HomeMy WebLinkAboutTR-46-98
DN:TR-46-98
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
Meeting:
Date:
Report #:
Subject:
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
JUNE 8, 1998 File # _H'=> ':::>.G') e:::
Res, # GPA-3S9 -q<i:?
TR-46-98 F' #
lie:
1998 / 1999 INSURANCE PROGRAM
By-law #
Recommendations: full d d h h G I Pu d Ad .. . C .
it IS respect y recommen e t at t e enera rpose an mInIstratIOn ommIttee
recommend to Council the following:
1. THAT Report TR-46-98 be received;
2 . THAT the presentation of Mr. David Reed from Frank Cowan Company Limited be
acknowledged and received with thanks; and
3 . THAT Frank Cowan Company Limited continue to be retained as the Municipality of
Clarington's insurance carriers for the period from July 1, 1998 to June 30, 1999,
under the Durham Municipal Group Insurance Program at an approximate cost of
$260,749 plus applicable taxes; and
4. THAT the Durham Municipal Group, in preparation of the 1999/2000 premium year,
commence a detailed investigation of an insurance pooling arrangement with the area
municipalities and the Region of Durham for implementation July 1, 1999.
BACKGROUND & COMMENTS
1.0 In preparation for the 1994/1995 premium year, the area municipalities in conjunction
with the Region of Durham undertook an investigation of the potential associated with
bulk co-operative purchasing, pooling of funds and reciprocal insurance.
1.1 As a result of this investigation, it was concluded that the Regional/Municipal Group
were not at a sufficient stage of development to be able to efficiently or effectively
administer the extreme move to a fully self-funded pooling arrangement as it would
require central co-ordination of all policies, additional expert staffing and significant
administrative cost.
1.2 At a Spring 1996 meeting of the Durham Municipal Group, presentations and
discussions took place regarding insurance pooling with purchased reinsurance to
reduce the risk to the participating Municipalities.
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· TR-46-98
PAGE 2
1.3 The Region of Durham financed the cost to update the actuarial study done in 1994 to
determine the viability of an insurance pooling arrangement.
1.4 Per Report TR-60-97, Frank Cowan Company Limited was retained as provider for the
Durham Municipal Group Insurance Program for the 1997/1998 premium year.
However it was also recommended that the Durham Municipal Group continue to
investigate insurance pooling as well as any other insurance alternatives.
1.5 In light of the investigation of other insurance alternatives, Frank Cowan Company has
presented an overall decrease in the renewal rate from the 1997/1998 premium year by
8.0%. In addition Cowan has offered a guarantee that rates will not exceed the current
level subject to our commitment to renew with the Frank Cowan Company for three
successive one year terms and our agreement to defer any market search for that three
year period.
1.6 At a May 1998 meeting of the Durham Municipal Group, it was agreed that insurance
pooling remains a viable option in the long term and this arrangement needs to be
investigated in greater detail. Therefore the Region and area municipalities agreed to
renew with Frank Cowan Company for one year and to proceed with the investigation
of an insurance pooling arrangement. Final recommendations in this regard will be
brought to council in advance of the renewal date for the 1999/2000 premium year.
SELF-INSURED LOSSES RESERVE
2.0 Annually, any surplus resulting from the comparison of premium year budget to actual
cost is transferred into the self-insured losses reserve. For the 1997/1998 premium
year, there was no unexpended budget remaining to be transferred into the reserve.
This is primarily a result of budget constraints as well as payments to our insurance
adjusters handling an increased number of claims and deductible payments for the
settlement of prior year's claims.
2.1 The self-insured losses reserve is intended to cover costs associated with insurance
claims below the Municipality's deductible amount, as well as fund the payment of the
deductible. Consistent with the levels established over the past few years, it is
recommended that the current levels be maintained as follows: the property deductible
of $10,000 and the boiler and machinery deductible of $5,000. A copy of the summary
of policy levels and deductibles is shown in attachment #1. As of December 31, 1997,
the balance in the reserve was $135,916 (1996 - $114,197). The total draw on the
reserve in 1997 was $13,281 as where possible, deductible payments were charged
directly to the insurance operating account. There was also a budgeted contribution of
$35,000 to the self-insured losses reserve in 1997.
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. TR-46-98
PAGE 3
CONCLUSION
The recommendations outlined above are respectfully recommended for approval for the
1998/1999 premium year to be effective July 1, 1998.
Respectfully submitted,
Reviewed by,
1~
ane A. Marano, H.BSc.,A.M.C.T.,
Treasurer.
~
W.H. Stockwell,
Chief Administrative Officer.
MAM/KS/km
Attachment #1
822
HIGHLIGHTS OF COVERAGE
CLASS OF INSURANCE SUMMARY OF COVERAGES LIMITS/AMOUNTS
PARrA
COMBINED CASUALTY POLICY:
Municipal Liability Limit of protection S 15,000,000.
Deductible S 5,000.
Errors and Omissions Limit of protection S 15,000,000.
Deductible S 2,500.
Non-Owned Automobile Limit of Protection S 15,000,000.
Environmental Liability Limit of Liability S 2,000,000.
Aggregate S 4,000,000.
Self-Insured Retention S 5,000.
Comprehensive Crime commercial Blanket Bond S 1,000,000.
Money & Securities S 100,000.
- Blanket any Location
counterfeit paper and S Included
Depositors' Forgery S Included
Audit Expense (Sub-Limit S 100,000J S Included
Councillors' Accident Accidental Death & Dismemberment S 100,000.
weekly Income - Total Disability S 500.
Weekly Income - partial Disability S 250.
Board Members' Accident Accidental Death & Dismemberment S 10,000.
weekly Income - Total Disability S 300.
Weekly Income - partial Disability S 50.
Fire-Fighters' Accident Accidental Death & Dismemberment S 100,000.
Funeral Expenses S 6,500. *
Blanket Accident Expenses S 5,000. *
Municipal Conflict
of Interest
Reimbursement of Legal Fees
and Expenses
s
100,000.
Legal Expense
Reimbursement of Legal Fees
Annual Aggregate
s
s
100,000.
250,000.
* coverage enhanced to a higher dollar limit
.5-
823
HICHLlCHTS OF COVERACE
CLASS OF INSURANCE
SUMMARY OF COVERAGES
LIMITS/AMOUNTS
PARTS
Boiler and Machinery
Total sum Insured S 68,014,835.
Deductible S 500./10,000.
Total Sum Insured S 600,000.
Deductible S 1,000.
Limit per Accident - comprehensive S 10,000,000. *
Deductible S 5,000.
property Insurance
Electronic Data
processing
e4R'1'~
Garage Automobile
primary Limit S 10,000,000.
section 3 - Third party Deductible S 1,000.
- Reimbursement Agreement
All perils Deductible S 5,000.
primary Limit S 10,000,000.
Collision (Legal Liability) S 200,000.
- Deductible S 500.
Specified Perils (AnyOne Occurrence) S 200,000.
Owned Automobile
Excess Automobile
(owned/Garage Only)
Excess of primary Limit
S 5,000,000.
* coverage enhanced to a higher dollar limit
.6-
824