February 10, 1999

In attendance were Dan McCune, Walter Houghtaling, Michael Canges, John Phillips, Heather Burkham, Donna Lloyd, June Laird, Mike Hutchinson, Leslie Dolan, Dave Little, Kent Miller, Mike McConnell, Michael Mihm, Chuck Turner, and Christopher Buckman.

Also in attendance from Westport Insurance Company and Employers Reinsurance Company were: Jerry Woolard, Senior Vice President of Employers Reinsurance (ERC) and President of Westport Insurance Company, Fred Fontein, Madeline Martin and Diana Cygan.

The purpose of the meeting was to discuss with the Westport Insurance Company representatives recent developments at Westport and the status of the Colorado Bar Association's sponsored malpractice insurance program.

Mr. Woolard reported that Coregis had changed its name to Westport Insurance Company after it was acquired by ERC. ERC is a subsidiary of General Electric Corporation and is the fourth largest company within the General Electric system. Mr. Woolard stressed that G.E. and all its subsidiaries are attempting to change the company culture to emphasize customer service and objectively measuring customer satisfaction. He reported that ERC has made a strategic decision to be a primary insurer as well as a reinsurer and that it is doing very well given General Electric's financial commitment and depth. He reported that when ERC acquired Coregis Insurance Company, ERC made very few changes in personnel as it was happy with how Coregis was being operated. Mr. Woolard reported that ERC and Westport are absolutely dedicated to the Lawyers' Professional Liability business as part of its overall plan of marketing E & O and professional liability insurance to professional groups and affiliation groups.

Fred Fontein reported that Westport/Coregis has now been in the lawyers' malpractice business for at least 25 years, with more emphasis on the lawyers' malpractice business in the last six or seven years. Westport now insures more law firms than any other insurance company in the country. ALAS has more lawyers, however ALAS focuses only on very large law firms. Mr. Fontein reported that there were 15-25 companies competing for the lawyers' malpractice business in any given state, and there are approximately 30-40 companies nationwide competing for the business. He reported that the criteria in terms of success in the lawyers' malpractice business is:

Mr. Fontein reported that because the market is very competitive Westport as well as other insurance companies are having to manage the changing risks that lawyers are being exposed to such as bond exposure or exposure from claims from employees, and Westport is endeavoring to modify its policies to address the changing risks.

Diana Cygan reported on the results of the program in Colorado. She reported that the largest number of claims is still found in the plaintiffs' personal injury practice, followed by domestic relations and residential real estate. She reported that in terms of severity, plaintiffs' personal injury results in the most severe claims, again followed by domestic relations and residential real estate. By far the most common mistake made by lawyers in terms of frequency of claims is diary or calendar. Missing deadlines also results in the most severe claims. Ms. Cygan reported that mistakes in diarying and calendaring have increased significantly since 1995. The committee discussed at length the problems of lawyers missing deadlines and discuss what might be done to reduce the problem.

Ms. Cygan discussed the process she goes through underrating law firms who have had claims.

Ms. Martin reported that Westport intended to reduce its base rates for standard and somewhat more for defense firms. Westport is also revising its credits for staff size, continuing legal education, loss control systems, and also for law firms that have been claims free for a number of years.

The committee discussed at length what could be done to get into law schools to discuss the problem of malpractice claims; most of the law schools have been very resistant to educating young lawyers on malpractice prevention issues.

After lengthy discussion on these and other issues, the committee adjourned.

Minutes by Michael T. Mihm