Welcome to the UCOP Captive Services RFI Bidder’s Conference Webinar

The call will begin shortly – the line is currently on mute

Overview, Directions, and Rules• A list of call attendees is

being kept via the phone numbers of those who call in. This list is not available to call attendees.

• The call is being recorded.• If you wish to ask a

question please do so by typing the question into the dialogue box.

• Please allow us to follow the agenda and only ask questions when asked to do so.

• We will not identify the company which has submitted the question

Introductions• Introductions of UC Team in room• Introductions of Vendors on the call

Objectives of This Call

• Discuss our objectives and goals in developing this RFI

• Go over key dates and deadlines for this RFI

• Answer any questions you may have at this time regarding the RFI and process

Background and Overview on Captive Services and the UC:

• Presented by: - Grace Crickette, UC Chief Risk Officer

Key insights gained from the feasibility study:

• The current self-insured program is very cost effective and moving it to a captive would increase costs.

• A JPA is the least expensive method of covering 1st party exposures

• A captive offers more comprehensive benefits than a JPA, because it can cover both 1st and 3rd party exposures.

• Although a captive is more expensive to operate than a JPA, the additional opportunities created from covering 3rd party exposures make the captive the best option. The additional profit generated from 3rd party exposures will more than offset additional operating expense and creates a more comprehensive program.

ART Strategy Overview:• Captive• Create a Profit Center• Eligibility for Federal

Terrorism Funds• Formalized Treatment of

Uninsured Risks• Improved Underwriting

Discipline

How?

UC’s current program will purchase a portion of

excess coverage from

the Captive

3rd parties will purchase

coverage and services from

the Captive

1st party risks that are

currently covered by 1st

dollar coverage will be moved to the captive

3rd party risks that are

currently covered by 1st

dollar coverage will be reinsured

by the captive

8

Professional Liability• Many higher education entities insure medical malpractice

in their entities– Can be both domestic and overseas (where legally permissible)– Can combine affiliates, e.g., other medical groups, non-employed

physicians • Prevents wasted finger pointing and combines defense• Allows access to affordable cover in hard markets• Helps retain physicians

– Can combine tax paying and non-tax paying e.g. using Reciprocal Risk Retention Groups

– Allows full understanding of all risk exposures – patterns emerge to show best focus for loss control dollars

– Allows cover to be manuscripted, e.g., inclusion of educators liability

9

Construction• University already has a UCIP program

– Projects above $25m– SIR with insurance layered above

• Captives often used to retain the primary layers– Increase the retention as retained earnings build

• Sometimes used for surety subject to:– Bonds being acceptable to parties requesting them– Captive is not admitted – using a front may not reduce costs, as

credit risk is the same (not an indemnification contract)– Captive may have to get a rating– California does not have captive legislation, so bonds would not be

from admitted insurer– May be able to provide surety for subs – Subguard type

arrangement

10

Income Generation• Reinsurance of Student Programs/Vendor

Programs– Program remains fronted by commercial insurer– Captive shares in premium and risk (quotashare

basis)– Profits can be used to fund other programs to ensure

no perception issues

UC & Affiliates Third Parties

Offshore Captive

Reinsurer

Fronting Carrier

1% FET

HI Multi-Member LLC

100% of Shares

Workers Comp, Property, etc.

Policyholders

Non-Third Party Liability Primary Policies

Plan C – Stock RRG with member holding entity

Reinsurance Agreement

Class B MembersClass A Members

Reinsurance Agreement

1% FET

9/12/11

HI Stock RRG(3rd Party Liability)

Highlights of the RFI and Deadlines

• Minimum Requirements – are defined as requirements essential to the UC for bid consideration. Automatic disqualification from the bidding process will result from bidder’s failure to provide or be in compliance with any one or more the requirements.

Deadlines – Release of RFI November 16, 2011

Webinar presentation by UC with Q&A (1 hour; will be recorded) November 18, 2011, 4:00-5:00 p.m. PST

RFI Respondent’s Questions Deadline November 28, 2011, 12:00 noon PST

UC Response to Questions December 5, 2011, 4:00 p.m. PST

RFI Respondent’s Intent to Respond Due December 9, 2011, 12:00 noon PST

Responses Due December 15, 2011, 4:00 p.m. PST

Notify finalists for Finalist Presentations December 19, 2011, 4:00 p.m. PST

Finalist Presentations January 10, 2012

Potential Contract Award January 20, 2012

Things to Remember• Brian Agius is key

contact on this RFI • No one from one of

our UC locations is to be contacted regarding this RFI

• Refrain from hand delivering the responses!

• RFI’s sent in after the deadline will not be accepted or reviewed

• Remember to review ALL deadlines outlined in the RFI

• Remember to check back at the bid posting website for updates http://www.ucop.edu/purchserv/welcome.html

Questions…• Please use the chat tool in this system to send

your questions into the webinar host…This provides us with a print out of all the questions so we may post the answers after this call.

• We will read the question and answer the questions as they are submitted. We do however reserve the right to answer questions at a later time in writing posted to our website for this RFI.

This Concludes the Webinar