HomeMy WebLinkAbout1990-04-10; City Council; 10573; REVISED INSURANCE AND SURETY BOND UNDERWRITING STANDARDS ALLOWING SMALL BONDS TO BE REVIEWED ON A CASE BY CASE BASISr --
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CIY)OF CARLSBAD - AGENWILL LU-
AB# 1~57~ TITLE.~EVISED INSURANCE AND SURETY BOND DEPT. k
MTG. I( I \OR0 UNDERWRITING STANDARDS ALLOWING SMALL CITY A1 BONDS TO BE REVIEWED ON A CASE BY CASE DEPT-A BASIS CITY M(
RECOMMENDED ACTION:
If Council concurs, your action is adopt Resolution No. qo-qb revising standards to allow small surety bonds to be reviewed 01 a case by case basis.
ITEM EXPLANATION
Various surety companies have argued strenuously that the Cit cannot place additional standards on them for doing businesr within Carlsbad or any other city other than those that havl required by the insurance commissioner. These standards art spelled out in the insurance code and associated regulations However, the City is empowered to accept surety bonds by virtu1 of Government Code Section 66499 which purpose is to guarante
that certain public improvements are guaranteed to be constructed In that regard, the City wishes to do business with only thos
sureties that are financially sound. In the surety industry
there are those sureties that specialize in issuing subdivisic bonds and do not deal in other lines of insurance. This keeF those companies relatively small when compared to other 'Iful line" insurance companies, however, they may be just as solvent The amendment to this resolution would allow the City to acceg
bonds from those surety companies specializing in subdivisic
bonds for small subdivisions but do not meet the Class I
financial size. It is not recommended that the City accept bond
from any surety company possessing less than an A rating in Best' resardless of its financial size.
FISCAL IMPACT
There will be a requirement of additional staff time in an unknob
amount in reviewing those small subdivision bonds on a case 1
case basis.
EXHIBIT
Resolution No. ?04b
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RESOLUTION NO. '90-96
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA REVISING STANDARDS FOR REVIEWING INSURANCE AND SURETY BONDS
WHEREAS, the City requires contractors, buil
subdividers, and other persons doing business with the Ci
obtain various types of insurance or bonds: and
WHEREAS, it is necessary to ensure that the insuranc
surety companies selected by those persons meet certain fina
and performance standards
NOW, THEREFORE, BE IT RESOLVED by the City Council (
City of Carlsbad, California, as follows:
1. That the above recitations are true and correc
2. That, except as expressly provided by law c
specifications to the contrary, insurance or surety com1
securing or insuring any obligation or risk of which the Cj
a beneficiary or an additional insured shall meet the fol:
minimum standards:
a. Authorization to conduct the busine
insurance, of a type required by the transaction, in the Sti
California as evidenced by listing by the State Ins1
Commissioner. For liability insurance, the City may acc
surplus line carrier provided the City is provided with a c
a surplus line carrier affidavit.
b. A rating in the latest available "Best's
Guidevo of ltA1p or better and a financial size of $10 m
(currently Class V) or better.
C. If a company is not listed by the
Insurance Commissioner, is not rated by Best's or does not p
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sufficient years of experience to be rated, or if the small
of the insurance or surety obligation or other risk factors ju
a lesser standard, the City Attorney or the City Manage
approve such company only if it produces satisfactory evidencc
its financial responsibility and performance capability with:
State of California is sufficient to insure or secure adeq
the subject risk or obligation.
PASSED, APPROVED AND ADOPTED at a Regular Meeting (
City Council of the City of Carlsbad on the 10th day of p
1990, by the following vote, to wit:
AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and
NOES: None
ABSENT: None
ATTEST:
ALETHA L. FbiUTENKRANZ, Cit$ Clerk
(SEAL)