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Trust Celebrates 15th Anniversary


The Texas Cotton Ginners’ Trust is celebrating its 15th anniversary in 2009. The Trust was formed in response to the Texas gin industry’s demand for stable, affordable workers’ compensation insurance coverage.

The workers’ compensation marketplace in Texas failed during the late 1980s, and by 1990 most insurance companies ceased offering workers’ compensation insurance to Texas gins. Many gins could only find coverage at prices two to three times higher than they previously paid. They found this cost more than their operation could bear.

The gins turned to their association, the Texas Cotton Ginners’ Association, for an answer. The Association’s Insurance Committee took on the challenge and spent several years exploring possible solutions.

Their search led to the formation of the Trust in 1994. Since that time, the Trust has provided the stability sought by
the ginners.

In the 15 years since its founding, the Trust has grown to provide coverage to 75 percent of the gins in Texas as well as other agricultural businesses across the state.

The Trust’s Producer Program now offers the protection of workers’ compensation coverage for employees of cotton producers who gin with members of the Trust.

The Trust has fulfilled its role, providing its members both hard savings in dividends paid back, and “soft” savings in premiums the members never had to pay to a commercial insurance carrier because the Trust was there to provide coverage in times of a restricted market.

The insurance marketplace in 2000 to 2003 was an example of a “hard” market. Customers of commercial carriers saw annual increases at their renewals of as much as 45 percent each year for several years.

The rate that Trust customers pay on their gin employees went up only 13 percent during those years, and the Trust’s rate started back down at least a year before other carriers began to cut their prices.

The Trust continues to stabilize the up-front cost of coverage. Last year the trustees decided to continue using a rate for gin workers that is 7.2 percent below the rate indicated by the Texas Department of Insurance.

The Trust continues returning profits, paying $3.3 million in dividends during 2008. It was the Trust’s second record dividend in two years. In excess of $11 million has been returned to members who participated in the first 12 months of the Trust program. More than 18 percent of premiums paid in those years was returned.

The Trust’s Safety Credit, which is available to member gins, returned an additional $445,000 to members who qualified in 2008. The Trust continues to improve safety service to members and their employees.

The Trust sponsors Safety Seminars offered by the TCGA to its members. Ten meetings were offered again in 2008, and 695 employees attended.

The Trust will once again be located in Booth No. 1 at this year’s Trade Show. Please visit and learn what’s in store for 2009 as the Trust enters its 16th year. This year’s Annual Meeting of the Trust is scheduled for 2:30 p.m. on Friday, April 3, in the Lubbock Memorial Civic Center. The meeting agenda will provide an update on Trust activities and financial position.

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