HomeMy WebLinkAbout6/1/2005 - STAFF REPORTS (13) U � N
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Cq</FORN�P City Council Staff Report
DATE: June 1, 2005 CONSENT
SUBJECT: EXCESS WORKERS' COMPENSATION INSURANCE RENEWAL FOR
FISCAL YEAR 2005/06
FROM: David H. Ready, City Manager
BY: Human Resources
SUMMARY
Staff is requesting Council approval to purchase excess workers' compensation
coverage for fiscal year 2005-06 with "a $2,000,000 self-insured retention (SIR) for
police and fire personnel, and a $1,000,000 self-insured retention (SIR) for all other
personnel subject to a $25,000,000 limit for each accident and disease. The City's
Broker of Record did a comprehensive search for coverage and found that purchasing
excess workers' compensation insurance continues to be difficult at best.
RECOMMENDATION:
Adopt Minute Order No. approving "THE CITY OF PALM SPRINGS' EXCESS
WORKERS COMPENSATION INSURANCE RENEWAL EFFECTIVE JULY 1, 2005."
STAFF ANALYSIS:
In marketing the Excess Workers' Compensation Insurance this year, the City's Broker
of Record, Ross Jones of Davis & Graeber, found that nothing about workers
compensation is instant. However, with the legislative reforms that have been made and
continue to be made, we are hopeful that the insurance market in California will soon
provide some relief in premium. Over the next year or so, these reforms should
continue to trickle down. We expect to see the effect on workers' compensation
insurance rates in California by late spring of 2006. This renewal, however, is based on
status quo coverage with a $1,573.00 increase over last year's premium.
As with last year, industry experience has shown that the frequency and severity
continues to climb with Police and Fire employees, while the numbers of claims are
decreasing for all other employees. The increases in Police and Fire frequency and
severity have caused the insurance market place to continue to increase the self
Item No. 2 . G .
City Council Staff Report
June 1, 2005--Page 2
Resolution— Excess Workers' Compensation Insurance Renewal
insured retention (SIR) for safety employees, or to increase the premium to meet
underwriting criteria. Since insurance is a conduit, what is paid out in losses has to be
charged in premium in the following years. On the positive note, because of the AB 899
reforms, we should begin to see some relief in 2006 in these areas.
FISCAL IMPACT:
The funds necessary to purchase this coverage ($231,560.00) are included in the
budget submitted for Council approval on June 1, 2005.
Susan E. Mills, Dire for of H anZesources David H. Ready, City Malaeger
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Attachments: Insurance Proposal from Davis & Graeber
Minute Order
i
MINUTE ORDER NO.
APPROVING THE CITY OF PALM SPRINGS'
EXCESS WORKERS' COMPENSATION
INSURANCE RENEWAL EFFECTIVE JULY 1, 2005.
I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that
this Minute Order approving the renewal of the City of Palm Springs' Excess
Workers' Compensation Insurance Renewal effective July 1, 2005, in an amount
not to exceed $231,560.00, was adopted by the City Council of the City of Palm
Springs, California, in a meeting thereof held on the 1 sc day of June, 2005.
James Thompson, City Clerk
Insurance Proposal
for
City o Springs
Pala
May 24, 2005
i
By
Ross B. Jones
Vice President Commercial Marketing
Davis & Graeber Insurance Services, Inc.
470 E. Highland Avenue
P.O. Box 750
Redlands, CA 92373
(909) 793-2373
Excess Workers Compensation
Named Insured: City of Palm Springs
Policy Term: July 1, 2005 to July 1, 2006
Insurance Carrier: National Union Fire Insurance Co (A++XV) Admitted
Coverages: Specific Excess Workers Compensation
Limits: $25,000,000 Limit Each Accident & Disease
$1,000,000 Employers Liability Each Accident
$2,000,000 Retention Each Accident & Disease, Emp Liab. - Police & Fire
$1,000,000 Retention Each Accident& Disease, Emp. Liab. All Others
Conditions: Covered States: California
Coverage is subject to any state required endorsements,
plus 54361; AIGCS Claims Audit with large losses in excess of$112,500
Premium: $227,020.00 (Rate: Adjusted at a rate of$.9022 per $100 of payroll on
estimated payroll of$25,162,895.)
CIGA Fee: $4,540.00
Estimated Annual Premium: $231,560.00
Terrorism: Included in premium