PURMIT Board of Trustees Meeting
February 5, 2019
Minutes
Trustees Present: Ryan Hagemann (WOU) Brian Roy (PSU), Christina McKnight (OSU), Greg Perkinson (SOU), Vivian Chen (OIT), Lara Moore (EOU)
Others Present: Sheryl Sattler, Ryan Britz (Berkley), Ron Graybeal, Tim Clarke (BBNW), James Parker (DWT), Jamie Kilcoyne and Taylor Marsden (K Financial)
Call to Order
Chair Lara Moore called the meeting to order at 11:08 a.m.
Roll Call
Roll call was taken.
Review and Approval of Minutes
Meeting minutes from the October 2, 2018 PURMIT Board of Trustees meetings were reviewed and discussed.
Action:
A motion was made by Ms. Moore to approve the minutes. The motion was seconded by Mr. Hagemann. The motion carried with no objections.
PURMIT Financial Auditors Report for Fiscal Year 2017 – 2018
Mr. Kilcoyne and Mr. Marsden presented the audited financial report. Mr. Kilcoyne noted that this was the fourth year for K Financial performing PURMIT’s audit. Mr. Kilcoyne noted that the majority of their work was completed in September and the final report was completed in November. He discussed the auditor’s letter and noted that management’s estimates for reserves are at an appropriate level. Mr. Kilcoyne noted that the Management Discussion and Analysis document is a requirement for the audit process and it provides a high level overview of the program and K Financial’s audit results. K Financial issued PURMIT a clean audit. Mr. Kilcoyne thanked the group for their confidence selecting K Financial to perform PURMIT’s financial audit.
Action:
No action taken at this time.
PURMIT Financial Review as of June 30, 2018
Ms. Sattler from Berkley Risk presented the financial information as of December 31, 2018. Ms. Sattler noted PURMIT had $2.7M of operating revenue and an operating income of $742K, resulting in a current surplus of $9.7M. Ms. Sattler continued her discussion with the balance sheet portion of the financial statement, noting the Trust has $21M in assets and $11.2M in liabilities. Ms. Sattler also noted that since the designated funds had been transferred to the Oregon State Treasury, PURMIT has earned approximately $112,000 of investment income. Ms. Sattler commented that all Trust lines of business are now operating at a profit. PURMIT’s expenses remained on budget through December. PURMIT continues to add surplus to the operation and has positioned itself well by utilizing the Oregon State Treasury as an investment vehicle within the overall PURMIT investment portfolio. Berkley continues its quarterly review of the surplus position and will advise the Trustees as to the amounts that are eligible for transfer to the Oregon State Treasury. Finally, Ms. Sattler mentioned that PURMIT’s financial position is above the Oregon statute’s regulatory requirement.
Action:
No action taken at this time.
Financial Proforma Update and Discussion
Ms. Sattler continued the financial discussion by reviewing the Proforma document and its trajectory out to 2022. Ms. Sattler noted that the Proforma document does not include any potential SAIF dividend for the group for the 2019 year and beyond. Ms. Sattler also noted that the Proforma is in line with prior assumptions and factors that were utilized to generate the exhibit. Mr. Roy asked where the Trust is with gaining access to the Oregon Public University Fund. Mr. Parker noted that he continues to work on this project with the appropriate folks to gain acceptance to the fund. Mr. Roy noted the importance of PURMIT accessing the fund and the potential increased return on our invested assets.
Action:
No action taken at this time.
July 1, 2019 Renewal Process and Timeline
Mr. Britz presented to the Trustees the proposed timeline Berkley and Brown & Brown Northwest plan to follow for analysis and implementation of the coverages that renewal July 1, 2019. Mr. Roy asked if there were any concerns or other items that the group needs to be aware of regarding the liability renewal. Mr. Clarke noted that the market is experiencing general firming of rates and that the group should expect a modest rate change at renewal.
Action:
No action taken at this time.
Uninsured Motorists/Underinsured Motorists Coverage Discussion
Mr. Parker recommended that PURMIT and its member universities sign an election form confirming what PURMIT offered and what the member purchased. He also recommended that this be done annually for the file. Mr. Roy agreed with the approach and annual discussion. Mr. Parker noted that he would finish the documents and transmit to the group for signature.
Action:
No action taken at this time.
The Trustees called a break at 9:51 a.m.
The meeting was called back into session and 10:00 a.m.
Executive Session
The Board adjourned the regular meeting and went into Executive Session at 10:02 a.m. to address documents and information relating to attorney-client privileged communications and trade secret documents. The executive session was held pursuant to ORS 192.660(2)(f) and ORS 192.660(2)(h).
The Board exited Executive Session at 11:01 a.m.
Final Decisions Related to Executive Session Discussions (if any)
The Board made no decisions related to executive session.
Procor Solutions & Consulting
The Trustees continued this discussion as a carry-over from the previous meeting. Mr. Roy commented that he was in favor of this proposal and recommended that the group move forward with the proposal. Mr. Clarke echoed Mr. Roy’s comments and added the importance of understanding the financial impacts that each member institution may have resulting from a claim. The process that ProCor uses will assist each institution with establishing the correct Business Income valuation as well as providing a general overview and benefit to understanding each institutions overall financial operations. Mr. Roy was in favor of engaging ProCor based on the provided proposal. Mr. Perkinson agreed that the proposal and process made sense to move forward. Mr. Roy noted that we need to confirm that the proposal and acceptance meet the Oregon procurement code. Mr. Britz noted that he would confirm the process. Mr. Parker suggested the Trustees authorize Berkley to move forward with the ProCor proposal, contingent upon confirmation from PSU regarding the procurement process.
Action:
A motion was made by Mr. Roy to authorize Berkley to accept the ProCor proposal, subject to confirmation of the procurement code. The motion was seconded by Ms. Moore. The motion carried with no objections.
Legal Counsel Items
Mr. Parker commented that he completed his annual reporting to the State of Oregon back in December, per his direction from the Trustees. Mr. Parker continued the discussion from PURMIT’s last meeting, regarding the development of PURMIT’s own memorandum of coverage. After discussion with Brown & Brown Northwest and Berkley, all parties agreed that the property coverage should be the first coverage form developed. The proposed timeline is for the July 1, 2020 renewal cycle, and the Trust should allocate $50,000 for completion of the project. Mr. Roy agreed with making the change from excess coverage to a coverage memorandum and then continuing to make additional changes, as needed in the future. Ms. McKnight agreed with Mr. Roy’s approach and comments. Mr. Perkinson agreed with the process as well. Mr. Parker also noted that if the Trustees agreed with the approach, DWT may be able to complete the project within their annual projected budget. He also noted that he can reach out to other known coverage lawyers in Oregon to gauge interest and determine costs if requested. Mr. Roy asked whom, within the group, should work on this project. Mr. Parker noted that it would be himself, Brown & Brown Northwest, Berkley and other DWT staff, as needed. Mr. Roy asked if DWT has experience drafting coverage language. Mr. Parker noted that in addition to himself drafting coverage language in the past, there are other lawyers within DWT that can assist with the project. In addition, he noted that he can further refine the process and identify the folks that will be involved and discuss at the Trustee meeting in the Spring. Mr. Roy agreed with this approach. Mr. Parker finished by commenting that he continues to work with Origami’s general counsel to get to resolution regarding the open items. He will update the Trustees at the next meeting.
Action:
No action taken at this time.
Other Items
Mr. Britz commented that Brown & Brown Northwest has secured a revised list of excluded countries from the Foreign Voluntary Workers’ Compensation coverage, greatly reducing the list of excluded countries. Mr. Britz recommended the Trustees agree to the revised list and upon doing so, he would instruct Brown & Brown to inform the carrier of PURMIT’s intent.
Action:
No action taken at this time.
Adjourn
The Board adjourned the meeting at 11:35 a.m.