FARM & RANCH WORKSHOP DECEMBER 4, 2015

Farm & Ranch Workshop Monte Plourde, Premium Audit Manager

Workshop Agenda

P 505.343.2879 [email protected]

Alec Grandon, Risk & Safety Manager

• Introduction & General Information • Underwriting Considerations • Risk & Safety Considerations & Services

P 505.343.2817 [email protected]

Ryan Inzenga, Director of Underwriting

P 505.343.2834 [email protected]

Tonya Huelskamp, Underwriting Supervisor P 505.343.2804 [email protected]

• Premium Audit Challenges & Considerations • Why New Mexico Mutual? • Discussion & Questions

New Mexico Mutual Farm & Ranch Workshop December 2015

Farm & Ranch Workshop General Information • Principal State Industry • Annual Receipts Over $3 Billion • Over 23K Jobs Supported • Seventh Highest Milk Producing State • Eighth Highest Cheese Producing State • Third Highest Pecan Producing State • Over 43 Million Agriculture Acres

New Mexico Mutual Farm & Ranch Workshop December 2015

http://www.nasda.org/

Farm & Ranch Workshop General Information Albuquerque Journal September 11, 2015

“New Mexico has roughly 24,700 farms; fewer than 8% employ three or more workers.”

Potential Market Opportunity •

24,700 Farms x 8% = 1,960 Farms

•

Around 1,960 Potential Policyholders

•

Approximately $13.5M Industry Premium

New Mexico Mutual Farm & Ranch Workshop December 2015

Farm & Ranch Workshop General Information • New Mexico Mutual (NMM) has Written Farm & Ranch Exposure Since Inception • NMM Maintains a Sizeable Farm & Ranch Book of Business • NMM Currently Provides Coverage Through More Than 25 Agencies

New Mexico Mutual Farm & Ranch Workshop December 2015

Farm & Ranch Workshop Workshop Goals I. Introduce & Discuss Farm & Ranch Challenges II. Provide Solutions for Farm & Ranch Challenges  Underwriting Considerations  Risk & Safety Considerations & Services  Premium Audit Challenges & Considerations

III.

Communicate New Mutual’s Interest as a Resource for the Farm & Ranch Industry

New Mexico Mutual Farm & Ranch Workshop December 2015

Farm & Ranch Workshop

Underwriting Considerations Tonya Huelskamp, Underwriting Supervisor

New Mexico Mutual Farm & Ranch Workshop December 2015

Underwriting Considerations Rating Spectrum • Eight Rating Companies Available

(LCMs)

Premier

Assurance

1.156

1.230

Mutual

Security

1.331

1.435

Employers

Southwest

1.525

1.675

• Account Characteristics Determine Rating Company • Out-of-State Coverage Options Available

Safety

1.950

Foundation

2.229

Underwriting Considerations Account Characteristics • • • • • • • • •

All Operations Performed by Entity(ies) Years of Experience Prior Coverage Loss History Extent of Contracted Labor Extent of Group Transportation & Travel Extent of Employee Housing Extent of Interchange Between Operations Location Remoteness Safety Controls New Mexico Mutual Farm & Ranch Workshop December 2015

Considerations  Complete description of operations  Accurate ownership  Safety controls  Loss Runs with claim details  Ex-Mod Worksheets

Farm & Ranch EZ Quote Form Available

Farm & Ranch Workshop

Risk & Safety Considerations & Services Alec Grandon, Risk & Safety Manager

New Mexico Mutual Farm & Ranch Workshop December 2015

Risk & Safety Considerations Farm & Ranch Injury Rate Data – Fatality Rates 7x Higher Than Average Worker • Leading Cause of Fatalities – Tractor Rollover • Tractor Roll-Over Protective Structures

– Injury Rate 40% Higher Than Average Worker • Leading Youth Cause (17 or younger) – ATVs & Machinery

New Mexico Mutual Farm & Ranch Workshop December 2015

Risk & Safety Considerations General Duty Clause 29 USC § 654 5(a)(1) (a) Each employer – (1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees

New Mexico Mutual Farm & Ranch Workshop December 2015

Risk & Safety Considerations Health & Safety Hazards • Chemicals/Pesticides • Cold • Dust • Electricity • Grain Bins • Hand Tools • Highway Traffic • Lifting • Livestock Handling • Machinery/Equipment

• Manure pits • Mud • Noise • Ponds • Silos • Slips/Trips/Falls • Sun/Heat • Toxic Gases • Tractors • Wells

Risk & Safety Considerations Safety Training • • • • • • • • •

Ergonomics Hearing Protection Respiratory Protection Emergency Action Plan Hazard Communication Personal Protective Equipment Vehicle Safety Lockout/Tagout Online Resources

• • • • • • • • •

Fall Protection Fire Safety Chemical Safety Electrical Safety Confined Spaces Heat Stress Eye Protection Ladder Safety Slips, Trips, and Falls

Farm & Ranch Workshop

Premium Audit Challenges & Considerations Monte Plourde, Premium Audit Manager

New Mexico Mutual Farm & Ranch Workshop December 2015

Premium Audit Considerations Premium Audit Challenges • Classification - Basic Manual Rule 1.D • Premium Basis - Basic Manual Rule 2.B • Ownership - Basic Manual Rule 2:E • Interchange of Labor - Basic Manual Rule 2.G • Subcontractors - Basic Manual Rule 2.H • Domestic Workers - Basic Manual Rule 3.C New Mexico Mutual Farm & Ranch Workshop December 2015

Contact the Premium Audit Department with any questions. Monte Plourde Premium Audit Manager P 505.343.2879

[email protected]

Premium Audit Considerations Entity Classification

Each Entity Classified Separately

Single Entity

Entity 1

Entity 2

Cattle Raising & Hauling Cattle

Cattle Raising

Hauling Cattle

Class Code 0083 Includes Cattle Raising & Hauling Cattle Under Single Entity

Class Code 0083 Cattle Raising

New Mexico Mutual Farm & Ranch Workshop December 2015

Class Code 7228 Hauling Cattle

Premium Audit Considerations Farm Operation Classification • Each Operation May Be Separately Classified • Records Should Be Kept Using:  Payroll and/or  Acreage

• Each Farm Class Code Includes:  General Maintenance  Crops Raised for Work Animals  Outside Domestic Workers  Drivers New Mexico Mutual Farm & Ranch Workshop December 2015

Premium Audit Considerations Premium Basis • Payroll Means Money or Substitutes for Money • Substitutes For Money Associated with Farm & Ranch Typically Include:  Employee Housing  Unpaid Working Family Members  Non-monetary Compensation

Premium Basis will be Developed for Premium Calculation

New Mexico Mutual Farm & Ranch Workshop December 2015

Premium Audit Considerations Considerations

Ownership • Sole Proprietorship = Single Owner at 100%  Owner Is Automatically Included

 Owner May Choose To Exclude Themselves  Community Property Does Not Determine Ownership • Partnership = Multiple Individuals/Companies at 100%  Partners Are Automatically Excluded  Partners May Choose To Include Themselves

New Mexico Mutual Farm & Ranch Workshop December 2015

• Verify Ownership to Determine Owner Exclusion/Inclusion Ability • Community Property Laws are not Applicable in Determining the Ownership of a Business Registered as a Sole Proprietorship.

Premium Audit Considerations Interchange of Labor

What to do first?

Verify that Records are Maintained by Either Payroll or Acreage New Mexico Mutual Farm & Ranch Workshop December 2015

Premium Audit Considerations Contract Labor • Subcontract Labor • Casual Labor

Considerations

• Independent Contractors

• Verify All Subcontracted Labor Provides a COI • COI Must Demonstrate Active Coverage • If Subcontractor Does Not Confirm Coverage, New Mexico Mutual May Include Subcontracted Exposure

New Mexico Mutual Farm & Ranch Workshop December 2015

Premium Audit Considerations Domestic Labor • Inside Domestic Employees – Separately Classified  Cooks  Housekeepers  Laundry Workers  Maids, Butlers  Resident Caretaker, Companion, Nanny

• Outside Domestic Employees – Included within Farm Class New Mexico Mutual Farm & Ranch Workshop December 2015

Farm & Ranch Workshop

Why New Mexico Mutual?

New Mexico Mutual Farm & Ranch Workshop December 2015

Workshop Summary Why New Mexico Mutual? • We know New Mexico workers’ compensation. – With twenty-five years of workers’ compensation experience, the company remains current on industry and legislature activity to ensure policyholders receive the highest level of service and remain compliant with state regulations. – New Mexico Mutual is the only mono-line, mono-state workers’ compensation carrier in New Mexico. The company has a local presence and dedicated to servicing New Mexico employers and agency partners.

• We know Farm & Ranch exposure. – New Mexico Mutual maintains a substantial book of Farm & Ranch exposures. The company is experienced with unique industry dynamics, such as unpaid working family members, interchange of labor between farms and/or operations, and dairy operations versus general cattle raising operations. – Industry expertise allows New Mexico Mutual to competitively price and account for the unique risks experienced by the Farm & Ranch industry. New Mexico Mutual Farm & Ranch Workshop December 2015

Workshop Summary Why New Mexico Mutual? • We have competitive rates. – Each farm or ranch is unique, and New Mexico Mutual underwrites each account based on its own characteristics. – The Company maintains a board tiering spectrum capable of competitive premiums throughout. With the exception of reinsurance exclusions and adverse loss history, New Mexico Mutual is able to find equitable premium solutions.

• We have dedicated Risk & Safety Consultants. – Employers can take advantage of Risk & Safety services at no additional cost. New Mexico Mutual can help employers identify and significantly reduce occupational risks through methods, such as retro-fitting tractors with roll-over protective structures.

• We have expert Premium Auditors. – New Mexico Mutual can help employers establish proper payroll records and guide them through complicated scenarios at the start of policy issuance, rather than waiting until audit time. New Mexico Mutual Farm & Ranch Workshop December 2015

Workshop Summary Why New Mexico Mutual? New Mexico Mutual is dedicated to Farm & Ranch employers and our independent agents. Our years of experience and industry knowledge allows Farm & Ranch employers to comply with state coverage requirements while confidently and accurately controlling their insurance costs. New Mexico Mutual understands your commitment in guiding clients to identify the right workers’ compensation and risk management services to meet specific needs. We want to be your partner of choice as your business grows.

New Mexico Mutual Farm & Ranch Workshop December 2015

Farm & Ranch Workshop Monte Plourde, Premium Audit Manager

Workshop Topics

P 505.343.2879 [email protected]

Alec Grandon, Risk & Safety Manager

P 505.343.2817 [email protected]

Ryan Inzenga, Director of Underwriting

• Underwriting Considerations • Risk & Safety Considerations & Services

P 505.343.2834 [email protected]

Tonya Huelskamp, Underwriting Supervisor P 505.343.2804 [email protected]

• Premium Audit Challenges & Considerations

Thank you New Mexico Mutual Farm & Ranch Workshop December 2015