HomeMy WebLinkAbout09. Receive overview of CSRMA Pooled Liability Program; and consider authorizing the General Manager to select and purchase best insurance option for July 1 renewal period Page 1 of 2
Item 9.
CENTRAL SAN BOARD OF DIRECTORS
POSITION PAPER
MEETING DATE: MAY 5, 2022
SUBJECT: RECEIVE OVERVIEW OF THE CALIFORNIA SANITATION RISK
MANAGEMENTAUTHORITY(CS RMA) POOLED LIABILITY PROGRAM;
AND CONS IDERAUTHORIZING THE GENERAL MANAGER TO SELECT
AND PURCHASE THE BEST AVAI LABLE LIABILITYINSURANCE
PROGRAM PRIOR TO THE JULY 1, 2022 POLICY RENEWAL PERIOD
GUEST PRESENTER: P.J. SKARLANIC, VICE PRESIDENT,ALLIANT
INSURANCE SERVICES, INC.
SUBMITTED BY: INITIATING DEPARTMENT:
SHARI DEUTSCH, RISK MANAGEMENT ADMINISTRATION DEPARTMENT- RISK
ADMINISTRATOR MANAGEMENT
REVIEWED BY: PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION
ROGER S. BAILEY, GENERAL MANAGER
Roger S. Bailey
General Manager
ISSUE
Central San's excess liability insurance expires on July 1, 2022, and all renewal quotes will not be available
until mid-J une at the earliest. Also, Central San's excess liability insurance premiums increased by over
40 percent last year and the commercial insurance market remains volatile. Between a range of
anticipated price increases and a small window in which to select the best option for Central San's
insurance for Fiscal Year 2022-23, there may not be time to recommend options for the Board's
consideration before a decision must be made. Accordingly, the issue of exploring potential options for
liability insurance coverage is brought to the Board for consideration and for authorization for the General
Manager to select the best available coverage option.
May 5, 2022 Regular Board Meeting Agenda Packet- Page 32 of 261
Page 2 of 2
BACKGROUND
Since insurance premiums have risen significantly over the last few years staff has investigated alternative
risk financing strategies to mitigate future premium increases and to improve coverage where possible.
Staff will introduce P.J. Skarlanic from Alliant Insurance Services, Central San's insurance broker, to
provide the Board with information regarding the Pooled Liability program from the California Sanitation
Risk Management Authority (CSRMA).
This information was presented to the Finance Committee on April 19, 2022.
Depending on renewal pricing, Central San may be better served to join the CSRMA risk retention pool
than to renew its excess liability insurance through the commercial market.
ALTERNATIVES/CONSIDERATIONS
An alternative is whether to proceed with the current commercial insurance arrangement or to consider a
transition to the CSRMA pooled liability program. The key considerations relevant to this decision include
cost, insurance coverage and terms, and claims handling provisions.
FINANCIAL IMPACTS
It is presently too soon to evaluate the financial implications of continuing with commercially availably
coverage orjoining the CSRMA program. Quotes from the commercial market and CSRMA will not be
available until June 2022.
Central San's excess liability insurance premium increased by over 40 percent last fiscal year and the
commercial insurance market remains volatile. While current market conditions suggest that Central San
will not receive an equivalent price increase again, staff does expect another rate increase for coverage
effective July 1, 2022.
COMMITTEE RECOMMENDATION
The Committee received the presentation and recommended that the Board authorize the General
Manager to select and purchase the best available liability insurance option prior to the July 1, 2022 policy
renewal.
RECOMMENDED BOARD ACTION
Authorize the General Manager to select and purchase the best available liability insurance option prior to
the July 1, 2022 policy renewal period.
Strategic Plan re-In
GOAL THREE: Fiscal Responsibility
Strategy 1—Maintain financial stability and sustainability, Strategy 2—Ensure integrity and transparency in financial
management
May 5, 2022 Regular Board Meeting Agenda Packet- Page 33 of 261