PURMIT Board of Trustees Meeting
May 4, 2016
9:00 a.m. – 1:30 p.m.
Minutes
Trustees Present: Ryan Hagemann (WOU), Lara Moore (EOU), Craig Morris (SOU), Brian Roy (PSU), Patrick Hughes (OSU), Michelle Meyer (OIT)
Others Present: Annette Schmidt, Jessica Russell, Ryan Britz, and Tiffani Burleson (Berkley); Brian Sornson and DeAnne Miller (SAIF); and James Parker (DWT)
Call to Order
Chair Patrick Hughes called the meeting to order at 9:07 a.m.
Roll Call
Roll call was taken.
Review and Approval of Minutes
Meeting minutes from the March 9, 2016 PURMIT Board of Trustees meeting were reviewed and discussed.
Action:
A motion was made by Mr. Roy to approve the March 9, 2016 minutes. The motion was seconded by Craig Morris. The motion carried with no objections.
SAIF Workers’ Compensation Renewal Proposal Presentation
Brian Sornson and DeAnne Miller from SAIF Corporation provided an overview of its workers’ compensation coverage renewal proposal effective July 1, 2016. The presenters detailed the premium structure and various rating plan options to the Board. An overview of YTD performance was given with discussion of the Department of Consumer and Business Services (DCBS) formula for calculating the annual assessment and retro premium. SAIF estimated the 2016 assessment to be an $80,000 savings as a result of lower standard premium, though it was noted that basic premium had been adjusted upwards due to investment income underperformance.
SAIF, as well as PURMIT staff, reviewed multiple pricing options by percentage maximum, excess loss limit, occurrence cap, and annualized premium. The group considered whether to continue $2 million in excess coverage and how much tail coverage was needed given the exposure and loss history. Finally, SAIF reviewed “other states” coverage, terrorism, and its rationale for an employers’ liability premium increase.
SAIF presented a brief analysis of the loss history, and analyzed causes and prevalent class codes. The Board learned about cost saving opportunities that if implemented by member Universities, could result in direct savings for the Universities. Increasing return to work programs to decrease the incidence of disabling claims reduces the DCBS assessment. SAIF encouraged all PURMIT members to become high utilizers of Oregon’s Employer-at-Injury-Program (EAIP). This SAIF- administered program returns up to $5,000 for worksite modification, tools, and equipment to employers who endeavor to identify transitional work that can be performed.
Action:
No action taken at this time.
Financial Review as of March 31, 2016
Ms. Schmidt of Berkley Risk presented PURMIT’s operating results and financial position as of March 31, 2016 to Trustees. On a combined basis, PURMIT’s net position as of 3/31/16 was $1.3 million. With loss costs driving net position, a PC claims analysis and discussion at the University level was recommended.
Ms. Schmidt presented the projected fiscal year end Statements of 25% Regulatory Requirement slide, which calculates PURMIT’s compliance with Oregon statute. Assuming no change in net position within the next quarter, PURMIT will exceed the Oregon surplus compliance target. In the future, the Statements of 25% Regulatory Requirements will include Member contributions on a combined basis to calculate regulatory requirement compliance.
Action:
No action taken at this time.
Financial ProForma Discussion
Mr. Britz provided a review of the FY 2016 – 2017 financial ProForma and covered the assumptions made during creation of the financial picture, and how the differences are driven by the liability retention for each scenario. The group considered the best scenario for five year planning, and Mr. Britz indicated that changes were recommended to the structure to improve the status of the PURMIT program. Staff described that there is no single industry standard for pool surplus levels; while some are well-capitalized, some run with a slim member surplus. The Board would like information from other pools, ideally ratios as a way to gauge financial health and provide a frame of reference for their analysis of financial data.
Action:
No action taken at this time.
July 1, 2016 Insurance Renewal Discussion
Mr. Britz covered the three renewal options with the Board, providing newly introduced two year rate lock offers, potential to buy higher limits at relatively low cost, and the details associated with each of the three retention levels.
Action:
No action taken at this time.
Legal Counsel items
Mr. Parker discussed the following items:
- Gallagher broker contract- PURMIT is on an extension of its contract and the Board discussed an RFP. The timeframe for proposals is year end, which means staff will initiate development of requirements, the market, and a legitimate submission deadline. The goal for decision-making is year end, possibly first quarter 2017.
- Banking update-Mr. Parker has asked OSU to consider a limited opinion letter confirming that the PURMIT – OSU agreement grants OSU the right to act on behalf of PURMIT with relation to the PUF. A status update will be provided at another meeting. The treasury is hesitant to confirm terms of additional services when in the process of its own potential bank change. Before moving forward, Board must detail its investment fund policy. To do so, staff was asked to make suggestions on amount or percentage to put in the treasury account to capitalize upon better earnings.
- Assessments- The Board discussed the availability of assessments under section 3.10 of the Trust Agreement.
Other items
- Workers’ compensation self-insurance- Mr. Parker is continuing to research regulatory issues associated with posting a letter of credit and meeting minimum deposit premium requirements with the treasury.
The Board adjourned the regular meeting and went into Executive Session at 12:30 p.m. to address documents and information relating to the 2016-17 allocation models, attorney-client communications regarding the handling of PURMIT documents by regulatory bodies and contract provisions, and potential and/or current litigation. The executive session was held pursuant to ORS 192.660(2) (f) and ORS 192.660(2) (h).
The Board exited Executive Session at 1:34 p.m.
Final Decisions Related to Executive Session Discussions (if any)
There were no final decisions made related to Executive Session discussions.
Adjourn
The Board adjourned the meeting at 1:35 p.m.