Dear SELF Members,

It’s spring and with it comes the annual rites and anxiety of unpredictable state revenues and program funding, a legislature desperately trying to deal with an imploding worker’s compensation system, constrained program budgets, spiraling health care costs, and the unpredictable price forecasting of the excess insurance marketplace. All in all, the spring of 2004 looks pretty much like the spring of 2003. Or as Yogi Berra might say, “It’s déjà vu all over again!”

Recently the SELF board held its annual long range-planning session. During that session the board discussed a number of projects to enhance the programs and services of SELF. One idea is to develop a series of Best Practices Guides and loss prevention workshops to assist SELF’s members in their ongoing risk management efforts. These Best Practices Guides will focus on loss activities that have penetrated SELF’s excess layer (excess $1 million). Topics will include athletics, volunteer coaches/assistants, transportation, vehicle/fleet safety, molestation, science/lab, and field trips. SELF’s Member Services Committee, chaired by Charlene Minnick of CSU, will take the lead in promoting this effort. Many SELF members have done an excellent job of creating and implementing loss prevention programs in their organizations and SELF would appreciate their participation and support in its effort to organize and disseminate these valuable loss prevention programs.

And now, a few more thoughts and comments:

· New Broker on Board: Concluding 3 months of effort the board approved the hiring of MARSH Risk & Insurance Services as SELF’s new broker effective January 2004. We welcome the opportunity to team with MARSH as we work to develop markets and expand risk transfer alternatives that will keep SELF at the forefront of providing public educational agencies with economically viable, alternative risk financing options.

· Underwriting Surveys / Risk Questionnaires: Recently SELF issued 2 survey questionnaires, one tailored to liability and the other for worker’s compensation. Contrary to popular opinion, expressed quite vocally by several of you, these questionnaires were not intended to frustrate, complicate, or overburden you with another futile task. Rather, the survey / questionnaire provides SELF’s broker with the data and information they need to educate underwriters in reinsurance markets that have not previously underwritten the public educational risk. As we remain fixed in a hard-market cycle it is imperative that
underwriters receive not only viable historical loss data but that they also receive as much information as we can provide to explain the nature of public education risk and how it is each of SELF’s members identify and respond to their loss perils.

· Someone’s puffing at the door: Puffing is defined as “an expression of opinion by a seller not made as a representation of fact.” It never fails that every year someone claims to have a better risk finance product at half the price than you’re currently paying. It usually follows that a few, perhaps driven by the need to save a few dollars, will abandon a tried and true product and/or relationship based on little more than someone’s statement that, “what I have is just what you need and at 50% less cost.” As purchasers of risk financing programs it is imperative that we stay abreast of market trends, pricing, changes to coverage terms and conditions, and industry trends. However, it is equally important that we question those who would claim to offer more for less – ask the cut-through questions beginning with, “how?” and followed by a challenge to “prove it”. As a “seasoned” risk manager once told me, “We’re naturally driven by cost but the focus should be coverage terms and conditions, claims administration effort/support, and finally cost.”

· Lessons Learned: As is often the situation, once a claim has been tendered to the excess program or insurer many of the cost details are lost in the flurry of motions and processes of a suit. We may long remember a settlement amount but we may have no idea as to the complete cost of defense. SELF’s Liability Claims & Coverage Committee, chaired by Ray Enos of Santa Clara SIG, in conjunction with the Member Services Committee is working to develop a Best Practice Guide for litigation management and expense cost control. This guide (once completed) is intended as a resource for members to apply in their litigation management strategies and practices to better understand, manage, communicate, and control their total loss costs.

In closing, if you have any questions regarding SELF operations, programs, or services please contact me,
a board member, or any of the SELF staff. We have a toll-free number (866-453-5300), individual e-mail, and an excellent web-site, www.selfjpa.org to assist you. Never lose sight that SELF is your program and your active participation will make it a program that responds to your needs.

Tom Osborne
Executive Director