PURMIT Board of Trustees Meeting
September 21, 2017
Minutes
Trustees Present: Ryan Hagemann (WOU) Brian Roy (PSU), Patrick Hughes (OSU), Lara Moore (EOU), Craig Morris (SOU), Vivian Chen (OIT)
Others Present: Sheryl Sattler and Ryan Britz (Berkley), Jason Catz (SOU), and James Parker (DWT)
Call to Order
Chair Brian Roy called the meeting to order at 12:00 p.m.
Roll Call
Roll call was taken.
Review and Approval of Minutes
Meeting minutes from the May, 22, 2017, June 6, 2017 and June 14, 2017 PURMIT Board of Trustees meeting were reviewed and discussed.
Action:
A motion was made by Mr. Roy to approve all minutes. The motion was seconded by Mr. Hagemann. The motion carried with no objections.
Financial Review as of June 30, 2017
Ms. Sattler from Berkley Risk presented the financial information as of June 30, 2017. Ms. Sattler noted that the figures presented and discussed were unaudited. PURMIT auditors were in Berkley’s office last week performing their field work portion of the audit. The discussions went well and Berkley anticipates that the audit will be completed by the agreed upon date of November 10. Ms. Sattler also noted that Berkley was waiting on the actuary to complete their review and that while discussing the reserves with them it came to Berkley’s attention that PwC was treating all liability claims on an occurrence basis. Berkley staff discussed the coverage differences with PwC and outlined which coverages are occurrence and which are claims-made. This change will have an impact to the reserve study and Berkley is awaiting the revised report before finalizing the financial information. Berkley expects the proper recognition of the claims will result in a benefit to PURMIT’s surplus. Ms. Sattler discussed the financial results, noting PURMIT had $5.6M of operating revenue and a net income of $549K, resulting in an overall surplus of $3.2M for the year. . Mr. Britz commented that he would confirm that the broker had or would net any earned commissions against the next fee installment. Mr. Morris asked if the Trust was still exploring workers’ compensation self-insurance option. Mr. Parker commented that Berkley, Brown & Brown and himself are continuing to have that dialogue and that per Trustee direction during prior meetings, will have options to present at the spring meeting. Ms. Sattler continued her discussion with the balance sheet portion of the financial statement, noting the Trust has $14.75M in assets and $11.474M in liabilities. Ms. Sattler also noted that since the designated funds had been transferred to the Oregon State Treasury, PURMIT has earned approximately $6,500 of investment income. Mr. Hagemann asked if prior financial statements will need to be restated due to actuarial recognition of the coverage parts and their claim basis. Ms. Sattler indicated that the financial statements will not need to be restated.
Financial Proforma Update and Discussion
Ms. Sattler continued the financial discussion by reviewing the Financial Condition Monitoring Report. Ms. Sattler discussed the key ratios that PURMIT should be watching closely and noted that all ratios have been improving year after year. Mr. Morris asked if there were any ratios that PURMIT should be concerned about. Ms. Sattler commented that there are none at this time. Ms. Sattler then discussed the proforma document and its trajectory out to 2020. Mr. Morris noted that Ms. Sattler did a nice job explaining the financial situation and also the conservative nature of the proforma. Mr. Roy echoed Mr. Morris’ comments.
Action:
No action taken at this time.
Berkley Contract
Mr. Parker commented that the contract between PURMIT and Berkley was a two year agreement, with five, two-year renewal options thereafter. As outlined in the contract, each party is to provide its intent to renew or non-renew. Berkley Risk had previously provided intent in writing to renew their services for another two-year term. Mr. Parker noted that, as outlined in the contract, PURMIT needs to decide to renew or non-renew their participation.
Action:
A motion was made by Mr. Morris to exercise PURMIT’s first option to extend its agreement with Berkley Risk as PURMIT’s administrator with instructions to Mr. Parker to document the agreement. The motion was seconded by Mr. Hagemann. After discussion, the motion carried with no objections.
Crime Policy – Social Engineering Options
Mr. Britz commented that Brown & Brown was exploring options that may increase the social engineering limit of the Crime policy. He noted that there have been discussions with markets that have provided additional limits and is awaiting further information. He mentioned that he would provide information to the Trustees once he received from Brown & Brown.
Action:
No action taken at this time
United Educators – Risk Management Practices Credit Program
Mr. Britz made the Trustees aware of the credit that United Educators offers is member insureds. He noted that the total credit would be 6% and will be recognized at next years’ renewal. He also noted that it is a two-stage process and the first phase has been completed, earning the Trust a 3% discount. Phase II is being handled by members of the Risk Council and it is anticipated that the remaining 3% will be completed within the next few months.
Action:
No action taken at this time
Annual Retreat Planning
Mr. Britz presented an example of a planning retreat as a result of discussions from past meetings. The Trustees agreed that it would be beneficial to engage in this activity and should look to include other folks like each institution’s VP of Finance and members of the Risk Council. Mr. Hagemann noted that it should be a meeting that is separate from a regular Board meeting. Ms. Moore commented that she would like to see a section that addressed real and/or potential vulnerabilities to the Trust. Mr. Hagemann commented that he would like to incorporate a dashboard process into the meeting, tracking accomplishments, goals, achievements, service providers, etc., keeping mind a way to present and inform PURMIT happenings back to member Presidents. Mr. Britz commented that he will continue discussions with Brown & Brown and Mr. Parker further establish an appropriate agenda. Mr. Roy noted that PSU would be willing to host the retreat.
Action:
No action taken at this time
Legal Counsel Items
No items were discussed.
Action:
No action taken at this time
Other items
No other items were discussed.
Action:
No action taken at this time.
The Board adjourned the regular meeting and went into Executive Session at 1:09 p.m. to address documents and information relating to attorney-client privileged communications and attorney work product. The executive session was held pursuant to ORS 192.660(2)(f) and ORS 192.660(2)(h).
The Board exited Executive Session at 2:09 p.m.
Final Decisions Related to Executive Session Discussions (if any)
The Board re-entered the regular meeting at 2:11 p.m.
Mr. Katz joined the meeting at the invitation of the Board. There were no final decisions or actions made related to Executive Session discussions. Mr. Roy noted his appreciation to Mr. Parker for the work done on behalf of the Trust over the past few months.
Adjourn
The Board adjourned the meeting at 2:15p.m.