MINUTES OF THE ANNUAL MEETING OF THE BOARD OF DIRECTORS CAWCD INSURANCE COMPANY, INC.

Transcription

1 MINUTES OF THE ANNUA MEETING OF THE BOARD OF DIRECTORS OF CAWCD INSURANCE COMPANY, INC. At the Fairmont Kea ani, Maui, 4100 Wailea Alanui Drive Wailea, Maui, Hawai'i And at the Central Arizona Project Headquarters Building egal Conference Room North Seventh Street Phoenix, Arizona Directors Present: James M. Holway, Theodore C. Cooke, Douglas A. Dunlap, and Kimberly A. Grouse Others Present by Invitation: Deborah Jo Maust (Vice President, Chief Operating Officer, and General Manager); Cheryl Visconti (Central Arizona Project ("CAP")); Ronald Stearns and Jean Deitrich (both CliftonarsonAllen P); Sanford Saito (Marsh Management Services Inc.); and Arik M. ook, Esq. (Char Hamilton Yoshida & Shimomoto) CA TO ORDER Pursuant to written notice the same, the Annual Meeting the Board Directors CAWCD Insurance Company, Inc. (the "Corporation") was called to order by James M. Holway at approximately 11:09 a.m., Hawaiian Standard Time (2:09 p.m., Mountain Standard Time), immediately following the conclusion the Annual General Meeting the Membership the Corporation. Mr. Holway chaired the meeting. Some attendees participated via conference call, by which all attendees could clearly and simultaneously hear each other for the duration the conference call and the meeting. QUORUM PRESENT All the Corporation's directors (collectively, the "Board") were present BD Mtg - Minutes Ann Mtg-vf2.docx ID: (Version 3)

2 Page 2 8 CA AGENDA CAPTIVE BOARD MEETING Ronald Stearns CliftonlarsonAllen P, the Corporation's independent auditor, presented and discussed matters relating to the forthcoming audit the Corporation's financial statements for the year ending December 31, 2017, including the members the audit engagement team, and the anticipated timing and schedule the audit work. Mr. Stearns also discussed required auditor communications and, upon inquiry, was informed by the Board that there were no specific areas requiring more attention during the audit. Jean Dietrich explained new accounting pronouncements. Discussion ensued regarding the same wherein Mr. Dunlap noted that, although the same would not apply to the Corporation, they may apply to CAP. Mr. Stearns and Ms. Deitrich were excused from the meeting. APPROVA OF MINUTES OF APRI 19, 2017 SPECIA MEETING OF THE BOARD The next order business was to approve the prior meeting minutes, included in the meeting materials. The Minutes the Special Meeting the Board the Corporation held on April 19, 2017 were presented and considered for approval. Theodore C. Cooke abstained from voting, noting that he did not attend the April 19, 2017 Special Meeting. Mr. Holway moved, Ms. Grouse seconded, and the following action was carried (with Mr. Cooke's abstention as noted above): To approve the Minutes the April 19, 2017 Special Meeting the Board Directors, as written. REVIEW AND APPROVA OF INVESTMENTS AS OF SEPTEMBER 30, 2017 Deborah Jo Maust reported on the Corporation's investment holdings as September 30, 2017 wherein she noted items from a schedule cash and investments ("Schedule Cash and Investments") in the meeting materials. Mr. Cooke moved, Ms. Grouse seconded, and the following action was unanimously carried: To approve and ratify the Corporation's investments and investment transactions for the period ended September 30, 2017, as detailed and presented in the Schedule Cash and Investments attached to the Minutes this meeting; and to authorize an ficer the Corporation to sign the Schedule Cash and Investments as a permanent record the Corporation's investments for the noted period.

3 Page 3 8 RECOMMENDATION ON 2018 CAPTIVE INSURANCE POICY RENEWAS Ms. Maust reported on the renewal the policies issued by the Corporation for the January 1, 2018 to December 31, 2018 policy period and the below-noted premium for the same. She noted that there were no proposed changes to the Corporation's coverages. Coverage Workers' Compensation Property General iability Automobile iability Public Officials & Employment Practices iability Fiduciary Security Errors & Omissions iability Non-Owned Aircraft Health Insurance*** 2018 Total Premiums Premiums $375,000 $464,000 $499,400 $78,000 $155,500 $8,000 $17,000 $4,000 $8,484,950 $10,085,850 ***Estimated Health Benefits Insurance premiums are subject to changes based on 2018 actual enrollment review during the year; and adjustment for additional and/or return premiums, if any. Ms. Maust reported on the 2016 True Up Adjustment to the Health Benefits Program and the resulting return $139,421 health benefits premiums due to available information regarding the actual enrollments and retirees in Mr. Dunlap moved, Ms. Grouse seconded, and the following actions were unanimously carried: To recommend that the CAP board directors approve the renewal premiums for the policy period January 1, 2018 to December 31, 2018, and review the options as presented above.

4 Page 4 8 Discussion ensued regarding the recommended approval the 2016 True Up Adjustment to the Health Benefits Program wherein Sanford Saito explained that the foregoing was a change to the Corporation's business plan and recommended that the Board approve such change. Mr. Dunlap moved, Ms. Grouse seconded, and the following actions were unanimously carried: To approve the return health benefits premiums $139, to the District related to the actual enrollments and retirees in APPROVE AUTHORIZED SIGNERS OF FHB ACCOUNTS The Board reviewed an updated list authorized signers for the Corporation's accounts at First Hawaiian Bank ("FHB") contained in the meeting materials (the "Updated Signers ist"), and the attached redline format list proposed authorized signers also relating to the Corporation's accounts at FHB (the "Proposed Authorized Signers ist"). Ms. Maust explained the reasons for the changes and the recommendations. Mr. Dunlap moved, Ms. Grouse seconded, and the following action was unanimously carried: To approve the authorized signers the Corporation's bank accounts at FHB, as presented in the Updated Signers ist, and the Proposed Authorized Signers ist. APPROVA AND RATIFICATION OF SERVICE PROVIDERS The Board then considered the appointment the Corporation's pressional service providers. Ms. Maust noted that there were no changes to the slate the service providers and summarized the roles each. Ms. Maust noted that all the service providers have been performing well and that, since the last evaluation report, she has not experienced any issues with the service providers. Ms. Maust referenced the rankings and scorecards contained in the meeting materials and briefly explained the evaluation process. Ms. Maust referenced prior issues with the Corporation's third party administrators and reported on the improvements in the service provided by the same. Discussion ensued regarding the rating system used to evaluate the service providers. Mr. Dunlap moved, Mr. Cooke seconded, and the following action was unanimously carried:

5 Page 5 8 To approve and ratify the following service providers until the next annual meeting, and thereafter, until their successors are duly selected: Service Captive Manager Name Marsh Management Services Inc. Scot Sterenberg Address 745 Fort Street, Suite 1100 Honolulu, HI Captive Designated Scot Sterenberg Representative Marsh Management Services Inc. 745 Fort Street, Suite 1100 Honolulu, HI Registered Agent and Address Scot Sterenberg 745 Fort Street, Suite 1100 c/o Marsh Management Services Inc. Honolulu, HI Third Party Administrators TR/STAR Risk Management 1430 E Missouri Ave, Suite 267 Ruby Williams Phoenix, AZ AmeriBen/lEC Group Tanya Edwards, Acct. Executive Marissa Olson, Client Accounting Supervisor 3449 E. Copper Point Dr. Meridian, ID Actuaries Select Actuarial Services Thomas Meyer 700 Craighead Street Nashville, TN Segal Gary. Petersen 1230 West Washington Tempe, AZ Auditor CliftonlarsonAllen P Ronald Stearns 3003 N. Central Avenue Phoenix, AZ Banking First Hawaiian Bank Joanne Arizumi Main Banking Center 999 Bishop Street Honolulu, HI egal Counsel Char Hamilton Yoshida & Shimomoto Gerald C. Yoshida, Esq. Pacific Guardian Center 737 Bishop Street, Suite 2100 Honolulu, HI 96813

6 Page 6 8 RECOMMENDATION TO REPACE FRANK FAIRBANKS AND YNN SAITO ON SEF-INSURED WORKERS' COMPENSATION BOARD OF TRUSTEES Ms. Maust summarized the recommendation to replace Frank Fairbanks, Sr., and ynn Saito on the Board Trustees the Self-Insured Workers' Compensation Trust wherein she noted that the recommendation by the Corporation's Board will be considered for action by the CAP Board Directors. Mr. Dunlap moved, Ms. Grouse seconded, and the following action was unanimously carried: To recommend to the CAP Board Directors, to replace Frank Fairbanks, Sr., and ynn Saito as Board Trustees; and appoint or re-appoint the following five individuals as members the Board Trustees the Self-Insured Workers' Compensation Trust: James M. Holway - member CA WCD Board Directors and Chairman Finance, Audit, and Power Committees Darin Perkins - Manager for Safety & Health CA WCD Ruby Williams - Claims Manager TriStar Risk Management Services Toni Kanehira - VP, Captive Solutions Marsh Management Services Inc. Sanford A. Saito - VP, Captive Solutions Marsh Management Services Inc. EECTION OF 2018 OFFICERS Mr. Holway noted the proposed slate individuals who were nominated for election as ficers the Corporation. Mr. Dunlap moved, Ms. Grouse seconded, and the following action was unanimously carried: To elect the following individuals, effective January 1, 2018, to their respective fices to serve until the next annual meeting, and thereafter, until their successors are duly elected and qualified: Name James M. Holway Theodore C. Cooke Douglas A. Dunlap Kimberly A. Grouse Deborah Jo Maust Position(s) Chairman the Board President and Chief Executive Officer Vice President, Chief Financial Officer, and Treasurer Vice President and Secretary Vice President, Chief Operating Officer, and General Manager

7 Page 7 8 CAPTIVE MANAGER'S REPORT Regulatory Compliance Mr. Saito presented the captive manager's report ("Report"). Among other items, Mr. Saito noted that the Corporation is in full compliance with all Hawai'i regulatory filing requirements, which were submitted to the State Hawai'i on or no later than the dates noted in the captive calendar in the Report. Financial Performance as September 30, 2017 Mr. Saito referred to, and discussed certain items in, the Corporation's unaudited comparative balance sheet and statement operations, both as September 30, 2017 and December 31, 2016, and led a discussion regarding items therein. Mr. Saito then presented and summarized two charts in the Report relating to a oss Projection Comparison, and Surplus Growth. He also presented and summarized key insurance ratios the Corporation, including the premium to surplus ratio, the reserve to surplus ratio, and the combinec;l ratio. Mr. Saito noted that the Corporation is within the acceptable target ratios for the industry. Discussion ensued throughout. Mr. Saito presented and noted certain items in the Corporation's unaudited financial statements as September 30, 2017 and December 31, 2016 and the exhibits included therewith. Mr. Saito then presented and explained various items in the Statutory Compliance Worksheet included in the Report, and noted that the Corporation is in compliance with the requirements for minimum capital and surplus and investment the reserves. CHIEF FINANCIA OFFICER'S REPORT Mr. Dunlap presented the Chief Financial Officer's report wherein he noted that, based on the recommendation Segal, the Corporation has an adequate buffer in the reserves. CHIEF OPERATIONS OFFICER'S REPORT Ms. Maust presented the Chief Operations Officer's report. Ms. Maust reported on the health benefits program and the stability that ensued after the same had been moved into the Corporation's program. She also commented on the historical and expected trends for premium rates for the Corporation's health benefits program. astly, Ms. Maust commented on the product ferings in the current market for excess workers' compensation coverages. Discussion ensued regarding the same wherein it was noted that workers' compensation stop loss is available albeit expensive.

8 Page 8 8 OTHER BUSINESS egislative Update Arik M. ook Char Hamilton Yoshida & Shimomoto presented and summarized various items in the Char Hamilton Yoshida & Shimomoto 2017 Fall egislative Advisory contained in the meeting materials Meetings Discussion was had regarding tentative dates for the Corporation's 2018 meetings. Two dates: April 17, 2018 and April 18, 2018-were presented for a special meeting the Board. The Board agreed that the earlier date is preferred, with the later date serving as an alternative. Ms. Maust noted that the next annual meeting the Board is tentatively scheduled to coincide with the annual Hawai'i Captive Insurance Council Forum once the date and location for the same has been finalized. ADJOURNMENT There being no further business to conduct the meeting was adjourned at approximately 12:32 p.m., Hawaiian Standard Time {3:32 p.m., Mountain Standard Time). Respectfully submitted:

9 r r r [ [ D r. Annual Board Directors Meeting Monday, 16"' October 2017 Immediately Following After the Annual General Membership Meeting The surplus reserves for are currently deposited in the Corporation's Operating account with the First Hawaiian Bank. Cash and investment the Corporation as September 30, 2017 are as follows; Market Amortized Monthly Fiscal YTD Value Cost Income Income Operating Checking Account $ 2,119,238 $ 2,119,238 $ 0 $ 0 Self-Insured Workers' Comp Trust Account 990, , AmeriBen & TriStar Claims Checking Accounts 2,682,961 2,682, Certificate Deposits 2,394,917 2,394, ,496 Total Cash & Cash Equivalents $ 8,188,029 $ 8,188,029 $ 576 $ 5,322 Investments $ 0 $ 0 $ 0 $ 0 Approved by: Date: /()-/~-! Page 16

10 CAWCD INSURANCE COMPANY, INC. Authorized Signers First Hawaiian Bank Proposed Authorized Signers Business Checking Authorized Invoice Approvers: Authorized Check Signers: AC No Account No INVOICE APPROVERS* Required No. Approver 1 Approval or Facsimile signature is valid Frank Faireanks SF,.James M. Holway Theodore Cooke Douglas Dunlap Kimberly Grouse Deborah Jo Maust Chairman the Board President and CEO VP, CFO, and Treasurer VP and Secretary VP, COO, and General Manaaer ---f Formatted Table AUTHORIZED BUSINESS CHECKING SIGNERS* Deborah Jo Maust VP, COO, & General Manager Douglas Dunlap VP, CFO, and Treasurer Gerald Yoshida General Counsel ynn SaitoAnnie Woo MMS Officer/ Authorized Signer Scot Sterenberg MMS Officer I Authorized Signer IMIT ON SIGNERS* Unlimited - required one signature lnteraccount Funds Transfers Funds to be transferred from one account to another; i.e. savings to/from checking or claims account to/from checking, to pay pre-approved invoices or reimbursement Self-Insured WC incurred expenses or funding accounts. NOTE: All invoices and fund transfers disbursements must be approved by an authorized approver prior to payment. *Also applies to all outbound wire transfers At no time will an approver an invoice or disbursement also be a signer on the check or wire request form for such disbursement. Authorized Wire Transfer: AC No AUTHORIZED SIGNERS Deborah Jo Maust Douglas Dunlap Gerald Yoshida Annie Woo Scot Sterenberg VP, COO, & General Manager VP, CFO, and Treasurer General Counsel MMS Officer I Authorized Signer MMS Officer I Authorized Signer ---j Formatted Table J NOTE: All funds transfer requests are to be requested by telephone and confirmed bv fax bv 10:30am HI Time. Page 19

11 CAWCD INSURANCE COMPANY, INC. Authorized Signers Continue: First Hawaiian Bank Proposed Authorized Signers TriStar Claims Account Account No Ameriben Claims Account Account No Maximizer Savings (Self- Account No Insured WC Trust Account} Certificate Deposit Account No Certificate Deposit Account No AUTHORIZED TRISTAR CAIMS CHECKING SIGNERS Authorized Check Signers: Douglas Dunlap VP, CFO, & Treasurer AC No Denise Cotter TriStar/Authorized Signer Ruby Williams Unit Supervision, Tristar/ Authorized Signer Donna Anselmo Unit Supervision, Tristar I Authorized Signer Authorized Check Signers: AUTHORIZED AMERIBEN CAIMS CHECKING SIGNERS AC No Andy Fujimoto Authorized Signer /Ameriben Douglas Dunlap VP, CFO, & Treasurer Deborah Jo Maust VP, COO, & General Manager Authorized Signers: AUTHORIZED MAXIMIZER SAVINGS (SEF-INSURED WC TRUST ACCOUNT} SIGNERS AC No Deborah Jo Maust VP, COO, & General Manager Douglas Dunlap VP, CFO, & Treasurer Gerald Yoshida General Counsel ynn SaitoAnnie MMS Officer I Authorized Signer Woo Scot Sterenberg MMS Officer/ Authorized Signer Authorized CD Signers: AC No AUTHORIZED CERTIFICATE OF DEPOSIT SIGNERS Deborah Jo Maust VP, COO, & General Manager Douglas Dunlap VP, CFO, & Treasurer ynn SaitoAnnie MMS Officer/ Authorized Signer Woo Authorized CD Signers: AC No AUTHORIZED CERTIFICATE OF DEPOSIT SIGNERS Deborah Jo Maust VP, COO, & General Manager Douglas Dunlap VP, CFO, & Treasurer ynn SaitoAnnie MMS Officer/ Authorized Signer Woo Page 20