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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 I 1 2 c 4 c c € 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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. Ill Ill Ill Ill Ill Ill Ill Ill Ill Ill 1 E c: 4 5 6 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 s 4