Details of Engagement-GASB

Self-Funded Actuarial Services, Inc. (SFA) is work product-oriented which reduces the necessity for the usual professional engagement formalities; SFA’s Home Site

www.self-fund-health.com provides numerous Sub Sites and other useful items of information. SFA treats risk management and actuarial topics as essentially the same.

SFA has established a methodology for meeting the new GASB 43 and GASB 45 requirements which is in two parts:

Part A

SFA provides an Actuarial Report to the Entity in three part (see examples):

· Actives and COBRAS (Exhibit A)

· Retirees without Medicare Card (Exhibit B)

· Retirees with Medicare Card (Exhibit C)

These Reports provide for the upcoming plan year (a) projected claims, (b) recommended funding for claims, (c) COBRA rates for actives (d) funding for claims and fixed costs for retirees and (e) estimated claim reserves. The Required Data and Product-Oriented Fees-GASB (Exhibit D) is also shown.

Part B

With the permission of the Entity, SFA will send a copy of the Annual Actuarial Reports (Exhibits A-C) to an allied, but independent actuary, Firm X that will provide the GASB certifications using such Annual Actuarial Reports as an essential starting point. See model Fee Quote for such GASB Certification. Exhibit E.

Relationships

The critical relationships are as follows:

1. SFA and the Actuarial Firm X are both totally independent of the Entity, the Plan Supervisor and each other.

2. SFA prefers to look to the Plan Supervisor (or another trusted vendor) as its client for data handling advantages; SFA will consent to be contractually tied to the Entity if the Entity so directs.

3. Actuarial Firm X will necessarily be connected contractually to the Entity.