While Terry Fleming is quick to thank his employers for supporting his participation in the Risk and Insurance Management Society over the last two decades, the new RIMS president for 2010 is quick to emphasize that it's a two-way street, considering how much value he and his fellow members have received from their work with the association.

Mr. Fleming–who serves as risk manager for Montgomery County, Md.–said his presidency marks the highlight of his career. “I've been involved in RIMS for over 20 years and it's a great organization–and I'm thankful my employer supports my participation,” he added, while noting that RIMS has helped him personally in a number of ways.

One example, he said, is with a new $80 million courthouse being built by the county. The architect was being asked to carry a $25 million errors and omissions policy, but to achieve that, had to tack an additional $1.3 million onto the contract.

Mr. Fleming called a RIMS contact in his county for help–Shari Natovitz, vice president and risk manager with Silverstein Properties Inc./World Trade Center Properties in Manhattan.

“She made a recommendation for me to buy an owners protective program, which I did, and it saved me more than $1 million,” he said. “So peer-to-peer benchmarking is really a valuable tool for us.”

Mr. Fleming joked that he made sure his boss was aware of the help he got, since “those savings will pay my RIMS dues for a long time.” He noted that RIMS staff members are working on ideas to help facilitate these types of transactions among members.

Risk management has personal meaning for Mr. Fleming as well, since he might not have become a risk manager at all had it not been for his wife, Karen.

Mr. Fleming, who worked on the claims side for a risk management consulting firm, said when he first met her, his wife was working as risk manager for a local government in the Washington, D.C. area. “I called on her to try to sell her some business and that's how we met,” he said.

The two were soon formally introduced by a friend and began dating, Mr. Fleming said. The match was a success. In fact, they recently celebrated their 20th anniversary.

“During that time she introduced me to risk management as far as her job,” he said, noting that while he was already familiar with the principles of risk management, he became more interested in its practice. Not long after, he was hired as a risk manager for the Fairfax County school system.

Mr. Fleming is serving as RIMS president during the organization's 60th anniversary, which he said calls for a year-long celebration, highlighted at the annual conference, set for April 25-29.

“The conference is in Boston, which is an insurance town, and Hartford is just down the road, so we expect that our attendance is going to be up this year despite the economy,” he said, adding that RIMS is setting up a special Web site for the anniversary.

Although he has a long to-do list for 2010, Mr. Fleming said the top-four items on his agenda are to:

o Continue lobbying for regulatory and legislative changes in Congress and at the state level.

“We have a number of issues we've lobbied for over the years, and it looks like some of them may come to fruition this year,” he said. They include the possibility of an optional federal charter and federal oversight of insurance; a bill reforming regulation of surplus lines; and the introduction of a bill creating a federal Insurance Information Office, which was supported by RIMS.

“We'll lobby for those all year and in June during our 'RIMS on the Hill' event,” he said.

Mr. Fleming noted that RIMS also will continue to work with the New York Insurance Department on proposed broker compensation regulation.

The department originally came out with a draft last January, he said–which RIMS supported. Some changes were made after push-back from the broker side, however, and the department came out with a new proposal the first part of December.

“We're responding to that and we have been working with them, trying to get our perspective recognized in the proposed regulation,” Mr. Fleming said.

He noted, however, that “we think once the final regulation is implemented, the broker compensation issue will raise its ugly head again and that the New York Attorney General will lift the ban on contingency fees for the big-three”–referring to the Marsh, Aon and Willis brokerages.

Because RIMS believes “the handwriting is on the wall for that,” he said the organization will push its preference on the compensation issue, which calls for a prohibition on contingency fees for all brokers. “Absent that, we think complete transparency is the fallback position,” he concluded.

o Develop an international strategy.

An international strategy will serve two purposes, Mr. Fleming said–provide products and services to U.S. companies with international operations, and expand to areas in the world where there is a need for risk management education and mentoring.

To develop the strategy, he said a committee has been established and “we're looking at areas of the world where we think we have the greatest chances of success.” RIMS will provide educational offerings (possibly conferences) and will work with other risk management groups to get a foothold globally, he noted.

Being considered are some of the emerging economies of the former Soviet Union, China and other Asian countries, and possibly South America, he said.

“With the way the economy is going, we have to expand our horizons to keep our revenue growing so we can remain a strong organization, and this is one way of doing that,” Mr. Fleming said.

o Promote student outreach.

A broad push to reach out to students is underway, encouraging graduates with an interest in insurance to “enter the risk management field, rather than do what they've done historically, which is go into the broker and insurer field,” he said.

RIMS is working with the risk management fraternity, Gamma Iota Sigma, and an organization of risk management professors and teachers at the college level to establish a relationship and provide mentoring for graduating students.

Students with a major or minor in risk management are given free membership to RIMS, which includes access to the Web site and job bank. Since 1978, RIMS has sponsored funding for students to attend its annual conference. In 2010, RIMS will sponsor 30 students to join them in Boston.

All of the scholarships and student sponsorships to the conference–including the Anita Benedetti scholarships and the Risk Manager in Residence Program–are administered through the Spencer Educational Foundation, he explained.

“We've done a number of Risk Manager in Residence programs with various universities around the country, and we're getting a lot of positive feedback from the university side,” he said, noting that students also have been receptive.

“Getting students into risk management is a great opportunity for everyone involved,” he said.

o Encourage more peer-to-peer benchmarking among members.

“With the tough economy and resources drying up, we've got a lot of experience and a wealth of knowledge among our members, and there are ways we can share that knowledge and talent throughout the organization. We're developing ways to do some outreach to make that happen,” Mr. Fleming explained.

Meanwhile, back in his “day job,” Mr. Fleming's risk management department has not been immune from the effects of the struggling economy.

Montgomery County is located adjacent to Washington, D.C., and since about one-third of the residents are employed by the federal government in some form, “it's a pretty affluent county, although we are being hit with the fiscal situation and the economy like everyone else,” he said. “Our revenue is based on income tax and property tax, and both have been affected.”

Mr. Fleming said his division consists of 11 employees, down from 12 last year, “and they are looking at cuts this year.”

While most of the county's exposure is in workers' compensation, he said, “we are blessed in a way, because we have a tort cap in Maryland for government entities.” This means that for auto, general and other forms of liability there is a cap on damages of $200,000 for individuals, with a maximum of $500,000 for any one occurrence.

The county also has an excess liability program in place for vehicles that travel out of Maryland, where there is no tort cap for claims involving federal litigation–such as environmental events. “So we have an excess program for that. Workers' comp is probably 90 percent of our claims,” he noted.

Coverage for the county includes an insurance pool that provides for 14 individual entities, including the school board and the local community college.

“We cover about 50,000 employees in our self-insurance program–about $100 million in total reserves for outstanding claims,” he explained.

Currently the only commercial insurance purchased is for property, covering “about $6 billion in real property, and our excess liability program. Fortunately the insurance market has been relatively soft, which has been helpful,” he said.

Regarding H1N1, he said public health and safety employees, first responders and emergency management personnel were vaccinated, which helped to mitigate the threat of a flu pandemic crippling county services. He noted that the county has an emergency management organization that keeps tabs on health issues and county employees.

Mr. Fleming said his main concern is controlling costs. “We're doing more with less money and fewer employees–that is a theme right now,” he noted, adding that to pull this off, “you have to set your priorities and keep focused on where the money is going and keeping costs under control to the extent possible.”

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