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.