AgdaPkt 2005-06-13 - Laserfiche WebLink

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. ' -I To the Honorable Mayor and City Council From the City Manager June 13, 2005 Subject Agreement with the California Public Entity Insurance Authority for the purchase of Workers' Compensation Excess Insurance. Recommendation Approve, by motion, the agreement to join the California Public Entity Insurance Authority (CPEIA) for its workers' compensation excess insurance coverage effective July 1, 2005 and ending June 30, 2006. Background The City of Redwood City has been a self-insured employer for the Workers' Compensaticn program since 1976. As a self-insured employer, whenever there is a workers' compensation injury, the City covers the amount up to the designated self- insurance retention cap. . When the costs of an injury exceed the self-insurance retention (SIR) cap, the City is insured through its excess workers' compensation insurance policy for expenses up to a maximum of one hundred million ($100,000,000) per incident. Historically, the City has purchased excess insurance with a self-insurance retention limit at the first three hundred fifty thousand dollars ($350,000) of expenses relating to the injury. In the wake of September 11, the insurance industry experienced huge losses with many insurance companies unwilling to underwrite agencies having Police and Fire services. As a result, the market has produced higher premiums and increased self-insurance retention levels. . Over the last several years the City has experienced increases in both self insurance retention levels and premiums. In July 2003 and 2004, the City Council approved staffs recommendation to purchase excess insurance coverage through Bay Cities Joint Powers Insurance Authority (BCJPIA) thereby minimizing significant premium and SIR increases. However, recent Worker's Compensation reform has opened the door for improved premium savings and lower SIR's. Staff has explored various alternatives for purchasing excess insurance. These alternatives were presented to Council at the April 11, 2005 Council Meeting. At this meeting Council approved the City's termination of membership with Bay Cities Joint Powers Insurance Authority and conceptual approval of membership with CPEIA for the purchase of the City's Workers' Compensation Excess Insurance pending the CPEIA Board approval. The City submitted its application for membership with the CPEIA Board and Redwood City was accepted as a member at the April Board meeting. Board minutes and agenda are attached, .