HomeMy WebLinkAbout2012-06-26; City Council; 20946; Renewal Excess Workers Compensation BenefitsCITY OF CARLSBAD - AGENDA BILL
20.946 AB#
MTG.
DEPT. HR
06/26/12
RENEWAL OF EXCESS WORKERS'
COMPENSATION BENEFITS
DEPT. HEA
CITY ATTY.
CITY MGR.
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RECOMMENDED ACTION:
Approval of Resolution No. 2012-150 authorizing the renewal of Excess Workers'
Compensation Insurance coverage in accordance with staff's recommendation at a premium of
$145,822.
ITEM EXPLANATION:
The current excess Workers' Compensation Insurance Policy expires on June 30, 2012. This policy
provides for loss coverage which exceeds the City's self-insured retention level. The City's Self
Insurance Retention (SIR) will remain at $1,000,000 per claim for safety employees and $750,000 per
claim for non-safety employees.
Brown & Brown, Inc., the City's insurance broker, obtained renewal quotes from three carriers (see
Exhibit 2). The renewal quotes for annual premiums ranged from $134,857 to $225,000. Based on
these quotes, staff recommends renewing its policy with Safety National Casualty Corporation at a
premium of $145,822 which results in continuing the current SIR. The 30% increase in the insurance
rate (from .1955 per $100 of payroll to .2540 per $100 of payroll) is primarily due to circumstances in the
State of California regarding workers' compensation. This year's average increase in California's pure
premium workers' compensation rates was 46%.
FISCAL IMPACT:
The recommended renewal quotation for one year is $145,822. The July 1, 2012 rate increase for this
insurance is greater than what staff estimated when preparing the Fiscal Year 2012-13 Preliminary
Operating Budget for adoption. Therefore, we request that Council appropriate an additional $16,000 in
the Fiscal Year 2012-13 Workers' Compensation Fund Operating Budget. Sufficient cash balances exist
in the Workers' Compensation Fund to allow for this additional appropriation.
ENVIRONMENTAL IMPACT:
The proposed action does not qualify as a "project" under the California Environmental Quality
Act (CEQA) per State CEQA Guidelines Section 15378 as it does not result in a direct or
reasonably foreseeable indirect physical change in the environment.
EXHIBITS:
1. Resolution No. 2012-150
2. Summary of Excess Workers' Compensation Insurance Quotations
DEPARTMENT CONTACT: Debbie Porter 760-602-2441 debbie.porter@carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF •
WITHDRAWN • OTHER-SEE MINUTES •
AMENDED •
RESOLUTION NO. 2012-150
2 A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING
RENEWAL OF THE CITY'S EXCESS WORKERS'
4 COMPENSATION INSURANCE.
5 WHEREAS, the City has established a self-insurance program for workers'
6 compensation; and
7 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; and
WHEREAS, the proposed Workers' Compensation Fund Operating Budget to be
adopted for FY 2012-13 does not contain sufficient appropriation to cover the cost of the
renewal;
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15 WHEREAS, the Workers' Compensation Fund has sufficient cash reserves to
16 fund an additional appropriation,
17 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
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2. That the renewal of the City's Excess Workers' Compensation Insurance
coverage with Safety National Casualty Corporation, with the premium in the
23 amount of $145,822, is hereby approved
24 3. That an additional appropriation of $16,000 is approved for the Workers'
25 Compensation FY 2012-13 Operating Budget.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council
of the City of Carlsbad on the 26*^ day of June, 2012, by the following vote to wit:
AYES:
NOES:
Council Members Hall, Kulchin, Blackburn, Douglas and Packard.
None.
ABSENT: None.
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iRRAINE M. WOOD, City Clerk LO
(SEAL)
CITYOF CARLSBAD
EXCESS WORKERS' COMPENSATION
CARRIER COMPARISONS 2012/2013
ESTIMATED PAYROLL: $57,410,345
INSURANCE CARRIER RATING
AOMITTEOor
NON.
ADMITTED
WORKERS'
COMPENSATION
UMIT
EMPLOYERS
UABIUTY UMIT
(OCCURRENCE]
EMPLOYERS
UABILUTY UMtT
(POUCY)
SELF.1NSUREO
RETENTION
SELF-
INSURED
RETENTION
Pollco & Firs
DEPOSIT
PREMIUM
MINIMUM
PREMIUM
RATE PER
$100
A SAFETY NATIONAL CASUALITY
CORPORATION A: XI ADMITTEO Statutory $2,000,000 $2,000,000 $750,000 $1,000,000 $145,822 $138,531 .2540
B SAFETY NATIONAL CASUALITY
CORPORATION A: XI ADMITTED Statutory $2,000,000 $2,000,000 $1,000,000 $1,000,000 $134,857 $126,114 .2349
C ARCH INSURANCE COMPANY A*: XV ADMrrTED Statutory $2,000,000 $2,000,000 $750,000 $1,000,000 $205,000 $205,000
(Indication) .3571
D MIDWEST EMPLOYERS
CASUALTY COMPANY A+:XV ADMrrTED $25,000,000 $1,000,000 N/A Declined
F ACE AMERICAN INSURANCE
COMPANY A*; XV ADMITTED Minimum Policy Premium: $125,000
E
NEW YORK MARINE AND
GENERAL INSURANCE
COMPANY
A: IX ADMITTED $50,000,000 $1,000,000 N/A $1,000,000 $1,000,000 $225,000 $225,000
(Indication) .3919
G STAR INSURANCE COMPANY A-: IX ADMITTED Declined - Police and Fire Exposure associated with the risk
2) Twrortsm Coverage is fnciudad In aU of the adove quotes
LAST YEAR
ESTIMATED PAYROLL: $60^.578
WORKERS'
COMPENSATION
UMIT
EMPLOYERS
LIABILITY UMIT
(OCCURRENCE)
EMPLOYERS
UABILITY UMIT
(POUCY)
SELF^INSUREO
RETENTION
SELF-
INSURED
RETENTION
Pollco & Flro
DEPOSIT
PREMIUM
MINIMUM
PREMIUM
RATE PER
$100
SAFETY NATIONAL CASUALTY CORPORATION Statutory $2,000,000 $2,000,000 $750,000 $1,000,000 $117,751 $111,803 .1955
Pfoose note (ta fo/towA^ 8S respects 0>e 20f2-fS quotes:
1) Safety Hational Casuatty Company quotes are subject to tha same policy tomt and emforsements as expiring.
2) Arcli Insurance option Is an Indication which, tf there Is Interest, can be eonfUmeO. It Is also sut^eet to the following endorsements: losses redefined to Include Allocated Loss Atflustment Expense Endt;
T&TX)Tism tilsk Insurance Pmgram Reauthortzadon Act Ertdoaenwnt; California Amendatory Et^^
3} Terrxirism Coverage Is IttebtOed In all quotes and ttte/»romlum Is Included In the deposit premium.
4) imMestEmtOoyerfcannotoffBra retention lower than t1,COO,ooom-Sttautoryl^^
•tflDiaB»-ri«ii iww. mo)