April 14, 2015GEMC Workers’ Compensation

Trustee Meeting

Georgia Electric Membership CorporationWorkers’ Compensation Fund

Georgia EMC Workers’ Compensation Fund Trustee Meeting Conference Call

• Randy Crenshaw­Call Meeting to Order

• Tonya Washington ­Conference Call Reminders­Roll Call­Determination of Quorum

• Randy Crenshaw­Motion on April 15, 2014 Trustee Meeting Minutes

» All in Favor

Executive Committee Report

The Executive Committee met via conference call on September 11th, October 27th and April 7th to discuss the following items

• Commissioner of Insurance Compliance Audit Report • 2015 Preliminary Budget• Nominating Committee • 2014 Financial Audit report• 2014 Actuarial Report• Financial Update

The Executive Committee gave email approval of 2014 Dividend Distribution

The Executive Committee consists of:

- Gary Miller - Chip Jakins

- Randy Crenshaw - Tony Tucker

- Wayne Livingston - Tony Watkins

State Compliance Exam Final Opinion

Summary Findings:

1. GEMC WCF reinsurance agreements lack automatic renewal language required by Georgia Insurance Regulation 120-2-34-.(16)(5)(b)   (Prior Exam Finding)

- Item has been addressed and should be rectified in future agreements

2. GEMC WCF specific excess attachment point in 2007 was greater than the amount allowed by Georgia Insurance Regulation 120-2-34-.16(4)(c), (no greater than $350,000 without prior approval from the Commissioner 30-days prior to implementation.)  (Prior Exam Finding)

- Corrected from previous audit when notified in May 2007

3. GEMC WCF did not have in a place a conflict of interest policy requiring annual disclosure of potential conflicts by its Board of Trustees and Officers.  (Prior Exam Finding)

- In process

4. GEMC WCF Services Agreement with GEMC has not been approved by the Department in accordance with Georgia Insurance Regulation 120-2-34-.18. (Prior Exam Finding)

- Complete

5. Third party claims administrator (AmPro) was replaced by Georgia Administrative Services, Inc. (GAS) in 2010.  GAS had not submitted Form GSF-6 (Application to Serve as Administrator of Group

Self-Insurance Fund) in accordance with Georgia Insurance Regulation 120-2-34-.10. (Prior Exam Finding)

- GAS has rectified

6. GEMC WCF did not have a written agreement with its reinsurance intermediary (Affinity Service Group, Inc.) in accordance with O.C.G.A. § 33-49-4.

- GEMC WCF and Affinity Services have an updated written agreement

Any further discussion?- Motion to accept- Second

- All in favor

Summary Findings Continued:

Description Budget 2014 Projected

2015 Proposed

% Change

Insurance placement 1,096,524 1,115,202 1,198,850 9 %

TPA Services 141,450 138,000 141,450 -

Subsequent Injury Trust Fund 290,000 259,684 265,000 ( 9 ) %

State Board of WC 93,000 86,330 95,000 2 %

Consulting Services (including BNY Mellon fee increase)

89,000 99,500 112,050 26 %

Personnel & A&G 617,246 632,490 691,065 12 %

Totals $2,327,220 $2,331,206 $2,503,415 8 %

2015 Preliminary Budget

2014 Dividends and Remaining SurplusYear

Previous

Dividends

Proposed

Dividends

Total

Dividends

Remaining

Surplus

2014 873,049

2013 - 393,610

2012 500,000 1,204,540 1,704,540 855,306

2011 600,000 800,000 1,400,000 90,442

2010 1,150,000 200,000 1,350,000 223,633

2009 500,001 500,001 183,778

2008 1,850,005 1,850,005 (130,143)

2007 992,235 293,611 1,285,846 50,000

2006 1,465,186 280,000 1,745,186 57,778

2005 1,456,001 5,377 1,461,378 -

2004 1,188,401 72,652 1,261,053

82-03 26,965,506 43,820 27,009,326 101,116

Totals 36,667,335 2,900,000 39,567,335 2,698,569

2014 Dividends/Net PremiumTotals Premiums Total Dividends

Returned Net Premium Percent Reduction

2014 • 6,912,322 - 6,912,322 00%

2013 7,219,468 - 7,219,468 00%

2012 7,099,315

1,704,540 5,394,775 24%

2011 6,451,109 1,400,000 5,051,109 22%

2010 6,169,447 1,350,000 4,819,447 22%

2009 6,313,430 500,001 5,813,429 8%

2008 6,370,328 1,850,005 4,520,323 29%

2007 5,647,078 1,285,846 4,361,232 23%

2006 4,965,595 1,745,186 3,220,409 35%

2005 5,158,207 1,461,378 3,696,829 28%

2004 4,887,895 1,261,053 3,626,842 26%

82-03 58,553,406 27,009,326 31,434,080 46%

Totals 125,747,600 39,567,335 86,180,265 31%

2015 Preliminary Budget and 2014 Dividend Distribution

• Approval of the 2015 Preliminary Budget comes to you in the form of a motion from the executive committee

Any further discussion?- Second to approve- All in favor

• This return of $2,900,000 in Dividends comes in the form of a motion from the Executive Committee

Any further discussion?

- Second to approve

- All in favor

Nominating Committee Report

• The Nominating Committee met via email to discuss the upcoming slate of officers for the Georgia EMC Workers’ Compensation Fund

• The Nominating Committee consists of the following members:

– Chip Jakins – Jackson EMC – Chairman– Romeo Reyes – Satilla EMC – Brad Thomas – Snapping Shoals EMC

Nominating Committee Report

• The Nominating Committee nominates the following trustees as officers:

– Gary Miller - President– Randy Crenshaw – Vice President– Tony Tucker – Secretary/Treasurer

• These recommendations come to you in the form of a motion from the Nominating Committee

Any further discussion?

- Second to approve

- All in favor

Investment Committee Report

• The Investment committee met via conference call on June 18, 2014, via email in December and again by conference call March 24, 2015 to discuss the

following items • BNY Mellon fee increase• Clarify cash reserve requirement • Discuss Equity Investment Allocation• Update purchases and sales

• The Investment Committee consists of the following members:– Matt Brinson– Denice Swan– Wade Hall

Investment Committee Report

Each Trustee was furnished with a copy of the purchases and sales by BNY Mellon from the last Trustee Meeting through 12/31/2014 with the meeting notice and mail out.

Approval of the purchases and sales come to you in the form of a motion from the Investment Committee

Any further discussion?- Second to approve- All in favor

Report of Independent Accountants Board Communication

Each Trustee was furnished with a copy of the 2014 Report of the Independent Accountants with the meeting notice and mail out

• No new accounting policies adopted

• No change in the application of existing policies

• No transactions with a lack of authoritative guidance

• All significant transactions have been recognized

• Accounting estimates used are reasonable

• No difficulties with management in performing and completing the audit

• All uncorrected misstatements were immaterial both individually and in aggregate to

the

• No disagreements with management in performing the audit

Report of Independent Accountants Board Communication

• Internal Controls

• The size of the Fund’s administrative staff precludes certain internal controls that would be preferred if the organization were large enough to provide an optimum segregation of duties

• Opinion

• Financial Statements present fairly, in all material respects, the admitted assets, the liabilities and surplus of the Fund as of December 31, 2014 and the income and surplus on the basis of statutory accounting as mandated by the Office of the Commissioner of Insurance

Approval of the report of the Independent Accountants Report comes to you in the form of a motion from the Executive Committee

Any further discussion?- Second to approve- All in favor

If you have any questions or comments regarding the report please contact either Jerry Wolfe with McNair, McLemore Middlebrooks or Mary Wellman

2014 Actuarial Report Each Trustee was furnished with a copy of the 2014 Actuarial Report with the meeting notice and mail out.

The GEMC WCF’s Balance Sheet

• Meets the requirements of the Insurance Laws of Georgia

• Consistent with reserves computed in accordance with

Standards of Practice issued by the Actuarial Standards Board

• Make reasonable provision for unpaid loss and loss adjustment

expense

• Make a reasonable provision for the SITF obligations of the

Fund

The major risk factor is the high specific retention relative to surplus. The current retention of $500,000 is 19% of surplus.

2014 Actuarial Report

Approval of the 2014 Actuarial Report comes to you in the form of a motion from the Executive Committee

Any further discussion?- Second to accept- All in favor

If you have any questions or comments regarding the report please contact either Lisa Dennison with By the Numbers Actuarial Consulting Inc. or Mary Wellman

Financial Highlights December 2014

December 31, 2014 December 31, 2013 Change

Total Assets 13,199,454 12,653,907 545,547

Reserve 7,279,716 8,350,995 (1,071,279)

Liabilities 3,221,170 1,574,428 1,646,742

Surplus 2,698,569 2,728,483 (29,914)

Open Claims 166 155 11

2014 Claims Paid Summary Total Gross

Claims PaidRecoveries Net Claims Paid

2014 1,813,825 (522,314) 1,291,511

2013 4,111,335 (634,017) 3,477,318

2012 2,652,657 (479,384) 2,173,274

2011 3,438,829 (599,655) 2,839,174

2010 3,204,168 (537,483) 2,666,686

2009 5,110,110 (1,275,059) 3,835,051

2008 3,568,417 (783,573) 2,784,844

2007 3,906,832 (1,050,878) 2,855,954

2006 2,435,133 (887,723) 1,547,410

2005 3,949,768 (1,587,943) 2,361,825

2004 3,592,998 (1,200,228) 2,392,770

82-03 38,941,382 (12,885,013) 26,056,370

Total 76,725,455 (22,443,269) 54,282,186

2014 Claims SummaryNet Claims Reserves

Paid and

Reserved

Total

Claims

Open

Claims

2014 1,291,511 2,506,601 3,798,112 296 123

2013 3,477,318 1,013,696 4,491,014 336 19

2012 2,173,274 554,435 2,727,708 343 5

2011 2,839,174 214,070 3,053,245 371 1

2010 2,666,686 357,234 3,023,920 437 4

2009 3,835,051 317,168 4,152,219 512 3

2008 2,784,844 456,750 3,241,593 516 2

2007 2,855,954 63,870 2,919,824 513 1

2006 1,547,410 22,891 1,570,301 468 1

2005 2,361,825 2,361,825 493

2004 2,392,770 2,392,770 544

82-03 26,056,370 299,028 26,355,398 13,924 7

Total 54,282,186 5,805,742 60,087,928 18,753 166

Additional Items

• Medical case management position• Participation in payroll audits• Experience modifier letter• Rate structure• May 17th training seminar• Potential Board Restructure

– Streamline compliance– Improve responsiveness– Reduce paperwork

Georgia Electric Membership CorporationWorkers’ Compensation Fund

Mark Your Calendar

Georgia EMC Workers’ Compensation Fund Coordinator’s Conference

May 7th at the Electrical Cooperative Training Center

Georgia Electric Membership CorporationWorkers’ Compensation Fund

8:00 a.m. – 9:00 a.m. Registration w/ Continental Breakfast

9:00 a.m. – 9:15 a.m. Welcome Tony Watkins

9:15 a.m. – 9:45 a.m. GAS Updates and Electronic Filing

Carla Edwards

Georgia Administrative Services

9:450 a.m. – 10:15 am Understanding your Mod Calculation Stan Deese

Georgia Municipal Association

10:15 a.m. – 10:30 a.m. Break

10:30 a.m. – 11:15 a.m.

Is this a Workers’ Compensation Injury? Wade McGuffey Goodman, McGuffey, Lindsey &

Johnson

11:15 a.m. – 11:35 p.m. The Plan: Georgia Workers’ Compensation Board – Current Events and 2015 Legislative Update

Honorable Elizabeth Gobell State Board of Workers’

Compensation

11:35 p.m. – 12:00 p.m. Evaluating Your Posted Panel Rick Thompson Levy, Thompson, Sibley & Hand

12:00 p.m. – 1:00 p.m. Lunch

1:00 p.m. – 2:30 p.m. Drugs don’t work!

Jesse Hambrick Douglas County Sherriff’s

Department

2:30 p.m. – 2:45 p.m. Break

2:45 p.m. – 4:00 p.m. Dealing with lower extremity injuries Dr. Anuj Gupta-Peachtree Orthopaedic Fred Hubbs-Hall, Booth, & Smith Kevin Skedsvold-skedsvold & white, L.L.C.

GEMC WCF Coordinator’s Conference

Agenda

April 14, 2015GEMC Workers’ Compensation

Trustee Meeting

Georgia Electric Membership CorporationWorkers’ Compensation Fund

Any further business to discuss?

• Motion to adjourn• Second• All in favor