Informe Anual 2015-16 - Senado de Puerto Rico

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~ GOB IERNO DE PUERTO RICO

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Corporación d e l Fondo del Seguro del Estado

Oficina Cent ral

26 de abril de 2017

Ledo. José R. Rodríguez Amorós Secretaría del Senado Senado de Puerto Rico San Juan, Puerto Rico Estimado licenciado Rodríguez: Se incluye el Informe de Resultados Anual para el año Fiscal 2015-16 de la Corporación del Fondo del Seguro del Estado. Este se emite en conformidad a las obligaciones y responsabilidades establecidas en la Ley Núm. 45 de 18 de abril de 1935, mejor conocida como la Ley de Compensaciones por Accidentes en el Trabajo, según enmendada y la Ley Núm. 236 de 30 de diciembre de 2010, Ley de Rendición de Cuentas y Ejecución de Programas Gubernamentales. De requerir mayor información, puede comunicarse a nuestras oficinas o acceder al portal de la Corporación donde observaran los servicios brindados y datos estadísticos, entre otros. Estamos a su disposición.

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Cordialmente,

Jesús M. Rodríguez Rosa, MIS Administrador

PO Box 365028 San Juan, PR 00936-5028

Tel. (787) 793-5959

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GOBIER,o DF PLJERTO RICO Corporación del Fondo del Seguro del Estado

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Informe Anual 2015-16 (Informe de Resultados Anual)

~I CORPORACIÓN DEL FONDO DEL SEGURO DEL ESTADO

Oficina de Planificación

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Página

Índice l. Introducción

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11. Trasfondo Histórico y Misión

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111. Resumen del Informe Anual 2015-16

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IV. Metas Estratégicas Para el Año fiscal 2015-16

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V. Situación Físcal

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VI. Actividades Operacionales

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1. Actividades de Seguros

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2. Actividades de Reclamaciones

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3. Investigaciones de Reclamaciones

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4. Actividades de los Servicios Médicos

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VII. Logros del Año fiscal 2015-16

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1. Área de Contratación

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2. Oficina de Auditoría Interna

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3. Oficina de Información Pública

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4. Oficina de Relaciones Laborales

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5. Área de Administración

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a. Seguridad Corporativa

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b. Recursos Humanos

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c. Normas y Procedimientos

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d. Educación y Desarrollo

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e. Seguridad y Salud Ocupacional

23

f. Asuntos Administrativos

24

6. Área de Finanzas, Planificación y Asuntos Actuaria les

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a. Contraloría

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b. Tesorería

25

c. Presupuesto

25

d. Oficina de Planificación

28

e. Área de Asuntos Actuariales

30

7. Área Servicios Médicos

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8. Hospital Industrial

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9. Área de Operaciones

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10. Oficinas Regionales

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a. Aguadilla

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b. Arecibo

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c. Bayamón

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d.Caguas

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e. Carolina

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f. Humacao

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g. Mayagüez

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h.Ponce

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i. San Juan

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VII. Conclusiones

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Anejos

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Informe Físcal Auditado, junio 30 de 2016 Borrador Estudio Actuaria! del Programa de Compensaciones por Accidentes del Trabajo. Balances de Incapacidad Parcial Permanente, Muerte y Incapacidad Total Permanente, Remanentes de Dietas, 2015-16. Resumen de la Cartera de Inversiones 2015-16. Comunicaciones sobre solicitudes de prórroga a Oficina del Gobernador y Ramas Legislativas.

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l. Introducción: El Informe Anual correspondiente al año fiscal 2015-16 de la Corporación del Fondo del Seguro

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del Estado presenta un resumen de los logros significativos durante este periodo, así como los asuntos de mayor relevancia, con el fin de cumplir con las metas y los objetivos de la CFSE. Cada área de servicio y cada unidad administrativa tienen unas funciones descritas y basadas en la Ley Número 45 del 18 de abril de 1935, mejor conocida como la Ley de Compensaciones por Accidentes de Trabajo (Ley 45-1935).

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11. Trasfondo Histórico y Misión:

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El Fondo del Seguro del Estado fue creado mediante la Ley Núm. 45 de 18 de abril de 1935, según

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L.P.R.A. § 1 et seq. El 29 de octubre de 1992, dicho estatuto fue enmendado, mediante la Ley

enmendada, conocida como Ley del Sistema de Compensaciones por Accidentes del Trabajo, 11

Núm. 83, para crear la Corporación del Fondo del Seguro del Estado, (CFSE o Corporación) a los fines de potenciar cambios fundamentales en el Sistema de Compensaciones por Accidentes del Trabajo, modernizarse y asegurar su eficaz funcionamiento. Las enmiendas incluyeron la creación de una Junta de Directores, hoy Junta de Gobierno por disposición de la Ley Núm. 16-2013, y de

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la Oficina del Administrador como autoridades de la corporación pública. La misión de la CFSE es dual: provee una cubierta de seguro amplia y económica, la cual ofrece inmunidad absoluta al patrono asegurado, protegiéndolo contra cualquier acción judicial que pudiera entablar en su contra el trabajador lesionado con relación a un accidente o condición derivada de la ocupación, y, además, brinda a los trabajadores lesionados servicios médicos y de rehabilitación y compensación económica por accidentes o enfermedades ocupacionales con el objetivo de una pronta reintegración al trabajo. La estructura administrativa y operacional de la Corporación encargada de ejecutar su misión se ilustra en la página siguiente.

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Auditoria Interna

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La Corporación cubre los servicios que presta y las compensaciones que otorga a los lesionados, así como sus gastos administrativos, con recursos propios. Estos recursos provienen íntegramente de las primas recaudadas por concepto del seguro obrero que pagan los patronos del País y del fruto de la cartera de inversiones de la agencia. Cabe señalar que, por disposición de Ley, los gastos administrativos de la Corporación no deben exceder el veintidós por ciento {22%) del total de ingresos por concepto de primas cobradas. Es por esto que la operación corporativa se ha dividido en dos programas: el programa médico y el programa administrativo. El programa médico tiene a su cargo la extensa e inclusiva gama de servicios de salud que provee la Corporación a través del Hospital Industrial, sus nueve (9) Oficinas Regionales 1 y sus nueve (9) Dispensarios lntermedios 2 y Locales. 3 Los servicios médicos incluyen tratamientos ambulatorios, hospitalización, terapia física y ocupacional, servicios médico quirúrgicos, medicina ocupacional y salud mental. Todas las instalaciones regionales e intermedias están debidamente licenciadas por el Departamento de Salud de Puerto Rico como Centros de Diagnóstico y Tratamiento {CDT) y ofrecen servicios médicos ambulatorios a los trabajadores lesionados. El Hospital Industrial es una facilidad hospitalaria ubicada en terrenos del Centro Médico y es el corazón de nuestro

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Las Oficinas Regionales están ubicadas en: Aguadilla, Arecibo, Bayamón, Caguas, Carolina, Humacao, Mayagüez, Ponce y San Juan. 2 Los Dispensarios Intermedios están localizados en: Manatí, Corozal, Cayey, Fajardo, Guayama y Yauco. 3 Los Dispensarios Locales están ubicados en: Vieques, Utuado y Coamo.

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programa médico. Todas estas instalaciones cuentan con salas de cuidado inmediato, gimnasios para terapias físicas, áreas para terapias ocupacionales, farmacias, servicios de radiología y

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laboratorios. Asimismo, la Corporación cuenta con una extensa red de proveedores de servicios médicos por contrato. El programa administrativo, por su parte, atiende los asuntos relacionados con el seguro obrero, determinación y revisión de las tarifas aplicables, cobro de las primas, pago de compensaciones y el trámite y adjudicación de las reclamaciones de los trabajadores lesionados que sufren accidentes en el trabajo o enfermedades ocupacionales, cifra que alcanza anualmente los 50,000 accidentes. Bajo este programa se encuentran también las funciones de dirección, administración

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y otros servicios auxiliares de la Agencia, que se conducen principalmente desde la Oficina Central de la Corporación ubicada en San Juan. Para poner estos programas en vigor, la Corporación cuenta con una plantilla de 3,140 empleados. El personal del servicio de confianza colabora con los niveles más altos de gerencia en la implantación de la política pública del Gobierno del Estado Libre Asociado de Puerto Rico. La base para el financiamiento de este seguro está contenida en las disposiciones de los Artículos 23, 24 y 25 de la Ley 45-1935, 4 los cuales le imponen al Administrador de la Corporación la responsabilidad de fijar las primas, incluyendo primas mínimas, para cada clase de oficio o industria. Las primas deben ser consistentes con la pretensión de establecer un Fondo del Seguro del Estado solvente y de crear un sobrante razonable. Asimismo, deben ser las más bajas posibles para cada clase de oficio o industria, de acuerdo al criterio del actuario de la Corporación después de haber tomado en consideración las pérdidas incurridas por reclamaciones legítimas motivadas

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por lesión o muerte y prestando toda consideración para mantener reservas estatutarias y eventuales adecuadas, así como también controlar los gastos de administración y demás gastos relacionados. Además de los recaudos por concepto de prima, la CFSE obtiene ingresos por el rendimiento y extracciones de la cartera de inversiones. Estos se utilizan mayormente para cubrir obligaciones producto de legislación especial.

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11 L.P.R.A. §§ 24, 25 y 26.

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111. Resumen del Informe Anual 2015-16: Durante el año fiscal 2015-16, la Corporación procesó el servicio a 96,552 reclamaciones, de las cuales 47,184 {4.7% por cada 100 personas empleadas) correspondieron a radicaciones del año

2015-16. El total de casos activos al finalizar el año fiscal de referencia era, 37,184 casos. Se reabrieron 7,285 casos. En los últimos nueve {9) años, se ha observado una disminución en los casos radicados. Se han identificado varias razones para esta tendencia, tales como la baja de empleos en sectores industriales de alta incidencia de accidentes, la efectividad de las medidas de seguridad tomadas por los patronos y las c_ampañas educativas a los empleados sobre la prevención de accidentes. Respecto a sus operaciones, la CFSE continuó con su plan de contención de costos, utilizando recursos internos, redefiniendo funciones, esfuerzos dirigidos a hacer más costo efectivo el servicio médico mediante supervisión efectiva, y la revisión de los contratos de servicios a través de ajustes y renegociación de las tarifas. De igual manera, la Corporación continúa con los esfuerzos de digitalización del proceso de radicación de reclamaciones por accidentes o enfermedades ocupacionales y los esfuerzos para establecer una herramienta electrónica para los procesos de pago de compensaciones. Se continúa trabajando para facilitar el intercambio de información de los lesionados entre el Hospital Industrial y los dispensarios de la Corporación. También, se agilizaron los procesos para el pago a proveedores de servicios. Ejemplo de ello es la mecanización del sistema contable y de pago, incluyendo una aplicación de facturación electrónica. Se completó el trabajó con lá aplicación electrónica para los procesos de recursos humanos, lo que brindará agilidad a todos los trámites relacionados con nuestros empleados. También se logró la digitalización de gran parte de los datos estadísticos a través de Business lntelligence {81-CFSE Analítico) y se completó para el uso interno de la Corporación, una plataforma digital que permite obtener los datos estadísticos actualizados y de manera dinámica y efectiva. Además, se contnuó trabajando y actualizando los documentos normativos que permiten mayor accesibilidad y eficiencia en los procesos administrativos y operacionales en la Corporación, y se continuó con los acuerdos interagenciales que han permitido el intercambio de

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información, conocimientos y peritaje, que han ayudado a viabilizar las metas y objetivos de la CFSE y de las entidades gubernamentales con las cuales se han alcanzado los mismos.

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5 IV. Metas Estratégicas para el Año Físcal 2015-16:

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A continuación, se presentan las metas estratégicas que estableció la Corporación para el año fiscal 2015-16: ,/ Continuar con la construcción y remodelación del Hospital Industrial. ,/

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Como parte de este Plan, se adoptará un enfoque colaborativo y multinivel con proveedores, tales como el Recinto de Ciencias Médicas, para lograr un incremento de acceso a los servicios de salud y a su personal clínico.

Implantar criterios de cumplimiento dentro de la CFSE, para cerciorarnos que las operaciones día a día cumplan con parámetros de calidad en virtud de: o o o

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Uniformar la utilización del Hospital Industrial (HI) como principal centro de hospitalización para los lesionados de la CFSE, garantizando los servicios de rehalitación.

la Ley 101 del 26 de junio de 1965, conocida como Ley de Facilidades de Salud de Puerto Rico, y la que regula las facilidades de salud mediante la otorgación de licencias. el Reglamento sobre el licenciamiento y mantenimiento de los hospitales del ELA; y todas las leyes federales y estatales relacionadas al área de la salud .

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Establecer métricas de trabajo para varios servicios o actividades que se realizan en las Regiones, ej. Investigaciones Realizadas, Recaudaciones, Concertación de Citas, otros; que permitan medir la ejecución y metas a alcanzar para mejorar los servicios brindados a los lesionados y el fortalecimiento de la Corporación.

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Reducir el tiempo de espera en la concertación de citas médicas iniciales a menos de 20 días y las de seguimiento a menos de 30 días, estableciendo unas métricas operacionales por Región.

,/ Continuar con las medidas de reducción en los gastos operacionales, pago de utilidades y renta, mediante la reducción de precios y tarifas en los servicios. ,/

Mantener medidas de control fiscal para continuar reduciendo el gasto administrativo dentro de los parámetros de la Ley habilitadora de la Corporación.

,/ Con el o~jetivo de incrementar los recaudos de la Corporación, se fortalecerá el Programa de Cobro a Patronos con Deudas en la Corporación. La meta es lograr recuperar la totalidad o gran parte de la deuda identificada, correspondiente a los años 2012, 2013, 2014 y años subsiguientes. ,/

Llevar a cabo una Reestructuración de la Oficina de Auditoría Interna de la CFSE, la misma se realizará en dos (2) etapas con el objetivo de desarrollar el Manual de Auditorías, Plan de Auditorías, Plan Estratégico y la Evaluación de Riesgo a cinco (5) años. Además, la revisión de las cartas constitutivas de la Oficina y del Comité de Auditoría de la Junta de Gobierno y el readiestramiento de la Oficina de Auditoría Interna.

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./ Continuar la agilización de los procesos operacionales de la CFSE, con el objetivo de aumentar la eficiencia de los recursos humanos, los servicios brindados y los recursos financieros. Entre estas herramientas se encuentran Business lntelligence y nuevos módulos en la aplicación de SAP (Systems Applications Products in Data Processing) . ./

Rediseñar la parte transaccional de un nuevo "Web Site" para nuevas transacciones, incluyendo las Pólizas de Propio Patrono y Hogar; incluyendo una sección para consultas a los lesionados.

Continuar con el cumplimiento del Artículo 6 de la Ley Núm. 62 de 2014 para establecer un mínimo de 20% del total de las partidas asignadas a compras del presupuesto 2015-16 de la CFSE para ser otorgados a las microempresas, pequeñas y medianas.

V. Situación Fiscal:

En el 2015-16 los activos totales de la Corporación disminuyeron en $ 500.9 millones en 2016 o 27.6 puntos porcentuales. Esta merma se atribuye principalmente al efecto neto de una pérdida por el deterioro registrado en los depósitos con el Banco Gubernamental de Fomento (BGF), una disminución en las primas por recibir como resultado de la tendencia decreciente en la imposición de primas, la disminución de las cuentas por cobrar de los corredores de inversión, la disminución de los valores de inversión como resultado de una disminución significativa en la valoración general de la cartera y la liquidación de ciertas posiciones para obtener el efectivo necesario para

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pagar y completar las notas existentes, pagaderas con la institución financiera y pagar las transferencias

intergubernamentales

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resultado

de

nueva

legislación 5 .

La tendencia decreciente de la recaudación de las primas (disminución del 3% en las cifras brutas de 2016 respecto a 2015) ha provocado una disminución del valor neto realizable de las primas

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El 6 de abril de 2016, el Gobernador firmó la Ley 21, conocida como "Ley de Rehabilitación de Moratoria y Financiación de Puerto Rico". La Ley 21 autoriza al Gobernador a (i) declarar una moratoria en los pagos del servicio de la deuda por un período temporal para el Commonwealth, el Banco Gubernamental de Fomento para Puerto Rico (GDB), el Banco de Desarrollo Económico de Puerto Rico (EDB) o cualquiera de los restantes Instrumentos de gobierno de Puerto Rico, y (ii) permanecer en los recursos del acreedor que pueden resultar de la moratoria; El 8 de abril de 2016, de conformidad con la Ley 21, el Gobernador firmó una Orden Ejecutiva en la que se declaraba que el GDB se encontraba en estado de emergencia y anunció el inicio, a la fecha de la Orden Ejecutada, de un período de emergencia definido en la Ley 21 Como se explica más detalladamente en la nota 3 de los estados financieros, la Orden Ejecutiva impone restricciones a las solicitudes de retiro, pago y transferencia presentadas a GDB por la Sucursal Judicial, la Sucursal Legislativa y varios instrumentalidades gubernamentales que incluyen a la Corporación y el 2 de julio de 2015 la Ley No. 102-2015 fue promulgada por la Comunidad de Puerto Rico. Cada año fiscal, el Cornmonwealth emite notas anticipando los impuestos y los ingresos (Notas de Anticipos de Ingresos Fiscales o 11 11 TRANS ) para que el Estado Libre Asociado, en su programa de gestión de flujo de efectivo diseñado para maximizar el uso de fondos en el Fondo General, Medios para proveer un mecanismo de liquidez para cubrir cualquier escasez temporal de efectivo proyectada para un año fiscal, entre otras.

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de seguros por cobrar. La tendencia decreciente de las primas adicionales impuestas, también ha provocado una disminución en la estimación de las primas adicionales aún no impuestas al 30 de junio de 2016. La cartera de inversiones de la Corporación reflejó una pérdida no realizada de $48.6 millones al 30 de junio, En comparación con una pérdida no realizada de $32.8 millones al 30 de junio de 2015 como resultado de la inestabilidad general del mercado y una nueva disminución en el valor de mercado de las

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Notas Garantizadas Senior del GDB en poder de la Corporación. El total de pasivos de la Corporación disminuyó en $314 millones en 2016 o 11.16 puntos porcentuales; esto se atribuye principalmente a una disminución en los gastos devengados (principalmente en ausencias

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compensadas acumuladas y acumulación legal), disminución de obligaciones de préstamo de valores, los

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aumento en las cuentas por pagar principalmente por las transferencias intergubernamentales

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pagos de arrendamiento financiero y otros pagarés. Por otra parte, la Corporación experimentó un

acumuladas al cierre del año. La Corporación también experimentó una disminución significativa en las cuentas por pagar a los corredores de inversión como resultado de una reducción en los valores comprados aún no recibidos al 30 de junio de 2016, y disminuciones generales en el pasivo por concepto de los los beneficios incurridos pero no pagados y los gastos de ajuste de dichos beneficios .

Al 30 de junio de 2016, la Corporación tenía un déficit de $1,195.3 millones en posición neta sin restricciones y $77.8 millones invertido en activos de capital-neto de deuda relacionada, para una posición de déficit total neto de $1,117.3 millones de dólares. En el año fiscal 2016, la posición neta disminuyó (el déficit aumentó) en $186.9 millones o 20.1 puntos porcentuales, una posición de déficit neto de $930.4 millones al 30 de junio de 2015 debido al efecto neto de una disminución de los ingresos operativos del

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8.7 puntos porcentuales, una disminución de los gastos operativos de 7.3 puntos porcentuales, lo que resultó en un ingreso operacional de $41.3 millones, junto con un aumento significativo de los ingresos no operacionales (gastos) y el impacto neto de las transferencias a otras Agencias del gobierno por $163.8 millones. En 2015-16, el déficit neto aumentó como consecuencia de una pérdida por deterioro de los depósitos en el Banco Gubernamental de Desarrollo (BGD) de $44.0 millones, una disminución neta del valor razonable de las inversiones de $54.4 millones y transferencias intergubernamentales de $163.8 millones. Los ingresos operacionales disminuyeron $51.2 millones o 8.8 puntos porcentuales en 2015-16 en

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comparación con 2014-15. La disminución en los ingresos operacionales se debe a una disminución de

8 $10.9 millones en primas de seguros ganadas, a una disminución en ingresos misceláneos de $9.7 millones, un aumento de $25.3 millones en el reembolso de Primas de seguros y un aumento de la provisión de primas de seguro incobrables por $5.2 millones. La Corporación ha experimentado una reducción en las nuevas pólizas de seguro suscritas del 2% en 2016 en comparación con 2015, así como en las primas preliminares evaluadas y las primas definitivas liquidadas (resultantes de las reducciones en las nóminas provisionales informadas por los empleadores frente a las nóminas finales). El downtum en la economía, que ha afectado los niveles de la construcción y del empleo, ha causado tal disminución, así como, una disminución en primas incidentales.

VI. Actividades Operacionales: 1. Actividades de Seguros

Gráfica 1: Total de Pólizas Vigentes, 2014-15 vs. 2015-16 140,000

129,538

126,912

113,175

120,000

11:1,209

100,000

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80,000 60,000 40,000 16,363

20,000

Total

Permanentes

15,703

Eventuales

u2014-15 112015-16

El total de pólizas vigentes al 2015-16 alcanzó la cantidad de 126,912, una merma de 2,626 pólizas en comparación con el año fiscal anterior. Esta reducción se debe a la crisis fiscal imperante, la reducción de patronos y reducción de empleados, entre otros posibles factores asociados al estancamiento económico. La formalización de pólizas nuevas durante este año fiscal 2015-16, dismunuyó en 733 pólizas o un -2.1 puntos porcentuales con relación al 2014-15. Del total de pólizas nuevas formalizadas, 9,622 (28.2 puntos porcentuales) correspondieron a pólizas

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permanentes y 24,529 (71.8 puntos porcentuales) a pólizas eventuales. Ver Gráfica II a continuación.

Gráfica 11: Póliza Nueva Formalizada. 2014-15vs. 2015-16 40,000 34,884 35,000

34,151

30,000 25,250

24,529

25,000 20,000 15,000 10,000

9,634

9,622

5,000

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Eventuales

Permanentes

• 2014-15

Total Acumulado Jun. ajul. 15-16

• 2015-16

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Los recaudos netos por concepto de primas durante el año fiscal 2015-16 disminuyeron en 3.1

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una merma de $17.4 millones 6• Refiérase a la Gráfica 111.

puntos porcentuales, comparado con $567.8 millones durante el año 2014-15. Esto representa

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Gráfica 111: Recaudaciones por Concepto de Primas 2014-15 vs. 2015-16

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$600,100,000

$567,777,.557

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$500,100,000

' $400,100,000 $300,100,000 $200,100,000

J;~?/~:~·i'-.' ' '?~':~:=ft1;f.~ -~·

$100,100,000

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$100,000 JUL/ JUN.2014-15

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JUL/ JUN.2015-16

Según las proyecciones de recaudos por concepto de formalización de pólizas para los años fiscales 2015-2016 y el 2016-2017, se proyecta una merma de $19.3 y de $17.1 millones respectivamente, lo que implica un cambio porcentual promedio de 3.3 puntos para los dos (2) años fiscales.

6

10 Las recaudaciones en el sector privado fueron $383.3 millones lo que represnta un 69.6 puntos porcentuales del total de los recuados netos, mientras que las del sector público fueron $128.9 o el 23.4 puntos porcentuales y las autoridades públicas con $40.0 o el 7. 3 puntos porcentuales. 2. Actividades de Reclamaciones Los casos radicados al 30 de junio de 2016 disminuyeron de 48,050 a 47,184, una merma de

866 casos. Esto representa un cambio porcentual de -1.8 puntos porcentuales, al comparar ambos periodos. Cabe destacar que, del total de casos radicados en este año (47,184), el 44.0 puntos porecentuales (20,973) proviene del sector público y el 56% {26,211) del sector privado. Por otra parte, el cuarentisiete puntos porcentuales (47.0) de los casos fueron radicados en las oficinas regionales de Bayamón, Ponce y Arecibo, esto es, 9,455, 6, 772 y 5, 756 casos respectivamente. El restante 53% se distribuye en las oficinas regionales de Caguas, San Juan, Carolina, Humacao, Aguadilla y Mayagüez. Ver Gráfica IV.

GRÁFICA IV: TOTAL DE CASOS RADICADOS

2014-15

vs.

2015-16

50,000 40,000 30,000 20,000 10,000

,..,..,.- -

A•ECIBO

An!dbo

SAN JUANMAYAG0EZHUMACAO

-

PONCE

11,- -.-,.

BAYAMÓN CA.OLINA

S..Juan T_M!!lyJ!~L-cao --........

BaYJ1m6n

CAGUAS AGUADILLA

T_earo1na:::'r ~:1

TOTAL

~ " T ~ T o l a l __¡

r

·~~!~i~i~;~;~i~,~i~T~I

16~_s.,756=t= 4,768 _j_3,284=r= 3,877

~·-201S___

--r=6,772 J_

9,455

L 4,426:1== 4,977 __ T 3,869

47,184]

onc1na de Planllcaclón

Con relación a la radicación de casos por tipo de accidente en el 2015-16, las condiciones del sistema

músculo-esqueletal

fueron

las

de

mayor

incidencia,

representando

35,027

reclamaciones o 74.2 puntos porcentuales.7 La tendencia en la radicación de reclamaciones

7

Incluye problemas de cintura, contusión, cuello, espalda, fractura, torcedura y heridas.

-

-

-

11

también se mantiene respecto a otras condiciones. Por desórdenes emocionales se radicaron 2, 775 casos, mientras que por condiciones de la vista se presentaron 764 reclamaciones. El perfil o los datos demográficos de los casos radicados para el año fiscal bajo consideración demuestran que 22,520 casos fueron radicados por mujeres y 24,664 por hombres. La edad de los lesionados se concentra principalmente en el intervalo de 41 a 60 años de edad, el cual agrupa al 54. O puntos porcentuales y en el intervalo de 21 a 40 años, que agrupa al 39.1 puntos

-

-

-

porcentuales. Por otra parte, los casos reabiertos, 8 al compararlos con el año anterior, reflejaron un incremento de 633 casos o 9.5 puntos porcentuales 9 • El total de casos a trabajar (es decir, la suma de los casos activos al finalizar el año anterior más los radicados en el año 2015-16 y los reabiertos) ascendió a 96,552 casos, lo que representa una disminución de 5,354 o -5.2 puntos porcentuales. De estos, se cerraron 59,368 casos o -2.5 puntos porcentuales menos que el año fiscal anterior. Al finalizar el año 2015-16, quedaron activos 37,184 casos, es decir 3,834 casos menos que el año fiscal anterior. De estos, 34, 729 casos (93.4 puntos porcentuales) estaban recibiendo tratamiento mientras continuaban trabajando y 2,455 {6.6%) casos estaban en

-

-

-

descanso 10 . El monto total por concepto de reclamaciones a la CFSE fue de $89.8 millones para el año fiscal 2015-16. Para detalles relativos a los balances por conceptos de incapacidad parcial permanente, incapacidad total permanente, muerte y remanentes de dietas, al finalizar el año 2015-16, refiérase a los anejos. 3. Investigaciones de Reclamaciones En el año fiscal 2015-16, se realizaron 9,432 investigaciones, una reducción de 902 investigaciones o -8.0 puntos porcentuales con relación al año fiscal 2014-15. La región que más investigaciones realizó fue San Juan con 1,432 (15.2%), seguida por las regiones de Carolina con 1,547 {16.4%} y Bayamón con 1,328 (14.1%} investigaciones. Ver Gráfica V.

8

Casos reabiertos son casos cerrados en que la CFSE o la Comisión Industrial, a petición de los lesionados, determina que es necesario más tratamiento médico o mayor incapacidad, por lo cual estos entran a formar parte nuevamente del total de casos activos en la Corporación. 9 El 71.6 % de las reaperturas fueron casos reabiertos por la Comisión Industrial. 10 Esta estadística está sujeta a revisión, específicamente en cuanto al total de casos en descanso y en tratamiento mientras trabaja (CT), toda vez que hay cambios en el proceso de mecanización de los informes estadísticos y la metodología ha variado.

12

Gráfica V: Total de Investigaciones de Reclamaciones Realizadas, 2014-15 vs. 2015-16

10,334

1,000

2,000

3,000

4,000

5,000

6,000

1ii12015-16

7,000

8,000

9,000

10,000

11,000

•2014-15

~~~.~füonclnlda Planlflcaclón

4. Actividades de los Servicios Médicos Los servicios médicos en la CFSE incluyen los servicios que se prestan en el Hospital Industrial y a nivel de los dispensarios regionales, intermedios y locales, así como los que se ofrecen a los lesionados a través de toda la Isla mediante proveedores externos contratados. Las citas médicas concertadas durante este año fiscal en las diferentes dependencias de la Corporación sumaron 1,049,969 incluyendo citas iniciales, de seguimiento y para estudios; un crecimiento de 6.8 (67,015 citas) puntos porcentuales. Ver Gráfica VI. /

Gráfica VI: Total de atas Concertadas, 201~15vs. 2015-16 1,100,000 1,000,000 900,000 •.

800,000



700,000 600,000

-

500,000 2014-15

2015-16 F-lnrormaCo.._...... eo-t.:16nClta,S19t-deWoma:16n, CFSE.

~1,~,mm Oficina da Planllcac:IOn

-

-

13 En las unidades de terapia física, incluyendo el Hospital Industrial, se admitieron 29,573

...

lesionados durante el año fiscal 2015-16, lo que representó un leve aumento de 485 pacientes respecto al año fiscal pasado, en el cual se admitieron 29,088 pacientes. Asimismo, se dieron de alta 29,520 pacientes. Al finalizar el año fiscal 2015-16, había 1,160 pacientes en tratamiento. Ver gráfica VII.

...

...

-

-

-

Fuente: lnfomm Estmllsticos Mensuales, Terapia Flsica, CFSE.

1

'°"'"'

<;9"•<,..AC:OÓN f "t 'i:íC:-.UtlOORfi t f!'O.IA(>CI , ...... -.

.... ,., •., ~

~.. )(,, .... '

1 """

Oficina de Planificación

VII. Logros del Año Fiscal 2015-1611 : l. OFICINA DE CONTRATACION

Asesora al Administrador en todos los asuntos de contratación de servicios profesionales y consultivos; servicios médicos y hospitalarios; adquisición de otros bienes y servicios conforme a las leyes y reglamentos aplicables, política y administrativa vigente.

De igual manera, asesora a funcionarios

responsables de administrar los contratos formalizados. Evalúa, negocia y formaliza contratos de servicios profesionales y consultivos, servicios médicos y hospitalarios, de bienes y servicios, según las normas aplicables. Atiende querellas sobre servicios contratados; custodia y mantiene al día los expedientes de cada proveedor contratado. Notifica al Contralor de Puerto Rico y cualquier otra Agencia u Oficina

-

11

Informe Anual 2015-16 no incluye informe de logros de las Áreas de Asesoría y Asuntos Jurídicos y del Área de Sistemas de Información de la CFSE debido a naturaleza y complejidad operacional de éstas.

14 Concernida de acuerdo a reglamentos aplicables.

Durante el año 2015-16, se egistró dentro de los

-

términos establecidos, 291 contratos en Oficina del Contralor de Puerto Rico; ver la siguiente tabla.

Concento

Afio Fiscal 2015-16

l. Contratos Registrados en la Oficina de Contralor de P.R.

291

A.

Contratos

223

1.

Servicios Médicos a. Médicos Especialistas-nuevos y

135 renovación de contratos

b. Laboratorios Clínicos

9

d. Ambulancias

2

e. Cllnicas, Hospitales y Servicios Ambulatorios Centro de Terapia Física

g. Otros Servicios Médicos

2.

Servicios Profesionales y Consultlvos

3.

Locales

4.

Contratos por Subastas a. Equipo y Suministros

b. Ma nteni miento c. Servicios Misceláneos

B.

7

13 3

24 6

38 7

13 18

Otros Contratos

20

a. Publicidad

1

b. Estudiantes y/o Universidades

5

c.

Farmacéuticos

d.

Otros

Enmiendas a Contratos -{Otros) a.

Médicos

b. Servicios Médicos c.

Servicios Profesionales y Consultivos

d. Otros

c.

29

c. Laboratorios Radiológicos

f.

s.

72

Contratos Inactivos/Resueltos

3

11 57 7

10 19 21 11

Fuente: Informes Narrativos, Oficina de Contrataciones, CFSE.

2. OFICINA DE AUDITORIA INTERNA Esta Oficina opera bajo las disposiciones de la Carta Constitutiva de la Actividad de Auditoría Interna firmada en mayo de 2014; e Integra el Comité de Auditoría de acuerdo a las Resoluciones 2003-04 y A-172014. Provee servicios independientes y objetivos de asesoramiento y consultoría, diseñados para añadir valor y mejorar las operaciones de la CFSE. Asiste a la Gerencia de la CFSE en lograr sus objetivos a través de un enfoque sistemático y disciplinado para evaluar y mejorar la eficacia de los procesos de gestión de riesgos, control interno y dirección. Colabora con la Gerencia a través con las auditorías que realiza; las cuales no se limitan al examen y evaluación de la adecuacidad y eficacia de la gobernanza y operaciones de la CFSE, sino también, a la gestión de riesgo y procesos de control en la entidad así como a la evaluación de la calidad del desempeño

-

-

15 en el cumplimiento de responsabilidades asignadas para lograr metas y objetivos programados por la CFSE.

-

Las actividades realizadas durante el año fiscal año 2015-16, fueron: ~

Oficina la Junta de Directores aprobó que la Compañía VERSA ofrezca el coaching a los Auditores de la CFSE para certificar a estos en CIA {Certified Interna! Auditors).

~

-

-

Internos-Capitulo de Puerto Rico. ~

PROCIP.

-

-

-

En abril, 2016, Director de Oficina de Auditoría Interna participó en la evaluación de PROCIP y en mayo, 2016, refirió a la Oficina del Contralor de Puerto Rico, contestación de reconsideración del

~

-

Durante el año los auditores asistieron a los adiestramientos de análisis de riesgos; seminario Interna! Audit: Relevant, Trusted and lnfluential Resource, auspiciado por Instituto de Auditores

-

-

Con el fin de cumplir con requerimientos y ampliar conocimiento del personal que labora en esta

Estableció Plan de Trabajo para realizar en conjunto con la Compañía Stericycle, lnc. contratada el decomiso de medicamentos controlados y no controlados en todas las secciones de farmacias de la CFSE.

En diciembre, 2015, concluyó decomiso de medicamentos controlados y no

controlados en todas las dependencias de la CFSE. ~

Cumplimiento Anual de Auditorias Proyectadas y Realizadas: AUDITORIAS REALIZADAS

Proyección afio fiscal 2015-16*/

Auditorías Fiscales Decomiso, Donaciones, Transferencias

Auditorías Operacionales e Impactos

% cumplimiento

21

28%

1

135

58

43%

Auditorías de Subrogación

30

12

40%

Auditorías Especiales

91

21

23%

2

1

50"A

5 2

o o

5

1

20"A

5

1

20"A

10

2

20"A

60%

Radicación indebida de casos compensables Pagos indebidos Falsificación de Documentos Públicos Hurto y extravío de pagos a lesionado Hurto de Propiedad CFSE Violación Orden Médica Descanso (Abandono) Conducta inapropiada de empleados CFSE

5

3

Apropiación ilegal de fondos

1

o o

Auditorías de Contrato

1

Cobro indebido

5

2

so

11

40% 22%

331

112

34%

TOTAL AUDITORIAS

-

Realizadas

20

Arqueo

Otras Auditorías Especiales

-

75

*/

Proyecciones revisadas en agosto, 2015-16

Nota: Certificar a Auditores Internos que laboran en esta Oficina en CIA (Certified Interna! Auditors), afectó el cumplimiento de la programación anual de auditorías.

16 3. OFICINA DE INFORMACION PÚBLICA

Esta Oficina asesora y promueve una comunicación transparente, oportuna y eficaz que permita emitir mensajes de información útil y permanente a través de comunicados de prensa; creación de campañas publicitarias y participación en actividades para promover los servicios de seguro, médicos y de rehabilitación que ofrece la CFSE. Además, asesora en el manejo, difusión de información, y educación para promover servicios en cumplimiento con la Ley 45 del 18 de abril de 1935, según enmendada. Brinda apoyo a las dependencias de la CFSE en aspectos relativos a comunicaciones. Mantiene relaciones de excelencia con los miembros de medios de comunicación masiva, líderes y representantes de la comunidad, industria privada y agencias públicas integrando esfuerzos para difundir información que contribuya a mejorar la relación obrero patronal que fomente el desarrollo económico de Puerto Rico. Las actividades significativas realizadas durante el año 2015-16, fueron: 1. En cumplimiento con la Ley Número 223, de 21 de agosto de 2004, Ley de Nuestra Música Puertorriqueña relativa a la Inversión en Eventos Culturales al Instituto de Cultura Puertorriqueña preparo y refirió Informe de Cumplimiento; 2. Informe de Logros CFSE, correspondiente al año fiscal 2015, conforme a solicitud de la Oficina del Gobernador; 3. Continuo monitoreo de los medios de comunicación masiva prensa escrita, radial y redes sociales para identificar asuntos de relativos y de interés a la CFSE. Cabe destacar, que publico en página de Facebook artículos informativos e interés cónsonos con la Ley 45 de 1935; 4. Ante el inicio de la veda electoral, realizó trámites correspondientes con la Comisión Estatal de Elecciones (CEE) relativos a Certificación de anuncios de prensa requeridos por ley; autorización para uso de medios de difusión para documentos, artículos promocionales, lago de la CFSE, cuentas de redes sociales, material informativo, etc.; Desarrollo de Actividades, en apoyo a la Campañas Benéficas de Sociedad Americana contra el Cáncer, Asociación contra la Distrofia muscular; Hospital del Niño (dando apoyo a actividades Unión de Empleados CFSE), Festival de la Bondad, Cierre Curso Control de Infecciones en el Recinto de Ciencias Médicas de la UPR, Mercado Agrícola en diferentes localidades de la CFSE, Recolección de alimentos y artículos de primera necesidad para personas sin hogar, Campaña de Reciclaje de Equipos Electrónicos en todas las dependencias de la CFSE, Actividades Semana de la Mujer (Mantenimiento preventivo autos Automeca Technical College y Venta y Exhibición de Productos hechos por mujeres microempresarias) y la celebración del Octogésimo primero (81) aniversario de la Ley del Sistema de Compensaciones por Accidentes del Trabajo, entre otras actividades.

4. OFICINA DE RELACIONES LABORALES E IGUALDAD EN EL EMPLEO

Oficina responsable de asesorar al Administrador (a) de la Corporación Fondo del Seguro del Estado y al Equipo Directivo sobre estrategias y cursos a seguir en las diferentes situaciones que incidan sobre el

-

17 ambiente de trabajo, implanta política pública e institucional contra el discrimen en el empleo y vela por derechos individuales. Administra los Convenios Colectivos e investiga toda situación que rompa la armonía.

-

-

Representa a la Corporación en todos los asuntos a dilucidarse ante los distintos foros

adjudicativos o de apelación. Entre las actividades realizadas en el año fiscal 2015-16, debemos destacar los acuerdos con la Unión de Empleados de la CFSE y Unión de Contadores y Auditores Internos, conforme a Ley número 66, Sostentabilidad Fiscal. No logro acuerdos con la unión de Abogados y Unión de Médicos, según lo establecido en la Ley número 66. Efectivo el 1r0 de julio de 2016, se procedió a aplicarles la Ley

-

Especial de Sostentabilidad Fiscal y Operacional del Estado Libre Asociado de Puerto Rico a estas dos (2) organizaciones sindicales, la preparación de los Informe de Casos Activos por Gremio correspondientes de enero 2013 al 2016, y cerró un total de 42 casos. De estos, veintisiete (27) casos fueron por Acomodo Razonable; ocho (8) casos por Hostigamiento Sexual, cinco (5) casos por Violencia Doméstica y dos (2) casos por Discrimen en el Empleo. Además, Continuó fortaleciendo y ampliando conocimientos del personal que labora en esta Oficina.

-

-

-

Durante el año, asistieron al adiestramiento sobre Legislación Laboral ofrecido por Asociación de Recursos Humanos y Relaciones Laborales; Carta de Derechos del Veterano dictada por Procurador del Veterano y actividades educativas auspiciadas por la Oficina de Ética Gubernamental en cumplimiento con la Ley de Ética Gubernamental e inició la revisión de documentos normativos vigentes para atemperar los mismos a la realidad administrativa y operacional de la CFSE, actividad realizada en coordinación y colaboración del Área de Normas y Procedimientos.

S. ÁREA DE ADMINISTRACION

El Área de Administración ofrece asistencia al Administrador(a) de la Corporación en la formulación de las políticas administrativas y desarrolla estrategias para su implementación, tanto a nivel Central como en las Oficinas Regionales. También elabora y ofrece recomendaciones o estrategias para la consideración del Administrador(a) relativas al establecimiento de nuevas normas y procedimientos de trabajo y/o la revisión de las ya existentes con el propósito de mejorar y agilizar tanto los servicios que se prestan como las operaciones de la Corporación. Esta Área sirve de enlace y supervisión respecto a las Áreas de Seguridad Corporativa, Recursos Humanos, Educación y Desarrollo, Normas y Procedimientos, Seguridad y Salud Ocupacional y Asuntos Administrativos.

-

18 a. Seguridad Corporativa Esta Oficina es responsable de garantizar y supervisar el control de vigilancia en todas las localidades (Oficina Central, Hospital Industrial, Oficinas Regionales, Dispensarios Intermedios Locales, Almacenes de Farmacia y Materiales, Archivo Inactivo, etc.) de la Corporación del Fondo del Seguro del Estado para proveer un ambiente seguro a empleados, lesionados, patronos y visitantes.

Además, desarrolla e

implementa planes de seguridad y vela por cumplimiento de los mismos en la CFSE. Además, Modifico los sistemas de controles de acceso electrónicos de la Oficina de Administración, Cuentas a Pagar y Operaciones, y fortaleció, amplió y garantizó la seguridad en las instalaciones, equipo, empleados y visitantes mediante el mantenimiento del sistema de control de acceso en áreas sensitivas que ubican en la oficina central, Hospital Industrial y las oficinas regionales de Bayamón y San Juan.

b. Recursos Humanos Asesora a la Autoridad Nominadora y Funcionarios para promover una gerencia de recursos humanos que facilite servicios ágiles, eficaces y de calidad. Esta Área Interviene y colabora en la formulación, modificación e interpretación de la política pública, administrativa y operacional de la CFSE y la planificación, organización, desarrollo y control de técnicas capaces de motivar el

desempeño óptimo del personal para brindar un servicio de excelencia a patronos, lesionados y público en general. Supervisa, coordina, dirige y vela por el fiel cumplimiento de las normas, procedimientos, reglamentosJ convenios colectivos o acuerdos contractuales y legislación (

relacionada con las funciones que tienen el propósito de establecer la norma o forma en que se regirá la administración de los sistemas de personal de la Corporación. Atiende asuntos directamente relacionados a las acciones afirmativas o planes de trabajo establecidos en respuesta a señalamientos realizados por oficinas internas de la Corporación, como lo es la Oficina de Auditoría o agencias gubernamentales externas como lo son: la Oficina del Contralor ·

y la de Ética Gubernamental. Además, acata y vela porque se cumplan las órdenes finales provenientes de los Sistemas de Tribunales o foros administrativos con jurisdicción. Entre las actividades significativas realizadas durante el año 2015-16, podemos mencionar la actualización de procesos en cumplimiento de legislaciones aplicables vigentes, acuerdos administrativos, entre estos: Ley número 428 del 15 de mayo de 1950, de Seguro de Choferes. Activó el código 123 y realizó el débito / descuento por la suma de $1.09 quincenal hasta completar la cuota anual que asciende a $26.00 a todos los empleados que utilicen un vehículo

-

...

-

...

19 de motor de la CFSE, Ley número 23 de 23 de enero de 2006, se registró en el portal para el Registro Central de Convocatorias de Reclutamiento, las convocatorias emitidas por la CFSE durante el año fiscal de referencia, Ley número 119 de 7 de septiembre de 1997 y reglamentación vigente sobre el requerimiento de verificación en el Registro de Personas Convictas por Corrupción a todo aspirante a empleo o candidato a puesto en el gobierno. Inició la solicitud de información al Departamento de Justicia previo al nombramiento del personal (interno o externo) y Ley número 70 de 2010, puso en vigor en julio, 2015, la tercera fase de cambio en por ciento de las aportaciones para retiro de empleados que cotizaban para el plan coordinado del Sistema de Retiro. Continuó acuerdos de colaboración con las Universidades Estatales, Privadas y Colegios Técnicos para Praticas Estudiantiles. Durante el año fiscal de referencia, 168 estudiantes realizaron Prácticas Estudiantiles en las secciones de Farmacia, Enfermería, Radiología, Terapia Física y Consejería en Rehabilitación de las oficinas/ dispensarios regionales

-

y Hospital industrial. Trabajó como parte de su Plan de Trabajo el Proyecto de Integración Financiera y Administrativa IFA. La implementación de este proyecto que utiliza la tecnología SAP, un sistema conocido como Systems Aplications and Program Proyecto Especial para actualizar y foliar expedientes para Asuntos de Retiro de los Empleados de la CFSE; con el fin de disponer de todos los datos requeridos ASRELAJ al radicar pensiones de empleados. Esto conlleva

-

de Pre Retiro para los empleados que calificaran.

-

c. Normas y Procedimientos

-

la preparación de nuevas Hojas de Servicios, entre otras y se completó las Fases 1 y 2 del Proyecto

Realiza labores especializadas en el área de la administración pública, que incluyen pero no se limitan a la creación, enmienda y promulgación de diversos documentos Procedimientos, Ordenes Administrativas y Reglamentos.

normativos, tales como: Normas y

Además, como complemento a estos, se

diseñan y se oficializan los formularios necesarios para la práctica administrativa y operacional de la Corporación.

Entre las actividades significativas realizadas durante el año 2015-16, se destacan el

Desarrollo del Portal de Normas y Procedimientos y su presentación a funcionarios y empleados de la CFSE. Esta herramienta está disponible en la Intranet del sistema de informática de la Corporación, y permite a los empleados el acceso a los documentos normativos vigentes

y formularios oficiales

mecanizados. Atendió las solicitudes de las diferentes unidades para la creación y/o enmiendas de formularios oficiales.

-

Algunos de los documentos normativos oficializados son, las Ordenes

20 Administrativas 16-01, para Adoptar la Política Institucional para la Instalación, Uso y Manejo de Desfibriladores Externos Automáticos (AED), en la Corporación del Fondo del Seguro del Estado., la 16-02, Establecer la Normativa para Solicitud de Opiniones al Área de Asesoría y Asuntos Jurídicos y la 16-03, Notificación sobre Empleo Adicional, Contratos o Negocios Fuera de la Jornada Regular de Trabajo en la CFSE, entre otras. Ademas, se oficializaron Normas y Procedimientos de solicitudes y autorizaciones, los Reglamentos Internos, las Guías Médicas y Manuales de presupuesto y contabilidad, entre otros.

d. Educación y Desarrollo Esta Área determina, ofrece y da accesibilidad a programas y actividades que fomentan el desarrollo y capacitación de los empleados de la CFSE. Establece las mejores estrategias, técnicas y conocimientos necesarios para asegurar que la capacitación de los empleados responda a necesidades de su crecimiento profesional, a las metas y objetivos requeridos para el funcionamiento efectivo de la Corporación.

Las actividades realizadas en 2015-16, fueron:

l.

Autorizó el 76% de las solicitudes de empleados para comparecer a actividades educativas tales como: seminarios, talleres, entre otras y actividades educativas conducentes a grados a universitario,(bachiller, maestría o doctorado) en instituciones universitarias estatal o privadas, estos:

Concepto

SaUcbdes

Redllldas

Aprobadas

Devueltas

r.onmsto

Partida

Hrs cantactD

Tiempo

aftdal

ads autDrlzado

Costo

administrativa

medica

Dinero Realperado

Qrsos Externos

1026

237

648

191

5,330

$71,514.96

$16,192.46

$55,322.50

O.sos OCALARH

234

71

115

45

1,517

$13,751.15

$8,366.35

$5,384.80

$190, 772.00

$73,069.00

$117,703.00

$10,729.00

$276,038.11

$97,627.81

$178,410.30

$10,729.00

Canceladas Matrlcuas

Unlvmltarlas

TOTALES

2.

2 105

19

83

o

1365

329

846

236

738

7,585

Continuó plan de capacitación a empleados que laboran en la CFSE, en cumplimiento de legislaciones aplicables que regulan práctica profesionales, y otros dirigidos a ampliar y fortalecer conocimiento cónsonos con los cambios aplicables en la CFSE, estos:

-

-

-

-

21 Personal Impactado

Actividad Educativa Adiestramiento Básico a Empleados CFSE

23

Empleados Nuevo Ingreso (participantes acumularon 7 horas de ~tica Gubernamental) Médicos y Enfermeras

Oficina Regional de Caguas (3) Oficina Regional de San Juan (16) Oficina Regional de San Juan (4)

Resucitación Cardlopulmonar (CPR)

147

Personal Área Médica

Hospital Industrial (89) Oficina Regional de Caguas (15) Oficina Regional de Humacao (8) Oficina Regional de Mayagüez (8) Oficina Regional de Ponce (8) Oficina Regional de San Juan (8) Dispensario Intermedio de Fajardo (11)

Resucitación Cardlopulmonar Avanzada en la CFSE

227

Médicos y Enfermeras (participantes acumularon 7 horas crédito

Oficina Regional de Aguadilla (21) Oficina Regional de Arecibo(15) Oficina Regional de Caguas (14) Oficina Regional de Carolina (39) Oficina Regional de Humacao (12) Oficina Regional de Mayagüez (14) Oficina Regional de Ponce (16) Oficina Regional de San Juan (57) Dispensario Intermedio de Guayama (7) Dispensario Intermedio de Manatí (8)

Reunión de Capacitación a Instructores sobre Uso

5

Médicos y Enfermeras-participantes

Oficina Regional de Areclbo (5)

Personal Administrativo Educación Continua

Recinto de Ciencias Médicas (2) Oficina Regional de Aguadilla (110)

-

-

-

-

Practicando con el Desflbrllador

112

Personal Área Administrativa Capacitación Uso del Desflbrllador

182

Personal Administrativo

Oficina Regional de Humacao (136) Dispensario Intermedio de Guayama(46)

Capacitación de Instructores para Taller sobre Uso del Desflbrilador

42

Médicos, Enfermeras, Oficiales de Enlace

Hosoital Industrial íSl Oficina Reeional de AEuadilla (6) Oficina Reeional de Humacao 171 Oficina Reeional de Mavaeüez 171 Disoensario Intermedio de Falardo IS) Disoensario Intermedio de Guavama 16) Disoensario Intermedio de Manatí 161

Guías de Manejo Médico de posible Exposición Ocupacional a Rabia, Tuberculosis y Patógenos en Sangre

96

Personal de Área Médica

Oficina Oficina Oficina Oficina Oficina

Reeional Reelonal Reeional Reeional Reelonal

de ARuadilla (31) de Arecibo í13l de Humacao (6) de Mavaeüez 1301 de San Juan (16)

Aprendamos a Dormir

147

Todo el personal

Oficina Oficina Oficina Oficina

Re¡¡ional Reeional Reelonal Reeional

de de de de

1,553

Supervisores y Todo Personal

Oficina Central (250) Centro de Cómputos (17) Hospital Industrial (113) Oficinas Reelonales (996) Dispensario Intermedios (167) Dispensario Local (10)

Respuesta Rápida en Situaciones de

2,906

Todo el Personal

Oficina Central (530) Hospital Industrial (388) Oficina Regional de Aguadllla (158) Oficina Regional Arecibo/dispensarios (265) Oficina Regional Bayamón/dispensario(249) Oficina Regional Caguas/dispensario (243) Oficina Regional de Carolina (198) Oficina Reeional Humacao/dispensarios (212) Oficina Regional de Mayagüez (163) Oficina Regional Ponce/dispensarios (283) Oficina Regional de San Juan (217)

465

Todo el Personal

Oficina Central (69) Oficina Regional de Areclbo (53) Oficina Regional de Bayamón (74) Oficina Regional de Caguas (71) Oficina Regional de Carolina (54) Oficina Regional de Humacao (52) Dispensario Intermedio de Cayey (19) Dispensario Intermedio de Fajardo (20) Dispensario Intermedio de Manatí (17) Dispensario Intermedio de Yauco (16) Dispensario Intermedio de Guayama (20)

Comportamiento Suicida º/

Comunicación Riesgos Químicos

-

Bayamón (17) Carolina 141) Mavaeüez 1721 Ponce 1171

Portal de Normas v Procedimientos

-

Efectuado en:

22 Actividad Educativa

Personal Impactado

Efectuado en:

15

Personal Área Médica

Recinto de Ciencias Médicas

Conferencia Educativa sobre la CFSE

23

Miembros Coaliciones de Servicios de Salud

Hospital HIMA San Pablo, Caguas

Documentación, Impericia Médica y Condiciones Respiratorias.

87

Personal Área Médica

Oficina Regional de Aguadilla (30) Oficina Regional de Caguas (16) Oficina Regional de Mayagüez (41)

1326

Todo el Personal

Oficina Regional de Arecibo (80) Oficina Regional de Mayagüez (70) Oficina Regional de San Juan (69) Oficina Regional de Ponce (115) Oficina Regional de Carolina (116) Oficina Regional de Aguadilla (90) Oficina Regional de Bayamón (93) Oficina Regional de Caguas (115) Oficina Regional de Humacao (133) Dispensario de Coamo (10) Dispensario de Coroza! (38) Dispensario de Fajardo (33) Dispensario de Guayama (46) Dispensario de Manatí {26) Dispensario de Utuado (9) Dispensario de Yauco (26) Hospital Industrial (85) Oficina Central (172)

197

Todo el Personal

Oficina Regional de Aguadilla (13) Oficina Regional de Arecibo (25) Oficina Regional de Bayamón (22) Oficina Regional de Caguas (33) Oficina Regional de Carolina (17) Oficina Regional de Humacao (35) Oficina Regional de Mayagüez (22) Oficina Regional de Ponce (18) Oficina Regional de San Juan (7) Hospital Industrial (5)

Certificación Control de Infecciones, Epldemlologla

-

y Gulas Médico Forenses

Plan Medico MCS

Orientación: Con la Dirección Correcta, Llega la carta

Principios del Seguro Obrero

7

Personal de Asesoría Jurídica

Oficina Central (7)

Sistema de Formallzaclón y Recaudaciones

93

Personal de Seguros

Oficina Oficina Oficina Oficina Oficina

Conferencia Educativa sobre CFSE

23

Miembros Coaliciones de Servicios de Salud

Hospital HIMA San Pablo, Caguas

Aspectos Legales en las Reclamaciones por Muerte: Investigación y Adjudicación

172

Personal que labora en Reclamaciones

Oficina Regional de Aguadilla (56) Oficina Regional de Bayamón (60) Oficina Regional de Caguas (56)

Nociones Jurídicas, Doctrinas de Compensabllldad y Pago de Compensaciones

44

Personal de Reclamaciones

Oficina Regional de Aguadilla(44)

Academia Sindica! Unión de Empleados

316

Empleados unionados -Unión Empleados CFSE

Universidad lnteramericana Ponce (68) Instituto Relaciones Trabajo (80) Local UIA-AAA (66) Centro Convenciones Punta Maracayo (102)

Semana ttlca Gubernamental Slumdog Fireproof The Blind Side Manejo de Estrés Transformando la Violencia en Paz

243

Todo el personal

TOTAL

Regional Regional Regional Regional Regional

8,451

•¡ En o antes del 30 de junio de 2016, todos el personal que labora en la CFSE deberá haber asistido a este curso conforme a requerimiento

de Arecibo (28) de Bayamón (11) de Caguas (20) de Ponce (16) de San Juan (18)

-

-

de la Comisión de Prevención para el Suicidio.

-

-

...

23

e. Seguridad y Salud Ocupacional Coordina actividades de seguridad y salud ocupacional en las dependencias de la CSE. Realiza estudios de seguridad, higiene industrial y epidemiológica para implantar programas de seguridad ocupacional de acuerdo a riesgos y medidas de prevención para minimizar lesiones y enfermedades y mejorar estado de salud de empleados de la CFSE. Implantar planes de contingencias y programas de seguridad y salud ocupacional para cumplimiento con normas que regulan las operaciones de los servicios federales y estatales. Promover prevención de accidentes y enfermedades ocupacionales entre patronos privados y gubernamentales. Las actividades significativas realizadas durante el año 2015-16 por los componentes de esta unidad, incluyen la participación en adiestramientos para ampliar y fortalecer los conocimientos relativos a seguridad y salud ocupacional y otros de interés, se completó el Informe de Registro de Lesiones y Enfermedades Ocupacionales (OSHA300) al 31/enero /2016, la Oficina Central; Publico en

-

-

-

Tablón de Edicto Copia de OSHA 300 y designó enlace entre el Área de Seguridad y Salud Ocupacional y Servicios Administrativos para consultas durante proceso de remodelación y otros.

Además, continuó las visitas, orientaciones a Patronos: Actividad

Patrono

ORIENTACIONES Ergonomía

Comunicación Riesgos Químicos

-

·.. . _

-

Extintores Protección Auditiva Protección Respiratoria Manejo Herramientas Manuales AJUSTES REALIZADOS Ergonómicos Respiratorios Estaciones de Trabajo OTRAS Muestreo Ambiental Proceso Querella de OSHA

-

Empleados impactados

Autoridad para Financiamiento de Vivienda Departamento de Hacienda -San Juan Pac-Tech de Trujillo Alto CFSE- Hospital Industrial CFSE- Oficina Regional de Aguadilla CFSE- Oficina Regional de Arecibo CFSE- Oficina Regional de Bayamón CFSE- Oficina Regional de Caguas CFSE- Oficina Regional de Carolina CFSE- Oficina Regional de Mayagüez CFSE- Oficina Regional de Ponce CFSE- Oficina Regional de San Juan CFSE- Dispensario Intermedio Cayey CFSE- Dispensario Intermedio de Fajardo CFSE- Dispensario Intermedio de Guayama CFSE- Dispensario Intermedio de Manatí CFSE- Dispensario Intermedio Yauco CFSE- Dispensario Local de Utuado CFSE- Dispensario intermedio de Manatí Pac Tech de Trujillo Alto PacTech PacTech

136

Autoridad Financiamiento Vivienda CFSE- Oficina Regional de Caguas Departamento Hacienda San Juan

24 17 17

69 15 56 24

53 75

so 54 43 30 54 41

20 46 58 48 2 14 3

21 21

CFSE-Oficina Regional de Bayamón CFSE- Oficina Regional de Caguas. CFSE- Oficina Regional de Arecibo (Reubico en 2ndo Piso Sección de Correo)

24

f. Asuntos Administrativos Esta Área supervisa, coordina, planifica y dirige todas las funciones de índole operacional administrativo e implanta la política pública en todos los Negociados/oficinas adscritos a la misma. 1. Compras y Suministros Es responsable de Desarrollar Plan de Compras y Mantener el Inventario de los productos necesarios para un óptimo funcionamiento de la CFSE. Asesorar a la Junta de Subastas y a los diferentes funcionarios de la CFSE en asuntos relacionados. Realiza trámites correspondientes para la adquisición de materiales, equipo, medicamentos y servicios no personales. 2. Ingeniería Coordina, supervisa actividades relativas a la seguridad, salud y vigilancia en las instalaciones de la CFSE. Ofrece asesoramiento de aspectos de ingeniería y cualquier otra

de índole técnico.

Realiza

recomendaciones sobre instalaciones prepara planos de distribución de espacios y reconstrucción de locales, edificios y oficinas. También, supervisa la construcción y remodelaciones realizadas en las instalaciones de la CFSE. 3. Servicios Generales Ofrece apoyo a través de un programa de servicio, mantenimiento y disposición de equipos, reproducción e impresión de documentos informativos y promocionales, transportación, conservación de planta física, operación y servicio de cuadro telefónico, servicios de mensajería interna y externa y administración de un programa de documentos públicos. Durante el 2015-16, el Área de Asuntos Administrativos realizó compras bajo condiciones especiales, formalizó contratos con compañías para fortalecer aspectos administrativos, operacionales y servicio directo al trabajador lesionado en los cuales determinó que los mismos eran costo beneficiosos a la CFSE. Logró Tecnología para disponer de infraestructura que agilicen servicios brindados por la CFSE, continuó el desarrollo de actividades correctivas a deficiencias y situaciones confrontadas y como parte de los esfuerzos de ser mas eficientes y reducir costos, elaboró de plan de uso de energía eléctrica en todos los edificios de la CFSE; inició el remplazo de iluminación regular por iluminación con bombillas LED; reprogramó (timer) de encendido e interrupción de sistema de acondicionadores de aire, incluyendo el mantenimiento regularmente al sistema eléctrico.

6. ÁREA DE FINANZAS Esta Área supervisa, coordina, planifica y dirige todas las funciones de índole operacional y

-

administrativa e implanta la política pública en estos aspectos en la siguientesunidades:

a. Oficina de Contraloría- Es responsable de mantener un sistema que provea a la Administración de la CFSE la información necesaria y confiable para la toma de decisiones en asuntos que

-

....

-

25 requieren conocer con exactitud la situación financiera de la CFSE. Asesora al Administrador en la formulación, desarrollo y ejecución de la política fiscal de la CFSE y alerta sobre anormalidades

-

en el flujo de ingresos u otros problemas relacionados con la materia. Realiza actividades relativas

-

Administrativos

...

-

..

a Contabilidad, Patronos No Asegurados y Subrogación, Cuentas a Pagar por Servicios y

por

Servicios

Médicos.

Implanta

Planes

de

Acción

correctiva,

pronunciamientos de contabilidad, política de transacciones aplicables. Además, orienta a los funcionarios sobre asuntos con inherencia de esta Área.

b. Oficina de Tesorería - Sus funciones principales son planificar y administrar con eficiencia programas fiscales de la CFSE. Establece y administra controles con los bancos depositarios, asesores de inversiones y gerentes de inversiones. Prepara estimados que servirán de base para la inversión de fondos en valores a corto plazo. Es la oficina responsable de monitorear el flujo de efectivo. Coordina el desarrollo de actividades de recaudaciones, pagaduría, inversiones, riesgos y seguros de la CFSE que le permita a ésta mantener una administración eficiente de los programas y controles fiscales de la misma.

c. Oficina de Presupuesto - Es la oficina encargada del proceso de la elaboración y la distribución efectiva del presupuesto de la Corporación. Asigna y distribuye los fondos a los distintos centros de costos y partidas presupuestarias para cumplir con los desembolsos presentados en los planes de trabajo. Vela por el fiel cumplimiento del artículo 18-3 (n) de la Ley número 45-1935, respecto a las limitaciones en el gasto administrativo. En el año fiscal 2015-16, las actividades realizadas

-

por el Área de Finanzas estuvieron principalmente dirigidas a la revisión de los documentos

-

disponibilidad de fondos para los gastos operacionales 'y cumplimientos de acuerdos, aprobó

-

normativos, proyecciones, análisis económico, ajustes, transferencias de fondos para garantizar

Manual de Presupuesto y Contabilidad que regulara los trabajos financieros; Manuales de Configuración SD de los módulos de facturación para facturas misceláneas, Revisión de la forma W-8, Certificate of Foreign, Department of The Treasury Interna! Revenue Service, según enmendada, para identificar la posición de Puerto Rico ante el rendimiento en inversiones domésticas (efectos de ingresos prospectivos de inversiones y cubiertas). Revisó las retenciones de los hospitales y registró las certificaciones de exención contributiva del

-

7%; y las cuentas de los patronos no asegurados para determinar tendencias a seguir durante los próximos años, incorporó los cambios por analogía en los centros de costos establecidos en el 1997 de acuerdo a Estudio realizado por la firma Deloitee & Touche, reactivó el Programa de

26 Financiamiento de Autos con nuevos topes crediticios a empleados de la Unión de Empleados de la CFSE. Conforme a los acuerdos firmados entre las partes en cumplimiento de la Ley número 66-2014, Ley de Sostentabilidad Fiscal del Gobierno del Estado Libre Asociado de Puerto Rico. Además, realizó modificaciones en el Reglamento de Propiedad y Orden de Viaje conforme a recomendaciones de la Oficina de Auditoría Interna y continuó implementación Sistema Financiero Systems Applications Products in Data Processing (SAP) para manejo de cuentas a pagar, inventario y propiedad, incluyendo el diseño de los formatos de presentación para Estados Financieros emitidos en la herramienta BOE- BI con datos de SAP. Configuró los módulos de cuentas a cobrar en SAP que incluye adiestramiento a usuarios, reclasificó transacciones transferidas de Masterpiece a SAP para efecto de informes financieros y ajustó las cuentas transferidas en SAP para reclasificar tipos de activos y aportaciones, entre otras actividades.

RECAUDACIONES POR CONCEPTO Ai'los Fiscales 2014-15

y

2015-16

Acumulado Concepto

2014-15

cambio 2015-16

Absoluto

Palizas Nuevas Permanente

5,467,535.60 20,186,769.74

Eventual

$

5ubtotal

$

25,654,305.34

5,100.420.56 11,621,086.51

(367,115.04) (8,565,683.23)

16,721,507.07

(8,932, 798.27)

340,367,494.44 4,153,246.00

( 7,854.430. 29) 4,153,246.00 ( 4, 199,332.84) 3,641,505.00 (2,358.465.16) ( 332.454.67) (202,440.29) (267,155.46) 24,682.13 (223,242.87) ( 147,936.44) ( 202, 925. 58) ( 182,020.39) (48,329.94) (43,702.69) 7,360.01 10,367.14 (54,231.51) (1,441.21) (8,280,949.06)

" -6.7% -42.4% -34.8%

Patrono Privado - Póliza Permanente Af'\oVigente 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

$

4, 199,332.84

Af'\os Cerrado

5ubtotal

348,221,924.73

$

3, 781,675.10 1,104,606.64 888,098.52 661,855.11 200,863.44 312,139.99 201,323.68 274,037.24 210,795.60 76,281.08 52,957.37 22.433.89 8,309.89 54,231.51 156,785.25 360,427,651.88

3,641,505.00 1.423,209.94 772,151.97 685,658.23 394,699.65 225,545.57 88,897.12 53,387.24 71,111.66 28,775.21 27,951.14 9,254.68 29,793.90 18,677.03

$

155,344.04 352,146,702.82

Póliza Eventual 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

3,608,686.94 735,141.09 238,149.05 59,372.55 51,187.56 21.458.84 14,931.78 11,071.37 20,972.61 2,637.80 442.03 2,542.70 558.88 0.03 30,198.28

Arios Cerrado

5ubtotal

7,748,971.83 2,515,219.59 595,056.99 222,807.58 76,275.23 9,122.85 17,835.89 23,080.84 93,573.95 14,032.77 46,481.04 4,636.73 14,209.58 653.69 2,135.61

1, 732,831.48

Af'ioVigente

$

6,530,182.99

69,446.34

$

11,453,540.51

6,016,140.35 2,515,219.59 (3,013,629.95) (512,333.51) (161,873.82) (50,249. 70) (33,351.67) 1,622.00 78,642.17 2,961.40

25,508.43 1,998.93 13,767.55 (1,889.01) 1,576.73 (0.03) 39,248.06 4,923,357.52

-2.3%

••¡ -62.4%

-30.1% -22.8% -40.4% 12.3%

-71.5% -73.5% -74.1% -86.3% -63.4% -82.5%

32.8%

•¡ ••¡ -0.9%

-2.3%

•¡ -83.5% -69.7% -68.0%

-84.6% -65.2% 7.6%

•¡ 26.7%

•¡ 75.8%

•¡ -74.3%

•¡ ••¡ •¡

-

-

75.4%

-

-

-

-

-

-

-

27 \

RECAUDACIONES POR CONCEPTO Años Fiscales 2014-15 y 2015-16

Contratista Permanente Año Vigente 2017 2016 2015 2014 2013 2012

2015-16

2014-15

$

8,112,571.88

Absoluto

5,134,541.19 31,237.59

(2,978,030.69) 31,237.59

18,283.80

18,283.80

28,209.16 15,013.63 30,203.53 1,451.94 12,335.13

11,407.53 (72,384.22) ( 21,896.36) (33,051.20) (21,903.48)

6,366.06 11,134.24

6,366.06 (1,531.20) (1,798.34) (2,962.53)

" -36.7%

10,CXX>.OO

16,801.63 87,397.85 52,099.89 34,503.14 34,238.61

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Años Cerrado

Subtotal

Cambio

Acumulado

Concepto

12,665.44 1,798.34 2,962.53 663.85 1,938.35

$

Contratista Eventuales Año Vigente

8,367,641.51

$

1,186.61

67.9% -82.8% -42.0"/o -95.8% -64.0%

-12.1%

••¡ ••¡

9,223.82

(663.85) 7,285.47

••¡ •¡

5,298,000.09

(3,069,641.42)

-36.7%

1,291.04

104.43

8.8%

1,291.04

104.43

8.8%

2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Año Cerrado

Subtotal

$

1,186.61

$

28 RECAUDACIONES POR CONCEPTO

Años Fiscales 2014-15 y 2015-16 Acumulado

Concepto

2014-15

Corporaciones Publicas y Municipios Año Vigente 2016 2015 2014 2013 2012 2011 2010

158,460,279.11 134,196.34

152,388,571.85

2007 2006 2005 2004

(6,071,707.26) (134,196.34) 6,277,136.85 (4,839,330.62) 779,263.27 317,921.79 577,439.85 722,318.20 22,344.30 17,965.34 4,890.46 2,277.76 11,905.14 7,448.49

6,277,136.85 1,484,053.37 1,321,042.02 771,139.23 584,312.53 722,527.86 30,414.67 26,035.71 5,579.41 2,277.76 11,905.14 7,448.49

6,323,383.99 541,778.75 453,217.44 6,872.68 209.66 8,070.37 8,070.37 688.95

2009 2008

Cambio Absoluto

2015-16

"

-3.8%

••¡ -76.5%

•¡ 70.1%

•¡ •¡ •¡ •¡ •¡ •¡ •¡ •¡

2003 2002

2001 Aílos Cerrado

•¡

Subtotal

$

330.26 165,937,097.92

$

825.66 163,633,270.55

$

495.40 (2,303,827.37)

-1.4%

TOTAL PRIMA

$

566,918,066.25

$

549,254,312.08

$

(17,663,754.17)

-3.1%

$

480,854.42 1,321,595.37 (840,740.95) 280,254.68 7,108,408.30 161,373.01 761,109.10

9.7% 128.2% -21.5% 27.3% 1758.8%

$

4,938,593.95 1,030, 772.48 3,907,821.47 1,027,819.97 404,153.85 623,666.12 5,966,413.92

$

(16,902,645.07)

-3.0%

Facturas Misceláneas Parcial Total Facturas No Asegurado Parcial Total TOTAL FACTURAS

s $

$

572,884,480.17

5,419,448.37 2,352,367.85 3,067,080.52 1,308,074.65 7,512,562.15 785,039.13 6,n7,523.02

25.9% 12.8%

o

o

Facturas por Incentivado Total Caslflcado Depósitos Auditados

s

$

555,981,835.10

Fuente: Informe de Recaudaciones, Área de Finanzas, Oficina de Tesorería, CFSE. Nota: Los depósitos auditados no incluye la devolución de Prima, dato provisto por la Oficina de Contabilidad.

d. Oficina de Planificación y Estadísticas Las funciones de esta Oficina están relacionadas con la recopilación de información, el análisis y la preparación de informes estadísticos sobre las actividades o programas de la CFSE. Como consecuencia de esta gestión, el Administrador recibe información valiosa y útil en la toma de decisiones para mejorar los programas y servicios. Asimismo, recibe recomendaciones para revisión de nuestro estatuto habilitador. La Oficina de Planificación y Estadísticas también elabora diferentes documentos, con la colaboración y participación de otras áreas u oficinas que componen la CFSE, tales como el Plan

-

de Trabajo Anual y los informes de logros. Estas herramientas ayudan en la dirección e identifican las actividades a realizar de acuerdo a la Ley orgánica y a las metas propuestas por la alta

-

-

29

gerencia. Además, permiten identificar situaciones que afectan los objetivos y metas propuestos, de forma tal que las mismas sean atendidas y resueltas con mayor agilidad y eficiencia.

-

-

-

Una actividad que marcó la gestión de la Oficina de Planificación durante el año fiscal 2015-16 fue, la integración de datos estadísticos y gráficas en la sección de estadísticas de la nueva página "web" oficial de la CFSE. Entre estos, el anuario estadístico 2014-15, tablas y gráficas de las actividades operacionales en el área de seguros (formalización, intervenciones, recaudaciones), reclamaciones (compensaciones, inversiones, cheque de dietas, pago de incapacidad, investigaciones) médica (citas médicas, terapia física) Hospital Industrial, Adjudicaciones, entre otras. Compartió en el "share" de la red de información de Sistemas, información específica relativa a los Casos Radicados por Sector Económico y Edad; Accidentes Radicados (lesiones y enfermedades) por los patronos (públicos y privados) como parte de acuerdo interagenciales con el Departamento del Trabajo y Recursos Humanos; haciendo uso de la aplicación de BI- CFSE Analítico. Continuó con la revisión y validación de datos estadísticos mensuales referidos por las

-

oficinas regionales con el objetivo de obtener datos más precisos y confiable, completó Proyecto Intranet de la CFSE para presentar y mantener actualizado los datos estadísticos mensuales y anuales; mostrar gráficamente comportamiento de los datos y comparar los mismos interanualmente y participó en el Comité de Estadísticas del Instituto de Estadísticas de Puerto

-

Rico y cumplió con los requerimientos de la Ley 170-2004 al referir al Instituto de Estadísticas de Puerto Rico en formato PDF los informes estadísticos correspondientes al año fiscal de referencia. Además, participó, al ser designado por la Administradora, en la elaboración de anteproyecto de la Cámara de Representantes (P de la C 2171) con relación a los requisitos a establecerse para ejercer la función profesional dentro del Área de Seguridad y Salud Ocupacional en Puerto Rico y cumplió con el referido a la Junta de Planificación de Puerto Rico de los Informes JP-362, JP536, JP-541 y JP-544, año 2015-16, según requerido por Ley número 75 de junio de 1975, el Informe de Transacciones realizadas en la CFSE durante el año fiscal 2015-16, en cumplimiento de requerimientos de Ley y a la Oficina de Contralor de Puerto Rico, a la Oficina del Gobernador y las Cámaras Legislativas, el Informe Anual y el Plan de Trabajo Operacional de la CFSE 2016-17. Preparó y Publicó el Boletín Estadísticos 2015-16, Informe Anual de la CFSE 2014-15, el Plan de Trabajo Operacional del Glosario de Términos, cónsonos con aspectos administrativos y operacionales, los Informes Estadísticos y Narrativos Mensuales, el Memorial Explicativo para

-

30 Presupuesto de CFSE 2016-17 y trabajó con las proyecciones de recaudos por concepto de la formalización de pólizas Nuevas, años fiscales 2016-17, entre otras.

e. Oficina de Asuntos Actuariales Provee asesoramiento técnico y pericial en asuntos actuariales, de seguro y de otra índole. Realiza el proceso de revisión de los tipos de primas- (análisis de adecuacidad de primas vigentes para referir recomendaciones a Alta Gerencia de la CFSE, sobre tipos de prima a revisar. Computa las reservas (cuantía de beneficios que se adjudica en casos de muerte e incapacidad total permanente, cantidad que se reserva para pago mensual por dichos conceptos), calcula el sistemas de mérito de los patronos (para la imposición de primas e información a los Patronos, relacionadas con la experiencia de utilización dentro 1

de este sistema y en el funcionamiento general del sistema de compensación por accidentes del trabajo). Durante el año fiscal 2015-16, la Oficina de Asuntos Actuariales, procesó un total de 1,613 casos de lesionados y 539 casos de patronos (ver siguiente tabla).

LESIONADOS Casos Nuevos Muerte Casos Nuevos ITP Inversión Revaluación ITP y Muerte Solicitud Inversiones Total

Cantidad

29 434 53 1019

Ca.ntidacl

PATRONOS Consultas Atendidas Envió de Experiencia Certificaciones Análisis

230 y/o

221 88

78 1613

Total

sn

Finalizó trámite de contratación de los actuarios externos para el cómputo de las reservas actuariales para el próximo estado financiero y para la fase III del Proyecto SIMERA, Trabajo con asuntos y situaciones cubiertos en garantía, procesó con el grupo de Nagnoi el proceso de interfase de SIMERA y el nuevo programa de sistema de Compensaciones que diseñó esta compañía, Se puso en producción las modificaciones o cambios realizados en SIMERA y desarrolló el módulo de edición de datos que permite modificar los datos guardados en SIMERA y notificar a la Región el cambio efectuado y la necesidad de modificar en el sistema de Main Frame, compareció a la Comisión Industrial como perito en caso de Melissa Managment y en asuntos relativos al cómputo pensiona! de los beneficios de un caso de Incapacidad Total Permanente, ante este foro, solicitó opinión legal al Área de Asesoría y Asuntos Jurídicos

-

sobre casos de subrogación y auditorías realizadas de los patronos Monsanto Caribe LLC, Terraza Trucking lnc. y Méndez & Co. También, concluyó la Guía Interpretativa del Manual de Clasificaciones de Oficios e Industrias y Tipos de Seguros y Formulario Notificación de Ajuste Actuaria! por Concepto de Pagos

-

-

31 Incorrectos, computó el Sistema de Mérito para el año póliza 2016 para Agencias y Municipios y computó las reservas de anualidades al 30 de junio de 2015, con relación a los beneficiarios de los Casos de Muerte y de Incapacidad Total Permanente {ITP), refirió a ASEM casos que no parearon con la base de datos de la

-,

CFSE relacionados a las facturas de los años fiscales 2012, 2013 y 2014 y los meses de abril, julio, agosto, septiembre, octubre y noviembre 2015. Preparó el Manual de Clasificaciones de oficios e Industrial y Tipos de Seguro edición 2016-17 y procesó además, los cambios en tarifas de las claves:

-

Clave

Fraseología

2015-16

Prima 2016-17

Cambio

AUMENTA la prima por cada $100.00 de nóminas en las claves:

-

2585-080 2731-140 3400-176 4558-243 5645-274 7536-269 7777-348 8010-342 8017-343 8046-342 8292-349 9029-360 9040-360 9063-361 9101-360 9166-364

9220-374 9402-371

-

-

Lavanderías (Laundries), Trenes de Lavado (Laundromat) y Tintorerías Carpintería, ebanistería y Productos de Madera (NIC) Productos de Metal (NIC) Pinturas y Tintas Construcciones de Madera Cables Jockeys Ferreterías y Materiales de Construcción Tiendas Venta de Piezas para Automóviles (Auto Parts) Negocios de Almacenaje (NIC) Conservación de Edificios Comerciales Hospital, Clínicas y Consultorios Médicos Organizaciones Dedicadas al Acondiciona-miento Físico, Social y Mantenimiento de la Buena Salud Colegios, escuelas y universidades (NIC) Pistas de Carreteras de Automóviles, Hipódromos, Canódromos, Velódromos, toda Pista de competencia y parque, cancha Atlética o Deportiva Cementerios Limpieza de Calles, recogido de Basura y Otros Desperdicios {NIC)

$4.60

$5.00

.40(t

$6.80 $4.70 $2.90 $10,00 $7.05 $5.80 $3.15 $1.95 $3.05 $2.95 $6.95 $5.50 $3.25

$7.15 $4.95 $3.20 $10,80 $7.75 $6.95 $3.60 $2.15 $3.20 $3.25 $7.30 $5.80 $3.40

.35(t .25ct .30ct .8oct .70ct $1.15 .45(t .2oct .15ct .30ct .35(t .30ct .15ct

$4.50 $3.00

$5.00 $3.15

.5oct .15ct

$5.20 $6.60

$6.00 $7.35

.8oct .75(t

-

32 Clave

Fraseología

Prima

2015-16

2016-17

cambio

REDUCE la prima por cada $100.00 de nóminas en las claves

2121-056 2130-245 2131-056 3683-185 4150-185 4611-242 5057-270 5191-353 5200-273 5471-275 5507-261 7101-310 7309-300 7405-373 7600-330 8012-343 8014-272 8263-345 8387-347 8601-353 8726-353 8742-354 8748-354 8803-350 8831-348 8871-350 8901-352 9012-360 9017-360 9162-364 9417-353 9421-353 9610-352

Cerveza, Líquidos Carbonatados y Gaseosas Destilerías Licores Espirituosos, Frutas, Jarabes (sirops), Líquidos No Carbonatados y Agua Instrumentos Profesionales o científicos de Alta Precisión (NIC) Efectos Óptico (NIC) Drogas, Medicinas y Productos Farmacéuticos Construcción con Acero o Hierro Máquinas y Equipos de Oficina (NIC) Hormigón Enlozado Manejo y Remoción de Materiales Tóxicos Carreteras, Calles, Caminos, Pistas, Terraplenes y Urbanización de Terrenos Operación de Trenes Carga y Descarga de embarcaciones Aeronaves/Empleados de Abordo Teléfonos y Estaciones Inalámbricas Equipo, Efectos y accesorios Médicos, Ortopédicos y Respiratorios, Equipos Analíticos y de Alta Sofisticación Alarmas Negociantes en Hierro, Acero y Metales Viejos Estaciones Servicio de Automóviles o Puestos de Servicios Ingenieros, Arquitectos, Químicos Analíticos y Geólogos Líneas o Agencia de Barcos Vendedores, Cobradores y Mensajeros Ventas y/o Alquiler de Vehículos de Motor Oficina de Auditores, Contadores, Abogados y Analistas de Sistemas Hospital Veterinarios Trabajo a Distancia Empresas de Teléfonos, estaciones Radiodifusoras y Televisaras Inalámbricas Operación edificios Comerciales por Dueños o Arrendatarios Mantenimiento en Plantas Industriales (NIC) Parques de Diversiones, Recreo, Exhibición, Deportivos, Atléticos, Balnearios Empleados Estatales Empleados Estatales Producción de Películas

$5.30 $4.75 $3.30

$5.20 $4.50 $3.25

.lO(t .25(t .o5
$3.10

$3.00

.10
$2.05 $2.75 $9.90 $1.60 $7.75 $10.70 $6.90

$1.95 $2.60 $9.75 $1.50 $7.50 $10.15 $6.70

.10
$5.45 $3.35 $2.60 $3.15 $3.80

$5.35 $3.30 $2.45 $3.05 $3.75

.10
$3.00 $12.75 $4.20

$2.85 $12.65 $4.10

.1S
$2.05

$1.95

.10
$2.95 $1.20 $2.05 $0.85

$2.85 $1.15 $2.00 $0.75

.lO(t

$3.45 $3.50 $2.20

$3.40 $2.45 $2.15

$ 1.05 .o5
$4.50

$4.40

.10
$3.60 $5.65

$3.55 $5.60

.o5
$1.55 $4.45 $0.95

$1.45 $4.25 $0.90

.10
.o5
.o5
-

-

-

33 7. ÁREA DE SERVICIOS MÉDICOS El Área Médica tiene como meta primordial garantizar que los servicios que se ofrecen a los

-

lesionados que sufren accidentes del trabajo o desarrollan enfermedades ocupaciones, sean eficiente y de alta calidad en los departamentos y secciones adscrita a nuestra Área Médica. Que se dispongan de los recursos humanos especializados y equipos necesarios internos o contratados y que los profesionales de la salud cumplan con los requerimientos aplicables,

-

licencias, certificaciones y educación continua, entre otros. Las actividades realizadas durante el año fiscal 2015-16, estuvieron encaminadas cumplir con las metas y objetivos programados; continuidad de servicios de excelencia ante las limitaciones confrontadas en la CFSE y al fortalecimiento de los servicios directos al lesionado a través de implantación nuevas

-

modalidades de servicios. Inicio Programa de Educación Continua Institucional en coordinación con el Área de Educación y Desarrollo. Con este persigue cumplir con las actividades de carácter compulsorio, otros para mejorar la competencia y capacitar a médicos y otros profesionales de la salud en aspectos actualizados de la medicina moderna. Efectuó:

>"" Taller Educativo Patógenos en Sangre, Tuberculosis y Rabia.

-

>"" Manejo Medico para la Preparación Pre- operatorio en la Clínica de Cirugía

-

secretarias médico legal que trabajarán en la clínica de cirugía electiva. El personal

-

-

Electiva.

Participaron médicos, enfermeras, personal de citas médicas y

impactado conoció su responsabilidad en el manejo de pacientes para procedimientos quirúrgicos.

>"" Seguridad, Administración de Sangre y sus Derivados, Terapia Endovenosa. >"" Taller Casos Clínicos sobre el Uso y Manejo de Bombas de Infusión. >"" Material Educativo de Control de Infecciones, Zika e Influenza. >"" Documentación del Record Electrónico para los Profesionales de Enfermería. >"" Academia de Calidad. >"" Resucitación Cardiopulmonar Avanzada en la CFSE - ACLS. Realizó trámites correspondientes para disponer de licencias y certificaciones vigentes para funcionamiento y cumplimiento de los estándares estatales y federales en los dispensarios de la

-

CFSE y de los profesionales de la salud conforme a las leyes aplicables a su profesión u oficio,

-

de PR para los dispensarios regionales de Humacao; intermedios de Cayey, local de Utuado y

entre estas, la renovación de los certificados de Inspección y Permiso del Cuerpo de Bomberos

34 Clínica de Empleados de la Oficina Central, la licencia sanitaria del Centro de Diagnóstico y Tratamiento (CDT) para los dispensarios regionales de Bayamón y San Juan y los dispensarios intermedios de Fajardo y Guayama, la licencia sanitaria de Farmacia- para los dispensarios regionales de Bayamón, Ponce, San Juan, dispensarios Intermedios Fajardo y Guayama, el certificado Registro de Sustancias Controladas para dispensario regionales de San Juan, intermedio de Fajardo, el registro de Profesionales para personal médico expedido por la Oficina de Reglamentación y Certificación de Profesionales de la Salud. Además, se logró la ampliación de centros y servicios contratados en apoyo a los empleados de las secciones de concernidas (Teraparia Física y Radiología, entre otras) y cumplir con la misión institucional de ofrecer servicios de excelencia y pronto retorno del trabajador lesionado a su empleo habitual, llevó al cabo el cumplimiento con legislaciones aplicables, adopción e implementación de nuevas modalidades y revisión de procesos y servicios; entre estos, la aprobación de las Guías para la Utilización de Bloqueos para el Manejo del Dolor en la CFSE (GM-05-16-01), para el Manejo de Casos de Staphylococcus Aureus Resistentes a la Meticilina ("MRSA") (Gm-05-16-02) elaboró las Guías de Manejo Médico de Asbesto (procedimientos, algoritmo, cuestionarios iniciales y seguimientos, examen físico especializado) y el Algoritmo de CTS. Al cierre del año fiscal este documento ésta ante la consideración para oficialización o enmienda de la Junta de Gobierno y la Alta Gerencia. Otras actividades incluyeron, la revisión de todos los códigos de diagnóstico de la Corporación Ortopédica Industrial, identificó de 4 as-códigos que se repiten con frecuencia y el desembolso correspondiente de estos y la implantación del proyecto piloto de Clínica de Cirugía Electivas.

8. HOSPITAL INDUSTRIAL

El Hospital Industrial es una institución Hospitalaria Supra Terciaria Especializada que ofrece servicios hospitalarios y ambulatorios a trabajadores que sufren accidentes en el trabajo o desarrollan enfermedades ocupacionales en su fase aguda de recuperación y rehabilitación para integrarlos a la sociedad con un mínimo de incapacidad. Persigue además, educar a pacientes/ lesionados y familiares en la prevención de accidentes, conservación y mantenimiento de la

-

salud. El Hospital cuenta con varias unidades especializadas únicas en Puerto Rico para atender condiciones de trabajadores lesionados entre estas están: Unidad de Intensivo, Unidad Espalda

-

-

35

Aguda / Cordón Espinal y Unidad de Quemados.

-

La particularidad de este hospital es que

combina la hospitalización con el cuidado de medicina física y rehabilitación, servicios de terapia

-

física, terapia ocupacional, nutrición, salud mental de forma integral, manejo de dolor así como

-

estuvieron dirigidas principalmente a realizar una coordinación efectiva y eficiente previa a la

cualquier otro servicio que se requiera. Las actividades realizadas durante el año fiscal 2015-16,

construcción y remodelación de esta institución. En el transcurso de la misma se garantizaría el cumplimiento con todos los estándares establecidos para evitar o minimizar señalamientos futuros y continuidad en los servicios que se ofrece en clínicas ambulatorias y de hospitalización.

-

Además, al cumplimiento del Reglamento 117 de la Ley número 101 de 26 de junio de 1965 y

-

profesionales de salud que en ella laboran.

-

-

-

otras aplicables que regulan los servicios en instituciones hospitalarias y con aplicabilidad a los

Ofreció orientaciones educativas, para fortalecer y ampliar los conocimientos del personal, cumplir con requerimiento de legislaciones aplicables vigentes y que profesionales de salud dispongan

de credenciales vigentes,

Neuromuscular Facilitation (PNF).

entre estas,

nuevas Técnicas

de Proprioceptive

Esta facilita el movimiento de pacientes / lesionados con

parálisis en un lado del cuerpo (hemiplejía). De igual manera, profesionales que laboran en esta institución dictaron orientaciones a lesionados, público en general y agencias públicas y privadas para prevenir lesiones y mantener conocimientos de asuntos de interés actualizados. Adopto un nuevo estilo de contratación en los servicios médicos utilizando pagos fijos mensuales generaron economías significativas sin limitar los servicios a ofrecerse a los pacientes/lesionados. Entre

-

estos destacamos Cirujanos de Mano, Ortopedas y Manejo de Dolor, se completó Inventario de

-

farmacia (Almacén, IDP y OPD) totalizó $393,275.56. Al comparar este inventario con el realizado

Farmacia correspondiente al año fiscal 2014-15, el monto por productos de las tres áreas de

en 2013-14, identifica una cantidad inferior de productos expirados con una diferencia económica de $3,667.69. Se continuó Proyecto de Remodelación del Hospital Industrial, coordinó obtención de servicios de esterilización en X-Terra del Centro Cardiovascular y vapor en Hospital Oncológico para evitar

-

situaciones adversas en la Sala de Operaciones del Hospital Industrial e inicio utilización de las Salas de Operaciones, Hospital Universitario para comenzar la remodelación de las salas de operaciones del hospital. Implementó el sistema de distribución de pacientes en la Unidad de

36

Cuidado Inmediato con médicos disponibles con resultados favorables, se reabrió la Unidad de Trauma al Cordón Espinal y el Departamento de Salud efectuó inspección en el Departamento de Servicios Dietéticos. Los hallazgos generales, reflejan un 96% de cumplimiento en los aspectos considerados en la inspección de saneamiento A continuación Tabla que movimiento de lesionados atendidos durante el año fiscal 2015-16 vs 2014-15. Movimiento de Lesionados Atendidos en Hospital Industrial Ai'los Fiscales 2014-15 y 2015-16

Servidos a Lesionados

CAMBIO Absoluto Porcentual

Afilo FISCAL 20,14-15 2015-16

Citas Medicas Concertadas

34,643

36,699

2,056

5.9%

lnldales

9,532

10,252

720

7.6%

O a 15 días 16 a 30 días

6,327

6,439

112

1.8%

674

790

116

17.2%

31 a 60 días

780

1,083

303

38.8%

1,751

1,940

189

10.8%

24,004

25,865

1,861

O a 15 días

6,098

5,871

(227)

-3.7% -13.4%

más de 61 días Seguimiento

7.8%

16 a 30 días

4,493

3,889

(604)

31 a 60 días

5,320

5,577

257

4.8%

más de 61 días

S,093

10,528

2,435

Estudios

1,107

582

(525)

30.1% -47.4%

O a 15 días

721

394

(327)

-45.4%

16 a 30 días

130

62

(68)

-52.3%

31 a 60 días

101

49

(52)

-51.5%

más de 61 días

155

77

(78)

-50.3%

1,717

1,601

(116)

-6.8%

so

109

29 (110)

36.3%

Hospltallzaclones Unidades Intensivo

1/

Sala A

110

Sala B

1.,068

11198

90

62

130 (28)

-31.1%

369

232

(137)

-37.1%

Unidad Quemados

Espalda Aguda Cordón Espinal

o

2/

12.2%

23

Total Egresos

1,711

1,604

(107)

Altas Medicas

1,545

1,477

(68)

-4.4%

(1)

-20.0%

Muertes Traslados

Activos al 30 de Junio de 2016 Número de Camas

5

4

161

123

(38)

-23.6%

38

35

(3)

-7.9%

60

SS

(2)

-3.3%

Por ciento de Ocupación

55.06

56.34

Censo Promedio Diario

33.04

32.68

7.84

7.94

Estadía Promedio

-6.3%

1 (0.4) 0.1

2.3% -1.1% 1.3%

•/mii6s de 100% ••/menos de 100% •••/menos de 1% 1/ A partir de agosto 1 2014 la Sala A permanece cerrada. 2/ A partir de abri1 1 2016 comenzó a utlllzar la Sala de Cordón Esplnal por necesidad de espacio para acomodar les lona dos durante el proceso de remodelaclón del HI. Fuent• de Información: Informe Mensual Estadístico de Junlo 1 2014-15 y 2015-16 preparado por la Oficina de Planlflcaclón y Estadísticas

9. ÁREA DE OPERACIONES

Esta Área tiene la encomienda de administrar el seguro obrero de acuerdo a lo que dispone la Ley 45-1935. Por tanto, está encargada de los servicios a patronos y del procesamiento de las reclamaciones que presentan los trabajadores lesionados. Asimismo, asesora al Administrador

-

de la CFSE en todos los asuntos relativos al ámbito de seguros y reclamaciones. Esta Área la componen las siguientes unidades: Servicios Regionales, Secretaría, Asesoría en seguros,

-

..

37 Asesoría en reclamaciones, Pólizas de gobierno, Determinación de estatus patronal, Ayuda al Ciudadano, Coordinación lnteragencial y Oficinas Regionales. Durante el año fiscal 2014-15, el Área de Operaciones trabajó en los siguientes proyectos: ).,,, Estableció como norma emitir mensualmente a las regiones, informes estadísticos para medir la ejecución en cuanto a los servicios directos de los lesionados. ).,,, Activó Comités de Disposición en las regiones para evaluar los casos activos evaluando el tiempo que llevan en el sistema. Esto permitió bajar considerablemente el total de casos

-

activos. De 41,018 en 2014-15 a 37,184 en 2015-16, esto es una reducción de 3,834 casos o menos un 9.3%. ).,,, Agilizó en un 98% la adjudicación total de casos pendiente de fijar status a los patronos, año fiscal 2015-16.

-

-

).,,, Proyecto PRENAM, como parte de la Fase V, diseñó el Sistema Global 360 un sistema de pago de compensaciones. Esto va dirigido a administrar, producir y mantener todas las transacciones relacionadas con el pago de dietas e incapacidad más los pagos de honorarios a los abogados (Proyecto SIC). ).,,, Implementó la CFSE-395, Aspecto Legal- Se realizaron unas mejoras al formulario CFSE-

-

395 con el propósito de que el documento solo provea los diagnósticos relacionados al

-

).,,, Implementó Proyecto 1135, el cuál va dirigido a identificar y relacionar con el Área de

caso mientras el lesionado está en tratamiento médico.

Finanzas las facturas en acorde con los referidos sobre los servicios médicos que ofrecemos a los lesionados. ).,,, Identificó todos los casos con cuentas "expunged" que tienen al presente balances en la tarjeta. Este proyecto se dividió por fase, en coordinación con el Área de Finanzas, de acuerdo a la cantidad acumulada en la tarjeta. Se emitieron escritos notificando al beneficiario la existencia de la cuenta para actualizar datos y/o proceder con el pago. ).,,, Coordinó con la Oficina de Planificación, la actualización sobre los datos estadísticos de Operaciones. Este proyecto se conoce como Business lntelligence. Su enfoque es que los

-

informes estadísticos estén acorde con los del Área de Operaciones, al evaluarse todos

-

oficiales y finales.

los conceptos.

Como proyecto final estos números serán presentados como datos

38 ~

-

Para mejorar el servicio en los casos Legacy, incluyó en el sistema mecanizado las decisiones de incapacidad, el formulario 1117 del médico, el resumen de Alta con Incapacidad, las Académicas e IPP máximo.

~

Continuó trabajando con las demandas de los bufetes Cordero & Cordero y Juan Hernández por pagos de honorarios sobre los servicios brindados a los lesionados. Al presente, el bufete de Juan Hernández tiene pendiente un balance de $246,866.88 de un total de $975,268.42 y de Cordero & Cordero, está pendiente revisar facturas por $28,071.23 de un total de $638,000.

~

En junio de 2015, inició un proyecto de capacitación al personal del área de reclamaciones, investigadores, inversiones, abogados, supervisores, entre otros. Este consiste de tres fases en donde se actualizará en los diferentes temas relacionados, con los casos de muerte, aspecto de compensabilidad, pagos de compensaciones, subrogación y aspecto de la Ley de Compensabilidad, entre otros.

~

Efectuó Acuerdo Contractual de Servicio del Programa de Determinación de Incapacidad del Seguro Social para proveer información sobre los casos ya identificados por el personal del Seguro Social que a su vez están tramitando beneficios en el Fondo.

~ Todos los años, en el mes de enero, se activa el Proyecto de Datos Vitales, el cual fue

creado para que cada beneficiario del sistema actualice la información en el sistema. Esto nos permitió tener al día todo lo relacionado con el beneficiario y así evitar la emisión de pagos indebidos. ~ Fusión de agencias de gobierno-Se emitió un comunicado para que el Área de Sistemas

de Información actualice los datos con los números de las pólizas sobre las agencias gubernamentales que han sido fusionadas. ~

Conforme a señalamiento emitido por los auditores externos, preparó un formulario que identifica los documentos que pueden formar parte dentro del expediente médico del lesionado. El mismo muestra los documentos que deben estar archivados en cada lado de la carpeta.

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Continuó evaluando y trabajando estrategias operacionales de las fases 1, 11 y 111. Como resultado de las operaciones de estas fases, se continúan presentando cambios para mejorar la programación.

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Implementó aplicaciones que modifican el sistema Case 360 para agilizar los procesos de fijación de estatus, a los patronos de gobierno que solo tienen un riesgo. Esta fijación está programada automáticamente para la fijación del caso. Tan pronto el sistema

1

identifica gobierno con un solo riesgo, se le adjudica la clave número (1).

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Rediseñó el portal interactivo en cuanto a la formalización de las pólizas permanentes, domésticas y de propio patrono. Coordinó a través de todas las regiones, la celebración de las Vistas Públicas para los patronos, acorde con la Ley 45 del Sistema de Compensaciones por Accidentes del

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Trabajo. Revisó y modificó el Manual de Clasificaciones de Oficios e Industrias y Tipos de Seguro como establece la Ley.

Se redujeron tipos de prima, se añadió fraseología y se

consolidaron clasificaciones. Rediseñó para el Área de Seguro el Programa SIFRE- Este es un concepto nuevo para

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trabajar desde la formalización de pólizas hasta las liquidaciones. Consiste en agilizar,

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todas las regiones.

captar mayor cantidad de patronos y a su vez uniformar la formalización de la póliza en

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Preparó un Plan de Trabajo en todas las regiones, dispensarios, Oficina Central y Colegio de CPA para atender a los patronos en la radicación de las declaraciones de nómina en cumplimiento con lo estipulado en la Ley.

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Realizó una monitoria a la Oficina de Pólizas de Gobierno estableciendo e identificando las diferencias en la liquidación de las auditorías realizadas a los municipios.

Se

corrigieron las notificaciones de cobro, obteniendo prima adicional en los años investigados. ~

Repositorio de documentos- En coordinación con el Área de Sistemas de Información se creó una aplicación en la que se guardan en PDF todos los documentos enviados a los patronos. Esto nos permitirá localizar los documentos de los patronos de forma más rápida y a su vez mantenerlos disponibles en el sistema.

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La Corporación participó en la otorgación de beneficio a los patronos certificados bajo la Ley 120 del 2014 (PyMes). Este beneficio consiste del descuento en prima de un 50% por dos años en sus pólizas.

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Mediante acuerdo lnteragencial se creó la aplicación de Sistema de Integración de Datos para compartir información de nóminas pagadas en la Corporación en comparación con los informados en el Departamento del Trabajo. Esta aplicación nos permitirá aumentar la captación de patronos y recaudos para obtener una mayor eficacia en el proceso de Notificación de Cobro.

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El Área de Operaciones participó en diferentes convenciones para orientar personal y patronos sobre los derechos y beneficios de nuestra Ley. Se impactaron un total de ocho convenciones durante los años 2015-2016.

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Formalizó un total de 2,205 pólizas nuevas en el año fiscal 2015-16, aumentando en un 2% para un total de 111,381 vigentes.

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Emitió todas las notificaciones de cobro para pólizas permanentes para el mes de noviembre de 2015.

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Estableció las líneas 1-844-Pólizas y 1-844-Patronos para facilitar y agilizar la atención a los patronos y resolver problemas con la "Web".

10. OFICINAS REGIONALES Las Oficinas Regionales son el brazo operacional de la CFSE. Con el fin primordial de hacer más accesibles sus servicios al trabajador que se accidenta o desarrolla enfermedades ocupacionales, la Ley 45-1935 autorizó el establecimiento de dispensarios regionales. Hoy contamos con nueve (9) oficinas regionales y con 9 dispensarios intermedios o locales ubicados en los municipios de Aguadilla, Arecibo (Manatí y Utuado), Bayamón (Coroza!), Caguas (Cayey), Carolina, Humacao (Fajardo y Vieques), Mayagüez, Ponce (Coamo, Guayama y Yauco) y San Juan. En la siguiente Tabla se observa las actividades operacionales dentro de estas regiones. Estas Oficinas ofrecen: Servicios a Patronos: Ofrece orientaciones sobre consultas de cubiertas y primas de seguros, formalización y ampliación de pólizas de seguro obrero patronal, emisión de certificados de vigencia y de no deuda, planes de pago a patronos que no tienen la capacidad para asumir deudas

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atrasadas e investigación de casos de accidentes laborales.

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Servicios a Trabaiadores Lesionados: Radicación de reclamaciones por accidentes del trabajo o enfermedad ocupacional, servicios médicos una vez se radica el caso, seguimiento médico y

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multidisciplinario de acuerdo a la condición reportada, servicios de rehabilitación física, ocupacional y vocacional, productos farmacológicos y ortóticos recomendados por médicos, pagos de trasportación y almuerzo y pago de compensaciones conforme a la Ley 45-1935. A continuación destacamos algunas de las actividades realizadas durante el año fiscal 2015-16 en cada región o dispensario:

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a. Oficina Regional de Aguadilla Esta localidad provee servicios a lesionados y patronos que residen en los municipios de Aguadilla, Aguada, Moca, San Sebastián, Isabela, Rincón. Durante el año fiscal 2015-16, procesó con el Departamento de Desarrollo Económico de Puerto Rico, el Programa Juvempleo, la propuesta de práctica de 520 horas de estudiante de Psicología en esta localidad, cumplimiento con legislaciones y regulaciones aplicables vigentes, corrección de deficiencias identificadas para garantizar un funcionamiento óptimo en estas instalaciones, obtuvo Certificación de Necesidad y Conveniencia al aprobar satisfactoriamente la inspección realizada por el Departamento de Salud. Continuó fomentando la participación del personal que labora en esta localidad en actividades educativas que le permiten ampliar, fortalecer conocimientos y cumplir con requerimientos.

b. Oficina Regional de Arecibo Provee, junto a los dispensarios de Manatí y Utuado, servicios a lesionados y patronos que

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residen en los municipios de Arecibo, Barceloneta, Ciales, Camuy, Florida, Hatillo, Lares, Manatí, Morovis, Utuado, Vega Baja. Las actividades significativas durante el 2015-16 incluyen la agilización de los procesos administrativos, operacionales y la continuidad de servicios durante el año de referencia y activo diversos comités en área de reclamaciones y compensaciones; mantuvo la colaboración de profesionales de enfermería y citas médicas en el Dispensario Intermedio de Manatí y los Asesores Legales dieron apoyo a otras localidades de la CFSE (División de Apelaciones y Oficina de Adjudicaciones de Aguadilla), entre otros. Además, implementó Clínica de Cirugía Electiva. Continuó Programa de Prácticas Estudiantiles este proveyó apoyo al

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personal que labora la Sección de Terapia Física. En el año de referencia dispuso de estudiante/practicante de National University, UPR-Recinto de Humacao y promovió la participación del personal en actividades educativas en cumplimiento con requerimientos de

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horas de educación continua, ética, entre otros y con el fin de mantener actualizado los conocimientos del personal que contribuya en un mejor servicio

c. Oficina Regional de Bayamón

Provee, junto al dispensario de Corozal, servicios a lesionados y patronos que residen en los municipios de Barranquitas, Bayamón, Cataño, Comerio, Corozal, Dorado, Guaynabo, Naranjito, Toa Alta, Toa Baja, y Vega Alta. Entre las las actividades realizadas por esta localidad en el 201516, están, la continuación como centro de prácticas clínicas; dispuso de la colaboración de Estudiante de Instituto EDP College y UPR, Recinto de Humacao en la Sección de Terapia Física, el fortalecimiento y accesibilidad de servicios que ofrece al lesionado, el desarrollo de actividades correctivas a deficiencias identificadas para disponer de instalaciones y equipo en óptimas condiciones y la eliminación de barreras arquitectónicas y la correción de los señalamiento del Departamento de Salud. d. Oficina Regional de Caguas Esta localidad, junto al dispensario de Cayey, provee servicios a lesionados y patronos que residen en los municipios de Aguas Buenas, Aibonito, Caguas Cayey, Cidra, Gurabo y San Lorenzo. Durante el 2015-16, se agilizaron procesos administrativos, operacionales y la continuidad de servicios, hizo uso de la tecnología para identificar y contactar patronos que tiene deudas con la CFSE cuyas gestiones mediante comunicaciones escritas, fueron infructuosas e implementó controles para evitar duplicidad en los comprobantes de pago.

e. Oficina Regional de Carolina Provee servicios a lesionados y patronos que residen en los municipios de Canóvanas, Carolina, Fajardo, Loíza, Luquillo, Rio Grande y Trujillo Alto. Las actividades realizadas durante el año fiscal 2015-16 incluyen el cumplimientos de legislaciones aplicables vigentes y agencia reguladoras, entre estos, requerimientos del Departamento de Salud, para administrar pruebas de tuberculina y muestras de sangre para obtener Certificados de Salud, certificó a Enfermeras para administrar la prueba de Tuberculina, continuó fomentando la participación del personal en actividades educativas para cumplir con requerimientos de educación continuay ética para ampliar y fortalecer el conocimiento. Además, llevó a cabo actividades correctivas a deficiencias identificadas en instalaciones y equipo en beneficio de empleados, trabajadores

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lesionados, patronos y visitantes.

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f. Oficina Regional de Humacao Esta localidad, junto a los dispensarios adscritos a la misma localizado en Fajardo y Vieques proveen servicios a lesionados y patronos que residen en los municipios de Ceiba, Cu~ebra, Humacao, Juncos, Las Piedras, Maunabo, Naguabo, Vieques y Yabucoa. Las actividades realizadas durante el año fiscal 2015-16 incluyen la agilización de los procesos administrativos, operacionales y la continuidad de servicios. Activó

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comités en las área de reclamaciones y compensaciones; mantuvo la colaboración de Fisioterapista

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permanentes eliminadas.

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Regional dando apoyo en el Dispensario Intermedio de Fajardo y completó el procesó de las pólizas

g. Oficina Regional de Mayagüez Provee servicios a lesionados y patronos que residen en los municipios de Añasco, Cabo Rojo, Hormigueros, Lajas, Las Marías, Maricao, Mayagüez, Sabana Grande y San Germán. Las actividades que se realizaron durante el año fiscal 2015-16 incluyen, el desarrollo de actividades correctivas a deficiencias identificadas para disponer de instalaciones y equipo en beneficio de empleados, trabajadores lesionados, patronos y visitantes, y fomentar la participación del personal en actividades educativas para ampliar y fortalecer conocimientos de acuerdo a las legislaciones aplicables.

h. Oficina Regional de Ponce Esta localidad, junto a los dispensarios de Coamo, Guayama y Yauco proveen servicios a lesionados y

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patronos que residen en los municipios de Adjuntas, Arroyo, Castañer, Coamo, Ensenada, Guánica, Guayama, Guayanilla, Jayuya, Juana Díaz, Villalba, Yauco.

Orocovis, Patillas, Peñuelas, Ponce, Salinas, Santa Isabel,

Las actividades realizadas durante el 2015-16 incluyen ajustes ocupacionales con el

patrono, conforme a las recomendaciones del Especialista en Rehabilitación para que el trabajador lesionado pueda continuar trabajando. Adelantó citas concertadas para realizar estudios de resonancia magnética (MRI), MRI de Cadera con Gadolinio lntraarticular a través del proveedor Advanced lmaging lnterventional Center y MRI de Hombro Derecho y MRI Cervical abierto y sentada. Además, llevo a cabo Vista Públicas relacionadas con los planteamientos presentados por los patronos. Continuó Programa de Prácticas Estudiantiles que brindaron apoyo al personal que labora la Sección de Terapia Física.

i. Oficina Regional de San Juan Provee servicios a los lesionados y patronos que residen en los municipios de San Juan y en algunas partes de sectores que pertenecen a los Municipios de San Juan, Guaynabo y áreas que colindan con Carolina y Trujillo Alto. Las actividades realizadas durante el 2015-16, incluyen la agilización de procesos

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administrativos, operacionales y continuidad de servicios. Activó comités en el área de Reclamaciones y

44 Compensaciones con el propósito de disminuir casos pendientes. Mantuvo la colaboración de funcionarios en las áreas de Seguros e Intervenciones en el Proyecto de Mecanización de la Sección de Formalización de Pólizas. Además, continuó el Programa de Prácticas Estudiantiles en apoyo a la Sección de Radiología y Terapia Física.

De igual manera, realizó inventarios anuales en la

Sección de Farmacia, que produjo la

actualización de costos e inactiv~ción de productos; y en Archivo de Expedientes, analizó e inactivó 7,571 expedientes médicos/ administrativos. Destaca un aumento en la localización y referido de expedientes solicitados por la Comisión Industrial.

VIII. Conclusiones El presente informe ha descrito a grandes rasgos las actividades desarrolladas por la CFSE y todas sus unidades componentes para cumplir con las metas establecidas para el año fiscal 2015-16. En síntesis, implementamos cambios y mejoras en la infraestructura de los sistemas de información, aumentando el acceso a los mismos y desarrollando un centro para la recuperación de datos en casos de desastres que garantice la continuidad de las operaciones corporativas. Desarrollamos sistemas o proyectos para la creación de sistemas para el manejo de diversas operaciones de la Corporación (expediente administrativo del lesionado, SIMERA, 81, SAP Finanzas y SAP Recursos Humanos, integración de datos y sistema de formalización de pólizas). Se diseñó y puso en función el nuevo portal de la CFSE en la Internet, cuya segunda etapa estará lista este año y permitirá a los patronos realizar múltiples transacciones en línea, sin necesidad de visitar las facilidades de la CFSE. Hemos alcanzado acuerdos con diversas instituciones públicas y privadas para ser centro de práctica y facilitar la formación de profesionales, principalmente en el campo de la salud. Implementamos iniciativas legislativas dirigidas a incentivar la creación de empleos (Ley 1-2013, Ley 120-2014 y Ley 62-2014). Se han evaluado las necesidades de servicios por contrato y las tarifas, lo que ha resultado en ahorros sustanciales a la Corporación. En el área de salud, se ha fortalecido al Hospital Industrial como centro especializado para hospitalización, tratamiento médico-quirúrgico y rehabilitación. La remodelación en curso de esta facilidad hospitalaria la ubicará entre las mejores del País, desde donde se proveerán servicios de alta calidad a los lesionados. Esperamos, además, que, en un futuro cercano, el Hospital Industrial sea un centro de adiestramiento y de especialización de profesionales en el campo de la rehabilitación. Finalmente, la Junta de Gobierno de la CFSE ha aprobado estrategias de inversión que tengan rendimientos adecuados y, a la vez, fomenten la

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economía local. En su gestión social, la CFSE ha desarrollado una serie de actividades para beneficio de entidades sin fines de lucro que llevan a cabo proyecto de significativa importancia para el País (Life Link, Sociedad Americana

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del Cáncer, Cruz Roja Americana, Hospital del Niño, Santuario Canitas, Centro Cardiovascular de Puerto

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periódicamente mercados agrícolas en las facilidades de la Corporación. También se han llevado a cabo

Rico).

Para fortalecer a los pequeños comerciantes, principalmente agroempresarios, se celebran

actividades para beneficio de los empleados de la entidad (clínicas de mamografías y adiestramientos para manejo de comportamiento suicida) .

.... En el presente año fiscal (2015-16) hemos emprendido nuevos proyectos que pretenden seguir

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fortaleciendo a nuestra entidad y los servicios que ofrece, sin renunciar a nuestros compromisos sociales . Los retos que ha tenido que asumir la CFSE en los pasados años no han mermado sus esfuerzos en

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continuar aportando al crecimiento del País, manteniendo una clase trabajadora saludable.

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... Aneios:

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Anejo 1: State lnsurance Fund - lndependent Auditor's Report; Basic Financia! Statements and Required Supplementary lnformation, June 30, 2016 .

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Anejo 11: Commonwealth of Puerto Rico State lnsurance Fund Corporation - Actuaria! Study of the Workers Compensation Program as of June 30, 2016.

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Anejo 111: Balances de Incapacidad Parcial Permanente, Incapacidad Total Permanente, Muerte y Remanentes de Dietas, 2015-16. Anejo IV: Resumen Cartera de Inversiones Corporación del Fondo del Seguro del Estado, 201516. Anejo V: Cartas - Solicitud de prórrogas: Oficina del Gobernador de Puerto Rico, Senado de Puerto Rico y Cámara de Representantes de Puerto Rico (debido a no disponibilidad de los Informes Financieros y Acturial Auditados).

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Anejo 1: };.,

State lnsurance Fund - lndependent Auditor's Report; Basic Financia! Statements and Required Supplementary lnformation, June 30, 2016.

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Basic Financial Statements and Required Supplementary lnfonnation June 30, 2016 (With Independent Auditors' Report Thereon)

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Table of Contents June 30, 2016 PAGE INDEPENDENT AUDITORS' REPORT MANAGEMENT'S DISCUSSION ANO ANALYSIS {UNAUDITED)

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5-19

BASIC FINANCIAL STATEMENTS: STATEMENT OF NET POSITION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

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STATEMENT OF CASH FLOWS

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NOTES TO BASIC FINANCIAL STATEMENTS

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REQUIRED SUPPLEMENTARY INFORMATION {UNAUDITED) TEN - YEAR CLAIMS DEVELOPMENT INFORMA TION

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PRELIMINARY ANO UNAUDITED SCHEDULES OF THE CORPORATION'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AND CORPORATION'S CONTRIBUTIONS

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SCHEDULE OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS POR PENSION COSTS

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SCHEDULE OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS

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INDEPENDENT AUDITORS' R.EPORT ON INTERNAL CONTROL ÜVER FINANCIAL REPORTING ANO ON COMPLIANCE AND ÜTHER MATIERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WJTH GOVERNMENT AUDITING STANDARDS

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P.O. Box 363642 San Juan, PR 00936 Tel. 787-765-4644 Fax 787-763-5504 www.landaumplerre.com

Independent Auditors' Report

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To the Board of Directors of State Insurance Fund Corporation:

Report on the Financia( Statements We have auclited the accompanying basic financia! statements of State Insurance Fund Corporation (the Corporation), a component unit of the Commonwealth of Puerto Rico, as of and for the year ended June 30, 2016, and the related notes to the basic financia! statements, which collectively comprise the Corporation basic financia! statements as listcd in the table of contents.

Management's Responsibility for the Financia! Statements Management is responsible for the preparation and fair presentation of these financia! statements in accordance with accounting principies generally accepted in the United States of America; this includes the design, implementation, and maintenance of interna! control relevant to the preparation and fair presentation of financia! statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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Our responsibility is to express an opinion on these financia! statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financia! auclits contained in Government Auditing Standards, issued by the Controller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financia! statements are free from material misstatement.

An auclit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financia! statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financia! statements, whether due to fraud or error. In making those risk assessments, the auditor considers intemal control relevant to the entity's preparation and fair presentation of the financia! statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's intemal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financia! statements.

Membar flrm of CPA Assoclates lnternatlonal wlth offlces In principal cltles worldwlde

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

Implementation ofGASB No. 68 and GASB No. 71 As more fully described in Note 18 to the basic financial statements, in fiscal year 2015, the Corporation adopted Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reportingfor Pensions - an amendment ofGASB Statement No. 27 (GASB No. 68), and Governmental Accounting Standards Board Statement No. 71, Pension Transitionfor Contributions Made Subsequent to the Measurement Date -An amendment of GASB Statement No. 68 (GASB No. 71) using preliminary unaudited amounts to reflect the required adjustments and related disclosures. Toe implementation of GASB No. 68, resulted in a restatement of beginning net position (July 1, 2014) of approximately $1.3 billion and reporting of the following preliminary and unaudited pension data corresponding to the Corporation's proportionate share of the Employees' Retirement System of the Commonwealth of Puerto Rico' s collective pension amounts: net pension liability of approximately $1.4 billion, deferred outflows of resources of $79 million, deferred inflows of resources of $11.3 million and pension expense of $81.3 million. As of the date of issuance of the accompanying basic financia! statements, the Commonwealth of Puerto Rico has not issued audited information to implement the requirements of GASB No. 68 and GASB No. 71. The amounts presented as net pension liability, deferred inflows of resources and deferred outflows of resources as of June 30,2016, are the same as those reported as of June 30, 2015 and represent the preliminary and unaudited amounts reported in Circular 1300-2316 and recorded on the 2015 financia! statements of the Corporation. Also, additional disclosures required by GASB No. 68 as well as required supplementary information have not been changed from the ones presented in the 2015 financial statements, since it is the latest available infonnation. Therefore, we were unable to form an opinion regarding the amounts and related disclosures of GASB No. 68 and GASB No. 71 presented in the accompanying basic financial statements, and were unable to obtain sufficient appropriate audit evidence about the implementation of GASB No. 68 and GASB No. 71 by other auditing procedures.

Qualified Opinion

In our opinion, except for the effects of the matters described in the Basis for Qualified Opinion paragraphs, the financial statements referred to above present fairly, in ali material respects, the :financia! position of the Corporation, as of June 30, 2016, and the respective statements of revenues, expenses and changes in net position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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Uncertainty Regarding Collectability of Financial Instruments As further discussed in Notes 4, 6, 23 and 24 to the financial statements, the Corporation has a credit risk that triggers uncertainty over the collectability of a Note Receivable from the Commonwealth of Puerto Rico (Commonwealth) with a face value of $100 million and Govemment Development Bank for Puerto Rico (GDB) Senior Guaranteed Notes with an aggregated face value of $110 million (estimated market value of $67 million at June 30, 2016). Toe issuers of these instruments are the Commonwealth of Puerto Rico and GDB which face significant risks and uncertainties, including liquidity risk, since them do not have sufficient liquid financia! resources to meet obligations when they come due. Furthermore, Commonwealth's management concluded that there is substantial doubt as to the ability of the Primary Government to continue as a going concem in accordance with GASB Statement No. 56. GDB also carries substantial doubt about its ability to continue as a going concem in accordance with GASB Statement No. 56. These matters expose the Corporation to a significant credit risk and uncertainty on the collectability of the aforementioned financial instruments that may result in significant losses to the Corporation. The financial statements do not include any adjustments that might result from the outcome ofthis uncertainty. Our opinion is not modified with respect to that matter.

Other Matten Required Supplementary Information Accounting principies generally accepted in the United States of America require that the management's discussion and analysis on pages 5 thru 19, the Ten-Year Claims Development Information, Preliminary and Unaudited Schedules of the Corporation's Proportionate Share of the Net Pension Liability and Corporation's Contributions, and the Schedules of Funding Progress and Employer Contributions for Pension Costs and Postemployment Benefits Other than Pensions on pages 94 thru 98, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial staternents in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary inforrnation in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the inforrnation and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financia} statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 28, 2017, on our consideration of the Corporation's intemal control over financia! reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. Toe purpose of that report is to describe the scope of our testing of intemal control over financia! reporting and compliance and the results of that testing, and not to provide an opinion on interna! control over financia! reporting or on compliance. That report is an integral part of an audit perfonned in accordance with Government Auditing Standards in considering the Corporation' s internal control over financia! reporting and compliance.

San Juan, Puerto Rico February 28, 2017 Certified Public Accountants (of Puerto Rico) License No. 95 expires on December l, 2017. Stamp No. El90119 ofthe Puerto Rico Socicty ofCPA's was affixed to the record copy ofthis report.

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MANAGEMENT'S DISCUSSION AND ANALYSIS {UNAUDITED)

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No assurance is provided.

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

INTRODUCTION The State Insurance Fund Corporation (the Corporation) is a component unit of the Commonwealth of Puerto Rico (the Commonwealth) created by Law No. 45 of April 18, 1935, as amended, known as the Worlcmen Compensation Insurance Act (the Act). Under the provisions of the Act, the Corporation is the exclusive provider of insurance coverage for work related accidents, deaths, and illnesses suffered by workers in Puerto Rico. On October 29, 1992, the Act was amended by Law No. 83 to convert the agency into a governmental corporation and to establish the functions and responsibilities of the Board of Directors, the Administrator and the Industrial Medical Advisory Board. The Act provides that the Corporation's administrative expenses shall not exceed 22% of the total insurance premiums collected during the previous fiscal year. Administrative expenses exclude depreciation and amortization expense, provision for (recoveries of) uncollectible accounts, interest expense and investment managers' fees. The Corporation complied with this requirement of the Act far the year ended June 30, 2016. This section presents a narrative overview and analysis of the financia! performance of the Corporation as of and for the year ended June 30, 2016. The information presented here should be read in conjuction with the basic financia! statements, including the notes thereto.

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FINANCIAL HIGHLIGHTS •



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The Corporation reported a net deficit position of $1, 117 .3 million at June 3 O, 2016 comprised of $1,315. 7 million in total assets and $79 million in deferred outflows of resources, less $2,500.7 rnillion in total liabilities and $11.3 million in deferred inflows of resources. The Corporation's net deficit position mainly resulted from the implementation in 2015 of GASB Statement No. 68, Accaunting and Financia! Reparting far Pensions - an amendment of GASB Statement Na. 27 (GASB Statement No. 68). During 2016, net deficit increased principally because of an impainnent loss on deposits held with the Governmental Development Bank (GDB) of $44 million, net decrease in fair value of investments of $54.4 million and intergovemmental transfers of $163.8 million. Decrease in total assets of $500.9 million in 2016 when compared to 2015. Decrease in total liabilities of $314 million in 2016 when compared to 2015. Decrease in operating revenues of $51.2 million in 2016 when compared to 2015. Toe Corporation has experienced a decreasing trend in premiums collected over the past years, which resulted in a decrease of approximately 3% in premiums collected during 2016. As a result of the downturn in the Puerto Rico economy it is expected that this adverse trend will continue in the upcoming years, therefore, resulting in a negative impact in the cash flows necessary far the Corporation to comply with all its obligations. Decrease in operating expenses of$39.3 million in 2016 when compared to 2015. Decrease in compensation and medica! benefits of $14.9 million in 2016 when compared to 2015.

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

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Accounting and Financia/ Reporting for Postemployment Beneflt Plans Other than Pension Plans (GASB No. 75), it is expected that for fiscal years ending 2018 and later, the net OPEB





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Toe actuarially determined credit for compensation benefits, medical benefits and benefit adjustment expenses decreased by $23.3 million in 2016 ($37.9 million) when compared to 2015 ($61.2 million). Decrease in general and administrative expenses (excluding depreciation and amortization) of $25 million in 2016 when compared to 2015. Toe Corporation had a decrease of $11.8 million in its operating income for 2016 when compared to 2015. The decrease is principally attributed to adjustments to actuarially determined reserves, including the actuarially detennined accrual for reimbursement of premiums which increased in 2016 as compared to 2015 and continued decrease in its operating revenues. At June 30, 2016 the Corporation's unfunded liabilities in connection with the Pension and Other Postemployment plans not covered by GASB Statement No. 68 amounted to $19,532,446 and $30,623,945, respectively. Currently, the Corporation does not have specific assets set aside to cover these liabilities. Due to the issuance of GASB No. 75,

obligation will be replaced by the unfunded liability, which is the difference in the actuarial liability and any assets. Therefore the Corporation will have to recognize the unfunded liability as the OPEB liability which may adversely impact the Corporation's net position. Transfers to other govemmental agencies amounted to $163 .8 million in 2016 as compared to $106.8 million in 2015. These transfers of funds have an adverse impact in the Corporation's resources in order to comply with its obligations and social responsibility. The change in net position for the year ended June 30, 2016 resulted in a decrease of $186.9 million. The negative results are mainly driven by an impairment loss on deposits held with the Governmental Development Bank (GDB) of $44 million, net decrease in fair value of investments of $54.4 million and intergovernrnental transfers of $163.8 million. This was partially offset with operating income of $41.4 million and investment income of $40.9 million.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS This discussion and analysis is required supplementary information to the basic financial statements and is intended to serve as an introduction to the basic financia} statements of the Corporation. The Corporation is a self-supporting entity and follows the enterprise fund reporting; accordingly, the financia! statements are presented using the economic resources measurement focus and the accrual basis of accounting. Enterprise fund statements offer short and long term financial information about the activities and operations of the Corporation. The basic financial statements include the following: {1) Statement of Net Position, (2) Statement of Revenues, Expenses, and Changes in Net Position, (3) Statement of Cash Flows, and (4) Notes to the Basic Financial Statements. The Corporation also includes additional required information to supplement the basic financial statements.

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

-~-·-·---· Toe statement of net position provides infonnation on the Corporation's assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the residual of all elements presented in a financia! position statement reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financia! position of the Corporation is improving or deteriorating. The statement of revenues, expenses and changes in net position presents information on how the Corporation's net position changed during the reporting period. Changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Toe statement of cash tlows shows changes in cash and cash equivalents, resulting from operating, non-capital and capital financing and investing activities, which include cash receipts and cash disbursements infonnation. The notes to the basic financial statements provide additional information that is essential for a full understanding of the data provided in the basic financial statements. The required supplementary information consists of four schedules conceming the following: (1) the ten-year claims development information required by the Governmental Accounting Standards Board (GASB) Statement No. 10, Accounting and Financia/ Reporting for Risk Financing and Related lnsurance Jssues, as amended, (2) the supplementary information of the Corporation's proportionate share ofthe Employees' Retirement System ofthe Govemment ofthe Commonwealth of Puerto Rico (the Retirement System) net pension liability and contributions established in statute as required by GASB Statement No. 68, Accounting and Financia/ Reporting for Pensions - an amendment ofGASB Statement No. 27 (GASB Statement No. 68), (3) the supplementary information of the Corporation's Pension Costs (for pensions not covered by GASB Statement No. 68) as required by GASB Statement No. 27, Accounting for Pensions by State and Local Governmental Employers, and (4) the supplementary information of the Corporation's Postemployment Benefits other than Pensions Program as required by the GASB Statement No. 45, Accounting and Financia/

Reporting by Employers for Postemployment Benefits other than Pensions.

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION ANO ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

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FINANCIAL ANALYSIS Toe following is the condensed financial position ofthe Corporation as of June 30, 2016 and 2015: Coadeased Statements of Net Positlon June 30 2016 Auets: Cash and cash equivalents Accounts receivablc - nct Investments Capital assets - net Other assets

244,681,069 (29,788,072) (727,023, 704) 11,490,664 ~311.084}

160.49% -36.51% -53.13% 10.49% -0.30%

11315,683 1894 79,027,503

1,816,635,021

t50019S 11127}

-27.58%

$

11394, 7111397

l 18951662,524

(500,951¡127)

-26.43%

s

387,850,309 21112,8801867

678,486,963 2,1361247,3~1

(290.636,654) t23,366,434l

-42.84% ·l.09%

2,500,7311176

2,814,734,264

t314,003,088l

-IU6%

111347,132

11,347,132

Total liabllltles Deferred lnflows or resources

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Net posltlon: Net invesunent in capital assets Rcstricted Unrestrictcd

~l,l95 13341978l

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Total net posltlon

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Total llabilities, deíerred lnflows and net positlon



Percent

152,459,267 81,599,435 1,368,489, l 86 109,490,074 104,597,059

Deferred outflows of resources Llabillties: Currcnt liabilitics Non-current liabilitics

Change Amount

397,140.336 51,811,363 641,465,482 120,980,738 104~851975

$

Total usets Total auets and deferred outflows

2015

77,968,067

$

79,027,503

0.00%

0.00%

58,447,635 62,920,001 (1,051.786,508)

19,520,432 (62,920,001) i 143,548,470)

3340% ·100.00% 13.65%

(l,117,366,91 ll

(930,4181872}

!l 86,9481039l

2009%

1,394, 711,397

1,895,662,524

~500,95 l, 127)

·2643%

The Corporation's total assets decreased by $500.9 million in 2016 (or 27.58%).

Decrease in total assets ofthe Corporation to $1,315.7 million in 2016 from $1,816.6 million in 2015 is mainly attributed to the net effect of: an impairment loss recorded on deposits with government bank, a decrease in premiums receivable as a result of the decreasing trend in premiums impositions and collections experienced by the Corporation during the past years, decrease in accounts receivable from investment brokers, decrease in investment securities as a result of a significant decrease in the overall valuation of the portfolio and liquidation of certain positions to obtain the necessary cash to pay in full the existing note payable with financia! institution and pay intergovernmental transfers as a result of new legislation. On April 6, 2016, the Govemor signed Act 21, known as the "Puerto Rico Emergency Moratorium and Financia} Rehabilitation Act". Act 21 authorizes the Govemor to (i) declare a moratorium on debt service payments for a temporary period for the Commonwealth, the Government Development Bank for Puerto Rico (GDB}, the Economic Development Bank for Puerto Rico (EDB), or any ofthe remaining govemment instrumentalities of Puerto Rico, and (ii) stay creditor remedies that may result from the moratorium. It also amends GDB's and EDB's Enabling Acts related to its

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

receivership provisions and authorizes the creation of a temporary "bridge" bank to carry on certain of GDB's functions and honor deposits. It also creates a new fiscal agency and financial authority. On April 8, 2016, pursuant to Act 21, the Governor signed an Executive Order which declared that GDB is in a state of emergency and announced the commencement, as of the date of the Executive Order, of an emergency period as defined in Act 21. As further explained in Note 3 to the financial statements, the Executive Order imposes restrictions on the withdrawal, payment, and transfer requests submitted to GDB by the Judicial Branch, the Legislative Branch, and various government instrumentalities including the Corporation. lt also prohibits the disbursement of any and all loans and advances by GDB, and the payment of any and ali obligations guaranteed by GDB are temporarily suspended. Toe Executive Order will remain in full force and effect until the earlier of (i) June 30, 2016, or (ii) revocation of the Executive Order. On June 30, 2016, the Govemor of Puerto Rico signed Executive Order No. OE-2016-030 (EO 30) and Executive Order No. OE-2016-031 (EO 31) which (i) declared the Commonwealth and several of its instrumentalities, to be in a state of emergency and announced the commencement of an emergency period (as such term is defined in Section 103 of the Act No. 21) for the Commonwealth and such instrumentalities, (ii) extended the state of emergency that had been previously declared for several of the Commonwealth's instrumentalities, (iii) implemented a suspension on transfer obligations of the Commonwealth and certain of its instrumentalities, with respect to the transfer of funds to and from such entities (pursuant to Section 201 of Act No. 21), and (iv) implemented a suspension on the payment obligations of debt issued or guaranteed by the Commonwealth, as well as the payment obligations of certain of its instrumentalities. Toe aforementioned measures will be in place until January 31, 2017, as such date may be extended in accordance with Act No. 21. Because GDB faces significant risks and uncertainties and does not have sufficient liquid financial resources to meet obligations when they become due, management concluded that it is probable that an impairment loss exists on the Corporation's deposits held with GDB as of June 30, 2016. The Corporation followed the accounting guidance provided by the Secretary of the Treasury of the Comrnonwealth in its Circular Letter No. 1300-08-17 dated October 18, 2016. This Circular Letter establishes that the net realizable value of deposits with GDB at June 30, 2016, should be detennined based on the actual subsequent collections received from GDB on such deposits after June 30, 2016. The amount of deposits in GDB not subsequently collected after June 30, 2016, was accounted for as an impairment loss on deposits with government bank of $44 million and was presented as a nonoperating expense in the accompanying statement of revenues, expenses and changes in net position. Such impairment loss is comprised of the balances at June 30, 2016 of the Reserve for Catastrophic Fund (demand deposit account) of $12.1 million and the time deposit renewed during fiscal year 2016 with outstanding balance of $31.9 million.

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On July 2, 2015 Act No. 102-2015 was enacted by the Commonwealth of Puerto Rico. Each fiscal year the Commonwealth issues notes in anticipation of tmces and revenues (Tax Revenue Anticipation Notes or "TRANS") so that the Commonwealth, in its cash flow management program designed to maximize the use of moneys in the General Fund, will have an altemate means of

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.... STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

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providing a liquidity mechanism to cover any temporary cash shortages projected for a fiscal year. TRANS are a type of short term fmancing, which are repaid during the last quarter of the fiscal year. Act No. 102-2015 amends certain existing laws such that certain governmental entities, such as the Corporation, can acquire TRANS from the Commonwealth during fiscal year 2015-2016 in the aggregate amount of $400 million. Pursuant to the Act, the Corporation was authorized on July 15, 2015 to invest $335 million in Tax Revenue Anticipation Notes from the Commonwealth during fiscal year 2015-2016. Toe TRANS should generate a return (6% interest per annum) equal or greater than the average investment return of the Corporation's fixed income portfolio during the 12 month period before March 31, 2015. Toe TRANS was collected, along with accrued interest in June 2016, thus causing the overall increase in the balance of cash and cash equivalents in 2016 as compared to 2015. Toe decreasing trend in premiums collections (decrease of 3% in gross collections for 2016 as compared to 2015) has caused a decrease in the net realizable value of insurance premiums receivable. The decreasing trend in the additional premiums imposed has also caused a decrease in the estimate for additional premiums not yet imposed at June 3O, 2016. Toe Corporation's investment portfolio reflected an unrealized loss of $48.6 million as of June 30, 2016, as compared to an unrealized loss of $32.8 million as of June 30, 2015 as a result of overall market instability, anda further decrease in the market value of the GDB Senior Guaranteed Notes held by the Corporation. All restricted investments were released upon payment in full during August 2015, ofthe Note Payable with financial institution. •

The Corporation's total liabilities decreased by $314 million in 2016 (or 11.16%).

Decrease in total liabilities to $2,500.7 million in 2016 from $2,814.7 million in 2015 is mainly attributed to a decrease in accrued expenses (principally in accrued compensated absences and legal accrual), decrease in securities lending obligations, the payments on capital lease and other notes payable and the pre-payment in full of the existing note payable with financial institution during fiscal year 2016. On the other hand, the Corporation did experience an increase in accounts payable principally due to intergovemmental transfers accrued at year end.

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The Corporation also experienced a significant decrease in accounts payable to investment brokers as a result of a reduction in securities purchased not yet received at June 30, 2016 and overall decreases in the liability for incurred but unpaid benefits and benefit adjustment expenses. On June 17, 2014, the Legislature of the Commonwealth enacted Act No. 66-2014, the "Fiscal Sustainability Act". Toe Fiscal Sustainability Act is a fiscal emergency law enacted to address the fiscal. pressures o~ the Commonwealth imposed by excessive leverage, persistent budgetary deficits, slugg1sh econom1c growth, and fiscally challenged public corporations, among others as exacerbated by the credit rating downgrades that occurred in February of 2014. Toe Fiscal

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 1016 (UN A UDITED)

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Sustainability Act will remain in effect for three fiscal years ending on June 30, 2017, or earlier if certain parameters are met. The principal corrective measures adopted by the Fiscal Sustainability Act include the following: (i) the freezing of benefits under collective bargaining agreements and the reduction of certain nonsalary compensation; (ii) the contribution of the savings generated by certain public corporations to support certain General Fund expenses; (iii) the freezing of formula appropriation increases to the University of Puerto Rico and the municipalities; (iv) the freezing and reduction of formula appropriations to the Judicial Branch, the Legislative Assembly and certain other entities; (v) the reduction in school transportation costs; (vi) the reduction of rates for professional and purchased services; (vii) the freezing of water rates for governmental entities; and (viii) the implementation of a payment plan system for legal judgments, among others. In addition, the Fiscal Sustainability Act imposes substantial additional managerial and administrative controls on the operations of the Executive Branch, including hiring and contracting requirements and procedures, savings targets for rent and utilities, fines to public employees for unauthorized transactions, and overall strengthening of oversight by the Commonwealth's Office ofManagement and Budget (OMB). After the enactment of the Act No. 66-2014, the Corporation entered into certain negotiations with the unionized groups within the Corporation, specifically in relation to the payment of certain benefits. As a result of the enactment of this Act, the Corporation has reported decreases in the accruals for compensated absences and Christmas bonus, and recorded an accrual for intergovernmental transfer of approximately $17 million as of June 30, 2016 representing the certified savings from the enactment of the Act. The Corporation is required to transfer the aforementioned savings of approximately $17 million to the "Fund of Services and Therapies for Special Education Students", in equal monthly installments until fiscal year 2017. Act No. 32-2013, required the Corporation to accrue at June 30, 2016 approximately $6 million related to an additional uniform contribution to the Employees' Retirement System of the Government of the Commonwealth of Puerto Rico (the Retirement System or ERS) to improve its liquidity and solvency. The Act provides for incremental annual contributions from the Commonwealth General Fund and participating employers including the Corporation, beginning in fiscal year 2014 and up to the fiscal year 2033. This additional contribution will be determined annually based on actuaria! studies to be performed by the ERS' s actuaries. The liability for incurred but unpaid benefits and benefit adjustment expenses, includes a reserve for both reported and unreported insured events (compensation and medical benefits), which includes an estimation of future payments and related adjustment expenses. It is developed by an independent actuary from historical benefit expenses and/or payments gathered by the Corporation. The liability for compensation and medical benefits is based on historical claims experience data, assumptions, and projections of future events, including the frequency, severity and persistency of the claims, as well as the inflationary trends. The accrual for reimbursement of premiums represents an estimate actuarially determined as a result of the settlement of premiums under the policies. The assumptions

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... STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

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used in estimating and establishing these liabilities are reviewed annually based on current circumstances and trends. Toe liability for incurred but unpaid benefits and benefit adjustment expenses, has decreased from $760.1 million as of June 30, 2015 to $728 million as of June 30, 2016. A factor driving the fluctuation is the consistent decrease in the temporary total outstanding losses as well as a decrease in cases adjudged and in the actuarially determined permanent total reserve. The implementation of the Global 360 program (described in the compensation and medical benefits section) has resulted in significantly lower levels of temporary total benefits paid since fiscal year 2013. The payments of temporary total benefits decreased by 31 % in 2016 as compared to 2015, and the payments of permanent total decreased by 8% in 2016 as compared to 2015. Also, the consistent reduction in work force, either because of unemployment or migration, is one of the main factors contributing to a consistent decrease in cases filed and adjudged. The discounted total outstanding losses as of June 30, 2016 have decreased by 4% as compared to the estímate in the prior actuaria! study as of June 30, 2015. During 2016, the Corporation hada change in independent actuary. Per the new independent actuary report, the overall cost level has decreased over the last several years, averaging $2.027 per $100 of payroll from 2007 through 2012 versus $1.418 from 2013 through 2016. The distribution of ultimate loss by benefit type has remained relatively consistent over the last ten accident years, with the exception of the temporary total benefit payments which started to decrease significantly since 2012. Also, the death and permanent partial benefit types have been increasing over the most recent three years. For loss adjustment expense increase of 18% in the discounted estimated liability, as compared to 2015, is principally attributed to differences in methodology and assumptions used by the new independent actuary as compared to the prior independent actuary. The Corporation has experienced a decreasing trend in settled premiums, but the actuarially determined accrual for reimbursement ofpremiums increased from $80.5 million as of June 30, 2015 to $87.6 million as of June 30, 2016, because for 2016 it was not discounted since the resulting rate, considering investment retum and duration, was lower than 1%. Toe pension and postemployment benefits other than pension obligations experienced an increase of $2.2 million as compared to obligations as of June 30, 2015. Toe pension obligation increased from $8.2 million as of June 30, 2015 to $10.1 million as of June 30, 2016, and although the postemployment benefits other than pension obligation have been consistently decreasing during the past three years, it hada slight increase from $.9 million as of June 30, 2015 to $1.2 million as of June 30, 2016, because the annual cost remained similar to prior year, but contributions made during fiscal year 2016 were lower than 2015.



The Corporation's deferred outftows and inflows of resources did not change in 2016.

As a result of the implementation of GASB Statement No. 68 during 2015, the Corporation recorded deferred outflows of resources and deferred inflows of resources related to pension plan, resulting

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

from changes in the net pension liability not included in pension expense. Deferred outflows of resources also include $30.6 million related to contributions made after the plan measurement date of June 30, 2014. As of the release date of this report the Commonwealth has not provided audited infonnation to determine the required adjustments to existing balances for the second year of GASB Statement No. 68 implementation, therefore balances remained the same as in prior year. •

The Corporation's net position decreased by $186.9 million in 2016 (or 20.09%).

As of June 30, 2016, the Corporation hada deficit of $1,195.3 million in unrestricted net position, and $77.8 million invested in capital assets-net of related debt, for a total net deficit position of $1,117.3 million. In fiscal year 2016, net position decreased (the deficit increased) by $186.9 million or 20.09%, from a net deficit position of $930.4 million as of June 30, 2015 dueto the net effect of a decrease in operating revenues of 8.68%, a decrease in operating expenses of 7 .34%, which resulted in operating income of $41.3 million, together with a significant increase in non-operating (expenses) revenues of 420.86%, and net of transfers to other governmental agencies of $163.8 million. In 2016, the net deficit increased, principally as a result of an impainnent loss on deposits held with the Govemmental Development Bank (GDB) of $44 million, net decrease in fair value of investments of $54.4 million and intergovernmental transfers of $163.8 million. During 2016, the Corporation paid in full an outstanding note payable with financial institution, which resulted in the release of restricted investment securities, and elimination of the related restricted component of net position.

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The following summarizes the condensed changes in net position of the Corporation for the years ended June 30, 2016 and 2015: Condensed Statements of Revenues, Expenses and Changes in Net Positlon June 30 2016 Opentlng revenues

$

Opentlng expenses: Compensation and medícal bencfits General and administrative Total operatlng expenses Operating income Non-operating (expenses) revenues - net Transfers to other govemmental agencies Cbange In net posltion Net posltion- beglnnlng of year Net posltion- end of year

s

2015

Chanse Amount

Percent

53814301870

5891637,606

i51 12061736}

-8.68%

372,440,636 12415941846 49710351482

387,321,709 1491089,6l l

-3.84% -16.43% -22.23% -420.86%

5361411 1320

(14,881,073) !2414941765} i3913751838l

41,395,388 (64,494,425)

53,226,286 20,100,239

(11,830,898) (84,594,664)

!16318491002}

'10617551532}

(571093 1470}

5348%

( 186, 948,03 9)

(33,429,007)

( 153,519,032)

459.24%

~93014181872}

{89619891865)

!33,4291007}

3.73%

~93014181872l

~ 18619481039)

20.09%

~111171366,91 l}

-7.34%

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

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Toe Corporation recognizes as income the subscribed premiums, which represent the preliminary premiums assessed at the beginning of the fiscal year plus additional premiums imposed or expected to be imposed as a result of the final settlement of premiums under the insurance policy or reduced by any unearned or reimbursable portion or provision for uncollectible accounts, as detennined. Premiums are based on individual employers' reported payroll ledgers using predetermined insurance rates based on the employers' risk classifications. Toe regular policies are issued for a one-year period consistent with the Corporation's fiscal year, which runs from July 1 to June 30. Incidental policies are issued to cover special risks over a pre-detennined period of time. Uneamed premiums represent the remaining portion at the end of the fiscal year, which is attributed to the unexpired tenn of the incidental policies issued during the fiscal year. Policy costs consist mainly of salaries and certain underwriting expenses. Benefits are recorded on an accrual basis, which includes benefits paid anda liability to cover estimated incurred but unpaid benefits and benefit adjustments expenses based on the ultimate settling cost, as detennined by the independent actuary. •

Operating revenues decreased by $51.2 million in 2016 (or 8.68%).

Operating revenues decreased by $51.2 million in 2016 as compared to 2015. The decrease in operating revenues results from a decrease of $10.9 million in insurance premiums eamed, a decrease in miscellaneous income of $9. 7 million, an increase of $25 .3 million in the reimbursement of insurance premiums, and an increase in the provision for uncollectible insurance premiums of $5.2 million. Toe Corporation has experienced a reduction in new insurance policies subscribed of 2% in 2016 as compared to 2015, as well as, in preliminary premiums assessed, and final settled premiums (resulting from reductions in preliminary payrolls informed by employers versus the final payrolls). The downtum in the economy, which has affected the construction and employment levels, has caused such a decrease, as well as, a decrease in incidental premiums.

....

There has been a decrease in the final payrolls reported by employers, as compared to the preliminary payrolls, as well as, there is a decreasing trend in projected and historical results of the settlement of premiums, which caused the decrease in the estímate for additional premiums not yet imposed at June 30, 2016. Also, the decrease experienced by the Corporation in collection of premiums of 3% during 2016 as compared to 2015, has resulted in an increase in the allowance for uncollectible premiums, because of a decrease in the net realizable value of insurance premiums receivable at year end. Toe actuarially determined accrual for reimbursement of premiums experienced an increase of $7 .1 million principally because of a decrease in the discount factor used by the independent actuary.

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)



Compensation and medical benefits decreased by $14.9 million in 2016 (or 3.84%).

Compensation benefits for the year ended June 30, 2016 amounted to $101.3 million, a decrease of $3.7 million or 3.55%, when compared to $105 million for the prior year. Decrease is principally attributed to short tenn disability (per diem) payments, which experienced a decrease of approximately $7 .2 million during 2016, as a result of the Global 360 program described below, resulting also in a temporary total reserve decrease of $5. 7 million, as compared to prior year actuaria! report, and pennanent total benefits actuarially detennined reserve which decreased by $69 .2 million as compared to prior year actuarial report. Overall, compensation benefits paid decreased by 11 % in 2016 as compared to 201 S. As in prior year, the decrease in compensation benefits is principally attributed to short term disability (per diem) payments, as a result of the effect of the implementation of the Global 360 program, in which the Official Disability Guidelines of the Work Loss Data Management are used to determine short term disability (per diem) payments. These guidelines provide minimum and maximum time limits in which cases can remain in resting period, thus shortening significantly the days for which per diem payments are made. Since the implementation of the program in mid-2012, the physician refers to diagnostic codes that prescribe the number of days temporary total benefits should be received for the claimant's type of injury, which is less than a month in the majority ofthe cases. When the prescribed number of days elapse, the claimant must return to work or seek more medical treatment thus resulting in a significantly lower level of temporary total benefits paid since fiscal year 2013. Medica! benefits for the year ended June 30, 2016 amounted to $309 million, a decrease of $34.5 million or 10.04%, when compared to $343.5 million for 2015. The decrease is mainly because during 2015 the Corporation implemented GASB Statement No. 68 which resulted in recording a pension expense of $52.5 million in the medical benefits expenses for the year ended June 30, 2015. The Corporation also has experienced a decrease in medical salaries, as a result of the effect in 2016 of Act No. 3 of 2013, and in the accruals for compensated absences and Christmas bonus as a result of the enactment of Act No. 66 of 2014. The Corporation's medical salaries and related benefits experienced a decrease of approximately 2% in 2016 as compared to 2015. Another factor affecting compensation and medical benefits in 2016 is the credit for compensation benefits, medical benefits and benefit adjustment expenses which decreased by $23.3 million in 2016 when compared to 2015 and results from the adjustments made to the liability for incurred but unpaid benefits and benefit adjustment expenses to confonn it with the actuarially detennined present value of estimated outstanding losses as of June 30, 2016. During 2016 the Corporation engaged a new independent actuary to perform the analysis of the liability for incurred but unpaid benefits and benefit adjustment expenses. The actuarially determined discounted liabilities resulted in a decrease in the temporary total (per diem) liability of $5. 7 million, an increase in permanent partial disability liability of $7.3 million, a decrease in the permanent total disability liability of $69 .2 million, an increase in the death benefit liability of $4 million, an increase in medical liability of $13.9 million andan increase in loss adjustment expense of $11.9 million.

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... STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)



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General and administrative expenses (excluding depreciation and amortization) decreased by $25 milllon in 2016 (or 17.63%).

General and administrative expenses (excluding depreciation and amortization) decreased by 17.63% in 2016 when compared to 2015 mainly because during 2015 the Corporation implemented GASB Statement No. 68 which resulted in recording a pension expense of $28.8 million in the general and administrative expenses of the Corporation for the year ended June 30, 2015. The Corporation also has experienced a decrease in administrative salaries, as a result of the effect in 2016 of Act No. 3 of 2013, and in the accruals for compensated absences and Christmas bonus as a result ofthe enactment of Act No. 66 of 2014. Toe Corporation's administrative salaries and related benefits experienced a decrease of approximately 2% in 2016 as compared to 2015.



Net non-operating (expenses) revenues increased by $84.6 million in 2016 (or 420.86 %).

Net non-operating (expenses) revenues represent principally interest and dividend income, net change in fair value of investments, including derivative instruments, and interest expense. Government accounting policies require that investments be carried at fair value; thus realized gains and losses from the sale of securities and unrealized changes in the fair value of outstanding securities are recorded through operations. Net decrease in fair value of investments, including derivative instruments, amounted to $54.4 million in 2016, a significant fluctuation of $41 million or 305.97% when compared to a net decrease in fair value of investments of $13.4 million in 2015. The significant variation is dueto the fact that the portfolio experienced during 2016 an overall depreciation in its market value, principally in the corporate bonds and GDB notes. Interest and dividend income, net of costs (investment managers' fees) amounted to $40.9 million in 2016, a decrease of $1.9 million or 4.44%, when compared to $42.8 million in 2015. Although the Corporation had interest income of $17.2 million in 2016 earned from the TRANS, the interest income collected on the remaining investment portfolio was significantly lower than 2015, due in part to the overall reduction in the investment portfolio. Interest expense amounted to $7 million in 2016, a decrease of $2.6 million or 27.01% from 2015, as a result of decrease in principal balances of the Notes Payable and Other Notes Payable, and prepayment in full during September 2015, ofthe Note Payable with financial institution. An important factor in the significant fluctuation of net non-operating (expenses) revenues in 2016 is the impairment loss on deposits with GDB of approximately $44 million, recognized by the Corporation for the year ended June 30, 2016. As previously explained, because GDB faces significant risks and uncertainties and does not have sufficient liquid financia! resources to meet obligations when they become due, management concluded that it is probable that an impairment loss exists on the Corporation's deposits held with GDB as of June 30, 2016. Toe Corporation followed the accounting guidance provided by the Secretary of the Treasury of the Commonwealth in its Circular Letter No. 1300-08-17 dated October 18, 2016. This Circular Letter establishes that

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17

STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UNAUDITED)

the net realizable value of deposits with GDB at June 30, 2016, should be determined based on the actual subsequent collections received from GDB on such deposits after June 30, 2016. Toe amount of deposits in GDB not subsequently collected after June 3 O, 2016, was accounted for as an impairment loss on deposits with government bank and was presented as a non-operating expense in the accompanying statement of revenues, expenses and changes in net position.



Transfers to other govemmental agencies-net increased by $57.1 million in 2016 (or 53.48°/o).

The Corporation is required by legislation, to transfer to other governmental agencies funds for programs related to injured employees and their families. During the year ended June 30, 2016, the Corporation transferred funds to other governmental agencies including, the Industrial Commission of Puerto Rico, the Department of Labor and Human Resources, and the Department of the Family, amounting to $163.8 million, as compared to $106.7 million in 2015. Dueto the enactment of Act No. 105 of July 2, 2015, the Corporation was required to mak.e intergovernmental transfers of $55,430,000 to the "Municipal Support Fund 2015-2016", $31,949,000 to the "Legal Responsibility Fund" created by Act. No.73-2014, and $12,621,000 to the "Fund for Services and Therapies for Special Education Students" created by Act No.78-2014. Contributions required during 2016 to the Retirement System pursuant to Act No.32 of 2013 (Additional Uniform Contribution) amounted to $6.4 million (presented as deferred outflows of resources as part of the implementation of GASB Statement No. 68 in 2015) and transfers made pursuant to Act No. 66-2014 amounted to approximately $17 million. CAPITAL ASSETS AND LONG-TERM DEBT



Capital assets-net increased by $11.5 million in 2016 (or 10.49%).

Capital assets are comprised of land, construction in progress, buildings used to render services to workers, medica! and offices' equipment, software and related assets, motor vehicles and assets under capital lease. During the year ended June 30, 2016 the Corporation's capital assets had additions mainly related to the SAP software implementation, acquisition of related licenses and construction in progress of the Industrial Hospital. The Corporation has an outstanding capital commitment of approximately $1 Omillion at June 30, 2016 related to the remodeling and expansion project of the Industrial Hospital. The Corporation entered into an interagency assistance contract with the Puerto Rico Infrastructure Financing Authority, a component unit of the Commonwealth of Puerto Rico, for the development and management of this project in ali its phases, originally for $34 million. The term of the contract ended on June 30, 2016, but the same was amended to increase the amount by $7.2 million and to extend the contract period until June 30, 2017. Toe project is approximately 75% completed.

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Refer to Note 8 to the basic financia! statements for further information regarding the Corporation's net capital assets.

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STATE INSURANCE FUND CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 (UN A UDITED)

Note payable decreased by $209.7 million in 2016 (or 100°/o).

On May 11, 2011, the Corporation entered into a loan agreement (the Loan) with a private financia! institution for the amount of $242,000,000. Toe Loan had a maturity date of May l, 2028 and carried a variable interest rate of 30 day LIBOR plus a 2.25% spread. On August 27, 2015, the Board of Directors of the Corporation approved the prepayment in full of the existing Note Payable with the private financia! institution in conformance with the agreement reached with said financia! institution. Toe Board approved the partial sale of the Corporation' s investment portfolio to obtain the funds to pay offthe debt. ln September 2015, the Corporation paid off approximately $208,000,000 related to the Note Payable, which included principal balance, interest and prepayment penalty. Upon the prepayment of the loan, ali pledged assets were released by the financial institution, therefore, there are no restricted investments in the Corporation's statement of net position as of June 30, 2016. CONTACTING THE CORPORATION'S FINANCIAL MANAGEMENT

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This report is designed to provide ali interested parties with a general overview of the Corporation's finances. Questions conceming any of the information provided in this report or requests for additional information should be addressed to State Insurance Fund Corporation, PO Box 365028, San Juan, Puerto Rico, 00936-5028.

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BASIC FINANCIAL STATEMENTS

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STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

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Statement of Net Position

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June 30, 2016

Assets

Current assets: Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses Investments

$

Total current assets

397,140,336 51,811,363 4,255,175 30,800 430,870,620 884, 108,294

Non current assets: Investments Note receivable from Commonwealth Capital assets-net of accumulated depreciation/amortization: Land Construction in progress Depreciable assets, including software

210,594,862 100,000,000 18,532,166 27,598,776 74,849,796

Total non current assets

431,575,600 1,315,683,894

Total assets Deferred Outflows of Resources

Deferrred outflows related to pension plan

79,027,503

Total assets and deferred outflows of resources

$

1,394,711,397

$

150,480,503 103,338,408 22,053,209 18,525,448 48, 112, 176 38,436,278

Liabilities

Current Iiabilities: Liability for incurred but unpaid benefits and benefit adjustment expenses Accounts payable Accrued Iiabilities Uneamed premiums Accrual for reimbursement ofpremiums Securities lending obligations Current portion of: Other notes payable Obligation under capital lease Total currcnt liabilities

5,965,955 938,332 387,850,309 (Continued)

See accompanying notes to basic financia) statements.

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STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Statement of Net Position June 30, 2016

Non current liabilities: Liability for incurred but unpaid benefits and benefit adjustment expenses Accrued liabilities Accrual for reimbursement of premiums Net pension liability Other notes payable Obligation under capital tease

$

577,516,833 41,793,674 39,499,276 1,417,962,700 9,379,130 26,729,254

Total non current liabilities

2, 112,880,867

Total liabilities

2,500,731, 176

Deferred Inflows of Resources Deferrred inflows related to pension plan

11,347,132

Commitments and Contingencies (Notes 21 and 22) Net Position 77,968,067 (1,195,334,978)

Net investment in capital assets Unrestricted Total net position

(1,117,366,911)

Total liabilities, deferred inflows of resources and net position See accompanying notes to basic financial statements.

$

=---------1,394,711,397

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

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Statement of Revenues, Expenses and Changes in Net Position

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Year ended June 30, 2016 Operating revenues: lnsurance premiums earned Miscellaneous income, net Less: Reimbursement of insurance premiums Provision for uncollectible insurance premiums

614,724,602 5,685,165

$

(46,052,092) (35,926,805} 538,430,870

Total operating revenues Operating expenses: Compensation benefits Medical benefits and legal fees Credit for compensation benefits, medica! benefits, and benefit adjustment expenses Administrative expenses Depreciation and amortization

101,298,700 309,006,331 (3 7,864,395) 116,840,971 7,753,875 497 ,035,482

Total operating expenses Operating income

41,395,388

Non operating revenues (expenses): Interest and dividend income, net Net decrease in fair value of investments Net rebate from securities lending transactions lmpairment loss on deposits with govemment bank Interest on note payable, other notes payable and obligation under capital tease

40,879,878 (54,404,240) 38,694 (43,979,135) ~7 ,029,6222

Total non operating expenses, net

(64,494,425l

Expense before transfers to other govemmental agencies Transfers to other governmental agencies

(23,099,037) ~163,849,002)

Change in net position

(186,948,039)

Net position at beginning of year

(930,418,8722

Net position at end ofyear

$

See accompanying notes to basic financial statements.

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~1,117,366,91

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Statement of Cash Flows Year ended June 30, 2016

Cash flows from operating activities: Excess of collections over reimbursements of insurance premiums Payments of compensation benefits Payments of medica! benefits and legal fees Payments of administrative expenses

$

Net cash provided by operating activities

553,077,463 (90,716,110) (313,7341541) tl 122691,264) 35,935,548

Cash flows from non capital financing activities: Transfers to governmental agencies Decrease in securities lending obligations Rebates of securities lending transaction costs

(159,626,394) (60,992,304) 38,694

Net cash used in non capital financing activities

(220,580,004)

Cash flows from capital and related financing activities: Acquisition of capital assets Payments of note payable Payments of other notes payable, net of imputed interest Payments of obligation under capital lease Payments of interest on notes payable and obligation under capital lease

(191244,539) (209, 733,336) (7,182,293) (847,475) t? 28791960)

Net cash used in capital and related financing activities

(244 2887,603)

Cash flows from investing activities: Proceeds from sales and redemptions of debt and equity securities Purchases of debt and equity securities Decrease in investments held under securities lending transactions Collections of interest and dividend income Change in value of cash equivalents in Govemment Development Bank Collection in excess of originations of employee loans

1,280,964, 921 (639,293,888) 29,961,705 44,206,864 (43,979,135) 22352,661

Net cash provided by investing activities

674,213,128

Net increase in cash and cash equivalents

244,681,069

Cash and cash equivalents at beginning of year

152,459,267

Cash and cash equivalents at end of year

$

397,140,336 (Continued)

See accompanying notes to basic financia( statements.

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Statement of Cash Flows

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Year ended June 30, 2016 Reconciliation of operating income to net cash provided by operating activities: Operating income Adjustments to rcconcile operating income to net cash provided by operating activities: Depreciation and amortization Provision far uncollectible accounts Changes in assets and liabilitics that increase (decrease) cash flows from operating activitics: Accounts receivable Inventaries Prepaid expenses Liability for incurred but unpaid benefits and benefit adjustment expenses Accounts payable Accrued liabilities Unearned premiums Accrual for reimbursemcnt ofpremiums Net cash providcd by opcrating activities

41,395,388 7,753,875 35,926,805

(25,693,282) 134,987 176,097 (32,151,612) 9,103,341 (5,123,121) c2,n1,149) 7,134,219 s _ _ _ _3_.5,.. 93_5_,5_48_

Summary of non-casb tnnsactions:

Securities purchascd but not yct reccived Sccurities sold but not yet dclivcred

s----------~-5-80.,8.0.1. s _____ 3,11111 62,..8.. ,6... 04_

Net decrease in the fair valuc of investments (unrealized gainsllosses)

s ______..,.<4.8.,5,..9.1,.811111 82,.)

Dueto other govemmental agencies -Act No. 66-2014

s _ _ _ _2_1.. ,1.23..,5..,5811111

See accompanylng notes to baslc flnanclal statements.

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STATE INSURANCE FUND

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CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 (1)

Organization

The State lnsurance Fund Corporation (the Corporation) is a discretely presented component unit of the Commonwealth of Puerto Rico (the Commonwealth) created by Law No. 45 of April 18, 1935, as am.ended, known as the Workmen Compensation lnsurance Act (the Act 45-1935). Toe objectives of the law are to: protect workers against the effects of employment related accidents and illness; establish employers' responsibility to insure its employees; establish the type of insurance coverage; and regulate the insurance coverage to make it mandatory for employers. On October 29, 1992, the Act 45-1935 was amended by Law No. 83 to convert the agency into a governmental corporation and to establish the functions and responsibilities of the Corporation's Board of Directors and Administrator, and the Industrial Medica! Advisory Board.

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Toe Corporation provides insurance to public and private employees against injuries, disability or death due to work or employrnent related accidents, or because of illness suffered as a consequence of their employment.

(l)

Summary of Significant Accounting Policies Toe accounting and reporting policies of the Corporation conform to accounting principies generally accepted in the United States of America, as applicable to governmental entities. Toe Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financia! reporting policies. Toe Corporation follows GASB Statement No. 55, The Hierarchy of Generally Accepted Principies for State and Local Governments, in the preparation of its financia! statements. Following is a description of the most significant accounting policies: (a)

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Reporting Entity Toe Governmental Accounting Standards Board (GASB) establishes the criteria used in determining which organizations should be included in these financia! statements. Toe GASB' s Codification of Governmental Accounting and Financia! Reporting Standards, Section 2100, requires the inclusion of govemment organizations for which the Corporation is financially accountable. Financia! accountability is defined as 1) appointment of a voting majority of the component unit's board and either (a) the ability to impose will by the primary government or (b) the possibility that the component unit will provide a financia! benefit to or impose a financia! burden on the primary government; or (2) fiscal dependency on the primary govemment. The Corporation does not have component units for which it is financially accountable. 26

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STATE INSURANCE FUND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements

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June 30, 2016 The Corporation is a major component unit ofthe Commonwealth of Puerto Rico. (b)

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Basis o/Accounting Toe Corporation accounts for insurance premiums, claim costs, acquisition costs, loss contingencies and other related costs in accordance with provisions of the GASB Statement No. 1O, Accounting and Financia/ Reporting for Risk Financing and Related Jnsurance Issues, as amended, which requires that the financia! statements of the Corporation be presented on the accrual basis of accounting in conformity with accounting principies generally accepted in the United States of America.

(e)

Basis o/Presentation

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Toe Corporation' s financial statements use the economic resources measurement focus and the accrual basis of accounting.

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Toe statement of net position and the statement of revenues, expenses, and changes in net position report information on ali activities of the Corporation. The statement of net position presents the Corporation' s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the residual of ali elements presented in a financia! position statement reported as net position. Net position is reported in three categories:

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Net investment in capital assets, consists of capital assets, net of accumulated depreciation and amortization and reduced by outstanding balances for bonds, notes, and other debt that are attributed to the acquisition, construction, or improvement of those assets.



Restricted component of net position consists of net position that is legally restricted by outside parties or by law through constitutional provisions or enabling legislation. As of June 30, 2016, the Corporation has no restricted component of net position.



Unrestricted component of net position consists of net position that does not meet the definition of the two preceding categories. Unrestricted net position often is designated, in order to indicate that management does not consider it to be available for general operations. Unrestricted net position often has constraints on use that are imposed by management, but such constraints may be removed or modified.

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Toe statement of revenues, expenses, and changes in net position presents information on how the Corporation' s net position changed during the reporting period. The Corporation distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses are those that result from the Corporation providing the services that correspond to their principal ongoing operations, which include those that result from providing insurance coverage and compensation benefits to the injured and disabled workers, including death benefits. Revenues and expenses not meeting these definitions are reported as non-operating revenues and expenses.

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The statement of cash flows shows changes in cash and cash equivalents, resulting from operating, non-capital and capital financing and investing activities, which include cash receipts and cash disbursements information.

(d)

New Accounting Standards Adopted For the year ended June 30, 2016, the Corporation implemented GASB Statement No. 72, Fair Value Measurement and Application (GASB Statement No. 72). GASB Statement No. 72 defines fair value and describes how fair value should be measured, what assets and liabilities should be measured at fair value, and what information should be disclosed in the notes to the financia! statements. For the year ended June 30, 2016, the Corporation implemented GASB Statement No. 73, Accounting and Financia/ Reporting for Pension and Related Assets That Are Not within the Scope of GASB No. 68, and Amendments to Certain Provisions of GASB No. 67 and GASB No. 68 (GASB Statement No. 73). GASB Statement No. 73 provides guidance on assets accumulated for pension plans that are not administered through a trust and provides clarity on certain provisions of GASB Statement No. 67 and GASB Statement No. 68. Toe implementation of GASB Statement No. 73 did not have an impact on the Corporation' s financia! statements. For the year ended June 30, 2016, the Corporation implemented GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principies for State and Local Governments (GASB Statement No. 76). GASB Statement No. 76 reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and non-authoritative literature in the event that the accounting treatment for a transaction or other event is not specified within the source of authoritative GAAP. The implementation of GASB Statement No. 76 did not have an impact on the Corporation' s financial statements.

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STATE INSURANCE FuND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

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For the year ended June 30, 2016, the Corporation adopted the provisions of GASB Statement No. 79, Certain Externa/ Investment Pools and Pool Participants (GASB Statement No. 79). GASB Statement No. 79 addresses accounting and financial reporting for certain external investment pools and pool participants. Specifically, it establishes criteria for an externa! investment pool to qualify for making the election to measure all of its investments at amortized cost for financia! reporting purposes. GASB Statement No. 79 establishes additional note disclosure requirements for qualifying external investment pools that measure all of their investments at amortized cost for financia! reporting purposes and for govemments that participate in those pools. The implementation of GASB Statement No. 76 did not have an impact on the Corporation' s financia! statements.

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Revenue Recognition and Unearned Premiums The Corporation recognizes as income the subscribed premiums, which include the preliminary premiums assessed at the beginning of the fiscal year plus additional premiums imposed as a result of the final settlement of premiums under the insurance policy during the year and an estimate for additional premiums not yet imposed. Premiums are based on individual employers' reported payroll ledgers using predetermined insurance rates based on employers' risk classifications. The regular policies are issued for a one-year period consistent with the Corporation's fiscal year, which runs from July 1 to June 30. Incidental policies are issued to cover special risks over a pre-determined period of time. Unearned premiums represent the remaining portian at the end of the fiscal year, which is attributed to the unexpired term of the incidental policies issued during the fiscal year. Insurance premiums due to the Corporation are recorded as insurance premiums receivable, net of the allowance for uncollectible accounts. Premiums receivable consist of both billed and unbilled amounts. Unbilled amounts include premiums for policies, which have not been assessed plus an estimate for additional premiums that are expected to be imposed as a result of the final settlement of premiums under the insurance policy.

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Toe estimates made for the additional and the reimbursable premiums are based on previous experience. The difference between the estimated and the actual amount of the premiums and the reimbursable premiums is recorded in the year when it is determined. The estimate of additional premiums is determined by management and covers the result of the final settlement of premium under the policies and through the audit of the employers' payroll ledgers. The accrual of premiums to be reimbursed represents an estimate actuarially determined based on the historical and projected results of the settlement of premiums under the policies. These amounts are estimates,

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 and while the Corporation believes such amounts are reasonable, there can be no assurance that the amounts ultimately received or disbursed will equal the recorded amounts. The accrual for reimbursement of premiums is discounted to reflect the present value of future reimbursable premium payments. Management believes that discounting such liability results in a better matching of costs and revenues since reimbursable premiums have a long payment cycle. Nevertheless, the accrual for reimbursement of premiums was not discounted at June 30, 2016 because the resulting rate, considering investment return and duration, was lower than 1%. Current and non current portions of the liability far reimbursement of premiums are based on projected actuarially determined payments. (/)

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Policy Acquisition Costs Acquisition costs consist of salaries and certain underwriting expenses, which are primarily related to the issuance of new policies. These costs are expensed as incurred since regular policies are issued far a one-year period, which is consistent with the Corporation's fiscal year, July pt to June 30th. Acquisition costs related to incidental policies with terms beyond one year are deemed to be insignificant and are charged to expense as incurred.

(g)

Reinsurance The Corporation does not use reinsurance agreements to reduce its exposure to large losses.

(h)

Incurred but Unpaid Beneflts and Beneflt Adjustment Expenses

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Benefit expenses are recorded as incurred. Toe Corporation establishes liabilities far estimated incurred but unpaid benefits and benefit adjustment expenses based on the ultimate estimated cost of settling the benefits. Incurred but unpaid benefits and benefit adjustment expenses include: (a) individual case estimates for reported cases (b) aggregate accrual estimates for reported and unreported cases based on past experience modified for current trends, and (c) an estímate of expenses for investigating and settling cases. Toe liabilities for cases reported which have not been adjudged and cases incurred but not yet reported are estimated by an independent actuary. Toe estimated liability also includes cases under reconsideration or on appeal before the Industrial Commission of Puerto Rico, a governmental agency, for additional medical treatment or benefits. 30

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STATE INSURANCE FUND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016 Toe liability for incurred but unpaid benefits and benefit adjustment expenses was discounted to reflect the present value of future benefit payments using a cliscounting factor of 3.54% at June 30, 2016. Management believes that discounting such liability results in a better matching of costs and revenues since compensation benefits have a long payment cycle.

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Management believes that the liability for incurred but unpaid benefits and benefit adjustment expenses, actuarially detennined at June 30, 2016, is a reasonable estímate of the ultimate net cost of settling benefits and benefit expenses incurred. Because actual benefit costs depend upon such factors as duration of worker disability, medica! cost trends, occupational disease, inflation, and other social and economic factors, the process used in computing the ultimate cost of settling benefits and expenses for administering benefits is necessarily based on estimates. Toe amount ultimately paid may be above or below such estimates. Adjustments resulting from changes in estimates of these liabilities are charged or credited to operations in the period in which they occur.

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Current and non current portions of the liability for estimated incurred but unpaid benefits and benefit adjustment expenses are based on projected actuarially detennined payments. (i)

lmpairment on Deposits witli Government Development Bank for Puerto Rico (GDB) Because GDB faces significant risks and uncertainties and does not have sufficient liquid financia! resources to meet obligations when they become due, management concluded that it is probable that an impairment loss exists on the Corporation's deposits held with GDB as of June 30, 2016. The Corporation followed the accounting guidance provided by the Secretary of the Treasury of the Commonwealth in its Circular Letter No. 1300-08-17 dated October 18, 2016. This Circular Letter establishes that the net realizable value of deposits with GDB at June 30, 2016, should be determined based on the actual subsequent collections received from GDB on such deposits after June 30, 2016. The amount of deposits in GDB not subsequently collected after June 30, 2016, was accounted foras an impainnent loss on deposits with (GDB) and was presented as a non-operating expense in the accompanying statement of revenues, expenses and changes in net position.

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STATE INSURANCE FUND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016

O)

Securities Purchased under Agreements to ReseU From time to time, the Corporation enters into purchases of securities under agreements to resell (resell agreements). The amounts advanced under these agreements generally represent short-term loans and are reflected as an asset. The securities underlying these agreements are usually held by the broker or his/her agent, with whom the agreement is transacted.

(k)

lnvestments lnvestments mainly include U.S. government and agencies' obligations, mortgagebacked securities, and corporate debt and equity obligations. Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair Value Measurement and Application (GASB No. 72). Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. Investments in equity securities with readily determinable fair values and ali investments in debt securities are carried at fair value. Money market investments with a remaining maturity at time of purchase of one year or less are carried at cost. lnvestment positions in 2a-7 like externa! investment pools are carried at the pools' share price. Fair value is determined based on quoted market prices and quotations received from independent broker/dealers or pricing service organizations. The Corporation has prívate equity investments, whose fair values have been estimated in the absence of readily determinable fair values. This estímate is based on information provided by the underlying fund managers. Securities transactions are accounted for on the trade date. Realized gains and losses from the sale of securities and unrealized changes in the fair value of outstanding securities are included in net increase (decrease) in fair value of investments. Realized gains and losses are computed as the difference between the proceeds of the sale and the original cost of the investment sold. Gains and losses on the sale of securities are determined based on the specific identification method.

(l)

Securities Lending Transactions Toe Corporation accounts for and reports its security lending transactions in accordance with the provisions of GASB Statement No. 28, Accounting and Financia/ Reporting for Securities Lending Transactions, as amended. This statement establishes standards of accounting and financia! reporting for securities lending transactions in which govemmental entities (lenders) transfer their securities to 32

-

-

.. ...

-

-

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016

-

broker--dealers and other entities (borrowers) for collateral and simultaneously agree to retum the collateral for the same securities in the future.

-

Cash received as collateral on securities lending transactions and investments made with that cash are reported as assets. Securities received as collateral are reported as assets if the Corporation has the ability to pledge or sell them without a borrower default. Liabilities resulting from these securities lending transactions also are reported in the statement of net position. Securities lending transactions collateralized by letters of credit or by securities that the Corporation does not have the ability to pledge or sell unless the borrower defaults are not reported as assets and liabilities in the statement of net position.

-

-

(m)

Toe allowance for uncollectible insurance premiums and other receivables is an amount that management believes will be adequate to absorb possible losses on existing receivables that may become uncollectible based on evaluations of the collectability of the receivables and prior credit loss experience. Because of uncertainties inherent in the estimation process, the related allowance may change in the future.

-

-

Allowance for Doubtful Accounts

(n)

lnventories Inventaries are stated at cost (first-in, first-out method).

(o)

Capital Assets Capital assets are stated at cost. Depreciation and amortization expense is computed using the straight-line method over the estimated useful lives of the assets, or in the case of assets under capital lease, over the term of the lease, whichever is shorter. The Corporation records as capital expenditures, assets with an individual cost of more than $1 OO. Toe useful lives of these assets are as follow: Description Buildings and improvements Medica! and office equipment Software and related assets Motor vehicles Assets under capital leases 33

-

Useful Lives 3-50 years 3-10 years 3 -5 years 5 years Lease term

STATE INSURANCE FUND CORPORATION

-

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Expenditures for repairs and maintenance, which do not extend the useful lives of the assets, are charged to operations in the year incurred. At the time capital assets are sold or otherwise disposed, the cost and related accumulated depreciation are removed from the books and the resulting gain or loss, if any, is credited or charged to operations. Toe Corporation capitalizes interest cost incurred in the construction of significant real estate projects, which consist primarily of facilities for its own use. The amount of interest cost to be capitalized for qualifying assets is intended to be that portion of the interest cost incurred during the assets' acquisition periods that theoretically could have been avoided if outlays for the assets had not been made. The interest rate for capitalization purposes is based on the rates applicable to borrowings outstanding during the period. Interest cost capitalized for the year ended June 30, 2016 amounted to approximately $83,000. (p)

Accounting for the lmpairment o/ Capital Assets The Corporation accounts for asset impainnent under the prov1s1ons of GASB Statement No. 42, Accounting and Financial Reporting for lmpairment of Capital Assets and for Insurance Recoveries. This statement establishes accounting and financia! reporting standards for impairments of capital assets. A capital asset is considered impaired when its service utility has declined significantly and unexpectedly. A capital asset generally should be considered impaired if both (a) the decline in service utility of the capital asset is large in magnitude and (b) the event or change in circumstances are outside the normal life cycle of the capital asset. lmpaired capital assets that will no longer be used by the Corporation should be reported at the lower of carrying value or fair value.

(q)

Deferred Outjlows and lnjlows o/ Resources The Corporation reports deferred outflows and inflows of resources in addition to assets and liabilities. A deferred outflow of resources is a consumption of net position by the Corporation that is applicable to a future reporting period. A deferred inflow of resources represents an acquisition of net position by the Corporation that is applicable to a future period. Pension related deferred outflows and inflows of resources may include changes in proportionate share contributions, contributions to the pension plan subsequent to the measurement date, differences between expected and actual experience in the total pension liability and net difference between projected and actual earnings on pension plan investments.

34

-

...

...

.. -

-

STATE INSURANCE FuND CORPORATION

-

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements

...

June 30, 2016

(r)

Compensated absences, such as unpaid vacation and sick leave pay, are accrued when incurred using the pay or salary rates in e:ffect at the statement of net position' s date. Toe employees ofthe Corporation are granted 30 days ofvacation and 18 days of sick leave annually. An additional amount is accrued for certain salary related benefits associated with the payment of compensated absences. In the event of employee resignation, an employee is reimbursed for accumulated vacation and sick leave days . As a result of Act No.66 of June 17, 2014, sorne ofthese excess accumulations are no longer payable to the employees (see Notes 10 and 18 for further discussion).

...

-

(s)

...

-

-

Termination Beneflts Toe Corporation accounts for termination benefits in accordance with the provisions of GASB Statement No. 47, Accounting for Termination Benefits. This Statement establishes accounting standards for termination benefits. Pursuant to this Statement, the Corporation should recognize a liability and expense for voluntary tennination benefits (for example, early-retirement incentives) when the offer is accepted and the amount can be estimated. At June 30, 2016 no formal voluntary termination benefits were incurred.

-

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Compensated Absences

(t)

Pensions The Corporation accounts for pension costs under the provisions of GASB Statement No. 68, Accounting and Financia/ Reporting for Pensions - an amendment of GASB Statement No. 27. This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate to pensions that are provided through pension plans administered as trusts or equivalent arrangements that meet certain criteria. This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, and expense/expenditures. For purposes of measuring the net pension liability, defened outflows of resources and defened inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Retirement System, and additions to/deductions from the Retirement System's fiduciary net position have been determined on the same basis as they are reported by the Retirement System. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investm.ents are reported at fair value.

35

STATE INSURANCE FUND CORPORATION (A Component Unit ofthe Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

(u)

Postemployment Benefits Other Than Pensions Toe Corporation accounts for postemployment benefits other than pensions (OPEB) under the provisions of the GASB Statement No. 45, Accounting and Financia[ Reporting by Employers for Postemployment Beneflts Other Than Pensions. This statement requires a systematic, accrual-basis measurement and recognition of OPEB cost (expense) over a period that approximates employees' years of service and provides information about actuarial accrued liabilities associated with OPEB and whether and to what extent progress is being made in funding the plan. GASB No. 45 allows employers to amortize the portion of the cost attributed to past service over a period not to exceed thirty (30) years.

(v)

lncome Taxes Toe Corporation, as a major component unit of the Commonwealth, is exempt from the payment of income taxes.

(w)

-

Statement of Cash Flows Toe accompanying statement of cash flows is presented in accordance with the provisions of GASB Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities that Use Proprietary Fund Accounting. The provisions of governmental accounting standards require that the direct method be used to present the funds inflows and outflows of the Corporation. For purposes of the statement of cash flows, the Corporation considers ali highly liquid debt instruments with maturities of three months or less when purchased to be cash equivalents.

(x)

-

....

Future Adoption ofAccounting Pronouncements Toe GASB has issued the following Statements that have effective dates after June 30, 2016:



In June 2015, GASB issued Statement No. 74, Financia/ Reporting for Postemployment Benefit Plans Other Than Pension Plans (GASB Statement No. 74). GASB Statement No. 74 establishes financial reporting standards to state and local governmental other postemployment benefit ("OPEB") plans. Toe requirements of GASB Statement No. 74 are effective for fiscal years beginning after June 15, 2016.

36

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-

-

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Com.monwealth of Puerto Rico)

..

Notes to Basic Financial Statements June 30, 2016

...



In June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (GASB Statement No. 75). GASB Statement No. 75 establishes accounting and financial reporting standards for OPEB that is provided to employees of state and local governments. The requirements of GASB Statement No. 75 are effective for fiscal years beginning after June 15, 2017.



In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures (GASB Statement No. 77). GASB Statement No. 77 requires state and local governments to disclose infonnation about tax abatement agreements. GASB Statement No. 77 requires governments to disclose information about their own tax abatements separately from information about tax abatements that are entered into by other governments and reduce the reporting government's tax revenues. GASB Statement No. 77 is effective for financial statements for periods beginning after December 15, 2015. GASB Statement No. 77 has no impact on the Corporation' s basic financial statements .



In December 2015, GASB issued Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Plans (GASB Statement No. 78). GASB Statement No. 78 addresses a practice issue regarding the scope and applicability of GASB Statement No. 68, associated with pensions provided through certain multiple-employer defined benefit pension plans and to state or local governmental employers whose employees are provided with such pensions. GASB Statement No. 78 amends the scope and applicability of GASB Statement No. 68 to exclude pensions provided to employees of state or local governmental employers through a cost-sharing multiple-employer defined benefit pension plan that ( 1) is not a state or local governmental pension plan, (2) is used to provide defined benefit pensions both to employees of state or local governmental employers and to employees of employers that are not state or local governmental employers, and (3) has no predominant state or local governmental employer (either individually or collectively with other state or local governmental employers that provide pensions through the pension plan). GASB Statement No. 78 establishes requirements for recognition and measurement of pension expense, expenditures, and liabilities; note disclosures; and required supplementary information for pensions that have the characteristics described above. GASB Statement No. 78 is effective for financial statements for periods beginning after December 15, 2015.

... ....

...

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-

37

STATE INSURANCE FUND CORPORATION

-

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016



In January 2016, GASB issued Statement No. 80, Blending Requirements for Certain Components Units, an Amendment of GASB Statement No. 14 (GASB Statement No. 80). GASB Statement No. 80 amends the blending requirements for the financia! statement presentation of component units of ali state and local govern.ments. Toe additional criterion requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. Toe additional criterion does not apply to component units included in the financia! reporting entity pursuant to the provisions of GASB Statement No. 39, Determining Whether Certain Organizations Are Componen! Units. GASB Statement No. 80 is effective for reporting periods beginning after June 15, 2016. GASB Statement No. 80 has no i.mpact on the Corporation's financia! statements.

-



In March 2016, GASB issued Statement No. 81, Irrevocable Split-Jnterest Agreements (GASB Statement No. 81). GASB Statement No. 81 provides recognition and measurement guidance for governments that benefit from irrevocable split-interest agreements. It addresses when these types of arrangements constitute an asset for accounting and financia! reporting purposes when the resources are administered by a third party. lt also provides expanded guidance for circumstances in which the government holds the assets. GASB Statement No. 81 is effective for reporting periods beginning after December 15, 2016. GASB Statement No. 81 has no impact on the Corporation's financia! statements.

-



In March 2016, GASB issued Statement No. 82, Pension Jssues - an Amendment of GASB Statements No. 67, No. 68, and No. 73 (GASB Statement No. 82). Toe objective of GASB Statement No. 82 is to address certain issues that have been raised with respect to GASB Statement No. 67, GASB Statement No. 68, and GASB Statement No. 73. Specifically, GASB Statement No. 82 addresses issues regarding (1) the presentation of payroll.. related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuaria! Standard of Practice for financia! reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. GASB Statement No. 82 is effective for reporting periods beginning after June 15, 2016, except for the requirements related to the selection of assumptions in a circumstance in which an employer' s pension liability is measured as of a date other than the employer' s most recent fiscal year-end. In that circumstance, the requirements for the selection of assumptions are effective for that employer in the first reporting period in

-

...

...

..

38

-

-

STATE INSURANCE FUND CORPORATION

...

(A Component Unit of the Commonwealth of Puerto Rico)

-

Notes to Basic Financial Statements June 30, 2016 which the measurement date of the pension liability is on or after June 15, 2017. Earlier application is encouraged.

-



criteria for detennining the timing and pattem of recognition of a liability and a corresponding deferred outflow of resources for Asset Retirement Obligations (AROs). lt requires that recognition occur when the liability is both incurred and reasonably estimable. GASB Statement No. 83 also requires disclosure of information about the nature of a government' s AROs, the methods and assumptions used for the estimates of the liabilities, and the estimated remaining useful life of the associated tangible capital assets, among other. GASB Statement No. 83 is effective for reporting periods beginning after June 15, 2018.

....

-

Management is evaluating the impact that these Statements will have on the Corporation' s basic financia! statements. (y)

-

-

-

Risk Management The Corporation is exposed to the risk of loss from torts, theft, damages to, and destruction of assets, errors and omissions, employee injuries and illnesses, natural disasters, environmental and other losses. Commercial insurance coverage is obtained for claims that may arise from such matters. Toe commercial insurance coverage is negotiated by the Department of the Treasury of the Commonwealth of Puerto Rico, and the cost is paid by the Corporation. No additional payments were made after the annual insurance costs were determined.

-

In November 2016, GASB issued Statement No. 83, Certain Asset Retirement Obligations (GASB Statement No. 83). GASB Statement No. 83 establishes

(z)

Use of Estimates Toe preparation of financia! statements in confonnity with generally accepted accounting principies in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financia! statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Toe accounts requiring the use of significant estimates include certain receivables, liability for incurred but unpaid benefits and bene:fit adjustment expenses, unearned premiums reserve, accrual for reimbursement of premiums, pension and OPEB liabilities, deferred outflows and inflows of resources and useful lives of property and equipment. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. 39

STATE INSURANCE FUND

CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016 (3)

Cash and Cash Equivalents

Toe Corporation's cash and cash equivalents as of June 30, 2016 are comprised of the following: Description

Amount

Cash on hand Cash in commercial banks

955,269 367 ,176,764

Total cash on hand and in banks

368,132,033

Cash equivalents-investments (see Note 4)

29,008,303

Total

$

397 ,140,336

-

-

Custodia/ Cr~dit Risk

Custodial credit risk related to deposits is the risk that in the event of a financia} institution failure, the Corporation's deposits might not be recovered. The Commonwealth requires that public funds deposited in commercial banks in Puerto Rico must be fully collateralized for the amount deposited in excess of federal depository insurance ($250,000 at June 30, 2016). At June 30, 2016, ali securities pledged by depository institutions as collateral are held by a trustee of the Department of the Treasury of the Commonwealth. As of June 30, 2016 the Corporation had approximately $350.2 million in depository balance with financial institutions, which were insured and/or collateralized. lnterest bearing deposits and demand deposit accounts with GDB are uninsured and uncollateralized. These deposits are exposed to custodial credit risk. Please refer to Note 23. On April 6, 2016, the Govemor signed Act 21-2016, known as the "Puerto Rico Emergency Moratorium and Financia! Rehabilitation Act" (the Act 21-2016). Section 201 and Section 203 of the Act, respectively, authorizes the Govemor to declare a state of emergency for GDB in order to protect the health, safety and welfare of the residents of the Commonwealth and to take any and all actions that are reasonable and necessary to allow GDB to continue carrying out its operations. On April 8, 2016, pursuant to Section 201 of the Act 21-2016, the Govemor signed an Executive Order which declared that GDB is in a state of emergency and announced the commencement, as of the date of the Executive Order, of an emergency period as defined in the Act 21-2016.

40

.....

... . . .

!

...

-

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-

....

-

-

STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Toe Executive Order provides the following: (1) GDB is instructed to honor withdrawal, payment, and transfer requests submitted to GDB by the agencies, public corporations and various government instrumentalities including the Corporation, only if (i) they are reasonable and necessary to fund the provision of essential services, relying on the certifications provided pursuant to Section 203(e)(ii) and (iii) of the Act and (ii) based on the depositor's cash flow needs, it does not project to have an altemate source of funds available from which to pay for such essential services. (2) Toe creation of the "GDB Disbursements Committee", comprised of one representative of each of the Department of the Treasury, the Office of Management and Budget of the Commonwealth (OMB) and GDB. This Committee will evaluate if disbursements are considered necessary to fund the provision of essential services . (3) GDB is authorized to impose weekly limitations on the aggregate amount of ali withdrawals and transfers of deposits in order to preserve its liquidity. (4) To the extent that the total amount ofwithdrawal, payment, and transfer requests, exceed the applicable weekly limitation, such withdrawal, payment, and transfer requests, shall be prioritized by GDB as provided in the Executive Order. (5) All GDB depositors are prohibited from printing or writing new checks or similar instruments creditable against their accounts at GDB unless they obtain a temporary waiver from GDB. All new checks or similar instruments printed or written after the date ofthe Executive Order in violation of this provision shall not be honored and shall be null and void. Any person that intentionally issues any check or similar instrument in violation of Section 203{h) of the Act 21-2016 shall be subject to the criminal penalties set forth therein. (6) Pursuant to Section 203 ofthe Act 21-2016, (a) the disbursement of any and all loans and advances by GDB, and (b) the payment of any and ali obligations guaranteed by GDB are temporarily suspended. The Executive Order shall remain in full force and effect until the earlier of (i) June 30, 2016, or (ii) revocation of the Executive Order.

....

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On June 30, 2016, the Govemor of Puerto Rico signed Executive Order No. OE-2016-030 (EO 30) and Executive Order No. OE-2016-031 (EO 31) which (i) declared the Commonwealth and severa! of its instrumentalities, to be in a state of emergency and announced the commencement of an emergency period (as such term is defined in Section 103 of the Act No. 21) for the Commonwealth and such instrumentalities, (ii) extended the state of emergency that had been previously declared for several of the Commonwealth' s instrumentalities, (iii) implemented a suspension on transfer obligations of the Conunonwealth and certain of its instrumentalities, with respect to the transfer of funds to and from such entities (pursuant to Section 201 of Act No. 21), and (iv) implemented a suspension on the payment obligations of debt issued or guaranteed by the Commonwealth,

41

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

-

Notes to Basic Financia! Statements June 30, 2016 as well as the payment obligations of certain of its instrumentalities. The aforementioned measures will be in place until January 31, 2017, as such date may be extended in accordance with Act No. 21.

-

lmpairment Loss on Deposits with Government Development Bank for Puerto Rico GDB faces significant risks and uncertainties and it currently does not have sufficient liquid financia! resources to meet obligations when they come due. Pursuant to recently enacted legislation, the Govemor of the Commonwealth has ordered the suspension of loan disbursements by GDB, imposed restrictions on the withdrawal and transfer of deposits from GDB, and imposed a moratorium on debt obligations of GDB, among other measures. GDB's management believes substantial doubt exists about GDB's ability to continue as a going concem.

-

As a result, management of the Corporation concluded that it is probable that an impairment loss exists on the Corporation's deposits held with GDB as of June 30, 2016 as follows: Type of Transatdon Cash and cash equivalents: Demand deposit account - Reserve for Catastrophic Fund lnterest bearing time deposit Investment: Puerto Rico Govemment lnvestment Trust Fund (PRGITF) Total

Deposits Held with GDB as of June 30, 2016 Deposit Balance Impainnent Loss Book Balance

S

12,072,531 31,906,604

(12,072,531) (31,906,604)

110421574

$

------45,021,709

11042 1574 ~43,979,1351

1,042,574

Toe Corporation followed the accounting guidance provided by the Secretary of the Treasury of the Commonwealth in its Circular Letter No. 1300-08-17 dated October 18, 2016. This Circular Letter establishes that the net realizable value of deposits with GDB at June 30, 2016, should be determined based on the actual subsequent collections received from GDB on such deposits after June 30, 2016. The amount of deposits in GDB not subsequently collected after June 30, 2016, was accounted foras an impairment loss on deposits with GDB and was presented as a non-operating expense in the accompanying statement of revenues, expenses and changes in net position. In relations to the Puerto Rico Government Investment Trust Fund (PRGITF), management concluded that no impairment loss exists at June 30, 2016, because even though it is a government-sponsored pool administered by GDB, it provides investment opportunities in a professionally managed money market portfolio by investing in high quality securities with minimal credit risk and has the highest principal stability fund rating assigned by S&P Global Ratings. Also, the fund is not subject to the dispositions of the moratorium imposed by Act No. 21.

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...

42

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STATE INSURANCE FUND CORPORATION

-

(A Component Unit of the Commonwealth of Puerto Rico)

...

Notes to Basic Financial Statements

-

June 30, 2016

Foreign Cu"ent Risk

-

Foreign currency risk is the risk that changes in exchange rates will adversely affect the value of a deposit. Cash in foreign currency present minimal foreign currency risk at June 30, 2016. See Note 4 for additional information related to credit risk, foreign currency risk and custodia! credit risk on cash equivalent investments.

... (4)

....

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Investments Toe Board of Directors (BOD) of the Corporation has enacted the Statement of Investment Policy, Guidelines and Objectives (the SIPGO) (amended on December 3, 2013), with the objective of providing general and specific guidance for the maximization of resources available for the payment ofbenefits to injured workers as the pervasive goal ofthe workers' compensation coverage of its insurance program. SIPGO sets as the primary objective for the available funds, to maximize the yield of invested assets, while having the adequate liquidity to pay obligations as they become due. The strategic objective is accomplished through a proper mix of adequate time horizon, risk tolerance and return expectation, and is achieved through strategic assets allocation. SIPGO provides guidance for the strategic assets allocation including the internally managed short term funds, securities selection and related restrictions; sets the responsibilities of the BOD, the Corporation's management, investment consultants, portfolio managers, and custodians. The SIPGO establishes standards for review and communication of compliance with the prevailing policies and procedures. The SIPGO also provides that the Finance Committee of the BOD (the Finance Committee) is responsible for implementing and monitoring the investment program of the Corporation. The Finance Committee meets on a quarterly basis. The SIPGO, as amended, allows management to purchase or enter into the following investment instruments: • • • •

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• • • • •

United States Government and agencies obligations Obligations of the Commonwealth, its agencies, municipalities, public corporations and instrumentalities Government National Mortgage Association (GNMA) Mortgage pass-through guaranteed by United States Government agencies other than GNMA, such as Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA), among others Mortgage and asset-backed securities Common and preferred stocks Corporate bonds and notes (convertible or non-convertible) Money market funds and bank-sponsored short-term investment funds Resell agreements 43

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

-

Notes to Basic Financia! Statements June 30, 2016 • Commercial paper • Non-US Government and corporate issues • Collateralized mortgage obligations (CMOs) • Senior secured loans • Certificates of deposit • Principal protected structured notes • Obligations of life insurance companies • Shares in institutional shares of mutual funds • Fixed income exchange-traded funds (ETFs) • Options, futures and interest-rate swap agreements for hedging and risk control purposes, as well as for the creation of synthetic products, which qualify under any of the foregoing investment categories • Open-end mutual funds with acceptable underlying assets and rated AAA by Standard & Poor' s or AAA by Moody' s • Puerto Rico Government Investment Trust Fund (PRGITF) • Securities lending transactions Toe SIPGO, as amended, establishes limitations and other guidelines on amounts to be invested in the aforementioned investment categories and by issuer/counterparty and on exposure by country. In addition, such policy provides guidelines on the institutions with which investment transactions can be entered into. The BOD of the Corporation will determine, from time to time, other transactions that the Corporation may enter into. Certain investment transactions that are generally considered to carry a greater than normal risk, require the prior approval of Government Development Bank for Puerto Rico (GDB), a component unit of the Commonwealth, before being executed. As of June 30, 2016 investments were classified as current and non-current in the accompanying statement ofnet position as follows: Amount

Description Current as sets: Cash equivalents Investments in debt and equity securities

$

29,008,303 430,870,620 459,878,923 210,594,862

Total current assets Non-current assets $

Total

670,473,785 ==-====:::ii1-===-==-

-

-

-

-

-

-

44

-

-

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

...

Notes to Basic Financia! Statements

-

-

June 30, 2016 Toe Corporation's investments presented as cash equivalents as of June 30, 2016 are comprised of the following:

Description

Amount

Interest bearing deposits held under securities lending transactions: Certificates of deposit with other banks, due within three months

$

Investments in debt securities held under securities lending transactions: Resell agreements, due overnight

14,398,245

Investments in: Money market funds

604,517

Total

-

-

-

14,005,541

$

29,008,303

=================

Fair Value of Investments Toe Corporation measures and records its investments using fair value measurement guidelines established by generally accepted accounting principies. These guidelines recognize a three-tiered fair value hierarchy, as follows: Level 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3: Unobservable inputs.

45

STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 At June 30, 2016, the Corporation had the following recuning fair value measurements: Falr Value Measarements Usia1

June 30, 2016 lavestmeats by falr value level Debt securities U.S. Treasuries U.S. Treasury Bilis U.S. sponsored agencies bonds and notes Mortpge-backed securities Collaterallzed mortgage obligations Asset-backed securlties Corporate bonds and notes Foreign government and corporate bonds and notes Municipal bonds Investments held under securities lending transactions: Money market funds Other

s

10,032,492 2541688

Total debt securities Equity securitles Exchange traded funds Private equlty funds - equity securitles Total equity securities Total investments by fair value leve! lnvestments measared at tbe net asset value (NAV) Private equity funds Altematlve investments Externa! investment pools

5,660,499

1,727,440 16,046,227 24,989,066 4,765,196

Sl1nmcant Otber Observable Iaputs (Level 2)

Siplficant Unobservable lnputs (Level 3)

14,976,0IS 1,089,779 2,230,476 11,943,748 717,645 2,857,155 56,757,062 1,705,402 72,622,731

10,032,492 2541688

228,3751621

6314751608

222,068,054 33,942,011 901689,201

222, 068,054 33,942,011 3017141972

346,699,266

28617251037

5751074,887

350,200,645

164,900,013

59,974,229 59,9741229 164,900,013

59,974,229

9,369,667 44,012,647 131008¿81

Total investments measured at the NA V Total lnvestments measured at fair value

20,636,514 1,089,779 2,230,476 13,671,188 16,763,872 2,857,155 81,746,128 6,470,598 72,622,731

Quoted Prlces In Active Markets ror Identlcal Assets (Level 1)

66 13901S95

s

641,46S,482

Toe Corporation' s investment managers generally use the market approach to value its investment securities, which uses prices and other relevant information generated by market transactions involving identical or similar assets, liabilities or a group of assets and liabilities. Debt and equity securities classified in Level 1 are valued using prices quoted in active markets for those securities. Debt and equity securities classified in Level 2 of the fair value hierarchy are valued using either a bid evaluation or a matrix pricing technique. Bid evaluations may include market quotations, yields, maturities, call features and ratings. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. Equity securities, namely private equity funds, classified in Level 3 are valued using financia! infonnation provided by individual capital fund managers, adjusted if deemed appropriate.

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46

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

Investments valued using the net asset value (NAV) per share (or its equivalent) are considered "altemative investments" and, unlike more traditional investments, generally do not have readily obtainable market values and take the forro of limited partnerships. The Corporation values these investments based on the partnerships' audited financia! statements. If June 30 statements are available, those values are used preferentially. However, some partnerships have fiscal years ending at other than June 30. If June 30 valuations are not available, the value is progressed frorn the most recently available valuation taking into account subsequent calls and distributions. The following table presents the unfunded commitments, redemption frequency (if currently eligible), and the redemption notice period for the Entity's altemative investments measured at NAV: FalrValue

Unfuaded Commitmeats

Redemption Freguea2:

Redemptlon Nodce Perlod

lnvestments meuured at tbe net uset value (NAV) McCoy Investments 11, L.P. Pluscios Fund LLC Eaton Vanee Institutional Senior Loan Fund Puerto Rico Oovemment Investment Trust Fund

9,369,667 44,012,647 11,965,707 11042,574

$

4,395,674

N/A

N/A

Quarterly Quarterly Daily

65 days 65 days S days

66,390,595

$

Investments in fixed-incorne externa! investment pools include approximately $1,042,000 in 2016, invested with the Puerto Rico Government Investment Trust Fund (the PRGITF), a government-sponsored pool, which is administered by GDB. Toe PRGITF may purchase only high quality securities denominated in U.S. dollars that the investment advisors believe present rninimal credit risk. Toe PRGITF had an average maturity of less than 60 days; accordingly, they were presented as investments with maturity of less than one year. The Corporation was exposed to custodia! credit risk. This pool is subject to regulatory oversight by the Commissioner of Financia! Institutions of Puerto Rico. Toe fair value of the pool is the same as the fair value ofthe pool shares. Toe fair value of investments in limited partnerships and altemative investments as of June 30, 2016 amounted to approxirnately $156.3 million. The fair values of these investments have been estimated by the corresponding general partner or fund manager of these partnerships and disclosed in its respective separate audited financia! statements. Toe allocations of net gain and net loss to the limited partners are based on certain percentages, as established in the limited partnership agreements. Toe investments in limited partnerships were as follows:

-



During the fiscal year 2016, the Corporation made contributions of $1,278,571 to the Guayacán Private Equity Fund L.P. 11, a Delaware limited partnership created by Grupo Guayacán, Inc., as General Partner, that has a total amount invested at June 30, 2016 of $9,818,945. Toe Corporation has a total commitment of $10.0 million. The 47

STATE INSURANCE FUND CORPORATION

-

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Corporation received no cash distributions during the fiscal year 2016. Tbis fund seeks to provide investors with a superior investment return and extensive diversification by investing in nineteen ( 19) private equity investment partnerships in the United States and Europe. This fund also invests a portian of its assets in a Puerto Rico based private equity investment entity.







During the fiscal year 2016, the Corporation made contributions of $3,371,128 to the Guayacán Fund of Funds III, L.P ., a limited partnership organized in April 2007, pursuant to the laws of the State of Delaware, bringing the amount invested at June 30, 2016 to $36,171,087. Toe Corporation has a total commitment of $40.0 million. Toe Corporation received cash distributions of $6,600,000 during fiscal year 2016. This partnership intends to seek out, invest in, and add value to companies, which will be based or operating in Puerto Rico or in companies whose products or services are targeted at the U. S. Hispanic market, with specific interest in those companies where Advent-Morro's Equity Partners, Inc. Puerto Rico contact, know-how and track record can be leveraged to enhance investment selection and post-investment value-add. Guayacán Private Fund of Funds III, L.P. will strive to have a balanced mix of portfolio investments primarily focusing on later stage opportunities such as: expansion financing, leveraged buyouts, management buyouts, and recapitalizations. This partnership may invest in de-novo companies that are being set up to enter established industries via market consolidation opportunities and/or intemal growth. During the fiscal year 2016, the Corporation made contributions to the Guayacán Fund ofFunds IV, LP, a Delaware limited partnership organized in February 23, 2015 by Grupo Guayacán, Inc. as General Partner of $4,250,000, bringing the amount invested at June 30, 2016 to $7,750,000. The Corporation has a total commitment of $50.0 million. Toe Corporation received cash distributions of $750,000 during fiscal year 2016. Toe Partnership's purpose is to achieve superior rates of return by investing in a diversified portfolio of United States and Intemational private equity investment partnerships and other limited liability vehicles that operate as pooled investment vehicles that, in turn, primarily malee equity and equity-related investments in private businesses. During the fiscal year 2016, the Corporation made no additional contributions to the the U.S. Government Properties Income & Growth Fund, L.P. (USG), a limited partnership organized in August 2011, pursuant to the laws of the State of Delaware. This partnership is a real estate fund that targets investments in assets leased to the U.S. General Services Administration and other federal leases located in the United States to provide current income and potential asset appreciation. Toe Corporation has a total commitment of $25.0 million. At June 30, 2016, the Corporation holds gross shares of 1,880,249 of Easterly Government Properties, Inc. (EGP) securities 48

-

..

...

... ...,

-...

STATE INSURANCE FUND CORPORATION

-

(A Component Unit of the Commonwealth of Puerto Rico)

-

Notes to Basic Financia! Statements June 30, 2016

-

held by the USG and received dividend income of $1,222, 163 during 2016. During 2015 EGP announced a public offering which resulted in the subsequent (July 2016) liquidation of the shares that the Corporation held in the fund. The shares (100%) were liquidated ata discount in two sale transactions that took place on July 13, 2016 and July 18, 2016, making the liquidation plan final. Following the provisions of GASB Statement No. 72, Fair Value Measurement and Application (GASB Statement No. 72), the Corporation reported this investment at the liquidation price of the sale transaction (excluding transaction costs), at June 30, 2016.



During the fiscal year 2016, the Corporation made additional contributions of $10,604,326 in McCoy Investments Il, L.P., a limited partnership organized in August 2011, pursuant to the laws of the State of Delaware, and had a return of capital of $4,193,612 in 2016, bringing the amount invested to $10,604,326 at June 30, 2016. The Corporation has a total commitment of $15.0 million. This partnership was organized to invest in other pooled investment portfolio funds investing primarily in private equity, including investments in U.S. and non-U.S. venture capital, leveraged buyout, distressed, turnaround, expansion capital, mezzanine and special situation funds.



During the fiscal year 2016, the Corporation made additional contributions of $2,743,458 to the limited partnership Palladium Equity Partners IV, L.P. (PEP IV), a partnership established in April 2014 by Palladium Equity Partners, LLC, a private investment firm focused on investments in the fast-growing U.S, bringing the amount invested to $16,072,520 at June 30, 2016. PEP IV will invest in lower-middle market companies - particularly founder-owned enterprises - and with a focus on the U.S. Hispanic market. Toe Corporation received distributions of $665,385 during fiscal year 2016. Toe Corporation has a total commitment of $31.0 million.



At June 30, 2016, the Corporation holds 1,365,948.287 shares in the Eaton Vanee Fund at a price of $8. 76 per share, and received dividends and redemptions of approximately $21,000,000. Toe Eaton V anee Fund is an altemative investment in senior secured loans managed by Eaton Vanee Management and is a separate investment fund of Eaton Vanee Institutional Funds, an exempted company incorporated with limited liability in the Cayman Islands. The Fund's investment objective is to provide a high level of current income as is consistent with the preservation of capital, by investing in a portfolio primarily of senior floating rate loans. The commitment in the Eaton V anee Fund is of $46.5 million.

...

-

-

-

-

During 2016 no additional contributions or distributions were made or received from the Pluscios Fund LLC, which is an altemative investment in a diversified hedge managed by

49

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Pluscios Fund LLC, a Delaware limited liability corporation. Pluscios Fund LLC is of $46.5 million.

Toe commitment in the

-

Toe following table summarizes the type and maturity of investments held by the Corporation at June 30, 2016. Expected maturities will differ from contractual maturities, because counter parties may have the right to call or prepay obligations with or without call or prepayment penalties. As of June 30, 2016 more than 5% ofthe Corporation's investments are in municipal bonds from the issuer GDB (11 %) (concentration of credit risk). Ju11clO 2016 AftcrOac to FlvcYean OacYear Wltbln

lnvatment TlJ!! s U S. Treuuries U. S. Treuury Bilis U. S. sponsorcd agencie, bond• and notes: Fcdcral Home Loan Bank (FHLB) Federal Home Loan Monpge Corporatlon (FHLMC) Federal National Mongage Asloc:ialion (FNMA) Mort¡age-backed 1ecuritics: Oovcmment National Mortgage Association (ONMA) FNMA FHLMC Collaterallz.ed Mortgage Obliptions (CMO's) issued andlor guarantced by: GNMA FNMA FHLMC Assct·Backed Securitics Corporate Bonds and Notes Foreign Govemment and Corporate Bonds and Notes Municipal Bonds Money Market Funds Extemal Jnvestments Pool· Fixed-lncome Securitics lnvestments held under securities lendin1 tnnsactions: Money Mllket Funds lnterest Bearlng Deposits Resell Agrcements Other Total debt sccurities and ftx•income extemal ínvestment pools

s

2,613,704 1,089,779

6,172,249

Aftcr Flve to Ten Vean 9,023,662

AftcrTen Vean 2,826,899

Total

s

20,636,514 1,089,779

326,010 771,971 311,358

326,010 423,660

1,195,631

397,477

708,835

4,672,728 5,802,221 l,294,627

4,672,728 7,703,833 1,294,627

1,810,693 8,510,729 6,442,450

604,517

1,810,693 8,510,729 6,442,450 2,857,155 81,746,128 6,470,598 72,622,731 604,517

13,008,281

13,008,281

10,032,492 14,005,541 14,398,245 2541688

10.032,492 14,005,541 14,398,245 254.688

1,901,612

3,478,738

59.797,343

2,857,155 37,148,144 1,976,115 72,622,731

122,2711852

35,000,085 4,305,293

50.654~12

6,119,161 189,190

37,6681698

270,392~05 222,068,0S4 33,942,011

Equity secunties Exchange traded ft.mds Private equity funds -equíty securitles: Guayacin Prlvate Equity Fund L.P. 11 Guayacin Fund of Funds 111, LP. Ouayac:tn Fund ofFunds IV, LP. US Oovemment Propertie.1 lncome & Orowth Fund. LP. McCoy lnvestmcnts 11, L P. Palladlum Equlty Partners IV, LP. Plusdos Fund LLC

10,218,391 29,482,960 6,683,260

...

-

-

30,714,972 9,369,667 13,589,618 «.0121647

s

Total

670,4731785

50

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

-

Notes to Basic Financia! Statements June 30, 2016

1

At June 30, 2016, the Corporation has variable-rate interest investments, which reset in the frequency shown below, at 100% of an interest rate index plus a spread, as follows:

Res et

Investment Tme

Amount

CMO's issued and/or guaranteed by:

GNMA

-

-

-

Monthly Monthly Monthly Quarterly Semiannually Semiannually

FNMA FHLMC Corporate bonds and notes Corporate bonds and notes US Treasury bonds and notes

$

1,480,411 4,184,610 3,316,974 5,469,302 380,203 2,277,279

$

17,108,779

Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. SIPGO expects to achieve capital preservation and income generation by investing in a diversified portfolio of marketable investment grade fixed income and equity securities. As of June 30, 2016, the SIPGO had established the optimum or efficient allocation for the total portfolio in accordance with the time horizon, risk tolerance, retum expectations, and assets class preferences as follows:

Assets Classes

Lower

Stocks:

Domestic stocks Intemational stocks Fixed lncome:

Domestic bonds Selective high yield Non US Bonds Cash and cash equivalents Altemative investments Private equities

% Allocation Limits Tar¡et

UEI?er

20.0º/o

25.0%

25.0%

20.0% 0.0%

22.5% 2.5%

25.0% 5.0%

40.0%

40.0%

50.0%

25.0% 6.0% 2.5%

31.5% 6.0% 2.5%

50.0% 8.0% 5.0%

O.O-Yo 25.0% 8.0%

0.0% 25.0% 10.5%

S.0% 30.0% 15.0%

51

/

STATE INSURANCE FUND CORPORATION

-

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Toe SIPGO limits its exposure to interest rate risk by setting duration of the investment portfolio of the fixed income assets not to exceed more than 25% of the duration of the specific market selected as a benchmark. Toe duration is a measure of a debt investment's exposure to fair value changes arising from changes in the interest rates. lt uses the present value of cash flows weighted for those cash flows as a percentage of the investment's full price. As of June 3 O, 2016 the duration of a fixed income portfolio amounted to 4.6 years.

Credit Risk Toe credit risk related to investments is the risk that debt securities in the Corporation' s portfolio will decline in price or fail to make principal and interest payments when due because the issuer of the security experiences a decline in the financia! condition. The Corporation limits its credit risk by investing principally in high quality investments (rated BBB or better, according to Standard and Poor's or other equivalent rating agencies when maturities are longer than ayear). Up to 20% of the total fixed income portfolio may be invested at any time in Selective High Yield securities (i.e. securities rated below BBB), but never lower than B. BBB is the lowest of investment grade ratings.

-

A minimum of 10% of all funds shall be placed in Puerto Rico investments such as: •

Certificates of deposit of GDB, or any other type of deposit with GDB



Securities issued by GDB; or any other investment previously approved in writing by GDB that is, in the judgment of GDB, an investment that positively impacts the economic development of Puerto Rico.

In addition, the Corporation restricts investment in certain securities to avoid concentration and/or increase duration.

-

52

-

'

...

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016

... 1

-

-

On December 19, 2013 the Corporation entered into a Note Purchase Agreement (the Agreement) with GDB whereby the Corporation agreed to purchase from GDB Senior Guaranteed Notes (the Notes) in an aggregate amount of $110,000,000 which are guaranteed by the Commonwealth of Puerto Rico' s full faith, credit and taxing power pursuant to Act No. 12 of the Legislature of Puerto Rico, approved on May 9, 1975, as amended (the Guaranty Act). The notes bear interest, payable monthly, in arrears, on the first day of each month at 8% per annum, commencing on February 1, 2014. Toe notes mature as follow:

Maturity Date (December 1) 2017 2018 2019

Principal Amount $

Toe Notes are carried at fair value amounting to $67,386,000 at June 30, 2016 and are presented as municipal obligations. Since the Notes are a private placement between the Corporation and GDB, fair value is not readily available and is estimated on a monthly basis by the investee using as reference the retum of the Commonwealth general obligations with similar terms. At year end, the Corporation validates the reasonableness of the fair price with its externa! independent investment consultant. GDB faces significant risks and uncertainties and it currently does not have sufficient liquid financia! resources to meet obligations when they come due. Pursuant to recently enacted legislation, the Governor of the Commonwealth has ordered the suspension of loan disbursements by GDB, imposed restrictions on the withdrawal and transfer of deposits from GDB, and imposed a moratorium on debt obligations of GDB within a previously announced emergency period that will likely last until January 31, 2017 (with an option for an extension of not more than two months), among other measures. As a consequence, subsequent to year end, GDB is in default on its payments of interests on the Notes held by the Corporation. The Notes have been assigned a crcdit rating of D (default) by Standard & Poor's Global Rating and represent a credit risk to the Corporation. At the date of issuance of these financia! statements management does not have sufficient available evidence to make an estimate of the probable loss on these Notes. Therefore, the financia! statements do not include any adjustments that might result from the outcome of this uncertainty. Please refer to Notes 3, 6, 23, and 24.

53

-

40,000,000 30,000,000 40,000,000

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

All of the Corporation's investm.ents in U.S. Treasury securities and mortgage-backed securities guaranteed by GNMA carry the explicit guarantee of the U.S. government and represent no risk therefore have been excluded from the following table. The credit quality ratings for investments in debt securities, excluding U.S. Treasury securities and mortgagebacked securities guaranteed by GNMA, at June 30, 2016 are as follows: 1~•Im!

-1,M__

....M±!I.M:..

~

1111:11111:

~-111111 •1•1111: ~~

e

Nl!!!m

Illll

US.11111IIIOlldQIIIClabollllallld1111a Pedall Ho• a-lai*(FHUI) P'ldml H- 1-Mo"PF ColpOlllloa (FHLMC)

l26.0IO

326.010

1.195,631

1,195.631

P'ldaalNllaollllMonpfl

Mo.,.........~ A9CIIIIIII !l'NMA)

FNMA FHlMC

ean.....ri. -"PF obllpli-

'701,135

108.135

7,703,,133 1.l"'.627

7.103.133 1.l'M,617

I.Slo:729 u,12,,1!0 1.511,116 16.521039

60Ul7

UI0,129 u,11,.uo 2.157,155 11,7,16.121 6,,170,591 '72,622.731 60,1,517

11,965.107

13,0DUII

(CMO'a) luuDd Ddfor auallliecd by

FNMA FHLMC ~,81Cbdllcurill11 Ca,pon11 llonda ud Netel F o l l l p ~ lloadallldNola Mllllldpll loada

1.176,029

1.900.590

,.., ...........

IJ31.,16l

l!xSerml - - - - - 1 · Fbed-1-IKUIIII .......... lllld . . . llQlftllcs

11,971.115 1.73,1,01'

-

1.mm 1.675.990

6.11'7.llS 326.ffl

6)0,,161 1n.1,o

13U9S

.U91J69

67J16,0CID

IJM2.!7.t

lalllaW--

-

10.032.,192

Mom)'Mubtl'ada 111111111 IIUIIII Deposita Rutll Apeemalll Olher TalaldclllNCllrilleludllxoll-lnco1111 exlClllll1--pools

IS,020,519

J,,5,1.4.531

12,,1()5.UI 12,391.1.tS

- ---

-----S

16 590 1,17

MI 111.0IO

39,12U05

1.600,000 Z.OCIQ.000

1J 111119

9.151,.473

~~

67Jl6000

10.032,,492 U,OIISJ,11 IU9U.t5

1Sf611

15UU

11.l,l,l:2tf

m11u,1

Custodia/ Credit Risk Custodia! credit risk for investments is the risk that, in the event of the failure of the counterparty to the transaction, the Corporation may not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. At June 30, 2016, all securities held in portfolio were registered in the name of the Corporation and were held in the possession of the Corporation' s custodian bank, JP Morgan Chase Bank, N.A., except for securities lent (see Note 12). Interest bearing deposits with other banks held under securities lending transactions (see Note 12) are uninsured and uncollateralized. These deposits are exposed to custodia! credit risk. In accordance with its investment policy, the Corporation manages its exposure to declines in fair values by structuring the investment portfolio so that securities mature to meet cash requirements for compensation and medica! benefit payrnents, thereby avoiding the need to sell securities on the open market prior to maturity. lnvestments in equity securities are not subject to the maximum maturity policy since they do not carry a maturity date. The Corporation is expected to achieve capital preservation and income generation by investing in a diversified portfolio of marketable, investment grade core fixed-income securities.

-

-

54

-

STATE INSURANCE FUND CORPORATION

-1

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 As of June 30, 2016, investment maturities as a percentage of total debt securities and fixedincome extemal investment pools are as follows:

1

-

Maturity

Maturity %

Within one year After one to five years After five years to ten years After ten years

22% 45% 19% 14%

Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. Toe Corporation's investment policy permits investing in intemational stocks to diversify the risks of the investment portfolio. The Corporation limits its exposure to foreign currency risk by limiting the total amount invested to a 10% of the portfolio. As of June 30, 2016, the Corporation had the following investments denominated in foreign currency: Descri2tion

-

Common stock

-

Preferred stock and other equities

-

FairValue

Currencl

Total

$ Australian Dollar Canadian Dollar Swiss Franc Danish K.rone Euro British Pound Hong Kong Dallar lndonesian Rupiah Japanese Yen Mexican Peso Norwegian Krone Swedish Krona Singapore Dollar South Afri can Rand Euro

426,882 1,092,079 2,183,791 226,738 6,405,826 3,803,625 648,367 289,771 6,555,729 253,393 501,709 495,479 435,738 308,964 544,393

$

24,172,484

Interest and dividend income for the year ended June 30, 2016, consists of the following: 55

-

STATE INSURANCE FUND CORPORATION (A Component Unit ofthe Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016 Amount

Description

Interest income on interest bearing deposits with GDB Interest income on GDB Notes Interest income on investments Interest income on TRANS Dividend income on investments Dividend income on investment in PRGITF ()therinterestincome

987,560 8,800,000 10,119,616 17,252,500 8,062,464 2,669 154,838

$

45,379,647 Less investment managers' fees

(4,499,769)

Total interest and dividend income-net

$

40,879,878

==--=========-==

-

Net increase in the fair value of investments for the year ended June 30, 2016, consists ofthe following:

2016 Description

Investments

Derivative lnstruments

Total

Gross realized gains Gross realized losses N et decrease in fair value

$

56,335,581 (62,065, 185) {47,292,4882

115,773 (198,527) {l,299,394}

56,451,354 (62,263,712) {48,591,882)

Total

$

,53,022,092)

!1,382,148)

!54,404,2402

-

56

-

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

-

Notes to Basic Financial Statements June 30, 2016

(S)

Accounts Receivable-Net Accounts receivable as of June 30, 2016, consist of: Amount

Description

-

Insurance premiwns receivable, including estimated additional premiums-net of allowance for uncollectible insurance premiums of$357,553,598 Interest and dividends receivable Securities sold but not yet delivered Employees' accounts receivable, collateralized with motor vehicles-net of allowance for uncollectible accounts of$2,293,754 Other accounts receivable-net of allowance for uncollectible accounts of $162,496,999

-

43,638,830 1,543,324 3,628,064 1,662,423

$

Total

-

$

__ ____ 1,338,722 ...... 51,811,363

Insurance premiums receivable include an estimate for additional premiums of $58,036,428 as of June 30, 2016. Toe Corporation follows a policy of not charging--off uncollectible insurance premiums against the related allowance for uncollectible accounts. Other accounts receivable mainly include the portion of insurance premiums of uninsured employers considered to be collectible. (6)

Note Receivable from Commonwealth On June 4, 2015 Act No. 80-2015 was enacted to authorize the Corporation, among other governmental agencies, to issue a loan and/or a contribution to the General Fund of the Commonwealth of Puerto Rico in the aggregate amount of $125 million, ensuring that the necessary amounts to amortize the related debt, be assigned in the operational budgets of the Commonwealth. Pursuant to the Act, on June 5, 2015, the Corporation granted a loan in the amount of $100 million to the Department of Treasury of the Commonwealth of Puerto Rico, at a 1% interest rate, to be payable along with the principal amount on an annual basis from July 31, 2017 through July 31, 2032. The payments for this loan will be consigned annually in the General Budgets ofthe Commonwealth until July 31, 2032. Toe Corporation has a significant uncertainty over the collectability of this Note Receivable and the GDB Senior Guaranteed Notes (Refer to Note 4). The Commonwealth of Puerto Rico and GDB face significant risks and uncertainties since them do have sufficient liquid financia! resources to meet obligations when they come due. At the date of issuance of these financia! statements management does not have sufficient available evidence to malee an estimate of the probable loss on these financia! instruments. Therefore, the financia! statements do not include any adjustments that might result from the outcome of this uncertainty (Refer to Notes 4, 23 and 24).

-

57

STATEINSURANCEFUND CORPORATION {A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016

(7)

Inventories Inventaries as of June 30, 2016, consist of:

Description

(8)

Amount

Medicines and medica! supplies Office materials and supplies

$

Total

$

3,703,186 551,989 4,255,175

-=====---==---

Capital Assets-Net The activity of capital assets far the year ended June 30, 2016 is as follows: Balance June 302 2015

Descrl2tlon Capital assets not subject to depreciation and amortization: Land Land-under capital tease Construction in progress

$

Capital assets subject to depreciation and amortization: Buildings and improvements Medical and office cquipment Software and related assets Motor vehicles Assets under capital leases: Building and improvements

Decrease

Capital assets being depreciated and amortized-net $

Balance June 302 2016

11.382,166 7,lS0,000 1;1081747

15,4901029

11,382,166 7,150,000 272598.776

30,6401913

15,490,029

461130,942

l 13,069,3S5 S0,623,132 16,647,981 942,921

160,161 535,996 2,189,538 7,240

(54,042) (154, 748) (782,035) (92,445)

2718501000

Less accumulated depreciation and amortization: Buildings and improvements Medical and office equipment Software and related assets Motor vehicles Assets under capital leases: Building and improvements

Capital assets-net

lncrease

113,175,474 51,004,380 18,055,484 857,716 271850.000

20911331389

2,892,935

( 1,083,270)

(56,780, 173) (45,686,265) (12,960,457) (932,334)

(2,847,229) (784,621) (3, 181, 778) (11,914)

10,132 154,748 1,687,520 92,445

(59,617,270) (46,316, 138) (14,454,715) (851,803)

210,9431054

~ 14,8531332)

(13,92419992

{928,333)

{13012841228)

(7,753,875)

1,944.845

(136,093,258)

7818491161

(41860,940)

8611575

74.849,796

109,4901074

10,6291089

861,575

120,9801738

-

58

-

-

STATE INSURANCE FUND CORPORATION

1

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

-

As of June 30, 2016, the net carrying value of assets under capital leases amounted to $20,146,668. Amortization of assets under capital leases amounted to $928,333 for the year ended June 30, 2016.

-

No impairment on long lived assets was recorded for the year ended June 30, 2016. (9)

Liability for Incurred but Unpaid Benefits and Benefit Adjustment Expenses

1

-

-. .

-

-

Toe liability for incurred but unpaid benefits and benefit adjustment expenses is based on historical claims experience data, assumptions, and projections as to future events, including claims frequency, scverity, persistency and inflationary trends determined by an independent actuaria! study. This liability has been discounted at 3.54% in 2016. The actuaria! study for 2016 considered the experience of the Corporation from fiscal years 2000-2001 to 20152016, and included estimates for cases reported that have not been adjudged and cases incurred but not reported. Toe assumptions used in estimating and establishing the liability are reviewed annually based on current circumstances and trends. Any resulting adjustments are considered to be a change in an accounting estímate and accounted for as an increase (decrease) to expenses of the Corporation during the current period. Toe Corporation has established a liability for both, reported and unreported insured events, which includes estimates of future payment of benefits and related benefit adjustment expenses. Toe liability for incurred but unpaid benefits and benefit adjustment expenses as of June 30, 2016 consists of: Amount

Description Compensation benefits: Cases adjudged: Long-tenn partial disability Long·tenn total disability Death

$

16,282,203 259,958,800 34.4641845 310.705,848

Cases reported not adjudged and cases incurred but not reported: Short-tenn disability (per diem) Long-tenn partial disability Long·tenn total disability Death

56,118,938 136,380,048 12,062,859 {191,154} 20413701691

-

Total compensation benefits

5151076,539

Medical benefits Loss adjustment expense, including legal fees Total

-

133,831,417 7910891380 $

59

727,997,336

STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 The following provides a reconciliation of the beginning and ending balance for the liability for incurred but unpaid benefits and benefits adjustment expenses for the year ended June 30, 2016: Description

Amount

Liability for incurred but unpaid benefits and benefit adjustment expenses at beginning of year lncurred benefits related to: lnsured events of the current year Insured events ofthe prior years

382,223 ,898 (13,496,510)

Total incurred benefits

368,727,388

Benefit payments related to: lnsured events of the current year Insured events of the prior years

(260,742,647) (140,136,353)

Total benefit payments

(400,879 ,000)

Liability for incurred but unpaid benefits and benefit adjustment expenses at end of year

(10)

760,148,948

$

$

727,997.336

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of June 30, 2016, consist of: Amount

Description

Accounts payable: Securities purchased not yet received Due to employers Due to other govemmental agencies Suppliers, professional services and others

$

4,580,807 16,472,917 27,123,558 55,161,126 103,338,408

Total accounts payable Accrued liabilities: Compensated absences~vacations and sick leave Accruals for Christmas bonus, salary increases, compensatory time and other fringe benefits Pension and postemployment benefits other than pensions (see Notes 18 and 19) Accruals for claims and contingencies (see Note 22)

34,877,838 10,061,448 11,395,193 7,512,404 63,846,883

Total accrued liabilities

s __16_1_,1_85,..29_1_

Total

11111

60

-

-

STATEINSURANCEFUND

-

CORPORATION

1

(A Component Unit of the Commonwealth of Puerto Rico)

1

Notes to Basic Financia! Statements June 30, 2016

-

On June 17, 2014, the Legislature of the Commonwealth enacted Act No. 66-2014, the "Fiscal Sustainability Act". This Act requires that ali instrumentalities, entities, agencies and public corporations of the Commonwealth of Puerto Rico reduce their operating expenses, specifically those related to payroll, professional services, contracted services and leases, among others. During the effective tenn of this Act, the excess accumulation of vacation and sick leave will not be paid to employees. Toe employees should exhaust the excess accumulation by the end of each fiscal year. The Act also establishes that the Christmas bonus paid to eligible employees shall not exceed $600. The Corporation is required to transfer the savings resulting from the enactment of this Act to the "Fund of Services and Therapies for Special Education Students", in equal monthly installments during fiscal year 2015, andan equal amount shall be transferred during fiscal years 2016 and 2017. At June 30, 2016 the Corporation accrued approximately $17 million related to this matter. Toe amount was recorded within accounts payable in the accompanying financia! statements of net position.

-

1

-

After the enactment of the Act No. 66-2014, the Corporation has had discussions, after each year end, and has entered into certain negotiations with the unionized groups within the Corporation, specifically in relation to the payment of certain benefits, which were affected by the enactment of the Act. After negotiations are finalized, the Corporation still reported decreases in the compensated absences accruals and Christmas bonus accrual, as a result of the enactment ofthe Act. This Act was effective on June 17, 2014 and the expense reduction and contribution to the special fund will remain in effect until July 1, 2017 or before that date if certain financia! and economic metrics are achieved by the Commonwealth of Puerto Rico.

..

-

-

(11)

Accrual for Reimbursement of Premiums As of June 30, 2016, the accrual for reimbursement of premiums as determined by the independent actuary was classified as current and non-current in the accompanying statement of net position as follows:

Descri2tion

-

Amount

Due within one year Due in more than one year

$

48,112,176 39,499,276

Total

$

87,611,452

The provision for reimbursement of insurance premiums for the year ended June 30, 2016 amounted approximately to $46,052,000, including a current year debit of approximately $7 .1 million, to reflect changes in the accrual for reimbursement of premiums determined by

61

STATE INSURANCE FuNn CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 an independent actuary. Toe accrual for reimbursement of premiums is discounted to reflect the present value of future reimbursable premium payments. Management believes that discounting such liability results in a better matching of costs and revenues since reimbursable premiums have a long payment cycle. Nevertheless, the accrual for reimbursement of premiums was not discounted at June 30, 2016 because the resulting rate, considering investment return and duration, was lower than 1%.

(12)

Securities Lending Obligations Toe Commonwealth statutes and the Corporation's SIPGO permit the Corporation to use its investments to enter into securities lending transactions, whereby securities are transferred to an independent broker or dealer in exchange for collateral in the form of cash, securities and/or irrevocable bank letters of credit. The Corporation's securities custodian, JP Morgan Chase Bank, N.A., as agent of the Corporation, manages the securities lending program and receives cash collateral, securities or irrevocable bank letters of credit as collateral. The collateral securities cannot be pledged or sold by the Corporation unless the borrower defaults. The collateral requirement is equal to 102 percent for securities issued in the United States and 105 percent for securities issued outside of the United States, of the fair value of the security lent. Additional collateral has to be provided by the next business day if the collateral fair value falls below the fair value of the securities lent. All security loans can be terminated on demand by either the Corporation or the borrower. In lending securities, the term to maturity of the securities loans is matched with the term to maturity of the investment made with the cash collateral. Such matching existed at year-end. At year-end, the Corporation has no credit risk exposure to borrowers because the amounts the Corporation owes the borrowers exceed the amounts the borrowers owe the Corporation. Contracts with the lending agents require them to indemnify the Corporation if the borrowers fail to retum the securities (and if the collateral is inadequate to replace the securities lent) or fail to pay the Corporation for income distributions by the securities' issuers while the securities are on loan. Securities lent as of June 30, 2016 had a fair value of $43,760,336 and were secured with collateral received with a fair value of $44,752,904.

-

i

-

-

62

-

STATEINSURANCEFUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

-

-

Notes to Basic Financia! Statements June 30, 2016 Securities lcnt for which cash was received as collateral as of June 30, 2016, consist of: Amount

Description

-

Corporate bonds and notes Foreign government and corporate bonds Equity securities

$

-

Total

$

-

4,579,002 10,294 33,001,958 37,591,254 =--===-==-a-==

Cash collateral received as of June 30, 2016 amounted to $38,436,278 (see Note 4), and was invested as follows:

-

Amount

Description $

-

Money market funds Resell agreements Interest bearing deposits: Certificates of deposit with other banks

-

Total

$

-

38,436,278 ===-=====-===

Fair Value Securities Collateral Lent Received

Descri2tion

U.S. sponsored agencies bonds and notes FHLMC U.S. Treasury notes and bonds Corporate bonds and notes Equity securities Total

-

14,005,541

In addition, the Corporation had the following lending obligations as of June 30, 2016 for which securities were received as collateral:

-

-

10,032,492 14,398,245

$

$

63

427,806 4,268,575

436,558 4,362,216

1,472,701

1,517,852

6,169,082

6,316,626

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Net (rebates) costs of securities lending transactions for the years ended June 30, 2016 consist of the following:

Amount

Descri2tion

(13)

Borrower rebates Agent fees

$

(177,985) 139,291

Total

$

p8,694l

Note Payable The Corporation hada loan agreement (the Note Payable) with a prívate financia! institution for the amount of $242,000,000, which had a maturity date of May 1, 2028 and carried a variable interest rate of 30 day LIBOR plus a 2.5% spread. The Note Payable required the Corporation to pledge 130% of the outstanding principal on the loan in securities in its investment portfolio. On August 27, 2015, the Board of Directors ofthe Corporation approved the prepayment in full of the existing Note Payable with the prívate financia! institution. The Board approved the partial sale of the Corporation' s investment portfolio to obtain the funds to pay off the debt. On September 2015, the Corporation paid off approximately $208,000,000 related to the Note Payable, which included principal balance, interest and prepayment penalty. Upon the prepayment of the loan, all pledged assets were released by the financia! institution.

..

64

-

-

STATE INSURANCE FuND CORPORATION

..

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

-

-

.. -

-

-

(14)

Other Notes Payable During 1999, the Corporation acquired the facilities where four regional offices are located. In consideration for the facilities acquired, the Corporation entered into non-interest bearing fmancing agreements with the sellers, payable on an installment basis and collateralized with first mortgages over the underlying facilities. Toe original terms of these notes payable are as follows: ~

Non-interest bearingnote, due in September 2018, payable in 40 semi-annual installments, effective interest rate of 6.S4Ya 2 3 4

-

s

3S,001,060

Non-intcrcst bearing note, due in September 2018, payable in 40 semi-annual installments, effective interest ratc of 6.S4%

21,419,834

Non-interest bearing note, due in October 2018, payable in 40 semi-annual installments, effective interest rate of 6.31 o/o

16,619,468

Non-interest bearing note, due in March 2019, payable in 40 semi-annual installments, effective interest rate of 6.84Yo

S3,28S,4S4

Total payments Less imputed interest at the inception ofthe notes

126,32S ,816 (S4,9S1, 702)

s

Total original balance

71:3681114

Toe activity of these notes payable for the year ended June 30, 2016, is as follows: Balance June 30 2 201!§

Descri2tion Note payable (gross): Note 1 Note2 Note 3 Note4

Pa2:ments

Balance June 302 2016

6,654,649 3,650,288 2,613,406 11¡7221173

(2,152,982) (1,779,523) (1,269,964) p1229,95S}

4,501,667 1,870,765 1,343,442 8,492,218

Total

24,640,516

(8,432,424)

16,208,092

Portian representing interest: Note 1 Note2 Note 3 Notc4

(513,083) (282,589) (199,002) (lzl 18,464}

301,612 223,226 154,847 570,446

Total

c2,113,138)

1,250,131

Principal of note payable: Note J Note2 Note3 Note4

6,141,566 3,367,699 2,414,404 10!6031709

(1,851,370) (1,556,297) (1,115,117) {216S91S09}

4,290,196 1,811,402 1,299,287 719441200

22,527,378

(7,182,293)

15,345,085

Total

-

Original Balance

Descrietion

$

$

65

(211,471) (59,363) (44,lSS) ~548!0182 (863,007)

STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Toe schedule ofpayments ofthese notes payable as of June 30, 2016, is as follows: Ending June 30,

2017 2018 2019

Princi2al $

Less current portion Non current portion

(15)

$

Interest

Total

5,965,955 7,640,404 1,738,726

622,501 240,506

6,588,456 7,880,910 1,738,726

15,345,085 !5,965,955}

863,007

16,208=092

9,379,130

Obligation Under Capital Lease

In fiscal year 2000, the Corporation acquired under a capital lease agreement the facility where a regional office is located. Toe agreement requires the Corporation to malee total payments of approximately $111.7 million over 30 years. Toe effective interest rate was detennined at 10.23%. Toe activity of the obligation under capital lease for the year ended June 30, 2016, is as follows: Balance June 30, 2015

Descri2tion

Future payment on assets under capital lease Portion representing interest Present value of minimum lease payments

$

55,873,125 !27,358,0642

$

28,515,061

Pa1ments

Balance June 30, 2016

(3,724,875) 2,877,400

52,148,250 (24,480,6642

~847,4752

27,667,586

-

-

-

66

-

-

-

STATE INSURANCE FUND CORPORATION

-

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Toe schedule of future minimum lease payments under this lease agreement, together with the present value of such minimum lease payments as of June 30, 2016, is as follows: Present Value Ca2ital Lease

Fiscal Year Endin1 June 30,

2017 2018 2019 2020 2021 2022-2026 2027-2030

-

..

$

Less current portion Non current portion $

-

-

(16)

Interest

Total

938,332 1,038,930 1,150,312 1,273,636 1,410,180 9,670,025 12,186,172

2,786,543 2,685,945 2,574,563 2,451,239 2,314,695 8,954,350 2,713,328

3,724,875 3,724,875 3,724,875 3,724,875 3,724,875 18,624,375 14,899,500

27,667,586

24,480,664

52,148,250

!938,332} 26,729,254

Transfers to Other Govemmental Agencies Transfers to other govemmental agencies during the year ended June 30, 2016, are as follows: Amount

Description

Industrial Commission of Puerto Rico Department ofLabor and Human Resources: Occupational Safety and Health Office Labor Standards Offices Other Department ofthe Family-Vocational Rehabilitation Program Additional Uniform Contribution to ERS (Act No. 32-2013) Fund ofServices and Therapies for Special Education Students (Act No. 66-2014) Fund of Services and Therapies for Special Education Students 2015-2016 (Act No. 73-2014, Act No. 105-2015) Fundfor Legal Responsibility 2015-2016 (Act No. 78-2014, Act No. 105-2015) Municipal Support Fund 2015-2016 (Act No. 105-2015)

$

Total

$

20,607,630 8,024,000 10,989,000 200,000 600,000 6,441,882 16,986,490 12,621,000 31,949,000 55,430,000 163,849,002

Toe expenses incurred by the Industrial Commission of Puerto Rico are covered by the Corporation under the provisions of Law No. 45 of April 18, 1935. These expenses shall not exceed 4% ofthe total of insurance premiums collected during the previous fiscal year. 67

-

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Toe transfers to the Department of Labor and Human Resources, Occupational Safety and Health and Labor Standards Offices, are in accordance with the applicable legislation as of July 20, 1990, which authorizes the Corporation to transfer certain amounts as prescribed by law to cover operational expenses of the above mentioned offices. Toe transfers to the Department ofthe Family are made under the provisions ofLawNo. 243, of July 23, 1974, which requires the Corporation to transfer to the Vocational Rehabilitation Programan amount not to exceed $600,000 each year for the vocational rehabilitation of injured workers. As a result of the enactment of Act No. 66-2014, the Corporation recorded an accrual of intergovernmental transfer of approximately $17 million representing the certified savings from the enactment of the Act as of June 30, 2016. The Corporation is required to transfer the aforementioned savings of approximately $17 million to the "Fund of Services and Therapies for Special Education Students", in equal monthly installments during fiscal years 2015, 2016, and 2017. Act No. 32-2013, required the Corporation to accrue at June 30, 2016 approximately $6 million related to an additional uniform contribution to the Employee Retirement System of the Government of the Commonwealth of Puerto Rico (ERS) to improve its liquidity and solvency. Toe Act provides for incremental annual contributions from the Commonwealth General Fund beginning in fiscal year 2014 and up to the fiscal year 203 3. This additional contribution will be determined annually based on actuaria! studies to be performed by the ERS's actuaries. On July 2, 2015 Act No. 105-2015 was enacted to create the "Municipal Support Fund 20152016" and define its uses and create the "Legal Responsibility Fund 2015 ..2016" among other. Act No. 105-2015 requires a transfer of $55,430,000 from the Corporation to the "Municipal Support Fund 2015-2016", a transfer of $31,949,000 to the "Legal Responsibility Fund 2015-2016" anda transfer of $12,621,000 to the "Fund of Services and Therapies for Special Education Students" created by Act No. 73-2014. Toe Corporation transferred the aforementioned funds in two installments of $50,000,000; the first installment during November, 2015 and the second one during December 2015.

(17)

-

-

Investment Derivative Instruments Toe Corporation entered into derivative instruments not designated as hedge transactions to the extent andina manner consistent with the Corporation's SIPGO, to establish an asset class exposure or in order to affect a change in the overall allocation strategy of the

68

-

...

STATE INSURANCE FuND CORPORATION

...

(A Component Unit ofthe Commonwealth of Puerto Rico)

-

Notes to Basic Financia! Statements June 30, 2016 investment portfolio or to affect currency hedging for non-US dallar positions. These investment derivative instruments consist of spot currency contracts, forward currency contracts and future contracts. Toe financia! exposure is managed through an independent money manager in accordance with the Corporation's investment policies. The Corporation is exposed to foreign currency risk and market interest risk as a result of the changes in the fair value ofthe derivative.

-

For the year ended June 30, 2016, the Corporation recorded within net increase in fair value of investments in the statement of revenues, expenses and changes in net position, a net loss on investment derivative instrument transactions amounting to approximately $1,382,000. At June 30, 2016, there were no significant outstanding investments in derivative instruments.

-

-

(18)

Retirement Plan Toe Employees' Retirement System of the Government of the Commonwealth of Puerto Rico (the Retirement System), created pursuant to Act No. 447 of May 15, 1951, as amended, is a cost-sharing, multiple-employer, defined benefit pension plan sponsored by and reported as a component unit of the Commonwealth. Toe Retirement System consists of different benefit structures pursuant to Act No. 447, as amended, including a cost-sharing, multi-employer, defined benefit program, a defined contribution program (System 2000 program) and a contributory hybrid program. The pension plan is sponsored by the Commonwealth, public corporations, and municipalities of Puerto Rico. Benefit provisions vary depending on member's date ofhire. Certain provisions are different for the three groups of members who entered the Retirement System prior to July 1, 2013 as described below:

• •



Members of Act No. 447 are generally those members hired befare April l, 1990 . Members of Act No. 1 are generally those members hired on or after April 1, 1990 and on or befare December 31, 1999. Members of Act No. 305 (or System 2000) are generally those members hired on or after January 1, 2000 and on or before June 30, 2013.

Defined Benefit Program Pursuant to Act No. 447, ali regular employees of the Corporation hired before January 1, 2000 and less than 55 years of age at the date of employment became members of the Retirement System, under the Defined Benefit Program, as a condition of their employment.

-

-

69

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 No benefits are payable if the participant receives a refund of their accumulated contributions. Toe Defined Benefit Program provides retirement, death, and disability benefits pursuant to legislation enacted by the Legislature. Retirement benefits depend upon age at retirement and the number of years of creditable service. Benefits vest after 1O years of plan participation. Disability benefits are available to members for occupational and non-occupational disabilities. However, a member must have at least 1Oyears of service to receive nonoccupational disability benefits. Members who have attained 55 years of age and have completed at least 25 years of creditable service, or members who have attained 58 years of age and have completed 1O years of creditable service, are entitled to an annual benefit payable monthly for life. The amount of the annuity shall be 1.5% of the average compensation, as defined, multiplied by the number of years of creditable service up to 20 years, plus 2% of the average compensation, as defined, multiplied by the number of years of creditable service in excess of 20 years. Toe annuity for which the participant is eligible, is limited to a minimum of $500 per month anda maximum of75% ofthe average compensation, as defined. Participants who have completed 30 years of creditable service are entitled to receive the Merit Annuity. Participants who have not attained 55 years of age will receive 65% of the average compensation, as defined; otherwise, they will receive 75% of the average compensation, as defined. Toe contribution requirement to the Retirement System is determined by law and not actuarially determined. Commonwealth Legislation required employees to contribute 5.775% of the first $550 of their monthly gross salary and 8.275% for the excess over $550 of monthly gross salary. Toe Corporation was required by the same statute to contribute 9.275% of each participant's gross salary. Pursuant to Act No. 116 of July 16, 2011, the Corporation's contribution was increased to 10.275% for 2012, an additional 1o/o annually (14.275% for 2016) for each ofthe next four years, and 1.25% annually for each ofthe five years thereafter, reaching an aggregate contribution rate of 20.525% effective July 1, 2020. Act No. 1 of February 16, 1990 made certain amendments as applicable to new participating employees joining the Retirement System effective April 1, 1990. These changes consisted principally of an increase in the retirement date from 55 to 65, a decrease in the benefit percentages of the average compensation in the occupational disability and occupational death benefits annuities from 50% to 40% and the elimination of the Merit Annuity for participating employees who have completed 30 years of creditable service.

70

-1

-

-

-

STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

.. 1

..

Notes to Basic Financia! Statements June 30, 2016

-

On April 4, 2013, the Legislature enacted Act No. 3, which will be described further below, amended the provisions of the different benefit structures under the Retirement System, including the Defined Benefit Program.

-

Defined Contribution Program - System 2000 Program

-

Toe Legislature enacted Act No. 305 on September 24, 1999, which amended Act No. 447 to establish, among other things, a defined contribution savings plan program (the System 2000 Program) to be aclministered by the Retirement System, similar to a cash balance plan. All regular employees hired for the first time on or after January 1, 2000, and fonner employees who participated in the Defined Benefit Program, received a refund of their contributions, and were rehired on or after January 1, 2000, become members of the System 2000 Program as a condition to their employment. In addition, employees who at December 31, 1999 were participants of the Defined Benefit Program had the option, up to March 31, 2000, to irrevocably transfer their prior contributions to the Defmed Benefit Program plus interest thereon to the System 2000 Program. Act No. 305 required employees to contribute 8.275% of their monthly gross salary to the System 2000 Program. Employees may elect to increase their contribution up to 10% of their monthly gross salary. Employee contributions are credited to individual accounts established under the System 2000 Program. Participants have three options to invest their contributions to the System 2000 Program. Investment income is credited to the participant's account semiannually. Toe Corporation was required by Act No. 305 to contribute 9.275% of each participant's gross salary. Toe Retirement System will use these contributions to increase its asset level and reduce the unfunded status ofthe defined benefit pension plan. Pursuant to Act No. 116 of July 16, 2011, the Corporation's contribution was increased to 10.275% for 2012, an additional 1% annually (14.275% for 2016) for each of the next four years, and 1.25% annually for each of the five years thereafter, reaching an aggregate contribution rate of 20.525% effective July 1, 2020. Under System 2000 Program, contributions received from participants are pooled and invested by the Retirement System, together with the assets corresponding to the Defined Benefit Program. Future benefit payments under the Defined Benefit Program and the System 2000 Program will be paid from the same pool of assets. As a different benefit structure, the System 2000 Program is not a separate plan and the Commonwealth does not guarantee benefits at retirement age. Corresponding employer' s contributions will be used by the Retirement System to reduce the unfunded status of the Defined Benefit Program.

-

71

STATEINSURANCEFUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 Toe System 2000 Program reduced the retirement age from 65 years to 60 years for those employees who joined this plan on or after January 1, 2000. Upon retirement, the balance in each participant' s account will be used to purchase an annuity contract, which will provide for a monthly benefit during the participant's life and 50% of such benefit to the participant's spouse in case of the participant's death. Participants with a balance of $10,000 or less at retirement will receive a lump-sum payment. In case of death, the balance in each participant's account will be paid in a lump sum to the participant' s beneficiarles. Participants have the option of receiving a lump sum or purchasing an annuity contract in case of pennanent disability. As discussed further below, Act No. 3 of April 4, 2013 substantially amended the provisions of the previous Acts governing the Retirement System benefit structures and programs, including the System 2000 Program.

Defined Contribution Hybrid Program On April 4, 2013, the Govemor of Puerto Rico signed into law Act No. 3 of 2013, which represents a comprehensive reform ofthe Retirement System and amended Act No. 447, Act No. 1 and Act No. 305, to establish, among other things, a defined contribution program similar to the System 2000 Program (the Defined Contribution Hybrid Program) to be administered by the Retirement System. All regular employees hired for the first time on or after July 1, 2013, and former employees who participated in the Defined Benefit Program and the System 2000 Program, and were rehired on or after July 1, 2013, become members of the Defined Contribution Hybrid Programas a condition to their employment. In addition, employees who at June 30, 2013, were participants of previous plans will become part of the Defined Contribution Hybrid Program. Act No. 3 froze all retirement benefits accrued through June 30, 2013 under the Defined Benefit Program, and thereafter, all future benefits will accrue under the defined contribution formula used for the System 2000 Program participants. Participants in the Defined Benefit Program who as of June 30, 2013, were entitled to retire and receive sorne type of pension, may retire on any later date and will receive the annuity corresponding to their retirement plan, as well as the annuity accrued under the Defined Contribution Hybrid Program. Participants who as of June 30, 2013, have not reached the age of 58 and completed 1Oyears of service or have not reached the age of 55 and completed 25 years of service can retire depending on the new age limits defined by the Defined Contribution Hybrid Program and will receive the annuity corresponding to their retirement plan, as well as the annuity accrued under the Defined Contribution Hybrid Program.

72

-

-

-

STATE INSURANCE FUND CORPORATION (A Component Unit ofthe Commonwealth of Puerto Rico) Notes to Basic Financia} Statements

-

....

June 30, 2016 Participants in the System 2000 Program who as of June 30, 2013, were entitled to retire because they were 60 years of age may retire on any later date and will receive the annuity corresponding to their retirement plan, as well as the annuity accrued under the Defined Contribution Hybrid Program. Participants in the System 2000 Program who as of June 30, 2013, have not reach the age of 60 can retire depending on the new age limits defined by the Defined Contribution Hybrid Program and will receive the annuity corresponding to their retirement plan, as well as the annuity accrued under the Defined Contribution Hybrid Program. Act No. 3 became effective on July 1, 2013 and amended the provisions of the different benefits structures under the Retirement System, including, but not limited to, the following: •

For active participants of the contributory defined benefit programs under Act No. 447 of 1951 and Act No. 1 of 1990, all retirement benefits accrued through June 30, 2013 were frozen, and thereafter, ali future benefits will accrue under the defined contribution formula used for System 2000 participants, and will be paid at retirement through a lifetime annuity.



Increases the minimum pension for current retirees from $400 to $500 per month.



Toe retirement age for Act No. 447 participants will be gradually increased from age 58 to age 61.



The retirement age for current System 2000 participants is increased gradually from age 60 to age 65.



Eliminates the "merit annuity" available to participants who joined the Retirement System prior to April 1, 1990.



The retirement age for new employees is increased to age 67, except for new state and municipal police officers, firefighters, and custody officers, which will be age 58.



The employee contribution rate was increased from 8.275% to 10% .



Por System 2000 participants, the retirement benefits will no longer be paid as a lump sum distribution, instead, they will be paid through a lifetime annuity.



Eliminates or reduces various retirement benefits previously granted by special laws, including Christmas and summer bonuses. The Christmas bonus payable to current

73

STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 retirees was reduced from $600 to $200 and was eliminated for future retirees. Toe summer bonus was eliminated. •

Disability benefits were eliminated and substituted for a mandatory disability insurance policy.



Survivor benefits were modified.

Employee contributions are credited to individual accounts established under the Defmed Contribution Hybrid Program. In addition, a mandatory contribution equal to or less than point twenty five percent (O .25%) is required for the purchase of disability insurance. Upon retirement, the balance in each participant's account will be used to purchase an annuity contract, which will provide for a monthly benefit during the participant's life. In case of the pensioner's death, the designated beneficiarles will continue receiving the monthly benefit until the contributions of the participant are completely consumed. In case of the participants in active service, a death benefit will be paid in one lump sum in cash to the participant' s beneficiarles. Participants with a balance of less than $10,000 or less than five years of computed services at retirement will receive a lump-sum payment. In case of pennanent disability the participants have the option of receiving a lump sum or purchasing an annuity contract. To improve the liquidity and solvency of the Retirement System, the Commonwealth enacted Act No. 32 of June 25, 2013, which provides for incremental annual contributions :from the Commonwealth General Fund beginning in fiscal year 2014 and up to the fiscal year 203 3. This additional contribution will be determined annually based on actuaria! studies to be performed by the Retirement System' s actuaries. Total employee contributions for the Defined Benefit Program amounted to approximately $18,058,000 during the year ended June 30, 2016. There were no employee contributions for the Defined Contribution Program during 2016. The Corporation's total contributions during the years ended June 30, 2016, 2015 and 2014, amounted to approximately $25,765,000, $24,176,000, and $23,260,000, respectively. These amounts represented 100% of the required contribution for the corresponding year. Individual information for each option is not available since the allocation is performed by the Retirement System itself. Toe Corporation's contributions (either paid or accrued) to the Retirement System pursuant to Act No. 32 of 2013 (Additional Uniform Contribution) for 2016 amounted to approximately $6,442,000.

74

-

-

.. ...

STATE INSURANCE FUND CORPORATION

1

(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements

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June 30, 2016

Pension Liability, Pension Expense, Deferred Outtlows of Resources and Deferred Inflows of Resources Related to Pensions (Unaudited)

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As of the date of the release of this report, the ERS has not issued its 2015 basic financia! statements, nor has it provided the Corporation with the required infonnation to implement the requirements of GASB No. 68 for its second year of implementation. Therefore, the accompanying financia! statements do not have any adjustments that will be necessary for the Corporation to account for its proportionate share of the net pension liability, deferred inflow of resources and deferred outflow of resources in the statement of net assets as of June 30, 2016, as well as the effect in the recorded pension expense in the statement of revenues, expenses and changes in net position for the year ended June 30, 2016. The amounts presented as net pension liability, deferred inflows of resources and deferred outflows of resources as of June 30, 2016, are the same as those reported as of June 30, 2015 and represent the preliminary and unaudited amounts reported in Circular 1300-23-16 and recorded on the 2015 financia! statements of the Corporation. Also, additional disclosures required by GASB No. 68 as well as required supplementary information have not been changed from the ones presented in the 2015 financia! statements, since it is the latest available information.

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At June 30, 2015, the Corporation reported a pension liability of $1,417,962,700 (no adjustments were made to this balance as of June 30, 2016) for its proportionate share of the collective Net Pension Liability (NPL) of the Retirement System, resulting from the implementation of GASB Statement No. 68. GASB Statement No. 68 replaces the requirements of GASB Statement No. 27, Accounting for Pensions by State and Local Government Employers and requires that employers report an NPL and related pension expense as determined by the Plan under the requirements contained in GASB Statement No. 67. Toe NPL was measured as of June 30, 2014 and was detennined by rolling forward the Total Pension Liability (TPL) as of the June 30, 2013 actuaria! valuation date. Toe NPL is equal to the difference between the TPL and the Plan's Fiduciary Net Position. Toe Plan's Fiduciary N et Position is equal to the market value of the Plan assets. On February 24, 2016, the Department ofthe Treasury ofthe Commonwealth issued Circular Letter 1300-23-16 which provided a preliminary and unaudited report of GASB No. 68 Collective and Allocated Pension Amounts for participating employers of the Retirement System in order for them to record the pension amounts and other related accounts impacted by the adoption of GASB No. 68 as of and for the year ended June 30, 2015. Toe final audited report has not been issued. The accompanying basic financia! statements include adjustments made in 2015 based on preliminary and unaudited amounts reported in Circular

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 1300-23-16. In addition, certain disclosures required by GASB No. 68 have been included to the extent the information was available. Toe Corporation's 4.71% proportion of the NPL was based on the employer's proportionate share (actual contributions made by the Corporation to the Retirement System in relation to the total contributions made by all participating employers) of statutorily required contributions to the Retirement System as of the measurement date. At June 30, 2016, the Corporation reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Pension Deferred Outflows/Inflows (Unaudited)

Deferred Outflows of Resources Contributions to the pension plan subsequent to the measurement date

Deferred Inflows of Resources

30,628,657

$

Differences between expected and actual experience with regard to economic or demographic 11,347, 132

assumptions

48,398,846

Changes of assumptions or inputs

$-=====-====7-9.,0=27='=50=3-

11,347, 132

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions that will be recognized in pension expense subsequent to June 30, 2016, are not available as of the date of the issuance of the accompanying basic financia! statements.

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As a result of the implementation of GASB No. 68 the Corporation recorded pension expense of $81.3 million in 2015.

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Actuaria} Methods and Assumptions

TPL represents the portian of the actuaria! present value of projected benefit payments attributable to past periods of employee service. Toe census data collection date has changed from end-of-year to beginning-of-year. For this switchover year, the June 30, 2013 census data used in the prior valuation is also used as the July 1, 2013 census data for the current 76

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)



Notes to Basic Financia! Statements June 30, 2016

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valuation. The liability results as of June 30, 2014 (measurement date) are based on projecting the Retirement System obligations determined as of the census data collection date of July 1, 2013 for one year, using roll-forward methods and assuming no liability gains or losses. Toe significant actuaria! assumptions used to measure the TPL as of June 30, 2014 (measurement date) for the initial adoption of GASB No. 68 were the following:

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Actuaria! cost method lntlation Municioal bond index Projected salary increases Mortality

Actuar1a1 Assump tions Entry aae nonnal 2.50% 4.29% as per Bond Buyer General Obligation 20-Bond Municioal Bond Index 3.00% per year. No compensation increases are assumed until July 1, 2017 as a result of Act No. 66 and the current general economy. Pre-retirement Mortality: For general employees not covered under Act No. 127, RP-2000 Employee Mortality Rates fer males and femalcs projected on a gcnerational basis using Scale AA. For members covered under Act No. 127, RP-2000 Employee Mortality Rates with blue collar adjustments for males and females, projected on a generational basis using Scale AA. As generational tables, they reflect mortality improvements both befare and after the measurement date. 100% of deaths while in active service are assumed to be occupational for members covered under Act No. 127. Post-rctirement Healthy Mortality: Rates which vary by gender are assumed for healthy retirees and beneficiaries bascd on a study ofplan's experience from 2007 to 2012 equal to 92% ofthe rates from the UP-1994 Mortality Table for Males and 95% ofthe rates from the UP-1994 Mortality Table for Females. The rates are projccted on a generational basis starting in 1994 using Scale AA. As a generational table, it reflects mortality improvements both before and after the measurement date. Post-retirement Disabled Mortality: Rates which vary by gender are assumed for disabled retirees based on a study ofplan's experience from 2007 to 2012 equal to 105% ofthe rates from the UP-1994 Mortality Table for Males and 115% ofthe rates from the UP1994 Mortality Table for Females. No provision was made for future mortality imorovement for disablcd retirees.

Most other demographic assumptions used in the July 1, 2013 valuation were based on the results of an actuaria! experience study using data as of June 30, 2003, June 20, 2005 and June 30, 2007. Long-Term Expected Rate of Return

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The long..tenn expected rate of return on pension benefits investments was determined in accordance with the asset allocation of the portfolio that was adopted by the Board of Trustees (the Board) of the Retirement System during December 2013 and the actuary's capital market assumptions as of June 30, 2014. Toe long-term expected rate of retum on pension benefits investments of 6.75% as of June 30, 2014 was slightly higher than the debt service ofthe senior pension funding bonds payable which ranged from 5.85% to 6.55%.

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

Toe Retirement System' s policy in regards to allocation of invested assets is established and may be amended by the Board. Plan assets are managed on a total retum basis with a longtenn objective of achieving and maintaining a positive impact on the Retirement System's financia! condition for the benefits provided through the pension programs. Toe following was the Board's adopted asset allocation policy as of June 30, 2014:

Asset class

Target allocation

Long-term expected rate of return

Domestic equity Intemational equity Fixed income Cash

25% 10% 64% 1%

6.8% 7.6% 3.9% 2.9%

Total

100%

Toe long-term expected rate of return on pension benefits investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected retums, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of retum by the target asset allocation percentage and by adding expected inflation.

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Discount Rate

Toe asset basis for the depletion projection is the Retirement System's fiduciary net position (the gross assets plus deferred outflows of resources less the gross liabilities, including the senior pension funding bonds payable, plus deferred inflows of resources). On this basis, the Retirement System's fiduciary net position was expected to be exhausted in the fiscal year 2015.

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Toe Retirement System's fiduciary net position was not projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the tax free municipal bond index (Bond Buyer General Obligation 20-Bond Municipal Bond Index) was applied to all periods of projected benefits payments to determine the total pension liability. The discount rate used to measure the TPL was 4.29% as of June 30, 2014.

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STATE INSURANCE FUND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico)

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Notes to Basic Financia! Statements June 30, 2016

Sensitivity of the Corporation's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate (Unaudited)

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Toe following table presents the Corporation's proportionate share of the Net Pension Liability using the .discount rate of 4.29%, as well as what the Corporation's proportionate share of the N et Pension Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.29%) or 1-percentage-point higher (5.29%) than the current rate:

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1% Decrease (3.29%) Corporation's proportionate share of the net pension liability

$

1,608,911,791

Current Discount Rate (4.29%)

1,417,962, 700

1% Increase (5.29%)

1,259,83 7,626

Pension Plan Fiduciary Net Position

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Toe Retirement System issues a publicly available financia! report that details its fiduciary net position and includes financia! statements and required supplementary information, as a component of the Commonwealth. A copy of its financia! report can be obtained by writing to the Employees' Retirement System of the Commonwealth of Puerto Rico and its Instrumentalities, P.O. Box 42003, San Juan PR 00940-2203.

Other Retirement Benefits not Covered by GASB Statement No. 68 In addition to the Defined Benefit Program and to the Defined Contribution Program, the Corporation provides the following retirement benefits:

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Life insurance benefit - Life insurance coverage is provided to retirees for a period of one year following retirement. It is covered through the Corporation' s health plan ($20,000 of life coverage for retiree only).



Christmas bonus benefit - Same eligibility as for the health benefits but retirement must occur after March 31. Toe benefit is a one-time payment in the year of retirement equal to 9.5% of salary up to a maximum of $3,325, except for unionized lawyers who receive 8.5% of salary up to a maximum of $2,720. Employees retired pursuant to various special incentive programs may receive up to five years of such Christmas bonuses.



Retirement payment benefit - Eligibility required at least 15 years of service at the Corporation and at least 30 years of credited service at the Retirement System and the 79

STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016 retiree must provide a letter of resignation at least 90 days prior to retirement. Benefit is a lump sum of $8,100. •

Retirement bonus benefit - Same eligibility as for the health benefits. Trust employees receive 21 % of final salary as a lump sum and all other employees receive 30% of final salary as a lump sum.



Disability benefit - To be eligible for disability benefits, the employee must be a permanent full-tirne employee. A totally disabled employee who meets the disability requirements of the Social Security Administration, the Worker Compensation or the Retirement System receives a lump sum of $5,000. A totally disabled employee who resigns and is not eligible for the disability requirements mentioned above, receives a lump sum of 55% of the last year salary and up to $5,000 for rehabilitation costs ($4,800 for trust employees).

As a result of enactment of Act No. 66-2014, certain benefits were reduced or eliminated for the perlad of effectiveness of the Act, and were negotiated with the different unionized groups within the Corporation with the following maximum amounts for 2016: •

Christmas bonus benefit - $600 for management and non-union employees and a maximum ranging from $600 to $3,150 for the different unionized groups within the Corporation. Toe unions will re-negotiate this benefit annually until June 30, 2017.



Retirement payment and retirement bonus benefits - suspended for certain unionized groups. Toe "Hermandad" and intemal auditors unions will negotiate this benefit annually until June 30, 2017.

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Funding Policy and Annual Pension Cost

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Toe required contribution is based on projected pay-as-you-go financing requirements. Benefits are actuarially calculated by an independent actuary.

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Toe Annual Pension Cost is calculated based on the annual required contribution of the employer (the ARC). Toe ARC is detennined in accordance with plan provisions, demographic participant data, actuarial assumptions, actuarial cost method, and other actuarial methods prescribed by GASB Statement No. 27. While pre-funding is not required, the ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuaria! liabilities over a period not to exceed thirty years. The ARC will generally increase with benefit cost increases and participant growth; in addition, gains/losses resulting from demographic and/or assumption changes will also impact the ARC.

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STATE INSURANCE FUND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

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The following table shows the components of the Corporation's annual pension cost for the

fiscal year ended June 30, 2016, the amount actually contributed to the Pension Program, the change in the Corporation's net obligation and the funded status ofthe Pension Program: Net Pension Obligation Movement:

Annual Required Contribution Interest on the net pension obligation Adjustments to the ARC

Amounts $

Annual pension cost

2,051,503

Employer contribution

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(137,842)

Increase in the net pension obligation Net pension obligation-beginning ofyear Net pension obligation-end ofyear

1,913,661 8,234,892 $

Percentage of annual pension cost contributed

1o, 148,553

===-----===--=--7%

Funded Status: Actuaria! valuation date

July 1, 2015

Actuarial accrued liability (AAL)

$

19,532,446

===111111:=:====--====-= $ 19,532,446 -========i-======i-==

Unfunded AAL Funded ratio

0%

Annual covered payroll

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2,455,695 284,927 (689,119)

$

81

181,509,828

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STATE INSURANCE FUND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

Pension Actuarial Valuation Toe following table shows the most significant actuaria! methods and assumptions used to estimate the net pension obligation. As pennitted by GASB Statement No. 27, the actuaria! valuation is perfonned every two years. Toe Corporation performed a roll-forward valuation for its fiscal year ending June 30, 2016 (valuation date July 1, 2015). Actuarial Methods and Assumptions 2016:

Valuation year Actuaria} cost method Amortization method Asset valuation method Discount rate Projected salary increase Mortality rate

July 1, 2015 Projected Unit Credit Level percentage of projected payroll on an open basis over 15 years. N/A 3.46% 4.00% RP-2014 Generational Healthy Mortality Table for blended healthy active employee/retiree RP-2000 Combined Disability Mortality Table for disabled parti ci pants

Actuaria! valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future, and actuarially determined amounts are subject to continua! revision as actual results are compared to past expectations and new estimates are made about the future. Toe schedule of funding progress, presented as required supplementary information following the notes to the basic financia! statements, presents multiyear trend information about the actuarial value of program assets relative to the actuaria! accrued liability for benefits. Calculations are based on the types of benefits provided at the time of each valuation and on the pattern of sharing of costs between the employer and members to that point. The projections of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattem of cost sharing between the employer and plan members in the future.

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.. ....

Toe actuaria! calculations reflecta long-tenn perspective. Consistent with that perspective, actuaria! methods and assumptions used include techniques that are designed to reduce shortterm volatility in actuaria! accrued liabilities and actuaria! value of assets.

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

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Notes to Basic Financial Statements June 30, 2016

(19)

Postemployment Benefits other than Pensions

Program Deseription and Membership Toe Corporation's Postemployment Benefits Other Toan Pensions Program (the OPEB Program) provides postemployment benefits other than pensions (OPEB) to all employees who meet certain age and years of service requirements. These benefits were agreed by the Corporation and employees in the collective bargain agreements and similar agreements. Toe benefits are funded from the Corporation' s assets.

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The Corporation provides the following OPEB:



Health and other health related benefits: medical, prescription drugs, dental, and vision benefits are provided together in a fully-insured health plan. Upon retirement, an eligible employee receives two years of non-contributory healthcare benefits from the Corporation and through its healthcare plan. Toe Corporation's healthcare plan covers medical, prescription drugs, vision, dental, and life insurance (see Note 18). After the two years, the retiree can continue participation in the Corporation' s plan (for lifetime) by contributing the difference between the plan premium and the Corporation's contribution of $35/month ($40/month for members of the "Unión de Empleados de la Corporación del Fondo del Seguro del Estado") per retiree (including dependents, if any). The $35/month and $40/month contributions end when the retiree reaches 65 years of age and, thereafter, the retiree must contribute the full plan premium. Sorne retirees who retired under special incentive programs have the two-years extended (ranging from 5 to 7 years total). After the two-year period (or the special retirement program period), the retiree can continue the spouse or family coverage for the lifetime of the retiree.

At June 30, 2016, membership in the Corporation's OPEB Program consisted of the following: Retirees and beneficiaries currently receiving benefits Current participating employees

448 3,169

3,617 Funding Policy and Annual OPEB Cost The required contribution is based on projected pay-as-you-go financing requirements. Benefits are actuarially calculated by an independent actuary. 83

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STATE INSURANCE FUND CORPORATION (A Component Unit ofthe Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016 Toe Annual OPEB Cost is calculated based on the annual required contribution of the employer (the ARC). The ARC is determined in accordance with plan provisions, demographic participant data, actuaria! assumptions, actuaria! cost method, and other actuaria! methods prescribed by GASB Statement No. 45. While pre-funding is not required, the ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuaria! liabilities over a period not to exceed thirty years. Toe ARC will generally increase with benefit cost increases and participant growth; in addition, gains/losses resulting from demographic and/or assumption changes will also impact the ARC. The following table shows the components of the Corporation's annual OPEB cost for the fiscal year ended June 30, 2016, the amount actually contributed to the OPEB Program, the change in the Corporation's net obligation and the funded status ofthe OPEB Program.

Net OPEB Obligation Movement: A.nnual Required Contribution Interest on the net OPEB obligation Adjustments to the ARC

Amounts

2,819,772 32,547 (49,187)

$

2,803,132

Annual OPEB cost

(2,497,148)

Employer contribution

305,984 940,656

Increase in the net OPEB obligation Net OPEB obligation at beginning of year Net OPEB obligation at end of year Percentage of annual OPEB cost contributed

$

1,246,640 -------=:11111:189%

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Funded Status:

July 1, 2015

Actuaria! valuation date Actuaria! accrued liability (AAL)

$ ==-=======-3-=º'=30=6=,2=-27==

Unfunded AAL

$ ====-===3º=='3==0=6=,2=-27-=

....

0%

Funded ratio

Annual covered payroll

$

84

181,509,828 ===--====---IIIIIÍI=--

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

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Notes to Basic Financia! Statements

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June 30, 2016

OPEB Actuarial Valuation Toe following table shows the most significant actuaria! methods and assumptions used to estimate the net OPEB obligation. As permitted by GASB Statement No. 45, the actuarial valuation is performed every two years. Toe Corporation performed a roll-forward valuation at June 30, 2016 (valuation date July 1, 2015). Actuaria) Methods and Assumptions 2016:

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Valuation year Actuarial cost method Amortization method Asset valuation method Discount rate Projected salary increase Mortality rate

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Health care cost trend rate for medical and prescription drugs

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July 1, 2015 Projected Unit Credit, level dollar Level percentage of projected payroll on an open basis over 30 years N/A 3.46%

4.00% RP-2014 Generational Healthy Mortality Table for blended healthy active employee/retiree RP-2000 Combined Disability Mortality Table for disabled participants

8% in fiscal year 2016, grading to 5% for fiscal year 2023

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future, and actuarially determined amounts are subject to continua! revision as actual results are compared to past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary infonnation following the notes to the basic financia} statements, presents multiyear trend information about the actuaria! value of program assets relative to the actuarial accrued liability for benefits. Calculations are based on the types of benefits provided at the time of each valuation and on the pattem of sharing of costs between the employer and members to that point. Toe projections of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattem of cost sharing between the employer and plan members in the future.

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico)

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Notes to Basic Financia! Statements June 30, 2016 Toe actuaria! calculations reflect a long-tenn perspective. Consistent with that perspective, actuaria! methods and assumptions used include techniques that are designed to reduce shortterm volatility in actuaria! accrued liabilities and actuarial value of assets. (lO)

Segregation of Fund

Toe Corporation is required to maintain an adequate accounting system and to segregate the financia! resources by funds, as defined by the Act No. 45 of April 18, 1935, as amended. Toe provisions of the Act establish the segregation of the funds be based on their purposes, as defined. As of June 30, 2016, the Corporation was required to account for the Death and Total Disability Fund (the DTDF) and for the Reserve for Catastrophic Fund (the RCF). Toe DTDF recognizes the claims awarded to the workers (injured employees or its beneficiaries). Toe Corporation maintains a separate account to record the inventory of claims adjudicated, which is part of the liabilities for incurred but unpaid benefits and benefit adjustment expenses, reflected in the accompanying financia! statements. As of June 30, 2016, the DTDF (adjudged cases) amounted to approximately $187.8 million and the investments portfolio serves to fund the obligation incurred. Toe RCF is required by the Article 23 of the Act, which serves to provide funds in an event of catastrophic situation. Toe provisions of Article 23 allow the Corporation to use the funds in the RCF to reduce any deficit incurred by the Corporation. As of June 30, 2016, the RCF amounted to approximately $14.2 million.

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STATE INSURANCE FUND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico)

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Notes to Basic Financia! Statements June 30, 2016

(21)

Commitments

Operating Lease Agreements Toe Corporation rents certain of its administrative offices and clinics under non-cancellable long-term operating lease agreements. Certain leases contain escalation clauses providing for increased renta!. Rent charged to operations in fiscal year 2016 amounted to approximately $21.7 million. At June 30, 2016, the minimum annual future rentals under non-cancellable leases, without considering renewal options, are approximately as follows:

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Fiscal Year Endin1 June 30,

2017 2018 2019 2020 2021 2022-2027

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Amount

$

20,802,654 14,230,147 12,935,905 9,052,156 9,000,208 24,522,947

$

90,544,017

See Note 16 for commitments with other governmental agencies.

(22)

Contingencies The Corporation is included as defendant in various lawsuits from approximately 100 cases as of June 30, 2016, most of current and fonner employees as a result of the Corporation's decision to declare null and void certain administrative personnel transactions which occurred in prior years. Plaintiffs' claims include damages and requests for reinstatements. On November 17, 2011, as part of one of the cases being litigated, the State Court of Appeals ratified a previous ruling in favor of plaintiffs on the subject related to nullification of personnel transactions. Management believes, based on the opinion of legal counsel, that their actions were appropriate and these adverse rulings were appealed to the State Supreme Court. Also, the Corporation is included as defendant or co-defendant in several other claims and lawsuits pending final resolution. The Corporation had medica! malpractice insurance coverage through June 3, 1991, and for the period from December 31, 1996 to April 1, 2007. During the periods from June 4, 1991 to December 30, 1996 and from April 2, 2007 to

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STATE INSURANCE FuND

CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016 present, the Corporation had no medica! malpractice coverage. Management has recorded an accrual of approximately $7.5 million to cover claims and lawsuits that may be assessed against the Corporation, including malpractice cases not covered by the related policy as of June 30, 2016. The Corporation has certain labor-related, medical malpractice, general liability and other claims far which the probability of loss is not probable, but reasonably possible, therefare no accrual was necessary to be made in the financia! statements at June 30, 2016.

In the opinion of management, any loss to be sustained as a result of an unfavorable outcome for the above mentioned cases has been provided for in the reserve estimates accrued and should not materially affect the Corporation's financial statements.

(23)

Transactions with Governmental Entities During the year ended June 30, 2016, insurance premiums earned by the Corporation from the governmental sector are approximately as follows: $94. 7 million from the Commonwealth and its agencies and public corporations and $40.5 million from the municipalities for a total amount of $135.2 million from the govemmental sector. These amounts represent approximately 22% of the total of premiums earned at June 30, 2016. Toe Corporation recorded an impairment loss on deposits with GDB of approximately $44 million for the year ended June 30, 2016. Interest income earned on these deposits amounted to $987,560 for the year ended June 30, 2016. Also, on December 19, 2013, the Corporation invested in GDB Senior Guaranteed Notes in an aggregate amount of $110,000,000, bearing interest of 8% per annum commencing on February 1, 2014, and maturities ranging from 2017 to 2019. Interest income earned on these notes at June 30, 2016 amounted to $8,800,000. Investment with the PRGITF amounted to approximately $1,042,000 as of June 30, 2016. Dividend income eamed on this investment amounted to $2,669 far the year ended June 30, 2016. On July 2, 2015 Act No. 102-2015 was enacted by the Commonwealth of Puerto Rico. Each fiscal year the Commonwealth issues notes in anticipation of taxes and revenues (Tax Revenue Anticipation Notes or "TRANS") so that the Commonwealth, in its cash flow management program designed to maximize the use of moneys in the General Fund, will have an altemate means of providing a liquidity mechanism to cover any temporary cash shortages projected for a fiscal year. TRANS are a type of short tenn fmancing, which are repaid during the last quarter of the fiscal year. Act No. 102-2015 amends certain existing

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STATE INSURANCE FUND CORPORATION (A Component Unit ofthe Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016

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laws such that certain governmental entities, such as the Corporation, can acquire TRANS from the Commonwealth during fiscal year 2015-2016 in the aggregate amount of $400 million. Pursuant to the Act, the Corporation was authorized on July 15, 2015 to invest $335 million in Tax Revenue Anticipation Notes from the Commonwealth. The TRANS generated a return of 6% interest per annum. The TRANS were fully collected in June 2016 and interest income earned by the Corporation amounted to $17,252,500 for the year ended June 30, 2016. Accounts receivable from the Commonwealth's agencies, municipalities and public corporations amounted to approximately $35.5 million as of June 30, 2016. Medica! and administrative expenses paid to the Commonwealth' s agencies and public corporations amounted to approximately $7.3 million for the year ended June 30, 2016. Toe Corporation has a capital commitment outstanding of $22 million at June 30, 2016 related to the remodeling and expansion project of the Industrial Hospital through an interagency assistance contract entered with the Infrastructure Financing Authority of Puerto Rico, a public corporation of the Commonwealth of Puerto Rico, for the development and management of this project in ali its phases. The term of the contract was extended to June 30, 2017. On June 4, 2015 Act No. 80-2015 was enacted to authorize the Corporation, among other govemmental agencies, to issue a loan and/or a contribution to the General Fund of the Commonwealth of Puerto Rico in the aggregate amount of $125 million, ensuring that the necessary amounts to amortize the related debt, be assigned in the operational budgets of the Commonwealth. Pursuant to the Act, on June 5, 2015, the Corporation granted a loan in the amount of $100 million to the Department of the Treasury of the Commonwealth of Puerto Rico, at a 1% interest rate, to be payable along with the principal amount on an annual basis from July 31, 2017 through July 31, 2032. The payments for this loan will be consigned annually in the General Budgets ofthe Commonwealth until July 31, 2032. Toe Commonwealth and severa! of its Component Units (also referred to as instrumentalities) face significant risks and uncertainties, including liquidity risk, which is the risk of not having sufficient liquid financia! resources to meet obligations when they come due, as further described in the basic financia! statements of the Commonwealth at June 30, 2014. GASB Statement No.56 Codification of Accounting and Financia/ Reporting Guidance Contained in the AICPA Statements on Auditing Standards (GASB Statement No. 56) require management to evaluate whether there is substantial doubt about a government's ability to continue as a going concem for twelve months beyond the financia! statement date. Toe risks and uncertainties facing the Commonwealth, together with other factors described in their basic financia! statements, have Ied the Commonwealth' s management to conclude 89

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STATEINSURANCEFUND CORPORATION

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(A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements June 30, 2016 that there is substantial doubt as to the ability of the Primary Government (including the Governmental Activities carried out by various Blended Component Units}, and of various Discretely Presented Component Units and Fiduciary Funds, to continue as a going concem in accordance with GASB Statement No. 56. For similar reasons, and for the uncertainty in the future ability of the Commonwealth to make appropriations for the repayment of their loans with GDB, the latter also carries substantial doubt about its ability to continue as a going concem in accordance with GASB Statement No. 56. For similar reasons, the Retirement System also carries substantial doubt about its ability to continue as a going concem in accordance with GASB Statement No. 56. The Retirement System's fiduciary net position as a percentage of total pension liability was less than one percent as of June 30, 2014. Management of the Retirement System understands that if measures are not taken to significantly increase contributions, the Retirement System will become insolvent by fiscal year 2018 depending on the timing of receipt of contributions and the Retirement System's ability to dispose of illiquid assets. Future employers' contributions have been pledged for debt service, consequently, further depletion of the Retirement System' s assets could result in inability to pay benefits.

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Loans to the Commonwealth and its public entities constitute a significant portian of GDB's assets. As a result, GDB's liquidity and financia! condition depends to a large extent on the repayment of loans made to the Commonwealth and its public entities, which face significant fiscal and financia! challenges. As a result of the fiscal, financia! and economic condition of the Commonwealth and its Component Units, which are both the counterparties to GDB's loan portfolio, which is GDB's principal asset, and its clients as a depositary institution, GDB's financia! condition and liquidity has materially deteriorated and it could become unable to honor ali its obligations as they become due. On April 8, 2016, pursuant to Section 201 of the Act 21-2016, the Govemor signed an Executive Order which declared that GDB is in a state of emergency and announced the commencement, as of the date of the Executive Order, of an emergency period as defined in the Act 21-2016. As further explained in Note 3 to the financia! statements, the Executive Order (a) imposes restrictions on the withdrawal, payment, and transfer requests submitted to GDB by agencies, public corporations and various government instrumentalities including the Corporation. It also prohibits the disbursement of any and all loans and advances by GDB, and (b) the payment of any and all obligations guaranteed by GDB are temporarily suspended. Toe Executive Order will remain in full force and effect until the earlier of (i) January 31, 2017, or (ii) revocation ofthe Executive Order. On June 30, 2016, the U.S. President signed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which grants the Commonwealth and its component

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STATE INSURANCE FUND

CORPORATION

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(A Component Unit ofthe Commonwealth of Puerto Rico)

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Notes to Basic Financia! Statements June 30, 2016

units access to an orderly mechanism to restructure their debts in exchange for significant federal oversight over the Commonwealth's finances. In broad strokes, PROMESA seeks to provide Puerto Rico with fiscal and economic discipline through the creation of a control board, relief from creditor lawsuits through the enactment of a temporary stay on litigation, and two altemative methods to adjust unsustainable debt. On August 31, 2016, the U.S. President announced the appointment of seven members to the Oversight Board.

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For transfers to (from) other govemmental agencies, see Note 16. For transactions with the Retirement System, see Note 18.

(24)

Subsequent Events On July 14, 2016 Act No. 69-2016 was enacted by the Commonwealth of Puerto Rico. Each fiscal year the Commonwealth issues notes in anticipation of taxes and revenues (Tax Revenue Anticipation Notes or "TRANS") so that the Commonwealth, in its cash flow management program designed to maximize the use of moneys in the General Fund, will have an altemate means of providing a liquidity mechanism to cover any temporary cash shortages projected for a fiscal year. TRANS are a type of short term financing, which are repaid during the last quarter of the fiscal year. Act No. 102-2015 amended certain existing laws such that certain governmental entities, such as the Corporation, can acquire TRANS from the Commonwealth. Act No. 69-2016 was enacted to authorize the Corporation, among other govemmental entities, to acquire TRANS in the aggregate amount of $400 million during fiscal year 2016-2017. Pursuant to the Act, the Corporation was authorized to invest $335 million in TRANS from the Commonwealth during fiscal year 2016-2017. Toe TRANS should generate a return (6% interest per annum) equal or greater than the average investment return of the Corporation' s fixed income portfolio during the 12 month period before March 31, 2016. Subsequent to June 30, 2016, the GDB entered into events of default by failing to make interest payments on the Notes held by the Corporation. As a result ofthe November 2016 Puerto Rico general elections, Ricardo R. Roselló Nevares, a member of the New Progressive Party, was swom in as Govemor in January 2017.

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On January 23, 2017 Act No. 3-2017, "Act to Address the Economic, Fiscal and Budgetary Crisis in order to Guarantee the Operations of the Govemment of Puerto Rico" (Act No. 32017) was enacted by the Commonwealth of Puerto Rico in order to take temporary emergency measures so that the Commonwealth can continue its operations and be able to offer essential services to its citizens; establish certain prohibitions over the engagement of 91

STATEINSURANCEFUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financial Statements June 30, 2016 professional services, among other measures which will be in effect until July 15\ 2021. Toe Act provides, among other, that during the term of this Act: • •

• • • •





There will be no increases in economic benefits or extraordinary monetary compensation to the employees of the Executive Branch, with certain exceptions; Collective bargain agreements that expired at the effective date of this Act or that expire during the term of the Act, will be extended with regards to their noneconomic clauses or other clauses not affected by the Act, until June 30, 2021. In the case of public corporations, all non-economic clauses (those listed in Article 17 of Act No. 66-2014) negotiated in the agreements in force with its unionized employees that have a direct or indirect economic impact on the operations of the public corporation should be suspended; Vacant positions at the effective date of the Act will remain vacant until June 30, 2017; Toe creation of new job positions is prohibited; From the effective date of the Act, each agency and public corporations should eliminate 20% of their authorized trusted positions; From the effective date of the Act, each agency and public corporations should reduce its operating expenses for the next fiscal year 2016-201 7 by 10% of half of the total budgetary expenses approved for such fiscal year and reduce its purchases by 5%. Public corporations will recognize the balances of accrued vacation days outstanding at the effective date of this Act, to its unionized and non-unionized employees, but cannot liquidate in cash ali excesses accrued befare and during the term of the Act. On the same token, the excess of sick days accrued by the employees, before the effective date of this Act, will be frozen at the salary of June 30, 2014 and its liquidation in cash would only be made if the employee separates from the public service. The savings generated by the Corporation as a result of the implementation of this Act, should be contributed to the "Fund of Services and Therapies for Special Education Students" during the tenn of the Act.

Toe Corporation is evaluating the impact of this legislation on its net position. On January 29, 2017 Act No. 5-2017, the "Puerto Rico Financia! Emergency and Fiscal Responsibility Act" (Act No. 5-2017) was enacted by the Commonwealth of Puerto Rico in order to facilitate and encourage a voluntary negotiation process under PROMESA between the Govemor and/or the Puerto Rico Fiscal Agent and Financia! Advisory Authority, on behalf of the Government of Puerto Rico, and the creditors of the Govenunent of Puerto Rico and its instrumentalities. Act No. 5-2017 authorizes the Goverrunent of Puerto Rico, within the parameters established by PROMESA, to designate certain services necessary for the

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Notes to Basic Financia! Statements

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June 30, 2016 health, safety and welfare of the residents of Puerto Rico and provided by the Commonwealth and its instrumentalities as "essential services", and amends and repeals portions of the Puerto Rico Emergency Moratorium and Financia! Rehabilitation Act, Act No. 21 ..2016, as amended by Act No. 40-2016 and Act No. 68-2016 (the "Moratorium Act:"), among other measures. On February 28, 2017 the Commonwealth of Puerto Rico submitted the Fiscal Plan to the Financial Oversight and Management Board for Puerto Rico. Toe Fiscal Plan establishes that the Commonwealth will defer the repayment ofTRANS until after fiscal year 2018. The Corporation evaluated subsequent events up to February 28, 2017 thc date the financia! statements were available to be issued.

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REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)

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No assurance is provided. 94

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STATE INSURANCE FUND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Required Supplementary lnformation (Unaudited) Ten - Year Claims Development lnfonnation Year ended June 30, 2016 SfATEINSURANC& FUND COUORATION (A~1UoitolllleC--olP-1oRico)

TEN-YIAR CLAIMS D&VELOPMENTINFORMATION (AMOUNTS IN THOIJSANDS) REQUIREDSUPPUMBNTARV INl'ORMA110N (UNAUIRTED) F1SCAL YIAR l!NDED .IUNE JI, Zlll6

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737,006

NA 3)Ellimatedulli-...... alpalic¡,,ar

s

417,591

s

266.119 336..490 367,169 3116.247 191.121 407,131 414.269 419,445 423,662 426,744

NA

2119

709,794

NA

2111 670,4'°

NA

2111

680,112

NA

2111 697,150

NA

2113 619,599

NA

2'14 663,054

NA

1Dl5 634,662

NA

1016 619,509

NA

471,404

476.)69

496,427

462,174

4JJ,ll4

419,716

117,231

l7l,ll5

lll,67'

269"69

276,197 lS0.117 J17.SS6 407,462 420,517 4lll,094 417,107 441,993

292,341 l17,S69 420,914 44",719

261,231 144611 115,763 408,457 422,667 412,164

247,695 lll,677 146,266 364,545 )ff,635

242,007 216.319 109,732 123,731

216,731 255,403 270.IIJ9

224,536 263,544

21",092

462,174 469,915 ,475,169 471,540 477,119 414,711

4JJ,J14 425,521

.fl9,716 J95.Z7' 176.1112 ]72,050

J17,2ll )45,761 127,100

J7J,IJS

JJl,67'

4)Awdedual 12mantu 24 mantu 36-.

......... ......... 96.-.

'°-"" 12..-..

1111-.

12011N1111bs

JJ7,744 172,665 J92,2l2

405.151 414.275 421,107 426,140

460,Jl9 470,690 477,'°6

4J0.241

5)~..._..,ill
............ '°_... 72 ...........

14IIIOlllbs 96IIIOlllbs IOI mandll 120111C1111bs

s

417,591

460.651 456.440 455,030 451,192 451,991 459,480 459,910 459,669 467,2S6

471,404 462,171 454,667 459,509 "66,071 ,465,325

466,JZI 465,151 474,591

476,)69 467,551 474,]34 479,214 480,454 480,1]2 479,115 411,261

,496,427 501,912 511,40] 516,950 520,624

520.JII 531,071

No assurance is provided. 95

42!1,611 ,426.119 422,575

141,IOO

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STATE INSURANCE FlJND

CORPORATION (A Component Unit of the Commonwealth ofPuerto Rico) Required Supplementary lnformation (Unaudited) Preliminary and Unaudited Schedules of the Corporation' s Proportionate Share of the Net Pension Liability and Corporation' s Contributions Year ended June 30, 2016 Toe following schcdules 2a & 2b are beíng presented to providc 1nfonnanon oa the Corporalion's proportíonate shan: or the Net Pensi011 liabibay &1111 the Corporati011's contríbutíons n:lated to the Employ,:es' Retin:mcnt Systcm or the Commonwealth of Puerto Rico and its Instrumentalities.

lnformation is pn:limi11111}' and 1111&udiled. (la) Scllldule of tlae Corponlioa's Praportioaate Sbare of tle Net PeuiH Llability Fiscal Year 20Uí* Corporalion's proportion of the net peasion liabilíty Corporation's proportionate shan, of thc aet penston liability Corporation's covcn:d-employee .-yro11 Corporation's proportíonatc shan, ofthe net pension liability as a pen:entagc of its covcn:d-employce .-yroll Plan's fiduciaiy aet position as a pen:entagc of the total pcnsion liabilily

s s

P"11e11I Yar 2015*

471% 1,417,962,700 116,993,972

4.71". 1,417,962,700 116,993,972

7S8%

7S8%

0.42%

0.42%

• Amounts pn:sented llbove were basccl on the measun,ment pcriocl ending June 30. 2014. Sincc it ís the latest availablc infonnation, no changes were madc for 2016.

(lb) Scllednle oftle Corporatioa's Coatribatioas

Statutorily n,quíred employt:r contríbution Amount or amtributions ra:ognizal by the pens1on plan in relatíon to the statUIOrily n,quired amtribution

s

Contribulion deficienc:y (excess)

s

Corporatíon's covered-employ,,c payroll Contribulíons n,Q>gnÍZed by thc pcnsion plan as a pen:entage

s

P"ucal Year 20Uí**

P"ucal Year 2015*

32,205,716

30,628,657

32,20S,716

30.628.657

l 81,S09,828

182,278,4S2

17.74%

16.80%

of covered-employee payroll •• Amounts pn,scnted above were basccl oa the fiscal year ended June 30, 2016. • Fisclll year 2015 was thc fint year of 1mplemenlation, lhaefore Ollly two years are shown See accompanying independent auditan' n:port,

No assurance is provided.

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STATE INSURANCE FUND CORPORATION (A Component Unit ofthe Commonwealth of Puerto Rico) Required Supplementary Information (Unaudited) Schedule of Funding Progress and Employer Contributions for Pension Costs Year ended June 30, 2016 UAALasa Percentage of Covered Payroll l(b)-(a)ICI

Unfunded/ (Oveñunded) ALL (UAAL) (3) (b)-(a)

Fuoded Ratio (a)l(b)

21,064,434

21,064,434

0%

182,278,452

11.6%

July 1, 2012

29,634,360

29,634,360

()OA,

189,416,028

15.6%

July 1, 2011

37,673,268

37,673,268

0%

201,141,746

18.7%

Annual Pension Cost (APC)

Employer Contributions (1)

Actuarial Valuation Date July 1, 2014

Actuarial Accrued Liability (3) (AAL)(b)

Actuarial Valueof Assets (a) $

Covered Payroll (l)C

Schedule of Employer Contributions:

Fiscal Y ear Ended June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012

$

2,051,503 2,539,669 2,543,130 4,043,044 4,629,858

137,843 422,634 3,515,455 7,141,863 1,629,318

Peruntage Contributed 6.7% 16.6% 140.6% 176.6% 352%

NetPension Obligation 10,148,553 8,234,892 6,117,857 7,150,183 10,249,002

( 1) Since thcre is no funding, these are estimated cash plan premiums and other payments less estimated participant contributions. (2) Estimatcd plan participant payroll, includes only plan participants. (3) The unfunded actuarial accrued liability does not include the impact of Act. No. 66-2014.

See accompanying independent auditors' report.

No assurance is provided.

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STATE INSURANCE FuND CORPORATION (A Component Unit of the Commonwealth of Puerto Rico) Required Supplementary Information (Unaudited) Schedule of Funding Progress and Employer Contrihutions for Postemployment Benefits other than Pensions Year ended June 30, 2016

Actuaria) Value of Assets (a)

Actuaria) Valuation Date

Actuaria) Accrued Liability

Unfunded/ (Oveñunded) ALL(UAAL)

(AAL) (b)

(b)-(a)

Funded Ratio (a)/(b)

Covered Payroll (2)C

UAALasa Percentage of Covered Payroll ((b)-(a)/CJ

30,838,515

30,838,515

0%

182,278,452

16.9%

July 1, 2012

38,363,662

38,363,662

0%

189,416,028

20.3%

July 1, 2011

57,800,111

57,800,111

0%

201,141,746

28.7%

July 1, 2014

$

Schedule of Employer Contributions: Annual OPEB Cost(AOC)

Fiscal Year Ended $

June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012

2,803,132 2,854,308 3,185,217 3,414,010 5,161,392

Employer Contributioos (1)

2,497,147 4,637,078 6,572,857 7,143,207 4,873,734

Percentage Contributed 89.1% 162.5% 206.4% 209.2% 94.4%

NetOPEB Obligation 1,246,641 940,656 2,723,426 6,111,066 9,840,263

(1) Since there is no funding, these are estimated cash plan premiums and other payments less estimated participant contributions. (2) Estimated plan participant payroll, includes only plan participants. See accompanying independent auditors' report.

No assurance is provided. 98

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P.O. Box 383642 San Juan, PR 00936 Tel. 787-765-4644 Fax 787-763-5504 www.landaumplerre.com

Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Peñormed in Accordance with Government Auditing Standards

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To the Board ofDirectors of State Insurance Fund Corporation: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financia! audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financia! statements of net position, revenues, expenses and changes in net position and cash flows of State lnsurance Fund Corporation (the Corporation) as of and for the year ended June 30, 2016, and the related notes to the financia! statements, which collectively comprise the Corporation's basic financia! statements and have issued our report thereon dated February 28, 2017.

Internal Control over Financia! Reporting

In planning and performing our audit of the financia! statements, we considered the Corporation' s internal control over financia! reporting (interna! control) to detennine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financia! statements, but not for the purpose of expressing an opinion on the effectiveness of the Corporation' s internal control. Accordingly, we do not express an opinion on the effectiveness ofthe Corporation's intemal control. A deficiency in interna/ control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in interna! control such that there is a reasonable possibility that a material misstatement of the entity' s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, ora combination of deficiencies, in interna! control that is less severe than a material weakness, yet important enough to merit attention by those charged with govemance. Our consideration of interna! control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in interna! control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in interna! control that we consider to be material weaknesses. We did identify certain deficiencies in interna! control that we reported to the Corporation' s management in a separate letter dated February 28, 2017.

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99 Member flrm of CPA Assoclates lnternatlonal wlth offlces In principal cltles worldwlde

Compliance and Other Matters As part of obtaining reasonable assurance about whether the Corporation' s financial statements are

free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statements amounts. However, providing an opinion on compliance with those provisions was notan objective of our audit, and accordingly, we do not express such an opinion. Toe results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Corporation's Response to Findings The Corporation' s response to the findings identified in our audit is described in a separate letter dated February 28, 2017. Toe Corporation's response was not subjected to the auditing procedures applied in the audit ofthe financial statements and, accordingly, we express no opinion on it.

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of intemal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's intemal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's intemal control and compliance. Accordingly, this communication is not suitable for any other purpose.

San Juan, Puerto Rico February 28, 2017

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Certified Public Accountants (of Puerto Rico) License No. 95 expires on December l, 2017. Stamp No. El90120 ofthe Puerto Rico Society of CPA's was affixed to the record copy ofthis report.

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Anejo 11: )""

Commonwealth of Puerto Rico State lnsurance Fund Corporation -Actuaria! Study of the Workers Compensation Program as of June 30, 2016.

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Puerto Rico State Insurance Fund Corporation Loss and LAE Projections as of June 30, 2016

March 2017

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Prepared by:

I

CTUARIAL LUTIONS

PUERTO Rico STATE INSURANCE FUND CORPORATION Loss AND LAE PROJECTIONS AS OF JUNE 30, 2016 TABLE OF CONfENTS

ExECUTIVE SUMMARY REPORT

l.

BACKGROUND AND SCOPE ....................................................................................................................................................... 5

11.

LIMITATIONS ............................................................................................................................................................................... 6

111.

DISTRIBUTION AND USE........................................................................................................................................................... 7

N.

DATA.............................................................................................................................................................................................. 8

V.

AsSUMPTIONS AND DEFINIDONS ........................................................................................................................................ 1O

VI.

EsTIMATING Loss .................................................................................................................................................................... 13

VII. LAE ............................................................................................................................................................................................. 17 VIII. RETURN PREMIUM LIABILfIY .............................................................................................................................................. 19 IX.

SUMMARYOF Loss, LAEAND RETURN PREMIUM REsERVES .................................................................................... 20

X.

CONFIDENCE INfERVALS ....................................................................................................................................................... 21

XI.

LIABILfIY DURATION .............................................................................................................................................................. 23

XII. PAYMENTS DURING NEXT FlVE YEARS .............................................................................................................................. 24 XIII. PROSPECTIVE FUNDING LEVEL ............................................................................................................................................ 25

XN.

PREMIUM ADEQUACY ............................................................................................................................................................. 27

XV. ÜBSERVED TRENOS IN ExPERIENCE ................................................................................................................................... 28 XVI. COMPARISON TO PRIORANALYSIS ...................................................................................................................................... 33 XVII. FINANCIAL STATEMENT RECONCILIATION .................................................................................................................... 37 XVIII. ADDITIONAL COMMENTS AND CONSIDERATIONS ........................................................................................................ 38 XIX. STATEMENT OF QUALIFICATIONS ........................................................................................................................................ 39 ExHIBITS APPENDICES

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PUERTO Rico STATE INSURANCE FuND CORPORATION Loss AND LAE PROJECTIONS AS OF JUNE 30, 2016

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ExECUTIVE SUMMARY

Actuaria! Solutions has evaluated the workers compensation loss and loss adjustment expense (LAE) liabilities, as well as the retum premium liability, for the Puerto Rico State Insurance Fund Corporation (SIFC) based on data evaluated as of June 30, 2016. This analysis provides the SIFC with an actuaria! central estimate of its needed loss, LAE and retum premium liability, as well as reserve estimates established by Actuaria! Solutions at indicated confidence levels requested by the SIFC. We have also determined additional requested scope items as discussed herein.

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Loss, LAE and Retum Premium Liability

It is projected that loss reserves of $913,712,886 are needed as of June 30, 2016 to pay benefits to Puerto Rico workers who were injured on or befare June 30, 2016. Adding in needed reserves for LAE of $111,364,000 and the retum premium liability of$87,611,452 yields a total undiscounted liability of$1,112,688,338 for the SIFC as of June 30, 2016. Table 1 presents this liability on both an undiscounted anda discounted b(;lsis.

Table 1

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Loss, LAEandReturn Premium Liability as of June 30, 2016

Liability Type (1) Temporary Total Benefits (2) Permanent Partial Benefits (3) Permanent Total Benefits (4) Death Benefits (5) Total Indemnity (1) + (2) + (3) + (4) (6) Total Medical (7) Total Loss (5) + (6) (8) Loss Adjustment Expense (9) Loss and LAE (7) + (8) (10) Return Premium (11) Total Liability (9) + (10)

Nominal Needed Reserve

Present Value Needed Reserve*

$66,588,135 174,094,500 462,578,525

$56,118,938 152,662,251 272 ,021,659

52,711,000

34,273,691

$755,972, 160

$515,076,539

157,740,726

133,831,417

$913,712,886

$648,907,956

111,364,000

79,089,376

$1,025,076,886

$727 ,997 ,332

87,611,452

87,611,452

$1,112,688,338

$815,608,784

* Loss and LAE are discounted at an annual rate of 3.54%; retum premium is discounted at 0.00%.

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Page 1 Actuaria! Solutions

Confidence Intervals Based upon statistical simulation techniques, Tables 2 and 3 present indicated reserves at various confidence levels on both an undiscounted anda discounted basis, respectively. Table 2 Undiscounted Basis Confidence Intervals

Benefit Type (1) Temporary Total

Actuaria! Central Estímate

174,094,500

(3) Permanent Total

462,578,525

(5) Medical

$1,157,195,872

$1, 185,013,080

$1,223,957,172

157,740,726 $913,712,886

(7) LAE

$111,364,000

(9) Total Liabili ty

90%

52,711,000

(6) Total Loss (8) Return Premium

80%

$66,588, 135

(2) Permanent Partial (4) Death

70%

$87 ,611,452 $1,112,688,338

Table 3 Discounted Basis* Confidence Intervals

Benefit Type

Actuaria! Central &timate

(1) Temporary Total

$56,118,938

(2) Permanent Partial

152,662,251

(3) Permanent Total

272,021,659

(4) Death (5) Medical (6) Total Loss

80%

90%

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34,273,691 133,831,417 $648,907,956

(7) LAE

$79,089,376

(8) Return Premium

$87 ,611,452

(9) Total Liabili ty

70%

$815,608,784

$848,233,135

$868,623,355

$897, 169,662

* Loss and LAE are discounted atan annual rate of 3.54%; retum premium is discounted at 0.00%. Page 2 Actuaria! Solutions

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Prospective Payments

Table 4 identifies benefit payments to be made during each of the next five fiscal calendar years on accidents -

occurring through June 30, 2016.

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Table 4 Prospective Loss Payments (Nominal Basis)

Benefit Type (1) Temporary,Total

(2) Permanent Partial

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(3) Permanent Total

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(6) Total Loss

16/17

17 / 18

Fiscal Year ... 18/19

19/20

Subsequent

'20/21

Total

$17,092,062 45,562,400

$10,463,035

$7,251,466

$5,336,385

$4,074,583

$22,370,604

35,602,096

23,521,688

15,725,731

11,107,622

42,574,963

$66,588, 135 174,094,500

18,404,546

18,348,636 3, 163,271

18,094,161

17,801,490

17,388,745

372,540,947

462,578,525

3,415,805

2,929,874

2,721,543

2,528,670

37,951,837

52,711,000

49,657,540

24,942,915

15,756,720

10,999,405

7,919,282

48,464,864

157,740,726

(4) Death (5) Medica!

$134, 132,353

$92,519,953

$67,553,909

$52,584,554

$43,018,902

$523,903,215

$913,712,886

(7) LAE

$16,348,150

$11,276,400

$8,233,520

$6,409,044

$5,243,175

$63,853,711

$111,364,000

(8) Retum Premium

$48,112,176

$13,329,136

$8,575,738

$5,409,607

$3,442,037

$8,742,758

$87,611,452

$198,592,679

$117,125,489

$84,363,167

$64,403,205

$51,704,114

$596,499 ,684

$1,112,688,338

(9) Total Liability

Loss Forecast

The ultimate cost of benefits associated with claims occurring during each of the next five prospective fiscal accident periods is presented by benefit type in Table 5 on an undiscounted basis.

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Table 5 Loss Forecast (Nominal Basis)

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Benefit Type (1) Temporary Total

2018

2020

2021

$15,730,000

$15,488,000

$15,004,000

$14,762,000

$14,520,000

45,254,000

46,464,000

47,432,000

48,642,000

49,852,000

(3) Permanent Total

8,954,000

8,954,000

8,954,000

8,954,000

8,954,000

(4) Death

2,178,000

2,178,000

2,178,000

2,178,000

2,178,000

260, 150,000

260, 150,000

260, 150,000

260,150,000

260, 150,000

$332,266,000

$333,234,000

$333,718,000

$334,686,000

$335,654,000

(2) Permanent Partial

(5) Medica! (6) Total Loss

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2017

Accident Funding Period 2019

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Liability Duration

We have estimated the average duration of loss payments by benefit type, as well as the expected payment duration for retum premium liability. This information is summarized in Table 6. Table 6 Average Duration Duration (In Years)

Item Tem porary Total

5.757

Permanent Partial

4.287

Permanent Total

18.356

Death

15.025

Me di cal

5.693

Return Premium

1.965

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Premium Adequacy

A review of loss ratios over the last 1O years allows insight into the adequacy of premium charged to Puerto Rico employers for workers compensation coverage. Please refer to Table 7.

Table 7 Accident Year

Loss Ratio

2006/07

64.3%

2007/08

64.4%

2008/09

68.8%

2009/10

79.2%

2010/ 11

71.2%

2011/ 12

60.6%

2012/13

54.0%

2013/14

49.3%

2014/15

53.9%

2015/16

54.7%

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PUERTO RICO STATE INSURANCE FUND CORPORATION Loss AND LAE PROJECTIONS AS OF JUNE 30, 2016 REPORT

l.

BACKGROUND AND SCOPE

The Puerto Rico State Insurance Fund Corporation (SIFC) was created in the 1940s as a public corporation to act as the sole source of workers compensation insurance in Puerto Rico. It is overseen by a board of directors which is appointed by the Govemor of Puerto Rico; it is also subject to the advice and cons~nt of the Senate of Puerto Rico. All employers in Puerto Rico are required by law to insure their workers through the SIFC at the rates and premiums set by its board of directors.

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The SIFC was created under the Workmen Compensation Insurance Act (the "Act"; Law No. 45) on April 18, 1935.

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and to establish the functions and responsibilities of the Board of Directors, the Administrator and the Industrial

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This report presents Actuaria! Solutions' analysis of the following items as requested by the SIFC:

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The Act was amended on October 29, 1992 by Law No. 83 to convert the agency into a govemmental corporation Medica! Advisory Board.

• • • • • • • • • • • •

Ultimate loss as of June 30, 2016 Needed loss and LAE reserves as of June 30, 2016 on a nominal basis Retum premium liability as of June 30, 2016 on a nominal basis Liability duration by benefit type Needed loss and LAE reserves as of June 30, 2016 on a discounted basis Retum premium liability as of June 30, 2016 on a discounted basis Specified confidence levels regarding the indicated loss, LAE and retum premium liability Projected loss payments in each of the next five fiscal years Loss forecasts of the ultimate benefit costs for the five prospective accident years Analysis of premium adequacy Trends in historical experience A liability reconciliation for financia! statement purposes

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11.

LIMITATIONS

The computations leading to our projections of ultimate loss and LAE, corresponding loss and LAE reserves, retum premium liability, and associated items, are based on generally accepted actuarial techniques and are in keeping with the Qualifications Standards of the American Academy of Actuaries and the Standards of Practice published by the Actuarial Standards Board. The projections involve estimations. We have used those estimations we considered most reasonable based upon information obtained from the SIFC. We have not audited this information, but our analysis included such reviews as we deemed necessary to ascertain the information's reasonableness and applicability in the projection of ultimate loss and LAE. The accuracy of our results depends upon the accuracy and completeness of the underlying data; thus, any significant discrepancy in the completeness, interpretation or accuracy ofthe information could alter the results presented, perhaps materially, and may require a revision of this report. While we believe these projections are as accurate as can presently be achieved, the projection of loss and LAE is necessarily an inexact science. The events which give rise to insurable loss are fortuitous and individually unpredictable, with the ultimate settlement of loss affected by inflation, social expectations and other unpredictable factors. The end result of these uncertainties is that the results are averages (mathematical expectations) and the actual future experience of the SIFC may differ, perhaps materially, from any estimate of ultimate loss, LAE and retum premium. We note that there is limited data availability for the SIFC (as detailed in later sections ofthis report). For three benefit types, only case reserves are available for accident years prior to about 1985. For medical and temporary benefits, no information is available for accident years prior to approximately 1985 and only paid loss (no case reserves) is available for the remaining years. Additionally, no claim count data is available; this could be used both in the projection of ultimate loss and in diagnostic testing and reasonability checks of our results. This significantly limits the use of standard actuaria! approaches and increases the variability of results. Furthermore, the reflection of discounting increases the uncertainty inherent in our estimates. In producing

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indicated reserves on a discounted basis, we have reflected the interest rates provided by the SIFC for each of loss and retum premium. Altemative interest rates could have a material impact on the discounted liability. We

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strongly recommend that a risk margin be included if the liability is recorded on a discounted basis on financial

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statements.

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111. DISTRIBUTION AND USE This report has been prepared for the use of the SIFC, as well as its auditors and regulators, for the purpose of reviewing the SIFC's loss, LAE and retum premium liability as of a point in time. This report should only be distributed in its entirety and with prior expressed written consent of Actuaria! Solutions.

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N.DATA

The following data was provided by the SIFC, unless otherwise noted, and relied upon in the course of perfonning this analysis: Triangles of cumulative paid loss for each of pennanent total, pennanent partial and death benefits for accidentyears 1988 and subsequent through a 180-month maturityt Triangles of cumulative paid loss for temporary total benefits for accident years 1984 and subsequent through 180 monthsl Triangles of cumulative paid medical loss2 for accident years 1986 and subsequent through 180 monthsl Triangles of incurred loss through 180 months for each of pennanent total and death (1986 and subsequent), as well as permanent partial (1984 and subsequent)t Case reserve "balances" for accident years 1961 and subsequent for permanent total and death benefits, and for 1975 and subsequent for permanent partial benefits 1 Triangles of eamed premium through 360 months for policy years 1986 and subsequent1 Triangles of collected premium through 336 months for policy years 1986 and subsequentt Triangles of retumed premium through 348 months for policy years 1986 and subsequentt Triangles ofuncollected premium through 288 months for policy years 1990 and subsequentt Loss, expense, payroll, premium and other relevant information as used by Aon in their five reports prepared as ofthe June 30, 2010 through June 30, 2015 evaluation dates The report on loss, LAE and retum premium reserves prepared as of June 30, 2009 by PricewaterhouseCoopers Paid loss and LAE information on a calendar year basis U.S. countrywide works compensation allocated loss adjustment expense (ALAE) and unallocated loss adjustment expense (ULAE) information available from the National Council on Compensation Insurance (NCCI) Explanations ofthe SIFC's data and operations provided by Aon at the request ofthe SIFC We note the following with regard to the data provided for our review: For pennanent total, death and pennanent partial benefits, we were provided with triangles of paid and incurred loss. There are several instances, for death and pennanent partial benefits, in which the paid loss is greater than the incurred loss for a given accident year, implying negative case reserves. We have not received an explanation as to why this occurs. Representatives of Aon, the SIFC's prior actuary, indicated that this data issue existed prior to their involvement with the SIFC; however, the data remained consistent throughout their engagement. Taking the difference between the incurred loss triangles and paid loss triangles yields implied case reserves. We compared these implied case reserves to the case reserve balances contained in the data file received from the SIFC and found many instances in which they do not match. Aon indicated they had not received an explanation for the cause of the discrepancy, but were infonned that the SIFC has

2

In 12-month intervals We note that revised medica! triangles were provided on December 20, 201q; cumulative payments through June 30, 2016 were updated.

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confidence in the data in the triangles and such should be utilized to the extent available. Aon also noted that this data discrepancy was consistently present throughout their engagement and in the report prepared by the actuary (PwC) preceding their engagement.

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V.

AsSUMPTIONS AND DEFINITIONS

A. Actuaria! Assumptions •

Estimates provided in this reportare actuarial central estimates (unless otherwise indicated) and represent an expected value over a range of reasonably possible outcomes, not all conceivable outcomes.



The annual rate of retum can be realized on assets held, prior to making loss, expense or retum premium payments.



The decrease in ultimate cost resulting from consideration of the effect of discounting is applicable only if there are assets available that can be invested and which equal or exceed the discounted liabilities.



The effect of discounting al1 future cash flows associated with benefits, expenses and retum premiurri has been reflected in this analysis at the request of the SIFC. Such discounting reflects an annual discount rate of 3.54% for loss and LAE and 0.00% for retum premiums, as provided by the SIFC. Actuarial Solutions expresses no opinion as to the appropriateness of these interest rates. We note, however, that we have been informed that these rates were determined based upon the average expected duration of remaining liability payments as produced by our analysis; we believe it is reasonable and appropriate to consider liability duration in selecting interest rates for discounted liabilities.



Secular trends are reflected in the process of estimating ultimate claims, but only to the extent they are already contained in the experience. Secular trends include inflation, increasing or decreasing utilization and increased costs associated with advances in medical technology.



No provision has been made for possible retroactive benefit changes to existing workers compensation claims.



Changes in the social or legal environment are recognized only to the extent they are implicit in the experience. Examples of such changes are an increased propensity to sue, an increase or decrease in claims utilization, changes injury awards, a broadened definition of compensable injury, anda heightened level of plaintiff attomey activity.



The ultimate loss and expense projections produced by this analysis are based upon the historical experience of the SIFC. These projections make no provision for extraordinary future emergence of new classes of losses or types of losses not sufficiently represented in the SIFC's historical database or which are not yet quantifiable.



As an historical SIFC LAE split of ALAE versus ULAE is not available, we have assumed that the United States countrywide workers compensation allocation of LAE into these components provides an appropriate allocation for the SIFC's LAE.



Loss for each accident period has been reduced to recognize the portian of the year earned as of June 30, 2016 based upon uneamed premium information provided by the SIFC. The uneamed premium results from multi-year construction projects.



Data is evaluated as of June 30, 2016; additional information has been provided through December 23, 2016.

B. Definitions 1. Accident Year

Within the context of this analysis, each accident year represents a period of time during which accidents associated with policies issued in that timeframe are aggregated. For example, accident year 2015/ 16 (also referred to as accident year 2016) represents accidents relating to policies issued from July 1, 2015 through Page 10 Actuarial Solutions

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June 30, 2016. While the majority of the accidents for a specified accident year occur within the corresponding 12 months ending June 30 for such policies, there are sorne long-term contracts issued by the SIFC which have the potential to contribute accidents for many years subsequent to June 30 ofthe given year. 2.

Benefits

In the context of workers compensation insurance, remuneration paid to injured workers, with amounts and duration established by applicable law. 3.

Case Reserves

The amount which remains to be paid for a particular claim, estimated by the claim adjuster. 4.

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mscount Rate

The interest rate used to derive the present value of liabilities; determined with consideration of available assets and duration of loss payments. Discount rates reflected in this report were provided by the SIFC after consideration of the liability durations generated by our analysis. S.

Incurred But Not Reported (IBNR)

Within the context of this report, the indicated IBNR represents the difference between: a) The projection of ultimate loss and LAE; and b) Paid loss and LAE plus carried loss and LAE case reserves as of June 30, 2016.

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Thus, IBNR reserves include two components: loss and LAE liability associated with claims for which the SIFC is responsible that have not yet been reported as of June 30, 2016 ("pure IBNR claims"); and additional development on known claims between June 30, 2016 and the time at which such claims will be closed.

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6. Incurred Loss

For the purpose of this report, incurred loss will mean paid loss plus case reserves, unless otherwise indicated. 7. Loss Adjustment Expense (LAE)

This report projects loss and LAE as of June 30, 2016. LAE has two components: defense and cost containment expense (DCCE) and adjusting and other expense (AOE). DCCE, also known as ALAE, includes defense, litigation and medical cost containment expenses. AOE (also known as ULAE) includes all other expenses associated with the claims handling function. For the SIFC, all claims administration is performed in-house, and outside attorneys are not utilized. LAE data is compiled by the SIFC and provided on a combined basis. 8.

Paid Loss

The dollars of benefits actually paid to or on behalf of the claimant. 9. Policy Year

Period of time during which policies incepting are aggregated. For the SIFC, a given policy year represents policies incepting from July 1 through June 30 of the following year. For example, policy year 2015/ 16 (also denoted as policy year 2016) represents policies issued from July 1, 2015 through June 30, 2016. While the

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majority of these policies expire on June 30, there are a number of long-term contracts which continue to contribute premium and exposure to loss subsequent to June 30 ofthe given policy year. 1 O. Present Value

The cost in today's dollars of future payments. For example, if $1.00 is to be paid a year from now, and if it was possible to eam an annual interest rate of 3%, one would need to invest $0.97 today to payout $1.00 next year ($0.97 x 1.03 = $1.00). 11. Retum Prerrúum

The portian of the premium paid to the SIFC, which is to be retumed to insureds in the case of a cancellation, an adjustment to the rate, an overpayment of an advance premium oran audit adjustment of exposure (payroll).

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VI. ESTIMATING Loss Historical SIFC loss data was provided to us for each benefit type. The data we received was comprised of the following:

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Permanent Total a. Incurred loss for accident years 1986 through 2016 at 12-month intervals from a 12-month maturity through a 180-month maturity b. Paid loss for accident years 1988 through 2016 at 12-month intervals from a 12-month to a 180-month maturity c. Case reserve "balance" as of June 30, 2016 for accident years 1961 through 2016



Permanent Partial a. Incurred loss for accident years 1984 through 2016 at 12-month intervals from a 12-month maturity through a 180-month maturity

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b. Paid loss for accident years 1988 through 2016 at 12-month intervals from a 12-month to a 180-month maturity

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c. Case reserve "balance" as of June 30, 2016 for accident years 1975 through 2016



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a. Incurred loss for accident years 1986 through 2016 at 12-month intervals from a 12-month maturity through a 180-month maturity b. Paid loss for accident years 1988 through 2016 at 12-month intervals from a 12-month to a 180-month maturity

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Death

c. •

Case reserve "balance" as of June 30, 2016 for accident years 1961 through 2016

Temporary Total a. Paid loss for accident years 1984 through 2016 at 12-month intervals from a 12-month to a 180-month maturity



Medical a. Paid loss for accident years 1986 through 2016 at 12-month intervals from a 12-month to a 180-month maturity

The actuary's role is to utilize this historical information to project the ultimate cost of claims arising over the time period under review. There are several methods considered in the loss projection process. An actuary's experience and judgment are important elements in the selection and application of each projection method. A general description of each method reflected within our analysis to project loss is discussed below. Dueto the limited data availability outlined above, we were notable to utilize every approach for each benefit type, or for certain years within a given benefit type. The benefit types for which each method was utilized are noted

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within the descriptions below. The approach taken for groups of accident years for which data is limited are separately discussed. The projection methods, selected ultimate loss and needed reserve amounts for each benefit type can be found in the following appendices: Temporary Total Permanent Partial Permanent Total Death Medical

Appendix A Appendix B Appendi.x C Appendi.x D Appendix E

A. Projected illtimate Loss for Accident Years 2001/02 to 2015/16 1.

Paid Development Method

Paid loss development factors are produced by dividing the paid loss at one evaluation by the paid loss at an earlier evaluation. The product of successive development factors is used to determine age-to-ultimate development factors. Applying an age-to-ultimate paid development factor to actual paid loss data provides an estimate of ultimate loss. In selecting development factors, we reviewed actual SIFC experience, by benefit type. Additionally, as workers compensation benefits generally are paid overa long period of time, and data was only available through a 180-month maturity, we utilized curve fitting to estimate the development beyond 180 months. For each accident year, by benefit type, the appropriate paid loss development factors were multiplied by actual paid loss as of June 30, 2016 to estimate ultimate loss. This method was used for ali five benefit types. 2.

Incurred Development Method

Similar to the paid loss development approach, this method projects ultimate loss using incurred loss development factors and actual incurred loss data. Actual incurred loss as of June 30, 2016 for each accident year was multiplied by the appropriate incurred loss development factors to produce an estimate of ultimate loss. This method was utilized to project permanent partial, permanent total and death benefits. 3.

Outstanding Development Method

This approach combines the incurred loss development factor and the paid to incurred ratio to produce a case reserve (outstanding) loss development factor. The case reserve loss development factor is applied to the case reserve as of June 30, 2016 and this product is then added to the cumulative paid loss as of this

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date to produce an estimate ofultimate loss. We estimated pennanent partial, pennanent total and death loss via the outstanding development method. 4.

Expected Loss Method

Expected loss is calculated by applying a selected loss cost to exposure for a given accident year. The exposure (payroll in $100 units) was provided by the SIFC. Indicated loss costs are derived by comparing projected ultimate loss to exposure. For more mature accident periods, selected ultimate loss is utilized; for less mature years, an estimate of ultimate loss is reflected based upon the three loss development factor (LDF) methods discussed above. These historical loss costs are then adjusted to reflect conditions anticipated to be in effect for accident year 2016 / 17. A loss cost for accident year 2016 / 17 is selected after reviewing the trended historical loss costs. This loss cost is then de-trended to obtain loss,costs applicable to accident years 2011 / 12 through 2015 / 16. These loss costs are then multiplied by each accident year's exposure to project ultimate loss for the given accident year. The expected loss method was utilized to project loss for each of the five benefit types. 5.

Bomhuetter - Ferguson Method: Paid Basis

Actual paid loss data through June 30, 2016 was added toan estimate of loss to be paid subsequent to

1

June 30, 2016 to provide an additional projection of ultimate loss. To estimate paid loss subsequent to June 30, 2016, the result of the expected loss method was multiplied by the portion oftotal loss assumed to be paid after June 30, 2016, as irnplied by the paid loss development factors. This approach was used to estimate ultimate loss for each of the five benefit types. 6. Bomhuetter - Ferguson Method: Incurred Basis This method is analogous to the Bomhuetter-Ferguson paid method using incurred loss data and incurred LDFs rather than paid. Incurred loss data is not available for all five benefits; thus, this approach was only used to project pennanent temporary, death and pennanent partial loss. 7.

Selected Loss for Accident Years 2001 / 02 and Subsequent

For accident years 2001/02 through 2015/ 16, actual paid loss data is available as of June 30, 2016; for sorne benefit types, incurred loss amounts have also been provided. For each benefit type, each applicable method is considered in the selection of ultimate loss for each given year. The consideration afforded a given method is based upon actuaria! judgment which takes into account the reasonableness of results, confidence in a particular method, type of data available and various other factors. The selected ultimate loss values are presented in Page 4 of the appropriate appendix for each benefit type.

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B. Projected Ultimate Loss for Accident Years 1986/8'73 to 2000/01 For accident years 1986/87 through 2000/01, paid loss stated as of a 180-month evaluation is available for all five benefit types. Additionally, incurred loss as of the 180-month evaluation is available for permanent total, death and permanent partial benefits. Paid and incurred loss amounts were not provided as of June 30, 2016. For each year, for each benefit type, we projected ultímate loss for each of these accident years via the paid development method discussed above by applying a 180-month to ultímate LDF to the cumulative paid loss as of 180 months. To the extent incurred loss data is available, we additionally utilized the incurred development method and outstanding development approach. We then select estímate ultímate loss values for each accident year based upon these projections, with consideration ofthe case reserve balances as of June 30, 2016.

C. Estimated Ultimate Loss for Accident Years 1985/864 and Prior For each benefit type for accident years 1985 / 86 and prior, very little information is known, as these years were not included in the loss triangles provided. To estímate ultímate loss for these years, we adjusted loss for accident years 1986/87, 1987 /88 and 1988/89 to the 1986/87 level, using trend factors based upon historical SIFC experience by benefit type. We then selected an ultimate loss value on the 1986/87 level and de-trended it to obtain estímated ultímate loss for each accident year from 1960 /61 through 1985/ 86. We feel this is a reasonable approach in a situation with little to no actual data as the historical experience is fairly stable from year to year for the SIFC.

D. Indicated Loss Reserves The manner in which needed loss reserves as of June 30, 2016 are derived depends upon the accident year in question. For accident years 2001/02 and after, actual paid loss as of June 30, 2016 is known. Needed reserves as of June 30, 2016 thus equal the difference between selected ultímate loss and cumulative paid loss. For accident years 2000/01 and prior, cumulative loss paid through June 30, 2016 is not known. Therefore, the needed reserve level must be estímated for these years and is subject to greater uncertainty. We have utilized the selected paid LDFs, as well as incurred and outstanding LDFs for benefit types for which these are available 5 , to estímate reserves for each accident year. We then review these results, as well as case reserve balances as of June 30, 2016 supplied by the SIFC, and selecta total needed reserve for each accident year for each benefit type.

3

4

s

For temporruy total and permanent partial benefits, this section also applies to accident years 1984 / 85 and 1985 / 86 for which comparable information was supplied. The approach discussed in this section does not apply to accident years 1984/85 and 1985/86 for temporruy total and permanent partial benefits for which loss data as of 180 months was provided. Incurred loss and case reserves are available for permanent partial, permanent total and death benefits.

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VII. LAE LAE refers to the costs incurred during the process of administering claims. It is our understanding that the SIFC performs a1.l claims-handling in-house and does not retain outside counsel for legal services. We have been informed that LAE specifically includes the cost of offices involved in the claim settlement process and legal department, among others. The loss data excludes a1.l LAE, thus LAE reserves must be separately projected. The SIFC provided LAE data on a fiscal calendar year basis; a segregation of ALAE versus ULAE is not available. We projected the LAE liability as of June 30, 2016 by utilizing a paid ratio approach. Paid LAE data was provided for fiscal calendar years 2005/06 through 2015/ 16; it is our understanding that these LAE payments reflect contributions from a1.l accident years. We determined the corresponding loss paid during each fiscal calendar

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period by taking the difference between cumulative paid loss as of consecutive June 30 evaluation dates for a1.l benefit types combined. For each fiscal calendar year period, only loss data for the respective latest 15 accident

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years is reflected, dueto limited data availability.

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we selected a ratio of 19% of LAE to loss to be used in estimating the LAE reserve need as of June 30, 2016. As

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We compared paid LAE to paid loss to derive LAE ratios for each fiscal calendar year. After reviewing these results, ALAE and ULAE have different payment timing, and only total LAE data was supplied, we estimated the split of LAE into ALAE and ULAE components. To do so, we assumed that the United States countrywide workers compensation distribution of LAE between ALAE and ULAE approximates that of Puerto Rico. Application of this split yields an ALAE ratio of 12.16% (64% of LAE) anda ULAE ratio of 6.84% (36% of LAE) for the SIFC as of June 30, 2016. Generally for workers compensation, the conventional wisdom is that half of the claim administration expenses categorized as ULAE are incurred when a claim is initially set up by adjusters, and half is incurred as losses are paid over time. We have thus split the remaining loss liability into two components: that associated with claims incurred but not yet reported (IBNR) and that which relates to known claims which are open as of June 30, 2016. The ULAE liability is determined by applying the full ULAE ratio to the loss liability for IBNR claims and half of the ULAE ratio to the needed loss reserves for known claims as of June 30, 2016. The breakdown of the loss liability into these components is calculated based upon estimated claim reporting pattems for workers compensation coverage in the United States, as claim count information was not available for the SIFC. The ALAE liability is incurred throughout the life of a claim. Therefore, the full ALAE ratio is applied to the loss liability to estimate ALAE reserves as of June 30, 2016. We noted above that the fiscal calendar year loss data only includes loss paid for the fifteen latest accident years for each respective period, while LAE data reflects payments related to a1.l accident periods. As such, the resulting LAE ratio is larger than it would have been if loss paid for a1.l accidents was reflected. To adjust for this mismatch,

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we have applied the ULAE and ALAE ratios discussed above to the loss liability for only the latest 15 accident years in estimating the LAE liability as of June 30, 2016. The determination of the nominal LAE liability of $111,364,000 can be found in Exhibit 2, Pagel.

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VIII.

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In addition to loss, the SIFC also reflects a liability for retum premium on its balance sheet.

RETURN PREMIUM LIABILITY

It is our

understanding that retum premiums can be caused by employers going out of business, payroll audits and -

cancellation of long-term projects.

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We have estimated the retum premium liability by applying two actuaria! approaches: a development method and

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a Bomhuetter-Ferguson method. These techniques are analogous to those contained in the section ofthis report discussing loss projections. The development method was applied to all policy years, while the BomhuetterFerguson approach was used for the latest five years. Appendix F presents our analysis ofthe retum premium. Based upon our review, we estimate that $87,611,452 will be returned after June 30, 2016 relating to premium eamed on policies issued through June 30, 2016.

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IX.

SUMMARY OF Loss, LAEAND RETURN PREMIUM RESERVES

A. Undiscounted Liability For ali benefit types combined, needed loss reserves are projected to be about $913.7 million as of June 30, 2016. Addition of the estimated LAE reserve ($111.4 million) produces a needed reserve for loss and LAE of approximately $1.025 billion. Finally, the return premium liability is projected to be $87.6 million. This results in a total liability as of June 30, 2016 for loss, LAE and return premium of$1.113 billion on a nominal basis.

B. Discounted Liability The discounting of the liabilities derived in this report is done in accordance with requests made by the SIFC. All future cash flows associated with benefits are discounted reflecting an interest rate provided by the SIFC. Page 13 of the applicable appendix for each benefit type presents a runoff of the benefits to be paid for each accident year through 2015/ 16 subsequent to June 30, 2016. Per the SIFC, an annual interest rate of 3.54% is reflected for the discounting ofloss. The loss runoffis based upon selected paid loss development factors for each benefit type. Similarly, reserves for LAE have been discounted atan annual interest rate of 3.54%. The return premium liability is discounted to July 1, 2016 using an annual interest rate of0.00%, also provided by the SIFC. Table 9 presents the SIFC's indicated loss and LAE reserves on both an undiscounted basis anda discounted basis as of June 30, 2016. This information can also be found in Sections I and 11, respectively, ofExhibit l. Table 9 Liability as of June 30, 2016 Benefit Type

Undiscounted

Discounted

Temporary Total

$66,588,135

$56,118,938

Permanent Partial

174,094,500

Permanent Total

462,578,525

152,662,251 272,021,659

52,711,000

34,273,691

157,740,726

133,831,417

Total Loss

$913,712,886

$648,907 ,956

LAE

$111,364,000

$79,089,376

$87 ,611,452

$87,611,452

$1, 112,688,338

$815,608,784

Death Me di cal

Return Premium, Total Liability

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X. CONFIDENCE INTERVALS The SIFC has requested that we estímate confidence levels relating to the loss, LAE and retum premium reserves. Specifically, we have been asked to present reserves at 70%, 80% and 90% confidence intervals. We have used simulation techniques to estímate such confidence levels. We have fit each accident year for each benefit type, and for retum premium, to a distribution in order to peñorm a simulation to estímate the reserves at the requested confidence intervals. Additionally, we have taken into consideration the potential parameter risks which could influence multiple accident years in the same manner. For example, as we noted earlier in this report, the paid and incurred loss information provided for our review only reflected losses out to a maximum maturity of 180 months. Thus, in making our projections ofultimate loss we relied upon development factors which were derived using a distribution curve fitted to the actual development factors available through 180 months.

While we believe this methodology to be the most reasonable and

appropriate given the data available, it is unlikely that the fitted development is a peñect reflection of the actual -

development for the SIFC. If the fitted development factors for a given benefit type are too high or too low, it has potential to affect all of the accident years for that benefit type in an analogous manner, creating the potential for

-

-

-

bias.

This is an important consideration in deriving reserves at the various confidence intervals; we have

undertaken simulations under altemative assumptions to understand the potential impact. Upon review of the results of these simulations, we have judgmentally selected the total liability to be greater than the central estímate by 4.0%, 6.5% and 10.0%, for the 70%, 80% and 90% confidence intervals, respectively. We note that these percentages are only applicable to the liability as a whole, as individual components of the liability will inherently have greater variability than the aggregated liability. However, we should note that these percentages have also been applied to the liability on a discounted basis, as we have assumed the adverse development in reserves would not significantly alter the payout of the liability. Table 1O presents the resulting confidence levels on an undiscounted basis, while Table 11 presents the discounted value of such reserves.

-

-

Page 21 Actuaria! Solutions

Table 10 Uncliscounted Reserves as of June 30, 2016

Benefit Type Temporary Total

Actuarial Central EBtimate

Confidence lntervals 80%

90%

$1,157,195,872

$1, 185,013,080

$1,223,957,172

$66,588,135

Permanent Partial

174,094,500

Permanent Total

462,578,525

Death

70%

52,711,000

Me di cal

157,740,726

Total Loss

$913,712,886

LAE

$111,364,000

Return Premium Total Liability

$87,611,452 $1,112,688,338

Table 11 Discounted Reserves as of June 30, 2016 Actuaria! Benefit

Central

Type

F.stimate

Temporary Total

$56,118,938

Permanent Partial

152,662,251

Permanent Total

272,021,659

Death Me di cal Total Loss

70%

80%

90%

34,273,691 133,831,417 $648,907,956

LAE

$79,089,376

Return Premium

$87,611,452

Total Liability

Confidence lntervals

$815,608, 784

$848,233, 135

$868,623,355

$897,169,662

* Loss and LAE are discounted at an annual rate of 3.54%; return premium is cliscounted at 0.00%.

-

-

Page 22 Actuaria! Solutions

-

.. ..

-

XI. LIABILI'IY DURATION We have been requested by the SIFC to estimate the average duration of payments for each benefit type for loss, as well as for retum premium. We have done so based upon payment pattems derived from selected paid development factors, using the remaining liability to be paid in each future fiscal calendar period as weights. The results of this review are presented in Table 12. Table 12

-

Average Duration

-

-

Duration (in Years)

ltem Te m porary Total

5.757

Permanent Partial

4.287

Permanent Total

18.356

Death

15.025

Me di cal

5.693

Return Premium

1.965

-

-

-

Page 23 Actuaria! Solutions

XII.

PAYMENTS DURING NEXT FIVE YEARS

Based upon payment pattems derived from selected paid LDFs for each benefit type, we have identified the loss payments anticipated in each of the next five fiscal calendar periods. This corresponds to the portian of the loss liability remaining to be paid as of June 30, 2016 on accidents occurring through June 30, 2016. The weighted average loss payout over a1l five benefit types is used to determine the payout ofthe LAE reserves. Finally, retum premium development is reflected in estimating the payout ofthe retum premium liability. A summary is provided in Table 13 below. Table 13 Prospective Loss Payments

Benefit Type

16/17

17/18

Fiscal Calendar Year ... 18/19

19/20

20/21

Subsequent

Total

$17,092,062

$10,463,035

$7,251,466

$5,336,385

$4,074,583

$22,370,604

(2) Permanent Partial

45,562,400

35,602,096

23,521,688

15,725,731

11,107,622

42,574,963

174,094,500

(3) Permanent Total

18,404,546

18,348,636

18,094,161

17,801,490

17,388,745

372,540,947

462,578,525

(1) Temporary Total

(4) Death (5) Medica!

$66,588,135

3,415,805

3,163,271

2,929,874

2,721,543

2,528,670

37,951,837

52,711,000

49,657,540

24,942,915

15,756,720

10,999,405

7,919,282

48,464,864

157,740,726

$134,132,353

$92,519,953

$67,553,909

$52,584,554

$43,018,902

$523, 903,215

$913,712,886

(7) LAE

$16,348,150

$11,276,400

$8,233,520

$6,409,044

$5,243,175

$63,853, 711

$111,364,000

(8) Return Premium

$48,112,176

$13,329, 136

$8,575,738

$5,409,607

$3,442,037

$8,742,758

$87,611,452

$198,592,679

$117,125,489

$84,363,167

$64,403,205

$51,704,114

$596,499,684

$1,112,688,338

(6) Total Loss

(9) Total Liability

Page 24 Actuaria! Solutions

-

XIII. PROSPECTIVE Loss FORECASTS Ultimate loss for fiscal years 2017 through 2021 was estimated based upan historical loss experience, by benefit type, and exposure (payroll) infonnation. We have received annual payroll data through June 30, 2016, and estimated prospective payroll based upan an annual 0.00% trend. This trend factor was selected after review of historical payroll movements from year to year in Puerto Rico. For each benefit type separately, projected ultimate loss for historical accident years 2001 / 02 through 2015 / 16

-

was compared to payroll (in $100 units) for each given year to generate a loss cost. Trend is considered to adjust

-

based u pon applicable trend adjustments. Application of the selected loss costs to anticipated payroll yields the

the loss costs to the level anticipated for accident year 2016/ 17. We then reviewed the indicated loss costs and selected a loss cost for each benefit type for 2016 / 17. Loss costs for 2017 / 18 through 2020 / 21 were derived estímate loss for each of the next five accident years. Table 14 presents a summary of these results on an undiscounted basis, while Table 15 summarizes the funding levels on a discounted basis. 6 Table 14

-

F..stimated Loss Forecast on an Undiscounted Basis

-

-

-

Accident Year

Tempoary Total

Permanent Partial

Permanent Total

2016/17

$15,730,000

$45,254,000

$8,954,000

2017/18

15,488,000

46,464,000

8,954,000

2018/19

15,004,000

47,432,000

2019/20

14,762,000

2020/21

14,520,000

Death

Me di cal

Total

$2,178,000

$260, 150,000

$332,266,000

2,178,000

260, 150,000

333,234,000

8,954,000

2,178,000

260, 150,000

333,718,000

48,642,000

8,954,000

2,178,000

260, 150,000

334,686,000

49,852,000

8,954,000

2,178,000

260, 150,000

335,654,000

Table 15 F..stimated Loss Forecast [email protected] 3.54%

-

-

6

Accident Year

Tempoary Total

Permanent Partial

2016/17

$14,489,753

$39,446,427

$4,348,689

2017/18

14,266,833

40,501,145

2018/19

13,820,995

2019/20

13,598,075

2020/21

13,375,156

Permanent Total

Me di cal

Total

$1,438,392

$250,797,566

$310,520,827

4,348,689

1,438,392

250,797,566

311,352,625

41,344,919

4,348,689

1,438,392

250,797,566

311,750,561

42,399,636

4,348,689

1,438,392

250,797,566

312,582,358

43,454,353

4,348,689

1,438,392

250,797,566

313,414,156

Death

The figures in Table 15 reflect discounting to the first day ofthe accidentyear (i.e., July 1, 2017 for accidentyear 2017 / 18).

Page 25 Actuaria! Solutions

The distribution ofthe estimated funding level for accident year 2016/ 17 by benefit type is illustrated in Chart A.

Chart A Distribution by Benefit Type of Estimated Loss for Accident Year 2016/ 17 TemporaryTotal 4.7%

Permanent Pa rti al 13.6%

PermanentTotal 2.7% Death 0.7% Medica! 78.3%

Page 26 Actuaria! Solutions

-

XIV.

PREMIUM ADEQUACY

-

In arder to assess the adequacy ofthe premium charged by the SIFC, we have reviewed historical loss ratios. Table

...

projections as of June 30, 2016 .

-

-

-

16 presents the ultimate loss ratios for each of the last fifteen accident years of SIFC experience based upon our

Table 16 Historical Loss Ratios

Accident Ye ar 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/ 11 2011/ 12 2012/13 2013/14 2014/15 2015/16

Indicated Ultima te Loss Ratio 59.4% 54.9% 53.7% 61.1% 62.6% 64.3% 64.4% 68.8% 79.2% 71.2% 60.6% 54.0% 49.3% 53.9% 54.7%

As can be seen in Table 16, loss ratios reached a high of 79% for accident year 2009 / 10 (for which premium is relatively low compared to surrounding years) and then decreased in each of the four subsequent years. The weighted average loss ratio for this 15 accident year period is estimated to be 61 %. The loss ratios for the most recent two accident years average 54.3% based upon projected ultimate loss as of June 30, 2016.

-

Page 27 Actuaria! Solutions

:XV.ÜBSERVED TRENDS IN ExPERIENCE

We have reviewed loss cost diagnostics by benefit type in order to identify any trends in the SIFC's historical experience. Each benefit type is addressed separately below.

A. Temporary Total Benefits Chart B

Loss Cost per $100 of Payroll Temporary Total Beneflts 0.400 0.350

0.300

!

0.250

!

0.200

~..,. , ,,..,,c:,....tl

Acddent Year

We note that the large decrease from 2012 to 2013 relates to a change in the manner in which temporary total benefits are paid which went into effect around July 1, 2012. Specifically, physicians began to use diagnostic codes that prescribe the duration for temporary total benefits based upon type of injury. Previously, claimants would receive benefit payments until the time of their next medical evaluation. This reduced the number of days for which a claimant receives temporary total benefits from more than a month to less than 30 days, on average.

B. Permanent Partial Benefits Chart

e

Loss Cost per $100 of Payroll Permanent Partial Benefits $D.3SO

-

$0.330 $0.310

-

1

$0.270

$0.250

_, $0.230

-

$0.210 $0.190 $0.170

Acddent Year

Page 28 Actuaria! Solutions

-

c.

Permanent Total Benefits Chart D

Loss Cost per $100 of Payroll Permanent Total Beneflts

-

$0.170

....,....

$0.150

-

$0.130

~ ~

-

-

$0.090

$0.050 $0.030

l

~

~,r!>

,#'

#' '\)

'\,#~""'

~""'

~........

s>

"'"'

-f'"

~

~~

~""'

,f>{i

,f>

Chart E

Loss Cost per $100 of Payroll Death Beneflts $0.019 $0.017 $0.015

~ $0.013

~

$0.011 $0.009 $0.007 $0.005

f

#

~,r!>

-,t

,¡;~""'

~........

s>

,f>

~v

'\,<:,....

Aa:ldent Year

-

-

'.', ~ "'"'"

D. Death Benefits

~

-

'.V>~

-f'"

Aa:ldent Year

-

-

$0.110

$0.Q70

-

..•....

Page 29 Actuarial Solutions

'.V>~ -f>"

~~

,f>~

~~

~

,f>

~""'

~

"'"'

E. Medical Benefits Chart F

Loss Cost per $100 of Payroll Medical Benefits $1.450 $1.400 $1.350 $1.300

!

$1.250

]

$1.200 $1.150 $1.100 $1.050 $1.000 - - - - . - - - ~ - - - . - - - - ~ - - - . - - - - - - . - - - ~ - - - - . - - - ~ - - - - - .

Acddent Year

F. Total Loss The overall loss cost level has decreased over the last severa! years, averaging 2.027 from 2007 through 2012 versus 1.418 from 2013 through 2016, as can be seen in Chart G. Chart G

Loss Cost per $100 of Payroll AII Benefits $2.300 $2.200 $2.100 $2.000 .. $1.900



= $1.800 o

..., $1.700 $1.600 $1.500 $1.400 $1.300

+-----,----........----.----'T'""-----r----r------r---...------.----, Acddent Year

The distribution ofultimate loss by benefit type has remained relatively consistent over the last ten accident years. There was a shift around July 1, 2012 when the change in tempora.ry total benefit payments noted above occurred, but otherwise the groups ofyears prior to and subsequent to this date are fairly stable. We also note that for the

Page 30 Actuaria! Solutions

-

-

death and permanent partial benefit types there have been fairly large increases over the most recent three years, and that this situation should be monitored as these years mature. Chart H

e $600,000 ,000

$500,000 ,000

$400,000 ,000

-

$300,000 ,000

-

$200,000 ,000

-

$100,000 ,000

$0 2006/07

2007/08

2008/09

• TemporaryTotal

-

2009/10

2010/11

• Permanent Partía\

2011/12

2012/13

111 Permanent Total

2013/14

ll! Death

Distribution of Loss Liability as of June 30, 2016* Medical

TemporaryTotal 7%

Perma nent Partial

19% Oeath

6%

Pe rma nent Tota I 51%

-

2015/16

Chart I

17%

-

2014/15

• Medica\

* for all accidents occurring throughJune 30, 2016

Page 31 Actuaria! Solutions

As can be seen in Chart I, permanent total reserves comprise a majority of the loss liability remaining as of June 30, 2016 for accidents occurring through June 30, 2016.

G. LAE Chart J presents historical ratios of paid LAE to paid loss as discussed in a previous section. LAE ratios range from a low of 16.2% in 2011 to a high of 21.8% in 2016, averaging 19.56% over the last five calendar periods. Chart J

LAE Ratios 22.00% 20.00% Vl

.9"'

18.00% 16.00%

"'C

ro

a..

14.00%

+"

12.00%

o

UJ

'.::i "'C

10.00%

ro

a.. ......

8.00%

',¡::;

6.00%

o o

ro a::

4.00% 2.00% 0.00%

Fi sea I Ca len dar Vea r

Page 32 Actuaria! Solutions

-

:XVI.COMPARISONTO PRIORANALYSIS

We have compared projected ultimate loss as of June 30, 2016 to comparable projections contained in Aon's June 30, 2015 analysis. Chart K presents a comparison of total ultimate loss by accident year. Chart K

-

Comparison of Projected Ultimate Losses as of une 30, 2015 versus une 30, 2016 $550.0

'

$500.0 $450.0

-

-

-

$400.0

V,

e:

o

~

e:

V, V,

.9 Q) ..... ro E

·.¡:;

5

...ro {=.

$350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 $0.0

Accident Year

111 6/30/2015

1111 6/30/2016

-

-

Page 33 Actuaria! Solutions

In Table 17, the total needed loss reserves as of June 30, 2016 are compared to the reserves estimated by Aon as of June 30, 2015. Table 17 Comparison of Total Needed Loss Reserves

Accident Ye ar

Total Needed Loss Reserves @6/30/ 16

Total Needed Loss Reserves @6/30/ 15

Increase/ (De crease)

Prior 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/ 11 2011/ 12 2012/13 2013/14 2014/15 2015/16

$210,532,761 13,570,000 13,937,000 14,948,000 38,048,000 38,085,000 40,512,000 44,350,000 46,268,000 53,465,000 52,624,000 46,940,000 48,312,000 56,406,800 76,888,800 118,825,525

$171,188,602 8,312,000 10,745,000 11,918,000 32,220,000 32,745,000 36,007,000 39,513,000 42,078,000 49,628,000 55,152,000 61,644,000 66,803,088 88,629,195 141,136,300 N.A.

$39,344, 159 5,258,000 3,192,000 3,030,000 5,828,000 5,340,000 4,505,000 4,837,000 4,190,000 3,837,000 (2,528,000) (14,704,000) (18,491,088) (32,222,395) (64,247 ,500) N.A.

Total

$913,712,886

N.A.

N.A.

2014/ 15 and Prior

$794,887 ,361

$847,719, 185

($52 ,831,824)

The total loss liability as of June 30, 2016 is approximately $913. 7 million. $118.8 million of this liability relates to accidents occurring during the latest accident year (7 / 1/ 15-6/30/ 16); accident years 2014/ 15 and prior comprise $794.9 million ofthe loss liability as of June 30, 2016. As of June 30, 2015, Aon estimated the needed loss reserves to be $847.7 million for accidents occurring through June 30, 2015. Comparing the liability for like periods, we note a decrease in total needed loss reserves of $52.8 million (6.2%) from June 30, 2015 to June 30, 2016 for accidents occurring through June 30, 2015. For LAE, needed reserves increased from $82.2 million as of June 30, 2015 to $111.4 million as of June 30, 2016. With respect to the retum premium liability, a decrease of $1.2 million is observed from $88.8 million as of June 30, 2015 to $87.6 million as of June 30, 2016. As seen in Table 18, the overall liability position of the SIFC increased to $1.113 billion as of June 30, 2016 from $1.019 billion as of June 30, 2015.

Page 34 Actuaria! Solutions

The liability as of

-

-

June 30, 2016 reflects 12 additional months of exposure as well as the change in experience for prior periods from June 30 of 2015 to 2016. This increase of $93.9 million (+9.2%) from 2015 to 2016 compares to an $80.6 million increase (+7.3%) from 2014 to 2015, as noted in Aon's June 30, 2015 analysis. 7

Table 18 Change in Liability (Undiscounted)

-

Benefit

As of

As of

lncrease/

Type

06/30/ 16.

06/30/ 15+

(Decrease)

-

Te m porary Total

$66,588,135

$68,625,040

($2,036,905)

Permanent Partial

174,094,500

165,252,481

8,842,019

-

Permanent Total

462,578,525

441,951,451

20,627,074

52,711,000

33,464,908

19,246,092

157,740,726

138,425,305

19,315,421

Total Loss

$913,712,886

$847,719,185

$65,993,701

LAE

$111,364,000

$82,228,731

$29,135,269

$87,611,452

$88,842,020

($1,230,568)

$1,112,688,338

$1,018,789,936

$93,898,402

Death Me di cal

-

-

Return Premium Total Liability

* Reflects accidents occurring through June 30, 2016

• Reflects accidents occurring through June 30, 2015 We note the following differences in methodology and assumptions between this June 30, 2016 analysis and that performed by Aon as of June 30, 2015: •

Aon only included paid loss for accident years 2000/01 and subsequent in the derivation of the LAE ratios. We included paid loss for the latest 15 accident years which were available at the end of each respective fiscal calendar year.

-

Aon utilized a single LAE ratio in determining the LAE liability. We estimated separate ALAE and ULAE ratios which comprise the SIFC's overall LAE costs. Aon applied the total LAE ratio to the loss liability for IBNR claims and half of the LAE ratio to the loss liability associated with known claims, thus treating the entire LAE reserve as if 50% is paid when claim file is set up and 50% during life of claim. We only used this approach for the ULAE component; for ALAE we applied the ALAE ratio to the full loss liability as of June 30, 2016 as we believe this more appropriately reflects how actual expense liabilities are incurred.

-

-

Loss adjustment expense liability:

7

Generally, a more complete understanding of the differences from one year to the next requires consideration of additional comparisons which we have provided elsewhere in this report. This is especially true given the lack of data available in preparing the estímate of liability for the SIFC. Page 35 Actuaria! Solutions

Aon applied the LAE ratio to the loss liability for all accident years. We have reflected only the loss liability for the latest 15 accident periods as this is consistent with how the LAE ratio was derived; use of all accident years in our calculation would overstate the needed LAE reserve level. •

We assumed larger tail development factors and longer payouts for most benefit types as compared to Aon. We based our tail factors on an inverse power curve which essentially extrapolates the observed development.



To provide results at the requested confidence intervals, we relied upon simulation techniques (see Section X. Confidence Intervals). As indicated in Aon's report, they relied upon "actuarial judgment and the indicated coefficient of variation (CV) of 0.17 based on the latest 1O years of loss rates".



Aon's June 30, 2015 report notes that only IBNR reserves were discounted for pennanent total and death benefits as the SIFC establishes case reserves on a discounted basis. We do not believe this is appropriate. The development process unwinds any discount which may be present in case reserves in projecting the total indicated reserve need. Further, the considerations for setting discounted case reserves may not be consistent with the assumed annual interest rate and duration of benefit payments which underlie the total needed reserve level. ·

Page 36 Actuarial Solutions

-

-

-

-

XVII.

FINANCIAL STATEMENT RECONCILIATION

We were requested to provide a reconciliation of the liability at the beginning of the current fiscal period (July 1, 2015) to the end ofthis period (June 30, 2016). Exhibit 10 contains this information for loss and LAE.

-

-

-

-

Page 37 Actuaria! Solutions

XVIII.ADDITIONAL COMMENTS AND CONSIDERATIONS

We offer the fallowing observations related to our review of the SIFC's loss, LAE and retum premium liability as of June 30, 2016. •

Far medical and temporary total benefits, we only received paid loss triangles. We believe it would be beneficial to the projections of ultimate loss if a history of incurred loss values were also maintained.



Far all benefit types, the paid (and incurred where applicable) triangles are cut off ata 180-month maturity. We recommend maintaining full triangles which contain as many accident years as possible far all 12-month maturities through the latest evaluation date. This would allow reliance upan actual historical experience in both the selection of tail developtnent factora and in the projection of loss liabilities far more mature accident years.



No claim count information was available far review. Additional actuarial methods (such as frequency / severity) could be employed if triangles of reported, open and closed claims were compiled. This information would also allow the use of diagnostic tools to assess trends in experience and the reasonability of resulta.



It would be useful to have a listing of "large" claims which contains infarmation such as claim status,

accident date, paid loss by benefit type and case reserves by benefit type as of the evaluation date. We could then monitor whether development was impacted by an unusual large claim, how large claims effect prospective loss farecasts, and other items.

Page 38 Actuarial Solutions

-

-

-

XIX. STATEMENT OF QUALIFICATIONS We, the undersigned, are Members of the American Academy of Actuaries and meet its qualification standards to render the actuaria! opinion contained herein. Date:

March 6, 2017

Signature: Steven P. Lattanzio,FÁS, MAAA, FCA President & Consulting Actuary

Date: Signature:

-

-

-

Date:

March 6, 2017

Signature: David K. Raikowski, ACAS, MAAA Consulting Actuary

Page 39 Actuaria! Solutions

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Exhibit 1

Summary of Estimated Liability as of June 30, 2016 Section 1: Undiscounted Liability

Benefit T~ee

(1)

(2)

(3)

(4)

(5)

Loss

Loss Adjustment Exeense (LAE)

Loss and LAE (1) + (2)

Return Premium

Total Liability (3) + (4)

$1,025,076,886

$87,611,452

$1, 112,688,338

Temporary Total Permanent Partial Permanent Total Death Medica!

$66,588, l 35 174,094,500 462,578,525 52,711,000 157,740,726

Total

$913,712,886

$111,364,000

Section 11: Discounted Liability

Benefit T:iee Temporary Total Permanent Partial Permanent Total Death Medical Total

(6)

(7)

(8)

(9)

(10)

Loss

Loss Adjustment Exeense (LAE)

Loss and LAE (6) + (7)

Return Premium

Total Liability (8) + (9)

$56, 118,938 152,662,251 272,021,659 34,273,691 133,831 ,41 7 $648,907,956

$79,089,376

$727,997,332

$87,611,452

$815,608,784

Notes: Column (1) is taken from Exhibit 3, Page 1. Column (2) is taken from Exhibit 2, Page 1, Line (12). Column (4) is taken from Appendix F, Page 11. Column (6) is taken from Exhibit 3, Page 2 and reflects an annual interest rate of 3.54%. Column (7) applies the average discount rate for loss to the undiscounted LAE liability in Column (2) to obtain the discounted LAE liability. Column (9) is taken from Appendix F, Page 11 and reflects an annual interest rate of 0.00%.

-

...

-

Exhibit 2 Page 1

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Estimated Loss Adjustment Expenses Liability as of June 30, 2016 ($000s)

(3)

(2)

(1)

Loss Paid During Period

Fiscal Period

-

-

-

-

2005/06 2006/07 2007 /08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/1 5 2015/16 Total

LAE Paid During Period

Ratio of Paid LAE to Paid Loss (2) / (1)

$407, l 28 412,297 416,172 424,117 461,212 455,631 435, 703 415,641 369,507 356,543 329, l 66

$71,713 75,185 75,031 76,351 78,882 73,872 71,416 71,761 70,634 73,592 71,713

17.6196 18.2496 18.0396 18.0096 17.1096 16.2196 16.3996 17.2796 19.1296 20.6496 21.7996

$4,483, l 17

$810, 150

18.0796

(4) Selected LAE Ratio (5) Estimated ULAE Ratio =(4) X 3696

6.8496

(6) Estimated ALAE Ratio =(4) X 6496

12.1696

(7) Loss Liability as of 06/30/16 for Pure IBNR Claims for Accident Years 2001 /02 through 2015/16 (8) Loss Liability as of 06/30/ 16 for Known Claims for Accident Years 2001 /02 through 2015/16 (9) Estimated ULAE Liability as of 06/30/16 for Pure IBNR Claims =(5) X (7)

-

$52,877

$650,303

$3,617

(1 O) Estimated ULAE Liability as of 06/30/16 for Known Claims =[(5) X 5096] X (8)

$22,240

(11) Estimated ALAE Liability as of 06/30/16 for AII Claims

$85,507

= [(7) +

(8)]

X

(6)

(12) LAE Liability as of 06/30/16 =(9) + (1 O) + (11)

-

19.0096

Notes: Column (1) is determined based u pon cumulative paid loss for all benefit types, as found in the loss triangles; the latest 1 5 accident years of loss payments are reflected for each fiscal period. Column (2) has been provided by the Puerto Rico State lnsurance Fund Corporation and includes paid LAE associated with all accident years. Line (4) was selected based upon judgment after a review of Column (3). Lines (5) and (6) reflect a split of LAE into ULAE and ALAE components, respectively, based upon U.S. countrywide workers compensation information available from the National Council of Compensation lnsurance. Line (7) is taken from Exhibit 2, Page 2, Column (6). Line (8) is taken from Exhibit 2, Page 2, Column (8).

$111,364

-

Exhlbit 2

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Page 2

Estimated Loss Llabillty for Purt IBNR versus Known Clalms Accldent Years 2001 /02 through 2015/16

(1)

(2)

(3)

(4)

(S)

(6)

(n

Total

Earned Premium Accldent Year

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16 Total

Selected

Reported

Total

to

Ultlmate Loss

Claim

St:lected

Ultimate Premium

as of 06/30/16 !1! X !2!

Oevelopment Factor

Ultimate Loss

$357,984,000 3 57,302 ,000 371,250,000 442, 120,000 452, 116,000 467,256,000 474,598,000 488,261,000 531,071,000 484,788,000 422,575,000 372,050,000 327,100,000 341,800,000 338,675,000 16,228,946,000

Notes: Column (1) Column (2) Column (4) Column (7)

Ratio

1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 0.998 0.996 0.983

$357,984,000 357,302,000 371,250,000 442, 120,000 452,116,000 467 ,2 56,000 474,598,000 488,261,000 531,071,000 484,788,000 422,575,000 372,050,000 326,445,800 340,432,800 332,917,525 16,221,167,125

(8) Loss

1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.020 1.050 1.100

Ultimate Loss for Known Claims

!3) l !4! $357,984,000 357,302,000 371,250,000 442,120,000 452,116,000 467,256,000 474,598,000 488,261,000 531,071,000 484,788,000 422,575,000 372,050,000 320,044,902 324,221,714 302,652,295 16, 168,289,911

Ultimate

Llability for

Loss for Pure IBNR Clalms

¡1¡- ¡s¡

so o o o o o o o o o o o

Total Loss Llablllty as 0106130116

Known Clalms

as of 06/30/16 17> -!6)

6,400,898 16,211,086 30,265,230

S 13,570,000 13,937,000 14,948,000 38,048,000 38,085,000 40,512,000 44,350,000 46,268,000 53,465,000 52,624,000 46,940,000 48,312,000 56,406,800 76,888,800 118,825,525

$13,570,000 13,937,000 14,948,000 38,048,000 38,085,000 40,512,000 44,350,000 46,268,000 53,465,000 52,624,000 46,940,000 48,312,000 50,005,902 60,677,714 88,560,295

152,877,214

1703,180,125

1650,302,911

Is taken from Exhlbit 51 Column (7). Is taken from Appendhc F, Page 1, Column (S). is based upon judgment and represents an approxlmation for the workers compensation clalm reporting pattern for the Puerto Rico State lnsurance Fund Corporation. is taken from Exhibit 8, Column (6).

-

-

-

-

-

-

-

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION

E>ehlbil 3 Page 1

Nominal Loss Payout

(6)

m

Beneflts

Tot&I Loss

53,415,805 3,163,271 2,929,874 2,721,543 2,528,670 2,336,163 2,170,288 2,034,900 1,880,530 1,740,792 1,634,494 1,535,891 1,449,153 1,362.972 1,280.247 1,212,360 1,145,225 1,084,977 1.029,852 974,700 925.590 877,490 832,052 785,179 744,613 708,753 668,877 632,863 596,898 565,511 537,573 ~05,533 478,766 450,166 422,495 396,589 371,812 348,306 331,994 316,280 300,260 285,171 269,291 252,765 237,736 222.200 206,256 189,178 173,623 161,015 148,463 134,062 122,537 108,479 99,737 92,972 85,603 79,241 74,922 66.217 57,073 48,779 39,737 33,571 27,711 21,91g 16,682 12,606 9,155 4,992

$49,657,540 24,942,915 15,756,720 10,999,405 7,919,282 5,982,194 4,779,580 4,052,432 3,310,983 2,823,731 2.577,143 2,312,825 2,074,145 1,825,379 1,521,796 1,373,895 1,248,390 1.136.615 1.040,358 955,615 880,975 815,262 755,082 701,510 652,618 610,785 568,931 533,604 500,172 469,457 439,320 412,184 386,391 359,938 338,900 315,687 293,698 274,319 253,171 235,959 216,631 199,768 181,816 166,603 150,952 134,862 120,539 106,528 91,549 77,231 63,973 49,349 38.611 27,008 17,158 9,242

5134.132.353 92,519,953 67,553,909 52,584,554 43,018,902 36,328,334 31,690,753 28,333,464 25,538.286 23,336,211 21,653,362 20,132,118 11.840,207 17,674.216 16,523,907 15,614,398 14,786,738 14,025,600 13,311,029 12,642,250 12.027.114 11,448,783 10,904,620 10,390,881 9,915,668 9,472,546 9,042.265 8,638,725 8,258,717 7,897,764 7,556,581 7,230,691 6,934,305 6,645,609 6,367,812 6,096,892 5,832,274 5,528,840 5,238,993 4,964,272 4,685,080 4,418,069 4,161,829 3,911,544 3,664,284 3,441,295 3.220.632 3,007,169 2,8H5,289 2,639,803 2,470,560 2,304,840 2,157,679 2,009,707 1,729,992 1,481.689 1,238,743 1.016,867 810,820 605,970 440,964 335,133 234,906 139,044 70,728 21,919 16,682 12,606 9,155 4,992

"''

$16,348,150 11,276,400 8,233,520 6,409,044 5,243,175 4,427,724 3,862,492 3,453,303 3,112,625 2.844,235 2,639,128 2,453,717 2,296.258 2,154,146 2,013,946 1,903.094 1,802,219 1,709,450 1,622,358 1,540,847 1,465,874 1,395,386 1,329,063 1,266.448 1,208,529 1,154,521 1,102.078 1,052,894 1.006,579 962,585 921,002 881,282 845,158 809,972 776,114 743,094 710,842 673,859 638,532 605,049 571,021 538,478 507,247 476,742 446,606 419,428 392,533 366,516 343,251 321,741 301,114 280,916 262.980 244,945 210,853 180,589 150,979 123,936 98,823 73,856 53,745 40,846 28,631 16.947 8.620 2,672 2,033 1,536 1,116 608

$150,480,503 103,796,353 75,787,429 58,993,598 48,262,077 40,756,058 35,553,245 31,786,767 28,650,911 26, 180,446 24,292,490 22,585,835 21,136,465 19,828,362 18,537,853 17,517,492 16,588,957 15,735,050 14,933,387 14,183,097 13,492,988 12,844,169 12,233,683 11,657,329 11,124,197 10,627,067 10,144,343 9,691,619 9,265,296 8,860,349 8,477,583 8,111,973 7,779,463 7,455,581 7,143,926 6,839,986 6,543,116 6,202,699 5,877,525 5,569,321 5,256,101 4,956,547 4,669,076 4,381,286 4,110,890 3,860,723 3,613,165 3,373,685 3,159,540 2,961,544 2,771,674 2,585,756 2.420,659 2,254,652 1,940,845 1.662,278 1,389,722 1,140,803 909,643 679,826 494,709 375,979 263,537 155,991 79,348 24,591 18,715 14,142 10,271 5,600

1462,578,525

$52,711,000

$157,740,726

$913,712,886

$111,364,000

S1,025 ,076,886

18.356

15.025

5.693

12.379

12.379

12.379

(1)

(2)

(3)

Temporary Total

Permanenl Partial

Permanent Total

De:ath

Medlcal

Beneflts

Benefits

Beneflts

Benefits

6!30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 6/30/2025 6/30/2026 6/30/2027 6/30/2028 6/30/2029 6/30/2030 6/30/2031 6/30/2032 6/30/2033 6/30/2034 6/30/2035 6/30/2036 6/30/2037 6/30/2038 6/30/2039 6/30/2040 6/30/2041 6/30/2042 6/30/2043 6/30/2044 6/30/2045 6/30/2046 6/30/2047 6/30/2048 6/30/2049 6/30/2050 6/30/2051 6/30/2052 6/30/2053 6/30/2054 6/30/2055 6/30/2056 6/30/2057 6/30/2058 6/30/2059 6/30/2060 6/30/2061 6/30/2062 6/30/2063 6/30/2064 6/30/2065 6/30/2066 6/30/2067 6/30/2068 6/30/2069 6/30/2070 6/30/2071 6/30/2072 6/30/2073 6/30/2074 6/30/2075 6/30/2076 6/30/2077 6/30/2078 6/30/2079 6/30/2080 6/30/2081 6/30/2082 6/30/2083 6/30/2084 6/30/2085 6/30/2086

S17 ,092,062 10,463,035 7,251,466 5,336,385 4,074,583 3,142,337 2,495,315 2,017,949 1,683,621 1,415,755 1,216,515 1,045,583 919,181 805,535 717,609 639,734 573,750 516.382 466,987 423,731 385,619 352,739 322,645 295,916 272,545 251,457 232,559 213,761 196,442 180,881 166,010 152,297 138,776 126,568 115,308 105,239 95,658 86,436 79,036 72,381 66,162 60,083 54,754 49,819 45,612 39,682 33,728 28,175 23,185 18,176 12,480 7,388 3,897 2,670 1,678 774

$45,562,400 35,602,096 23,521,688 15,725,731 11,107,622 8.009,073 5,954,999 4,494,529 3,507.458 2,811,701 2,283,143 1,881,444 1,564,923 1,344,969 1,147,733 992,875 866,298 760,888 672,439 596,913 532,879 478,139 430,762 388,640 353.254 321,262 293,756 268,877 246,590 227,029 209,666 192.863 178,608 164,416 150.975 139,071 127,813 117,748 108,327 99,911 91,605 83,585 75,433 67,520 59,981 52,996 46,493 40,125 34,150 28,802 22,876 17,841 13,315 9.901 6,647 3,722

$18,404,546 18.348.636 18,094,161 17,801,490 17,388,745 16,858,567 16,290,501 15,733,654 15,155,687 14,544,232 13,942,067 13,356,375 12,832,798 12,335,361 11,856,522 11,395,534 10,953,075 10,526,738 10.101,393 9,691,291 9,302,051 8,925,153 8,564,079 8,219,636 7,892,638 7,580.289 7.278,142 6,989,620 6.718,615 6,454,886 6,204,012 5,967,814 5,751,764 5,544,521 5,340,134 5.140,306 4,943.293 4,702,031 4,466,465 4,239,741 4,010,422 3,789,462 3,580,535 3,374,837 3,170,003 2,991,555 2,813,616 2.643,163 2,493,782 2,354,579 2,222,768 2,096,200 1,979,319 1,861,649 1,604,772 1.374,979 1,153,140 937,626 735,898 539,753 383,891 286,354 195,169 105,473 43,017

Tota.l

$66,588,135

SI 74,094,500

5.757

4.287

(4)

(5)

Anticipated During 12 Months Ending ...

(9) Ouri.tion of Beneflts in Yur.

Note5: Column (1) is ta.ken from Appendix A, Pi.ge 14. Column (2) is ta.ken from Appendix 8, Pi.ge 21. Column (3) is taken from Appendix C, Pi.ge 21. Column (4) is taken from Appendix O, Pi.ge 21. Column (5) is taken from Appendix E. Page 14. Column In reflects the payout of the LAE liability, taken from Exhlbit 2. Page 1, Line (12), bued on the weigh1ed payout of Ion. Line (9) reflects the average duration of benefit payments: we have assumed that payments occur uniformty cwer a given fisa.1 year.

-

(8)

Payments Total Loss and LAE

PUERTO RICO- STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Exhlblt 3 Page 2 Dlscounted Loss

(1) Dlscount Rate

P.1vmenu Anttclpated Durlng 12 Months Endlnq ...

3.54%

(2)

(3)

(4)

(5)

(6)

{n

Temporary Total Benefits

PermanentPartlal Benefits

PermanentTotal Benefits

Death Beneflts

Medical Beneflts

Total Loss

6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 6/30/2025 6/30/2026 6/30/2027 6/30/2028 6/30/2029 6/30/2030 6130/2031 6/30/2032 6/30/2033 6/30/2034 6/3012035 6/30/2036 6/30/2037 6/30/2038 6/30/2039 6/3012040 6/30/2041 6/30/2042 6/30/2043 6/30/2044 6/30/2045 6/30/2046 6/30/2047 6¡30/2048 6/30/2049 6/30/2050 6/30/2051 6/30/2052 6/30/2053 6/30/2054 6130/2055 6/30/2056 6/30(2057 6/30/2058 6/30/2059 6/30/2060 6/30/2061 6/30/2062 6/30/2063 6/30/2064 6/30/2065 6/30/2066 6/30/2067 6/30/2068 6/30/2069 6/30/2070 6/30/2071 6/30/2072 6/30/2073 6/30/2074 6/30/2075 6/30/2076 6130/2077 6/30/2078 6/30/2079 6130/2080 6/30/2081 6/30/2082 6/30/2083 6130/2084 6/30/2085 6/30/2086

Sl&,797,335 9,931,056 6,647,455 4,724,639 3,484,147 2,595,123 1,990,313 1,554,530 1,252,641 1,017,327 844,271 700,833 595,048 503,645 433,331 373,098 323,175 280,917 245,360 215,021 188,991 166,966 147,500 130,655 116,222 103,563 92,505 82,121 72,887 64,819 57,456 50,908 44,802 39,464 34,724 30,608 26,870 23,450 20,709 18,317 16,171 14,183 12,483 10,970 9,700 8,150 6,1591 5,398 4,290 3,248 2,154 1,232 627

Total

{ll

(9)

lAE

Total Loss and LAE

252 1l2

S-14,776,744 33,791,956 21,562,449 13,922,983 9,498,048 6,614,353 4,749,836 3,462,366 2,609,595 2,020,420 1,584,519 1,261,094 1,013,074 840,915 693,063 579,053 487,958 413,931 353,307 302,902 261,163 226,323 196,926 171,595 150,639 132,313 116,848 103,295 91,494 81,356 72,565 64,468 57,661 51,265 45,465 40,448 35,903 31,945 28,384 25,284 22,389 19,731 17,197 14,867 12,756 10,885 9,223 7,687 6,319 5,147 3,948 2,974 2,144 1,540 998 540

S18,087, 187 17,415,724 16.587,008 15,760,783 14,868,992 13,922,774 12,993,657 12,120,440 11,276,031 10,451,130 9,675,902 8,952,509 8,307,481 7,712,438 7,159,604 6,645,967 6,169,520 5,726,655 5,307,381 4,917,819 4,558,914 4,224,645 3,915,138 3,629,199 3.J.65,676 3,121,962 2,895,038 2,685,216 2,492,856 2,313,118 2,147,206 1,994,841 1,856,889 1,728,784 1.608,128 1,495,028 1,388,572 1,275,644 1,170,307 1,072,919 980,188 894,518 816,302 743,101 674,134 614,435 558,130 506,391 461,437 420,784 383,647 349,432 318,667 289,475 241,001 199,431 161,537 126,856 96,159 68,118 46,791 33,709 22,190 11,582 4,562

Sl,356,905 3,002,439 2.685,830 2,409,554 2,162,248 1,929,338 1,731,069 1,567,588 1,399,139 1,250,891 1,134,351 1,029,477 938,128 852,171 773,082 707,058 645,069 590,239 541,095 494,609 453,630 415,352 380,379 346,678 317,527 291,902 266,060 243,128 221,471 202,652 186,054 168,983 154,564 140,362 127,230 115,346 104,442 94,494 86,989 80,039 73,387 67,316 61,394 55,656 50,557 45,638 40,914 36,244 32,126 28,775 25,625 22,348 19,728 16,868 14,978 13,485 11,992 10,721 9,790 8,357 6,956 5,742 4,518 3,686 2,939 2,245 1,650 1,204 845 445

$48,801,270 23,674,726 14,444,264 9,738,468 6,771,721 4,940,440 3,812,297 3,121,796 2,463,415 2,029,064 1,788,557 1,550,240 1,342,725 1,141,282 918,942 801,267 703,179 618,330 546,615 484,924 431,764 385,897 345,192 309,736 278,297 251,553 226,305 204,996 185,582 168,231 152,048 137,779 124,742 112,229 102,056 91,816 82,500 74,422 66,336 59,712 52,947 47,156 41,451 36,684 32,102 27,699 23,911 20,409 16,940 13,802 11,042 8,226 6,216 4,200 2,577 1,340

S131,819,441 87,815,901 61,927,006 46,556,427 36,785,156 30,002,028 25,277,232 21,826,720 19,000,821 16,768,832 15,027,600 13,494,153 12,196,456 11,050,451 9,978,022 9,106.443 8,328,901 7,630,072 6,993,758 6,415,275 5,894,462 5,419,183 4,985,135 4,587,863 4,228,361 3,901,293 3,596,756 3,318,756 3,064,290 2,830,176 2,615,329 2,416,979 2,238,658 2,072,104 1,917,603 1,773,246 1,638,287 1,499,955 1,372,725 1,256,271 1,145,082 1,042,904 948,827 861,278 779,249 706,807 638,869 576,129 521,112 471,756 426,416 384,212 347,382 312,498 259,806 214,908 173,529 137,577 105,949 76,475 53,747 39,451 26,708 15.268 7,501 2,245 1,650 1,204 845 445

S16,066,250 10,703,067 7,547,709 5,674,331 4,483,401 3,656,669 3,080,807 2,660,256 2,315,834 2.043,798 1,831,575 1,644,677 1,486,513 1,346,137 1,216,129 1,109,900 1,015,133 929,959 852,404 781,899 718.422 660,494 607,592 559,172 515,356 475,493 438,375 404,492 373,478 344,944 318,758 294,583 272,849 252,550 233.719 216,125 199,676 182,815 167,309 153,115 139,563 127,110 115,644 104,973 94,975 86,146 77,866 70,219 63,513 57,498 51,972 46,828 42,339 38,087 31,665 26,193 21,150 16,768 12,913 9,321 6,551 4,808 3,255 1,861 9)4 274 20) )47 )03 54

Ulll,131,053 142,611,857 103,191.817 80,139,5153 65,071.518 54,451,249 46,895,062 41,296,800 36,455,240 32,543,715 29,457,985 26,1571,056 24,271,303 22,103,179 20,045,779 18,370,635 16,861,802 15,495,255 14,241,253 13,094,526 12,057,192 11,105,571 10,233,436 9,432,648 8,705,217 8,042,203 7,422,534 6,856,588 6,337,677 5,859,121 5,419,395 5,013,165 4,647,702 4,306,029 3,988,736 3,691,561 3,413,477 3,127,330 2,863,666 2.622.056 2,391,167 2,179,004 1,983,618 1,801,692 1,631,017 1,480,725 1,339,690 1,209,392 1,095,128 992,615 898,702 811,046 734,332 661,128 550,027 455,357 368,208 291,922 224,811 162,271 114,045 83,710 56,671 32,397 15,916 4,764 3,501 2,555 1,793 944

S56,11a,918

S152,662,251

$272,021,659

S34,273,691

Sl 33,831,417

$648,907,956

$79,089,376

Sl,168,124,099

415

Notes: Une (ll hu been prOVided by- the Puerto ltko State lnsur1nce Fund Coporation. Columns (2> through (6) and (8) represent the discounted payments corrffpondlng to the nominal payout found in Columns (1 ¡ through (5) a.nd (7), retpectively, of Exhiblt 3, Page 1 uslng the lnterest rate In llne (1).

'

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-

-

-

-

Exhlblt 4

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Prospectlve Expected Loss Sectlon 1: Prospectlve Loss Costs per S 100 of Payroll

Accldent Year

(1)

(2)

(3)

(4)

(5)

(6)

Temporary Total

Permanent Partlal

Permanent Total

Death

Medlcal

Total

2016/17 2017/18 2018/19 2019/20 2020/21

50.065 0.064 0.062 0.061 0.060

50.187 0.192 0.196 0.201 0.206

S0.037 0.037 0.037 0.037 0.037

S0.009 0.009 0.009 0.009 0.009

S1.075 1.075 1.075 1.075 1.075

Sl.373 1.377 1.379 1.383 1.387

Sectlon 11: Prospectlve Expected Loss

-

-

-

-

-

Accldent Year

(7)

(8)

(9)

(10)

(11)

(12)

Temporary Total

Permanent Partlal

Permanent Total

Death

Medlcal

Total

2016/17 2017/18 2018/19 2019/20 2020/21

515,730,000 15,488,000 15,004,000 14,762,000 14,520,000

$45,254,000 46,464,000 47,432,000 48,642,000 49,852,000

$8,954,000 8,954,000 8,954,000 8,954,000 8,954,000

52, 178,000 2,178,000 2,178,000 2, 178,000 2, 178,000

$260, 150,000 260, 150,000 260, 150,000 260, 150,000 260, 150,000

5332,266,000 333,234,000 333,718,000 334,686,000 335,654,000

Total

$75,504,000

$237,644,000

$44, 770,000

S 10,890,000

S 1,300,750,000

S 1,669, 5 58,000

Notes: Columns Columns Columns Columns Columns

(1) and (2) and (3) and (4) and (5) and

(7) are taken from Appendlx A, Page 1, Columns (7) and (8), respectively. (8) are taken from Appendlx B, Page 1, Columns (7) and (8), respectively. (9) are taken from Appendlx C, Page 1, Columns (7) and (8), respectively. (1 O) are taken from Appendlx D, Page 1, Columns (7) and (8), respectlvely. (11) are taken from Appendlx E, Page 1, Columns (7) and (8), respectlvely.

PUERTO RICO - 5TATE IN5URANCE FUND CORPORATION WORKER5 COMPEN5ATION

Exhlblt 5

Oerivation of lndicated Historical Loss Ratios

(2)

(1)

(3)

(4)

(5)

(6)

(7)

Medica!

Total

Selected Ultimate Loss

Ultlmate Earned Accident Vear

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total

Accident Year

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total

Premlums

Temporary Total

Permanent

Permanent

Partial

Total

Death

$602,912,000 650,981,000 691,518,000 723, 136,000 722,539,000 726,307 ,000 737,006,270 709,793,754 670,460,365 680,882,475 697, 149,936 689,599,056 663,053,940 634,662,054 619,509,376

$41, 125,000 42,968,000 43,500,000 71,973,000 72,230,000 76,573,000 76,281,000 78,474,000 90,883,000 85,680,000 67,000,000 22,000,000 16,450,000 15,000,000 15,500,000

S66,000,000 62,500,000 57,500,000 59,750,000 60,000,000 63,000,000 62,250,000 62,000,000 69,000,000 62,500,000 52,750,000 42,500,000 38,000,000 43,500,000 53,500,000

S 14,500,000 13,750,000 14,500,000 40, 150,000 36,750,000 36, 150,000 36,050,000 34,250,000 34,000,000 27,000,000 17,000,000 16,000.000 16,250,000 11,500,000 8, 175,000

$2,800,000 2,250,000 1,275,000 3,875,000 4,400.000 3,875,000 4,250,000 3.050.000 3,025,000 2,925,000 2,825,000 2, 100,000 1,900,000 2,300,000 3,000,000

$233,559,000 235,834,000 254,475,000 266,372,000 278, 736,000 287,658,000 295,767,000 310,487,000 334, 163,000 306,683,000 283,000,000 289,450,000 254,500,000 269,500,000 258,500,000

S35 7,984,000 357,302,000 371,250,000 442, 120,000 452, 116,000 467,256,000 474,598,000 488,261,000 531,071,000 484, 788,000 422, 5 75,000 372,050.000 327,100,000 341,800,000 338,675,000

S10,219,5 10,226

$815,637,000

S854,750,000

$356,025,000

S43,850,000

$4, 158,684,000

$6,228,946,000

(13)

(14)

Medica! (6)/(8)

Total !7!1!8)

(11)

(8)

(9)

(10)

Ultimate

Temporary

Permanent

Earned Premiums

Total !2)1!8)

Partial !3)1!8)

(12)

lndicated Loss Ratio Permanent

Total !4!1!8)

Death (5)1!8)

$602,912,000 650, 981,000 691,518,000 723, 136,000 722,539,000 726.307 737,006,270 709, 793, 754 670,460,365 680,882,475 697, 149,936 689,599,056 663,053,940 634,662,054 619,509,376

6.8% 6.6% 6.3% 10.0% 10.0% 10.5% 10.4% 11.1% 13.6% 12.6% 9.6% 3.2% 2.5% 2.4% 2.5%

10.9% 9.6% 8.3% 8.3% 8.3% 8.7% 8.4% 8.7% 10.3% 9.2% 7.6% 6.2% 5.7% 6.9% 8.6%

2.4% 2.1% 2.1% 5.6% 5.1% 5.0% 4.9% 4.8% 5.1% 4.0% 2.4% 2.3% 2.5% 1.8% 1.3%

0.5% 0.3% 0.2% 0.5% 0.6% 0.5% 0.6% 0.4% 0.5% 0.4% 0.4% 0.3% 0.3% 0.4% 0.5%

38.7% 36.2% 36.8% 36.8% 38.6% 39.6% 40.1% 43.7% 49.8% 45.0% 40.6% 42.0% 38.4% 42.5% 41.7%

59.4% 54.9% 53.7% 61.1% 62.6% 64.3% 64.4% 68.8% 79.2% 71.2% 60.6% 54.0% 49.3% 53.9% 54.7%

S 10,219,510,226

8.0%

8.4%

3.5%

0.4%

40.7%

61.0%

·ººº

Notes: Columns (1) and (8) are taken from Appendix F, Page 2, Column (3). Column (2) Is taken from Appendlx A, Page 4, Column (5). Column (3) Is taken from Appendix B, Page 4, Column (9). Column (4) Is taken from Appendix C, Page 4, Column (9). Column (5) is taken from Appendix D, Page 4, Column (9). Column (6) is taken from Appendix E, Page 4, Column (5).

-

-

-

-

-

Distrlbutlon of Ultlmate Loss by Beneflt Type

-

-

...

-

(1)

-

(2)

(4)

(3)

(5)

(6)

Medlcal

Total

Selected Ultlmate Loss Temporary Total

Accldent Year

Permanent Partlal

Permanent Total

Death

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 201 5/16

$41, 125,000 42,968,000 43,500,000 71,973,000 72,230,000 76,573,000 76,281,000 78,474,000 90,883,000 85,680,000 67,000,000 22,000,000 16,450,000 15,000,000 15,500,000

$66,000,000 62,500,000 57,500,000 59,750,000 60,000,000 63,000,000 62,250,000 62,000,000 69,000,000 62,500,000 52,750,000 42,500,000 38,000,000 43,500,000 53,500,000

$14,500,000 13,750,000 14,500,000 40, 150,000 36,750,000 36, 150,000 36,050,000 34,250,000 34,000,000 27,000,000 17,000,000 16,000,000 16,250,000 11,500,000 8,175,000

$2,800,000 2,250,000 1,275,000 3,875,000 4,400,000 3,875,000 4,250,000 3,050,000 3,025,000 2,925,000 2,825,000 2, 100,000 1,900,000 2,300,000 3,000,000

$233,559,000 235,834,000 254,475,000 266.372,000 278,736,000 287,658,000 295,767,000 310,487,000 334, 163,000 306,683,000 283,000,000 289,450,000 254,500,000 269,500,000 258,500,000

$357,984,000 357,302,000 371,250,000 442, 120,000 452, 116,000 467,256,000 474,598,000 488,261,000 531,071,000 484,788,000 422,575,000 372,050,000 327,100,000 34 1,800,000 338,675,000

Total

$815,637,000

$854,750,000

$356,025,000

$43,850,000

$4, 158,684,000

$6,228,946,000

(11)

(12)

Medlcal (5)/(6)

Total

Accldent Year

(7)

(8)

Temporary Total (1)/(6)

Permanent Partlal (2)/(6)

(9)

(10)

Dlstrlbutlon b~ Beneflt T~ee Permanent Death Total (4)/(6) (3)/(6)

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

11.5% 12.0% 11.7% 16.3% 16.0% 16.4% 16.1% 16.1% 17.1% 17.7% 15.9% 5.9% 5.0% 4.4% 4.6%

18.4% 17.5% 15.5% 13.5% 13.3% 13.5% 13.1% 12.7% 13.0% 12.9% 12.5% 11.4% 11.6% 12.7% 15.8%

4.1% 3.8% 3.9% 9.1% 8.1% 7.7% 7.6% 7.0% 6.4% 5.6% 4.0% 4.3% 5.0% 3.4% 2.4%

0.8% 0.6% 0.3% 0.9% 1.0% 0.8% 0.9% 0.6% 0.6% 0.6% 0.7% 0.6% 0.6% 0.7% 0.9%

65.2% 66.0% 68.5% 60.2% 61.7% 61.6% 62.3% 63.6% 62.9% 63.3% 67.0% 77.8% 77.8% 78.8% 76.3%

100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Total

13.1%

13.7%

5.7%

0.7%

66.8%

100.0%

Notes: Column Column Column Column Column

-

Exhlblt 6

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

(1) (2) (3) (4) (5)

Is Is Is Is Is

taken taken taken taken taken

from from from from from

Appendlx Appendlx Appendlx Appendlx Appendlx

A. Page 4, Column (5). B, Page 4, Column (9). C, Page 4, Column (9). D, Page 4, Column (9). E, Page 4, Column (5).

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Exhlbit 7

Comparison of Ultimate Loss to Prior Report

Section 1: Selected by Actuaria! Solutions at 06/30/16

Accident Year

(1)

(2)

(3)

Temporary Total

Permanent Partial

Permanent Total

(4)

Death

(5)

Medical

(6)

Total

S41,125,000 42,968,000 43,500,000 71,973,000 72,230,000 76,5 73,000 76,281,000 78,474,000 90,883,000 85,680,000 67,000,000 22,000,000 16,450,000 15,000,000 1 5,500,000

S66,000,000 62,500,000 5 7,500,000 59, 750,000 60,000,000 63,000,000 62,250,000 62,000,000 69,000,000 62,500,000 52,750,000 42,500,000 38,000,000 43,500,000 53,500,000

S14,500,000 13, 750,000 14,500,000 40, 1 50,000 36,750,000 36, 1 50,000 36,050,000 34,2 50,000 34,000,000 27,000,000 17,000,000 16,000,000 16,250,000 11,500,000 8, 1 75,000

S2,800,000 2,250,000 1,275,000 3,875,000 4,400,000 3,875,000 4,250,000 3,050,000 3,025,000 2,925,000 2,825,000 2,100,000 1,900,000 2,300,000 3,000,000

S233,559,000 235,834,000 254,475,000 266,372,000 278,736,000 287,658,000 295,767,000 310,487,000 334, 163,000 306,683,000 283,000,000 2 89,4 50,000 254,500,000 269,500,000 258,500,000

S357,984,000 357,302,000 371,250,000 442, 120,000 452, 116,000 467,256,000 474,598,000 488,261,000 531,071,000 484,788,000 422,575,000 372,050,000 327,100,000 341,800,000 338,675,000

Total

S815,637,000

S854,750,000

S356,025,000

S43,850,000

S4, 1 58,684,000

!6,228,946,000

2014/15 and Prior

$800, 137,000

S801,250,000

$347,850,000

S40,850,000

S3,900, 184,000

S5,890,271,000

(11)

(12)

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

Section 11: Selected by Aon at 06/30/15

(7)

(8)

(9)

Temporary

Permanent Partial

Permanent Total

Total

Accident Year

(10)

Death

Medica!

Total

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/1 5 2015/16

S40,692 ,ooo 42,465,000 43,294,000 71,262,000 71,573,000 76,010,000 75,676,000 77,982,000 90,685,000 86,115,000 69,527,000 21,555,000 17,145,000 17,634,000 N.A.

S64,127,000 62,006,000 57,162,000 59,521,000 59,646,000 62,978,000 62,088,000 61,760,000 68,870,000 61,697,000 51,272,000 38,951,000 38,753,000 51,830,000 N.A.

Sl 1,810,000 11,703,000 11,994,000 34,369,000 31,558,000 31,023,000 30,456,000 28,205,000 26,371,000 24,079,000 22,245,000 26,350,000 26,400,000 26,400,000 N.A.

S2,434,000 1,873,000 1, 121,000 3,255,000 3, 764,000 3,278,000 3,522,000 2,694,000 2,5 70,000 2,467,000 2,409,000 2,016,000 1,876,000 2,285,000 N.A.

$232,782,000 235,059,000 253,608,000 265,382,000 277,619,000 286,380,000 294, 111,000 308,544,000 331,822,000 303,461,000 280, 736,000 288,040,000 261,587,000 274,986,000 N.A.

$351,845,000 353, 106,000 367.179,000 433,789,000 444, 160,000 459,669,000 465,853,000 479.185,000 520,31 8,000 477,819,000 426, 189,000 376,912,000 345,761,000 373, 135,000 N.A.

Total

S801,615,000

S800,661,000

$342,963,000

S35,564,000

S3,894, 117,000

S5,874,920,000

(16)

(17)

(18)

Death

Medical

Total

Section 111: Change In Ultimate Loss from 06/30/15 to 06/30/16

Accident Year

(13)

(14)

(1 5)

Temporary Total

Permanent Partlal

Permanent

Total

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

S433,000 503,000 206,000 711,000 657,000 563,000 605,000 492,000 198,000 (435,000) (2,527,000) 445,000 (695,000) (2,634,000) N.A.

S 1.873,000 494,000 338,000 229,000 354,000 22,000 162,000 240,000 130,000 803,000 1.478,000 3,549,000 (753,000) (8,330,000) N.A.

S2,690,000 2,047,000 2,506,000 5,781,000 5, 192,000 5, 127,000 5,594,000 6,045,000 7,629,000 2,921,000 (5,245,000) (10,350,000) (1 0, 1 50.000) (14,900,000) N.A.

S366,000 377,000 154,000 620,000 636.000 597,000 728,000 356,000 455,000 458,000 416,000 84,000 24,000 15,000 N.A.

!777,000 775,000 867,000 990,000 1,117,000 1,278,000 1,656,000 1,943,000 2,341,000 3,222,000 2,264,000 1,410,000 (7,087,000) (5,486,000) N.A.

$6, 139,000 4,196,000 4,071,000 8,331,000 7,956,000 7,587,000 8,745,000 9,076,000 10,753,000 6,969,000 (3,614,000) (4,862,000) (18,661,000) (31,335,000) N.A.

Total

(S 1,4 78,000)

S589,000

S4,887,000

S5,286,000

S6,067,000

Sl5,351,000

Notes: Column (1) Is taken from Appendlx A, Page 4, Column (5). Column (2) Is taken from Appendix Column (3) is taken from Appendlx Column (4) is taken from Appendix Column (S) is taken from Appendix Columns (7) through (11) are taken

liabllity as of June 30, 2015.

B, Page 4, Column (9). C, Page 4, Column (9). O, Page 4, Column (9). E, Page 4, Column (S). from Aon's report on the Puerto Rico State lnsurance Fund Corporation's needed loss, LAE, and Return Premium

-

-

-

-

-

-

Exhiblt 8

PUERTO RICO - STATE INSURANCE FUNO CDRPORATION WORKERS COMPENSATION

Comparison of Loss Llabilitv to Prior Report Section 1: lndicated by Actuaria! Solutlons as of 06/30/ 16

(1)

(2)

(3)

Temporary

Permanent

Permanent

Total

Partlal

2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

$6,310,485 608,050 648,000 760,000 675,000 1,687,000 2,036,000 2,589,000 3,215,000 4,091,000 6,025,000 7,433,000 7,632,000 3,471,000 3,748,100 5,624,000 10,035,500

$3,442,000 725,000 1,337,000 1,692,000 1,720,000 2,336,000 2,819,000 3,394,000 4,351,000 5,290,000 8,190,000 10,255,000 12,065,000 14,412,000 19,074,000 32,064,000 50,928,500

Total

$66,588, 135

$174,094,500

$462,578,525

2014/ 1S and Prior

$56,552,635

$ l 23, 166,000

$454,542,500

Accldent Year Prior

Total $155,178,000 8,750,000 9,006,000 8,748,000 9,773,000 29,727,000 28,229,000 29, 183,000 30,279,000 29,941,000 30,864,000 25,441,000 16,162,000 15,725,000 16,097,500 11,439,000 8,036,025

(4)

(5)

Oeath

Medical

$25,665,000 750,000 955,000 865,000 510,000 1,661,000 1,968,000 1,935,000 2,421,000 1,756,000 1,834,000 2,015,000 2,028,000 1,705,000 1,593,200 2,146,800 2,903,000

(6)

Total

$7,782,424 1,321,802 1,624,000 1,872,000 2,270,000 2,637,000 3,033,000 3,411,000 4,084,000 5, 190,000 6,552,000 7,480.000 9,053,000 12,999,000 15,894,000 25,615,000 46,922,500

$198,377,909 12, 154,852 13,570,000 13,937,000 14,948,000 38,048,000 38,085,000 40,512,000 44,350,000 46,268,000 53,465,000 52,624,000 46,940,000 48,312,000 56,406,800 76,888,800 118,825,525

$52,711,000

$157,740,726

$913,712,886

$49,808,000

$110,818,226

$794,887,361

Sectlon 11: lndicated by Aon as of 06130/ IS

-

.....

Accident Year Prior

2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

Total

(8)

(9)

Temporary

Permanent Partlal

Permanent

Total

$3,000,000 216,000 283,000 380,000 558,000 1,269,000 1,763,000 2,461,000 3,246,000 4,448,000 7,096,000 9,324,000 11,754,000 4,652,445 6,288,275 11,886,320

$4,340,797 (687,000) (355,000) 1,478,000 1,691,000 2,511,000 2,933,000 4,179,000 5,320,000 6,895,000 11,009,000 13,714,000 15,960,000 17,780,049 29,015,235 49,468,400

Total $139,195,801 7,874,000 6,799,000 7,170,000 7,753,000 25,436,000 24,362,000 25,302,000 25,837,000 24,912,000 24,076,000 23,129,000 21,731,000 26,254,650 26,248,000 25,872,000

(10)

(11)

Oeath

Medical

$13,184,004 381,000 657,000 546,000 400,000 1,155,000 1,477,000 1,501,000 1,895,000 1,538,000 1,535,000 1,729,000 1,781,000 1,713,984 1,744,620 2,227,300

(12)

Total

$3,030,000 654,000 928,000 1.171,000 1,516,000 1,849,000 2,210,000 2,564,000 3,215,000 4,285,000 5,912,000 7,256,000 10,418,000 16,401,960 25,333,065 51,682,280

SI 62,750,602 8,438,000 8,312,000 10,745,000 11,918,000 32,220,000 32,745,000 36,007,000 39,513,000 42,078,000 49,628,000 55, 152,000 61,644,000 66,803,088 88,629,195 141,136,300

N.A.

N.A.

N.A.

N.A.

N.A.

N.A,

$68,625,040

$165,252,481

$441,951,451

$33,464,908

S 138,425,305

$847,719,185

Section 111: Change in Loss Reserves from 06/30/ 1S to 06/30/ 16 for Accident Vean 2014/ 1S and Prior

Accident Year Prior

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Total

-


(13)

(14)

(15)

Temporary

Permanent Partlal

Permanent

Total $3,310,485 392,050 365,000 380,000 117,000 418,000 273,000 128,000 (31,000) (357,000) ( 1 ,071 ,000) (1,891.000) (4,122,000) (1,181,445) (2,540, 175) (6,262,320) N.A.

(S 12,072,405)

Notes: Column (1) is taken from Appendhc Column (2) Is taken from Appendix Column (3) is taken from Appendix Column (4) Is taken from Appendix Column (5) Is taken from Appendix Col~m~~ (n through (11) are taken l1ab1hty as of June 30, 201 S.

($898,797) 1,412,000 1,692,000 214,000 29,000 (175,000) (114,000) (785,000) (969,00b) (l,605,000) (2,819,000) (3,459,000) (3,895,000) (3,368,049) (9,941,235) (17,404,400) N.A.

($42,086,481)

Total $15,982,199 876,000 2,207,000 1,578,000 2,020,000 4,291,000 3,867,000 3,881,000 4,442,000 5,029,000 6,788,000 2,312,000 (5,569,000) (10,529,650) (10, 150,500) (14,433,000)

(16)

(17)

Death

Medlcal

$12,480,996 369,000 298,000 319,000 110,000 506,000 491,000 434,000 526,000 218,000 299,000 286,000 247,000 (8,984) (151,420) (80,500)

N.A.

N.A.

$12,591,049

$16,343,092

(18)

Total

54,752,424 667,802 696,000 701,000 754,000 788,000 823,000 847,000 869,000 905,000 640,000 224,000 (1,365,000) (3,402,960) (9,439,065) (26,067,280)

$35,627,307 3,716,852 5,258,000 3, 192,000 3,030,000 5,828,000 5,340,000 4,505,000 4,837,000 4,190,000 3,837,000 (2,528,000) (14,704,000) (18,491,088) (32,222,395) (64,247,500)

N.A.

($27,607,079)

N.A.

($52,831,824)

A, Page 3, Sheet l, Column (7), B, Page 3, Sheet l, Column (14). C, Page 3, Sheet 1, Column (14), O, Page 3, Sheet l, Column (14). E, Page 3, Sheet l, Column (7), from Aon's report on the Puerto Rico State lnsurance Fund Corporation's needed loss, LAE, and Return Premium

Exhibit 9

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Projected Liabillty Payout by Fiscal Year

Paxments Anticieated Durlns Fiscal Year ... Benefit Txee

2017/18

2018/19

2019/20

2020/21

Subseguent

Total

$5,336,385 1 5,725,731 17,801,490 2,721,543 10,999,405

$4,074,583 11,107,622 17,388,745 2,528,670 7,919,282

$22,370,604 42,574,963 372,540,947 37,951,837 48,464,864

$66,588, 135 174,094,500 462,578,525 52,711,000 157,740,726

$17,092,062 45,562,400 18,404,546 3,415,805 49,657,540

$10,463,035 35,602,096 18,348,636 3,163,271 24,942,915

Total Loss

$134, 132,353

$92,519,953

$67,553,909

$52,584,554

$43,018,902

$523,903,215

$913,712,886

LAE Return Premlum

$16,348, 1 50 48,112,176

$11,276,400 13,329,136

$8,233,520 8,575,738

$6,409,.044 5,409,607

$5,243, l 75 3,442,037

$63,853,711 8,742,758

$111 ,364,000 87,611,452

Total Llablllty

$198,592,679

$117,125,489

$84,363, 167

$64,403,205

$51,704,114

$596,499,684

Sl, 112,688,338

Temporary Total (2) Permanent Partial (3) Permanent Total (4) Death (5) Medica!

(6) (7)

2016117

$7,251,466 23,521,688 18,094,161 2,929,874 15,756,720

(1)

Notes: Llnes (1) through (6) are taken from Columns (1) through (5) and (7), respectlvely, of Exhibit 3, Page 1. Llne (7) Is taken from Appendlx F, Page 11,

-

-

-

-

-

Exhlbit 10 Page 1

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Undiscounted

-

07 /01 /15 - 06/30/16 Fiscal Period LAE

Loss

Loss and LAE

(1) Unpaid loss and loss adjustment expense at beglnnlng of the fiscal perlod

-

(2) lncurred loss and loss adjustment expense at end of fiscal perlod (a) Provlslon for accldents of the current fiscal year (b) lncreases/(Decreases) In provislon for accldents of prior fiscal years (c) Total incurred loss and loss adjustment expense (2a) + (2b)

(3) Payments (a) Loss and loss adjustment expense, attrlbutable to accidents of the curren! fiscal year (b) Loss and loss adjustment expense, attrlbutable to accldents of prior fiscal years (c) Total payments (3a) + (3b)

-

$847,718,873

$82,228,731

$929,947,604

332,917,525

N.A.

N.A.

62,242,488

N.A.

N.A.

395, 160,013

100,848,269

496,008,282

·ººº

N.A.

N.A.

N.A.

71,713,000

N.A. 400,879,000

S111 ,364,000

$1,025,076,886

214,092

11 5,074,000 329, 166,000

* *

(4) Total loss and loss adjustment expense at the end of the fiscal year ( 1) + (2c) - (3c) $913,712,886

Notes: Llne (1) Is taken from Aon's report on the Puerto Rico State lnsurance Fund Corporatlon's needed loss, LAE, and Return Premlum llablllty as of June 30, 2015. Line (2a) equals the sum of the ultlmate loss for the 2015/16 accldent year, taken from Page 3, Sheet 1, Column 3 of Appendices A through E. Line (3) represents fiscal calendar year payments based u pon informatlon provlded by the Puerto Rico State lnsurance Fund Corporation and contained In Exhlblt 2, Page 1. Llne (4) reflects the lndlcated reserves for accldents occurrlng through 06/30/16 found In Sectlon I of Exhlblt 1. * lncludes payments assoclated with accident years 2001 /02 and subsequent as payments made on clalms from prior accident perlods are not avallable.

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Discounted

Exhibit 10 Page 2

07 /01 /15 - 06/30/ 16 Fiscal Period Loss

LAE

Loss and LAE

(1) Unpald loss and loss adjustment expense

at beglnnlng of the fiscal perlod

(2) lncurred loss and loss adjustment expense at end of fiscal perlod* (a) Provlslon for accldents of the current fiscal year (b) lncreases/(Decreases) In provlslon for accldents of prior fiscal years (c) Total lncurred loss and loss adjustment expense (2a) + (2b)

(3) Payments (a) Loss and loss adjustment expense, attrlbutable to accldents of the current fiscal year (b) Loss and loss adjustment expense, attrlbutable to accldents of prior fiscal years (c) Total payments (3a) + (3b)

$692,934,319

$67,214,629

S760, 148, 948

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

285, 139,637

83,587,747

368,727,384

214,092,000

N.A.

N.A.

115,074,000 329, 166,000

N.A. 71,713,000

N.A. 400,879,000

$648,907,956

$79,089,376

$727,997,332

(4) Total loss and loss adjustment expense at the end of the fiscal year (1) + (2c) - (3c)

Notes: Llne (1) Is taken from Aon's report on the Puerto Rico State lnsurance Fund Corporatlon's needed loss, LAE, and Return Premlum llablllty as of June 30, 201 S. Llne (3) represents fiscal calendar year payments based u pon informatlon provlded by the Puerto Rico State lnsurance Fund Corporatlon and contalned in Exhiblt 2, Page 1. Llne (4) reflects the lndlcated reserves for accldents occurrlng through 06/30/16 found In Sectlon I of Exhlblt 1. • Changes In lncurred loss and loss adjustment expense on a discounted basls lmpllcitly take into conslderatlon changes In the appllcable dlscount rateas well as changes In the expected payout pattern of llablllty. •• lncludes payments associated wlth accldent years 2001 /02 and subsequent as payments made on clalms from prior accldent perlods are not available.

-

-

-

-

Prospectlve Loss Forecasts

Accldent Year

-

-

-

Appendlx A Page 1

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Temporary Total

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011 /12 2012/13 2013/14 2014/15 201 5/16

(1)

(2)

(3)

(4)

(5)

Selected Ultlmate Loss

Loss Cost per Payroli ¡soos¡

S100 of Payroli !1! l !2!

Loss Cost Trend Factor

S100 of Payroli !3! X !4!

$41, 125,000 42,968,000 43,500,000 71,973,000 72,230,000 76,573,000 76,281,000 78,474,000 90,883,000 85,680,000 67,000,000 22,000,000 16,450,000 15,000,000 15,500,000

$202,420,000 21 5,080,000 226,330,000 238,750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242, 156,580 233,992,560

S0.203 0.200 0.192 0.301 0.295 0.315 0.314 0.344 0.391 0.361 0.290 0.087 0.067 0.062 0.066

0.351 0.360 0.370 0.347 0.326 0.306 0.287 0.270 0.253 0.390 0.600 0.922 0.941 0.960 0.980

Trended Loss Cost per

(6)

(7)

(8)

Projected Payroli ¡soos¡

Estlmated Loss Cost per $100 of Payroli

ProJected Loss

2016/17 2017/18 2018/19 2019/20 2020/21

$242,000,000 242,000,000 242,000,000 242,000,000 242,000,000

(9)

!6¡xm

S0.071 0.072 0.071 0.104 0.096 0.096 0.090 0.093 0.099 0.141 0.174 0.080 0.063 0.060 0.065

Avg (AliYrs) Wtd Avg (Ali Yrs) Wtd Avg (Lates! 5) Wtd Avg (Latest 3) Wtd Avg (Lates! 2) Wtd Avg (Ali Yrs Excl HI/Lo)

S0.092 0.092 0.088 0.063 0.062 0.088

Selected for accldent year 2016/17

$0.065

$0.065 0.064 0.062 0.061 0.060

Notes: Column (1) Is taken from Appendlx A, Page 4, Column (5), Column (2) has been provlded by the Pueno Rico State lnsurance Fund Corporatlon. Column (4) reflects trendlng to accident year 2016/ 17 based upon the loss cost trends taken from Appendlx A, Page 11, Llnes (5) through (8). Column (6) Is based on the payroli for accldent years 2013/ 14 through 201 5/ 16 andan annual payroli trend factor of 0.0%, selected based u pon Judgment after a revlew of the hlstorlcal payroli provlded by the Pueno Rico State lnsurance Fund Corporatlon. Column (7) Is based upon Llne (9) andan annual loss cost trend factor of -2.0%, taken from Appendlx A, Page 11, Line (8). Llne (9) Is selected based upon Judgment after a revlew of Column (5).

S15,730,000 15,488,000 15,004,000 14,762,000 14,520,000

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Appendlx A Page 2

Temporary Total

Change In Loss Reserves from 06/30/15 to 06/30/16

Accldent Year

1960/61 1961 /62 1962/63 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 1971 /72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981 /82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

(1)

(2)

Needed Loss Reserves as of 06/30/16

Needed Loss Reserves as of 06/30/15

$570 1,292 2,056 2,865 3,721 4,758 5,990 7,151 8,521 10,115 11,782 13,714 15,751 18,065 20,504 23,410 26,491 29,904 33,907 38,103 42,952 48,249 54,044 58,596 69,922 76,896 145,415 195,345 230,845 278,826 318,202 392,817 443,239 451 ,384 487, l 28 540,972 584,533 567,367 510,163 534,920 608,050 648,000 760,000 675,000 1,687,000 2,036,000 2,589,000 3,215,000 4,091,000 6,025,000 7,433,000 7,632,000 3,471,000 3,748, 100 5,624,000 10,035,500

(3)

Change in Reserves

(1) - (2)

$0

o o o o o o o o o o o o o o o o o o o o o o o o

80,000 110,000 130,000 140,000 150,000 170,000 200,000 240,000 270,000 310,000 320,000 330,000 290,000 110,000 150,000 216,000 283,000 380,000 558,000 1,269,000 1,763,000 2,461,000 3,246,000 4,448,000 7,096,000 9,324,000 11,754,000 4,652,445 6,288,275 11,886,320 N.A.

$570 1,292 2,056 2,865 3,721 4,758 5,990 7,151 8,521 10,115 11,782 13,714 15,751 18,065 20,504 23,410 26,491 29,904 33,907 38,103 42,952 48,249 54,044 58,596 69,922 (3,104) 35,415 65,345 90,845 128,826 148,202 192,817 203,239 181,384 177,128 220,972 254,533 277,367 400,163 384,920 392,050 365,000 380,000 117,000 418,000 273,000 128,000 (31,000) (357,000) (1,071,000) (1,891,000) (4, 122,000) (1,181,445) (2,540, l 75) (6,262,320)

-

N.A.

2014/15 and Prior

$56,552,635

$68,625,040

(S 12,072,405)

Total

$66,588, l 35

N.A.

N.A.

Notes: Column (1) is taken from Appendlx A, Page 3, Sheet 1, Column (7). Column (2) is taken from Aon's report on the Puerto Rico State lnsurance Fund Corporation's needed loss, LAE, and Return Premium liabllity as of June 30, 201 5.

-

-

Total Estlmated Loss Reserves as of 06/ 30/ 16

111

1960/61 1961/62

-

-

-

-

121

1964/65 1965/66 1966/67

1967/68 1968/69 1969/70 1970171 1971172 1972/73 1973/74 1974/75 1975/76 1976¡ 77 1977/78 1978/79 1979/80 1980/81 1981 /82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988189 1989/90 1990/91 1991/92 1992/93 1993194 1994195 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005106 2006107 2007/08 2008/09 2009/10 2010/11 2011 J l 2 2012/13 2013/14 2014/ l 5 2015/16 Total

131

141

(SI

(61

Ultlmate

Estlmated Ultimate Lon asof06/30/16

Paid Loss

Age-to-Ultlmate

Unpaid

Lou Reserves

loss

Ratio

(1) X (2)

asof06/30/16

Factor

100% - 1.0 l jS)

as of06f30ll6

I 11,400,564

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 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 0.998 0.996 0,983

11,742,581 12,094,859 12,457,704 12,831,436

13,216,379 13,612,870 14,021,256 14,441,894 14,875,151 15,321,405 15,781,047 16,254,479 16,742,113 17,244,376 17.761,708 18,294,559 18,843,396 19,408,698 19.990,959 20,590,687 21,208,408 21,844,660 21,678,000 23,775,000 23,955,000 41,571,000 51,339,000 55.585,000 61,429,000 64,089,000 72,342,000 74.319,000 68,840,000 67,488,000 67,825.000 66,191,000 57,759,000 46,552,000 43,500.000 43,855,000 41,125,000 42,968,000 43,500,000 71,973,000 72.230,000 76,573,000 76,281,000 78,474,000 90,883,000 85,680,000 67,000,000 22,000,000 16.450.000 1 5,000,000 15,500,000 $2.137,710,189

Paid

PMcent

1.00005 1.00011

0.0050%

1.00017 1.00023 1.00029 1.00036 1.00044 1.00051 1.00059 1.00068 1.00077 1.00087 1.00097 1.00108 1.00119 1.00132 1.00145 1.00159 1.00175 1.00191 1.00209 1.00228 1.00248 1.00271 1.00295 1.00322 1.00351 1.00382 1.00417 1.00456 1.00499 1.00546 1.00600 1.00660 1.00727 1.00804 1.00891 1.00992 1.01108 1.01245 1.01406

0.0170%

Total Needed

1570 1,292 2,056 2,865

$11,400,564 11.742,581 12,094,859 12,457,704 12.831,436 13,216,379 13,612,870 14,021,256 14,441,894 14,875, 151 15,321.405 15,781,047 16,254,479 16,742,113 17,244,376 17,761,708 18,294,559 18,843,396 19,408,698 19,990,959 20.590,687 21,208,408 21,844,660 21,678,000 23,775,000 23,955,000 41.571,000 51,339,000 55,585,000 61,429,000 64,089,000 72,342,000 74,319,000 68.840,000 67.488,000 67,825,000 66,191.000 57,759,000 46,552,000 43,500,000 43,855,000 41,125,000 42,968,000 43,500,000 71,973,000 72,230,000 76.573,000 76.281,000 78,474,000 90,883,000 85,680,000 67,000,000 22,000,000 16,417,100 14,940,000 15,236,500

140,477,000 42.208.000 42,825,000 70,286,000 70, 194,000 73,984,000 73,066,000 74,383,000 84,858,000 78,247,000 59,368,000 18.529,000 12.669.000 9,316,000 5,201.000

4,758 5,990 7, 151 8,521 10,115 11,782 13,714 15,751 18,065 20.504 23.410 26.491 29,904 33,907 38,103 42,952 48,249 54,044 58.596 69,922 76,896 145,415 195,345 230,845 278,826 318,202 392.817 443,239 451,384 487,128 540,972 584,533 567,367 510, 163 534,920 608,050 648,000 760,000 675,000 1.687.000 2,036,000 2,589,000 3,21 5,000 4,091,000 6,025,000 7,433,000 7,632,000 3,471,000 3,748,100 5,624,000 10,035,500

12.137,353,789

S7S5,6 l 1,000

$66,588.135

Notes: For accident years 1960/61 through 1982/83, Column (1) Is based upon the ultimate selected loss for 1983/84 through 1985/86 andan annual loss trend of 3.00%, (whlch Is selected based u pon judgment after a review of Appendix A, Page 12). For accldent years 1983/84 through 2000/01. Column (1) Is taken from Appendix A. Page 3, Sheet 2, Column (3). For accldent years 2001 /02 through 2015/16, Column (1) Is taken from Appendix A, Page 4, Column (5). Column (2) Is taken from Appendlx F, Page l, Column (5). Column (4) Is taken from Appendlx A, Page 4, Column (1). Column (5) Is taken from Appendlx A, Page 9, Column (9). For accident years 1960/61 through 2000/01, Column (7) Is equal to Column (3) times Column (6). For accident years 2001 /02 through 201 5/ 16, Column (7) Is equal to Column (3) mlnus Column (4).

-

17)

to Ultlmate Premium

Earned Premium

Selected

1962/63 1963/64

-

Page 3 Sheet l

Temporary Total

Accident Year

-

Appendtx A

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION

0.0110%

0.0230% 0.0290% 0.0360% 0.0440% 0.0510% 0.0590% 0.0680% 0.0769% 0.0869% 0.0969% 0.1079% 0.1189% 0.1318% 0.1448% O. l 587% 0.1747% 0.1906% 0.2086% 0.2275% 0.2474% 0.2703% 0.2941% 0.3210% 0.3498% 0.3805% 0.4153% 0.4539% 0.4965% 0.5430% 0.5964% 0.6557" 0.7218% 0.7976% 0.8831% 0.9823% 1.0959% 1.2297" 1;3865%

3,721

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Temporary Total

Appendix A Page 3 Sheet 2

Projection of Ultimate Loss ($000s) Historical Paid Loss Development Method Accident Years 1983/84 through 2000/01

Accident Year

(1)

(2)

(3)

Paid Loss at 180 months maturit~

Paid 1 80 to Ultimate Factor

Projected Ultimate Loss (1) X (2)

1983/84 1984/85 1985/86 1986/87 1987 /88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995 /96 1996/97 1997 /98 1998/99 1999/00 2000/01

$21,337 23,401 23,578 40,916 50,531 54,710 60,462 63,080 71 ,203 73, 149 67,756 66,425 66,757 65, 149 56,849 45,819 42,81 5 43, 164

Total

$849, 199

1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1.016 1 .016 1.016

$21,678 23,775 23,955 41,571 51 ,339 55,585 61,429 64,089 72,342 74,319 68,840 67,488 67,825 66, 191 57,759 46,552 43,500 43,855 $862,784

Notes: Column (1) is taken from Appendix A, Page 1O and reflects the paid loss for each accident period at 180 months maturity. Column (2) is taken from Appendix A, Page 8.

-

-

-

Appendix A Page 4

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Temporary Total

Selection of Ultimate Loss ($000s) Accident Years 2001 /02 through 201 5 /16

-

(1)

-

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/10 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16 Total

Notes: Column Column Column Column Column

-

(5)

Paid BornhuetterFerguson Method

Selected Ultimate Loss

Projected Ultimate Loss

Accident Year

-

(4)

(3)

(2)

(1) (2) (3) (4) (5)

Paid Loss as of 06¿30/16 $40,477 42,208 42,825 70,286 70,194 73,984 73,066 74,383 84,858 78,247 59,368 18,529 12,669 9,316 5,201

Paid Loss Development Method $41, l 25 42,968 43,724 71,973 72,230 76,573 76,281 78,474 90,883 85,680 67,264 22,050 16,432 14,496 15,780

Expected Loss Method

$25,163 17,865 17,063 16,467 15,678

$755,611

has been provided by the Puerto Rico State lnsurance Fund Corporation. is taken from Appendix A, Page 5, Column (3). is taken from Appendix A, Page 6, Column (7). is taken from Appendix A, Page 7, Column (7). is selected based upon judgment after a review of Columns (1) through (4).

$62,312 21,387 16,576 15,195 15,705

$41, l 25 42,968 43,500 71,973 72,230 76,573 76,281 78,474 90,883 85,680 67,000 22,000 16,450 15,000 15,500 $815,637

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Temporary Total

Appendix A Page 5

Projection of Ultimate Loss ($000s) Historical Paid Loss Development Method Accident Years 2001 /02 through 201 5 /16

Accident Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total

(1)

(2)

(3)

Paid Loss as of 06/30/16

Paid Age to Ultimate Factor

Ultimate Loss (1) X (2)

$40,477 42,208 42,825 70,286 70, 194 73,984 73,066 74,383 84,858 78,247 59,368 18,529 12,669 9,316 5,201

1.016 1.018 1.021 1.024 1.029 1.035 1.044 1.055 1.071 1.095 1.133 1.190 1.297 1.556 3.034

$755,611

Notes: Column (1) is taken from Appendix A, Page 4, Column (1 ). Column (2) is taken from Appendix A, Page 8.

$41,125 42,968 43,724 71 ,973 72,230 76,573 76,281 78,474 90,883 85,680 67,264 22,050 16,432 14,496 15,780 $815,933

-

-

-

-

Expected Loss Method

-

-

Appendlx A Page 6

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Temporary Total

Accident Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

(1)

(2)

(3)

(4)

Preliminary Ultimate , Loss (SOOOs)

Earned Payroll (SOOs)

Loss Cost per $100 of Payroll [(1) X $ 1,000J I (2)

Loss Cost Trend Factor

$41,125 42,968 43,500 71,973 72,230 76,573 76,281 78,474 90,883 85,680 67,264 22,050 16,432 14,496 15,780

$202,420,000 215,080,000 226,330,000 238,750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242, 156,580 233,992,560

(8)

(5) Trended Loss Cost per $100 of Payroll (3) X (4)

0.351 0.360 0.370 0.347 0.326 0.306 0.287 0.270 0.253 0.390 0.600 0.922 0.941 0.960 0.980

$0.071 0.072 0.071 0.104 0.096 0.096 0.090 0.093 0.099 0.141 0.175 0.081 0.063 0.058 0.066

Avg (AII Yrs) Wtd Avg (AII Yrs) Wtd Avg (Latest 5) Wtd Avg (Latest 3) Wtd Avg (Latest 2) Wtd Avg (AII Yrs Excl Hi/Lo)

0.092 0.092 0.088 0.062 0.062 0.092

Selected for accident year 2016 /17

0.065

$0.203 0.200 0.192 0.301 0.295 0.315 0.314 0.344 0.391 0.361 0.291 0.088 0.067 0.060 0.067

(6)

Loss Cost per $100 of Payroll (8) / (4)

(7)

Expected Loss (SOOOs) [(2) x (6)) / $1

S0.109 0.071 0.070 0.068 0.067

Notes: For accldent years 2001 /02 through 2010/11, Column (1) is taken from Appendix A, Page 4, Column (5). For accident years 2011 /12 through 2015/16, Column (1) is taken from Appendix A, Page 4, Column (2). Column (2) has been provided by the Puerto Rico State lnsurance Fund Corporation. Column (4) reflects trending to accident year 2016/ 17 based u pon the loss cost trends found on Appendlx A, Page 11, Unes (5) through (8). Line (8) is selected based upon judgment after review of Column (5).

-

·ººº

$25, 163 17,865 17,063 16,467 15,678

Appendbc A Page 7

PUERTO RICO - 5TATE IN5URANCE FUND CORPORATION WORKER5 COMPENSATION Temporary Total Projectlon of Ultlmate Loss (SOOOs)

Bornhuetter-Ferguson Method

(1)

(2)

(3)

(4)

(5)

Percent

Accldent Year

Percent

E•pected

Age to Ultlmate

Pald

Unpald

Loss

Factor

100% l !2)

100% - !3)

1.133

88.3" 84.0" 77.1"

11.7" 16.0" 22.9" 35.7" 67.0"

2011/12 2012/13 2013/14 2014/15 2015/16

125,163 17,865 17,063 16,467 15,678

Total

192,236

1.190 1.297 1.556 3.034

64.3%

33.0"

(6)

In

Expected

Cumulatlve

Pald

Pald loss as of06l30ll6

Unpald

Ultlmate

Loss !1!. !4>

!5! + !6!

Loss

159,368 18,529 12,669 9,316 5,201

12,944 2,858 3,907 5,879 10,504

162,312 21,387 16,576 15,195 15,705

1105,083

126,092

$131,175

en.

Notes: Cotumn (1) Is taken from Appendlx A, Page 6, Column Columns (2) and (S) are taken from Columns (2) and {I), respectlvely, of Appendlx A, Page S.

-

-

-

-

-

PUERTO RICO - 5TATE IN5URANCE FUND CORPORATION WORKER5 COMPENSATION

Pald Loss Oevek>pment Factors

Accldent Year 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011 /12 2012/13 2013/14 2014/15

.lL.ll 1.703 1.871 1.783 1.955 1.789 1.846 1.843 1.916 1,994 1.989 1.953 2.065 2.082 2.047 1.870 1.700 1.779 1.770 1.839 1.769 1.850 1.833 1.844 1.906 1.918

1.922 2.016 1.991

1.971 2.041 1.761

li.;.H

.li..i.M

1.169 1.182 1.211 1,204 1.208 1.193 1.185 1.211 1.204 1.183 1.200 1.200 1.196 1,169 1.118 1.124 1.131 1.136 1.126 1,129 1,127 1.127 1.151 1.153 1,158 1.181 1.209 1.216 1.200 1.192 1.176

1.102 1.122 1.133 1.134 1.110 1.097 1,101 1,102

1.089 1.091 1.092 1.089 1.074 1.048 1.046 1.056 1.066 1.056 1.057 1.057 1.050 1.059 1.064 1.070 1.075 1.086 1.098 1.090 1.067 1.098

il__;_§_Q

il.;_Zl

1.097 1.109 1.107 1.086 1.069 1.066 1.067 1.059 1.058 1.054 1.059 1.044 1.029 1.025 1.028 1.035 1.033 1.033 1.033 1,029 1.033 1.035 1.039 1.042 1.051 1.058 1.055 1,045 1.028

1.092 1.091 1.074 1.061 1.053 1.047 1.043 1.046 1.038

1.048 1.048

1.033 1.032 1.030 1.025

1.041

1.031 1.023 1.019 1,015 1.017 1.020 1.024 1.024 1,021 1.022 1.021 1.027 1.027 1.036 1.036 1.040 1.032 1.019

Latest 5 Latest 3 Latest 2 Years 04/05 & After Excludlno Hl/lo

1.904 1.948 1.856 1.745 1.919 1.904

1.173 1.206 1.195 1,185 1.175 1.173

1.079 1.087 1.082 1.074 1.078 1.079

1.045 1.048

1.031

Aon Selectlons f!J6/30/ l 5

2.000

1.200

1.090

Seltcted

1.950 3.034

1.200 1.556

1.090 1.297

Cumulatlve

IZ..;M 1.073 1.063 1.044 1.044 1.040 1.034 1.032 1.030 1.031 1.024 1.015 1.015 1.012 1.012 1.014 1.014 1.018 1.016

1.013 1.016 1.016 1,020 1,022 1.023 1.025 1.025 1.015

.li.;___9§

1,049 1.037 1.033 1.031 1.026 1,026 1.022 1.023 1.020 1.012 1.009 1.009 1.009 1,009 1.009 1.012 1,012 1.009 1.011

1.015 1.013 1.015 1.016 1.015 1.016 1.012

1.023 1.022

1,016

1.012 1.009 1.007 1.007 1.006 1,008 1.009 1.007 1.009 1.008 1.012 1.012 l.012 1.011 1.010 1.012

.lJ2L.ll2 lllL..l..ll J..ll..:..IM JM..;.lifi llL.l.U

J..§L.lJl!

1.027 1.023 1.018 1.021 1.014 1,016 1.012 1.010 1.007 1.006 1.006 1.006 1.006 1.006 1.006 1.005 1.005 1.008 1.007 1.008 1.009 1.008 1,008 1.006,

1.019 1.017 1.016 1.013 1.015 1.010 1.008 1.005 1.004 1.006 1.005 1.005 1.006 1.005 1.004 1,003 1.005 1.007 1.007 1.006 1.007 1.005 1.006

1.011 1.011 1.012 1,011 1.010 1.006 1.005 1.005 1.003 1.004 1.004 1.003 1,003 1.003 1.002 1.005 1.005 1.005 1.006 1.005 1.004 1.004

1.010 1.011 1.012 1.007 1.005 1.004 1.003 1.004 1.003 1.002 1,003 1.004 1.003 1.002 1.003 1.004 1.005 1.005 1.003 1.002 1.002

1.009 1.009 1.006 1.004 1.003 1.002 1.002 1.003 1.003 1.002 1.002 1.003 1.002 1.002 1.002 1.003 1,003 1.002 1.003 1.003

1.006 1,005 1.003 1.002 1.003 1.002 1.001 1.002 1.003 1.002 1.002 1.002 1.002 1.002 1.002 1.003 1.002 1.002 1.002

1.007 1.006 1.006 1.005 1.005 1.007

1.005 1.005 1.004 1.004 1.004 1.005

1.004 1.003 1.002 1.002

1.003 1.003 1.003 1,003

1.002 1,002 1.002 1.002

.w_;_¡¡J¡

1.009

1.016

1.015 1.014 1.014

1.033

1.020 1.022 1.023

1.012 1.011 1.010 1.010

1,015 1.016

1.012

1.009 1.008 1.007 1.007 1,007 1.009

1.004

1.003

1.002

1.055

1.037

1.023

1.015

1.011

1.008

1.007

1.005

1.004

1.002

1.002

1.005

1.050 1.190

1.035 1.133

1.022 1.095

1.015 1.071

1.011 1.055

1.008 1.044

1.006 1.035

1.005 1.029

1,003 1.024

1.003 1.021

1.002 1.018

1,016 1.016

The 180 to ultlmate development factor Is taken from Appendhc A, Page 9, Column (10),

-

1.031 1.032 1.027 1.023 1.021 1,017 1.020

1.021

1.044 1.037

Notes: Oevelopment factors are based on Appendlx A, Page l O,

-

.iL..lQI

1.727

Welghted Avera51e AilYears

-

Appendlx A Page 8

TemPorarv Total

1.010

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Temporary Total

Appendbc A Page 9 Paid Loss Development lnverse Power Curve

(1)

Development Perlod in Months 12 24 36 48 60 72 84 96 108 120 132 144 156 168

-

(2)

Time ~

24 36 48 60 72 84 96 108 120 132 144 156 168 180

-1.&..L.ill-

1.0 2.0 3.0 4.0 5.0 6.0 7.0 B.O 9.0 ID.O 11.0 12.0 13.0 14.0

(3)

(4)

Selected Age toAge Paid Loss Oevelopment Factor

Selected Age toAge Paid Loss Dev~opment Factor Less 1.0 (31- 1.0

1.000 0.500 0.333 0.250 0.200 0.167 0.143 0.125 0.111 0.100 0.091 0.083

1.950 1.200 1.090 1.050 J.035 1.022 1.015 1.011 1,008 1.006 1.005 1.003 1.003 1.002

0.011 0.071

(5)

In 121

0.950 0.200 0.090

In 141

0.035 0.022 0.015 0.011 0.008 0.006 0.005 0.003 0.003 0.002

(8)

(9)

(10)

lnclusion In Regression (1.0 to indude2

Fitted Age toAge Paid Lon Development Factor 1Unrounded2

Fitted Age to Ultimate Paid Loss Development Factor jUnroundss!J

Fitted Age to Ultimate Pald Loss Development Factor (Rounded}

1.01598 1.01406 1.01245 1,01108 1.00992 1.00891 1.00804 1.00727 1.00660 1.00600 1.00546 1.00499 1.00456 1.00417 1.00382 1.00351 1.00322 1,00295 1.00271 1.00248 1.00228 1.00209 1.00191 1.00175 1.00159 1.00145 1.00132 1.00119 1.00108 1.00097 1.00087 1.00077 1.00068 1.00059 1.00051 1.00044 1.00036 1.00029 1.00023 1.00017 1.00011 1.00005

1.016 1.014 1.012 1.011 1.010 1.009 1.008 1.007 1.007 1.006 1.005 1.005 1.005 1.004 1.004 1.004 1.003 1.003 1.003 1.002 1.002 1.002 1.002 1.002 1.002 1.001 1.001 1.001 1.001 1.001 1.001 1.001 1.001 1.001 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.000

-0.051 -1.609 -2.408 -2.996 -3.352 -3.817 -4.200 -4.510 -4.828 -5.116 -5.298 -5.809 -5.809 -6.215

0.000 -0.693 -1,099 -1.386 -1.609 -1.792 -1.946 -2.079 -2.197 -2.303 -2.398 -2.485 -2.565 -2.639

o.oso

m

(6)

1.00200

1.00160 1.00140

11.00120

r~

""' 1.00100 1.~ 1.00040 1.00020

15.0

20.0

25.0

....

30.0 Tlml hdex

40.0

45.0

60.0

56.0

Time ~

Development Period in Months

0.000 0.000 0.000 0.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 t.000 1.000

1.00180

,!i

Development Period lnMonths

60.0

· · - - - - - - - - - --------------------------·---

180 - 192 192-204 204 - 216 216-228 228 - 240 240 - 252 252 - 264 264 - 276 276 - 288 288 - 300 300 - 312 312 - 324 324 - 336 336 - 348 348 - 360 360 - 372 372 - 384 384 - 396 396 - 408 408 - 420 420 - 432 432 - 444 444 - 456 456 - 468 468 - 480 480 - 492 492 - 504 504 - 516 516 - 528 528 - 540 540 - 552 552 - 564 564 - 576 576 - 588 588 - 600 600-612 612 - 624 624 - 636 636 - 648 648 - 660 660 - 672 672 - 684

Notes: Column (3) is tale.en from Appendix A, Page 8. Column (7) indicatH which factors have been included in fitting the [email protected] curve; the R-Squared va&ue of this fil is D.99045, Column {8) represents the output of the [email protected] inverse power curve. Column (9) for a glven maturity is equal to the product of Column (8) for that and any subsequent maturities.

1.00189 1.00159 1.00135 1.00116 1.00100 1.00087 1.00076 1.00067 J.00059 1.00053 1.00047 1.00043 1.00038 1.00035 1.00032 1.00029 1.00026 1.00024 1.00022 1.00021 1.00019 1.00018 1.00016 1.00015 1.00014 1.00013 1.00012 1.00012 1.00011 1.00010 1.00010 1.00009 1.00009 \.00008 1.00008 1.00007 1.00007 1.00007 1,00006 1.00006 J.00006 1.00005

15.0 16.0 17.0 18.0 19.0 20.0 21.0 22.0 23.0 24.0 25.0 26.0 27.0 28.0 29.0 30.0 31.0 32.0 33.0 34.0 35.0 36.0 37.0 38.0 39.0 40.0 41.0 42.0 43.0 44.0 45,0 46.0 47.0 48.0 49.0

so.o 51.0 52.0 53.0 54.0 SS.O 56.0

180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 5 76 588 600 61 2 624 636 648 660 672

to Uhimate to Ultimate to Ultlmate to Ultlmate to Ultlmate to Ultimate to Ultlmate to Ultimate to Ultlmate to Ultimate to Ultlmate to Ultimate toUltimate to Uttlmate to Ultlmate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultlmate to Ultimate to Ultimate to Ultimate to Ultimate to Ultlmate to Ultimate to [email protected] to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate

-

-

-

-

-

PUERTO RK:O - STATE INSURANCE FUND CORPORATION WORKERS COMPENSA.TION

Appendhc A

Paoe 10

Temporary Total Historlcal Unlimited Pald Loss (SOOOs)

AccldentYear

1983/84 1984185 1985/86 1986/87 1987/88 1988189 1989190 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002103 2003¡04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015Jl6

.iillmiííii 6,442 6,348 6,841 11,422 16,361 18,111 20,347 20,185 22,759 24,278 22,983 21,856 22,685 23,802 23,609 20,327 17,711 18,049 16,481 17,769 17,407 28.433 27.381 27,565 26,769 26,477 28,678 27,850 22,893 6,938 6,116 5,395 5,201

IDA9iíílíi 10,970 11,879 12,200 22,332 29,276 33,430 37,502 38,679 45,376 48,298 44,876 45,130 47,223 48,726 44,155 34,558 31,508 31,952 30,302 31,442 32,196 52.126 50,487 52,549 51,350 50,881 57,815 55,440 45,119 14,159 10,771 9,316



12,826 14,038

141,769 26,894 35,362 39,874 44,422 46,850 54,655 57,145 53,871 54,151 56,502 56,943 49,361 38,837 35,649 36,308 34,107 35,485 36,274 58,722 · 58,117 60,573 59,447 60,074 69,906 67,391 54,132 16,881 12,669



14,131 15,756 16,730 30,491 39,254 43,754 48,893 51,632 59,499 62.317 58.837 58,970 60,692 59,650 51,620 41,021 37,987 38,331 36,035 37,525 38,095 62,178 61,858 64,809 63,896 65,231 76,777 73,482 57,773 18,529

ID!mííiíi 15,501 17,471 18,524 33,112 41,945 46,627 52,158 54,666 62,933 65,659 62,317 61,559 62,455 61,124 53,090 42,452 39,237 39,586 37,228 38,602 39,343 64,344 64,269 67,529 67,144 69,006 81,035 76,791 59,368



Notes: Data has been pr
-

-

-

16,929 19,()641 19,893 35,125 44,161 48,819 54,425 57,161 65,337 68,346 64,245 62,984 63,623 62,057 54,012 43,308 40,194 40,552 38,027 39,459 40,163 66,059 66,003 69,937 69,551 71,743 83,589 78,247



Evaluated as of...

18,170 20,256 20,776 36,655 45,949 50,464 56,180 58,874 67,385 70,000 65,229 63,900 64,371 62,796 54,786 43,909 40,924 41,192 38,532 40,096 40,824 67,399 67,454 71,572 71,277 73,534 84,858

üííííí!íi

19,066 21.014 21,471 37,779 47,153 51,770 57,437 60,246 68,752 70,853 65,809 64,472 64,966 63,332 55,268 4'4,444 41,398 41,578 38,942 40,708 41,363 68,403 68,547 72,681 72,430 74,383



19,663 21,694 22.050 38,649 48,150 52,649 58,558 61,216 69,544 71,482 66.250 64,952 65,380 63,824 55,746 44,744 41,767 41.915 39,401 41,187 41,874 69.123 69,242 73,549 73,066



20,198 22.202 22,452

39,-443 48,834 53,474 59,271 61,806 70,058 71,933 66,626 65,353 65,765 64,218 56,074 44,960 41,980 42,268 39,658 41,534 42,269 69,657 69,810 73,984

ií.tiííííillíi 20,581 22,588 22,812 39,940 49,547 54,035 59.733 62,134 70.365 72,333 66,953 65,650 66,142 64,522 56,290 45,107 42,201 42,562 39,942 41,784 42,585 69,993 70,194



20,816 22,846 23,092 40,394 50,023 54,342 60,051 62,470 70,585 72,647 67,224 65,875 66,359 64,708 56,424 45,354 42,392 42,769 40,171 41,982 42,736 70.286



21,016 23,090 23,366 40,678 50,256 54,539 60,244 62,748 70,810 72,825 67,439 66,107 66,553 64,845 56,591 45,547 42,586 42,974 40,281 42,085 42,825

ill..Míiííiííi 21.211 23,288 23,502 40,833 50,398 54,627 60,379 62,936 70,997 72,990 67,597 66,317 66,655 64,995 56,723 45,702 42,725 43,079 40,409 42,208



21,337 23,401 23,578 40,916 50,531 54,710 60,462 63,080 71,203 73,149 67.756 66,425 66,757 65,149 56,849 45,819 42,815 43,164 40,477

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Appendix A Page 11

Temporary Total

Loss Cost Trend $0.400 $0.350 $0.!00

~

$0.250

! $0.200 $0.150 $0.100

AcddentYur

(1)

-1!!!:..-

Earned Payroll !SOos¡

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

$202,420,000 215,080,000 226,330,000 238, 750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242, 156,580 233,992,560

Accident

(2) Projected Ultlmate Loss !SOOOs¡ $41,125 42,968 43,500 71,973 72,230 76,573 76,281 78,474 90,883 85,680 67,264 22,050 16,432 14,496 15,780

(4)

(3) Loss Cost

per SlOO of Payroll 1!21• s1,ooo¡ L¡1¡

Percent Change

S0.203

o.zoo

0.192 0.301 0.295 0.315 0.314 0.344 0.391 0.361 0.291 0.088 0.067 0.060 0.067

-1.5% -4.0% 56.8% -2.0% 6.8% -0.3% 9.6% 13.7% -7.7% -19.4% -69.8% -23.9% -10.4% 11.7%

Exeonential Exelude

Years Reviewed

2001 /02 2001 /02 2003/04 2003/04 2004/05 2009/10 2009/10 2012/13 2012/13 2013/14

-

-----

(5)

(6) (7) (8) Notes: Column (1) has been provlded by the Puerto Rico State lnsurance Fund Corporation. For accldent years 2001 /02 through 2010/11, Column (2) is taken from Appendlx A, Page 4, Column (5). For accident years 2011 /12 through 201 5/16, Column (2) is taken from Appendix A, Page 4, Column (2). Unes (5) through (8) are selected based upon judgment, after a revlew of the curve flts above.

R-Sguared

Trend

0.933 0.337 0.740 0.885 0.812 0.760 0.920 0.539 0.571 0.000

-2.7% -8.4% 9.2% 11.1% 5.2% -37.4% -41.0% -8.9% -7.5% 0.0%

5elected for accldent years 2001 /02 through 2003/04 Selected for accident years 2003/04 through 2009/10 Selected for accident years 2009/10 through 2012/13 Selected for accldent years 2012/13 and subsequent

-2.5% 6.5% -35.0% -2.0%

2003/04 2015/16 2009/10 2009/1 O 2009/10 2012/13 2012/13 2015/16 2015/16 2015/16

2004/05 2011/12 2014/15

-

-

-

-

Appendix A Page 12

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Temporary Total

Loss Trend

-

$100,000

r

$90,000

1] 1 i

$80,000 $70,000 $60,000 $50,000

:,

1

$40,000 $30,000

-

$20,000

$10,000 -I--,--,--,--,--,---,---,.~-....-,---,--,--,--,--,---,-~-.---,--,--....---.----,---,---,---,---,.~.---....-..---,--,--,

..,,.,.f_rd,~~~#.,~.g,\of>¡f>f'\~°':-v-°'"'!'>~~Et-'°'\.,~,Jof'"., ,'l~¡,,~q">rf'',s,••i'·_,..,~"':-v-"':..~~~,"':.~ "'"' "'"' ,f> ,f>

,¡,~J,..

{'i ~ ~ ...,~ {'i {'i ...,.... {'i {'i ~- {'i {'i {'i ...,a;, ~- {'i {'i

-

-

-

'1,(Y ,,.,.. ,, .... ,,.,.. '1,(Y ,,..,..

'1,(Y '1,(Y "'"'

Accldent Year

Accident Year 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

(1) Selected Ultimate Loss (SOOOs) $21,678 23,775 23,955 41,571 51,339 55,585 61,429 64,089 72,342 74,319 68,840 67,488 67,825 66,191 57,759 46,552 43,500 43,855 41, l 25 42,968 43,500 71,973 72,230 76,573 76,281 78,474 90,883 85,680 67,000 22,000 16,450 15,000 15,500

(2) Percent Change 9.7% 0.8% 73.5% 23.5% 8.3% 10.5% 4.3% 12.9% 2.7% -7.4% -2.0% 0.5% -2.4% -12.7% -19.4% -6.6% 0.8% -6.2% 4.5% 1.2% 65.5% 0.4% 6.0% -0.4% 2.9% 15.8% -5.7% -21.8% -67.2% -25.2% -8.8% 3.3%

Years Reviewed 1983/84 1984/85 1985/86 1985/86 1985/86 1985/86 1985/86 1985/86 1985/86 1985/86 1986/87 1993/94 1993/94 1998/99 1998/99 1999/00 2000/01 2000/01 2001 /02 2001 /02 2001 /02 2001 /02 2001 /02 2001/02 2005/06 2005/06 2005/06 2005/06 2007/08 2008/09 2008/09 2009/1 O 2011/12 -

-

-

-

Ex elude

1985/86 2011/12 1992/93 1992/93 2001/02 2004/05 2009/10 2010/11 2015/16 201 5/16 2012/13 2014/15 2012/13 2015/16 2015/16 2009/1 O 2005/06 2009/1 O 2009/1 O · 201 5/16 201 5/16 2009/1 O 2009/1 O 2010/11 2010/11 2004/05 2011 /12 201 3/14 2013/14 2009/10 2011 /12 2011 /12 2009/1 O 2010/11 201 5/16 201 5/16 2010/11 2011 /12 201 5/16 2015/16 2015/16 2009/1 O 2011 /12 2015/16 201 5/16

Exeonential R-Sguared Trend 0.806 0.288 0.813 0.813 0.011 0.003 0.166 0.208

o.oso

0.009 0.002 0.219 0.279 0.486 0.794 0.838 0.233 0.281 0.836 0.817 0.889 0.635 0.059 0.093 0.020 0.298 0.706 0.848 0.799 0.840 0.850 0.864 0.681

Notes: For accident years 1983/84 through 2000/01, Column (1) is taken from Appendix A, Page 3, Sheet 2, Column (3). For accident years 2001 /02 through 2015/16, Column (1) is taken from Appendix A, Page 4, Column (5).

-

-

5.1% 2.2% 14.6% 14.6% 0.6% 0.3% 1.7% 1.8% -1.6% -0.5% 0.2% -3.8% -4.2% 6.9% 7.9% 9.0% -6.4% -6.7% 10.8% 9.5% 10.1% 7.2% -3.3% -4.0% 0.7% -1.5% -17.9% -18.5% -23.6% -27.0% -25.3% -30.6% -28.2%

PUERTO RICO, STATE IHSURAtcE FUNOCORPORAT!ON WORWISCOM"l:NSATION Tempc:,reryTotll

Ai,~ndi~A Pate13 Shttt1

PaycutofRemeinirtCI.D$,liab•lity

(IJA(cid•nlYHt

CllÑHd1dRIUNH

........lQllL!L .....lfilL!L_ --lli.!lJ.!.._ -1.Qlli!L. -L!U!iJ1...._ -1fil9.ill.._ -l.Q.Q!L!L -1..22!.LQ!_

~ ~ ~ ~ ~ ~ _l2!ll1.QL_

---1.222L.2..L.

S10,o35,SOD

SS,624,000

Sl,70,100

Sl,471,000

'7,632,000

57.433.000

S6,025.000

U,Q91,000

B.21S,OOD

S2,589,000

S2,036,000

Sl,687,000

S675,000

'760,000

S&-48,000

S6oa.oso

4,686,990 1.924,106 1,039,025 629,246 462.446 300,824 209,612 156,022 114,696 86,787 72,707 43,815 44,056 29,665 27,199 23.471 20,031 17,000 14.153 12.1n 11.350 9,195 8,881 7,998 6,965 6,373 S,780 S.208 4,596 4,315 4,024 3,563 3,432

2,023,212 1,092,541 661,652 4S6.262 )16,316 220,472 164.058 120,601 91.261 76,453 46,072 46,325 31,196 29,340 24,678 21,062 17,879 15,612 1J.45S 11,929 10,404 9,336 8,408 7,317 6,704 6,074 5,478 4,831

1,137,237 6H,725 506,155 329,256 229,492 170,771 125.535 94,996 79,576 47.957 41,219 32,474 30,540 25,619 21,92) 11.613 16,252 14,007 12.417 I0,121 9,715 a.1u 7,620 6,979 6,32) 5,701 S,030 4,719 4,40! 3,891 J.752 3,261

915,622 672,905 07,728 305,097 227,031 166,893 126,292 105,796 63,755 64,102 43,172 40,600 34,155 29,143 24,745 21,607 18,622 16,512 14,398 12.916 11,631 10,128 9,278 8,407 1.sa1 6,689 6,272 5,859 5,186 4,988

2,009,127 U07,B9 911,215 678,065 494,446 377,189 115,972 190,411 191,456 128,935 121.265 102.002 87.043 73,901 64,536 55,622 49,)10 42,999 U.580 34,741 30,253 27,712 25,109 22,637 19,973 18,73r 17,500 15,485 1-4.898 12,944 12,295 11,707 10,341 10.410 9,044 8,456 8,395 7,159 7,159 6,502 6,502 5,793 5,854 5,205 4,556 5.205 4,5S6 3,900 J,900 3.900 3,900 3,259

1.728,311 1,204,619 896,442 658,980 498,665 417.7l5 lSl,741 253,116 170,461 160.315 134,857 115,078 97,699 85.)16 73,BS 65,19S 56,848 51,005 45,929 39,990 36,637 33,196 29,933 26,402 24,767 Zl.139 20,470 19,697 17,118 16,256 15,483 13,677 13.751 11,952 11,179 11,097 9,462 9.462 8,600 1.600 7,656 7,718 6,883 6,021

1.272,347 946,787 695,990 526,669 441.193 265,877 267,329 180,039 169,321 142,431 121,5)6 103,19<1 90,110 77,662 61,854 60,045 53,864 48,507 42,241 31,699 35,066 31,613 27.190 26,161 24,437 21,618 20,!04 18,075 17,165 16,352 14,442 14.532 12,621 11.809 11,719 9,989 9,989 9,086 9,0116 8,086 1.176 7,266 6,356 7.266 6,356 5.453 5,453 5,45) 5,453 4,530

814,9!0 599,09-4 45),348 379,772 228,863 230,115 154,975 145,7-46 122,603 104,619 88,824 77,565 66,851 59,266 51,686 46,367 41,753 36,357 H.309 30,183 27,209 24.006 22.517 21,032 18,610 17,906 15,558 14,777 14,073 12,433 12,510 10,870 10,166 10,088 8,599 8.599 7,818 7,818 6,959 7.037 6.255 5,474 6.255 5,474 4,692 4,692 4,692 4,692 3,913

587,917 444,905 172.696 224,600 225,828 152,016 143,0)2 120,318 102,671 87,161 76.122 65,609 58,166 50,720 45,502 40,975 35,680 32,690 29,620 26,704 23,556 22.100 20.640 11,261 17,57) 15,271 14,503 13,812 12.201 12.278 10,667 9,976 9,899 a.o9 8,439 7,674 7,674 6,829 6,906 6,137 5.372 6,137 5.)72 4,604 4,604 4,604 4,604 3,819

418,4511 367,296 221,347 222,556 149,!82 140,961 118,576 101.1111 85,906 75,016 64,658 57,320 49,986 44,844 40,181 35,164 )2,215 29,191 26,317 23,216 21,779 20,342 17,999 17,311 15,050 1-4,294 13,613 12,023 12,098 10,511 9,130 9,755 8,)18 8,318 7,562 7,562 6,731 6,106 6,050 5,295 6,050 5,295 4.519 4,519 4,Sl9 4,539 3,770

347.735 209,557 210,702 141,899 133.452 112,259 95,794 81.312 71,022 61.212 54.268 47,325 42,455 l&,232 33,291 30.499 27,635 24,915 21.979 20.619 19,259 17,039 16,396 14,24' 13,531 12,888 11,383 11.455 9,952 9,307 9,235 7,875 7,875 7.159 7,159 6,373 6.444 5,727 5,011 5.727 5,011 4,296 4,296 4,296 4,296 3.580

209,)99 210,544 141,794 13).352 112,175 95,722 81.270 70,969 61,167 54,229 47,2111 42.42) U,202 B.266 30,476 27,615 24.897 21,963 20.60) 19,244 17,027 16,)82 14.2)7 13,521 12,877 tt.375 11,446 9,945 9,300 9,230 7,870 7,870 7,155 7,155 6.367 6,439 5,724 5,007 5,724 5,007 4,292 4.292 4,292 4,292 3,576

96,1111 64,714 60,91& 51,244 43,728 37,126 32,420 27,942 24,773 21.602 19,180 17,452 IS,197 13,923 12,61S 11,373 10,033 9,412 1,791 7,77! 7.414 6,504 6,177 5,883 5,196 5,229 4,543 4,241 4,216 3,595 3,595

85,050 79,916 67,285 57,415 4!,747 42,568 36,689 )2,526 2!,364 25.446 22,915 19,954

76,793 64,591 55,123 46,SOl 40,888 35,224 31,228 27,232 24,430 22,000 19.157 17,550 15,903 14,337 12,641 11.865 11,082 9,105 9,4)4 8,198 7,716 7,416 6,551 6,591 5,726 5,356 5,314 4,531 4,531 4,120 4,120 3,666 3,708 3,296 2,!84 l,296 2,884 2,472 2,472 2,472 2.472 2,060

68,765 58,678 49,819 43,504 37,496 H,242 2S,9H 26,006 H,41! 20,393 111,682 16,92a 15.261 13,463 12,630 11,797 10,438 10,043 a.121 1.218 7,19-4 6,971 7,017 6,096 5,701 5,657 4,824 4.1124 4,315 4,3&5 3,903 3,947 3,501 3,070 3,508 3,070 2,631 2,631 2,631 2,631 2,198

C3Jhv..,.nhAntkl~ted0..ring 12 MonthsEnding ...

6¡JO¡l7 6/30¡111 6/)0/19 6110120 6¡30/21 6¡)0/22 6/30/21 6/)0/24 6/30/25 6J30J26 6¡30¡27 6/30/211 6/30/29 6/30/30 6/)01)1 6/30/32 6/30/B 6/30/34 6130135 6/30/36 6/30/17 6/10131 6/)0/39 6/30/40 6/30/41 6/30/42 6/30/43 6/30/44 6130/-45 6/30/46 6/30/47 6/30/-48 6/30/49 6/30/50 6/10151 6/30/52 6/l0153 6/10/54 6/30/55 61]0¡56 6{30/57 6/)0/51 6/30/59 6/30/60 6/30/61 6/30162 6/30/63 6/)0/64 6/30/65 6/30/66 6¡30/67 6130/6! 6¡30¡69 6/30/70 6/30/71 6130/72

2.9t1 2,130 2.690 2,37! 2,398

2,on

1,9,47 1,927 1,6-46 1,646 1,495 1,495

1.HS 1,345 1,194 1,044 1,194 1,044

"' '" "' m "'

4.533 4,235 3,746 3.605 3,133 2,975 2,834 2,503 2,520 2,188 2,047 2.030 1.112 1,732 1,575 1.575 1.400 !,417 1,260 1,102 1,260 1,102

'" ,., "' '" "'

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2.950 2.605 2,620 2,279 2,129 2,114 1,803 1,803 l,6ll 1.631 1,458 l,47l 1.)12 t.141 1,312 1,141

"' "' "' "' "' '"""'TIJITToo

4.))5

4,117 3,922 3.464 3,485 3,027 2,132 2.812 2,39S 2,395 2,1110 2,180 1,940 1,961 1,742 1.524 l,742 1,524 1.309 1,309 l,31)g 1,309 1,077

6.813 6,021 5,159 5,159 5,159 5.159 4,300

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U68 ),261 2.909 2,942 2,614 2,288 2,614 2,2111 1,961 1,961 1,961 1.961 1.633

~

11.ao 16,563 14,913 13,174 12.358 11,543 10,21)

9.127 1,539 1.110 7,724 6,823 6,866 5,964 5,S71 5.536 4,720 4,720 4.291 4,291 3,819 3,862 3,4)3 J,004 3,433 3,004 2,575 2.575 2.575 2,575 2.147

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Notu: Une (2) 1, u.ken fromAppendl• A, Page 3, Sheet l,Column (7). LiPM ()) js blffd on the p.ay..,.nt p.an.rn derived on AppendlY A. Pao;ie 14.

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PUERTO RICO· STATE INSURANCE FUNOCORPORATION

WORKERS COMPENSATION TemporilryTotill

~

---1!2!(!!_ -1.fill!!_ --1!!!L.!!...._ _Jillill_ __!.llifil_ ~

--.!..ttU!L ---11!..!.L!L

---1ill.L!L_ -1fil.L!.!L_ _l!!!1.!!..._ --1lliL!L_ --1.!!!L!L_ _!.filL!!_

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SS34.920

SSl0.163

'567,367

SS8'4,SH

S540,972

S487,121

1451,384

S443,l39

rnn.111

S318,202

SZ71,826

SB0,845

S\95,345

Sl0.415

S76,896

569,922

51,203 49.416 4),152 37.192 32,973 21.754 25,795 B.229 20,227 18,531 16.791 15,138 13.354 ll.528 11,701 10,353 9,961 8,657 1.222 7.830 6,917 6,960 6,047 5,655 5,611 4,785 4,785 4.350 4,350 3,172 3.915 3,480 J,045 3,480 3.045 2.610 2,610 2.610 2.610 2.176

52.113 46,179 39,802 35,286 30,771 27,605 24,859 21,647 19,831 17,969 16,200 14.292 13,401 12,522 11,079 10,660 9.264 8,798 8.379 7.402 7.448 6,471 6,052 6,005 5,121 5.121 4,655 4.655 4,143 4,189 3.724 3,258 3.724 3.258 2,793 2.793 2.793 2.793 2.332

57.297

56.593 50.173 43.752 39.251 35.l46 30.779 28.197 25,550 23,0U 20.321 19.063 17,805 15,754 15,158 ll,172 12.510 11.915 10.525 10.591 9.201 8,605 8.539 7,281 7,281 6.619 6,619 S,891 5,957 S,295 4,634 5.295 4.634 3.971 3,971 3,971 ),971 3,308

51,411

49,314 43.7.. 31,179 34.251 30,143 26,158 24,606 22.295 20.100 17.732 16,635 15.537 ll,747 ll,227 11,494 10,917 10,396 9.184 9,241 8,028 7.S09 7,4Sl 6,353 6,353 5,776 5,776 5,140 S,198 4,621 4.043 4.621 4.043 3,465 3,465 3.465 3.465 2.891

44,8B 40,220 36.219 31,539 28,893 26,180 23,603 20,822 19,533 18.245 16,143 15.532 13.497 12.819 12.2og 10.784 10.852 9.428 8,817 8.750 7.461 7.461 6,783 6.783 6.036 6.104 5.426 4.748 5.426 4.748 4.070 4.070 4.070 4,070 3.387

44.610 40,020 36,039 31,382 2',750 26,050 23,486 20,719 19,436 18,154 16,062 15,455 13.430 12.755 U.141 10,710 10.798 9,311 8,774 1,706 7,424 7.424 6,749 6,749

40,821 36,761 32.011 29.326 26.572 23.956 21,134 19,826 11,518 16,314 15.765 13,699 13,011 12,391 10,946 11,014 9.569 8.949 8,881 7,572 7,572 6,884 6,884 6,127 6.196 S,507 4,819 5,507 4,819 4.111 4.131 4,131 4.131 3,438

39.616 34.558 31.660 28.617 25.863 n.116 21,404 19,992 17,688 17,019 14.790 14,046 13,377 11,817 11,891 10.331 9.661 9,587 8,17S 8,175 7,432 7,432 6,614 6,689 5.946 5.202 5,946 5.202 4,459 4.459 4.459 4,459 3.717

H.639 30,818 27,924 25.175 22,209 20,835 19,460 17.218 16.566 14.396 13,673 13,021 11,502 11,575 10,056 9,404 9.332 7.958 7.958 7,234 7.234 6,438 6.511 5,787 5,064 5,717 5,064 4,341 4,341 4,341 4.341 3,615

27.301 24,731 22,303 19,675 18,451 17,240 15.253 14,676 12,754 12,113 11.536 10,190 10,254 8,908 8,331 8.268 7.050 7,050 6,409 6,409 5,704 5.768 S,127 4.486 5,127 4,416 3,845 3.845 3.845 3.845 3,207

13.712 21,377 18.859 17,692 16.524 14,620 14,067 12,224 11,610 ll.OS7 9,767 9,829 1.531 7,986 7,924 6.757 6,757 6,143 6,143 S,467 S.529 4.914 4,300 4,914 4.300 l.616 3,686 3.686 3,686 3,072

19,)44 17,065 16,008 14,952 1).229 12,729 11.061 10,506 10,005 8,8)8 8,894 7,726 7,226 7,171 6,114 6.114 S,559 5,559 4,947 5.003 4,447 3.891 4,447 3.891

15.761 14,786 13,810 12,219 ll,757 10.211 9,703 9,241 l,163 8.ll4 7.136 6.674 6.623 5.647 S,647 5,134 S,134 4,569 4.620 4,107 3,594 4.107 3,594 3,080 3,040 3,080

11.972 11.183 9,894 9,520 8.273 7.851 7,48) t,610 6,651 5,778 5.404 5,363 4,513 4,571 4,IS, 4,157 3.700 3,741 3.326 2.910 3,326 2,910 2,494 2,494 2,494 2,494 2,078

6.444 5,701 5.416 4.767 4.521 4.)12 3.809 3,03 3.HO 3.114 3,090 2,635 2.635 2,396 2,196 2.132 2,156 1,916 1,677 1,916 1,677 1.437 1,437 1,437 1,437

S.6SI 5,444 4,731 4.493 4.210 J,710 3.804 3,305 3,091 3,067 2.615 2,615 2.377 2.377 2,116 2.140 1,902 1.664 1.902 1,664 1.426 1.426 1,426 1,426 1.193

U) Payment,Antlclpilled Durlng 12 Monlhl Ending ..

6130/17

6/10Jll 6/30/U 6110120 6¡)0/21 6/30/22 6{30/23 15/30124

6/30/25 6/30/26 6/30127 6/30/28 6/30/29 6/30/30 61)0/31 6/30/32

6!30/33 6130/34 6JJ0/3S

6/30/36 6110137 6/10/38 6/}0/39 6/l0/40 6/30/41 6/30/42 61)0/43 6/30¡44 6/)0/45 6/}0/46 6/)0/47 6130/41 6/10/49 6/30/SO 6/30/Sl 6/30/52 6/l0/S3 6/30/54 6/30/55 6/30/56 6/30/57 6110/58 6/30159 6/30/60 6/30/61 6¡30/62 6/30/6J 6/30/64 t,/)0/65 6/30/66 15/30/67 6/30/68 6/30/69 6/30/70 6/30/71 6/30/72

hiolH: Lin,, (2) li uk1n from Appendiw A, Pao• J. 5hH1 1, Column (7). Llne (3) is b,,w,d on the p.¡ym,,nl p.¡ttern d1rN1d on AppendiwA, P111e 14.

'·'°'

6,074 5,399 4.724 S.399 4,724 4.049 4,049 4.049 4.049 l,375

3.Jl5 3.335 3,115 3.335 2.779

1.oao

2.568

1.198

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PUERTO RICO· STATE INSUIIANCE FUNDCOIIPORATION WORICERSCOMPfNSATIOt\l Ten,poraryTot.l

01Ac:cld•11tYnr

--1!!lL!!...... .....!!!!l§L_ --1!!!L.!L --1.!!!l.!L. --1!!!L!L --1!!!1.!L. ---1!!!L!L. _l!!2L!L S7,151

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12.165

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6/30/20 6/J0/21 61)0/22 6/10/2)

6/)0/24 61)0/25 6¡)0/26 6/)0/27 6/)0/21

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1,019

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2.495,)15 2,017,94' 1,611.621 l.415,7SS 1,045,513 919.111 105,535 717,60i 6)9,734 573.750 516,112

li/30/)0

6/l0/31 6/30/32 6/)0/JJ 6/30/34

466.911 423.1}1

6/l0/35 6/)0/36 6/)0/37 6/30/31 6/JO!lt 6/J0/40

315,619

352.7)9 122,645 295,916 212.545 251,451 2Jl.S59 213.761 196,442 110.111 166,010

6/30/41 6/30/42

6/30/43 6/)0/44 6/30/45 6/)0/46 61)0/47

152,297 111,176 126,5111

115,)0I 105,239

6/JO/SI 6/30/52 6/10/51 6/30/54

95.651

16,06 79.016 72.311

6/30/55

6/)0/56 6/)0/57

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6/30/41 6/30/49

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54,7S4 49.119

45.612

6/30/&l

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6/30/6) 6/30/64 6/30165

n,121 ll.175

6/10/66

11,176

6/30/67

12.410 7,JU

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6/J0/61

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6/30{69 6/10/70 6/)0/71 6/30/72

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....... ....... ....... .......

o.oosos

lS.9746,f; 19.4264" 11.7541'6 1.154621' 5.15244" l.9202" 2,9171" Z,1444" 1.6227% 1,3594" O.ll!ml 0.,231ll 0.5547" 0.5217" 0.4318" 0.1745" 0.1179'1, 0.2776" 0,2393'1; 0.2121• 0.11509' 0,1660lll. 0.1495" 0.1301,if; 0.1192" O.IOIO!II 0.01174" 0.065911, 0,0IOISS 0.0753'6 0.0666'5 0.0641" 0,0551511 0.052911. 0.0504. 0.0445" 0.0441!11 0.0319" 0.0364'6 0,0361S 0.030n O.OJOIK o.ozao. 0.0210X 0,0241S 0.0252" 0,02241' O.Olte& 0.0224!1 0.01961' 0.0161!1 0,016"' 0,0168'1 0.016"' 0.0140S

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o.oosra

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0.0060'6 o.oosmr.

0,1648' 0.7245" 0.4lfilS

0.4J9or. 0,295D U7IO!lli 0.2339111 0.1996" 0.16941' 0,1410JI 0.1275" O,IIJI"

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12.1nn 6.9411" 4,203D 3.0893"

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1.400,. l.0423X 0,7662" G.579" 0.4&57" 0.2927" 0.2943" 0.198211 0.1164" 0,151M1 o.1nn 0.1136'1. 0.0992. 0,11&55" o.onn 0.0661" 0,0SHS 0.0514,if; 0,0465!11 0.0426" 0.038"' O.OJ4ft 0.0307" 0.0218" 0.0269" 0.0238" 0.0229" 0,0199111 0.0161S O.OIIOIII 0.015911. O.Ol&O'll 0.0139" O,OIJmll 0.0129" o.011os O.OIIOS O.OIOO!II o.01oo,r. O,OOIIS

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0.0119" 0.0104" 0.0119JII 0.0104" 0.00191, 0.0089" 0.0019lll O,OOIIS 0,0071"

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6,9411" 4.2036" 3.049)"

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1.400,. l.04U" 0,7662" 0,5798" 0.4157" 0.2927" 0,290!11 0,1912" 0.1164• 0.1560 0.l)JU 0.1136" 0.0992" o.oan" o.onn 0.0661!11 O.OS9lX 0.0534" 0.0465" 0,0426" 0.0316'5 o.014n 0.0301" 0.021... 0.0269" 0.0238" 0.0229" 0.0199!1 O.OIIIS O,OIIOIII O,Ol59'C 0.0l&O'll 0.0139'C O.OIJOS 0,0129" 0.0119" 0.01IO!II O.OIOO!II O.OJOOS 0,00IIS 0.0090S O,OOIOIII 0.0070.

J0.3417" 11.3151" 1),5043" l,7&4ft 6.1229'C 4.5562'1; U493" 2.nn• z.1211• J,2795!1 1.2165" 0,11564"

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0.0561" 0,0564" 0.0411" 0.0481" 0.0437" 0.0431'1 0,0169" 0,0393. 0,035°" 0.0306S 0.035°'5 0.0306" 0,0262" 0.0262" 0,02152!11 0.0262" 0.0223"

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4.2036" 3,0l9]"

1.4001" 1,0421" 0.7662" 0,5798" 0,4151ll 0,2927'1; 0.2943" 0,\912J5 0,1164111 O.IS&nl o.1nn 0.1136" 0,0992" 0.0155" o.onn 0,0661!11 0,0S93" 0.0514" 0.0465" 0,0426" 0.0316" 0,034. . 0.0307" 0.0288" 0,026911; 0.0238" 0.0221S 0,0199!1 0.011911, O,OIIOIII 0.0159" 0.016°" 0.0139"

0.0130S 0,0129" O.OllOS O.OllOS O,OIOO!II

26.319211 19.3165" 12.611CN 6,7&91S 6,540. .

4.aoaz,c 3.6315" 3.046. l.636&w.

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1.2438" 1,1697'11 0.914°" 0,1396'6 0.7129'C 0,6225!11 G.5365" 0.4751'11 0,4148'1 0.3721" 0,3351" 0.2911X 0,2673" D.2422" 0,2114" 0,1927" 0.1801'11 0,\615M 0.1494,if; 0,1431'11 0,124911. 0,1116" 0.113°" 0.099n5 0.1000. 0.0172" 0.11&16"

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0,0019" 0.0090!5 0.001• o.001mi; 0.008°" 0.007ffll, o.ooso.

.

3.0193" 2.0096" 1.4001'11 1.042"' 0,7662" 0.579B 0.4151.1 0.2921.I 0.2943" 0.198ZW. 0,11"*'5 0.156"' o.1nn O.IUD 0,0992" 0,0155'1, 0.0758"

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0.0593" 0,0534" 0.0465" 0.0421S

l>.OHISS 0,0348 0.0101'11 0.0211S 0.0211S o.oun 0.02ZIS 0.0199'C 0,0181S 0.0180lr. 0.0159'C 0.016°" O.OIJIS O.OIJO!lli 0,0129'1, 0.01101'

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0.0\00X O.OIOOX O.OOIIS

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o.oo&mr. 0.0050S

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26.l329'C 17.1297'11 11.U94S 1.8145" 6,511°'5 4.9422• 4,1401" 2.4949'C 2,SOIU 1.6194,if;

I.SH"' I.J)IS" l,1405" 0.9613,if;

o.usa o.nm 0.6461" 0.56M'6 0.5055!11 0,4552" 0.3964" 0.3631" O,U9°" 0.2966!11 0.26\illl 0.2455. 0.229)" 0,2029" 0.1952" 0.16961' 0,1611" O.ISl4" 0.1355" 0.1364,if; 0.1185,if; o.11on. 0,IIOOS 0.0938" o.o93n 0,0652" o.oasz• 0.0759" 0.0767" 0,05121' 0.0597" 0.0682,if; 0,0597" 0.05111' o.os11• 0.0511!11 0.0511" 0.0427"

2,00!l&S l.4001ll 1.0423!1

o.1&1z,w; 0.5798" 0.4151'11 0.292'1'11 0,2941" 0.1932" 0,1164" 0,156"' o,1nn 0,1136'5 0,0992" 0.0655" 0.07Sn 0.0661" 0.059)" 0.0534" 0.0465" 0.0426" 0.03a6'5 0.03WI: 0,0301'1 0.0218 0.0269'C 0.0238" 0,02Z9'l 0.0199" 0,0IIIS O.OIIO!II 0.0151S 0.016°" O.OIJ9'C 0.013°" 0,012911, O.OIIOS 0.011• O,OIOO!II

2l.2S28'1 16.207n 12.0603'1 U651S ,.101a S.6ZOO!lli 3.316. . 3.4053" 2.2933" Z,151M 1.1143" l,5412" 1.3144" 1.1478" 0,9193'6 0.1111" o.7&4n o.6162" 0.6171S 0.5310lC 0.4921S 0.4468' 0.4021'11 G.3552" 0.33)2" 0.3113" 0.2754" 0.2650X 0.2303" O.Zllilll O.ZOl3" 0,1840X 0.1151" O.l&OM

0,1504" 0,1493" 0.1273" 0.1273" 0.1151'11 0.1151'11 O.IOJO!II 0.1041,if; 0.0926" 0.0610X 0.0926" O.OIIOX 0.0694" 0,01594" 0,0694" 0.0694" 0.0579"

l.4007'11 1.IM21'1ó 0,7662" 0.579B 0.4657')1 O.l921ll 0.2943" 0.1932" 0,1864'6 O,IHM 0.1338" 0,1139 0.0192" O.OIS5" 0.015D 0.0661" 0.0593'1 0.0534" 0.0465" 0.0426'5 0.038"' 0.0348'1 0.0307'5 0.026B 0.0269'l 0.023D O.O.Z21S 0.0191S 0.0119" O.Ollla 0.0151S 0.0l&O'll O.OIJIS 0.0IJOX 0.0129" O.OIIOS 0.011°'5

21,1178" 15,7143" 11.5517" 1.7414" 7,JZZ7" 4.4121S 4.437°" 2,9112" 2.a1on; 2.)64°" 2.0172" l,7121ll 1.4956" 1.21,0S 1,1428" 0.99615X 0,1941a 0.1051" 0,7011" 0.6423" 0.5620X 0.5247" 0.4629" 0.4142" 0,4056" 0.3588" 0.3453" O,JOOO!II 0.2149" 0.2114" 0.2391ll 0.241Z • 0,2098' 0.19601'

O.l!MS"

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0.1658" 0.165D 0.1508" D.1508" 0.1142" 0.1357'11 0.1206" 0.1055" O.IZ06" O,IOS5" 0,0905S o.otos• 0,0905!1 0.0905 • 0.0752"

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0,0\00!il O.OOBIS 0,0090X 0.0070X o.001mi;

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0.0155• 0,07511' 0.0661!(, O.OStJS 0,05)4" 0.046S" 0.04l6" O,OJl6'1i 0.014. . 0.0)071' 0.0111K 0.0119" 0.021• o.on• 0.0199" 0.0119" 0,01107' 0.0159" O.Olf,O!I, 0.01)9" O.OIJOlló O,OU9" O.OIIOlli 0,01\0Jrli 0.010•

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O.S7911' 0.41571' O.Hl7S 0.294311:

o.1un: 0.11641' o.u,.. O.IJJ. . 0.1136" 0.0992" O,OISSS o.o75a 0.01611' 0.05t)W, O,OSJ4,i; o.0465• 0.0426" 0,0316" 0.0348" O,OJ07'1i 0.021• 0.0119" o.onn 0.0229" 0.0199" 0.011915 O,OIIO!f. 0,0159" o.Olf,O!I, O.Ollfl O.OIJGll 0.0129" 0,0IIOII o.011o,i; 0,0100Jrli

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2.H7J" 2.17U1' 1.196'* 1.63411' l,44171' l.26lft l.11J41' I.OZOW 0,1111!1. 0.114~ o.n7n 0.665Uli 0.516"' 0,55041' 0.51411' 0,454ft o.4377" 0,31031' O.JIIZ"

0.)4401' O,JOJ915 o.1osn; 0.2657" 0.2415" 0.2466" 0,2102" 0.2102'1; 0.11111' 0,1911S 0.1701" 0.17201' O,IUtlll o.1na O.IUft o.1un 0.1147" 0,1141!1. 0.1147" 0,1147" O.otS&•

0.766215 o.57911' 0.41571' o.ltZ7" 0,29431' 0.1912i' 0.11641' 0.156"' o.1nn o,113n: 0.09921' o.oass•

0.07511' 0.06611' 0.05931' 0,05J41' 0.0465" 0.042&1' O.OH6" 0.034"' O.OJ07'1i

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11.211)1' 1Ull41' 11.5924" li.tlli09' 7.0242" 4.nos• 4.4419" J.742.flf, l.lHS1' 2,7lll!I, U671'5

0,5466111, 0.47SOlló 0.45111' 0.4290: 0,)7951' Ul19" o.nin: O.JIOJ11; O.J07K 0.26251' O.l6251' 0.2317"

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o.OOIO!C 0.00701' O.OOIOII 0.00701'

O.S79ft 0.41S1" 0.291711 0.2943" 0.191~ 0.11641' o.u,.

l,0401"

0.2124" 0.2141K 0,1909" 0.1671" 0.1909" 0,1671S 0,1432" 0.1011' 0,143~ 0.14121' 0.119411,

....... .......

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lli.9U41' 14.116191, 1.54951'

l,st152!1ó S.71921(. S,444R

4.Sleft UIOlllró ).JIIIS 2,19751' 2,49741' 2,2140" I.H07" 1.7U11' 1,55911' 1,JSIZS l.244JII 1,IZ75S 1.0165• 0.1967" 0.1411" 0.7157" 0.19521'

....... 0,HIJ1' 0.5521" o.sz5n 0,4644" 0,46731' 0.40601' 0.)197" 0,376"' O.UIJII O.UIJS 0.21211' 0.29211' D.26001'

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0.2U7" 0,2045!(, o.2nni: 0.2045" 0,1753• 0,1753" o.11n,i; 0.1753S 0.1456"

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0.41571' O.H27S 0,2943" 0.1982% 0.11641' 0.156"' o.1nn O.IIMS 0.09921' 0.08SSS 0.075"' 0,0661" 0.059)1' O.OS34S 0.04651' 0.042R O,OH6'& o.oua,i; O.OJ07'1i o.011n 0.0169" o.on• O,OU9" 0.0199" 0.0119" O.OIIOIII, O.OISft 0,01601' 0.0119" 0.0130" 0.012• 0.01107' o.011o,i; 0,01001' 0.01001' 0.0019"

17.079)1' IO.Z92R 10,14111' 6.9695" li.5S46S 5,51)71' 4,70509' ).9941" )

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J.00651' 2.66541' l.12441' 2.0ISlS 1.1778", 1.,nu, l.49IOS 1.357)1'

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I.09lS!1', 7.716511', 6.76641' &,42641' 6.120411', 5.40&J!I', 5.440)1' 4.726)111, 4.420311', 4.316J1' ).7402" J.1402W. l.4002'11, J.4002w. J.02&21' J.0602S 2,7202" 2.)IOIW. 2,7202'5 2.l601!1', 2.040111', 2,0401" 2.040111', 2,040111', 1.100111',

0.0229"' 0.0199"' 0.0119"' O.OIIO'I O.OISft

º·º''°'

0.013ft 0.0IJfll!I, 0.012ft 0.011fll!I, O.OllD'II, 0.0100'4 0.01~ O.OOltlli

....... o.ooaoi. 0.001°" 0.0010. 0.0070II. 0.006(111,

....... O.OO&ft 0.0060!II

o.oosor;

1.47211• 7.3&22' 6.992~ 6.6593" 5.8124" 5.919ft 5.1424" 4.8095111, 4.17251'

........ ...... .......

0.019911', 0.0119"' 0.018°" O.OIS9" 0.0160'5 0,01)9" O.OIJO!I -0.0119" 0.01101' 0.0llO!li O.OIOOS 0.0101)15

1.1495!11,

0.009. O.OOIOJló 0.0070!li 0,00IOfl 0.007(111 0.0060JI, 0,0060!li O.OOlca 0.0060!I', O.OOS(l!I',

).6996' J.2926"' ).3296111 2.9591'4 Ul91'4 2,9591'4 2.5191'4 2.21tn 2,Z1911i 2.21911' Ul9ft

.......

1,04)7'1. 1.11151' 1.2151"'

1.42&n 6.4&7"5 UIIMtl; S.ZHM S.2142"' 4.4412'11 4.44&2"' 4,0420fl 4.0421)15 ),H14"' J.&37D

una

2.12MS

J.ZUB 2.12941'

2.4252"' 2.425211', 2.4252" UU2"

Z.0!14"'

0,0ll!S 0.0181)11', 0,0159" 0.0160'5 O.OIJft D.OIJOló o.DIHS D.OIIOló D.OIIOlli D.OIOO!I D.OIOOlll 0,0089"'

....... ....... º·""" ....... ....... ....... ....... 0.0070lli

0,0070lli

0.0058"

1.)071'1. 7,9121" 6.98905' 7.0))0,.:

~·-

S.7141" 5.610:SS 4.IJS2" 4.US2" 4,1950 4,J956S ).91211' J.956°" 3.51&5S J.076B 3.51651' 3.016'11. 2.6J74S 2.63741' l.63741' 2.6374111, 2.197n.

Mot11:Colum11(,\jl111klnl111mAP91ndhlA.Pq1 IS.Columnt3J.

-

-

-

-

-

-

-

PUEIITORlto•SU,QINSUIIANal'UIIOCOlll'OIIATION

-IIISCCIM'IN'SATION

"" _ _.,Yg.._,__

..':' . 1

10 11

"""

" " """ "" " """ "" "" " " 16 17

JO

JI

-

-

-

.. ."... ...." .." " ."""" ""

P1.Y1111nl

171)

(ni

AfFNemY'IHJIID/IJ Percenttge ol Ultlma.. Lon 111malnlng 1obtP1.ld a1of

__...!!!!!!D...~

Petuntio• of Lilblllly lobtPald uol Ofifl0/16

.JZ.!U.2JIII!..

17)1

{741

(75)

--.rw,mflt PercenDII' of Ultli111ll l.o$1 ll1tnv.lnlll11 toblP11d uol ~

hrcenQfll of Lllblllly iobtPald 11of 116/30/16

176)

..... Y!Kllll/D Pern1111111 of Ulltlllall LoH llit111oalnlng tobtPald uof

,.n::,nrq1 of Lllblllty 10btP1.ld 1101 06110116

,.,_.. .,,LDll,.ld (77) (71) ....,.Yw,mtn '*'""'ª'" ol U911111.11e Lou lltmalnlna 1obthld HOI

'*n::•nuu• ol Lllbllltw IObthkl uof 06/30/16

.JllU..L122I!. .....J!!LW.!.!_ ..Jm..L.L!.?.!. __..W.W..lL- ..JZl.U..J:!1!Z

17111)

(IOI

..... Ywlt7f07 ,.runt11111t of Ulllmlilto Lo11 R1tm11111ng tobtP11d 11of

r.rc.11ta111t of Lilblltv IObitPald uof 06/30/16

~

..JZI.LL...2i.W

0.01)°" o.012n O.OIIOS 0.011°" 0.010111' 0,0IOOS O.OOIW 0,009(111¡

l.977W 1.,01n 7.5961'111 7,59671' 6.9061"' 6.9061"' 6,1464'1i 6.ZIU"' 5.5249"' 4,HO"' S.524"' 4.134)" 4.106"' 4,IOPI, 4.106"' 4.1436"' ).4Sl°"

1111

...,..,.,,,.,."' IHI

(14)

hionrq1 of Ultlmate loH litnv.lnlng 10b1Pald uol

P1rcenuge ol Lllblllly iobthld 1.101 06/30116

--2!t.W.J.1_

~

0.01101' o.OIIOSII 0.01009' O.OIOOS 0,0089" 0,009Cllli O,OOIOS 0.0070llli O,OOIOfl, 0.0070!!, 0.00601' O.OO&OS 0,00601' 0.00601' 0.00509'

t.2515" 9.lSIS1' 1.4104" L41041' 7.4153" 7,5694111 6.7lDIII 5.117JS 6.72DIII S,117JIII 5.0461111 5.04631' 5,04611' s.0461111 4..2051"'

ioo.GOOO!I ------¡r.¡¡¡w

~

(IZJ

.,...,.,YIVIIDtll PercenDg1 ol Ulllmate loH llitmalnlna iobthld uof

hrunDlllt of Lllblllly 10blP11d uof D6/J0116

~ ~

J2.9SI"' 11.)1111!1; 12.aun li.MII" 4.ZOJ6'1. 3.0193" Z.009655 1.4007" l.04ZJS o.7662111 0.5798" 0.4157" 0.2927" O.Z94JS 0.191~ 0,1164"

o.n&a O.IUft O.IUR 0.09t211i O.OISS"

o.onn O.o&61" O.OHJS o.on• 0.0465111 0.0426'1. 0.0)16'1. 0.014"' 0.0107"

o.021n. O.O?&• o.onn.

O.Oll"' 0.019"' 0.011"' O.OIIOX O.OIS911i 0.01605' O.OU9JI O.OUOII, o.ou• O.OIIOIC O.OIIOS O.OIOOllí O.OIOOS O.OOl9" O.OOIOll O,OOI°" 0.0070fl, 0,00IOX 0.00701' O,OCl6C*. O.OO&OS 0.0060'5 o.0060S o.oosoir;

O.OIIOS O.OIS9" 0.016°" 0.0139" o.on• o.ou• O.OIIOS 0.0IIO!I: O.OIOOJI, 0,0lOOK 0,00l9" 0,00,QII O,OOIOII

o.oo,ox

O.ODIOS 0.0070fló O,OOliO!li 0.GOIOI' 0.0060fló o.00&011 0,00SOK

l.&29°" 7,622Z" 7.6702'1 6.66U" 6.2llOJI ,.1141111 5.27331' 5.Z7US 4.791911i 4.7939" 4,26651' 4,3145111

uu11,

).3557" 1.1351111 1,)557" l.1763" l.176JS 2,876),r; 2.11&3" Z.396"'

O.OIS9" 0.016°" 0.0139511 O.OIJOII, 0.012• O.OIIOS O.OIIO!I, O.OIOOJI, 0.0\00S O,OOl915 0.00,0II 0.DOIOK 0.0070II 0.001°" 0,0070!!, 0.0060fl: 0.00&(ISI; 0,0060lli 0.00&1* 0.0050ll

--¡¡¡¡r.¡¡¡¡¡;a ------oJ"oiW ~------¡:¡¡¡;¡¡-

1.)421" 1.1945" 7.ltZn 6.1206'5 6,7&&1" 5.7712" 5.7712" 5.246"' 5.l4HS 4,66951' 4,7219" 4.1973" 3.67lR 4.1973" 1.6726"' 3.1410K J.148°" 1.141°" 1,148°" 2,6231"'

0,0160'I, 0.013911i 0.01309' 0.012"' 0.0111)!11; O,OllOS 0.0\00llí O.OIOOS 0,00lft 0,0090K O.ODIOS 0,00701' 0.0DIOfló 0.007DK 0.00609' O,OOfiOIII, O.~

o.0060lli

O.OOSOIII

9.IHR 7.9SliSIII 7,441),r; 1,1141" 6.2965'1 li,ll6S" 5.7241111 5.7241111 5,0944S 5,1517" U79"' 4.00litlll 4.5793" 4,0069" 1.4345111 J.4345" 3.4345111 Ul45s Z.1618"

~ ~ ~

Nolu: Column IA) Is t,.kln IRlm App111dllr A, r111• 15, Colwmn IJ).

O.OU9" 0,0llOlli o.o un O.OIIOS O,OIIOK O.OIOOSII O.OIOOSII 0,00HIII 0.0090S 0.008°" 0.007111' 0.008°" 0,00701' 0,0060lli O.OO&DK 0.006°" o.oo60III 0.0050lli

1.7517" 1.1911111 1.12151' 6.UU1' 6.911)111 6.101~ 6.JOIJIII 5.60111' 5.67111' 5.041°" 4.41Nlli 5,041111' 4.4IOl1' 1.7107" 3.7807"' l.7807"

1.11on. 3,1506lli

O.OOIO'I

0.007111' O.OO&Olli 0,0071)111, 0,0060'I 0.0060S 0.0060S 0.00&°" 0,005°"

-o.rm;r ---,¡¡r.¡¡¡;¡;¡ --,:mw

o.ouw O.Ol!CI" 0.0111* O.OIOC* O.OIOOIII 0.001915 O.oo90K O,OOIOK 0.0070fló O,ODIOfló 0.0070Jfó O.CIO&Olli O,OO&OJI O.G060lll 0.00&• o.oos•

~ ~

,.111•

l.l460K l,l460K 7.517lS 7.517JS 6,7527" 6.821"' 6.069"' S,3111111 6,0691111 5,)111111 US24" U5241' 4,5SZ4'1. 4.5S24" J.79U"

-

,.,.......,.,,a1.. ~r:IUIHP•ld

116}

(15)

. . .MIWJW/N Pua,it1g1 ol

Ci,,onlon hy111.nl

Yvr

..'' .• 1

5

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JI

..

... ..... .... " J7

....

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Pert,11tqe ol

hrt111tag1 ol

Ulllnu,.. loH h11t,1lnl111J

Lllbllfy IO bl P11d

ieNP,111 uef

a1of 06/30116

Ulllmai. loH hmllllll'II

Lllblllty IO bt hld

Ulllmate lon ltmalnlllg

tobtPald uof

1101 06/30/11

ioNPald uof

Ptft'tntlgl of llabllltv to b9 Pald

1101 OltJ0/16

(91)

h1e1111111 ol Ulllmab lon llem.lnlllg

tobtPald •101 ~

..,.,..,.a, 193)

194)

hrt1ntag1 of

h,anta,ot of

Lllblltt, ta be hld

Ultlln,,le LOH Rem11lnl111J

hrunta,ot of lllbllll,

uof 06/)0/16

IOblPald 1101

l92)

. . . . Yllrltzl111

..lllJ.J..U.lil .....llltWJL.

IO be P&ld

.1101 06/30116 ~

195)

1961

(91)

Peruntaf9 ol

hrunll.,. of

hrunt&91 of

Ultlmalt loH h1111lnl111J

Llablllly lo M Pald

UhlfNltt loH hm1llllllg

P11ant1111 ol Llabdlly lo bt Pald

iobeP11d uof

uof 06/30116

toNPald 1.uf

uof OIJJ0/16

...... r-,111111

(91J

. . . rw:11WH

.....llltWJL. ..l2lU..RJlll1I .....llltWJL. .Jlll.Ll.2WL

n.asin

6,9411ll 4.20JD, ).Ga9lS 2.0098' 1.40Q1W,

O.S7tn

11

hia11tl9' of

(90)

Jl.9Sln

l.04U" 0.,66~

"" "" ,.""" "" "" "" "" "" "" " .,

Pe1ant1tt of

1191

kM!MDKIIZI/R

31,JIIO!II,

11

15

il71

.....limm....- .....llltWJL. .Jlll..l.RJ.Wll .....llltWJL. .Jlll.<.l.lllll .....w.wJL.. .JUJ..<.Wm.

10

..""

...,.,._,mm111,

o.,asnr. 0,2927'1 O.J90S O.IH2!1. 0.116411, 0.156.,. O.UH" 0.113"'

O.M92" O.GISSS o.o nas. 0.0661'5 0,0SHS 0.0514" 0.0465" 0.04HS 0.0316'1 0.0J41S D.0107'1 O.Olla 0.0269" 0.021• O.GlZ915 O.Ollft

-

º·º""'

o.OIIOS 0.0159'11, O.OlfiOII

O.OIJ9S O.OIJOS 0.0129" 0.0119" O.Ol!Oll 0.010(9' 0.0IOCIS

O.GIIO!I,

....... ....... ....... ........ ....... ........ .......

....... ....... ....... ....... ....... .......

~

--nmi'

0.007(1!1,

O.OOIO!ló

0.007(1!1,

o.oosc.

O,OIOOS 0,0IOOS O.OOlts

0.0070S 0.0070S

O.OOIIIII

0.0050ll5

10.IMft U671111 9.2671111 1.241415 1,)4111' 7.414J11, 6,41751' 7.41011, 6.411511 5.5607'1 5.5607'1 5.5607'1 S,5607'1 4.&n•

º·º'°°"

....... ....... ...... ....... 0.0100II

o.ooa• 0.00711!1

·0.0070S

............ 0,005(1!1,

10.119"' 10.3199" 9.1147'1 9.2179" l.lU9" 7.UJ9" I •.HS9" 7.JZJ9" 6,1920K 6.19ZO!I 1.192(1!1, 6,19ZOJ1, 5.16001'

.............. O.OIO!a

o.ooa• O.OOlft 0.00701'

0.0070!li 0.0060!5 0.0060!I 0.0060r.

........ 0.0051)11,

11.S07SS 10.Z417" 10.3567" 9.20601' 1.ossn. 9,2060r. 1.05521' 6.9045111: 6,!!045• 6.90451' 6,904SS S.7U7'1

....... ....... ....... ....... ....... 0.0089"

0,00701'

0.007°" 0.00601' 0,00601' O.OOSO!I

11.S735S ll.70JSS 10.40311' t.lOZ7'1 I0.40JIS 9.1027'1 7.IOZJ11, 7.IOZJ11, 7.8023'1. 7,IOZJ" 6,502211,

0.00901' 0.00801' 0.0070ll

O,OOI01'

....... ....... ....... ....... 0.0070!5

O.OOSOIII

13•.US3" 11.7647'1 10.194111, 11,7641" 10.ZMIW. I.IZJSS UUS'll 1.12351' l,IUS'!I, 7,JU\"

...... .......

O.GOIOll 0.0070S

.

....... ....... ...... 0.0070!li

0.0050S

IJ.S593'1 11""6«S IUS93'1

"....... 10,lfi!ISS 10.16951' I0.1695S 10.1695'1 1.4746111

~ - - - - - - r o ; ¡ ¡ ¡ ' ~ ~ ~ - - - - - ¡ ] ' m i " ~ ~ ----¡¡;¡:oooc;¡ ~ ~

........ ...... ...... -.................

13,7255'1

15.6161!5

0,0050.

IJ,7ZUS 11.7147'1 11.1647'1 11.7147'1 11,7647'1 t.lOJ"'

-----¡r,ra¡-

~

NOlu:Colum11(A)l$talr.tnfromAppendlxA.Pag1 IS,Column!3J.

-

-

-

..... 1•

-

'" P¡ymt111

Jtt[ -~ ~ - ---ll!W!!....-

...'• 1

,

JO

11

..." ..."" 11 16

..""

..""" ""... ".. JI

".. ......" ..

.... .... .." ..

"

-

-

-·....

T-,,ryTottl

""

19111

OIHh

hffllllhl• of UIH111i,11 LoH

..........

---····

"--•f1'1.-.hld

....,,,,._,.,.

(105)

(106)

11071

(IOII

(110)

hrcent1g1 ol Llllblllty

hrtll!Qf9 of Uhlmate Lou

h1an11ot of Ultlm111 l.clu

hn:tntaat of Ll•blllty

hiallllgt ol Ultlmat1 I.OH

P1ra,11119
hm1lnlng

lo be P•ld

Rlmatnlng

bmalnlllg

1a bll P11d

lttrnalnlng

IO bl P11d

iobtPald 1101

nol 06110116

tobtPald

Pe10nt111• of Llablllly lo bll hld 1101 06130/16

tobtP11d 1,01

1101 06/l0/16 ~

ioblP•ld

--l!!L12LJ.L.

nol 06t30/II ~

JS.29411, JS,2941" 29.411ft

O.OOSOll

45.45451'

(102)

11011

hrc.ntap of Ll11blllly

Perunllge of Uhl1111tt loll

P•n:tntlfl of Llllbllity

Puunt1g1 of Uhlnu,t. LoU

. .nvlnlng

lo be P11d

.. 1111lnlng

lo N P11d

10btP11d 1,ot ~

1101 06130116

.....IDLL.2J!m!

O.OOIO!l 0,0071* O,OO&Oll 0.0060ll 0.00&°" 0.0060ll 0.00501'

11.lllft 15.9011" U.6364" IJ,6J64" U.&364• U,6)64" ll,J6U"'

iobtPald nof 1101 06/10116 ~ ~

.

_,.,,._ ..,.

(1011

MNWYIMIMP

(1041

nof

(IOI)

AflNWYw lllllfl

......2W2L11... ..f.!..21l..L.2 ......2iL1!LlL JWllHlllZ!. ......2lL12L!L.

not

11111

11111

hrc.111• of

hrun~ of Lllbllllv

.,...,.rw:,w111 UltllNb Lon lttmalnlng

to bl l'lld

toblhld

nof 06130116

uof

--2iL12L!.L. J.!.J.!U..Y!12!

)Z.9Slft )1.)110'4

IUSJft 6.MIIX 4.ZOJQI¡

,...... 3.0l93X

1.400711

1.042311, 0.166211.

O.S79ft 0.415711 0.29275 0.294311: 0.191l'S 0.1,.... O.IS&n O.IUD

....... o.1ua o.oass• o.orsn. 0.06611'

o.os,:. 0,0534" 0.046S'ili 0.0426" O,O)lft O.OJ4llil, 0,0307"

0.02,.. 0.0169"

o.onn

0.022• 0.0199" 0.011•

0.0111* 0.0159" O.Ol&osl 0.011951: O.OIIOS 0.0129" 0.01101' O,OIIOS 0.01001' O.OIOOS O.OOlfl o.ootOI.

o.ooa•

0,0070I. 0,0081* 0.007D11, 0,00&0llli 0.0060N 0,00&0ll O.OO&OS O.OOSOS

0.00701' O.DOIOS 0.0060" O.G060S O,OQ6051¡ O.OOSOS

19.4444" 16.6161" 16.6611" 16.6H1" 16.6661" 11.1....

0,00601' O,ODCIOll 0.0061* 0.00601' O.OOSO!II,

20,U9nt; 20,6197" 20,U91" 20.6191'1 17.2411"

0,00609(. 0.0060!r, O.oo60W, O,OOSOS

~ ~ ~ -----¡;ffiiii' ~

------ronoi'

-----roonmr

---¡;¡m;¡-

NolH: Column(A) b 111Hnf111mAppendhrA. Paee IS, Column ()),

26,0l70W. 26.0&701' H.08701' 21,7l!IOIII

0.006°" 0,006(1!1, o,OOSOII.

~ -----¡:ffioii

100.0000!5 ~ ~

0,00501'

100,0000!II

--uRoi' ---r5o.ooo1lií

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Temporary Total

Appendix A Page 15 Payment Pattern

(1)

Maturity ~in Months)

Paid Age to Ultimate LDF

12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672 684

3.03409 1.55594 1.29662 1.18956 1.13291 1.09460 1.07104 1.05521 1.04373 1.03545 1.02927 1.02415 1.02109 1.01803 1.01598 1.01406 1.01245 1.01108 1.00992 1.00891 1.00804 1.00727 1.00660 1.00600 1.00546 1.00499 1.00456 1.00417 1.00382 1.00351 1.00322 1.00295 1.00271 1.00248 1.00228 1.00209 1.00191 1.00175 1.001 59 1.00145 1.00132 1.00119 1.00108 1.00097 1.00087 1.00077 1.00068 1.00059 1.00051 1.00044 1.00036 1.00029 1.00023 1.00017 1.00011 1.00005 1.00000

(2) Cumulative Percent of Loss Paid

1.0

¿ (1)

32.9588% 64.2698% 77.1236% 84.0647% 88.2683% 91.3576% 93.3672% 94.7679% 95.8102% 96.5764% 97.1 562% 97.6419% 97.9346% 98.2289% 98.4271% 98.6135% 98.7703% 98.9041% 99.0177% 99.116go,.6 99.2024% 99.2782% 99.3443% 99.4036% 99.4570% 99.5035% 99.5461% 99.5847% 99.6195% 99.6502% 99.6790% 99.7059% 99.7297% 99.7526% 99.7725% 99.7914% 99.8094% 99.8253% 99.8413% 99.8552% 99.8682% 99.881196 99.8921% 99.9031% 99.9131% 99.9231% 99.9320% 99.9410% 99.9490% 99.9560% 99.9640% 99.9710% 99.9770% 99.9830% 99.9890% 99.9950% 100.0000%

Notes: Column (1) is taken from Appendix A, Pages 8 and 9.

(3)

lnterval ~In Months)

Estimated Percentage of Loss Paid in lnterval

O - 12 12 - 24 24 - 36 36 - 48 48- 60 60 - 72 72 - 84 84 - 96 96 - 108 108 - 120 120 - 132 132 - 144 144 - 156 156 - 168 168 - 180 180 - 192 192 - 204 204 - 216 216- 228 228 - 240 240 - 252 252 - 264 264 - 276 276 - 288 288 - 300 300 - 312 312 - 324 324 - 336 336 - 348 348 - 360 360 - 372 372 - 384 384 - 396 396 - 408 408 - 420 420 - 432 432 - 444 444 - 456 456 - 468 468 - 480 480 - 492 492 - 504 504 - 516 516 - 528 528 - 540 540 - 552 552 - 564 564 - 576 576 - 588 588 - 600 600 - 612 612 -624 624 - 636 636 - 648 648 - 660 660 - 672 672 - 684

32.9588% 31.3110% 12.8538% 6.9411% 4.2036% 3.0893% 2.0096% 1.4007% 1.0423% 0.7662% 0.5798% 0.4857% 0.2927% 0.2943% 0.1982% 0.1864% 0.1568% 0.1338% 0.1136% 0.0992% 0.0855% 0.0758% 0.0661% 0.0593% 0.0534% 0.0465% 0.0426% 0.0386% 0.0348% 0.0307% 0.028896 0.026996 0.0238% 0.022996 0.019996 0.0189% 0.0180% o.015go,.6 0.016096 0.013996 0.0130% 0.012996 0.011096 0.0110% 0.0100% 0.0100% 0.0089% 0.0090% 0.0080% 0.0070% 0.0080% 0.0070% 0.0060% 0.0060% 0.0060% 0.0060% 0.0050%

-

-

-

-

-

-

-

-

Appendlx B Page 1

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION Permanent Partlal Prospectlve Loss Forecasts

Accldent Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Selected Ultlmate Loss

Loss Cost per Payroll ¡soos>

S100 of Payroll !1! ! !2>

Loss Cost Trend Factor

Trended Loss Cost per $1 00 of Payroll !3) X !4!

Projected Payroll ¡soos¡

Estlmated Loss Cost per $100 of Payroll

Projected Loss (6!x
$66,000,000 62,500,000 57,500,000 59,750,000 60,000,000 63,000,000 62,250,000 62,000,000 69,000,000 62,500,000 52,750,000 42,500,000 38,000,000 43,500,000 53,500,000

$202,420,000 21 5,080,000 226,330,000 238,750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242, 156,580 233,992,560

S0.326 0.291 0.254 0.250 0.245 0.259 0.256 0.272 0.297 0.263 0.229 0.169 0.156 0.180 0.229

0.607 0.674 0.749 0.731 0.713 0.695 0.679 0.662 0.646 0.734 0.834 0.948 1.077 1.051 1.025

S0.198 0.196 0.190 0.183 0.175 0.180 0.174 0.180 0.192 0.193 0.191 0.160 0.168 0.189 0.235 $242,000,000 242,000,000 242,000,000 242,000,000 242,000,000

2016/17 2017/18 2018/19 2019/20 2020/21

(9)

Avg (AIIYrs) Wtd Avg (AH Yrs) Wtd Avg (Latest 5) Wtd Avg (Latest 3) Wtd Avg (Lates! 2) Wtd Avg (AII Yrs Excl HI/Lo)

S0.187 0.186 0.188 0.197 0.211 0.185

Selected for accldent year 2016/ 17

S0.187

$0.187 0.192 0.196 0.201 0.206

Notes: Column (1) Is taken from Appendlx B, Page 4, Column (9). Column (2) has been provlded by the Puerto Rico State lnsurance Fund Corporation. Column (4) reflects trendlng to accldent year 2016/17 based u pon the loss cost trends taken from Appendlx B, Page 19, Llnes (5) through (8). Column (6) Is based on the payroll for accldent years 2013/14 through 2015/16 andan annual payroll trend factor of 0.0%, selected based upon judgment after a revlew of the hlstorlcal payroll provlded by the Puerto Rico State lnsurance Fund Corporatlon. Column (7) Is based upon Line (9) and an annual loss cost trend factor of 2.5%, taken from Appendix B, Page 19, Line (8). Une (9) Is selected based u pon Judgment after a revlew of Column (5).

-

$45,254,000 46,464,000 47,432,000 48,642,000 49,852,000

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Appendlx B Page 2

Change in Loss Reserves from 06/30/1 5 to 06/30/16

Accident Year 1960/61 1961 /62 1962/63 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 1971 /72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981 /82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 201 5/16

(1)

(2)

(3)

Needed Loss Reserves as of 06/30¿16

Needed Loss Reserves as of 06/30¿1 5

Change in Reserves (1) - !2)

so o o o o o o o o o o o o o 5,000 o

so o o o o o o o o o 300 o o o 1,013 o o

so o o o o o o o o o (300) o o o 3,987 o

2,500 7,000 26,000

2,297 7,718

2,500 4,703 18,282

17,000 10,000 32,000 2,500 11,000 11,000 15,000 18,000 40,000 25,000 80.000 60,000 175,000 350,000 300,000 350,000 350,000 425,000 480,000 650,000 725,000 1,337,000 1,692,000 1,720,000 2,336,000 2,819,000 3,394,000 4,351 5,290,000 8,190,000 10,255,000 12,065,000 14,412,000 19,074,000 32,064,000 50,928,500

8,690 4,545 20,106 4,100 14,105 11,800 14,025 8,953 60,306 63,699 61,771 106,666 213,330 419,190 375,883 329,602 406,634 595,303 733,667 877,094 (687,000) (355,000) 1,478,000 1,691,000 2,511,000 2,933,000 4,179,000 5,320,000 6,895,000 11,009,000 13,714,000 15,960,000 17,780,049 29,015,235 49,468,4()0 N.A.

8,310 5,455 11,894 (1,600) (3,105) (800) 975 9,047 (20,306) (38,699) 18,229 (46,666) (38,330) (69,190) (75,883) 20,398 (56,634) (170,303) (253,667) (227,094) 1,412,000 1,692,000 214,000 29,000 (175,000) (114,000) (785,000) (969,000) (1,605,000) (2,819,000) (3,459,000) (3,895,000) (3,368,049) (9,941,235) (17,404,400) N.A.

o

·ººº

o

2014/15 and Prior

S123,166,000

S 165,252,481

Total

S1 74,094,500

N.A.

o

($42,086,481)

Notes: Column (1) is taken from Appendix B, Page 3, Sheet 1, Column (14). Column (2) is taken from Aon's report on the Puerto Rico State lnsurance Fund Corporatlon's needed loss, LAE, and Return Premium liabillty as of June 30, 201 5.

N.A.

-

-

-

-

-

.....

APIMndbil

PUEaTO IIICO- STATE INSUIWCE FUNDCOlPORATION WORKERS COMPENSATION

SNIII

1'9m111111111'anlll To111lb1lna11dloHIIIHM15&10foti/30/16 (IJ

S.IK11d

....

Ultln1111 AccldeMYor IH0/61 1961/H

Hi,2D,1J4 6,660,122

1962/6]

7,051,7)0

1163/154

7,41).)11 7,Ul.112 1,408,lSI 1,lll,746 9,447,511 10,014.161 10,ll'S,223 11,252,1)7 11,927,265 12,642.901 13,401,475 14.205,563 15,057,197 15,961.)71 16,919,05] 17,934,116 19,010,241 20,150,11) Z!,)59,915 22,641,509 lJ,606,000 26,031,000 27,420.000 31,404.000 53,000,000 57,500,000 63,000.000 66,600,000 74,000,000 75,500,000 78,500,000 IS,000,000 15,750,000 14,500,000 83,000,000 75,500,000 75.000.000 72.500.000 66,000,000 62,500,000 57,500,000 59,750,000 60,000,000 63,000,000 62,250,000 62,000,000 69,000,000 62.500,000 52,750,000 42,500,000 H.000,000 0.500,000 53,500.000

1164/iS 196516& 1166167 1967/61 1961169 1969/70 1170/71 1971/72 1972/71 197)/74 1974/75 1975/76 1976/77 1177/71 1171/71 1971/60 lH0/81 1911/12 1912/13 1913/84 1984/85 1915/86 1996/17 1917/18 1911/19 1919/90 1990191 \Hl/92 199219) 1993/94 1994195 1995ft6 1996ft7 1997ftl 1998ft9 1999100 2000101 2001/02 2002/0) 2003/04 2004/05 2005/06 2006107 2007/0I 2008109 2009/10 2010!11 2011112 2012113 201)/14 2014115 2015116

ioul

i2.21>.id.6§B

"'

.

"'

....

hrnedPremklm

bllffllted Uhlm,.te

Uhim111'Premlum

•nf06130/16

--'!!!L-____fil.!_.W__ 1.000 ).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 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 0.991 0.996 0.911

$6,21),1)4 6.660,122 7,059,730 7,413,Jll 7,tU,J\2 1.401.251 1,912,746 9,447.511 10,014,)61 10.615.223 11.252.137 11.127,265 12.642.901 13,401,475 14.205,563 15,057,197 15.961,371 16,919,0SJ 17,934,196 19,010,241 20,150,113 21,359,915 22,641,509 2),606,000 26,031,000 27,420.000 31,404,000 53,000,000 57,500,000 1),000,000 66,600,000 74,000,000 75,500,000 78,500,000 15,000,000 85,750,000, 84,500,000 83,000,000 75,500,000 75.000,000 72,500,000 66,000,000 12,500,000 57,500.000 59,750,000 60,000,000 6),000,000 62.250,000 62,000,000 69,000,000 62,500.000 52.750,000 42.500,000 31,124.000 4),)26,000 52,590,500

n:m:m:m-

{4)

.......

15of06/JO/l6

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CaHlMI

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..

a1of06(30(16

o o o o o o o o o o

o o o o

1,011

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1,4H S,150

o

),950 2,219 7,146 500 2,401 2.225 2,925 3,417 1.491 5,)17 11,175

U.MI 31,955 65,045 54,596 57,833 59,70 71.451 87,002 100,928 115,197 164,661,000 60,IOl,000 55,710.000 57,414,000 57,\11,000 51,606,000 57,199,000 56,710,000 60,110,000 52,245,000 40,685,000 21.0ll,000 11,150,000 11,26l,OOO 1,662,000

-.m:m:B"

...

Agtl0Ullim111-t

'"

(1)

'"

(100

1111

......

lncurr.d A;etoUllimu.

,.re.ne

Unnpomd

i'ííli

Oumandina Av910Ulli1111111

lncuríid

l>welopmtM F;telGr

....

~ 1 0 0 ' l 6 - 1 , 0 / j 6 1 ~ ~ ~ ____ill.!_ll'L_ l,00007

0.0010!f,

1.00014 1.00022 1.00030 1.000)t 1.00041 1.00051 1.00061 1.00079 1.00091 l,00103 1,00116 1.00131 1.00146 1.00162 1.00110 1.0011, 1.00219 l,00241 1.00265

0.014(1(,

0.0220Jil O.OJO!*

O.OJto,c, 0.041DIII 0.0511* 0.061°" 0.011•

,...... 0.102W

o.ns•

1.00319 1.00)49 1.00383 1.00419 1.00460 1.00504 1.00553 1...... 1.00669 1.007)7 l.oo&14 1.00,00 1.00999 1.01111 1,01240 1.01390 1.01564 1.01769 1.02012

0.130ft 0.1451W, o.1,1n: 0,1797'11 0,\916'1, 0.21151' 0.2404" O,l643" 0.2~ O.Jllo,i; 0.)4711' 0.3115" 0.417)" 0.4519'C 0.5015!11 0.5500!( 0.604)1' 0.6649' 0,73115" 0.80749', 0.192

I.OZJ04

2.2SZ1•

I.OOl!ll

113)

1121

1141

l..tlcai.d Lou Rt!HIWI •• of 06/30/16 Ull!!P···

1.00005 1.00011 1.00017 1.00021 1.00029 1.000)6 l,00044 1.00051 1.00060 1.000lt 1.00071 l,OOOII 1.00099 1.00110 1.00121 1.00136 l,00150 1.00166 1.00112 1.00200 1.00220 1.00241 1.00264 1.00290 I.OOJl7 1,00)41 l,00)12 1.00411 1,00460 1.00507 1,00551 1.00616 1.00612 1.00757 1.00842 1.00940 l,OIOSJ l,01116 l,01341 1.01526 1.01747

o.oos°"

O.OllOJfi 0,0J70N; 0.0l)Oll

0.0291N O.OJ6DIII 0.044DIII o.051o,r;

,...... 0.069"

0.01,-

0.0879'6 0.0919" 0.1099M 0.122111, 0.1)5111, 0,14919' 0.16571' 0.1111'1 0.199615 0.21151' 0.240W o.26n• 0,219Zfl 0.3160'Jli 0.)46111, O,HOS!II 0.41711' 0.4579" 0.50441' 0,5549" 0.612l" 0.6774" 0,7513" O.H50SC 0.931Zfl 1.042DIII 1.17211' l,32)3" 1.50)1" l.7170JI

J.SOOOO 4,66667 4.40000 4,21571 l.90000

,.00000 4.14211 ,.00000 4.15711 4.136)6 4.12000 4.142H 4.09)75 4.05556 4.15)15 4.09091 4.06122 4.IUOI 4.0l475 4.07612 4.09159 4,08974 4.105U 4,11121 4,10714 4.11514 4.15702 4.15031 4.12925 4.14907 4.13413 4,14216 4.15741 4.15417 4.Hi541 4,17511 4,17161 4.11117 4.11527 4.205U 4.21140

"' ,.... l,553

2,245

4,0)6 5,169 6,424 7,901 t,649 11,571 1),124 11,5)7 19,Ut 22.170 27,059 Jl,699 36,961 0,114 50,244 51,471 67,925 71.747 10,057 IOl,627 125,556 157,491 Ztl,500 347,47) 411.191 417.246 '597,476 67),460 776.444 ,u.tao 1,050,266 1.158,411 1,218,117 1,112,417 1,479,225 1,6)2,77)

óíí11111ñíll,. To1.1INNdM

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~

Ul4

"'

1.200 1,721

2.JOO l.027 ).922 4,111

'·"'

7,)25 8.765 10,414 12,504 14,nt 11,457 20,449 24,423 21,471 )1.536 37,944 41,111 51.SH 66.761 11,769 14,659 91,JII 122.417 224,586 271.791 323,159 316,431 461,026 50,)92 654,816 764,)46 156,))7 940,2U 1,046,302 l,Oll,094 1.221.253 l,J60,ZZ2

Factor

..

o

••o o

o o o o o o o o 4,208 o

Louftnl,rw1

!1Df06/J0/16

IO

o o o o o o o o o o

o o

,.oooo o

l,OIJ 5.U4 24,304

2,500 7.000 21.000

16,119 9,075 29.)41 2,059 ,.1n 9.201 12.159 14,182 35,090 22.351 69,775 SJ,149 1)2,850 270,20I 227,415 241.412 241,221 )07,659 )64,127 424,411 415.983

17,000 10,000 )2,000 2,500 11.000 11.000 15.000 18,000 40,000 25,000 10,000 10,000 175,000 350,000 300,000 )50,000 350,000 4l5,000 4IO,OOO 650.000 725.000 1,337,000 J,692,000 1.720.000 2,))6,000 2.llt,000

o

o

),)94.000

4.)51,000 5.2to.ooo 1,190,000 10.255,000 12.065,000 14.412,000 19.074.(100 )2,064.000 50,921.500

-----mrnr

---m:m:M"

NDt.1: For.«~nt'f'll'li 1960/61 thn:wgh ltl2/U.Colun1111l111 b11tduponthliuhill'lil.t9 ..llc:Md loH for191)1141hrough 1915/961nd1n1n11111llo111,.ndof6.001', (whichl1 it.llldonjlldg1N1111frer1 NvnofApp111idhi l,hgll 20), For Kcid•nt """ 1913/14 through 2000/01. Column 11111 talwn from .\pplndia" l. , . 3, ShNI 2. Colun11116). Forac:cld•ntve1l'li 2001/02 1""*oh 2015/16, Column 111 ll taHnfromAppendhl l. l'lgl4, C.""' ft). Column (2) 11 t1k1n from A11111ndbl F. Pllgl l, Column (5), Column MI l1 t1hn from App1ndbl l. Page 4, Column (11. Column (5) has biten provldtd bv thli ,..no Rico Sllt. lnlulllQ Fund Corpora1lo11. Columr1(6)kt1ktnfromAPP1ndhl l. l'lgt 12,Columnl91, Column (11 k llken from App1ndilr l. Pllgl IS, Column (91, Collmn (JO) 11 taktn from APP1ndl• l. Plgl J, Shlil! 6, Column (5). Forac:c:ld•n1w1n 1960/61 rhro41gh 2000101, Column 1141 Is Mlacn.d biis.d upcmjudg1Nnt1fctor1 fh'llwofColumn1 (5) ~nd 1111 through 1111, Forwcid•n1.,...l'li 2001/02 through 2015/11, Cokin1111141 il mqu1l10 Column{31 mlnu1 Column 141,

---m:m:m- ----n:m:nT

1174.0iUIRS

Appendlx B Page 3 Sheet 2

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION Permanent Partlal Selectlon of Ultlmate Loss (SOOOs) Accldent Years 1983/84 through 2000/01 (1)

(2)

(3)

(4)

(5)

(6)

lncurred Loss Oevelopment Method

Outstandlng Loss Oevelopment Method

Selected Ultimate Loss

$23,606 26,031 27,420 31,404 52,987 57,309 62,061 66,608 74,394 75,91 S 79,038 84,726 85,988 84,238 83,377 75,877 74,684 71,917

N.A. N.A. N.A. N.A. 57,779 59,235 66,502 66,760 73,71 S 74,916 78,069 82,649 84,630 81,906 82,736 74,454 72,396 68,492

ProJected Ultlmate Loss

Accldent Year 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 Total

Paid Loss at 180 Months Maturl!}:

lncurred Loss at 180 Months Maturl!}:

N.A. N.A. N.A. N.A. 49,960 SS, 145 58,91 S 64,805 72,669 74,259 77,290 83,207 84,190 82,818 81,403 74,367 73,501 71,194

$23, 143 25,521 26,882 30,788 51,948 56,185 60,844 65,302 72,935 74,426 77,488 83,065 84,302 82,586 81,742 74,389 73,220 70,507

$1,003,723

$1,066,609

Pald Loss Oevelopment Method N.A. N.A. N.A. N.A. 51,309 56,634 60,506 66,555 74,631 76,264 79,377 85,454 86,463 85,054 83,601 76,375 75,486 73,116

Notes: Column (1) Is taken from Appendlx B, Page 3, Sheet 3, Column (1), Column (2) Is taken from Appendlx B, Page 3, Sheet 4, Column (1 ). Column (3) Is taken from Appendlx B. Page 3, Sheet 3, Column (3). Column (4) Is taken from Appendlx 8, Page 3, Sheet 4, Column (3). Column (5) Is taken from Appendlx B, Page 3, Sheet S, Column (4). Column (6) Is selected based u pon Judgment after a revlew of Columns (1) through (5).

$23,606 26,031 27,420 31,404 53,000 57,500 63,000 66,600 74,000 75,500 78,500 85,000 85,750 84,500 83,000 75,500 75,000 72,500 $1,088,174

-

-

-

-

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Projection of Ultimate Loss ($000s) Historical Paid Loss Development Method Accident Years 1983 / 84 through 2000/01

... ...

-

Accident Year 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995 /96 1996/97 1997 /98 1998/99 1999/00 2000/01 Total

(1)

(2)

(3)

Paid Loss at 1 80 Months Maturit~

Paid 180 to Ultimate Factor

Projected Ultimate Loss (1) X (2)

N.A. N.A . N.A. N.A. 49,960 55,145 58,91 5 64,805 72,669 74,259 77,290 83,207 84, l 90 82,818 81,403 74,367 73,501 71, l 94

1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027 1.027

$1,003,723

Notes: Column (1) is taken from Appendix 8, Page 13. Column (2) is taken from Appendix 8, Page 11.

-

Appendix 8 Page 3 Sheet 3

N.A. N.A. N.A. N.A. 5 l ,309 56,634 60,506 66,555 74,631 76,264 79,377 85,454 86,463 85,054 83,601 76,375 75,486 73, 116 $1,030,825

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Appendix B Page 3 Sheet 4

Projection of Ultimate Loss ($000s) Historical lncurred Loss Development Method Accident Years 1 983 / 84 throug h 2000/01

Accident Year 1983/84 1984/85 1985/86 1986/87 1987 /88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01 Total

(1)

(2)

(3)

lncurred Loss at 180 Months Maturit~

lncurred 1 80 to Ultimate Factor

Projected Ultimate Loss (1) X (2)

$23,143 25,521 26,882 30,788 51,948 56, 185 60,844 65,302 72,935 74,426 77,488 83,065 84,302 82,586 81,742 74,389 73,220 70,507

1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020 1.020

$1,066,609

Notes: Column (1) is taken from Appendix B, Page 16. Column (2) is taken from Appendix B, Page 14.

$23,606 26,031 27,420 31,404 52,987 57,309 62,061 66,608 74,394 75,915 79,038 84,726 85,988 84,238 83,377 75,877 74,684 71,917 $1,087,943

-

.. ...

--

Appendix B Page 3 Sheet 5

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial Projection of Ultimate Loss ($000s) Outstanding Loss Development Method Accident Years 1983/84 through 2000/01

Accident Year

-

1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 Total

(1)

(2)

(3)

(4)

Paid Loss at l 80 Months Maturi~

Outstanding Loss at l 80 Months Maturi~

Outstanding l 80 to Ultimate Development Factor

Projected Ultimate Loss (1) + [(2) X (3)]

N.A. N.A. N.A. N.A. 49,960 55,145 58,915 64,805 72,669 74,259 77,290 83,207 84,190 82,818 81,403 74,367 73,501 71,194 $1 ,003,723

N.A. N.A. N.A. N.A. 1,988 1,040 1,929 497 266 167 198 (142) 112 (232) 339 22 (281) (687) $5,216

3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933 3.933

N.A. N.A. N.A. N.A. 57,779 59,235 66,502 66,760 73,715 74,916 78,069 82,649 84,630 81,906 82,736 74,454 72,396 68,492 $1 ,024,239

Notes: Column (1) is taken from Appendix B, Page 3, Sheet 3, Column (1 ). Column (2) is the difference between incurred and paid loss found in Column (1) of Appendix B, Page 3, Sheets 4 and 3, respectively. Column (3) is taken from Appendix B, Page 7, Sheet 2, Column (5) for a maturing of 180 months.

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Appendix B Page 3 Sheet 6

Derivation of Outstanding LDFs (1)

(2)

(3)

(4)

(5)

Accident Year

lncurred Loss Development Factor

Paid Loss Development Factor

lmplied Ultimate Loss $100,000 X (1)

lmplied Paid Loss (3) / (2)

lndicated Outstanding Development Factor

1960/61 1961 /62 1962/63 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 1971 /72 1972/73 1973/74 1974/75 1975/76 1976/77 1977 /78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987 /88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01

1.00005 1.00011 1.00017 1.00023 1.00029 1.00036 1.00044 1.00051 1.00060 1.00069 1.00078 1.00088 1.00099 1.00110 1.00123 1.00136 1.001 so 1.00166 1.00182 1.00200 1.00220 1.00241 1.00264 1.00290 1.00317 1.00348 1.00382 1.00419 1.00460 1.00507 1.00558 1.00616 1.00682 1.00757 1.00842 1.00940 1.01053 1.01186 1.01341 1.01526 1.01747

1.00007 1.00014 1.00022 1.00030 1.00039 1.00048 1.00058 1.00068 1.00079 1.00091 1.00103 1.00116 1.00131 1.00146 1.00162 1.00180 1.00199 1.00219 1.00241 1.00265 1.00291 1.00319 1.00349 1.00383 1.00419 1.00460 1.00504 1.00553 1.00608 1.00669 1.00737 1.00814 1.00900 1.00999 1.01111 1.01240 1.01390 1.01564 1.01769 1.02012 1.02304

$100,005 100,011 100,017 100,023 100,029 100,036 100,044 100,051 100,060 100,069 100,078 100,088 100,099 100,110 100,123 100,136 100,150 100,166 100,182 100,200 100,220 100,241 100,264 100,290 100,317 100,348 100,382 100,419 100,460 100,507 100,558 100,616 100,682 100,757 100,842 100,940 101,053 101,186 101,341 101,526 101,747

$99,998 99,997 99,995 99,993 99,990 99,988 99,986 99,983 99,981 99,978 99,975 99,972 99,968 99,964 99,961 99,956 99,951 99,947 99,941 99,935 99,929 99,922 99,915 99,907 99,898 99,889 99,879 99,867 99,853 99,839 99,822 99,804 99,784 99,760 99,734 99,704 99,668 99,628 99,579 99,524 99,456

Notes: Column (1) is taken from Column (9) of Appendix B, Page 1 5. Column (2) is taken from Column (9) of Appendix B, Page 12. Column (5) represents the development factor which yields the ultimate loss of Column (3) when applied to the outstanding loss and this product is added to the cumulative paid loss. Algebraically, Column (5) = [Column (3) - Column (4)] / [$100,000 - Column (4)].

3.50000 4.66667 4.40000 4.28571 3.90000 4.00000 4.14286 4.00000 4.1 5789 4.13636 4.12000 4.14286 4.09375 4.05556 4.1 5385 4.09091 4.06122 4.13208 4.08475 4.07692 4.09859 4.08974 4.10588 4.11828 4.10784 4.13514 4.15702 4.15038 4.12925 4.14907 4.13483 4.14286 4.15741 4.15417 4.16541 4.17568 4.17169 4.18817 4.18527 4.20588 4.21140

-

-

..

-

-

-

Appendlx B

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION

Page 4

Permanent Partial

-

-

Selectlon of Ultimare Loss (SOOOs) Accident Years 2001 /02 through 2015 /16 (1)

(2)

(3)

(4)

Pald Loss as of06¿30ll6

lncurred Loss as of06l]Ol l 6

(7)

CB>

(9)

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

$64,663 60,808 55,780 57,414 57,181 59,606 57,899 56,710 60,810 . 52,245 40,685 28,088 18,850 11,262 1,662

$64,252 60,772 55,706 57,659 57,164 59,876 58.123 56,788 61,983 53,888 42,697 30,193 20,926 13,393 2,086

Total

$683,663

$695.506

Accldent Year

Paid

lncurred

lncurred Loss

Outstanding Loss Development

E>cpected Loss

BornhuetterFerguson

Bornhuener-

Selected

Development

Ferguson

Ultimate

Method

Method

Method

Method

Method

Method

Loss

$66,409 62,693 57,788 59,940 60,212 63,540 62,705 62,778 69,688 63,007 53,216 42,076 37,266 44,541 62,445

$65,537 62,170 57,210 59,504 59,451 62,810 61,785 61.445 68,801 62, l 87 52,475 41,183 35.553 42,657 58,133

Notes: Columns (1) and (2) have been provided by the Puerto Rico State lnsurance Fund Corporation. Column (3) is taken from Appendix B, Page S. Column (3).

Column Column Column Column Column Column

-

(6)

Pald Loss Development

-

-

(5) Pro¡ected Ultlmate loss

(4) is (5) is (6) is (7) is (8) is (9) Is

taken from Appendix B, Page 6, Column (3). taken from Appendix B, Page 7, Sheet 1, Column (4). taken from Appendix B, Page 8, Column (7). taken from Appendix B, Pa9e 9, Column (7). taken from Appendix B, Page 9, Column (14). selected based on judgment after a revlew of Columns (1) through (8).

$63,047 60,665 55,476 58,341 57, 109 60,705 58,887 57,071 66,091 59,755 50,324 38,758 31,246 37,309 46,193

SSl ,249 49,066 41,927 42,620 42,119

$52,729 44,378 39,562 43,099 42,644

$52,229 43,294 38,158 42,630 42,689

$66,000 62,500 57,500 59,750 60.000 63,000 62.250 62,000 69,000 62,500 52,750 42,500 38,000 43,500 53,500 $854,750

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Appendix B Page 5

Projection of Ultimate Loss ($000s) Historical Paid Loss Development Method Accident Years 2001 /02 through 2015/16

Accident Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16 Total

(l)

(2)

· Paid Loss as of 06/30/16

Paid Age to Ultimate Factor

$64,663 60,808 55,780 57,414 57, 181 59,606 57,899 56,71 O 60,81 O 52,2,45 40,685 28,088 18,850 11 ,262 1,662

1.027 1.031 1.036 1.044 1.053 1.066 1.083 1.107 1.146 1.206 1.308 1.498 1.977 3.955 37.572

$683,663

(3)

-

Ultimate Loss ( 1) X (2) $66,409 62,693 57,788 59,940 60,212 63,540 62,705 62,778 69,688 63,007 53,216 42,076 37,266 44,541 62,445

-

$868,304

Notes: Column (1) is taken from Appendix B, Page 4, Column (1 ). Column (2) is taken from Appendix B, Page 11.

-

..

..

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Projection of Ultimate Loss ($000s) Historical lncurred Loss Development Method Accident Years 2001 /02 through 2015/16

-

( l)

(2)

(3)

lncurred Loss as of 06/30/16

lncurred Age to Ultimate Factor

Ultimate Loss (1) X (2)

Accident Year

-

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/1 5 2015/16

$64,252 60,772 55,706 57,659 5 7, 164 59,876 58, 123 56,788 61,983 53,888 42,697 30, 193 20,926 l 3,393 2,086

Total

$695,506

1.020 1.023 1.027 l.032 1.040 1.049 1.063 1.082 l. l lo 1.1 54 1.229 1.364 1.699 3.185 27.868

Notes: Column (1) is taken from Appendix B, Page 4, Column (2). Column (2) is taken from Appendix B, Page 14.

-

Appendix B Page 6

$65,537 62, 170 5 7 ,21 O 59,504 59,451 62,810 61,785 61,445 68,801 62, 187 52,475 41, l 83 35,553 42,657 58, 133 $850,901

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Appendix B Page 7 Sheet 1

-

Projection of Ultimate Loss ($000s) Outstanding Loss Development Method Accident Years 2001 /02 through 2015/16

Accídent Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total

(1)

(2)

(3)

(4)

Paíd Loss as of 6/30/16

Outstanding Loss as of 6/30/16

Outstandíng Age to Ultímate Development Factor

Projected Ultimate Loss (1) + ¡(2) X (3)]

$64,663 60,808 55, 780 57,414 57, 181 59,606 57,899 56,71 O 60,810 52,245 40,685 28,088 18,850 11,262 1,662 $683,663

($411) (36) (74) 245 (17) 270 224 78 1, 173 1,643 2,012 2, 105 2,076 2, 131 424

3.933 3.964 4.107 3.785 4.239 4.072 4.411 4.632 4.502 4.571 4.791 5.069 5.971 12.223 105.027

$11,843

$63,047 60,665 55,476 58,341 57, 109 60, 705 58,887 57,071 66,091 59,755 50,324 38,758 31,246 37,309 46,193 $800,977

.... Notes: Column (1) is taken from Appendix B, Page 4, Column (1 ). Column (2) is the difference between Columns (2) and (1) of Appendíx B, Page 4. Column (3) is taken from Appendíx B, Page 7, Sheet 2, Column (5).

-

-

.. .. -

-

Appendix B Page 7 Sheet 2

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial Derivation of Outstanding LDFs Accident Years 2001 /02 through 201 5/16 (1)

(2)

(3)

(4)

(5)

Accident Year

lncurred Loss Development Factor

Paid Loss Development Factor

lmplied Ultimate Loss $100,000 X (1)

lmplied Paid Loss (3) / (2)

lndicated Outstanding Development Factor

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 201 5/16

1.020 1.023 1.027 1.032 1.040 1.049 1.063 1.082 1.11 O 1.154 1.229 1.364 1.699 3.185 27.868

1.027 1.031 1.036 1.044 1.053 1.066 1.083 1.107 1.146 1.206 1.308 1.498 1.977 3.955 37.572

$102,000 l 02,300 102,700 l 03,200 l 04,000 104,900 106,300 l 08,200 111,000 115,400 122,900 136,400 169,900 318,500 2,786,800

$99,318 99,224 99,131 98,851 98,765 98,405 98,153 97, 742 96,859 95,688 93,960 91,055 85,938 80,531 74,172

Notes: Column (1) is taken from Column (2) of Appendix B, Page 6. Column (2) is taken from Column (2) of Appendix B, Page 5. Column (5) represents the development factor which yields the ultimate loss of Column (3) when applied to the outstanding loss and this product is added to the cumulative paid loss. Algebraically, Column (5) = [Column (3) - Column (4)] / [$100,000 - Column (4)].

-

-

3.933 3.964 4.107 3.785 4.239 4.072 4.411 4.632 4.502 4.571 4.791 5.069 5.971 12.223 l 05.027

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partlal

Appendix 8 Page 8

Ex pected Loss Method

(1)

Accldent Year

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Preliminary Ultimate Loss (SOOOs!

$66,000 62,500 57,500 59,750 60,000 63,000 62,250 62,000 69,000 62,500 52,005 40,672 34,688 41,502 55,590

(2)

(3)

(4)

Loss Cost per $100 of Payroll [S 1,000 x !l!l L (2)

Earned Payroll (SOOs¡

$202,420,000 215,080,000 226,330,000 238,750,000 245 ,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242, 156,580 233,992,560

(8)

$0.326 0.291 0.254 0.250 0.245 0.259 0.256 0.272 0.297 0.263 0.225 0.162 0.142 0.171 0.238

Loss Cost Trend Factor

(5) Trended Loss Cost per $100 of Payroll

(3)

X

!4)

0.607 0.674 0.749 0.731 0.713 0.695 0.679 0.662 0.646 0.734 0.834 0.948 1.077 1.051 1.025

$0.198 0.196 0.190 0.183 0.175 0.180 0.174 0.180 0.192 0.193 0.188 0.154 0.153 0.180 0.244

Avg (AII Yrs) Wtd Avg (AII Yrs) Wtd Avg (Latest 5) Wtd Avg (Latest 3) Wtd Avg (Latest 2) Wtd Avg (AII Yrs Excl Hi/Lo)

0.185 0.185 0.183 0.192 0.211 0.185

Selected for accident year 2016 /17

0.185

(6)

(7)

Loss Cost per $100 of Payroll (8! L !4>

Expected Loss (SOOOs) [!2! X (6)) / $ 11000

S0.222 0.195 0.172 0.176 0.180

Notes: For accident years 2001 /02 through 2010/11, Column (1) is taken from Appendix 8, Page 4, Column (9). For accident years 2011 /12 through 2015/ 16, Column (1) is equal to the average of Columns (3) through (5) of Appendix 8, Page 4. Column (2) has been provided by the Puerto Rico State lnsurance Fund Corporatlon. Column (4) reflects trending to accident year 2016/17 based upon the loss cost trends found on Appendix 8, Page 19, Unes (5) through (8). Une (8) is selected based upon judgment after review of Column (5).

$51,249 49,066 41,927 42,620 42,119

-

-

-

-

-

Appendhc B Page 9

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION Permanent Partlal

-

Projectlon of Uklmate Loss (SOOOs)

Bornhuener-Ferguson Method Sectlon 1: Pald Loss

(1)

-

-

(2)

Expected Loss

Accldent Year

SS 1,249 49,066 41.927 42,620 42,119

2011/12 2012/13 2013/14 2014/15 2015/16

Total

Pald Loss

Factor

IOO!li- !3!

asof06¿30¿16

1.308 1.498 1.977 3.955 37.572

76.5% 66,8% 50.6% 25,3% 2.7%

23.5% 33.2% 49,4" 74.7% 97.3%

5226,981

(8)

Accldent Year

Total

Expected Loss

SS 1,249 49,066 41,927 42,620 42,119

(9)

(10) Cumulatlve

(11)

lncurred Age to Ultlmate

Percent

Percent

Factor

Reponed 100% / (9)

Unreported lOO!li-(10)

1.229 1.364 1.699 3.185 27.868

81.4% 73.3% 58.9% 31.4% 3.6"

18.6% 26.7% 41.1% 68.6% 96.4%

S226,9si


Notes: Columns (1) and (8) are taken from Appendhc B, Page 8, Column Columns (2) and (5) are taken from Columns (2) and (1), respectlvely, of Appendl>c B, Page 5. Columns (9) and (12) are taken from Columns (2) and (1), respectively, of Appendlx B, Page 6.

-

(7)

Expected Unpald loH !ll X !4!

Ultlmate Lon

¡s¡ + !6!

$40,685 28,088 18.850 11,262 1,662

512,044 16,290 20,712 31,837 40,982

$52,729 44.378 39,562 43.099 42,644

5100,547

5121.865

$222,412

Sectlon 11: lncurred Loss

2011/12 2012113 2013/14 2014115 2015116

-

(6)

Percent Unpald

Age to Ultlmate

(4)

(5)

(3) Cumulatlve Percent Pald 100% 1!2)

Pald

(12) lncurred Loss

ai.of06!30/16

(13)

(14)

Expected Unreported

UIUmate

Loss (8) X (11)

(12) + (13)

LOH

542,697 30,193 20,926 13,393 2,086

59,532 13,101 17,232 29,237 40,603

552,229 43,294 38,158 42,630 42,689

$109,295

$109,705

5219,000

-

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-

-

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION Permanent Partial

Page 11 Paid Loss Oevelopment Factors

Accident

Vear

.l.Lli

2i..;.l§

l§.;.il

iLRll

1983/84 1984/85 1985/86 1986/87

-

1987/88

6.688 6.196 8.063 8.29S 8.406 8.582 11.770 7.944 7.905 12.505 9.379 10.592 7.177 6.839 7.744 9.752 7.734 8,133 7.676 6.904 8.779 8.851 7.673 8.736 9.622 10,288 10.186 8.500

1.752 1.769 1.815 1.872 1.890 2.070 1.840 1.833 2.024 1.973 2.051 1.707 1.647 1.675 1.710 1.564 1.661 1.651 1.593 1.734 1.770 1.742 1.809 1.930 2.142 2.111 1.975

1.293 1.307 1.305 1.306 1.338 1.331 1.312 1.334 1.323 1.345 1.245 1.210 1.210 1.205 1.187 1.188 1.197 1.198 1.223 1.241 1.247 1.238 1.284 1.314 1.323 1.329

1.176 1.162 1.158 1.165

Welghted Aver!lile AUYears Latest 5 latest 3 Latest 2 Years 04/05 & After Exduding Hi/Lo

8.352 9,314 9.526 9.198 8,340 8.313

1.805 1.966 2.082 2.045 1.80S 1.809

1.267 1.293 1.321 1.326 l,262 1.266

Aon Selections 06/30/15

9,500

1.950

Selected Cumulative

9.500 37.572

2.000 3.955

1988/89 1989/90

1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

-

-

Appendhc B

=

ZL.U.

il.;JJj1

J.QLlil2

=

lll..;..W J.il.c.ll§.

llLW.

=

J..12..c.l!ll

1.108 1.098 l.100 1.101 1.099 1.112 1.098 1.092 1,073 1.066 1.063 1.058 1.053 1.053 1.058 1.058 1.064 1.082 1.081 1.073 1.073 1.079 1.085 1.089

1.068 1.066 1.066 1.064 1.072 1.069 1.063 1.050 1.042 1.040 1.037 1.036 1.032 1.034 1,036 1.042 1.052 1.056 1.050 1,046 1.051 1.053 1.051

1.048 1.044 1.045 1.051 1.051 1.051 1.035 1.028 1.027 1.023 1.026 1.022 1.021 1.024 1.027 1.034 1.037 1.037 1.036 1.034 1.035 1.034

1.033 1.030 1.038 1.036 1.035 1.031 1.022 1.019 1.017 1.017 1.016 1.015 1.015 1.017 1.023 1.025 1.024 1.028 1.023 1.021 1.020

1.025 1.027 1.027 1.025 1.022 1.019 1.016 1.012 1.012 1.011 1.012 1.011 1.013 1.016 1.017 1.019 1.017 1.017 1.016 1.014

1.019 1.019 1.020 1.015 1.015 1.01"4 1.011 1.010 1.009 1.007 1.009 1.009 l,012 1.012 1.014 1.012 1.013 1.012 1.008

1.014 1.014 1,013 1.012 1.010 1.009 1.008 1.007 1.007 1.006 1.008 1.010 1.008 1.009 1.010 l,008 1.009 1.007

1.011 1,011 1,009 1.008 1.006 1.007 1.006 1.005 1,005 1.005 1.008 1.007 1.007 1.006 1.007 1.007 J,006

1.133 1.137 1.147 1.151 1.131 1.134

1.078 1.080 1.084 1.087 1.080 1.078

1.050 1.050 1.052 1.052 1.051 1.050

1.034 1.035 1.034 1.034 1.035 1.034

1.023 1.023 1.021 1.021 l.023 l.023

l.017 1.017 1.016 1.015 1,016 1.017

1.012 1.012 1.011 1.010 1.010 1.012

1.009 1.009 1.008 1.008 1.007 1.009

1,007 1.007 l,007 1.006 1.007

1.005

1.004

1.280

l.130

1.078

1.050

1.035

1.025

1.017

1,013

1.009

1.007

1.006

1.00S

1.005

1.320 1.977

1.145 l.498

1.085 1.308

1.052 1.206

1.035 1.146

1.021 1.107

1.016 1.083

1.012 1.066

1.009 1.053

1.007 1.044

1.005 1.036

1.004 1.031

1.027 1.027

1,171 1.173 1.175 1.156 1.158 1.135 1.111 1.106 1.100 1.094 1.090 1.094 1,099 1.108 1.125 1,126 1.122 1.124 1.140 1.151 1.152

1.007 1.006 1.007 1.006 1.006 1.006 1.005 1.004 1.004 1.006 1.006 1.005 1.004 1.004 1.005 1.005

1.005 1.005 1.004 1.005 1.004 1.005 1.003 1.004 1.004 1.005 1.004 1.003 1.003 1.003 1.003

1.005 1.005 1.004 1.005

1.004 1.003 1.003 1.003

¡

Notes: Development factors are based on Appendix 8, Page l 3. The 180 to ultimate development factor is taken from Appendix B. Page 12, Column (10).

-

li;.j§

-

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION Permanent Panial

Appendix B

Page 12 Paid loss Development lnverse Power Curve

(2)

(1)

(l)

(6)

(S)

(4)

(7)

Selected

Selected Age to Age Paid loss

Development [email protected] in Months

Time

~

12 - 24 -

,.o ,.o 4.0 s.o

60 72 84 96 108 120 132 144 156 168 180

Development Factor

1.000 0.500 0.333 0.250 0.200 0.167 0.143 0.125 0.111 0.100 0.091 0.083 0,077 0.071

1.0

24 - 36 36 - 48

48 60 72 84 96 108 120 132 144 156 168

-1.&.L.ilL

6.0 7.0 8,0 9.0 10.0 11.0 12.0 13,0

14.0

9.SOO 2.000 1.320

1.145 1.085 1.052 1.035 1.023 1.016 1.012 J,009 1.007 1.005 1.004

Age toAge

Pald Loss Oevelopment Factor Leu 1.0 !31- 1.0

In ¡4¡

In ¡2¡

8,500

0.000

1.000 0.320 0.145 0.085 0.052 0.035 0.023 0.016 0.012 0.009 0.007 0.005 0.004

-0.693 -1.099 -1.386 -1.609 -1.792 -1.946 -2.079 -2.197 -2.303 -2.398 -2.485 -2.565 -2.639

lndusion In Regression ¡1.0 to lnclude¡

-1.931 -2.465 -2.957 -3.352 -3.772 -4.135 -4.423 -4.711 -4.962 -5.298 -5.521

1.00300 1.00250 1.00200

1::::: 1.00050 1.00000

Notes. Column Column Column Column

(3) (7) (8) (9)

20.0

25.0

35.0 30.0 Tlmt ... dH

40.0

45.0

so.o

55.0

(10)

Fitted

Age to Ultimate

Age to Ultimate Pald loss

Paid Loss

Development Perlod

Development Factor

Development Time

Perlod

in Months

¡Unrounded¡

~

in Months

Development Factor ¡[email protected]¡

Development Factor (Rounded~

1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

1.00350

15.0

(9) fitted

o.o o.o o.o o.o

2.140 0.000 -1.139

1.00400

j

(8)

fitted Age to Age Paid Loss

-

60.0

180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 S 16 528 540 552 564 576 588 600 612 624 636 648 660 672

-

is taken from Appendix B, Page 11. indicates which factors ha1,e been induded m fitting the de1Jelopment cuNe: the R-Squared value of th,s fit is 0.99799. represents the output of the fltted in1,erse power cur\'e. for a given maturity is equal to the product of Column (8) for that and any subsequent maturit1es.

192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672 684

1.00347 1.00286 1.00239 1.00202 1.00172 1.00148 1.00128 1.00111 1.00097 1.00086 1.00076 1.00068 1.00061 1.00054 1.00049 1.00044 1.00040 1.00037 1.00033 1.00031 1.00028 1.00026 1.00024 1.00022 1.00020 1.00019 1.00018 1.00016 1.00015 1.00014 1.00013 1.00012 1.00012 1.00011 1.00010 1.00010 1.00009 1.00009 1.00008 1.00008 1.00007 1.00007

15.0 16.0 17.0 18.0 19.0 20.0 21.0 22.0 23.0 24.0 25.0 26.0 27.0 28.0 29.0 30.0 31.0 32.0 33.0 34.0 35.0 36.0 37.0 38.0 39.0 40.0 41.0 42.0 43,0 44.0 45,0 46.0 47.0 48.0 49.0

so.o S 1.0 52.0 53.0 54.0 SS.O 56.0

180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 S 16 528 540 552 564 576 588 600 612 624 636 648 660

to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Uhimate to Ultimate to Ultimate to Ultlmate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultima.te to Ultimate to Ultimate to Ultimate to Ultimate to Ultima.te to Ultimate 672 to Ultimate

1.02659 1.02304 1.02012 1.01769 1.01564 1.01390 1.01240 1.01111 1.00999 1.00900 1.00814 1.00737 1.00669 1.00608 1.00553 1.00504 1.00460 1.00419 1.00383 1.00349 1.00319 1.00291 1.00265 1.00241 1.00219 1.00199 1.00180 1.00162 1.00146 1.00131 1.00116 1.00103 1.00091 1.00079 1.00068 1.00058 1.00048 1.00039 1.00030 1.00022 1.00014 1.00007

1.027 1.023 1.020 1.018 1.016 1.014 1.012 1.011 1.010 1.009 1.008 1.007 1.007 1.006 1.006 1.005 1.005 1.004 1.004 1.003 1.003 1.003 1.003 1.002 1.002 1.002 1.002 1.002 1.001 1.001 1.001 1.001 1.001 1.001 1.001 1.001 1.000 1.000 1.000 1.000 1.000 1.000

-

-

-

-

-

-

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION Permanent Partial Historical Unlimited Paid Loss (SOOOs)

Evaluated as of...

Accidenr Year

1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

l..2híillíi lli!íííííhi 1Ulo.iíílii IDlííííítíi wloíííhi llilímílíi lliloiíílíi .KMoíííJíi

2.021 2,429 1,935 2.007 2,140 1,961 1,785 2,961 2.825 1,831 2,542 2,584 3,956 3,953 3,106 2,502 2,658 2,550 2,759 2,967 2.239 2,252 2,626 l,881 1,295 973 937 1,325 l,662

13,516 15,050 15,601 16,648 17,989 16,830 21,009 23,522 22,331 22,897 23,841 27,370 28,394 27,033 24,052 24,400 20,557 20,739 21,178 20,483 19,656 19,932 20,148 16,433 12,461 10,010 9,544 11,262

Notes: Data has been provided

-

Appendlx B Page 13

23,679 26,626 28,316 31,163 33,995 34,831 38,661 43,106 45,193 45,165 48,889 46,711 46,778 45,292 41,123 38,154 34,141 34,236 33,734 35,508 34,795 34,712 36,452 31,722 26,688 21,132 18,850

30,609 34,788 36,955 40,691 45,480 46,356 50,725 57,505 59,806 60,760 60,860 56,533 56,583 54,574 48,797 45,314 40,858 41,029 41,257 44,057 43,375 42,957 46,793 41,692 35,312 28,088

36,008 40,431 42,811 47,392 53,268 54,367 59,582 66,494 69,270 68,986 67,611 62,552 62,228 59,679 53,178 49,576 44,890 45,467 46,403 49,609 48,646 48,303 53,333 47,983 40,685

39,893 44',391 47,075 52,156 58,530 60,457 65,443 72,611 74,334 73,535 71,878 66,177 65,519 62,843 56,250 52,450 47,745 49,190 50,166

53,235 52,178 52,115 57,861 52,245

bv the Puerto Rico State lnsurance Fund Corporatlon.

42,602 47,307 50,186 55,468 62,74,4 64,622 69,590 76,258 77,437 76,453 74,539 68,545 67,631 64,994 58.254 54,627 50.249 51,941 52,689 55,666 54,854 54,865 60,810

44,649 49,390 52,447 58,279 65,931 67,898 72,017 78,388 79,529 78,230 76,465 70,025 69,042 66,538 59,811 56,487 52.099 53,837 54,577 57,578 56,768 56,710

™ 46,111 50,879 54,429 60,374 68,235 70,004 73,602 79,844 80,845 79,530 77,717 71,108 70,111 67,663 61,164 57,882 53,346 55,355 55,825 58,799 57,899

™ 47,256 52,24<1 55,895 61,897 69,722 71,328 74,768 80,775 81,818 80.425 78,622 71,878 70,988 68,766 62,223 58,964 54,273 56,319 56,713 59,606

™ 48,155 53,217 57,016 62.856 70,759 72.319 75,560 81,580 82,520 81,027 79,316 72,494 71,872 69,574 63,076 59,663 54,958 57,010 57,181

™ 48,835 53,957 57,739 63,590 71,-491 72.987 76,192 82,156 83,060 81,520 79,924 73,211 72,463 70,208 63,720 60,132 55,471 57,414

mllííííílíi

49,364

s•.s•6

58,253 64,120 71,945 73,482 76,634 82,573 83,476 81,968 80,573 73,743 72,947 70,656 64,181 60,528 55,780

™ 49,708 54,882 58,665 64,508 72,348 73,905 77,022 82,881 83,829 82,446 81,046 74,119 73,264 70,953 64,482 60,808

™ 49,960 55,145 58,915 6 ... 805 72,669 74,259 77,290 83,207 84,190 82,818 81,403 74,367 73,501 71,194 64,663

-

PUERTO RICO - STATE INSURANCE FUNO CORPORA.TION WORKERS COMPENSATION

Appendlx 8 Page 14

Permanent Partlal lncurred loss Development Factors

Accldent Vear 1983/84 1914/85 1985/86 1986/87 1987/88 1988/89 1989¡90 1990¡91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006¡07 2007/08 2001/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

=

1L.li

~

il..;.Al2

fio....u.

1.L.li

li.;_j§_

.w_;_w

.iL.l.lll

~

1.066 1.070 1.050 1.049 1.044 1.049 1.049 1.047 1.059 1.052 1.046 1.034 1.029 1.027 1.025 1.026 1.023 1.024 1.028 1.036 1.049 1.043 1.034 1.033 1.041 1.041 1.040

1.048 1.037 1.03S 1.030 1.036 1.031 1.031 1.041 1.039 1.040 1.023 1.018 1.017 1.017 1.019 1.016 1.015 1.019 1.022 1.032 1.029 1.026 1.027 1.029 1.026 1.024

1.031 1.029 1.025 1.026 1.023 1.022 1.031 1.026 1.027 1.020 1.015 1.013 1.011 1.014 1.012 1.011 1.013 1.015 1.023 1.019 1.017 1.023 1.019 1.014 1.015

1.024 1.019 1.022 1.019 1.019 1.022 1.021 1.021 1.016 1.014 1.012 1.009 1.010 1.009 1.011 1.010 1.012 1.018 1.015 1.015 1.013 1.013 1.011 1.011

1.067 1.069 1.063 1.059

1.039 1.038 1.041 1.040 1.039 1.039

1.026 1.026 1.026 1.025 1.026 1.027

1.018 1.017 1.016 1.014 1.017 1.019

1.014 1.012 1.012 1.011 1.012 1.014

1.010 1.009 1.008 1.007 1.007 1.010

1.008 1.007 1.007 1.007 1.005 1.008

1.006 1.00S 1.005 1.004

1.00S 1.004 1.003 1.004

1.004 1.003 1.003 1.002

1.006

1.005

1.004

1.100

1.060

1.037

1.028

1.019

1.015

1.010

1.007

1.006

1.005

1.004

1.015

1.110 1.364

1.065 1.229

1.040 1.154

1.026 1.110

1.018 1.082

1.013 1.063

1.009 1.049

1.007 1.040

1.005 1.032

1.004 1.027

1.003 1.023

1.020 1.020

5.951 7.035 5.421 6.021 6.773 5.875 7.031 7.193 7.177 8.289 12.383 7.420 6.926 13.586 9.416 9.836 6.S48 6.221 6,980 9.046 7.009 7.693 7.210 6.697 8.011 1.186 6.917 8.008 8.606 9.132 9.198 7.773

1.655 1.591 1.606 1.656 1.627 1.683 1.609 1.714 1.729 1.926 1.698 1.621 1.867 1.861 1.901 1,567 1.494 1.540 1.595 1.433 1.549 1.53S 1.503 1.615 1.640 1.605 1.634 1.791 2.023 1.949 1.857

1.264 1.263 1.272 1.264 1.2S2 1.207 1.225 1.225 1.258 1.267 1.233 1.259 1.247 1.279 1.168 1.139 1.138 1.141 1.119 1.129 1.143 1.157 1.183 1.201 1.184 1.168 1.221 1.253 1.251 1.274

1.155 1.151 1.137 1.132 1.112 1.113 1.114 1.125 1.133 1.125 1.131 1.114 1.117 1.083 1.070 1.071 1.061 1.057 1.057 1.068 1.074 1.08S 1.105 1.08S 1.087 1.100 1.101 1.116 1.122

Weighted Average AIIYears Latest 5 l.a.1Ht3 La.lest2 Years 04 /05 & After Excluding Hi/lo

7.672 8.523 8.799 8.365 7.743 7.S76

1.66S 1.817 1.951 1.90S 1.67S 1.667

1.204 1.228 1.258 l.26J 1.206 1.204

1.091 1.106 1.115 1.119 1.100 1.100

Aon Selections fi/30/ l 5

1.750

1.800

1.220

Selecled Cumulative

1.750 27.168

1.875 3.185

1.245 1.699

1.112

1.089 1.097 1.069 1.076 1.065 1.073 1.073 1.073 1.090 1.073 1.064 1.043 1.037 1.043 1.037 1.032 1.033 1.040 1.043 1.051 1.074 1.0S9 1.053 1.0S6 1.063 1.068 1.070

1.051 1.062

fil.;.lll llL..l.il .l.il..;_lli llLill J..6L.J.1R 1.017 1.013 1.009 1.007 1.007 1.016 1.012 1.010 1.011 1.007 1.012 1.008 1.010 1.009 1.006 1.015 1.016 1.010 1.008 1.004 1.015 1.012 1.006 1.006 1.004 1.012 1.008 1.016 1.004 1.003 1.015 1.010 1.007 1.00S 1.003 1.012 1.010 1.006 1.00S 1.005 1.013 1.006 1.006 1.005 1.004 1.010 1.007 1.00S 1.006 1.004 1.001 1.008 1.005 1.004 1.003 1.009 1.006 1.004 1.003 1.004 1.008 1.005 1.004 1.004 1.00S 1.006 1.006 1.00S 1.006 1.004 1.008 1.007 1.008 1.00S 1.004 1.008 1.010 1.006 1.004 1.002 1.011 1.007 1.005 1.004 1.003 1.009 1.007 1.00S 1.003 1.003 1.011 1.009 1.006 1.003 1.002 1.010 1.007 1.005 1.004 1.011 1.008 1.004 1.010 1.005 1.004

Notes; Development fa.dors a.re based on Appendlx B, Page 16. The 180 to ultima.te development factor Is ta.ken from Appendix B, Page 15, Column (10).

-

-

-

-

-

Page 15 lncurred Loss Development lnverse Power Curve

(1}

(1)

(4)

(l)

(2)

(6)

(7)

Selected Age to Age Development Period

Time

in Months

~

24 36 48 60 72 84 96 108 120 132 144 156 168

-

1.0 2.0

36 48 60 72 84 96 108 120 132 144 156 168 180

lncurred Loss Oevelopment

-1.:Q..LJ.!L

l.O

1.000 0.500 0.333

4.0 1.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0

0.250 0.200 0.167 0.143 0.125 0.111 0.100 0.091 0.083 0.077 0.071

Factor

~

in Months

(UnroundedJ

Factor (Rounded)

in Months

(Unrounded)

In (4)

In (2)

º·ººº

7.750 0.875 0.245 0.110 0.065 0.040 0.026 0.018 0.013 0.009 0.007 0.005 0.004 0.003

p

1.0 1.0 1.0 1.0 1.0 1.0

'·º

1.0 1.0 1.0

,00100 1.00050

i!l 1.00000

30.0

35.0

Tlnw lndex

40.0

45.0

50.0

55.0

lncurred Loss

o.o o.o o.o o.o

2.048 -0.134 -1.406 -2.207 -2.733 -3.219 -3.650 -4.017 -4.343 -4.711 -4.962 -5.298 -5.521 -5,809

-0.693 -J,099 -1.386 -1.609 -1.792 -1.946 -2.079 -2.197 -2.303 -2.398 -2.485 -2.565 -2.639

1

60.0

180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672

-

192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 ~ 672 - 684

Notes: Column (3) is taken from Appendix B, Page 14, Column (7) indicates which factors have been included in fitting Che development curve: the R-Squared value of Chis fit is 0.99760. Column (8) represents the output of the fitted inverse power curve. Column (9) for a given maturity is equal to the product of Column (8) for that and any subsequent maturities,

-

Development

Factor

Period

1.00200

25.0

Development

Period

Development

8.750 1.875 1.245 1.110 1.065 1.040 1.026 1.018 1.013 1.009 1.007 1.005 1.004 1.003

20.0

Development Time

lnclusion In Regression .O to include)

1.00150

15.0

(10)

Fitted Age to Ultimate

Development

Age to Age lncurred Loss

1.00300

-

(9)

Fitted Age to Ultimate lncurred Loss

Factor Less 1.0 (3)- 1.0

1.()0250

,

(8)

Fitted Age to Age lncurred loss Developmenl Factor

Selec1ed

12 - 24

-

Appendbc 8

PUERTO RICO - STATE INSURANCE FUND CORPORATlON WORKERS COMPENSATION Permanent Partial

1.00265 1.00218 1.00182 1.00\54 1.00131 1.00112 1.00097 1.00085 1.00074 1.00065 1.00058 1.00051 1.00046 1.00041 1.00037 1.00034 1.00030 1.00028 1.00025 1.00023 1.00021 1.00020 1.00018 1.00017 1.00015 1.00014 1.00013 1.00012 1.00012 1.00011 1,00010 1.00009 1.00009 1.00008 1.00008 1.00007 1.00007 1.00007 1.00006 1.00006 1.00006 1.00005

IS.O 16.0 17.0 18.0 19.0 20.0 21.0 22.0 23.0 24.0 25.0 26.0 27.0 28.0 29.0 30.0 31.0 32.0 33,0 34.0 35.0 36.0 37.0 38.0 39.0 40,0 41.0 42.0 43.0 44.0 45.0 46.0 47.0 48.0 49,0

so.o 51.0 52.0 53.0 54,0 SS.O 56.0

180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 5 76 588 600 612 624 636 648 660 672

to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate 10 Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ullimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate 10 Ultimate to Uhimate to Ultimate to Ultimate to Ultimate 10 Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate to Ultimate

1.02017 1.01747 1.01526 1.01341 l.01186 1.01053 1.00940 1.00842 1.00757 1.00682 1.00616 1.00558 1.00507 1.00460 1.00419 1.00382 1.00348 1.00317 1.00290 1.00264 1.00241 1.00220 1.00200 1,00182 1.00166 1.00150 1.00136 1.00123 1.00110 1.00099 1.00088 1.00078 1.00069 1.00060 1.00051 1.00044 1.00036 1.00029 1.00023 1.00017 1.00011 1.00005

1.020 1.017 1.015 1.013 1.012 1.011 1.009 1.008 1.008 1.007 1.006 1.006 1.005 1.005 1.004 1.004 1.003 1.003 1,003 1.003 1.002 1,002 1.002 1.002 1.002 1.002 1.001 1.001 1.001 1.001 1,001 1.001 1.001 1.001 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1,000

Appendi>t B Page 16

PUERTO RICO· STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial Historical Unlimited lncurred Lon (SOOOsl

Accldent Year 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/9-1 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

.IIllíiííilíí llilmíílii 1,163 1,171 1,636 1,696 2,674 3,370 3,093 3,022 2,953 2,567 2,178 4,169 4,091 2,073 3,177 3,473 5,480 5,334 4,172 3,288 3,501 3,217 3,474 3,702 2,980 2,971 3,652 2,511 1,748 1,237 1,225 1.723 2,086

6,921 8,238 8,869 10,212 18,111 19,798 21,748 21,738 23,260 21,277 26,970 30,935 28,336 28,163 29,915 34,162 35,883 33,183 29,122 29,744 24,538 24,747 25,049 24,792 24,081 24,320 25,262 20,107 15,043 12,162 11,267 13,393

™ ™ ™ ™ 11,452 13,106 14,246 16,916 29,475 33,313 34,999 37,257 40,214 40,974 45,801 50,372 52,916 52,399 56,861 53,541 53,595 51,114 46,457 42,637 38,003 37,977 37,651 40,044 39,495 39,022 41,271 36,006 30,432 23,699 20,926

14,473 16,554 18,118 21,388 36,898 40,224 42,886 45,653 50,578 51,907 56,456 63,413 65,973 67,011 66,413 60,997 60,966 58,327 51,972 48,140 43,447 43,930 44,527 48,077 46,763 45,579 50,408 45,121 38,059 30,193

16,717 19,060 20,606 24,220 41,025 44,772 47,777 51,348 57,304 58,388 63,869 70,624 73,698 72,558 71,081 65.329 64,687 61,644 54,958 51,410 46,658 47,654 49,182 52,171 50,816 50,128 55,831 50,377 42,697

18,586 20,748 22,600 25,892 44,132 47,677 51,285 55,092 61,496 63,648 68,512 75,118 76,865 75,210 74,113 67,734 66,741 63,688 57,157 53,631 49,020 51,200 52,075 54,949 53,641 53,265 59,608 53,888

.wloíiilü 19,818 22,207 23,723 27,161 46,090 50,023 53,796 57,675 65,107 66,942 71,662 77,679 79,060 77,267 75,939 69,515 68,261 65,188 58,729 55,542 51,414 53,385 53,849 56,785 55,854 55,432 61,983

Evaluated as of...

™ ™ 20,773 23,024 24,542 27,969 47,754 51,557 55,478 60,066 67,663 69,649 73,284 79,101 80,419 78,551 77,408 70,621 69,316 66,429 60,024 57,326 52,903 54,789 SS,293 58,411 57,287 56,788

21,427 23,692 25,153 28,690 48,871 52,675 57,211 61,634 69,461 71,074 74,375 80,152 81,329 79,674 78,331 71,433 70,226 67.440 61,382 58,394 53,778 56,061 56,316 59,212 58,123



21,948 24,141 25,717 29,230 49,803 53,810 58,409 62,935 70,607 72,101 75,283 80,904 82,179 80,386 79,165 72,141 71,042 68,657 62,286 59,260 54,453 56,786 56,920 59,876



22,330 24,524 26,017 29,659 50,538 54,663 59,299 63,670 71,492 72,787 75,905 81,649 82,811 80,884 79,785 72,732 71,853 69,292 62,974 59,829 55,040 57,369 57,164



22,616 24,815 26.238 30,119 51,122 55,325 59,915 64,330 71,907 73,316 76,475 82,134 83,245 81,331 80,371 73,462 72,335 69,773 63,529 60,270 SS,481 57,659



22,812 25,064 26,492 30,409 51,427 55,787 60,362 64,688 72.303 73,707 76,883 82,476 83,607 81,740 81,022 73,919 72,726 70,125 63,905 60,544 55,706



22,974 25,334 26,720 30,652 51,727 56,029 60,643 65,007 72,654 74,151 77,222 82,758 83,919 82,239 81,436 74,213 72,999 70,320 64,127 60,772



23,143 25,521 26,882 30,788 51,948 56,185 60,844 65,302 72,935 74,426 77,488 83,065 84,302 82,586 81,742 74,389 73,220 70,507 64,252

Notes: Data has been provlded by the Puerto Rico 5tate lnsurance Fund Corporation.

-

-

...

-

Outstanding Loss Comparison

-

-

Appendix B Page 17

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Accident Year

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total

(1)

(2)

(3)

lmplied Case Reserves as of 06/30/16

Outstanding Loss Balance as of 06/30/16

Difference in Outstanding Los ses (1) - (2)

($411 ,000) (36,000) (74,000) 245,000 (17,000) 270,000 224,000 78,000 1.173,000 1,643,000 2,012,000 2, l 05,000 2,076,000 2,131,000 424,000

$109,320 179,422 147,072 229,798 212,540 365,615 498,848 758,105 1,429,249 1,801,018 2,225,034 2,227,325 2, 194,404 2, 164,340 424,888

($ 520,320) (215,422) (221 ,072) 1 5,202 (229,540) (95,615) (274,848) (680, 1 OS) (256,249) (158,018) (213,034) (122,325) (11 8,404) (33,340) (888)

$11 ,843,000

$14,966,978

($3, 123,978)

Notes: Column (1) equals the difference between the incurred and paid loss found in Columns (2) and (1 ), respectively, of Appendix B, Page 4. Column (2) has been provided by the Puerto Rico State lnsurance Fund Corporation.

-

-

Appendbc B Page 18

PUERTO RICO - STATE INSURANCE FUNO CORPORA TION WOA.KERS COMPENSATION Permanent Partlal Permanent Partlal Pald to lncurred Ratios

Accldent Year

1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001,02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009110 2010111 2011112 2012/13 2013114 2014/15 2015!16



N.A. N.A. N.A, N.A. 75.6" 72.1" 62.6% 66.4" 72,5% 76,4%

.,...

71,0% 69,1" 88.3%

.....

74.4'6 72.2% 74,1% 74,4% 76.1'6 75.9K 79.3'6 79.4%

ªº·'"

75,1% 75.8% 71.9" 74.9% 74.1'6 78,7'6 76.5% 76.9% 79.7"



N.A, N.A. N.A, N.A. 74.9' 76.°" 71,791! 76.9' 77.3%

~?::

76.0% 78,8" 81.3" 79.7'6 80.1'6 79.1'6 81,5% 82,6" 82,0'6 83.8" 83,8" 84.5'6 82.6'6 81,6'6 82,o,¡¡ 79.8'6 81.7" 82.8% 82.3" 84,7" 84.1%



N.A. N.A. N.A. N.A. 80,31í 79.9'1í 80,9% 83.6% 84.5% 85.0% 84.4% 85.6% 85,4% 86.2" 86,0% 87.2" 87.3'6 88.6" 88.5'6 89,5% 89.8" 90.1% 89.6" 88.7% 88.1'6 89.0'6 88.3% 88.1'6 87.7" 89.2" 90.19'

IDloííilíi üíiiíihi lliiííííiííi N.A. N.A. N.A, N.A. 83.0% 86.5% 86.2" 89.19' 89,9" 89.3" 89.8% 90,7" 90.7% 90,7" 91.6'6 92.7" 92,8'6 93.6'6 93.9" 94.1% 94.0% 93.4'6 92,7" 91,6% 92.8'6 94,2% 92.8" 92,4" 92.8" 93.0%

N.A, N.A. N.A. N.A. 87,8" 90.3% 89,6" 92.3" 93.0% 93.1% 93.39' 94,2" 94.0% 95,1% 95.1'6 95,7"

...... ...... 96,8% 96.8'6 96.4%

95.4'6 94.3'6 95.1'6 95.7" 96.4'5 95.5" 95,2'6 95,3"

N.A. N.A. N.A. N.A. 90.4% 93.1% 91.8" 94,79' 95.2" 95.0% 95,5% 96.7" 96.7% 97.8'6 97,0% 97.7'6 98.2% 98,7% 98,4% 97.8% 97,4% 96,1% 96,39' 96.9" 97,3" 97.8'6 97,1" 97.0%



E11aluated as of. ..

N.A. N.A. N.A, N.A. 92.41í 94.6% 93.3%

......

96.4% 96.5% 97,1'6 98.2" 97.9" 98.9" 98.2% 98.6% 99.1'6

.........,,.

98.4% 97.7" 97.39' 97.8" 98.()% 98.2" 99.0'6 98.1"



N.A. N.A. N.A. N.A. 93,51í 95,81í 94.51í 97.0% 97,4'6 97.5% 98.3% 99.1% 98.9" 99.6% 98.8% 99.2" 99.6% 100.2% 99.6% 98.5% 98.5% 98.3% 98.7" 98.6" 99.1'6 99,9'6



N.A. N.A. N.A, N.A. 94.4" 96,6" 95.1" 98.0% 98.2% 98.S" 99.0% 99.6" 99.4% 99.8'6 99.2" 99.5'6 99,8% 100,3% 99,6" 99.1'6 99.2% 98.7" 99.1'6 99.3'6 99,6"



N.A, N.A. N.A. N.A. 94.9'1 97.1% 95.7" 98.4'6 98.791! 98.9'1 99,3'6

......

99.6" 100.0,C 99.3'6 99.6" 99.9" 100.2% 99.9" 99.5% 99,796 99.2% 99.69' 99.5"



N.A. N.A. N.A. N.A. 95.3" 97.41í 96.2" 98.79' 99.09' 99,4" 99.5% 99.9" 99.6" 100.2" 99.4'6 99.7" 100.0% 100.4% 100,2%

.........,,.

99.4% 100.0%



N.A. N.A. N.A. N.A. 95.5% 97.5% 96.4% 98,8% 99.4" 99.6" 99.6" 100.0% 99.8" 100,2% 99.4'6 99.7" 100,2'6 100.6% 100.3" 99.8% 100.0% 99.6"



í.wlííiíílíi N.A. N.A. N.A. N.A.

.....

97.8'1i 96,5% 99.1% 99.5% 99.7" 99.7" 100.1'6

...... ......

100.3'6 99.4'6

100.3'6 100.8" 100.4'6 100.0'6 100.1'5

N.A. N.A. N.A. N.A. 96.1% 91,09' 96.7" 99.2% 99.6" 99.7" 99.7" 100.1% 99,9" 100.3% 99.5'6 99.9" 100,4'6 100.9% 100,6'6 100.19'



N.A. N.A. N.A. N.A. 96.2" 98.1% 96.8" 99.2" 99.6% 99.B 99.7'6 100.2% 99.9" 100.3% 99.6" 100,0% 100,4'6 101,0% 100,6"

Notes: Pald to lncurred ratlos are based upon the dollars of pald loss and lncurted loss found In Appendl>i 8, Page 13 and Page 16, respectlVely.

-

-

Appendlx B Page 19

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

-

-

Permanent Partial

Loss Cost Trend $0.370

$0.320

! J

$0.270

$0.220

$0.170

$0.120

(1)

Accldent __!!!!:...._

Earned Payroll csoos¡

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

$202,420,000 215,080,000 226,330,000 238, 750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243, 760,000 242, 156,580 233.992,560

(2) Prelimlnary Ultlmate Lon !SOOOs) $66,000 62,500 57,500 59,750 60,000 63,000 62,250 62,000 69,000 62,500 52,005 40,672 34,688 41,502 55,590

(3) Loss Cost per $100 of Payroll [Sl,000 x !2l] I !ll S0.326 0.291 0.254 0.250 0.245 0.259 0.256 0.272 0.297 0.263 0.225 0.162 0.142 0.171 0.238

(4) Percent

Change -10.7% -12.7% -1.6% -2.0% 5.7% -1.2% 6.3% 9.2% -11.4% -14.4% -28.0% -12.3% 20.4% 39.2%

Years Revlewed

2001 /02 2001 /02 2001 /02 2001 /02 2001 /02 2002/03 2003/04 2003/04 2004/05 2004/05 2004/05 2006/07 2006/07 2009/10 2013/14

------(5)

(6) (7) (8)

Exelude

0.997 0.215 0.392 0.590 0.478 0.524 0.494 0.653 0.790 O.SOi 0.560 0.437 0.540 0.971 0.974

-11.7" -1.4% -3.0% -4.4% -3.5% -4.3% 1.3% 2.5% 3,4% 2.1% 1.3%

5elected for accident years 2001 /02 through 2003/04 Selected for accldent years 2003/04 through 2009/ 1O 5elected for accldent years 2009/1 O through 2013/14 Selected for accident years 2013/14 and Subsequent

-10.0% 2.5% -12.0% 2.5%

2003/04 2011/12 2012/13 2014/15 2015/16 2014/15 2008/09 2009/10 2009/10 2010/11 2010/11 2012/13 2012/13 2013/14 2015/16

2009/10 2009/10

Notes: Column (1) has been provlded by the Puerto Rico State lnsurance Fund Corporatlon.

For accldent years 2001 /02 through 2010/11, Column (2) is taken from Appendlx B, Pa9e 4, Column (9). For accident years 2011 / l 2 through 2015 /16, Column (2) Is equal to the average of Columns (3) through (5) of Appendlx B, Page 4. Llnes (5) through (8) are selected based on judgment, after a revlew of the curve fits above.

-

Exponentlal R-Sguared Trend

-5.9" -5.9" -17.8" 29.5%

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partlal

Appendix B Page 20

Loss Trend $100,000 $90,000

1~

$80,000 $70,000 $60,000

1

$50,000 $40,000

1

$30,000 $20,000 $10,000

+-....---.---,---,~.---..-...---,---,---,~...-..-...---,---,---,~.---..-...---,---,---,~...-..--.--,---.--.---,~..--.---.--,

$0

,~~#~~~~$~$~~;~~~~~~~f~~~~?~~~~~~~~ ~ ~ ~ ~ ~ ~ ~'~·~ ~ ~~~-~~~ ~-~~-F~W~ ~ ~~~~·~~~~~~~~·~ ~ ~ ~ ~ ~

~

Accldent Year

Accident Year 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011 /12 2012/13 2013/14 2014/15 201 5/16

(1) Selected Ultimate Loss (SOOOs) $23,606 26,031 27,420 31,404 53,000 57,500 63,000 66,600 74,000 75,500 78,500 85,000 85,750 84,500 83,000 75,500 75,000 72,500 66,000 62,500 57,500 59,750 60,000 63,000 62,250 62,000 69,000 62,500 52,750 42,500 38,000 43,500 53,500

(2) Percent Change 10.3% 5.3% 14.5% 68.8% 8.5% 9.6% 5.7% 11.1% 2.0% 4.0% 8.3% 0.9% -1.5% -1.8% -9.0% -0.7% -3.3% -9.0% -5.3% -8.0% 3.9% 0.4% 5.0% -1.2% -0.4% 11.3% -9.4% -15.6% -19.4% -10.6% 14.5% 23.0%

Years Reviewed 1983/84 1983/84 1983/84 1987/88 1995/96 1995/96 1995/96 1995/96 1995/96 1995/96

Exclude

-

1986/87 1995/96 2015/16 1995/96 2003/04 2010/11 201 5/16 2015/16 - '2015/16 - 2015/16

-

2010/11 2013/14 2010/11 2013/14

Exponential R-Sguared Trend 0.972 0.891 0.040 0.970 0.957 0.618 0.740 0.769 0.746 0.773

9.5% 12.4% 0.7% 6.3% -4.9% -2.2% -3.0% -3.1% -2.7% -2.8%

-

Notes: For accldent years 1983/84 through 2000/01, Column (1) is taken from Appendix B, Page 3, Sheet 2, Column (6). For accident years 2001 /02 through 2015/16, Column (1) is taken from Appendix B, Page 4, Column (9).

-

-

~!CO · Sf ATE l'ISURANCE ~Ul>IO COR,ORATION WOR~ERS COMP'ENSATIO~

.....

PUEIITO

, ... u

'•Vo
-

~---12.!.lliL...---1!!.!.!L!L-.---12..!.lL!L_~~~~~~~~~~~ (2¡"-'tdedbHrwi

6/)0/17

:;:~:::

-

6/30120 6130121 6130122 6/)0¡2) 6130/24 61].(1125 6110/26 6/l0/27 6130/21 6/30129 6/30/10 6/30/31 6/30/U 6130/H 6130¡34 6/30¡]5 6/30/36 6/30117 6/30/ll

:;:~~!~

:::~~:~

-

112,06S,OOO

SI0,2SS.OOO

1,ns.ao2

2,590,SU

2,207.671

1,134,134

SS0,921,500

112,064,000

119,074,000

114,412.000

11,116,853 1),229,442 l,46&,112 5,064,171 l,lH,ln 2.l56,Jl7 1,Sll7,52S l,Gl6,610 773,291 519,039 447,ISl 351,305 252,191 22J,4H 176,124 146,419 122,412 103,792 11,412 76,444 65,901 57.396 50.127 44,257 39,673 35.039 31,525 28,411 25,362 22,116 ll,217 18,742 17,621 15,584 14,566 13,547 12,521 11,459 10,389 9,UO 'i.422 1,301 7,M3 7,7U 6,04 6.264 6,264 !i,704 5,246 5,H6 4,685 4,685 4,176 4,176 1.667 3,722

10,1§1,131 6,944,710 4,153,763

6,244,465

4,195,636

J,7l4,U7

Ut6,220

2,506,991

l,247,S41

1,"4,10

n2,,s1

1.11•. 201 101,JH S70,JJ2 434,09 129.770 2S9.0l2 115,HI 164,710 130,421 107,971 90.296 76,563 &S,214 56,313 41,620 42.325 37,461 32,655 29,240 25,&45 23,270 20,962 11,712 16,823 15,660 1),110 13,00I 11.S02 10,no O,HS 0.232 l,4SO 7.617 7,216 6,943 6,141 5,779 5,741 !i,016 4,05 4,615 4.215 ).l!iJ 3.153 3,471 J,471 3,090 3.000 l,709 2,711

1,063,144 7S6,60I 576,)09 07,417 JO,H& 20,741 211,512 173,024 143,2)6 119,793 101,50 16.511 74,791 64,4t9 56.16) 49,70& 0,313 31,101 34.301 30,&74 27,791 24,1)0 22,320 20,711 11.U7 17,253 15,lSO 14,237 ll,259 12,234 11.20& 10.113 9,676 0,211 1,144 7,673 7,6l!i 6,660 6,141 6,141 5,\74 S.116 5.116 4,609

07,147

US0.7U 1.)10.327 Hl,251 04,290 41),140 H,6,141 211,127 206,145 113,20 145,051 120,010 100,424 IS,130 n,5H 62,615 54.060 47,070 41.613 16.296 32,545 21.761 25,876 21,111 20,810 11,725 17,411

l,'69,409 1,31),540 900,246 '40.6'5 411,00S )70,446 291,036 20l,93l 115,093 146,512 121.291 101,4U IS,H6 73.256 U,326 S4,621 47,560 42,097 16,679 Jl,IS9 29,040 26,10 23,535 21.027 11,194 17,S97 IU22 14,&14 12,911 12,041 11,227 10,162 9,49&

1,50.0H

2,7U,US

616.216 S1U6S 40U09 219,540 256,491 203,0)9 161,079 140,US 119,114 101,514 87,762 75.692 6s.lff sa.no 50.ll4 45,512 40,251 )6,221 32,621 29,1'.M 26,191 24,386 21.505 20.20 17,905 16,6'5 15,557 14.3S7 IJ,IS7 H,9S7 11,352 10,809 9,547 0.014

541.!>'6 00.914 J09,3k H4.ot5 216.961 179,607 150,205 127,J5S 101,4U U.714 10.176 70.41.

6130/0 6130/44 &/)0/45 6/30/46 6/30/47 6130/41 61)0¡49 61)0/50 6/JO/SI 6110/52 6130/53 6130/54 6/30/55 6110/56 6/30157 6/10/58 6/30/59 6110/60 6/Ml/61 6130/62 6/Ml/63 6/1(1/64 6/30/65 6/30/66 6/30/67 6/30161 6/30/60 6/30/70 6/30i71 6/Jo1n

,uso

14,461 12,794 11,92& 11,126 10,260 9,305 1,529 &,112

1,n1

:::!: 6,JII S.S79 5,152 5,162 4,UI 4,297 4,297 3,141 3,141

J,431 ),01 ),014 2,910

1,633 a,11& 7,797 6,09 6,500

!::~~ 5,203 5,203 4.n1

4,JJI 4,331

"" ),906 J,47)

3,473 3,041 2,999

'·"' '·"'

4,090 ),Sil 3.Sk

l1h>IH. liM (2/lf IU1n ffam"-11di1r l. Pap 3, Shu1 l. Cdumn (14~ Uno()) 1, l>uedon die p,1',1Nnl pattsrn doriwd on "9Pendix l.,_,. 22,

-

11.no.000

IS,290.000

14,JSl.000

12,119.000

l,IJl,UI IOS.572 611.601 465.790 )65.HI 262.712 2U.7l4 114,224 152,500 127,542 IOl,111 n,10, 79,630 61.'75 S,,79) 52,921 46,lll 4U15 36.517 U.&67 2•.s9• 26,04 2l.76J

142,950 642,077 417,40)

ll!,2CM 471,559

479,416

in,o,a

236,930

239,464

376.644

10.SSI

11o.4n

270.39) H9,Sl9 119,612 156.H2 131,270 111,JOO H .... 11,HO 70,614 61,U9 54,472 '7,451 42,521 17,516 ll,&21 30,462 27,209 24,4U 12,77S 20,0I) 11.'°4 15,717 15,595 14,U9 11,407 12,llS 11,163 10,602 10,098 l,919 l,415 l,151 7,293 6,732 ,.112 6.114 S,610 5,610 S,049 5,049 4,01 4,4H 3.927 J,931

166.145 ll7,5Mi 115,021 ')7,524 13.013 71,117 61.9n SJ,924 47,730 41.Sl6 31,260 12,935 29,UI 26,691 U,Ml 21.431 19,957 17,597 16,!i65 14,64& 11,665 12,731 11.741 I0,765 0,712 9,290 8.141 1.,1, 7,374 7,324 Uto S,191 5,IH

156,913

265,964 215,615 1'6.504 IS4,HO 129,111 109,471 93,254 10,611 6',526 60,532 B,571 46,611 41,824 )6.971 U.271 29,962 26.762 24,057 22,404 19,753 11,596 16,444 15.341 14,292 1),119 12,0&3 IO,NO 10,00 9.931 &,773 1,21, ,.220 7,175 6,612 6,622 6.014 5,519 S.519 4,H5 4,H5 4,416 4,416 3,862 3.156

26il,HI 239.174 119,321 156,122 1)1,(lq 111,121 k,662 11,ns 70,575 61,446 54,)19 47,)86 42,4S7 17.528 33,776 30,415 27,1'5 24,421 22,741 20.052 11.177 16,691 1s.sn 14.507 13,lH 12,266 11.147 10.517 IO,Ol2 1,905 l,403 1.347 7,211 6,721 6,721

200.Ul

112,1111

6,106

4,916 4,916 4,424 4,424 ),9)2 3,932 ),442 3,44!i

m,.ymenUMtil:ip.11edDunn11 12....,..thsEnd,ng

l.9SJ 7,&04 7,209 7,209 6,54)

.... ,,....

5,404 !i,404 4.110 4,110 4,205 4,197

1,Hll,916 1.JH.094 Ml,730

~:!:

o.u, 0,006 18,706 '.M,157

)1,130 27.985 26,061 22.981 21.no 19,132 17,M6 16.626 15,340 14,0S4 12,77& 12,129 11,SU 10,205

::!~ 1.346 7,707 7,707 6.9~ 6,4ll 6,421 5,774 !i,774

s,ns UlS

4,496 4,469

22.lll 19,515 11,167 16,240 15,151 14,119 IJ,024 11,934 10.145 10,300 ,.,11 1.665

•.in

,,120 7.0l3 6.Sll 6,UI S,941 5,449 5,449

..... .....

4.359 4,359 3,114 3,04

274.tol 20,530 192,771 IS9.577 133.451 IIVU 96,JII

,un

11,161 61,567 55,llO 41,241 0,H2 Jl.210 34.HO J0.970 27,&59 24.166 2),156 20,419 19,211 16,995 IS,ISS 14,1n lUU 12.492 11.352 10.777 10,264 9,0'7 8.554 8,4N 7,414 6.144 6.144 6,211 5.704 5.71>1 5,134

UN 4,564 4,564

3.9114 3,997

5.602 S,602 S,041 S,041 4,4&0 4,480 1.920 ).92)

s.n•

lll,2U 111,264 9',776 11.IH 70.661 61.519 54,454 47,444 U.SOi 37,574 B,116 30,451 27,199 24,451 22.169 20,077 1•.~ 15,712 15.590 14.524 1),404 12,20 11,160 10,599 10.094 1.917 1,41) 1,357 7.291

,.n9

6.n, 6.113 \:,607 S,607 S.047 S,047 4,417 4,487 3.925 l,927

174,474 144,432 120,790 IOl,411 17,2)7 7!,416 65,041 56,627 SO,IH 0,670 )9.127 34,516 31,127 21,029 25,035 22,506 20,951 11,410 17,JH 15,)12 14,350 ll.370 12,n6 11,304 10.2n 9,756 0,292 l,20I 7.741 7,'92 6,710 6,194 6,194 5,626 5,162 5,162 4,646 4,646 4,130 4,130 3,614 1,615

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-

-

-

,ut:RTO RICO· ST~TE INSIJRANCE FUNO CORPOl!ATION WORnllSCOMPEN!.ltiTION

Plyo~tolhmolnl"1LQ
$26,000

12,500 ()) ,..,...,..nu....,1Kip,11ed Dunng

12 ....... llliEllding 6110/17

6/30/11

:;!~:~~ 61)0/21 61)0122

6/30/2) 61)0124

6130/25

:;:g:!~

6/)0121 6/30/29 6110/JO 61)0/JI

::!~::~ 6130/34 6/J0/35 6/)0136

6/)0{37

:::~::: 6110140

61)0141 6130142 6/30/43 6/30/44

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2,0IS 1,UI

1.119

1,310 1.171

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PUERTO RICO· STATE INSURANCE fUNOCORPOAATION WOltWISCOMPENSATION

Apper,dl•B Pqe21

Sheel4

(IJAtcidentYear

----1!l2l!.L..

~ ~ ~ ~ -1!ili!§..._ ~ _...!.!lli!!__ _!!ili!L_ __!.!!!l.!L_ ~ ~ $174,094.SOO

{2)N~edR•••-1 (3) PavmenU.Antlclpale
12Mooth1E!ldlng 45,562,4()1) lS,602,096 23,S21,6H 15,125,731 11,107,622 1,009,013 S,!15.4,~9 4,494,529 3,507,451 2,811,701 2,213,10 l,Ul,4H 1,564,923 1,344,969 t,147,733 992.175 866,291 760,UI

6/30{17 6130flS 600/1!1 6/30/20 6130/21 6/30/22 6130/23 6/30/24 6¡)0/25 6/30/26 6/30127 6/30/21 6130/29 6/30/30 6/30/31 6¡30/32 6/30/33 6/30/34 6/10135 6/30/36 6/30/37 6/30/31 6¡30/J!I 6/30/40 6/30/41 6130/42 6/30/43 6130/44 6/30/4S 6/30/46 6/30/H 6/30/0 6/30/0 6130/SO 6/30/SI 6/30/52 6110/U 6130/54 6130/55 6/30/56 6130/57 6130/51 6/30/59

,n.o,

596,913 532,179 471,13!1 430,762 111,640 3S3,2S4 321,262 293,756 261,177 246,590 221.029 209,666 192,163 171,60, 164,416 IS0,975 139,071 127,113 117,744 IN,327 99,911 91,605

o.sas

75,413 67,SlO 59.911 52,996 46,493 40,125 34,ISO lt,102 22.876 17,1141 13,315 9,901 6,647 3,722

6/30/60 6/30/61 6/30/62 6130/6! 6130/6-4 6/30/65

6/30/66 6/30/67 6/30/61 6/30/69 6/30/70 6/30/71 6/301n

Notu: Llne (2) is talten ftom,f.¡,pendllr 1, Page 3, Shu1 1, Column (14). Une (3) is baud <>ti the p,.yment pattern det~ on Api,enili~ l.

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1.4780!5 1.usa 0,1546"' 0,5714" 0.41201' 0,41701' O.U80!5 0,2798" 0.23401' 0.1914" 0.169°" 0.1461S O.IZ&oll. 0.1097" 0,0971" O.Ol4ft o.onn 0,067(111; 0.060:tll. o.oso• 0.0415" 0.04)0 0.0406" o.o n a 0,0))7" O.OZtn

19,37J7111, 14.1570Jr; 11.202111 l,I001S 15.JIIIW. 5.5971,i; 4.4105. 3.6576" J.0573'1

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Z.2153" 1.9151" \,1551"' l.4)10Wi I.Z721S 1.1089" 0.99Jb 0.1712" 0,7904,r, 0,7118" 0.15357"' 0.5715,r, 0.5322" 0.4593" 0.4417'5 0,J!IOfiK 0.1644" 0.339$,i; O,JIUS O.Zl11S 0.2609Ji 0.2477" o.zn• 0.2064X 0,196b 0.1953" 0.1704S 0.1573" 0.1573'1: 0.142"' 0.13111' 0.1311!l 0,IIIOJI. O.lllDIII 0.1049" 0.1049" 0.0918" 0.0911S

Notl!1:Column(A)Kt.1kenlra111Appendl•I.Pa,123,ColumnC31.

0.154&r. 0.5714" 0.4120,C 0.42701' o.uaca 0,279ft o.2wo,r, 0.1914" O.l&IIOIII 0.14151" 0.1260lló 0,1091S 0,0971• 0,0845" 0.075111 0.067'* 0.050. 0.0543" O.D415• 0,0436"

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0.03S8" o.on,w. 0.02,n 0,02,a O.D2S9" O.OZ39" 0.0219" 0,019911 0.0119" 0,01IO!I 0.015!1111 o.ono,r, 0.0149" O.DIJo,r. 0.0120Jr; 0.0120il0.0109" 0.0106" O.OIOOII.

............. 0,009DIII

o.lUIW. 0,6714111 0,41201' 0.427(),i; O,UIO'll, O,UIIK O,U40II. 0.1914" 0.119°" 0,1461S 0.1260!I 0.1097" 0.0971• 0.0146" o.onn O.Ofi70w. 0.0603" o.oso,r, 0.0415" 0,041"' 0,040liS o.ona,r, 0.0337"' 0.0298" 0.027"' 0,0259" 0.0239"' 0.0219"' 0.0199111 0,0119"' 0.011()111 0,0159" 0.015(111; 0.0149" 0.0IJOII 0,0UO!I O.OIZOW. 0,0109"

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1.200DII. 1.08051' 0.95$2" 0,1670. 0.8079" 0.1124• 0.6706" 0.59JO!I o.ss12• 0,51541' 0.4756" o.o5n O.J960!I 0,1761• 0.)512" 0,1164" 0.2915!l 0.29651' 0.2517" 0.236"' 0.2Jln 0.2169" 0,199°" 0.199°" D.1791!l 0.1791• 0.1592" D.IS92" 0.1393" 0.1199"

0,57147' 0.41ZO!I 0,4270!I O.HSOK 0.279"' O.ZMO!I 0.1914. 0.1159°" 0.1461" O,IZ&OIII 0.1097" 0.0971•

.......

o.onn 0.0670W, 0.0603• 0.054~ 0.0465" 0.0430. 0.0406" 0.0JStw. O.OU7"' 0.029"' 0.027"' 0.0259" 0.0239111 0.0219"' 0.0199!11 0,0119" 0.0180!5 0.0159" o.o,sow. 0.0149" 0.011D!I 0,0\ZOW. 0.0120III 0,0109" 0.0IOOIII O.OIOOIII

........ ...... ....... ....... O.OD70!I O.OD70S

15.otln 11.5574. 10.2316" 1.1045" 15.10901' 5.610ft 4.7572" 4.0521'1 J.S032" J,0212" 2.5104" 2.3213'1. 2.021s• 1.11,s,i; l,6065W. 1.4459" I.J020S 1.1629" 1,0454,i; 0.9715" 0.8514" O.IOIIS 0.7145" 0.66667' 0.62101' 0.573111, 0.52517' 0.4772" 0,4S32" 0.4316S 0.1112,i; 0,1597" O.JS7J• 0.)117" 0,2171" 0.2177" 0.2614" O,U9"' 0.2Jllb o.2n• O.Z15n 0,191"' 0.191ft o.1&1n O.IUOIII

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0.4270JI, O,JHOJI. o.21t• O.ZJ40X 0.19H,r, O.l&tOlr. O.l4t\,i; O.IHOX 0.1097'5 0,0971"

0.0846" 0.0758" 0,067°" 0.0603" 0,0543" 0.0415" 0.0416" 0.0406" 0,0158" o.ou,w. 0,02,a 0.0278'1 0.0259!1 0.0239" 0.0219" 0.019911. O.DIOS 0,0IIOII. 0.0159" o.01so,r. 0.0149" O.OIJOJI, o.012o,r. 0.0120. 0.0109'I 0,010C*, 0.010C*

....... ....... ....... O.OO&o,r. o.001o,r, o.oo,o,r,

IJ,7750lr. IUOJl,i;

....us,.,. ....... 7,ff6)W,

5.li700lr. 4.1298" 4.1754"

J,1)51" 2.7750ll 2.4178" 2.1613'1 l,9141X 1.7213" l,5518" I.JHl1' 1.246°" 1.1603" l,OUIS 0,9631,r, 0,1515" o.,... s• 0.7402" 0.61)0Wi 0.6259" 0,5667"' o.54011, 0,5144" 0.45441' 0.4217" 0.425n O.l715S D.1429" O,J429" 0.1115" o.zas• D.Jl58'1 0.2572" 0.257211, 0.221• O.ZH6" 0.2001,i; 0.2004"

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o.oJSn o.on,w. 0.0291Sr. 0.02,n 0.0259" 0.0239'11 0,02191Jl 0.0191!11 0,0119JI

o.011os 0.015!* o.on°" 0.0149111 0.01301' o.oucs D.0120ll 0.0109"' O.OIOC* O.OIOOIII

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l.2207" 1,91116" 1.7997" 1.6075" 1.4451" 1.)457'C l.116ft l.111flll 0,9177"' 0,921D.1514" 0.7922" 0,7259"' D,6596" 0.6264" 0.5966" 0.5270III 0.4972" 0.4939"' O,ODt!I 0.3971'1!, O,J977'C 0.3613" 0,3]14" O.U14S 0.2913" 0,2,a¡,c. 0.2652" D.26521& O.ZJZB 0.2319JI

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12,42401l IO,J90JIII

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O.U40III 0.1914111 0.1690!' 0.1461X 0.1260III 0,109711 0.0971,r, 0,0&4Qr; 0.07Sl'M 0,067Q!II, O.OIOJIII 0.0543" 0.0415111 0.04)6"

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o.onn O.OU7'1i 0,0Ztlll 0.0Z11S o.orna 0.02)9" 0,0219!1 0,019911 0.01"" O.OIIQl!li 0.0151111 O.OISOlli O.Ol491l O.OJJOlli 0,0IZIN 0.0\ZIN 0.0109" O.OIDOII O.OIDOfll,

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0.1914111 0.1691a 0.1461111 0,1261* 0.1097'1. 0.0971111 O.Ol46fl

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-

-

-

-

.,..

-

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Partial

Appendix B Page 23

Payment Pattern (1)

Maturity (in Months)

Paid Age to Ultimate LDF

12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672 684

37.57159 3.95490 1.97745 1.49807 1.30836 1.20586 1.14625 1.10749 1.08259 1.06554 1.05291 1.04352 1.03626 1.03111 1.02659 1.02304 1.02012 1.01769 1.01564 1.01390 1.01240 1.01111 1.00999 1.00900 1.00814 1.00737 1.00669 1.00608 1.00553 1.00504 1.00460 1.00419 1.00383 1.00349 1.00319 1.00291 1.00265 1.00241 1.00219 1.00199 1.00180 1.00162 1.00146 1.00131 1.00116 1.00103 1.00091 1.00079 1.00068 1.00058 1.00048 1.00039 1.00030 1.00022 1.00014 1.00007 1.00000

(2) Cumulative Percent of Loss Paid

1.0 ! (1)

lnterval (In Months)

Estimated Percentage of Loss Paid in lnterval

2.6616% 25.2851% 50.5702% 66.7526% 76.4316% 82.9284% 87.2410% 90.2943% 92.3711% 93.8491% 94.9749% 95.8295% 96.5009% 96.9829°.....6 97.4099°.....6 97.7479°.....6 98.0277% 98.2617% 98.4601% 98.6291% 98.7752% 98.9012% 99.0109% 99.1080% 99.1926% 99.2684% 99.3354% 99.3957% 99.4500% 99.4985% 99.5421% 99.5827% 99.6185% 99.6522% 99.6820% 99.7098% 99.7357% 99.7596% 99.7815% 99.8014% 99.8203% 99.8383% 99.8542% 99.8692% 99.8841% 99.8971% 99.9091% 99.9211% 99.9320% 99.9420% 99.9520% 99.9610% 99.9700% 99.9780% 99.9860% 99.9930% 100.0000%

o- 12 12 - 24 24 - 36 36 - 48 48- 60 60 - 72 72 - 84 84 - 96 96 - 108 108 - 120 120 - 132 132 - 144 144 - 156 156 - 168 168 - 180 180 - 192 192 - 204 204 - 216 216 - 228 228 - 240 240 - 252 252 - 264 264 - 276 276 - 288 288 - 300 300 - 312 312- 324 324 - 336 336 - 348 348 - 360 360 - 372 372 - 384 384 - 396 396 - 408 408 - 420 420 - 432 432 - 444 444 - 456 456 - 468 468 - 480 480 - 492 492 - 504 504 - 516 516 - 528 528 - 540 540 - 552 552 - 564 564 - 576 576 - 588 588 - 600 600- 612 612 - 624 624 - 636 636 - 648 648 - 660 660 - 672 672 - 684

2.6616% 22.6235% 25.2851% 16.1824% 9.6790% 6.4968% 4.3126% 3.0533% 2.0768% 1.4780% 1.1258% 0.8546% 0.6714% 0.4820% 0.4270% 0.3380% 0.2798% 0.2340% 0.1.984% 0.1690% 0.1461% 0.1260% 0.1097% 0.0971% 0.0846% 0.0758% 0.0670% 0.0603% 0.0543% 0.0485% 0.0436% 0.0406% 0.0358% 0.0337% 0.0298% 0.0278% 0.0259% 0.0239% 0.0219% 0.0199% 0.0189% 0.0180% 0.0159% 0.0150% 0.0149% 0.0130% 0.0120% 0.0120% 0.0109% 0.0100% 0.0100% 0.0090% 0.0090% 0.0080% 0.0080% 0.0070% 0.0070%

Notes: Column (1) is taken from Appendix B, Pages 11 and 12.

-

(3)

-

Appendlx e Page 1

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total Prospectlve Loss Forecasts

Accldent Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Selected Ultlmate Loss

Payroll !SOOs)

Loss Cost per $1 00 of Payroll (1) ! (2)

Loss Cost Trend Factor

Trended Loss Cost per S 100 of Payroll !3>x !4)

Projected Payroll !SOOs)

Estlmated Loss Cost per $100 of Payroll

ProJected Loss !6)x!7)

S 14,500,000 13,750,000 14,500,000 40,150,000 36,750,000 36, 150,000 36,050,000 34,250,000 34,000,000 27,000,000 17,000,000 16,000,000 16,250,000 11,500,000 8, 175,000

$202,420,000 21 5,080,000 226,330,000 238,750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242, 156,580 233,992,560

S0.072 0.064 0.064 0.168 0.150 0.148 0.148 0.150 0.146 0.114 0.074 0.064 0.067 0.047 0.035

N.A. N.A. N.A. 0.243 0.247 0.251 0.254 0.258 0.262 0.328 0.410 0,512 0.640 0.800 1.000

N.A. N.A. N.A. 0.041 0.037 0.037 0.038 0.039 0.038 0.037 0.030 0.033 0.043 0.038 0.035 $242,000,000 242,000,000 242,000,000 242,000,000 242,000,000

2016/17 2017/18 2018/19 2019/20 2020/21

(9)

Notes:

Avg (Ali Yrs) Wtd Avg (AII Yrs) Wtd Avg (Latest 5) Wtd Avg (Lates! 3) Wtd Avg (Latest 2) Wtd Avg (AII Yrs Excl HI/Lo)

$0.037 0.037 0.036 0.039 0.036 0.037

Selected for accldent year 2016/17

S0.037

S0.037 0.037 0.037 0.037 0.037

Column (1) Is taken from Appendlx C, Page 4, Column (9), Column (2) has been provlded by the Puerto Rico State lnsurance Fund Corporation. Column (4) reflects trendlng to accldent year 2016/17 based upan the loss cost trends taken from Appendlx C, Page 19, Unes (5) through (8). Column (6) Is based on the payroll for accldent years 2013/ l 4 through 201 5 / 16 and an annual payroll trend factor of 0.0%, selected based u pon Judgment after a revlew of the hlstorlcal payroll provlded by the Puerto Rico State lnsurance Fund Corporatlon. Column (7) Is based u pon Llne (9) andan annual loss cost trend factor of 0.0%, taken from Appendlx C, Page 19, Line (8). Llne (9) Is selected based upan judgment after a review of Column (S).

$8,954,000 8,954,000 8,954,000 8,954,000 8,954,000

-

-

-

-

-

Change In Loss Reserves from 06/30/15 to 06/30/16

Accident Year

-

-

-

-

-

Appendlx e Page 2

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

1960/61 1961 /62 1962/63 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 1971 /72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981 /82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/l O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

(1)

(2)

(3)

Needed Loss Reserves as of 06/30/16

Needed Loss Reserves as of 06/30/15

Change in Reserves (1) - (2)

$20,000 13,000 100,000 55,000 140,000 250,000 350,000 500,000 1,000,000 1,200.000 1,250,000 1,500,000 1,650,000 1,750,000 1,800,000 1,900,000 2, 150,000 2,250,000 2, 150,000 2,450,000 2,500,000 2,400,000 2.000,000 2, 100,000 2,500,000 2,850,000 3,250,000 6,750,000 7,250,000 7,500,000 8,600,000 8,900,000 8,900,000 9,600,000 10,500,000 9,100,000 10,000,000 10,250,000 9,000,000 8,750,000 8,750,000 9,006,000 8,748,000 9,773,000 29,727,000 28,229,000 29, 183,000 30,279,000 29,941,000 30,864,000 25,441,000 16,162,000 15,725,000 16,097,500 11,439,000 8,036,025

7,598 38,989 30,539 80,596 125,806 220,115 223,413 876,744 1,021,813 955,430 1,204, l 76 1,451,653 1,365,200 1,536,654 1,551,050 1,875,938 2, 108,543 1,563,717 1,809,791 1,873,028 1,763,789 1,358,692 1,241,918 1,614,873 2,053,986 2,319,733 6,653,618 6,473,098 7,296,892 9,085,882 9,803,613 8,747,545 9,542,896 10,094, l 48 8,055,270 9, 167,958 9,004,439 7,116,955 7,863,945 7,874,000 6,799,000 7,170,000 7,753,000 25,436,000 24,362,000 25,302,000 25,837,000 24,912,000 24,076,000 23, 129,000 21,731,000 26,254,650 26,248,000 25,872,000 N.A.

2014/1 5 and Prior

$454,542,500

$441,951,451

$12,591,049

Total

$462,578,525

N.A.

N.A.

Sl 5,758

$4,242 5,402 61,011 24,461 59,404 124,194 129,885 276,587 123,256 178,187 294,570 295,824 198,347 384,800 263,346 348,950 274,062 141,457 586,283 640,209 626,972 636,211 641,308 858,082 885,127 796,014 930,267 96,382 776,902 203,108 (485,882) (903,613) 1 52,455 57,104 405,852 1,044,730 832,042 1,245,561 1,883,045 886,055 876,000 2,207,000 1,578,000 2,020,000 4,291,000 3,867,000 3,881,000 4,442,000 5,029,000 6,788,000 2,312,000 (5,569,000) (10,529,650) (1 0, 1 50,500) (14,433,000) N.A.

Notes: Column (1) Is taken from Appendix C, Page 3, Sheet 1, Column (14). Column (2) is taken from Aon's report on the Puerto Rico State lnsurance Fund Corporation's needed loss, LAE, and Return Premium liability as of June 30, 201 S.



APfll!ndbrC

PUEIITO RICO- STATE "'5llltANCE FUNO CORPOAATION WORKERS COMPENSA.TION Puffilllln!TO!al

AccldentVur

1960/61 1961/62 IH2/63 196)/64 lt64165 1965/66 1966117 1967161 1961/69 1961170 1170171 1971172 1972173 1973/74 1974/75 1975176 1976/77 1977/71 1971179 1979110 1110,11 1911/U 1912113 1913/14 1914115 1915116 19161&7 1917111 1911119 1919190 1990191 1991;92 199ZJ9J 199)/94 1994/95 1995196 1996/97 1997/91 1991/99 1999/00 2000,01 2001/02 200ZJOJ 2003/04 2004/05 2005/06 2006/07 2007/0I 200l/09 2009/10 2010/11 2011/12 !012/13 l013/14 2014115 2015116 foíal

Shu1!

IIJ

...

5elec:ll!d Ultifflllil

.

....

112.579,491 12,142,)H l2,70S,60I 12,769,IH 12,IJ2.911 12.197,146 12,961,632 1),026,440 13,091.572 13,157,030 13,222.115 13.216,930 13.355,374 13,422,151 13,4&9,211 1),556,701 13,624.492 13,692,614 IJ,761,077 IJ.129.&13 13,199,032 1).961,527 14,031.170 14,IOl,562 14,17',104 13.126.000 14,512,000 24,500,000 24,500,000 24,500.000 25.000.000 24,000,000 Z4,500,000 24,500,000 25,500,000 21.200.000 21.aoo.000 21,000,000 11,371,000 16,500,000 16,500,000 14,500,000 13,750,000 14,500,000 40,150,000 )6,750,000 )6,150,000 36,050,000 34,250,000 )4,000,000 27,000,000 17,000,000 16,000,000 16.250,000 11,500,000 l,175,000

il.6J6.ili.J46

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....

0.991 o.,13

112.579,491 12,M2,3H ll.705.608 12,769,IH ll.lJl.111 12.1117.146 12,961,632 1),026,440 1),091.572 13,157,0JO IJ,2J2,115 13.211.930 1),155,374 1),422,151 13,419,262 1),556,701 13,624,412 n.au,614 13,761,077 IJ.129,Hl IJ.191,032 13,961.527 14.031.370 14,IOl,562 14,179,104 13.121,000 14.512,000 24,S00,000 24,500.000 24,500.000 25.000,000 24,000,000 24,500,000 24,500.000 25,500,000 21.200.000 21.100,000 21,000,000 11.)71,000 16,500,000 16,500,000 14,500,000 1),750,000 14,500,000 40,150,000 36,750,000 H,150,000 )6,050,000 )4,250,000 34,000,000 27,000,000 17,000,000 16,000,000 16.217,500 11,454,000 l,0)6,025

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CaHloU IIHIMII illOf06/30'16

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lndluiled Ibis bMMII H of 06/30/16 U•!!,-·PÍÍci lncurrÑ óut11i1ñdlng O.V.1Dp!Mn1 Di11,e1Dp,.,.n1 n..lD~nt FiitlOr Fildor

''""

~~,~~~----lll..!...m.......W....:...~ I.OSl34 1.0650 1.07211 l.0&049 1.08149 1.09614 1.10555 1.11416 1.12411 1.1)415 1.14460 1.15557 1.16710 1.1792) 1.19201 1.20550 1.l1975 1.23414 1.l5014 l.l6713 1.21592 1.30521 U25U 1.14792 1,)7164 1.39719 l.4l471 1.45461 1.41715 1.52251 1.56131 1.60405 1.65120 1.70356 1.76204 1.12775 1.90211 1,91690 2.0144) 2.1977) 2.33012

5.512"" 6.1412'5 6.716a 7.4494" 1.129"' 1.1290f(. 9.5473" IG.2165" 11.0463'1 11.1212'5 12.6332'5 13.462h 14.317S. 15.191. 16.1081" 17,0419" 11.0l&(IIC, 19.0178" 20.05)7'6 21,1251" 22.2)4~ 2).3"'°" 24.5755" 25,1116" 27,0946" 21.4278'1i 29.1117" Jl.2554". 32.7573'5 34.322ta 35.9541'5 17.6578" 39.4)1(a 41.H94" 41.2476" 45.2179,& 47.426"' 49.6703"

52.025)" 54.4915"' 57,0966"

1.02503 1.02105 1.03119 1.03444 1.03711 1.04135 1.04502 1.04115 1.05214 1.05701 l,0&137 1.06594 1.07072 1.07573 l.0&100 l,0&654 1.09237 1.09153 1.10502 1.11190 1.11911 1.121191 1.1)51) 1.14)19 1,15324 l.lli326 1.17400 1.11556 1.19104 1.2115) 1.21619 1.24217 1.25964 1.27&15 1.30005 1.)2)5& 1.34915 1.37935 l,41274 1.45083 l,49469

2.4419Jl 2.7215'1 3.0241'5 3.1293'1 3.645n, 3.97°"' 4.30II" 4.6575" 5.01,n 5,19)5" 5.7121" 6.1161" 6.6049" 7.0399" 7.49)1" 7.9647'6 1.4559!1 1.969)" 9.50)9'5 10.06)9" 10.6419" 11.2118'1i 11.9044" 12,5790& 11.211n 14.0347" 14.12111' 15.6517" 16.5)015 17,4597'6 11.446615 19.495~ 20.6122" 21.1047111 2),07"" 24,447311 25.9177" 27.5021" 29,.2150 Jl,0739"

J),0965"

1.79SJ6 1,79960 1.10117 1.80807 1.11215 1.11736 1.12211 1.12741 1.13265 l,11114 l,14392 1.15011 l,1561& l.&1212 1.16975 1.17691 l,H452 1.19256 1.90084 1,90911 1.91910 1,92199 1.0951 1.95051 1.96231 1.97509 1.91151 2.00308 2.01167 2.0J544 2.05)61 2.07345 2.0MU Z.11149 2.14440 Z.17307 2.20497 2.24060 2..21085 2.12656 2.)7900

1693,432 776,395 162.304 951,224 1.00.210 1,131.619 1,237,416 1,339,965 1,446,134 1,556,240 1,670,465 1,719,035 1,912,156 2,040,019 2,172,864 2.310,991 l.454,SH 2,604,0)4 2,759,605 vm.577 l,090,40I 3,266,400 3,450,000 ),641,646 ),141.772 3,930,421 4,347,434 7,657,573 &,025,539 1.408,190 l,tal,525 9,0]7,172 9,662,)10 10,111,353 11,021,131 9,601,035 10,339,042 10,430,763 9,561,210 1.992,253 9,420,939

SJl2,4H 341.131 410.465 01.197 507,652 514,)91 Hl,9ZJ 746.179 1,020,912 l,19!1.602 1,234,735 1.449.222 l.&IJ.710 1,712,212 1,716,550 1.175,671 2,097,499 2,171,419 2,00,007 2,290,171 2,155,1119 2.356.344 2.229.934 2,)12,714 2,579,747 2,120,79) ),264,156 6,751,692 7,124,161 7,562,209 1,571,119 1.958,)72 9,073.172 9,555.435 10,562,111 1,161.495 9.622.0JI 9,11,64,905 1,124,314 UJ6,417 1.419.024

H.471 5,729 47,117 24,904 72,292 111,156 111,641 256,154 666,971 900,647 161,972 1.160,350 1,)51,121 1,429,464 1,450,525 1,49),9)1 1.711.&73 1,715,221 1,)97,06 1,716,641 1,179,357 1.510,156 1.011.702 1,115,941 1,365,141 1,7Jl,7IO 2.1113.291 5,147,041 6.207,291 6,'85,571 1,147,017 1,171,IJO 1,429.552 1.925,791 10,0)0,294 1,009,214 1,751,094 9,162.154 7,152,415 7,699,107 7,20),15)

55,494,000 5,002,000 4,727,000 10,423,000 1,521,000 6.967,000 5,771,000 4,)09,000 ),116,000 1.559,000 138,000 275,000 120,000 15,000

o

--m:rm,,r

-=

TolillNNdld lmslleMn,es illof06/30/16 120,000 1),000 100,000 55,000 140,000 250,000 350,000 500,000 1.000.000 1.200.000 1,250,000 1,500,000 1,650,000 1,750,000

l,I00,000 1,900,000 2,150,000 2,250,000 2.150,000 2.450,000 2,500,000 2,400,000 2,000,000 2,100,000 2,500,000

2.150,000 ).250,000 6,750,000 7,250.000 7,500.000 1.600.000 1.900.000 1.900,000 9,600,000 10,500,000 9,100,000 10,000,000 10,250,000 9,000,000 1,750,000

1.150,000 9,006,000 1,741.000 9,773,000 29,727,000 21,229.000 29,113,000 )0,279,000 29,941,000 )0,164,000 25,441.000 16,162,000 15,725,000 16,097,500 11,439,000 1,0)6,025

.m:m:m- .m:m:m- .m:m:m-

frmlH: for acclclilnl yun 1960161 Ulrough 1914/15.Columnlll II blled upon lhl ultlffllll lilllcled IDH for 1915/16 thlOUClh 1916117 illld illlilnnuill lDu trendof0.50!5('Mhlch i. blMd 011Judg1,.,.nli1fler il 1Wllwof ~ndi~ C, Pilg1 20!,

forilCcldlnt yurs 1915/16 U11augh 2000/01.Column 11111 tilklnfromAp,-ndhl C. Pilcl• ).Shelt 2.CalumnC6), For ilCCldilnl yurs 2001 /02 thraugh 2015/16, Column 11111 lilkiln from Ap111ndhc C, Pilg1 4, Column 191, Colunml2JillilkilnfromAPP1ndhfF,Pilgl l,Colurm(51. Column 14111 lillten from Apptndi1 C, hgl 4, Colum11 (IJ, Coilmn 151 has bHn provldld by ti."-"° lllco 51111 lnsur111t1 Fund Corporatlon. Column 16111 lilken fmm Ap111ndhr C, Pilgl 12, Shut 1, Column 191, Column l&) lf lilken fnlm Appandhr c. hgl 15, 5hnt 1, Column 13). Cotumn (10) is lilken fromAPP1ndhc C. hgl ), Pilge 3,Column (5). fo, ilCCldilnt yurs 1960/61 thmugh 2000/01, Column 114111111Kted b,aslld uponjl,dgmant ilflilr I l'lview of Columns (5J ilnd (1 \) through ti )J, For i1ccld1n1 yu,s 2001 /02 through ZOl 5111, Colurnn 1141 ll 1t41ui1I IO Column (31 mlnu1Column (4).

(14)

P&B>U.8

-

-

-

-

-

Selectlon of Ultlmate Loss (SOOOs) Accldent Years 1985/86 through 2000/01

(1)

Accldent Year 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 Total

Notes: Column Column Column Column Column Column

-

(2)

(3)

(S)

(6)

lncu rred Loss Development Method

Outstanding Loss Development Method

Selected Ultlmate Loss

$13,826 14,582 25,280 25,822 24,642 25,628 24,679 24,599 24,827 25,961 21.416 22,066 21,561 18,378 17,990 17,962

N.A. N.A. 23,253 24,118 24,163 24,657 23,964 24,721 23,641 26,378 21,670 22,409 22,670 18,379 19,753 20,355

(4) ProJected Ultlmate Loss

-

-

e

Appendlx Page 3 Sheet 2

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

(1) (2) (3) (4) (5) (6)

Is Is is is Is Is

Paid Loss at 180 Months Maturl!}'.

lncurred Loss at 180 Months Maturl!}'.

N.A. N.A. 10,976 11.063 10,094 10,689 10,204 9,833 10,454 10,261 8,501 8,726 8,213 7,383 6,514 6,248

$7,937 8,371 14,512 14,823 14,146 14,712 14,167 14,121 14,252 14,903 12,294 12,667 12,377 10,550 10,327 10,311

$129, 159

$200,470

Paid Loss Development Method N.A. N.A. 27,319 27,536 25,124 26,605 25,398 24,474 26,020 25,540 21, 159 21,719 20,442 18,376 16,213 15,551

taken from Appendlx C, Page 3, Sheet 3, Column (1). taken from Appendix e, Page 3, Sheet 4, Column (1). taken from Appendlx C, Page 3, Sheet 3, Column (3). taken from Appendix e, Page 3, Sheet 4, Column (3). taken from Appendlx e, Page 3, Sheet 5, Column (4). selected based u pon Judgment after a revlew of Columns (1) through (5).

S13,826 14,582 24,500 24.500 24,500 25,000 24,000 24,500 24,500 25,500 21,200 21,800 21,000 18,378 16,500 16,500 $340,786

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Appendix e Page 3 Sheet 3

Projection of Ultimate Loss ($000s) Historical Paid Loss Development Method Accident Years 1985 / 86 through 2000/01

Accident Year 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01 Total

( 1)

(2)

(3)

Paid Loss at 180 months maturit~

Paid 1 80 to Ulti mate Factor

Projected Ultimate Loss (1) X (2)

N.A. N.A. 10,976 11 ,063 10,094 10,689 10,204 9,833 10,454 10,261 8,501 8,726 8,213 7,383 6,514 6,248 $129,159

2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489 2.489

N.A. N.A. 27,319 27,536 25, 124 26,605 25,398 24,474 26,020 25,540 2111 59 21,719 20,442 18,376 16,213 15,551 $321,476

Notes: Column (1) is taken from Appendix C, Page 13, and reflects the paid loss for each accident period at 180 months maturity. Column (2) is taken from Appendix C, Page 11.

-

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Projection of Ultimate Loss ($000s) Historical lncurred Loss Development Method Accident Years 1985/86 through 2000/01

-

Accident Year

.

-

Appendix e Page 3 Sheet 4

1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01 Total

( 1)

(2)

(3)

lncurred Loss at 180 months maturit~

lncurred Age to Ultimate Factor

Projected Ultimate Loss (1) X (2)

$7,937 8,371 14,512 14,823 14, 146 14,712 14,167 14, 121 14,252 14,903 12,294 12,667 12,377 10,550 10,327 10,311 $184, 162

1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742 1.742

$13,826 . 14,582 25,280 25,822 24,642 25,628 24,679 24,599 24,827 25,961 21 ,416 22,066 21,561 18,378 1 7,990 17,962 $320,811

Notes: Column (1) is taken from Appendix C, Page 16, and reflects the paid loss for each accident period at 180 months maturity. Column (2) is taken from Appendix C, Page 14.

-

-

e

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Appendix Page 3 Sheet 5

Projection of Ultimate Loss ($000s) Outstanding Loss Development Method Accident Years 1985/86 through 2000/01

Accident Year 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01 Total

(1)

(2)

(3)

(4)

Paid Loss at 180 months maturi~

Outstanding Loss at 180 months maturi!l'.

Outstanding 180 to Ultimate Development Factor

Projected Ultimate Loss (1) + [(2) X (3))

N.A. N.A. 10,976 11,063 10,094 10,689 10,204 9,833 10,454 10,261 8,501 8,726 8,213 7,383 6,514 6,248

N.A. N.A. 3,536 3,760 4,052 4,023 3,963 4,288 3,798 4,642 3,793 3,941 4,164 3, 167 3,813 4,063

$129, l 59

$55,003

N.A. N.A. 3.472 3.472 3.472 3.472 3.472 3.472 3.472 3.472 3.472 3.472 3.472 3.472 3.472 3.472

N.A. N.A. 23,253 24,118 24,163 24,657 23,964 24,721 23,641 26,378 21,670 22,409 22,670 18,379 19,753 20,355 $320, 131

Notes: Column (1) is taken from Appendix C, Page 3, Sheet 3, Column (1). Column (2) is the difference between lncurred and paid loss found in Column (1) of Appendix C, Page 3, Sheets 4 and 3, respectively. Column (3) Is taken from Appendix C, Page 7, Sheet 2, Column (5) for a maturing of 180 months.

-

-

-

-

-

-

Appendix e Page 3 Sheet 6

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total Derivation of Outstanding LDFs

(l)

(2)

(3)

(4)

(5)

Accident Year

lncurred Loss Development Factor

Paid Loss Development Factor

lmplied Ultimate Loss $1 00,000 X (1)

lmplied Paid Loss (3) / (2)

lndicated Outstanding Development Factor

1960/61 1961 /62 1962/63 1963/64 1964/65 1965/66 1966/67 1967 /68 1968/69 1969/70 1970/71 1971 /72 1972/73 1973/74 1974/75 1975/76 1976/77 1977 /78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987 /88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01

1.02503 1.02805 1.03119 1.03444 1.03783 1.04135 1.04502 1.04885 1.05284 1.05701 1.06137 1.06594 1.07072 1.07573 1.08100 1.08654 1.09237 1.09853 1.10502 1.11190 1.11918 1.12691 1.13513 1.14389 1.15324 1.16326 1.17400 1.18556 1.19804 1.21153 1.22619 1.24217 1.25964 1.27885 1.30005 1.32358 1.34985 1.37935 1.41274 1.45083 1.49469

1.05834 1.06543 1.07281 1.08049 1.08849 1.09684 1.10555 1.11466 1.12418 1.1341 5 1.14460 1.15557 1.16710 1.17923 1.19201 1.20550 1.21975 1.23484 1.25084 1.26783 1.28592 1.30521 1.32583 1.34792 1.37164 1.39719 1.42478 1.45466 1.4871 5 1.52258 1.56138 1.60405 1.65120 1.70356 1.76204 1.82775 1.90211 1.98690 2.08443 2.19773 2.33082

$102,503 l 02,805 l 03,119 l 03,444 l 03,783 l 04,135 l 04,502 l 04,885 l 05,284 l 05,701 106,137 l 06,594 l 07,072 107,573 108,100 l 08,654 109,237 l 09,853 110,502 111,190 111,918 112,691 113,513 114,389 115,324 116,326 117,400 118,556 119,804 121, l 53 122,619 124,217 125,964 127,885 130,005 132,358 134,985 137,935 141,274 145,083 149,469

$96,853 96,492 96,120 95,738 95,346 94,941 94,525 94,096 93,654 93,198 92,728 92,244 91,742 91,223 90,687 90,132 89,557 88,961 88,342 87,701 87,033 86,339 85,617 84,863 84,077 83,257 82,399 81,501 80,559 79,571 78,532 77,440 76,286 75,069 73,781 72,416 70,966 69,422 67,776 66,015 64,127

Notes: Column (1) is taken from Appendix C, Page l 5, Sheet 1, Column (3). Column (2) is taken from Appendix C, Page 12, Sheet 1, Column (9). Column (5) represents the development factor which yields the ultimate loss of Column (3) when applied to the outstanding loss and this product is added to the cumulative paid loss. Algebraically, Column (5) = [Column (3) - Column (4)] / [$100,000 - Column (4)].

-

1.79536 1.79960 1.80387 1.80807 1.81285 1.81736 1.82228 1.82741 1.83265 1.83814 1.84392 1.85018 1.85638 1.86282 1.86975 1.87698 1.88452 1.89256 1.90084 1.90983 1.9191 O 1.92899 1.93951 1.95058 1.96238 1.97509 1.98858 2.00308 2.01867 2.03544 2.05361 2.07345 2.09488 2.11849 2.14440 2.17307 2.20497 2.24060 2.28085 2.32656 2.3 7900

Appendix C

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION

Page 4

Permanent Total

Selection of Ultimate Loss ($000s)

Accldent Years 2001 /02 through 2015/16 (2)

(1)

(4)

(3)

(6)

(5)

(7)

(8)

Pald

(9)

Proiected Ultlmate Loss

Pald Loss as of 06¿30¿ 16

asof06¿30¿16

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

SS,494 5,002 4,727 10,423 8,521 6,967 5,771 4,309 3,136 1.559 838 275 120 15

$8,481 8,035 7,688 21,861 18,914 17,427 16,030 14,295 11,932 7,812 3,883 2,541 1,397 281

Total

$57,157

$140,577

Accldent Year

o

lncurred Loss

o

Pald Loss

lncurred Loss

Oevelopment Method

Development

Outstandlng loss Development

Expected Loss

BornhuetterFerguson

lncurred BornhuetterFerguson

Method

Method

Method

Method

Method

$13,675 13,645 14,261 38,586 36,751 35,608 35,688 33,175 31,630 21,541 17,368 9,889 9,278 4,639

o

$14,774 14,624 14,769 40,465 36,939 36,422 36,340 35,966 34,078 27,108 16,980 16,110 16,385 11,536

o

$15,865 15,508 15, 194 41,328 37,019 36,71 S 36,548 36,783 34,705 28,434 16,900 17,231 17,548 12,566

o

$19,622 17,110 13,407 10,655 8,190

$19,518 16,906 13,353 10,638 8,190

$19,012 16,948 13,664 10,680 8, 165

Selected Ultlmate Loss $14,500 13,750 14,500 40,1 so 36,750 36,1 so 36,050 34,250 34,000 27,000 17,000 16,000 16,250 11,500 8,175 $356,025

Notes: Columns (1) and (2) have been provided by the Puerto Rico State lnsurance Fund Corporation.

Column Column Column Column Column Column Column

(3) Is taken from Appendlx C, Page S. Column (3). (4) Is taken from Appendlx C. Page 6, Column (3), (5) Is taken from Appendlx C, Page 7, Sheet 1, Column (4). (6) Is taken from Appendix C, Page 8, Column (7), (7) Is taken from Appendlx C, Page 9, Column (7). (8) Is taken from Appendlx C, Page 9, Column (14). (9) Is selected based upon Judgment alter a revlew of Columns (1) through (8).

-

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

-

Appendix e Page 5

1

Projection of Ultimate Loss ($000s) Historical Paid Loss Development Method Accident Years 200 l /02 through 20 l 5 /16

-

( l)

(2)

(3)

-

Paid Loss as of 06/30/16

Paid Age to Ultimate Factor

Ultimate Loss (1) X (2)

-

...

-

Accident Year 2001 /02 2002/03 2003/04 2004/05 2005 /06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total

$5,494 5,002 4,727 10,423 8,521 6,967 5,771 4,309 3, 136 1,559 838 275 120 15

o

2.489 2.728 3.017 3.702 4.313 5.111 6.184 7.699 10.086 13.817 20.726 35.960 77.314 309.255 4638.822

$57,157

Notes: Column (1) is taken from Appendix C, Page 4, Column (1 ). Column (2) is taken from Appendix C, Page 11 .

$1 3,675 13,645 14,261 38,586 36, 751 35,608 35,688 33, 1 75 31,630 21 ,541 1 7,368 9,889 9,278 4,639

o

$315,734

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Appendix e Page 6

Projection of Ultimate Loss ($000s) Historical lncurred Loss Development Method Accident Years 2001 /02 through 201 5/16

Accident Year 2001/02 2002/03 2003/04 2004/05 2005 /06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total

(1)

(2)

(3)

lncurred Loss as of 06/30/16

lncurred Age to Ulti mate Factor

Ultimate Loss (1) X (2)

$8,481 8,035 7,688 21 ,861 18,914 17,427 16,030 14,295 11 ,932 7,812 3,883 2,541 1,397 281

o

1.742 1.820 1.921 1.851 1.953 2.090 2.267 2.516 2.856 3.470 4.373 6.340 11. 729 41.053 359.215

$140,577

Notes: Column (1) is taken from Appendix e, Page 4, Column (2). Column (2) is taken from Appendix C, Page 14.

$14,774 14,624 14,769 40,465 36,939 36,422 36,340 35,966 34,078 27,108 16,980 16, 11 O 16,385 11,536

o $352,496

-

-

....

....

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Appendix C Page 7 Sheet 1

Projection of Ultimate Loss ($000s) Outstanding Loss Development Method Accident Years 2001 /02 through 2015/16

Accident Year

(1)

(2)

(3)

(4)

Paid Loss as of 06/30/16

Outstandlng Loss as of 06/30/16

Outstanding Age to Ultimate Development Factor

Projected Ultimate Loss (1) + ((2) X (3)]

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

$5,494 5,002 4,727 10,423 8,521 6,967 5,771 4,309 3,136 1,559 838 275 120 15

Total

$57,157

o

$2,987 3,033 2,961 11,438 10,393 10,460 10,259 9,986 8,796 6,253 3,045 2,266 1,277 266

o

3.472 3.464 3.535 2.702 2.742 2.844 3.000 3.252 3.589 4.298 5.275 7.483 13.648 47.184 389.284

$83,420

Notes: Column (1) is taken from Appendix C, Page 4, Column (1 ). Column (2) is the difference between Columns (2) and (1) of Appendix C, Page 4. Column (3) is taken from Appendix C, Page 7, Sheet 2, Column (5).

$15,865 15,508 15,194 41,328 37,019 36,715 36,548 36,783 34,705 28,434 16,900 17,231 17,548 12,566

o

$362,344

Appendix e Page 7 Sheet 2

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total Derivation of Outstanding LDFs

(1)

(2)

(3)

(4)

(5)

Accident Year

lncurred Loss Development Factor

Paid Loss Development Factor

lmplied Ultimate Loss $100,000 X (1)

lmplied Paid Loss (3) / (2)

lndicated Outstanding Development Factor

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 201 5/16

1.742 1.820 1.921 1.851 1.953 2.090 2.267 2.516 2.856 3.470 4.373 6.340 11. 729 41.053 359.215

2.489 2.728 3.017 3.702 4.313 5.111 6.184 7.699 10.086 13.817 20.726 35.960 77.314 309.255 4638.822

$174,200 182,000 192,100 185, l 00 195,300 209,000 226,700 251,600 285,600 347,000 437,300 634,000 1, 172,900 4, 105,300 35,921,500

$69,988 66,716 63,673 50,000 45,282 40,892 36,659 32,680 28,316 25, 114 21,099 17,631 15, 171 13,275 7,744

Notes: Column (1) is taken from Column (2) of Appendix C, Page 6. Column (2) is taken from Column (2) of Appendix C, Page 5. Column (5) represents the development factor which yields the ultimate loss of Column (3) when applied to the outstanding loss and this product is added to the cumulative paid loss. Algebraically, Column (5) = [Column (3) - Column (4)] / [$100,000 - Column (4)].

3.472 3.464 3.535 2.702 2.742 2.844 3.000 3.252 3.589 4.298 5.275 7.483 13.648 47.184 389.284

-

-

-

-

-

e

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Appendix Page 8

Expected Loss Method Accident Years 2001 /02 through 2015/16

Accident Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

(1)

(2)

(3)

(4)

Prellminary Ultimate Loss (SOOOs)

Earned Payroll (SOOs)

Loss Cost per $100 of Payroll [(1) x 1,0001 / (2)

Loss Cost Trend Factor

S14,500 13,750 14,500 40,1 36,750 36,1 36,050 34,250 34,000 27,000 17,083 14,410 14,404 9,580 N.A.

so so

s

$202,420,000 215,080,000 226,330,000 238,750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243, 760,000 242, 156,580 233,992,560

-

-

-

-

(8)

(5) Trended Loss Cost per $100 of Payroll (3) X (4)

N.A. N.A. N.A. 0.243 0.247 0.251 0.254 0.258 0.262 0.328 0.410 0.512 0.640 0.800 1.000

N.A. N.A. N.A. 0.041 0.037 0.037 0.038 0.039 0.038 0.037 O.D30 0.029 0.038 0.032 N.A.

Avg (Ali Yrs) Wtd Avg (Ali Yrs) Wtd Avg (Lates! 5) Wtd Avg (Latest 3) Wtd Avg (Latest 2) Wtd Avg (Ali Yrs Excl Hi/Lo)

0.036 0.036 0.033 0.033 0.035 0.036

Selected for accident year 2016/17

0.035

S0.072 0.064 0.064 0.168 0.1 0.148 0.148 0.1 0.146 0.114 0.074 0.057 0.059 0.040 N.A.

so so

(6)

Loss Cost per $100 of Payroll

C8> 1C4>

(7)

Expected Loss (SOOOs) [(2) X (6)] / $ 1,000

$0.085 0.068 0.055 0.044 0.035

Notes: For accident years 2001 /02 through 2010/11, Column (1) is taken from Appendix C, Page 4, Column (9). For accident years 2011 /12 through 2015/16, Column (1) is equal to the average of Columns (3) through (5) of Appendix C, Page 4. Column (2) has been provided by the Puerto Rico State lnsurance Fund Corporation. Column (4) reflects trending to accident year 2016/17 based upon the loss cost trends found on Appendix C, Page 19, Unes (5) through (8). Line (8) is selected based upon judgment after review of Column (5).

Sl 9,622 17,110 13,407 10,655 8,190

-

Appendix e Page 9

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Projection of Ultimate Loss (SOOOs) Bornhuetter-Ferguson Method

Section 1: Paid loss (1)

(2)

(3)

(4)

(S)

(6) Expected Unpaid

Cumulative

Expected

Age to Ultlmate

Percent Paid

Loss

Factor

100%1 !2!

Percent Unpaid 100%-!3!

20.726 35.960 77.314 309.255 4,638.822

4.8% 2.8% 1.3% 0.3% 0.0%

95.2% 97.2% 98.7" 99.7" 100.0%

Paid Accident Year

2011/12 2012/13 2013/14 2014/15 2015/16

$19,622 17,110 13,407 10,655 8,190

Total

$68,984

(7)

Paid Loss

loss

Ultlmate Loss

as 0106130116

!1! X (4!

¡5¡ + !6!

$838 275 120 15

o

$18,680 16,631 13,233 10,623 8,190

$19,518 16,906 13,353 10,638 8,190

h,248

$67,357

$68,605

Section 11: lncurred Loss

(8)

Accldent Vear

Expected Loss

2011 /12 2012/13 2013/14 2014/15 2015/16

$19,622 17,110 13,407 10,655 8,190

Total

$68,984

(9)

(10) Cumulatlve

(11)

lncurred

Percent

Percent

Age to Ultimate

Reponed

Unreported

Factor

100% 1!9!

100%-!10!

4.373 6.340 11.729 41.053 359.215

22.9" 15.8" 8.5% 2.4% 0.3%

77.1% 84.2% 91.5% 97.6% 99.7"

Notes: Columns (1) and (8) are taken from Appendlx C, Page 8, Column (7).

Columns (2) and (5) are taken from Columns (2) and (1 ), respectlvely, of Appendix C, Page 5. Columns (9) and (12) are taken from Columns (2) and (1 ), respectively, of Appendix C, Page 6.

(12) lncurred loss as of06130116

(13) Expected

(14)

Unreported Loss

Ultimate

!8! X (11!

!12! + !13!

Loss

$3,883 2,541 1,397 281

$15, 129 14,407 12,267 10.399 8,165

$19,012 16,948 13,664 10,680 8,165

$8,102

$60,367

$68,469

o

-

Appendlx e Page 10

PUERTO RICO- STA.TE INSURAfllCE FUND CORPORATION WORKERS COMPENSA TION Permanent Total

Historlcal Loss (SOOOsl

Evaluated as of...

___!!!!:___

-

-

-

1985/86

lncurred 1986/87

-

Pald

Reserve

1987/88

Paid

Reserve lncurred

1988{89

Pald Reserve

lncurred 1989/90

Pald Resel'\le

·~·

lncurred

1990/91

Reserve

lncurred

1991/92

Paid Reserve

lncurred 1992/93

Pilid Reserve

lncurred Patd Reserve

lncurred 1994195

Pald Reserve

lncurred 1995/96

1996/97

Pald Reserve lncurred

N.A.. N.A.

Pald

1997/98

1998¡99

Pald

Pa1d

lncurred

Pald

Reserve

lncurred Pa.ld Reserve

lncurred 2002/03

Paid Reserve

lncurred

2003/04

Paid

Reserve

lncurred Pald Reserve

lncurred 2005/06

Pald Reserve

lncurred 2006/07

Pald Reserve

lncurred 2007/08

2008/09

2009110

2010/11

2011/12

2012/13

2013/14

2014115

2015/16

N.A.. N.A.

409

1,186

2,259

----nr -----¡:,rs-

Paid

-

N.A.. N.A.

----,:'§34

N.A. N.A.

N.A.. N.A..

N.A. N.A..

N.A. N.A.

3,220

3,972

4,789

5,592

3,312

4,197

5,019

---u&r -----;r,s¡r

N.A.. N.A. ---r.m-

70

~ 9

319

--+.m-

N.A.

N.A. N.A.

N.A.. N.A.

N.A. N.A..

N.A.. N.A.

-----,;m- --,;m- --,;m- -,:m-

N.A. N.A.

N.A.. N.A.

N.A, N.A.

N.A. N.A.

6,333

7,129

7,940

8,724

9,515

7,239

8,089

8,868

9,652

--r,-r,r --g:m- ----,:z¡r ----,,:;¡¡r

255

2,377

~.~;~

:.;~1 -4.m- ~

: x;~

1ó:~:1

l,089

1,853

2,609

4,113

4.821

5,501

6,327

7,128

7,943

3,443

-lli- -H*" ----t.m- ~ ~ ~

N.A. N.A,

---r.,JT

N.A.. N.A. ~

N.A. N.A.

-----¡;rn-

10,240

10,976

5,792

6,489

lj.!~~ ---rHH-

1i.~~ ---rMH-

10,381

11,063

1::!gg

,::~~~

8,666

9,398

10,094

-+.m- ---tm- ~ ~ ----¡f.m- ---,tfil- --& ----,tm- ---M*-

10

317

987

l,761

2,479

3,302

4,137

5,015

5,885

6,811

7,587

8,388

9,168

9,914

10,689

O

180

693

1,485

2.180

2,880

3,708

4,554

5,444

6,266

7,059

7,892

8,650

9,440

10,204

28

151

739

1,456

2,076

2,769

3,445

4,162

4,918

5,738

6,545

7,427

8,230

9,024

9,833

1,001

l,669

2,566

3.420

4,269

5,847

6,640

7,398

8,216

8,988

9,741

- * ---+.ffi- ~ ~ ~ -tm- ~ ~ -itffi- ~ ~ ---i+m- ~ ---,tm- ~ ---* ,.g~: :.~:! ~ H?o -+.m- ~ ::m .~.:~~ ----,t.m- ~ ---i4:ffi- --,f.lli- .::m ,!.~~ --*" ---ffi- ~ ---tffi- ~ --+*- --tffi- ~ ~ ~ ~ ~ ~ ---,t.ffi- ---,f.ffl2

---ffi-

299

~

---+.ffi-- ~ ~ --mt-

4,987

:.~;:

,~.:::

~ ~ --,t.Ht-

--Wo---,t.ffi- ~

10,454

1!:~;~

39

261

811

1,417

2,192

3,009

3,781

4,623

5,404

6,157

6,918

7,706

8,593

9,416

10.261

3

232

731

1,471

2.124

2,718

3,331

3,911

4,550

5,189

5,833

6,483

7,162

7,826

8,501

17

286

861

1,627

2.281

2.863

3,403

3,998

4,613

5, 187

5,850

6,502

7, 191

7.944

8,726

-*" ---dH- --+.m- --t.m- -tm- ~ ---tm- ~ ~ ~ -M*- ~ ~ -ñ:W,- ~ ~ ~ l:~~ !.~: t~ ~ ~ --w- ~ ----t.IB- 1Ó.~;~ 1ó.:1~ 1jJj~ --& ~ 3

31

153

234

642

1.;~r 604

1,238

~~

~ ~ ~ ~ ~ ~

t:~: :.~;

2,338

2,861

3,504

4,117

4,681

:.~~~

:.~~~

;.:g~

:.:~

::~;: -H*-

1,038

2,011

2,554

--ffi- ---,:m. -H*- ~

1.777

-tffi- ~ ----H&

1,533

!.m --+*- :.ci:~

3,097

---tm-

3,676

~

5,347

5,977

1a.::l

6,700

7,479

8,213

~ ~ ~

4,205

4,793

5,404

6,130

6,763

7,383

---+.w.- ~ ~ ----tm- ~ ~

13

187

525

860

1,275

1,634

2,036

2,487

3,006

3,577

4,153

4,771

5,349

5,903

6,514

4

151

556

791

1,193

l,523

1.983

2,499

3,043

3,589

4,177

4,707

5,183

5,725

6,248

7

89

294

605

863

1,243

1,606

2,048

2.525

2,987

3,488

4.021

4,508

5,011

5,494

103

383

757

1,502

1,882

--*---*- ---+.m- ~ -t.lli- --tlli- -H*- ---tlli- ~ ~ ~ ~ ~ ~ -.ij#---* ~ ----+*- -t.m- -w.r !:m !:~il ---t.m-- -t.ffi- ~ rn~ ---tm- :.!~~ ---1* ~ ----* --m- -tw.- ~ --tffi- -+m- -fflt- ~ ---+*- ~ ---4:*" ~ ---+fil- ---t1*- ---H*17

~ 3

---ffi- ---+.ffi- --t.m85

320

----* ~ 1.~~= -----* -----ffl- t~~: 5

110

475

1,086

~.:~:

2,233

2,709

3,178

3,632

4,113

i.::! ---t.m:-

~.~~~

!.~~,

~:~~

~.ó~~

~.::;

2.295

2,779

3.264

3,752

4,241

611

902

1.274

1,796

~.::

!.~~~

!:~i ---t.fil- ~ --tm- ~ ~ ~ 3,640

964

1,605

2,515

~.~:~

~.g:

1~J~:

4,904

6,130

7,489

rn.n: ---*.ffi- ~ ~ ~ :.!~ :.:;~ ~:~:g ::H: 1b:t~: ~ 1:.iri~ :2.1:: :~.~:~ --*----+*- ~ ~ ~ ~ ,n~g ---+mt- ~ :~.~~ O

175

611

1,191

1,985

2,816

3,852

4,853

5,999

7,196

18

154

555

1,017

1,665

2,460

3,449

4,538

5,721

6,967

112

379

O

930

1,636

:.;¡~

::~~:

1.009

1,723

905

1,528

2,535

3,509

4,619

1JJg:

1!.~~;

2,469

3,293

.::m

2,295

.rn~

~---m-~~~~~

Paid Reserve lncurred

~

~ ~

O

87

478

O

84

404

---rn- rn~ --* ---m- ,.~~: 8

70

232

O

65

:.~i:

Reserve lncurred

---o-º --*t

Reserve lncurred

---g-

O

O

O

~ 20

241

69

-,a120

~--*----+*

Paid Reserve lncurred

O 266 --º~

Pald Reserve lncurred

O O ---0

O

15

4,533

~

~.ó!~

Pald Reserve lncurred

Paid Reserve lncurred

N.A.

N.A. N.A. -o.m----..m-

1,067

---g

.... ....

N.A. N.A. ~

N.A, N.A..

-rr,¡r

i:lj~

Reserve lncurred

Pald Reserve lncurred

N.A.. N.A.

----...rr- --.:m- ----r.m-

--* ---+.ffi- ~ ---+* ~ ----t.m- ----t.ffi- ~ ~ -,W,t -,tm- ~ ---,tm- ~ ---,tm-

Notes: Data Is taken from Appendhc c. Page 13 and Page 16.

-

N.A. N.A.

----,.m- ---u,o

~ ~

Reserve

2001/02

N.A. N.A.

--m- ---r:m-

N.A.. N.A..

Reserve lncurred

·~·

Reserve

2000/01

N.A. N.A.

-ffi- -----11*- ~ ~

lncurred 1999/00

21

N.A, N.A.

lncurred

Reserve

2004/05

-

~

'Tñcurred - - - g -

1993¡94

-

Paid Reserve

N.A. N.A..

-tffi- ~ 488

~:~~:

950

514

838

~.~:~

275

~ l ,559

;,~~: ~::n

~'.!~~

:.::~

~

3,136

4,309

5,771

~

8,933

~6.:~; 8,521

:~::~l

10,423

i::::~

4,727

5,002

--tm-

-

PUERTO RICO- STATE INSURANCE FUNO CORPORATION WORl
Appendlx e Page 11

Permanenl Total Pald Lou Development F~ctor~

AS!jld!nl Y!l;fl

1985/86 1986/87 1987/88

1988/89 1989/90 1990/91

l.L..1-'

19.476 4.557 28.333 31.700

1991/92

1992(93 1993/94

1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001,02 2002/03 2003l04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

5,393 149.500 6.692 77,333 16,824 51,000 7.548 14.385 37.750 12.714 6.059 28.333 22.000 8.556

B.750

"'--'--'-' 2.900 3,345 4.271 3.114 3,850 4.89-4 3.348 3.107 l.151 l.010 4,196 2.581 2.807 3.682 3.303 3.718 3.765 4.318 3.491 3.604 3.384 5.494 4.810 3.314 3.708

1L.<.8

1.905 2.228 1.702 1.784 2.143 1,970 1.667 1,747 2.012 1.890 1.928 1.719 1.638 1.423 2.058 1.977 1.909 2.029 l.949 1.832 2.454 2,111 2.240 2.103 2.133 3.986

iLl>ll

O
1.425 1,393 1,408 1,408 1.468 1.426 l,537 1.547 1.444 1.402 l,435 1.477 1.483 1.508 1.426 1.435 1.476 1.665 1,667 1.637 1.759 1.708 1,688 1,947 1.630

1.234 1.267 1.320 1.332

1.321 1.334 1.333 1.373 1.280 1.255 l.316 1.312 l.282 1.277 1.440 1.383 1.412 1.567 1.419 1.477 1.550 1.433 1.502 1,641

lLM

"-'--"

1.206 1.196

1.168

1.195 1,2Sl 1.288

1.172

1.244

1.248 1.257 1.226 1.189 1.224 1.270 1.246 1.302 1.292 1.253 1.410 1.447 1.368 1.402 1.384 1.334 1.366

1.154 1.212 1,228 1.208 1.168 1.223 1.174 1.175 1.225 1.213 1.222 1.260 1.275 1.187 1.278 1.347 1.260 1.316 1.316 1.309

J..llL.UQ

J.lJL..ill

ill..;_lli

lli..;..llJ;

llL..lil

ill..:..180

1.133 1.120 1.141 1.173 1.195 1.182 1.172 1.169 1,161 1.154 l,175 l,187 1.209 1.218 1.233 1.213 1.211 1.250 1.236 1.261 1.249

l,126 1.116

1.114 1.117 1,127 1.114 1.127 1.141 1.114 1.124 1.124 1.128 1.142 1.140 1,161 1.164 1.168 l,143 1.150 1.193 1.184

1.099 1.096 1.114 1.106 1.118 1.135 1.111 1.114 1.111 1.111 1.118 1.127 1,149 1,127 1,153 1.132 1.130 1,167

1.091 1.088 1.091 1.093 1.096 1.108 1.094 1.115 1.105 1.106 1.121 1,134 1.121 1.101 1,121 1.102 1.115

1.076 1,076 1,084 1.081 1.091 1.096 1,084 1.096 1.093 1.105 1.116 1.103 1.104 1.105 1,112 1.103

1.072 1,066 1.074 1.078 1.081 1.090 1.073 1.090 1.086 1.098 1.098 1.092 1,104 1.091 1.096

1.093 1.105

>L1J2I

1,150 1.157 l,151 1.167 1.136 1.139 1.140 1.124

1.137 1.144 1.190 1.179 1.183 1.173 1.175 1.222 1.200 1.218

l.OlL.l!l1

6,000

Welghted Average AilYears LatestS latest3 Latest2 Excludln9 HI/LO

14.945 21.250 N.A. N.A. 17.244

3.499 4.460 5.059 9.450 3,532

1.919 2.241 2.356 2.545 1.927

1.505 1.736 1.739 1.784 1.507

1.357 1.509 1,505 1.555 1.360

1.277 1.371 1.362 1,349 1,274

1.226 1.309 1.314 1.313 1.225

1.188 1,245 1.248 1.255 1,189

1.160 1.204 1.213 1.208 1.159

1.139 1.175 1.181 1.189 1.136

1.121 1.147 1.151 1.156 1.119

1.104 1.112 1.113 1.108 1.104

1.106 1.108 1.093

1.084 1.096 1.097 1.094 1.085

Wellilhted Avera51!: Accldent Years 2003l04 and Prior AilYem La1es1 5 Lates13 Latest2 ExcludlnQHl/lo

13.397 13,977 10.259 9.400 15.517

3.365 3.379 3,599 3.739 3.351

1.864 1.744 1.979 1.946 1.850

1.447 1.468 1.445 1.453 1.446

1.310 1.349 1.410 1.3% 1.314

1.241 1.296 1.315 1.325 1.239

1.199 1,243 1.245 1.231 1,201

1.171 1.216 1.219 1.212 1.174

1.147 1.180 1.177 1.174 1,149

1.131 \,157 1.153 1.146 1.131

1.117 1.138 1.138 1.131 1.118

1.104 1.112 1.113 1.108 l,104

1.093 1.105 1.106 1.108 1.093

1.084 1.096 1.097 1.094 1.085

Welgh1ed Average Accldent Years 2004l05 and After Ali Years latestS Laiesl3 Latest2 Excludlno Hltlo

28.774 21.250 N.A. N.A. 13.846

4.064 4,460 5.0S9 9.450 3.895

2.118 2.241 2.356 2.545 2.128

1.700 1.736 1.739 1.784 1,686

UOJ 1.509 1.505 1,555 1.505

1.384 1.371 1.362 1.349 1.380

1.309 1.309 1.314 1.313 1.314

1.249

1,213

1.189

1.167

1.248 1.255 1.250

1.213 1.208 1.218

1.189

Aon 5electlons /116/30/15

15.000

3.800

Z.150

1.750

1.385

1.300

1.240

1.185

1.155

1.135

1.115

1.100

1.095

2,060

Selected, Accldent Years 2003/04 and Prior Cumulallve, Accfdent Years 2003/04 and Prior

15,000 2,023.207

3.600 134.880

1.900 37.467

1.445 19.719

U7S 13.647

1.296 9.925

1.230 7.658

1.210 6.226

1.175 5.145

1.150 4.379

1.135 3,808

1.112 3.355

1,106 3,017

1.096 2.728

2.489 2.489

Selected, Accldent Years 2004/05 and After CumulaUve, Accldent Years 2004/05 and After

15.000 4,638.822

4.000 309.255

2.150 77.314

1.735 35.960

1.500 20.726

1.370 13.817

1.310 10.086

1.245 7,699

1.210 6.184

1.185 5.111

1.165 4.313

3.702 3.702

Notes: Developmenl factors are based on Appendix C, Page 13. The \80 to ultlmate development factor utlllted far accldent years 2003/04 and prior Is taken from Appendlx C, Page 12, Sheet 1, Cotumn (10), The 144 10 ultimate development factor ullllzed far accldent years 2004/05 and afttt Is 1aken from Appendlll C, Page 12. Sheet 2, Column (1 O).

-

-

-

-

-

PUERTO RICO• STATE INSURANCE FUND CORPORATION

-

Pqe12 5hff11

Perm.mentTot~

Paid Loss Oevelopmenl lnverse Power Curv1 Accident Vears 2003/04 and Prior

"'

l2l

11)

Time

Perlod

~ ~

).0 2.0

24 • 36 36 • 48

72 - 84

,.o ,.o 5,0 ,.o

96 - 108 108 - 120 120 - 132 132-144 144-156 156 - 168 168- 180

7.0 8.0 9.0 10.0 11,0 12.0 13.0 14,0

..... 48- 60

60 • 72

1

-1&...L.1!.L

Development FactorLess 1.0

~

0.250 0.167 0.143

,....

14,000

0.000

2.639

-0.69) •l,099 -1.316 -1.609 -1.792 -1.946

0.956 -0.105

0.445 0.375 0.296 0.230 0.210 0.175 0.150 0.135 0.112 0.106 O.D90

-2.079 -2.197 -2.303 -2.398 -2.485 -2.565 -2.639

0,900

t.296 1,230 1.210 1.175 1,150 1.135 1.112 1.106 1.096

0.125 0.111 0.100 0.091 0.083 0.077 0.071

"'

Fltted AgetoAge

_fil:.!.:!!__ --'.!!.fil._ ---'.!l.i!L_

IS.000 J,600 1,900 1.445 1.375

0~00

17)

Ageto49f PaldloH

Pildlou

Development

1.000 0.500 0.333

"'

IS>

(4)

Selected

Selected A9910Age

Developmenl

12-24

-

AppendlxC

WOlKERS COMPE~TION

lncluslon lnRegression (1.0toinclude)

-0.810 -0.981 -1.217 -1.470 -1.561 -1.70 -1.897 -2.002 -2.189 -2.244 -2.343

1.oaooo

-

-

-

1.oaooo 1,05000

J

1.D4000

1

1.03000

!

1.02000

1

1.01000

>5»

20.0

215.0

30.0

"'·º

TlmelndH

40.0

••o

,o.o

!15.0

~

80.0

85.0

180 - 192 192 - 204 204 - 216 216-228 228 - 240 240 - 252 252-264 264 - 276 276 - 288 218 - 300 300 - 312 312-324 324-336 336 - 348 348 - 360 360 - 372 372 - 384 384 • 396 396 • 408 408 • 420 420 • 432 432 - 444 444 - 456 456 - 468 468 - 480 480 - 492 492 - 504 504 - 516 516 - 528 528 • 540 540 • 552 552-564 564 • 576 576 - 588 588 - 600 600 - 612 612 - 624 624 - 636 636 - 648 648 - 660 660 - 1572 672 - 684 084 708 708 720 720 732 732 744 744

••• •••

"' "' m

708

708 780

780

Noln: Column (3) Is taken from Appendht C, Page 11, Column India.tes whlch facrcm have been lnduded in fitting the de\'flopmenl curve: the R-Squared value of thls flt Is 0.96907. Column (8) reprnents the outpUI of lhe fhted tnve~e power curve. Column (9) for a QIYen ma1urlty Is equal 10 the producr ot Column (B> for tha1 and anv subHquent maturitln,

m

Paldloss Development

Oevelopmen1

Factor

TI-

jUnroundedl

~

"""'

inMonths

(10)

Flned

Age to Uhlm11e

A.getoUIUmare

Pilidlou Developmenl

P,11ldl.on Oevelopment

Factor

F;ictor

!Ynrounded)

~

1.000 1.000 1.000 >.000 ),000 ).000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 ).000

1.07000

-

Developm1n1 Perlod

,., Fitted

1.Q6794 1.06056 1.05435 1.04909 1,04-158 1.04068 1.03729 1.03433 1.03171 1.02939 1.02733 1.02548 1.02383 1.02233 1.02098 1,01975 1.01862 1.01760 1.01666 1.01580 1.01500 1,01427 1,01359 1.01296 1.01237 1,01182 1.01131 1.01084 1.01039 1.00998 1,00958 1,00922 1.00887 1.00854 1.00823 1,00794 1,00767 1.00741 1.00716 1.00692 1.00670 1,00649 1.00629 1,00610 1,00591 1.00574 1.00557 1.00541 1.00526 1.00512 1.0CM98

15,0 16.0 17.0 )8.0 19.0 20,0 21.0 22,0 23.0 2-1.0 25.0 26.0 27.0 28.0 29.0 JO.O 31,0 32.0 33.0

....

35.0 36.0 37.0 38.0 39,0 40.0 41.0 42.0

o.o

44.0 45.0 46,0 47.0 48.0 49.0 50.0 51.0 52,0 53.0 54.0 55,0 56.0 57,0 58.0 59.0 60.0 61.0

"·º 63.0 64.0 65.0

180 192 204 216 228 2-10 252 26-1 276 288 300 312 324 336 348 360 372 384 396 408 420 02 444 4 56 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672 684 696 708 720 732 744 756 768 780

t0Ultlm.1te toUltlrnate toUlthmite toUltlmate toUltimate toUhiffllte toUhiffllle toUhlmitle toUltlmate toUhlrnate 10Ultimate to Uhlmate toUltimate to Uhlnwite to Ukimate 10Uhtm;a1e toUltlmitle to Uhlm¡le to lJhlm¡te 10Ultim11e toUlllmille to Ulllrnale IOUltlmale to Ullirnale to Uhlmate toUltimate to Ultlmate to Uklmate toUhlm,te 10 Ultimare tollhirnale toUhimate toUltirnale IOUhirnale 10Ultim.11e 10Ulllm1te 10Ultim11e to Ullima1e t0Ultim1te toUftlmate touttimate roUhlrmite touttlm1te 10 Ulllrmire 10 Ultlmare IOUhlmille 10 Ul1l1Nte 10Ultlmare toUhlmate roUhlmate to Uhlmate

2.48918 2.33082 2,19773 2.08443 1.98690 1.90211 1.82775 1.76204 1.70356 1.65120 1.60405 1.56138 1.52258 1.48715 1.45466 1.42478 1,39719 1,37164 1.34792 1,32583 1.30521 1.28592 1.26783 1.25084 l,23484 1.21975 1.20550 1.19201 1.17923 1,16710 1.15557 1.14460 1.13415 1.12418 1.11466 1.10555 1.09684 1,01849 1,08049 1.07281 1.06543 1.05834 1.05152 1.04494 1.03861 1.03251 1.02662 1,02093 1.01543 1.01012 1.00498

2.489 2,331 2.198 2.084 1.987 1.902 1.828 1.762 1,704 1.651 1.604 1.561 1.523 1.487 1.455 1.425 1.397 1.372 1.348 1.326 1,305 1,286 1,268 1.251 1.235 1.220 1.205 1.192 1.179 1.167 1,156 1,145 1.134 l,124 1,115 1.106 1.097 1,088 1,080 1.073 1.065 1.058 1.052 1,045 1.039 1.033 1.027 1.021 1.015 1.010 1.005

Appendbt: C PAge 12 5heet2

PUERTO RtCO • STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

(1)

.....

Development inMonths 12-24 24-36 36-48 48 ·60 60 - 72 72 • 84 84 • 96 96 • 108 108 • 120 120 - 132 132-14,4

r,-

lndn:

).O

,.o ,.o

...

5.0

,.o 7.0 a.o

9.0 10.0 11.0

Paid L.oss Developmen1 lrwen.e Powet Curv1 Accldent Vean. 2004/05 and Aher

,,,

"' -1.:!!.Li!.L

(5)

'"

Selected Age toAge Paldloss Oevdopment

Selected AgetoAge Paldloss Development Factor L.ess 1,0

~ ~

1.000 0.500 0.333 0.250 0.200 0.167 0.143 0,125 0.111 0.100 0,091

15.000 4.000 2.150 1.735 1.500 1.370 1.310 1.245 1.210 1.185 1.165

14.000 3.000 1.150 0.735 0.500 0.370 0.310 0.245 0.210 0,185 0.165

--.1!!.J!L.._

º·ººº

-0.693 -1,099 -1.386 -1.609 -1.792 -1.946 -2.079 -2.197 -2.303 -2,398

'"

"'

~

lndusion lnRegression (l,Otoinclude)

2,639 1.099 0.140 -0.308 -0,693 -0.994

-1.171 -1.406 -1.561 -1.687 -1.802

1.12000

,.,0000 1.0IIOOO

i

1.0IIOOO

,....... 1.0ZOOO

20.0

40,0

30.0

"'·º

. ,.,

"'

Tim, ~

Oevefopmen1 Period lnMonths

Fltted Age1outr:imate Paidloss Development Factor (Unr01Jnd!!!

(10) FIUed AgetoUlllll'll.te Paldl.oss Development

''""'

~

1.000 J.000 J.000 1.000 1,000 1.000 1.000 1.000 1.000 1.000 1.000

--------------------- ----------·--------------------

1

Oevelopmenl Perlod ~

·~

Fllted AgetoAge Paidloss Development Factor (Unroundedj

70.0

T... -

----- ----- ------------ ----------- -------···-- - - - -

144 - 156 156 • 168 168 - 180 180 - 192 192 - 204 204 - 216 216 - 228 229 • 240 240 • 252 252 • 264 264 • 276 276 - 288 288 - 300 300 - 312 312-324 324 - 336 336-3-18 348 - 360 360 • 372 372-384 384 - 396 396 - 408 408 - 420 420 - 432 432-444 444 - 456 456 - 468 468 - 480 480 - 492 492 - 504 504 - 516 516 - 528 528 - 540 540 - 552 552-564 564 - 576 576 - 588 588 • 500 600 • 612 612 • 624 624 - 636 636 - 648 648 - 660

660 - 672 672 - 684 684 • 696 696 - 708 708 - 720 720 - 732 732-744 744-756 756 - 768 768 - 780 780 - 792 Notes: Colunv1 (3) Is taken from Appendbl: C, Page 11, Colurm pment cun,e; the R-Sqwired val~ of thls flt Is 0.98724. Column (8) represents the output of the fltted lnven.e power curve. Column (9) for a gtven maturlty Is equal to the product of Column (8) for that and any subsequent maturltles,

1.11657 1,10077 1.08805 1.07166 1.06905 1.06184 1.05573 1,05050 1.04600 1.04209 1.03867 1.03567 1.03301 1.03065 1.02853 1.02664 1.02493 1.02339 1,02199 1.02072 1.01955 1.01849 1.01751 1.01661 1.01578 1.01501 1.01430 1.01364 1.01303 1.01245 1.01192 1.01142 1.01095 1.01051 1.01010 1.00971 1.00935 l,OOSIOO 1.00868 1.00837 1.00808 1.00780 1.00754 1.00730 1,00706 1.0068"4 1.00662 1.00642 1.00623 1.00604 1.00587 1.00570 1.00554 1.00538

12.0 13.0 14.0 IS.O 16.0 17.0 18.0 19.0 20,0 21.0 22.0 23,0 24.0 25.0 26.0 27.0

,a.o

29.0 JO.O 31.0 32.0 33.0 34.0 35.0 36.0 37.0

....

39.0 40.0 41.0 42.0 43.0 44.0 45.0 46.0 47.0 48,0 49.0

so.o

51.0 52.0 53.0 54.0 SS.O 56,0 57,0

....

59.0 60.0 61.0 62.0 63.0 64.0 65.0

144 156 168 180 192 204 216 228 240 252 264 276 281 300 l12 324 336 341 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672 684 696 708 720 732 744 7S6 768 780

toUIUmate 101.eumate tot.iUm.ate toUlllmate toUlllmate toUlllmate toUllirnate tolitimate to IAl:imate to Ulllmate 10Ultimate 10Ultimate toUltlmate t0Ultlma1e toUlllmate tolAtimate to IAl:lnwe to Uhlmate to Uhlmate toUhlmate t0Uluma1e to UIUmate toUhimate toutr:imate to UIUmate tollltlmate toUh:lmate 10Ultlmate toUlttmate toUltlmate to Uhlmate tolltlmat:e toUltlmate toUlllmate 10 Uhimate to Uhima1e to Uhlmate toUIUmate to Ulthnate touttlmate toUtumate toUltlmate toUlllmate IOlitimat:e to Uhimate to lltimate tolAl:imate tOUhirnate toUhlmate tolAl:lmate 101.Jttimate toUtttmate to Uhimate to Ultimate

3.70157 3.31512 3.01165 2.76793 2.56847 2,40257 2.26265 2.14322 2,04018 1,95046 1.87168 1.80199 1.73993 1.68433 1.6l425 1.58891 1.54768 1.51003 1.47552 1,44377 1.41447 1.38734 1.36216 1.)3872 1.31685 1.29639 1.27722 1.25921 1.24226 1.22629 1.21121 1,19694 1.18343 1.17061 1.15843 1.14685 1.11581 1,12530 1.11526 1.10566 1.09648 1.08769 1.07927 1.07119 1.06343 1.05598 1.04881 1.04191 1.03526 1.02885 1,02267 1.01671 1.01095 1.00538

l,702 U15 3.012 2.768 2.568 2.403 2.263 2.143 2.040 1.950 1.872 1.802 1.740 1.684 1.634 1.589 1.548 1.510 1.476 1.44,4 1.414 1.387 1.362 1.339 J.117 1~96 1.271 1.259 1.242 1.226 1.211 1.197 1.183 1.171 1.158 1.147 1,136 1,125 1.115 1.106 1.096 1.088 1.079 1.071 1.063 1.056 1.049 1.042 1.035 1.029 1.023 1.017 1.011 1.005

-

-

-

-

-

-

-

-

-

Appendix e Page 13

PUERTO RICO- STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Permanent Total Historical Unlimited Paid Lon CSOOOs)

Acc1den1 Vear

1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16



™ 21 70 9 10

o

28 2 39 3 17 3 31 13 4 7 17 3 5

o o o o 8 o o o o o

18

.IDliíílii IDloíííhi 409 319 255 317 180 151 299 261 232 286 153 234 187 151 89 103 85 110 175 154 112 87 84 70 65

o

20 15

1,186 l,067 1,089 987 693 739 1,001 811 731 861 642 604 525 556 294 383 320 475 611 555 379 478 404 232 241 69 120

2,259 2,377 1,853 l,761 1,485 1,456 1,669 1,417 1.471 1,627 1,238 1,038 860 791 605 757 611 964 1,191 1,017 930 1,009 905 488 514 275

™ 3,220 3,312 2,609 2,479 2,180 2,076 2,566 2,192 2,124 2,281 1,777 1,533 1,275 1,193 863 1,086 902 1,605 1,985 1,665 1,636 1,723 1,528 950 838

Evaluated as of...

z2..Mmíílíí iillíiííilíi !iniíiííílíi 3,972 4,197

3,443 3,302 2,880 2,769 3,420 3,009 2,718 2,863 2,338 2,011 1,634 1,523 1,243 1,502 1 274 2,515 2,816 2,460 2,535 2,469 2,295 1,559

Notes: Data has been provided by Puerto Rico State lnsurance Fund Corporation.

4,789 5,019 4,113 4,137 3,708 3,445 4,269 3,781 3,331 3,403 2,861 2,554 2,036 1,983 1,606 1,882 11796 3.640 3,852 3.449 3,509 3,293 3,136

5,592 5,792 4,821 5,015 4,554 4,162 4,987 4,623 3,911 3,998 3,504 3,097 2,487 2,499 2,048 2,233 21295 4,904 4,853 4,538 4,619 4,309



™ 6,333 6,489 5,501 5,885 5,444 4,918 5,847 5,404 4,550 4,613 4,117 3,676 3,006 3,043 2,525 2,709 2¡779 6,13Ó 5,999 5,721 5,771

™ 7,129 7,239 6,327 6,811 6,266 5,738 6,640 6,157 5,189 5,187 4,681 4,205 3,577 3,589 2,987 3,178 31264 7,489 7,196 6,967

™ 7,940 8,089 7,128 7,587 7,059 6,545 7,398 6,918 5,833 5,850 5,347 4,793 4,153 4,177 3,488 3,632 3z752 8,933 8,521

8,724 8,868 7,943 8,388 7,892 7,427 8,216 7,706 6,483 6,502 5,977 5,404 4,771 4,707 4,021 4,113 41241 10,423 ,



™ 9,515 9,652 8,666 9,168 8,650 8,230 8,988 8,593 7,162 7,191 6,700 6,130 5,349 5,183 4,508 4,533 41727

10,240 10,381 9,398 9,914 9,440 9,024 9,741 9,416 7.826 7,944 7,479 6,763 5,903 5,725 5,011 5,002

™ 10,976 11,063 10,094 10,689 10,204 9,833 10,454 10,261 8,501 8,726 8,213 7,383 6,514 6,248 5,494

PUERTO RICO- STATf. lN5UAA.NCE FUNO CORPORATION WORKER5 COMPf.NSA.TION ~rmanentTotal

Appendbl e Page 14 lncurred Loss Oevelopmenl Factors

4"1iatDI tllt 1985/16 1916/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003t04 2004105 2005/06 2006/07 2007/08 2008109 2009/10 2010/11 2011/12 2012,13 2013/14 2014/15 2015/16 We!ihled Aver!Sle Ailvears l.atKt5 Latest3 1.a1es12 ExcludtngHI/LO we1ghted Aver!9e1Accldent Years Z003l04 and Prior .ijjvean LllHl5 lalHl) Latest2 bcludlng HI/LO Welghted Avera(l!1Accldent Years 2004t05 and After AHvears Latests lalHl3 Latest2 Ellcludlng HI/LO

l.L.li 23.476 28.731 9.056 2.936 7,169 21,743 35.821 4.403 10.331 3.857 7,274 5.249 14.740 7.237 12.853 14.691 6.404 11.606 1).276

9.691

6,407

3,392

li.;..li

lL..il

=

1,438 1.317 1.338 1.192 1.186 1.308 1.383 1.J36 1.337 1,387 1.281 1.287 1.307 1.309 1.271 1,285 1.343 1.285 1.368 1.457 1.303 1.365 1.554 1,350 1,480

lilL..U

lL.I!

ILü

2IL..lJlll

J..ll.L.Ull

1.296 1.186 1.118 1.121 1.161 1,272 1.286 1,208 1.213 1,256 1.163 1.084 1.257 1.193 1.174 1.232 1.221 1.224 1.440 1.401 1,290 1.269 1.274 1.197 1,175 1.417

1.122 1.149 1.126 1.136 1.159 1,208 1.185 1.244 1.163 1.201 1.187 1.198 1.145 1.172 1.ISS 1.210 1.222 1.203 1.155 1.163 1,276 1.244 1.191 1.141 1.314

1.080 1.121 1.071 1.126 1.140 1.152 1.198 1.155 1.145 1.116 1.137 1,090 1.129 1.087 1.142 1.129 1.106 1.130 1,196 1.143 1.082 1.114 1.122 1.224

1.107 1.080 1.118 1,092 1,114 1.1)5 1.127 1.144 1.072 1.068 1.128 1.109 1,101 1.117 1.174 1.087 1.152 1.140 1.095 1.100 1.106 1.102 1.125

1.064 1.085 1.119 1,066 1.117 1.121 1.076 1.093 1.067 1.072 1,053 1,067 1.044 1.117 1.102 1.128 1.092 1.083 1,092

1.635

1.350 1.465 1,486 \,491 1.347

1.235 1.256 1.245 1,276 1.237

1.191 1.233 1.213 1.226 1.186

1.131 1.135 1.151 1.171 1.128

1,111 1.107 1.111 1.113 1.111

2.187 2.355 2,402 2.275 2.197

1.547 1,509 1,598 1.650 1.548

1.306 1.:105 1.329 1.322 1.310

1.205 1.250 1.289 1.325 1,205

1.174 1.188 1.193 1.179 1.173

1.129 1,140 1,144 1.163 1,129

3.531 4.190 4,149 5.627 3.557

1.804 1.989 2.114 2,407 1.796

1.425 1.465 1.486 1.491 1.427

1.284 1.256 1,245 1.276 1.287

1.219 1,233 1,213 1.226 1,21&

1.135 1.135 1.151 1,171 1.127

2.775 2.HO 2.049 2.192 1,958 1.845 1.978 2.536 1.869 2.319 3,032 \,928 2.389 1.994 2.293 2.323 2.614 1.910 3.055 4,103 2.818 2.594 3.363 4.462 4.507 3.884 2.867

1.739 1.644 1.538 1.472 1,)65 1.439 1.847 1.625 1,580 1.673 1.552 1.113 1.430 1.459 1.384 1.454 1.S04 1.582 1.741 1.601 1,602 1.585 1.992 1.907 1.897 1,799 2,029 2.996

1.521

=

J.12..clli .lil.;_lll

llL..lll .l.iL..lll!

1.076 1,043 1.065 1.079 1.066 1.045 1.069 1.111 1.058 1.051 1.066 1.069 1.085 1.074 1.079 1.071 1.114 1.074 1.056 1.076 1.066

1.066 1.037 1.068 1.069 1.061 1,057 1.062 1.040 1.035 1.058 1.072 1.055 1.072 1.071 1.066 1,061 1,058 1.055 1.05) i.o5o

1.035 1.034 1.034 1.050 1,065 1,039 1,039 1.052 1.026 1.046 1.035 1,066 1.073 1.064 1,0S6 1,032 1.040 1,028 1.038

1.024 1.037 1.047 1.045 1,034 1,047 1.042 1.050 1.025 1.050 1.033 1,061 1.056 1,019 1,0S7 1,065 1,043 1,050

1.031 1.043 1.032 1.023 1,029 1,027 1,027 1.040 1.0
1.0l6 1.086 1.085 1.087 1.087

1,071 1.075 1.069 1.071 1.069

1,058 1.054 1.051 1.050 1,059

1.045 1.039 1.035 1.033 1,045

1.044 1.""6 1.05] 1.... 1,044

1.041 1.058

1.112 1,129 l,128 1.117 1.112

1.087 1.100 1.089 1.088 1.087

1,071 1,078 1.081 T.065 1.069

1.059 1.059 1.055 1.054 1.060

1.045 1.039 1.035 1.033 1.045

1.044 1.046 1.053 1.046 1.044

1.041 1.058 1.071 1.093 1.038

1.108

1.085

1,071

1.050

1.111 1.113 1.104

1.085 1.087 1.083

1.071

1.083 1.091 1.082

l.llWlll

1.451

3.501

8,713 10.843 N.A. N.A.

9.516 7.462 11.132 9.413 12.()9()

8.)86 15,921 10,843 N.A. N.A.

7.357

2,540 4.190 4.149 5.627 2.548

1.637 1,989 2.114 l.407

1.071

1.093 1,038

9,000

3.400

1.850

1,475

1.260

1.195

1.130

1.105

1.092

1.075

1.060

1.055

1.055

1.045

1.400

5elected, Accldent Years 2003/04 and Prior cumulauve, Accldent veart 2003/04 and Prior

8,750 208.683

2.350 23,849

1.600 10,149

1.315 6.343

1.215 4.824

1,190 3.754

1.140 3,154

1.115 2.767

1.085 2.482

1.070 2.287

1.055 2.138

1.055 2.026

1.055 1.921

1.045 1.820

1,742 1,742

5elected, Accldent YHrt 2004105 and After Cumulatlve, Accldent Yeart 2004/05 and After

8.750 359,215

3.500 41.05)

,.aso 11.729

1,450 6,)40

1.260 4.373

1.215 3.470

1.135 2.856

1,110 2.516

1.085 2.267

1.070 2.090

1,055 1.953

1.851 1.851

Aon 5electlons M/30/ 15

NOles: ~opment facton are based on Appendl11 e, Page 16. The I ao to ultlmar. developmmt factor utlllzed for accldent years 2003/04 and prior Is taken from Appendhc e, Page 1 5, Sheet 1, Column (3). The 144 to ultlm,ite ctevtlopment factor utlllzed for accldent vears 2004/05 •nd aftff Is taken from Appendl,c e, Page 15, Sheet 2, Column (3).

-

-

-

lncurred Loss Development Factors Accident Years 2003 /04 and Prior

..

...

-

-

-

-

Appendix e Page 1 5 Sheet l

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Development Period in Months 180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672

to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to

Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate

(1)

(2)

Age to Ultimate Paid Loss Development Factor

Selected Paid Loss to lncurred Loss Ratio

(3) Age to Ultimate lncurred Loss Development Factor (1) X (2)

2.48918 2.33082 2.19773 2.08443 1.98690 1.90211 1.82775 1.76204 1.70356 1.651 20 1.60405 1.56138 1.522 58 1.4871 5 1.45466 1.42478 1.39719 1.3 7164 1.34792 1.32583 1.30521 1.28592 1.26783 1.25084 1.23484 1.21975 1.20550 1.19201 1.1 7923 1.16710 1.15557 1.14460 1.1 341 5 1.12418 1.11466 1.10555 1.09684 1.08849 1.08049 1.07281 1.06543 1.05834

70.0% 73.0% 75.8% 78.4% 80.8% 83.0% 85.0% 86.5% 88.0% 89.0% 90.0% 90.5% 91.0% 91.5% 92.0% 92.5% 93.0% 93.5% 94.0% 94.2% 94.4% 94.6% 94.8% 95.0% 95.2% 95.4% 95.6% 95.8% 96.0% 96.2% 96.4% 96.6% 96.8% 97.0% 97.2% 97.4% 97.5% 97.6% 97.7% 97.8% 97.9% 98.0%

1.74243 l. 701 50 1.66588 1.63419 1.60542 1.57875 1.55359 1.52416 l .4991 3 1.46957 1.44365 1.41 305 1.38555 1.36074 1.33829 1.31792 1.29939 1.28248 1.26704 1.24893 1.23212 1.21648 1.20190 1.18830 1.17557 1.16364 1.1 5246 1.14195 1.13206 1.12275 1.11397 1.10568 1.09786 1.09045 1.08345 1.07681 1.06942 1.06237 1.05564 1.04921 1.04306 1.03717

Notes: Column (1) is taken from Appendix C, Page 1 2, Sheet 1, Column (9). Column (2) is selected based upon judgment after a review of the historical paid loss to incurred loss ratios for permanent total benefits.

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Appendix e Page 15 Sheet 2

lncurred Loss Development Factors Accident Years 2004/05 and After

Development Period in Months 144 156 168 180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672

to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to to

Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate

(1)

(2)

Age to Ulti mate Paid Loss Development Factor

Selected Paid Loss to lncurred Loss Ratio

(3) Age to Ultimate lncurred Loss Development Factor (1) X (2)

3.70157 3.31512 3.01165 2.76793 2.56847 2.40257 2.26265 2.14322 2.04018 1.95046 1.87168 1.80199 l. 73993 1.68433 1.63425 1.58891 1.54768 1.51003 1.47552 1.44377 1.41447 1.38734 1.36216 1.33872 1.31685 1.29639 1.27722 1.25921 1.24226 1.22629 1.21121 1.19694 1.18343 1.17061 1.1 5843 1.14685 1.13581 1.12530 1.11 526 1.10566 1.09648 1.08769 1.07927 1.07119 1.06343

50.0% 54.1% 57.9% 61.496 64.696 67.696 70.3% 72.696 74.796 76.5% 78.0% 79.2% 80.2% 81.2% 82.2% 83.296 84.2% 85.2% 86.2% 86.7% 87.296 87.7% 88.296 88.796 89.296 89.7% 90.2% 90.7% 91.2% 91.4% 91.696 91.8% 92.0% 92.2% 92.4% 92.6% 92.8% 93.0% 93.2% 93.4% 93.6% 93.7% 93.8% 93.9% 94.096

1.85079 1.79348 1.74375 1.69951 1.65923 1.62414 1.59064 1.55598 1.52401 1.4921 O 1.45991 1.42718 1.39542 1.36768 1.34335 1.32197 1.3031 5 1.28655 1.27190 1.25175 1.23342 1.21670 1.20143 1.18744 1.17463 1.16286 1.1 5205 1.1421 O 1.13294 1.12083 1.10947 1.09879 1.08876 1.07930 1.07039 1.06198 1.05403 1.04653 1.03942 1.03269 1.02631 1.01917 1.01236 1.00585 0.99962

~

... ...

Notes: Column (1) is taken from Appendix e, Page 12, Sheet 2, Column (9). Column (2) is selected based u pon judgment after a review of the historical paid loss to incurred loss ratios for permanent total benefits.

-

-

-

-

-

-

-

-

Appendh1

PUERTO RICO - STA TE INSURANCE FUNO CORPORA TION WORKERS COMPENSA TION

e

Page 16

Permanent Total Historlcal Unllmlted lncurred Loss (SOOOs)

Accident Year

1985/86 1986/87

1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2Ó04/Ó5 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013114 2014/15 2015/16



li.Mííííílíi 21 26 177 608 254 70 28 201 157 294 117 253 73 156 75 55 89 71 29 94

o o o o 153 o o o o o

231

493 747 1,603

1.785 1.821 1,522 1,003 885 1,622 l,134 851 1,328 1,076 1,129 964 808 570 824 385 §11 1,404 1.480 804 741 611 519 460

o

399 281



Evaluated as of...

IDtííiiiíí mfuíííi íiMííñílii iillííííílii üíííííiíi

1,368 1,785 3,284

2,379 2,934 5,051

3,912

5,758 4.867

3,864 6,760 6,863 5,773

4,042

5,288

3,665 3,647 4,790 4,399 4,005 4,388 3,676 3,284 3,058 2.729 2.292 2,490 2,047 5,986 6,340 6,084 5,387 6,303 5,224 3,626 2.676 2.541

5,070 4,872 6,405 6,100 5,130 5,647 4,803 4,299 3,886 3,507 3,078 3,199 21800 8,724 8,259 8,307 8,374 8,509 7,730 5,514 3,883

3,566

2,808 1.984 2,244 3,032 2,630 2.580 2,561 2,571 2,251 2,210 1,877 1,524 1,574 11176 3,738 3,957 3,839 2,704 3,306 2,754 2,016 1,319 848 1,397

3,420

4,431 4,583 7,560 7,696 6,705 6,728 6,520 5,886 7,769 7,662 5,968 6,123 6,039 5,129 4,561 4,319 3,757 3,914 41032 12,218 10,654 10,541 10,668 10,185 9,082 7,812

Notes: Data has been provlded bV Puerto Rico State lnsurance Fund Corporatlon.

4,973 5,267 8,514 8,739

7,770 8,125 7,726 7,323 9,038 9,199 7,082 7,334 6,917 6,012 5,268 5,225 4,591 4,708 41658 14,214 13,590 13,109 12,708 11,681 11,932

5,371 5,904 9,119 9,839 8,860 9,362 9,252 8,459 10,346 10,269 8,051 7,997 7,807 6,536 6,018 5,898 5,077 5,319 51569 16,248 14,701 14,609 14.255 14,295





6,329



6,920 11,412

6,811 7,215 12,150

10,745

11.451

12,353

9,867 10,630 10,429 9,674 11,095 10,971 9,079 8,868 8,599 7,302 7,063 6,414 5,851 6,066 61097 17,867 16.264 16,105 16,030

11,023 11.916 11,225 10,576 11,841 11,758 9,561 9,462 8,979 8,156 7,786 7,236 6,387 6,572 61660 19,347 17,743 17,427

12,457 12,000 11,827 12,532 12.363 10,195 10,118 9,744 8,762 8,404 7,750 7,112 7,057 71036 20,827 18,914

5,948 6,375 10,199

11,754



7,261 7,482 12,980 13.200 12,475 13,172 12,747 12,295 12,969 13,078 10,931 10,675 10,446 9,382 8,962 8.225 7.526 7,447 71406 21.861



7,516 7,737 13,'422 13,863 13,292 13,684 13,242 12,934 13,311 13,685 11,310 11,382 11,205 9,983 9,468 8,487 7,824 7,656 7,688



7,698 8,024 14,057



7,937

8,371 14,512

14,490

14,823

13,747 14,324 13,792 13,577 13,645 14,371 11.688 12.073 11,837 10,168 10,003 9,039 8,159 8,035

14,712 14,167 14,121 14,252 14,903 12,294 12,667 12,377 10,550 10,327 10,311 8,481

14,146

Appendix e Page 17

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Outstanding Loss Comparison

Accident Year

( 1)

(2)

(3)

lmplied Case Reserves as of 06/30/16

Outstanding Loss Balance as of 06/30/16

Difference in Outstanding Los ses (1)-(2)

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

$2,987,000 3,033,000 2,961,000 11,438,000 10,393,000 10,460,000 10,259,000 9,986,000 8,796,000 6,253,000 3,045,000 2,266,000 1,277,000 266,000

$3,015, 167 2,992,219 2,895,945 11,683,434 10,603,098 10,633,574 10,571,286 9,805,735 8,926,272 6, 1 59,472 3,180,313 1,978, 196 1,118,716 266,245

($28, 167) 40,781 65,055 (245,434) (210,098) (173,574) (312,286) 180,265 (130,272) 93,528 (135,313) 287,804 1 58,284 (245)

Total

$83,420,000

$83,829,672

($409,672)

o

o

-

o

Notes: Column (1) equals the difference between the incurred and paid loss found in Columns (2) and (1 ), respectively, of Appendix C, Page 4. Column (2) has been provided by the Puerto Rico State lnsurance Fund Corporation.

..

-

-

-

-

-

-

-

-

Appendhc e Page 18

PUERTO RICO - STATE INSURANCE FUNO CORPORATION WORKERS COMPENSATION Permanent Total

Permanent Total Pald to lncurred Rallos

Accldent Year

1985/86 1986187 1987188 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2D03l04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

.í.iiío.íííiíi illiüílíi. N.A. N.A.

11.9"

11.5" 3.59' 14.39' 0.011 13.9" 1.3" 13.J" 2.6" 6.7" 4.1" 19.9" 17.39' 7.3" 7.911 23.9" 10.3" 5.3" 7.8'6

5.2"

N.A, N.A.

25.5" 17.9" 14.otlí 20.8" 17.9" 17.l" 18.4" 23,°" 27.3" 21.5" 14.29' 20,7" 19.49' 18.7" 15.69' 12.59' 22.19' 12,1" 12.59' 10.6 13.1* 11.7" 13.7% 13.5" 14.19' 5.0II 5.3"



illioíííhi miüi N.A. N.A,

N.A. N.A.

N.A. N.A.

36.1" 27.3" 30.S" 35.19' 34.9" 32.9" 33.°" 30.8% 28.3" 33.6"

44,,41.3"

47.6" 48.3" 45.2" 46.9" 43.0% 42.6" 40.19' 35.99Ci 41.4" 40.4" 37.0% 35.7% 32.8" 34.0% 28.0% 33,9" 32.2" 18.4" 24.0% 20.0% 19.5" 20.2"

25.0II 26.8" 23.8" 29.6" 19,3" 24,3" 27.2" 12,7" 15.49' 14.59' 14.0% 14.59' 14.7" 11.5" 18.3" 8.111 8.69'

38.19' 43,69' 40.59'

39.9" 34,8% 32.2" 36.7" 37.1" 33.7" 31,69' 28.1" 29.°" 26.4" 30.49' 29.B 16.1" 18.8" 16.7" 17.3" 16.otfi 17,3" 13.5" 19.2" 10.8%

19,8" 17.2" 21.6"



IDlmiíbi N.A. N.A.

N.A. N.A.

52.5"

56.2% 57.49' 52.!* 50,9Wi

54.S" 51.39' 49.19' 44.29'

47.0% 44.09' 39.3" 45.5" 46.8% 38.7" 39,29' 35.8" 35.39' 33.19' 38.49' 31.6" 20.6" 26.4" 23.3" 23.n: 24.29' 25.3" 20.0%

48.0% 47.0% 47.2" 41.19' 47.0% 46.4" 41.49' 42.59' 38.6" 38.°" 35.09' 40.0% 38.611 25.6" 28.3% 26.39' 27.6" 28.2" 26.3"

Evaluated 1.1 of•••



N.A. N.A.

61.3" 58.9" 54.4% 53,6% 49.29' 49.2" 48.2" 45.09' 48.6" 50.09' 44.9" 47.4% 41,3" 42.4" 40.39' 42.0% 41.29' 3Ó.2" 33,0%

31.1" 32.49' 30,1"



N.A, N.A.

&2.n, 60.49' 55.8" 55.49' 52.29' 50.8" 52.7" 49.39' 50.19' 52.0% 47.9" 50.39' 42.6" 47.4" 43,29' 44.7" 4S.6" 34.3" 36.9" 35,59' 36.09'



ill..íloíííhi N.A. N.A.

62.5" 63.2" 57.4% 57.2% SS.ni 54.3" 56.19' 52.4" 54.3" 54.8" 52.19' 51,6" 45.9" 49.6" 46.8" 48.49' 49.09' 38.7" 40.69' 40.09'

Notes: Pald lo lncurred ratlos are bilsed upon the dollars of pald loss and lncurred loss found In Appendlx e, Page 13 and Paae 16, respectlvely.

N.A.

N.A, 65.39'



lliJlmííhí N.A. N.A. 67.29'

N.A.

N,A, 70.9" 69.611

Íili!RÍÍÍtlÍ N.A. N.A.



N.A.

N,A,

72.8'6 71.6% 68.4%

75.6" 72.7" 72.0% 69.6" 73.49' 68.9" 69.1" 68.9" 66.49' 70.0% 63.19' 60.6" 64.8%

65.5" 60.69'

67.2" 63.7"

65.2"

60,9" 58.R 55.3" 59.09' 56.09' 57.2" 57.8" 54.9" 54.7" 49.4" 53,9% 49.0II 51.5" 53.3" 42.9" 45.19'

63.7" 61.9" 60.4" 63.49' 58.9" 59.3" 60.9" 57.2" 57.6" 53.2" 57.2" 53.4" 55.2" 57.3" 47.7"

67,0%

69.Z%

65.3" 63.6" 67.5" 62.89' 63.3" 63.2" 59.h 61.4" 56.59' 61.19' 57.6% 59.2" 61.5"

68.4" 66.5" 71.4" 65.5" 67.09' 65.8" 63.2" 66.5% 59.0% 63.3" 61.4" 62.3"

74.69' 71.49'

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Appendlx C Page 19

Permanent Total

Loss Cost Trend $0.180 $0.160 $0.140

$0.120

á

$0.100

] $0.080 $0.060 $0.040

$0.020 $0.000

+-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

.l' Acdde11t YHr

(4)

(2)

(3)

Preliminary

Loss Cost

Earned

Ultimate

Accident ~

Payroll ¡soo,¡

Loss ¡sooo,¡

per 5100 of Payroll H21 • Sl ,00011 ¡11

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

$202,420,000 215,080,000 226,330,000 238,750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242, 156,580 233,992,560

(1)

$14,500 13,750 14,500 40,150 36,750 36,150 36.050 34,250 34,000 27,000 17,083 14,410 14,404 9,580 N.A.

S0.072 0.064 0.064 0.168 0.150 0.148 0.148 0.150 0.146 0.114 0.074 0.057 0.059 0.040 N.A.

Exeg;nential

Percent

Change -11.1%

º·°"

162.5% -10.7" -1.3%

º·°"

Years Reviewed

2004/05 2004/05 2005/06 2005/06 2009/10 2012/13

----

Exclude

i-~guarea

Trend

0.492 0.527 0.719 0.848 0.946 0.678

-2.4% -2.0% -12.3% -14.3% -22.0% -16.2%

Selected for accident years 2001 /02 through 2004/05 Selected for accident years 2004/05 through 2009/1 O 5elected for accident years 2009 / 1O through 2014 / 1 5 Selected for accldent year 201 S/16 and Subsequent

N.A. -1.5% -20.0%

2008/09 2009/10 2012/13 2014/15 2014/15 2014/15

1.4% -2.7" -21.9" -35.1% -23.0% 3.5% -32.2% N.A. (5) (6) (7)

(8) Notes: Column (1) has been provided by the Puerto Rico State lnsurance Fund Corporation.

For accident years 2001 /02 through 2010/11, Column (2) is taken from Appendix C, Page 4, Column (9). For accident years 2011 /12 through 2015 /16, Column (2) is equal to the average of Columns (3) through (5) of Appendix C, Page 4. Lines (5) through (8) are selected based upon judgment after a review of the curve fits above,

º·°"

-

-

-

-

-

-

Loss Trend $45,000 -

i j

$40,000 $35,000 $30,000

-

-

-

~-·

¡

$25,000

_g 5

$20,000

-

$15,000

..

1

.,

• ·-'.···~-

..

. ..

,.

-

,.

e' $10,000

...

.--~

$5,000 $0

~#~~~/###/##~~//~##/#~~#;~f~~##/~ ,rlf>,df>,df>~ ,rfi~ ~ ~ " '\) ,,rS>,,rS>,#'\) '\) '\) ,,.,_"' , <:> , <:>

~ ,oi ~ ~ ~ "

'\,<:,

'\,<:,

'\,<:,

'\,<:,

Accldent Year

-

e

Appendix Page 20

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Accident Year

1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96, 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/l O 2010/11 2011/12 201 2/13 2013/14 2014/l 5 201 5/16

(1) Selected Ultimate Loss (SOOOs)

(2) Percent Change

Sl 3,826

14,582 24,500 24,500 24,500 25,000 24,000 24,500 24,500 25,500 21,200 21,800 21,000 18,378 16,500 16,500 14,500 13,750 14,500 40,1 so 36,750 36,1 so 36,050 34,250 34,000 27,000 17,000 16,000 16,250 11,500 8, 175

5.5% 68.0% 0.0% 0.0% 2.0% -4.0% 2.1% 0.0% 4.1% -16.9% 2.8% -3.7% -12.5% -10.2% 0.0% -12.1% -5.2% 5.5% 176.9% -8.5% -1.6% -0.3% -5.0% -0.7% -20.6% -37.0% -5.9% 1.6% -29.2% -28.9%

Years Reviewed

1985/86 1985/86 1987/88 1987/88 1987/88 1987/88 1987/88 1992/93 1993/94 1993/94 1993/94 1996/97 1996/97 1996/97 2000/01 2000/01 2001 /02 2001 /02 2001 /02 2001 /02 2004/05 2004/05 2005/06 2005/06 2005/06 2005/06 2006/07 2006/07 2007/08 2008/09 2009/10

---

-

1994/95 1995/96 1994/95 1999/00 2000/01 2002/03 2003/04 2003/04 1999/00 2000/01 2015/16 2003/04 2004/05 2015/16 2015/16 201 5/16 2009/l O 2011 /12 2012/13 2012/13 2013/14 2015/16 2013/14 2013/14 2015/16 201 5/16 201 5/16 2015/16 201 5/16 201 5/16 201 5/16

Exclude

2009/10

2009/1 O

2009/1 O 2010/11 2009/1 O 2010/11 2010/11 2011/12

Exeonential R-Sguared Trend

0.514 0.352 0.152 0.655 0.724 0.801 0.832 0.937 0.881 0.912 0.036 0.917 0.007 0.022 0.067 0.085 0.587 0.153 0.032 0.019 0.826 0.881 0.828 0.914 0.893 0.937 0.917 0.932 0.938 0.943 0.935

Notes: For accident years 1985/86 through 2000/01, Column (1) is taken from Appendix C, Page 3, Sheet 2, Column (6). For accident years 2001 /02 through 2015/16, Column (1) is taken from Appendix C, Page 4, Column (9).

-

5.7% 4.0% 0.3% -2.7% -3.1% -3.9% -3.9% -5.8% -6.4% -6.2% -1.2% -6.5% 1.0% -1.1% -2.7% -2.9% 14.0% 5.3% 2.2% 1.7% -10.7% -13.0% -11.7% -12.0% -14.1% -13.8% -1 5.5% -15.4% -17.0% -18.4% -19.4%

~EFITO RICO· STATE INSIJAANCE fUNOCOlll'OAATION WORURS COMPENSATION

,t.ppendi•C

Pi1,21 Shtttl

l'a-,outolRem.inin,.otsliabili1y

ClJAccidentVeu (2) NHded Resuves ()¡

---1.2..!.1L!.L Sl,036,025

--1..Q.W.!L_ --1.2..W..J.L_ ~

.....1..2l..!.i

-1.QJ..Qill__ --1..QQW.L _l.QQ!LQL -1QQ.llQL ~ ~ ~ ~ ~ ~

.....l222L.9J..

JI 1,439,000

S16,091.500

S15,725.000

S16,162,000

$25.441,000

Sl0,864,000

$29.941,000

H0.219,000

$29,183,000

S21,l29.000

S29,727,000

$9,77),000

U,741,000

S9.006.000

SS,150,000

111.313 170,104 234,557 276,147 307,309 352,744 365,190 319.715 415,407 419,411 361,404 341,132 335,529 321,974 301,521 29Ul9 lll.635 270,429 251.750 247.60 2)7,130 221.156 217,730 201,715 200,388 192.404 114,877 177,751 171,036 164,664 lSl,659 151.905 141.517 142,170 117.543 112,164 121.517 124,342 120,315 116,518 112,960 109,441 106,200 103.071 100,034 97,254 ~.372 91,80íl 89.)39 16,902 14,591 12.304 10.210 71,174 76,149 74,296 72,455 70,750 69,069 67,410 65,716 64.310 62.192 61,421

242.589 333,HI 39),423 436,709 501,216 518,967 55),111 590,321 624,454 513,591 495,706 476,108 457,555 01,432 419,151 401,649 314,312 167,699 351,924 H6.915 322,10) 309,410 296,693 214,765 273,432 262,727 252,602 243,056 233,991 225,462 217.)00 209,622 202,329 195,456 111,101 112,642 176,702 170,972 165,579 160,524 155,534 150.914 146,417 142,157 131,213 134.101 130,470 126,961 12l,414 120.216 116,964 113,916 111,019 108,207 105,514 102,916 100,545 91,146 95,796 93,471 91,316 19.37) 17,235

B0,602 )90,200 433,129 497J62 514,711 549,274 S85,419 619,329 509,l&O 491,642 472,191 453,101 434.143 416,319 398,346 )11,151 364,694 349,032 334,219 320.161 306,813 294.262 212.421 271,193 260,579 250,531 241,064 232,070 223,610 215,511 207.916 200,661 193,151 117,253 181,136 175,255 169,571 164,216 159,216 154,262 149,616 145,283 140,990 137.075 113,002 129,401 125,926 122,482 119,227 116,003 111,047 110,115 107,123 104,713 102.134 99,712 97.331 95.010 92,715 90,619 88,642 16.600

409,658 454,111 521,952 540.376 576,676 614,689 650,213 534,761 516,166 496,410 476,423 456,521 437.015 411.208 400,171 312.171 366,441 350,177 336,121 322.173 101,937 l96,50S 214,710 271,514 263,020 253,097 20,642 234,769 226,252 211,214 210,672 203,528 196,595 190,171 113,911 178,o24 172,416 167,147 161,943 157,143 152,521 141,02& 143,923 139.640 135,851 132,205 121.585 125.175 111,797 111,611 115,671 112,665 109,934 101,219 104.697 102.192 99,752 97,344 95,162 91,061 90,865

7H.405 142,911 112.754 931,344 992.759 1,050,121 161.697 IB,625 101,849 769,463 7l7,)06 705,911 675,433 646,303 611,369 591.134 566,691 542,160 520,319 491.949 471,176 459,821 441,1)4 424,711 408,761 393,496 379,173 365,435 JS2.H6 H0,241 lll,691 317,504 307,149 297.151 281.534 278,452 269,954 261,559 2Sl,799 246.145 239,069 232,429 225.534 219.403 21),501 207,675 202,154 196,710 191.672 116,113 111,979 171,553 lll,177 169,011 165.061 161,092 157.200 153,689 150,305 146,796

1.053.080 1,090.240 1,163.480 1,240,177 1.311,143 1,078,944 1.041.382 1.001,691 961,221 921,074 811.146 143,191 107,371 772.495 739,316 707,928 678,175 649,996 623,291 598,2)7 574,410 551.941 530,676 510,614 491,571 473,670 456,479 440,)98 425,021 410,615 396.633 313.701 371.232 359.195 347,1)7 137,220 326.757 317,066 307,745 291,640 290,369 211.727 274,101 266.727 259,412 252,529 245,701 239,443 233,394 227,313 221,120 216,326 211,233 206,172 201.264 196,318 192,005 117.146 113,301

1,095,002 1,161.537 1.245,516 1.317,584 1,083,655 1,045,929 1,006,048 965,418 925,017 115,615 847,450 110,192 775,161 742,537 111,009 611.121 652,834 626,036 600,156 576,933 554,351 532.980 512,159 493,727 475,7H 451,417 442,318 426,199 412.407 391,)65 315,371 372,125 360,759 )49,382 331,693 328,183 318.423 309,0&1 299,949 291.625 212,942 275,271 267,182 260,547 25),630 246,804 240,486 234,40! 221,300 222.761 217,212 212.132 207,072 202.112 197,251 192,850 111,568 114,194

1.226.602 1,301,411 1,383,024 1,137.491 l,097,S86 1,056,041 1.013.318 911,041 929,616 119.567 151,173 114,314 779.442 746,347 714,941 68U74 657,115 6)0,681 605,510 511,902 559,465 531,330 511.255 499,361 411,254 464,291 441,099 432.199 411.ISJ 404,497 391,356 371,669 366.739 355,536 344,414 334,250 324,439 314,871 306,121 297.007 211,952 211.201 273.510 266.243 259,067 252,436 246,047 219,651 233.145 221,061 222,672 217,37) 212,165 207,041 202.415 197,934 193,244

1.313.152 1,389.257 1,142,602 1.102,'26 1,060,773 1,017,932 975,413 9B,856 193,554 855,004 111.051 712.922 749,711 711.164 681,339 660,090 633,534 601,320 514,506 561,977 540.761 520,566 501.597 41J,416 466,374 450.119 434,156 420,031 406.)15 39),124 310,)71 361,371 )57,112 346,023 335,750 325.117 316,215 307,501 291,lll 290,254 182,462 274,729 267,433 260,225 253,571 247,151 240,731 234,10}4 229,017 22l.6H 211,347 213,123 207,951 20),311 191.124 194.212

1.407,159 1,157,333 1,117,0SO 1,074,452 l,031,064 9&7,987 945.891 905,078 166.009 121.606 793.037 759,360 727,4]3 697,228 668,604 641.702 616,154 592,047 569,210 547.727 527.289 508.066 419.660 472.384 455,927 440,457 425,467 411,551 )98.191 315.291 173.llt 361.726 350.491 340.075 330,082 320,343 311.451 302,191 294,005 286.101 278,211 270,115 26),574 256.156 250,335 20,142 237,914 232,042 226,566 221,174 215,167 210,645 205,959 201,116 196.644

1,212.690 1,231,040 1,190,834 1.142,136 l,094,994 1,048,152 1,003,108 959,125 911,356 171,9)1 141,631 106,226 772,75) 741,005 711,119 612.119 656,164 630,166 607.055 514,403 563,019 542.696 523,552 505,300 411.147 471,530 456,lll 441,327 427,021 413,532 400.198 JH,443 376,909 365,ISO 355,059 345,190 334.934 325,131 317,091 301.411 300.213 292,127 214,666 271,472 270,241 263,671 257,161 251.104 245.129 239,243 233.476 221.244 223,190 211,019

513,591 514,001 399,002 379.119 361,533 344,254 327,972 312.641 291,262 284,756 272,100 260,216 249,065 238.591 228.757 219,492 210,7~ 202,594 194,174 181.563 110,683 174,174 161,017 162,171 156,661 151,403 146,429 141,709 137,203 132,903 121.147 124,958 121,244 117,616 114,325 111,080 107,912 105,030 102,171 99.479 96,160 94,349 91,964 19,618 17,419 85,279 IJ,237 81.243 79,347 71,510 15,741 74,030 72,359

415,610 176,960 351,117 341,566 325,242 309.854 295,315 281,791 269.036 257,069 245,145 235,304 225,411 216,119 207,371 199,141 191,406 184,110 177.201 110,100 164,550 151,141 153,212 141,007 143,039 131,341 133,179 129.621 125,569 121,728 111,054 114,546 111,117 101.012 104,950 102,019 99,229 96,534 93,910 91.513 19.IH 16,885 14.619 82,590 10.569 11,636 76,764 74,962 13,221 71,550 69,940 61,314

410.890 391,113 372,301 354,512 B7.743 321,965 307,1S9 293,244 210.213 267,974 256.412 245,702 235.570 226,033 217,072 208,624 200,681 19),152 116,064 179.)63 171,023 167,007 161,331 155,912 150,796 145.933 141,29S 136,164 132.615 121,671 124,159 121.194 117,735 114.394 111.197 101,162 105,226 IOl.40 99,741 97,157 94.691 92,312 90,024 87,127 15,719 83,666 11.711 79,111 71,992 16.2)6 74,506

191,160 379,015 360,903 343,831 327,765 312,690 291,533 285,259 272.799 261,109 250,136 239,820 230,101 220,911 212,319 204,295 196,630 119,420 112,595 176,146 170,013 164,231 151.716 153,510 148,551 143,141 139,335 135,074 130,996 127,103 123,314 119,151 116,454 11),201 110.110 107,111 104,283 101,544 91,910 96,401 93,975 91,639 19,401 17,264 15,171 13.116 11,253 79,391 71,604 75,154

Paymnt,Antidpated Durlng 12 MonthsEnding 6¡J0¡11 6/10/11 6/30/19 6¡30/20 6/30/21 6/30/22 6/30/23 6/30/24 6/l0125 6/30¡26 6/30127 6110121 6/30¡29 6/30130 6/)0¡31 6/30/32 6130/B 6/30/34 6¡30¡35 6/30/36 6/30/37 6¡30/31 6J30J)9 6{10/40 6¡30/41 6/30142 6/30/43 6/30¡44 6130/45 6110146 6¡30/47 6110141 6J30J49 6¡30¡50 6/30/51 6/}0¡52 6/30/53 6/30/54 6/30/55 6/30/56 6¡30/57 61)0/51 6/30¡59 6/30/60 6/30/61 6/30162 6/30/63 6/30/64 6130¡65 6/10166 6/30/67 6130/68 6/30/69 6¡30/70 6/30/71 6¡30/72 6/)0/73 6/30/74 6/30/15 6/30116 6¡30¡71 6/30171 6110179 6¡)0/80 6/30/11

24.261 71,966 119,560 164,210 193,901 215,237 247,060 255,719 272,952 290,952 307,764 2H,121 244,319 234,997 225,507 216,019 206,117 197,951 119,409 111,221 173,450 166.081 159,091 152,492 146,232 140,349 134,764 129,414 124,494 119,793 115,325 111.122 101,096 103,319 99,719 96,116 93,057 90,012 17,086 14,266 11,606 79,115 76.656 74,381 72,196 70,066 61,121 66,096 64,104 62,571 60,165 59,250 57,650 56,110 54,749 53,)27 52,0H 50,147 49,SSO 41,369 47,212 46,071 45,042 44,045 43,017

~

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~ ~

Lin1 ,2i is t.aken fromAppendl~ C. PaQe 3, Sh11t l,Column (14). Lin1 ())Isba.sed on thl p.,i~ment putern deriv1d on Appendix e, PaQe 22.

129.941,000

~ ~ ~ ~ ~

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~ ~

-

-

-

-

-

-

-

PUERTO RICO· STA TE INSIJAANCE fUND CORPOAATION WORKEFIS COMPENSATION

1'fy,:,utolRemall'Mn1LonLiability

~

--l!!!l.!L

---1.llZ.l.2!_ __!1W.!L_ ~

U,750,000

19.000,000

S\0,250,000

397.084 178,105 360,220 343.194 327.600 312.760 298,856 285,801 273,551 262,054 251.256 241,071 231.516 222.51) 214,034 206,010 198,450 191,101 114,538 178,124 1'2,069 166.2&5 160,825 155,(;45 150,691 145,976 141,514 137.244 lH,166 129,264 125,571 122.010 118.606 115.360 112.228 109.261 106,)83 103,626 101.001 98,05 96,014 9).669 91.420 &9,233 87,150 &5.129 83,186 81,305 79,474

407,394 )88,125 369,999 352.971 336,987 322.011 307,944 294.741 282,357 270.720 259,749 249,453 219.751 230,616 221.967 21).822 206.118 19&,837 191,916 185,400 179,172 173,286 167,697 162,369 157,284 152,47& 147,870 143,471 119.275 135,297 131.454 127.791 124.299 120,924 117,720 114,624 111.654 108,121 106,083 103,446 100,926 98,505 96,147 93,897 91,719 89,631 87,606 85,662

462,9113 441.)65 421,060 401,995 184.119 367,340 351.596 336,825 322,937 309.847 297,568 2&5,996 275.100 264,778 255,061 245,177 237,US 228,934 221,154 213,723 206,712 200,049 193,694 187,626 181,886 176.392 171,155 166.142 161.397 156,815 152.438 148,266 144,248 140,425 136,735 lH.119 129,127 126,536 12).400 120.386 117,506 114,698 112.012 109,409 106,918 104.499 102,177

S 10,000,000

S9,I00,000

---1!!!.l!L.. S 10,500,000

U.600,000

U.900.000

U.900.000

U.600,000

S7,500,000

H.no.ooo

16,750.000

suso.ooo

432,682 413,779 396,048 379.402 363,754 349,018 335.194 322,147 309,871 298.253 287,309 276,960 267,178 257,875 249,110 240,749 232,848 225,331 218,179 211.144 204,883 198,701 192,797 187,142 181,795 176,640 171,706 Hi7.011 162,480 158,179 154,022 150,019 146,237 142.541 139.008 115,610

401,719 314,498 368,335 )53,152 338,841 325,420 312,755 300,838 289,562 27&,926 268,887 259,3&2 250,357 241,849 233,723 226,051 218,762 211,811 205,181 198,906 192.199 187,167 181.685 176,496 171,485 166,706 162,140 157.744 153,570 149,529 145,649 \41,973 138,177 ll4,951 131,658 128,491 125,421 122,491 119,652 116.919 114,276 111,752

402.672 l&S,753 369,848 lSU61 340,799 327,538 315.060 303,241 292,116 281,596 271,646 262,194 253.285 244.777 236,740 229,104 221,124 214,882 208.305 202,021 196,023 190,273 184,835 179.593 174.5&2 169,812 165.202 160.832 156,596 152,528 148,68l 144,919 141,312 137,179 134,568

390,414 374,115 159,145 344.920 3)1,496 318,&71 306,908 29S,642 284,995 274.925 265,362 256.340 247,7)2 239,596 211,873 .!24,503 217,477 210,129 204.465 198,385 192,571 117.076 181.761 176,696 171.162 167,193 162,772 158,489 154.379 150,474 146,673 143,035 1)9,544 1)6,198 132,947 129,834 126,824 123,926 121,131 118,422

341.963 )28,101 115,105 302,843 29U08 280,180 270,090 260,363 251,168 242,421 234,188 226,UO 218,888 211,830 205,103 198,675 192.600 1&6,788 181,231 175,928 170,903 166,050 161.421 157,005 152.745 148,703 144,788 141,030 137,468 133,995 1)0.673 127,4&5 124,425 121.•55 118,613 115,160 113.211 110,655 108,207

312,311 319,152 306.7)3 295,051 283,981 271,557 263,712 254.395 245.536 B7.198 229.231 221.705 214,557 2D7,7J4 201,231 195,076 189,189 183,570 171,191 173,101 161,186 163,495 159,022 lH,708 150,612 146,653 142,847 139,236 135,720 132,356 129,123 126,020 123,011 120.IH 117,149 114.666 112.078 109,563

311.418 299,302 287,901 277.101 266,929 2H,317 248,225 239.585 231.444 22J.668 216,331 209,351 202,703 196,351 190,350 184,606 179,118 \73,873 168,905 164,106 159,530 155.169 150,957 146,961 143,091 139,381 115,864 132.428 129,148 125,989 122.972 120,029 117.221 114,500 111,888 109,364 106,922

lSl.076 145,321 1)9.170 134,739 129.1116 125,297 120,936 116.828 112,902 109.197 105.674 102.317 99,112 96,081 93.181 90.415 87.76] 8U57 82,836 80.525 71,325 76,200 74,111 72,231 70,356 68,578 66,&46 65.189 61,596 62,012 60,587 59,170 57.798 56.479 55.205 53,972

-.!.illl!L

---1!!!1.!L_ S2,500.000

(1) P,y....,nll .lln1kipiltd 011rlnv 12 Month,Endinv. 6/}0/17

6/10/11 6/l0/19

6110120

6/30/21 6110/22 6/30/23 6/J0/24 6/l0/25 6/30/26 6/30/27 6/30121 6/30/29

6/30/30 6/30/31

6/30/32 6/30/H 6130/34 6J30J3S 6J10J36 6/30/37 6/10131 6/10/39 6/30/40 6/30/41 6/30/42 6/10/0 6/30/44 6/30/45 6/30/46 6/30/47 6130/48 6/30149 6/30/50 6/30/Sl 6/30152 6/30/53 6/)0/54 6/30/55

6/30/56 6/30/57 6/30/58 6130/59 6/30/60 6/10/61 6/30162 6130/63 6/30/~ 6/30/65

450,970 430.220 410.740 392.480 175.340 359,250 344,150 129.960 316.590 304.050 292,220 281,090 270.540 260.610 251,230 242.350 23),920 225.970 21&.l&O 211.210 204,400 197.910 191.710 185,840 180.240 114.880 169.760 164.910 160,230 155.760 15UOO 147,390 141.480 139,710 136,080 132.650 129.290 126.090 123.010 120.060 117,190 114.450 111.790 109.240 106,780 104,380

409,991 391,427 374,019 357,615 142,)60 327,973 314,441 301.711 289,753 278.47& 267,868 257,821 248,157 239,412 230,958 222,923 215.342 208,101 201.274 IM,786 118,598 182,692 177,104 171,763 166,657 161.771 JS7,157 152.689 148,430 144,372 !40,4S9 116,737 133,142 129.684 126,408 123.214 120,156 117,226 114,414 111.684 109,073 106,534 104,104 101,756

472,952 451,931 432,191 413.651 l96.281 379,943 364,550 350,102 l36.4U 321.663 311,525 300,090 289,216 279,059 269,346 260.201 251.454 243,201 235.35& 227.882 220,742 213,990 207,5)3 201,369 195.468 189,882 184,496 179.351 174,447 169,712 165,218 160,871 156.692 152.744 148,880 145,184 141,645 138,243 134,946 131.716 121,730 125,790 12l.945 120,180

99,489

6/30/66 6/30/67 6130/61 61)0/69 6/10170 6/30/71 6/30/72 6/30/7) 6/30174 6/30/75 6/30176

6{)0¡77 6130171 6/30/79 6¡30/80 6/30/81

lint (21 is u.kotn from Appotndix e, PalJ• l. si-.1 1, Column 1141, lint 131 is b.i._don 1lw PilV'""'"' p;i111rncar;..edon.-.ppotndi• C. Pl.Qe 22.

-

--1llii.!L_ ~ -1.lliJJ.L_ ~ .....l.!!2..(.2 ---1!!!f.!L_ ---1.!!11.!!.._ ___!.!!!.E_

132.355 129,197 126.173 123.245 120,4)2 117,715 115,074

lll.JSS 121.285 125.303 122.446 119,678 117,014

1)1,648 128.638 12),915 119.452 115,231 111,221 107,442 103,&34 100,425 97,188 M.098 91,JS2 88,364 85,697 83,152 I0,715 78.409 76,1&3 74,057 72,034 70,079 68,223 66,428 64,704 63.071 61,477 59,953 58,488 57,086 55,720 54.418 53,155 51,941 50.770 49,632

l 11,)90 114.045 109,940 106,05S 102,363 98,885 95.563 92.425 89,445 86.605 13.&93

11,325 71.873 76,528 14,285 72.165 70,115 68,160 66,295 64,495 62,790 61,138 59,550 58,048 56,510 55.17& 53.830 52,538 51,213

50,085 48.920 47,805 46.725 45,680

___,,, .....

PVEKTO RICO- STA.TE INSURANCE FUNOCOIIPORATION

WORIIERSCOMPENSATION

P1youtolllem,ininat.ouü1blli1y

OJA.c:cld1n1Vur (2)Nledld . . MMJ

--1.!!.!.l.!!- -lH1L!L -1.!!!..lll.- ---1!.!2l.!L ----l.filL.!2.. ---1!Z!.J.!!... --1!!1LlL..

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--1!!!LlL- ---1!Zll!L --1.!1.!.LZ.L.

--1.!Z9Ll.!__ __!!!!Lm..,_ ~

52,100,000

52,000,000

U,400,000

U,500,000

U,450,000

Sl,IS0,000

$2,250,000

Sl,150,000

Sl,900,000

Sl,100,000

Sl,750,000

Sl,650,000

Sl,500,000

Sl,250,000

Sl,200,000

Sl,000,000

100,561 96,940 93,515 90,260 17.192 14,265 11,497 71,170 76,364 73,973 71,711 69,S46 67,471 65,50) 63,HO 61,124 60,100 51,451 56,170 55,364 53,909 52.508 51,113 49,190 41,653 47,464 46,126 45.219 44,161 43,1)6 42.151 41,200 40,210

96,966 93,540

117,967 11).IIJ 109,992 106,298 102.109 99,494 96.JJ4 93,314 90,461 17,732 15,126 12,632 10.270 77,993 75,116 71.742 71,741 69,142 61,006 66,240 64,567 62.935 61,375 59,171 51.440 57,043 55,709 54.411 53.174 51,974 50,115

124.711 120,500 116,453 112.621 IOl,998 105,533 102.221 99,103 96,111 93,255 10,523 17.931 IS,440 13,051 10,711 71,S93 71,513 74,500 72,561 70,735 66,946 67.231 65,59S 64,023 62,493 61,030 S9,615 51.255 56,9)1 55,660

124,291 120,116 116,172 IU,426 lOl,154 105,446 102.ZZl 99,1)7 96,119 93,172 90,704 11,129 15,672 IJ,129 11,066 71.922 76,144 74,150 72,961 71.116 69,352 61,659 66,037 64,460 62.ISO 61,490 60,016 51.729 57,420

111,041 107,395 IOJ,9U 100,631 97.479 94,497 91,646 11.922 16,311 13,152 11,472 79,197 17.032 74,94) 72,951 71,040 611,196 67,441 65.743 64,11) 62,541 61.047 59.519 51.196 56,844 55,547 54,292 53.0II

111.512 114,619 111,047 107,561 104.279 101.131 91,127 95,252 92,53J 19,90) 17.397 15,005 12.699 10,510 71,J92 76,)51 74,430 72,547 70,749 69,023 67,365 65,756 64.220 62,721 61,297 59.91) 51,572

115,615 112,011 101,502 105,114 102,009 91,910 96,079 93,3)4 90,615 11,154 15,744 13,411 11.210 79,073 77,022 75,076 71.177 71,365 69,621 67.951 66,321 64.777 H,272 61,IJO 60.432 59,011

104,616 101,UI 91,240 95,276 92.445 19,7)5 17,172 14,691 12,335 10,0IJ 77,910 75,141 7).153 71.936 70,UO 61.147 61.652 65,026 6),464 61,950 60,500 59,096 57.747 56,441 55,170

101,599 91,492 95,519 92,612 19.966 17,315 14.915 12,546 10,219 71.109 76,043 74,043 72,121 70,299 61,522

101,414 91,422 95,491 !IIZ,699 90,052 17,495 15,054 12,721 I0,413 71,JS3 76,291 74,312 72,04 70,604 61,154 67.172 65,560 63,994 62.491 61,047 59,654 51.307 57.00S

91,510 95,513 92,713 90.131 17,574

92,411 19,703 17,141 84,661 IZ,105 10,055 77,112 75.IZI 73.126 71.910 70,094 61.322 66,629 65,00) 63,443 61,926 60,479 59,075 57,726 56.423 55,151

79,660 77,315 75,119 73,090 71,091 19,163 67,))) 65,Stl 63,159 62,246 60,671 59,169 57.725 56.)J9 54,994 SJ.708 52.460 51,264 50,106 41.91)

79,346 77.094 74,942 72,194 70,915 69,0)1 67,ZZJ 65,471

61,794 66,174 65,046 63.210 61,605 59.115 51,421 56,952 55,513 54.137 SZ,115 51,541 50,316 49,140 47,999 46.903 45,144 44,121

m Payment, Antklp,1tftl Duri"'III 12 MonthsElldlng..... 6/J0/17 6/)0(11 6/)0/19 11.1.0,20 6/)0fZI 6/10/ll 6/)0/lJ 61)0(24 6/30125 6130/26 6JJ0/l7 6/10/21 6/10129 6/301)0 6130131 6/10/32 6/30/U 6/)0/34 6/)0/35 6/30¡36 6/30¡37 6130131 6130/39 6/10/40 6/)0/41 6/)0/42 6/)0/43 1/30/44 6/)0/45 6/)0/46 6/10/47 6/)0/41 6/30/49 6/10/50 6/)0/51 6/30/52 6/30¡5) 6/30/54 6110155 6/30/56 6/30/57 6/30/51 6/30/59 6/30/60 6/)0/61 6/30/62 6130161 6130/64 6130/65 61J0¡66 6¡)0¡67 6130161 6/J0/69 61)0170 6/30/11 6/)0/72 6/10/7) 6/30/74 6130175 6/J0¡76 6130177 6130171 6130/79 &/30/IO 6130111

90,216

17,216

14,ZII 11,520 71,192 76.)16 73,992 71,730 69,566 67,491 65,520 61,641 61,142 60,\16

51,472 56,116 55,310 53.924 52,524 51.191 49,904 41,666 47,471 41,UI 45,232 44.174 43,141 42,164 41.212 40,294

H,U)

65,192 63,621 62.107 60,655 59,247 57,195 56.511 55,325

as.no

12,802 I0,555 71,4Zl 76,360 74,379 72,499 70,661 61,916 67,233 65.621 64,05) 62,555 61.103 59,707 51.359 57.056

61,IH 62.210 60.161 59.111 57,767 56,317 55,0U 53.790 52,562 51,376 50,231

Une 121 is tak1n f,omA.ppelldlx C. "'91 3, 5.... t 1, Co .... mn (14). Lin1 (JJ Is b&11d on lhe paymen1 pallun deriwed on AJ¡pendlx C. Plgl! 22.

-

-

PUERTO RICO· STATE INSURANCE FUNDcoaPORATION WORKEIISCOMPl;NSA.TION

Appendi1C

111.. 21

P9rmmnmtTotat

~ofRe1n1ininat.aulilbílity

-

ll)Accld.n1Ynr

noo.ooo

SJS0,000

1250,000

Sl40,000

555,000

SI00,000

SlJ.000

120,000

5462,578,525

)5,901

26,U9

11.711 11.410 11,114 10,lll 10.559 10,218 10,046

4.192 4,765 4,645 4,527 4,415 4,107 4,204 4,103

9,571 9,147 9,130 8.922 l,720 1.527

4,00&

9.510 9,269 9,015 1.111 l,596 1,)90 1,119 7.1118 7,112 7,614 7.461 7,295

2,225

25,625 24,946 24.290 2),660 2),062 22,479 21,922 21,Jl7 20.174 20,375 19,199 19.417 11,991 11,564 11.148

19,791 19.269 11,762 11.275 17,814 17,)63 16,911 16,520 16,121 15,7JI 15,370 15.0ll 14,671 14,ll9 14,017

l,))l

34,926 Jl,971 ll.079 12.208 1\,372 J0.580 29,807 29,068 21,359 27,678 27,017 26,)15

1,291 1,266 1.215 1.205 1,176 l,149 1,122 1,097 1.072 1,048

2,170 2,117 2.066 2,017 1,969 1.124 1,110 1.117 1,795

11.404.546 11,)41,6)6 11,094,161 17,801,490 17.318.745 16,151,567 16.290,501 15,7)),654 15,155,617 14,544,212 1),942,067 13,356,175 12.832,791 12.1J5,361 11,156,522 11.)95,534 10,953,075 10,526,711 10.101,lH 9,&91,291 9,)02,051 8,125,lSJ 1,564,079 1,219,636 7,192,611 7,580,219 7,278,142 6,919,620 6,718,615 6,454,116 6,204,012 5,967,114 5,751,764 5.544,521 5,340,134 5,140,306 4,943,2113 4,702,031 4,466,465 4,219,741 4,010,422 ),719,462 ),510,535 ),174,831 J,\70,001 2.991,555 2.81),616 2,64),161 2,40,7J2 2.154,579 2.222,768 2.096,200 1.979,319 1.861,649 1,604,772 l,)74.979 1.15),140 07,626 735,191 5)9,751

(3)P.1ym11nisAn1lcipa1tdDuring 12Mo111hsEnding ....

-

6/)0/17 6110/11 6130/19 6/10/20 6¡J0/21

-

6/)0/l7 6/10/21

-

6/30/22 61)0¡2)

61)0/24 6/10/25 6()0/26

6110/19 6/)0/)0 6/301)1 6130/)l 6!301U 6/)0/34 61)0/35 6/30/)6 6/J0/17 6/30/31 6/3009 6/30/40

n.rn

15,184 24,616 24.062

,.,os

),915 3.825 J,739

u,;s

6/10/41

6/30/42 6/)0/0

6/30/44 6/30/45 6/30/46

6/30/47 6/30/41 6/30/49

,,10,so 61)0/51 6/30/52 6/30/53 6/30/54 6/30/55 6/30/56 6/)0/57 6/30/51 6/30/59 6/30/60 6110/61 6/30/62 6/30/H 6110/64 6/30165 6/30/66 6/10/67

6/30/61 6/30/69 6/30/70 6/30/71 6/30/72 6/30/7)

6/30/74

6J30/7S 6/30/76

6/30/77 6/30/71 6/30/79 6/30/10

113,891 216,JS4 195.169 105,473 4),017

6/30/11

---iTooToo

--mo.ooo -mo:ooo

~ ----m:iioo" ---mo.ooo ~ ~ "fflT.ffl:m'° Pao• ),Shn1 l,Coll11nnl14J. AV1ro111• Dura1ionof Plyou1:c:::!!Jm hu• 22.

NolH; LIM(2)11 hlk•nft0mAp1111ndlsC,

Llnt lll 1, bf.Md on lht NYIIMnl pathlrn Dllriv.d on ,*,p,.ndill C.

-

l'UIIITOIIICO•SfAft1NSUIWICIFUIIDCCIIPOIUt,flOH

:.2!

WOUEltS COMHkSATION

~· ........

CIOHLOH P1t1itr11for Accldlitl

,-

...'

Xter 1

'

." '

1

" "" ..""" """ 14

.."

"" """ " "" " " " ""

.. ... ... ..... ...." ....".."" .."" "" ...."

2001/04 ~ 0.041ft. 0.&920. 1.921a 2.4022"

US6fa 2.,. . . 2.912 .... 3.00]31' 3.171o,r, 3.401o,r, J.425:t,r, 3.545,,r, 1.n1a 3.Sll« ].51&nl; 2.729515 2.59111' 2.4732" Z.J5SOl5 2.zua 2.1318"

.......

1. . . . . 1.161« 1.78011' 1.701,S l.&322" l.564ft 1.50151' l.44ZOS 1.31§9,r, l.llJl1' 1.21311' 1.21&<* 1.19151' 1.1494,r, 1.1094" 1.0711'1. 1.0357" 1.0017"

....... ...,... 0.9H"' 0.9092" 0.1114'1 0.1541!1i

0.80511' 0.71211' 0.7599" 0.7311'1. 0.71151' 0.6990!5 0.68051' 0.6621Jii 0.6454", 0.6191!1. 0.61US o.59IO!II. 0.5134'1 0.5"""

o.SSSlll 0.5421!1i 0.5102" 0.5111• 0.50&4" 0.49511'

--

,.. Cronlou P1ymtnl P1tt1rnlo1 A«ld1nt Yun 2004/0S

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'"

Ptn:enugeof Uhlm1ttl.oH l11111lnl.. iobtP11d

Pen:ent.111101 L.. bllLty tobeP11d

Hof

0&/30/16

e"5Mllt:JWIIII/II

1101

(1)

l'trcent.19101 UltllnallLOH h1111lnlng toNhld

....

--ld.6blL- --9:i.l..lRL.!. ...IIJ..l..22.2 .....wa.lL. o.oz1n O.JOll!li o.t700JII, l.417S'5 z.oun 2.412. . 2.,11. . J.D1J7" 3.lll2'1,

J.3959'1 Ultft UztOS 3.149ztl

l.039"' 2.9211'1. UOSR Z.&1141' 2.57lft

ueu•

z.nas,r, Z.U47" 2.n1• Z.066115 l.t1M,r, 1.11972" 1.119315 1.7461"

'·"""

l.6110S I.S419f5 1.490415 1.41'*"' I.JIU" 1.33241' 1.215,41' 1.24061' 1.19151' 1.1571'1. 1.119915 1.01351' 1.04141' l,015:t,r,

o.tao•

0.9U7'1 o.9ZS. . 0.1911" 0.1717" 0.1475" 0.1221•

.......

0.301D o.11oca u1n• J.0439'1 2.4124" 2.,11• 3.0137" 3.1121" J.395"' 3.619b 3.&29°" J.1492" 3.03!1"' 2.923711

2.105"'

Z.6114" 2.5739" 2.462,S 2.]5&515 2.2547'11

....... Z.ISNa

1.9794,r, 1.1972" 1.119B, 1.7461" 1.6766" 1.6111* 1.5419'1 1.4tcM,r, 1.4J4ft

uazs•

1.3124" 1.2154" 1.2405" 1.1915" 1.1571'1. 1.11"" 1.01n,r, 1.041415 l.0153" 0.9143" 0.9U7" o.9zso1,r, 0.1912" 0.1717" 0.1475" O.IZZIX

··-

O.UU1' O.IIJ51' 0.64741' Q.6)14!1. 0.1115!1. 0.6018" 0.5174" O.S7U15 0.5604" 0.54IOS O.SHl1'

0.7715" 0.701" 0.7311111, 0.7172" 0.69891 0.6112" 0.6635" 0.6474" O.Hl4" 0.616515 0.6018" 0.5170: 0,5712" o.5&04!5 0.54IOJI, o.ns1•

~

------;m¡;;¡-

0.1715!1. 0.7S72" 0.73711' 0.71721'

º·'""'

....,.

O.JOl!li. o.t1oa

2.0443" Z.41291i 2.671411, J.074411, 3.112911. J.39J.&20ft J.IZta 3.14t9" 1.040Bo 2.924)1, Z.1()62,r, Z.&I'°" 2.5745,. 2.463:DI. US70to z.2nz11, Z.1514,. 2.06&1'1. l.97ta l.h7&s 1.1197" 1.746511, 1.6170II. 1.,11,,r, l.549a 1.4901'1. 1.435111, l.312ft J.3321'1. 1.2151'1. l.2409!I. 1.1910. 1.uao,r, 1.1201,. 1.083711, 1.0415" I.OISS11, 0.914511, 0,953911. 0.925MI. 0.191411, 0.6719" 0.1477" O.IZZ511,

.....,.. 0.7711'1. 0.751411, o.nn,r, 0.71741,

º·"''"

o.u1n. 0.6636" 0.14751' 0.,11511, O.&l&R 0.601!1i. 0.517511, 0.571:t,1, 0.5&0511, o.s... ,,. o.un,.

--....-

,.,

eWMtMYWHlflll

0.1700. 1.4115" 2.IMH" Ul24S z.,na J.013,,. 1.1,22" U959" ).119"' ).IZ,o,r, 3,14!112"

J.OJ!lft 2,9n,x 2.1055" 2.6114" 2.5739'1

U&Jlll 2.3515,r, Z.1541'1.

z.n,•

Z.0&6bl l.!11194tl 1.1972" 1.1193"

1.741i,, 1.676611. 1.511o,r, l.541ft l.4904tl. l.434ft I.JIZS!I, 1.JU4" 1.215« 1.240&s l.1915W. I.IS7711, 1.1199'1 I.OIJS" 1.041411 I.OISb 0.9141,r, O.,U7" 0.925415 G.IH2'1. 0.1711'1. 0.147511. 0.122Di

--·alL.11111'1~

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0.9731,r, 1.4923'1 2.0505" uzoa 2.6165,r, 3.0137" 3.1925• J.406911 l.&JISS J.1414" J.U!MX J.04951' 2.9na 2.1141'1\ 2.&971S Z.5121'5 U70fll 2.3141,r, 2.2520'5 Z.1649" 2.0730III. 1.n5a 1.90)4" l.a2SZS 1.n1a 1.uzo,r, 1.61&1" I.SSJQ,r, 1.4952" 1.431511.

I.Jl70S 1.31&7" 1.28,er; 1.244n 1.2024'1 l.161SW. 1.12n,r, l,0110III. 1.0518" I.Oll&ll

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..... r-201111,

l'trcent191of Puan1111101 LUblllty UltlmU11LoH 1obltP11d ll1111lnl.. uof 10NP11d 06/1011& nol ~ --2§.l..W.l!_

1.417511. 2.00ft 2.4124'5 2.&11n 3.0737" J.\IZ2" J.J95ft 3.619"' J.IZ90tl. 3.1492"

J.O)tft 2.9211'r, 2.1056il

2.6114!1. 2.5739'1 Z.4&18" 2.15&51' 2.2547" Z.IS7M

....... 1.9194!1. 1.1972" 1.1191,r, 1.7461" 1.61&6" 1.111o,r, l.541ft

......

1.4348" 1.1125,r, 1.3324" 1.2154" 1.2400, 1.1915,r, 1.151,r. 1.1199" 1.01n•

Ptm::1nllllfol l11blllty 10blP11d uof 0&¡30/1&

uo1o,r, 2.0707" z,444o,r, 2.712!1i. J.1140I.

J.J2J9" J.4404,r, ).6&72,r, J.1792" 1.1905!1. J.0794"

2.H20S Z.14Z4S J.12)6" 2.&076" 2.49511' Z.H74S 2.2142,r, 2.11&2" z.o9M• z.oou,r, 1.9221,r, 1.101,r, l.7&90!I l,6Hh l.&32115 1.so2s l.5otft 1.451"' l.40Gn 1.1499" 1.30221'

1.ZH9"

0.6112" 0.6635" 0.&474S 0.6114" 0.61&5" 0.6018" 0.517. . O.S732" 0.5604" O.S4IOS 0.5351"

--,r,m&' --r&o:'illRRii" ---u:m&'

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...... 0.77151' 0.7S12" 0.737\W. 0.7172" 0.69191f, 0.&112" O.HJSS 0.6474,r, 0.6)14"

o.&1H• 0.6018" 0.51741' 0.5732" 0.58041' 0.548°" 0.53511'

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I.Ml4S 1.0151,r, 0.9143" 0.9S37" 0.9254" O.IH2" 0.171"' o.un• 0.122),r,

...... 0.77151' 0.7572" 0.7371,r, 0.1112•

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hfflllnlng

tobtP11d HDf

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l.214ZS 1.1729" 1.134&1' 1.0971'1. 1.062111. 1.0216S 0.9972,r, 0.9&62,r, 0.9375,r, 0.9100ll o.cn1• O.H8h O.IJJIS O.IIOSl5 0.7U7" 0.7671" 0.7468" 0.7Z&6S 0.70111' 0.6901S 0.6722" o.&5sn 0.6197" 0.6246" 0.6097" 0,595115 0.5801'1. O.S677" o.sn2s 0.5419"

o.ts&a 0.92&415 0.9011,r, 0.174511. O.IS02X 0.12509' 0.1025" o.111o,r, 0.7591'1. 0.739SS 0.719SS 0.7012" O.lil34" 0.6657" 0,6495" 0.6330: 0.&11515 0.601fll 0.5191'1 0.5751S 0.5&22" 0.549B 0.537(1,r,

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M#m!W2•1JIII Ptru11tag1of Ult111111et.ou

2.0439" 2.4124'5 2.&778" J.0737" l.lll21' ).)95"' ).lil9B J.12tca 3.14921' l.039&S 2.9237" 2.105"' 2.lilUS Z.5739" 2.4&1,S 2.35&5S 2.2541'1. 2.U7"' 2.0&6Di 1.9794,r, 1.1971" 1.119)" 1.74&11' l.&1661' l.lill0l5 1.5419'1; l.4904S 1.4348" 1.)1251' 1.33241' 1.21541' 1.2406" 1.1915" 1.1517" l.ll99W, 1.0135'5 1.041411. 1.0153,r, 0.9143" 0.9SJ7" 0.9254" O.IHZ,i; 0.8711'1. 0.847511. 0.1221" O.IOOOS 0.77151' 0.75721' 0.7371S 0.7172" 0.69191f, 0.6112" 0.6635• 0.647415 0.&3]4,r, 0.&1&5"

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0.5174" 0.57121' 0.5604" 0.5480'5 0.5)511'

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2.1024" Z.4114" 2.7544" 3.1&10. 3.l13Z"

J.49)11'11 1.72US 3.9315" 3.2H3" 3.12&S" 3.007JS Z.1159" 2.76SJS Z.6475S

2.SU2" Z.42Jft 2.)192" 2.21H!1, 2.12$415 2.03&0!I l.9SIS" l.171J" 1.79&0ll 1.724" 1.&57115 1.SHZ1' l.5UCl1' 1.4758" 1.422o,r, 1.17051' 1.1222• 1.27&1!1.

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l,190h I.ISl91f, 1.1145" 1.0714" 1.0443" 1.0125• O.MIOS 0.9519" 0.9l191f, 0.19liliS 0.171"' 0.1458" 0.122911

.......

0.7119" 0.7Sl2" 0.1371'1. 0.1119" 0.7007" O.lilZSS O.&&Sft 0.&495" 0.&341" 0.619°" 0.60421' 0.519"' 0.57141' 0.5&37" o.no"'

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2.1241"

2.&114!1.

2.7044'5

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z.aoH•

1.4)""' l.312SS 1.u2.,, 1.2154" l,2400. 1.1915" 1.1571'1. 1.1199.11 1.0135" 1.0414!1. 1.015),r, 0.984:t,r, 0.95)7'1 0.9254" 0.1912" 0.1717'11 0.847SS 0.1.ZZJ,r,

....... 0.71851' 0.7S71" 0.7l71W. 0.7171"

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2.&na 1.0731" l.llZ2" ).)959" J.619ft UZ9°" 3.1492"

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1.179415 1.1972" 1.1193" 1.7461" 1.67&61' 1.6110. I.S41ft

...... l.4J4ft

1.4526511

I.JIZSS

1.199915 1.3506'5 1.1on,r, 1.259:t,r, I.ZIMS 1.1767" 1.1314" 1.1015" 1.066. l.034D

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1.0153"

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.......

0.7715" 0.1S72" 0.7371S 0.1112• 0.691911, O.Ul2" O.&HSS 0.64141' 0.1114" 0.616511. 0.601ft 0.5174" 0.5712" 0.5604" 0.5419" o.sn1•

3.4120fl. J.5324!1. 1.7191'1. 4.0112" 4.J504S J.49Sn U741!1. J.24Utl. 1.1144• z.no,r, 2.1572" J.7JJM Z.6159" 2.5029" U9S4!1. 2.Z9J1'1. 2.1!1171!1. 2.11119" 2.0115!1. l.!IIJIJ!I. 1.11111' 1.7031'

1.7194"

-

1.6544!1. 1.5921'1. 1.5341'1. l.4790W, l.420Jr, 1.3771" 1.3304" 1.215115 1.2432" 1.202n I.IHl!I

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7,5255frli 7,1213" 7.1275" 6,111001' 6.1599" u112" 6,1226" 6.2H4" 6.11051' 5.9639" 5.1111" s.HUfrli 5.55)3" 5.4Z66frli 5.JQIO!rl: s.11SP:

0.6990frli

0.6105" 0.6626" 0,6151" 0.,111" 0.6U2" 0,ShOfrli 0.5131" 0.5694" o.sssn o.5,un O.SJO:tW. o.5111" 0,50611' o.1ts1111i

7.9171" 7.707ft 7.50411' 7.)1001' 7.1254" 6.!IIS1" 6,71Jlfrli 6.607"' 6.1192" 6.2952" ,.11791 6.00521' S.16129' 5,7J5R

~ ~ -----¡;mr. ~ -----.:ii'Ai' ~ -----.:Tlooi' --ioó.iii5liii'

---r.mw

s.60169'

0.6IOS" 0,6626" 0.61SI" o.u11" 0.61U" 0.SMOfrli 0.5114" O,S&MS o.5558" o.s12n 0.5302" 0.5111• 0,51)6,U¡ 0.1951•

0.6626"

No1u:Coll11nni,.1111,1nnfnimAppendlllC,,111Zl,Shn11,co1umnf31. Column 111111 llkln fra111 Appendbr C, P11t U, SIIMI 2. Column ()), Actlden1v-111IH0/6llllfo11gll200)/0lutlllnColu1nnCA)10dl.W.1lllbllll\lp,11\'lllllp,1111un• .t.ccld1n1y1111l00110Sllmlugh2015116u11heCOluinn(lltod•JM11kblUl\lp1Y011lp,11t11rn.

-

IO bl ,,111 HOf

CIOIJ

Z.0663"

0.6154" 0.62911' 0,61)21' O.SIIOIII 0,5114" 0,56911' o.snn o.s12n O.SJ02" o.s111• 0.50611' OA95'"

0,5111" 0.5064" o.1951"

hn:1n1q1 of Lllblllry

(107)

l.03Hfrli

1.)70:tW, 1,15011' 7,931Sfrli 1.n&Ofrli 7.5124frli 7.JSSS!l 7.17591J. 7.00)7'5 &.1164" 6,6765" 6.5215" 6.)717'1, 6.lZHlll &.Gl9n

o.non;

(1061

AfdM:YftrlWfff

,.n:en~ ol Lllblllty

_ ....... x,.. ,._ _ --l!!!ltW- ----..!1l!L- -WJ.2LlL. ...l!!1.L.Llill --2lL12L.!.L- J.!.2!LJ...I.W! -W12L!L J.WU..!:.U22!. ......aiLl2L!L.

..

-

_,

PUlllTOIIICO·ITATllrftUll,UIClFUJrlOCOIIPOIIITIOfrl WOlllEIIS~Jrl5ATIOfll

1.19461' 1.6617" 1.1419" l,Zll4" 1.0274" 7.13111' 7,6115'5 7.4609"

0,61511' o.6291" 0.61U1' O.HIOll.

O.Sl)lfrli 0.56941' o.sssa

1.11649'

o.su"'

7.1171" 6.ISIIS 6.797"' &.6159"

O.U02" 0.5111" 0,5061frli o.1951"

9.5095" 9.2691" 9.0JSI" 1.1111• I.SMO!r, 1.3197" a.1193frli 7.997n 1.1121• 7.&un 7,1611" 7.2919"

0.6211" 0.6UZ• 0.59IIOfrli O.Slll!l 0.5691" o.sssn. o.soa o.uo2• O.SIII" 0.5061• o.49Sls

10,20111, 1.9115" 9.7370frli 9.499JS 9.2711" 9.0499" 1.111zfrli 1.6))11' 1.0609' 1.2155'5 1.061 ,.

o.4951"

~ ~ ~ ~ ~ ---,:nJ:N --mr.liiSlilii

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Appendix e Page 23 Sheet l

Payment Pattern Accident Years 2003/04 and Prior (1)

Maturlty (in Months)

Paid Age to Ultimate LDF

(2) Cumulative Percent of Loss Paid 1.0 l (1)

12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672 684 696 708 720 732 744 756 768 780 792

2,02 3.20702 134.88047 37.46680 19.71937 13.64662 9.92481 7.65804 6.22605 5.14549 4.37914 3.80795 3.35502 3.01711 2.72794 2.48918 2.33082 2.19773 2.08443 1.98690 1.90211 1.82775 1.76204 1.70356 1.65120 1.60405 1.56138 1.52258 1.4871 5 1.45466 1.42478 1.39719 1.37164 1.34792 1.32583 1.30521 1.28592 1.26783 1.25084 1.23484 1.21975 1.20550 1.19201 1.17923 1.16710 1.15557 1.14460 1.13415 1.12418 1.11466 1.10555 1.09684 1.08849 1.08049 1.07281 1.06543 1.05834 1.051 52 1.04494 1.03861 1.03251 1.02662 1.02093 1.01 543 1.01012 1.00498 1.00000

0.0494% 0.7414% 2.6690% 5.0712% 7.3278% 10.0758% 13.0582% 16.0615% 19.4345% 22.8355% 26.2608% 29.8061% 33.1443% 36.6577% 40.1739% 42.9034% 45.5015% 47.9747% 50.3297% 52.5733% 54.7121% 56.7525% 58.7005% 60.5619% 62.3420% 64.0458% 65.6780% 67.2429% 68.7444% 70.1864% 71.5723% 72.9054% 74.1885% 75.4245% 76.6160% 77.7654% 78.8748% 79.9465% 80.9822% 81.9839% 82.9533% 83.8919% 84.8011% 85.6825% 86.5373% 87.3667% 88.1718% 88.9539% 89.7138% 90.4525% 91.1710% 91.8700% 92.5505% 93.2131% 93.8585% 94.4876% 95. l 008% 95.6988% 96.2822% 96.8516% 97.4074% 97.9502% 98.4804% 98.9985% 99.5049% l 00.0000%

(3)

lnterval (In Months)

Estimated Percentage of Loss Paid in lnterval

O - 12 12 - 24 24 - 36 36 - 48 48 - 60 60 - 72 72 - 84 84 - 96 96 - 108 108 - 120 120-132 132 - 144 144 - 156 156 - 168 168 - 180 180 - 192 192 - 204 204 - 216 216-228 228 - 240 240 - 252 252 - 264 264 - 276 276 - 288 288 - 300 300 - 312 312 - 324 324 - 336 336 - 348 348 - 360 360 - 372 372 - 384 384 - 396 396 - 408 408 - 420 420 - 432 432 - 444 444 - 456 456 - 468 468 - 480 480 - 492 492 - 504 504 - 516 516-528 528 - 540 540 - 552 552 - 564 564 - 576 576 - 588 588 - 600 600 - 612 612-624 624 - 636 636 - 648 648 - 660 660 - 672 672 - 684 684 - 696 696 - 708 708 - 720 720 - 732 732 - 744 744 - 756 756 - 768 768 - 780 780 - 792

0.0494% 0.6920% 1.9276% 2.4022% 2.2566% 2.7480% 2.9824% 3.0033% 3.3730% 3.4010% 3.4253% 3.5453% 3.3382% 3.5134% 3.5162% 2.7295% 2.5981% 2.4732% 2.3550% 2.2436% 2.1388% 2.0404% 1.9480% 1.8614% 1.7801% 1.7038% 1.6322% 1.5649% 1.5015% 1.4420% 1.3859% 1.3331% 1.2831% 1.2360% 1.1915% 1.1494% 1.1094% 1.0717% 1.0357% 1.0017% 0.9694% 0.9386% 0.9092% 0.8814% 0.854896 0.829496 0.805196 0.782196 0.7599% 0.7387% 0.7185% 0.6990% 0.6805% 0.6626% 0.6454% 0.6291% 0.6132% 0.5980% 0.5834% 0.5694% 0.555896 0.542896 0.5302% 0.5181% 0.5064% 0.4951%

Notes: Column (1) is taken from Appendix C, Page 11 and Appendix C. Page 12, Sheet l.

-

-

-

-

Payment Pattern Accident Years 2004/05 and After (1)

Maturity (in Months)

Paid Age to Ultimate LDF

(2) Cumulative Percent of Loss Paid 1.0 / (l)

lnterval (In Months)

Estimated Percentage of Loss Paid in lnterval

12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 252 264 276 288 300 312 324 336 348 360 372 384 396 408 420 432 444 456 468 480 492 504 516 528 540 552 564 576 588 600 612 624 636 648 660 672 684 696 708 720 732 744 756 768 780 792

4,638.82216 309.25481 77.31370 35.95986 20.72615 13.81743 l 0.08572 7.69902 6.18395 5.11070 4.31283 3.70157 3.31512 3.01165 2.76793 2.56847 2.40257 2.26265 2.14322 2.04018 1.95046 l.87168 l.80199 l.73993 1.68433 l.63425 l.58891 1.54768 1.5 l 003 1.47552 1.44377 l.41447 1.38734 l.36216 1.33872 l.31685 1.29639 1.27722 1.25921 1.24226 1.22629 1.21121 l.19694 l.18343 l.17061 l. l 5843 l.14685 l.13581 l.12530 l.11526 l.10566 1.09648 l.08769 1.07927 l.07119 1.06343 l.05598 1.04881 l.04191 1.03526 1.02885 l.02267 l.01671 1.01095 1.00538 1.00000

0.0216% 0.3234% 1.2934% 2.7809% 4.8248% 7.2372% 9.9150% 12.9887% 16.1709% 19.5668% 23.1866% 27.0156% 30.1648% 33.2044% 36.1281% 38.9337% 41.6221% 44.1960% 46.6588% 49.0153% 51.2700% 53.4279% 55.4942% 57.4736% 59.3708% 61.1901% 62.9362% 64.6128% 66.2238% 67.7727% 69.2631% 70.6979% 72.0804% 73.4128% 74.6982% 75.9388% 77.1373% 78.2950% 79.4149% 80.4984% 81.5468% 82.5621% 83.5464% 84.5001% 85.4255% 86.3237% 87.1954% 88.0429% 88.8652% •89.6652% 90.4437% 91.2009% 91.9380% 92.6552% 93.3541% 94.0353% 94.6988% 95.3462% 95.9776% 96.5941% 97.1959% 97.7833% 98.3565% 98.9169% 99.4649% l 00.0000%

O - 12 12 - 24 24 - 36 36 - 48 48 - 60 60 - 72 72 - 84 84 - 96 96 - l 08 108-120 120 - 132 132 -144 144 - 156 156 - 168 168 - 180 180 - 192 192 - 204 204 - 216 216-228 228 - 240 240-252 252 - 264 264 - 276 276 - 288 288 - 300 300- 312 312 - 324 324 - 336 336 - 348 348 - 360 360 - 372 372 - 384 384 - 396 396 - 408 408 - 420 420 - 432 432 - 444 444 - 456 456 - 468 468 - 480 480 - 492 492 - 504 504 - 516 516-528 528 - 540 540 - 552 552 - 564 564 - 576 576 - 588 588 - 600 600 - 612 612 - 624 624 - 636 636 - 648 648 - 660 660 - 672 672 - 684 684 - 696 696 - 708 708 - 720 720 - 732 732 - 744 744 - 756 756 - 768 768 - 780 780 - 792

0.0216% 0.3018% 0.9700% 1.4875% 2.0439% 2.4124% 2.6778% 3.0737% 3.1822% 3.3959% 3.6198% 3.8290% 3.1492% 3.0396% 2.9237% 2.8056% 2.6884% 2.5739% 2.4628% 2.3565% 2.2547% 2.1579% 2.0663% 1.9794% 1.8972% l.8193% l.7461% 1.6766% l.6110% l.5489% 1.4904% 1.4348% l.3825% 1.3324% 1.2854% 1.2406% l.198596 l. l 577% l.1199% 1.0835% 1.0484% 1.0153% 0.9843% 0.9537% 0.9254% 0.8982% 0.8717% 0.8475% 0.8223% 0.8000% 0.7785% 0.7572% 0.7371% 0.7172% 0.6989% 0.6812% 0.6635% 0.6474% 0.6314% 0.6165% 0.6018% 0.5874% 0.5732% 0.5604% 0.5480% 0.5351%

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-

...

-

...

-

Appendix e Page 23 Sheet 2

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Permanent Total

Notes: Column (l) is taken from Appendix C, Page 11 and Appendix

(3)

e,

Page 12, Sheet 2.

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

Appendlx O Page 1 Prospectlve Loss Forecasts

(1)

(2)

(3)

(4)

(S)

(6)

(7)

(8)

Accident Year

Selected Ultlmate Loss

PayroH (SOOs¡

Loss Cost per $100 of PayroH o¡ 1¡2¡

Loss Cost Trend Factor

Trended Loss Cost per $1 00 of PayroH (3) X (4!

Projected PayroH (SOOs)

Estlmated Loss Cost per $100 of PayroH

Projected Loss (6) X (7)

2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

$2,800,000 2,250,000 1,275,000 3,875,000 4,400,000 3,875,000 4,250,000 3,050,000 3,025,000 2,925,000 2,825,000 2,100,000 1,900,000 2,300,000 3,000,000

$202,420,000 215,080,000 226,330,000 238,750,000 245,090,000 243,450,000 242,880,000 228,200,000 232,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242, 156,580 233,992,560

S0.014 0.010 0.006 0.016 0.018 0.016 0.017 0.013 0.013 0.012 0.012 0.008 0.008 0.009 0.013

0.482 0.468 0.454 0.441 0.428 0.470 0.517 0.568 0.624 0.686 0.754 0.828 0.910 1.000 1.000

S0.007 0.005 0.003 0.007 0.008 0.008 0.009 0.007 0.008 0.008 0.009 0.007 0.007 0.009 0.013 $242,000,000 242,000,000 242,000,000 242,000,000 242,000,000

2016/17 2017/18 2018/19 2019/20 2020/21

(9)

Avg (AH Yrs) Wtd Avg (AH Yrs) Wtd Avg (Latest 5) Wtd Avg (Latest 3) Wtd Avg (Latest 2) Wtd Avg (AH Yrs Excl HI/Lo)

S0.008 0.008 0.009 0.010 0.011 0.008

Selected for accldent year 2016/17

$0.009

S0.009 0.009 0.009 0.009 0.009

Notes: Column (1) Is taken from Appendlx O, Page 4, Column (9). Column (2) has beén provlded by the Puerto Rico State lnsurance Fund Corporatlon. Column (4) reflects trending to accldent year 2016/17 based upon the loss cost trends taken from Appendix O, Page 19, Unes (5) through (7). Column (6) Is based on the payroH for accldent years 2013/ 14 through 201 5/16 andan annual payroH trend factor of 0.0%, selected based upon judgment after a revlew of the hlstorlcal payroH provlded by the Puerto Rico State lnsurance Fund Corporatlon. Column (7) Is based upon Llne (9) and an annual loss cost trend factor of 0.0%, taken from Appendlx O, Page 19, Une (7). Une (9) is selected based upon Judgment after a review of Column (5).

$2, 178,000 2, 178,000 2,178,000 2, 178,000 2, 178,000

-

-

-

-

-

-

-

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

Appendix D Page 2

Change in Loss Reserves from 06/30/15 to 06/30/16

Accident Year 1960/61 1961 /62 1962/63 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 1971 /72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981 /82 1982/83 1983/84 1984/85 1985/86 1986/87 1987 /88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

(1)

(2)

(3)

Needed Loss Reserves as of 06/30/16

Needed Loss Reserves as of 06/30/15

Change in Reserves (1) - !2)

$50,000 150,000 125,000 11 5,000 225,000 175,000 250,000 275,000 425,000 325,000 250,000 500,000 450,000 550,000 450,000 375,000 675,000 500,000 700,000 750,000 750,000 775,000 800,000 375,000 400,000 500,000 500,000 650,000 800,000 750,000 900,000 1,050,000 1,300,000 1,250,000 1,000.000 1,100.000 1,500,000 1,200,000 1,750,000 1.000.000 750,000 955,000 865,000 51 1,661,000 1,968,000 1,935,000 2,421,000 1,756,000 1,834,000 2,015,000 2,028,000 1,705,000 1,593,200 2,146,800 2,903,000

$24,132 52,482 58,364 56,686 116,028 71,746 108,786 144,674 167,107 137,091 118,179 222,295 221,887 282,615 241,180 218,625 363,704 251 ,297 420,539 436,307 365,806 386,962 263,442 141,861 146,693 234,880 246,798 373,521 371,729 351 ,317 51 5,427 564,636 706,501 788,422 551 ,546 646,596 916,589 603,81 5 841,176 452,563 381,000 657,000 546,000 400,000 1,155,000 1,477,000 1,501,000 1,895,000 1,538,000 1,535,000 1,729,000 1,781,000 1,713,984 1,744,620 2.227,300 N.A.

2014/15 and Prior

$49,808,000

$33,464,908

$16,343,092

Total

$52,711,000

N.A.

N.A.

º·ººº

$25,868 97,518 66,636 58,314 108,972 103,254 141,214 130,326 257,893 187,909 131,821 277,705 228,113 267,385 208,820 156,375 311.296 248,703 279,461 313,693 384, 194 388,038 536,558 233, 139 253,307 265, 120 253,202 276,479 428,271 398,683 384,573 485,364 593,499 461,578 448,454 453,404 583,411 596,185 908,824 547,437 369,000 298,000 319,000 110,000 506,000 491,000 434,000 526,000 218,000 299,000 286,000 247,000 (8,984) (151,420) (80,500) N.A.

Notes: Column (1) is taken from Appendix D. Page 3, Sheet 1, Column (14). Column (2) is taken from Aon's report on the Puerto Rico State lnsurance Fund Corporation's needed loss, LAE, and Return Premlum liabllity as of June 30, 201 5.

-

.....

,U[IITO RK:O ·STATE IN5URANC( FUNDCORfORATIOt.1 WOltk(RS COMPlNSATION

AP91nclblD ShMtl

°""



Total lndicated Lo11 b11trw1 uof06/30.'\6

111

S.ltc1ed Uhlmate

11194/95 1995/91 1996/97 19117/91 1998/99 1999/00 2000,01 2001,02 2002101 2001104 2004/05 2005106 2006107 2007/08 2008109 2009/10 2010111 2011112 2012/1) 2011/14 2014/JS 2015/16

Total

"'

Eal'ftldl'Nmlum

..

hllmaled Uhlmata

Uhimlteftremlum

a1of06ilO/l6

....

__....!!!!L_ ~

AccldentYgr IM0¡61 lHl/lil 1H2/H 1963/M 1964165 1965/611 1966/67 1967/61 1968/69 IH9/10 1970/71 1971/72 1972/73 1973/74 1974175 1915/76 1976/17 1917/11 1971/79 1979/10 1910/ll 1911/12 1912/13 1913/84 1984/85 1985/lli 1986/87 1987/88 1988189 1919¡90 11190/91 11191/9.Z 11192(93 11193194

"'

U04,S77 JJS.0)4 161.5)1 405,)92 445,911 490,524 5)9.576 59J,U4 652,187 711,176 789,994 161.99) 955,192 l,051,482 1.156.630 1.272.293 1,399.522 1,519,474 1,691.422 1,1112.7114 2,049,040 2,253,944 2.4111,3)9 2,727,273 ),000,000 ),500,000 3,200,000 4,200,000 4,250.000 4,375,000 4,575,000 3,900,000 3,700,000 3,200,000 2,975,000 J,)00,000 3,000,000 2,150.000 ),250,000 2,475,000 2,325,000 2.800,000 2.250,000 1,275.000 J,815,000 4,400,000 3,875,000 4.250,000 3,050,000 3,025,000 l.1125,000 2.825,000 2.100.000 1,900,000 l.)00,000 ),000,000

11a.1H.rn

1.000 1.000 J.000 J.000 1.000 1.000 1.000 J.000 J.000 J.000 1.000 J.000 J.000 J.000 J.000 J.000 J.000 J.000 J.000 J.000 1.000 1.000 J.000 1.000 J.000 J.000

,.ooo J.000 ,.ooo

J.000 J.000 1.000 1.000 J.000 1.000 J.000 1.000 1.000 1.000 1.000 J.000 J.000 J.000 J.000 J.000 1.000 J.000 J.000 J.000 J.000 J.000 J.000 J.000 0.998 o.996

0,913

"'

.......

....!!..!!..2!i

U04.577 US,034

C.Ml.oH

..H-

11of06(l0116 S\3,697 41,&14 36,167 )2,1110 61,451 49,051 69.549 80,558 126,423 94,178 70,675 150.506 l34,9Sl 160,415 125,63) 102,941 196,339 14),501 214.0111 228,195 222.578 231.647 232:,687 81,802 75,01 113,427 113,721 152,694 194.141 168,164 241.457 310,920 367,JJ4 373,031 300,532 353.624 487,787 )74,061 551,067 294,039 163,35)

)6&,531

405,192 445,9)1 490,524 539,576 5U,5J4 652,817 718,176 789,994 868,119) 955,192 1,0Sl,482 1,156,610 1,272.293 1,399,522 1.519,474 1.693,422 1,112,714 2,049,040 2,25).944 2,479,UII 2,727,213 J,000,000 J,500,000 ),200,000 4,200,000 4,250,000 4,375,000 4,575,000 l,900,000 3,700,000 J,200,000 2,975.000 3,300,000 ),000,000 l.lS0.000 3,250,000 2,475,000 2,325,000 2,800,000 2,250,000 l,275,000 ),815.000 4.400,000 ),875,000 4,250,000 ),050,000 3,025,000 2,925,000 2,825,000 2,100,000 1,896,200 2,290.800 2,949,000

"'

...

Age10Uhimate Factor 1.0)213 1.0)490 1.0)777 1.04076 1.0066 1.0470& 1.05043 l,05H3 1.05757 1.06137 1.06534 1.06949 1,07)84 1.071311 1.08317 1.08819 1.09347 1.09903 1.10419 1.11109 1.11765 1.12460

J.IJIH 1.1398) 1.14820 1.15715 1.11673 l,1710) 1.11811 1..1:0008 1.21305 1.22716 1.24255 1.25942 1.27799 1.29854 1.32140 1.)4699 1.37584 1.40860 1.44616

"'

...

'"

(JOO

(IIJ

1121

'P!~ªted LoH .. ,.rcent Unpald IOOH.· 1.0' (61 ).11)0!5 3.)72)" 3.6395" ).911144.2011'6 4,49639' 4.&009" 5.1170!5 5.4416". 5.7821" 15.\)))"

6.4975" 6.1763" 7.2692% 7.6784" 8.104"' 8,5480!5 9.010"' 9.4933" 9.9913" 10.5266% 11.01115" 11.65929' 12.267"' 12.9072" n.s8on 14.2904" 15.0404" 15,IJ27W, 16.6122" 17.5632% 18,5110!5 19.5203'6 20.5984" 21.7521" 22.9904" 24.ll27" 25.7604" 27.3171" 29.0075" 30.85141'

lncurred AgetoUhlmate Factor 1.02697 1.02&69 1.030§1 1.0320 1,0)446 1.036111 1,0)818 1.04128 1.04182 l.046SI 1.04916 I.OS2JI 1.05558 1,05898 1.06259 1.06643 1,07051 1.07485 1.011141 I.01442 I.Ol910 1.09536 1.10141 1.10791 1.11490 1.12244 1.13057 I.IJ9l6 l,14890 1.15921 1,170110 1,11175 1.19409 1.20778 1.22176 1.23750 1.25401 1.21021 1.21171 1.30578 I.JlU)

,.runt Unrepaned

01111tancllr1411 Age toUlllmate

~ ~ 2.626215 2.7&9<* 2.9601" ).1411"

3.)312" ),5)11'6 ),742S. U6441' 4.11181• 4.440" 4.10)"' 4,9173" 5.2654" S.Si95" 5.890311 11,2292" 6.5866" 6.HJn 7.)628" 7.714ft 8.2316" 8.70Sft 9.207)" 9,7400'6 10,)05"' 10.9084" 11.5491* 12.2314" 12.9602" 1),7)96", 14.571"' IS.J79?K 111.2542" 17.20351' 18.150. 19.1919" 20.2ssn 21.2729" 22.J47(a 2).4174" 24.427)"

li,39400 5.71167 5.3515, 5.0517S 4.624114 4.66100 4.53455 4.44000 4.31077 4.)2214 4.29067 4.2737S 4 ..1:6941 4.27667 4.29421 4.32150 4,)57112 4.40227 4.45565 4.51750 4.58657 4.66769 4.75454 4.15391 4.911207 S.011)) 5.2JJZ9 5.35500 5.51212 S.68471 S.81561 5,91216 S.97667 6.06780 6.04000 6.05212 5.H059 S.74051 S.491156 5.18934 4,80271

Developmant Fec:tor

Dwebt,mtm fK...

17.545.291

Nol:11: ForKcidlmyears 19110161 throu,h 198418S,CotumnCl)llbllud11pon1h111himatewlKU!d Ion for 198S/861h,ouah 19871881nd 1n1nn11allo1t t,.ndof 10.00H,, i-,hkh 15 bllMd uponjudg ...1111 lfnr1 NYilwofAppendbl D. htl 201. forKtldllll we,ln 1985116 through 2000101, Column (IJ II tabn fromAP91ndD; D, Page 3, ShNI 2, Coklmn (6), For1«1denl , ..n 2001/02 through 2015/16, Column (\) is tak1nftomApp1ndbr D, '-U• 4,Column 191, Column(2) lltabnfromAppendbl F, hge l,Co.. mn(SJ. Column (4111 tabn fromAppenclhc D, hg1 4, Column(l), Column (SI has bun provlded bv 1t. PIMrto Rko 5tate IM11ran« funcl Corpanlllon. Column (6111 taUntiom Appendlx D. Paot 12, Coiumn 19), Column 11111 t.11•1n fiom Appendb- D. Pq,t 1S, C-mn 13). Column(lO) llta..nftomAppendbl D.l'lge J,5hHt6,Column(5). Foraccldenlvu,n 1960161 tMOlllh 2000101.Coklmntl4111 Mllc:led aftua ,.,,._ ofColumns 1s11nd CI 1, 1hrouohCIJJ. For accldenl ~1r1 2001 /02 lhrough 2015; I I, Cohonn (14) I, equal to Colunw1 ()) mlnut Column (41,

Dew.lopm1nt Factor

---1!1.!.ili... --.lll..!..ll!. ---1!l..!..1!!! H.4&1 11,291 11,411 15,117 18,1J7 22.on 25,905 30,)71 JS,541 41,526 41,45) 56,46) 65,7)0 76,434 aa.111 103,110 119.11)1 118,717 160,762 186,245 215,694 249.726 219,071 3)4,571 )87,216 415.128 451,291 631.697 1172.890 729,409 803.516 721.929 722.251 659,149 1147,125 758,611 729,681 553,849 887.106 717,1136 717,295

S21,i91i Sl.221 47,271 44,894 76.)06 6tl.J1S 19,70 104,088 153.131 126,196 107,8)5 lH.751 115,214 218.977 193,762 182,195 2U,S20 250,101

na.102

)73,207 391.247 427.811 460,967 347.4)8 384,108 495.221 413,289 '66,41) 745,650 7611,272 914,204 1110,728 968,739 923,543 840,521 91US7 1,095,461 831,435 1.217,)45 873.620 7)1,218

$1,845,000 I.JIS,000 765,000 2.214,000 l.432.000 1,940,000 1,129,000 1,294,000 1,191,000 910,000 797,000 )95,000 303,000 144,000 46.000

-mr.m:nr~

(13)

---m:m:m-

{14)

,,c.::'oe,1011~~:::ina.ng

----¡¡¡:m:nr

Sl7,S79 242.159 IH.87'5 162,521 106,128 221.627 115,371 )57,678 552.566 409,644 303,20 643,225 576,165 686,042 539.494 444,160 855,571 631,7)0 95).594 1,030,171 1,020,870 1,081.256 1,106,UO 397,061 374,294 576.360 592,161 817,676 1.07),917 955,964 1,453.978 1,838,209 2.195,04 2,263,471 1.8JS,2n 2.140,175 2,917,254 2,147,349 ),028,973 1,525,168 784,5)7

TotalNHded UIHllilHl'WIS

HOf06/30/11i $50,000 150.000 125,000 115,000 225,000 175,000 250,000 275,000 425,000 Jl5,000 250.000 500,000 450,000 SS0,000 450,000 375,000 675,000 500,000 700,000 750,000 750,000 775,000 800,000 )75,000 400,000 500,000 500,000 650,000 800,000 750,000 900.000 1,050,000 1,300,000 1,250,000 1,000,000 1.100.000 1,500,000 1.200.000 1.750.000 1.000,000 750,000 ts5,000 165,000 510,000 l,Hl,000 1,968,000 l,U5,000 2,421,000 1,756,000 1,814,000 2,015,000 2.028,000 1,705,000 1,5U,200 2.146,100 l.1103,000

~ ~

-

-

-

-

-

Selectlon of Ultlmate Loss (SOOOs) Accldent Years 1985/86 through 2000/01

-

(2)

(1)

(4)

(5)

(6)

lncurred Loss Development Method

Outstandlng Lou Development Method

Selected Ultlmate Loss

$3,359 2,945 3,610 4,162 4,362 4,558 3,985 3,918 3,189 2,976 3,471 2,976 2,158 3,236 2,434 2,332

N.A. N.A. 2,174 3,663 4,286 4,483 4,380 4,763 3,094 3,112 4,027 2,898 2,138 3,085 2,265 2,298

(3)

ProJected Ultlmate Loss

Accident Year 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 Total

Notes: Column Column Column Column Column Column

-

Appendlx D Page 3. Sheet 2

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

Pald Loss at 180 Months Maturl!):

lncurred Loss at 180 Months Maturl!):

N.A. N.A. 2,844 2,940 2,950 3,081 2,559 2,382 2,168 1,957 2,166 2,020 1,454 2,216 1,683 1,575

$2,505 2,196 2,692 3,104 3,253 3,399 2,972 2,922 2,378 2,219 2,588 2,219 1,609 2,413 1,815 1,739

$31,995

$40,023

Pald Loss Development Method N.A. N.A. 4,238 4,381 4,396 4,591 3,813 3,549 3,230 2,916 3,227 3,010 2,166 3,302 2,508 2,347

(1) Is taken from Appendlx D, Page 3, Sheet 3, Column (1 ), Is taken from Appendlx D. Page 3, Sheet 4, Column (1),

(2) (3) (4) (5) (6)

is Is Is is

taken from Appendix D, Page 3, Sheet 3, Column (3). taken from Appendlx D. Page 3, Sheet 4, Column (3). taken from Appendlx D. Page 3, Sheet 5, Column (4). selected based upan Judgment after a revlew of Columns (1) through (5).

$3,500 3,200 4,200 4,250 4,375 4,575 3,900 3,700 3,200 2,975 3,300 3,000 2,150 3,250 2,475 2,325 $54,375

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

Appendix D Page 3 Sheet 3

Projection of Ultimate Loss ($000s) Historical Paid Loss Development Method Accident Years 1985/86 through 2000/01

Accident Year 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01 Total

( 1)

(2)

(3)

Paid Loss at 180 Months Maturit:i

Paid 1 80 to Ultimate Factor

Projected Ultimate Loss (1) X (2)

N.A. N.A. 2,844 2,940 2,950 3,081 2,559 2,382 2, 168 1,957 2, 166 2,020 1,454 2,216 1,683 1,575

1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490 1.490

$31,995

Notes: Column (1) is taken from Appendix D, Page 13. Column (2) is taken from Appendix D, Page 11.

N.A. N.A. 4,238 4,381 4,396 4,591 3,813 3,549 3,230 2,916 3,227 3,01 O 2,166 3,302 2,508 2,347 $47,674

-

-

-

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

...

Projection of Ultimate Loss ($000s) Historical lncurred Loss Development Method Accident Years 1985 / 86 through 2000 /0 l

-

-

-

Accident Year 1985/86 1986/87 1987 /88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01 Total

-

Appendix D Page 3 Sheet 4

( l)

(2)

(3)

lncurred Loss at l 80 Months Maturit~

lncurred l 80 to Ulti mate Factor

Projected Ultimate Loss (1) X (2)

$2,505 2, 196 2,692 3, l 04 3,253 3,399 2,972 2,922 2,378 2,219 2,588 2,219 1,609 2,413 1,81 5 1,739

1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341 1.341

$40,023

Notes: Column (1) is taken from Appendix D, Page 16. Column (2) is taken from Appendix D, Page 14.

$3,359 2,945 3,61 O 4,162 4,362 4,558 3,985 3,918 3, 189 2,976 3,471 2,976 2, 158 3,236 2,434 2,332 $53,671

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

Appendix O Page 3 Sheet 5

Projection of Ultimate Loss ($000s) Outstanding Loss Development Method Accident Years 1985/86 through 2000/01

Accident Year 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 Total

(1)

(2)

(3)

(4)

Paid Loss at 180 Months Maturi!:l

Outstanding Loss at 180 Months Maturi!:l

Outstanding 180 to Ultimate Development Factor

Projected Ultimate Loss (1) + ((2) X (3)j

N.A. N.A. 2,844 2,940 2,950 3,081 2,559 2,382 2,168 1,957 2,166 2,020 1,454 2,216 1,683 1,575

N.A. N.A. (152) 164 303 318 413 540 210 262 422 199 155 197 132 164

$31,995

$3,327

4.41 O 4.41 O 4.410 4.410 4.410 4.41 O 4.41 O 4.41 O 4.41 O 4.410 4.410 4.410 4.41 O 4.410 4.410 4.410

N.A. N.A. 2,174 3,663 4,286 4,483 4,380 4,763 3,094 3, 112 4,027 2,898 2,138 3,085 2,265 2,298 $46,666

Notes: Column (1) is taken from Appendix O, Page 3, Sheet 3, Column (1 ). Column (2) is the difference between incurred and paid loss found in Column (1) of Appendix O, Page 3, Sheets 4 and 3, respectively. Column (3) is taken from Appendix O, Page 7, Sheet 2, Column (5) for a maturing of 180 months.

-

.. -

-

....

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

..

Derivation of Outstanding LDFs (1)

(2)

(3)

(4)

(5)

Accident Year

lncurred Loss Development Factor

Paid Loss Development Factor

lmplied Ultimate Loss $1 00,000 X (1)

lmplied Paid Loss (3) / (2)

lndicated Outstanding Development Factor

1960/61 1961 /62 1962/63 1963/64 1964/65 1965/66 1966/67 1967 /68 1968/69 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977 /78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987 /88 1988/89 1989/90 1990/91 1991 /92 1992/93 1993/94 1994/95 1995/96 1996/97 1997 /98 1998/99 1999/00 2000/01

1.02697 1.02869 1.03051 1.03243 1.03446 1.03661 1.03888 1.04128 1.04382 1.04651 1.04936 1.05238 1.05558 1.05898 1.06259 1.06643 1.07051 1.07485 1.07948 1.08442 1.08970 1.09536 1.10141 1.10791 1.11490 1.12244 1.13057 1.13936 1.11890 1.1 5928 1.17060 1.18175 1.19409 1.20778 1.221 76 1.23750 1.25401 1.2 7021 1.28778 1.30578 1.32323

1.03213 1.03490 1.03777 1.04076 1.04386 1.04708 1.05043 1.05393 1.05757 1.06137 1.06534 1.06949 1.07384 1.07839 1.0831 7 1.08819 1.09347 1.09903 1.10489 1.11109 1.11765 1.12460 1.13198 1.1 3983 1.14820 1.15715 1.16673 1.17703 1.18811 1.20008 1.21305 1.22716 1.24255 1.25942 1.27799 1.29854 1.32140 1.34699 1.37584 1.40860 1.44616

-

...

-

-

-

Appendix O Page 3 Sheet 6

$102,697 102,869 103,051 103,243 103,446 103,661 103,888 104,128; 104,382 104,651 104,936 105,238 105,558 105,898 106,259 106,643 107,051 107,485 107,948 108,442 108,970 109,536 110,141 110,791 111,490 112,244 113,057 113,936 114,890 115,928 117,060 118, l 75 119,409 120,778 122, 176 123,750 125,401 127,021 128,778 130,578 132,323

$99,500 99,400 99,300 99,200 99,099 99,000 98,900 98,800 98,700 98,600 98,500 98,400 98,300 98,200 98,100 98,000 97,900 97,800 97,700 97,600 97,499 97,400 97,299 97,200 97,100 97,000 96,901 96,800 96,700 96,600 96,501 96,300 96,100 95,900 95,600 95,299 94,900 94,300 93,600 92,701 91,500

Notes: Column (1) is taken from Appendix O, Page 1 5, Column (3). Column (2) is taken from Appendix D, Page 12, Column (9). Column (5) represents the development factor which yields the ultimate loss of Column (3) when applied to the outstanding loss and this product is added to the cumulative paid loss. Algebraically, Column (5) = [Column (3) - Column (4)] / [$100,000 - Column (4)].

-

6.39400 5.78167 5.35857 5.05375 4.82464 4.66100 4.53455 4.44000 4.37077 4.32214 4.29067 4.27375 4.26941 4.27667 4.29421 4.32150 4.35762 4.40227 4.45565 4.51750 4.58657 4.66769 4.75454 4.85393 4.96207 5.08133 5.21329 5.35500 5.51212 5.68471 5.87568 5.91216 5.97667 6.06780 6.04000 6.05212 5.98059 5.74053 5.49656 5.18934 4.80271

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION

Appendix O Page 4

Death Selection of Ultimate Loss (SOOOs)

Accident Years 2001 /02 through 201 S/16 (2)

(1)

(4)

(3)

(5)

(6)

(7)

(8)

(9)

Pro¡ected Ultimate Loss Paid

lncurred

Outstanding Loss

Development

Development

Expected Loss

BornhuetterFerguson

Bornhuetter-

lncurred Loss

Paid Loss Development

lncurred Loss

Pald Loss as of 06130¿16

as of06l30l16

Method

Method

Method

Method

Method

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/1 O 2010/11 2011 /12 2012/13 2013/14 2014/15 2015/16

Sl ,845 1,385 765 2,214 2,432 1,940 1,829 1,294 1,191 910 797 395 303 144 46

$2,158 1,656 931 2,777 3,110 2,702 2,887 2,117 1,978 1,893 1,777 1,248 1,040 898 321

Total

$17,490

$27,493

Accldent Year

$2,749 2,147 1,239 3,757 4,358 3,692 3,793 2,993 3,072 2,699 2,848 1,779 1,910 1,725 5,510

$2,894 2,249 1,287 3,893 4,426 3,885 4,232 3,167 3,009 2,923 2,825 2,064 1,841 2,145 3,182

Notes: Columns (1) and (2) have been provided by the Puerto Rico State lnsurance Fund Corporation.

Column Column Column Column

(3) Is taken (4) Is taken (5) Is taken (6) Is taken

from Appendlx from Appendlx from Appendlx from Appendlx

O, O, O, O,

Page Page Page Page

5, Column (3). 6, Column (3). 7, Sheet 1, Column (4), 8, Column

en.

$3,225 2,439 1,364 4,079 4,503 4,068 4,569 3,272 2,977 3,009 2,819 2, 130 1,829 2,206 2,993

$2,770 2,768 2,194 2,422 2,340

$2,791 2,549 2,148 2,365 2,367

Ferguson Method

$2,805 2,341 1,994 2,305 2,425

5elected Ultlmate Loss $2,800 2,250 1,275 3,875 4,400 3,875 4,250 3.050 3,025 2,925 2,825 2,100 1,900 2,300 3,000

-

-

$43,850

-

Column (7) Is taken from App1:ndlx O, Page 9, Column (7).

Column (8) Is taken from Appendlx O, Page 9, Column (14). Column (9) is selected based upon Judgment after a revlew of Columns (1) through (8).

-

-

-

-

-

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

Appendix D Page 5

Projection of Ultimate Loss ($000s) Historical Paid Loss Development Method Accident Years 2001 /02 through 2015/16

-

( l)

(2)

(3)

-

Paid Loss as of 06/30/16

Paid Age to Ultimate Factor

Projected Ultimate Loss (1) X (2)

.....

-

Accident Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/1 O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

$1,845 1,385 765 2,214 2,432 1,940 1,829 1,294 1, 191 910 797 395 303 144 46

Total

$17,490

1.490 1.550 1.619 1.697 1.792 1.903 2.074 2.313 2.579 2.966 3.574 4.503 6.304 11.978 119.784

Notes: Column (1) is taken from Appendix D, Page 4, Column (1 ). Column (2) is taken from Appendix D, Page 11.

-

$2,749 2, 147 1,239 3,757 4,358 3,692 3,793 2,993 3,072 2,699 2,848 1,779 1,91 O 1,725 5,51 O $44,271

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

Appendix D Page 6

Projection of Ultimate Loss ($000s) Historical lncurred Loss Development Method Accident Years 2001 /02 through 2015/16

Accident Year 2001 /02 2002/03 2003/04 2004/05 2005/06 2006/07 2007 /08 2008/09 2009/l O 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Total

(l)

(2)

(3)

lncurred Loss as of 06/30/16

lncurred Age to Ultimate Factor

Projected Ultimate Loss (l) X (2)

$2, 1 58 1,656 931 2,777 3, 11 O 2,702 2,887 2, 11 7 1,978 1,893 l ,777 l ,248 l ,040 898 321

1.341 1.358 l .382 1.402 1.423 1.438 1.466 1.496 l.521 l.544 l.590 1.654 1.770 2.389 9.914

$27,493

Notes: Column (1) is taken from Appendix D, Page 4, Column (2). Column (2) is taken from Appendix D, Page 14.

$2,894 2,249 l ,287 3,893 4,426 3,885 4,232 3, 167 3,009 2,923 2,825 2,064 1,841 2, 145 3, 182

.....

$44,022

-

-

-

-

-

-

Appendix D Page 7 Sheet 1

PUERTO RICO - STATE INSURANC E FUND CORPORATION WORKERS COMPENSATION Death Projection of Ultimate Loss ($000s) Outstanding Loss Developme nt Method Acc id ent Years 2001 / 02 through 201 S/16

Accident Year

-

.....

(1)

(2)

(3)

(4)

Paid Loss as of 06/ 30 / 16

Outstand ing Loss as of 06 / 30 /1 6

Outstanding Age to Ultimate Deve lopment Fact or

Projected Ultimate Loss (1) + [(2) X (3))

2001 / 02 2002 / 03 200 3 / 04 2004 / 05 2005 / 06 2006 / 07 2007 / 08 2008 / 09 2009/1 O 20 10/1 1 2011 /1 2 2012 /13 20 13 / 14 20 14 / 15 201 5/ 16

$1,845 1,3 85 765 2,214 2,432 1,94 0 1,829 1,294 1, 191 910 797 395 303 144 46

$313 271 166 563 6 78 762 1,058 823 787 983 980 853 737 754 275

Total

$17, 490

$10,003'

4.41 O 3.890 3.609 3.312 3.054 2'.793 2.590 2.404 2.270 2.135 2.063 2.034 2.071 2. 735 10.718

Notes: Col umn ( 1) is taken from Appendix D, Page 4, Column (1). Co lum n (2) is the difference between Column s (2) and (1) of Appendi x D, Page 4. Co lu mn (3) is taken from Appendix D, Page 7, Sheet 2, Column (5).

-

-

$3 ,225 2,439 1,364 4,0 79 4,503 4,068 4, 569 3,272 2,977 3,009 2,8 19 2, 130 1,829 2,206 2,993 $45,482

PUERTO RICO - STATE INSURANCE FUN D CORPORATION WORKERS COMPENSATION Death

Appendix D Page 7 Sheet 2

Derivation of Outstanding LDFs

(1)

(2 )

( 3)

(4)

(S)

Accident Year

l ncurred Loss Deve lopment Factor

Paid Loss Deve lopment Factor

lmplied Ultimate Loss $100,000 X (1)

l mplied Pa id Loss (3) ! (2)

lndicated Outstanding Development Factor

200 1 / 02 2002 / 03 200 3 / 04 2004 / 05 2005 / 06 2006 / 07 2007 / 08 2008 / 09 200 9 / 10 2010 / 11 201 1 / 12 2012 / 13 20 13 / 14 2014 /1 5 201 5/ 16

l.341 l.358 1.382 1.402 1.42 3 l .438 1.466 l .496 1.521 1. 54 4 l. 590 1.654 1.770 2.389 9.9 14

1.490 1.550 l.619 1.697 1.792 l.903 2.074 2.313 2.579 2.966 3.5 74 4.5 0 3 6.304 11.978 119.784

$13 4,100 l 3 5,800 l 38,200 140,200 142,300 143,800 146,600 149,600 152 , l 00 154,400 l 59,000 165,400 177,000 238, 900 99 1,400

$90,000 87,613 85,361 82 ,616 79,408 75,565 70,685 64,678 58,976 52, 0 57 44,488 36,731 28,0 77 19,945 8,277

4.4 1O 3.890 3.609 3.312 3.054 2.793 2. 590 2.404 2.270 2.135 2.063 2.034 2.071 2. 735 l 0. 718

-

.....

Notes: Column (1) is taken from Colu mn (2) of Append ix D, Page 6. Column (2) is taken from Co lu mn (2) of Appendix D, Page S. Column (5 ) represent s the deve lopment facto r w hich yields the ultimate loss of Col umn (3) when applied to the outstand ing loss and th is product is ad ded t o the cumu lative paid loss. Algebraically, Co lu mn (5) = [Column (3) - Colu mn (4 )] / ($1 0 0 ,00 0 - Column (4)] .

-

-

-

.....

-

Appendix D Page 8

PUERTO RICO - STATE INSURANCE FUND CORPORATION WORKERS COMPENSATION Death

Ex pected Loss Method

-

-

-

Accident Year 2001 / 02 2002 / 03 2003 / 04 2004 / 05 2005 / 06 2006 / 07 2007 / 08 2008 / 09 2009/1 O 2010 / 11 2011/12 2012/13 2013 /1 4 2014 / 15 2015 / 16

(1)

(2)

(3)

(4)

Prelimina ry Ult imare Loss ($000s)

Earned Payroll ($00s)

Loss Cost per $ 100 of Payroll [( 1) X $1,000] / (2)

Loss Cost Trend Factor

$2,800 2,250 1,275 3,875 4,400 3,875 4,250 3,050 3,025 2,925 2,831 1,991 1,860 2,025 3,895

$202,420 ,000 215,080,000 226,3 30 ,000 238,750,000 245,090,000 243,450,000 242 ,880,000 228,200,000 232 ,489,940 237,514,470 230,850,000 251,622,480 243,760,000 242.156,580 233,992,560

(8)

.....

.....

....

-

$0 .014 0.01 O 0.006 0.016 0.018 0.016 0.017 0.013 0.013 0.012 0.012 0.008 0.008 0.008 0.017

0.607 0.674 0.749 0.731 0.713 0.695 0.679 0 .662 0.646 0.734 0.834 0.948 1.077 1.051 1.025

(5) Trended Lo ss Cost per $100 of Payroll (3) X (4) $0.008 0.007 0.004 0.012 0.013 0.011 0.012 0.009 0.008 0.009 0.010 0.008 0.009 0.008 0.017

Avg (A II Yrs ) Wtd Avg (AII Yrs) Wtd Avg (Latest 5) Wtd Avg (Latest 3) Wtd Avg (Latest 2) Wtd Avg (A II Yrs Excl Hi / Lo)

0.01 O 0.01 O 0.010 0.011 0.013 0.010

Selected for acc ident year 2016 / 17

0.010

(6)

(7)

Loss Cost per $100 of Payroll (8) / (4)

Expected Loss ($000s) [(2) X (6)] / $ 1,000

$0 .012 0.011 0 .009 0.010 0.010

Notes: For accident years, 2001 / 02 through 2010/11, Column (1) is taken from Appendix D. Page 4, Column (9). For accide nt years, 2011 / 12 through 201 5 / 16, Column (1) is equal to the average of Columns (3) through (5) of Appendix D, Page 4. Column (2) has been provided by the Puerto Rico State ln sura nce Fund Corporation. Column (4) reflects trending t,0 accident year 2016/17 based upon the los s cost trends found on Appendix D, Page 19, Lines (5) through (7). Line (8) is se lected based upon judgment after review of Column (5) .

$2,770 2,768 2, 194 2,422 2,340

PUERTO RICO - 5TATE IN5URANCE FUNO CORPORATION WORKER5 COMPE NSA TION Oeath

Append lx o Page 9

ProJectlon o f Ultimate Loss (SOOO s) [email protected] Method 5e ction 1: Pald Loss

Accld entYu,

(1)

(21

[email protected] Loss

Pald [email protected] to Uh [email protected] Factor

(3) Cumu1ative [email protected] Pa ld 10096 ¿ t2 >

Percent Unpa id 1 0096 - ~3 )

3. 57 4 4.503 6.304 11.9 7 8 1 19.784

28.096 22.2% 15.996 8,3% 0 .896

72 .096 77 .8% 84.1% 91 .796 99.296

2011 /12 20 12/13 20 13/14 2014/1 S 20 15 / 16

S2 .770 2,768 2.194 2 ,4 22 2,340

Tota l

S 12,494

(41

151

Pa id Loss as of06l30ll6

(6) Expected Unpaid Lo ss ( 1) )( t4)

171

Ultlmate Lo ss (5) + (6)

S797 395 303 144 46

S 1,994 2 .1 54 1,845 2 .221 2.32 1

S2,791 2,549 2,148 2,365 2.367

Sl .685

S l0 ,5 35

S l 2.2 20

Section 11 : [email protected] Loss

Accldent Year

(8)

(9)

Expected l oss

lncurred Age to [email protected] Factor

( 10) Cumu latlve Percent Reported 100% / (91

Percent Unreported 10096 - (10)

1.590 1.654 1.770 2. 389 9.9 14

62.9% 60.596 56.5% 41.996 10.1%

37. 1% 39.5% 43.5% 58.1% 89.9%

2011 /12 2012/13 20 13/1 4 20 14 /15 20 15/16

S2,770 2,768 2, 194 2. 4 2 2 2,340

Total

S I 2,494

(11)

112)

(13)

(14)

lncurred Los s as of 06/30 /1 6

[email protected] Unreported Loss (8) X ( 11)

Ult lmate Los s ( 12) + (13)

S 1,777 1.248 1,040 898 321

S 1,028 1,093 954 1,407 2,104

S2, 80 S 2,34 1 1,994 2.305 2, 4 25

S5,284

S6.586

S 11 ,870

[email protected] : Columns (1) and (8 ) are taken from [email protected] D, Pag e 8, Column (7), Columns (2) and (5) [email protected] taken from Co lu mns (2) and (1), respMtive ly, of Append ix O. Page 5. Column s (9) and (12) are taken fro m Co lu mns (2) and (1 ), respectively , of Ap pe ndix O, Page 6 .

....

-

PUERTO RICO - STA TE INSURANCE FUNO CORPORA TION WORKERS COMPENSATION

Apptndh< D Pagel O

~ath

HluorLtillLOH(SOOOS)

-

~ 1985 / 86

Rts t rve

~ 1986/ 87

Rtterve ~ 1987 / 88

N.A.

N.A.

N.A .

N.A .

N.A.

N.A.

N.A.

N.A.

NA.

N.A.

~

N.A.

N.A.

N.A.

N.A.

N.A.

S94

l,485

l.626

1.712

1.888

2.0lO

2.097

2.13 8

2.2 50

2,292

2.3Sl

2.391

2 .4 51

2,Sll

2.SOS

N.A.

N.A.

N.A.

N.A.

N.A .

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

502

1.325

1.519

1.662

1.741

1.805

1.911

1,958

1.968

2,001

2.056

2.087

793 1.68S

1.215 662 1.877

1,491 568 2,061

1.130 410 2.140

1,9112 307 2,289

2,181 171 2,352

2,297 86 2.383

2.H6 55 2.<19 1

2,541 28 2,569

2.621 36 2.657

1.199 1,170 2,369

1.497 1,006 2,503

1,710 836 2.566

1.906 720 2,626

2 ,088 664 2.752

2,269 522 2.791

2,194 489 2.881

2 ,520 432 2 ,952

2.620

1,212 2, 165

1.172

61 62! 684

11.tserve ~

406

_Ll.!!_ 1.622

1988 / 89

SO!

Rt'itrve

779 859

~ 1989/ 90

~

70 676 74 6

Pald Rtterv, ~<