Florida Self-Insurance Guaranty Association Audit Committee and Board Reports: August 23, 2011
Aug 23, 2011
Florida Self-Insurance Guaranty Association Audit Committee Reviews Audit, Bookkeeping Issues
The Audit Committee of the Florida Self-Insurance Guaranty Association (“FSIGA”) met today, August 23, 2011.
After approving the Committee’s previous meeting minutes, the members reviewed the financial reporting and involvement of FSIGA’s external auditor, which FSIGA Executive Director Brian Gee noted is not involved in the organization’s internal bookkeeping process.
The Committee then reviewed FSIGA’s internal fiscal controls, as well as those of Commercial Risk Management (“CRM”), the third-party administrator that handles claims payments and large transactions externally for the FSIGA. Mr. Gee added that he personally reviews CRM’s fiscal controls on an annual basis, and that he did not have any additional recommendations for their improvement this year. FSIGA’s external auditor also audits CRM.
It was noted that the Claims Committee receives monthly reports on this information.
The Committee moved to recommend to the FSIGA Board the approval of its external auditor for a new engagement agreement, to which no material changes were made.
In keeping with the FSIGA’s adopted policy of rotating its audit partner every five years, a new one was named today, as well.
The Committee discussed legal compliance monitoring and FSIGA’s whistleblower policy. Mr. Gee noted that FSIGA is in compliance with local, state, and federal laws and that there have been no instances of non-compliance or whistleblower complaints.
General housekeeping matters relating to banking and required signatures for bank accounts held by the FSIGA were then discussed, after which the meeting adjourned.
FSIGA Board Meets
The FSIGA Board of Directors (“Board”) also met today.
After approving its previous meeting minutes, the Board reviewed FSIGA’s second quarter investment performance, noting that it has funds invested in the Florida Treasury’s Special Purpose Investment Account (“SPIA”). This fund is managed by the Florida Treasury, which is a division of the Florida Department of Financial Services. The expected annualized yield of the SPIA fund is 2.2 percent.
Additional FSIGA funds are invested in the Vanguard Stock Market Investment Fund, which has a higher expected annualized yield of 12.75 percent.
The Board reviewed FSIGA’s second quarter financial statement. Claims expenses have declined in the first six months of 2011, while investment income has increased due to stock market performance. Net assets of the FSIGA had increased by $1.3 million for the first six months of 2011.
Also approved was the contract renewal for CRM, the FSIGA’s third-party administrator. The new contract includes a give percent increase in the fee paid to CRM. Mr. Gee noted that he was very pleased with CRM and added that the company’s most recent fee increase was in 2006.
The Board approved the Audit Committee’s recommendation to approve the renewal of FSIGA’s existing external auditor’s contract, as well as the external auditor’s new audit partner.
Terry Godbold, who has been the lead actuary for the FSIGA for the last 15 years, was approved as its actuary.
As part of the agenda, the Board presented awards of appreciation to Trina Girimont and Mike Broussard, who are both former FSIGA Board members.
Recent insolvency activity was discussed, during which it was noted that there has not been much claim activity so far for this year. In 2008 through 2009, there were a record 11 insolvencies, largely due to the recession.
After discussing general housekeeping matters relating to banking and required signatures for bank accounts held by the FSIGA, the Board determined it will most likely meet again in mid-November, prior to Thanksgiving.
The meeting was then adjourned.
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