ALC-Executive Subcommittee

Members, do it, grab your seat, and get started first things first, uh, Representative Ferguson, if y'all would stand, he's gonna give us a prayer. If you would remember Senator Joyce Elliott and Representative, uh, former Representative Capps in this prayer. Amen. Thank you, Representative. So we'll go ahead and get started. We're gonna start with the, uh, we're gonna kind of take some things out of order. We're gonna start with, uh, A C first with the discussion of the procurement consultant service agreement with the TAO, and we have Rayo and Tom on online, so we'll go straight to, uh, Rao and Tom. I don't know which one of you guys are gonna start, but it's good to see y'all again. It's been a long time. Um, it's so nice to see you. We'll let you guys go ahead and present and we'll get going. Well, thank you all so much for. Thank you, Mr. Chair, and this may be a, a question for the chair, um, or, or the presenter. I'm not sure, but will they review any current, um, contracts going through this process to determine any sort of deviation from the appropriate process or the intent of the legislation or will they just be looking at the rules as, as promulgated. Thank you. of contracts and solicitations and review those as part of our review, not just what is documented in statute, rule. Policy, but also how it's being implemented. Thank you. See, no further questions. Representative Cozart, do you have a motion? Thank you, Mr. Chair. Yes, I do. I have a motion. I move that we approve the proposal from acaso Consulting and authorized BLR to negotiate a contract. Between Acasa, if I say that wrong or right, and BLR incorporating the scope of work and pricing terms included in his proposal to be brought to the subcommittee at its next meeting. That's what I have, Mr. Chair. That's proper motion. Do I have a second? I have a 2nd. All those in favor say aye. All opposed. I have it. Thank you guys and we look forward to working with you guys again. Thank you so much. Thank you. Members with that we'll move on to uh the presentation for the education facility property insurance with per night. I If you guys would introduce yourself for the record and you're recognized to get started. Here we go. So my name is Kyle Hays. I'm a principal and consulting actuary at Pern. I'm also the director of our risk strategies and solutions, uh, area, and with me is Charlie Lenzo Charlie introduces himself. I, um, I'm Charlie Lenz. I'm also a principal and consulting actuary with Per Knight. So we were asked, um, you know, as, as many people in the room know, uh, this has been an ongoing engagement, uh, that's started back in April. Um, we've been asked to take a look at the, uh, property insurance, uh, marketplace, uh, for the state-owned buildings in Arkansas, and this is, uh, a follow up, uh, agenda to some of the questions. That we were asked by the Department of Finance, I believe it was, uh, Mr. Jim Hudson had asked had requested some additional information. So in essence, this agenda goes through that request and it also kind of ends with some, some final observations and recommendation. So we were asked to look at a couple other scenarios for the, uh, state-owned buildings. One of them was a was a scenario where we would combine the Uh, 3 agencies together and look at various self-insured retentions, uh, based on different, um, uh, per occurrence retentions of 20, 5 million, and, uh, and 3 million and with an annual aggregate of 50 million. And so, uh, what Charlie and his team had done was an actuarial analysis to estimate the losses associated with that, and, uh, we, uh, put together a pro forma exhibits which are in the the more detailed report that accompanies. This, uh, which essentially goes through and kind of estimates what the first year funding level would be, uh, based on those different scenarios and um in in essence, so there, there is one main component that's missing here and the component is how the, you know, if the agencies retain more risk. It really comes down to how much will the reinsurance rates go down based on the fact that we're retaining more risk versus uh where it was before. So what We've done is, and, and we won't know that answer until we get quotes from the reinsurers, so we still don't know the total cost of risk, but still we've gone through and put together just kind of sample scenario and just to kind of walk through uh what likely would would happen. So in this scenario, what we would do is we would get quotes from the reinsurers for coverage above what the self-insured, uh, amounts are. And we would go through and then say, OK, based on where those reinsurance premiums are coming in. And we would look to see what the total premiums would be. So in this, uh, sample scenario here, we could say, you know, almost without a doubt, we would exclude scenario number 2, the total premiums are higher than each of the other two, plus it puts it, uh, the agencies a little bit more at risk versus scenario one. so in this case, uh, clearly scenario two would not be a good, uh, uh, you know, it wouldn't be a good, um, option. So we would eliminate that and then it would be between scenarios 1 and 3 in this case, we would want to dig into it a little bit more, uh, deeply just to kind of determine how much additional risk, the self-insured entity could handle, uh, and, and then make a decision if scenario 1 or scenario 3 was, was the way to go. Again, just a sample scenario in this case for the reinsurance premiums because until we get those quotes, we won't know exactly the best way to, uh, to move forward. Um, another request that we had uh we were asked to do was to look at the major differences between a certified self-insured entity and a captive insurance company. And while there's several differences between the two, and I've outlined these in the report that, uh, I, I provided on September 24th. The two main ones are, uh, you know, where there, there is a significant difference, at least how it pertains to the, uh, you know, to the structure, um, for the state of Arkansas comes down to regulation and the ability to risk pool. So with a certified uh so with a captive insurance company that is going to be regulated by the Arkansas Insurance Department, which means there's going to be a requirement for an audit for an actual opinion. There'll be a minimum, uh, capital and surplus uh requirements and it does afford protections that an insurance company has and in my report, I detailed this in a little bit more uh uh you know, go through this a little bit more detail, but I'll I'll just kind of mention the story here. So in the financial crisis of 207-2008. AIG had, uh, you know, there, so let me back up, sorry. AIG is, is a very large conglomerate, uh, that provides insurance and it also provides, uh, financial products. When that, uh, so and there's many insurance companies, many, uh, uh, financial companies. So in the, when the 2007, 2008 financial crisis had hit. AIG's financial products were not doing very well at all. They had taken unfortunately some very risky uh uh uh propositions and in essence, what ended up happening was The, um, you know, the Finra had come in as well as the European regulators had come in and they, what they wanted to do was essentially take, uh, the monies that the insurance companies, uh, had and used that to pay for the losses that the financial companies, uh, had incurred. And what ended up happening was the National Association of Insurance Commissioners had stepped in and basically said you can't do that. That money is earmarked for insurance purposes is not earmarked for financial purposes and the National Association of Insurance Commissioners essentially blocked, uh, FINRA and some of the European agencies from, uh, essentially rating the accounts of the insurance companies to pay for the financial company's losses. You say, well, why is that important? Well, that's important for our Arkansas because for all we know, 3 years, 5 years, 10 years down the line, there may be a new governor or you know, new legislative branch comes into Arkansas and, and relooks at these programs and realizes, oh, there's a lot of money in the accounts, uh, for each of these agencies and decides to pull that money out and use it for another purpose. If it's set up as a regulated insurance company, it will be significantly harder if not impossible for that, uh, to take place because of. The protections that are afforded by an insurance company. The other major difference is what we call risk pooling or or reinsurance risk pooling. Um, so what this allows you to do is to strategically place a captive in some of the excess layers that the reinsurers will participate in and it'll, uh, allow them to essentially replace some of these reinsurers with the captive. And I'll, I'll go through an example. Um, and this slide was up here before when we had presented back in September, but these, uh, these are actual figures from M8. And what these are is the reinsurance quotes that uh they received for $500 million of coverage, excess and $8.5 million limit. And so what I'm highlighting here is what is this company 3 where if we look through and to see what they quoted premium was relative to the other companies we could see this Company 3 was charging a significantly higher amount, uh, on the column on the right versus the total excluding them, which is the bottom, uh, column there. So in essence, what was happening is this Company 3 was charging significantly more than what the other carriers were charging. So, you know, A good risk strategy would be to replace Company 3 with the captive model and the captive then would go through and take on that 10% of the pooled risk in the $500 million layer that was excess $8.5 million. Um, so if you're, you know, an astute observer would look at this and say, well, jeez, Kyle, you know, company 6 seems to be charging even more, and that is true, uh, the difference though is that Company 6 is taking on a higher pooled percentage also in looking at the Players above this $500 million layer Company 6 participates in some of those other layers as well. So that might not be one that would be targeted to be replaced by the captive versus Company 3, the only layer that they participate in is this, uh, $500 million layer and, um, and their overall participation rate is not significantly high enough such that the captive probably could have, you know, if a captive was formed at that time, it could have participated in that. and been able to, uh, assume some of that risk and we could have eliminated, uh, Company 3. So we ran these scenarios for each of the agencies and what we've found is that the total savings was $1.45 million in insurance premiums if there was a captive in place, um, earlier this year that would have strategically, uh, removed some of the carriers that were charging rates that were higher than the other carriers relative again to the layer of of risks that they were, uh, that they were participating. And this next exhibit has been on there before and essentially just kind of shows, uh, you know, this is a sample scenario, but it, it really just shows how, um, the market premium kind of works relative to what we would call an actuarly appropriate premium. So in blue here would be actually appropriate premium. Those typically go up 3%, 5%, 8% a year. It should be fairly consistent and fairly well known, but the market premium doesn't work that way. And so again this risk pooling allows Us to in the instances or in the years where that market premium is, is significantly above what we think the actuarial premium should be, then we would want to take on more risk. Conversely, if it was if the market premium is below where we think the act appropriate premium is, then we wouldn't want to take on nearly as much risk and again these are options that we would have from having a captive structure that we would be able to go through and, and, uh, be able to see which, uh, you know, carriers were above the Market versus below the market and and really see what, um, you know, which ones we may want to replay. Um, so just a couple observations again, this is very specific to, uh, you, you know, to the property coverage. So we looked at a couple numbers here for each of the agencies and, and, um, you know, Charlie and I are, are very much numbers people and and in my opinion, numbers tell a story and, and, you know, kind of walk through the story that, that we've seen. So if you look at each of these agencies, what's happened is leading Up to 2021. The reinsurance premiums, so the premiums that they were charging to buy, uh, insurance in the commercial marketplace relative to this and, and, uh, the reinsurance premiums were relatively flat. Each and every year maybe going up a little bit, sometimes it kind of dropped down, um, you know, that's not surprising a little bit. Mostly, you know, total insured values come, uh, come up, newer buildings get, uh, placed in, into the pool. Um, and then each year they had a fun balance and for the most part this fun balance was, was. consistent. It's a little tricky, this fund balance does not include reductions for case reserves or IBNR. So it's really not set up like an insurance company would have been, and again this is what I was mentioning before, that there's monies there to pay for claims, but until we, you know, at the time, really would know what those claims, uh, would be. It's, it's just kind of money that's, that's set aside and, and we're sort of hoping that it's enough, but, um, in essence, we could, we start to see in 2022, the reins Premiums went up and this is going to be consistent among each of the, uh, agencies. For M8, the fund balance also went up, so it wasn't that big of a deal. But then you see in 2023 and 2024, those reinsurance premiums were significantly higher than they had historically been and you could see the reduction in the fund balance and what that really tells us is that there is an extra reserve balance that was drawn down to pay for you know, in essence, the reinsurance premiums. And that's consistent if you look at how Aspit uh was as well. Reinsurance premiums, uh, from 2020, 2021, relatively stable 2022, you start seeing an inkling of this, fund balances start to drop down and you look at where we are in 2024, where the reinsurance premiums are significantly higher than they than they were previously and the fund balance was drawn down. ASA had a very similar situation. There's is, uh, their balance is called the net position, so this one actually does include an IBNR estimate and case reserves. This one though is a little tricky because it is all coverages together, not just property, but again, it's a very similar story. The reinsurance premiums, uh, you know, relatively flat for the 1st 2 years in 22, they went up, um, you know, but not all that significantly than in 23 and 24, there were very Large increases in their, uh, reinsurance premiums and you could see their net positions continued to, to drop. So What this tells us is very consistent with what we've seen up until this point. Up through 2023, uh, sorry, up to 2021, everything was going well.insurance premiums were stable. The fund balances and net positions which I'll call surplus, those are, you know, either flat or rising, and at this time no actuarial studies were ever performed. But warning signs started coming up in 2022. The reinsurance premiums started to see some unusual increases and again unfortunately no actuarial studies were were done at that time either. Then the reinsurance market hardens in 2023. The problem though that we've observed is that there wasn't a plan in place to address this hard market. So when the reinsurance premium started increasing, there's little choice but to pay those reinsurance premiums. As I mentioned before, those fund balances, the net positions, what I'm calling surplus that that could have been used to retain more risk versus simply paying the reinsurance premiums. But again, without studies really done without this, you know, really looking into it, um, you know, in, in more detail, we won't really know what was the best use of, of those funds unfortunately. So there was an actual studies were performed in 2024, but the problem with that is they only addressed the uh IBNR which is the, you know, incurred but not reported. It's essentially the claims that we know about the development on those claims. It's also claims that we don't know about but that will come in in, in a, um, you know, that that will eventually come in that are associated with the year where the premium, uh, was earned. So the problem though with the actuarial studies is that they didn't consider any higher retentions. For the agencies, the only thing that they considered was just looking at the IBNR. My guess is that's probably the only thing they were asked to look at. There was never an actual appropriate rating plan developed, so again, um, you know, in a situation where we would go through and to see, uh, you know, potentially how much more, you know, how much higher the deductibles, you know, could have been for the schools and how to, uh, you know, essentially kind of, uh, encourage that, you know, the, the schools to take those higher deductibles. Um, there wasn't a done on that. And the other problem too is because there weren't any prior actuarial studies done. There were no baseline comparisons from pre-2022 to really see how much did the underlying risk really go up versus how much are, uh, these agencies just simply being charged more because the because the market hardened. And so the final, uh, observation here is, uh, you know, what we really needed was an independent holistic risk management plan which would be able to go through and look to see when do we want to increase our, uh, retentions. When do we want to pool the uh you know, the agencies together, uh, Charlie's last, uh, uh, report had shown the benefits of of pooling the, the, uh, risks, uh, Among the three agencies and ultimately the key piece too is to optimize the participation in the reinsurance, uh, pool, so that would be strategically using a captive to remove the reinsurers that are charging above market rates. And so our final recommendations are, are these 4 here. Uh, combine the three insurance operations into, uh, you know, into one. Again, Charlie, uh, Charlie's report talked about this before. There are a lot of benefits, usually what happens is, is one of the agencies has an adverse year. The other two typically don't. And so, um, you know, kind of tends to smooth the results over time. The other recommendation is to form a captive to self-insure the entity's property coverage. We went through a lot of the reasons, the re the main ones really fall down to the regulatory protections that are afforded as well as the ability for a captive to participate in reinsurance pooling and therefore we could strategically remove some of these reinsurers that are overcharging. Uh, the next, uh, recommendation is to annually consult with an independent, uh, risk, uh, uh, strategic risk consultant to optimize the use of the captive. So in what years do we retain more risk and what years do we not keep as much risk? How, you know, how much do we want to fund this? Do we have enough capital in here to look at all of the different types of, uh, you know, iterations of, uh, you know, uh, you know, of going through and, you know, really Maximizing the use of the dollars that we have on hand to ultimately, um, you know, kind of reduce the insurance premiums and, uh, you know, put more of the risk, uh, you know, at, at times back on on the actual buildings themselves. And then the final one is to annually perform an independent actuarial analysis. So again, uh, most of the results can't be run or can't be done until, uh, until an actuary goes through and kind of runs their analysis, but it's more than just estimating what the, um, outstanding loss reserves are going to be, it's looking at this from a funding estimate to say if we retain more risk, how much more is that going to cost us and looking, you know, comparing. That to see, well, how much of a reduction do we get from the reinsurers? Um, so that's it. Any questions? So Irvin recognized for a question. Thank you, Mr. Chair. Thank you for your presentation. I appreciate the comments. I would agree that, um, if you. Go the route that's perhaps not the captive insurance. rout, uh, it's subject to, um, being drained in the future. Uh, that's one of my big concerns as we have been discussing this issue, but two different things. Could you put together a funding map? Uh, what I mean by that is we need to see, in my opinion, a map of existing funds that are being, that are being utilized at this, at this juncture for this issue, and, um, how those funds would then be moved into this recommendation. So, and where all those funds exist in all the different pockets to ensure that we're utilizing and then if there's any additional. funding that would have to come from state general revenue. I'd like to see that and know that number. Um, if that's avail or if we could do that. We, we can, it's a little tricky though, um, and let me go back to this here. Here. It's a little tricky for a couple reasons. So for Amate and Aspit, the, uh, you know, the, the, the two on the top here. That funding balance, um, is as of 2024, so that's actually the latest balance. What we would need to do is estimate the IBNR for that for the property, uh, component. That's probably not too challenging though, because we know what their maximum losses would be, so that shouldn't be a, a problem. I should note though. that this fund balances the property coverage only. Each of those also has two other coverages. There's an auto and there's a cyber. They're they're separate line items so we could just ignore the auto and and the, um, and, and the cyber and just focus on the property, which is fine. What I don't know though is like usually when you combine funds, uh, you know, for different coverages, the main advantage of doing that is that is risk diversification, right? So is one of them goes up, the other might go down, so on and so forth. So, um, you know, we could certainly do it for those two and you know, and, you know, come up with a number and and I'm pretty sure I actually had sent those numbers to Jill previously, but I'll double check that and, and make sure that, um, that that's current. APA is a little bit more tricky because again that one does consider 3, it considers 3 coverages as well an auto and a cyber as well, but they're all the funds are co-mingle. So if looking at that net position that 8.2 million that does include case reserves and it does include IBNR, which is great, but in, in, but some of that in that position would support the other two programs as well, the auto and the, you know, and the cyber, so you'd have to kind of estimate how much is in each of those coverages, not the easiest thing to do, um, but just letting you know, we, you know, we could do it, probably not give you like an exact number on it. Just to ensure that whoever, I mean, that we have very specific as to who's paying the premiums into the fund as well, correct. And then the second thing is, and this is maybe directed towards the chairs, but I, I really believe this is a very, um, meaty policy that we're considering. You know, this is not, this is high level, um, high-level meaty policy. And so I really think that if we, if adopt these final recommendations, um, We create or figure out, um, what legislative support that we're going to have and to continue the knowledge of these policies and this program because, you know, these are annual, um, functions that are going to have to be performed and so I'm not sure where this would go, if it would go to an ALC subcommittee or a standing committee or we create a new one, but we're going to have to have some pretty, um, you know, intense education and So that the said that the knowledge continues and it's continuously supported by this legislature beyond just this group of individuals that have, we have, we have done a deep dive into this issue. I've learned way more than I've ever known in my life about property and casualty insurance and I appreciate so much being able to be a part of this, but moving forward, I think that's something that we're going to have to decide and figure out and not sure if that's a recommendation from these gentlemen. More so maybe a discussion that we need to have amongst ourselves. Thank you, Mr. Chair. Send her out, I will say it may help other questions that those Issues that you just brought up are being discussed, um. Not broadly broadly at this point, but have been discussed and the answer to your question is yes. Uh, the, the other answer here is this is a recommendation of where to go, but in this recommendation, the details of it are not there yet, so like the deductibles and those things that that will come later. So today, this is a broad. Recommendation, but it will be narrowed down as we get closer to session time. So, and I fully agree with that. And that's one reason I've been pushing since August to get to this day. Because we're running out of time to get to session. So thank you for those. Points, Senator Hammer, you're recognized. Thank you, Mr. Chair. On, on the handout here, just a couple of quick questions for my educational purposes, the pool percentage that you're referring to, what is it that makes up the pool percentages at the different companies in there just give me a brief explanation of that, please. Yeah, so in this case, there were 6 companies that participated, but they didn't all take it uh 16th, 16, 16th. So you could see the first company there, they took half of the uh the losses. You could look at it as like a uh like A co-insurance and, uh, uh, or or or like a copay and that and, um, you know, on, on a health insurance. So it's like if they say, OK, you're responsible for 10% of the claims. So if it's a $1000 of claims, you're responsible for $100 of it. These are just simply the amounts that each of these carriers decided to, uh, participate within that, uh, within that group of, um, you know, within that layer of loss. And so if a company 3 chose not to. To participate the way Company One did, was that because Company 3 felt that the risk was greater or less or what is it that separates the two? Not necessarily. It may, it may be how much of their own, um, capacity, how much of their own capital they want to be, they can put it, uh, at risk for, they've got a certain amount of capital and, um, in a year they've got to allocate that capital to, uh, business according to their strategic plan as an insurance company. So that they, that's part of the consideration. So a company that's going to have greater resources to commit. That is going to be more competitive as far as the cost to us, right? OK, yeah, I mean there could be a new CFO comes in and says, I don't want to do property insurance in Arkansas anymore. Well, but we were doing it last year. OK, well, why don't we just quote a little bit higher than we typically had done and the state says yes, to go for it. OK, great. If they don't, then not a big deal. We want to get out of that market anyway. That's the reality of, of what happens. OK, last question would be on, on, The companies that would get chosen or, you know, the format that you recommending going forward. Are we insulated with, with what you recommend recommending or in your recommendation, would we be insulated from events that would occur in other parts of the country that would ultimately have an impact on our costs here. For example, everything's happening out on the East Coast right now with your recommendation, the direction you're recommending we go, are we going to be insulated from that or are we gonna still have to bear some of the cost because of the company. overall insurance. So what, what's going to end up happening is the reinsurers base it on, uh, you know, what they're considering market risk again this is where the actuarial analysis is so important because in actuarial analysis looks at this in isolation and says, OK, how much are the true underlying costs really going up and it compares those numbers. The reinsurers likely will charge more because it's property, it's, uh, you know, it's Uh, you know, when I say charge more is because when, uh, Helena, you know, came through, now there's a lot of damage in that. There's a lot of costs that that they have to, uh, you know, account for and so they're gonna, you know, maybe relook at their models, relook at, hey, do we want to be in property? What, you know, what do we want to do? So anytime there's a major disaster like that, it forces insurance companies to kind of relook and rethink, uh, what their plans are on a going forward basis. But again, our model sets us up. for that because as some of the carriers decide they don't want to be part of this, uh, plan anymore either they completely remove their capacity or they just simply charge a lot more to say, well, if we are going to take on that risk, we'll take it on, but I really want to make sure that we're, uh, we're making money on this and it's profitable in case of an adverse outcome and so again this is where having that captive model could come in and just say, all right, we think it's significantly higher than what, uh, you know, we're being significantly higher than, uh, what the true rates are, and that's where the captive could come in and, and, um, you know, kind of self-insure it and do that at a much lower premium. Representative Brooks, you recognize. Thank you, Mr. Chair, and I'll just, I guess, pre-ask for a little bit of latitude to ask a few questions if the chair is OK with that. Um, so on page 5 talking about captive, um, savings, which, of course, you know, we're all looking for savings in this, and again, thank you guys for your work. You've done outstanding. Last number of months. Uh, so $1.45 million is estimated savings. Did you do a dive into what the captive costs would be, they'll be offset by those savings. So it's probably actually the savings is probably even more than that. And the reason is because this is assuming the captives already set up. So in the first, uh, couple of pages here. In page 3, which I don't think I'm, uh, sharing my screen anymore. Those are the costs, uh, the, the funding estimates that I have on page 3 have already built in all of the costs for the, uh, for the captive there. Um, so all the overhead, uh, you know, all of those components, um, you know, are already in there. I'm Suggesting is that the captive would just, uh, on page 5, the captive would just charge the average rate of the other carriers that are participating in that pool, but removing that one, you know, uh, that, that is, that is too high. So that's a very bottom line that says the total excluding Company 3, but the marginal cost for that captive to just include the extra risk in there is likely even lower than what that premium is because that premium dollar. Includes for each of the other insurance carriers, all of their expenses, their risk loads, their overhead, their commissions, the taxes, all that other component. So it's likely an even larger savings from, uh, from that, uh, standpoint, but I just listed the 145 is just simply saying, uh, the 1.45 million is simply saying well if Company 3 wasn't around, and they were charging a rate of 1.557, we removed the rate of 1.557 and charged the rate of 1.2. 8. It's that savings between those two, right? OK. But, but at this point we haven't really arrived at a, a stronger but maybe something we do in the future, arrived at a solid number for what the cost of a captive is. Correct, um, I, we did put in our pro forma what we think the estimated amount to, uh, to set up the captive and to run that on a yearly basis. Um, but again, we'll need, this is the deeper dive, this is the feasibility study which would be, you know, essentially kind of step two, where we would do the, uh, request for proposals we would need to get a captive manager and then, you know, on and on, we need an auditor, an actuary, legal, um, you know, claims handlers, all that type of stuff to, you know, to add that in. We think those, uh, the estimates are very solid based on our experience of doing this, uh, for 20 some years, but we won't know those exact numbers until, uh, you know, until we run those, uh, scenarios. Two more questions. Uh, looking back the original scope of services back last spring. It seems like another life ago, uh, in all this. There were a couple items on there that I was, I was just kind of personally curious about that I haven't seen that we've gotten to, but I thought were pretty relevant. Uh, one of those being, um, the maintenance schedule per school system. Did we ever look into what the because a lot of our questions were surrounding some of the lower cost losses, right, that, that oftentimes we would, we would not deal with deferred maintenance issues, and so we'd wait till we have a more major loss to replace a roof, right? Uh, which we can know that's, that's kind of habit in our society, uh, but did we actually get to a place where we got what the average or what the, uh, schedules were on a per school district basis. Um, I believe we were given that information, and I don't know if we had summarized it. I, I mean, it seemed like I, you know, it did seem like this was something that was done on an annual basis or or I don't want to say annual, but it was done on a recurring basis and it had had a schedule on that. I think the bigger issue really was that those deductibles were so low that there is very little incentive to, um, you know, to do that maintenance ahead of time and to really get ahead of the. Curve. And, you know, and again, you know, to have, uh, you know, a deeper dive in terms of the, you know, in, in terms of seeing, well, what is the cost savings of having of increasing those deductibles and how much of an incentive then does it put back onto the schools to essentially kind of address those lower, uh, losses. Thank you. And then final question, this may be, uh, a, a punt for now, but more information to come, uh, relative to the recommendation at the end about combining all the insurance operations for the three entities? Have we looked at what the, the legal feasibility is given that one of the entities is a, a private nonprofit, uh, that maintains money in a trust. Uh, we looked at, at how all that. Flushes out in terms of of how it impacts combining all these. It's, we didn't look at it from that aspect, but I, I will say the option could be, you're just combining the insurance operations component of it. So not necessarily, you know, an option could be not necessarily combining the three agencies themselves, but the insurance operations could be pooled all of that could, could work and I again, I'm not an attorney so I can't speak to that, but, um, you know, to me that's just, Combining, you know, how the insurances work, not necessarily the underlying agencies themselves. Thank you, Mr. Chair. Representative Flight, you recognize. Thank you, Mr. Chair, for taking my, uh, questionnaire. Uh, I think the consultant underestimates the general assembly ability to get their hands on surplus money for one thing, um, but, uh, my question is to the chair, it appears to me looking at this this morning that we're growing government. Am I looking at it wrong? Thank you. No, I think you're looking at it wrong when you look at where we're at today and the number of employees and stuff that it takes, it's actually a better efficient model going forward than what we're at today. Um, members seeing no other questions without objection, we are going to move forward with the recommendations of per night. Seeing no recommendations that I seeing no objections that, uh, recommendation is adopted. And seeing no other business on the agenda, we are adjourned.