HomeMy WebLinkAboutCC Res 4030 1991-04-08
RESOLUTION NO. ~
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RESOLUTION OF THE CTIY COUNCIL
OF THE CTIY OF SEAL BEACH, CALIFORNIA
APPROVING REVISED GOVERNING DOCUMENTS FOR" THE
ORANGE COUNIY CITIES RISK MANAGEMENT AUTHORfIY
WHEREAS, the Orange County Cities Risk Management Authority was created in
1978 as a joint powers agency to administer a program of risk management, self-
insurance and risk sharing; and
WHEREAS, said risk management program continues to offer significant
advantages to the City in terms of cost, liability protection and services; and
WHEREAS, the efficient administration of OCCRMA requires amendments to the
Joint Powers Agreement, By-laws and Plan Document governing the operations of
OCCRMA; and
WHEREAS, these revised documents shall be effective immediately upon the
approval by the governing bodies of two-thirds of the members of OCCRMA and may
thereafter be amended in accordance with their terms;
I Jt~~:'Fo'";, BE rr BE;VEO by tho Ci'Y Council of ... Ci'Y of
1. That the City of JERG ~""'W hereby approves:
(a) That amended Joint Powers Agreement entitled "Joint Powers
Agreement for the Orange County Cities Risk Management
Authority" which is attached hereto as Exhibit "A"; and
(b) The revised By-laws for OCCRMA entitled "By-laws for the Orange
County Cities Risk Management Authority" which is attached hereto
as Exhibit "B"; and
(c) The revised Plan Document governing the general liability program
of OCCRMA entitled "General Liability Insurance Plan Document
for the Orange County Cities Risk Management Authority", which
is attached hereto as Exhibit "C".
2. That the City Manager is hereby authorized to execute the Joint Powers
Agreement on behalf of the City, forthwith.
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3. That the Clerk is directed to certify a copy of this Resolution and to
forward the same, together with a copy of the executed Joint Powers Agreement, to
OCCRMA.
Resolution Number ~~
PASSED, APPROVED AND ADOPTED this ~6. day of ~ '/.-
1991 by the following vote:
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STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF SEAL BEACH
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I, Joanne M. Yeo, City Clerk of Seal Beach, California, do hereby
certify that the ~9i"11qoing resolution is the original copy of
Resolution Number ~ on file in the office of the city Clerk,
pas , approved, and adopted by the City Council of ~lf;tCity of
S 1 eac at a regular meeting thereof held on the - day of
.
, 1991.
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EXHIBIT "A"
Resolution Number
4.10
JOINT POWERS AGREEMENT
FOR
ORANGE COUNTY CmES RISK MANAGEMENT AUTHORl1Y
Section 1.10
JOINT EXERCISE OF POWERS
This Agreement is entered into pursuant to the provisions of Chapter 5
(beginning with Section 6500) of Division 7 of Title 1 of the Government Code
authorizing specified local public entities to exercise jointly the power to provide Risk
Management, including insurance, pursuant to the provisions of Chapter 3 (beginning
with Section 989) of Part 6 of Division 3.6 of Title 1 of the Government Code.
WITNESSETH:
WHEREAS, the public interest requires and it is to the mutual interest of the
parties hereto to join together to establish and operate a cooperative program of risk
management; and
WHEREAS, the operation of such a cooperative program is of such magnitude
that it is necessary for the parties to this Agreement to join together to accomplish
the purposes herein. after set forth; and
WHEREAS, each of the local public entities which is a party to this
Agreement has the power to establish and operate a program of risk management;
and
WHEREAS, Title I, Division 7, Chapter 5 of the California Government Code
authorizes the joint exercise by two or more local public entities of any power which
is common to each of them; and
WHEREAS, each of the parties to the Agreement desires to join together with
the other parties for the purpose of minimizing risk through any. all or any
combination of the following: pooling of risk, joint funding of insurance or risk
reserves in any legal manner, formation or rental of a captive insurer, establishing
certain self-insured reserves against losses and jointly purchasing insurance, excess
insurance, re-insurance and administrative services in connection with a cooperative
program of risk management;
NOW, THEREFORE, for and in consideration of the mutual advantages to be
derived therefrom and in consideration of the execution of this Agreement by other
local public entities, each of the parties hereto does agree as follows:
ARTICLE 1.
DEFINITIONS
The following definitions shall apply to the provisions of this Agreement and
its By-Laws:
(a) "Authority" - shall mean the Orange County Cities Risk Management
Authority created by this Agreement.
(b) "Risk Management Board" or "Board" shall mean the governing body
of the Authority.
(c) "Claims management" shall mean the process of identifying,
controlling and resolving demands by individuals, public entities or private entities to
recover losses from an insured, otherwise indemnified, or self-insured entity.
Disposing of such demands for payment requires skills in insurance, law,
adjusting/investigation, loss contrel engineering and general business. Claims
management is the function of supervising legal, adjusting, investigation and
engineering services to resolve such demands.
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(d) "Local Public Entity'; shall mean city, county, public authority and
such other governmental entities as the Authority may determine.
(e) Executive Committee" or "Committee" shall mean the Management
Committee of the Board of Directors of the Authority.
(f) "Participation" or "Participating" shall mean a member agency's action
or state of taking part in the programs of the Authority by doing all, any, or any
combination of the following through the Authority with respect to one or more risk
areas:
(1) purchase of risk management administrative services;
(2) purchase of insurance or re-insurance;
(3) purchase of claims administration services;
(4) contribute to designated reserve, operating and other funds
or costs as required under the Authority's program;
(5) payor make provisions for payment of assessments, defense
costs, claim and judgment costs and other related costs as
required by this Agreement or Authority's By-Laws;
(6) participate by the payment of premiums and entering into
requisite agreements in any pooling of losses, captive
insurance program or other self-insurance program
established and administered by the Authority.
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(g) "Rating Structure" shall mean the means by which premiums,
assessments, contributions to a fund, or allocated expenses are established for a risk
area or insurance program on the basis of conditions which affect the probability of
loss.
(h) "Risk Area" shall mean an area of exposure to pure risk of financial
loss. As used herein, this term refers to one of the following fields of exposure:
worker's compensation, public liability, accident and health, unemployment I
compensation, property damage and such other areas as the Board shall agree upon.
(i) "Risk Management" shall mean the process of identifying, evaluating,
reducing, transferring, and eliminating risks. Risk management includes various
methods of funding claims payments. Risk management includes elements of
insurance, law, administration, technology and general business utilized to effectively
manage risks.
G) "Risk Manager" shall mean the person or entity appointed by the
Board and given responsibility for the management, administration and operation of
the cooperative programs of risk management of the Authority.
(k) "Eligible Member" shall mean a representative eligible to vote on a
matter coming before the Board in a given area of risk, due to the representative's
public entity participation in that area of risk. In the case of new areas of risk that
OCCRMA is considering, "Eligible members" shall be all members who reasonably
expect to participate in that area of risk.
ARTICLE 2.
SEPARATE ENTIIY
There is hereby created a separate public entity, the full legal name of which I
shall be "Orange County Cities Risk Management Authority", and may be referred to
herein as "OCCRMA" or the "Authority." The Authority is a public entity separate
from the parties to this Agreement. The debts, liabilities and obligations of the
Authority shall not be the debts, liabilities or obligations of the parties to the
Agreement.
ARTICLE 3.
SYSTEM ESTABUSHED
A risk management system consisting of the parties to this Agreement is
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hereby established. This system represents a cooperative program of risk
management which may encompass, but is not limited to, the following risk areas:
Public liability, worker's compensation, accident and health, property damage and
unemployment compensation and such other areas as the Board shall agree upon.
Each party to this Agreement agrees to comply with and be bound by the provisions
of the By-Laws as the same may be amended from time to time.
ARTICLE 4.
OCawA POWERS
(a) OCCRMA shall have the power and the duty to establish and operate
a 'program of risk management and provide for its execution either directly by
OCCRMA or by contract.
(b) OCCRMA is authorized to make and enter into contracts; to employ
agents and employees; to acquire, construct, manage, maintain or operate any
building, works or improvements; to acquire, hold or dispose of property, liabilities
or obligations; establish risk management related lines of credit, to incur
indebtedness, liabilities or obligations, to sue and be sued in its own name, and to
exercise all powers necessary and proper to cany out the tenns and provisions of this
agreement, or otherwise authorized by law. The foregoing powers include, but are
not limited to, those relative to contracting for excess insurance or re-insurance, risk
pooling, including formation, of an owned or use of a non-owned captive insurance
company, funding of self-insurance in any legal manner, claims administration
services and consulting services.
(c) The day-to-day operations of OCCRMA shall be subject to, and shall
be governed by the By-Laws adopted by the Board.
(d) The powers exercised by the Authority shall be subject to the
restrictions upon the manner of exercising such powers of a general law city.
ARTICLE 5.
MEMBERS: GOVERNING BOARD
(a) Each local Public Entity which is a party to this Agreement is a
"member agency" of OCCRMA and is entitled to the rights and privileges and is
subject to the obligations of members, all as provided for in this Agreement and the
By-Laws.
(b) After formation of OCCRMA by the initial membership group, new
members may be accepted upon application to OCCRMA and upon acceptance by the
Board by two-thirds vote, and subject to acceptance by the prospective member of
the financial arrangements and fund contributions specified by the then current
members.
(c) Each local Public Entity shall be entitled to one voting representative
on the governing body of the Authority which shall be known as the "Risk
Management Board" and may be referred to herein as the "Board."
(d) Each member's representative shall be designated by appointment by the
member agency's city council or other governing body. Each member also may, in
the same manner, appoint one alternate who mav attend meetin~ and vote in the
event of absence of the representative. Each representative or alternate shall be a
public agency employee. '
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ARTICLE 6.
POWERS OF BOARD
The Board shall have the following powers and functions:
(a) To elect from its members, as provided herein, an Executive Committee.
(b) To establish such other committees as it may, from time to time, deem
necessary to cany out its purposes, including, but not limited to underwriting and
claims review committees.
(c) To review all acts of the Executive Committee and to modify or ovenide I
any decision or action of the Executive Committee.
(d) The power to exercise all of the powers of OCCRMA, including all
business assigned to the Executive Committee.
(e) To elect a president and vice-president, and establish and appoint such
other officers, including an auditor, clerk and treasurer, as may be necessary or
desirable to cany out the purposes of this Agreement, and to provide therefor in the
By-Laws.
(0 To perform such other duties and functions as are provided for in this
Agreement.
ARTICLE 7.
MEETINGS OF TIlE BOARD
The Board shall establish a time and place to hold regular meetings not less
often than quarterly. Meetings shall be conducted pursuant to the most current
edition of Roberts Rules of Order or such other procedural rules as the Board shall
adopt. '
ARTICLE 8.
QUORUM; VOTING
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(a) A quorum for the transaction of business by the Board shall consist of a
majority of the representatives, or their alternates, of members of OCCRMA eligible
to vote on the business at hand.
(b) All matters within the purview of the Board of Directors may be
decided by majority vote of a quorum of the board, except those matters which the
Agreement or By-Laws specify as requiring a two-thirds vote of the Board must be
decided by a vote of two.thirds of all members of the Board.
(c) Each representative on the Board may vote on each matter brought
before the Board for decision. Except, if the Board by majority vote designates a
particular matter as one which pertains only to a given risk area (e.g., workers'
compensation), or a specific insurance program (e.g., self insured pool), then only
the representatives of those members who are participating members with respect to
the given risk area or specific insurance program may vote upon the matter. This
limitation respecting who may vote on certain matters is not intended to prohibit any I
member from expressing its opinion as to how those qualified to vote should vote.
ARTICLE 9.
EXECUI1VE COMMlTI'EE
The Board may establish an Executive Committee of the Board of Directors
which shall consist of at least three members, as provided in the By-Laws. The
president of the Board shall be a member of the Executive Committee; the remainder
of the members may be selected as provided in the By-Laws. The Executive
Committee shall exercise general supervisory and policy control over the Risk
Manager, and may exercise any and all powers delegated by the Board, as provided
in the By-Laws.
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ARTICLE 10. ocawA FUNDS
The Treasurer of the Authority shall be the depositary of the funds of
OCCRMA. The Treasurer's selection, responsibilities, compensation and related
matters shall be governed by the By-Laws. The auditor shall be the disbursing officer
of OCCRMA and shall draw warrants against the funds of OCCRMA in the treasury
when demands are presented and authorized as designated in the By-Laws.
I ARTICLE 11. TERM OF AGREEMENT
This Agreement shall continue in effect until it is rescinded by mutual
consent of the parties or terriUnated by the written consent of two-thirds of all
member agencies; provided that'this agreement and OCCRMA shall continue to exist
, for th~ purpose of disposing of all claims, distribution of assets and all other
functions necessary to wUld up the affairs of OCCRMA. If established, the Executive
Committee shall be vested with all powers of OCCRMA for the purpose of winding
up and dissolving the business affairs of OCCRMA as may be provided in the
By-Laws.
ARTICLE 12. MEMBERSHIP TERM; wrnIDRAWAL; EXPUlSION
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(a) A party to this Agreement shall remain a member agency for two
years; thereafter the member agency may withdraw by:
(1) Giving written notice to the Board or its designee, on or
before the next succeeding March I, of the intent to
withdraw as of 12:01 a.m. on the next July I, and
(2) Fully performing its obligations as a member agency.
(b) On the July 1 specified in the notice pursuant to subdivision (a) (1)
above. and. upon fully perfonning its obligations as a member agency, whichever is
later, the member agency shall cease to be a party to this Agreement.
(c) The Board shall have the right to cancel, for good cause, any city's
participation in the Authority, or any program thereof, upon a 2/3 vote of the entire
Board of Directors; provided that a reasonable time shall be afforded, in the
discretion of the Board of Directors, for the member to seek coverage elsewhere.
ARTICLE 13. DISPOsmON OF OCCRMA PROPERlY AND FUNDS
(a) If a party withdraws as a member of OCCRMA, any property interest
of that member agency remaining in the funds of OCCRMA following a discharge of
all obligations attributable to that party, its officers and employees, shall be disposed
of as provided in the By-Laws. A member agency of the Authority may withdraw as
a member in accordance with the adopted By-Laws, provided that no withdrawing
agency shall be entitled to payment or return of any earned premium, except as
provided in paragraph (c). The withdrawal or cancellation of any city shall not
tenninate its responsibility to contribute its share of premium or funds to any
insurance program of OCCRMA, until all claims or other unpaid liabilities covering
the period the city was a participant have been finally resolved and. a determination
of the final amount of payments due by the city or credits for such peripd has been
made by the Authority.
(b) In the event of the dissolution of OCCRMA or the complete rescission
or final termination of the Joint Powers Agreement by all of the then parties thereto,
any property of OCCRMA remaining after all claims and obligations have been paid,
or provision made for the payment of the same, shall be returned to the then current
members of OCCRMA in proportion to their current deposits.
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,(c) If this Agreement is finally tenninated as to all parties who are then
members, any money or assets in possession of OCCRMA after the payment of all
liabilities, costs, expenses and charges incurred pursuant to this Agreement shall be
returned to the parties in proportion to their contributions to OCCRMA detennined as
of the date of termination. '
ARna.E l4. ENFORCEMENT
OCCRMA shall have the authority to enforce this Agreement. Any dispute
regarding the intezpretation of this Agreement or the Bylaws adopted, hereunder, I
between or among OCCRMA and any Member agency or agencies shall be submitted
to final and binding arbitration in accordance with the procedures established in the
California Code of Civil Procedure and referred to the Judicial Arbitration and
Mediation Service or other arbiter as may be agreed by the parties; except that the
Authority or affected member may sue for the collection or return of assessments or
premiums. As to such a claim for the collection or return of funds, the prevailing
party shall be entitled to reasonable attorney's fees.
ARna.E 15. INVAllDl1Y
Should any portion, tenn, condition or provision of this Agreement be
determined by a court of competent jurisdiction to be illegal and in conflict with any
law of the State of California or be otherwise rendered unenforceable or ineffectual,
the validity of the remaining portions, tenns, conditions and provisions shall not be
affected thereby.
ARna.E 16. AMENDMENTS
No amendments to this Agreement shall be effective unless accomplished by
written agreement executed by the governing bodies of at least two-thirds of the . I
parties to this Agreement. Reasonable prior notice of any Board meeting in which
amendments are to be voted upon, must be given to each member in writing. Such
notice must include mention of the nature of the amendments to be voted upon.
ARna.E 17. BYLAWS AND PLAN DOCUMENT
(a) By a two-thirds vote of the entire Board, the Board shall develop and
adopt By-Laws and a Plan Document to govern the day-to-day operations of
OCCRMA and may amend such documents from time to time.
(b) Notwithstanding any provision in the By-Laws or Plan Document adopted
by OCCRMA and its member agencies, in the event of any conflict between this
Agreement and the By-Laws or Plan Document, this Agreement shall prevail; in the
event of any conflict between the By-Laws and the Plan Document, the By-Laws shall
prevail.
ARna.E 18. PROHIBmON AGAINST ASSIGNMENT
No member agency may assign any right, claim or interest it may have under
this Agreement, and no creditor, assignee or third party beneficiary of any member
shall have any right, claim or title to any part, share, interest, fund, premium or I
asset of the Authority.
ARna.E 19. TORT LIABIUlY
Section 895.2 of the Government Code imposes certain tort liability jointly
upon public entities solely by reason of such entities being parties to an agreement as
defined in Section 895 of said Code. Therefore, the parties hereto, as between
themselves pursuant to the authorization contained in Sections 895.4 and 895.6 of
the Government Code, each assumes the full liability imposed upon it or any of its
officers, agents, or employees by law for injury caused by a negligent or wrongful act
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or omission occurring in the performance of the Agreement, to the same extent that
such liability would be imposed in the absence of Section 895.2 of said Code. To
achieve this purpose, each party indemnifies and holds hannless the other party for
any loss, cost or expense that may be imposed upon such other party solely by virtue
of Section 895.2 of the Government Code.
ARTICLE 20. AGREEMENT COMPLETE
The foregoing constitutes the full and complete Agreement of the parties.
There are no oral understandings or agreements not set forth in writing herein.
ARTICLE 21. DATE AGREEMENT EFFECTIVE
This Agreement shall become effective immediately after it has been
approved as an amendment to the prior joint powers agreement establishing
OCCRMA in accordance with its terms.
Executed by the undersigned local public entities upon the respective dates
set forth after the signatures of their duly authorized officers.
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Resolution Number
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EXHIBIT "B"
BY-LAWS
OF TIm
ORANGE COUNlY CITIES RISK MANAGEMENT AUTHORITY
PREAMBLE
The Orange County Cities Risk Management Authority (hereinafter referred to as
OCCRMA) is established for the purpose of operating and maintaining a cooperative
program of insurance, self-insurance and risk management and to provide a forum for the I
discussion, study, development and implementation of procedures of mutual benefit in risk
management programs.
Sec 1.1 PURPOSES
(a) The purposes of OCCRMA are:
(1) To provide a self-insurance and risk management program and system
which will achieve the following objectives for the benefit of OCCRMA's member agencies
in all risk areas handled by OCCRMA:
(i) Reduced costs of insurance coverage through effective loss control practices,
pooling of risk, and combined purchasing power;
(ll) Reduced costs of claims administration services through central management,
volume and combined purchasing power;
(ill) Greater stability of insurance markets through size of combined membership,
longer duration of insurance agreements and effective loss control practices;
(iv) Reduced amount and frequency of losses of member agencies;
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(v) Improved control of sources of risk through the application of risk
management - loss control techniques;
(vi) Improved recovery from responsible third parties;
(vii) Funding of adequate reserves by members to ease the impact of heavy
losses; and
(viii) Monitor local, state and federal legislative and agency risk management
activities with the intent of advocating OCCRMA's position through coordination with
appropriate representatives.
(2) To provide a self. insurance and risk management program and
system, including any, all, or any combination of the following: payment of claims and
benefits as authorized by OCCRMA's member agencies; administration of one or more
programs wherein member agencies subscribe to a funding plan designed to relieve the
impact of heavy losses; administration of a self.insurance pool to be funded in any legal
manner, including, but not limited to, premiums, assessments or the issuance of
certificates of participation; joint purchase of insurance, reinsurance, or excess insurance, I
subject to any legal limitations; formation of an owned or use of a non-owned onshore
or offshore captive insurance company to provide insurance and acquire reinsurance;
joint purchase of administrative and other services including risk management, consulting,
brokering, claims administration, claims adjusting, loss prevention, data processing, legal
and related services.
(3) To acquire, hold and dispose of property, real and personal, necessary
or desirable for the purpose of providing the members of OCCRMA with a complete
self-insurance and risk management program, including but not limited to the acquisition
of necessary facilities and equipment, the employment of personnel, and the operation
and maintenan~e of a system of risk management.
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Sec. 2.1
RISK MANAGEMENT BOARD
(a) The governing body of the Authority shall be the "Risk Management Board"
and may be referred to herein as the "Board."
(b) Voting members of the Board shall consist of one representative from each
participating member agency. Each member's representative shall be so designated by
appoinnnent by the member agency's governing board. Each member's governing board
also may appoint one alternate who may attend meetings and vote in the event of
absence of the representative. Each representative or alternate must be a public agency
staff member.
(c) The Risk Management Board shall meet at least quarterly to review all
operations of OCCRMA conducted pursuant to the OCCRMA Joint Exercise of Powers
Agreement and these By-Laws. The Board shall provide policy direction for the Executive
Committee and the Risk Manager. Other functions of the Board shall include, but not
be limited to, final approval of:
(1) All matters with respect to which it is mandatory that the Executive
Committee make recommendations the Board, and
(2) The following matters not covered by Paragraph (1) above:
(i) Selection and employment of a Risk Manager;
(ii) Admission of new Members;
(ill) Expulsion of present Members;
(iv) An operating budget for OCCRMA, to be approved in advance of the
commencement of each fiscal year;
(v) Arrangements, if any be made, with outside agencies for establishment of
risk management related lines of credit;
(vi) Selection of claims administrators;
(vii) Selection of broker;
and
(viii) Selection of insurance policies after considering advice of the Risk manager;
(ix) Detennine, by majority vote, reductions in participation in SeMces or costs
of claims administration or risk management due to special circumstances.
Sec.2.110 MEETINGS OF THE BOARD
The Board shall establish a time and place to hold regular meetings not less often
than quarterly. Meetings shall be conducted pursuant to the most current edition of
Roberts Rules of Order or such other procedural rules as the Board shall adopt.
Sec.2.120 BOARD AND RISK MANAGER
(a) The Board shall employ or contract for the services of a Risk Manager to
administer and operate OCCRMA's programs of risk management under the direction and
supervision of the Board and Executive Committee. The Risk Manager may, but need
not be, a consultant, a corporation, or an employee of a member of OCCRMA.
(b) Compensation, tennination and other employment matters respecting the
Risk Manager shall be governed by the By-Laws to the extent covered therein. OCCRMA
may, but is not required to, enter into a written contract of employment with the Risk
Manager.
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Sec. 3.1 EXECUTIVE COMMITIEE
(a) An Executive Committee is hereby established for OCCRMA.
(b) The Executive Committee shall consist of the President, Vice.President,
Treasurer, Clerk, and Chairpersons of the Claims and Underwriting Committees.
Each person on the Executive Committee shall be entitled to one vote.
(c) The Executive Committee shall be responsible for the administration and I
operation of the risk management programs of OCCRMA subject to the policy control and
direction of the Board.
(d) The Executive Committee shall implement general policy and monitor
operations of the Treasurer, Auditor, and Risk Manager.
(e) The Executive Committee shall have such other powers and functions as
may be delegated to it, from time to time, by the Board.
(f) The President of the Authority, or the Vice President in the President's
absence, shall serve as the Chairperson of the Executive Committee.
Sec. 3.120 RESPONSIBILITIES: DELEGABILI1Y
(a) The following Executive Committee functions may not be delegated:
(1) Implementing policy and monitoring activities of the Treasurer,
Auditor, and Risk Manager.
(2) Maintaining an awareness of major risk management field I
developments which may affect OCCRMA handled California public entity risks.
(3) Adopting a set of procedural rules for Committee meetings.
(4) Perfonning those advisory responsibilities set forth in Section 3.130
of these OCCRMA By-Laws.
functions.
(5) Retaining overall supervisory responsibility respecting delegated
(b) The Executive Committee shall perfonn, delegate or contract to have
performed the following functions:
(1) Establish criteria for selection of a Risk Manager. Interview Candidates.
Make recommendations to the Board respecting employment.
(2) Establish criteria for selection of insurance brokers or companies,
underwriting and actuarial consultants, legal counsel and other consultants, as needed.
(3) Establish criteria for selection of cl. administration and claims adjusting I
services. Interview candidates. Make selection recommendations to the Board. Selection
criteria shall include a requirement that claims persons show knowledge and
understanding of the laws regarding claims against public entities.
Sec.3.130 RESPONSIBIUTIES: ADVISORY
(a) The Executive Committee shall make recommendations to the Board
respecting the following matters which must be approved by the Board before becoming
effective:
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(1) Recommend to the Board risk management programs, claims
administration services, adjusting services, loss prevention services and other risk
management services which can help the Authority cany out its risk management
objectives and its obligations to member agencies.
costs.
(2) Recommend to the Board each member agency's share of operating
(3) Recommend to the Board appropriate insurance broker(s);
(4) Recommend to the Board such taxes and assessments as may be
levied by each member agency pursuant to paragraph (i) of Sec. 6.110.
(5) Recommend authorizing payment of proper charges for costs of
administering this Agreement.
(6) Recommend whether to approve payment requests from member
agencies when the requests are in excess of the Auditor's authorization.
(7) Recommend a Conflict of Interest Code for adoption by the Board,
Committee, Officers, and Risk Manager.
Sec.3.140 MEETINGS OF THE COMMIITEE
The Executive Committee may establish a time and place to hold regular meetings.
Meetings of the Executive Committee shall be called, as needed, by the President or by
a majority of its members. The meetings of the Committee shall be held, noticed and
conducted in the same manner as the meetings of the Risk Management Board.
Sec. 3.150 REPORTS
The Committee shall report to the Board not less than quarterly in order to advise
the Board of its decisions and activities concerning implementation and operation of the
Authority's cooperative program and system of self-insurance and risk management.
Sec.3.160 APPEAL TO BOARD
Any decisions to the Executive Committee may be appealed to the Board by any
member agency subject to such resnictions as the Board may adopt.
Sec. 3.2
OTHER COMMl1TEES
The Board shall establish such committees as it shall require to assist it in
conducting the business of OCCRMA. The following committees shall be appointed by
the President and approved by the Board:
(a) Underwritin~ Committee. The Underwriting Committee shall consist of five
(5) members of the Board. The Underwriting Committee shall be responsible for review
of coverage issues concerning claims reported to OCCRMA pursuant to the pooled general
liability and automobile coverages offered through OCCRMA. In addition, the Committee
shall: review and recommend coverage changes; review and make recommendations on
new applications; review and recommend reinsurance levels; and perform other duties
prescribed by the Plan Document. The Underwriting Committee shall recommend
assessments, if necessaIY, to the Board. Imposition of an assessment may be approved
by a simple majority of the Board, however, a 2/3 vote of a quorum of the Board shall
be required to modify such a recommendation of the Underwriting Committee.
(b) Claims Review Committee. The Claims Review Committee shall consist of
five (5) members of the Board. The Claims Review Committee shall be charged with the
responsibility for review of claims reported to OCCRMA pursuant to the pooled general
liability and automobile coverages offered through OCCRMA. As to such claims, the
Resolution Number ~~
Committee shall: review and recommend reserve levels; review and recommend claims
procedures; recommend, as necessary, legal defense finns; assist the Risk Manager and
Claims Administrator in planning and implementing loss control activities and perform
other duties as prescribed by the Plan Document.
(c) Investment Committee. The Investment Committee shall consist of not less
than three (3) members of the Board appointed by the President from among the
representatives whose cities are participants in the pooled genera1liability program. The
committee shall be responsible for recommending investment policies to the Board and
the Treasurer of OCCRMA.
Except as expressly noted, the Investment, Claims and Underwriting Committees
will be advisory committees only and they shall report their findings and
recommendations to the OCCRMA Board. The Claims Review Committee and
Underwriting Committee shall be assisted in their deliberations by the Risk Manager,
OCCRMA brokers, underwriter, claims administrator and other consultants, as appropriate.
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Sec. 4.1 OFFICERS
(a) The officers of the Authority shall be:
(1) President
(2) Vice President
(3) Clerk, who may also serve as Treasurer, and his or her duly
appointed deputies, if any
(4) Treasurer and Auditor, and his or her duly appointed deputies, if any
(b) The Board shall elect the President and Vice President of the Authority for I
such terms and in such manner as the Board shall provide.
(c) The Board shall designate the Clerk, Treasurer and Auditor in the manner
provided for in these By-Laws.
(d) Each Officer shall hold his or her position until relieved of functions as an
Officer by either:
(1) Expiration 9f his or her elected or term, or
appointed term, or
(2) Removal by a two-thirds vote of the Risk Management Board.
Sec. 4.110 PRESIDENT
(a) The President shall be elected by the Board from its membership.
(b) The duties of the President are to:
(1) Preside at and conduct meetings of the Board.
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(2) Preside at and conduct meetings of the Executive Committee.
(3) Execute documents on behalf of the Authority.
(4) Exercise such spending authority as may be authorized by a
, resolution approved by the Board.
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Res~lution Number
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Sec.4.120 VICE PRESIDENT
(a) The Vice President shall be elected by the Board from its membership.
(b) The Vice President shall exercise the duties of the president in the absence
of the President.
Sec.4.130 CLERK,
(a) The Clerk shall be elected by the Board from its membership by majority
vote or by resolution.
(b) The duties of the Clerk are to:
(1) Attend the meetings of the Board and of the Executive Committee,
and make minutes thereof.
(2) Keep all official records of the Authority not required to be kept by
the Treasurer.
(3) File such notices and statements as are required by Sections 6503.5
and 53051 of the Government Code.
Brown Act.
(4) Cause notices of meetings to be given as required by the Ralph M.
(c) In the absence of the Clerk, the President may appoint a Clerk pro tempore
from among the members of the Board to carry out the Clerk's duties at any meeting.
In addition, the Clerk shall recommend, and the Board may appoint such assistant or
deputy clerks to act on behalf of the Clerk, as the Clerk deems necessary or convenient.
Sec.4.14O TREASURER
(a) The Treasurer shall be elected by the Board from its membership by
majority vote or resolution.
(b) The duties of the Treasurer are to:
(1) Perform the duties of the Treasurer prescribed in Section 6505.5 of
the Government Code.
(2) Attend meetings of the Executive Committee as a member thereof.
(3) To sign warrants or such other negotiable instruments as may be
used for proper disbursement of moneys from any OCCRMA fund.
(c) The Treasurer shall recommend, and the Board may appoint such assistant
or deputy treasurers to act on behalf of the Treasurer, as the Treasurer deems necessary
or convenient. In addition, the Board may set minimum qualifications which any such
assistant or deputy may be required to meet.
Sec. 4.150 AUDITOR
(a) The Treasurer shall serve as Auditor.
(b) The duties of the Auditor are to:
(1) Perform the duties of the Auditor prescribed in Section 6505 and
6505.5 of the Government Code.
Resolution Number 1430
(2) Issue warrants for the payment of claims of member agencies after
obtaining the member's authorization.
(c) Any assistant or deputy of the Treasurer is, ex officio, a deputy Auditor of
the Authority.
Sec. 5.1
RISK MANAGER
(a) There shall be an OCCRMA Risk Manager appointed by the Board. The
Risk Manager shall be responsible for the day to day administration, management and I
operation of OCCRMA's programs of risk management and he or she shall be subject to
the direction and control of the Board and Executive Committee. The Risk Manager may,
but need not be, a consultant, a corporation or an employee of a member of OCCRMA.
Sec. 5.110 RESPONSIBILITrES
(a) The responsibilities of the Risk Manager shall include, but not be limited
to:,
(1) Monitoring status of: OCCRMA's programs and operations, member
losses, administrative and operational costs, service companies' performance, brokers'
performance.
(2) Providing appropriate risk management counseling and infonnation
to member agencies.
(3) Writing quarterly reports to each member agency detailing loss
experience, desirable correction actions and other information pertinent to risk
management programs being handled by OCCRMA.
(4) Preparing an annual budget.
(5) Advising State Legislators on OCCRMA needs. Advising member
cities on legislative developments.
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(6)
changed programs.
Advising member cities on the risk impact of proposed new or
(7)
selecting brokers,
services.
Assisting the Executive Committee and Risk Management Board in
insurance companies, insurance policies, and claims administration
(8)
Performing or contracting for, actuarial studies to detennine cost
allocations.
(9) Advising member cities on selection of claims attorneys.
(10) Developing criteria to assist cities in preparation of risk management
plans consistent with the Authority's master risk management plan.
(11) Conducting risk management audits to review the participation of
each member agency in one or more of the Authority's programs. The audit team shall I
include the Risk Manager, the Board representative from the entity being audited and a
Board representative from at least one other member agency. The Risk Manager will
submit an audit report to the ltQvemiruz bodv of the audited member al{enCY,
(l2) , Developing effective risk management and loss control procedures and
advising member entities on how to implement them.
(13) Selecting and supervising OCCRMA employees as authorized by the
Board or Executive Committee.
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Res'olitt:ion Number ~
The Risk Manager's responsibility to perfonn the above services with respect to any
member agency is limited to those risk areas or specific insurance programs in which the
member agency is a participating member.
Sec.5.120 COMPENSATION. EMPLOYMENT
(a) The Risk Manager shall be compensated for his services to the OCCRMA
in such amounts and manner as may be fixed from time to time by the Board.
(b) Details respecting compensation, termination and other employment related
matters pertaining to the Risk Manager shall be governed by the By-Laws and such terms
and conditions as the Board shall set.
Sec. 6.1
MEMBER AGENCIES
(a) Any party to the Agreement is a member agency. Any local public entity
may become a party to the OCCRMA Agreement by agreeing to be bound by the
Agreement and these By-Laws and by complying with all of the following requirements:
(1) Submit application for membership and obtain Board approval.
(2) Execute the original of the OCCRMA Joint Exercise of Powers
Agreement as amended from time to time, and
(3) Become a participating member with respect to at least one risk area
or insurance program handled by OCCRMA, and
(4) Pay a fee to OCCRMA as determined by the Board for initial risk
program analysis and structuring consulting services.
(b) Non-city local public entities may be admitted as participating member
agencies upon terms and conditions, if any, approved by the Board.
(c) Additional requirements, as approved by the Board, may be imposed for
participation in specific insurance programs or risk areas.
Sec.6.110 DUTIES OF THE MEMBER AGENCIES
Each member agency shall:
(a) Appoint a member to the Risk Management Board and an alternate.
(b) Establish a Risk Management Advisory Committee to act as a liaison with
the OCCRMA Risk Manager and to advise him or her of any proposed or altered program
which may have significant risk management ramifications.
(c) Maintain an active Safety Committee.
(d) Provide necessary data to assist in obtaining reinsurance, excess insurance,
claims administration services quotes, or as otherwise required for participation in specific
insurance programs.
(e) Establish and maintain a risk management program approved by the
Executive Committee.
(f) Establish and maintain a prudent claims management program for the
member agency's self insured risks.
(g) Pay when due all premiums or assessments levied by the Board pursuant
to the OCCRMA Agreement, By-Laws, specific insurance plans, or Board policies adopted
in furtherance of the Agreement or By-Laws.
Resolution Number ~
(h) Enter into and maintain contracts of insurance or reinsurance as required
by the Board in risk areas or specific insurance programs in which the member agency
is participating.
(i) Pay from other funds or levy and collect taxes and assessments to pay
judgments pUISuant to Chapter 2 (beginning with Section 970) of Part 5 of Division 316
of Title 1 of the Government Code; pUISuant to Article 3 (beginning with Section 43720)
of Chapter 4 of Division 4 of Title 4; or pUISuant to Article 7 (beginning with
Section 50170) of Chapter 1 of Part 1 of Division 1 of Title 5 of the Government Code,
if necessaxy.
G)
By-Laws.
Comply with the letter and spirit of the OCCRMA Agreement and these
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Sec. 6.120 RIGHTS OF MEMBER AGENCIES
The rights of member agencies are to:
(a) ~ave the Board designate appropriate required contracts of insurance with
excess insurers or reinsurers to provide coverage above the level of risks retained by the
member agency or the Authority.
(b) Receive assistance from the Executive Committee and Risk Manager in
establishing and maintaining a risk management program compatible with the master risk
management program o~ the Authority.
(c) Appeal decisions of the Executive Committee to the Board, subject to such I
resmction as the Board may adopt by resolution or By-Laws.
(d) Withdraw from membership as provided herein.
(e) Amend the Joint Powers Agreement or dissolve the Authority by a
two-thirds vote of all the Member Agencies, and amend these Bylaws by 213 majority
vote of a quorum of the Board.
Sec.7.115 CLAIMS SEITLEMENT
Unless otherwise provided in an approved plan of insurance or risk-pooling
administered by the Authority, the detennination of whether a claim for general liability,
automobile liability, worker's compensation, or accident and health is to be allowed,
compromised, settled, or rejected shall be that of the party against whom the claim is
filed; provided that no party shall have the power to commit the funds of the Authority
to pay any claim without the consent of the Authority.
Sec. 7.120 DEPOSIT AND INVESTMENT OF AUTHORITY FUNDS
The Treasurer may deposit and invest Authority funds subject to the same 'I
requirements and resmctions that apply to deposit and investment of the funds of a
genera1law city.
Sec. 7.130 AUDIT
An annual audit of the financial affairs of OCCRMA shall be made by a certified
public accountant at the end of each fiscal year in accordance with generally accepted
auditing principles. A copy of the annual report shall be delivered to each member. The
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cost of the annual audit constitutes an administrative expense of OCCRMA and shall be
paid for in the same manner as other administrative expenses are paid.
Sec. 8.1
CLAIMS AGAINST THE AUTHORI1Y
(a) Defense of Claims. As to any claim or action against the Authority which
is based on or arises out of an occurrence involving an officer or employee of the
Authority and arises out of activities within the course and scope of his or her duties as
such, who is also an officer or employee of a member agency, such claim or action
against the Authority will be defended by the Authority, except as to those claims arising
while such officer or employee is traveling to or from a meeting of the Authority, it being
the intent of the Authority that the risks of such travel be borne by the member agency
in accordance with Article 19 of the OCCRMA Joint Powers Agreement. The Authority
may secure workers compensation, liability, or other appropriate policies for its own
activities.
. (b) Payment of Claims. Claims and judgments against the Authority as to
which the Authority has a duty to defend pursuant to Paragraph (a) shall be paid from,
or charged to, the appropriate coverages or self-insured funds the Authority has
established against such claims, judgments, or losses. Such amounts shall be paid from
the Authority's own coverage or self-insured funds.
(c) Costs of Defense. All costs of defense incurred pursuant to Paragraph (a)
shall be paid from such funds of the Authority as the Board shall designate, but shall not
be charged disproportionately to the account of the member agency of the officer or
employee.
Sec. 9.1
DISPUTES OR CLAIMS BE1WEEN MEMBERS
(a) Arbitration. Any differences, claims or matters in dispute arising between
or among members shall, if such differences arise out of these By-Laws, be submitted by
such members to arbitration in accordance with the provisions of the Joint Powers
Agreement. The decision of the arbitrator(s) may be entered as a judgment in any court
of the State of California or elsewhere.
(b) Authority Representation Conflicts. Any differences, claims or matters in
dispute arising between or among members shall, if such differences do not arise out of
the OCCRMA Agreement or By-Laws, be handled as follows:
(1) After being notified in writing that one member agency has filed a
formal claim against another in accordance with provisions of the California Government
Code, the Authority can no longer act on behalf of either member insofar as the case
giving rise to the claim is concerned if the claim involves a risk area or areas in which
each of the involved members is a participating member.
(2) Conversely, the Authority may continue to act on behalf of a
participating member, even after receipt of written notice of a formal claim filed by one
member agency against another, provided the claim only involves a risk area or areas in
which only one of the involved member agencies is participating.
(c) In any case falling within the ambit of (1) or (2) above, the Authority may,
in its discretioh, act on behalf of one or all involved members, provided that the
Authority first obtains the written consent of all such members.
Sec. 10.1
MEMBER WITHDRAWAL: OCCRMA DISSOLUTION
(a) A member agency of the Authority may withdraw as a member upon
complying with the Joint Powers Agreement and these By-Laws.
(b) In the event of the dissolution of OCCRMA or the complete rescission or
final tennination of the Joint Powers Agreement by all of the then parties tl\ereto, any
'Resolution Number ~~
propertY of OCCRMA remaining after all claims and obligations have been paid, or
provision made for the payment of the same, shall be returned to the then current
members of OCCRMA in proportion to their current deposits.
Sec. 11.1 EXPULSION OF MEMBERS
(a) A party to this Agreement may be excluded from membership when its
actions:
(1) Cause the member to not substantially comply with the tenns of the I
Joint Powers Agreement, or
(2) Cause the member to fail in substantially complying with a written
and acknowledged tenn or condition imposed on the member by a simple majority vote
of the Board;
(3) Cause an adverse effect on OCCRMA's relations with the insurance
market and the member fails to remedy the adverse effect within a reasonable time after
receiving written notice from the Board as to appropriate corrective action.
(b) The Board may, by a two-thirds (2/3) vote, tenninate and exclude the
offering member from any and all benefits of membership in OCCRMA.
Sec. 12.1
LEGAL REPRESENTATION
Legal counsel to advise on matters relating to the operation' of OCCRMA may be
recommended by the Executive Committee or Risk Manager and approved by the Board. I
OCCRMA shall have the right to pay such legal counsel a reasonable compensation for
said services under a contract.
Sec. 13.1
AMENDMENT OF BYLAWS AND PLAN DOCUMENT
By a two-thirds vote of the entire Board, the Board shall develop and adopt By-
Laws and a Plan Document to govern the day-to-day operations of OCCRMA and may
amend such documents from time to time.
Sec. 14.1
NOTICES
(a) Notice to the Authority shall be given by delivety of such notices to the
Clerk of the Authority.
(b) Notice to member agencies shall be given by delivery of such notice to the
clerk of each member agency.
Sec. 15.1
EFFECTIVE DATE
These By-Laws shall be effective immediately upon the effective date of the
Amended Joint Powers Agreement; subsequent amendments to these By-Laws shall be I
effective upon their adoption by the Board.
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Re~i'ii1\~ion Number d.atJ
EXHIBIT "c"
GENERAL UABIInY SELF-INSURANCE PROGRAM
PLAN DOCUMENT
FOR
ORANGE COUNIY CITIES RISK MANAGEMENT AUlHORITY
I. PURPOSE OF PLAN DOCUMENT
This document is intended to guide the day-to-day operations of the general
liability self-insurance program of OCCRMA. This Plan Document shall not:
1. Limit the authority of the board of directors of OCC~ except as
specUically agreed.
2. lnfringe on rights and authorities of individual member agencies except as
specifically agreed.
3. Modify in any way, the tenns and conditions of the agreement establishing
OCCRMA, or the Bylaws.
On September 1, 1986,. the Orange County Cities Risk Management Authority
(OCCRMA) established a new Self Insurance Program, covering municipal liability, for
its members. The pwpose of this document is to fonnally summarize general
understanding and guidelines as respects the administration of the self-insurance
programs of OCCRMA.
It is the recognized interest of all participants in this program that a method of
pooled self-insurance is a desirable alternative to the "standard" insurance markets
(coverage from same being unavailable or unacceptable) and that this program
represents such desirable alternative. By entering into this program, participants
recognize that the only source for payment of claims against the program may be the
pooled assets of member agencies. It is also recognized that this entails an exposure to
members above and beyond premium payments.
II. MODIFICATION OF nns DOCUMENT
Modification of this document once adopted may be made with 2/3 majority vote
of a quorum of the members of the Board of Directors of OCCRMA. All member
agencies shall receive copies of the revised Plan Document within 30 days of the
amendment.
m. EXECUTIVE COMMrITEE
It is intended that the Executive Committee of OCCRMA shall be made up solely
of representatives of participating members of the Self-Insurance Program. Duties shall
include review and assessment of all matters relative to the Self-Insurance Program as
may be appropriate.
Resolution Number I~o
IV. UNDERWRITING COMMrITEE
The purpose of this committee will be to act on recommendations from the
Program Underwriter as respects:
j.
a.
Acceptance of new members.
Rejection of new members.
Contract of Pooled Self Insurance form changes.
Notification of premium calculations.
Establishment of self insured retention levels.
Levels of assessments.
Allocation of Assessments.
Rule on questions of coverage on specific excess claims or incidents
and recommend action to the Claims Review Committee or Board.
Recommend purchase or rejection of all excess and reinsurance.
And any other matters as may from time to time be necessary.
b.
c.
d.
e.
f.
g.
h.
i.
The Underwriting Committee shall submit actions to the Board of Directors of OCCRMA
for review or approval as necessary. The OCCRMA Risk Manager, Program Underwriter
and Program Broker serve as advisors to the Underwriting Committee.
v. CLAIMS REVIEW COMMlTIEE
The purpose of the committee shall be to review all open claims submitted through the
reporting requirements contained herein and to:
f.
g.
h.
a.
Set and review reserve levels as respects potential Self-Insurance
Program exposure.
Report claims to the Self-Insurance Program Claims Coordinator and
Excess Claims Manager as necessary.
Review the specific "handling" of all potential program losses.
Make recommendations to individual members for settlement or
defense and/or tendering of losses to the Self Insurance Program.
Refer questions regarding the existence of coverage to the
Underwriting Committee.
Accept or reject claims after due consideration of the
recommendations of the Underwriting Committee.
Set reserve levels on all excess claims.
Adopt set of procedures under which claims will be reported,
reviewed, and handled, to be distributed to all members for
reference.
b.
c.
d.
e.
The Risk Manager, Program Underwriter, Program Broker, and Program Excess Claims
Manager will serve as advisors to the Claims Review Committee.
VI. DEFINITIONS
The following terms are used in this Plan Document:
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1. Excess Claim is a claim which may exceed the Self-[nsured Retention of a
city and which meets the guidelines contained herein and has been labeled an excess I
claim by the Claims Review Committee and referred to the Program Claims Coordinator
and Program Excess Claims Manager for handling. '
2. Program Claims Coonlinator shall be the Risk Manager of OCCRMA and shall
perform the duties prescribed in Article XIII.
3. Program Excess Claims Manager shall be an individual or legal entity under
contract or employed with or by the Board of Directors of OCCRMA for the express
purposes of representing the Self-[nsurance Program as respects claims which may be
expected to be paid within Self-[nsurance (excess insurance) Program.
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ResoluYron Number
4. Tendered Claim is a claim which is tendered to the Self-Insurance Program for'
handling by the Claims Coordinator and Program Excess Claims Manager. by an
individual city and accepted by OCCRMA. That city thereby agrees to pay the full self
insured retention liability accruing from any judgement or settlement arising from such
claim.
S. Premium is the amount payable annually by participating public entities to
qualify as members of the "pool" and insureds under the Contract of Pooled Self-
Insurance issued under the program. Such premium amounts will be established by the
Program Underwriter in accordance with underwriting guidelines established in this
document. Non-subject premium is deemed to be exclusive of all fees.
6. Program Underwriter is an individual or legal entity either on contract with
or employed by OCCRMA for agreed purposes.
7. Assessments are additional funds required to be paid from time to time as
are necessary through the assessment procedure to ensure the "solvency" or ability to
meet financial obligations of the program.
8. Risk Management is the process through which risk or loss is transferred,
reduced, eliminated, or knowingly assumed to minimize the overall exposure to a
member agency.
9. Non-subject premiums are the total premiums paid exclusive of program
administrative fees. To be identified by the Program Underwriter.
10. The tenns "the Board", "the Board of Directors", and "the Board of Directors
of OCCRMA" are defined to mean those members of the governing body of OCCRMA
who are currently participants in the Self-Insurance Program and are entitled to vote on
matters relative to the Self.Insurance Program as provided in the OCCRMA bylaws.
VII. GENERAL PROGRAM OPERATIONS
All program participants shall pay "premiums," as detennined through accepted
underwriting methods, into' il"pool" of funds to be held as reserves against future losses.
Risk of Loss is shared under this program among participants. Assessments may be
required in event "pooled" premiums are inadequate to pay projected losses. Projected
assessment amounts are limited by both per-occurrence and aggregate limits of coverage
under the program.
Administration of this program shall be consistent with sound professional
insurance industry standards and includes:
1. Adherence to underwriting principles in an effort to accurately predict
proper funding levels.
2. Establishment of sound claims management procedures to protect "pooled"
premiums.
3. Use of professional consultants to counsel in all matters relating to
insurance practices and legal issues.
4. Control of the program by participating agencies.
S. "Pooled" premiums maintained in a trust or custodial account or its
functional equivalent.
Participants have agreed to pay premiums, assessments (if any) share risk of loss,
and cooperate on claim management under the OCCRMA agreement and the Contract
of Pooled Self-Insurance offered through the Authority.
Resolution Number ~~O
VIII. El..lGmIU1Y GUIDELINES
The following represent general guidelines of risk acceptability:
l. Members shall be of general size, geographical location and quality of risk
as to be comparable to existing membership. It is the intent to limit eligibility of cities
to a maximum population of 250,000.
2. This program does not allow for the inclusion of any agencies with I
"unusual" risk exposure.
3. As long term commitment is essential to any program of this nature, all
members shall be required to remain in the program for a minimum period of 2 years.
Early withdrawal may be authorized by written appeal to the underwriting committee
demonstrating just cause, on such tenns and conditions as the committee may prescribe.
Cancellation of individual members will be in accordance with standard insurance policy
language, as provided in the Contract of Pooled Self Insurance and will require a
majority vote of the full Board.
4. Financial condition of prospective members must be such as to ensure
ability to pay premiums and assessments.
s. Risk management attitude of each member will be consistent with other
members as well as generally accepted guidelines. Such attitude shall be reviewed by
the Underwriting Committee.
IX. UNDERWRITING CRITERIA
Overall premium levels as well as individual (member) premium allocation shall
be the responsibility of the program underwriter. However, all such sums shall be I
reviewed and approved by the Underwriting Committee and may, with justifications, be
modified, rejected, or accepted by same.
Once accepted, such premium levels and allocations shall be deemed "fixed" and
shall be an obligation of individual members (and OCCRMA collectively) in order to
retain or be admitted to membership in the program. Premiums are due and payable
within 30 days of effective date of coverage.
Such premium levels shall be reasonably calculated in accordance with general
insurance practices by a qualified underwriter retained by OCCRMA. The underwriter
shall consider the following in arri$g at recommended overall premium levels (such
consideration shall not be limited to these factors alone):
1. Past loss experience.
2. Projected loss exposure potential based on overall group exposures.
3. A "safety factor" in order to build or maintain reserves at an acceptable
level. It is the intent of OCCRMA that this funding basis be conservative to establish
reliability in the solvency of the prostram.
Such individual premium allocations shall be reasonably calculated in accordance
with general underwriting practices by a qualified underwriter retained by OCCRMA.
The underwriter shall consider the following in arriving at individual premium
allocations (such considerations shall not be limited to these factors alone):
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1. Past loss experience (most recent past five years).
2. Size of self insured retention.
3. Underwriting factors relating to:
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Resor~ti6n Number ~~
a. Population.
b. Miles of streets.
c. Police exposure.
d. Automobile exposure.
e. Unusual exposures (beaches, utilities, risk management attitude,
etc.).
f. Fire department exposures.
g. New construction in City/Member.
h. Entity Budget.
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X. ACCEPTANCE OF NEW MEMBERS
It is generally accepted that program growth through the acquisition of new
members of "like kind and quality" is good for program stability.
Prospective new members shall make application on a form provided by the
Program Broker, and shall work with said broker in accurately and completely
completing same. Such application shall contain any and all information deemed
necessary by the Program Underwriter and Underwriting Comminee and shall furnish,
as B minimum, the information described under "Underwriting Guidelines" as well as
complete financial information as to establish the financial capabilities to meet potential
program obligations.
It is the intent that all program members be members of OCCRMA and shall
make concurrent application for same, fulfilling any financial obligations of membership.
There is an application fee of $500.00 (subject to change at the discretion of the
Board).
Such program application shall be reviewed by the Program Broker and presented
to the Program Underwriter. The Program Underwriter shall perform the underwriting
task in a fashion consistent with "Underwriting Guidelines" and with methods used on
all existing members. Rates and/or premiums shall not be discriminatory in any way.
The Program Underwriter shall make wrinen submission to the Underwriting
Comminee as to establish recommended premiums, self-insured retention, specific
exclusions and other considerations. The Underwriting Comminee shall have available
any underwriting data used in the Program Underwriter's evaluation.
The Underwriting Comminee shall accept, reject or modify the Underwriter's
recommendations and report same to the Board of Directors of OCCRMA. The Board of
Directors of OCCRMA shall have final right of acceptance or rejection of prospective
members.
XI. ASSESSMENT PROVISIONS
It is acknowledged that the Contract of Pooled Self Insurance is fully assessable.
Such assessability is necessary to provide for complete solvency of the program. It is
the intent of all members to adhere to these provisions.
It is the desire of all parties concerned that future claims and claims expense
costs be funded through annual premiums determined as described herein. Premium
levels should be "conservative" so as to provide reasonable confidence that all future
claims obligations be met through this source alone. Assessments are agreed to be
undesirable by program members. However, in the event of imminent short-fall of funds
so that it may be reasonably concluded additional monies will be needed to assure
solvency and maintain reasonable reserves, assessment provisions will be enforced as
follows:
The Program Underwriter shall have primary responsibility in projecting future
short-falls. To assist in this maner, a study may be done (with approval of the
Underwriting Comminee) by an outside consulting firm to recommend short-fall amounts
Resolution Number ~~O
and methods of allocating assessments. Such reconunendations may be modified in the
judgement of the Underwriter. The Underwriter shall make reconunendation of
assessment level, and allocation thereof, to the Underwriting Committee for review and
action. The Committee may amend the amount reconunended, reject the Underwriter's
reconunendation or accept same.
The assessment level shall be detennined taking into consideration all incurred
losses and associated expenses, projected reserves and anticipated payment dates as well
as current reserve levels and using an acceptable "Incurred But Not Reported" (IBNR)
factor.
The assessment level shall be allocated based on the following:
1. All claims reasonably concluded to have directly led to the short-fall shall
be identified.
2. The amount of the assessment shall be apportioned by policy yeu based
on date of occurrence in a ratio which the claims from each year bears to the overall
claims being considered. Such percentage shall be applied to the overall assessment to
detennine the assessable amount per policy year.
3. That amount assessable for each policy year will be apportioned in
accordance with the ratio of non-subject premiwns paid by members during that policy
year bears to total non-subject premiwns paid by all mem~ers. This percentage may be
increased or decreased up to 100% based on Underwriter's and Underwriting Committee
judgement. Such penalty (increase) of up to 100% shall be based solely on the
contribution to the overall short-fall by individual member agency claims.
Once detennined and accepted by the Underwriting Committee, the Board of
Directors of OCCRMA shall review and take prompt action on the reconunendation of
the Committee. A majority vote shall be sufficient to approve the reconunendation.
Rejection of the Underwriting Committee reconunendation shall require a 213 majority
vote of a quorum of Board of Directors. However, in the event of such rejection, an
alternate funding mechanism must be implemented by the Board of Directors to assure
solvency of the program, and the Board MUST ACf to implement an allocation of the
agreed assessment amount in an alternate plan within fourteen (14) days.
All assessments are due and payable within 30 days of date of mailing of notice
by the Board of Directors. Any agency not fulfilling this or any other financial
obligation shall be deemed to be delinquent in payment.
Delinquent payments shall be subject to a penalty to cover liquidated damages,
covering administration and other costs of collection, which cannot be accurately
estimated in advance, which shall accrue at a rate equal to two percent (2%) over the
prevailing prime interest rate, beginning on the date when the assessment is due and
payable.
XII. CLAIMS HANDLING PROCEDURES
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It is the general intent that all Self-Insurance Program claims be handled in a
fashion consistent with professional insurance company claims handling procedures. I
Certain intentions as respects incurred claims are as follows:
1. It is the intent of OCCRMA to establish and maintain a data base of all
claims reserved or paid at an amount of $10,000 or higher. A data base management
system will be established to maintain records in all such cases.
2. All claims falling within the self-insured retentions of the individual
members shall be administered by such member until detennined to be an "excess claim"
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Resolu'l'io'h Number ~42~
and even then shall be handled in conjunction with the OCCRMA and its Program
Claims Coordinator and Program Excess Claims Manager.
3. It is not the intent of the program to assume control of or usUIp any
authority as respects an individual claim from the member agency involved unless such
excess claim is voluntarily "tendered" to the Self-Insurance Program and accepted by the
Authority.
4. It is the intent of all member agencies that there be full cooperation
between member claims handling personnel and program risk management personnel in
the method and direction of claims management of "excess claims."
5. a. Committee and Board consideration of individual daims shall take place
in dosed session. Any representative of a member, regardless of appointment on either
the Claims or Underwriting Committee, may attend a committee meeting to present
their position on the initial review of their daim or matter that is under consideration
by that committee.
b. In no case shall a member agency participate in nor be present during any
vote or action pertaining to a specific daim where that member agency is a party or
potential party to that claim. The representative will be excused from the meeting at
the condusion of their presentation. If the president or claims chairperson has a conflict
on a specific daim or matter, the Vice President of Vice Chairperson will assume the
duties of the president or chair.
c. Upon request of the committee chairman, OCCRMA consultants may be present
in an advisory capacity.
d. The committee c:hainnan will instruct the committee members on the
confidentiality of the information discussed and will distribute coverage opinion letters
and any other confidential material needed to assist members in the decision process.
~e chairinan will condude the discussion and ask the committee to vote its position
on the initial review of the daim or matter. Prior to the condusion of the dosed
session, the committee c:hainnan will collect all confidential information from committee
members and consultants.
e. The chairman will announce the committee's decision on the initial review of
the daim or issue to the city's representative.
f. If the member does not agree with the decision rendered by the Committees
on their daim or matter, the member city can appeal the decision to the full Board of
Directors. Th~ appeal process will follow the same procedures as were followed by the
Claims and Underwriting Committees in their initial determination of the disposition of
the daim or matter as outlined in steps a - e, wherein the Committees will be replaced
by the full Board of Directors, as the decision making body.
g. If the member does not agree with the final decision rendered by the full
Board of Directors, the member can pursue binding arbitration.
h. If the Claims and Underwriting Committees can not reach agreement on the
disposition of the daim or matter, the claim will be sent for determination directly to
the Board of Directors.
i. If the Board of Directors is the first to render a decision on the daim or
matter, the Board may refer the matter to the Underwriting or Claims Committees for
a recommendation.
j. Reservations of Rights letters will be issued by the Claims Committee. The
Committees decision on other issues will be communicated to the involved member in
writing by the respective committee chairman.
Resolution Number
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It. Upon receipt of a request from a member for a decision on a coverage issue,
a claim issue or any other issue, the committee should endeavor to render their decision
within a reasonable time.
6. If the Claims Committee is unable to convene the Claims Committee
Chairman or the President may authorize the hiring of an Excess Claims Attorney to
represent OCCRMA in an amount not to exceed $25,000. This action should be
reported at the next Claims Committee meeting.
At the recommendation of the Program Claims Coordinator, the Claims Committee
Chainnan and the OCCRMA President may authorize the payment of a claim up to the
limit of $500,000 in excess of the member's Self Insured Retention (SIR) amount.
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At the recommendation of the Program Claims Coordinator and Claims Committee,
the Executive Committee may authorize the payment of a claim up to the limit of
$1,000,000 in excess of the member's Self Insured Retention (SIR) amount.
If the Program Claims Coordinator recommends payment of a claim in an amount
greater than $1,000,000 excess of a member's Self Insured Retention (SIR) amount, the
Board of Directors approval is needed.
7. All documents and reports prepared by or on behalf of OCCRMA, or
provided to OCCRMA by a member agency, which pertain to a specific claim shall be
considered provided in confidence, and OCCRMA shall be considered an agent of the
member to the same extent as, an ordinary insurer. Such information shall not be
distributed beyond OCCRMA representatives. Every effort shall be made to further
protect such documents under the attorney-client privilege and work-product doctrine.
All claims with reserves or potential payments, including defense costs, of
$10,000 or more, or involving any of the following, shall be reported in writing to the I
Risk Manager of OCCRMA:
1. Deaths.
2. Any paralysis.
3. Multiple claimants.
4. Any amputation.
5. Bum cases.
6. Loss of sight/hearing.
7. Any serious head injury cases.
8. Any multiple fractures.
A claim is one that has been made in writing by or on behalf of any injured
party to the member agency.
The report to the Risk Manager shall be in writing and contain all particulars as
determined by OCCRMA Claims Review Committee, including any summons or
complaint. Additional facts requested shall not be withheld.
Such reports and additional facts shall be considered confidential by the program
and disclosed only as necessary to further the purposes of the program.
. Nalolless frequentldy tl~n quartherly, the ClaIl'~ Rceviewdi committdee shall meet to I,
reVlew open reporte c aIms. T e Program C auns oor nator an Program Excess
Claims Manager shall make recommendations as to which claims shall be deemed "excess
claims." The Claims Review Committee shall make such detennination based on claims
potential to penetrate into Self Insurance Program Contract of Pooled Self Insurance.
All claims labeled "excess claims" shall be assigned to the Program Claims Coordinator
and the Program Excess Claims Manager for handling.
Handling by the Program Excess Claims Manager shall involve the assessment of
claims potential, recommended reserve level, regular reports to the Claims Coordiniltor,
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~esolu~ion Number
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quarterly report to the Claims Review Committee and working directly with member
agency claims handling personnel to assess the claims handling procedures and make
appropriate recommendations regarding same.
Questions of coverage shall ."e referred to the Underwriting Committee by the
Claims Review Committee for review and recommendations of acceptance, rejection, or
acceptance subject to reservation of rights to deny at a later date due to just cause.
Such recommendations shall be acted upon by the Claims Review Committee in formally
accepting, rejecting or reservation of rights. Member agencies shall be advised
immediately of actions of Underwriting and/or Claims Review Committees in this regard.
XIII. RISK MANAGER ROLE IN CLAIMS HANDLING
As respects the handling claims, it is agreed that the OCCRMA Risk Manager shall
also serve as the Claims Coordinator and shall have responsibilities and authority as
granted by the Board of Directors and appropriate committees. These duties shall
include, but not be limited to:
1. Review claims for the existence of possible coverage questions and report
same to the Claims Review COmmittee.
2. Recommend and, with authorization, retain outside counsel to represent
OCCRMA interests.
3. Act (with approved authority) to pay claims to the benefit of OCCRMA.
4. Coordinate obtaining coverage interpretations from the coverage attorney
and ensure that third party adjusters under contract to OCCRMA provide prompt and
complete infonnation.
5. Notify members when their claim has been placed on the 'Watch Ust".
6. Notify members when the Claims Committee has hired the services of an
excess attorney to represent the interests of OCCRMA on a claim.
7. Manage and direct activities of third party adjusters under contract to
OCCRMA.
XIV. EXHAUSI10N OP ANNUAL AGGREGATE LIMlTS
It is agreed by all member agencies that in the event of short-fall of annual
aggregate limits all affected members shall share the short-fall proportionally based on
the ratio of total claims that would have been paid by the Contract of Pooled Self
Insurance had no short-fall occurred as bears to the total amount collectible. If return
funds are due from certain memoer agencies to others, these funds will be due and
payable within 30 days of detennination of short-fall claim.
XY. WITHDRAWAL (TAIL) COVERAGE
In event of withdrawal of one or more member agencies, it is the intent of the
program to offer a 2 year "tail" or extended discovery period coverage as respects the
claims made fonn of coverage. The premium charged for same shall be derived,
reviewed and approved in the same manner as for other program premiums, provided
that in no case should the "tail coverage" premium exceed 200% of the prior year's
premium.
In no way does the offer or ,purchase of "tail" coverage waive any other provision
of the Contract of Pooled Self Insurance or of this plan document.
XVI. ~DING - RETURN OP PREMIUMS
.
It is the i.'ltent of this program to adjust for over or under funding levels through
Resolution Number ~~
the decrease or increase in annual premiums. In the event of a "retro-return" of
premium in the fonn of cash or other negotiable method the calculation and allocation
of such return shall be made in accordance with the "assessment" provisions (contained
in this document) calculated in reverse. Such calculation shall be the responsibility of
the Program Underwriter. However, the use of a study by an outside consulting firm
may be included if approved by the Underwriting Committee. This return premium will
be approved or disapproved by the Board of Directors and all such returns shall not
discriminate against any members who have withdrawn.
It is noted that no such retro-return is required and that overfunding' may be I
neutralized by reduced premiums and withdrawn member agencies will not benefit from
same. However, this is offset by the possibility of increased premiums to make up for
underfunding and such withdrawn member agency will not be subject to this method
of raising funds.
XVII. CJ.AIMS AUDITS
A claims audit will be required of an on-going member of this program.
Such audit will be made at least once in three years and shall be perfonned by a
qualified outside firm (selected by the Claims Review Committee and approved by the
Board of Directors). The cost of such audit shall be the responsibility of the Self-
Insurance Program. Such audit shall be considered a condition of membership in the
program.
A claims audit (such as described above) may be required of a prospective
member or an existing member (under special circumstances) other than on a three'
year periodic basis. Such requirement may be requested by either the Underwriter or
Claims Review Committee. Final authority for making such audit mandatory shall be
with the Board of Directors.
XVIII. DISPUTES
It is agreed by all program member agencies and all withdrawn member agencies
that all disputes arising from enforcement of the tenns of the Contract of Pooled Self
Insurance as well as agreements contained herein shall be addressed and settled to
conclusion as follows (in order):
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1. Appeal to the appropriate program committee or committees.
2. Appeal to the Board of Directors of OCCRMA.
Following such appeals decisions by the above shall be made and affected parties
notified of such decisions in writing within seven (7) days of the hearing of such appeal.
If the matter remains unresolved, affected agencies shall participate in the process
of binding arbitration. Any differences, claims or matters in dispute arising between or
among members shall be submitted by such members to arbitration in accordance with
the Joint Powers Agreement. The decision of the arbitrator(s) may be entered as a
judgment in any court of the State of California or elsewhere. Cost of such arbitration
proceedings shall be allocated by the arbitrators.
No Court proceedings shall be initiated by OCCRMA or affected member or
withdrawn member agency other than for the collection of premiums anellor assessments I
or retro-return of premiums payable as outlined in this document, or enforcement of an
arbitration award.
XIX. POUCY FORMS, ENDORSEMENTS, COVERAGE Q~ONS
It is the intent of OCCRMA that all matters dealing with coverages provided
under the Self. Insurance Program be the sole responsibility of the Underwriting
Committee. The Underwritivg Committee shall receive advice in all such matters from
the Program Underwriter. Decisions of the Underwriting Committee may be appealed
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~esol~~i~~ Number ~~"
to the full Board of Directors of OCCRMA.
When specific coverage questions arise pending claims, the Claims Review
Committee shall refer the question to the Underwriting Committee for a report. The
Claims Review Committee shall'then take such action as it may deem appropriate after
due consideration of the report. Disputes between the committees on coverage questions
shall be resolved by majority vote of the Board of Directors before final action is taken.
It is recognized that time may be of the essence, and that special meetings of
committees or the Board may be required.
xx. UMlTS OF lJABn.nY
It is the intent of member agencies of the Self-Insurance Program that the limits
of liability be established using the following general guidelines:
1) Per occurrence limit shall approximate two times the annual premiums
collection under the program.
2) Annual aggregate limits shall approximate four times the annual premium
collected under the program. The purpose of this limitation is to assure member
agencies that potential assessments shall be limited to a maximum relative to the annual
aggregate exposure.
The limits of liability shall be established annually (at each anniversaxy) and shall
not be amended with the mid-term addition or deletion of participating member
agencies.
The limits of liability shall be recommended by the Program Underwriter to the
Underwriting Committee. The Underwriting Committee shall approve, disapprove or
modify such recommendation with just cause. However, final limits shall be established
by the Underwriting Committee sufficiently in advance of policy anniversary so as to
allow for final Board of Directors' approval. The Board of Directors of OCCRMA shall
have final authority in the establishment of the limits of liability.
Limits of liability may be expanded above the general guide lines established
above based on:
1. Availability of excess or reinsurance.
2. Accumulation of adequate reserves to justify same.
XXI. HANDLINGIINVESTMENT OF RESERVE FUNDS
All Self-Insurance Program reserve funds shall be held in a custodial (or
comparable) account in an appropriate financial institution. Funds in such institutions
shall be removed only for the following causes:
.
1.
2.
3.
4.
Payment of claims and related claims expenses.
Payment of administrative or other program costs.
Retro-return of premiums as described herein.
Liquidation of the Self.Insurance Program (returns established as if
retro-return premiums).
Other than the above, the integrity of the reserve funds shall be inviolate.
Resolution Number ~.;;o
XXlI. PARTICIPATING MEMBER RESERVE FUND LEVELS
It is the intention of program members to establish and maintain individual
reserve fund levels. As to the Authority itself, the Board shall establish a method of
funding reserves for the Authority, at such levels as the Board shall deem appropriate.
The level of such reserves shaH be reviewed from time to time by the Underwriting
Committee who shall make recommendations for adjustments as necessary.
In general the foHowing guidelines should be foHowed as to other members:
1. Maintenance of a reserve fund for the individual member Self Insured
Retention losses is mandatory to comply with, within the first policy year. The fund
level should approximate three times the individual member Self Insured Retention at
any given time.
2. Maintenance of a reserve fund to provide for possible assessment
provisions contained herein. This fund level should approximate three times the highest
annual premium paid to the Self-Insurance Program within the past five years.
Full control of such reserve funds shall remain. with the individual member.
public agency.
It must be noted that the above fund levels are recommendations only.
However, lack of appropriate funding may be a cause for cancellation of coverage
provided by the Self-Insurance Program. Such review, recommendations for adjustment
of funding levels, and recommendation for cancellation shall be the responsibility of the
Underwriting Committee. Final action in all such cases shall be the responsibility of
the Board of Directors of OCCRMA.
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