WCRA's Comments on Settlements

Present Value and Settlement Value

Present value is the amount of money that needs to be invested today to generate sufficient funds to pay the expected future benefits.  The WCRA expects a long-term return on its investment of 7%.  Because the present value of a claim represents the maximum cost if the claimant remains eligible for benefits, settling for less than present value seems prudent.  Although the individual characteristics in each claim have to be considered, it is our experience that most claims settle at 50-75% of the present value.  If significant savings cannot be realized, the WCRA generally prefers to pay out the claim over time.

Contact the WCRA

Members are required to notify the Association prior to entering into claim settlements that may involve present or future WCRA reimbursement.  Contacting our claims services staff allows us to work with members to make certain that proposed settlements involving WCRA funds are accurate and that they adequately protect the WCRA's interests.

If a settlement involving WCRA funds is executed without advance notice to the Association's claims services staff, but we have no substantial disagreement with the terms of the settlement, we will simply reimburse the member for the full settlement amount. If, however, the terms of a settlement entered into by a member are based either on errors in applying the provisions of Minn. Stat. Ch. 176 or because the settlement is clearly excessive and materially affects the WCRA's financial interests, we may reduce the reimbursement to the member.  The undisputed settlement amount will be reimbursed to the member, who may request a review of the denial of the reimbursement as provided in the WCRA Plan of Operation.

The WCRA does not attend or participate in settlement conferences or pretrial conferences, nor should the WCRA be included as a signatory on a stipulation for settlement.