A Captive Insurance Company created by and for Connecticut Towns and Schools CCIA ANNUAL COLLABORATIVE May 21, 2019

What is CT PRIME? An association sponsored, non-profit, non-stock specialty insurance company in CT that launched July 1, 2016 Comprised of “members,” with by-laws created by a working group of towns and schools, all with equal voting power First municipal captive in Connecticut governed by a member-elected Board of Directors completing its 3rd year Managed by a team of experienced insurance professionals, under the day-to-day oversight of CREC, as a contracted service provider to the CT PRIME Board

Why was CT PRIME created? To stabilize cost and coverage terms of medical stop loss insurance for self-insured towns and schools To assist members in ensuring that health insurance administrators accurately administer benefit plans (CT PRIME has found errors costing towns $$$) To collaborate and share ideas and resources to develop other long term benefit-cost control strategies To provide an opportunity for shared services in CT (no county government)

Goals of CT PRIME To reduce costs and keep employees healthy. Other CT PRIME programs: Employee Assistance Program – 24-hours-a-day free counseling and other services Medical claims and dependent eligibility audits – RFP issued Medicare Advantage Program - plan to provide relief from OPEB and GASB responsibilities for those members who pay all or a significant portion of their 65+ retirees’ medical premiums

Challenges of a municipal captive Requires review, oversight and participation by members with a knowledge of health care programs Requires regular actuarial projection updates Requires discussions about unpredictable catastrophic claims Transplants, neonatal intensive care, specialty drugs Requires discussions about renewal premiums based on group experience vs. employer’s actual loss experience Requires commitment to stay together for long term goals rather than shopping annually

Benefits of a municipal captive Allows members to obtain MSL insurance as a group to ensure economies of scale Allows members to share expertise, best practices and trends Provides a review of claims by the MSL carrier to ensure compliance with underlying health care plans Provides support to members to procure additional health and wellness programs such as Employee Assistance Programs Provides stable pricing and predictability over the long term (claims will always be what the claims are for members)

Key savings CT PRIME this year issued $8 million in premiums for 12 member towns and schools and close to 10,000 employees CT PRIME has historically beat industry stop loss trend Carrier retention percentages included in the pricing for traditional stop loss policies are between 32-36% compared to 26-30% for stop loss captive 2019-2020 – CT PRIME going out to market to ensure the best financial rate and policy terms

Future plans for CT PRIME Increase interest in towns and schools working together to improve efficiencies Explore ways to increase preventative care to reduce health care costs Expand the number of medical stop loss members Allow the addition of new captive cells

Future for CT municipal captives? CT PRIME, Inc. – first municipal captive in CT established in 2016 Connecticut Foundation Solutions Indemnity Company, Inc. (“CFSIC”) - chartered and licensed as a captive insurer in 2019 to assist the State of CT with the fair and equitable adjustment of homeowner claims resulting from the pyrrhotite-affected home foundations natural disaster. The State of CT allocated $5 million to reimburse homeowners for the cost of testing their concrete foundation. Special Education Model Task Force Cooperative Model – Task force established by the CT Legislature in 2018 to analyze the potential to establish a captive insurance company to finance special education costs in Connecticut.

A Captive Insurance Company Created by and for Connecticut Towns and Schools CCIA ANNUAL COLLABORATIVE May 21, 2019