Florida Workers’ Compensation Joint Underwriting Association Operations Committee Report: August 30

 

The Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Operations Committee (“Committee”) met via teleconference on August 30, 2010. 

Chase Selected As FWCJUA Bank

The Committee began the agenda with the competitive bidding selection of a primary bank for the five-year period beginning October 1, 2010 and ending September 30, 2015.   Responses were received from four institutions:  Bank of America, Chase, CNL, and SunTrust. 

Following initial screening and in-person interviews, FWCJUA staff recommended that Chase be engaged as the FWCJUA’s primary bank.  It was noted that Chase, along with CNL, offered a five-year guarantee that rates would not increase.  The Committee approved the staff’s recommendation to select Chase.

2011 Business Plan and Forecast

The Committee has begun to formulate the 2011 FWCJUA Business Plan and Forecast for a draft presentation to the Board of Governors (“Board”) in September 2010.   The following list of organizational objectives for 2011 was reviewed:

• Manage the Subplan “D” deficit in accordance with FWCJUA’s filed program to eliminate the individual rating plan deficit and address any future statutory deficits
• Maintain rate adequacy
• Minimize operating loss
• Maintain solvency without an FWCJUA policyholder assessment, provided rate adequacy exists.
• Pursue sound investments
• Manage uncollectible premiums within acceptable limits
• Maintain a dynamic, responsive organization capable of responding to market fluctuations in a timely manner
• Implement a policyholder return of premium and dividend, if declared
• Implement an assessment, if one becomes necessary
• Promote loss prevention and safety in the workplace of FWCJUA policyholders

Policy Administration and Managed Care Service Provider Audit

The Committee reviewed a recent performance audit of Travelers, the FWCJUA’s policy administration and managed care service provider.  Although Travelers’ overall performance score for the 2009 audit was 98.3 percent, the company received a less-than-satisfactory rating in the area of timely reinstatement of policies or rescission of cancellation notices.  This has caused the FWCJUA to re-examine policies relating to that area.   The subsequent review determined that only two of 16 new and renewal policies that qualified for reinstatement without a lapse in coverage were outside of the appropriate time range.  This resulted in a score of 87.5 percent, which is considered satisfactory.

During the 2010 audit, a potential issue was discovered regarding timely cancellation following an employer’s failure to submit a signed Safety Acknowledgement Form.  As a result, Travelers recently implemented several controls to ensure that it is in receipt of the signed Form from each of the FWCJUA’s policyholders.  It was noted that Travelers has been quick to remedy such situations.

FWCJUA’s Disaster Recovery Plan Internal Audit Report

The Committee was updated on results of an internal audit of the FWCJUA’s Information Technology (“IT”) Systems Disaster Recovery Plan.  Conducted by RSM McGladrey as part of a three-year engagement beginning in 2008, this year’s audit resulted in a “Satisfactory” rating for the FWCJUA’s internal and external network security system.   The initial audit was a comprehensive examination of the Disaster Recovery Plan, the security of the FWCJUA’s IT systems and the reliability of the documentation for IT systems recovery.  Subsequent audits focused on network security.  The complete audit report is included in the attachment on page 15.

With regard to extending the current audit contract with RSM McGladrey, the Committee discussed revising the preliminary 2011 Business Plan to extend the agreement for one year, after which the new Board would consider what to do beyond that. 

Other Business

A recommendation to the Board to adopt proposed revisions to the FWCJUA Records Management and Retention Policy was approved.  The changes will allow for more efficiency related to storing, recovering and destroying human resource records.

Finally, the Committee approved an additional expenditure to upgrade to the FWCJUA’s virtualized desktop software using “VMware VIEW” in order to speed up the end-user experience.  The upgrade is scheduled before the end of 2010.

With no further business, the meeting was adjourned.

The meeting materials are attached for review.

 

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

 

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