1. “Should Our Nonprofit Corporation Join A Self Insurance Pool” Presented by: David G. Pilkington Vice President, – Brown & Brown Insurance – WC Program Manager CTD Presentation March, 5, 2008

2. Benefits of Self Insurance Pooling Cost of insurance spread among members of pool or fund Group purchasing allows for greater leverage when negotiating coverages, terms, conditions and pricing with insurance carriers Cost savings over traditional insurance purchasing process from the lack of need to develop excessive surplus and removal of much of insurance carriers profits. Ability to purchase all lines of insurance coverages from one provider with a single expiration date

3. Benefits of Self Insurance Pooling Pool or Fund is actually owned by the members Specialized service providers dedicated to the membership Shared limits on property created by a “spread of risk” model Greater predictability of loss from shared exposures and common data

4. About Public Risk Underwriters Public entity and nonprofit insurance program specialists located in Lake Mary, FL Created and administered the Preferred Governmental Insurance Trust (PGIT) comprised of 600 Florida public entities purchasing workers compensation, property and casualty insurance coverages

5. About Public Risk Underwriters Originated and spearheaded Florida Statue 624.4625 which allows for not-for-profit corporations to form a self insurance fund for the purpose of pooling and spreading liabilities of its group members. Currently in the final stages of implementing the Nonprofit Community Insurance Fund (NCIF) for Florida’s governmentally funded not-for-profit corporations

6. Synopsis of Florida Statue 624.4625 Annual normal premiums in excess of $5,000,000 Two or more not-for-profit corporations organized under the State of Florida may form a self-insurance fund for the purpose of pooling and spreading liabilities of its group members

7. Synopsis of Florida Statue 624.4625 Participating members must receive at least 75% of its revenues from local, state or federal government sources or a combination of such sources Utilization of qualified actuary to determine rates using accepted actuarial principles and submits to the insurance office certification that rates are sound and not inadequate

8. Synopsis of Florida Statue 624.4625 Maintains a continuing program of excess insurance coverage and reserve evaluation to protect the financial stability of the fund Fund retains a per loss maximum of $350,000

9. Synopsis of Florida Statue 624.4625 Submits annually to insurance office an audited fiscal year-end financial statement Has a governing body comprised entirely of officials from participating not-for-profit corporations

10. Synopsis of Florida Statue 624.4625 Uses knowledgeable persons or business entities (with a minimum of 5 years experience in self insurance funding) to administer or service the fund in the areas of: –Claims administration and adjusting –Underwriting –Loss control and risk management –Financial audit –Legal representation –Policy administration –Education and training

11. Potential Eligible Nonprofit Classes Alcohol and Drug Abuse Centers Associations for Retarded Citizens Children and Family Services Community Action Agencies Hospices Mental Health Organizations Rehabilitation Organizations Social and Recreational Services Vocational Training Head Start Programs

12. Coverage Available in Self Insurance Fund Property / Inland Marine / Equipment Breakdown General Liability Automobile Liability and Physical Damage Directors and Officers Workers Compensation Professional Liability Crime / Bond Excess Flood

13. Key Factors to Consider When Evaluating Self Insurance Fund Retention levels maintained Financial rating and stability of excess carriers. Excess of loss versus reinsurance. Educational, training and loss control capabilities Assessable or non-assessable?

14. Key Factors to Consider When Evaluating Self Insurance Fund Exit or liability run off costs. Premium allocation methods among membership. Fund’s “spread of risk”. Flexibility of coverage design and product offerings. Online technology capabilities. Deviation potential on Rates.

15. Contact Information Bill Kelly Public Risk Underwriters Executive Vice President bkelly@publicrisk.com David Pilkington Brown & Brown Insurance Vice President – WC Program Administrator dpilkington@bbpinellas.com