Loss Portfolio Transfers

During at session at the CA-SIG Spring Forum Matt Shaff, Director – Business Development – West Region, Safety National and Tom Fitzgerald,  Director – Business Development – East Region & LPT Practice Leader, Safety National presented on Loss Portfolio Transfers(LPTs) and the benefits of a LPT for self-insurance groups.

A loss portfolio transfer is a financial solution for transferring outstanding loss liabilities. Simply stated converting the self-insurance policy to a guaranteed cost policy. The benefits of a LPT include:

• Conversion of all known and unknown liabilities into a fixed payment, including IBNR.
• Streamlined process resulting in a timely turnaround.
• Eliminates members Joint & Several liability.
• Your Group is no longer subject to membership assessments.
• Elimination of all administrative costs and the time required.

A comprehensive LPT submission should include:

• Completed Application – need to know the chronology of carriers and potential to have the policy rights assigned to us.
• TPA loss runs in Excel format (All claims, not just the open case reserves, and for all loss years).
• Current Final Actuarial Report.
• Audited Financial Statements.
• Amount of Security being held by the state? (Currently, Washington, Wyoming, Wisconsin, Ohio, West Virginia and Florida are not approved jurisdictions).

Once a submission is received, the submission is reviewed by a group of individuals from several departments including Claims, Actuarial and Underwriting. The preferred industries for LPTs are manufacturing, healthcare, hospitality, wholesale/distribution, technology, retail, construction and auto dealers.