ENERGY INSURANCE MUTUIAL
description
Transcript of ENERGY INSURANCE MUTUIAL
ENERGY INSURANCE
MUTUIAL
ENERGY INSURANCE
MUTUIAL
22nd ANNUALRISK MANAGERS
INFORMATION MEETING
22nd ANNUALRISK MANAGERS
INFORMATION MEETING
David L. Hadler
David L. Hadler
President and Chief Executive OfficerPresident and Chief Executive Officer
2007
THE YEAR IN REVIEW
CLAIMS NOTICE CATEGORIES
CATEGORY ONE Highly improbable that it will impact EIM; requires only
periodic review to insure that it is not adversely developing.
CATEGORY TWO Requires continuous monitoring and specific actions.
CATEGORY THREE Meets the accepted requirements for setting specific loss
reserves
OPEN CLAIMS - 2007
CATEGORY 1 CATEGORY 2 CATEGORY 3
GENERAL LIABILITY
500 23 6
DIRECTORS & OFFICERS LIABILITY
48 6 5
FIDUCIARY LIABILITY
13 2 2
PROPERTY 33 10 115
CATEGORY 2 AND 3GENERAL LIABILITY LOSSES
FIRE 12
GAS EXPLOSION 11 FLOODING 2 POLLUTION 2 LAND CLAIM 1 STEAM PIPE RUPTURE 1
CASE RESERVES ESTABLISHED
-50,000,000
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
2002 2003 2004 2005 2006 2007
GL D&O Property R/I
LOSSES PAID
-50,000,000
0
50,000,000
100,000,000
150,000,000
200,000,000
2002 2003 2004 2005 2006 2007
GL D&O Property R/I
2007 – CLAIM PAYMENTS,NEW RESERVES ESTABLISHED
CLAIMS
PAID
NEW CASE RESERVES
GENERAL LIABILITY
$ 45,463,208 $166,351,723
D&O/FIDUCIARY $ 89,433,740 $ 70,867,734
PROPERTY $ 13,824,441 $ 22,304,193
REINSURANCE $ 10,951,231 $ 1,905,017
$159,672,620 $261,428,667
TOTAL CLAIMS PAID1986 -2007
CLAIMS PAID
GENERAL LIABILITY $214,343,260
D&O/FIDUCIARY $550,301,105
PROPERTY $ 51,476,384
REINSURANCE $ 44,114,707
$860,235,456
SURPLUS
300,000,000
350,000,000
400,000,000
450,000,000
500,000,000
550,000,000
600,000,000
650,000,000
700,000,000
2002 2003 2004 2005 2006 2007
2007 – DESPITE SEEING:
• DISTRIBUTION OF $ 12,500,000
• PAID LOSSES OF $159,672,620
• CASE RESERVES OF $261,428,667
• SURPLUS GREW BY $ 31,070,000
2008 A. M. BEST RATINGENERGY INSURANCE MUTUAL LIMITED
BEST’S RATING: A (EXCELLENT) OUTLOOK: STABLE “The rating reflects the Company’s excellent
capitalization, historically strong operating returns, and conservative leverage position.”
DISTRIBUTIONS
1988 – 1990 $ 52,133,827
1996 – 2001 $ 95,000,000
2005 – 2007 $ 32,500,000
TOTAL $179,633,827
REINSURANCE
2008
REINSURERS IMPACTED
• PURCHASED REINSURANCE SINCE DECEMBER 1, 1986
• FIRST CLAIM ON REINSURERS 1996
• NEXT CLAIMS ON REINSURERS 2000, 2001, 2002, 2003, 2004, 2005 AND 2007
REINSURANCE
• Our argument that we are a market of severity not frequency is obviously now open to question.
• We seem to have entered a phase where we are finding ourselves involved with frequent severe losses.
REINSURANCE RELATIONSHIPSON CORE BUSINESS – GL AND D&O• Various Lloyd’s Syndicates have reinsured
EIM since December 1, 1986.
• NEIL first reinsured EIM on January 1, 1994.
• Basically the same group of reinsurers since January 1, 2004.
• Personal relationships are extremely important.
2008 REINSURANCEGENERAL LIABILITY
RETENTIONS
• $5,000,000 EACH AND EVERY LOSS
• $50,000,000 EACH LOSS AND
• $75,000,000 IN THE AGGREGATE
2008 REINSURANCEGENERAL LIABILITY
RECOVERABLES
• FIRST $100,000,000 LOSS $45,000,000 RECOVERABLE
• SECOND $100,000,000 LOSS $70,000,000 RECOVERABLE
• THIRD $100,000,000 LOSS $95,000,000 RECOVERABLE
MAXIMUM RECOVERABLE $250,000,000
2008 REINSURANCED&O LIABILITY
• MAXIMUM CAPACITY $50,000,000
• NEIL REINSURES EIM FOR 80% OF $20,000,000 EXCESS OF $30,000,000
• THEREFORE EIM’S MAXIMUM NET LINE IS $34,000,000
2008 REINSURANCED&O LIABILITY
RETENTIONS
• $5,000,000 EACH AND EVERY LOSS
• $29,000.000 EACH LOSS AND
• $58,000,000 IN THE AGGREGATE
2008 REINSURANCED&O LIABILITY
RECOVERABLES
• FIRST $50,000,000 LOSS $16,000,000 RECOVERABLE
• SECOND $50,000,000 LOSS $16,000,000 RECOVERABLE
• THIRD $50,000,000 LOSS $45,000,000 RECOVERABLE
• FOURTH $50,000,000 LOSS $45,000,000 RECOVERABLE
MAXIMUM AMOUNT RECOVERABLE $102,000,000 FROM THE NON NEIL REINSURANCE
2008 CASUALTY REINSURERS
• ASPEN INSURANCE UK LIMITED• ENDURANCE SPECIALTY• LIBERTY MUTUAL• LLOYDS• NUCLEAR ELECTRIC INSURANCE LIMITED• ODYSSEY RE• PLATINUM RE• TRANSATLANTIC RE
2008 REINSURANCEPROPERTY
• UP TO FEBRUARY 1, 2007 50/50 QUOTA SHARE ARRANGEMENT WITH ENDURANCE, BERMUDA.
• FROM FEBRUARY 1, 2007 EXCESS OF LOSS ARRANGEMENT WITH LLOYD’S, ODYSSEY RE HANNOVER RE AND NEIL.
• FROM FEBRUARY 1, 2008 EXCESS OF LOSS PROGRAM WITH NEIL.
THE ENERGY SCHOOL
Samuel M. Garvin, Jr.Samuel M. Garvin, Jr.
Vice President and Chief Financial OfficerVice President and Chief Financial Officer
2007FINANCIAL
REVIEW
12/31/07 12/31/06 CHANGEASSETS
Invested assets $1,245.5 $1,250.4$
(4.9) Reinsurance recoverable 404.1 292.4 111.7 Other 67.4 59.0 8.4TOTAL $1,717.0 $1,601.8 $ 115.2
LIABILITIES AND SURPLUS Loss reserves $844.4 $750.1 $ 94.3
Unearned premiums 102.4 110.4 (8.0) Policyholder distribution payable 12.5 10.0 2.5
Payable for investments 3.2 19.5 (16.3) Deferred taxes 72.5 59.8 12.7
Other 14.9 16.0 (1.1) Policyholders’ surplus 667.1 636.0 31.1TOTAL $1,717.0 $1,601.8 $ 115.2
(In Millions)
SIMPLIFIED BALANCE SHEET
FIXED INCOME MANAGERS Pyramis Global Advisors Morgan Stanley
EQUITY MANAGERS SSgA State Street Global Advisors
INVESTMENT ADVISORS Frank Russell Company
INVESTMENT MANAGEMENT
12/31/07 12/31/06 CHANGEASSETS
Invested assets $1,245.5 $1,250.4$
(4.9) Reinsurance recoverable 404.1 292.4 111.7 Other 67.4 59.0 8.4TOTAL $1,717.0 $1,601.8 $ 115.2
LIABILITIES AND SURPLUS Loss reserves $844.4 $750.1 $ 94.3
Unearned premiums 102.4 110.4 (8.0) Policyholder distribution payable 12.5 10.0 2.5
Payable for investments 3.2 19.5 (16.3) Deferred taxes 72.5 59.8 12.7
Other 14.9 16.0 (1.1) Policyholders’ surplus 667.1 636.0 31.1TOTAL $1,717.0 $1,601.8 $ 115.2
(In Millions)
SIMPLIFIED BALANCE SHEET
12/31/07 12/31/06 CHANGE
Invested assets $1,245.5 $1,250.4$
(4.9)
Payable for investments 3.2 19.5
(16.3)
TOTAL $1,242.3 $1,230.9$
11.4
12/31/07 12/31/06
PYRAMIS $ 289.3 24.1% $ 277.1 23.3%
MORGAN STANLEY $ 287.3 24.0% $ 279.6 23.5%
SSgA – US $ 427.5 35.7% $ 426.8 35.9%
SSgA – NON US $ 194.7 16.2% $ 204.9 17.3%
TOTAL WITH MANAGERS $1,198.8 100.0% $1,188.4 100.0%
CASH $ 43.5 $ 42.5
TOTAL $1,242.3 $1,230.9
(In Millions)
INVESTMENT MANAGERS ALLOCATION
ASSET ALLOCATION - DECEMBER 31, 2007
ASSET CLASS TARGET DRIFT RANGE
U. S. EQUITY 35% 30% - 45%
NON-U. S. EQUITY 15% 10% - 20%
FIXED INCOME 50% 40% - 55%
12/31/07 12/31/06 CHANGEASSETS
Invested assets $1,245.5 $1,250.4$
(4.9) Reinsurance recoverable 404.1 292.4 111.7 Other 67.4 59.0 8.4TOTAL $1,717.0 $1,601.8 $ 115.2
LIABILITIES AND SURPLUS Loss reserves $844.4 $750.1 $ 94.3
Unearned premiums 102.4 110.4 (8.0) Policyholder distribution payable 12.5 10.0 2.5
Payable for investments 3.2 19.5 (16.3) Deferred taxes 72.5 59.8 12.7
Other 14.9 16.0 (1.1) Policyholders’ surplus 667.1 636.0 31.1TOTAL $1,717.0 $1,601.8 $ 115.2
(In Millions)
SIMPLIFIED BALANCE SHEET
12/31/07 12/31/06 CHANGE
Loss reserves $844.4 $750.1$
94.3
Reinsurance recoverable 404.1 292.4
111.7
TOTAL $ 440.3 $ 457.7$
(17.4)
12/31/07 12/31/06 Change
LOSS RESERVES $147.3 $195.1 $(47.8)IBNR $290.0 $260.8 29.2LAE RESERVES $ 3.0 $ 1.8 $ 1.2
TOTAL $440.3 $457.7$
(17.4)
NET CLAIM RESERVES
12/31/07 12/31/06 CHANGEASSETS
Invested assets $1,245.5 $1,250.4$
(4.9) Reinsurance recoverable 404.1 292.4 111.7 Other 67.4 59.0 8.4TOTAL $1,717.0 $1,601.8 $ 115.2
LIABILITIES AND SURPLUS Loss reserves $844.4 $750.1 $ 94.3
Unearned premiums 102.4 110.4 (8.0) Policyholder distribution payable 12.5 10.0 2.5
Payable for investments 3.2 19.5 (16.3) Deferred taxes 72.5 59.8 12.7
Other 14.9 16.0 (1.1) Policyholders’ surplus 667.1 636.0 31.1TOTAL $1,717.0 $1,601.8 $ 115.2
(In Millions)
SIMPLIFIED BALANCE SHEET
12/31/07 12/31/06 CHANGE
Unearned premiums $ 102.4 $ 110.4$
(8.0)
UNEARNED PREMIUM RESERVES
12/31/07 12/31/06 ChangeGENERAL LIABILITY $ 49.7 $ 49.4 $ 0.3
D&O / FIDUCIARY $ 36.1 $ 41.7$
(5.6)
PROPERTY $ 16.6 $ 19.3$
(2.7)
TOTAL $102.4 $110.4$
(8.0)
STATEMENT OF OPERATIONS
Revenues (In Millions) 2007 2006 ChangePremiums
Gross premiums written$194.1 $202.0
$ (7.9)
Reinsurance premium assumed5.4 5.6 (0.2)
Decrease in unearned premiums 8.1 4.8 3.3Reinsurance premiums ceded (92.1) (92.6) 0.5Net premiums earned
$115.5 $119.8$
(4.3)Other underwriting income
2.7 3.7 (1.0)Investment income - net 44.4 38.2 6.2Net (loss)/gain on disposal of investments (2.0) 1.5
(3.5)
TOTAL REVENUE $160.6 $163.2
$ (2.6)
STATEMENT OF OPERATIONS
Revenues (In Millions) 2007 2006 ChangePremiums
Gross premiums written$194.1 $202.0
$ (7.9)
Reinsurance premium assumed5.4 5.6 (0.2)
Decrease in unearned premiums 8.1 4.8 3.3Reinsurance premiums ceded (92.1) (92.6) 0.5Net premiums earned
$115.5 $119.8$
(4.3)Other underwriting income
2.7 3.7 (1.0)Investment income - net 44.4 38.2 6.2Net (loss)/gain on disposal of investments (2.0) 1.5
(3.5)
TOTAL REVENUE $160.6 $163.2
$ (2.6)
2007 2006 CHANGE
Net premiums earned $ 115.5 $ 119.8$
(4.3)
NET PREMIUMS EARNED
12/31/07 12/31/06 Change
GENERAL LIABILITY $ 60.1 $ 61.7 $ (1.6)
D&O/FIDUCIARY $ 44.7 $ 47.3 $ (2.6)
PROPERTY $ 5.3 $ 5.2 $ 0.1
ASSUMED $ 5.4 $ 5.6 $ (0.2)
TOTAL $115.5 $119.8 $ (4.3)
(In Millions)
STATEMENT OF OPERATIONS
Revenues (In Millions) 2007 2006 ChangePremiums
Gross premiums written$194.1 $202.0
$ (7.9)
Reinsurance premium assumed5.4 5.6 (0.2)
Decrease in unearned premiums 8.1 4.8 3.3Reinsurance premiums ceded (92.1) (92.6) 0.5Net premiums earned
$115.5 $119.8$
(4.3)Other underwriting income
2.7 3.7 (1.0)Investment income - net 44.4 38.2 6.2Net (loss)/gain on disposal of investments (2.0) 1.5
(3.5)
TOTAL REVENUE $160.6 $163.2
$ (2.6)
2007 2006 CHANGE
Investment income – net
Net (loss)/gain on disposal of investment
TOTAL
$ 44.4
(2.0)
$ 42.4
$ 38.2
1.5
$ 39.7
$ 6.2
(3.5)
$ 2.7
NET INVESTMENT INCOME
(In Millions)
12/31/07 12/31/06 ChangeINTEREST AND DIVIDENDS $44.4 $38.2 $ 6.2REALIZED (GAINS) LOSSES -EQUITIES -FIXED INCOME
0.7 (2.7)$42.4
1.6
(0.1)$39.7
(0.9)
(2.6)$ 2.7
INVESTMENT PERFORMANCE
EIM ANNUAL RETURN
2007 6.5% 2002(6.1)%
2006 12.6% 2001(1.1)%
2005 6.0% 2000 1.7%
2004 9.2% 1999 7.7%
2003 18.0% 1998 14.4%
TAX ADJUSTED PERFORMANCEVS. BENCHMARKS BY MANAGER
ONE YEAR RETURNS
PERFORMANCEBENCHMARK
COMBINED FUND 6.5 6.7
FIXED INCOME PYRAMIS 6.4 5.4 MORGAN STANLEY 3.3 7.0
EQUITY SSgA S&P 900 5.9 5.7 SSgA NON-US 12.1 11.2
LONG TERM INVESTMENT PERFORMANCEAS OF DECEMBER 31, 2007
7 Years 6.1%
5 Years 10.4%
3 Years 8.3%
Expenses (In Millions)
Losses and loss adjustment expenses
2007 2006 Change
Gross losses and LAE incurred $258.0 $195.3 $(62.7)
Assumed losses and LAE 0.0 (1.8) (1.8)
Reinsurance recoveries (133.9) (94.2) 39.7
Net losses and LAE incurred $124.1 $ 99.3 $(24.8)
Other underwriting expenses 1.9 2.6 0.7
Administrative expenses 9.9 8.6 (1.3)
Total expenses $135.9 $110.5 $(25.4)
Policyholders’ distribution 12.5 10.0 (2.5)
Income before income taxes $ 12.2 $ 42.7 $(30.5)
Income tax (0.9) 9.6 10.5
NET INCOME $ 13.1 $ 33.1 $(20.0)
STATEMENT OF OPERATIONS
2007 2006 CHANGE
Net losses and LAE incurred $ 124.1 $ 99.3$
(24.8)
NET LOSSES AND LAE
12/31/07 12/31/06 Change2007 $ 119.8 $ 0.0 $(119.8)2006 (3.4) 72.8 76.22005 0.6 37.8 37.22004 (5.8) (15.9) (10.1)2003 19.4 (6.7) (26.1)2002 3.3 23.1 19.8PRIOR (12.4) (9.8) 2.6TAIL 2.6 (2.0) (4.6)
$ 124.1 $ 99.3 $ (24.8)
(In Millions)
(In Millions)
Gross Net
Initial 12/31/07 Change Initial 12/31/07 Change
2007 $ 252.6 $ 252.6 $ 0.0 $ 119.7 $ 119.7 $ 0.0
2006 132.6 102.2 30.4 72.8 69.4 3.4
2005 155.5 288.2(132.7)
82.1 112.9 (30.8)
2004 125.8 59.4 66.4 79.5 36.5 43.0
2003 147.8 167.6(19.8)
59.6 96.2 (36.6)
2002 262.1 427.0(164.9)
103.1 273.7 (170.6)
2001 149.2 122.0 27.2 60.1 68.9 (8.8)
2000 120.7 91.0 29.7 73.9 73.0 0.9
All Coverages
INCURRED LOSSES BY ACCIDENT YEAR
Gross IBNR $471.1 Million
CHANGE IN POLICYHOLDERS’ SURPLUS
BEGINNING SURPLUS $636.0
Plus:Net income $13.1Unrealized gain of investments $18.0
Change $31.1
ENDING SURPLUS $667.1
(In Millions)
2007UNDERWRITING REVIEW
JILL DOMINGUEZVice President-Underwriting
NEW MEMBERSIN 2007
Cascade Natural Gas Corporation
Spectra Energy Corporation
RC Cape May Holdings, LLC
Bicent Power, LLC
MEMBER RETENTION RATE
“The EIM staff does a great job of providing focused customer service and treats their Members with the highest regard. EIM is an indispensable element to the industry’s financial security and strength. EIM is a pleasure to do business with.”
MEMBER RETENTION RATE
2007 98%
2006 97%
2005 96%
2004 99%
2003 96%
2007 MEMBERSHIP
One Acquisition by Non-EIM Member
Three Non-Renewals2 no longer needed limits1 lost because of price
Three Member/Member Mergers
ENDED 2007 WITH 172 MEMBERS
MEMBERSHIP MIX
“I think EIM has done a good job of providing a stable product for the utility industry”
MEMBERSHIP MIX
GROSS WRITTEN PREMIUM2006 VS. 2007
2006
$207,667,046
2007
$199,896,285
GENERAL LIABILITY
$91,982,504 Gross Written Premium
169 EGL Policyholders
$74.6M Average Limit
$39M Average Attachment Point
48.5% of excess GL Policies Written for Maximum $100M Limit
GENERAL LIABILITY ENHANCEMENTS
EPLI 48%
Worker’s Compensation 18%
Drop Down Joint Venture 43%
Drop Down Over Specific Aggregates
Professional Liability($65M Sublimit)
67%
7.2%
Breakdown of other key operations insured by Excess Liability Policies
Propane - 22 members
Dams – 16 members
E & P – 23 members
Mining – 9 members
Water Operations – 18 members
DIRECTORS AND OFFICERS LIABILITY
$57.4M Gross Premium Written
94 EDO Policyholders
$36.4M Average Limit
$44.1M Average Attachment Point
44% of D&O policies written for maximum $50M Limit
FIDUCIARY LIABILITY
$6.46M Gross Written Premium
$22.8M Average Limit
$38.3M Average Attachment Point
45 Policy Holders
PROPERTY
Premium
$7.5M EIM Only
$21.5M NEIL Only
Total policies written Primary layer – 50
Excess layer - 23
PROPERTY
Capacity =
$35,000,000
8% of members buy maximum limits
What is EIM thinking on Property
Long term view of market –
Strive to keep capacity over long term
BUILDERS RISK
Term = 18 Months up to a Maximum of 60 Months
TRIA AND TRIPRA
Program extended until 2014
Eliminates distinction between foreign and domestic acts of terrorism – both now considered “certified”
$100 billion cap – insurer aggregate liability
EIM will offer terrorism coverage in accordance with the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA)
EIM removed the cap on Non-certified
Climate Change/Carbon Sequestration
Currently working with a few members on Carbon Sequestration projects, solely in information gathering phase-
What liabilities are to be assumed by utility?
How will sites be managed over long periods of time?
Will state or federal government provide any relief?
Please keep us informed of your company’s needs and questions regarding climate change issues and carbon sequestration projects.
What should a mutual actually do?
Long term provider of stable capacity?or
Lowest cost provider, which could meanReduced capacity
Loss of policyholder’s distribution
More restrictive coverage
Give us your input on comment sheets or at Member’s Only Session
Customer Service – In Focus!
It would be difficult to improve on the overall operation of EIM. EIM is a very important player in my insurance program and the ease of doing business with EIM makes my job easier. I appreciate the Company and everyone I come in contact with.
2007 RISK MANAGER SURVEYRESULTS
EIM follows reasonable, prudent, and sound underwriting practices:
100%
Agree/Strongly Agree
EIM provides added value in form of broad coverage, price stability, consistent limits, and financial strength:
2007 RISK MANAGER SURVEYRESULTS
99.25%
Agree/Strongly Agree
Overall, EIM meets my expectations in level of service:
2007 RISK MANAGER SURVEYRESULTS
99%
Agree/Strongly Agree
Robert P. SchmidRobert P. SchmidVice President and Chief Operating OfficerVice President and Chief Operating Officer
ENERGYINSURANCE SERVICES
▪ EIS OVERVIEW
▪ OUR DOMICILE
▪ SERVICE IMPROVEMENTS
▪ COVERAGE
▪ REGULATORY & COMPLIANCE ACTIVITY
▪ THE FUTURE
2007 THE YEAR IN REVIEW
EIS BY THE NUMBERS
▪ $1.8 Billion in Assets
▪ $1.6 Billion in Gross Reserves
▪ $500 Million Net Reserves
▪ $450 Million Invested Assets
▪ $150 Million Cash / Equivalents
▪ $70 Million in MBP Equity
▪ $80 Million Written Premium
▪ $35 Million Ceded Premium
▪ $60 Million Paid Claims
SOUTH CAROLINA
▪ State Legislature Passes S589Allows Director to Approve Reinsurers
▪ New Director of Insurance AppointedScott H. Richardson CPCU
▪ Continued Focus on Service Providers IssuesManagers are the SCDOI’s First Responders
▪ Captive CPA Appointed State TreasurerConverse Chellis
SERVICE IMPROVEMENTS
▪ Information and ReportingExpanded Financial Information
Improved Accuracy and Timeliness
Provided Internet Banking
Developed Foundations of Secure Web Portal
▪ Insurance Support & Policy
Development Improved Information Stream between Major Carriers, Participants and their Advisors
COVERAGE
▪ All Risk Property▪ All Risk Power Producer
Operational ▪ All Risk Railroad Rolling Stock▪ Aggregate Excess of Loss
Reinsurance ▪ Automobile▪ Builder's Risk▪ Contractor Equipment Floater▪ Deductible Buy-Back▪ Environmental▪ Excess Liability▪ Excess Workers’
Compensation▪ First Excess Nuclear Property▪ First Excess Casualty
▪ Following Form EGL Indemnity
▪ Hull and Machinery
▪ Loss Portfolio Transfer of Workers’ Compensation Claims
▪ Marine Liability
▪ Professional Liability
▪ Public Liability Deductible Reimbursement
▪ Retiree Medical Group Stop Loss Policies
▪ Specific Risk Liability
▪ Transmission and Distribution
▪ TRIA
▪ Ultimate Net Loss
BUILDER’S RISK
▪ Program Flexibility
▪ Savings of 4% to 6% if Reinsured versus Commercial Options
▪ Project Orientations, Wrap Ups or OCIP Platforms
▪ Uninsurable or Prohibitively Expensive Perils can be Covered
WORKER’S COMPENSATION
▪ Platform for Fronted Program in Jurisdictions where Regulators Require Admitted Insurer
▪ Deductible Reimbursement Programs May Enhance the Treatment of Current SI Reserves
▪ Access to Reinsurers with Nuclear Capacity
▪ Daily Funding of TPA Claims Management
PARAMETRIC T&D
▪ Developed by a Consortium of Utilities with Hurricane Wind Exposure
▪ Creates a System Wide Detailed Inventory of Exposures
▪ Models Potential Future Events Based on Robust Historical Storm Data
▪ Estimates the Likelihood of a Future Event of a Given Intensity Occurring at any Location During the Policy Period
▪ Claim is Triggered not by Loss Amount, but by Physical Parameter of Covered Event.
TERRORISM
▪ Individual Cell MBP’s can access TRIA program
▪ Lower Earned Premiums mean lower Deductibles and Higher Recoupment
▪ MBP’s can cover Nuclear, Biological and Chemical Risks Excluded by Insurers and access TRIA for those Perils
▪ MBP’s can fund Retentions and Access Reinsurance for Assumed Risks
REGULATORY & COMPLIANCE
▪ First U.S. Audit Completed and Filed with the SCDOI
▪ 2007 Audit Began in September
▪ EIB Tax Years 2003 & 2004 are under Examination by the IRS
▪ IRS Issued Revenue ruling 2008-8
Provides guidance for Protected Cell Companies regarding Insurance Treatment for Federal Tax Purposes
2008
▪ Continue Service Improvements for Existing Members
▪ Responsive Consultations with Prospective Participants
▪ Support the Resolution of the Current IRS Examination
▪ Meet all Regulatory and Compliance Responsibilities in our Domicile
▪ Host an Effective and Informative Annual Meeting in Greenville October 13th – 16th