Understanding Dividends

Dividends are one of the many valuable benefits of being insured with OAMIC. As a mutual company, OAMIC is owned by its policyholders, Oklahoma lawyers like you, rather than external shareholders. This structure allows us to prioritize long-term stability, personalized service, and a strong policyholder voice in governance through our Board of Directors, who are elected by and held accountable to you.

We know dividends are especially appreciated this time of year, and we often receive questions about how they work. This article aims to provide clear information about the process and what makes OAMIC's approach unique.

Criteria for Dividends

To qualify for a dividend, a firm must meet two main requirements:

1. Have an active lawyers professional liability policy with OAMIC on Dec. 31 of the dividend year; and
2. Have earned premium on the primary layer of coverage (up to $1 million in limits) during the calendar year. Dividends are based solely on premiums earned during the calendar year, regardless of when your policy renews. (If you’re unfamiliar with the terms “earned” and “unearned” premium, this short article can help better explain them.)

Premiums for coverage above the $1 million base layer, additional or ancillary products(such as cyber coverage or employment practices liability), and payments for extended reporting endorsements (“tail coverage”) are not included in the dividend calculation.

Our Approach to Rates and Dividends

At OAMIC, we work diligently to set insurance rates as low as possible while still ensuring the company can break even over time and maintain strong financial reserves. Our goal is to provide affordable, high-quality coverage without building unnecessary profit margins for outside shareholders.

Any surplus generated, often from prudent investment of reserves, can be returned to policyholders in the form of dividends. Importantly, these dividends are paid out of investment income and overall financial performance, not because our insurance rates are set too high. In many years, we have been able to deliver dividends even when underwriting results (premiums minus claims and expenses) were break-even or slightly negative, thanks to steady investment returns. This reflects our focus on stability and long-term value for you, rather than short-term gains.

Dividend Declaration and This Year's Update

The Board of Directors carefully reviews OAMIC's financial position and future outlook before declaring a dividend. Factors such as new claims, the severity of open claims, and overall surplus are considered to ensure any distribution maintains our longstanding financial strength. Dividends are never guaranteed and depend on each year's results.

This year, the Board declared a dividend of 6% of qualifying earned premium (for the primary layer up to $1 million). For example, if your firm's qualifying earned premium for 2025 is $3,000, your dividend would be $180, assuming all criteria are met.

Thank You to Our Insureds

Since 1994, we have proudly returned over $37 million to policyholders through annual dividends. These consistent returns are a testament to the trust you and your fellow Oklahoma lawyers place in OAMIC. We are grateful for your continued support and committed to delivering the stability, service, and benefits that only a policyholder-owned mutual company can provide.

If youhave questions about your specific dividend or the process, please don't hesitate to contact us, we're here to help.

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