June 2 2009 (DOC)

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					January 31, 2010


B. Fleming, Chairman       CFO Appointee
B. Channer                 CFO Appointee
R. Chapin                  CFO Appointee
D. Halamuda                USAA
R. Hanson                  STATE FARM
P. Hulbert                 CFO Appointee
J. Tomlin                  CFO Appointee
J. Watson                  ALLSTATE

FROM: Bernice D. Ingram, AAI, AIS, API, CPIW, DAE, PIAM
      Underwriting Manager

RE:     Board of Governors Meeting
        September 15, 2009

Attached are the Minutes of the meeting of the Board of Governors held September
15, 2009, at the Intercontential Hotel, Tampa, Florida.

cc:   Eugenia Tyus                        Bill Ferguson
      General Manager                     Thomas Howell Ferguson, PA

      Bill Graham                         Christopher Young
      Carr Allison                        Director, Filing Services
      Service Provider
      Dovetail Insurance
                         BOARD OF GOVERNORS MEETING
                               September 15, 2009

Board Members Present:
Brian Fleming, Chairman      CFO Appointee
Roger Chapin                 CFO Appointee
Penny Hulbert                CFO Appointee
Steve Hylka                  Liberty Mutual
Scott Johnson                FAIA
John Tomlin                  CFO Appointee
John Watson                  Allstate

Board Member present via telephone:
Dave Halamuda               USAA
Roger Hanson                State Farm

Board Members not present:
Ed Langston                PIA
Barron Channer             CFO Appointee

FAJUA Staff Present:
Eugenia Tyus                 General Manager
Lisa Stoutamire              Administrative Coordinator

Others Present:
Bill Graham                  Carr Allison
Thomas Assad                 AIPSO
Kevin Leeman                 AIPSO
Tim Messier                  AIPSO
Bill Ferguson                Thomas, Howell, Ferguson
Jim McGee                    York Claims
Robert Reyes                 Florida Partners
Kay Womble                   Dovetail Insurance
David Ridge                  State Farm

Present via telephone:
Claire Call                  Office of Insurance Regulation
Bernice Ingram               FAJUA, Underwriting Manager
                      CALL TO ORDER – Brian Fleming, Chairman

After declaring a quorum present the Chairman, Mr. Fleming, called the meeting of
the Board of Governors to order on September 15, 2009, at the Intercontential Hotel,
Tampa, Florida.

Mr. Fleming welcomed those in attendance and asked everyone to introduce
themselves. After the introductions John Tomlin was recognized as a new Board
member representing AAA appointed by the CFO.

                           Florida Administrative Weekly

The Chairman announced that notice of the meeting had been published in the
Florida Administrative Weekly.

                   PREAMBLE – Bill Graham, General Counsel

Bill Graham, General Counsel, read the Anti-Trust Preamble and Disclaimer.

We are here to discuss and act on matters relating to the business of the FAJUA and
not to discuss or pursue the business interests of our individual member companies.
We should proceed with caution and alertness towards the requirements and
prohibitions of federal and state anti-trust laws. We should not engage in discussions
- either at this meeting or in private conversations - of our individual companies' plans
or contemplated activities. We should concern ourselves only with the business of
the FAJUA as set forth in the agenda for this meeting. Only FAJUA market matters
may be discussed at the meeting and each company's voluntary market plans cannot
be discussed. In addition to anti-trust concerns, we should also be mindful of the
requirements of the Government In The Sunshine Law that requires all discussions
between two or more Board members be held in an open and properly noticed
meeting. Board members should not otherwise discuss Association matters that may
foreseeably come before the Board.



The Chairman stated that the minutes of the April 14, 2009 Board of Governors
meeting were distributed prior to the meeting and were also included in the agenda.
Roger Hanson moved to accept the minutes as published. Scott Johnson seconded
the motion. The motion was unanimously passed by the Board.
                     GENERAL COUNSEL’S REPORT – Bill Graham

       Open Litigation Matters: As the policy count continues to stay low, the
number of active litigation matters continues to shrink. The Lydecker law firm
handles nearly all of the defense of claims and we are pleased with the
representation that they provide to the FAJUA. Chairman Fleming, continues to
take a close interest in monitoring the open claims to ensure appropriate claims
handling. Mr. Graham provided a brief update on the largely unchanged status of
the Fung and Seeley matters.

        Contract Extensions for FAJUA Service Providers: The service contracts
for York and Dovetail were each for 36 months with the possibility of a 2 year
contract extension. Payment under each contract was based upon a percentage
of written premium with a minimum amount owed if the premium did not reach a
certain level. In each case the minimum payment requirement was utilized soon
after the contract's inception due to the shrinking policy base of the FAJUA.
    Chairman Fleming and Mr. Graham were asked to work with York and
Dovetail to determine whether they wished to continue as the FAJUA service
providers. Further we were asked to secure a reduction in the minimum monthly
payment in light of the continuing reduction in the FAJUA policy base and open
claims status. Fortunately, both vendors did want to continue the working
relationship. We agreed to extend the contracts for another 24-month period,
commencing on October 1,2009 through September 30, 2011. York has agreed
to reduce the minimum monthly payment from $45,000 to $20,000. Dovetail has
agreed to reduce the minimum monthly from $33,750 to $30,000.

        Fraud Prosecution Program: For several years the Board has agreed to
budget an amount of $150,000 per year to pay for the cost of a dedicated "anti-
PIP fraud" prosecutor. For several years this program was run through the Dade
County State Attorney's office. About 2 years ago the Dade SAO discontinued
the relationship with the FAJUA. Since then the FAJUA has not been able to
secure an alternative location for this program.
    At the most recent meeting of the FAJUA Budget Committee the Committee
again approved this budget item as an appropriate expenditure. The Committee
directed Mr. Graham to try again and establish another "anti-fraud" prosecutor
with a Florida State Attorney's office. Mr. Graham was directed to approach the
Orange County State Attorney first and if not successful there try the
Hillsborough and West Palm Beach Counties’ State Attorney's offices.

                     LEGISLATIVE REPORT – Robert Reyes
                              Florida Partners

Mr. Reyes and his firm have worked with the Florida CFO’s budget office and the
Florida legislature to secure funding for seven additional fraud prosecutor positions in
He continues to look for fraud prevention projects the FAJUA can fund. There
appears to be a need by the OIR for a surveillance van that will cost between
$110,000 and $120,000. The legislature withdrew funding for one van last year and
there is still a need for the van for fraud surveillance.

Exhibit I is a memo from Robert Reyes to the FAJUA.

Earlier this year the Governor signed into law the following bills:

       Accident Response Fees: Prohibits local government from charging first
       responder response fees for crashes wherein emergency aid and
       transportation are provided. This law results in a large savings for insurance
       companies who would have been billed for the expenses.

       DHSMV Fees: Increases the fee for crash reports from the Florida
       Department of Highway Safety from $2 to $10 as well as increasing all
       documents from the agency.

       Seatbelt Law Revision: The law authorizes law enforcement agencies to stop
       motorist who are suspected of not wearing a seat belt. The bill passed the
       Senate and House under the promise of $35.5 million in federal highway
       money if the state passes a tough seat belt law. The fine for not wearing a
       seat belt will be $30 and is classified as a non moving violation. The previous
       law allowed ticketing for failure to wear a seat belt only when the driver had
       been pulled for another violation.

Scott Johnson asked if the FAJUA included the expense of MVRs in the rates or
were they furnished by the producers. Bernice Ingram replied that the MVRs are
submitted with new business applications by the producers, with endorsement
requests adding drivers, and prior to the annual renewals.

                      GENERAL MANAGER’S REPORT - Eugenia Tyus

Mrs. Tyus reported that the FAJUA’s inforce policy count as of the end of July was
231 commercial risks and 4 private passenger risk for a total inforce premium of

A report issued last month stated that the State of Florida has the largest number of
uninsured vehicles in the country. The FAJUA continues to believe that due to
extremely high and certainly non-competitive rates with the voluntary market and that
the FAJUA has no payment plan, many drivers just take a chance and drive without
insurance. The FAJUA continuously receives phone calls from individuals who are
shopping for auto insurance and the staff provides names and numbers for
producers in their areas who may assist them.
In some areas the FAJUA rates are over 200% above the non-standard markets in
Florida. Additionally the FAJUA does not offer an in house payment plan to ease the
burden of paying the higher rates.

In July 407 invoices were mailed to member companies for the annual membership
fee assessments.

Mrs. Tyus thanked the representatives in the audience who provide services to the
FAJUA in addition to staff members Lisa Stoutamire, Administrative Coordinator,
Elaine Joyner, Producer Records Representative, and Bernice Ingram, Underwriting
Manager for their continued dedication and support of the FAJUA. She also thanked
the Board Members who give their time and knowledge to the association.

                     BUDGET COMMITTEE - Penney Hulbert

Ms. Hulbert reported that the Budget Committee met on the day prior to the Board
meeting and to prepare the FAJUA budget for the fiscal year beginning October 1,
2009. Committee members are Barron Channer, David Halamuda and John
Watson. The budget is included with these minutes as Exhibit II. Several vendors
have agreed to reduce their fees for the coming year. Staff salaries will remain at the
2007-2008 level.

Legal, audit, central processing and D& O insurance have been decreased. The
FAJUA last purchased a server in 2003 and the purchase of a new server is included
in the budget.

Since the recommendation was from the Budget committee a motion to accept was
not necessary. The recommendation was seconded by John Watson and
unanimously approved by the Board

                     FINANCE COMMITTEE – Kevin Leeman

The Finance Committee chaired by Kevin Leeman, AIPSO, had met on the day prior
to the Board meeting to review the issues before the FAJUA. Committee members
are Stephen Hylka, John Watson and Ken Willhite. The following is a report on the
committee’s discussion.

At the April meeting, staff was asked to research if there was any language in the
pension plan document about a minimum funding percentage and/or trigger for
additional funding. It was noted that there are no additional requirements other
than the normal minimum annual contribution, as calculated by the Plan’s
actuaries, Watson Wyatt.

At the April meeting, staff was also asked to research employer 401(K) matching
contributions and benchmark the FAJUA’s employer match against other residual
market mechanisms. No benchmarks with other residual market entities were
available. However, a survey was discussed that indicated the following:
        1. 505 survey participants, mostly large companies
        2. 90% of participating companies had a 401(k) plan
        3. Two-thirds of companies indicated they had at least 70% of employees
           enrolled in the plan in 2008
        4. 60% of companies were not making any changes to their plans
        5. 50% of companies offered an employer match of 3%-4%
        6. Only 5% of participating companies had decreased or eliminated their
           matching contributions during 2008
No changes to the FAJUA’s 401(k) Plan or matching contributions were proposed.

The Committee reviewed the latest yields for SPIA, as compared to other
investment options, and decided that SPIA was still the appropriate investment
vehicle for the JUA. See Exhibit III from the SPIA dated July 9, 2009.

At the April meeting, staff was asked to review the risks associated with SPIA
and to provide a report to the full Board, which included the State of Florida
CFO’s most recent investment report and the allocation of assets within SPIA.
This report was provided shortly after the April meeting. Further, it was noted
that SPIA is diversified in such investments as U.S. Treasuries, government
agencies, commercial paper, CMOs, corporate bonds, municipal bonds, money
market funds, etc.

Staff, along with Mr. Graham, had been previously asked to formalize the
appropriate documents for the post-retirement and post-employment employee
benefits. It was noted that the benefits have always existed, have now been
formalized, and are available for any Board member who wants one.

The latest cash flow projections were reviewed. It was noted that a policy year
closeout will take place in January 2010 and will result in a distribution to
member companies of approximately $6,000,000. This will be offset by an
approximate $6,200,000 assessment necessary to fund 2010 operating results.

                            CLAIMS COMMITTEE – Brian Fleming

Mr. Fleming presented the data that is reflected in Exhibit IV as of September,

            2009 PROPOSED RATES – Tim Messier and Tom Assad

Due to declining data issues for Private Passenger, AIPSO has been working
with OIR to develop a process to make FAJUA rates going forward.

Mr. Messier presented the proposed rates for Private Passenger which would be
an overall decrease of 9.4%. Due to the continued decline in volume and
statutory requirements that the FAJUA rates be based on experience, AIPSO
used the same blended methodology utilized in 2008. This combines experience
based rate indications with market comparison.      Exhibit V is the Private
Passenger Rate Proposal that includes detailed summary of the blended

The Commercial Automobile Proposal prepared by AIPSO has an overall
decrease of 3.2%. Exhibit VI is the proposal.


As required by Florida Statutes each member company is polled as to the need for
an independent actuarial certification of the FAJUA’s rate adequacy. Of the 48
members that responded, the majority voted against an independent certification by a
vote of 44 opposed and 4 for.

Chairman Fleming called for a motion to accept the rate filing and authorize AIPSO to
make the filing with OIR and work with OIR and FAJUA to get approval. John
Watson made the motion and it was unanimously approved by the Board.

                            FAJUA PAYMENT PLAN

Mrs. Tyus stated that she had had a discussion with Insurance Commissioner
Kevin McCarty wherein he asked that the FAJUA Board of Governors consider a
premium payment plan to ease the burden of paying the annual premium in full
or employ premium financing. Commissioner McCarty is concerned about the
number of uninsured drivers in Florida and believes that a pay plan could attract
the uninsured drivers. Currently Florida has approximately 25% of its drivers
uninsured. Mr. Graham advised that the FAJUA had a premium payment plan
for a number of years. It was discontinued when auto insurance fraud became a
issue for the FAJUA. The majority of the FAJUA’s book of business is premium

The previous payment plan was 30% down with 8 monthly payments. This was a
labor intensive operation for the service provider. The payment plan was altered
to 3 installments of 1/3 each before the plan was discontinued.

The Board was concerned that a check submitted for a down payment that did
not clear the bank before a claim was processed and paid. There have been
instances of claims payments being made before financial institution had notified
the carrier of the dishonored check. A few banks may take up to 30 days before
sending the notification to the carrier that the check was dishonored. When an
applicants down payment check is not honored the policy is cancelled flat in
accordance with Florida Statutes.
It is possible that the FAJUA is not meeting the mandate to provide insurance for
those that have not been able to obtain insurance thru other markets and a
payment plan may benefit those individuals.

The non-standard auto insurance markets in Florida have less expensive rates
than the FAJUA. Many offer payment plans.

The Board questioned whether attracting consumers with a payment plan would
be effective due to the FAJUA rates and other market availability.

Mr. Fleming asked that Mrs. Tyus look into payment plans including obtaining
additional information from the OIR as to the number of uninsured motorist,
availability of auto insurance, payment plans of non standard carriers vs premium
financing and a price for handling a plan from Dovetail.


Chairman Fleming adjourned the meeting at approximately 10:00 AM.

Bernice D. Ingram, AAI, AIS, API, CPIW, DAE, PIAM
Secretary to the Board

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