Now that my year as Chairman is drawing to an end, it's worth reviewing some of the more significant events of the past year.

The Association started off the year with a new Executive Director (Sandy Clark) and an entirely new mandate from our membership in the form of an improved and updated Constitution. This was all the result of a very healthy reaction to the changes that have been going on in our industry for some years and in particular to the upheaval that hit our industry in the late '80s and early '90s. All of these changes have entailed a complete self-examination of our operations and our mission.

As previously mentioned, Sandy Clark has come on board and has been instrumental in setting us on a new proactive course and making us much more committed and responsible for the direction our industry ultimately takes. This has required each and every one of us to look at our industry and examine how we interact with it utilizing new perspectives. This new approach affects all aspects of our operations, from running the Stamping Office to our relations with the DOI, legislature, the press; and in particular how we best serve you, our members.

This internal scrutiny has resulted in new and more effective education programs, which will be expanded in the years to come. Additionally, a new Insurance Commissioner with a commitment to totally restructure and rejuvenate the Insurance Department has had significant impact on our ability to work effectively with the DOI.

In the legislative arena, as always, things have been quite lively. This year the most difficult piece of legislation that has been proposed relates to broker liability. Carried to it's fullest extreme, as presently written, it would have a very negative impact on how we run our businesses, However, thanks to our very active Legislative Committee (Chaired by Dave Anderson) and the hard work done with both the DOI and various involved and interested legislators, better ways to deal with the problem of the "bad broker" are being explored.

The advent of SB959 and the concept of "prior approval" has come into being. This year has been the first year in which all non-admitted insurers have been reviewed under the provision of this new legislation. This review process by the DOI, with assistance from the SLA, has been the most in-depth analysis of the California surplus line market ever undertaken. The result will be a much stronger, healthier market place for all concerned. ::

An Export List has been adopted in an attempt to simplify at least some of the detailed due diligence procedures that came into existence several. years ago. Now we must, in cooperation with the DOI, assist in determining just how that list is to be handled, what procedures are to be followed and what lines of business should be on the list. No simple task.

Last but not least, we've launched the Association on a journey into the 21st Century. - We have started a complete review of how the Association currently uses automation and how we can best take advantage of the advances taking place in information and electronic technology. What we find and implement (in the form of state of the art systems and procedures), will help us streamline and improve how we interact, support and service our membership; and in turn how our membership services their clients.

Initial steps have resulted in the use of much more effective financial analysis and information processing in security analysis related to the new SB959 procedures. Also in the works is the development of software that will greatly simplify and enhance the filing procedures required under the Code (as pat of the due diligence requirements). This particular tool will be made available to every member free of charge and will be introduced at the Annual Meeting in January. Welcome to the paperless world of electronic filings.

Finally I'd like to express my deep pleasure and gratitude to each and every one of you that has pitched in and dealt with all the various challenges that have faced us this year. Having been around this Association for many years, I've always known that we are privileged to have a dedicated and wonderful group of people to work with here in California. But it's never quite so clear as when you have the opportunity to serve as Chairman and you see every day how many individuals selflessly take on job after job to be sure our industry works more effectively and efficiently.

Without getting too longwinded I'd like to publicly recognize the chairpersons of all the committees who have advanced with the highest levels of integrity and professionalism the ideals of this Association. These words do not even begin to approximate the praise each one of them deserves for their selfless work, however I hope each one of them knows how much I appreciate the support they have all shown throughout this very interesting year:

Along with the committee chairpersons I would also like to extend my appreciation for the diligent work of every member of all the committees and the Association staff. Without their dedication and commitment, the California SLA would be nothing. It's been a great privilege and honor to serve as your chairman.

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