Florida Workers’ Compensation Joint Underwriting Association Audit Committee Report: April 2010

The Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Audit Committee (“Committee”) met by teleconference on April 27, 2010, during which it reviewed and approved the FWCJUA financial audit statement prepared by the organization’s independent auditor (“auditor”) for the fiscal year ended December 31, 2009.

The FWCJUA’s auditor issued an unqualified opinion that the audit fairly represents the financial condition of the FWCJUA for fiscal year 2009 and 2008.   Two changes discovered subsequent to December 31, 2009 were noted, but deemed not material enough to warrant adjustment to the year-end statements.

The statements show that the FWCJUA had total year-end admitted assets of $108.2 million and liabilities of $24.5 million, for a surplus of $83.7 million.  Comparably, the 2008 year-end surplus was $79.5 million.

The Committee reviewed its responsibilities for the first and second quarters of fiscal year 2010 as outlined on its Charter Procedures Checklist.  The items reviewed can be found in Attachment E of the attached Committee meeting documents.

The Committee reviewed its Certificate of Deposit investment policy and agreed that auditors should be given access to the investment software for monitoring purposes, but would not have the ability to manipulate cash or investments.

The Committee discussed the question of engaging an auditor for fiscal year 2010 and beyond, in view of the National Association of Insurance Commissioners’ Model Audit Rule on auditors expected to be adopted by the Florida Office of Insurance Regulation.

While Committee Chairman Charlie Clary expressed satisfaction with the independent auditor’s services, he suggested that soliciting bids for audit services might nevertheless be prudent, since it has been five years since the last such bid solicitation.  Mr. Clary also noted that the terms of the current Committee Board will end in 2011, thus raising the question of whether the decision on engaging an auditing firm should be left to the incoming Board.  The Committee agreed to consider that decision at its August meeting and make a final decision by September on how to proceed.

The Committee scheduled its next meetings for August 19 and November 18, 2010.

The April 27 meeting materials are attached.

Should you have any questions or comments, please contact Colodny Fass.

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