FWCJUA Board of Governors Meeting Report: September 9
Sep 11, 2009
The Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Board of Governors (“Board”) met on September 9, 2009. A meeting recap is attached. To view the meeting materials, click here.
The following is a brief summary of Board actions.
December Board Meeting Location Change
The Board changed the location and time of its next meeting to December 8, 2009 at 10:30 a.m. at the Orlando International Airport Hyatt Regency Hotel. During discussion, it was suggested that Board members should attend at least one meeting per year in person.
Executive Compensation Report
An external consultant developed a report that will assist in determining whether FWCJUA employee compensation is competitive with that of similar agencies. A change to the FWCJUA retirement plan that would enhance benefits while containing costs were adopted.
Investment Committee
The Board voted to reconfirm holding bonds from the following companies as investment policy exceptions: Home Depot, Lehman Brothers, SunTrust, Anheuser Busch, CitiGroup and Vulcan Materials.
A change to the FWCJUA Investment Policy to permit 100 percent investment allocation for Certificates of Deposit issued by banks or thrift institutions that are fully insured by the Federal Deposit Insurance Corporation also was approved.
Operations Committee
After a competitive bidding process in which Tropics Software Technologies was the single respondent, the company was chosen to create a web-based interactive application process for the FWCJUA. Six months after the system’s activation, which is expected during early 2010, all applications for FWCJUA coverage will be required to be submitted using this web-based process.
The Board discussed a preliminary 2010 FWCJUA business plan, which projects the collection of $8 million in premiums.
Producer Committee
It was reported that work will begin on developing a perpetual Agency Producer Agreement, which is expected to result in cost efficiencies for both the FWCJUA and producers. The FWCJUA will clarify rules on revocations and suspensions so that an agency’s or designated producer’s privileges will be terminated, instead of revoked for two years, which affords the opportunity to reapply for authorization to the FWCJUA.
Rates and Forms Committee
The Board approved an overall average premium decrease of 9.4 percent effective January 1, 2010 for new and renewal business. This rate reduction will be adjusted to reflect any approved voluntary market rate level and class relativity changes that may become effective on January 1, 2010. The Board also agreed to adopt an ongoing policy that the Tier 3 surcharge shall not be less than the Tier 2 surcharge.
Milliman, Inc. was reconfirmed as outside actuary and the Board agreed to continue utilizing Milliman’s methodology for determining FWCJUA loss ratios.
A $2.8 million dividend was authorized for 2002 policyholders.
The Board also adopted a clarification to the FWCJUA Policyholder Dividend Policy that addresses how a dividend distribution will be handled for policyholders with final audits that remain outstanding.
Reinsurance Committee
It was reported that, as FWCJUA premiums decrease, negotiating better reinsurance rates becomes more difficult. The Board agreed that it would be prudent to require banks issuing necessary Letters of Credit to hold a certain level of financial rating.
The FWCJUA’s existing reinsurance broker was reconfirmed for 2010.
Audit Committee
All recommendations from the 2008 FWCJUA audit have been applied. In advance of the current external auditor contract expiration, a request for proposal will be issued for a new three-year agreement (with two one-year extensions).
Should you have any questions or comments, please contact Colodny Fass.
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