Loading...
HomeMy WebLinkAboutMINUTES - 09271994 - 1.57 7 C 1. 57 TO: BOARD OF SUPERVISORS �E- �� Contra FROM: Phil Batchelor, County Administrator '< Costa 2;w 't a County DATE: September 27, 1994 SUBJECT: Excess Liability Insurance SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: Approve the purchase of $8 million liability coverage, excess of a $2 million self-insured retention, through the CSAC Excess Insurance Authority; and authorize the Risk Manager to execute a Memorandum of Understanding to this end between the County and the CSAC Excess Insurance Authority. BACKGROUND: The County has self-insured its liability exposures since 1975 . At that time, liability insurance coverage was unavailable. Since then, such coverage has been unavailable, or, if available, has been extremely expensive with many exclusions . It has been prudent for the County to self-fund its liability exposure and control its losses through proactive claims administration and loss control . To protect the County's financial solvency and ensure the self-insurance program is fiscally sound and able to meet financial obligations, monies are set aside each year, based on actuarial recommendations . To protect the County from catastrophic losses, and because of the loss potential of high awards, claims cost inflation, the litigious climate, and the lower cost and availability of liability coverage protection through the CSAC Excess Insurance Authority, the County should purchase catastrophic liability claim protection. In consultation with the County's actuary, it is recommended that the County purchase $8 million liability coverage excess of a $2 million self-insured retention through the CSAC Excess Insurance - Authority at an annual cost of $275,000 . This coverage, subject to ratification by the CSAC Excess Insurance Authority Program II Liability Committee, would be effective October 1, 1994 . The prorated premium for the October 1, 1994 to July 1, 1995 period is $205,700 . CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF B RD OMMITTEE APPROVE OTHER SIGNATURE(S)- ACTION IGNATURE S:ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT ► AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. Contact: Joseph J. Tondda - 646-2014 SEP 217 cc CAO Risk Management ATTESTED Auditor-Controller PHIL BATCHELOR,CLERK OF THE BOARD OF CSAC Excess Insurance Atthori.ty SUPERVISORS AND COUNTY ADMINISTRATOR M382 (10/88) BY `v-A � � y y �+ a� ,DEPUTY December 11, 1990 Effective February 15, 1991 CSAC EXCESS INSURANCE AUTHORITY and LIABILITY PROGRAM 11 MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding is entered into by and between the CSAC-EIA (hereinafter referred to as the'Authority")and the participating counties who are signatories to this Memorandum. 1. Except as otherwise provided herein, all terms used herein shall be as defined in Article 1 of the Joint Powers Agreement Creating the Excess Insurance Authority (hereinafter referred to as "Agreement'). 2. There is hereby created a "Mega Fund' (hereinafter referred to as the "Fund"), consisting of contributions from the participating counties in the Fund to the Authority for the purpose of establishing a second Excess Liability Program (hereinafter referred to as"Program II'). Said Fund shall be used exclusively for the payment of claims made against the participating counties in the Fund for excess liability claims in accordance with the terms and conditions of the excess insurance policy (hereinafter referred to as the "coverage document"). Certificates of coverage will be issued by the Authority evidencing membership in the Fund. 3. There is hereby established a Program II Liability Committee(hereinafter referred to as"Committee")and, except as otherwise provided herein, said Committee shall have full authority to determine all matters affecting the participating counties. 4. The Committee shall consist of all Program II member counties of the Authority, with the committee member being that person designated as the Board member for the Authority. However, only those counties participating in the Fund shall be eligible to vote on matters relating to fiscal issues affecting the Fund, including, but not limited to, funding, dividends and similar matters. All members shall be eligible to vote on claim payments made from the Fund. 5. The Committee shall meet on the call of the Chair of the committee as provided in Article 12 of the Agreement and Article VI of the Byiaws of the Authority (hereinafter referred to as the "Bylaws"). Page 1 of 4 Uability Program II December 11, 1990 Memorandum of Understanding Effective February 15, 1991 6. A majority of the members of the Committee shall constitute a quorum for the transaction of business. Except as otherwise provided herein, all actions of the Committee shall require the affirmative vote of a majority of the members present at a meeting duly held at which a quorum is present. If a quorum is Initially present at a meeting, the committee may continue to transact business notwithstanding the withdrawal of enough members to leave less than a quorum, N any action taken is approved by at least a majority of the number required to constitute a quorum. Notwithstanding the above, any action taken on fiscal matters affecting the Fund as described herein, shall require a majority vote of the participating counties in the Fund. 7. Contributions to the Fund shall be as established by the counties participating in the Fund upon consultation with the underwriters. 8. The self-insured retention amounts of those counties participating in Program II shall be as established by the counties participating in Program II, upon consultation with the underwriters. 9. The Fund shall be funded at 100%for the first year. Each succeeding year shall be funded at 100% less accumulated interest and dividends, or on an actuarial basis as determined by the counties participating in the Fund. Should the Fund for any reason not be fully funded in each succeeding year,pro-rata assessments to the participating counties may be utilized to ensure a 100% funding level for these years. 10. The method of allocating contributions to the Fund shall be calculated according to those rates as established by the underwriter. Future allocations may be changed by the participating counties in the Fund. 11. Any interest accruing on the contributions by the participating counties to the Fund shall inure to the benefit of the participating counties in accordance with their percentage of contribution to the Fund. Each participating county shall determine the manner in which its proportionate share of interest shall be utilized, if a dividend is declared, whether returned to the county at the end of each coverage year or as a credit on future contributions to the Fund. 12. Withdrawal of a participating county from Program II shall follow the terms and conditions of the Agreement relating to withdrawal of participating counties except that any county which has withdrawn shall be entitled to receive any interest or other dividend which accrues for any period of participation. 13. Dividends, i.e., money still remaining in the Fund at the end of a coverage year, shall be payable from the Fund to a participating county in accordance with its percent of contribution to the Fund when the participating counties in the Fund agree to the declaration of such a dividend, or the excess underwriter agrees to the release of the Fund and accepts liability for same. 14. Any county wishing to make application to join Program II and become a participating county may become a participating county upon the approval by the Committee and approval of the underwriter. Page 2 of 4 Liability Program II December 11, 1990 Memorandum of Understanding Effective February 15, 1991 15. Any county which makes application to become a participating county and who is not already a participating county in the Authority must be approved by the participating counties in accordance with the provisions of Article 20 of the Agreement. 16. New participating counties may be added to Program II during the term of the coverage period on a pro-rata basis. Notwithstanding late entry into the Fund, the new county may be assessed additional sums pursuant to paragraph 9 herein, based upon all claims against the Fund during the entire coverage period. 17. Withdrawal of a member county from Program II shall be in accordance with the withdrawal provisions of Article 21 of the Agreement, except that any interest or other dividend to which the withdrawing county is otherwise entitled shall be payable to the withdrawing county, in accordance with paragraphs 12 and 13 herein. 18. Any question or dispute with respect to the rights and obligations of the parties to this memorandum regarding coverage shall be determined by a majority.vote of the Committee, subject to approval of the underwriter. 19. Annual Authority administration costs associated with Program II shall be as determined by the committee. 20. The Authority is designated as the custodian of contributions to the Fund. The Authority shall be responsible for the investment of contributions to the Fund and shall provide each participating county with an accounting reflecting the expenditures of the contributions to the Fund. 21. Except as otherwise provided herein, the coverage document is controlling with respect to the actions of the participating counties under this Memorandum. 22. This Memorandum may be amended by a majority vote of the Committee and signature on the Memorandum by the member from each county. 23. Except as otherwise provided herein, this Memorandum constitutes the full and complete agreement of the members. 24. Should any provision of this Memorandum be judicially determined to be void or unenforceable, such determination shall not affect any remaining provision. 25. This Memorandum shall become effective on the effective date of coverage for the member county and upon approval by the Committee; and the signing of this agreement by the member and the General Manager/Secretary/Treasurer of the Authority. 26. This Memorandum may be executed in several counterparts, each of which shall be an original, all of which shall constitute but one and the same instrument. Page 3 of 4 Liability Program II December 11, 1990 Memorandum of Understanding Effective February 15, 1991 In witness whereof,the undersigned have executed this Memorandum as of the date set forth below. Q�ds-�y �rGt Dated CSAC Excess In utance A ority Dated o my Page 4 of 4