PURMIT Board of Trustees Meeting
January 26, 2017
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), Vivian Chen (OIT)
Others Present: Sheryl Sattler, Jack Goodwin and Ryan Britz, (Berkley); Ron Graybeal, Tim Clarke and Michaelene Thomas (BBNW); Kevin Wick (PwC); Jamie Kilcoyne and Daniel Kugel (K Financial); and James Parker (DWT)
Call to Order
Chair Brian Roy called the meeting to order at 9:01 a.m.
Roll Call
Roll call was taken.
Review and Approval of Minutes
Meeting minutes from the August 9, 2016 PURMIT Board of Trustees meeting were reviewed and discussed.
Action:
A motion was made by Mr. Morris to approve the August 9, 2016 minutes. The motion was seconded by Mr. Hughes. The motion carried with no objections.
Meeting minutes from the November 30, 2016 PURMIT Board of Trustees meeting were reviewed and discussed.
Action:
A motion was made by Mr. Morris to approve the November 30, 2016 minutes. The motion was seconded by Mr. Roy. The motion carried with no objections.
PURMIT 2016 Financial Auditors Report for year ended June 30, 2016
Mr. Kilcoyne provided an overview of the financial audit work performed to the Trustees. Mr. Kilcoyne noted that there are two letters included in the audit packet: Statute 114 and Statute 115. Statute 114 outlines the responsibility of the auditor. Statute 115 outlines the responsibility of the Trust’s management. Statute 115 letter is used for management communication of any items regarding internal controls. Mr. Kilcoyne noted that there were no issues with this years audit and the internal control recommendations noted in the June 30, 2015 audit letter had been resolved and appropriate controls have been established and working. Mr. Kilcoyne commented that they issued a clean auditors opinion for the year ending June 30, 2016. Mr. Kilcoyne expressed his thanks to PURMIT for their willingness to allow them to present the financial report.
Action:
No action taken at this time.
Financial Review as of December 31, 2016
Ms. Sattler of Berkley Risk presented PURMIT’s operating results and financial position as of December 31, 2016 to the Trustees. On a combined basis, PURMIT’s net position as of December 31, 2016 was $3.7 million. Ms. Sattler noted that the performance of the Property component of the financial statement was showing a decrease in performance from prior years due to increased loss activity with this line of business. Budget remains on track for the 2017 year and no recommendations for change were requested. Ms. Sattler also presented the projected fiscal year end Statements of 25% Regulatory Requirement slide, which shows PURMIT’s continued compliance with Oregon’s statutory minimum surplus requirement.
Action:
No action taken at this time.
Financial ProForma Update and Discussion
Ms. Sattler provided the quarterly Proforma update, noting that the Trust’s financial condition and projections continue to improve. Berkley continues to monitor losses and operating costs as part of the ongoing financial management of the Trust. The Proforma will continue to be updated based on the most current loss and expense figures. Ms. Sattler also presented the updated financial metrics that Berkley will use to show the Trust’s financial performance. Mr. Roy stated that the Proforma and financial metrics documents look good and appreciated that it showed the Trust’s financial performance on many separate levels. Mr. Britz commented that as the Trust continues to refine their focus regarding surplus expectations and intent, Berkley will model different scenarios and projections which will assist the Trust establishing the desired surplus position.
Action:
No action taken at this time.
Brown & Brown Northwest Introduction
Brown & Brown Northwest (BBNW) individuals Ron Graybeal, Tim Clarke and Michaelene Thomas were present at the meeting to meet the Trustees and discuss BBNW’s involvement going forward. Mr. Graybeal discussed a proposed timeline that outlined BBNW’s intent for servicing PURMIT over the immediate 6 months leading up to and through the July 1, 2017 renewals. Mr. Graybeal also provided a list of BBNW staff that will be working on the account to service PURMIT member needs and noted that a SharePoint site had been set up for PURMIT members to use. Mr. Clarke mentioned that he had been invited and will attend the next in person meeting of the Risk Council. He will be working on development of a proposed service plan that will be individualized for each of the PURMIT members. Mr. Graybeal and Mr. Britz discussed July 1, 2017 renewal activities thus far and how the process will work for this renewal cycle.
Action:
No action taken at this time.
PURMIT July 1, 2016 Actuarial Review
Kevin Wick from PricewaterhouseCoopers presented the July 1, 2016 actuarial findings. Overall, PURMIT’s losses and reserves continue to develop as expected. The benefits of pooling member experience continues and is evidenced through the loss projections as well as the ability to purchase excess coverage at attractive and predictable attachment points. Mr. Wick also commented that the Trust’s net position continues to increase at a steady pace. Mr. Hughes and Mr. Wick discussed the confidence level used in the analysis and determined that it is appropriate. Mr. Wick thanked PURMIT for their continued confidence and partnership in Pricewaterhouse Coopers as the Trust’s actuary.
Action:
No action taken at this time.
Review of Service Provider Contracts
Mr. Britz discussed PURMIT’s service provider contract renewal dates. Service providers up or review include Berkley Risk, K Financial and Pricewaterhouse Coopers. The Board discussed all three entities and provided Mr. Britz with direction to discuss terms and pricing with K Financial and Pricewaterhouse Coopers. Mr. Britz agreed and commented that he would report back to the Trust any developments at the next Board meeting.
Action:
No action taken at this time.
July 1, 2017 Renewal Process
Mr. Britz commented that there were no additional items to discuss as this topic was addressed during the BBNW discussion.
Action:
No action taken at this time.
Legal Counsel items
Mr. Parker discussed the following items:
- Workers’ Compensation – The Board’s latest guidance has PURMIT continuing to work with SAIF for the July 1, 2017 renewal term. Mr. Roy noted that he agreed with the plan, but also thinks the Trust should continue to explore all options. Mr. Parker agreed and commented that he would work with Mr. Britz and Mr. Graybeal to outline a plan inclusive of all pieces involved for a potential move to a self-insurance platform, to bring to the Board for consideration at the Fall Quarterly meeting of the BOT. Mr. Morris commented that it may be beneficial to participate in a meeting of the university finance directors to inform them of the desired approach and move, when the time is appropriate.
- Broker of Record letters – There are certain policies and renewal processes that BBNW would like to occur in advance of the BBNW contract effective date that should be recognized within the insurance brokerage agreement. Mr. Parker noted that PURMIT can decrease the risk associated with the transition BOR’s by including language in the contract allowing BBNW and PURMIT to issue BOR’s and service those policies in advance of the contract start date provided the remaining terms of the contract are effective. Mr. Parker committed to including such terms in the draft Brokerage Services contract with BBNW. Mr. Morris noted that he is in agreement with Mr. Parker’s partial solution.
- Insurance Brokerage Services contract – Contract is in the final stages of being drafted. Mr. Parker will send to Mr. Britz when draft is complete.
- Waiver of Actual and Potential Conflicts of Interest – Mr. Parker distributed a waiver to the Trustees, that acknowledges and allows the continued work by Davis Wright Tremaine (DWT) on behalf of Brown & Brown on unrelated matters. The waiver outlined the responsibilities of DWT going forward in regard to their relationship with BBNW and PURMIT.
- Banking update – Mr. Parker is waiting for communication from Treasury regarding process, procedure, and the insurance brokerage services contract on behalf of PURMIT. The motion was seconded by Mr. Roy. The motion carried with no discussion.
Action:
Mr. Morris made a motion for Berkley Risk to sign the DWT conflict waiver and the insurance brokerage services contract on behalf of PURMIT. The motion was seconded by Mr. Roy. The motion carried with no discussion.
Other items
- Mr. Parker noted that he met with the General Counsel of the City and County Insurance Services. Mr. Parker commented that the discussion was general in nature and that as both entities continue to evolve there may be partnership opportunities.
Action:
No action taken at this time.
The Board adjourned the regular meeting and went into Executive Session at 11:49 a.m. to address documents and information relating to attorney-client communications regarding the handling of PURMIT documents 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 1:39 p.m.
Final Decisions Related to Executive Session Discussions (if any)
There were no final decisions made related to Executive Session discussions.
The next PURMIT Board of Trustees meeting is scheduled for May 4, 2017.
Adjourn
The Board adjourned the meeting at 1:41 p.m.