HomeMy WebLinkAboutFND-011-05
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ClfJl-!lJgton
REPORT
FINANCE DEPARTMENT
Meeting:
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
TUESDAY, SEPTEMBER 6,2005 Resolution #:tt/f315-0-;;-
Date:
Report #: FND-011-05
File#:
By-law #:
Subject:
2005/2006 INSURANCE PROGRAM
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report FND-011-05 be received; and
2. THAT the general insurance placement, in conjunction with the other member
municipalities of the Durham Municipal Insurance Pool, with the Frank Cowan
Company for an integrated pooling arrangement that includes integrated
insurance coverages, common self retention deductible levels, and related stop
loss aggregate premium limits for the period July 1, 2005 to June 3D, 2006 at an
approximate cost to Clarington of $528,693 be ratified.
R";ewed by' a~.
. Franklin Wu,
-1;' Chief Administrative Officer.
NT/hjl
REPORT NO.: FND-011-05 PAGE 2
______________________________________________________________________
BACKGROUND AND INFORMATION:
1.0 The purpose of this report is to provide Council with an update with respect to
insurance coverage for the period July 1, 2005 to June 30, 2006. As Council is
aware, the Municipality of Clarington is a member of the Durham Municipal
Insurance Pool. Insurance has been a difficult issue over the past several years
due to world events and a ‘hard’ insurance market. Very few insurers are
interested in municipal liability coverage due to a generally poor loss experience
and an increase in frequency and severity of claims.
1.1 The Board of Directors of the Durham Municipal Insurance Pool (of which
Clarington sits as Chair), has proceeded with a proposal from the Frank Cowan
Company for an integrated pooling arrangement. The main features of the
proposal include:
1) Retention of Clarington’s local insurance deductibles of $25,000 for most
of the lines of coverage
2) Sharing the cost of claims by the Pool members from the local deductible
level to $500,000 per claim, and
3) A total aggregate annual stop loss limit of $2.0 million for all claims falling
between the local deductible and the $500,000 pool deductible.
1.2 In order to proceed with the 2005/2006 placement, staff of the participating
municipalities recommended that each municipality’s contribution to the Pool be
increased by 14.51% over last year. This provides for the purchase of insurance
as well as the funding of $1.8 million of the annual aggregate mentioned above.
The balance would be funded from the pool surplus if necessary.
1.3 For Clarington, the 2005/2006 contribution is estimated at $528,693. This
represents the 14.51% increase over last years’ pool contribution of $461,717.
1.4 The 2005 budget for insurance is $500,000 for premiums as well as adjusters
costs and payment of claims below the local deductible. As a result, the budget
for insurance (as mentioned in budget deliberations) will require further
adjustment in the 2006 budget process. For 2005, any shortfall will be funded
through the self-insured losses reserve as required.
REPORT NO.: FND-011-05 PAGE 3
______________________________________________________________________
CONCLUSION:
2.0 For the 2005/2006 year the Durham Municipal Insurance Pool has been
successful in obtaining a reasonable insurance placement with an increase that
is modest in comparison to those that some municipalities have been facing
across the country. It was therefore recommended that Clarington proceed with
the insurance placement in conjunction with the Durham Municipal Insurance
Pool with the Frank Cowan Company.
______________________________________________________________________
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T (905)623-3379 F (905)623-4169