Safety, Health, Environment & Risk Management UTHSC-H Risk Finance Summary for Workforce & Property Exposures April 29,

UTHSC-H Employee Injury Reports and Workers’ Compensation Insurance Premium Trends, FY03 to FY10 Note: premium calculation based on employee payroll(30%), and injury frequency(20%) and severity(50%) Oversight by SHERM 185 fewer reported injuries compared to FY03 Medical claim costs reduced $112,543 compared to FY03 2

$262,000 reduction in RAP funding in FY10 as compared to peak in FY07 3

UTHSC-H Residents’ Injury Reports and Workers’ Compensation Insurance Premium Trends, FY03 to 10 Note: insurance premium influenced predominantly by market conditions, employee census, employee payroll, and injury frequency and severity Oversight by SHERM 4

Total of $238,131 in dividend payments since

Workers’ Compensation Insurance Premium Adjustment for UTS Health Components Fiscal Years 2003 to 2010 (discount premium rating as compared to a baseline of 1, three year rolling average adjusts rates for subsequent year) UT HSC Tyler (0.09) UT Medical Branch Galveston (0.16) UT HSC San Antonio (0.12) UT Southwestern Dallas (0.17) UT HSC Houston (0.09) UT MD Anderson Cancer Center (0.05) Oversight by SHERM 6

Named Windstorm Premium Fire and all other perils premium Premium 7

2011 CPPP Structure - Fire and All Other Perils $1 billion $5 million Fire & All Other Perils (Excluding Named Windstorm) Commercial Insurance Policy $850m Layer 50% Inst. With Loss 50% All Institutions $250,000 Institution Deductible $250k Fire & All Other Perils (Excluding Named Windstorm) Commercial Insurance Policy 75% of $150m Layer 50% Inst. w/Loss $150 million 50% All Institutions UT Share 25% of $150m Layer 8

2011 CPPP Structure - Named Windstorm $50 million $250,000 NFIP & TWIA policies Interim Financing 60% Fund Interim Financing 40% Institution With Loss Named Windstorm Commercial Insurance Policy 75% of $150m Layer Institution Deductible $250k $200 million Interim Financing 40% Institution with Loss Interim Financing 60% Fund UT Share 25% of $150m Layer 9

Loss Scenarios – Insurance Carrier Payouts Policy Deductibles: $100,000 Equipment Breakdown; $5M Fire and AOP; $50M NWS (Galveston and TMC) All payouts shown are excess of applicable policy deductibles. UT’s 25% pro-rata share portions will be financed through CPPP Fund or debt issuance. All financing through CPPP Fund or debt issuance will be replenished via 50/50 (Fire and AOP) or 40/60 (NWS). 10

FY10 Property Losses  Retained Losses Water damage NSH $10,000 Water damage SON $35,000 Water damage NSH $1000 Water damage UCT $1000 Water damage SRB $20,000 Water damage NSH $7,000 Water damage UCT $1000 Water damage SON $500 Water damage SON $600 Water damage MSB $2000 Water damage UCT $500 Water damage MSB $1000 Hurricane damage RAHC $4000 Various thefts (87) $17,400 Total Retained Losses $85,200  Losses incurred by but covered by third party  N/A  Losses incurred and covered by insurance  N/A Retained Property Loss Summary By Peril (Total FY10 losses by cause and amount in dollars, Total Loss~$85,200) Hurricane 11

UTHSC-H CPPP Premium Allocation Model Score vs. UTS Average UT HSC Houston *A premium credit is provided for scores in excess of * 12

Other Policies Equipment Floater Rate* (per $100 of insured value)Total Insured ValueAnnual Premium FY03 $0.42$4,600,788$19,390 FY04 $0.49$3,083,582$15,204 FY05 $0.42$4,017,404$16,870 FY06 $0.46$3,581,709$16,476 FY07 $0.54$3,983,875$23,414 FY08 $0.54$3,487,380$19,782 FY09 $0.54$5,118,381$26,949 FY10 $0.54$4,890,127$26,670 Fleet Insurance (n=79 vehicles) LiabilityComprehensive/CollisionLossesPremium FY03$189$334$96,052$43,322 FY04$169$349$2,610$37,508 FY05$234$434$20,074$40,443 FY06$230$412$905$38,202 FY07$230$418$846$42,234 FY08$252$459$6,518$37,181 FY09$216$322$19,791$38,178 FY10$212$274$10,552$33,471 *Not Inclusive of administrative processing fee of $

Other Policies Fine Arts Limit Based PremiumLossesAnnual Premium FY05$500,000$0$2,689 FY06$500,000$0$200 FY07$500,000$0$215 FY08$500,000$0$906 FY09$500,000$0$906 FY10$500,000$0$906 Endowment Policy (Property and Liability) Total Insured ValueLossesAnnual Premium FY05$5,462$0$3,177 FY06$0 FY07$53,254$0$2,746 FY08$53,254$0$7,129 FY09$102,942$0$14,220 FY10$102,942$0$10,549 14

Total Cost of Risk Transfer Workforce & Property Insurance Policy FY09 PaidFY10 Estimated or PaidChangeNet Change Employee Workers Comp $ 335,710 $ 338,6821% $2,972 Resident Workers Comp $ 170,461 $162,305-5% -$8,156 Fine Arts $ 1,000 0% $0 Auto $ 38,178 $ 33,471-12% -$4,707 CPPP Fire & AOP Premium $ 256,234 $ 247,174-4% -$9,060 CPPP Named Windstorm $ 1,078,439 $ 1,088,2811% $9,842 Mobile Diagnostic Equipment $ 5,566 0% $0 Equipment Policy $ 26,950 $ 26,6700% $280 Policy Premium Total $1,912,538 $ 1,903,149-1% -$9,389 15

Discussion Items 1.CPPP premium reduced 5.39% with a UTS increased exposure of 25% of the $5M -$150M portion of any fire and AOP loss and a 25% increased exposure of the $50M-$200M portion of any named windstorm loss. 2.Next years premium likely to see a significant increase due to change in CAT model based on Hurricane Ike losses 3.For a variety of reasons there is a significant decline in retained losses-some due to our efforts, some due to chance. 4.Despite continual reductions in WCI losses and premium, rebate amounts continue to diminish. This is due to effort to reduce the WCI fund down to the designated capitalization target amount. This will eventually lead to the need for other sources of funding for the Employee Health Services program. 16

Annual Premium Insurance policies managed by AE $5K 17