a. KTRS Detailed Requirements.docx

INVITATION FOR BID

COMMONWEALTH OF KENTUCKY

TEACHERS’ RETIREMENT SYSTEM OF THE STATE OF KENTUCKY

Request for Bid 758 1900000315

NAMED INSURED

Commonwealth of Kentucky Teachers’ Retirement System of the State of Kentucky C/O Division of State Risk & Insurance Services Division 209 St. Clair Street, 5th Floor Frankfort, KY 40601

“Insured” shall mean:

1) The fund defined under Named Insured

2) Any past, present or future trustee or employee of the fund defined above and estate, heirs or legal representative of any such person should such person be deceased or incompetent.

RESTRICTION ON COMMUNICATIONS

The Commonwealth Buyer listed below shall be the sole point of contact throughout the procurement process. Bidders shall not communicate with any other Commonwealth staff concerning this Solicitation.

For violation of this restriction on communications to the Commonwealth Buyer, the Commonwealth shall reserve the right to reject the bid of the offending bidder.

All communications concerning this procurement shall be in writing and regular or express mailed, E-mailed or faxed to the Commonwealth Buyer:

Richard Mize, CPPB Statewide Procurement Consultant Finance and Administration Cabinet Office of Procurement Services 702 Capitol Avenue, Room 095 Frankfort, Kentucky 40601 E-mail: Richard.Mize@ky.gov

This provision does not preclude bidders who presently hold contracts with the Commonwealth from communicating with state agencies regarding existing contracts.

NOTICE TO PROSPECTIVE BIDDERS:

MARKET ASSIGNMENT

In an effort to assure a fair and competitive bid environment, no underwriters, wholesalers, or insurance brokers are to be approached for a quotation prior to the release date of this solicitation. Further, it shall be understood that no prospective Bidder may in any manner block, tie-up, or in any other way manipulate the insurance market to restrict access to other agencies wishing to quote.

All bidders intending to submit a bid package must identify in writing (via e-mail) to the buyer of record, the market they are going to use for their offer, as soon as that is known, IN ADVANCE of the bid submission itself. Bidders should also identify a second-choice market in the event that their first choice market has already been selected by another bidder. Bidders may only approach that one market assigned to them. Any other markets approached must be released so as to be available to other potential bidders.

NOTICE OF MARKET SELECTION SHALL BE SENT TO

Richard.mize@ky.gov

Market assignments will be recorded in the order received, first received, first assigned, as determined by the date and time stamp of the e-mail. In the event of a tie, assignment will be by random coin toss. Bidders will be promptly notified of their market assignment. In the event of an unintentional conflict arising from different markets doing business under one corporate entity, the first assignment will have precedence and the second assignment will be withdrawn and that bidder allowed to request a new assignment. .

Bidders shall release any market(s) contacted outside of their recorded market assignment.

RISK PROFILE AND UNDERWRITING INFORMATION

Established by law in 1938, KTRS legally known as “Teachers’ Retirement System of the State of Kentucky” became operational on July 1, 1940. TRS is classified as an “actuarial reserve, joint-contributory” system, which means that contributions of the members and employers and the earnings from the TRS investments are placed in reserve to pay for the System’s annuity obligation. TRS is a tax-qualified governmental plan under code section 401(a). TRS also administers a medical insurance plan, closed 403(B) tax-sheltered annuity plan, supplemental benefit fund, life insurance benefit and scholarship bequest.

TRS administration is the responsibility of the Board of Trustees consisting of eleven (11) members. The Board of Trustees appoints an Executive Secretary who is responsible for administering TRS under the policies established by the Board.

TRS membership is mandatory for all persons in eligible agencies occupying positions that require either certification or graduation from a four (4) year college or university as a condition of employment. Additionally, any person providing part-time or substitute teaching services that are the same or similar to those teaching services provided by full-time, certified teachers shall be a member of the retirement system, regardless of whether certification or graduation from a four (4) year college or university is required. University employees, however, must be employed on a full-time basis (seven-tenths or more of normal full-time service measured by the contract days in the position for which they are employed) and must be filling a position requiring either certification or a four-year degree in order to be eligible for membership in TRS. Agencies eligible for membership in TRS include public elementary and secondary schools, regional educational cooperatives, Eastern Kentucky University, Kentucky State University, Moorhead State University, Murray State University, Western Kentucky University, the School for the Deaf, the School for the Blind, the Workforce Development Cabinet, the Kentucky Community and Technical College System, the Department of Education, the Educational Professional Standards Board, and other agencies as specified by law.

TRS currently serves 72,130 active members and over 52,966 annuitants.

TRUSTEES

Ronald L. Sanders Chairperson Lay Trustee

Alison Wright Vice Chairperson Active Teacher

John Boardman Trustee Appointed Trustee

Frank Collecchia Trustee Appointed Teacher

Hollis Gritton Trustee Lay Trustee

Brenda McGown Trustee Retired Teacher

Lynn Patterson Trustee Active Teacher

Laura Schneider Trustee Active Teacher

Josh Underwood Trustee Active Teacher

Allison Ball Ex-Officio KY State Treasurer

NON-VOTING INVESTMENT COMMITTEE

Beavis Longstreth Additional Insured Investment Expert

George Philip Additional Insured Investment Expert

DESIRED COVERAGE

Fiduciary liability and defense cost insurance. The proposed insurance shall pay on behalf of the insured(s) all sums, which the insured becomes legally obligated to pay from the retroactive date of November 30, 1985 through the specified policy period as a result of any actual or alleged breach of fiduciary duty or administration committed by an insured(s) or by any other person for whom the insured(s) are legally responsible.

Breach of fiduciary duty shall be defined as, or similar to, the violation of any of the responsibilities, obligations or duties imposed upon fiduciaries by the common or statutory law of the United States of America or any state or other jurisdiction therein, including negligent acts, errors or omissions in giving counsel to participants and beneficiaries with respect to a Plan, interpreting a Plan, handling the records of, or effecting enrollment, termination or cancellation of participants under a plan.

The proposed insurance policy shall also have the right and duty to defend any suit to which the insurance applies alleging a claim against the insured(s) even if the allegations are groundless, false or fraudulent. Any settlement must be with the consent of the insured(s).

Cyber Risk coverage. Coverage for content restoration expense and crisis notification expense.

HIPAA coverage. Coverage for civil fines and penalty expenses.

LIMIT OF INSURANCE

Provide a bid response with these limits:

Defense Costs Coverage Included

COVERAGE PROVISIONS

1. Coverage Form: Claims made basis.

2. Defense Costs: Included

NOTE: Bidders shall submit sample copies of their coverage terms and conditions as well as any relative endorsements, along with the bid submission.

RETROACTIVE DATE

November 30, 1985

REQUIRED POLICY ENDORSEMENTS

The Division of State Risk and Insurance Services, 209 St. Clair Street, Frankfort, KY 40601 is responsible for receiving three copies of the policy and any endorsements or changes in the policy during the policy term.

Endorsement # 1:

The policy shall be endorsed to extend the notice of cancellation or non-renewal to ninety (90) days or longer, fourteen (14) days for non-payment of premium.

Endorsement # 2:

The following should be attached and made a part of the contract:

"It is hereby agreed that in any claim or suit for damages covered by the policy, the Company will not, except upon written request of the insured by its duly authorized officer, deny liability of the insured through the use of the defense of immunity because the insured is a governmental agency."

POLICY PERIOD AND RENEWAL OPTIONS

The policy period shall be from 12:01 a.m. January 28, 2019 to 12:01 a.m. January 28, 2020 with options to renew for four additional one-year terms by mutual agreement of the insurer and the Commonwealth of Kentucky.

PRICE GUARANTEE

All bids shall be guaranteed for 90 days after the opening. Rates must be guaranteed until the expiration of the contract. Price adjustments may be considered for subsequent policy years, only if the insurer notifies the Division of State Risk and Insurance Services in writing no less than 90 days prior to the expiration date of its intention to change the existing contract rates for the next policy year.

Failure to notify the Division of State Risk and Insurance Services or to provide changes in writing within a timely manner, no later than ninety (90) days prior to renewal, waives any opportunity for change or modification of the contract terms, conditions or premium.

CANCELLATION AND SPECIAL PROVISIONS

The insurer shall provide a ninety (90) day notice of cancellation or non-renewal. Refunds shall be computed on a pro rata basis upon cancellation, whether requested by the insured or the carrier.

METHOD OF PREMIUM PAYMENT

The insured will render payment within 30 days as required in KRS 45.453, upon presentation of two copies of the billing. Premium will be paid on an annual basis.

LEGAL REQUIREMENTS

The vendor is required to comply with all applicable federal, state and local rules, regulations, and statutes, including but not limited to the insurance code in Chapter 304 of the Kentucky Revised Statutes, during the contract term.

Any servicing agents shall be licensed and have on file with the Kentucky Office of the Controller proof of financial responsibility as required under Chapter 304 of the Kentucky Revised Statutes during the contract term.

Any claims adjuster(s) shall be licensed as required under Chapter 304 of the Kentucky Revised Statutes during the contract term.

TAXES

Kentucky Premium Surcharge of 1.8% pursuant to KRS 136.392 applies to all policies issued within the Commonwealth and shall be stated separately on the Bidder Quotation Form.

The Commonwealth, however, is exempt from most other taxes, such as the Federal Excise Tax, and the Kentucky Sales or Use Tax and the Local Government Premium Tax (Municipal Tax).

BIDDER ELIGIBILITY

1. CERTIFICATE OF AUTHORITY

Bids will be accepted from any authorized (admitted) insurer holding a Certificate of Authority from the Commonwealth of Kentucky that meets the minimum requirements of this Solicitation. A Certificate of Authority equates to being licensed in accordance with the Insurance Code, KRS Chapter 304.

If there are no responsive and responsible bidders with Certificates of Authority from the Commonwealth of Kentucky, bids will be accepted pursuant to KRS 304.10-040 as a condition for export; these bids shall be from an "eligible surplus lines insurer", as defined pursuant to KRS 304.10-070. The insurer will have sole responsibility for selecting agent (s), if any. The Commonwealth will issue no Agent-of-Record Letters.

2. A.M. BEST RATING

Bidders shall have a B+ or better A.M. Best Rating. Bidders with an A.M. Best rating lower than B+ shall not be considered. Should the successful bidder drop below a B+ rating from A.M. Best during the contract term, the Commonwealth of Kentucky may take appropriate action to secure or maintain this coverage.

SIGNING SOLICITATION

An authorized representative shall complete and sign where indicated on the solicitation sheet that is the front page of this solicitation and elsewhere as identified in this solicitation. FAILURE TO DO SO SHALL RESULT IN THE VENDOR’S PROPOSAL BEING REJECTED.

SOLICITATION SUBMISSION REQUIREMENTS

Vendors shall submit one (1) marked original and three (3) copies of the bid proposal under sealed cover, which shall be received no later than the date and time indicated on the face of this solicitation. Any bid proposal received after this date and time shall be rejected and returned unopened to the offeror.

Proposals shall be submitted to:

Bid Clerk Division of Material and Procurement Services Finance and Administration Cabinet Room 095, Capitol Annex Frankfort, KY 40601

The outside cover of the package containing the bid proposal shall be marked:

Commonwealth of Kentucky Teachers’ Retirement System of the State of Kentucky Fiduciary Liability and Defense Costs Coverage Bid Proposal

RFB 758 1900000315

Name of Offeror

FORMAT OF SOLICITATION RESPONSE

The bid proposal shall be arranged and labeled in the manner set forth below. Failure to arrange and label your submittal in this manner may result in rejection of your proposal.

1. Completed and signed solicitation.

2. Signed solicitation addenda, if applicable.

3. AM Best rating.

4. Endorsements.

5. Sample copies of coverage terms and conditions as well as any relative endorsements.

6. Proof of License.

7. Certificate of Authority.

8. Copies of all quotations and declination letters from every company and market approached in relation to this request for bids, or a statement identifying such companies and markets.

9. A signed statement verifying that the copies of quotations and declinations or other statement identifying such companies and markets submitted with the solicitation response is a true, correct and complete disclosure of all markets and insurers approached in relation to this request for bids.

10. Bidder Information Sheet signed by a duly authorized representative of the vendor’s organization.

11. Bid Quotation Form

12. Bid Specification Deviations.

13. Bid Specification Enhancements.

CONTRACT EXECUTION

The original copy of the binder shall be furnished to the Division of State Risk and Insurance Services within ten (10) days of award of contract, but no later than two (2) days prior to the effective date of coverage. The original policy and its endorsements shall be furnished within 45 days after the effective date of coverage.

ORIGINAL INSURANCE CARRIER

During the term of this contract, the successful vendor(s) will maintain coverage with the original insurance carrier(s), unless written permission is granted by the Division of State Risk and Insurance Services and the Kentucky Teachers’ Retirement System to place coverage elsewhere. Any request for changes must be provided to the Division of State Risk and Insurance Services, in writing at least 90 days prior to the expiration of the current policy. Consideration will only be given if it is deemed to be in the best interest of the Commonwealth.

LOSS SUMMARIES

The successful bidder shall provide two (2) copies of annual loss summaries by February 1st to the Kentucky Office of the Controller, State Risk & Insurance Services, 209 St. Clair Street, 5th Floor, Frankfort, Kentucky 40601. Please include the following information:

NOTICES

After the award of contract, all normal communications, exclusive of price considerations, are to be delivered to the address below or to such other addresses or party as is designated:

XXXXXXXXX

XXXXXXXXX

XXXXXXXXX

After the award of the contract, all notices of a contractual nature are to be delivered to the address below or to such other address or party as is designated:

Richard Mize, CPPB Sealed Bid Purchasing Officer Finance & Administration Cabinet Office of Procurement Services 702 Capitol Avenue, Room 095 Frankfort, KY 40601 E-mail: Richard.Mize@ky.gov Telephone: 502-564-6251 Fax: 502-564-1434

METHOD OF AWARD

A committee comprised of representatives from the Division of State Risk and Insurance Services and the Teachers’ Retirement System of the State of Kentucky will review all eligible bids to ensure they meet the minimum coverage requirements set forth in this solicitation.

The contract will be awarded to the responsive, responsible bidder meeting the minimum criteria of the solicitation with the lowest premium.

TERMINATION OF CONTRACT

The contract resulting from this Solicitation shall be subject to the following termination provisions. The contract may be terminated by the Commonwealth:

· for default

· for Delinquency Proceeding

· for unavailability of funds

· for convenience

Termination for Default Any contractor who is determined in writing by the Commonwealth Buyer to be in breach of any of the terms and conditions of a contract with the Commonwealth of Kentucky held by such contractor, shall, at the discretion of the Commonwealth Buyer, be declared in default and such contract may be terminated as a result of such default.

A default in performance by a contractor for which a contract may be terminated shall include, but shall not be limited to, failure to perform the services requested in this Solicitation.

Termination for Delinquency Proceeding In the event of the filing of a delinquency proceeding against the vendor, the Commonwealth shall have the right to terminate the contract upon the same terms and conditions as a termination for default. The Commonwealth shall receive a current copy of any proprietary source code should termination occur due to the filing of a delinquency proceeding against the vendor.

Termination for Unavailability of Funds In the event that Commonwealth funds for the contract become unavailable, the Commonwealth shall have the right to terminate the contract without penalty and upon the same terms and conditions as a termination for convenience.

Availability of funds will be determined at the sole discretion of the Commonwealth.

Termination for Convenience The Commonwealth shall be authorized to terminate for its own convenience all contracts for the procurement of supplies and services when the Commonwealth Buyer has determined that such terminations will be in the Commonwealth’s best interests. When it has been determined that a contract should be terminated for the convenience of the Commonwealth, the purchasing agency shall be authorized to negotiate a settlement with the contractor according to terms deemed just and equitable by the purchasing agency. Compensation to a contractor for lost profits on a contract terminated for convenience of the Commonwealth shall not exceed an amount proportionate to the sum that the contractor’s total expected margin of profit on the contract bore to the contract price, based on the total out of pocket expense incurred by the contractor as of the date of termination of the contract. Whenever a contract is terminated for the convenience of the Commonwealth, the contractor shall have the burden of establishing the amount of compensation to which he believes himself to be entitled by submission of complete and accurate cost data employed in submitting his bid or proposal for the contract and evidence of expenses paid or incurred in performance of the contract from the date of award through the date of termination. Payment of the sum agreed to in settlement of a contract terminated for convenience of the Commonwealth shall be made from the same source of funds or account as the original contract.

GENERAL CONDITIONS AND INSTRUCTIONS FOR SOLICITATIONS AND CONTRACTS

The General Conditions and Instructions for Solicitations and Contracts, hereby incorporated by reference, shall be an integral part of this solicitation and resulting contract. Therefore, it is the bidder’s responsibility to access and read these General Conditions for Solicitations and Contracts at http://www.state.ky.us/ageneices/finance/manual/pol&proc/FAP110-10-00.doc or request a copy by contacting the Office of Material and Procurement Services. By submitting a bid to the Commonwealth, a bidder agrees to these conditions.

EXHIBITS

a. Detailed Requirements

b. Bidder information form

c. Quotation form

d. Bid Enhancements form

e. Bid Deviations form

f. bidder Affidavit of financial compliance

g. Resident bidder Affidavit

h. Qualified bidder Affidavit

KTRS LOSS RUN

SAMPLE POLICY

INTERNET INFORMATION

Financial, Investment and General Program Information – https://trs.ky.gov