HomeMy WebLinkAbout2003-06-24; City Council; 17217; Renewal of Excess Workers' Comp Benefitsh
CITY OF CARLSBAD - AGENDA BILL
48 # 17,217 I TITLE:
HTG. 6/24/03
3EPT. HR
RENEWAL OF EXCESS WORKERS’
COMPENSATION BENEFITS
DEPT. wc
CITY ATTY
CITY MGR-
RECOMMENDED ACTION:
Approval of Resolution No. 2003-168 authorizing the renewal of Excess
Workers’ Compensation Insurance coverage in accordance with staff‘s recommendation
at a premium of $122,250.
ITEM EXPLANATION:
The current excess Workers’ Compensation Insurance Policy expires on June 30,2003.
Coverage will be continued pending Council action on the current proposal. This policy
provides for loss coverage which exceeds the City’s self-insured retention level up to
$25,000,000 per occurrence.
The City’s incumbent carrier, Employers Reinsurance Corporation is no longer writing
excess workers’ compensation insurance policies in California. Cal-Surance , the City’s
insurance broker, obtained renewal quotes from seven other carriers (see Exhibit 2). The
renewal quotes for annual premiums ranged from $122,250 to $226,997. Based on these
quotes, staff recommends renewing its policy with Continental Insurance Company. The
renewal premium is $122,250 which is significantly higher than last year’s premium of
$74,180.
The City’s Self Insurance Retention (SIR) would increase from $500,000 for each claim
to $1,000,000 for each claim. As shown in Exhibit 2, none of the potential carriers offer
a $500,000 SIR. However, in the last twenty-nine (29) years, the City had only three (3)
claims that exceeded the SIR threshold. Therefore, this increase to the SIR is not likely
to have a significant fiscal impact.
Increases to both the premium and the SIR are due to: 1) nation-wide losses experienced
by workers’ compensation insurance providers, 2) an increased concern by insurance
providers regarding large costs due to a higher concentration of employees in one
worksite and 3) mandatory increases to the Workers’ Compensation benefits.
FISCAL IMPACT:
The recommended renewal quotation for one year is $122,250. This premium may be
subject to an additional surcharge of $2,265 by the California Insurance Guaranty
Association. Sufficient funds have been budgeted in the 2003/04 operating budget
adopted June 17,2003. The City’s Self Insurance Retention (SIR) would increase from
$500,000 for each claim to $1,000,000 for each claim.
EXHIBITS:
1. Resolution No. 2003-168 .
2. Summary of Excess Workers’ Compensation Insurance Quotations
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RESOLUTION NO. 2003-168
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 a renewal quotation for
Excess Workers’ Compensation Insurance coverage; and
WHEREAS, upon evaluation of this quotation for excess insurance, the City
desires to renew its insurance.
NOW, THEREFORE, BE IT RESOLVED by the City Council for the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
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2. That the renewal of the City’s Excess Workers’ Compensation Insurance
coverage with Continental Insurance Company, with the premium in the amount of
$122,250, is hereby approved.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the Carlsbad
City Council held on the 24th day of JUNE , 2003; by the following
vote, to wit:
AYES: Council Members Lewis, Kulchin, Hall, Packard
NOES: None
ABSENT: Council Member Finnila
ATTEST:
(SEAL)
esolution No. 2003-168, page 2 of 2
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