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HomeMy WebLinkAbout2001 11 12 Consent A Renewal of All Liability Coverages, Property Damage and Workers Compensation . . . COMMISSION AGENDA ITEM A CONSENT X INFORMA TIONAL PUBLIC HEARING REGULAR 11/12/01 Meeting MGR. ~ illEP~ Authorization REQUEST: It is requested that the City Commission approve stafrs recommendation to renew liability and property damage insurance coverages for FY 02 through Coregis and AIG, and to authorize a change in the workers compensation insurance carrier effective January 1, 2002, from the Florida Municipal Insurance Trust (FMIT) to the Preferred Governmental Insurance Trust (PGIT). PURPOSE: This agenda item allows for the renewal of all liability coverages, property damage, and workers compensation insurance through September 30,2002. BACKGROUND: 1. Through Risk Management Associates (RMA) of Altamonte Springs, the market of public entity insurers was asked for quotes on the full range of our property and casualty coverages. The results of that effort are outlined on the first page of the attached letter from Paul Dawson of RMA. 2. The second page of that same letter lists the comparison of premiums from FY 00-01 to FY 01-02, with the following explanations for corresponding increases and decreases: Property Damage-the premium decrease of $4,535 (-25.5%) reflects a good loss record plus revisions in the property schedule which cut most underground structures and appurtenances that have Iittle-to-no exposures. The slight rate change per $100 of value had no appreciable effect. Automobile Liability-the premium increase of$15,631 (+37.8%) reflects 27 more vehicles which had not previously appeared on our . Consent Agenda Item "A" City Commission Meeting November 12, 2001 schedule. The vehicle schedule had not been updated since 1998. To minimize the premium increase, physical damage coverage was removed from all those vehicles over 5 years old. A rate increase per vehicle also had a negative impact. General Liability-the premium increase of $7,899 (+18.4%) reflects higher city operating expenditures, which is the major factor used by underwriters in determining GL premiums. The small rate increase per $100 of net operating expenditures had a very minor negative impact. Public Officials Liability-the premium increase of $7,305 (+16.5%) reflects concern by carriers over our losses during the past 4 years. A rate increase also impacted the renewal premium. . 3. RMA also submitted a proposal for workers compensation coverage through the Preferred Governmental Insurance Trust (PGIT) which offers substantial savings over the program by the Florida Municipal Insurance Trust (FMIT). For the Period 10/0112001 through 9/30/2002 FMIT PGIT $ 361,421 328,208 Difference 33,213 Unfortunately, the PGIT quote was received after $85,184 had already been paid to FMIT for the quarter October 1, 2001 through December 31,2001. In addition, FMIT would have imposed a short rate cancellation penalty of $36,142, for not providing notification of cancellation 45 days prior to the effective date of cancellation. Staff has concluded, however, that substantial savings caD still be realized by providing immediate notice of cancellation, to be effective December 31, 2001, with PGIT providing coverage effective January 1,2001. Cost and savings calculations are as follows: For the Period 1/01/2001 through 9/30/2002 . FMIT PGIT $ 276,237 246,156 Difference 30,081 . . . Consent Agenda Item "A" City Commission Meeting November 12,2001 It should be noted that premium quotes from both trusts reflect a substantial increase in city payroll, an increase in the city's Experience Modification, and higher state-approved classification code rates per $100 of payroll. Also, awarding this coverage to PGIT further reduces the property and liability premiums by $3,227 (already reflected in the "Total Premium" figure on the "Premium Recapitulation" page), and would not be pro-rated or otherwise affected by an award effective January 1,2002. 4. The following represents budgeted and actual premiums for FY 00-01 and for FY 01-02 (if approved): Budgeted 00-01 Actual 00-01 Budgeted 01-02 Proposed 01-02 Property Damage and Liabilities $ 163,750 $146,390 $161,000 $166,193 Workers Compo 253,000 227,696 340,738* 328,208* Totals 416,750 374,086 501,738 503,433 * * * -- Annual premium amounts subject to pro-ration calculations as outlined in 3. above. ** -- Staff recommends $1,000,000 coverage with $100,000 deductible for Public Officials Liability coverage, a continuation of current policy limits. The small difference of $1,695 between the FY 01-02 premium amounts budgeted versus proposed premiums to be paid can easily come from the "Insurance Settlements" line item of the Risk Management budget, which is othenvise used to pay claims within our deductibles. The Commission can further decide to reduce or increase deductibles, which will have corresponding - but inverse - effects on premiums. RECOMMENDATIONS: It is recommended that the proposal by Risk Management Associates which includes liability and property damage coverages by Coregis Insurance, public officials liability coverage by AIG, and Workers Compensation coverage by PGIT, at a total net premium of $503,433, be accepted. . Consent Agenda Item "A" City Commission Meeting November 12, 2001 A TT ACHMENTS: 1. Letter dated October 1, 2001, from Paul Dawson, Risk Management Associates 2. Premium Capitulation, Risk Management Associates COMMISSION ACTION: . . Oct-OB-Ol 09:55A P.02 . RMA Ri~k Management Associates October I, 200 I Gem.: D~Marie, General Services Din:ctor City of Winter Springs Winter Springs, florida Dear Gene, Pkasl.: linJ enclosed the property, liahility and workers' comp~nsation insurance proposal for the City of Winter Springs. . As is the standard procedure for Risk Management Associates (RlvtA), we solicited seven'! other insurance carriers tor insurance yuotes on your bchal f. I have summarized their responses below. There arc only three companies and one self. insured pool currently writing property und liability insurance for public entities in Florida. They arc Corcgis, Sl. Paul Argonaut and Florida Municipal Insurance Trusl (PM I"). RMA has direct access to all except FMIT. Sl. PaullnslIrance Co. ..' Not competitive with the renewal premium. Decline<i to givl:: a quote hased on Coregis premium and covemges. Argonaut In~urance Co. Callnot wrile property 011 an admitted basis in the State of Florida. Coregis and St. Palll will not write stand-alone property policies. Florida insuranl.:c law prohibits LIS from placing coveragl.: with a non-admitted carrier when an admitted carrier will provide the coverage;' ~.Q.[e~is- Quote renewal at $121,193 Public Onicials' Li~lhility' ca'iTie'rs' approached were as f()'IJows. Cort~~is - Declined due to paslloss experience Z.Jd[.i.~lt. Declined due to past loss experience. St. Paul - Will not write stand-alone Public Officials' Liability coverage. ^n.:onaul- Will not write stand-alone Public Omcials' l.iahility coverage. United National Declined due lo loss experience. AIG .. Quoled renewal at $51,500. Please find on the attached page a summary of premium and exposure changes from last year to this year for your review. . Commcn:iaJ Insurance. Hond.s . Ri.c;k Management Service!". . Pro~ram Design and Adrnini!itration r.O f,,)X I tj I J07 . All,:onll)f1(I~ sprine::., Flori(I,} :I ;171 (,-1507 . P/)onc; (107) 33 1-1~OO . h')(~imil(~; (1(17) 33' ..1H()(l OCT-08-2001 11:16 96% P.02 Oct-Oa-Ol 09:55A . Pmpert y i.r:tcluding bui Idings/ contcnW. inland marine! hoiler & Cllach..i.pery 00-01 TlV $15,Xl\7, 751 Premium S 17,759 Rate $.0012 per $1 on val LIe. 01-02 TIV $10,718.376 Premium $13,224 Rate $.0123 per $1 no value. 10'Yo increase Autol11obill:; L-jability 00-01 113 vehicles 01 -02 140 vehicles Premium $ 41,304 Premium S 56,935 Rate $366 per vehicle. Rate $407 per vehicle. 11 % increase General Liability 00-01 $11.458,457 net expenditures Premium $42,882 01-02 $12,334,895 net expenditures Premium $50,781 Rate $.374 per $100 Rate $.412 p~r $1 00 10% increase Puo lie Omcial's ~iabilitv 00-01 $11,458,457 net expenditures Premium $44,195 01-02 $12,314,895 net expenditures Premium 551,500 Rate $.386 per $100 Rare $.41 ~ per $100 9% increase Crime 00-01 01-02 Premium $249 Premium 5253 2% increase . Total Premium 00-01 5146,390 01-02 $172,693 J 8% increase 1 realize the gross premium is more than anticipated. Please reali7.e that the above final premiums are a result of several negotiatiuns with Coregis and AIG to reduce premiums from [heir original renewal quotes released to RMA. R.\1A has also r~dUl.:ed their commission in order to get premiums clos<;:r to the City's hudget. When we indicated renewal premiums to the City several months ago, we did not anticipate the addition of27 vehicles and the unwillingness of public officials' liahility can-ien; to "illote the City's husiness. Please feel free to check with other neighboring cilie!' to deLennine if Lhe above increases are in line with their experience. Regards, P~r:> ..--- Paul Dawson Senior Account Executive . nrT-~O-~~~1 11: 1h qc.'..-:- P.03 Pel, . RMjA Risk Managemel t Associates City of \Vinter Springs PREMIUM RECAPITULATION Annual Premium Property (including equipment breakdown) $11,488 Inland Marine $ 1,736 Crime/Employee Dishonesty $ 253 General Liability, Law Enforcement, and EMT /Paramedics $ 50,781 . Automobile Liability and Physical Damage $ 56,935 Public Officials Liability ($500,000 limit, $100,000 deductible (l, 000, 000 limit $100,000 deductible Workers' Compensation $ 47,500 $ 45,000) $ 51,500) $328,208 Accidental"'Death & Dismemberment ,. .n. - __n _u_ -'h" ,-" - ... $ " - 2,515" FEMA and Florida State Fire Marshall Surcharges $ 17 Total Premium: $499,433 . Notes of Importance: . Property and Liability premiums include a $3,227 credit when Workers' compensation coverage is purchased. . Signed acceptance of proposal required to bind coverage . Signed statement of values required to bind coverage . Signed Pub lie Officials Liability application required to bind coverage . Signed pollution applieation required to bind coverage . Property appraisal required within 60 days of policy effective date . Signed uninsured motorists form required The brief description of insurance coverage contained in this proposal is being provided as an accommodation only and is not intended to cover or describe all policy terms. For more complete and qetailed infonnation relating to the scope and limits of coverage, please refer directly to the policy documents. Specimen forms are available upon request.