Will Your JPA Pass the Competition Test? Presented to: CAJPA ’ s Fall Conference & Training...

Will Your JPA Pass the Competition Test?

Presented to:CAJPA’s Fall Conference & Training Seminar

South Lake TahoeSeptember 11, 2013

Presented by:

Michael M. Kaddatz, CPCU, ARM Director, Risk Consulting SolutionsBickmore

[email protected] 714-426-8511

mailto:[email protected]

The Heat is On

• Competition• Cost Pressures• Decision-Maker Turnover

Competition is the keen cutting edge of business, always shaving away at costs. Henry Ford

Lost that Lovin’ Feeling• Board Member’s #1 Loyalty• Newbies• Lack of a Uniting Crisis

Passion is momentary; love is enduring. John Wooden

Remembering Why

Evaluation Criteria First-Dollar Insurance

Self-Insurance

Public Sector Pool

Claims handling service quality control

Claim settlement decision voice

Litigation choices

Loss prevention service quality control

Relative cost

Cost stability

Satisfying insurance requirements in contracts and for regulators

Key:

= Clear advantage = Clear disadvantage = Some advantage

Top Reasons Pool Members Evaluate Alternatives

• Claims Handling Incidents• Perceived Cost Allocation Inequities• Incompatibility with Other Members• Lack of Control

Control your own destiny or someone else will. Jack Welch

Top Reasons Pool Members Evaluate Alternatives (cont’d)

• The Lure of Self-Insurance• Pool Inflexibility• New Management• Honest Due Diligence

Diligence is the mother of good luck. Benjamin Franklin

Withdrawal ConsiderationsHow Do We Get Out?:• Minimum Commitment (Money & Time)• Advance Notice• Ability to Rescind Notice• Net Asset Entitlement/Forfeiture• Post Departure Obligations

Parting is such sweet sorrow. William Shakespeare

Pool Evaluation Criteria

Ownership Issues:• When Established• Membership Composition• Organization Type• Governance• Regulatory Oversight


Coverage Features:• Scope of Coverage• Limits (Shared?)• Retentions and Deductibles• Flexibility


Financial Soundness:• Net Contributions to Net Assets• Loss Reserves to Net Assets• Net Assets to Pool Retention• Assessable vs. Non-Assessable• Independent Rating• Reinsurance Quality


Ownership Obligations / Entitlements:• Minimum Commitment• Governance Participation• Net Asset Ownership• Profit Sharing


Claims Fit:• Administrator• Legal Representation• Decision Voice• Dispute Resolution

Delivering on the Promise

Claims Fit:• Administrator• Legal Representation• Decision Voice• Dispute Resolution

Evaluating Pool Management

Management = Staff + Board

• How Long has CEO Been in Place?• Does the Pool have a Business Plan?• What do Pool Members Say?• What Initiatives is the Pool Pursuing?

Will Your JPA Pass the Competition Test? Presented to: CAJPA ’ s Fall Conference & Training...

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