HomeMy WebLinkAbout2002-09-24; City Council; Resolution 2002-2871
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RESOLUTIONNO. 2002-287
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARJSBAD, CALIFORNIA, AUTHORIZING AWARD
OF CONTRACT TO TRISTAR RISK MANAGEMENT.
WHEREAS, the City Council has determined that the City requires professional services
of a third party administrator that is experienced in managing and administering the City’s
workers’ compensation claims.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
California, as follows:
1. That the above recitation is true and correct.
2. That the City Council approves the attached Ratification of and Agreement
(Exhibit 2) awarding the contract to TRISTAR Risk Management to provide third party
administration of workers’ compensation claims.
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 award of contract to provide Third Party Administration services with
TRISTAR Risk Management is hereby approved .
PASSED, APPROVED, AND ADOPTED at a regular meeting of the Carlsbad City
Council held on the &hday of SEPTEMBER ,2002; by the following vote, to wit:
AYES: Council Members Lewis, Finnila, Hall
NOES: None
ABSENT: Council Members Kulchi
ATTEST:
RATIFICATION OF AND
AGREEMENT FOR THIRD PARTY ADMINISTRATIVE SERVICES
TRISTAR Risk Management
THIS AGREEMENT is made and entered into as of theflday-
of 2002, but is effective as of July 1,2002, by and between the CITY OF CARLSBAD. a
municipal corporation, ("City"), and TRISTAR Risk Management, a privately held
Corporation.
RECITALS
A. City requires the professional services of a third party administrator that is
experienced in managing and administering the City's workers' compensation
claims.
B. Contractor has the necessary' experience in providing professional
services and advice related to workers' compensation.
C. Selection of Contractor is expected to achieve the desired results in an
expedited fashion.
D. Contractor has submitted a proposal to City and has affirmed its
willingness and ability to perform such work.
E. Contractor has been performing the work since July 1,2002, without the
benefit of an agreement and the parties desire to ratify this work.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
contained herein, City and Contractor agree as follows:
1. SCOPE OF WORK
City retains Contractor to perform, and Contractor agrees to render, those services (the
"Services") that are defined in attached Exhibit 'A, which is incorporated by this
reference in accordance with this Agreement's terms and conditions. Any services
performed since July 1.2002, are hereby ratified.
2. STANDARD OF PERFORMANCE
While performing the Services, Contractor will exercise the reasonable professional
care and skill customarily exercised by reputable members of Contractor's profession
practicing in the Metropolitan Southern California Area, and will use reasonable
diligence and best judgment while exercising its professional skill and expertise.
3- - TERM
The term of this Aareement will be effective for a oeriod of three (31 vears from the date
first above writtensubject to the annual appropriation of funds by the City Council. The
City Manager may amend the Agreement to extend it for two (2) additional one (1) year
periods or parts thereof in an amount not to exceed one hundred ten thousand dollars
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($1 10,000) per Agreement year. Extensions will be based upon a satisfactory review of
Contractor's performance, City needs, and appropriation of funds by the City Council.
The parties will prepare a written amendment indicating the effective date and length of
the extended Agreement.
4. TIME IS OF THE ESSENCE
Time is of the essence for each and every provision of this Agreement.
5. COMPENSATION
The total fee payable monthly in advance for the services to be performed during the
initial Agreement term will be:
Year One (1): $90,000.00/12 = $7500.00
Year Two (2): $92,700.00/12 = $7725.00
Year Three (3): $95,481.00/12 = $7956.00
This fee covers handling of all new and continuing indemnity tiles, and all medical only
files for the period of the Agreement. Also, this fee was premised on an estimated
annual (open) claims volume of 108 indemnity files and 40 medical only files. Should
the actual claim volumes be less than or exceed these estimates by 15% due to an
acquisition or sale of facilities by the City, a significant change in the number of
employees or as a result of a catastrophic loss, then both parties will agree to negotiate
in good faith, as to a reasonable fee adjustment.
No other compensation for the Services will be allowed except for items covered by
subsequent amendments to this Agreement. The City reserves the right to withhold a
ten percent (10%) retention until City has accepted the work andlor Services specified
in Exhibit "A.
Incremental payments, if applicable, should be made as outlined in attached Exhibit "A.
6. STATUS OF CONTRACTOR
Contractor will perform the Services "in Contractor's own way as an independent
contractor and in pursuit of Contractor's independent calling, and not as an employee of
City. Contractor will be under control of City only as to the result to be accomplished,
but will consult with City as necessary. The persons used by Contractor to provide
services under this Agreement will not be considered employees of City for any
purposes.
The payment made to Contractor pursuant to the Agreement will be the full and
complete compensation to which Contractor is entitled. City will not make any federal or
state tax withholdings on behalf of Contractor or its agents, employees or
subcontractors. City will not be required to pay any workers' compensation insurance or
unemployment contributions on behalf of Contractor or its employees or subcontractors.
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Contractor agrees to indemnify City within thirty (30) days for any tax, retirement
contribution, social security, overtime payment, unemployment payment or workers’
compensation payment which City may be required to make on behalf of Contractor or
any agent, employee, or subcontractor of Contractor for work done under this
Agreement. At the City’s election, City may deduct the indemnification amount from any
balance owing to Contractor.
7. SUBCONTRACTING
Contractor will not subcontract any portion of the Services without prior written approval
of City. If Contractor subcontracts any of the Services, Contractor will be fully
responsible to City for the acts and omissions of Contractor‘s subcontractor and of the
persons either directly or indirectly employed by the subcontractor, as Contractor is for
the acts and omissions of persons directly employed by Contractor. Nothing contained
in this Agreement will create any contractual relationship between any subcontractor of
Contractor and City. Contractor will be responsible for payment of subcontractors.
Contractor will bind every subcontractor and every subcontractor of a subcontractor by
the terms of this Agreement applicable to Contractor‘s work unless specifically noted to
the contrary in the subcontract and approved in writing by City.
8. OTHER CONTRACTORS
The City reserves the right to employ other Contractors in connection with the Services.
9. INDEMNIFICATION
Except as otherwise provided in Exhibit “C”, Audit Unit Penalty Assessment Guidelines,
Contractor agrees to indemnify and hold harmless the City and its officers, officials,
employees and volunteers from and against all claims, damages, losses and expenses
including attorneys fees arising out of the performance of the work described herein
caused in whole or in part by any willful misconduct or negligent act or omission of the
Contractor, any subcontractor, anyone directly or indirectly employed by any of them or
anyone for whose acts any of them may be liable.
The parties expressly agree that any payment, attorney’s fee, costs or expense City
incurs or makes to or on behalf of an injured employee under the City’s self-
administered workers’ compensation is included as a loss, expense or cost for the
purposes of this section, and that this section will survive the expiration or early
termination of this Agreement.
10. INSURANCE
Contractor will obtain and maintain for the duration of the Agreement and any and all
amendments, insurance against claims for injuries to persons or damage to property
which may arise out of or in connection with performance of the services by Contractor
or Contractor’s agents, representatives, employees or subcontractors. The insurance
will be obtained from an insurance carrier admitted and authorized to do business in the
State of California. The insurance carrier is required to have a current Best‘s Key Rating
of not less than “A-:V“.
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10.1 Coveraqes and Limits.
Contractor will maintain the types of coverages and minimum limits indicated below,
unless City Attorney or City Manager approves a lower amount. These minimum
amounts of coverage will not constitute any limitations or cap on Contractor's
indemnification obligations under this Agreement. City, its officers, agents and
employees make no representation that the limits of the insurance specified to be
carried by Contractor pursuant to this Agreement are adequate to protect Contractor. If
Contractor believes that any required insurance coverage is inadequate, Contractor will
obtain such additional insurance coverage, as Contractor deems adequate, at
Contractor's sole expense.
10.1. General Liabilitv Insurance. $1,000,000 combined single-limit per
occurrence for bodily injury, personal injury and property damage. If the submitted
policies contain aggregate limits, general aggregate limits will apply separately to the
work under this Agreement or the general aggregate will be twice the required per
occurrence limit.
10.1.2 Automobile Liability (if the use of an automobile is involved for
Contractor's work for City). $1,000,000 combined single-limit per accident for bodily
injury and property damage.
10.1.3 Workers' Compensation and Emplover's Liability. Workers'
Compensation limits as required by the California Labor Code and Employer's Liability
limits of $1,000,000 per accident for bodily injury. Workers' Compensation and
Employer's Liability insurance will not be required if Contractor has no employees and
provides, to City's satisfaction, a declaration stating this.
10.1.4 Professional Liabilitv. Errors and omissions liability appropriate to
Contractor's profession with limits of not less than $1,000,000 per claim. Coverage must
be maintained for a period of five years following the date of completion of the work.
10.2. Additional Provisions. Contractor will ensure that the policies of
insurance required under this Agreement contain, or are endorsed to contain, the
following provisions:
10.2.1 The City will be named as an additional insured on General
Liability.
10.2.2 Contractor will obtain occurrence coverage, excluding Professional
Liability, which will be written as claims-made coverage.
10.2.3 This insurance will be in force during the life of the Agreement and
any extensions of it and will not be canceled without thirty (30) days prior written notice
to City sent by certified mail pursuant to the Notice provisions of this Agreement.
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10.3 Providinq Certificates of Insurance and Endorsements. Prior to City's
execution of this Agreement, Contractor will furnish certificates of insurance and
endorsements to City.
10.4 Failure to Maintain Coveraqe. If Contractor fails to maintain any of these
insurance coverages, then City will have the option to declare Contractor in breach, or
may purchase replacement insurance or pay the premiums that are due on existing
policies in order to maintain the required coverages. Contractor is responsible for any
payments made by City to obtain or maintain insurance and City may collect these
payments from Contractor or deduct the amount paid from any sums due Contractor
under this Agreement.
10.5 Submission of Insurance Policies. City reserves the right to require, at
anytime, complete and certified copies of any or all required insurance policies and
endorsements.
11. BUSINESS LICENSE
Contractor will obtain and maintain a City of Carlsbad Business License for the term of
the Agreement, as may be amended from time-to-time.
12. ACCOUNTING RECORDS
Contractor will maintain complete and accurate records with respect to costs incurred
under this Agreement. All records will be clearly identifiable. Contractor will allow a
representative of City during normal business hours to examine, audit, and make
transcripts or copies of records and any other documents created pursuant to this
Agreement. Contractor will allow inspection of all work, data, documents, proceedings,
and activities related to the Agreement for a period of three (3) years from the date of
final payment under this Agreement.
13. OWNERSHIP OF DOCUMENTS
All work products produced by Contractor or its agents, employees, and subcontractors
pursuant to this Agreement is the property of City. In the event this Agreement is
terminated, all work products produced by Contractor or its agents, employees and
subcontractors pursuant to this Agreement will be delivered at once to City. Contractor
will have the right to make one (1) copy of the work product for Contractor's records.
14. COPYRIGHTS
Contractor agrees that all copyrights that arise from the services will be vested in City
and Contractor relinquishes all claims to the copyrights in favor of City.
15. NOTICES The name of the persons who are authorized to give written notices or to receive written
notice on behalf of City and on behalf of Contractor under this Agreement.
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For Citv:
Deborah A. Harvey
Benefits Administrator
Human Resources Department
City of Carlsbad
1635 Faraday Avenue
Carlsbad, CA 92008
(760) 602-2435
TRISTAR Risk Management:
Name: Thomas J. Veale
Title: President
Address 100 Oceangate Suite 700
Long Beach, CA 90802
Phone No. (562) 495-6600
Each party will notify the other immediately of any changes of address that would
require any notice or delivery to be directed to another address.
16. CONFLICT OF INTEREST
City will evaluate Contractor's duties pursuant to this Agreement to determine whether
disclosure under the Political Reform Act and City's Conflict of Interest Code is required
of Contractor or any of Contractor's employees, agents, or subcontractors. Should it be
determined that disclosure is required, Contractor or Contractor's affected employees,
agents, or subcontractors will complete and file with the City Clerk those schedules
specified by City and contained in the Statement of Economic Interests Form 700.
Contractor, for Contractor and on behalf of Contractor's agents, employees,
subcontractors and consultants warrants that by execution of this Agreement, that they
have no interest, present or contemplated, in the projects affected by this Agreement.
Contractor further warrants that neither Contractor, nor Contractor's agents, employees,
subcontractors and consultants have any ancillary real property, business interests or
income that will be affected by this Agreement or, alternatively, that Contractor will file
with the City an affidavit disclosing this interest.
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17. GENERAL COMPLIANCE WITH LAWS
Contractor will keep fully informed of federal, state and local laws and ordinances and
regulations which in any manner affect those employed by Contractor, or in any way
affect the performance of the Services by Contractor. Contractor will at all times observe
and comply with these laws, ordinances, and regulations and will be responsible for the
compliance of Contractor's services with all applicable laws, ordinances and regulations.
Contractor will be aware of the requirements of'the Immigration Reform and Control Act
of 1986 and will comply with those requirements, including, but not limited to, verifying
the eligibility for employment of all agents, employees, subcontractors and consultants
that the services required by this Agreement.
18. DISCRIMINATION AND HARASSMENT PROHIBITED
Contractor will comply with all applicable local, state and federal laws and regulations
prohibiting discrimination and harassment.
19. DISPUTE RESOLUTION
If a dispute should arise regarding the performance of the Services the following
procedure will be used to resolve any questions of fact or interpretation not otherwise
settled by agreement between the parties. Representatives of Contractor or City will
reduce such questions, and their respective views, to writing. A copy of such
documented dispute will be forwarded to both parties involved along with recommended
methods of resolution, which would be of benefit to both parties. The representative
receiving the letter will reply to the letter along with a recommended method of
resolution within ten (IO) business days. If the resolution thus obtained is unsatisfactory
to the aggrieved party, a letter outlining the disputes will be forwarded to the City
Manager. The City Manager will consider the facts and solutions recommended by each
party and may then opt to direct a solution to the problem. In such cases, the action of
the City Manager will be binding upon the parties involved, although nothing in this
procedure will prohibit the parties from seeking remedies available to them at law.
20. TERMINATION
In the event of the Contractor's failure to prosecute, deliver, or perform the Services,
City may terminate this Agreement for nonperformance by notifying Contractor by
certified mail of the termination. If City decides to abandon or indefinitely postpone the
work or services contemplated by this Agreement, City may terminate this Agreement
upon written notice to Contractor. Upon notification of termination, Contractor has five
(5) business days to make available for pick-up any documents owned by City and all
work in progress to City address contained in this Agreement. City will make a
determination of fact based upon the work product delivered to City and of the
percentage of work that Contractor has performed which is usable and of worth to City
in having the Agreement completed. Based upon that finding City will determine the final
payment of the Agreement.
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Either party upon tendering thirty (30) days written notice to the other party may
terminate this Agreement. In this event and upon request of City, Contractor will
assemble the work product and put it in order for proper filing and closing and make
claims available for pick by the City. Contractor will be paid for work performed to the
termination date; however, the total will not exceed the lump sum fee payable under this
Agreement. City will make the final determination as to the portions of tasks completed
and the compensation to be made.
21. COVENANTS AGAINST CONTINGENT FEES
Contractor warrants that Contractor has not employed or retained any company or
person, other than a bona fide employee working for Contractor, to solicit or secure this
Agreement, and that Contractor has not paid or agreed to pay any company or person,
other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift,
or any other consideration contingent upon, or resulting from, the award or making of
this Agreement. For breach or violation of this warranty, City will have the right to annul
this Agreement without liability, or, in its discretion, to deduct from the Agreement price
or consideration, or othemise recover, the full amount of the fee, commission,
percentage, brokerage fees, gift, or contingent fee.
22. CLAIMS AND LAWSUITS
By signing this Agreement, Contractor agrees that any Agreement claim submitted to
City must be asserted as part of the Agreement process as set forth in this Agreement
and not in anticipation of litigation or in conjunction with litigation. Contractor
acknowledges that if a false claim is submitted to City, it may be considered fraud and
Contractor may be subject to criminal prosecution. Contractor acknowledges that
California Government Code sections 12650 et sea., the False Claims Act applies to
this Agreement and, provides for civil penalties where a person knowingly submits a
false claim to a public entity. These provisions include false claims made with deliberate
ignorance of the false information or in reckless disregard of the truth or falsity of
information. If City seeks to recover penalties pursuant to the False Claims Act, it is
entitled to recover its litigation costs, including attorney's fees. Contractor acknowledges
that the filing of a false claim may subject Contractor to an administrative debarment
proceeding as the result of which Contractor may be prevented to act as a Contractor
on any public work or improvement for a period of up to five (5) years. Contractor
acknowledges debarment by another jurisdiction is grounds for City to terminate this
Agreement.
23. JURISDICTIONS AND VENUE
Any action at law or in equity brought by either of the parties' for the purpose of
enforcing a right or rights provided for by^ this Agreement will be tried in a court of
competent jurisdiction in the County of San Diego, State of California, and the parties
waive all provisions of law providing for a change of venue in these proceedings to any
other county.
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24. SUCCESSORS AND ASSIGNS
It is mutually understood and agreed that this Agreement will be binding upon City and
Contractor and their respective successors. Neither this Agreement or any part of it nor
any monies due or to become due under it may be assigned by Contractor without the
prior consent of City, which shall not be unreasonably withheld.
25. ENTIRE AGREEMENT
This Agreement, together with any other written document referred to or contemplated
by it, along with the purchase order for this Agreement and its provisions, embody the
entire Agreement and understanding between the parties relating to the subject matter
of it. In case of conflict, the terms of the Agreement supersede the purchase order.
Neither this Agreement nor any of its provisions may be amended, modified, waived or
discharged except in a writing signed by both parties.
26. AUTHORITY The individuals executing this Agreement and the instruments referenced in it on behalf
of Contractor each represent and warrant that they have the legal power, right and
actual authority to bind Contractor to the terms and conditions of this Agreement.
ent, a privately held Corporation
By:
Sign Here
l&SE./ I RibOddL-LC m (Print Name and Title) (Print Name and Title) ’
I corporation of the State of California
ATTEST:
c
A/
INE M. WOOD ~ ~
City Clerk
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
executed the instrument.
Though the information below is not required by law, it may pmve valuable to persons relying on the document and couldprevent fraudulent removal and reanachmenf of this form to another document.
Description of Attached Document
Title or Type of Document: &mror4++- .&Y TA ,i% I KC
Document Date:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer@)
0 Partner - 0 Limited 0 General
0 Guardian or Conservator
Signer Is Representing:
0 1994 National Notary AIroclallon. 8236 Remmel Aue.. PO. Box 7184 * Canoga Park CA 91309~7184 Pmd. No 5907 Reorder: CsllToll-Free 1-000676-6827
1:
Title(s): cm.
0 Partner - 0 Limited 0 General
0 Attornev-in-Fact
0 Trusted
Guardian or Conservator
0 Other:
I I
Signer Is Representing:
I I
If required by City, proper notarial acknowledgment of execution by contractor must be
attached. If a Corporation, Agreement must be signed by one corporate officer from
each of the following two groups.
*Group A.
Chairman,
President, or
Vice-president
**Group B.
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering the offcer(s) signing to bind the corporation.
APPROVED AS TO FORM:
. BALL, City Attorney
By: Beputy City Attorney 4- LC -OL
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EXHIBIT “A”
SCOPE OF SERVICES
I. CLAIMS ADJUSTING AUTHORITY AND RESPONSIBILITIES OF
TRISTAR
1.1 Subject to all the terms and conditions of this Agreement,
TRISTAR shall have the authority and responsibility to
provide claims adjusting and administration services to
conclusion for the City in connection with claims or losses
relating to occurrences during the period proscribed in
Exhibit A.
1.2 In connection with its authority and responsibilities under this
Agreement, TRISTAR shall:
[a] Receive and examine, on behalf of the City, all
claims reported to it and initiate procedures for
the proper servicing of each claim.
[b] Investigate and adjust, settle or deny all claims
in accordance with applicable insurance laws.
[c] Upon approval of the City, engage the services
of persons or firms outside its organization for
work in connection with investigations and
adjustment of claims and to incur other
“Allocated Loss Adjustment Expense” (as
hereinafter defined) at the City’s expense. The
City shall have the right to require TRISTAR to
terminate the employment of any person or
firm considered unsatisfactory by the City.
[dl Establish and adequately reserve a claim file
for each claim for which there is injury and/or
anticipated liability andlor a formal claim has
been made and code such claim in accordance
with The City’s statistical data requirements as
may be mutually agreed upon, such agreement
not to be unreasonably withheld by either
party.
[e] Make timely payments of valid claims for
compensation, rehabilitation expenses, and
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other required benefits payable under
applicable insurance laws, together with
Allocated Loss Adjustment Expenses, out of
funds provided by the City hereof subject to the
limitations and requirements of this Agreement.
If an authorized representative of the City
directs in writing that any payment not be
made, and if after receipt of such notice
TRISTAR nevertheless makes such payment,
the City shall be under no obligation to repay
TRISTAR for such payment.
[f~ Maintain an accurate and complete claim file
on each reported claim which shall be available
during normal business hours for inspection by
the City, its representatives or by appropriate
regulatory authorities. The City shall have the
right to copy any and all claims files or any
documents related to any claim. TRISTAR
shall maintain and store closed claim files for
no less than one year after the expiration of the statute of limitations applicable to each claim
file or as othenvise directed by state. The
provisions of this subsection may be restricted
by state laws in which case the applicable law
will govern.
[g] Provide all forms necessary for efficient claims
administration and prepare and timely file all
legally required forms and reports with the
appropriate state and federal agencies,
including but not limited to filings required by
Section 6041 of the Internal Revenue Code.
[h] In connection with the performance of its
obligations under this Agreement, provide
claims examiners and perform the services to
be rendered herein under in good faith, and in
accordance with all applicable laws and
regulations.
[I] Protect and pursue any subrogation rights to
the City which may arise upon payment of
claims and notify the City of any subrogation
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rights which, through litigation or otherwise,
may be available to the City.
Perform all administrative and clerical work in
connection with Qualified Claims including the
preparation of checks andlor drafts drawn on
the loss fund established herein; and
Respond immediately to any inquiry, complaint
or request received from an Insurance
Department. other Regulatory Agency, the
City, claimant, agent, broker, or other
interested party relating to a claim serviced
under this Agreement; a copy of both the
original inquiry and the TRISTARs response
shall be provided in a timely manner to the
City.
Upon prior approval of the City, engage the
services of licensed andlor Certified Health and
Rehabilitation firms or individuals for
Rehabilitation Management as required by
state regulations.
Report all cases involving suspected fraud to
the appropriate state mandated agency.
Settlement authority is not permitted on cases
of suspected fraud unless TRISTAR receives
written authority from the City. When operating
in states that require fraud to be reported to the
state insurance department, TRISTAR must
maintain an internal special investigative unit or
contract with an entity to provide such services.
II. CLAIM SETTLEMENT AUTHORITY
2.1. Unless otherwise advised by the City or in cases of
suspected fraud, TRISTAR shall have authority and control
in all matters, pertaining to the handling of claims under this
Agreement, except which involve or which are expected to
involve aggregate expenditures (of loss and Allocated Loss
Expenses) in excess of $20,000 unless otherwise agreed to
by the City. For claims in excess of this amount, TRISTAR
shall provide the City with a Narrative Serious Loss Report
and a copy of the claim file. The Narrative Serious Loss
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2.2
2.3
Report shall be in a form as may be mutually agreed upon,
such agreement not to be unreasonably withheld by either
party. Additional Narrative Serious Loss Reports shall be
submitted whenever there is a change in the reserve on
such claims. Unless otherwise advised by the City,
TRISTAR shall continue to handle the claim but shall not
settle the claim without first obtaining the approval of the
City.
The City shall retain ultimate settlement authority for all
claims serviced under the Policy. Notwithstanding the
authority delegated to TRISTAR under this Agreement, The
City shall have the option of taking over the handling and
settlement of any or all claims upon written notice to
TRISTAR.
TRISTAR shall comply with claims procedures and
guidelines attached hereto as Exhibit B, and such
amendments or replacements thereto as may be agreed to
by TRISTAR, such agreement not to be unreasonably
withheld.
V. DRAFT AUTHORITY AND ISSUANCE
3.1
3.2
3.3
TRISTAR shall have authority to draw upon a trust account
(the “Loss Payment Account”), which shall be established for
the payment of the City’s claims. Such authority may be
revoked at any time by the City upon written notice. The
Loss Payment Account will be replenished monthly by the
City to an amount equal to two and one-half (2-112) months
estimated paid losses based on an average of the last three
months paid losses upon receipt of required monthly
accountings. The City may review the adequacy of the
account at any time and increase or decrease the account
as necessary. TRISTAR shall be required, upon request of
the City, to remit promptly any funds in the account in excess
of the required amount as determined by the City.
Individual or aggregate loss payments in excess of $20,000
shall require the prior approval of The City.
All checks shall be accounted for by TRISTAR as on hand,
issued, voided, or canceled. TRISTAR shall provide a
monthly account to the City within fifteen (15) days after the
end of the month for which the account is given. TRISTAR
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shall have the responsibility for balancing the Loss Payment
Account. A duplicate copy of all bank statement shall be
sent to the City by TRISTAR. Copies of checks shall be
made available to The City by TRISTAR upon City’s request.
IV. REPORTING REQUIREMENTS
4.1
4.2
4.3
TRISTAR shall provide monthly loss run reports to The City - - by hard copy on paper or in an acceptable electronic data
format -- detailing by report period and inception to date, the
following information by accident date: claim number, state,
location number, total incurred expense, broken down by
loss coverage/peril, allocated loss adjustment expense,
outstanding reserves (loss and loss adjustment), salvage,
subrogation, and such other information requested by The
City.
TRISTAR shall provide to The City monthly documentation
identifying all loss payments and allocated loss expenses.
TRISTAR agrees to provide The City with copies of all loss
payments checks and allocated loss expense checks,
refunds, recoveries and voided checks upon The City’s
request.
Monthly loss reports shall be due within eight (8) business
days after the end of the month for which they relate.
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EXHIBIT B
GENERAL CLAIMS PROCEDURES &GUIDELINES
This exhibit describes general claims handling guidelines utilized by TRISTAR on our
clients’ behalf.
TRISTAR will comply with all rules, regulations and reporting requirements promulgated
by state regulatory authorities as to adjusting, licensing, tenancy and claim settlement in
each state where claims handling activities are conternplated or where claims adjusting
takes place.
All claims must be handled in compliance with these guidelines, incorporating the
authority and reporting criteria outlined in the individual account contracts, as well as
any special handling instructions agreed to by TRISTAR and its client where they may
differ from these guidelines.
CONTACTS & INVESTIGATIONS:
0 Upon first notice of injury or claim, the examiner must contact the
employer (client) within 24 hours in order to substantiate
causation/compensability and evaluate subrogation possibilities.
This contact should also be utilized to facilitate return to work as
soon as possible, reinforce prompt reporting and the use of
designated medical providers.
0 Within 24 hours, contact with the injured worker should be made.
This contact sets the tone for positive communication and will
provide the examiner the opportunity to establish a good
relationship with the injured worker, which may eliminate future
problems that could lead to litigation.
Within three (3) working days, contact with the treating medical
provider should occur. The purpose of this contact is to evaluate
the nature and extent of injury, verify causal relationship, determine
disability status and treatment plan, including diagnosis and
prognosis, and to provide any necessary authorization. Discussion
of return to work should also occur with an effort to identify current
physical restrictions with a consideration of potential modified or
alternate work.
Initial investigation should be completed and a reserve established
within five (5) working days.
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a Prompt follow-up work should be accomplished to complete or
investigate new or ongoing issues.
Appropriate field investigations should be conducted in order to
properly evaluate and defend questionable claims, to develop and
advance subrogation and contribution claims.
All coverage issues must be identified, investigated and evaluated.
Refer any actual or potential coverage issues to the Client, with
recommendations.
RESERVING:
Initial reserves should be promptly established (within five (5)
working days in most cases), and should reflect the estimated
ultimate value of each reported claim. Reserving should be realistic
and should be established based on the available evidence in the
file along with the experience and expertise of the examiner
handling the case.
a Revisions to outstanding case reserves must be made immediately
when significant developments occur that change the established
ultimate value of a claim.
0 Claims exceeding the authority level indicated within the Agreement
must be reviewed and approved by the Client. Reporting
requirements should be followed as outlined below.
REPORTING GUIDELINES:
a TRISTAR will provide a Narrative Serious Loss Report when loss
and allocated loss reserves meet or exceed the designated
authority level established within the Claims Servicing Agreement
and/or when one or more of the following situations exist regardless
of the level of reserving.
a Severe head injury involving loss of consciousness
and/or hospitalization.
a Death claim.
Spinal cord injury resulting in paraplegia or
quadriplegia, either partial or complete.
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Major amputations.
Burn unit cases.
Bilateral extremity fractures.
ICU or CCU hospitalization.
AIDS.
Employer Liability (Coverage B) claims.
Bad faith actions.
Questionable coverage claims.
All lawsuits naming the Client as a defendant.
s TRISTAR will notify the Client by phone or fax within 24 hours of
their knowledge of a reportable claim. This notification will be
followed by the required written information within ten (IO) working
days.
s The Narrative Serious Loss Report will include the following
information:
TRISTAR Claim Number and Client Claim Number, if
available.
Coverage confirmation.
Complete description of how accident occurred.
Information regarding the injured worker, including but
not limited to age, occupation, date of hire, average
weekly wage and compensation rate.
Description of injury, treatment plan, and prognosis.
Discussion of all outstanding issues and the plan of
action to resolve.
Reserve calculations including loss and expense paid
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to date. The report should clearly indicate on what
the reserves are based. For example, if permanent
disability reserves are indicated, provide the PD rating
equation and the reasoning behind the level of
estimated PD.
Subsequent Reports will be provided upon request.
MEDICAL MANAGEMENTICOST CONTAINMENT PROGRAMS:
Treatment should be performed and supervised by certified medical
care providers of the highest caliber and quality.
0 Medical treatment should be directed toward the best result
possible, aiming at a return to pre-injury status whenever possible.
0 Where possible, given the limitations of litigation and legislated
constraints, directing and guiding the injured worker as to the
appropriate treating physician should occur.
Use of Medical Management Nurses is a valuable tool in
coordinating medical care and getting injured workers back to work.
Cases appropriate for referral may involve:
hospitalization or surgery (pre/post).
0 Home care nursing requested or
needed.
pain management program or
substance abuse detoxification.
non-compliance with physician's
recommended treatment.
0 unclear medical diagnosis or prognosis.
frequent extensions of disability by the
physician where the injured worker
reports little or no improvement.
0 pre-existing condition is complicating
recovery or multiple problems are not
being adequately addressed by the
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treating physician.
8 all catastrophic cases: spinal cord injury
blindness
major amputations
severe head injuries
severe burns
multiple fractures or crush injuries
massive internal injuries
severe hand injuries
8 Cost containment Programs should be utilized on all claims. These
programs will include but not be limited to, bill reviews for reduction of
billing overcharges, use of PPO/HMO programs when possible, and
utilization reviews. Use of independent medical evaluations are
appropriate in certain circumstances.
RETURN TO WORK PROGRAMS:
8 Every effort- should be made to identify modified work the injured worker
can perform while recuperating from his or her industrial injury. A modified
job might consist of a modification of the duties or hours worked in the
employee’s customary job, or it could be an alternative job that meets the
worker’s physical requirements.
a When an injured worker is medically eligible for vocational rehabilitation
services, the service company should work with the employer and
employee to permanently modify or alternate his or her job whenever
possible to meet vocational rehabilitation benefit requirements.
a When a vocational rehabilitation specialist or counselor is required, the
service company should timely secure the services of a qualified
individual. If required by state regulations, rehabilitation counselors
should be properly certified or licensed.
LITIGATION MANAGEMENT:
a Cases requiring legal representation will be assigned to an attorney
selected from an approved panel, which is maintained and reviewable on
an annual basis. Attorneys on the approved panel should provide quality
services, be familiar with the Workers’ Compensation jurisdiction of the
selected case, and charge reasonable rates relative to the local market.
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All assignments to attorneys should contain specific instructions and
direction. Discovery and legal activity should be limited to that which is
needed to best defend and resolve the pertinent issues of the case.
0 Responsibility for maintaining control of defense counsel and expenses
remain with TRISTAR, unless the City Attorney determines it is in the
best interest of client for the City Attorney's Office to assume this
control.
Consultation with Client should occur when the exposure exceeds the
authority outlined in the Claims Servicing Agreement.
SUBROGATION AND CONTRIBUTION:
0 Potential subrogation and contribution situations should be identified and
investigated as soon as possible.
TRISTAR is responsible for developing evidence to support recovery.
Assignments to appropriate investigators should occur. Consideration
must be given to the quality of the case, the value of the case, and the
cost of various aspects of the investigation. Authority levels must be
adhered to as stated in the Claims Servicing Agreement. As with the
settlement of claims, the final decision to pursue subrogation or
contribution rests with the client.
All recoveries must be posted to the claims file and reported in the
monthly reconciliation report required by the Claims Servicing Agreement.
DOCUMENTATION AND FILE MATERIALS:
0 Every claim file should be thoroughly documented. Mandatory forms
should be completed and copied to the file. All phone conversations and
investigative work should be summarized within the file. Medical
information should be updated on a regular basis. Copies of all
correspondence should be within the file. All supporting documentation
for defending or supporting our position on various issues should be in the
file. All bills and payment information should be within the file.
0 File documentation can consist of hardcopy paper files, computerized
information, or a combination of both.
TRISTAR will maintain confidentiality of all data, which is of a protected
class. This includes work product in litigated and third party cases and
medical reports and records relating to the injured employees.
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Confidentiality of medical records will be maintained pursuant to
applicable state laws.
EXHIBIT C
AUDIT UNIT PENALTY ASSESSMENT GUIDELINES
Under the guidelines of legislation regarding Workers' Compensation in the State of
California effective January 1, 1990 there are procedures for the assessment of
penalties in varying amounts for specific violations of either claim practices or the timely,
accurate, and effective provision of benefits to the injured Employees as determined
through the audit process of the Department of Workers Compensation Audit Unit.
It has been clearly stated by the Audit Unit that in the case of a self-insured Employer
whose claims are administered by a third party administrator (TPA) that "the penalty
imposed shall be joint and several, and shall be served upon both the self-insured and
third party administrator."
This is to say that both parties will have the obligation to resolve the payment of the
assessment, pay the penalty assessed or to lodge the appropriate defense against such
payment if the penalty is felt to be either inappropriate or unreasonable under the
specific circumstances that have given rise to the assessment of the penalty in
question.
In the event that the penalty assessedt is for work done or not done properly by a prior
administrator, where there has been a subsequent change in third party administrators
the penalty again will be issued as a joint and several document with notice being
served upon both the self-insured and the Drjor administrator.
The schedule of penalties has once again been refined and it is possible that it will be
further refined as The Audit Unit continues to draft its procedure manual for the
conduction of an audit and the determination of penalty assessment.
In order to determine in an orderly manner who should be responsible for the payment
of any penalties assessed, the following guidelines will be utilized by TRISTAR.
NATURE OF VIOLATION AND RESPONSIBLE PARTY
Failure to pay full 10% self-imposed increase
As this would appear to be a calculation error and therefore the responsibility of
the claims examiner, the penalty would be paid by the TRISTAR.
However, in the event that the calculation error was based on incorrect
information provided by the CLIENT, which TRISTAR had no ability to verify, the
penalty would appear appropriate for payment by the CLIENT.
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26
Self-imposed penalty not paid
If the penalty was not paid because the CLIENT had not notified TRISTAR of the
return of the claim form from the claimant and TRISTAR had no reason to prompt
the CLIENT for this information, then this penalty would be paid by the CLIENT.
Where the failure to pay the self-imposed penalty is a calculation error by the
claims examiner and all information has been timely provided the examiner, the
payment of the assessment would be the responsibility of the TRISTAR.
Failure to advance permanent disability when due
Where the file is clearly documented and the failure to pay is an examiner error
then the penalty assessed is the TRISTAR responsibility.
If the knowledge of permanent disability is withheld from the examiner by either
the CLIENT and TRISTAR had no other reasonable means of discovering the
permanent disability, the penalty is the CLIENT’S responsibility.
No CLIENT date received on Employee claim form
It should be noted that for this assessment to apply, the claim form must have
been returned to the CLIENT and the CLIENT, in sending the CarriernPA copy
of the form, will have neglected to complete the appropriate information required.
This penalty would be appropriate for CLIENT payment.
Additionally, it should be noted that from time to time TRISTAR may receive a
claim form from sources other than the CLIENT (Le. doctors or Applicant‘s
Attorney). When that occurs, TRISTAR will document the file that the claim form
was originally received from a source other than the CLIENT, forward a copy of
the claim form, completed by the Employee, to the CLIENT for completion of the
appropriate information and for return to TRISTAR. If the form is not returned to
TRISTAR with the required information, the CLIENT will be responsible for the
payment of the assessment.
Failure to respond to written Employee request for treatment within 20 days
If the written request is received by TRISTAR the payment of this penalty will be
paid by TRISTAR. However, if the written request is received by the CLIENT and
it is not communicated and sent to TRISTAR in sufficient time for TRISTAR to
meet the response time, the penalty should be paid by the CLIENT.
Failure to pay requested and uncontested medical mileage
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If the mileage request is sent by the Employee directly to TRISTAR rather than to
any other party, TRISTAR will pay the penalty assessment. If the mileage
request is sent first to the CLIENT and the CLIENT does not communicate and
send the mileage request to TRISTAR in sufficient time for TRISTAR to meet the
payment deadline, the penalty will be paid by the CLIENT.
Payment at less than maximum T.D. rate without documentation in addition to the
Employer's Report
This penalty assumes that there is not ample documentation to support such a
payment. It is TRISTAR 's procedure to pay all temporary disability benefits at
maximum unless an adequate wage statement has been provided and in our
possession at the time that any indemnity benefit is paid. In light of this policy
the payment of the penalty assessed is the responsibility of TRISTAR unless the
wage information provided by the CLIENT is inaccurate and TRISTAR has no
reasonable basis for questioning the accuracy, and in that case the CLIENT
would be responsible for the payment of the assessment.
Failure to pay first T.D. payment within 14 days of date of knowledge of injury and
disability
This date of knowledge is determined to be the CLIENT's date of knowledge.
Where the information has been provided to TRISTAR by the fifth business day
following the CLIENT's date of knowledge, the penalty assessed by the Audit
Unit will be paid by TRISTAR. Where TRISTAR is not provided notice and
sufficient information within five business days of the CLIENT's date of
knowledge, or where it is determined afler investigation or discovery that the
CLIENT's date of knowledge was actually earlier than stated, the penalty will be
the responsibility of the CLIENT.
Failure to comply with any rule or regulation of the AD.
This is certain to be the area of most discussion in any penalty assessment.
TRISTAR's ability to control the receipt of much of the information identified is
difficult if not impossible to control. In light of the ambiguous nature of this
penalty, the determination of who is responsible for payment will have to be
determined on a case-by-case basis. The following guidelines on specific areas
will be the starting point for determining responsibility.
No Employee Claim Form, or document is given to Employee by CLIENT, or sent
by claims administrator
The legal obligation to provide a claim form to an injured Employee has been
placed on the CLIENT. TRISTAR has provided guidelines for the documentation
of the claim form use of both the Claim Form log and the six-part Claim Form.
TRISTAR will not provide the Claim Form to the Employee except on specific
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request by the Employee or the Employee's representative, otherwise the claims
examiner will advise the requesting party to notify the CLIENT while at the same
time the claims examiner will call the CLIENT identifying the request so that
documentation provision of the Claim Form can be maintained at the CLIENT's
premises.
If the CLIENT utilizes the suggested procedures then all files should have
appropriate documentation of the Claim Form and no penalty should arise. If the
CLIENT is not following the suggested procedures or has not provided TRISTAR
with any proof that the Claim Form has been provided for the claim file this
penalty will be paid by the CLIENT.
Untimely provision of the Claim Form to the Employee by the CLIENT
Penalty assessment will be the CLIENT's responsibility.
No Employer Report
Penalty assessment will be the CLIENT's responsibility.
No, or missing medical reports
In many cases obtaining medical reports from doctors can only be achieved after
it is made absolutely clear that there will be no payment for medical services
unless the appropriate reports are provided. Even then, some doctors resist the
obligation. Where the offending medical facility is selected by the CLIENT,
penalties assessed will be the responsibility of the CLIENT. If the medical
provider has been selected by TRISTAR. TRISTAR will be responsible.
Incomplete or no record of payment (includes missing bills)
Penalty assessment will be the TRISTARs responsibility.
No copy of W.C.A.B. Order and Award
If there is proof that service of the W.C.A.B. Order and Award was provided to
TRISTAR, than payment of the penalty will be TRISTARs responsibility.
No copy of Application for Adjudication of Claim
Where there is proof that service of the application was provided to TRISTAR, or
where the CLIENT is served a copy of that application provided to TRISTAR, the
penalty assessment will be TRISTAR's responsibility.
No DIA (DWC) 500 sent
Penalty assessment will be TRISTAR's responsibility.
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DIA (DWC) 500 sent, but inaccurate (DON, DOK, BNU#, periods rates, etc.)
Where TRISTAR has access to accurate information and provides inaccurate
information TRISTAR will be responsible for penalties. Where date of notice and
date of knowledge are not accurately provided to TRISTAR by the CLIENT or
their representative, penalty assessment will be the CLIENT'S responsibility.
No DIA (DWC) 510 sent
Penalty assessment will be the CLIENT'S responsibility.
Failure to pay or object to medicalllegal expense within 60 days of receipt of
billing. (Must be reasonable objection)
If first receipt is TRISTARs receipt, TRISTAR will bear the responsibility. If the
CLIENT has first receipt and provides TRISTAR with the billing in sufficient time
for TRISTAR to meet the payment or objection deadline, then CLIENT bears the
responsibility for the assessment.
Failure to pay or object to medical expenses within 60 days (Must be reasonable).
See above medicalllegal expense.
Each payment due. Failure to pay within 10 days any indemnity due, which is not
specified above. Includes Maintenance Allowance, Interest on Awards,
subsequent to first T.D. payments.
If all available and accurate information has been provided to TRISTAR then this
assessment would be the responsibility of TRISTAR. Where the required
information is within the knowledge of the CLIENT but has not been provided to
TRISTAR, and TRISTAR has no reason to request this information from CLIENT,
the CLIENT will bear the responsibility of the assessment.
No claim log provided within 5 days of request
Penalty assessment will be TRISTAR's responsibility.
Each denied claim not designated on claim log
Penalty assessment will be the TRISTAR's responsibility.
Each other omission or misdesignation on claim log
Penalty assessment will be the TRISTARs responsibility.
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Failure to comply with Rehabilitation time and notice requirements each
occurrence
TRISTARs responsibility where all required information is available.
Where TRISTAR does not have information that is available to the
CLIENT and that information has not been provided to TRISTAR. after
TRISTAR requests it, CLIENT will bear the responsibility for this
assessment.
Failure to pay or appeal Notice of Assessment within 15 days of the issue
date
Any penalties will have to be evaluated on an individual basis and
determination made both as to appropriateness of the penalty and
identification of the party responsible. The need to act promptly is
imperative and any party that delays action in such determination of
liability or the need to appeal any notice of assessment will bear the
responsibility of this penalty. For purposes of this paragraph, a dispute
between the parties over who should pay the penalty does not constitute a
“delay” of action. If liability for the penalty assessment is agreed upon and
payment is appropriate the party responsible for the payment of the
assessment will pay the penalty.
Failure to comply with or appeal any final order of the W.C.A.B. within 30
days of service
If the issue is simply the late payment of an uncontested W.C.A.B. Order
or Award this penalty would be the responsibility of TRISTAR if TRISTAR
had the Order within the time frame allowed for payment or compliance of
same. If TRISTAR did not have service of the Order but the CLIENT did
make such Order available to TRISTAR within the time frame allowed, and
TRISTAR has no reason to request the Order from CLIENT, such penalty
would be the responsibility of the CLIENT.
Insufficient documentation to support denial of liability for a claim
The determination to deny a claim is generally the result of both TRISTAR
and CLIENT involvement. Where TRISTAR acts unilaterally in the denial
of a claim, this penalty would be TRISTARs responsibility. Where the
CLIENT has participated in the decision, the penalty would be a shared
responsibility. In the event that the CLIENT insists upon denial of a claim
against recommendation of the TRISTAR the entire penalty would be the
CLIENT’S responsibility.
No documentation indicating service of denial on the injured worker or
hislher agent
27 of 28
.? I
Penalty assignment will be TRISTARs responsibility.
Failure to comply with or appeal any lawful written request of the A.D.
regarding a claim filed within 30 days
These penalties are TRISTARs responsibility provided that TRISTAR has
access to the information requested. If the information or action requested
requires information within the control of the CLIENT and that information
is not provided to TRISTAR in a timely manner so that the written request
can be complied with in the time allowed, the penalty assessment will be
the responsibility of the CLIENT.
Failure by a claims administrator, to provide a claim form within 24 hours
upon request of an injured worker or hislher agent.
Penalty assessment will be TRISTARs responsibility.
28 of 28
.I 2
ACORD, CERTIFICATE OF LIABILITY INSURANCE DATE (MMIDDW
PHODUpER <310)393-9477
07/23/2002
FAX (310)393-7186
White Q Conpany Insurance Inc
P 0 Box 70
Tewanna Wade CISR, Ext. 151
Santa Monica, CA 90406-0070
ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
INSURERS AFFORDING COVERAGE
INSURED Tristar Risk Management (a Corp.) INSURERA: Transportation Ins Co
Long Beach, CA 90802
100 Oceangate X700 INSURER% American Cas Co of Reading PA
INSURERC: National Union
INSURER D:
INSURER E: I
COVERAGES
ALLOWNEDAUTOS
HIRED AUTOS
NON-OWNED AUTOS
I I I I I E.L. DISEASE. POLICY LIMIT 5 I b%!essional Liabilit~P~~~~~~ I01/01/2002 I01/01/2003 1 $5,000,000 each Wrongful Act ICI -1 I I I $5 , 000 , 000 Aggregate I I I I I
DESCRIPTION OF OPERATIONSILOCATIONWEHlCLESlEXCLUSlONS ADDED BY ENDORSEMENTISPECIAL PROUSIONS Except 10 Days Written Notice of Cancellation for Non Payment of Premium. I: ertificate Holder its officials, enployees and volunteers are Additional Insured with respects to
iability arising out of activities performed by or on behalf of the Named Insured.
CERTIFICATE HOLDER ADDITIONAL INSURED INSURER LETTER: CANCELLATION
SHOULD ANY OFTHE ABOVE DESCRIBED POUClES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL
*30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT City of Carlsbad
Human Resources Department Deborah A. Harvey. Benefits Administrator BUT FAILURE TO MUL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY
Carlsbad. CA 92008-7314 1635 Faraday Avenue
AWHORIZED REPRESENTATIVE
OF ANY KIND UPON THE COMPANY, 115 AGENTS OR REPRESENTATIVES. n I Carolyn B. Crowe
ACORD 254 (7/97) OACf@D CORPORATION 1988
33
IMPORTANT
If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement
on this certificate does not confer rights to the certificate holder in lieu of such endorsement@).
If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may
require an endorsement. A statement on this Certificate does not confer rights to the cerfificate
holder in lieu of such endorsement(s).
DISCLAIMER
The Certificate of Insurance on the reverse side of this form does not constitute a contract between
the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it
affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon.
THE PARTIES SPECIFIED HEREUNDER AGREE THAT ALL REQUIRED NOTICES ARE THE RESPONSIBILITY OF THE “COMPANIES AFFORDING COVERAGE. THE
TATIVE OR NOT, BEARS NO RESPONSIBILITY FOR ANY NOTICE.
PRODUCER WHETHER AN AUTHORIZED REPRESEN-