HomeMy WebLinkAbout2008 04-07 500 CMW
AGENDA
COUNCIL-MANAGER WORKSHOP
Monday, April 7, 2008
Council Chambers, City Hall
5:00 p.m.
A. Call to Order
B. Roll Call
C. Approval of agenda
D. New Business
1. Presentation by League of Minnesota Cities Insurance Trust (LMCIT)
regarding concerns with City of Maplewood Liability Insurance
Coverage
E. Old Business
F. Adjournment
Agenda Item D1
AGENDA REPORT
TO
: City Council
FROM:
Chuck Ahl, Acting City Manager
SUBJECT:
Presentation about League of Minnesota Cities Insurance Trust (LMCIT)
regarding concerns with City of Maplewood Liability Insurance Coverage
DATE:
April4, 2008
INTRODUCTION/SUMMARY
A representative of our Insurance Company, from Arthur J. Gallagher Risk Management
Services, Inc., along with representatives from LMCIT has requested time to address the City
Council regarding a mid-year review of our liability insurance coverage.
This preliminary indications are that LMCIT will be considering the levels and extent of our
coverage. Attached is a letter from June 22, 2007 that identifies the exposure concerns and
rate adjustment of 13.5% to $189,952. As we understand, the LMCIT Board will be considering
a number of options for continuation of Maplewood?s coverage. Preliminary information
indicates that an additional surcharge of 15% may be applied. This is an increase of
approximately $28,500 which will be applied for the majority of 2008.
Additional indications are that LMCIT may be considering increase the deductible liability limits
for employment litigation from the current level of $50,000 per occurrence to $200,000 per
occurrence. While this is an expenditure that is not immediately a cost item, we have typically
budgeted for a portion or percentage of the liability exposure.
RECOMMENDATION
There is no action required as part of this meeting. It is a requested [by Arthur J. Gallagher Risk
Management Services] as a Meeting to review the various options that are being presented to
the LMCIT Board for discussion regarding Maplewood?s coverage.
Attachments:
1.
June 22, 2007 Letter from LMCIT to Mark Julic regarding Maplewood coverage
ß¹»²¼¿ ׬»³ Üï ߬¬¿½¸³»²¬ ï
changes in the city's operations or risk chdracteristicsy uringlhe last`year''With this in mind,
LMCIT applied a 10% debit,to thO p''xperienee gating modiflc #lvn to.�morc accurately reflect the
apparent change in the city operations or ati$eine'nt: 4
As was stated previously, LMCIT will continue to monitor the loss activity of the city during the
71/07 to 7/1108 coverage term and their loss history will determine if additional'underwriting
action is necessary.
Future underwriting actions could be, positive, such as reducing or eliminating the 10% debit.
However, LMCIT could also implement additional negative actions if they feel itis necessary.
These actions could include:
r Increasing the debit
• Increasing the deductibles
• Appling special limits or exclusions
• Requiring the city take special actions to reduce risk
These additional actions could b t leen rid ew l br rritt errn; The LMCFF Board has reviewed
and agreed ro-rhase renewal Perm, :r
We also need to remember that when the past liability claims, roll on to the formula for the City's
711108 renewal, we estimate that the city's experience, experience modifeation,wili increelse to
1,15% based on the incurred losses as of 5131/07, The combined.efi'ect.of the.experienco rating
formula and additional underwriting could be quite significant.
Finally, as you know there have been several telephone conversations and letters between
LMCIT staff and various city attorneys that addressed our concerns as .outlined im' 'my 5114/0.7
letter. I don't believe that we need to review each letter since it appears that the city understands
the concerns of LMCXT.
LMCIT is committed to providing whatever help we canto the city to address these issues and to
reduce the city's risks.
S' cercly, �
ichael ozniak, CFC
LMCIT Underwriting Ma ager''
TOTAL P.83