Florida Workers’ Compensation Joint Underwriting Association Investment Committee Meeting Report: April 2, 2010

Apr 5, 2010

The Investment Committee (“Committee”) of the Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”), which met Friday, April 2, initiated plans to solicit bids from software companies offering computer programs to help the FWCJUA manage its investment portfolio.

At the meeting, the Committee set the guidelines it will use to evaluate bidders.  Among other criteria, the Committee is seeking a firm with at least five years of experience developing software solutions and which offers a product that has been serving insurance clients for at least three years, “so we know the kinks are out of the system,” said Laura Torrence, the Committee’s executive director.

The Committee expects to place advertisements soliciting bids by April 16, and set May 7 as the deadline for submission of bids.  Final approval by the FWCJUA Board of Governors is anticipated on June 8, if an acceptable bid is identified.

FWCJUA staff members suggested the price for new software could range as high as $100,000, but expect the bidding process will lower the cost substantially.

Also during the meeting, the Committee chose to retain the five bonds in the FWCJUA’s portfolio that presently carry ratings below “A,” concluding there was no undue risk in doing so.  SunTrust Inc., the largest of the outstanding bonds, has a par value of $1.6 million and matures on May 1, 2010.  

The sub-“A” rated Anheuser Busch Companies bond, also in the FWCJUA’s portfolio, matured as scheduled on April 1 with a par value of $328,000.

The total value of the FWCJUA’s cash and investment portfolio was stated as $106,311,103, with an average portfolio rating of AA.

Among other agenda items at its next meeting, which is scheduled for May 28, the Committee will consider whether the current state of the investment market and the FWCJUA’s overall portfolio performance warrants any changes in investment policy, investment strategy or cash management decisions.  Seeking bonds with shorter maturities and lowering the current targets of 4 percent and 4.5 percent return on bonds with a maturity beyond two years and five years, respectively, are among the ideas the Committee will consider next month. 

The meeting materials are attached for review.


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