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The Kentucky Association of Counties All Lines Fund held a special Board of Directors' meeting, pursuant to proper notice given in accordance with KRS 61.823, at 12:30 p.m. on Wednesday, November 20, 2019 at 400 Englewood Drive in Frankfort, Kentucky.
The roll was called. The following Directors were present: Chairman Robert Carpenter, Greenup Co. Judge/Executive; John Wilson, Garrard Co. Judge/Executive; Orbrey Gritton, Anderson Co. Judge/Executive; Charles Kenner, Boone Co. Commissioner; and Adam O'Nan, Union Co. Judge/Executive.
Others present were: Temple Juett, Director of Insurance; Jim Henderson, Executive Director/CEO; Tim Sturgill, General Counsel; Karen Basham, Chief Financial Officer; Jeremy Head, Claims Manager; Michael Ray, Safety & Loss Control Manager; Bruce Lawson, Senior Accountant; Crystal Hellard, Litigated Claims Specialist; Kris Dunn, Underwriting Manager; Andrea Morse, Associate Underwriter; Marie Skinner, Accountant; Rich Ornstein, Staff Attorney; Macy Thompson and Kathy Basham, Customer Service Representatives; Steve Bolton, Board Counsel; Rob Brown and Joe Greathouse, LGIA/KACo Marketing Agents; Jerry Pace and Clint Combs, Peel & Holland/Marketing Agents; Greg Sisson, Jeremy Russell, Ed Meredith, and Terry Banaszak, Underwriters Safety & Claims; Grant Satterly, Director of Financial Services; Ryan Siemens, Programmer/Developer; Jesse Penn, Computer Support Specialist; and Sonya Chesser, Executive Secretary.
Vice-Chair Wilson called the meeting to order at 12:41 p.m.
Motion made by Orbrey Gritton, seconded by Adam O'Nan, to approve the minutes of the October 24, 2019 and October 30, 2019 meetings. Motion carried.
Ms. Basham presented and discussed the following reports: balance sheet as of October 31, 2019; FY 2019/20 budget detail for the four months ending October 31, 2019; check history report for October 1 - 31, 2019; FY 2019/20 PAF budget for period July 1, 2019 through October 31, 2019; FY 2019/20 agent commissions as of October 31, 2019; FY 2019/20 additions and deletions for period October 1 - 31, 2019; FY 2019/20 premium receivables as of November 14, 2019; and FY 2019/20 investment portfolio summary as of October 31, 2019. She said the Fund is in compliance with its investment ratios.
Motion made by Orbrey Gritton, seconded by John Wilson, to accept the financial reports as presented. Motion carried.
Mr. Head presented and discussed the claims report activity for period 2015 through 2019. He also presented the new reported claims for October 2019.
Mr. Juett provided the board with a written report of activities for November, which included an update on the grant program, law enforcement specialist, loss control, underwriting and AGRiP.
Ms. Basham provided an annual review of the finances of the Fund to determine if contributions should be returned to the members in the form of a dividend. She said the Fund has up to $4.6 million to consider based on calculations from FY 2006/07. Mr. Juett said staff's recommendation is to consider a $2 million dividend out of FY 2006/07. He said staff will present dividend calculations for eligible members at the next board meeting.
Motion made by John Wilson, seconded by Orbrey Gritton, to adopt staff's recommendation of a $2 million dividend subject to approval by the Kentucky Department of Insurance. Motion carried.
Mr. Ray presented a proposal for the Fund, in conjunction with the KACo Workers Compensation Fund, to offer loss control and safety videos for programs' members. He said he reached out to several vendors and received quotes with the best option available through Underwriters, Safety & Claims (USC). Mr. Sisson said USC can grant access to Succeed Training Solution, a software service that would allow KACo loss control consultants to offer bi-lingual safety video training on a wide variety of topics to KACo members. The annual fee is $5,000 and includes 100 safety video training views and unlimited e-learning sessions. Additional blocks of 1,000 safety video views are available for an extra $2,500 annually. He said the software management will allow all users in the system to train and track employee training and assign e-learning courses/videos. The board recommended including incentives for members completing the trainings. Mr. Sisson said the system will automatically populate a report allowing KACo the opportunity to offer certification. Mr. Juett said the cost would be split with the KACo Workers Compensation Fund. He will provide a draft of the agreement for the board's consideration at the next meeting.
Motion made by Adam O'Nan, seconded by Charles Kenner, to proceed with providing loss control safety video services to the members. Motion carried.
Mr. Satterly presented the Fund's investment policy as adopted December 18, 2013 for the board's annual review.
Motion made by Orbrey Gritton, seconded by Adam O'Nan, to accept the investment policy as reviewed. Motion carried.
Mr. Juett presented and discussed the engagement letter from Oliver Wyman to perform a rate analysis by coverage for period July 1, 2020 through June 30, 2021 at fee of $14,000.
Motion made by John Wilson, seconded by Orbrey Gritton, to approve the engagement letter with Oliver Wyman. Motion carried.
Judge O'Nan expressed his concern with a KACo local agent competing against KACo for business and asked how that issue of direct competition could be resolved.
Motion made by John Wilson, seconded by Orbrey Gritton, to direct staff to prepare a proposed policy for the board's review at the next meeting concerning local agents competing against KACo for business. Motion carried.
The next regularly scheduled board meeting will be held December 18th at 1:00 p.m.
Motion made by John Wilson, seconded by Orbrey Gritton, to go into closed session at 12:33 p.m. to discuss proposed or pending litigation involving the board as authorized by KRS 61.810 (1)(c). Motion carried.
Motion made by John Wilson, seconded by Orbrey Gritton, to return to open session at 12:40 p.m. Motion carried. No action was taken in closed session.
Motion made by Orbrey Gritton, seconded by, John Wilson to adjourn the meeting at 12:40 p.m. Motion carried.
