0.974 1.004 0.995 0.977 1.032 1.017 0.999 1.006 1.019 1.028 96 0.992 1.001 0.992 1.004 1.002 0.966 1.020 1.006 1.004 1.024 108 1.002 0.990 1.003 1.012 1.008 1.012 1.026 0.997 1.017 3/3 5/5 3/5 3-$ 5-$ Selected Cumulative Note: 1.160 1.268 1.278 1.163 1.263 1.250 1.774 1.125 1.142 1.131 1.124 1.140 1.140 1.419 1.054 1.077 1.065 1.054 1.076 1.065 1.245 Average Development Factors 1.044 1.022 1.020 1.036 1.029 1.015 1.022 1.023 1.016 1.046 1.022 1.020 1.038 1.030 1.016 1.035 1.169 1.025 1.129 1.015 1.101 1.018 1.014 1.014 1.019 1.015 1.015 1.085 1.011 1.004 1.010 1.013 1.007 1.010 1.069 1.013 1.012 1.012 1.011 1.011 1.010 1.058 Based on data provided by the State Of Mississippi. Exhibit A-V Sheet 3 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST REPORTED LOSS APPROACH DEVELOPMENT OF INDICATED ULTIMATE LOSSES AS OF JUNE 30, 2008 NET OF ALL RECOVERIES ($000'S OMITTED) Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Valued as of (Months) 156 168 180 4,656 4,792 4,612 7,046 6,954 7,249 4,610 4,792 4,612 7,065 6,994 4,600 4,792 4,612 7,065 120 4,560 4,803 4,653 6,939 6,888 6,958 6,798 9,781 9,548 132 4,558 4,803 4,652 6,919 7,012 7,191 6,808 9,939 144 4,558 4,808 4,612 7,046 7,068 7,212 6,944 192 4,601 4,792 4,612 204 4,544 4,792 216 4,544 120 1.000 1.000 1.000 0.997 1.018 1.033 1.001 1.016 132 1.000 1.001 0.991 1.018 1.008 1.003 1.020 144 1.022 0.997 1.000 1.000 0.984 1.005 Period to Period Factors 156 168 180 0.990 1.000 1.000 1.003 1.006 0.998 1.000 1.000 1.000 1.000 1.000 1.000 192 0.988 1.000 204 1.000 216 3/3 5/5 3/5 3-$ 5-$ Selected Cumulative Note: 1.017 1.013 1.012 1.017 1.014 1.010 1.048 1.010 1.008 1.010 1.010 1.009 1.008 1.038 0.996 0.997 0.999 0.996 0.997 1.005 1.030 Average Development Factors 1.003 1.000 1.000 1.000 1.000 1.000 1.001 1.000 1.000 1.003 1.000 1.000 1.000 1.000 1.000 1.005 1.025 1.000 1.020 1.000 1.020 0.994 0.994 0.994 0.994 0.994 1.000 1.020 1.000 1.000 1.000 1.000 1.000 1.000 1.020 1.020 Based on data provided by the State Of Mississippi. Exhibit A-VI STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST UNPAID LOSS APPROACH DEVELOPMENT OF INDICATED ULTIMATE LOSSES AS OF JUNE 30, 2008 ($000'S OMITTED) Indicated Expected Losses (a) (2) 4,112 4,958 5,167 5,505 6,324 6,824 7,347 7,906 8,245 10,677 11,998 14,643 15,722 16,860 15,598 13,947 15,431 15,998 Expected Portion Unpaid (b) (3) 0.043 0.043 0.048 0.052 0.057 0.061 0.069 0.078 0.088 0.098 0.109 0.130 0.162 0.208 0.274 0.363 0.496 0.753 Expected Unpaid Losses (c) (4) $ Indicated Ultimate Losses (e) (6) $ 4,659 5,005 4,860 7,187 7,186 7,583 7,266 10,351 9,911 13,137 14,689 15,043 13,984 16,167 14,012 11,954 14,414 15,743 Accident Period (1) Paid Losses (d) (5) 4,482 4,792 4,612 6,901 6,826 7,167 6,759 9,734 9,185 12,091 13,381 13,139 11,437 12,660 9,738 6,891 6,760 3,697 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total 177 $ 213 248 286 360 416 507 617 726 1,046 1,308 1,904 2,547 3,507 4,274 5,063 7,654 12,046 $ 187,262 $ 42,899 $ 150,252 $ 193,151 Notes: (a) See Exhibit A-VIII, Sheet 1. (b) Derived from payment pattern on Exhibit A-IV. (c) [(2) x (3)] (d) Provided the State of Mississippi. Losses are net of all recoveries. (e) [(4) + (5)] Exhibit A-VII STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST UNREPORTED LOSS APPROACH DEVELOPMENT OF INDICATED ULTIMATE LOSSES AS OF JUNE 30, 2008 ($000'S OMITTED) Indicated Expected Losses (a) (2) 4,112 4,958 5,167 5,505 6,324 6,824 7,347 7,906 8,245 10,677 11,998 14,643 15,722 16,860 15,598 13,947 15,431 15,998 Expected Expected Portion Unreported Reported Unreported (b) Losses (c) Losses (d) (3) (4) (5) 0.020 0.020 0.020 0.020 0.020 0.024 0.029 0.037 0.046 0.055 0.065 0.078 0.092 0.114 0.145 0.197 0.295 0.436 $ 82 $ 99 103 110 126 164 213 293 379 587 780 1,142 1,446 1,922 2,262 2,748 4,552 6,975 Indicated Ultimate Losses (e) (6) 4,626 4,891 4,715 7,175 7,120 7,413 7,157 10,232 9,927 13,509 14,840 15,264 13,708 16,890 13,431 11,864 14,892 16,182 Accident Period (1) 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total 4,544 $ 4,792 4,612 7,065 6,994 7,249 6,944 9,939 9,548 12,922 14,060 14,122 12,262 14,968 11,169 9,116 10,340 9,207 $ 187,262 $ 23,983 $ 169,853 $ 193,836 Notes: (a) See Exhibit A-VIII, Sheet 1. (b) Derived from reporting pattern on Exhibit A-V. (c) [(2) x (3)] (d) Provided by the State of Mississippi. Losses are net of all recoveries. (e) [(4) + (5)] Exhibit A-VIII Sheet 1 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST EXPECTED LOSS APPROACH DEVELOPMENT OF INDICATED EXPECTED LOSSES ($000'S OMITTED) Expected Loss Indicated Accident Payroll (a) Per $100 Expected Period ($000's) Payroll (b) Losses (c) (1) (2) (3) (4) 7/90 - 6/91 $ 397,236 7/91 - 6/92 467,244 7/92 - 6/93 488,642 7/93 - 6/94 539,268 7/94 - 6/95 611,792 7/95 - 6/96 656,621 7/96 - 6/97 675,720 7/97 - 6/98 706,273 7/98 - 6/99 752,087 7/99 - 6/00 808,869 7/00 - 6/01 827,461 7/01 - 6/02 822,657 7/02 - 6/03 849,854 7/03 - 6/04 887,390 7/04 - 6/05 843,146 7/05 - 6/06 796,958 7/06 - 6/07 881,752 7/07 - 6/08 969,591 Total 1.035 1.061 1.057 1.021 1.034 1.039 1.087 1.119 1.096 1.320 1.450 1.780 1.850 1.900 1.850 1.750 1.750 1.650 $ 4,112 4,958 5,167 5,505 6,324 6,824 7,347 7,906 8,245 10,677 11,998 14,643 15,722 16,860 15,598 13,947 15,431 15,998 $ 187,262 Notes: (a) Provided by the State of Mississippi. (b) Based on the Trust's long-term historical experience. (c) {[(2) x (3)] ÷ 100}. Exhibit A-VIII Sheet 2 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST COMPARISON OF INDICATED EXPECTED LOSSES TO REPORTED LOSSES AS OF JUNE 30, 2008 ($000'S OMITTED) Indicated Experience Reported Modification Losses (d) Factor (e) (5) (6) $ 4,544 4,792 4,612 7,065 6,994 7,249 6,944 9,939 9,548 12,922 14,060 14,122 12,262 14,968 11,169 9,116 10,340 9,207 1.128 0.986 0.911 1.310 1.128 1.088 0.973 1.306 1.214 1.281 1.253 1.046 0.859 1.002 0.838 0.814 0.950 1.020 1.040 Accident Period (1) Indicated Expected Expected Expected Portion Reported Losses (a) Reported (b) Losses (c) (2) (3) (4) 4,112 4,958 5,167 5,505 6,324 6,824 7,347 7,906 8,245 10,677 11,998 14,643 15,722 16,860 15,598 13,947 15,431 15,998 0.980 0.980 0.980 0.980 0.980 0.976 0.971 0.963 0.954 0.945 0.935 0.922 0.908 0.886 0.855 0.803 0.705 0.564 $ 4,030 4,859 5,064 5,395 6,198 6,660 7,134 7,613 7,866 10,090 11,218 13,501 14,276 14,938 13,336 11,199 10,879 9,023 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total $ 187,262 $ 163,279 $ 169,853 Notes: (a) See Sheet 1. (b) Derived from reporting pattern on Exhibit A-V. (c) [(2) x (3)] (d) Provided by the State of Mississippi. Losses are net of all recoveries. (e) [(5) ÷ (4)] Exhibit A-VIII Sheet 3 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST COMPARISON OF INDICATED EXPECTED LOSSES TO PAID LOSSES AS OF JUNE 30, 2008 ($000'S OMITTED) Indicated Experience Modification Factor (e) (6) 1.139 1.010 0.938 1.322 1.145 1.118 0.988 1.335 1.222 1.255 1.252 1.031 0.868 0.948 0.860 0.776 0.869 0.935 1.041 Accident Period (1) Indicated Expected Losses (a) (2) 4,112 4,958 5,167 5,505 6,324 6,824 7,347 7,906 8,245 10,677 11,998 14,643 15,722 16,860 15,598 13,947 15,431 15,998 Expected Portion Paid (b) (3) 0.957 0.957 0.952 0.948 0.943 0.939 0.931 0.922 0.912 0.902 0.891 0.870 0.838 0.792 0.726 0.637 0.504 0.247 Expected Paid Losses (c) (4) $ Paid Losses (d) (5) 4,482 4,792 4,612 6,901 6,826 7,167 6,759 9,734 9,185 12,091 13,381 13,139 11,437 12,660 9,738 6,891 6,760 3,697 7/90 - 6/91 $ 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total 3,935 $ 4,745 4,919 5,219 5,964 6,408 6,840 7,289 7,519 9,631 10,690 12,739 13,175 13,353 11,324 8,884 7,777 3,952 $ 187,262 $ 144,363 $ 150,252 Notes: (a) See Sheet 1. (b) Derived from payment pattern on Exhibit A-IV. (c) [(2) x (3)] (d) Provided by the State of Mississippi. Losses are net of all recoveries. (e) [(5) ÷ (4)] Exhibit A-IX Sheet 1 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST DEVELOPMENT OF PRESENT VALUE ADJUSTMENT FACTORS 5.0% RATE OF RETURN Payment Year (1) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Payment Made in Period (2) 24.69 25.67 13.34 8.93 6.62 4.58 3.21 2.09 2.00 1.75 1.60 1.40 1.20 0.90 0.75 0.60 0.30 0.20 0.10 0.07 Remaining Present Payments at Value of Beginning of Remaining the Period Payments (3) (4) 100.00 75.31 49.64 36.30 27.37 20.75 16.17 12.96 10.87 8.87 7.12 5.52 4.12 2.92 2.02 1.27 0.67 0.37 0.17 0.07 86.13 65.14 42.09 30.53 22.91 17.27 13.44 10.82 9.22 7.63 6.22 4.89 3.70 2.66 1.87 1.19 0.63 0.35 0.16 0.07 Reserve Discount Factor [(4)÷(3)] (5) 0.8613 0.8650 0.8479 0.8410 0.8370 0.8323 0.8312 0.8349 0.8482 0.8602 0.8736 0.8859 0.8981 0.9110 0.9257 0.9370 0.9403 0.9459 0.9412 1.0000 Note: Column (2) is based on payment pattern on Exhibit A-IV. Exhibit A-IX Sheet 2 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST DEVELOPMENT OF PRESENT VALUE ADJUSTMENT FACTORS 4.0% RATE OF RETURN Payment Year (1) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Payment Made in Period (2) 24.69 25.67 13.34 8.93 6.62 4.58 3.21 2.09 2.00 1.75 1.60 1.40 1.20 0.90 0.75 0.60 0.30 0.20 0.10 0.07 Remaining Present Payments at Value of Beginning of Remaining the Period Payments (3) (4) 100.00 75.31 49.64 36.30 27.37 20.75 16.17 12.96 10.87 8.87 7.12 5.52 4.12 2.92 2.02 1.27 0.67 0.37 0.17 0.07 88.53 66.89 43.39 31.52 23.67 17.87 13.91 11.19 9.51 7.85 6.38 5.00 3.77 2.70 1.89 1.20 0.64 0.36 0.17 0.07 Reserve Discount Factor [(4)÷(3)] (5) 0.8853 0.8882 0.8741 0.8683 0.8648 0.8612 0.8602 0.8634 0.8749 0.8850 0.8961 0.9058 0.9150 0.9247 0.9356 0.9449 0.9552 0.9730 1.0000 1.0000 Note: Column (2) is based on payment pattern on Exhibit A-IV. Exhibit A-X Sheet 1 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST DEVELOPMENT OF ULTIMATE CLAIMS AS OF JUNE 30, 2008 Accident Period (1) 7/90 - 6/91 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 Total Selected Indicated Reported Development Ultimate Claims (a) Factor (b) Claims (c) (2) (3) (4) 1,866 2,047 2,241 2,543 2,555 2,524 2,526 2,822 2,698 2,888 3,124 2,960 2,715 2,856 2,499 2,402 2,319 2,060 45,645 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.002 1.004 1.008 1.065 1,866 2,047 2,241 2,543 2,555 2,524 2,526 2,822 2,698 2,888 3,124 2,960 2,715 2,856 2,504 2,412 2,338 2,194 45,813 Notes: (a) Provided by the State of Mississippi. Excludes 'Reporting Purposes Only' claims. (b) See Sheet 2 and Sheet 3. (c) [(2) x (3)] Exhibit A-X Sheet 2 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST DEVELOPMENT OF ULTIMATE CLAIMS AS OF JUNE 30, 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 12 1,738 1,966 2,154 2,367 2,402 2,353 2,364 2,682 2,535 2,694 3,023 2,775 2,537 2,694 2,362 2,249 2,227 2,060 24 1,855 2,041 2,235 2,533 2,547 2,512 2,519 2,802 2,662 2,846 3,094 2,922 2,706 2,847 2,488 2,397 2,319 36 1,861 2,045 2,239 2,539 2,554 2,517 2,521 2,806 2,668 2,853 3,100 2,957 2,714 2,851 2,497 2,402 Valued as of (Months) 48 60 72 1,862 2,045 2,239 2,539 2,554 2,522 2,522 2,808 2,671 2,856 3,124 2,959 2,714 2,853 2,499 1,862 2,045 2,239 2,540 2,554 2,522 2,522 2,808 2,671 2,888 3,124 2,960 2,714 2,856 1,864 2,046 2,240 2,540 2,554 2,522 2,522 2,808 2,698 2,888 3,124 2,960 2,715 84 1,864 2,046 2,240 2,542 2,554 2,522 2,522 2,822 2,698 2,888 3,124 2,960 96 1,865 2,046 2,240 2,542 2,554 2,522 2,526 2,822 2,698 2,888 3,124 108 1,864 2,046 2,240 2,542 2,554 2,524 2,526 2,822 2,698 2,888 12 1.067 1.038 1.038 1.070 1.060 1.068 1.066 1.045 1.050 1.056 1.023 1.053 1.067 1.057 1.053 1.066 1.041 24 1.003 1.002 1.002 1.002 1.003 1.002 1.001 1.001 1.002 1.002 1.002 1.012 1.003 1.001 1.004 1.002 36 1.001 1.000 1.000 1.000 1.000 1.002 1.000 1.001 1.001 1.001 1.008 1.001 1.000 1.001 1.001 Period to Period Factors 48 60 72 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.011 1.000 1.000 1.000 1.001 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.010 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.001 1.000 1.000 1.000 1.005 1.000 1.000 1.000 1.000 84 1.001 1.000 1.000 1.000 1.000 1.000 1.002 1.000 1.000 1.000 1.000 96 0.999 1.000 1.000 1.000 1.000 1.001 1.000 1.000 1.000 1.000 108 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 3/3 5/5 3/5 3-$ 5-$ Selected Cumulative Note: 1.053 1.057 1.059 1.054 1.057 1.057 1.065 1.002 1.004 1.003 1.002 1.005 1.004 1.008 1.001 1.002 1.001 1.000 1.002 1.002 1.004 Average Development Factors 1.000 1.000 1.000 1.002 1.002 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.002 1.002 1.001 1.002 1.002 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Based on data provided by the State Of Mississippi. Excludes 'Reporting Purposes Only' claims. Exhibit A-X Sheet 3 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST DEVELOPMENT OF ULTIMATE CLAIMS AS OF JUNE 30, 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 120 1,864 2,046 2,240 2,542 2,555 2,524 2,526 2,822 2,698 132 1,864 2,046 2,240 2,543 2,555 2,524 2,526 2,822 144 1,864 2,046 2,241 2,543 2,555 2,524 2,526 Valued as of (Months) 156 168 180 1,864 2,047 2,241 2,543 2,555 2,524 1,866 2,047 2,241 2,543 2,555 1,866 2,047 2,241 2,543 192 1,866 2,047 2,241 204 1,866 2,047 216 1,866 120 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 132 1.000 1.000 1.000 1.000 1.000 1.000 1.000 144 1.000 1.000 1.000 1.000 1.000 1.000 Period to Period Factors 156 168 180 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 192 1.000 1.000 204 1.000 216 3/3 5/5 3/5 3-$ 5-$ Selected Cumulative Note: 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Average Development Factors 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Based on data provided by the State Of Mississippi. Excludes 'Reporting Purposes Only' claims. Exhibit A-X Sheet 4 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST AVERAGE CASE RESERVE PER OPEN CLAIM Open Claims Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: 12 24 36 Valued as of (Months) 48 60 72 84 96 108 808 661 631 775 793 654 601 512 578 122 142 172 177 132 158 131 94 118 72 66 75 104 84 82 87 57 53 25 45 42 54 63 60 41 52 36 19 16 30 26 37 43 36 24 35 13 16 13 24 18 28 22 21 21 10 13 10 9 14 15 21 15 15 3 7 13 13 5 7 10 18 16 4 2 5 11 9 6 7 7 19 12 24 36 Case Reserves ($000's) 48 60 72 84 96 108 4,911 5,857 3,801 3,245 4,096 5,057 4,582 4,837 5,510 2,862 2,744 3,283 2,737 2,362 3,548 2,778 2,307 3,580 2,176 1,766 2,275 2,544 1,727 2,555 2,890 1,831 2,225 725 1,454 1,382 1,752 1,884 2,075 1,785 2,181 1,431 900 603 1,158 774 1,049 1,328 1,357 1,185 2,308 760 707 561 660 470 1,166 797 1,063 825 356 965 450 302 359 488 691 624 983 52 260 615 377 234 150 339 690 679 114 49 233 384 69 243 178 285 831 12 24 36 Case Reserves Per Open Claim 48 60 72 84 96 108 6,078 8,861 6,024 4,187 5,165 7,732 7,624 9,447 9,533 23,459 19,324 19,087 15,463 17,894 22,456 21,206 24,543 30,339 30,222 26,758 30,333 24,462 20,560 31,159 33,218 32,123 41,981 29,000 32,311 32,905 32,444 29,905 34,583 43,537 41,942 39,750 47,368 37,688 38,600 29,769 28,351 30,884 37,694 49,375 65,943 58,462 44,188 43,154 27,500 26,111 41,643 36,227 50,619 39,286 35,600 74,231 45,000 33,556 25,643 32,533 32,905 41,600 65,533 17,333 37,143 47,308 29,000 46,800 21,429 33,900 38,333 42,438 28,500 24,500 46,600 34,909 7,667 40,500 25,429 40,714 43,737 Based on data provided by the State Of Mississippi. Exhibit A-X Sheet 5 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST AVERAGE CASE RESERVE PER OPEN CLAIM Open Claims Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: 120 5 2 3 5 5 9 6 5 8 132 5 2 3 5 6 7 6 6 144 5 2 0 3 6 5 5 Valued as of (Months) 156 168 180 5 1 1 3 4 4 4 1 0 2 4 2 1 0 2 192 2 1 0 204 1 1 216 1 120 210 60 60 224 293 109 256 117 363 132 203 58 58 145 340 297 185 205 144 197 35 0 245 329 147 185 Case Reserves ($000's) 156 168 180 280 0 0 226 163 82 225 0 0 176 168 149 0 0 164 192 123 0 0 204 64 0 216 62 120 42,000 30,000 20,000 44,800 58,600 12,111 42,667 23,400 45,375 132 40,600 29,000 19,333 29,000 56,667 42,429 30,833 34,167 144 39,400 17,500 0 81,667 54,833 29,400 37,000 Case Reserves Per Open Claim 156 168 180 56,000 0 0 75,333 40,750 20,500 56,250 0 0 88,000 42,000 74,500 0 0 82,000 192 61,500 0 0 204 64,000 0 216 62,000 Based on data provided by the State Of Mississippi. Exhibit A-X Sheet 6 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST RATIO OF OPEN CLAIMS TO REPORTED CLAIMS Open Claims Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: 12 24 36 Valued as of (Months) 48 60 72 84 96 108 808 661 631 775 793 654 601 512 578 122 142 172 177 132 158 131 94 118 72 66 75 104 84 82 87 57 53 25 45 42 54 63 60 41 52 36 19 16 30 26 37 43 36 24 35 13 16 13 24 18 28 22 21 21 10 13 10 9 14 15 21 15 15 3 7 13 13 5 7 10 18 16 4 2 5 11 9 6 7 7 19 12 24 36 48 Reported Claims 60 72 84 96 108 2,694 3,023 2,775 2,537 2,694 2,362 2,249 2,227 2,060 2,662 2,846 3,094 2,922 2,706 2,847 2,488 2,397 2,319 2,806 2,668 2,853 3,100 2,957 2,714 2,851 2,497 2,402 2,522 2,808 2,671 2,856 3,124 2,959 2,714 2,853 2,499 2,522 2,522 2,808 2,671 2,888 3,124 2,960 2,714 2,856 2,554 2,522 2,522 2,808 2,698 2,888 3,124 2,960 2,715 2,542 2,554 2,522 2,522 2,822 2,698 2,888 3,124 2,960 2,240 2,542 2,554 2,522 2,526 2,822 2,698 2,888 3,124 2,046 2,240 2,542 2,554 2,524 2,526 2,822 2,698 2,888 12 24 Ratio of Open Claims to Reported Claims 36 48 60 72 84 96 108 0.300 0.219 0.227 0.305 0.294 0.277 0.267 0.230 0.281 0.046 0.050 0.056 0.061 0.049 0.055 0.053 0.039 0.051 0.026 0.025 0.026 0.034 0.028 0.030 0.031 0.023 0.022 0.010 0.016 0.016 0.019 0.020 0.020 0.015 0.018 0.014 0.008 0.006 0.011 0.010 0.013 0.014 0.012 0.009 0.012 0.005 0.006 0.005 0.009 0.007 0.010 0.007 0.007 0.008 0.004 0.005 0.004 0.004 0.005 0.006 0.007 0.005 0.005 0.001 0.003 0.005 0.005 0.002 0.002 0.004 0.006 0.005 0.002 0.001 0.002 0.004 0.004 0.002 0.002 0.003 0.007 Based on data provided by the State Of Mississippi. Exhibit A-X Sheet 7 STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST RATIO OF OPEN CLAIMS TO REPORTED CLAIMS Open Claims Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Accident Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: 120 5 2 3 5 5 9 6 5 8 132 5 2 3 5 6 7 6 6 144 5 2 0 3 6 5 5 Valued as of (Months) 156 168 180 5 1 1 3 4 4 4 1 0 2 4 2 1 0 2 192 2 1 0 204 1 1 216 1 120 1,864 2,046 2,240 2,542 2,555 2,524 2,526 2,822 2,698 132 1,864 2,046 2,240 2,543 2,555 2,524 2,526 2,822 144 1,864 2,046 2,241 2,543 2,555 2,524 2,526 156 Reported Claims 168 180 1,866 2,047 2,241 2,543 2,555 1,866 2,047 2,241 2,543 192 1,866 2,047 2,241 204 1,866 2,047 216 1,866 1,864 2,047 2,241 2,543 2,555 2,524 120 0.003 0.001 0.001 0.002 0.002 0.004 0.002 0.002 0.003 132 0.003 0.001 0.001 0.002 0.002 0.003 0.002 0.002 144 Ratio of Open Claims to Reported Claims 156 168 180 192 0.003 0.000 0.000 0.001 0.002 0.002 0.002 0.000 0.000 0.001 0.002 0.001 0.000 0.000 0.001 0.001 0.000 0.000 204 0.001 0.000 216 0.001 0.003 0.001 0.000 0.001 0.002 0.002 0.002 Based on data provided by the State Of Mississippi. Exhibit A-XI STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST SPECIFICATIONS OF SIMULATION MODEL TO ESTIMATE THE VARIABILITY IN LOSS ESTIMATES 1. The average losses are lognormally distributed with an unlimited mean of $40,000 and a coefficient of variation of 5.00. 2. The maximum value of a claim is limited to $1,000,000 and includes loss and loss adjustment expenses. 3. The number of unpaid claims as of 6/30/08 are Poisson distributed with a mean of 1,069. Exhibit A-XII STATE OF MISSISSIPPI SELF-INSURED WORKERS' COMPENSATION TRUST SUMMARY OF PRIMARY PER OCCURRENCE AND AGGREGATE SELF-INSURED RETENTIONS Accident Period (1) 7/90 - 6/91 7/91 - 6/92 7/92 - 6/93 7/93 - 6/94 7/94 - 6/95 7/95 - 6/96 7/96 - 6/97 7/97 - 6/98 7/98 - 6/99 7/99 - 6/00 7/00 - 6/01 7/01 - 6/02 7/02 - 6/03 7/03 - 6/04 7/04 - 6/05 7/05 - 6/06 7/06 - 6/07 7/07 - 6/08 7/08 - 6/09 Per Occurrence Program Primary SelfLimits of Insured Retention Indemnity (2) (3) $350,000 $350,000 $350,000 $350,000 $350,000 $350,000 $350,000 $350,000 $350,000 $350,000 $350,000 $500,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $10,000,000 $10,000,000 $10,000,000 $10,000,000 $10,000,000 Statutory Statutory Statutory Statutory Statutory Statutory Statutory Statutory Statutory Statutory Statutory Statutory Statutory Statutory Aggregate Self-Insured Retention (4) Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Note: Provided by the State of Mississippi. A $500,000 corridor deductible applies in the excess layer for accident periods 7/05-6/06 through 7/08-6/09.