MASSACHUSETTS MEDICAL MALPRACTICE

REINSURANCE PLAN

GOVERNING COMMITTEE

Minutes of a Meeting

September 9, 2004

A Meeting of the Governing Committee of the Massachusetts Medical

Malpractice Reinsurance Plan (“MMMRP”) was held at the Executive Offices, 95A Turnpike Rd, Westborough, MA on Thursday, September 9, 2004.

The following members were present in person:

William T. McGrail, Esq., Chairman

John S. Coldiron, M.D., Vice Chairman

Gerald J. Cassidy

Jill A. Gold

Peter T. Robertson, Esq.

The following MMMRP Staff/Consultants were present in person:

John Tympanick, CPA, MST - CFO MMMRP

Dolores Ivester, Director of Administration – MMMRP

Robert White, Robert White Associates

William Fein, Madison Scottsdale (by conference call)

Peter Kiely, Investment Committee Chairman (by conference call)

Also present in person were:

Richard Brewer, President ProMutual Group

Jerry Condon, MA Division of Insurance

1.  Call to Order

Mr. McGrail called the meeting to order at 9:20 AM. Dolores Ivester kept a

record of the proceedings.

2. Quorum and Notice

Mr. McGrail noted that all committee members were in attendance and that a

quorum was present at the meeting. Mr. McGrail reported that the required notices for the meeting had been sent to the Secretary of State, Executive Office of the Administration and Finance, and the Division of Insurance and placed on the Plan’s website.

3. Minutes of Prior Meeting

Mr. McGrail noted the minutes to the previous meeting dated June 11, 2004 have been distributed. A motion was made to approve the June 11 minutes with one correction to include Dr. Phillip Carling conducting audits. The motion was duly seconded and passed unanimously.

Mr. McGrail noted the minutes to the Executive Session dated June 11, 2004 have been distributed. A motion was made to approve the June 11 Executive Session minutes with one correction noting that Dr. Coldiron had kept a record of the proceedings. The motion was duly seconded and passed unanimously

4.  Financials

Mr. John Tympanick discussed the custodial and management fee structure of the company portfolio currently being administered by Madison Scottsdale. He indicated the current average of 30 basis points was a very good rate in the industry.

Mr. William Fein and Mr. Peter Kiely then joined the meeting via conference call. Attendees were given copies of the June 30, 2004 Madison Scottsdale Portfolio Investment Report. Mr. Fein began the discussion with an overview of the second quarter 2004. He noted that investing in the current bond market has been very challenging. Mr. Fein highlighted interest rates, housing market, economy, job growth and inflation as the main contributors to the market’s volatility. He continued with discussion of Portfolio performance including total return, maturity, duration and bond quality. The Portfolio is currently valued at $26M with expected annual income of $1M. The discussion and conference call ended at 10:15am. A copy of the Madison Scottsdale report is attached.

Mr. Tympanick then continued the financial discussion reporting Ceded Policies in Force, Ceded Policies Written as well as the Balance Sheet which reflected $28.5M of assets. Mr. McGrail reported that Ernst & Young had the Plan file an amended return for the 2003 tax year that would request a refund of $58K. Mr. Tympanick discussed the Statement of Operations pointing out considerably higher than expected Accounting and Actuarial expenses due to increase in ceded premium in 2003 as well as the issues regarding internal control as required by Sarbane-Oxley.

5. Compliance Committee Report

Mr. Peter Robertson, Chairman, reported the committee had met at the offices of Tom Ghezzi of Tillinghast on August 17 to discuss assessments. The Tillinghast report determined that MMMRP is entitled to assessments of $840K. It was recommended that invoices be prepared for October 1 billing. A motion was made and duly seconded to accept the Compliance Committee recommendation to continue to assess member companies according to Rule 4 of the MMMRP Rules of Operation. The motion was approved by unanimous vote.

Mr. Robertson discussed the issue of payment of ceding commission. The committee recommended that a 15% ceding commission be paid quarterly on ceded policies with an effective date of January 1, 2005 and beyond. A motion was made and duly seconded to accept the Compliance Committee ceding commission recommendation. The motion was approved by unanimous vote.

6. The meeting resumed after a 10 minute break beginning at 10:35am.

7. Legislative Update

Mr. Robert White discussed the status of the legislative Insurance and Health Care committees indicating that medical malpractice is a high priority for the committees. Generally trial lawyers still blame the insurance companies for the high costs associated with medical malpractice insurance. A bill that was signed into law by the Governor reduced the rate paid on past judgement interest from 12% to 4% over T-bill rates. Mr. White further stated that doctors as a group, through the MA Medical Society, need to be more upfront and visible in the legislature to make significant impact. Lastly, as a whole, there are fewer legislators practicing law over the past 10 years.

9.  Operations Committee

Copies of the proposed Sexual Harassment Policy were previously distributed to the Governing Committee. Dr. Coldiron, Chairman, reported that the committee recommended that the Governing Committee accept the policy as presented. After brief discussion, a motion was made and duly seconded to approve the proposed MMMRP Sexual Harassment Policy effective September 9, 2004 as recommended by the Operations Committee. The motion was approved by unanimous vote.

Dr. Coldiron indicated that the Plan currently has a 401K Plan, but that the Operations Committee recommended to add a regulatory ‘Safe Harbor’ modification to eliminate the need for discriminatory testing. A motion was made and duly seconded to approve the amended MMMRP 401K Plan as recommended by the Operations Committee. The motion was approved by unanimous vote.

Copies of the proposed Employee Handbook were previously distributed to the Governing Committee. Dr. Coldiron discussed the modifications to the Handbook as recommended by the Operations Committee. The modifications were: limit education reimbursement to 6 credits per semester; limit co-pay reimbursement to $5K per year; remove 3 floating paid holidays; and set life insurance to 2x salary. A motion was made and duly seconded to approve the Employee Handbook as modified effective September 9, 2004 as recommended by the Operations Committee subject to review by counsel for regulatory compliance. The motion was approved by unanimous vote.

10. New Business

Next meeting is scheduled for Thursday December 2, 2004, 9am at MMMRP Executive Offices, 95A Turnpike Rd, Westborough, MA.

11. Old Business

No old business to discuss.

12. Adjournment

A motion was made and duly seconded to adjourn the Governing Committee Meeting at 11:20 A.M. The motion passed on a unanimous vote.

A true record transcribed on September 17, 2004.

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