MINUTES OF THE VLCT PROPERTY AND CASUALTY INTERMUNICIPAL FUND, INC. BOARD OF DIRECTORS SPECIAL MEETING
FRIDAY, OCTOBER 21, 2022
Directors Present: Carl Rogers, Jackie Higgins, David Atherton, Jared Cadwell, Rob Gaiotti, Patrick Moreland, Bryan Young, Judy Frazier and Kathleen Ramsay
Staff Present: Joe Damiata, Fred Satink, Phil Woodward, Ted Brady, Kelley Avery and Seth Abbene
President Rogers called the meeting to order at 10:03 a.m. President Rogers noted an additional item regarding the Contribution Credit for 2023 will be discussed under Other Business on the agenda. Board members received documentation regarding this item via email yesterday.
Upon motion (Atherton/Higgins) duly adopted, the board voted unanimously to approve the agenda as amended.
Upon motion (Moreland/Higgins) duly adopted, the board voted unanimously to approve the minutes of the meeting held September 30, 2022.
Staff reviewed a new property reinsurance quote that Guy Carpenter obtained from Great American Insurance Company (GAIC). The quote from GAIC differs in price and limits from what was presented and approved at the September meeting and requires board approval. Information on the new quote including how it differs from what was presented and approved in September was provided by staff. A conversation ensued as staff reviewed the revised limits and program structure and answered several questions from the board.
Additionally, staff also recommended that the Trust remain with ACE/Chubb (our current general liability excess carrier) since they have lowered their renewal premium by $18,000 and increased the aggregate limit by $10,000,000 since the last meeting.
In total these recommended reinsurance changes would save the Trust approximately $348,000 over what was approved at the September meeting. If the board approves these changes, staff will submit an amended filing with the Department of Financial Regulation.
Upon motion (Higgins/Moreland) duly adopted, the board voted unanimously to approve the revised reinsurance structure as presented and authorized staff to bind coverage.
Staff recommended that the board consider allocating $150,000 of the $348,000 in reinsurance savings towards the Grant Program, which would increase total funding to $350,000 in 2023 ($200,000 was already approved at the September meeting). In addition, staff recommended that the program be 100% funded (rather than the 50/50 funding as approved at the September meeting) and that the maximum grant award be set at $7,500. Staff shared that it is too late to work the lower reinsurance premium into the rates, so enhancing the Grant Program is a good way to put that money to work helping members improve risk management. The remainder of the reinsurance premium savings will go to net position if everything tracks according to budget.
Upon motion (Atherton/Cadwell), duly adopted the board voted unanimously to allocate a total program funding of $350,000 to the Grant Program in 2023 and approved keeping the program as 100% funded for 2023 with a maximum award of $7,500 per member.
Seth Abbene reviewed the proposed changes to the contribution credit allocation for 2023. At the September meeting, the board approved a contribution credit of $1.5 million that pulled from fund years 2003, 2010, 2012 and 2016. It was a staff oversight to include 2003, as a decision had been made several years ago to no longer pull contribution credits from fund years prior to 2010 due to system and accounting procedural changes. Staff recommends that the amount remain at $1.5 million, but requests that funds originally intended to come from 2003 be reallocated to years 2010, 2012 and 2016, as outlined in the updated exhibit from Milliman. Staff has taken steps to ensure this oversight does not occur again.
Upon motion (Cadwell/Higgins), duly adopted, the board voted unanimously to approve removing the 2003 fund year from the previously approved $1.5 million contribution credit allocation for 2023 and reallocating those funds to the remaining years, as presented.
There was no other business.
Upon motion (Atherton/Higgins), duly adopted, the board voted unanimously to adjourn the meeting. (10:44 a.m.).