CIRCULAR LETTER 1014 JUNE 22, 2000
PROCEEDINGS OF THE WISCONSIN GOVERNING COMMITTEE
TO: MEMBERS OF THE BUREAU
Minutes of the Wisconsin Governing Committee meeting held in the premises of the Cherry Hills Lodge and Golf Course, 5905 Dunn Road, Sturgeon Bay, WI 54235 on Friday, June 16, 2000. The meeting was called to order at 9:00 A.M. with the following members present:
Society Insurance A Mutual Company, Chair Rick Levin
Fire & Casualty Company of CT Mike Smith
Firemans Fund Insurance Company Jim Vandenberg
Employers Insurance of Wausau A Mutual Company Steve Ginsburg
General Casualty Insurance Company Pete McPartland
Secura Insurance Company Gary Gudex
Sentry Insurance A Mutual Company Bill Swarthout
Travelers Insurance Company Alan Carpenter
Wisconsin Compensation Rating Bureau Ralph Herrmann
Employers Mutual Casualty Company Bob Cascioli
Liberty Mutual Insurance Company Charlie Echols
Michael Best & Friedrich Paul Riegel
Tri-State Insurance Company of MN Gregg Murray
West Bend Mutual Insurance Company Pam Allison
State of Wisconsin
Office of the Commissioner of Insurance Jo LeDuc
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The Chairperson read the following opening statement before convening the meeting:
"This Committee meeting has been called to discuss the items of mutual interest and concern to the members of the Wisconsin Compensation Rating Bureau. In accordance with both Federal and Wisconsin State Anti-trust Laws, this Committee is prohibited from any discussion or action which constitutes any form of boycott, coercion or intimidation."
1. Vice President Kierzek presented information on the Bureau expenses through
May of 2000, and the final audited expenses for 1999. Following discussion, the Committee voted to levy an assessment of $1,350,038 to cover the Bureau expenses for the third quarter of 2000.
NOTE: Since the direct premium writings of the current calendar year do not become available until the following calendar year, the net direct premium writings of the preceding calendar year shall be used as a temporary basis for the apportionment of this assessment.
2. The Committee next considered the usual items centering on Bureau
administrative affairs, occupancy, etc., including the following:
a. WCRB/NCCI data collection procedures
This item is continued with no action taken. No further recommendations will be made until the Annual Meeting in May, 2001.
b. Home Insurance Company
Legal Counsel, Paul Riegel, updated the Committee on the status of Home
Insurance Companys request for distribution of surplus funds in Wisconsin. A portion of the last disbursement will be withheld to cover money owed to the Wisconsin Automobile Insurance Plan.
c. Alternative Budget Method
President Herrmann reported that all Bureau functions will be reviewed in the near future. The Committee voted to have the Bureau continue with the current budget procedures for 2001.
d. Assessment Procedures
President Herrmann reported that the Independent Bureaus and the Workers Compensation Insurance Organization reviewed the request to develop an alternate assessment procedure and determined that no action will be taken. This item was referred back to the Bureau for review.
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e. WWCIP Servicing Carrier Fee
The Committee reviewed the study requested from NCCI on the adequacy of the current servicing carrier allowance. The NCCI will be asked to expand the study to determine what the servicing carrier allowance should be at different premium levels and varying average risk sizes.
f. Hartford Underwriters Insurance Company Servicing Carrier Resignation
There were no problems reported with the reassignment of Hartford Underwriters Insurance Companys accounts.
g. Workers Compensation Research Institute
President Herrmann updated the Committee on the activities of the Workers Compensation Research Institute and the multi state report schedule to be released in December, 2000.
h. Limits of Liability Threshold WWCIP Accounts
The Committee concurred with the recommendation of the Pool Committee to eliminate the current threshold on Increased Limits of Liability in the Pool. The limits available will be in accordance with the rules in the Basic Manual.
The following items were added by the unanimous consent of all members present:
i.. Finance Subcommittee
Two openings were created for the Finance Subcommittee due to changes in Governing Committee members. The Governing Committee appointed General Casualty Insurance Company and Travelers Insurance Company to fill the vacancies. Sentry Insurance was elected as chair.
j. Alternative voting methods need to be reviewed prior to the next Annual
Meeting. This item was referred to the Operations Subcommittee of the Governing Committee for review. Firemans Fund will be available as a special consultant.
k. The Committee reviewed and approved revised Investment Guidelines to
be effective June 30, 2000.
l. Financial Reports
Each member of the Committee was furnished with a copy of the following reports:
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The balance of the Pool Fund equaled 135% of outstanding losses. Therefore, in accordance with the Pool Rules, a disbursement of $13,354,330 will be declared but not distributed in 2000.
The Committee voted to accept these reports. These reports will be filed with the Office of the Commissioner of Insurance for their information.
3. Vice President Siekierski updated the Committee on A.C.C.C.T. activities and the operation of the new Spectrum system.