PURMIT Board of Trustees Meeting October 17, 2019
Minutes
Trustees Present: Ryan Hagemann (WOU) Brian Roy (PSU), Christina McKnight (OSU), Vivian Chen (OIT), Lara Moore (EOU), Greg Perkinson (SOU)
Others Present: Sheryl Sattler, Ryan Britz (Berkley), Ron Cutter (BBNW), James Parker (DWT)
Call to Order
Chair Lara Moore called the meeting to order at 9:02 a.m.
Roll Call
Roll call was taken.
Review and Approval of Minutes
Meeting minutes from the May 16, May 26, June 19 and June 29, 2019 PURMIT Board of Trustees meetings were reviewed and discussed.
Action:
A motion was made by Mr. Roy to approve the minutes. The motion was seconded by Mr. Hagemann. The motion carried with no objections.
PURMIT Financial Review as of June 30, 2019
Ms. Sattler from Berkley Risk presented the financial information as of June 30, 2019. Ms. Sattler noted PURMIT had $4.9M of operating revenue and an operating income of $2.169M, resulting in a current surplus of $11.3M. Ms. Sattler continued her discussion with the balance sheet portion of the financial statement, noting the Trust has $17.2M in assets and $5.9M in liabilities. Ms. Sattler also noted that since the designated funds had been transferred to the Oregon State Treasury, PURMIT has earned approximately $252K of investment income. Ms. Sattler commented that all Trust lines of business continue to operate at a profit. PURMIT’s expenses remained on budget. 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
Action:
No action taken at this time.
DAS WC Paid loss Retro Billing
Mr. Britz noted that the Trust had received an inquiry and invoice from DAS, relating to workers’ compensation claims that had occurred when the institutions were a part of the state system. The letter suggested that the PURMIT members were responsible for the retrospective premium payments DAS paid to the carrier. Mr. Britz, Mr. Hagemann, and Mr. Parker noted that they would do the research and work with the representative from DAS and report back at the next meeting.
Action:
No action taken at this time.
ProCor Solutions & Consulting
Due to an unresolvable firm conflict, Mr. Parker recommended the Trust utilize one of its non-DWT lawyers to work with Berkley to get the contract finalized. Ms. Moore agreed that it would be best and asked that Berkley begin to work with the outside firm.
Action:
No action taken at this time.
United Educators – Risk Management Practices Credit Program
Mr. Britz noted that the risk management practices credit program offered by United Educators has been launched and the members of the Risk Council are actively working through the program. He also noted that the Risk Council members have readily embraced the program and have found that it is beneficial for their departments and assists with their internal risk management practices.
Action:
No action taken at this time.
Legal Counsel Items
Mr. Parker discussed several items with the group:
- Public Universities Fund – work continues with OSU to allow PURMIT access to the fund. Parker has informed OSU that PURMIT would like to join the PUF by the end of the year.
- Property Memorandum of Coverage –Davis Wright Tremaine has attorneys that have experience drafting insurance coverage and have the resources to work on the project, should Trustees choose to move forward. Roy asked if it is advantageous for PURMIT to move in this direction at this time. Mr. Cutter noted that could be an advantage to the Trust to have its own memorandum of coverage. Mr. Parker asked if stabilization of the program and structure is needed before introducing a different form. Mr. Cutter noted that he would seek advice from Mr. Troisi and report back.
- Annual reporting to the state will occur as soon as the financial audit and actuarial reports are completed.
Action:
No action taken at this time.
Other Items
Mr. Britz made the Trustees aware of the upcoming in person Risk Council meeting that will take place at OSU’s Cascades Campus. Topics to be discussed include: Sexual Abuse & Molestation Coverage Update by UE representatives; Cyber Coverage update by Chubb; BBNW presentation for Property Coverage and Fleet Risk Management; McLarens loss adjusting services overview; and ProCor overview by ProCor staff. Mr. Roy noted that there was previous Trustee discussion regarding a visit with Lloyds underwriting markets and that there are plans being discussed for a visit in February. Mr. Cutter commented that he as other clients that conduct visits with Lloyds underwriters and it has been beneficial for establishing relationships and providing a more in-depth understanding of program activities for the markets. Ms. McKnight noted that it would be beneficial to have a representative from OSU present to discuss any specifics regarding last year’s large loss. The group agreed with the intent and requested staff to begin identifying dates for the meetings.
Mr. Roy noted that due to the large premium increase for the property coverage at the renewal, he wanted to make the Trustees aware that PSU has asked BBNW and Berkley to do due diligence on a separate property coverage tower for PSU. Mr. Cutter commented that he is working with PSU and that premium indications should be provided sometime after January 1st. Ms. Moore thanked Mr. Roy for informing the group and requested that Mr. Roy share the information he is provided with the other Trust members. Mr. Parker clarified that a separate coverage tower is within PURMIT and is an effort to find the best way to build and structure the property program so it provides the best benefit to all members. Mr. Roy agreed and noted that he would keep the group up to date with the information. Mr. Parker asked if Mr. Troisi can give the group a sense where rates are headed for next year’s renewal. Mr. Cutter commented that, barring any additional catastrophic events, the market is still firming and that will likely continue through 2020, estimating increases in the 15%-20% range. He further noted that firming property markets have not traditionally lasted for several years, but if losses continue where they have been, pricing can be expected to remain higher than it has been in recent history. He is going to discuss with Mr. Troisi and provide further indications at the next meeting. Mr. Roy requested Berkley provide proforma allocation models at the next meeting, using several different scenarios, so the Trustees can begin analyzing potential premium changes for the 2020 renewal.
Action:
No action taken at this time.
The Trustees called a break at 10:15 a.m.
The meeting was called back into session at 10:25 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 10:57 a.m.
Final Decisions Related to Executive Session Discussions (if any)
The Board made no decisions related to executive session.
Adjourn
The Board adjourned the meeting at 11:12 a.m.