Welcome to the UCOP Captive Services RFI Bidder’s Conference Webinar

1. Welcome to the UCOP Captive Services RFI Bidder’s Conference Webinar The call will begin shortly – the line is currently on mute

2. Overview, Directions, and Rules • A list of call attendees is being kept via the phone numbers of those who call in. This list is not available to call attendees. • The call is being recorded. • If you wish to ask a question please do so by typing the question into the dialogue box. • Please allow us to follow the agenda and only ask questions when asked to do so. • We will not identify the company which has submitted the question

3. Introductions • Introductions of UC Team in room • Introductions of Vendors on the call

4. Objectives of This Call • Discuss our objectives and goals in developing this RFI • Go over key dates and deadlines for this RFI • Answer any questions you may have at this time regarding the RFI and process

5. Background and Overview on Captive Services and the UC: • Presented by: - Grace Crickette, UC Chief Risk Officer

6. Key insights gained from the feasibility study: • The current self-insured program is very cost effective and moving it to a captive would increase costs. • A JPA is the least expensive method of covering 1st party exposures • A captive offers more comprehensive benefits than a JPA, because it can cover both 1st and 3rd party exposures. • Although a captive is more expensive to operate than a JPA, the additional opportunities created from covering 3rd party exposures make the captive the best option. The additional profit generated from 3rd party exposures will more than offset additional operating expense and creates a more comprehensive program.

7. ART Strategy Overview: • Captive • Create a Profit Center • Eligibility for Federal Terrorism Funds • Formalized Treatment of Uninsured Risks • Improved Underwriting Discipline

8. Professional Liability • Many higher education entities insure medical malpractice in their entities • Can be both domestic and overseas (where legally permissible) • Can combine affiliates, e.g., other medical groups, non-employed physicians • Prevents wasted finger pointing and combines defense • Allows access to affordable cover in hard markets • Helps retain physicians • Can combine tax paying and non-tax paying e.g. using Reciprocal Risk Retention Groups • Allows full understanding of all risk exposures – patterns emerge to show best focus for loss control dollars • Allows cover to be manuscripted, e.g., inclusion of educators liability

9. Construction • University already has a UCIP program • Projects above $25m • SIR with insurance layered above • Captives often used to retain the primary layers • Increase the retention as retained earnings build • Sometimes used for surety subject to: • Bonds being acceptable to parties requesting them • Captive is not admitted – using a front may not reduce costs, as credit risk is the same (not an indemnification contract) • Captive may have to get a rating • California does not have captive legislation, so bonds would not be from admitted insurer • May be able to provide surety for subs – Subguard type arrangement

10. Income Generation • Reinsurance of Student Programs/Vendor Programs • Program remains fronted by commercial insurer • Captive shares in premium and risk (quotashare basis) • Profits can be used to fund other programs to ensure no perception issues

11. Plan C – Stock RRG with member holding entity UC & Affiliates Third Parties 100% of Shares Class A Members Class B Members Reinsurance Agreement Offshore Captive Reinsurer 1% FET HI Multi-Member LLC Reinsurance Agreement 1% FET Fronting Carrier HI Stock RRG (3rd Party Liability) Workers Comp, Property, etc. Policyholders 9/12/11 Non-Third Party Liability Primary Policies

12. Highlights of the RFI and Deadlines • Minimum Requirements– are defined as requirements essential to the UC for bid consideration. Automatic disqualification from the bidding process will result from bidder’s failure to provide or be in compliance with any one or more the requirements.

13. Deadlines –

14. Brian Agius is key contact on this RFI No one from one of our UC locations is to be contacted regarding this RFI Refrain from hand delivering the responses! RFI’s sent in after the deadline will not be accepted or reviewed Remember to review ALL deadlines outlined in the RFI Remember to check back at the bid posting website for updates http://www.ucop.edu/purchserv/welcome.html Things to Remember

15. Questions… • Please use the chat tool in this system to send your questions into the webinar host…This provides us with a print out of all the questions so we may post the answers after this call. • We will read the question and answer the questions as they are submitted. We do however reserve the right to answer questions at a later time in writing posted to our website for this RFI.

16. This Concludes the Webinar