PCoRP Pennsylvania Counties Risk Pool

30th Anniversary1987-2017

The Power of Partnership

30th Anniversary Membership Meeting

November 20, 2017The Hotel Hershey

6 p.m.

Dinner MenuBoston Bibb Salad

Frisee, Sliced Egg, Roaster Cherry Tomatoes, Manchego Cheese, White Balsamic Vinaigrette

Grilled Filet of Beef, Bordelaise Sauce and Crab Cake

Chocolate Trilogy DessertMilk Chocolate Crème Brulée, Chocolate Caramel Torte

and White Chocolate Cheesecake

Reception and Dinner Music ByRoy Lefever Trio

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Membership Meeting Agenda

1. Welcome

2. Introductions PCoRP Board of Directors Retired PCoRP Board Members PCoRPStaff RetiredPCoRPStaff

3. Membership Meeting President’s Report Roll Call Financial and Operations Update Recognition of PCoRP Members Recognition of PCoRP Partners

4. Other Business

5. Adjournment

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2017-18 PCoRP Board of Directors Frank Staudenmeier, Chair, Schuylkill CountyErick Coolidge, Vice Chair, Tioga CountyWilliam Gaylord, Secretary/Treasurer, Wyoming CountyPaul Conklin, Clinton CountyS. Paul Crooks, Bedford CountyKrista Davis, Centre County Larry Maggi, Washington CountyMark Partner, Juniata CountyDee Robinson, Union CountyMark Sather, Huntingdon CountyNorman Wimer. Forest CountyDavid Witchey, Columbia CountyJamie Wolgemuth, Lebanon County

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Retired Board Members in Attendance

Ron Shearer, Juniata County, Chairman (1987-1991)Bill Finkenbiner, MifflinCounty,(1987-1991)Larry Sather, Huntingdon County, Chairman 1992, (1987-1992)Gary Marcho, Susquehanna County, (1987-1988, 1991)Bill McNett, Bradford County, (1992-1995)Gail Kipp, Columbia County, (1993-2014)Rob Cyphert, Beaver County, (1996-2011)Donna Spicher, Centre County, (1996-1997)Forrest Shadle, Schuylkill County, (1998-2003)Larry Horn, Venango County, (2003-2007)Harold Hurst, Montour County, (2002-2007)June Sorg, Elk County, (2003-2014)Ken Ammann, Mercer County, (2002-2004, 2008-2011)Andy Follmer, Lycoming County, (2002-2006)John Sullivan, Bradford County, (2008-2010)Deborah McHugh, Centre County, (2012-2014)

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Thank you for your service on the PCoRP Board!

Reinsurance Broker: Willis Re PoolingJohn Hayden and Collen Shaner

Property Reinsurer: TravelersWayne Robertson and Rosemary Wuestefeld

Liability Reinsurer: County Reinsurance, Limited (CRL)Phil Bell

Actuaries: Liscord, Ward & RoyJohn Hanna

Auditors: Johnson LambertAdam Dubuque

Property Appraisals: Industrial AppraisalRay Ruggiero and Teri Reza

Defense Counsel

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Stephen BankoMike DonohueBrian GabrielJoseph GreenRobert Grimm

Thomas HeimbachMarie Milie Jones

Frank LaveryMary Lou Maierhofer

Robin ReadChris Sinnott

Chuck Wasilefski

Andrew AdairGuy DonatelliTrent Echard

Gerard GeigerJohn Greiner

Jay HabasHugh J. Hutchinson

Paul KreppsDavid J. MacMain

Strassburger McKennaThomas PellisDave SchwalmDavid Smith

Frank Tamulonis

;; and.

2017 PCoRP Service Firms

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Local Insurance Producers Scott AdamsonCliffBeaver

Mark CampbellMatt ConferCarl DeYulis

Peter GebhardRobert Hall

Linda Crook-HurtCarl KarschnerPaul Kreischer

Kim LatschDavid March

Thomas McKeeStan Miles

Mark MoschellaEdward Pawlak

Tim PecoraTaylor ReadeBeth Riccardo

Michael SchmidMark Sitler

Robert SnyderMarc ThayerRobin Vorous

Charlene Wildoner

Patricia AbbottJeffAzzatoScott Burns

Chris CatersonRodney Cook

William DimondPaul Haines

Greg HaraydaKathy Johnson

David KerrJames Knepper

Michael MalinowskiBecky MatsonKenneth Miller

Ann PattonDavid PearsonErica Puruczky

Debbie ReichardWilliam Rittenhouse

Mark Simon David Smail

Steve SumnerRyan Tyson

Timothy WeaverlingTony Willard

John Sallade, Managing Director, Insurance ProgramsRyan Cale, Claims Representative 2Karen Cohen, Insurance and Reinsurance ManagerDennis Cutler, CSHM, Senior Risk Control SpecialistMarsha Elmer, Property and Casualty UnderwriterPatty Ensminger, SCLA, Senior Claims SupervisorTona Faust, Insurance Programs Services CoordinatorGinger Galliher, Financial Team LeaderJewell Hartz, Underwriting Administrative AssistantSara Hazelton, Finance/Accounting AssociateCathy Hoffman, Claims Administrative AssistantDanielle Horanic, Claims Representative 1Jodi Kroski, Insurance Pool Operations Administrative AssistantKelly Kyzer, Risk Control SpecialistDanielle McKenna, Insurance Member Services Admin. AssistantMaureen McMahon, CSP, ARM-P, Senior Risk Control SpecialistGina Mecca, Claims Representative 2Ethan Nicholson, Claims Representative 2Cassandra Piaskowski, Claims Representative 3Linda Rosito, Risk Management Training DirectorAndrew Smith, Risk Control SpecialistPamela Szajnuk, ChiefFinancialOfficerCassie Troup, Claims ManagerJennifer Ulsh, Claims Representative 2Keith Wentz, Risk Management and Underwriting ManagerBarb Zemlock, Esquire, Insurance Boards Legal Counsel

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PCoRP Staff

Dick Dibeler, former CCAP Finance DirectorGary Nicholson, former Risk Control Manager

John Yaninek, former PCoRP Corporate Counsel

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Retired PCoRP Staff in Attendance

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PCoRP FinancesPCoRP’sannualfinancialauditwascompletedbyJohnsonLambert and was reviewed and approved by the PCoRP Board of Directors at their September 8, 2017 meeting.

A copy of the full audit will be sent to the entire membership in early December, as part of the email with this year’s dividend announcement. Here are some highlights from the audit.

PCoRP’s assets at the end of the 2016-17 year were $49,753,645 compared to $46,820,877 at the end of 2015-16.

Operating Income for 2016-17 was $9,945,864 and Operating Expenses were $12,191,486 leaving a net loss of $2,245,622. Investment Income was $4,731,703, leaving income of $2,486,081 before the $2,000,000 dividend and a total increase in net position for the year of $486,081. Total Member Equity was $29,317,896. Overall this was a good fiscalyearforPCoRP,withasmallnetincreaseevenafterissuing a $2 million dividend.

PCoRP’s record of returning unneeded surplus to the membership is unparalleled. This is money which would have beentheprofitfortheshareholdersofacommercialinsurance carrier, and instead was returned to the PCoRP members – PCoRP’s owners!

Dividends Loss Prevention Grants (Distributed in December)16/17 $2 million 16/17 $810,00015/16 $2 million 15/16 $795,00014/15 $3 million 14/15 $500,00013/14 $3 million 13/14 $500,00012/13 $2 million 12/13 $500,00011/12 $1.5 million 11/12 $500,00010/11 $1.5 million

Total $15 million Total $3 million

Prison Documentation Project (2016 – 2019): $1.8 million

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Total Surplus Returned: $19.8 million!

PCoRP Returns Funds to the Members

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PCoRP’s Partners

County Reinsurance Limited (CRL)Phil Bell, Executive Director

Travelers Property CasualtyWayne Robertson, Assistant DirectorRosemaryWuestefel,AccountExecutiveOfficer

JonesPassodelisMarie Milie Jones, Founding Partner

Newman WilliamsGerard Geiger, Attorney

Beaver Insurance GroupCliffBeaver, Producer

Little and Nelson Insurance AgencyChris Caterson, Producer

Willis Re PoolingJohn Hayden, Executive Vice PresidentColleen Shaner, Senior Account Executive

CCAPHarlan Shober, PresidentDoug Hill, Executive Director

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PCoRP Members 2017-2018

2017Blair CountyWashington County

2013Berks CountyChester County

2009Butler CountyWayne County

2007Erie CountySnyder County

2004Cambria CountyNorthampton CountyCentral Counties Youth Center

2001Fulton CountyPike CountyMercer County

1999Adams County

PCoRP Members By Entry Year

2014Crawford CountyWestmoreland County

2010Lawrence County

2008Franklin County

2005Lycoming - Clinton Joinder

2003Huntingdon-Bedford-Fulton AAA Pike County Economic Development Authority

2000 Fayette County

1998Bedford CountyLebanon County

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1997Lycoming County

1994Tioga CountyPotter County

1992Indiana CountyClinton CountyColumbia CountyMontour County

1990Warren County

1988 Juniata County

1996McKean County

1993Perry CountyJeffersonCountyBeaver CountyCentre County

1991Bradford County

1989Huntingdown County

1987-2008, 2010Cameron County

Carbon CountyCameron CountyClarion CountyClearfieldCountyElk CountyForest CountyMifflinCounty

Monroe CountySchuylkill CountySomerset CountySullivan County Susquehanna CountyUnion CountyWyoming County

14 Original PCoRP Members

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Current PCoRP Staff

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PCoRP History

PCoRP began as a plea from Pennsylvania’s counties in 1985. They believed CCAP (then called PSACC) could help them. In the midst of a terrible contraction in the commercial insurance market, they came to CCAP for help.

Counties (and other public entities) across the country faced an insurance crisis – many could not get liability coverage, and if they could buy it, the cost was prohibitive. Several years later many state Attorneys General sued the large insurance companies, alleging collusion to limit coverage and drive up prices. The suit was settled out of court, and the companies contributed more thantwenty-fivemilliondollarstoafundtostudypublicriskandclaims management. By then the crisis had ebbed.

The crisis was so bad that at least one Pennsylvania county went “bare” for general liability and law enforcement liability coverage and put aside money to pay potential claims. Another Pennsylvaniacountywasoffereda$500,000generalliabilitypolicyfor a premium of $500,000!

Therearemorethanfourhundredandfiftypublicentityinsurancepools in the country, and many were formed in the years 1985 – 1988 when the public entity insurance crisis was at its worst. The crisis for public entities ended when together they devised other ways to obtain the protection they needed.

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In 1985 CCAP put together a Study Group to determine what to do about the public entity insurance crisis. At the time CCAP was sponsoring the PENCO commercial insurance program, a package program which was also endorsed by the National Association of Counties(NACo).Thisprogramwasalsosufferingfromtheinsurance crisis and became very expensive and particular about what counties it would cover.

The Study Group decided to issue a Request for Proposals (RFP) to the brokerage community seeking solutions to the problem. The RFP provided data about counties in Pennsylvania, and stated what CCAP wanted to achieve: long term availability of insurance coverage, broad coverage tailored for counties, stable pricing year to year, and the ability to retain some funds in the program if loss experience was good.

More than ten brokers responded (there were a lot more national brokersinthosedays)andthecommitteechosefiveforinterviews,PENCO’s All Lines Aggregate model was selected. The basic structure chosen by the committee in 1986 became the Pennsylvania Counties Risk Pool (PCoRP) and has changed little in thirty years! Coverages to be provided included auto, property, crime,generalliability,publicofficialsliability,lawenforcementliability, and boiler and machinery.

PCoRP began operations on April 1, 1987. The truest measure of PCoRP’s success surely is the continued support and activeparticipationofsomanydifferentcountiesandcountyrelatedentities. PCoRP’s initial twelve members were joined by two more duringthefirstyearofoperations,andmembershipsteadilygrewtothecurrenttotalof56members-51countiesandfivecountyrelated entities.

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Over its thirty years of operation, only four members have opted to end their PCoRP membership. Of these, one county related entity left because it ceased operations, and two of the counties that left returned to membership in later years. And the fourth is considering a proposal for 2018!

PCoRP is owned by its members, and governed by its members. Some of the members of the original Study Group that created PCoRP went on to serve as initial board members of PCoRP. Including the Study Group, more than 70 people have served on the governing body of PCoRP.

After being in operation for some time, it became obvious to PCoRP’s BoardofDirectorsandstaffthatsomePCoRPmembershadinstitutedrisk management programs which were making an impact, preventing claims and saving money. Beginning in 1996, PCoRP developed an Awards Program to recognize these members, elected and appointed officials,andcountyemployeesfortheirsafetyefforts.

SincethestartPCoRPhasworkedtodefineitselfthroughmemberservice, basing its services on the needs of the members. A primary method of collecting feedback is an annual survey of the members and local insurance producers. The results of this survey are shared directly with the PCoRP Board of Directors and are an essential part of PCoRP’s annual goal planning process. For example, the change in PCoRP’s common renewal date from April 1 to June 1 came about at the request of members wishing to make payments to PCoRP at a timeoftheyearwhencashflowwasbetter.

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PCoRP remains actively connected to the local insurance producers who provide service to each member. An annual meeting is held with continuing education and program updates for the producers, and has been an essential way PCoRP has received input and suggestions about the program.

PCoRP remains a very active program, sometimes changing reinsurers, steadily assuming more and more risk on its own prior toreinsurance,andofferingmoreservicestoitsmembers.Servicesadded over the years include property appraisals, reviews of prison and personnel policies, elevator and boiler inspections, free risk control training, risk control visits, a fraud hotline, online claims reporting, and more.

One major change was the writing, from scratch, of PCoRP’s own Coverage Document, done over a two year period and implemented in 2001. Having its own Coverage Document allows PCoRP to obtain reinsurance from insurance companies on PCoRP’s coverage terms, and has provided a much clearer explanation to the members of what is covered and what is excluded. The document is annually reviewed and amended to keep it up to date.

Change has allowed PCoRP to control more of its own destiny, including less reliance on commercial insurance companies and avoidance of the “insurance cycle” which is a major enemy to stable pricing. One way PCoRP has achieved this is through membership in County Reinsurance, Limited (CRL), a “pool for pools”, created by county risk pools throughout the U.S. CRL is a Vermont based captive which provides reinsurance coverage for the “active layer” of PCoRP’s liability lines. Just like PCoRP’s members own PCoRP, PCoRP is one of the members and owns a part of CRL.

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While we do not seek growth or change for its own sake, we continuetoremainvigilantinourattemptstoprovideefficientand innovative services to PCoRP’s members. Recent examples are the PCoRP Prison Electronic Documentation Project, to which PCoRP has pledged $1.8 million in funding, and our very popular Loss Prevention Grants, which provide $20,000 per member per year for risk and loss prevention projects.

Have you applied for your $20,000 PCoRP Loss Prevention Grant yet? For more information, please contact Keith Wentz at kwentz@pacounties.org or at (800) 895-9039 x 3324.

Property, Liability, Automobile and other related insurance coverages

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PCoRP Members:

I’mamemberofCCAPstaffbecauseofPCoRP. Doug Hill and I met while we worked for the Pennsylvania State Association of Boroughs, and after we both moved on from there, he invited me to consult with CCAP when the insurance crisis hit. That work with the Insurance

Study Group led to PCoRP’s creation, and then Doug asked me to jointheCCAPstafftomanagePCoRPandtheCCAPUCTrust.

WhenIstartedinJanuary1988,CCAPhadabout8staff,andoverthe next 30 years we grew as Pennsylvania’s counties’ responsibilitiesgrew.Wenowhave30insurancestaffandthatdoesnotincludethefinanceandotherstaffwhoassistuswithinsurance issues.

It is easy to identify what I have enjoyed the most – the members, thefunoffindingsolutionstoproblems,andthegreatpeopleIhave been privileged to work with at CCAP. Who would have ever thought we would see 51 counties agree on the same thing – purchasing their coverages and services from PCoRP! The membership has not only been supportive, they challenge us – seeking help, new programs, new coverage and better services. They and their local insurance producers keep us on our toes!

The CCAP Board of Directors and CCAP management has always supported PCoRP and the other insurance programs, providing us with the tools essential to meet with needs of the PCoRP members.

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ThestaffIgettoworkwitharegreat!Weareallindifferentphasesof learning, and I know together we can solve any matter in a professional way. Even when we have to tell a member some tough news, they know we will provide them with honest information.

PCoRP has been blessed with great board members, people who believe in the program and are willing to learn about risk management, and who can let us know what will work in the county setting, and just as importantly, what won’t.

I’m looking forward to working with PCoRP and its members for some more years, and I know it will always be interesting, because with counties and risk management, most days you just can’t make thisstuffup!

Thanks for your support and friendship,

John

John R. Sallade, CRMPCoRP Managing Director

Thank you for attending the PCoRP 30th Anniversary!