SFAA Addresses Louisiana and Ohio LSA's (3/22/2011)
Tuesday, March 22, 2011
SFAA Presentation to Louisiana and Ohio LSAs
Robert Duke, director of underwriting/counsel for SFAA, made a presentation to the Louisiana Surety Association on March 22, 2011, and a presentation to the Surety Association of Ohio on April 12, 2011. The presentations covered the state of the surety industry and current challenges that the industry is facing. The remarks hit on current economic indicators and surety results. Given the depth of the past recession and the slow pace of the recovery, results have been surprising good. Typically, increased loss ratios follow poor economic conditions. However, Mr. Duke noted that he was not ready to "exhale” yet.
Mr. Duke also discussed the challenges facing the industry including threshold increases and bond waivers. The stated justification for such measures is to assist small contractors. Mr. Duke noted that the opposite is true and in the long run, waivers and threshold increases are detrimental to small contractors. He reported on efforts in Maryland to allow individual sureties to write bonds without any regulation or oversight. Again the justification is to assist small contractors. Lastly, he noted that SFAA staff continues to see onerous bond forms and longterm warranty requirements.
The key to meet these challenges is constant education and communication with constituencies such as public owners and contractors.