HomeMy WebLinkAbout1990-08-07; City Council; 10752; RENEWAL OF EXCESS WORKERS' COMPENSATION INSURANCEP
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DEPT. AB# ’(I .’5L TITLE* RENEWAL OF EXCESS WORKERS’
MTG. 8/7/90 COMPENSATION INSURANCE CITY b
DEPT. RM CITY 1\1
RECOMMENDED ACTION:
authorizing the renewal of Excess Workers’ 7% 27/ Approval of Resolution No.
Compensation Insurance coverage in accordance with staff recommendations at a p
deposit of $32,926.
ITEM EXPLANATION
The Current Excess Workers’ Compensation Insurance Policy expired on June 30, 3
Coverage has been continued pending Council action on the current proposals. Th
provides for loss coverage which exceeds the City’s self-insured retention level.
Although renewal of the coverage is normally affected by market fluctuations and b
levels, the current quotations are more reflective of the increase in competition bet
two major providers of this coverage in California. Those providers are Employers
Reinsurance and General Reinsurance.
The staff recommendation is to renew under Quote I with General Reinsurance. ’I
differences between the quotations are set forth below.
Provider S.I.R. Rate/$lOO of Pavroll Deposit Premium
Gen. RE $300,000 .173 $32,926
Emp. RE $25 0,000 .2504 $47,5 72
Emp. RE $3 00,000 .1945 $36,952
There are two basic coverage differences between the companies. First, General
Reinsurance uses separate retention levels for Workers’ Compensation and Emploq
Liability. Since claims under Employers Liability are relatively rare in California, tl.
difference is not considered to be of significance. Second, once the self-insured ret(
level is exceeded, General Reinsurance will pay the claims expense on a pro rata b;
This difference is also considered to be insignificant. It should also be noted that, t
the City’s experience, the self-insured retention level would increase from its curren
$250,000 to $300,000. That means that the City would be responsible for the first 9
of any claim, as opposed to the $250,000 level from prior years. This change occur
result of two severe claims which the City experienced during the prior coverage ye
Historically, only one claim has had the potential for penetrating the excess insuran
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FISCAL IMPACT
The recommended renewal proposal contains a cost increase of $2,434 over the 1989,
deposit premium. However, it is still lower than the other two quotes. Additionally,
previously indicated, the self-insured retention level would increase by $50,000 from t
the prior fiscal year. That means that the City’s risk of loss on any claim will increase
$250,000 to $300,000.
Funds are available in the Workers’ Compensation Self-Insurance Fund for payment t
deposit premium.
EXHIBITS
1. Resolution No. @dJ?/
2. Summary of Excess Workers’ Compensation Insurance Proposals - Exhibit A
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90-2 7 1 RESOLUTION NO.
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 desired to renew its insurance.
NOW, THEREFORE, BE IT RESOLVED by the City Council of
Carlsbad, California as follows:
1.
2.
That the above recitations are true and correct.
That the renewal of the City’s Excess Workers’ Compensation
Insurance with General Reinsurance is hereby approved and the Finance Director
is authorized to issue a warrant for the deposit premium of said renewal in the
amount of $32,926.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of
the City Council of the City of Carlsbad on the
the following vote, to wit:
7th day of August . 1990, b
AYES:
NOES: None
ABSENT:
Council Members Lewis, Kulchin and Mamaux
Council Members Pettine and Larson
ATTEST:
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