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2008-08-15 BOD Meeting10:00 am PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING The Terrace Hotel Lakeland, FL August 15, 2008 AGENDA Call To Order John Litton, Chairperson Consent Agenda 1. Request Approval of June 6, 2008 Board Meeting Minutes 2. Request Approval of Treasurer's Report as of June 30, 2008 3. Ratify Election of Officers from June Board Meeting Any Board Member may request to have an item removed from the Consent Agenda and placed on the Regular Agenda for further discussion. Regular Agenda 4. Executive Director's Report Ross Furry, Executive Director A. Automatic Contract Renewal for Broker Services, Insurance Advisor, and Legal Counsel 5. Broker's Report Andy Cooper, World Risk Management A. Renewal Applications — Why Timing Is So Important B. Market Update C. New Member Prospects D. AD &D - PRM Group Policy 6. Insurance Advisor's Report A. Competition: What Are the Differences B. Homeowners and Auto Insurance Updates Glenn Tobey, Tobey & Associates 7. Legal Update Donovan Roper, Esq. 8. Board Member Items A. 2009 PRM Educational Conference John Litton, Chairperson Public Comment: State full name and address. Discussion must be limited to a maximum of five (5) minutes per person. Adjournment Luncheon immediately following PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING AUGUST 15, 2008 CONSENT AGENDA SUMMARY 1 Request Approval of June 6, 2008 Board Meeting Minutes Background: Meeting Minutes attached 2. Request Approval of Treasurer's Report as of June 30, 2008 Background: Financial Reports Attached 3. Ratify Election of Officers from June Board Meeting At the June Board Meeting, the following were re- elected to serve 2 -year terms, commencing 10 -1 -08: John Litton - Chairperson Mike Sheppard - Treasurer Article 6.2. of the By -Laws states the Board shall, bi- annually select [officers] during the final quarter of each two -year term to serve during the subsequent two -year term. Therefore ratification is required at this meeting. Board Action: Approved Denied Deferred Other 1. BOARD MEETING MINUTES JUNE 6, 2008 PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING Hilton Beach Resort, Marco Island, FL June 6, 2008 MINUTES Attendance: Kathy Bennett, City of Avon Park; J. P. Murphy, Town of Belleair; Vivian Hunter, City of Belle Glade; Steve Baumgartner, City of Brooksville; Ted Byrd, City of Clewiston; Linda Stilson, City of Crystal River; Jerry Hill, DeSoto County BOCC; Mike Sheppard, City of Eustis; Deena Ware, City of Fort Meade; Mary Ann Dotson, Glades County BOCC; Jennifer Valdes, City of Gulfport; Jane Long, Hardee County BOCC; Wayne O'Neal, Hendry County BOCC; John Minor, Highlands County BOCC; Martin Schless, City of Indian Rocks Beach; Nancy Beelman, Town of Kenneth City; Lisa Smith, City of LaBelle; Bill Vance, Town of Lady Lake; John Litton, City of Lake Mary; Arlene Tuck; Town of Lake Placid; Robert Zega, Lee County Port Authority; Jacqueline Martin, Levy County BOCC; Thomas Kelley, Town of Longboat Key; Carol Rogers, City of Longwood; Steve Gailbreath, City of North Port; Sharon Allison, City of Okeechobee; Robbie Chartier, Okeechobee County BOCC; Connie Collins, City of Oviedo; Derrek Moore, City of Pahokee; Shirley Dresch, City of Port Richey; David Drury, City of Punta Gorda; Dan Andrews, City of Sebring; David Davis, South Florida Conservancy District; Dana March, Sun 'n Lake of Sebring Improvement District; Crissy Bublitz, City of Tavares; Woody Hubbard, City of Temple Terrace; James Braddock, City of Wauchula; Frank Gilbert, City of Winter Garden; Katrina Bouthot, City of Zephyrhills Absent: Holmes County BOCC, City of Lake Wales, City of Moore Haven, City of New Port Richey, City of Safety Harbor, Sarasota/Manatee Airport Authority, City of South Pasadena, City of St. Pete Beach Chairperson John Litton called the meeting to order at 9:02 a.m. with a quorum present. Consent Agenda 1. Request Approval of March 14, 2008 Board Meeting Minutes. 2. Request Approval of Treasurer's Report as of March 31, 2008. Dave Drury made a motion to approve the consent agenda. J. P. Murphy seconded the motion and it was unanimously approved. Regular Agenda 3. Broker's Report A. Marketing Report — The broker, along with a letter from the Executive Director, mailed information to over 100 entities, explaining the PRM program and the benefits of joining the Pool. The broker will continue pursuing new members. B. PRM Program — Did You Know? The broker provided an update on the following items: At renewal, exclusion was placed by the carriers on vehicles over 25,000# gross vehicle weight. This exclusion has since been removed. Volunteer police officers are covered under Workers Compensation. A performance bond is required on all contracts that amount to more than $200,000. C. Insurance Marketplace Update — A status report was provided within the agenda packet. Reductions in the property marketplace are continuing. More carriers entering the marketplace are helping to reduce rates. If there is a quiet hurricane season, it is anticipated that rates will continue to decline. The casualty marketplace has also been experiencing falling rates. Workers' Compensation rates in Florida continue to fall due to rate reductions mandated by the State. D. Statutory AD &D Policy for Police Officers and Firefighters — At the last Board Meeting, members expressed interest in a group policy. The broker is awaiting response from the carrier regarding premium with the possibility of discounts if enough members participate in the group policy. 4. Insurance Consultants Report A. PRM: Review of the Past Five Years — Mr. Tobey compared the Pool's costs from the 10/1/03 -04 renewal versus 2008 -09. Property values have increased 69% in the 5 -year period from $1.3 billion to $2.1 billion. Vehicle count decreased 12 %. Coverage Document in 2003- 04 was $3.5 million and in 2008 the renewal was $3.5 million. Property premium in 2003 -04 was $3.6 million [prior to the hurricanes] compared to $9.8 million in 2008. Workers' Compensation premiums decreased $100,000 from 5 years ago. Administration costs have decreased 4 %. From a premium standpoint, the Pool has basically remained constant in the last five years, but a tremendous amount of coverage has been added to the program. At the next Board Meeting, Mr. Tobey will compare the PRM program with Florida League of Cities and BRIT. 2 5. Election of Officers — Elections for a 2 -year term were held for Chairperson and Treasurer. Chairperson — Mr. Litton expressed interest in continuing to serve as Chairperson. No nominations were received from the floor. Mr. Murphy made a motion to re -elect Mr. Litton as Chairperson. Mr. Drury seconded the motion and it was unanimously approved. Mr. Litton was re- elected Chairperson for the 2 -year term, commencing 10 -1 -08. Treasurer — Mike Sheppard expressed his interest to continue serving as Treasurer. No nominations were received from the floor. Bill Vance made a motion to re -elect Mr. Sheppard as Treasurer. The motion was seconded by Derrek Moore and it was unanimously approved. Mr. Sheppard was re- elected Treasurer for the 2 -year term, commencing 10 -1 -08. 6. Executive Committee Report A. Executive Director Evaluation and Recommended Salary for FY 2008/09 — Mr. Litton advised that the Executive Director's overall performance evaluation was excellent. Following discussion, Wayne O'Neal made a motion to increase the base salary for the Executive Director by 4.5 %. Robbie Chartier seconded the motion, and it was unanimously approved. 7. Safety Performance Awards — Rob Ross, Sr. Loss Control Consultant, and Mr. Litton presented awards to the following members who have made significant safety achievements during the past year: Safe Driving — Accident Free — Glades County BOCC, Town of Belleair, South Florida Conservancy District, City of Indian Rocks Beach, Town of Lake Placid Best Overall Safety Performance — South Florida Conservancy District, City of Belle Glade, Glades County BOCC Most Improved Safety Performance — Sun 'n Lake of Sebring Improvement District, City of Belle Glade, Glades County BOCC 8. Legal Update A. Applicability of Parentally Signed Releases/Waiver to their Children — Mr. Roper indicated the releases may be binding depending upon the geographical area and distributed a map of the Appellate Districts. Problematic areas include the 4th and 5th Districts, with the 2nd District undecided. 3 B. Vocational Issues in FL Workers' Compensation — A recent decision broadens the definition of permanent disability from a purely physical exertion standard to a full range of vocational factors such as age, level of education, work experience and transferable skills. A claimant with a physical capacity of light work may be found to be permanently disabled under the new guidelines. Mr. Roper distributed a ruling on a public records case involving Highlands County vs. Preston Colby. The Court upheld the County's right to collect an advance deposit for copying and/or inspection of records. Mr. Roper urged members to obtain a deposit if a public records request would require more than 15 minutes of staff time. 9. Board Member Items A. Establish Board Meeting Dates for 2009 — Ted Byrd made a motion to approve the dates for the 2009 Board Meetings, locations to be determined. June meeting is subject to change as it is held in conjunction with the PRM Conference and a request was made to hold later in the month of June. Sharon Allison seconded the motion and it was unanimously approved. The 2009 Board Meetings are scheduled as follows: March 13, 2009 June 5, 2009 August 14, 2009 November 13, 2009 There was no public comment. Meeting adjourned at 10:05 a.m. Respectfully submitted, Judith A. Hearn Assistant Executive Director Secretary to PRM Board JAH:smb O:\Judy\BD MTGS \Board of Directors Meeting 6-6 -08 4 JUNE 6, 2008 @ 9:00 A.M. PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING MARCO ISLAND, FLORIDA Avon Park, City of Belleair, Town of Belle Glade, City of Brooksville, City of Clewiston, City of Crystal River, City of DeSoto County BOCC Eustis, City of Fort Meade, City of Glades County BOCC Gulfport, City of Hardee County BOCC Hendry County BOCC Highlands County BOCC Holmes County BOCC Indian Rocks Beach, City of Kenneth City, Town of Benne JAIFIVIurphy 40- ) Li,t4 Vivia unter Steve Baum Ted Byrd Linda tilson Mike Sheppar Phyllis Kirk Robert Giesler Jane Log vek- ayne O'Neal J Sarah Adelt ,g4f ‘,,71 Susan Lee Patrice Monaco Margaret Bosack '4./ Laurie Lindsey Paul Erickson Isaacs , "11 ifs ha Ware Mary 4im Dotson Danny Weeks Ricky Helms Raymon Thomas k - Mart)n Schless Nancy Bee an Monty Merchant Bert Valery /0-1:41-1z---- Muriel H. Whitman LaBelle, City of Lady Lake, Town of Lake Mary, City of Lake Placid, Town of Lake Wales, City of Lee County Port Authority Levy County BOCC Longboat Key, Town of Longwood, City of Moore Haven, City of New Port Richey, City of North Port, City of Okeechobee, City of Okeechobee County BOCC Oviedo, City of Pahokee, City of Port Richey, City of Punta Gorda, City of Safety Harbor, City of Michael Boyle Sandra Davis Pamela Conner Fred Moody Gerald Wilson Dawn Jackson Maxine Brantley Steve, Gailbreath Sharon Allison. Robbie Char-tier Connie Collins f' Derrek Moore 1 1 Shirley Dresch Phil Wickstrom Bill Cropsey Phil Williams Melissa Arnold Thomas O'Neill Sherry Borgsdorf Brian Whitehall Dan Hopd Stephanie Marsh - Corinthian David Drury Alan Zimmet Sarasota/Manatee Airport Authority Sebring, City of South Florida Conservancy South Pasadena, City of St. Pete Beach, City of Sun n' Lake of Sebring Tavares, City of Temple Terrace, City of Wauchula, City of Winter Garden, City of Zephyrhills, City of Dan,Andrews David Davis James Graham Gary Behnke = Dana March - 1:kafrt.C;t2c/ Crissy Bublitz Woody Huibbard1,., 4,e2,(2, •Fit ames Braddoc Frank Gilbert I tile) Katrina Bouthot John SchusslerP\ /.1 Mike Eastman Elsie King MikefiS fl IleAna Mart. Lori Tucker Kim D. Lei 'bach Terri Svendsen Peggy Carpenter Rick Moore GUESTS / ADDITIONAL ATTENDEE SIGN IN SHEET + JUNE 6, 2008 Name Entity / Company Signature f GUESTS / ADDITIONAL ATTENDEE SIGN IN SHEET JUNE 6, 2008 Name Entity / Company Signature 2. TREASURER'S REPORT AS OF 6/30/08 PUBLIC RISK MGMT OF FL BALANCE SHEET JUNE 30, 2008 CURRENT ASSETS PETTY CASH $ 75.00 OPERATING - BB & T 59,912,973.53 OPERATING - REGIONS 16,971.23 A/R MEMBERSHIPS 3,262,365.76 A/R TRADE 3,218.46 A/R - PRM GR HLTH 142,146.47 A/R CONSULTANT FEE- MEMBERS 29,727.44 A/R- REINSURANCE RECOVERIES (10,769,742.38) A/R OTHER 2,254.66 A/R -STATE W/C ASSESSMENT 182,972.99 A/R- APPRAISALS 767.00 A/R - ADDITIONAL INSURANCE 501.21 A/R - SCHOLARSHIP PROGRAM 8,300.00 DUE FROM MEMBERS 1,750,000.00 STATE ADMIN. FUND 1,926.41 TOTAL CURRENT ASSETS 54,544,457.78 PROPERTY AND EQUIPMENT FURNITURE & FIXTURES 33,422.72 LESS: ACCUM. DEPRECIATION (31,038.77) OFFICE MACHINES & EQUIPMENT 63,981.28 LESS: ACCUM. DEPRECIATION (35,324.36) AUTOMOBILE 116,538.79 ACCUMULATED DEPRECIATION (51,547.93) TOTAL PROPERTY & EQUIPMENT 96,031.73 OTHER ASSETS PREPAID INSURANCE 15,551,959.57 PREPAID FLOOD INSURANCE 94.49 PREPAID EXPENSES 24,634.79 DEFER MEMBER CONTR - 1987 -89 183,808.00 DEFER MEMBER CONTR - 1989 -90 295,679.00 DEPOSITS 5,665.06 TOTAL OTHER ASSETS 16,061,840.91 TOTAL ASSETS $ 70,702,330.42 LIABILITIES ACCOUNTS PAYABLE $ 522,516.22 A/P - GALLAGHER/RISX -FACS 229,795.46 FEDERAL TAXES PAYABLE (40.14) PEBSCO PAYABLE (542.49) A/P EMP LIFE INS (129.99) A/P - OTHER 4,840.49 A/P - LOSS PREVENTION 14,933.73 ACCRUED VACATION 41,121.55 ADVANCE FROM REINSURER 4,472,468.05 CLAIMS PAYABLE - 1987 -89 73,185.37 CLAIMS PAYABLE - 1990 -91 (9,614.54) CLAIMS PAYABLE - 1991 -92 (61,408.75) CLAIMS PAYABLE - 1992 -93 77,547.85 CLAIMS PAYABLE - 1993 -94 (51,096.88) CLAIMS PAYABLE - 1994 -95 45,619.92 CLAIMS PAYABLE - 1996/97 11,921.31 CLAIMS PAYABLE - 1997/98 (75,507.52) CLAIMS PAYABLE - 1998/99 (53,944.86) CLAIMS PAYABLE - 1999/00 (246,094.55) CLAIMS PAYABLE - 2000/01 (416,537.57) CLAIMS PAYABLE - 2001/02 (390,476.72) CLAIMS PAYABLE - 2002/03 735,613.51 CLAIMS PAYABLE - 2003/04 (532,353.44) CLAIMS PAYABLE - 2004/05 2,067,242.52 CLAIMS PAYABLE - 2005/06 492,993.80 CLAIMS PAYABLE - 2006/08 11,867,251.46 CLAIMS PAYABLE - 2008/09 (336,235.22) NONCURRENT CLAIMS PAYABLE (13,314,538.00) PUBLIC RISK MGMT OF FL BALANCE SHEET JUNE 30, 2008 SUSPENSE - CLEARING ACCOUNT 13,314,538.00 TOTAL LIABILITIES CAPITAL FUND BALANCE REVENUE IN EXCESS OF EXPENSE 27,555,329.01 24,663,932.84 TOTAL CAPITAL TOTAL LIABILITIES & CAPITAL 18,483,068.57 52,219,261.85 $ 70,702,330.42 PUBLIC RISK MGMT OF FL INCOME STATEMENT FOR THE NINE MONTHS ENDING JUNE 30, 2008 CURRENT MONTH YEAR TO DATE REVENUES MEMBERSHIP ASSESSMENTS $ 4,548,997.08 $ 40,890,943.35 INTEREST INCOME 120,811.53 1,418,085.00 MISCELLANEOUS INCOME 0.00 0.00 TOTAL REVENUES 4,669,808.61 42,309,028.35 EXPENSES OFFICERS' SALARIES 10,372.20 101,128.95 OFFICE SALARIES 41,013.64 400,970.35 PAYROLL TAXES 4,200.02 38,227.32 EMPLOYEE RETIREMENT BENEFITS 9,615.09 53,272.76 HEALTH INSURANCE- OFFICER 1,421.16 12,790.44 HEALTH INSURANCE - OFFICE 9,288.12 83,477.73 LIFE INSURANCE- OFFICER 78.30 704.70 LIFE INSURANCE- OFFICE 159.51 1,424.28 LTD INSURANCE 1,167.12 9,996.26 LEGAL FEES 649.30 18,357.98 LEGAL -PRE- DEFENSE 0.00 0.00 AUDIT FEES 0.00 27,500.00 ACTUARIAL STUDY 0.00 14,507.50 WORKERS COMP CLAIMS AUDIT 0.00 0.00 APPRAISAL FEE EXPENSE 0.00 2,750.00 TELEPHONE 1,358.82 12,916.16 TEMPORARY LABOR 0.00 0.00 COPY MACHINE LEASE 0.00 1,624.00 REPAIRS & MAINT. - EQUIPMENT 0.00 0.00 OFFICE SUPPLIES 1,494.92 12,641.38 NEWSLETTER 0.00 2,497.50 POSTAGE 1,269.00 7,502.36 PRINTING 69.50 518.41 LOSS PREV EQUIP & SUPPLIES 260.69 12,103.74 MARKETING & PROMOTION 0.00 1,427.41 MEETING EXPENSE 280.21 8,273.47 MISCELLANEOUS EXPENSE 42.78 2,824.79 CONFERENCE MEMBER ROOM EXPENSE 9,288.00 9,288.00 TRAINING /SEMINAR PRESENTATION 0.00 0.00 TOTAL EXPENSES 92,028.38 836,725.49 REVENUE IN EXCESS OF EXPENSE $ 4,577,780.23 $ 41,472,302.86 SALARY RELATED EXPENSES OFFICERS' SALARIES OFFICE SALARIES PAYROLL TAXES EMPLOYEE RETIREMENT BENEFITS HEALTH INSURANCE- OFFICER HEALTH INSURANCE - OFFICE LIFE INSURANCE - OFFICER LIFE INSURANCE- OFFICE LTD INSURANCE TOTAL SALARY RELATED EXPENSES PUBLIC RISK MGMT OF FL EXPENSES TO BUDGET FOR THE Nine MONTHs ENDING June 30. 2008 MONTHLY MONTHLY Y -T -D Y -T -D TOTAL YEAR % of YTD ACTUAL BUDGET ACTUAL BUDGET BUDGET ACTUAL 10,372.20 11,236.50 101,128.95 101,128.50 134,838.00 75.00 41,013.64 44,431.33 400,970.35 399,882.01 533,176.00 75.20 4,200.02 4,206.67 38,227.32 37,859.99 50,480.00 75.73 9,615.09 5,744.83 53,272.76 51,703.51 68,938.00 77.28 1,421.16 839.08 12,790.44 7,551.76 10,069.00 127.03 9,288.12 11,319.25 83,477.73 101,873.25 135,831.00 61.46 78.30 83.67 704.70 752.99 1,004.00 70.19 159.51 165.50 1,424.28 1,489.50 1,986.00 71.72 1,167.12 958.33 9,996.26 8,625.01 11,500.00 86.92 77,315.16 78,985.16 701,992.79 710,866.52 947,822.00 74.06 GENERAL EXPENSES LEGAL FEES 649.30 1,250.00 18,357.98 11,250.00 15,000.00 122.39 LEGAL - PRE - DEFENSE 0.00 416.67 0.00 3,749.99 5,000.00 0.00 AUDIT FEES 0.00 2,416.67 27,500.00 21,749.99 29,000.00 94.83 ACTUARIAL STUDY 0.00 1,166.67 14,507.50 10,499.99 14,000.00 103.63 APPRAISAL FEE EXPENSE 0.00 481.25 2,750.00 4,331.25 5,775.00 47.62 AUTO EXPENSE 190.24 400.00 6,237.15 3,600.00 4,800.00 129.94 AUTOMOBILES- REPLACEMENT 0.00 0.00 487.62 0.00 0.00 0.00 TRAVEL EXPENSE 4,280.83 2,500.00 39,479.34 22,500.00 30,000.00 131.60 ASSOCIATION MEMBERSHIPS 0.00 166.67 849.00 1,499.99 2,000.00 42.45 DUES & SUBSCRIPTIONS 0.00 266.67 1,586.95 2,399.99 3,200.00 49.59 EDUCATION/TRAINING /CONFER. 6,135.75 2,500.00 22,400.95 22,500.00 30,000.00 74.67 OFFICE LEASE 6,190.52 6,311.33 55,714.68 56,802.01 75,736.00 73.56 JANITORIAL / CLEANING 350.00 316.67 2,751.00 2,849.99 3,800.00 72.39 OFFICE /COMPUTER EQUIPMENT 2,592.05 1,500.00 20,251.28 13,500.00 18,000.00 112.51 TELEPHONE 1,358.82 2,166.67 12,916.16 19,499.99 26,000.00 49.68 COPY MACHINE LEASE 0.00 250.00 1,624.00 2,250.00 3,000.00 54.13 REPAIRS & MAINT. - EQUIPMENT 0.00 166.67 0.00 1,499.99 2,000.00 0.00 OFFICE SUPPLIES 1,494.92 1,166.67 12,641.38 10,499.99 14,000.00 90.30 NEWSLEIIER 0.00 333.33 2,497.50 3,000.01 4,000.00 62.44 POSTAGE 1,269.00 1,083.33 7,502.36 9,750.01 13,000.00 57.71 PRINTING 69.50 166.67 518.41 1,499.99 2,000.00 25.92 INSURANCE- FLOOD /GENERAL 0.00 250.00 0.00 2,250.00 3,000.00 0.00 LOSS PREV EQUIP & SUPPLIES 260.69 1,833.33 12,103.74 16,500.01 22,000.00 55.02 MARKETING & PROMOTION 0.00 375.00 1,427.41 3,375.00 4,500.00 31.72 MEETING EXPENSE 280.21 2,008.33 8,273.47 18,075.01 24,100.00 34.33 MISCELLANEOUS EXPENSE 42.78 208.33 2,824.79 1,875.01 2,500.00 112.99 CONFERENCE MEMBER ROOM EXPEN 9,288.00 12,126.00 9,288.00 12,126.00 12,126.00 76.60 TRAINING /SEMINAR PRESENTATION 0.00 500.00 0.00 4,500.00 6,000.00 0.00 WEB SITE MAINT. 0.00 566.67 0.00 5,099.99 6,800.00 0.00 INSURANCE CONSULTANT 0.00 18,166.67 127,166.69 163,499.99 218,000.00 58.33 TOTAL GENERAL EXPENSES 34,452.61 61,060.27 411,657.36 452,534.19 599,337.00 68.69 TOTAL OPERATING EXPENSES 111,767.77 140,045.43 1,113,650.15 1,163,400.71 1,547,159.00 71.98 PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING AUGUST 15, 2008 REGULAR AGENDA SUMMARY Executive Director's Report Ross Furry, Executive Director A. Automatic Contract Renewal for Broker Services, Insurance Advisor and Legal Counsel A provision in the contracts for World Risk Management, Glenn Tobey, and Roper & Roper automatically renews their services each year unless cancelled by the Board. Broker Services — World Risk Management renews 8/1/08 Insurance Advisor — Glenn Tobey renews 10/1/08 Legal Counsel — Roper & Roper, P.A. renews 10/1/08 5. Broker's Report PUBLIC RISK MANAGEMENT OF FLORIDA BOARD OF DIRECTORS MEETING AUGUST 15, 2008 REGULAR AGENDA SUMMARY Andy Cooper, World Risk Management A. Renewal Applications — Why Timing Is So Important - Attachment B. Market Update — Attachment C. New Member Prospects D. AD &D — PRM Group Policy 6. Insurance Advisor's Report Glenn Tobey, Tobey & Associates A. Competition: What Are the Differences B. Homeowners and Auto Insurance Updates RLD RISK MANAGEMENT, LLC Public Risk Management of Florida Board Meeting August 15, 2008 Agenda Items 1. Renewal Applications — Why timing is so important Although April seems a long way off we are already preparing to distribute the renewal applications. They will be distributed by September 1 and our target date to have them returned is October 1. It is very important that the October 1 date is strictly adhered to as we have deadlines that we need to meet in the renewal process. For us to get the renewal information to the carriers in good time so that we can negotiate the best possible terms and conditions for the PRM Membership is of vital importance. Also, as there are some members issuing RFP's that we need to respond to we will need to have terms from the carriers in time to do this. We are unable to send information to the carriers until every member has sent their information to us. Therefore, one member can delay the whole process for the other 46 members. Once we receive the renewal applications we collate the information into spreadsheets and carrier applications. We also analyze and report the loss information to the carriers, as well as marketing PRM to new carriers. This in itself is a timely process, but one that is very important. We are willing to visit any member to help complete the application to ensure their timely return. Please feel free to call Andy, Michele or Sonia if you have any questions at all. 2. Market Update There has not been much change in the market since we reported at the Board Meeting in June. We are still seeing a softening of rates, although it looks like rates have begun to stabilize somewhat. The industry is still RISK MANAGEMENT, LLC expecting an eventful hurricane season, but fortunately so far we have only seen tropical storms get close to land. Attached is an article taken from Business Insurance reporting $13 Billion in catastrophe losses in the first half of the year, which is higher than recent years. A further article from Insurance Newsnet.com is also attached. 3. New Member Prospects We have responded to, or are in the process of responding to 7 RFP's /RFQ's and we will report when the results are known. We are still marketing the PRM Program to prospects and again ask for any referrals you may have for us. We feel that PRM is more than a match for any other program in Florida given it's competitive pricing, unmatched coverage and superior service levels. 4. Accidental Death & Dismemberment (AD &D) We have heard back from The Hartford who have looked into the Group Program. Members will keep the existing pricing, subject to the usual renewal underwriting. However, if enough members join a Group Program discounts based on the following will apply: Number of Members Group Discount Upto29 0% 30 -32 3% 33 — 35 5% 36 -38 7% 39 -41 9% 42 -45 11% 46 and above 12% We will be asking the members who currently have AD &D coverage if they wish to participate. Soft Market Conditions Continue in Second Quarter 2008, but Premium Drops Not as Ste... Page 1 of 3 Subscribe to INN Free Newsletter INN Magazine Post Press Releases Refer an Associate Insurance Events Advertising Info Contact Us Linking Instructions Submit an Article Article Search'-', Insider Login Soft Market Conditions Continue in Second Quarter 2008, but Premium Drops Not as Steep E -mail Article Pri r- Free Article 1 Newsletter Copyright: Marketwire Source: Marketwire Wordcount: 723 WASHINGTON, DC, July 22 / MARKET WIRE/ -- THOIVISON The commercial property/casualty market remained mired in soft market conditions during the second quarter of 2008, but there were some signs that the steepest decline in rates may be over, according to the latest commercial property/casualty market survey released by The Council of Insurance Agents & Brokers. Agents and brokers responding to the survey said they saw little change in the market For account renewals between first quarter 2008 and second quarter 2008. Although insurers were still hungry for business and willing to accept lower deductibles and looser terms and conditions, the market was essentially the same quarter -to- quarter, the survey respondents said. "We think the survey generally reflects what is going on in the marketplace. There is still plenty of capacity, but as industry analysts have noted recently, the economic woes, coupled with the soft market, are beginning to hit insurers' bottom line," said Council President Ken A. Crerar. "Relatively mild hurricane seasons the last two years have helped the industry return to profitability, but the clock may be ticking on that front," Crerar said. Seventy-six percent of the commercial p/c brokers responding to The Council's market survey said premiums for renewals of small accounts, which yielded less than $25,000 in commissions and fees, were down 1 -20 percent compared with the previous quarter. Seventy-seven percent reported renewal premiums for their medium accounts, yielding $25,000 to $100,000 In commissions and fees, were down 1 -20 percent, and 12 percent said premiums for renewals of those accounts dropped 20 -30 percent compared with similar accounts in the first quarter of the year. For large accounts, 57 percent of the brokers reported renewal premiums to be down 1 -20 percent, and 27 percent more said those renewals were down 20 -30 percent compared with the previous quarter. "Rates continue to slide for quality accounts. The larger the premium, the more competition and higher the discounting," one agent observed. "Rates have still decreased from Q1 to Q2 in 2008, however not as rapidly as they did from Q4 2007 to Q1 2008," said a broker from the Southeast. "Terms and conditions, deductibles are still favorable. No change since Q1." Those impressions were backed up by an analysis of The Council's survey data by Lehman Brothers which showed an average decline in premium rates for all accounts of 12.9 percent compared with a 13.5 percent drop in the first quarter of 2008. For small accounts, average premiums were down 9.7 percent in the second quarter, with medium account premiums decreasing by 14.1 percent and large accounts registering a 15.7 percent drop. The soft market conditions were affecting all lines of business, and even the coastal areas, which have suffered from lack of availability and high prices for wind coverage, were seeing some relief, the survey showed. "Many of our underwriters are looking at these renewal accounts as if they were new business to them," a broker from the Southeast. "Rates over the past two years for CAT property in the Southeast increased dramatically, and INN Services Free Newsletter EditJdY Newsletters Advertising Info PR /Press ReleaSe Service Ad. 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ISO: U.S. P/C Insurers to Pay About 56.QZ5__Kficirdn Cat Clalnts_Ittsecond Quarter once Committed to e Pattnership,J'1 COIL -NAIC Relationship Shows Signs of Strain i Rattle Over Broker Compensation Focuses on Winners and_Lasers Spfratarket Conditions Continue in Second Quarter afikE,Aut Premium Drops Not as Steep B.a.ttLe elewing Between State Regulators and Federal Regulators on ns(e1Led Annuity RuIe Hials_tate__coslstal Insurance P1alLaniing Agent, Insurer Support Life,Jtealth Insurers Hit by Mortgage- Backed Securities Congress Considerjng Legislation to Ban Arbitraton i Clauses , Congress Thwacts_Bush yetszan_L' Le41Lcar_e Advantage Cuts Big I, The Council, Nationwide and Travelers AnQOU ing_e_S,pport of CQastal_Insurance_SolutJon TNN Featured'Offi Stop Wasting Money on Senior Seminars - Free Audio_Report Our turnkey system will train you step -by -step on http: / /www. insurancenewsnet.com/article .asp ?a= top_news &neid = 200807222800.1 _6e3 90... 7/24/2008 Soft Market Conditions Continue in Second Quarter 2008, but Premium Drops Not as Ste... Page 2 of 3 they are now willing, after two years of calm winds, to grant generous reductions from 2007 rate levels. We are seeing rate levels In the second quarter of 2008 that are now approaching pre- Katrina rating levels." Although the bottom of the cycle may be In sight, there was no question that customers were benefiting from the fierce competition among insurers, who were easing up on underwriting standards, deductibles, loss history and other policy terms and conditions to get business. "They continue to ask what it will take to win the account and are willing to Include perks to coverage for lower price," a Southwest agent commented. Are there underwriting standards right now ?" asked one broker. "There is reckless abandon in the current market," agreed a Midwest agent. "Name your price and conditions, and you'll probably get them." how to attack this booming and very lucrative market. Free Annuity Selling Software Increase your commissions to over $20,000 PER CLIENT, whith this exclusive software. Cash4Reneweis We purchase Life, LTC, Med Supp, CI, and Final Expense Renewal Commissions. Discover the power of To view the full survey results, please visit knowledge and boost www.ciab.com/2Q2008MarketSurvey. your sales.in 2008 Get all your news In one Founded in 1913, The Council is the premier association for commercial convenient format - the new insurance and employee benefits intermediaries. The Council represents the InsuranceNewsNet leading commercial brokers and agents in the United States and abroad. Magazine. Council members annually place 80 percent of all commercial Subscribe now FREE. property/casualty premiums in the United States and administer billions of dollars in employee benefits accounts. www.ciab.com Breakthrough Indexed Annuity Offers clients Contact: choice of 7 markets Cheryl Arvidson 10% bonus, 10 year Assistant Director, Strategic Communications surrender, PLUS $2,450 202- 662 -4426 First Case Bonus Email Contact A New Annuity S�lling Maura Nelson System for Annpity Lads Vice President, Marketing & Communications and Insurange Leads 202- 662 -4432 Write at least $3,000,000 of Email Contact annuity premium per year with our new and improved annuity selling system or we pay you. This is a news service of Thomson_S.usiness Intebigent_e_Service ©2006. This content is for your personal use only, subject to Terms and Conditions. No redistribution allowed. 4 Back to Too :JE -mail Article ,;;4Format for Printing SUBSCRIBE ADVERTISm ABOUT US PRIVACY TERMS & CONDITIONS Insurance News It Site Map http: / /www. insurancenewsnet.com/article. asp ?a= top_news &neid= 200807222800.1 _6e390... 7/24/2008 FIT n, 7 n a O .G 2 0 0 ro p Fg .4aG w K w H 2 a. w— III a o7,-, O &I 6c. rn n n a 11 G Q. 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Board Member Items John Litton, Chairperson A. 2009 PRM Educational Conference Following a survey, Members selected June 17 -19 from the hotel's available dates to hold next year's PRM Conference. At this time, arrangements are still being finalized to hold the Conference at the Marco Island Hilton Beach Resort. For the 2008 Conference, the Board allocated $12,126 from surplus funds for estimated 94 attendees at $129 a night. The actual cost was $9,417 for 73 attendees. At this time, we are negotiating with the Hilton for the 2009 Conference, and they are currently quoting an increased room rate of $139 a night. The Executive Director recommends Board approval of $12,126 from surplus funds for increase in attendance and possible higher room rate for one night's room accommodation for each Board Member and Alternate of the P &C Pool. Board Action: _Approved Denied Deferred Other The next Board Meeting will be held on November 14, 2008, at the Terrace Hotel in Lakeland. Public Comment: Discussion must be limited to a maximum of five (5) minutes per person. Adjourn PUBLIC RISK MANAGEMENT OF FLORIDA EXECUTIVE COMMITTEE MEETING Terrace Hotel, Lakeland, FL August 15, 2008 Member Attendance: John Litton, Chairperson; Jeff Sutton, Vice Chairperson; Mike Sheppard, Treasurer; Robbie Chartier, South Representative; Jennifer Valdes, North Representative; Ross Furry, Executive Director; Judy Hearn, Assistant Executive Director and Secretary to Board of Directors; Susan Baron, Administrative Assistant Other Attendees: Don Roper, Esq.; Andy Cooper, Michele Schaare, World Risk Management; Glenn Tobey, PRM Insurance Advisor -r Mr. Litton called the meeting to order at 8:05 a.m. Consent Agenda 1. Request Approval of March 14, 2008 Executive Committee Meeting Minutes Mike Sheppard made a motion to approve the Consent Agenda. Robbie Chartier seconded the motion, and it was unanimously approved. Regular Agenda 2. Executive Director's Report A. Automatic Contract Renewal for Broker Services, Insurance Advisor and Legal Counsel — For informational purposes, Mr. Furry advised the Committee of the automatic renewal clause in the contracts for World Risk Management, Glenn Tobey, and Roper & Roper unless the Board opts to cancel. Rates remain unchanged. 3. Broker's Report A. Renewal Applications — Why Time Is So Important — Mr. Cooper advised that renewal applications have been distributed via e-mail with a due date of October 3rd. Supplemental applications will be sent next week. The timely return of applications, preferably in electronic format, is vital to avoid delaying the negotiation process with carriers for the best possible terms and conditions. B. Market Update — The broker advised that a decline in rates on all lines of coverage is being reported in the marketplace. C. New Member Prospects — The broker has responded to several Requests for Proposals (RFPs) including the City of Naples, Ormond Beach, City of Bartow, Treasure Island, City of Bonifay, Clay County, Gulf County and Barron Water Control District in LaBelle. The broker advised that the City of Temple Terrace and Holmes County may rescind their notices to withdraw from the Pool. The broker was asked what challenges are being experienced in marketing the PRM program. Competition provides more flexibility, will tailor plans to the entity providing the least coverage and cost and then increasing premium in 2 -3 years. PRM's program is more rigid. With PRM, everyone pays the same. D. AD &D — PRM Group Policy — Response from Hartford Insurance indicated that every member would retain Statutory Limits and be rated on an individual basis. Discounts would be applied depending on the number of members participating in a group policy. A group discount begins with enrollment of 30 members. The broker will solicit members of their interest. 4. Insurance Advisor's Report A. Competition: What Are the Differences — Mr. Tobey presented a comparison from the Florida League of Cities, PGIT, and PRM on a property proposal. Identifying misleading information on this quote, Mr. Tobey indicated, in the event of a loss, the entity may not receive reimbursement in the amount they expect. Members are encouraged to utilize the services of the Insurance Advisor and broker to assist in reviewing and understanding proposals. B Homeowners and Auto Insurance Updates — The City of Punta Gorda and Hardee County will serve in a pilot program, offering homeowners and auto insurance as an employee benefit. Employees will be billed directly by the insurance company. The City /County and PRM will not be connected to the program. 5. Legal Update — Mr. Roper had no legal issues of interest to the Pool to report. 6. Committee Items A. 2009 PRM Educational Conference — Mr. Furry advised that the Conference will be held June 17 -19 and arrangements are being finalized with the Marco Hilton Beach Resort. He recommended using $12,126 from surplus funds for one night's room accommodation for each Board Member and Alternate. Mr. Sheppard made a motion to 2 approve this recommendation. Ms. Chartier seconded the motion, and it was unanimously approved. Mr. Furry presented a report on the effect of PRM if the eleven members who have given notice actually withdraw on 3/31/09. The Pool would lose 40% of premium or $5.8 million, 30% of Loss Fund, 30% of Gallagher Bassett contract, 35% of Total Program and 32% of PRM Administrative Budget. He provided options for reducing the Administrative Budget, which included not only cutting Operating Expenses on supplies and postage, but also personnel. Another option to offset this shortage would be to allocate interest income to the Administrative cost. To be more competitive, Mr. Litton initiated discussion on providing flexibility to the PRM program, asking Mr. Furry for comments. The Executive Director recommended giving larger members the opportunity to maintain some of their Loss Fund with higher SIR deductibles. He suggested offering more flexibility for members by paying their own Workers' Compensation State Fees as well as their Gallagher Bassett fees. Another option would be to offer Managed Care by member. To better market the PRM program, Mr. Furry suggested establishing a Marketing Distribution Network by contracting a professional agent. A professional - looking brochure outlining PRM is a main priority. Mr. Litton requested the Executive Director, the Insurance Advisor and the broker review options and report recommendations to the Executive Committee next month. The information will be shared with the Board at the November 14th meeting. There was no public comment. Meeting adjourned at 9:52 a.m. Respectfully submitted, Judith A. Hearn Assistant Executive Director Secretary to PRM Board JAH:smb O: \Judy \Exec Com Mtgs \Exec Com Mtg 8 -15 -08 3