Florida Self-Insurers Guaranty Association Board Approves Reports, Contracts and Revised Definition of 'New Members'
Date Published: 03-30-2012
During a short meeting today, March 30, 2012, the Florida Self-Insurers Guaranty Association ("FSIGA") Board of Directors ("Board") approved the organization's 2011 Actuarial and Financial Statements, agreed to renew two contracts and voted to amend language defining "New Members" in its Plan of Operation.
Highlights of the meeting follow:
- The FSIGA liability net of excess insurance recovery as of December 31, 2011 is approximately $10.6 million-a decrease of roughly $500,000 from the previous year's amount, it was noted during a summary of the actuarial report.
- The overall message was that FSIGA is in "solid financial condition," with few changes in its actuarial and audit reports from the previous year.
- One of the biggest changes was a large security deposit of about $4 million that was refunded during 2011. Investments also decreased by about $4 million, it was noted, with everything else pretty much the same as the year before.
- The reports showed unrestricted net assets of $42 million, of which $33 million was designated to be available for application to insolvency losses.
After hearing the brief reports, Board members approved a motion to accept and approve the audit and financial statements, which will be forwarded to the Florida Department of Financial Services ("DFS").
Board members then voted to renew FSIGA's contract with Genex, a company that handles cost-containment and fully integrated care management services in the occupational, non-occupational, auto and group healthcare markets.
The approved contract contained no major changes but included an overall savings of approximately $10,000. It was noted that the contract includes $14,538 in network reductions. With $4,311 in fees charged, the net savings equals about $10,000.
The Board also voted to renew its contract with Cypress Care, FSIGA's pharmacy benefit manager, which included a "hard" savings of $11,953 based on a new discounted fee schedule.
Lastly, the Board agreed to amend language in the Plan of Operation relating to the definition of "New Members."
The language revision was spurred from a query by Walt Disney World Parks and Resorts ("Disney"), which began self-insuring last July. It was unclear if Disney should be classified as a "Returning Member" or a "New Member." The Board was presented with a legal analysis of the matter, and voted to refer the matter to the DFS for resolution.
The approved amendment also clarifies the definition of Returning Member and states that a former corporate self-insurer that merges into another corporation with the assets and liabilities of the former self-insurer can petition FSIGA for consideration as a Returning Member.
Returning Members are allowed to assume the assessment rate schedule at the same point where their previous membership was terminated. In other words, Returning Members do not have to re-start the assessment schedule.
It was noted that approximately six other companies that have left and come back would also qualify under the amended definition as a Returning Member, resulting in a rebate of approximately $275,000. The amended definition would be retroactive to December 2000.
Under the amended definition, Disney qualifies as a Returning Member and would receive a substantial reduction in its assessment. Currently, under the classification of New Member, Disney has 8.5 years in assessments at 1 percent, 5 years at 1/2 percent, and one year at 1/10 percent.
With the reclassification, Disney will pick up where it left off with only four years at 1/2 percent and one year at 1/10 percent, it was noted. The amended definition would be retroactive to December 2000.
"I am hoping this move is going to make other people take a second look at coming back to self-insurance," one Board member said.
With no further business before the Board, the meeting was adjourned.
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