Surety Association of Ohio
1st Quarter Meeting Minutes
March 12, 2003

• Mark Drengler, President, opened the meeting at Noon with approximately 85 members in attendance at the Hilton off of Rockside Road in Cleveland, OH.

• The meeting started with Mark Kelsay and Walid Gemayel from ODOT. They spoke on ODOT pre-qualification, long-term warranties, design/build, electronic bidding, and Local Public Agency Program (LPA).

• Lynn Shubert, President of the Surety Association of America, spoke to the group next. She discussed general issues within the industry regarding increasing loss ratios, economy, difficult obligees, automation, federal terrorism legislation, reinsurance capacity, and withdrawals/mergers. She discussed various issues within the commercial surety industry such as bond availability & accessibility, undesirable bond forms, large bankruptcies, and public understanding. Contract surety issues are bond availability/accessibility, undesirable bond forms, long-term warranties, alternative products, Power of Attorneys on Federal jobs, and trust fund statutes. She then discussed statistics and projections. SAA is projecting losses in all lines in ’02, the market will continue to tighten, see the increase in the use of personal indemnity & co-surety, a decrease in availability of fringe products, increase loss costs, increase use in electronic bond forms, push by obligees for onerous bond forms, will see pressure for higher bond thresholds & waivers, increase in requirements for surety bonds, increase in tightening of reinsurance, and potential increase in mold claims. The outlook for ’03 is also very bleak for the industry. Lynn also advised that the members should get involved from a personal level when writing to legislators on legislative issues regarding the industry.

• Marc Oravecz then reported that the web site is up and running now. The association’s by-laws and roster may now be viewed on the web site.

• Eric Schmidt reported on behalf of the Legislative Committee. He discussed the need for wet powers on Federal jobs. He also advised that the Commonwealth of Kentucky now requires the surety to have an AM Best rating of A-.

• Marc Oravecz then announced the Association has put a Scholarship Program together for students entering their first year in college. Applicant must be a business student and directly related to a member of the association. Further details and requirements are outlined in the application. Applications will be available soon and a $1,000 scholarship will be awarded for Fall ’03. Thanks to Marc, Bill Wildenheim, and Bruce Lehmkuhl for putting the program together. A special thanks goes to Bill’s staff for typing the application and program requirements.

• Mark Drengler then announced that Jack Kehl has been appointed as the new Education Committee Chairperson. Jack is looking for help to conduct presentations throughout the State of Ohio to promote surety. The association’s goal is to do ten presentations per year.

• The meeting was adjourned at 2:30PM. The next meeting will be held in Cincinnati, OH in June ’03. The date and time will be announced at a later date. This will be our annual golf outing. The board then met in executive session to plan the next meeting and discuss board related matters.