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The Kentucky Association of Counties Workers' Compensation Fund held a special Board of Trustees' meeting, pursuant to proper notice given in accordance with KRS 61.823, at 10:40 a.m. on Wednesday, May 27, 2020 via teleconference.
The roll was called. The following Trustees participated by phone: Chairman Greg Terry, Carlisle Co. Judge/Executive; Michael Logsdon, Oldham Co. Magistrate; Casey Ellis, Owen Co. Judge/Executive; Dan Mosley, Harlan Co. Judge/Executive; and Elbert Bennett, Caldwell Co. Magistrate.
Others participating by phone included: Temple Juett, Director of Insurance; Jim Henderson, Executive Director/CEO; Tim Sturgill, General Counsel; Karen Basham, Chief Financial Officer; Michael Ray, Safety & Loss Control Manager; Bruce Lawson, Senior Accountant; Crystal Hellard, Litigated Claims Specialist; Kris Dunn, Underwriting Manager; Jeremy Head, Claims Manager; Andrea Morse, Associate Underwriter; Rich Ornstein, Staff Attorney; Kathy Basham, Customer Service Representative; Dwayne Litton, Safety & Loss Control Representative; Rob Brown and Joe Greathouse, LGIA/KACo Marketing Agent; Clint Combs, Peel & Holland/Marketing Agent; Sue Porter, Michele Barrett, and Kathy Marshall, Roeding Insurance/Marketing Agents; Paul Harnice, Board Counsel, Stoll, Keenon, Ogden, PLLC; John Logan and Kristie Whistle, Marsh, Inc.; Grant Satterly, Director of Financial Services; Phil Crumpton, Law Enforcement Specialist; Jeremy Russell, Safety & Claims; Jon Sharp, KACo IT Manager; and Sonya Chesser, Chief Administrative Officer/Executive Assistant to CEO.
Chairman Terry called the meeting to order at 10:40 a.m.
Motion made by Michael Logsdon, seconded by Elbert Bennett, to approve the minutes of the April 22, 2020 meeting as presented. Motion carried.
Ms. Basham presented and discussed the following reports: balance sheet as of April 30, 2020; FY 2019/20 budget detail for the ten months ending April 30, 2020; FY 2019/20 PAF budget for period July 1, 2019 through April 30, 2020; check history report for April 1 - 30, 2020; FY 2018-19 payroll audit receivables as of May 21, 2020; FY 2019/20 agent commissions as of April 30, 2020; FY 2019/20 premium receivables as of May 21, 2020; and FY 2019/20 investment portfolio summary as of April 30, 2020.
Motion made by Dan Mosley, seconded by Michael Logsdon, to acknowledge receipt of the financial reports as presented. Motion carried.
Mr. Head, providing an update on the quarterly claims report, said he anticipates that the Fund will be over budget by at least 6% this fiscal year on claims payments. He said staff made a concerted effort this fiscal year to settle and resolve claims from 2015 and older bringing the total number of open claims reported during that time period from 503 down to 456. He provided claims information by year, 2015 to 2019, including incurred, frequency, exposure and more. He also provided the total number of open and closed for 2019, new reported claims for April 2020 and discussed the top ten open claims from 2019.
Ms. Basham presented and discussed the FY 2020/21 proposed draft budget for the board's review. The final budget will be presented to the board for adoption at its October meeting.
Ms. Whistle presented and discussed the FY 2020/21 reinsurance renewal with County Reinsurance Limited (CRL), fronted by Safety National. The Fund is under a five year policy with CRL expiring July 1, 2022. This year's renewal resulted in a 4% decrease with equity increasing by 28%. Staff's recommendation is to maintain retention at $850,000 for a premium totaling $1,246,100.
Motion made by Michael Logsdon, seconded by Elbert Bennett, to renew with County Reinsurance Limited for policy year 2020/21 as recommended. Motion carried.
Mr. Juett requested approval of a memorandum of extension and amendment with Marsh commencing on July 1, 2020 and continuing through June 30, 2023. At the conclusion of this term, there will be an option for one additional extension of three years remaining.
Motion made by Dan Mosley, seconded by Casey Ellis, to approve a three year extension with Marsh commencing on July 1, 2020 and continuing through June 30, 2023. Motion carried.
Mr. Juett provided the board with a copy of his monthly director's report.
Mr. Juett said the Kentucky Chamber of Commerce is asking the Fund to join them, the Kentucky Coal Association and the Kentucky League of Cities in submitting an amicus brief to the Supreme Court in defending the statutory provision to terminate wage benefits at age 70. The cost of the brief would be split four ways with each paying $2,500. He recommended its approval and for Mr. Harnice to provide legal services in this matter.
Motion made by Elbert Bennett, seconded by Dan Mosley, to join in the amicus brief at the cost of $2,500. Motion carried.
The board agreed to move the next regularly scheduled meeting from June 16th at the Marriott Griffin Gate in Lexington to June 24th via teleconference at 9:30 a.m. (EDT).
Motion made by Michael Logsdon, seconded by Elbert Bennett, to go into closed session at 11:21 a.m. to discuss proposed or pending litigation involving the board as authorized by KRS 61.810 (1)(c). Motion carried.
Motion made by Casey Ellis, seconded by Elbert Bennett, to return to open session at 11:28 a.m. Motion carried. No action was taken in closed session.
Motion made by Elbert Bennett, seconded by Dan Mosley, to adjourn the meeting at 11:39 a.m. Motion carried.
