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Home My WebLink About2011-06-21; City Council; 20592; RENEWAL LIABILITY COVERAGECITY OF CARLSBAD - AGENDA BILL AB# 20,592 MTG. 6/21/11 DEPT. FIN RENEWAL OF LIABILITY COVERAGE THROUGH CALIFORNIA MUNICIPAL EXCESS LIABILITY (CAMEL) PROGRAM DEPT. DIRECTOR CITY ATTY. CITY MGR. RECOMMENDED ACTION: Approval of Resolution No. 2011-139 approving the renewal of liability insurance through the California Municipal Excess Liability (CAMEL) insurance program. ITEM EXPLANATION: The City participates in the Alliant Insurance Services, Inc. CAMEL joint purchase program for liability coverage. Alliant negotiated a renewal for the program for 2011-12. The City's premium is $236,252, which is about 2% lower than last year's premium due to a relatively flat liability insurance market and the benefits of participation in a joint purchase program. A summary of coverage is shown in Exhibit 2. The City was marketed separate from the joint purchase program as well. However, of the 9 carriers approached, 2 did not respond, and the remaining 7 declined to provide a quote based on pricing or coverage terms that would not be competitive with the joint purchase program. A summary of these results is shown in Exhibit 3. FISCAL IMPACT: This premium will be paid with funds from the 2011-12 Liability Fund. The Carlsbad Municipal Water District and Housing and Redevelopment Agency are also insureds under this coverage and contribute to the premium through the budget process. ENVIRONMENTAL IMPACT: Pursuant to Public Resources Code section 21065, this action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. DEPARTMENT CONTACT: Erin K. Letsch 760-602-2470 Erin.Letsch@carlsbadca.gov FOR CITY CLERKS USE ONL Y. COUNCIL ACTION: APPROVED DENIED D WITHDRAWN D AMENDED D CONTINUED TO DATE SPECIFIC D CONTINUED TO DATE UNKNOWN D RETURNED TO STAFF D COUNCIL RECEIVED THE D REPORT/PRESENTATION OTHER - SEE MINUTES D 1 2 3 4 5 WHEREAS, in 1999 the City became a member of the California Municipal 6 Excess Liability program (CAMEL) for purposes of obtaining liability coverage; and 7 WHEREAS, the City desires to renew its insurance through Alliant Insurance8 10 11 12 r RESOLUTION NO. 2011-139 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE RENEWAL OF LIABILITY INSURANCE THROUGH THE CALIFORNIA MUNICIPAL EXCESS LIABILITY PROGRAM (CAMEL) Services, Inc. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the renewal of liability coverage through the California Municipal 14 Excess Liability program effective July 1, 2011 to June 30, 2012 is hereby 15 approved and the Finance Director is authorized to issue a warrant in the 16 amount of $236,252 for the payment of the premium to Alliant Insurance Services, Inc. 19 20 21 22 23 24 II 25 II 26 II 27 28 CALIFORNIA MUNICIPAL EXCESS LIABILITY PROGRAM (CAMEL) INSURANCE PROPOSAL JULY 1,2011 TO JULY 1,2012 CITY OF CARLSBAD x3; 5; r¥ Nl INSURANCE COMPANY: 'BEST'S GUIDE RATING: ^STANDARD & POOR'S: CALIFORNIA STATUS: PROGRAM TERM: COVERAGE: PRESENT Everest National Insurance Company **Alliant National Municipal Liability Program A+, Superior; Financial Size Category 15; Greater than $2,000,000,000 AA-; Very Strong Financial Security Admitted July 1,2010 to July 1,2011 Excess Municipal Liability on an Occurrence Basis including: • Bodily Injury • Personal Injury • Property Damage • Public Officials Errors & Omissions • Unfair Employment Practices Liability • Dams PROPOSED Security National Insurance Company **Alliant National Municipal Liability Program A, Excellent; Financial Size Category IX; $250 Million to $500 Million A; Positive Admitted July 1,2011 to July 1,2012 Excess Municipal Liability on an Occurrence Basis including: • Bodily Injury • Personal Injury • Property Damage • Public Officials Errors & Omissions • Unfair Employment Practices Liability • Dams *See last page for additional details. "ANML PROGRAM G\_Client Files\Califomia Municipal Excess Liability Program (CAMEL)\Came! 2010-2011V2 Quote-Proposal cr CALIFORNIA MUNICIPAL EXCESS LIABILITY PROGRAM (CAMEL) INSURANCE PROPOSAL CITY OF CARLSBAD PAGE 2 PRESENT PROPOSED EVEREST NATIONAL INSURANCE COMPANY SECURITY NATIONAL INSURANCE COMPANY **ALLIANT NATIONAL MUNICIPAL LIABILITY PROGRAM **ALLIANT NATIONAL MUNICIPAL LIABILITY PROGRAM MAJOR EXCLUSIONS: Note: Refer to policy for complete details Nuclear Punitive, exemplary or multiplied damages Aircraft or Airports, except public areas Workers' Compensation or similar law Property owned by insured or in their care, custody and control Asbestos Pollution/Contamination except for: Hostile Fire and Collision Upset/Overturn of owned and non-owned vehicles and Time Element Extension Eminent Domain or condemnation proceedings except as a result of negligence ERISA Financial Interests Subsidence Failure to Supply - amended Medical Malpractice TRIA (Except where coverage was purchased for an additional premium of $4,815) Transit Nuclear Punitive exemplary or multiplied damages Aircraft or Airports, except public areas and Non-Owned Aircraft operated by or on behalf of the insured Workers' Compensation or similar law Property owned by insured or in their care, custody and control Asbestos Pollution/Contamination except for: Hostile Fire and Collision Upset/Overturn of owned and non-owned vehicles and Time Element Extension Eminent Domain or condemnation proceedings except as a result of negligence ERISA Financial Interests Subsidence Failure to Supply - amended Medical Malpractice TRIA (Except where coverage is purchased for an additional premium of $4,543) Transit War INSURING AGREEMENT: CLAIMS ADMINISTRATION: Pay on behalf Claims reporting requirements apply as outlined in the issued policy. Pay of behalf Claims reporting requirements apply as outlined in the issued policy and coverage comparison. "ANML PROGRAM CALIFORNIA MUNICIPAL EXCESS LIABILITY PROGRAM (CAMEL) INSURANCE PROPOSAL CITY OF CARLSBAD PAGE 3 PRESENT PROPOSED EVEREST NATIONAL INSURANCE COMPANY SECURITY NATIONAL INSURANCE COMPANY **ALLIANT NATIONAL MUNICIPAL LIABILITY PROGRAM **ALLIANT NATIONAL MUNICIPAL LIABILITY PROGRAM LIMITS OF LIABILITY: SELF-INSURED RETENTION: DEFENSE COSTS AND EXPENSES: ANNUAL PREMIUM: COMMISSION: $10,000,000 Any one occurrence or any combination thereof $ 10,000,000 Aggregate applies to Completed Operations Hazard Note: Aggregate applies separately to each CAMEL Member $ 500,000 Per Occurrence $ 1,000,000 Employment Practices Liability Defense Costs are included inside the Self-Insured Retention and inside the Limits of Liability $240,747 (Excludes TRIA) 10% $10,000,000 Any one occurrence or any combination thereof $ 10,000,000 Aggregate applies to Completed Operations Hazard Note: Aggregate applies separately to each CAMEL Member $ 500,000 Per Occurrence $ 1,000,000 Employment Practices Liability Defense Costs are included inside the Self-Insured Retention and inside the Limits of Liability $227,165 $ 9,087 Wholesale Broker Fee $236,252 Total Premium ($240,795 with TRIA) 10% SUBJECT TO AUDIT: CONDITIONS: No N/A No Coverage applicable to Named Insureds at time of binding. Additional named insureds subject to underwriting and additional premium "ANML PROGRAM CALIFORNIA MUNICIPAL EXCESS LIABILITY PROGRAM (CAMEL) INSURANCE PROPOSAL CITY OF CARLSBAD PAGE 4 PRESENT PROPOSED EVEREST NATIONAL INSURANCE COMPANY SECURITY NATIONAL INSURANCE COMPANY ** ALLIANT NATIONAL MUNICIPAL LIABILITY PROGRAM **ALLIANT NATIONAL MUNICIPAL LIABILITY PROGRAM BROKER: ALLIANT INSURANCE SERVICES, INC.NEWPORT BEACH, CALIFORNIA Gordon DesCombes Rennetta Poncy Julia Gordon Ryan Jacques Executive Vice President Vice President Asst. Vice President Account Manager Lead THIS PROPOSAL IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ALTER THE POLICY IN ANY WA Y. PLEASE REFER TO THE POLICY FORM FOR COMPLETE COVERAGE, TERMS & CONDITIONS AND EXCLUSIONS. Alliant embraces a policy of transparency with respect to its compensation from insurance transactions. Details on our compensation policy, including the types of income that Alliant may earn on a placement, are available on our website at www.alliantinsurance.com. For a copy of our policy or for any inquiries regarding compensation issues pertaining to your account you may also contact us at: Alliant Insurance Services, Inc., Attention: Chief Financial Officer, 1301 Dove Street, Suite 200, Newport Beach, CA 92660. * Analyzing insurers' over-all performance and financial strength is a task that requires specialized skills and in-depth technical understanding of all aspects of insurance company finances and operations. Insurance brokerages such as Alliant Insurance typically rely upon rating agencies for this type of market analysis. Both A.M. Best and Standard and Poor's have been industry leaders in this area for many decades, utilizing a combination of quantitative and qualitative analysis of the information available in formulating their ratings. A.M. Best has an extensive database of nearly 6,000 Life/Health, Property Casualty and International companies. You can visit them at www.ambest.com For additional information regarding insurer financial strength ratings visit Standard and Poor's website at www. standardandpoors. com To learn more about companies doing business in California, visit the California Department of Insurance website at www. insurance, ca.gov CXOx*~ "ANML PROGRAM Exhibit 3 if 3 CITY OF CARLSBAD 2011-2012 EXCESS LIABILITY MARKETING REPORT MARKET ANML - Security National Ironshore Insurance Compan Chartis (Insurance Company of the State of Pennsylvania) Catlin Insurance Company Genesis Underwriting Managers (General Reinsurance) Munich American Risk Partners (Munich Reinsurance) Travelers Insurance Company Brit Insurance (Lloyds Underwriters) Market (Evanston Ins. Co.) Midlands Underwriting (New York Marine and General Ins. Co.) RESPONSE Quote Provided Declined - not competitive with ANML form or pricing Declined - not competitive with ANML pricing Declined - can't provide coverage on dams Declined - indicated premium twice current amount Declined - not competitive Declined - class of business/size of city Declined - not competitive with current pricing Did not respond Did not respond