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CAT CONTINUATION FUND TO BE FULLY FUNDED SOONER THAN EXPECTED

 CAT CONTINUATION FUND TO BE FULLY FUNDED SOONER THAN EXPECTED
 HARRISBURG, Pa., Feb. 3 /PRNewswire/ -- State Insurance Commissioner Constance B. Foster and Budget Secretary Michael H. Hershock reported today that because of higher than expected traffic violation surcharge revenues, the Catastrophic Loss Benefits (CAT) Continuation Fund will be fully funded by the year 2007, which is 29 years earlier than originally projected.
 Fully funded means that the fund will have sufficient revenues to pay all anticipated claims.
 Foster and Hershock made their annual report as to the fiscal condition of the CAT Continuation Fund to the General Assembly, as required by law.
 The CAT Continuation Fund pays up to $1 million in extraordinary medical expenses (but not the first $100,000) for persons injured in traffic accidents between Oct. 1, 1984, and Dec. 31, 1989. The General Assembly abolished the benefits program in 1989, but the fund still must pay outstanding claims for the period of its existence.
 Originally, it was estimated that the surcharge on traffic violations would raise $26.4 million per year for the fund. At that collection rate, it would have taken until 2036 for the fund to have enough money to pay all eligible benefits.
 It is now projected that in fiscal year 1991-92, the surcharge will generate $35.3 million, and $34.9 million in subsequent years. Because of the increase, surcharges will need to be collected only through 2007 to pay for the unfunded liability of the fund.
 Since its inception in 1984, the CAT Continuation Fund has paid $266.6 million to 1,789 Pennsylvanians injured in motor vehicle accidents. Actuaries predict the average amount paid to each claimant will be $315,900 and that the final claim will be paid in the year 2054.
 A law passed by the General Assembly in 1989 mandates that motorists convicted of traffic violations pay surcharges in addition to normal fines to erase the $310 million unfunded liability of the fund.
 /delval/
 -0- 2/3/92
 /CONTACT: Amy Dugan of the Insurance Department, 717-787-3289/ CO: Insurance Department ST: Pennsylvania IN: INS SU:


JS -- PH035 -- 6302 02/03/92 15:47 EST
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Publication:PR Newswire
Date:Feb 3, 1992
Words:356
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