STRIMA Annual Conference, Lexington, KY Why Can’t State Risk Managers and University Risk Manager’s Be Friends? Louis Drapeau, University of Kentucky Scott Jordan, State of Alaska Jen Coney, State of Oregon Jean Demchak, Education & Public Entity Leader, Marsh September 21, 2011

2 Discussion Outline  Current program for each panelist  Association Statistics  State Government vs. Higher Education – Risk Profiles – Coverages – Services  Future Considerations

3 “State of the Union”  State of Oregon  University of Kentucky  State of Alaska

4 “The World According to GARP”  STRIMA – 45 States participate in RM Survey – Higher education as “clientele”  10 states DO NOT include  35 states DO include  University Risk Management Insurance Association (URMIA) – 4,500 Institutions in U.S. – 500 Risk Managers  Peer benchmarking challenging

5 Risk Profile: State Government Programs The protection of sovereign immunity and the birth of the doctrine dates back to the 13th century in the Kingdom of Britain, when the courts decided the King could do no wrong.  Absence of capitalism with State governments. – Not driven by same “risk of loss” for settlement in private industry, governmental entities do not suffer from the same pressures in this regard. State government:  budgets are set  they are not profit-making entities  they can rely on tax dollars  they are not subject to punitive damages

6 Public vs. Private – Sovereign Immunity  In most states, government entities such as public colleges and universities, and cities and counties, are protected by sovereign immunity – which works together with general liability policies.  Sovereign immunity can cover mistakes and accidents as long as they were not done with willful negligence or malice. Pursuant to this protection, the public entity may have caps on the amount to which they can be held liable, or immune from suits.  STRIMA – 4 states with total immunity – 35 states with limited/partial immunity – 4 states with no immunity

7 Risk Profile: State Government Programs  Agency Operations – Employee base (unions) – Aviation – Transportation – Prison – Department of Public Works – Children and Family Services – Power / Energy / Sewer – Hospitals – State Police – Marine

8 Risk Profile: State Government Programs Cont.  Higher Education – Main University – Community Colleges – State University / Regional  K-12 municipal or regional oversight – Charter Schools – For profit

9 Risk Profile: Higher Education  Academic environment with open culture  STUDENTS!!!  Publics compete with Privates, For Profits and Non-US institutions  Employee base (staff, faculty, grad students)  Operations include: – Residence Halls – Food Service – Transportation – Campus Security – Aviation – Administration – Athletics  UK: 4H State-wide Program; Agricultural Extension Service

10 Risk Profile: Higher Education continued  Academic Medical Centers  Patient Safety  Medical Training  UK Level I Trauma Center  Research – Sponsored programs – Funding contingencies – Clinical trials  Human subject safety  Alignment with peers  International Programs – K&R – Terrorism – WC

11 Coverages: State vs. Higher Education  Casualty – General and Automobile Liability  Workers Compensation  Property  Public Officials vs. Educators Legal Liability  Aviation  Marine  Higher education specific: – Out of state operations – Fine arts, – Foreign programs (K&R, SOS, Crisis Mgt., WC, DBA) – Contractual liability – Athletics – Student: Health care and professional liability

12 Services: State Vs. Higher Education  Claims administration  Information services  Legal defense  Risk control  Appraisals – Property  Fine Arts – Public vs. private appraisers / inspectors  Other

13 Emerging Areas for Consideration  Total Cost of Risk Model – State Government – Higher Education  URMIA TCOR I Whitepaper 2008  URMIA TCOR II Advanced Whitepaper Dynamic worksheets  Enterprise Risk Management – State Government – Higher Education  URMIA ERM Whitepaper 2007

14 Speaker Contact Information Jen Coney, Manager Risk Management State of Oregon State Services Division Department of Administrative Services Scott Jordan, Director, Division of Risk Management State of Alaska Louis J. Drapeau Director of Risk Management University of Kentucky Jean Demchak, Managing Director Global Education & Public Entity Leader Marsh, Inc