Florida Insurance Guaranty Association Finance and Audit Committee Meeting Report: October 29

Oct 30, 2009

On Thursday, October 29, 2009, the Florida Insurance Guaranty Association (“FIGA”) Finance and Audit Committee (“Committee”) met in Tampa and heard the following reports:

  • American Guarantee Fund Group 2008 Audit Report
  • 990 Tax Return
  • Investment Report
  • Florida Insurance Assistance Interlocal Agency (“FIAIA”) Update
  • DFS Operational Review
  • 401(k) Agreed Upon Procedures Report
  • 2010 Proposed Budget
  • Charter/Checklist Review

The following is a review of the items that received significant attention, as well as motions adopted by the Committee:

The American Guarantee Fund Group (“AGFG”) 2008 Audit Report included an analysis of AGFG’s financial statements.  No disagreements with management were identified and the Committee adopted the report for presentation to the Board of Directors (“Board”).

Changes to the 990 Tax Return for non-profit organizations were discussed.  The Committee adopted the tax return and it will be provided to Board for review and approval. 

The investment report included a discussion on financial markets.  Liquidity has opened up dramatically compared to one year ago.  Interest rates on the funds FIGA invests in are very low, as is the risk.  The Committee discussed moving to an investment strategy that would bring larger returns.  The Committee agreed to move funds in the Evergreen account to a Wells Advantage Heritage Fund that would provide an additional 14 basis points return.  The Committee also charged FIGA Staff with reviewing options that would provide an even larger return, such as short term bond funds.

During the FIAIA report, the Committee approved recommending that the Board ratify Raymond James’ service contract and continuation of the current underwriting team relationships.

A DFS Operational Review was provided by an outside firm. The firm reviewed FIGA’s policies and procedures, including:  its organizational structure, plan of operation, 401(k) structure, and employee handbook.  No significant deficiencies were identified during the review.  

The 2010 FIGA budget was reviewed and a six percent increase in the budget was identified. The primary reason for the increase is American Guarantee Fund Group compensation.  The Committee recommended the proposed budget for approval by the Board.

The Committee approved asking the Board to form a separate committee to draft a Request for Proposal for future audit services.


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