HomeMy WebLinkAboutMINUTES - 12191989 - 1.102 TO'• BOARD OF SUPERVISORS
FROM: Phil Batchelor. County Administrator ���wtra
CIWICI
DATE: December. 19f 1989 ' '. Camey
SUBJECT: Actuarial Study of County' s Self-Insurance Trust Funds
SPECIFIC REQUEST(S) OR RECCMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION•
Receive this report on the actuarial analyses of the County' s self-funded
workers ' compensation, general liability and medical liability programs and .
reaffirm. the goal of funding the. County' s self-insurance programs at the 80 .
to 90 percent confidence level by the end of 1991-92 fiscal year.
FINANCIAL ,IMPLICATIONS:
Receipt -of this report has no direct financial implications. However, to
fund at the,-80o to 90% confidence level requires an additional $1, 956,000
to $3 ,644,000 over funding required at the expected value level.
BACKGROUND:
Each year a comprehensive actuarial study is conducted of the County' s
self-insurance trust funds. The Board has adopted, a funding and strategy
plan with a goal of funding the . County's self-insurance programs at the 80
to 90 percent confidence levels by the end of the 1991-92 fiscal year.
This actuarial study of the County' s :self-insured liabilities incurred
through June 30; 1989 found the County' s liabilities are funded at roughly
a 70 percent confidence level overall. Last year' s study of those
liabilities ,incurred through June 30, 1988 found the liabilities were
funded at approximately the expected value level. Expected value refers to
the overall average level of losses .estimated for a coverage year and
approximates a 55 percent confidence level. Confidence level refers to the
estimated probability that losses will not exceed the indicated reserve
funding amount. The actuary recommends funding at the 80 to 90 percent
confidence level.
Since the prior actuarial study and based upon the Board goal of increasing
the confidence level, the County has increased its confidence level to 70
percent. To ensure the self-insurance program is sound and able to meet
its financial obligations, the program should be funded at an 80 to 90
percent confidence level. To -accomplish this, upcoming fiscal years should
be funded at the 90 percent confidence level. This will result in raising
the overall confidence level for. all liabilities. It is anticipated that
two years of funding at the 90 percent confidence, level will bring the
overall confidence level of the program .to 80 percent. It is therefore
recommended that the self-insurance program be funded at the 90 percent
confidence level for the next two fiscal years, if' sufficient funding. can
be identified to meet this objective.
CONTINUED ON ATTACHMENT: YES - SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEND T ON O BOA D COMMITTEE
APPROVE OTHER -
SIGNATURE S :
ACTION OF BOARD ON . 'DEC 1 9 1989 APPROVED AS RECOF4MENDED 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 SHDWN.
cc: CAO-Finance ATTESTED
DEC 19 1989
Risk MariaCJeIrierit PHIL BATCHELOR, CLERK OF THE BOARD OF
Auditor-Controller , SUPERVISORS AND COUNTY ADMINISTRATOR
BY
,DEPUTY
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