Florida Workers’ Compensation Insurance Guaranty Association Investment Committee Report: November 10
Nov 13, 2009
The Florida Workers’ Compensation Insurance Guaranty Association (“FWCIGA”) Investment Committee (“Committee”) met via teleconference on Monday, November 10 to review a report from a management consultant on the FWCIGA Investment Policy.
The Committee had hired the consultant, Tom Burt, a Wealth Advisor and Portfolio Manager specializing in insurance companies for Morgan Stanley Smith Barney, to ensure that the Investment Policy was fulfilling both statutory requirements and those of the FWCIGA Charter. A review of the Investment Policy’s purpose and goals also yielded recommendations for improvements in order to maximize income and minimize risk.
Mr. Burt determined that the Committee does an excellent job of fulfilling its fiduciary duties. FWCIGA assets are held according to law and the Investment Policy, the securities “watch list” is managed well and approved exceptions to the Investment Policy are discussed frequently. However, Mr. Burt’s report included several possible policy and practice improvements.
After reviewing Mr. Burt’s report, the Committee voted to instruct the FWCIGA staff to use its recommendations to rewrite the Investment Policy by including more specifics on the responsibilities and benchmarks of investment managers, strengthening the investment manager search process, defining related key terms and timelines, defining allowable risks and expectations and stating liquidity versus cash-flow needs.
Significantly, the Committee determined that the FWCIGA would be able to increase income by investing in certificates of deposits up to the FDIC insurance limits as their primary investment requirement instead of the underlying bank’s rating. This is envisioned to be a short-term strategy until the economy improves.
The revised Investment Policy will be reviewed by the Committee at its next meeting on December 16 and presented to the full FWCIGA Board of Directors the following day. Both meetings will be at the Orlando Airport Hilton Hotel.
Should you have any questions or comments, please contact Colodny Fass.
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