Washington Supreme Court to Review Whether a Pool Should be Treated Like an Insurer

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1 Uniting the pooling community for excellence in pool governance, management, and services. March 1, 2016 enews We invite you to submit information and notable pool news to be included in any of these areas throughout the year. Advocacy Washington Supreme Court to Review Whether a Pool Should be Treated Like an Insurer Operations & Best Practices Why AGRiP Recognition Matters Education & Networking CEO & Senior Staff Institute, Featuring Resident Futurist Rebecca Ryan Webinar: Enterprise Risk Management (ERM) For Pools - May 10 AGRiP & Other Pool News The 2016 Governance & Leadership Conference App Now Available for Download Welcome to AGRiP's Newest Member, Municipal Property Insurance Company (MPIC) Washington Supreme Court to Review Whether a Pool Should be Treated Like an Insurer The Washington Counties Risk Pool (WCRP) has an important case pending before the Washington Supreme Court, calling into question whether a pool in that state should be considered an "insurer," as well as several other important issues relevant to public entity risk

2 pools. In the State of Washington, and in other states, the legal and contractual distinction between insurers and risk pools are meaningful and there is broad value in retaining these distinctions. Washington State Statute RCW very specifically excludes local government entities organized together as a self-insured entity from the definition of "insurer." AGRiP will submit an amicus brief on behalf of public entity pooling interests and has secured collaboration on materials through NLC, NLC-RISC, and CAJPA. Amicus support is intended to underscore the public policy values of risk pooling, the benefits of public entities participating in a risk pool, and the reasons why legislative distinctions for risk pooling in the public sector are so meaningful. An adverse decision by the Washington Supreme Court would impact all 14 AGRiP members in Washington and could have ramifications - legal, political, or otherwise - throughout AGRiP's pooling membership. Some of the issues that could come into play include: Whether public entities in Washington would be allowed to assign claims against the pool in which they participate (and effectively other pool members) to private third parties, despite contractual prohibitions. Whether Washington pool members might be able to stipulate to judgments against their own pool, even if such stipulations had dire financial consequences. Whether Washington pools might be subject to all contractual interpretations usually applied to insurance companies, even though the bargaining for and membership structure of a pool agreement is substantially different than a traditional insurance contract. The hearing date in the matter of WCRP vs. Clark County, et.al. is May 10, Why AGRiP Recognition Matters Completing AGRiP's Recognition process is an opportunity for pool staff to fully examine their pool's policies and procedures, operational basics and best practice considerations. The Recognition process is guided by Advisory Standards, which are essentially a step-by-step guide for internal review of every aspect of a pool's activities, capturing strengths and identifying opportunities to improve. The top three values cited by pools going through the Recognition process include: Educating pool staff on the basics of pooling and the inner workings of a specific pool Giving Boards operational intelligence to evaluate management and assure the Board is meeting its fiduciary responsibility to adequately oversee operations Advocating on behalf of pooling operations in a shifting regulatory environment Southwest Washington Risk Management Insurance Cooperative recently achieved Recognition. Peggy Sandberg, Director of Insurance Operations at the pool, found the self-audit and review process extremely useful.

3 "Beyond financial indicators of pool health, AGRiP Recognition provides the benchmark of excellence for public entity pools. This rigorous examination in 11 key areas is a good way to reassure our board and members of the high quality of their pool. We are proud to display the plaque announcing our pool's Recognition," said Sandberg. The Advisory Standards represent 78 best practice recommendations, spread across 11 operational categories - Government Regulations & Governing Documents; Staff & Service Providers; Member Services; Coverages; Funding; Financial Management; Business Continuity; Claims Management; Professional Development; Governance; and Ethics. Once Recognition is awarded, it remains in place for three years. Pools vary in terms of how long it takes to complete the internal review, but once an application for Recognition is made it typically takes another 8-12 weeks of peer review and finalization. Approximately 40 pools across the United States have achieved Recognition to date. Contact AGRiP if you are interested in learning more or to begin the application process. CEO & Senior Staff Institute, Featuring Resident Futurist Rebecca Ryan AGRiP's CEO & Senior Staff Institute will be at the Loews Coronado Bay Resort in San Diego, CA from August This event is offered exclusively to those in executive leadership roles with member pools. At this year's Institute, we'll focus on how to lead like a futurist, guided through pooling specific futuring activities by AGRiP's Resident Futurist, Rebecca Ryan. You can familiarize yourself with Rebecca and futuring concepts at her keynote presentation at the Governance & Leadership Conference in Nashville next week. During her keynote and follow-up roundtables, Rebecca will explore ideas and outcomes from AGRiP's recent publication, Thriving in Uncertainty, including how technology, generational shifts, leadership changes, and catastrophic weather events are likely to impact the public entity pooling world and how best to prepare for the coming changes. Additional details about the Institute will be made available in April. Registration for the event will open in early May. Webinar: Enterprise Risk Management (ERM) for Pools May 10, 2016, 2:00 PM EST - 3:00 PM EST Speaker: Dorothy Gjerdrum, Senior Managing Director, Arthur J. Gallegher & Co Enterprise Risk Management (ERM) is a defined process for managing uncertainty. When applied to public entity pooling operations, managing uncertainty includes addressing emerging member risks, as well as managing pool operations into the future. This webinar will review both approaches and provide examples from peer pooling organizations that have embarked upon the ERM journey. You'll end with a better understanding of how ERM applies to pool and member

4 operations, and ideas about how to take the next steps. Register here. AGRiP & Other Pool News The 2016 Governance & Leadership Conference App is Now Available for Download We are less than a week away from AGRiP's 2016 Governance & Leadership Conference in Nashville, TN! If you haven't already done so, download the conference app by searching AGRiP 16 G&L in the app store. Use the app to review sessions and speakers, customize your schedule, access presentations, and more. The conference app is how AGRiP provides all session materials, so attendees are highly encouraged to make full use of it. Be sure to create a username and login for complete access to the conference app and all its features. And if you can't attend the conference but want to see planned presentations, you can review the conference program online. Welcome to AGRiP's Newest Member, Municipal Property Insurance Company (MPIC) In February 2015, Wisconsin municipalities were concerned about where they would find property insurance after legislative changes to eliminate the State's property fund succeeded. That's when three AGRiP members, Cities and Villages Mutual Insurance Company (CVMIC), League of Wisconsin Municipal Municipalities (LWMMI) and Wisconsin Municipal Mutual Insurance Company (WMMIC) joined together to craft a solution for their members. The three pools worked collaboratively to create the Municipal Property Insurance Company (MPIC), offering property insurance to local governmental entities in Wisconsin. MPIC wrote its first policy on September 1, As of January 1, 2016, MPIC had 232 insureds, $6.9 million in written premium and $10.6 billion in insured property value. Given the similar needs of all three pools, combining resources to create one new company to write property business created efficiencies due to the larger premium base across which administrative costs could be spread. MPIC believes one of the key factors in their success is directly tied to the support of their membership. They noted that maintaining positive and strong

5 ties with the membership, as well as keeping them informed of progress, was important. MPIC became an AGRiP member on February 23, See what's happening on our social sites: Association of Governmental Risk Pools (518)