FWCJUA Board of Governors Meeting Report: May 1

The Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Board of Governors (“Board”) met via teleconference on May 1, 2009, to review action taken during the most recent FWCJUA Committee meetings.

 

Legislative Update

The FWCJUA General Counsel reported on recent action on House Bill 903 relating to Attorney’s Fees in Workers’ Compensation.  On Thursday, April 30, the Florida Senate took up the bill, substituted the language of SB 2072 for HB 903, and passed it with a substantial amendment.  HB 903 was sent back to the House, which refused to concur with the amendment.  The Senate then agreed to recede, passing HB 903 without the amendment.  The bill was sent to Florida Governor Charlie Crist to be signed into law.

HB 903 amends s. 440.34, F.S., to remove all statutory language providing for a “reasonable” attorney’s fee in workers’ compensation cases and specifies that fee awards cannot exceed the amount authorized by a statutory attorney’s fee schedule.  Thus, attorney’s fees in workers’ compensation would be calculated in the manner they had been from the effective date of 2003 Florida workers’ compensation reform legislation, up to the 2008 Florida Supreme Court decision in Murray v. Mariner Health.  

 

MAP Committee Report

The FWCJUA Market Assistance Plan Committee met on April 22, 2009, for its annual review of the FWCJUA’s Market Assistance Plan (“MAP”) and to consider whether modifications to the MAP are warranted.

Alterations to the current MAP were minimal in 2008, inasmuch as it has been an effective tool in the FWCJUA’s depopulation efforts and goes beyond the requirements of the law.  The FWCJUA has reduced its residual market share from $300 million in 1993 to $6.4 million in 2008.  In addition, the number of voluntary market insurers participating in the MAP Partnership program has increased from 10 to 24, and some of the insurers have expanded their underwriting guidelines so more FWCJUA applicants qualify for voluntary market consideration.

Members agreed that the current MAP effectively addresses the FWCJUA’s statutory charge to establish programs encouraging insurers to provide coverage to applicants and insureds of the plan.  Thus, the Committee had no recommendations for any MAP modifications.

To view the MAP, which can be found in Part Two of the FWCJUA Operations Manual (Pages 9-11), click here.

 

Safety Committee Report

The FWCJUA Safety Committee met on April 23, 2009, to review the FWCJUA 2009 Cause of Loss and Safety Program Analysis Report and consider whether modifications to the FWCJUA loss control and safety programs, including performance standards, are warranted.

In an additional effort this year to promote safety, the FWCJUA has sent a notice encouraging policyholders to implement a safety program by offering a two-percent safety credit towards the policy premium for participation in the program.  Also, this year, the FWCJUA publicized bulletins via mail and its Website regarding free statewide safety workshops offered by the Florida Division of Workers’ Compensation and the United States Department of Labor, Occupational Safety and Health Administration.

Committee members determined that the analysis produced no recommendations to alter the current Loss Control and Safety Performance Standards or modify the FWCJUA’s current loss control and safety programs.

To view the Loss Control and Safety Performance Standards, which can be found in Part Three of the FWCJUA Operations Manual (Pages 25-29), click here.

 

Investment Committee Report

The FWCJUA Investment Committee met on April 24, 2009, and agreed to recommend a revision to the FWCJUA Investment Policy to reflect an extension in the Temporary Liquidity Guarantee Program (“TLGP”) that was announced by the Federal Deposit Insurance Corporation on March 17, 2009.  Because the current FWCJUA Investment Policy references the expiration date of this program, the Committee recommended that the Board adopt a revision to the Investment Policy that deletes the TLGP expiration date of June 2012 and replaces it with “until expiration of the program.”  The Board passed a motion to adopt the proposed change.

On April 24, the Committee continued to support the holding of six bonds within the FWCJUA’s portfolio that had been downgraded below an “A” rating.  There have been no changes in those bonds, which include Anheuser Busch, Home Depot, Vulcan Materials, CitiGroup and Lehman Brothers.  In addition, the rating of the FWCJUA’s SunTrust bond was downgraded by Moody’s from A1 to Baa1 on April 23.  The Committee passed a motion to authorize an additional exception to the Investment Policy to continue holding the downgraded SunTrust bond, which matures in October 2009.

The Board passed a motion confirming the Investment Committee’s resolution to continue holding the downgraded bonds.

 

Audit Committee Report

The FWCJUA Audit Committee, which met on April 27, 2009, received an unqualified opinion with no material weaknesses on its 2008 Financial Audit from auditor Thomas Howell Ferguson, P.A.  The audit was expected to be filed on Friday, May 1, 2009, with the Florida Department of Financial Services.

The audit identified a small number of control deficiencies that did not constitute significant deficiencies or material weaknesses, which the FWCJUA staff has corrected.

The Audit Committee was advised that the FWCJUA’s 2007 federal income tax return was in appeal regarding a penalty, inasmuch as the Internal Revenue Service was considering the return as it would a 12-month return instead of a six-month return.  As of June 2008, the penalty was $12,810 plus interest.

The Audit Committee agreed to schedule its third- and fourth-quarter meetings for August 20, 2009, at 10:00 a.m. and November 18, 2009, at 10:00 a.m., respectively.

 

The next FWCJUA Board meeting is scheduled for Tuesday, June 9, 2009, via teleconference.

 

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