HomeMy WebLinkAbout1987-09-01; City Council; 7059-3; Renewal of excess workers compensation insuranceCH OF CARLSBAD - AGEND BILL
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MTQ 9/1/87
DEPT._RJYL
TITLE: RENEWAL OF EXCESS WORKERS'
COMPENSATION INSURANCE
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RECOMMENDED ACTION:
Approval of Resolution No. 9^3 y^5 authorizing the renewal of Excess Workers'
Compensation Insurance Coverage in accordance with staff recommendations at a
premium deposit of $36,690.
ITEM EXPLANATION
The current Excess Workers' Compensation Insurance Policy expired on July 1, 1987.
It has been extended pending Council action on the proposed renewal. The excess
insurance policy provides for coverage above the City's self-insured retention level
of $250,000. The coverage has been provided by Employers Reinsurance Company.
That company carries a rating of A+:XV, the highest rating available in Best's Key
Rating Guide.
Renewal of the coverage continues to be affected by the fluctuating insurance
market and the increasing benefit levels in California. The two leading companies
offering coverage in California are Employers Reinsurance and General Reinsurance.
Cost increases are, unfortunately, still the norm. The self-insurance retention
levels submitted in each of the four proposals (two from each company) remained at
the current level of $250,000.
The current Employers Reinsurance proposal is set forth below, as well as that
for the prior year (FY 86/87).
Fiscal
Year
1986/87
1987/88
Self-Insured
Retention Level
$250,000
250,000
Rate per
$100 of Payroll
.2300
.3084
Estimated
Payroll
$11,292,000
$11,893,000
Deposit Premium
$26,000
$36,690
FISCAL IMPACT
The recommended renewal proposal contains a cost increase of $10,690. That
represents an increase of 41% over the FY 1986/87 rate and is a direct reflection
of the increase in the payroll rate calculations.
Funds are available in the Workers' Compensation Self Insurance Fund for payment
of the deposit premium. The deposit premium is based upon an estimate of the
annual payroll. The final premium will be calculated after a year end audit and
will be based upon actual payroll levels.
EXHIBITS
1. Resolution No. °lSj\^
2. Summary of Excess Workers' Compensation Insurance Quotes - Exhibit A
3. Letter from Cal Surance Associates Dated 6/17/87 - Exhibit B
1 RESOLUTION NO. 9213
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, AUTHORIZING RENEWAL OF
3 THE CITY'S EXCESS WORKERS' COMPENSATION INSURANCE
4 WHEREAS, The City has established a self-insurance program for
5 workers' compensation; and
6 WHEREAS, the City's Insurance Broker has received quotes for excess
7 workers' compensation insurance; and
8 WHEREAS, upon evaluation of the quotes for excess insurance, the
9 City desires to renew its insurance.
10 NOW, THEREFORE, BE IT RESOLVED by the City Council of Carlsbad,
11 California as follows:
12 1. That the above recitations are true and correct.
13 2. That the renewal of the City's excess workers' compensation insurance
14 with Employers Reinsurance Corporation is hereby approved and the Finance
15 Director is authorized to issue a warrant for the premium of said renewal in
16 the amount of $36,690.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council on the 1st day of September 1987, by the following vote,
to wit:
AYES: Council Members Kulchin, Pettine, Mamaux and Larson
NOES: None
ABSENT: Council Member Lewis
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DE A. l^WKS, MayorCLAUDE A.
9 ANN J. KULCHIN, Mayor Pro-Tern
10| ATTEST:
11
12
ALETHA L. RAUTENKRANZ, City perk
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XHIBIT B
CAL-SURANCE ASSOCIATES, INC,
June 17, 1987
JUN22J98T
Robert J. German
Risk Manager
City of Carlsbad
1200 Elm Avenue
Carlsbad, California 92008
L
CITY OF CARLSBAD
RISK MANAGEMENT
RE: Excess Worker's Compensation Coverage
Insurance Company: Employers Reinsurance Corporation
Policy #C-35152
Renewal: July 1, 1987
Dear Bob:
We have been able to obtain excess Worker's Compensation insurance
renewal quotations for the city of Carlsbad for the period of July
1, 1987 to July 1, 1988.
Please review the enclosed Matrix which outlines quotations at
limits of $10,000,000 and Statutory with a Self-Insured Retention
level of $250,000.
As indicated on the attached Matrix, the City currently carries a
Statutory limit excess of a $250,000 Self-Insured Retention for an
annual deposit premium of $26,000 based on a rate of .2300 per $100
of payroll.
For your information, Worker's Compensation premiums have increased
due to the fact that the Worker's Compensation benefits have
increased in the past year. In addition, the overall Worker's
Compensation rates are being increased and the excess Worker's
Compensation rates are based on this premise.
The two leading insurance companies writing excess Worker's
Compensation coverage in the state of California are Employers
Reinsurance Corporation and General Reinsurance Corporation. Both
companies carry a Best Rating of A+:XV and are admitted in the state
of California.
We would like to advise you that this coverage does not automati-
cally extend to include volunteers, therefore, if you desire this
extension of coverage, please be sure and notify our office.
A Member of the Cal-Surance Group
Mailing Address P.O. Box 3469, Torrance, CA 9O51O 279O Skypark Drive, Torrance, CA 9O5O5 (213) 53O-5555 LA. (213) 772-3151
Page Two
June 17, 1987
Robert J. German
Please review these quotations and advise us of the City's renewal
instructions prior to July 1, 1987. Should you have any questions,
please do not hesitate to contact this office.
Very truly yours,
David J. Williams
Account Executive
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