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316 �
<br /> .
<br /> commencing July 1, 1977 and attaching report from the Director of
<br /> Finance also dated June 24.
<br /> Director of Finance Ference noted that the decision to investigate
<br /> the possible economic and other advantages of self-insurance w�th
<br /> regard to the sub,7ect Program resulted in the employment of the
<br /> services of Mund, McLaurin & Co., insurance consultants, for the
<br /> purpose of analyzing proposals received. He advised that at his
<br /> request proposals relative to insurance/risk management for Fiscal -
<br /> Year 1977-78 were sought from Boring-Reifenrath-Greenwold
<br /> q and from Kindler and Laucci. The following proposals were received.
<br /> ,
<br /> Boring-Reifenrath-Greenwold
<br /> i. Restrospective Rating, $100,000 Loss Limitation (represents
<br /> renewal of existing insurance program providing full cover- i
<br /> age, excluding, among other items, errors and omissions,
<br /> no self-�nsurance); Insurer - Industrial Indemnity �
<br /> Company; total premium - 393,731 , _
<br /> �
<br /> 2. $10,000,000 excess of $50,000 self-insured Retention
<br /> (deductible), Broker - Flamer & Co., Insurers - National
<br /> Union and State of Pennsylvania, Administration - American
<br /> International Group; Total premium - 391,552 ($382,427, as
<br /> ad�usted)
<br /> Kindler and Laucci
<br /> 1. $10,000,000 excess of $100,000 self-insured Retention
<br /> (deduct�ble); Insurers - Drake, Puritan and Employers Re,
<br /> Administration - R. L. Kautz Company, Total premium -
<br /> $��—
<br /> Mr. Ference referred to his report prepared by Assistant City Con- �
<br /> troller Higg�nbotham of June 24, the Comparison of Proposals sub-
<br /> mitted on June 23 by Don De 4ere of Mund, McLaurin & Co., and the
<br /> letter dated June 23 from C H. Re�fenrath
<br /> Discussion followed�and Mr. Ference comnented and replied to ques-
<br /> tions concerning the recommendation of the consultant and staff that
<br /> Council approve the proposal submitted by Kindler and Laucci; the
<br /> considerable expertise with�administration of city accounts of R. L.
<br /> Kautz, the policy cancellation procedures of insurance companies; the
<br /> amount of risk to which the City might expose itself under each of
<br /> the three proposals, whether or not it is desirable for the City to
<br /> attempt to reduce insurance costs by becoming partially self-insured;
<br /> the cla�m experience of the City and speculation as to the future; �
<br /> the fa�lure of the consultant to provide information regarding in- ,
<br /> surance companies and administrators which might assist Council in
<br /> reviewing the report, the very conservative estimates of staff and
<br /> the consultant regarding estimated claims, and the use of the trust
<br /> fund.
<br /> Don De Vere, Mund, McLaurin & Co., commented regarding h�s analysis
<br /> of the proposals, noting that protection of the assets of the City
<br /> is the primary consideration in making such evaluations He stated
<br /> that losses based on the City's past experience average $50,536, ,
<br /> although for comparative purposes losses have been assumed to be
<br /> $71,385 for the 1977-78 fiscal year, and observed that in the event
<br /> of a claim of $100,000 or more, settlement would not be expected for
<br /> two or more years so that a reserve would be built up
<br /> Reg.Mtg. -5-
<br /> 6/27/77
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