Meeting of the Board of Directors September 16, 2010 INDEPENDENT SCHOOLS COMPENSATION CORPORATION MEETING OF THE BOARD OF DIRECTORS Thursday, September 16, 2010 10:00 a.m. Assumption College Agenda I. Minutes of the June 9, 2010 Meeting II. Nominating Committee Report – Mr. Vincent III. Marketing Report – Mr. Schneiter IV. Proposal to Amend Member Net Worth Requirements – Mr. Bakker V. Claim & Loss Control Committee Report – Mr. Greenlaw VI. Treasurer’s Report – Mr. Vincent VII. Financial Report as of June 30, 2010 – Ms. DiPietro VIII. 2011 Deviation Discussion – Ms. DiPietro IX. Next Meeting – Wednesday December 8, 2010 College of the Holy Cross X. Other Business Independent Schools Compensation Corporation • c/o Meadowbrook/TPA Associates 10 New England Business Center, Suite 303, Andover, MA 01810 Tel: (978) 691-2470 • Fax: (978) 691-2477 ISCC BOARD OF DIRECTORS MEETING Board Book Materials Index Information Section Minutes A Financial Charts and Graphs B Financial Statements C Dividends D Investment Information E Marketing F Loss Control Report G Member Net Worth Requiements H Section A Minutes A1 A2 Section B Financial Charts and Graphs INDEPENDENT SCHOOLS COMPENSATION CORPORATION CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2010 Assets Cash and Invested Assets Premium Receivable Other Assets ASSETS June 30, 2010 December 31, 2009 Cash and Invested Assets $ 17,786,747 96% $ 17,521,438 99% Premium Receivable 679,367 4% (56,185) 0% Other Assets 47,503 0% 189,851 1% TOTAL $ 18,513,616 100% $ 17,655,100 100% Liabilities Unearned Premium Reserve for Losses and LAE Member Dividend Payable Other Liabilities LIABILITIES June 30, 2010 December 31, 2009 Unearned Premium $ 3,163,863 17% $ - 0% Reserve for Losses and LAE 4,970,325 27% 4,794,966 27% Member Dividend Payable 9,992,356 54% 12,310,648 70% Other Liabilities 387,069 2% 549,486 3% TOTAL $ 18,513,616 100% $17,655,100 100% B1 OVERVIEW OF INCOME STATEMENT TRENDS BY CALENDAR YEAR INDEPENDENT SCHOOLS COMPENSATION CORPORATION $5,000,000 CONSOLIDATED $4,000,000 $3,000,000 $2,000,000 $1,000,000 Written Premium $0 06/01 06/02 120% 100% 06/03 80% 06/04 60% 06/05 40% 20% Combined Ratios 06/06 0% 06/07 06/08 06/01 06/09 06/02 06/10 120% 06/03 100% 06/04 B2 80% 06/05 60% Dividends Earned 6/0 40% 0 6 20% 06/07 0% 06/08 -20% 06/09 06/01 06/10 06/02 06/03 06/04 06/05 06/06 06/07 06/08 06/09 06/10 INDEPENDENT SCHOOLS COMPENSATION CORPORATION OVERVIEW OF INCOME STATEMENT TRENDS BY FUND YEAR CONSOLIDATED Written Premium $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 01 02 03 04 05 06 07 08 09 Combined Ratios 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 01 02 03 04 05 06 07 08 09 Dividends Earned 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 01 02 03 04 05 06 07 08 09 B3 ISCC Reinsurance Recoverable on Large Losses June 30, 2010 AIG Mead Total Paid Paid Paid Reserve Incurred Limit Recov Received A B TOTAL 1995 The Learning 180,766 135,085 315,851 (250,000) 65,851 (51,529) 14,322 Center for Deaf Children 107,503 107,503 107,503 180,766 135,085 315,851 107,503 423,354 (250,000) 173,354 (51,529) 121,825 121,825 1996 Allen Chase Foundation 280,372 29,138 309,510 (250,000) 59,510 (58,648) 862 (Eaglebrook) 11,561 11,561 11,561 280,372 29,138 309,510 11,561 321,071 (250,000) 71,071 (58,648) 12,424 12,424 1999 Amherst College 40,846 280,628 321,474 (250,000) 71,474 (85,793) (14,319) 57,189 57,189 57,189 40,846 280,628 321,474 57,189 378,663 (250,000) 128,663 (85,793) 42,869 42,869 2002 Linden Hill 0 421,180 421,180 (300,000) 121,180 (138,853) (17,672) 000 0 421,180 421,180 0 421,180 (300,000) 121,180 (138,853) (17,672) (17,672) 2003 Wellesley College 0 0 (512,922) (512,922) 00 00000 0 0(512,922) 0 (512,922) (512,922) EXCESS LIMITS 494,268 (847,745) 116,576 (470,053) (353,476) 1992 - 2001 250,000 2002 300,000 2003 350,000 Reinsurance Recov - Paid (2,488) (527,241) (529,729) * 2004 500,000 2005 500,000 Reinsurance Recov - Unpaid 119,064 57,189 176,253 2005 (statutory limits) 25,500,000 of payroll 2006 500,000 2006 (statutory limits) 25,500,000 of payroll 116,576 (470,053) (353,476) 2007 thru 2010 500,000 * Awaiting reimbursement from excess carrier. B4 INDEPENDENT SCHOOLS COMPENSATION CORPORATION CLASS A 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 # of Members 160 155 150 151 148 144 143 133 123 107 106 103 Manual Premium 6,209,692 5,973,191 5,503,364 6,087,264 5,754,237 5,850,352 5,335,720 4,909,323 4,352,021 3,508,420 3,318,105 3,235,201 Standard Premium 5,693,702 5,503,490 5,232,026 5,973,507 5,728,361 5,308,389 4,794,863 4,203,708 3,693,115 2,957,419 2,886,048 3,014,823 Net Premium 5,554,474 5,383,464 5,119,794 5,985,775 5,795,605 5,223,799 4,734,181 4,061,876 3,563,798 2,886,532 2,853,334 2,981,221 Before Deviation Deviation % 20% 20% 10% 10% 10% 15% 10% 10% 10% 10% 15% 10% Net Premium 4,415,730 4,282,765 4,596,603 5,388,430 5,222,780 4,434,572 4,263,691 3,643,589 3,194,700 2,590,791 2,420,432 2,679,739 Average Premium 27,598 27,631 30,644 35,685 35,289 30,796 29,816 27,395 25,973 24,213 22,834 26,017 CLASS B 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 # of Members 555555555444 Manual Premium 3,098,930 3,080,017 2,871,697 3,098,647 2,924,451 2,979,077 2,875,786 3,000,703 2,897,758 2,096,633 2,001,444 2,010,550 Standard Premium 2,563,019 2,672,144 2,734,297 3,101,289 2,912,857 2,590,898 2,462,320 2,577,068 2,276,465 1,572,651 1,548,187 1,701,845 Net Premium 2,359,563 2,458,820 2,500,252 2,906,584 2,700,559 2,369,914 2,239,771 2,366,396 2,085,511 1,443,694 1,421,584 1,560,423 Before Deviation Deviation % 20% 20% 10% 10% 10% 15% 10% 15% 15% 15% 15% 15% Net Premium 1,846,959 1,924,392 2,226,823 2,596,455 2,409,273 1,981,278 1,993,540 1,979,836 1,744,042 1,207,796 1,189,357 1,305,145 Average Premium 369,392 384,878 445,365 519,291 481,855 396,256 398,708 395,967 348,808 301,949 297,339 326,286 Manual Premium Payroll multiplied by applicable rates Standard Premuim Manual premium multiplied by experience modification factor Net Premium Before Deviation Standard premium multiplied by member ARAP if any, and reduced by premium discount B5 INDEPENDENT SCHOOLS COMPENSATION CORPORATION COMPARISON OF EXPENSE RATIOS 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Net Premium 6,262,689 6,207,157 6,823,426 7,984,885 7,632,053 6,415,850 6,257,231 5,623,425 4,938,742 3,798,587 3,609,789 Underwriting expenses incurred Administration and services Claims administration 3.0% 3.1% 2.7% 2.3% 2.4% 2.8% 3.0% 3.0% 3.0% 4.0% 4.7% Loss control 4.1% 4.1% 3.6% 3.0% 3.2% 3.8% 3.5% 3.5% 3.7% 4.6% 4.5% Broker services 2.6% 2.5% 2.7% 4.3% 4.3% 4.4% 4.4% 4.3% 4.4% 4.5% 5.0% Association services 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Consulting fees 0.5% 0.5% 0.4% 0.6% 0.6% 0.7% 0.8% 0.5% 0.7% 0.8% 1.2% Program management 5.6% 5.6% 5.1% 4.7% 4.8% 5.2% 5.4% 5.6% 5.7% 6.3% 6.8% Subtotal 15.8% 15.9% 14.6% 14.9% 15.2% 16.9% 17.1% 16.9% 17.5% 20.3% 22.3% Insurance expense Excess insurance 7.5% 7.6% 6.5% 7.2% 9.0% 10.1% 4.8% 6.3% 6.5% 10.8% 8.4% D&O insurance 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.3% 0.3% Other insurance 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0% 0.1% 0.0% 0.1% 0.0% Subtotal 7.7% 7.8% 6.7% 7.3% 9.1% 10.2% 5.0% 6.5% 6.7% 11.1% 8.7% Other expenses Directors fees 0.2% 0.2% 0.2% 0.2% 0.1% 0.0% 0.1% 0.2% 0.2% 0.3% 0.3% Actuarial services 0.1% 0.1% 0.1% 0.2% 0.2% 0.2% 0.1% 0.2% 0.1% 0.2% 0.2% Premium audit services 0.5% 0.4% 0.4% 0.4% 0.4% 0.5% 0.5% 0.3% 0.3% 0.3% 0.4% Legal services 0.1% 0.0% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.1% 0.0% CPA 0.3% 0.3% 0.3% 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% 0.6% 0.6% State examination 0.0% 0.0% 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.0% Invest manager / cash custodian 1.1% 1.1% 0.9% 0.7% 0.7% 0.7% 0.7% 0.7% 0.8% 1.0% 1.1% Licenses, taxes, & misc.