CENTRAL SAN JOAQUIN VALLEY RISK MANAGEMENT AUTHORITY POOLED AUTO PHYSICAL DAMAGE PROGRAM MASTER PLAN DOCUMENT AMENDED JULY 1, 2001

Transcription

1 POOLED AUTO PHYSICAL DAMAGE PROGRAM AMENDED JULY 1, 2001

2 FOR THE POOLED AUTO PHYSICAL DAMAGE PROGRAM TABLE OF CONTENTS ARTICLE I - GENERAL... 1 A. AUTHORITY... 1 B. PURPOSE... 1 C. WHO MAY PARTICIPATE... 1 D. GOALS AND OBJECTIVES... 1 E. RESPONSIBILITY AND AUTHORITY... 2 F. PROGRAM YEARS... 3 G. LIMITS OF LIABILITY... 3 H. DEDUCTIBLES... 3 I. FINANCING THE PROGRAM... 3 J. AMENDMENTS TO THIS DOCUMENT... 4 ARTICLE II - PREMIUMS, RATES, AND ASSESSMENTS... 5 A. ADMINISTRATIVE EXPENSES AND DEPOSIT PREMIUM CALCULATIONS... 5 ARTICLE III - COVERAGE... 6 A. GENERAL DESCRIPTION... 6 ARTICLE IV - ADMINISTRATION... 7 A. RESPONSIBILITY AND AUTHORITY... 7 ARTICLE V - PARTICIPATION A. ELIGIBILITY AND APPLICATION B. PARTICIPANTS DUTIES C. PAYMENT OF PREMIUMS AND OTHER CHARGES D. INTEREST AND PENALTIES E. TERMINATION OF PARTICIPATION ARTICLE VI - DEFINITIONS... 13

3 FOR THE POOLED AUTO PHYSICAL DAMAGE PROGRAM (PAPDP) ARTICLE I GENERAL A. AUTHORITY 1. This Master Plan Document ( MPD ) is incorporated into the Bylaws of the Central San Joaquin Valley Risk Management Authority. As such, it shall be treated as one of the Authority s governing documents. The MPD shall have the same weight and effect as the Bylaws and Memorandum of Coverage, however, any conflict between the MPD and the Agreement, Bylaws, or Memorandum of Coverage, for auto physical damage shall be determined in favor of the Agreement, Bylaws, or Memorandum of Coverage for auto physical damage. 2. The MPD for the Pooled Auto Physical Damage Program ( PAPDP ) is intended to be the primary operational guide for the conduct of the Authority s PAPDP. 3. AUTHORITY AND STANDARDS B. PURPOSE The Authority s PAPDP has been organized under authority granted by, and shall be conducted in accordance with the laws of the State of California and the standards set forth by the California Association of Joint Powers Authorities ( CAJPA ) in its accreditation standards for pooled programs. The Authority, as a part of its overall objectives, provides an Auto Physical Damage program which has been designed to provide for the needs of its Member Cities for protection against physical injury to the Member Cities automobiles. C. WHO MAY PARTICIPATE All Member Cities of the Authority may participate in the PAPDP. D. GOALS AND OBJECTIVES 1. The Authority offers its Member Cities this PAPDP designed to provide coverage for the physical damage to all automobiles. PAPDP Master Plan Document Amended July 1, 2001 Page 1

4 2. The PAPDP shall provide a non-equity pool to pay on behalf of the Member Cities for the amount of a loss, not to exceed the limits of liability, in excess of the deductible amount as established by the Executive Committee. 3. The Authority may purchase auto physical damage insurance to insure the automobiles of the Member Cities, subject to the exclusions of the policies. 4. Through a contractual arrangement between the Member Cities of the Authority and as authorized in the statutes of the State of California for joint powers authorities, the participating Member Cities shall collectively pay on behalf of all pooled Member Cities, a covered loss to an automobile of any Member City. The PAPDP shall be initially funded by a contribution from each Member City in an amount established by the Board of Directors. Additionally, the PAPDP shall provide for the sharing of operating costs by charging all Member Cities their fair share of such costs. 5. The PAPDP is provided to the Member Cities under those terms and conditions as established in this MPD and the Memorandum of Coverage. The Executive Committee shall have the right to alter, from time to time, the terms and conditions of the pooled coverage in response to the needs and abilities of the PAPDP and the participating Member Cities. E. RESPONSIBILITY AND AUTHORITY 1. The Board of Directors shall have the responsibility of establishing policies and remaining informed as to the financial strength and viability of the PAPDP. The Board has the authority, within the parameters of the Agreement and Bylaws of the Authority and this MPD, to act as needed to maintain and develop the financial strength of the PAPDP. 2. The Executive Committee shall have the responsibility and authority to affect the general policies established by the Board of Directors. The Executive Committee shall have the authority to enter into insurance contracts for the insurance coverages within the budgeted costs of such insurance as prescribed by the Board of Directors. The Executive Committee shall report to the Board of Directors. 3. The Authority Administrator shall have the responsibility to manage the daily activities of the PAPDP and shall be given the authority to implement the policies established by the Authority. The Administrator shall report to the Executive Committee and to the Board of Directors, as necessary. PAPDP Master Plan Document Amended July 1, 2001 Page 2

5 F. PROGRAM YEARS 1. A program year is defined by the term of the coverage period, generally a period of twelve (12) months. The program years generally will begin at 12:01 a.m. on July 1, and end at 12:01 a.m. on the following July The income and expenses of this PAPDP shall be accounted for and the funds maintained separately from any other program of the Authority. An annual contribution may be charged to each participating Member City at the inception of the program year to fund the losses and expenses anticipated during that program year. 3. Any excess funds at the end of the program year shall be retained by the PAPDP to pay claims and expenses which may be incurred in the future. G. LIMITS OF LIABILITY The Board of Directors shall establish an initial limit of liability for the PAPDP which may be amended by the Executive Committee for subsequent program years. This limit of liability shall apply to each automobile for each claim as described in the Memorandum of Coverage for this PAPDP. H. DEDUCTIBLES 1. A deductible, applicable to each claim, may be established by the Executive Committee. 2. A deductible, applicable to purchased insurance and applying to each loss, shall be established for each coverage by the Executive Committee based on the ability of the PAPDP to assume such deductibles for the participating Member Cities and the savings in premiums with such assumption of risk of loss. I. FINANCING THE PROGRAM 1. Deposit premiums may be established and charged to the individual Member Cities such that, with the addition of funds raised from other sources and the balance in the PAPDP, there shall be sufficient funds to meet expected losses, other expected expenses, and desired contributions to the reserve fund. 2. A reserve fund shall be established and maintained to fund adverse loss history which may develop during the program year. 3. The deposit premiums may be used to fund the claims against the PAPDP, pay premiums for purchased coverage for participating member cities, and pay program administrative expenses for participating member cities. Any remaining deposit PAPDP Master Plan Document Amended July 1, 2001 Page 3

6 premiums shall be a contribution to the establishment or maintenance of the reserve fund. 4. If the Executive Committee determines that the PAPDP lacks sufficient funds to complete a program year, the Executive Committee, upon a two-thirds (2/3rds) vote of the Executive Committee present and voting at a regular or special meeting, may assess the participating Member Cities based on the number of vehicles, an amount sufficient to fund incurred costs and the completion of the program year, or may temporarily suspend the coverage under the PAPDP until such time as the Board may vote to terminate or continue the PAPDP pursuant to Article VIII.C. of the Agreement. J. AMENDMENTS TO THIS DOCUMENT The provisions of this document may be amended from time to time by a two-thirds (2/3rds) vote of the Executive Committee, provided prior written notice has been given to the members of the Board of Directors. Any provision of this document which is so amended may be modified or repealed by a majority vote of the Member Cities which participate in this PAPDP. This action must be taken within thirty (30) days after notice of the amendment to the Master Plan Document. The appeal process may be by mail with a majority of the Member Cities signing the repeal notice. The repeal process may also be conducted at any subsequent regular or special meeting of the Board of Directors. PAPDP Master Plan Document Amended July 1, 2001 Page 4

7 FOR THE POOLED AUTO PHYSICAL DAMAGE PROGRAM ARTICLE II PREMIUMS, RATES, AND ASSESSMENTS A. ADMINISTRATIVE EXPENSES AND DEPOSIT PREMIUM CALCULATIONS 1. DEPOSIT PREMIUMS a. For the initial four years of participation in the PAPDP, the annual deposit premium for each participating Member City shall be calculated by multiplying the appropriate premium rate times the values of the covered automobiles for each participating Member City plus an administrative charge of $25 per vehicle and the expected costs of insurance. b. The premium rates shall be.0125 for four years. c. The values of the automobiles to be used in the calculation of the deposit premium shall be the values collected prior to the preparation of the annual budget each program year. d. Upon participating in the PAPDP and paying deposit premiums for a period of four years, a Member City s deposit premium shall be the administrative charge of $25 per vehicle plus the expected costs of insurance. e. Any assessments will be made in accordance with Article I, Section I.4. of this MPD. PAPDP Master Plan Document Amended July 1, 2001 Page 5

8 FOR THE POOLED AUTO PHYSICAL DAMAGE PROGRAM A. GENERAL DESCRIPTION ARTICLE III COVERAGE 1. The coverage provided under this PAPDP shall be defined in a Memorandum of Coverage, which shall be adopted by the Executive Committee. The Executive Committee may alter or amend the limit of liability and deductible applicable to the program year under the Memorandum of Coverage prior to such program year. 2. The Executive Committee may determine to provide coverage in excess of the limit of liability established in the Memorandum of Coverage by obtaining excess coverage attaching coverage at the PAPDP s limit of liability. This coverage may be obtained from an insurance company, by participating in another pool established under the Government Code as a joint powers agency, or offered through another PAPDP pooling procedure. If the coverage is purchased from an insurance company, such insurance company shall have an A.M. Best Rating Classification of A- or better and an A.M. Best financial rating of VII or better. PAPDP Master Plan Document Amended July 1, 2001 Page 6

9 FOR THE POOLED AUTO PHYSICAL DAMAGE PROGRAM A. RESPONSIBILITY AND AUTHORITY ARTICLE IV ADMINISTRATION 1. RELATION TO AUTHORITY STRUCTURE a. The Agreement, Bylaws and Memorandum of Coverage have precedence over this document, and anything in this document contrary to the Agreement, Bylaws or Memorandum of Coverage is void and without effect. b. The Authority s Administrator shall administer the PAPDP and report to the Executive Committee and the Board of Directors, as necessary. 2. BOARD OF DIRECTORS a. The Board of Directors retains unto itself the authority to: (1) Approve the annual budget for the PAPDP; (2) Terminate any Member City from the PAPDP pursuant to Article V(E)(3); and (3) Terminate the PAPDP. 3. EXECUTIVE COMMITTEE a. The Authority s Executive Committee shall have the responsibility and authority to carry out and perform all functions of the PAPDP not otherwise reserved to the Board of Directors. 4. ADMINISTRATOR a. The Administrator shall use his or her best efforts to administer the PAPDP such as to achieve the objectives and goals of the PAPDP and the Authority. PAPDP Master Plan Document Amended July 1, 2001 Page 7

10 b. The daily operation of the PAPDP shall be administered by the Authority s Administrator who shall report to the Authority s Board of Directors and Executive Committee. c. The Administrator shall be assisted by the Authority s Board Secretary and Assistant Treasurer who shall provide the technical oversight of the PAPDP, maintenance of this document, and the accounting systems which support this PAPDP. d. The PAPDP shall be administered in a manner which will provide claim and cost accountability for the PAPDP and each participating Member City, separate and apart from all other programs of the Authority. e. The Administrator shall: (1) Assist the participating Member Cities in training their personnel in the correct procedures for timely and accurately reporting of claims; (2) Accept loss notices and supporting documents; (3) Evaluate and pay claims in accordance with the Memorandum of Coverage; (4) Determine the possibility of recovery through subrogation and coordinate such action with the Member City where appropriate; (5) Act as liaison between the insurance broker and the Member Cities; (6) Prepare and submit a budget for each program year to the Executive Committee for review and to the Board of Directors for approval prior to the program year; (7) Prepare and submit an annual report to the Board of Directors and the Executive Committee; (8) Recommend rates and deposit premiums for each new program year in the manner described in Article II; (9) Invoice participating Member Cities for deposit premiums and other amounts due; (10) Report to the Executive Committee any delinquent billings not paid and outstanding in excess of 60 days; (11) Prepare demands for payment on claims against the PAPDP; PAPDP Master Plan Document Amended July 1, 2001 Page 8

11 (12) Present timely annual financial statements to the Board of Directors and the Executive Committee; (13) Provide other services as may reasonably be requested by the Board of Directors, the Executive Committee, or a Member City; (14) Have the authority to engage outside legal counsel for the purpose of providing an opinion regarding the scope of coverage provided under this program, as necessary; and (15) Secure the services of an actuarial consultant, as necessary. 5. CLAIM SETTLEMENT AUTHORITY a. The Administrator shall review all claims properly submitted and make a determination as to applicability of coverage and amount of the loss. Upon such determination, the Administrator shall advise the Member City experiencing the loss and process a payment to the Member City where appropriate. b. Any decision of the applicability of coverage or amount of the loss by the Administrator may be appealed to the Executive Committee within thirty (30) days after notice of the decision to the Member City. The decision of the Executive Committee shall be final. PAPDP Master Plan Document Amended July 1, 2001 Page 9

12 FOR THE POOLED AUTO PHYSICAL DAMAGE PROGRAM ARTICLE V PARTICIPATION A. ELIGIBILITY AND APPLICATION 1. To participate in the PAPDP, the applicant city must be a member of the Authority. All Member Cities are eligible for participation in the PAPDP. 2. An applicant city may apply for participation at any time during a program year. 3. The applicant city must apply for participation in the PAPDP by providing all information requested by the Administrator. 4. Upon receipt of the requested information, the Authority Administrator shall prepare a quote for coverage for the applicant Member City. 5. Once the applicant Member City accepts the quote for coverage, a letter from the applicant Member City shall be sent to the Authority Administrator indicating the date on which the Member City is requesting coverage. B. PARTICIPANTS DUTIES 1. Each participating Member City shall be responsible for providing the data required by the Authority to determine the values of covered vehicles. This data shall be factual and provided in a timely manner. 2. A participating Member City shall be obligated to remain in the PAPDP until the end of a program year. 3. A participating Member City requesting to withdraw from the PAPDP shall give written notice to the Authority at least ninety (90) days prior to the end of a program year. C. PAYMENT OF PREMIUMS AND OTHER CHARGES PAPDP Master Plan Document Amended July 1, 2001 Page 10

13 1. Each year, the Authority shall include in the annual billing, as described in the Authority s Bylaws, the deposit premium for this PAPDP. The due dates and delinquency dates are the same as those for the annual billing. 2. Any other charges, including assessments, are due and payable in accordance with Article XI(H) of the Bylaws. D. INTEREST AND PENALTIES 1. Any billing or invoice which is delinquent shall be subject to the penalties and interest charges as defined in the Authority s Bylaws. 2. Failure to pay billings, penalties, or the accrued interest shall be considered grounds for removal of the Member City from the PAPDP and may result in the expulsion of the Member City from the Authority in accordance with the Joint Powers Agreement. The defaulting Member City or former Member City shall be liable for the billings, penalties, accrued interest, and all costs incurred by the Authority in the enforcement of all provisions set forth in this document. E. TERMINATION OF PARTICIPATION 1. A participating Member City shall be obligated to remain in the PAPDP until the end of a program year. 2. A participating Member City shall participate in the next program year unless: a. at least ninety (90) days prior to the end of the program year a request to terminate participation is received from the participating Member City, or b. at least thirty (30) days prior to the end of the program year a termination notice has been sent to the participating Member City. 3. The PAPDP may initiate termination of future participation for the following reasons: a. Termination as a member of the Authority; b. Nonpayment of past premiums, assessments, or other charges; c. Development of an extraordinarily poor loss history; PAPDP Master Plan Document Amended July 1, 2001 Page 11

14 d. Substantial change in exposures which are not acceptable in this PAPDP; and/or e. Financial impairment which is likely to jeopardize this PAPDP s ability to collect amounts due in the future. PAPDP Master Plan Document Amended July 1, 2001 Page 12

15 FOR THE POOLED AUTO PHYSICAL DAMAGE PROGRAM ARTICLE VI DEFINITIONS The words in bold print are defined in the Authority s governing documents. PAPDP Master Plan Document Amended July 1, 2001 Page 13