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The Kentucky Association of Counties Workers' Compensation Fund held a Board of Trustees' meeting at 11:00 a.m. on Wednesday, January 30, 2019 at 400 Englewood Drive in Frankfort, Kentucky.
The roll was called. The following Trustees were present: Chairman Greg Terry, Carlisle Co. Judge/Executive; Michael Logsdon, Oldham Co. Magistrate; Casey Ellis, Owen Co. Judge; Dan Mosley, Harlan Co. Judge/Executive; and Elbert Bennett, Caldwell Co. Magistrate.
Others present were: Temple Juett, Director of Insurance; Brian Roy, Executive Director/CEO; Jim Henderson, Deputy Director; Kris Dunn, Underwriting Manager; Michael Ray, Safety & Loss Control Manager; Jeremy Head, Claims Manager; Bruce Lawson, Senior Accountant; Tim Sturgill, General Counsel; Karen Basham, Chief Financial Officer; Crystal Hellard, Litigated Claims Specialist; Rich Ornstein, Staff Attorney; Clint Combs and Jerry Pace, Peel & Holland/KACo Marketing Agents; Sue Porter, David Livingston and Kathy Marshall, Roeding Insurance/KACo Marketing Agent; Andrea Morse, Associate Underwriter; Macy Thompson and Kathy Basham, Customer Service Representatives; Grant Satterly, Director of Financial Services; Jeff McCaffrey, Deming, Malone, Livesay & Ostroff, PLLC; Jesse Penn, Computer Support Specialist; and Sonya Chesser, Executive Secretary.
Chairman Terry called the meeting to order at 11:01 a.m.
Chairman Terry welcomed new board members: Judge Mosley, Squire Bennett and Judge Ellis.
Introductions were made by board and staff.
Motion made by Michael Logsdon, seconded by Casey Ellis, to approve the minutes of the December 19, 2018 meeting as presented. Motion carried.
Chairman Terry accepted nominations for a chairman, vice-chair and secretary.
Motion made by Dan Mosley, seconded by Michael Logsdon, to elect Greg Terry as chairman. Motion Carried.
Motion made by Elbert Bennett, seconded by Michael Logsdon, to elect Dan Mosley as vice-chairman. Motion carried.
Motion made by Casey Ellis, seconded by Michael Logsdon, to elect Sonya Chesser as secretary. Motion carried.
Ms. Basham presented and discussed the following reports: balance sheet as of December 31, 2018; FY 2018/19 budget detail for the six months ending December 31, 2018; check history report for December 1 - 31, 2018; FY 2018/19 PAF budget for period July 1, 2018 - December 31, 2018; additions and deletions for December 1 - 31, 2018; FY 2018/19 premium receivables as of January 22, 2019 including an oral update on receivables paid to date; FY 2018/19 agent commissions as of December 31, 2018; and FY 2018/19 investment portfolio summary as of December 31, 2018. She said the Fund is in compliance with its investment ratios as statutorily required by the Kentucky Department of Insurance.
Motion made by Michael Logsdon, seconded by Dan Mosley, to approve the financial reports as presented. Motion carried.
Chairman Terry requested a board retreat for the program. Mr. Roy said he is working to develop a retreat in March and would provide more information at the next meeting.
Mr. Head presented and discussed the following claims activity reports: summary of losses valued as of December 31, 2018; graph of opened and closed claims during fiscal year 2018; graphs of average paid claims from 2014 - 2018; stats of open loss time and open medical claims for 2018; open claims for all years as of December 31, 2018; and a chart comparing the claim count from the last three, five and ten years including the monthly incurred averages as of June 30, 2018. There were a total of 127 newly reported claims totaling an incurred value of $475,505.29 for the month of December 2018 as compared to 105 reported claims totaling an incurred value of $326,431.64 for the month of December 2017.
Mr. Juett said Knox County Help, Inc., which owes a premium of $3,355.83, dissolved prior to July 1, 2018. He asked if the board desired to pursue the collecting the amount or writing it off as bad debt. Mr. Juett recommended writing it off because of the cost the Fund would incur trying to collect.
Motion made by Michael Logsdon, seconded by Casey Ellis, to write off Knox County Help, Inc. Motion carried.
Mr. McCaffrey presented and discussed the unaudited quarterly statement as of December 31, 2018.
Motion made by Elbert Bennett, seconded by Michael Logsdon, to approve the December 31, 2018 unaudited quarterly statement as presented. Motion carried.
Each board member signed the Trustee Confirmation of Receipt of the quarterly financial statement dated December 31, 2018.
Ms. Basham said there was an error to one of the pages to the unaudited quarterly statement for September 30, 2018. She requested approval of the amended statement as requested by the Department of Insurance.
Motion made by Michael Logsdon, seconded by Dan Mosley, to approve the quarterly statement as of September 30, 2018 as amended. Motion carried.
Mr. Satterly presented and discussed investment report as of December 31, 2018 including the quarterly security position changes for period October 1, 2018 through December 31, 2018. He also presented his personal outlook for January 2019.
Motion made by Dan Mosley, seconded by Michael Logsdon, to ratify the quarterly security position changes as presented. Motion carried.
Mr. Juett provided an update on Bluegrass Health Network's Nurse Triage program and its benefits. He said the fee for this service exceeds $20,000, therefore, it will be bid out. The board agreed for staff to send out a request for proposal for nurse triage services.
Mr. Juett said the actuarial rate study will be presented at the next meeting for the board's consideration.
With regards to the Fund becoming a member of AGRiP, Mr. Juett said KACo, as the sponsoring agency of the insurance pools will be the named member of AGRiP, but the KACo All Lines Fund and the KACo Workers Compensation Fund will reimburse KACo for the membership dues.
Mr. Juett said the Department of Insurance approved the $3 million dividend that the board declared late last year. He said it will be paid out to those members who were members in 2006/ 2007 and who are members as of July 1, 2019.
Mr. Juett presented information related to House Bill 40 that would expand workers compensation coverage for psychological only injuries for first responders and others. He said the KACo Legislative Committee asked that the KACo Workers Compensation Fund board take action to support or oppose the bill. Mr. Juett said passage of this bill amendment would significantly increase the workers compensation costs, which will result in higher premiums. Therefore, he recommended that the board oppose the bill.
Motion made by Michael Logsdon, seconded by Dan Mosley, that the board strongly opposes HB 40 and urges the KACo Legislative Committee to do the same. Motion carried.
Due to the KACo insurance forum coinciding with the next regularly scheduled board meeting on Feb. 20th, the board agreed to hold a special meeting on February 27th at 11:00 a.m.
Motion made by Michael Logsdon, seconded by Casey Ellis, to go into closed session at 12:08 p.m. to discuss proposed or pending litigation involving the board as authorized by KRS 61.810 (1)(c).
Motion made by Elbert Bennett, seconded by Michael Logsdon, to return to open session at 12:21 p.m. Motion carried. No action was taken in closed session.
Motion made by Elbert Bennett, seconded by Casey Ellis, to adjourn the meeting at 12:21 p.m. Motion carried.
