September 1, 2009


Re:  Annual Report for 2009

As of August 31, 2009, the Georgia Self-Insurers Guaranty Trust Fund (“Fund”) has continued payment of workers’ compensation benefits, medical expenses, and rehabilitation services to nearly 400 injured workers and their dependents. Since 1991, approximately $27,824,324 of benefits have been paid to these workers or to their dependents on their behalf. The Fund has recovered over $9,205,122 in reimbursement from the Subsequent Injury Trust Fund, bankruptcy courts, and excess insurance carriers. These funds have been recovered as a result of efforts by the Trustees and Fund management to seek all remedies and relief available to them in mitigation of the cost of servicing the claims of insolvent members.

The Fund consists of approximately 223 active members. This membership figure has remained relatively constant for the last five (5) years.

To date, sixty-four (64) members of the Fund have become insolvent since 1991. In 33 of these insolvencies, the Fund has been called upon to take over the obligation of the employers. Over  325 claims have been resolved.  We are currently servicing 143 lost-time cases, seventy-one (71) of which are for General Motors Corporation which filed for bankruptcy protection in June 2009.  Of the 33 bankruptcies in which claims have been administered by the Fund, security was adequate to respond to liabilities in all but ten (10) employer bankruptcies.

As previously reported, in July 2007, the Fund was ordered by the State Board of Workers’ Compensation to claim security and commence payment of claims pending against a member who was in default on previous Board Orders and compensation awards.  The Fund continues to administer 18 of the original twenty-one (21) lost-time claims for this employer and paying benefits from their forfeited collateral.  Unfortunately, litigation was necessary in order to pursue collection on a $500,000 bond for that member.  I am happy to report that the litigation has been successfully resolved and the face amount of the bond ($500,000) recovered by the Fund.

The Trustees continue to reevaluate security requirements on an annual basis with decreases or increases where appropriate.  It should be noted that the workers’ compensation rate was $175.00 per week for temporary total disability when the GSIGTF was established in 1990.  The weekly compensation rate is currently $500.00 per week for TTD.  The adequacy of the annual assessment is currently under review in light of the increase in benefits, increase in the cost of medical treatment, and the current low rate of return on fixed rate investment of our assets, which is required by statute.

The security methodology has been revised to provide that when the calculation reveals the need to increase security by $500,000 or more, an employer’s security requirement will be increased, even if it represents less than a twenty percent (20%) increase.  Additionally, the methodology was revised to permit a decrease in security if the calculation decreased by $350,000 or more, even if the decrease represented less than a twenty percent (20%) variance.

Members should be reminded that the Trustees have determined that all security and excess policies should be issued in the name of the member and also add the term “and self-insured subsidiaries and affiliates, if any.”  This change will eliminate the risk that a subsidiary or affiliate might not be named on the security or excess policy.  Also please be reminded that the Fund should be named as a loss payee and named insured on all excess policies and the required bankruptcy endorsement must be part of the policy.  Please call if you have questions on this issue.

As of today, the Self-Insurers Guaranty Trust Fund’s total net worth is approximately $1.3 million net of all liabilities.

At this point, we are in the preliminary stages of scheduling a Membership Meeting in the Spring 2010.  Stay tuned for further details!

For more information about the Georgia Self-Insurers Guaranty Trust Fund, please visit our newly re-designed website at

As in the past, the members of the Board of Trustees appreciate your cooperation and participation in the continued operation and funding of this necessary endeavor.


Sheldon Fram, Chairman

C. W. Matthews Contracting, Inc.

Tim Holt, Secretary

Brown Industries, Inc.

Dr. Frank McElroy, Jr.

Presbyterian Homes of Georgia

Chris H. Hunt

Georgia Power Company

Sam Storey

Wellstar Health System

Brenda Ratcliff

Shaw Industries Group, Inc.