RON FARRELL APPOINTED 2001 Current and past positions held: Non Executive Director, Victorian Managed Insurance Authority; General Manager, Australian Eagle Insurance Co Ltd; Chairman and Non Executive Director, Utilities Insurance Co Pty Ltd; Non Executive Director, connect.com.au Pty Ltd; Non Executive Director, Metropolitan Fire and Emergency Services Board to NICK RENTON FFA, FSIA, FIAA, AIAA APPOINTED 1995 Current and past positions held: Consulting Actuary and Principal of N E Renton and Associates; Former Director, OFM Investment Group Limited; Executive Director, Life Insurance Federation of Australia 1975-86; Principal Officer, Switzerland Life Assurance Society Limited 1960-75. ADRIAN NYE BA (hons), Dip Ed, MBA (Melb), FCPA APPOINTED MARCH 2004 Current and past positions held: Chairman, Victorian Managed Insurance Authority. DR MICHAEL KENNEDY BBus DBA APPOINTED 1995 Current and past positions held: CEO, Mornington Peninsula Shire Council; former CEO Boroondara City Council; former CEO, Shire of Hastings; former Director/General Manager Coastal Expressline; former Executive General Manager, Intermodal ANL Limited. 30/6/2003. ALAN HOLMES Bcom, GDip Bus, ACA, FAICD EX-OFFICIO Current and past positions held: MAV Financial and Insurance Consultant and Contract Manager. JIM BULLING LLB EX-OFFICIO Current and past positions held: Partner, Middletons Lawyers; MAV adviser. GRAEME LEMMER Dip Fin Serv, QPIB, AAII EX-OFFICIO Current and past positions held: CMP Scheme Manager (JLT). BOB FALZON Dip Fin Serv, QPIB, AAII EX-OFFICIO Current and past positions held: JLT General Manager - Risk Services. 9 MAV INSURANCE ANNUAL REPORT 2003/4
RISK MANAGE ONE PRIORITY FOR MAV INSURANCE. THIS YEAR FOCUSSED ON THE DOCUMENTATION OF PROCEDURES, POLICIES AND MONITORING PROCESSES TO MINIMISE MEMBERS’ EXPOSURE TO RISKS. AUDIT PROCESS MAV insurance adopted a tighter audit process during 2003/04 to further improve risk management by testing the effectiveness of councils’ systems. The audit included assessment of high risk areas such as the management of contracts, trees, roads and footpaths. Emphasis was also placed on the traceability of inventories, inspections, maintenance activities and proof of completed works. Councils were required to provide documentary evidence that proactive risk management occurs. A more stringent scoring criteria was adopted to prevent subjectivity of the audits including increasing the scoring system to a zero to five rating to reflect outstanding risk management performance. As the benchmark was lifted many council members’ overall risk management scores decreased from the 2002/03 assessment. GOVERNANCE Policies and procedures were put in place to address fitness and propriety of members of the Insurance Committee and the responsible officers of the MAV in accordance with criteria set by APRA. The development of a Risk Management Strategy included MAV Insurance policies, procedures, processes and control systems appropriate to the size, business mix and complexity of the organisation’s operations. RISK MANAGEMENT STRATEGY As part of the MAV’s application for an Australian Financial Services License (AFSL) for its insurance business, a Compliance and Risk Management Strategy was developed for both CMP and the Municipal Officers Fidelity Guarantee Fund. The strategy consists of two major components: RISK MANAGEMENT PLAN As part of the overall strategy for risk management, a Compliance and Risk Management Plan was developed for CMP and the Municipal Officers’ Fidelity Guarantee Fund that sets out specific procedures and key information that MAV Insurance must follow in order to comply with the spirit of APRA. The plan also highlights the roles and responsibilities of the Insurance Committee and the MAV Insurance Compliance Officer. RISK ANALYSIS Specific detail about MAV Insurance’s obligations under the Corporation Act, ASIC policy, AFSL and internal policies was provided to ASIC in the form of a Compliance and Risk Analysis Table. The table documents the: · Risk of non compliance · Priority of risk · MAV Insurance compliance and monitoring procedures FUTURE DIRECTIONS A sub-committee has been established in both Victoria and Tasmania to review this year’s audit before developing the 2004/05 process and criteria. 18 MAV INSURANCE ANNUAL REPORT 2003/4
COMBINED FINANCIAL STATEMENTS 15 RELATED PARTIES The Municipal Association of Victoria is a body corporate established under the Municipal Association Act 1907 to provide services for and the representation of Local Government authorities in Victoria. The Association and its wholly-owned controlled entities, including MAV Insurance, trade with its members in the normal course of business and on an arm’s length basis. The discreet nature of these transactions is not material. Total expenses of $352,000 (2003 $289,450) payable to the Municipal Association of Victoria being payment for Administrative support, and overseeing the management of the insurance activities, including the conduct of bi-monthly Committee Meetings. Other than this there were no material related party transactions during the year. Committee Members During The Year A. Murphy (Independent Chairperson) G. Lake (MAV – President) Appointed 26 August 2004 B A Matheson (MAV - President) Resigned 17 June 2004 Cr. J. Dale (MAV – Acting President) Appointed 17 June 2004 S. Wardlaw (LGAT Representative) Resigned 30 July 2003 A. Garcia (LGAT Representative) Appointed 30 July 2003 N. Renton (Independent) J. Warburton (Independent) R. Farrell (Independent) A. Nye (Independent) Appointed 2 March 2004 Dr. M. Kennedy (CEO, Mornington Peninsula Shire Council) R. Spence (MAV - Chief Executive Officer) Cr. C. Papas (MAV Representative) Appointed 2 August 2003 Resigned 28 June 2004 Cr. J. Ryan (MAV Representative) Appointed 2 August 2003 Cr. Rod Fyffe (MAV Representative) Appointed 28 June 2004 COMBINED CIVIC MUTUAL PLUS MUNICIPAL OFFICERS FIDELITY GUARANTEE FUND 2004 $ 2003 $ 2004 $ 2003 $ 2004 $ 2003 $ Independent committee members receive remuneration for meeting fees. Chairperson receives $750 per meeting and other independent committee members receive $500 per meeting. Remuneration of Committee Members Total Income received or receivable by Committee Members 26,000 17,750 26,000 17,750 - - Number of Committee Members whose total income falls within the following bands: $0 - $9,999 2004 14 2003 11 Loans to Committee Members No loans were made to or are payable by Committee Members. Transactions There were no other material transactions with Committee Members.