PURMIT Board of Trustees Meeting
October 2, 2018
Minutes
Trustees Present: Ryan Hagemann (WOU) Brian Roy (PSU), Patrick Hughes (OSU), Greg Perkinson (SOU), Vivian Chen (OIT), Lara Moore (EOU)
Others Present: Sheryl Sattler, Ryan Britz (Berkley), Ron Graybeal, Ron Cutter, , Richard Poling (BBNW), James Parker (DWT)
Call to Order
Chair Brian Roy called the meeting to order at 9:06 a.m.
Roll Call
Roll call was taken.
Review and Approval of Minutes
Meeting minutes from the April 24 2018 and the May 22, 2018 PURMIT Board of Trustees meetings were reviewed and discussed.
Action:
A motion was made by Mr. Hughes to approve all minutes. The motion was seconded by Mr. Roy. The motion carried with no objections.
Board of Trustees Chair and Vice Chair
Mr. Roy noted that he has been PURMIT’s Chairperson for two years and that it is time to bring in someone new. He commented that the past few Chair and Vice chair rotations have been with himself and Mr. Hughes. In addition, typically the Chair would become Vice Chair and the Vice Chair would then be done serving in their role and remain as a PURMIT Trustee. Mr. Roy noted that Ms. Moore, with her history as a Trustee and long term involvement on the Board, would be a strong leader to fill the Chairperson role. Ms. Moore commented that she would be willing to serve as PURMIT’s next Chairperson.
Action:
A motion was made by Mr. Roy naming Ms. Moore as Chair of PURMIT and Mr. Roy as Vice Chair. The motion was seconded by Mr. Hughes. The motion carried with no objections. Mr. Hughes thanked Mr. Roy for his work as PURMIT Chair the past two years.
PURMIT Financial Review as of June 30, 2018
Ms. Sattler from Berkley Risk presented the financial information as of June 30, 2018. Ms. Sattler noted PURMIT had $4.8M of operating revenue and an operating income of $2.4M, resulting in a current surplus of $8.9M. Ms. Sattler continued her discussion with the balance sheet portion of the financial statement, noting the Trust has $15.7M in assets and $6.7M in liabilities. Ms. Sattler also noted that since the designated funds had been transferred to the Oregon State Treasury, PURMIT has earned approximately $116,000 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 June. . 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. Mr. Roy asked about PURMIT’s actual incurred legal fees. Ms. Sattler said they will pull the fees to date and advise actual numbers. Mr. Britz noted that the Trust has now stabilized the claims process and that most old claim inventory has been cleaned up and in many cases closed out. He continued by saying that the large decreases to the actuarial study will likely begin to slow down and barring any changes in frequency and/or severity or Trust retention appetite, the study will begin to stabilize. 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 2021. Ms. Sattler noted that the proforma document included the SAIF dividend for the group for the 2019 year. 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.
Surplus Analysis Presentation
Mr. Graybeal commented that BBNW was going to offer an alternate to the PURMIT actuary’s proposal regarding the ongoing surplus adequacy discussion. He noted that Mr. Poling will be discussing the data needs and the process of comparative metrics between PURMIT and similar pools to offer a benchmark. He further noted that PURMIT may look to set a goal to develop a “free capital methodology” supporting PURMIT’s financial obligations and goals, and then determining how to best serve the Trust with the additional funds. Mr. Poling noted that in order to start this process, three items are needed: the actuarial study, financial industry ratios and capital adequacy measures, and a benchmarking stud of the cost of risk to compare to other local pools. Mr. Hughes asked how Mr. Poling will find out the risk appetite of each institution, as they will vary from one to the next. Mr. Poling proposed sending out a questionnaire that would ascertain the pertinent information from each member. He also noted that he will need the actuary to provide additional confidence level information to the Trust so he can provide a surplus range for the Trust to consider. Mr. Parker noted for Berkley to instruct the actuary to obtain additional confidence levels per Mr. Poling’s request. Mr. Roy summarized the discussion noting the following two points: 1. Establish the desired confidence level/range based on actuarial data. 2. Second level surplus growth (above the confidence level band) and deployment of those funds as appropriate.
Action:
No action taken at this time.
The Trustees called a break at 10:01 a.m.
The meeting was called back in session at 10:10 a.m.
Media Liability
Mr. Britz said that PURMIT members are being requested to show larger liability limits on the Media Liability contract and certificates of insurance. He noted that BBNW was able to secure agreement from PURMIT’s liability carrier to extend coverage on top of the existing Media Liability coverage. Mr. Hughes noted that several vendors have been requesting the higher limits in order to meet contractual obligation and that the increased limit would be helpful meeting those requirements.
Action:
A motion was made by Mr. Roy to bind the additional coverage limit for the Media Liability per the BBNW secured quote. The motion was seconded by Mr. Hagemann. The motion carried with no objections.
Uninsured/Underinsured Motorists Coverage
Mr. Britz recommended that PURMIT adopt a resolution affirming the coverage limit the Trust offers in the event of an uninsured/underinsured motorists claim. Mr. Cutter noted as an agency practice, BBNW recommends to all of their self-insured clients that they adopt a resolution stating coverage and limit for uninsured/underinsured motorists coverage. Mr. Hughes asked if each institution needed to sign as well, or if it was sufficient to be handled at the Trust level. Mr. Parker proposed that the Trust look into this further and bring back a proposed solution at the next meeting.
Action:
No action taken at this time.
Procor Solutions & Consulting
Mr. Britz said that as part of the member institutions desire to establish the appropriate business income levels, BBNW introduced Procor to the risk council. The risk council was presented with options for consideration to establish next steps in the business income valuation process. Risk council recommended that PURMIT select the option that includes business income valuation services for each of the six institutions. Included in this process would be meeting with Procor to work through a series of metrics and data requests to establish the base data for Procor to develop the appropriate business income value. Mr. Roy noted this is a worthy endeavor and necessary for the member institutions, but would like to explore a more efficient method for the metrics and data gathering discussion. Mr. Hughes commented that if we’re spending the money on the product, we should provide all the appropriate information accurately so as to get the most accurate result. Mr. Parker noted that procurement law may affect the process and that the Trust should check with the procurement requirements prior to selecting the services. Ms. Moore agreed that this is an important process for the institutions to take part in. Ms. Chen requested an example of the work product for review prior to moving forward. Mr. Cutter said he would work with Procor to move the process forward.
United Educators
Mr. Britz commented that the member institutions are again working through the risk management practices credit process with United Educators. He noted that the process is similar to last year and that the program has been discussed with risk council and they are all moving toward selecting the completing their desired educational track.
Action:
No action taken at this time.
Legal Counsel Items
Mr. Parker informed the Board that work would resume on PURMIT’s entry into the Public Universities Fundnow that the Trust is eligible to hold an account with the Oregon State Treasury. Mr. Parker continued by asking the Trustees if they would like him to begin exploring the early stages of developing their own Memorandum of Coverage. Mr. Roy asked Mr. Parker for a reasonable timeline to get this completed, what line of coverage is recommended they start with? Mr. Roy also asked if BBNW has recommended language for the Trust to start looking at. Mr. Graybeal noted there would also be a cost to generate the document. Mr. Roy commented that he would like to see the following by the next meeting: timeline, budget and which line of business to begin the process. Mr. Parker commented that he would work with BBNW and Berkley Risk to begin outlining the process and desired items expressed by Mr. Roy.
Action:
No action taken at this time.
Other Items
Mr. Britz commented that the risk council has received responses from the RMIS RFP and that they are planning to have three respondents do an in person demonstration of their respective system. He continued by noting that the risk council would evaluate the proposals and demonstration together to determine which RMIS system is the best fit for PURMIT members. The risk council will also make a recommendation to the Trustees for discussion and approval, at a future Trustee meeting. The Trustees agreed with this approach.
Executive Session
The Board adjourned the regular meeting and went into Executive Session at 1:10 p.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 1:43 p.m.
Final Decisions Related to Executive Session Discussions (if any)
The Board re-entered the regular meeting at 1:44 p.m.
There were no final decisions or actions related to Executive Session discussions.
Other Items
Adjourn
The Board adjourned the meeting at 1:47p.m.