February 22, 2013 - Oregon State Bar

2013 PLF BUDGET, AND 2013 PRIMARY ASSESSMENT PAGE 10
OCTOBER 6, 2012
V. Staff Recommendations
If you add the operating expense portion of $562 per lawyer to the actuaries' indicated claim cost of
$2,768, you would have an assessment of $3,330. We feel that it is appropriate to include a margin
of $150 per attorney for adverse development of pending claims. This allows for a budget of about
$1 million for adverse development of pending claims. An assessment of $3,500 would allow a
projected budget profit of about $132,000.
We were happy to have a favorable adjushnent in the latest actuarial review of claim liabilities. We
hope that most of the claims coming out of the economic downturn have been made at this point.
We are concerned about the rising costs to defend claims. We feel that it is prudent to continue to
provide for negative development in 2012 and 2013. However, because of the favorable current
liability review, we have reduced the margin for adverse development from $300 to $150 per
lawyer.
Because of good financial results for the first six months of 2012, the PLF currently has positive
combined retained earnings of about $2.3 million. The Board of Directors has along-term goal of
$12 million positive retained earnings. A 2013 assessment with some margin makes it more likely
that some small progress will be made toward that retained earnings goal.
Given the factors discussed above, the PLF staff feels that the current Primary Program assessment
should be maintained for 2012. Accordingly, we recommend setting the 2012 Primary Proeram
assessment at $3,500.