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MEETING MINUTES 062106 MEETING MINUTES: New Hanover County Finance Office – Risk Management BUSINESS: Review and discuss renewal information for Cape Fear Public Transportation Authority, City of Wilmington, Housing and Economic Opportunities, New Hanover County Airport Authority, New Hanover County Board of Education, Southeastern Center for Mental Health, Developmental Disabilities, & Substance Abuse Services, Wilmington Housing Finance & Development, and New Hanover County. TIME AND PLACE: June 21, 2006 9:30 a.m. New Hanover County Library – Main Branch Wilmington Room Wilmington, NC 28401 ATTENDANCE: Those in attendance were George Chadwick III, Walker Taylor IV, Deborah Watts, Anne Brown – Risk Manager, Tiffany Allen – Risk Management Specialist, and Avril Pinder – New Hanover County Finance Director. ORDER OF BUSINESS: Risk Manager Anne Brown first welcomed all members and guests and directed everyone’s attention to the meeting materials, which included an Agenda, Minutes of the June 21, 2005 meeting, and renewal, marketing, and claim data for various entities. Although minutes approval is not required, as a precaution, Risk Manager Brown asked each member to review the Minutes of the June 21, 2005 meeting and advise of any corrections or additions of which there were none. Risk Manager Brown continued by discussing the renewal offered by the North Carolina Association of County Commissioners Liability and Property Pool for Cape Fear Public Transportation (DBA Wave Transit). The renewal premium is higher than estimated due to increased rates for auto insurance. The market for transportation services is very limited and the renewal pricing received is acceptable. Risk Manager Brown advised the Committee that she warned Cape Fear Public Transportation that their coverage may be non-renewed next year by the North Carolina Association of County Commissioners because their appetite for transportation risks is declining. Effective 07/01/06, NCACC no longer writes insurance for transit risks that are not already on their books. In comparison, the North Carolina League of Municipalities ceased writing coverage for all transit risks effective 07/01/06. Risk Manager Brown stated that the Public Official’s Liability premium reduced drastically because NCACC changed their rating basis to the payroll. Cape Fear Public Transportation Authority only has a few employees because their drivers are contracted through First Transit. Risk Manager Brown reviewed the three options offered by Midwest Employers Casualty Company for the City of Wilmington’s Excess Workers’ Compensation renewal that expires on 07/01/06. The first quote offered by Midwest is closest to their current coverage and increases the Specific Retention for regular employees from $300,000 to $350,000 and keeps the Specific Retention for Firemen and Police Officers at $500,000 respectively. The second quote increases the Specific Retention for regular employees to $400,000 and makes the Specific Retention for Firemen and Police Officers $500,000. The third and final quote is for a Specific Retention of $500,000 for all employees. Risk Manager Brown stated the premium basis, or payroll, increased by 3 – 4% over last year. Member Taylor inquired as to how many claims breached the $350,000 Specific Retention? Risk Manger Brown referred members to the loss runs which indicated two losses going above the $350,000 retention (police officer and sanitation worker). The higher claims are also due to the required Medicare set aside fund for such claims. Member Watts inquired as to who handles the City’s claims to which the reply was the Third Party Administrator - Key Risk. Finance Director Pinder asked for clarification of the retention and class codes. The City of Wilmington has several Workers’ Compensation claims that exceed their retention and their Excess Workers’ Compensation policy will make payments. Risk Manager Brown advised that she is meeting with the City’s Finance Director, Brent McAbee; to discuss the Workers’ Compensation renewal offers later in the afternoon and a decision will be made at that time. The Committee agreed that the first option of $350,000 for regular employees and $500,000 for Firemen and Police Officers is the preferred choice. Risk Manager Brown advised Housing & Economic Opportunities, Inc. came to New Hanover County Risk Management for assistance while the RM Department was working with the Housing Authority. As the Housing Authority of the City of Wilmington is no longer serviced by the New Hanover County, the Risk Management Department referred Housing & Economic Opportunities back to the Housing Authority for insurance services. To make the transition seamless, Risk Manager Brown assisted HEO and the Housing Authority by requesting the endorsement adding Housing & Economic Opportunities as additional insured to the Housing Authority’s policy through NCHARRP. The resulting change not only streamlined their coverage, but saved them a considerable amount of money. Risk Manager Brown reviewed the renewal quote located on page 23 of the handout for the New Hanover County Airport Authority. The premium significantly increased over the prior year due to a 40% property rate increase by the North Carolina Association of County Commissioners. The higher premium came as a surprise, since NCACC did not notify policyholder’s of the possibility of a substantial rate increase prior to receiving the quote. Risk Manager Brown reported that she met with Jim Morton, New Hanover County Airport Authority Finance Director, and he accepted the renewal offer. Member Chadwick inquired as to the EMT’s noted on the spreadsheet for the Airport. Risk Manager Brown responded that the general liability written through NCACC is for the Airport’s EMT exposure only. The Airport has separate coverage for the Airport’s operation, which excludes EMT’s. Risk Manager Brown explained page 24 of the handout is a notification sent to Jim Morton offering different deductible options available to the Airport. The Airport chose the $5000 deductible option. Risk Manager Brown reviewed the loss runs for the Airport and noted the most significant claim is the damage to the Main Terminal building on 9/15/05. Risk Manager Brown discussed the New Hanover County Board of Education’s Commercial Package and Workers’ Compensation renewals. The NHC Board of Education renewed their Commercial Package, which consists of Auto Liability and Physical Damage, Garage Liability, and Excess Automobile Liability for an annual premium of $112,926. Risk Manager Brown advised the NHC Board of Education renewed their policy with Key Risk for an annual premium of $716,880. The premium amount was higher than the previous year due to rate increases. Risk Manager Brown advised the NHC Board of Education’s committee implemented a Return to Work Program, as per the mandate from Key Risk, and the Board of Education should begin seeing the benefits of the program very soon. Risk Manager Brown reviewed the renewal quotes offered to Southeastern Center for Mental Health, Developmental Disabilities, and Substance Abuse Services. As per the spreadsheet on page 41 of the handout, the overall premium is up due mostly to the increased property rates. Risk Manager Brown reported she negotiated with the North Carolina Association of County Commissioners and was successful in getting them to change the premium basis for Public Officials Liability to payroll, which resulted in a 60% premium reduction from the prior year. Risk Manager Brown advised Southeastern Center’s claim history for lines of insurance under the Commercial Package policy is good. Southeastern Center did have one claim paid under their Professional Liability, which settled for $300,000. The case in question involved Brunswick County Social Services and to a lesser extent Southeastern Center for MH/DD/SAS. Brunswick County took the brunt of the claim settlement. Risk Manager Brown advised the renewal of the Workers’ Compensation policy for Southeastern Center for MH/DD/SAS came in lower than the prior year due to a reduction in payroll. Risk Management Specialist Allen discussed the renewal offer and acceptance by Wilmington Housing Finance & Development. The North Carolina League of Municipalities commercial package policy renewed for $27,539, which included a $20,000 deductible per Named Storm. Risk Manager Brown added should the higher deductible be troublesome, WHFD would be eligible for assistance from FEMA. Risk Management Specialist Allen added the Builder’s Risk policy renewed as expiring with Firemen’s Fund Insurance Company Risk Manager Brown began discussion of New Hanover County’s renewal offers by first discussing the Deductible Analysis performed by Gallagher at her behest. The consultant’s report concluded that the County would not benefit from raising deductibles. Risk Manager Brown proceeded by discussing several significant additions to the County’s schedule of insurance, which included the New Hanover County Jail and other Emergency Operations towers and buildings. The larger premium basis for property and the higher rates account for the increased Package Policy premium over what was projected. The Excess Workers’ Compensation policy premium came in less than projected, even though it included a 4% increase of payroll over the prior year. Risk Manager Brown reviewed the deductible options found on page 52 of the handout. Discussion ensued where the following deductibles were recommended and chosen: Auto $10,000 – with physical damage on units 2000 & newer General Liability $5,000 Inland Marine $10,000 Property $ 50,000 Public Officials $25,000 Law $25,000 Risk Manager Brown added that she is working with the North Carolina Association of County Commissioners in an effort for them to offer property insurance only. Risk Manager Brown concluded discussion of the County by reviewing the County’s premium history as noted on page 53 of the handout. Risk Manager Brown asked if there were any other items of business to be brought before the Committee. There were none and the meeting was adjourned.