TERRAFIRMA RISK RETENTION GROUP LLC CONSERVATION DEFENSE LIABILITY - - PowerPoint PPT Presentation

CONSERVATION DEFENSE LIABILITY INSURANCE

TERRAFIRMA RISK RETENTION GROUP LLC

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Purposes

• Safety net
• No substitute for sufficient reserves
• Helps meet liability of legal challenges
• Terrafirma funds defense costs
• Provide early effective expert assistance
• Minimize disputes
• Provide wide array of problem solving
• Must have sound practices
• Most land trusts will face litigation
• Few land trusts can fund long litigation

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Goals

• Uphold conservation obligations forever
• Defend conserved land
• Help prevent violations
• Avoid unnecessary litigation
• Create favorable case law
• Avoid bad precedents
• Maintain public confidence in

– conservation easements as a legal tool – land trusts as effective conservation organizations

• Prevent land trust bankruptcy from legal battles

3

Terrafirma Organization Facts

• 423 land trusts are Terrafirma owner-members for 2013
• Land trusts in 46 states and DC
• Alliance Risk Management Services LLC

– provides daily operational management – ARMS is Alliance subsidiary

• Multiple independent contractors

– technical compliance services

• Registered in 49 states and DC
• Policy inception March 1, 2013
• No commercial coverage available
• No commercial carrier interested

4

Terrafirma Regulators

• Vermont Insurance Regulator approval

– Leading state for captives – Over 900 hundred – Terrafirma is #965 – License July 12, 2012 – Risk retention group

• IRS tax exemption

May 16, 2012 as 501(n) charitable risk pool

• Vermont non-member managed limited liability

company organized April 2011

5

Terrafirma Statistics

• 20,411 parcels of conserved land currently

enrolled; 6.3 million acres

• 18,557 conservation easements currently

enrolled; 1854 fee land parcels enrolled

• Not counting large national organizations (which

can self-insure) 79% of Alliance members’ 24,415 conservation easements enrolled

• Capitalization of $4 million from foundations and

major donors

• Available only to private tax-exempt 501(c)(3)

conservation organizations

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Basic Numbers

• Covers both conservation easement and fee-owned land
• Defends and enforces conservation rights
• Base premium of $60 per year per property
• Maximum limit of $500,000 per claim
• Some higher aggregate limits for large portfolios
• $5,000 deductible per claim
• Discounts available
• No coinsurance (co-payment) except in unusual situations

7

Structure and Governance

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St Structure a e and Managem gement

Terrafirma Insurance Policy

• One annual enrollment window in January of

each year

• Details, frequently asked questions, eligibility

requirements and more at www.terrafirma.org

• Only for legal related expenses and not damages
• Does not cover pre-existing problems
• Must report claims on time
• Must also be fully eligible to have the coverage
• Thirteen eligibility criteria
• Has 32 exclusions from coverage

9

Terrafirma Structure & Governance

COMMERCIAL PROVIDER OF CAPTIVE MANAGEMENT SERVICES

CAPTIVE MANAGEMENT COMPANY And other consultants

THE INSURANCE COMPANY (LCIA)*

Terrafirma Risk Retention Group Limited Liability Company 501(n) tax status

(Vermont manager-managed not-for-profit LLC)

LAND TRUST OWNER MEMBERS

THE LAND TRUST ALLIANCE, INC.

(MA not-for-

profit corporation) The Manager (ARMS)

ALLIANCE RISK MANAGEMENT SERVICES LLC

(Vermont LLC; Alliance sole member)

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Structure & Governance

Members Committee of Terrafirma

• General oversight
• Appointment of service providers and committees
• Nominate candidate slate for Members Committee
• Overall policy direction
• All volunteer; Single terms; Elected regionally
• Only member land trust senior leadership eligible
• Must be independent
• One rep for each geographic region (total of eight),
• One for regulator required Vermont resident

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Claims Committee

• Evaluate, monitor, administer claims
• Seven experienced individuals
• Manages claims and legal strategy
• Determines claims
• Approves all settlements
• Appoints attorneys or other experts
• Collaborative process with land trust

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Claims

• Service to Land Trusts guiding principle
• Uphold conservation permanence
• Avoid unnecessary litigation
• Implement timely responses
• Support strong risk management practices
• Give early advice for dispute resolution
• Encourage timely and effective claim reports
• Maintain adequate claim loss and expense reserves
• Provide an equitable member claims dispute resolution
• Obtain best result possible given all the circumstances
• Comply with fair claims practices and regulations

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Conta tact I t Inform rmatio tion

he help@ p@terrafirma. a.org

Lorri B rri Barre rett a at 202-800 800-2219 2219 Leslie R e Ratley ey-Beach at at 802 802- 262 262-6051 6051

Website ite a at www.te terra rafir irma.org rg

May 1 10, 2 2013

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