|Source: Ernst & Young's independent audits of BRIM's financial statements.|
In fiscal year 1994, BRIM initiated a plan to reduce and eventually eliminate the unfunded liability which it is on course to accomplish according to plan. The plan involved substantial increases in premium charges, increases in State appropriations, and cost cutting measures.
Although the unfunded liability is on course to be eliminated, there are areas in
which BRIM can improve. Premium charges should reflect not only loss history but
exposure to potential loss. Currently, BRIM's premium charges are based primarily
on loss history. Risk management, which is mandated by statute, needs to improve to
reduce the exposure to future losses. BRIM also needs to re-examine its policies on
assessing surcharges and incentives. Its surcharges can lead to inadequacies in cost
recovery, and incentives are not broad enough to acknowledge those entities with
good loss history.