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Risk Mgmt Advisory Committee Mtg Min 6-15-10 MEETING MINUTES: New Hanover County Attorney’s Office – Risk Management BUSINESS: Review and discuss the renewal pricing for the following entities: Cape Fear Community College (CFCC) City of Wilmington (City) New Hanover County Airport Authority (Airport) New Hanover County Board of Education (BOE) Southeastern Center for Mental Health, Developmental Disabilities & Substance Abuse Services (SCMH) Cape Fear Public Utility Authority (CFPUA) TIME AND PLACE: June 15, 2010 9:00 a.m. New Hanover County Government Center - Finance Conference Room #500 230 Government Center Drive Wilmington, NC 28403 ATTENDANCE: Committee members and staff in attendance: George Chadwick III Ron Woodruff Walker Taylor IV Deborah Watts Tiffany Allen – Risk Manager Jennifer Stancil – Risk Management Specialist Guests in Attendance: Eric Stevens, Account Executive, Moore & Johnson Agency Eric Gilbert, Account Executive, Moore & Johnson Agency Charlie Hoover, Jr., President, Moore & Johnson Agency Avril Pinder, Finance Director, New Hanover County ORDER OF BUSINESS: Although minutes approval is not required, as a precaution, Risk Manager Allen asked each member to review the Minutes of the June 25, 2009 meeting and advise of any corrections or additions of which there were none. Risk Manager Allen reviewed the New Hanover County Board of Education’s premium projections for the upcoming 2010-2011 year, on page 1 of the BOE section of the meeting materials with the committee. The premiums for all lines of insurance are $655,649. Snipes Elementary School was removed from Flood coverage because the building was demolished and it has not been determined yet if the school built to replace it will require flood insurance. The school will provide Risk Management with an elevation certificate for determination. The Committee reviewed page 2 of the BOE section of the meeting materials, which detailed Workers’ Compensation options for first-dollar insurance vs. self-insurance. The committee agreed with Risk Manager Allen that it would be prudent for the BOE to have an actuarial study done prior to becoming self-insured. Additionally, committee members agreed that the BOE should concentrate on controlling their losses for the next year and reexamine going self-insured in 2011. Risk Manager Allen reviewed Cape Fear Community College’s spreadsheet of actual insurance premiums for the 2009-10 and projected insurance premiums for the 2010-11 policy years. The Commercial Package policy renewed with Utica; however, it was necessary to obtain this market through another agency. The former agent of record, Surry Insurance, moved their book of business to Montgomery Insurance and Cape Fear Community College. In reviewing the premium projections, Risk Manager Allen attributed the significant increase of for property insurance in 2010-11 to the upcoming $10.2 million parking deck addition. The property rates will remain the same, so the difference in premium should reflect changes in values or loss experience only. Risk Manager Allen reviewed New Hanover County Airport Authority’s renewal premium projections on page 1 of the Airport section of the meeting materials. The total premium for all lines for 2010-2011 is $238,968. Risk Manager Allen mentioned she met with the Finance Director, Jim Morton, and reviewed the renewal information. The Airport does not have a wind deductible and will renew with the North Carolina Association of County Commissioners Liability & Property Pool (NCACC) with an all peril deductible of $5,000. It was noted that the property insurance premium increase of 8% is due to NCACC’s application of loss experience factors to the 2010-11 policy period, after not charging any loss experience factors during the 2009-10 policy period. Risk Manager Allen discussed the $442 charge shown on the Worker’s Compensation policy quote for “volunteers”. Under NCACC’s policy form, volunteers are automatically covered by the worker’s compensation policy. Discussions with NCACC revealed that NCACC is aware that worker’s compensation is not a remedy for volunteer injury claims; however, they have made this coverage mandatory under their worker’s compensation policies for all members. Risk Manager Allen requested the coverage be removed from the Airport’s policy, as it is not statutorily correct. The Airport requested bids for their Airport Operator’s Liability policy that renews in August. The Risk Management Department sent out a Request for Proposal on 6/7/10. Depending on the number of responses, the Committee may be asked to convene to interview bidders. Risk Manager Allen introduced Eric Stevens, Eric Gilbert and Charlie Hoover from Moore and Johnson Agency who presented their quote for New Hanover County. Several options were discussed; however, the option for property insurance discussed in detail was the quote from Lexington Insurance. The quote included a loss limit of $50,000,000 for all other perils and a wind loss limit of $25,000,000. The liability insurance was quoted with Travelers; the total premium for liability and property is $1,244,211. Stevens and Gilbert noted they obtained an additional quote for property insurance through AmRisk but did not present the quote due to the exorbitant premium. Risk Manager Allen discussed an alternative quote obtained from the Walker Taylor Agency for property insurance, which was $20,000 more than the quote from Lexington. After discussing the various renewal quote options, the Risk Management Advisory Committee suggested that the County contact NCACC to see if their renewal pricing was their “best offer”. If so, the recommendation is to purchase the Lexington and Travelers policies quoted through the Moore and Johnson Agency. Risk Manager Allen directed everyone to page 2 of the NHC section of the handout to review the information for WASTEC. The renewal premiums were higher than anticipated due to the loss of the North Carolina Insurance Underwriting Association as a market for excess wind coverage. The Committee recommended purchasing the option for windstorm deductible buy-back coverage that reduced the 3% windstorm deductible to $300,000 for $78,500. Risk Management is still working with the agent for other options, like reducing the property policies windstorm deductible from 3% to 2%. Risk Manager Allen reviewed the optional quotes received from New Hanover County’s Specific and Aggregate Excess Worker’s Compensation and Employer’s Liability Insurance through Safety National. The Committee agreed that Option 2 for $89,262 is the best choice. Risk Manager Allen discussed Southeastern Center for Mental Health, Developmental Disabilities, and Substance Abuse Services renewal premiums, which came in lower than budgeted. Risk Manager Allen discussed the Cape Fear Public Utility Authority’s renewal premiums for 2010-2011 on page 1 of the CFPUA section, which shows the total premium amount for all lines of coverage as $602,138. The premium amount is below budget; however, the Specific and Excess Workers’ Compensation and Employer’s Liability policy through Midwest required a higher retention of $400,000. Risk Manager Allen also mentioned she is putting together a contract class for the Cape Fear Public Utility Authority and the City of Wilmington in July. Risk Manager Allen discussed the City of Wilmington’s premium projection on page 1 of the City section of the meeting materials. The policies renewing in July are the Specific and Excess Workers’ Compensation and Employer’s Liability and Volunteer Accident policies. Unfortunately, the City’s worker’s compensation loss history is limiting the available markets willing to write the coverage. Midwest did offer a quote, but increased the retentions. The Committee discussed the need for loss control and possible changing third-party-administrators. Additionally, the Risk Management Office is pursuing quotes for short-term policies, so the City’s policies will coincide with their fiscal year of 7/1. The City of Wilmington requested Risk Management to pursue changing their renewal date from 10/1 to 7/1, which Risk Manager Allen asked if there were any other items of business to be brought before the Committee. There were none and the meeting was adjourned.