07-05-2011 - Payment of FY 2011/12 Excess Liability Insurance C - Item 8 (2).doc
TO: Andrew G. Pasmant, City Manager
and City Council
FROM: Erin Patricia Hoppe, Director
Risk Management
SUBJECT: PAYMENT OF FY 2011/12 EXCESS LIABILITY INSURANCE COVERAGE AND APPROVAL OF CONTINUED MEMBERSHIP WITH THE BIG INDEPENDENT CITIES EXCESS POOL (BICEP)
RECOMMENDATION:
Authorize payment of the City’s 2011/12 excess liability insurance coverage with the Big Independent Cities Excess Pool (BICEP) in the amount of $378,771 to be paid from account 361.15.1530.6411.
Approve West Covina’s continued membership in BICEP for an additional three years beginning July 1, 2011.
DISCUSSION:
On July 1, 2003, the West Covina City Council unanimously approved membership in the Big Independent Cities Excess Pool (BICEP) Joint Powers Insurance Authority for West Covina’s excess
liability insurance coverage needs. BICEP provides insurance coverage for member public agencies to shield them from financial debt due to large liability claims, judgments, and settlements.
Insurance stability is provided with BICEP through a rolling three-year commitment whereby each member entity annually renews its commitment for the following three years. Currently,
the public entities sharing in this program are Santa Ana, Huntington Beach, San Bernardino, Oxnard, and West Covina.
The FY 2011/12 quote provides the following layers of coverage:
$0 to $1,000,000 - City of West Covina’s Self-Insured Retention (SIR)
$1,000,000 to $2,000,000 - BICEP Risk Sharing Layer (pooled among all member cities)
$2,000,000 to $12,000,000 - BICEP Memorandum of Coverage reinsured by Wesco Insurance Company (Am Trust Financial Group)
$12,000,000 to $27,000,000 - Starr Indemnity and Liability Company
Reinsurer Wesco Insurance Company is rated A, Excellent; Financial Size Category IX; $250,000,000 to $500,000,000 and Reinsurer Starr Indemnity and Liability Company is rated A, Excellent;
Financial Size Category X; $500,000,000 to $750,000,000 by Best’s Guide.
FISCAL IMPACT:
West Covina’s FY 2010/11 excess liability insurance premium was $350,376. For FY 2011/12 coverage, BICEP has provided a premium quote of $378,771 which represents a $28,395 increase
in premium from FY 2010/11. Funds have been included in the 2011-12 budget for payment of this year’s premium.
____________________________
Erin Patricia Hoppe
Risk Manager/
Director of Risk Management