HomeMy WebLinkAbout1989-07-18; City Council; 10140; Renewal of excess workers compensation insuranceCIT~ OF CARLSBAD - AGENDA BILL
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MTQ. 7/18/89
DEPT._BM
RENEWAL OF EXCESS WORKERS' COMPENSATION
INSURANCE
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RECOMMENDED ACTION:
Approval of Resolution No. ^^2^LZ authorizing the renewal of Excess Workers'
Compensation Insurance coverage in accordance with staff recommendations at a
premium deposit of $30,200.
ITEM EXPLANATION
The current Excess Workers' Compensation Insurance Policy expired on June 30,
1989. Coverage has been continued pending Council action on the current
proposals. This policy provides for loss coverage which exceeds the City's self-
insured retention level.
Although renewal of the coverage is normally affected by market fluctuations and
benefit levels, the current quotations are more reflective of the increase in
competition between the two major providers of this coverage in California.
Those providers are Employers Reinsurance and General Reinsurance.
The staff recommendation is to renew under Quote I with General
Reinsurance/Firemans Fund. The basic differences between the two quotations,
which retain the current self-insured retention level, are set forth below.
Provider S.I.R. Rate/$100 of Payroll Deposit Premium
Gen. RE $250,000 .173 (+ $5,000 flat charge) $30,200
Emp. RE $250,000 .2748 $39,906
There are two basic coverage differences between the companies. First, General
Reinsurance uses separate retention levels for Workers Compensation and Employers
Liability. Since claims under Employers Liability are relatively rare in
California, this difference is not considered to be of significance.
Second, once the self-insured retention level is exceeded, General Reinsurance
will pay the claims expense on a pro rata basis only. This difference is also
considered to be insignificant.
FISCAL IMPACT
The recommended renewal proposal contains a cost reduction of $9,062 from the
1988/89 adjusted premium and a savings of $9,706 over the quote from Employers
Reinsurance. That represents an initial savings of 24%. An additional savings
of 36% will occur at the time of the premium adjustment because of the lower rate
at which the calculation will be made.
Funds are available in the Workers' Compensation Self-Insurance Fund for payment
of the deposit premium.
y EXHIBITS
1. Resolution No.
2. Summary of Excess Workers' Compensation Insurance Proposals - Exhibit A
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RESOLUTION NO. 89-244
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 General Reinsurance/Firemans Fund is hereby approved and
the Finance Director is authorized to issue a warrant for the deposit
premium of said renewal in the amount of $30,200.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City
Council of the City of Carlsbad on the 18th day of July 1939,
by the following vote, to wit:
AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Larson
NOES: None
ABSENT: None
A. LEWTSK M^yor
ATTEST:
I.
ALETHA L. RAUTENKRANZ, City Clerk \
06/28/89 16:24 CAL-SURANCE ASSOCIATES NO.664 F 002. "'002
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