to: achd commissioners and executive team december 3, 2013 … · 2016. 3. 8. · liability,...

15
___________________________________________________________________________________________________________________ Ada County Highway District • 3775 Adams Street • Garden City, ID • 83714 • PH 208 387-6100 • FX 345-7650 • www.achdidaho.org Sara M. Baker, President John S. Franden, Vice President Rebecca W. Arnold, Commissioner Mitchell A. Jaurena, Commissioner Jim D. Hansen, Commissioner To: ACHD Commissioners and Executive Team December 3, 2013 From: Michael L. Brokaw, Chief of Staff Subject: FY 2014 Insurance (Liability, Property, Auto, Inland Marine and Crime) December 11, 2013 Commission Meeting Executive Summary: The Highway District is currently insured for all liability, property, auto, equipment, errors & emissions and crime claims through CNA Insurance. After receiving the renewal quote from CNA Insurance and a quote from ICRMP, District staff instructed our broker to research a selfinsured option and to compare each option. The attached report from Moreton & Company is the result of that request. The report outlines the details of each option. Background: The Highway District received numerous requests over the past two years to consider an insurance quote for our liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program (ICRMP). Our broker, Moreton & Company, is not an authorized agent of ICRMP and therefore could not get a quote from ICRMP. We went through a selection process to choose an agent to provide the District with a quote from ICRMP and selected The Hartwell Corporation based in Caldwell, Idaho. They then provided the District with a quote from ICRMP. After reviewing the two quotes we determined that further research was needed to explore two alternatives. One alternative was to look at a partial selfinsured program and the other alternative was to break out the Commuteride insurance. The broker had been informed that the reason most insurance companies declined to quote coverage for the District was due to the vanpool program and the associated risks. The results of the research yielded the following: 1. CNA $489,281 premium for continuing existing insurance program. 2. ICRMP $286,700 premium for changes to current limits, deductibles and joint powers agreement. 3. CNA $401,681 premium for separating Commuteride. Commuteride premium $165,000. 4. Partial SelfInsuring $91,152 premium for property, auto, equipment, crime and claims processing. Selfinsured for all liability claims. The District Legal Department was asked to review the ICRMP Joint Powers Subscriber Agreement. The legal Department reviews all agreements before the Commission. The legal review pointed out a concern for eight

Upload: others

Post on 13-Sep-2020

0 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program

___________________________________________________________________________________________________________________ Ada County Highway District • 3775 Adams Street • Garden City, ID • 83714 • PH 208 387-6100 • FX 345-7650 • www.achdidaho.org

Sara M. Baker, President John S. Franden, Vice President

Rebecca W. Arnold, Commissioner Mitchell A. Jaurena, Commissioner

Jim D. Hansen, Commissioner

To: ACHD Commissioners and Executive Team December 3, 2013 From: Michael L. Brokaw, Chief of Staff Subject: FY 2014 Insurance (Liability, Property, Auto, Inland Marine and Crime) December 11, 2013 Commission Meeting Executive Summary: 

The Highway District is currently insured for all liability, property, auto, equipment, errors & emissions and crime 

claims through CNA Insurance. After receiving the renewal quote from CNA Insurance and a quote from ICRMP, 

District staff instructed our broker to research a self‐insured option and to compare each option.  The attached 

report from Moreton & Company is the result of that request.  The report outlines the details of each option. 

Background: 

The Highway District received numerous requests over the past two years to consider an insurance quote for our 

liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program 

(ICRMP). Our broker, Moreton & Company, is not an authorized agent of ICRMP and therefore could not get a 

quote from ICRMP.   We went through a selection process to choose an agent to provide the District with a 

quote from ICRMP and selected The Hartwell Corporation based in Caldwell, Idaho.  They then provided the 

District with a quote from ICRMP.   

After reviewing the two quotes we determined that further research was needed to explore two alternatives.  

One alternative was to look at a partial self‐insured program and the other alternative was to break out the 

Commuteride insurance.  The broker had been informed that the reason most insurance companies declined to 

quote coverage for the District was due to the vanpool program and the associated risks.  The results of the 

research yielded the following: 

1. CNA ‐ $489,281 premium for continuing existing insurance program. 

2. ICRMP ‐ $286,700 premium for changes to current limits, deductibles and joint powers 

agreement. 

3. CNA ‐ $401,681 premium for separating Commuteride.  Commuteride premium $165,000. 

4. Partial Self‐Insuring ‐ $91,152 premium for property, auto, equipment, crime and claims 

processing.  Self‐insured for all liability claims. 

 

The District Legal Department was asked to review the ICRMP Joint Powers Subscriber Agreement.  The legal 

Department reviews all agreements before the Commission.  The legal review pointed out a concern for eight 

Page 2: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program

specific sections of the agreement that could create issues for the District.  Three of the sections are the 

following. 

Article VI (pg. 4): Members are required to comply with loss reduction and prevention 

recommendations. 

Article IX (pg. 6): Member Contributions – ICRMP reserves the right to discontinue membership 

or diminish coverage or limits or increase self‐insured responsibility of any member who does 

not cooperate with ICRMP’s “goals, objectives or requirements or acts without regard to 

consequences concerning matters that affect ICRMP.” 

Article VVIII (Sec. 1, pg. 14): Member Expulsion – A member can be terminated from the 

program for “willful failure to undertake or continue loss reduction or loss prevention 

recommendations by ICRMP” or “Failure to allow ICMP reasonable access to all facilities and 

records.” 

   

The Highway District has been in contact with Corey Pence, Risk Manager with Boise City in regards to being self‐ 

insured.  They have been self‐insured for Liability and Worker’s Compensation since 1989.  The District has also 

been in contact with Kelly Paananen, Risk Manager with Ada County.  They have been self‐insured for the past 

10‐years.  They both expressed a high level of satisfaction with their respective self‐insurance programs. 

Moreton & Company also hired an actuary to review the District claims and recommend an amount to reserve 

for 2014 if the District chooses to self‐insure.  The actuary projected claims for 2014 at approximately $100,000.  

   

Fiscal Implications: 

Savings of $398,129 from CNA renewal versus self‐insured.  Savings of $195,548 from ICRMP quote versus self‐

insured.  Savings would be deposited into insurance reserve account at the level recommended by an actuary. 

Policy Implications: 

None. 

Alternatives: 

1. Renew existing insurance policy with CNA Insurance at a cost of $489,281. 

2. Breakout Commuteride policy and purchase insurance at a cost to Commuteride of $165,000 and a cost 

to the General Fund of $401,681. 

3. Purchase insurance from the Idaho Counties Risk Management Program (ICRMP) at a cost of $286,700 

4. Begin a Self‐insured program at a cost of $91,152 that excludes all liability coverage’s and establish a 

reserve account at the level recommended by the actuary.  

 

Recommendation: 

Staff recommendation is Alternative #4.

Page 3: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 4: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 5: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 6: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 7: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 8: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 9: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 10: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 11: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 12: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 13: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 14: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program
Page 15: To: ACHD Commissioners and Executive Team December 3, 2013 … · 2016. 3. 8. · liability, property, auto, equipment and crime coverage from the Idaho Counties Risk Management Program