Members present: Ms. Hudson, Ms. Joswiak, Mr. Kante, and Mr. Wittry
Absent: Ms. Neuman
Staff present: Ms. Huntley-Cooper, Mr. Krueger, Mr. Moreth and Mr. Tomsyck
Call to order. The meeting was called to order by the Chair, Mr. Wittry at 9:15 A.M. in conformance with Wisconsin’s open meeting law.
Open session
Decline of Reappointment. Ms. Hudson’s appointment term expires June
30, 2006. Due to increasing demands on her time, Ms. Hudson has declined to
accept appointment for another term. The department and other Council members
thanked Ms. Hudson for her efforts in supporting the self-insurance program
throughout her nine-year tenure on the Council.
Review and approval of the minutes of the previous meeting. Minutes of
the November 7, 2005 regular meeting, and the January 6, 2006 emergency meeting
were reviewed, and approved as written.
Closed session Federated Department Stores presentation. In accordance
with s. 19.85(1)(f) the council convened in closed session to review financial,
loss experience, safety and other information of Federated Department Stores.
Some of the company’s specific financial or other business information may be
confidential and not subject to public disclosure.
Closed session Knight Transportation presentation. In accordance with s.
19.85(1)(f) the council convened in closed session to review financial, loss
experience, safety and other information of Knight Transportation. Some of the
company’s specific financial or other business information may be confidential
and not subject to public disclosure.
Closed session review reports of self-insured employers. In accordance
with s. 19.85(1)(f) the council convened in closed session to review financial,
loss experience, safety and other information of employers presently or
previously exempt from the duty to insure. Some of the companies’ specific
financial or other business information may be confidential and not subject to
public disclosure.
Closed session Genmar Holdings/Carver presentation. In accordance with s.
19.85(1)(f) the council convened in closed session to review financial, loss
experience, safety and other information of Genmar Holdings/Carver. Some of the
company’s specific financial or other business information may be confidential
and not subject to public disclosure.
Open session
The Council returned to open session, and made the following recommendations:
Applications.
The self-insurance application of Federated Department Stores is approved,
subject to a $500,000 surety bond and specific excess insurance with a retention
of $500,000 and statutory limits.
The self-insurance application of Knight Transportation is approved, subject to
a $1 million surety bond and specific excess insurance with a retention of
$500,000 and statutory limits.
The self-insurance application of Genmar Holdings/Carver is denied due to the
insufficient financial strength of the parent company.
Alternative collateral program.
MMC Securities presented an alternative plan to the posting of security by each
self-insurer. The plan would transfer most of the risk to the credit market,
with a certain amount retained by the department. Examples of implementation
were given, from states that had experienced large numbers of defaulted
self-insurers. The Council felt that the current system works well enough in
Wisconsin, given the relatively rare occurrence of default. In addition, the
Council was concerned about the need to establish a sizable fund to offset the
retained risk, especially given the law changes that would be necessary to
protect such a fund from being used for other purposes.
Changes to specific excess insurance and/or security requirements.
Grede Foundries – Required bond increase to $3 million.
Manor Care - approved request to increase excess retention from $750,000 to $1
million.
Mayo Foundation - approved request to increase excess retention from $350,000 to
$400,000.
Richardson Industries - denied request to lower current $500,000 bond, but
agreed to reconsider after 12 years out of program (1/1/2009).
Snap-on – approved request to increase excess retention from $500,000 to
$750,000.
Willman Industries – approved request to increase excess retention from $350,000
to $450,000.
Other action.
Due to the rapidly deteriorating operating and financial condition, Delphi Corp.
will be denied the usual exemption period beyond its current Order through June
30, 2006, and will be extended only as long as an orderly transition to full
insurance can be arranged.
Miscellaneous.
Ms. Joswiak reported that the excess insurance market for utilities remains
stable, but that licensed excess coverage remains unavailable.
Mr. Tomsyck reported on his efforts to gather data and generate reports which
will allow for calculation of possible assessment refunds from the AR
Accessories and Evans Products cases. The Council recommended that any employer
in default on its WC self-insured obligations not receive refunds until in
compliance. Also, if a former self-insurer or its successor owed a refund cannot
be located, then that amount should stay in the fund.
Mr. Moreth reported that, subsequent to the January 6, 2006 emergency Council
meeting, he represented the department and Ms. Joswiak represented the Council
at the January 10, 2006 meeting of the Assembly Committee on Forestry hearing on
AB-686. The department and Council testimony was in opposition to this group
self-insurance proposal. On January 19, 2006 the Forestry Committee referred the
matter to the WC Advisory Council, which will establish a working group to study
the issue.
Next meeting. Mr. Moreth will poll the members for acceptable dates in
Fall 2006, as applications or conditions warrant.
The meeting was adjourned at 3:00 PM