HomeMy WebLinkAbout1988-07-05; City Council; 9506; Excess workers comp insurance renewalTITLE: RENEWAL OF EXCESS WORKERS'
COMPENSATION INSURANCE
RECOMMENDED ACTION:
Approval of Resolution No.ff42// authorizing the renewal of Excess Workers'
Compensation Insurance Coverage in accordance with staff recommendations at
a premium deposit of $34,393.
ITEM EXPLANATION
The current Excess Workers' Compensation Insurance Policy will expire on
June 30, 1988. The Excess Workers' compensation Insurance Policy provides
for loss coverage exceeding the City's self-insured retention level of $250,000.
That coverage has been provided by Employers Reinsurance Company for the
last 3 years and 7 of the last 9 years. They carry a rating of A+:X 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.
companies offering coverage in California are Employers Reinsurance and
General Reinsurance.
The two leading
The self-insurance retention levels submitted in each of the four proposals (two
for 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 87/88).
Fiscal Self- I nsured Rate per Estimated
Year Retention Level $100 of Payroll Payroll Deposit Premium
1987 188 $250,000
1988 I89 $250,000
FISCAL IMPACT
.3084 $11,893,000 $36,690
.2892 $11,894,000 $34,393
The recommended renewal proposal contains a cost reduction of $2,297.
represents a decrease of over 6% from the FY 1987/88 rate and is a direct
reflection of the decrease in the payroll rate calculations.
is based upon an estimate of the annual payroll.
calculated after a year end audit and will be based upon actual payroll levels.
That
The deposit premium
The final premium will be
There is a $393 difference between the two lowest quotes.
recommendation of the City's insurance broker and the City's staff that the
bid of Employers Reinsurance Company be accepted because of more favorable
policy conditions.
It is the
Funds are available in the Workers' Compensation Self-Insurance Fund for
payment of the deposit premium.
EXHIBITS
1. Resolution No. ffda//
2. Summary of Excess Workers' Compensation Insurance Quotes - Exhibit A
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VARIATIONS IN COVERAGE - EXCESS INSURANCE
EMPLOYERS REINSURANCE
common retention with respect to Workers' Compensation and Employer's Liability, for each accident.
No restriction as to applicable State benefits for injuries occurring in other States.
Claims expense is considered a part of the total claim with respect to retention. All cost above the re- tained limit would be reimbursed.
Must report any loss exceeding 50% of the rention, and any serious injury (as defined). If not done within one year, a 15% penalty applies to any indemnity under the policy; if not within three years, 40%.
GENERAL REINSURANCE
Separate retentions for Workers' Compensation and for Employer's Liability subject to a combined retention for each accident.
Only provides reimbursement up to the benefits applic- able in California.
Reimburses claim expense on a pro-rata basis. Thus, the same portion of expenses will be paid as of the loss itself.
No such provision.
Refer to actual policies for specific wording and other differences.
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RESOLUTION NO. 88-211
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, AUTHORIZING RENEWAL OF
THE CITY'S EXCESS WORKERS' COMPENSATION INSURANCE
WHEREAS, The City has established a self-insurance program for
workers' compensation; and
WHEREAS, the City's Insurance Broker has received quotes for
excess workers' compensation insurance; and
WHEREAS, upon evaluation of the quotes for excess insurance, the
City desires to renew its insurance.
NOW, THEREFORE, BE IT RESOLVED by the City Council of Carlsbad,
California as follows:
1. That the above recitations are true and correct.
2. That the renewal of the City's excess workers' compensation
insurance with Employers Reinsurance Corporation is hereby approved
and the Finance Director is authorized to issue a warrant for the premium
of said renewal in the amount of $34,393.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council on the 5th day of July , 1988, by the following vote,
to wit:
AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Larson
NOES: None
ABSENT: None
ATTEST :