Member Updates

UPDATES

8-5-10 Membership Udate

Approval of Funding Plan

Order Vacating
Cease and Desist Order

Resolution 09-10-04
dated 7-27-10

5-18-10 Member Letter

3-18-10 Email

Resolution

2-25-10 NAM Letter

2-25-10 Member Letter

2-12-10 Member Letter

2-01-10 Meeting Update

1-28-10 Member Letter

OFM Order

1-20-10 NAM Letter

1-20-10 Member Letter

We are pleased to announce that the Cease and Desist Order issued to the Cities Insurance Association of Washington (CIAW) by the Office of Financial Management (OFM) on January 14, 2010 has been vacated.  While the title might have projected a rather ominous perception, it is important to remember that the directive itself simply required a funding plan from the CIAW to account for claims which may potentially arise from the years of 2002 to 2006. 

 

During this ordeal, the CIAW continued to provide its members with a full array of services and the daily operations were never affected, nor at risk.  Additionally, the CIAW continued to add members during this period.  This is a testament to the CIAW members and the strength of the program.

 

The following is a timeline of the events that surrounded the OFM's order:


• 2009: Updated actuarial projections for years 2002-2006 reflected higher potential claims liabilities than originally estimated.  The CIAW meets with and submits several prospective funding plans to the OFM.


• January 14, 2010:  New revisions to the Washington Administrative Code (WAC) affecting pool operations were put into effect.  Hours later, and without forewarning, the CIAW was issued a Cease and Desist Order, based upon the newly passed WACs.


• February 25, 2010: The CIAW board approves and submits a funding plan that includes, at the OFM's insistence, a retroactive assessment of full members during the 2002-2006 period. The OFM studies the plan.


• May 7, 2010:  A report completed by the OFM's consultant, James Marta, concludes that the CIAW's funding plan met or exceeded the criteria for solvency and safe financial operations.  However, the OFM's Cease and Desist Order remained in effect.  Mr. Marta is an independent auditor who was hired by the OFM to evaluate the CIAW's financial condition. (Click here to see the complete Marta & Company report)


• May 17, 2010:  The CIAW Board votes to initiate an administrative appeal of the Cease and Desist Order.


• July 28, 2010:  As part of the appeal process, a mediation hearing was held and an agreement is reached. 


• July 30, 2010: The CIAW Board approves the mediated agreement.


• August 4, 2010: The OFM approves the CIAW funding plan and vacates the Cease and Desist Order.  The CIAW drops the appeal.


There has been no change to the CIAW funding plan as submitted to the OFM on February 25, 2010.  As outlined by Board's Resolution 09-10-03, an additional $197,242.80 will be collected each year, for the next five years, by re-assessment.  These amounts are calculated on an individual basis and will be invoiced separately from regular dues.  Affected members can generally expect an invoice for between 3 to 6 percent of their 2002-2006 premiums.

 

Should you like any additional information or have any questions, please do not hesitate to contact your local broker, the third-party administrator (Canfield), or any of the CIAW's Board of Directors. Thank you for your continued support of the CIAW.