The URL can be used to link to this page

Home My WebLink AboutWORKSHOP re WCRP Premium Increases Presentation2026 Premiums November 16, 2025 Presentation by Philip C. Hunsucker, Chief Civil DPA 1November 17, 2025 Philip’s Insurance Background 8 years: Coverage counsel for insurance companies at a national law firm 22 years: Coverage counsel for policyholders Washington Counties Risk Pool: •8 years: Service as a director or alternative director of the Board of Directors •5 years: Executive Committee •2 years: Co-chair of the Underwriting Committee November 17, 2025 2 WCRP and Public Entity Risk Pool Basics 3 WCRP Creation, Purpose & Mission Creation:The Washington Counties Risk Pool was “Created by Counties for Counties” in 1988. Purpose:Pursuant to chapter 48.62 (Local Government Insurance Transactions) and chapter 39.34 RCW (Interlocal Cooperation Act), the WCRP provides to member counties programs of: 1.Joint self-insurance; 2.Joint purchasing of insurance; and 3.Joint contracting for or hiring of personnel to provide risk management, claims handling, and administrative services. Mission:The WCRP mission is: 1.To provide comprehensive and economical risk coverage; 2.To reduce the frequency and severity of losses; and 3.To decrease costs incurred in the managing and litigation of claims. November 17, 2025 4https://www.wcrp.info/about.asp Public Entity Risk Pools in Washington State (chapter 42.62 RCW) Chapter 42.62 RCW provides “the exclusive source of local government entity authority to individually or jointly self-insure risks, jointly purchase insurance or reinsurance, become a captive owner as defined in RCW 48.201.020, and to contract for risk management, claims, and administrative services.” RCW 48.201.011. “This chapter shall be liberally construed to grant local government entities maximum flexibility in self-insuring to the extent the self-insurance programs are operated in a safe and sound manner.” RCW 48.201.010. “‘Local government entity’ or ‘entity’ means every unit of local government, both general purpose and special purpose, and includes, but is not limited to, counties, cities, towns, port districts, public utility districts, water-sewer districts, school districts, fire protection districts, irrigation districts, metropolitan municipal corporations, conservation districts, and other political subdivisions, governmental subdivisions, municipal corporations, quasi-municipal corporations, nonprofit corporations comprised of only units of local government, or a group comprised of local governments joined by an interlocal agreement authorized by chapter 39.34 RCW.” RCW 48.201.011. November 17, 2025 5 Public Entity Risk Pools in Washington State (chapter 42.62 RCW) Interlocal Agreement Required.“Membership in a joint self-insurance program requires the execution of an interlocal agreement. Members of a joint self-insurance program shall receive benefits for claims covered by the program only as a result of their signature on the interlocal agreement. Only members may participate in risk-sharing. Only members may participate in the self-insured retention layer, and only members may participate in the joint purchase of insurance.” WAC 200-100-2005. Written Claims Program Required.“All self-insurance programs shall have a written claims administration program which includes, as a minimum, claims filing procedures, internal financial control mechanisms, and claim and claim adjustment expense reports.” WAC 200-110 -120. November 17, 2025 6 WCRP Membership November 17, 2025 7 24 of Washington’s 39 counties Member counties have approximately 12,500 employees Washington Counties Risk Pool Washington Counties Risk Group Individually Self-Insured November 17, 2025 8 WCRP Programs Insurance Companies Do Not Have •The WCRP provides stability, high limits, and specialized support in a volatile legal environment •Pooling of resources to get higher coverage at lower costs •County specific coverages •Predictable contributions that make budgeting easier. •High coverage limits that protect counties from catastrophic losses. •Risk management services for counties •Member programs for training, claims handling, and loss prevention •“Pre-defense” program •WCRP Meetings provide a state-wide forum to discuss county problems November 17, 2025 9 What are the coverages provided by the WCRP? 10 Coverages provided by the WCRP Crime Cyber Property Liability Terrorism November 17, 2025 11 Summary of Decisions Made by the WCRP Board of Directors for 2026 WCRP Board voted to increase the liability Self-Insured Retention (SIR) from $3M to $4M, and to select Safety National for the $5M excess of $4M layer and Obsidian for the $1M excess of $9M layer. WCRP Board voted to continue with Chubb and AWAC on a 50/50 quota share basis for the $5M excess of $10M layer and continuing with Bowhead on the $2.5M excess of $15M layer, and SiriusPoint on the $2.5M excess of $17.5M layer. WCRP Board voted to renew the WCRP Property Program, continuing with a $100,000 WCRP deductible. WCRP Board voted to renew the Cyber coverage with AXA XL, continuing with a $500,000 WCRP Self-Insured Retention (SIR). The crime, terrorism, and optional $5M excess of $20M liability layer are all optional coverages that members may choose whether or not to participate. Jefferson County participates in all these coverages. November 17, 2025 12 Cyber, Crime, & Terrorism Coverage Renewal Summary: No Significant Increase 13 Cyber, Crime, & Terrorism Coverage Renewal Summary No changes in coverage. Crime Coverage bound for a 3.25 year policy. No significant increase for the renewal. November 17, 2025 14 Property Coverage Renewal Summary: About the Same as Last Year 15 November 17, 2025 16 November 17, 2025 17 November 17, 2025 18 Property Coverage: About the Same as Last Year The insurance premiums from all property insurers have decreased approximately 21.8% from last year. However, property values have increased following the completion of building appraisals, individual assessments will vary. Jefferson County’s premium is expected to be about the same as last year. The WCRP Board budgeted the property program at an amount equal to last year, or at a 0% increase, with any amount collected in excess of the insurance premiums and retained losses going into fund balance. November 17, 2025 19 Liability Coverage Renewal Summary: 35 Percent Increase 20 November 17, 2025 21 WCRP Change in Net Position November 17, 2025 22 Primary Causes of Change in Net Position The projected losses within the WCRP’s $3M SIR have increased by 35%. The premiums for reinsurance and excess insurance above the WCRP’s $3M SIR are projected to increase by a total of 20.2% for all layers. November 17, 2025 23 Primary Causes of Increases in Claims Payments and Premium Increases Nuclear Verdicts Litigation Funding for Plaintiffs Lack of Tort Reform in Washington State Inflation November 17, 2025 24 November 17, 2025 25 Recent Washington Verdicts & Settlements, WCRP 2025 Liability Trends: Increases in Large Claims (>$1 million) November 17, 2025 26 Liability Trends: SAM Claims November 17, 2025 27 Liability Trends: Funding Adequacy November 17, 2025 28 Liability Trends: Projected 2026 Loss November 17, 2025 29 Liability Coverage Renewal Summary The projected WCRP Net Position is below the State of WA solvency requirements due to the increase in prior year projected losses within the SIR, requiring additional capital funding. The final overall base rate percentage increase as determined by the Board, after considering the total to be added toward capital funding, was an increase of 35% resulting in approximately $15.4M toward fund balance. November 17, 2025 30 Solvency Requirements November 17, 2025 31 WAC 200-100-03001 Standards for solvency—Actuarially determined liabilities,program funding and liquidity requirements. (1)All joint self-insurance programs shall obtain an annual actuarial review as of fiscal year end which provides written estimates of the liability for unpaid claims measured at the expected level and the seventy,eighty,and ninety percent confidence level. (2)The governing body of the joint self-insurance program shall establish and maintain primary assets in an amount at least equal to the unpaid claims estimate at the expected level as determined by the program’s actuary as of fiscal year end.All joint self-insurance programs meeting this requirement shall be considered in compliance with the primary asset test.All joint self-insurance programs that do not meet the requirements of the primary asset test shall notify the state risk manager in writing of the condition.The state risk manager shall take corrective action,which may include the service of a cease and desist order upon the program,to require that the program increase primary assets in an amount equal to the unpaid claims estimate at the expected level as determined by the program’s actuary as of fiscal year end. (3)The governing body of every joint self-insurance program operating under this chapter shall establish and maintain total primary and secondary assets in an amount equal to or greater than the unpaid claim estimate at the eighty percent confidence level as determined by the program’s actuary as of fiscal year end. Liability Trends: Reinsurance Budget Options–Option A Selected November 17, 2025 32 November 17, 2025 33 Questions November 17, 2025 34 Philip C. Hunsucker, Chief Civil DPA