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Home My WebLink About062215_cabs012:00 p.m. Commissioners Chambers JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST TO: Board of County Commissioners Philip Morley, County Administrator FROM: Leslie Locke, Deputy Clerk of the Board DATE: June 22, 2015 SUBJECT: Washington Counties Risk Pool Update STATEMENT OF ISSUE: Vyrle Hill, Director Washington Counties Risk Pool and David Goldsmith, Member Services Manager have requested to update the County Commissioners on the Washington Counties Risk Pool. RECOMMENDATION: Listen to update. dlz�r Date WASHINGTON COUNTIES RISK POOL Created by Counties for Counties Impetus Behind the Self - Insured Pooling Movement U.S. Supreme Court ruled concept of sovereign immunity did not flow from the Constitution to states leaving states to determine their degrees of immunity for actions of their governmental entities and public officials. • Little if any commercial insurance - public sector became too risky • Washington generally authorized "pooling" in 1979 with Chapter 48.62 RCW — Local Government Insurance Transactions 1 CHAPTER 48.62 RCW F07LOCAL GOVERNMENT INSURANCE TRANSACTIONS RCW 48.62.011 Legislative intent — Construction. This chapter is intended to provide the exclusive source of local government entity authority to individually or jointly self- insure risks, jointly purchase insurance or reinsurance, and to contract for risk management, claims, and administrative services. This chapter shall be liberally construed to grant local government entities maximum flexibility in self- insuring... � Washington Counties ICI. Risk Pool ( "WCRP ") • Created by Counties for Counties in 1988 via Interlocal Agreement (per RCW 39.34) • Joint Self- Insuring Program pursuant to RCW 48.62.031 (not the statutes governing commercial insurers) • Member- owned, member - governed cooperative /association • Quasi- county — operates as extension of and service provider for Member Counties • 26 participating Member Counties • Governing Board — Director (and one or more Alternate Directors) appointed by each Member County's legislative authority WCRP, Is It A Hybrid? Not insurance; rather, a Member - defined and - shared mechanism for transferring financial risks... How it Works • Member Counties individually transfer the financial risks for their "covered" claims to WCRP (Member Counties collectively). • WCRP, operating independently but on behalf of the whole, may transfer portions of the inherited financial risks via reinsurance for the Pool /membership as authorized by the Board of Directors. • AND /OR some financial risks transferred through joint /group insurance purchases authorized by the Board with WCRP serving as administrative mechanism for these acquisitions, e.g. excess (umbrella) liability, property, cyber risk /security coverages. 70 What Is The WCRP? 26 Member Counties and the Pool's Board of Directors, Committees, Consulting Agents, Staff and Organization 2014 - 2015 WCRP Members WXATGOM It • • �.., .. • �_,. .v. • aw L .w SLASD • • v��..e. �� rtna s...e •••mav i Eltmeot N'CRP VnPUlaiim 41 J50 Q5NO) WCRI'1lamba COUWics 9pua �c Nile Ji95B 22 (',,) [. wtY Revd Milen tOtl (57� 'M�) Ivd�r�d V .1- lenw.v 6 3 WCRP's Mission ■ To provide comprehensive and economical risk coverage Governance (Board of Directors /Executive Committee Responsibilities), Standing Committees, Memorandum of Coverage, Risk Financing /Transfer ■ Reduce the frequency and severity of losses, and Loss Control /Coordination, Compact Compliance, Training, Other RM Efforts ■ Decrease costs incurred in the managing and litigation of claims Claims services, JSILP Memorandum of Coverage, Redefining Exposures F —1 0 Controlling Documents — Interlocal Agreement Foundational document: responsibilities of membership and powers, appointment of Director /Alternate Director /Risk Manager; responsibilities and authorities granted to the organization by its Member Counties — Membership Compact Defines Members' obligations to engage in Pool activities and to practice risk management; director /alternate director Board participation, education and certification of Risk Manager — Bylaws Rules governing the conduct of business — Board Policies Rules governing various aspects of administration, program delivery and implementation Ell Expectations of Appointed Directors /Alternate Directors • Bring (County /Government) knowledge and experiences to the table... assist the pooling organization with reaching its goals. • Get involved... volunteer for and participate in one or more of the Board's standing committees. Attend regular and special meetings of the Board (Membership Compact). — Come prepared... read /review the meeting materials, and ask questions as needed (officers, committeepersons, other directors, staff). — Seek to fully understand the issues under consideration. — Participate in and stand behind the decisions taken by the Board. • Act to further the Pool's mission and its long -term interests. =r:p Organizational Structure BOARD OF DIRECTORS Each Member County appoints Director and Alternate Director(s) Standing Committees. Finance, Personnel, Risk Management & Underwriting EXECUTIVE COMMITTEE II members elected fmmiby Board of Directors INVESTMENT COMMITTEE Sec/rre, FC Chair, Exec Director and Two (2) Other DirectorslAtternates WCRP STAFF Executive Director Administrative Services - Claims Services - Member Services rpCommittees /Assignments Elected from /by Board of Directors... • Executive Committee: Operational governance /oversight • Investment Committee: Investment Policy (oversight of investment program and professional advisor) Appointed by President /Committee Chair... • Finance Committee: Financial Management and Travel Policies (oversight of budgeting, accounting and financial reporting practices and procedures) • Risk Management Committee: Risk Management Policy (oversight of risk assessments, loss control activities and Compact compliance) • Underwriting Committee: Underwriting Policy (oversight of 151LP Mol-C, criteria for assessments, evaluating new members) and Claims Handling Policies & Procedures (oversight of claims administration practices & procedures) • Personnel Committee: Personnel Policy (oversight of personnel administration including compensation) • Ad Hoc: Established as needed on a topic -by -topic basis it WCRP's Coverages ➢Third Party Liability (Casualty) Program ■ General Liability including Law Enforcement, Public Officials and Disciplinary Proceedings ■ Employment Practices Liability ■ Automobile Liability ➢Property Program (Member option) ➢Cyber Risk /Security (Member Option) r Access to Specialty Coverages (Member Options): Crime, Environmental , Airport /Ferry /Railroad Operations, Special Events, etc., even Public Official Bonds 11 Cr7 evenues /Expenses and Operating Income 1� _. / / / Categorized Liabilities & Net Position $40 — 0 $35 $30 $75 $20 $15 $10 - $5 $0 — $5 f11�a �Te �y10ti1 e��ti�' �10�p A/P, Other & Accrued Liabilities JSILP & WCPP Rate Stabilization 1SILP Claims Reserves 13 7 Memorandum of Self Insured Liability ��J�� (lll� Coverage CREATED by COUNTIES for COUNTIES • Unique to Counties and their operations — Membership written, and altered only with Board approval — Annually reviewed /revised by Board with assistance from Underwriting Committee, coverage counsel, Producer and staff — Developed /maintained for the ever - changing county - related activities and exposures — Coverage for • Bodily Injury, Personal Injury, Property Damage, Errors and Omissions, and Advertising Injury • Expense and Indemnity — Broad, yet succinct... only 11 pages with Cover and Declarations — Elected /Appointed Officials, Employees and Volunteers, even Spouses (vicarious liability)... must satisfy RCW 4.96.041 provisions • Occurrence Based WCRP's JOINT SELF - INSURANCE LIABILITY PROGRAM ( "JSILP "): from the (Member) County Perspective 'OPTIONAL' ADDITIONAL LIMITS IPer occurcence): • TOLLOWING FORM' EXCESS(ro$20 MILUONJ LIASILITY POLICY IOtNTLY (GROUP) PURCHASED from COMMERCIAL INSURER by WCRP with PARTICIPATING COUNTIES also INDIVIDUALLY NAMED UPPER LIMITS (per occurrence): • 'FOLLOWING FORM' EXCESS (xo $10 MILLION) LIABILITY POLICY JOINTLY (GROUP) PURCHASED from COMMERCIAL INSURER by WCRP with COUNTIES also INDIVIDUALLY NAMED LOWER /BASIC LIMITS (per occurrence): • SUBJECT TO MEMBER DEDUCTIBLES IS options from $10,000 to $500,000) RISK - SHARED AMONGST MEMBERSHIP L n FREQU EN CV of 3rd4'ARTY LIABILITIES ,.to 's Me close of Py2014 PRESENTED 'Per Million WorkerHPUrs- $ 25 __ 13.5 ° a 15 10. 5 10 z0 g 3.5 0 _ OA 1,088 -0993 10,93 -0998 1t1 /99 -p9/03 -WC3 -03,03 10,08- 09.'13 10113 -09!'9 Mnuellzetl Pmlotl¢ — RePOnetl poosAcYUenelul4Tt EsoTsss -f WOrke'HWrs —WCRP MemEe.S 17 SEVERITY of 3rd -PARTY LIABILTIES Dare al the close of Py2014 PRCSENTED -Per Million WoAer H.,s- T/00 35 �9 $ E5o0 - ....... _ _ 30 F I F, E5o0 - 25 Sm e ao 83 1 Dreg - 0993 10193 - 0998 10/98 - M93 10103 -09,08 10/08 - 09113 10113 - 03114 Annualized PorloG¢ +Incurre] �hctus�el VlLm csnn ales �WO'¢er HOU -s —WLRn Memc— 1£ fl t5 -... _ _.. 3 315 �K 28.0 35 i o 30 -- Y i SEVERITY of 3rd -PARTY LIABILTIES Dare al the close of Py2014 PRCSENTED -Per Million WoAer H.,s- T/00 35 �9 $ E5o0 - ....... _ _ 30 F I F, E5o0 - 25 Sm e ao 83 1 Dreg - 0993 10193 - 0998 10/98 - M93 10103 -09,08 10/08 - 09113 10113 - 03114 Annualized PorloG¢ +Incurre] �hctus�el VlLm csnn ales �WO'¢er HOU -s —WLRn Memc— 1£ fl fl WASHINGTON COUNTIES PROPERTY FOPROGRAM ( "WCPP "): Jointly (Group) Purchased Insurance ■ Limits of Coverage: —$500 Million "All Other Perils" per occurrence — County - selected deductibles from $5,000 to $50,000 —NO member or primary program aggregates — Earthquake & Flood sub - limits: $200 Million "per occurrence" $200 Million program annual aggregates, each coverage $25 Million limits within Special Flood Hazard Areas —LEED Construction — Historic Reproduction Option — Over - the -Road coverage (except for sedans, sues, pickups, LE- assigned) 19 20 10 WCPP Participation and Exposures __.__. __. _. _. son 26.6 26 0 2fi.0 25.J 26.0 26 0 26.0 26.0 .... ._ _.. i 535 24 _3n _. 2.6.._ Sao 36 5 $26 23 /20.�' $29 2.3 ...52.6 $2J.. $2) $2.>. 2.6 f 52.5 2.4 $2.5 us l4y C' 8" 80 Ra ti0 h� ti ti� ' — P.McWtinB Counties �Compoahe lneuM6 Values(■lllons) —A—CCmpo$ke Assessments (Millions) 20 10 CYBER RISK /SECURITY: Jointly (Group) Purchased Insurance • WCRP's JSILP /MLC protects most third party losses; Cyber coverage to "fill the gap' • Cyber coverage protects first party data breaches for: Business Interruption, Data Recovery, Cyber Extortion, Breach Response and Management (Regulatory Compliance) • Does not protect first - parties for monetary losses... purpose for Crime policies F -1 0 How are Members' Assessments Computed ?* 1. Self Insured Liability Program: proportionate share of program's projected costs based on risk exposures (licensed vehicles /worker hours), deductible selected, assessment modifier. 2. Property Program: proportionate share of group purchase based on schedule of values of insured properties ( buildings /contents /vehicles /mobile equipment), risk factors, deductible. 3. Cyber Liability: member share of group premium. *Assessment methodologies are reviewed /approved by the Board of Directors during the annual meetings held each July 11 STAFF Years Em. Date Vyrle Hill (Executive Director) 26+ 06/01/05 5 3 ... dofD ,rectors— PA(o8/18J88toO9 /3o /o4) e,d PSA (11104J84to 05 /3110.5) Susan Looker (Claims Manager) 25+ 02/20/90 David Goldsmith (PSA — Specialty Services) 19+ 11/04/04 :• Board of Directors— JF(10 /20/95to D722/04) Sue COlbo (Accounting Officer) 16+ 01/26/99 Mike Cook (Sr. Claims Analyst) 11+ 01/15/04 Jill Lowe (Loss Control Coordinator) 8+ 01/22/07 Lisa McMeekin (Claims Representative -PT) 6+ 09/22/08 Stacey Spears (Administrative Assistant -PT) 3+ 12/12/11 Holly Fierro (Claims Analyst) 1+ 03/01/14 Joe Campeau (Sr. Claims Analyst) 1+ 03/16/14 Trish Todd (Office Assistant -PT) 0+ 11/17/14 Sally King (Claims Assistant) 0+ 04/21115 WASHINGTON COUNTIES RISK POOL Created by Counties for Counties Serving the Membership and Accomplishing the Mission! 12