HomeMy WebLinkAboutTR-1-87 TOWN OF NEWCASTLE
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MEETING: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
DATE: January 5, 1987
REPORT #: TR-1-87 FILE #:
SUBJECT:
MUNICIPAL LIABILITY INSURANCE - FINAL REPORT
BY THE MINISTER OF MUNICIPAL AFFAIRS
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and
Administration Committee recommend to Council the following:
1 . That report TR-1-87 be received; and
2. That Council support the recommendations of the final
report of the Minister-_of Municipal Affairs_ regarding _Xgni_cipal`Liability
Insurance;
3. That the Minister of Municipal Affairs be notified of
the support of Council.
BACKGROUND & COMMENTS:
The Council meeting of December 8, 1986 received and referred
to the Treasurer for review and report, the final report from
the Minister of Municipal Affairs on Municipal Liability
Insurance in Ontario.
The report aims to provide a case for making amendments to
the tort system, and solicits the support of the Municipalities
in hopes that the Province will recognize the urgency of the
recommendations and will act quickly to implement them.
The recommendations that are stressed in the report and that
apply to the Town are briefly described here:
1. That Municipalities seriously consider the level of risk
they can retain with a view to assuming the cost of higher
deductible levels.
2. That adequate reserves be established to cover the cost of
claims falling within these increased deductible levels.
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G.P.A. Meeting Page 2
TR-1-87 g
3. That the Ministry create a Municipal Disaster Level Insurance
Fund to alleviate the concern of unusually large claims. The
financing is to be through a $2,000,000 contribution from the
unconditional grants allocation for each of five years, which
is to be invested with OMERS.
4. That all Municipalities carry liability insurance protection of
$4,000,000 in excess of a $1,000,000 standard that would be
secured individually from any conventional or alternative source.
The belief is that it is ineffective to purchase liability insur-
ance greater than $5,000,000, given most Municipalities' claims
records.
5. That a group purchase program be established by an organization
such as AMO.
6. That current legislation be amended to provide authority for a
Municipality to self-insure the Corporation's risk of liability.
7. That self-insurance and reciprocal insurance exchange be recog-
nized as viable alternatives to conventional insurance services.
8. That legislative amendments be enacted to enable all Municipal-
ities to join and form reciprocal insurance exchanges.
9. That the Minister designate "volunteers as may provide their
services on behalf of, or directly to the municipality," as
"employees". This is provided that the council has first passed
a by-law designating such persons as employees for the purposes
of the Minister's designation.
10. That each Municipality maintain some form of a Risk Management
program, either formal or informal, as responsible control of
risks will ultimately lead to lower insurance premiums, and
potentially less liability exposure.
In conclusion, the report points out that there is no ultimate
insurance mechanism to service the needs of Municipalities in
Ontario, but the recommendations above lead to alternatives which
might better suit their varied requirements.
There are drawbacks and disadvantages to every system. The Committee
therefore advises caution, and careful consideration before any
changes are considered.
If enacted these modifications will be a positive step to encouraging
the competative nature of the insurance market, and that could of
course benefit the Municipal world.
Respectfully submitted, Recommended for presentation
to the Committee
)J R. Blanchard Lawrene . Kotseff
V Treasurer Chief nistrative Officer
MAM/JRB/pp `� I
ter: 7 , I Q
07PIKee chairman,
Vnistry of Aunicipal Affairs,
777 Hy Street,
WOW, Ontario.
FIG 2C E,
Dear Ms. Millar:
Re: Final Report of the Advisory Committee to the
Ministry of Eunicipal Affairs.
Our File; 35.31 .5
At a regular meeting of Council held Nonday, December 8, 1901 the
following resolution was passed:
"That the cD!7z-,.iuni cation dated November 13, 00, frorn
Claudette Hillar, Committee Chairman, Advisory Committee
an Aunicipal insurance, Ministry of Municipal Affairs,
Re: Final Report of the Advisory Committee to the Minister
of Hunicipal Affairs be referred to staff for an overview
report to the General Purpose and Administration Committee
prior to the and of january 1987."
Yours truly,
Rosemary Rutled we.
Deputy Clerk.
Wfos.
1��C'sf
Ministry of Ministere des COMMUNICATIONS DIRECTION D-8
Y Advisory Committee Comit6 consultatif
®rT Municipal Affaires on Municipal sur('assurance
Affairs municipales Insurance des municipalit6s
Ontario
November 13, 1986
.. _. ✓.w
MEMORANDUM TO: All Heads of Council
RE: Final Report of the Advisory Committee
to the Minister of Municipal Affairs
On April 21 , 1986, I forwarded to you a copy of the
Committee's preliminary report, "Municipal Liability
Insurance in Ontario". The report was very well
received and a number of you indicated your Council 's
support for many of the recommendations.
As Chairman of the Committee, I am pleased to inform
you that the final report has been presented to the
Minister of Municipal Affairs and that he has
instructed me to circulate the report to solicit the
broadest input possible. A copy is enclosed with this
letter.
The final report is being forwarded to the municipal
associations, to insurance industry representatives
and to other groups and individuals who have expressed
an interest in municipal liability for their comments .
I believe that the Committee has presented a logical
case for amendments to the tort system, supported by
factual evidence, where such evidence was available;
and I urge you to support the recommendations of the
final report and to advise the Minister of Municipal
Affairs of your support by the end of January, 1987.
Yours sincerely,
Claudette Millar
Committee Chairman
Enclosure
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