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VLCT Property and Casualty Intermunicipal Fund, Inc.
Board of Directors Meeting
Friday, October 13, 2017
VLCT Offices, Montpelier, Vermont

Minutes

Directors Present: Joshua Powers, John Lawe, Carl Rogers, Brendan Whittaker, Stu Hurd (by phone), Neal Fox, Aaron Frank, Pete Johnson, Jerry Storey, Bruce Urie

Staff Present: Joe Damiata, David Sichel, Maura Carroll, Jeremiah Breer, Fred Satink, Jill George (left 10:52 a.m.)

The meeting was called to order by Vice President Johnson at 10:05 a.m.

Upon motion (Rogers/Frank) duly adopted, the Board voted unanimously to approve the agenda as presented.

Upon motion (Powers/Lawe) duly adopted, the Board voted to approve the minutes from the September 29, 2017 meeting as presented.

The Board discussed a board vacancy that resulted from the retirement of Mel Adams.

Upon motion (Powers/Frank) duly adopted, the Board voted unanimously to appoint Jerry Storey to fill the vacant Board Member position.

The Board discussed the vacant Alternate Board Member vacancy created by the appointment of Jerry Storey to the Board.  Three nominations were considered.

Upon motion (Powers/Frank) duly adopted, the Board voted unanimously to appoint David Atherton to fill the vacant Alternate Board Member position.

Joe Damiata presented the staff report.

  • Town Fair went very well.
  • There was not a quorum present for the PACIF Annual Meeting. There were 26 members in attendance.  34 members were needed to make up a quorum. The Bylaws are silent on the number of members needed to make up a quorum. This means the State non-profit laws statute applies, which requires 10 percent. This will be discussed at a future meeting.

Upon motion (Whittaker/Frank) duly adopted, the Board voted unanimously to extend appreciation to staff for a tremendous Town Fair.

Jeremiah Breer presented the second quarter financial report.  Net Position increased by $763,164 primarily due to strong investment earnings.

Upon motion (Lawe Whittaker) duly adopted, the Board voted unanimously to accept the financial report.

Jill George presented the second and third quarter claims report.

Upon motion (Powers/Rogers) duly adopted, the Board voted unanimously to accept the claims report.
    
Joe Damiata reviewed the 2018 Loss Reserve, Funding and Distribution Credit Analysis report prepared by Milliman.  The full report was provided to the board.  Their recommendation is for an average 1.5% (gross-net) rate increase at a 70% confidence level and a $700,000 distribution to members.  Proposed rates were "smoothed".  

Upon motion (Fox/Hurd) duly adopted, the Board voted unanimously to accept the actuarial report.

Fred Satink reviewed the proposed 2018 rates. The overall average gross-net rate increase is 1.5%.  Workers' compensation rates are up by an average of 20% while property and casualty rates are down 12.1% to move closer to the goal of not having property and casualty rates subsidize workers’ compensation.

Mr. Satink also reviewed proposed changes to the Underwriting Policy.

Also discussed was the use of up to $1 million of Net Position for underwriting purposes.

Upon motion (Fox/Powers) duly adopted, the Board voted unanimously to approve the 2018 rates as proposed, approve changes to the Underwriting Policy and authorize use of up to $1 million of Net Position for underwriting purposes.

Fred Satink updated the board on the reinsurance renewals. Staff recommends renewing the reinsurance coverage as quoted. There will higher costs compared to last year's rates. In addition, the Boiler and Machinery reinsurance is being put out to bid.

Upon motion (Rogers/Whittaker) duly adopted, the Board voted unanimously to approve reinsurance renewal as proposed and to authorize staff, in conjunction with PACIF’s reinsurance broker, to place the Boiler and Machinery reinsurance once bids are received.

Fred Satink reviewed proposed changes to the Coverage Document for 2018. The only change from the Coverage Document that was reviewed at the last meeting is that the proposed general liability fellow employee exclusion was eliminated.

Upon motion (Frank/Storey) duly adopted, the Board voted unanimously to approve the proposed changes to the 2018 Coverage Document.

Joe Damiata reviewed the proposed distribution credit to members for 2018. Staff is recommending a distribution credit of $700,000 with $500,000 as rate credits and $200,000 to fund the PACIF Equipment Grant Program.  

Upon motion (Fox/Powers) duly adopted, the Board voted unanimously to approve a distribution of $700,000 to members for 2018. $500,000 of the distribution will be allocated as contribution credits per the current distribution policy and $200,000 of the distribution amount will be allocated to fund the PACIF safety equipment grant program.

John Lawe presented the report of the Joint Investment Committee. The committee met on September 8.  The committee discussed investment results through the second quarter and proposed changes to the Investment Policy. The committee recommends that the board approve the proposed changes to the Investment Policy.

Upon motion (Whittaker/Rogers) duly adopted, the Board voted unanimously to accept the report of the Joint Investment Committee.

Upon motion (Lawe/Frank) duly adopted, the Board voted unanimously to approve the changes to the Investment Policy as amended.

The Board discussed going into executive session to discuss the Town of Victory hearing.

Upon motion (Whittaker/Frank) duly adopted, the Board voted unanimously to enter executive session at 11:59 a.m.

At the request of the Board, staff, with the exception of Maura Carroll, left the meeting during the executive session.

The Board left executive session at 12:35 p.m.

Upon motion (Powers/Whittaker) duly adopted, the Board voted to recess the meeting to Friday, October 27, 2017 at 10:00 a.m. by phone or in person.

The meeting was recessed at 12:35 p.m.

The meeting was reconvened on Friday, October 27, 2017.

Directors Present: Pat Scheidel, Jackie Higgins, Brendan Whittaker, Jerry Storey, Joshua Powers, John Lawe, David Atherton, Neal Fox, Carl Rogers, Stu Hurd (by phone), Aaron Frank, Pete Johnson (by phone)

Staff Present: Joe Damiata, David Sichel, Maura Carroll, Dean Mudgett

The meeting was called to order by President Scheidel at 10:00 a.m.

Upon motion (Fox/Powers) duly adopted, the Board voted unanimously to enter executive session at 10:02 a.m.

At the request of the Board, staff left the meeting during the executive session.

The Board left executive session at 12:03 p.m.

A motion was made by Neal Fox to deny PACIF coverage to the Town of Victory.  The motion was seconded by Jackie Higgins.  The motion failed on a roll call vote of 2-9, with Fox and Higgins voting in favor of the motion.

Upon motion (Fox/Powers) duly adopted, the Board voted unanimously to adjust staff’s recommendation from denying coverage to offering coverage to the Town of Victory and to put the Town of Victory on probation with the possibility of continued probation to be determined by the Underwriting Division.

Brendan Whittaker will work with staff and attorneys to develop a written decision and the terms and conditions of probation for the Board’s review at their November 17 meeting.

Upon motion (Fox/Whittaker) duly adopted, the Board voted unanimously to adjourn the meeting at 12:17 p.m.

Respectfully submitted,

David Sichel
Assistant Secretary

Board or Committee: 
PACIF Board of Directors

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