CALIFORNIA JOINT POWERS RISK MANAGEMENT AUTHORITY COVERAGE & CLAIMS COMMITTEE MEETING. June 9 th, :00 A.M.

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1 CALIFORNIA JOINT POWERS RISK MANAGEMENT AUTHORITY I. CALL TO ORDER: 9:00 a.m. II. ROLL CALL III. PRESENTATIONS None COVERAGE & CLAIMS COMMITTEE MEETING June 9 th, :00 A.M. CJPRMA Main office 3252 Constitution Drive Livermore, CA (925) AGENDA IV. THIS TIME IS RESERVED FOR MEMBERS OF THE PUBLIC TO ADDRESS THE BOARD OF DIRECTORS ON MATTERS OF BOARD BUSINESS. STATE LAW PROHIBITS ACTION BY THE BOARD ON NON-AGENDA ITEMS. V. COMMUNICATIONS A. Committee Members B. Staff VI. APPROVAL OF MINUTES Minutes of the Coverage and Claims Committee Meeting held on April 28, 2010 (Pages 3 4) VII. CONSENT CALENDAR None VIII. ACTION CALENDER 1. Insurance Renewal (Pages 5-17) 2. Coverage issues A) Contractual liability discussion (Pages 18-29) B) Benchmarking CJPRMA coverage vs. the competition C) Review and update of the MOC (Pages 30-35) Coverage & Claims Committee Meeting Agenda June 9th, 2010 Page 1 Page 1

2 3. Claims A) Review of current watch list files (36-61) B) Discussion of CJPRMA Litigation Management C) Discussion of RMIS claims system implementation D) Explore options for creating a database of primary claims data E) Development of claims communications and trending information to the Board of Directors 4. Additional Issues A) CJPRMA RFP for Broker of Record B) Review of job description of Claims Manager (Pages 62-64) I. CLOSED SESSION None II. ACTION ON CLOSED SESSION ITEMS III. ADJOURNMENT Coverage & Claims Committee Meeting Agenda June 9th, 2010 Page 2 Page 2

3 CALIFORNIA JOINT POWERS RISK MANAGEMENT AUTHORITY COVERAGE & CLAIMS COMMITTEE MEETING April 28, :00 A.M. Hilton Sonoma Wine Country Nagasawa D 3555 Round Barn Boulevard Santa Rosa, CA (707) Members Present: MINUTES Jeff Tonks, YCPARMIA, Chair Steve Schwarz, Fremont Bill Henderson, Livermore Rob Epstein, San Rafael Roger Carroll, SCORE Jessica Henry, Chico, Vice-Chair Jeff Davis, REMIF Members Absent: MaryAnn Perini, San Leandro Non Members Present: Amber Holinsworth, Chico Byrne Conley, Gibbons & Conley Staff Present: David Clovis, CJPRMA Item#1 Jeff Tonks started the meeting by discussing the history of the Claims Committee and how they had functioned in the past. He also identified the potential of both a claims and coverage committee and how this group has the potential of meeting member s needs. The committee discussed a number of issues that will be discussed at future meetings. The identified topics for future discussion are: Discussion of ISO Forms and how they impact our MOC; Earth movement, inverse condemnation and issues involving land use; Identify five JPA s for the benchmarking of coverage; Evaluation of exclusions, which should be deleted and items to be added; Pollution; Airport Coverage; Coverage & Claims Committee Minutes April 28, 2010 Page 1 Page 3

4 Protection of Revenue; Health & Welfare related products; Litigation Management Policy; CJPRMA Special Event Endorsement; Annual meeting with City Attorneys; Reporting to members on claims and activities; The above items will be open for discussion at all future Coverage/Claims Committee Meetings. In closing, Director Tonks stated, A Lawyer thinks a good result is a win, not necessarily the best business decision. Coverage & Claims Committee Minutes April 28, 2010 Page 2 Page 4

April 28, 2010 - Annual Board Meeting Casualty and Property Reinsurance

5 April 28, Annual Board Meeting Casualty and Property Reinsurance Renewal Presentation July 1, Casualty Reinsurance Page 5 1

6 Historical Underwriting Participation July 1, 2003/2010 California Joint Powers Risk Management Authority $40MM $15MM $15MM $15MM $15MM $15MM $15MM SCOR Re SCOR Re SCOR Re SCOR Re SCOR Re SCOR Re $20MM $10MM X $10MM $10MM X $10MM $10MM X $10MM $10MM X $10MM $20MM $20MM AM Re AM Re AM Re Munich Re $20MM $20MM $20MM $10MM AM Re AM Re $10MM AM Re $10MM AMRe $10MM AMRe $10MM Munich Re Munich Re Munich Re Munich Re $5MM $5MM SIR CJPRMA /03 $5MM SIR CJPRMA $5MM SIR CJPRMA $5MM SIR CJPRMA / / /06 $5MM SIR CJPRMA /07 $5MM SIR CJPRMA $4MM SIR with $1m occ/agg Corridor Retention CJPRMA / /09 $5MM SIR CJPRMA $5MM SIR CJPRMA / /11 2 Year Term /04 2 Year Term Extended to 7/1/2013 Marsh 2 Reinsurance Program Structure July 1, California Joint Powers Risk Management Authority $5MM Self Insured Retention Excess Reinsurance Layer $15 MM x $25 MM GL, AL & POL SCOR Re Reinsurance Layer $20 MM x $5 MM Pool Layer (ALAE Inside SIR) Underlying Retentions $4.5 MM x $500,000 $500,000 GL, AL & POL Munich Re $4 MM x $1 MM $1MM Marsh 3 Page 6 2

7 Reinsurance Renewal Program Comparison California Joint Powers Risk Management Authority $20MM Excess $5MM (SIR) Munich Reinsurance America, Inc. (A+ XV) Final Annual Premium July 1, 2009/2010 $1,969,875 $ 1,645,677,042 Payroll Final Annual Premium July 1, 2010/2011 $1,913,708* $1,695,047,353 ** Payroll.1197 Excess Reinsurance Rate.1129 Excess Reinsurance Rate $5M SIR CJPRMA $5M SIR CJPRMA * Pending Final Payroll June ** Estimate January 2010, Marsh 4 Reinsurance Liability Renewal: July 1, 2010 to July 1, 2011 California Joint Powers Risk Management Authority Rate Comparison: Munich Reinsurance America, Inc. July 1, July 1, Difference Munich Re $20MM x $5MM SIR* (5.7%) * Final premium June 2010 Marsh 5 Page 7 3

Excess Reinsurance Liability Renewal: July 1, 2010 / 2012 California Joint Powers Risk Management Authority $15MM xs $20MM xs $5M SIR July 1, 2009/2010 July 1, 2010/2012 Scor Reinsurance Company (A-

8 Excess Reinsurance Liability Renewal: July 1, 2010 / 2012 California Joint Powers Risk Management Authority $15MM xs $20MM xs $5M SIR July 1, 2009/2010 July 1, 2010/2012 Scor Reinsurance Company (A- IX) $15MM x $20MM Scor Reinsurance Company (A- XV) $15MM x $20MM $351,733* Flat $ 316, 000* Flat 1st Year of 2 Year Premium Guarantee * Includes TRIA * Includes TRIA Marsh 6 Auto Physical Damage Page 8 4

9 Automobile Physical Damage Program July 1, 2010/2011 California Joint Powers Risk Management Authority Renewal Options Fireman s Fund 7/1/09-10 Expiring 7/1/10-11 Renewal Options Carrier National Surety Corp. National Surety Corp. (Fireman's Fund) (Fireman's Fund) Best: A XV Best: A XV (Incumbent) Limit per occurrence $5,000,000 $5,000,000 $5,000,000 $5,000,000 Deductible per occurrence $10,000 $10,000 $20,000 $25,000 Covered Vehicles excess $25,000 excess of $25,000 excess of $25,000 excess of $25,000 Rate per $100 of value $ $ $ $ Vehicle Values - Estimate $135,334,204 $134,460,849 $134,460,849 $134,460,849 Deposit Premium * $297,735 $268,922 $242,030 $228,583 Surplus lines taxes & fees N/A N/A N/A N/A $297,735 $268,922 $242,030 $228,583 Optional Terrorism Premium Declined $13,459 $12,115 $11,442 Comments Includes EQ & Flood (9%) Includes EQ & Flood Automatic roll on Automatic roll on Audit 7/1/10 - as expiring Rate Reduction Audit 7/1/11 - as expiring Claims adjuster Fireman's Fund Claims adjuster Fireman's Fund Values as of Updated values will be provided as of *Fireman s Fund + $250 Property Floater Marsh 8 General Office Programs Page 9 5

CJPRMA General Office 1) Office Package Policy June 24, 2010 2011 2) Non-owned Auto Policy June 24, 2010 2011 3) Public Employee Blanket Bond February 1, 2009 2012 Carrier Limit of Liability

10 CJPRMA General Office 1) Office Package Policy June 24, ) Non-owned Auto Policy June 24, ) Public Employee Blanket Bond February 1, Carrier Limit of Liability Deductible Premium Coverage Office Package Policy and Non-Owned Auto June 24, Federal Insurance Company (A++XV) $1MM Per Occurrence / $2MM Aggregate General Liability & Non-owned Auto. $25,000 Office Contents - Values on file with carrier. $1,000 Per Occurrence Office Contents Property No Deductible General Liability /Auto Liability $3,465 (Property) $1,973 (General Liability) $ 359 (Misc.) $ 407 (Non Owned Auto Liability) $6,204 Total Property Contents & General Liability - Premises Livermore CA General Liability Premises San Ramon, CA Non-Owned Auto Liability CRIME SHIELD Program February 1, Harford Fire Insurance Co. ( A+XV) $4MM Employee Dishonest $4MM Theft, Disappearance & Destruction $4MM Depositors Forgery $4MM Computer Fraud $40,000 each loss $15,962 Three Year Pre-Paid Employee Dishonesty Computer Fraud Depositor Forgery Marsh 10 Property Reinsurance Page 10 6

11 11 Year Net Loss Experience Property Insurance Program Policy Year Net Loss Pending $250, $283, $131, $1,125, $449, $235, $75, $384, $4, $197,709 Marsh 12 Property Program Structure California Joint Powers Risk Management Authority Loss Limit $300M $290,000,000 excess of $10,000,000 Select Program Sublimits XL Ins. Co AM Best A XV $10M $10,000,000 Primary Munich Reinsurance America, Inc AM Best A+ XV Deductible $25,000 Marsh 13 Page 11 7

12 California Joint Powers Risk Management Authority 7 Year Primary Rate Analysis July 1, July 1, 2011 California Joint Powers Risk Management Authority Program Rate Analysis RATE Primary Limit: $5M $5M $5M $5M $10M $10M $10M Marsh 14 Property Program California Joint Powers Risk Management Authority Premium Analysis 2009/ /2011 Variance Total Insured Values $7,089,573,720 *$6,536,573,780 *(7.8%) Account Rate (2.9%) Reduction Primary $2,176,499 $1,947,899 ($63,118) **Excess Property $290,000 $290,000 N/A Annual Premium $2,466,499 *$2,237,899 ($228,600) Comment * Excludes Premium for the City of Santa Rosa **Federal Ins. Co. Quoted $50M xs $10M based upon $135,000 annual premium Marsh 15 Page 12 8

13 Property Program California Joint Powers Risk Management Authority Swing Rate Structure Feature Loss Rate Deposit Premium $300, $1,947,899 $275, $1,910,573 $250, $1,873,248 $225, $1,835,823 $200, $1,798,598 $175, $1,761,273 $150, $1,723,948 $125, $1,686,623 $100, $1,649,298 $75, $1,611,973 $50, $1,574,648 $25, $1,537,323 $0 MP $1,500,000 Based on Swing Rate Structure CJPRMA would have received return premiums in 6 of the last 11 years. Total Savings $1,213,731 Marsh 16 Master Property Program $10M Primary Property Layer California Joint Powers Risk Management Authority Rate Stabilization Feature Program Inception July 1, 2010 to July 1, 2013 Loss Ratio based upon Paid and Reserved Claims Swing Rate Stabilization Feature is based upon Loss Ratio not exceeding 50% annually Swing Rate Calculation Valued 12 Months After Expiration Marsh 17 Page 13 9

14 Boiler & Machinery Boiler and Machinery Program Structure California Joint Powers Risk Management Authority Loss Limit $21.25M Various Program Sublimits $5, 000, 000 each accident Demolition Expediting expense Hazardous Substances $1,000,000 each accident Business Income Extra Expense Service Interruption Perishable goods Ordinance and Law $100,000 each accident Off Premise Property Damage Contingent Business Interruption Data Restoration Hartford Steam Boiler (Munich Re AM Best A++ Deductibles Deductible $5,000 except $3.00/KVA, $10K minimum on Transformers $30/HP, $10K minimum on ICE Generator Units $30/KW, $50K minimum on Water Turbine Units 24 Hours Business Interruption Marsh 19 Page 14 10

15 Boiler and Machinery Program California Joint Powers Risk Management Authority 2009/ /2011 Variance Total Insured Values $6,781,117,521 *$6,280,056,286 *(7.4%) Account Rate (2.5%) Annual Premium $353,100 *$320,283 *($32,817) Comments 3 Year Program Excludes City of Santa Rosa 2.5% Rate Reduction 2010 ( 40% Earned Loss Ratio ) 5% Rate Reduction 2011 ( 40% Earned Loss Ratio ) Flat Rate 2012 ( 40% Earned Loss Ratio ) Marsh 20 Boiler & Machinery Program July 1, 2010 to July 1, 2011 California Joint Powers Risk Management Authority 3 Year Cumulative Rate Stabilization Plan Program Inception July 1, 2010 to July 1, 2013 Loss Ratio based upon Paid and Reserved Claims Rate Reduction / Stabilization Feature is based upon Cumulative Loss Ratio not exceeding 40% Marsh 21 Page 15 11

16 California Joint Powers Risk Management Authority 2010 Casualty and Property Marketing Summary Casualty Multi-Year Program 3 Years Rate Reduction 5.7% in 2010 Collateral Premium Offset - Property Auto Physical Damage Rate Reduction 9% Property Multi-Year Program - 3 Years Rate Reduction 2.9% in 2010 Rate Stabilization Feature Premium Redistribution Loss Sensitive Marsh 22 California Joint Powers Risk Management Authority Summary of Premium Savings /2011 Primary General Liability $56,167 Excess General Liability $35,733 Auto Physical Damage $28,813 Primary Property $63,118 Excess Property $ N/A Boiler & Machinery $ 8,827 Total $192, and 2012 Marsh Commission Contribution $100,000 annual Comment Premium Savings do not include potential for Property Swing Rate Structure Marsh 23 Page 16 12

17 California Joint Powers Risk Management Authority Brokerage Income Analysis Insurance Program 2010/2011 Based on 1 Year program Existing Rates 2010/2011 Based on 3 Year program Revised Rates Brokerage % 2010 Brokerage Income Marsh Fee relative to placing multi-year programs Casualty Primary Casualty $2,028,972 $1,913,708 10% $191,371 $95,685 Excess Casualty $351,733 $316,000 15% $47,400 $23,400 APD $268,922 $268,922 15% $40,338 N/A Total $2,649,627 $2,498,630 $279,109 $119,085 Property Primary Property $2,006,728 $1,947,899 10% $194,790 $97,395 Excess Property $282,000 $282,000 10% 28,200 N/A Total $2,288,728 $2,229,899 $222,990 $97,395 Boiler & Machinery Premium $326,563 $320,283 15% $48,042 N/A Office Package Premium $6,204 $6,204 18% $1,117 N/A Crime Premium 3 years $16,962 $16,962 15% *N/A N/A Total $5,288,084 $5,071,978 $551,258 $216,480 Comments: 1. Premiums reflected above are Gross ( includes commission ) 2. * Brokerage income on Crime program was received in Marsh to include an additional fee associated with 3 year Primary Property and Casualty Programs as well as the 2 year Excess Casualty insurance program. Fee calculation was based upon 2.5% commission reduction for years 2 and 3 as respects Primary Property and Primary Casualty programs A 7.5% commission reduction for Excess Casualty program for year % of the proposed Marsh Fee will be credited to proposed fee agreement relative to CJPRMA RFP. Page 17

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62 CLAIMS ADMINISTRATOR DEFINITION: This position coordinates and directs the CJPRMA liability claims process, including the development of policies, procedures, and systems. Peforms a wide variety of professional risk management/claims services and is responsible for supervising various professional administrative activities for the California Joint Powers Risk Management Authority (CJPRMA). REPORTING RESPONSIBILITIES: Receives general supervision from, and reports directly to, the General Manager. Makes presentations to the Board, Executive Committee, Claims/Coverage Committee and member entities. Works with CJPRMA staff, investment managers, insurance broker, consultants, Board Members, member entities, TPA s and counsel. ESSENTIAL AND IMPORTANT DUTIES: 1) Supervise and direct liability claims processing activities and procedures; participate in the development of policies, goals and objectives; recommend new or modified programs and systems. 2) Receive, review and evaluate claims submitted against members; assign claims to defense attorneys; monitor an evaluate progress and final disposition; attend settlement conferences and authorize settlement decision as appropriate. 3) Coordinate the activities of contractual services provided to CJPRMA by attorneys, auditors and claims adjusters; evaluate services; monitor contract compliance and approve payment of fees. 4) Prepare and present operational reports; keep members apprised of claim status. Develops risk control recommendations, prepares reports and monitors entities implementation plans; 5) Meet with member claims staff, defense attorneys and TPA s. 6) Reviews claims patterns and coordinates, recommends and conducts specific training programs to reduce claims in critical areas; 7) Assists entities in developing and implementing new and revised policies and procedures in the area of risk control and litigation management; Page 1 of 3 Page 62

63 8) Reviews contracts and assists entities in establishing appropriate insurance requirements, and developing hold harmless agreements and contractual risk transfer specifications for such agreements; 9) Assists member entities in establishing litigation management programs and provides appropriate training; 10) Provides expert assistance to entities, in the absence of their risk manager; 11) Oversees and manages the CJPRMA RMIS System; 12) Review and development of the Claim Manual; 13) Maintain current knowledge of legislation and general development related to risk management administration; 14) Issues certificates of coverage to members in the absence of the General Manager; 15) Works with and assists the General Manager in the purchase and placement of commercial insurance products; 16) Works with the General Manager on special projects. 17) Performs other duties as assigned. JOB RELATED AND ESSENTIAL QUALIFICATIONS: Knowledge: The individual must possess knowledge of (1) litigation management practices and training; (2) the structure and operation of public organizations; (3) methods and techniques regarding the investigation and settlement of liability claims and risk control programs for local government agencies; (4) principals of contract administration; (5) computer and RMIS systems; (6) English grammar and usage; and (7) principles of public sector litigation management. Skills: The individual must be able to (1) use various computer software programs including Microsoft Office Suite; (2) analyze problems and recommend alternatives/solutions; (3) plan, initiate and complete assignments with a minimum of direction; (4) design and prepare various types of reports; (5) communicate clearly and concisely, both orally and in writing; (6) establish and maintain cooperative working relationships with those contacted in the course of work; and (7) manage personnel in an office environment. Page 2 of 3 Page 63

64 Abilities: The individual must be able to (1) develop and manage liability management programs; (2) conduct general on-site assessment of claims and write reports; (3) consult with entities regarding their litigation management practices and programs; and (4) maintain expertise on current legislative and case laws related to public sector litigation. PHYSICAL REQUIREMENTS: This individual must have the ability to (1) type and use computer keyboards; (2) use hands to reach, handle or feel objects or controls; (3) stand, walk, talk, see and hear with sufficient acuity to successfully perform all aspects of the job; (4) travel to various entity sites by vehicle or plane; (5) be exposed to dust, noise, moving objects and other vehicles while in the field; (6) work unusual and prolonged hours; and (7) lift and carry items weighing up to 25 pounds. Reasonable accommodations will be provided upon request. EXPERIENCE AND TRAINING: Any combination of experience and training that would likely provide the required knowledge, skill and ability outlined above is qualifying. A typical way to obtain such knowledge, skill and ability would be the possession of a Bachelor s degree from an accredited college or university with major course work in business or public administration or a related field; ten years of increasingly responsible administrative experience in public sector claims/litigation management, or a related field; and possession of a professional designation such as ARM, CPCU or claims adjuster license. LICENSE OR CERTIFICATE: Possession of, or ability to obtain, a valid California Driver's License is required; however, a reasonable accommodation alternative will be considered for individuals with a disability. Page 3 of 3 Page 64

MARIN MUNICIPAL WATER DISTRICT

MARIN MUNICIPAL WATER DISTRICT DEFINITION RISK MANAGEMENT ANALYST I/II/III Under general supervision, performs technical, professional and consultative duties related to the District s risk management