State of West Virginia - West Virginia Legislature

BRIM BOARD MEETING MINUTESDecember 7, 2010 PAGE 4LLP, financial auditors for the West Virginia Board of Risk and Insurance Management,who presented the annual audit results. The report entitled “West Virginia Board of Riskand Insurance Management, 2010 audit results and communications” was distributed tothe Board members, and Mr. Johnson noted that he and Susan Wheeler, SeniorManager with Ernst & Young, would be explaining the report findings.(The meeting was interrupted at 1:30 p.m. so that Ms. JoEllen Cockley of AONRisk Consultants, our actuary, could join in via conference call and present the annualactuarial review.)Ms. Cockley began her presentation by referring to the Risk Funding Study as ofJune 30, 2010, which had previously been distributed to the Board members, andstating that the claim experience for the program overall has been favorable. Thepayment activity for the fiscal year was in line with expectations, and the incurred lossactivity for the fiscal year was better than expected. No new refinements wereintroduced into the model this time but continued with the specific loss developmentfactors previously identified before for the State Spending Units (SSUs) and the SenateBill #3 (SB #3) programs. AON continues to see some of the differences emerge inthose two programs. Overall, BRIM had a $17 million reserve reduction, which was11% of the reserve as of June 30, 2009. Referring to the comparison of unpaid lossestimates by line of business on page 2, the largest dollar reduction was in the generalliability line for the SB #3 program. The auto liability for the SB #3 program also didquite well. AON continues to closely monitor the automobile liability and medicalmalpractice programs for the State Spending Units. A very small reserve remains forthe HB 601 program, and by next year, that reserve should go to zero (0). In