PURMIT Board of Trustees Meeting
July 23, 2015
2:50 p.m. – 5:00 p.m.
Minutes
Trustees Present: Chair Patrick Hughes (OSU); Eric Yahnke (WOU); George Marlton (OIT); Vice Chair Brian Roy (PSU); Craig Morris (SOU); Deb Donning (UO)
Trustees Absent: Lara Moore (EOU)
Others Present: James Parker (DWT); Ryan Britz (Berkley); Jon Paulsen (Berkley Risk); Ashley Grealish (PURMIT)
Call to Order
Chair Patrick Hughes called the meeting to order at 2:50 p.m.
Roll Call
Roll call was taken of those present.
Review and approval of meeting minutes
Meeting minutes from the June 25 Board of Trustees meeting and minutes from the June 29 Board of Trustees meeting were reviewed and discussed.
Action:
A motion was made by Mr. Morris to approve the June 25 minutes. The motion was seconded by Mr. Marlton. The motion carried with no objections. A second motion was made by Mr. Morris to approve the June 29 minutes. The motion was seconded by Mr. Marlton. The motion carried with no objections.
Berkley transition update
Mr. Britz provided an update regarding the administration transition progress. Berkley is working closely with Ms. Grealish and the staff at Perkins to finalize the accounting process. Berkley has met with all other PURMIT vendors and has established contacts with each. Mr. Britz also informed the Board that they have the transition complete by August 1, 2015.
Action:
A motion was made by Mr. Roy to have Mr. Parker provide notice and terminate Statement of Work (PURMIT Staffing) between the USSE and PURMIT and the Service Provider Host Agreement between OSU and PURMIT effective September 1, 2015. The motion was seconded by Mr. Morris. The motion carried with no objections.
Independent financial auditor request for proposal review
Mr. Britz provided an update regarding the status of the independent auditor request for proposal responses. Ten auditors were solicited for bids. Three firms provided quotes for services: McGladrey; K Financial; and Cummings & Keegan. The Board discussed proposals and decided to move forward with reference checks on two firms: McGladrey and K Financial. Mr. Britz was instructed to perform reference checks on both firms and report back to the Board Chair with results. Following discussion with Mr. Hughes, Mr. Britz will schedule a meeting of the Board to finalize the selection process.
Action:
No action taken at this time.
Claims procedures and protocol
Mr. Britz began the discussion with processes and procedures that Berkley Risk utilizes for other clients. Berkley’s main responsibility for current clients is to protect and authorize the release to the member/trust/boards assets. This is in contrast to the model currently in use by PURMIT, where the members have authority to distribute and pay claims using PURMIT funds with limited oversight from PURMIT governing body. Mr. Parker commented on this situation, stating that when the universities were all one entity with a common funding source, they were spending their own funds. Now that the Trust has been formed, the funds are the responsibility of the Trust and there is a need for oversight and representation for the benefit of the Trust. Mr. Parker continued, informing the Board that many pools have a third party administrator that would perform certain claim handling functions, which serve to look out for the pool. An entity to perform these functions is important to the success of the Trust. Mr. Marlton asked whether or not the items being discussed were the function of the claim committee. Mr. Roy stated that the claims situation being discussed is more involved than what could be expected from the claims committee. Mr. Morris commented that there could be a perceived conflict of interest if an individual member were to control all aspects of the claim handling process. Mr. Parker provided three potential options to consider for handling the issue:
- Expand services of the existing or another TPA. A TPA could become involved in with all aspects of claims process.
- Have a TPA involved in the supervision of the claims but leave the litigation and claims handling with the member.
- A combined approach of the two previously mentioned.
Mr. Roy agreed with Mr. Parker’s comments and indicated that there needs to be oversight from an entity specific to the Trust layer. Mr. Britz outlined how Berkley provides the combined claim handling approach on a program they currently administer. On that program, a Berkley employee works with member to set the Trust’s reserves, provides notice to excess carriers, and provides assistance through the life of the claim. The individual member remains involved with the claim in conjunction with Berkley’s oversight and assistance. Mr. Hughes requested that Berkley provide options and costs for: full claim adjudication services, combination approach with member involvement and administrator oversight and collaboration with claim process, and local TPA options. Mr. Morris requested Berkley to provide specific details on claims handling procedures, what controls need to be in place, items to be in place so the Trust can move forward. Board agreed next steps for Berkley are to provide specifics around both requested claim handling processes and present at next Board meeting. Mr. Morris also requested Mr. Britz have a similar discussion with the Risk Council to get their thoughts and direction.
Action:
No action taken.
Property renewal update
Mr. Britz provided an update on the renewal process for the October 15 property renewal. PURMIT’s broker is processing the exposure information and has plans in place to receive terms and conditions by September 21. Specific items that PURMIT’s broker has been requested to provide include: market options, single carrier or a blended carrier approach; DIC and stand-alone quote coverage options in the event coverage is moved from the incumbent carrier; explore making property form proprietary to PURMIT. Board requested all items be explored during the renewal process.
Action:
No action taken.
Financial Review
Mr. Britz provided a financial update to the Board. The financial information was as of May month end due to June month end information was not yet complete. Mr. Britz reported that PURMIT was in a strong position surplus position after two years of operations. Berkley Risk continues to work with the Trust’s accounting firm (Perkins) and Ms. Grealish to round out the monthly and yearly financials. Mr. Britz indicated that the Board will start to see format changes to the accounting reports, as Berkley Risk will be moving the accounting to a pool accounting structure. In addition, Berkley Risk will provide ongoing financial metrics for the Board to compare quarterly reports and yearly reports, which will assist with the financial review of the Trust.
Action:
No action taken.
Sedgwick claim review
Ms. Grealish provided an update regarding the claim review call with Sedgwick. The call addressed current open claims being handled by Sedgwick. Ms. Grealish reported that the call went well. Mr. Hughes expressed concern with subrogation process in place with Sedgwick and would like a greater sense of urgency around these efforts. Mr. Hughes requested Berkley look into this in the near future. In addition to the Sedgwick claim discussion, it was determined that PURMIT needs to have an authorized individual representing the entity in regards to MMSEA procedures.
Action:
Mr. Morris made a motion to have Berkley be the authorized signor on the MMSEA document. The motion was seconded by Mr. Hughes. The motion carried with no objections.
SAIF
Currently Ms. Grealish is representing PURMIT regarding SAIF items that needs Trust attention. As a result of the change in administrator to Berkley, the Board determined that it would specifically delegate Berkley as the administrator on behalf of PURMIT.
Action:
Mr. Morris made motion to delegate authority to Berkley to engage SAIF for access to claims data, retro meetings, quarterly payroll reporting, policy documents, electronic access to SAIF web data/”Business on line” website, and other confidential information as needed to conduct business. Motion was seconded by Mr. Hughes. The motion carried with no objections.
Workers Compensation Broker
The Board requested that Arthur J. Gallagher serve as the broker on the Workers Compensation coverage under the existing brokerage services agreement.
Action:
No action was taken
Tax Return Status
Mr. Parker discussed the tax return status of the Trust, specifically as how it relates to the 115 Tax exempt status for governmental business. Mr. Parker commented that it is likely that PURMIT qualifies for this status. However, a private letter ruling from the IRS would be required to confirm it. Mr. Parker indicated there will be additional legal and administrative costs to request a formal ruling. The Board directed Mr. Parker to develop a formal proposal and present to the Board at next meeting for Board decision.
Action:
No action taken
Davis Wright Tremaine engagement letter
Mr. Parker requested the Board review and approve signature for the Davis Wright Tremaine LLP engagement letter and conflict of interest form in order to comply with the firms engagement rules. Mr. Hughes requested additional time for review by OSU’s general counsel.
Action:
No action taken
AGRiP Membership
Mr. Hughes presented to the Board the AGRiP membership information, benefits, cost and duration of membership. The Board agreed to join AGRiP.
Action:
Mr. Morris made motion for PURMIT to join AGRiP. Motion was seconded by Mr. Hughes. Motion carried with no objections.
Mr. Morris made motion to adjourn meeting. Mr. Yahnke seconded the motion. Motion carried with no objections.