Item 15 - Renew Citywide Insurance Program and Policies Procured through Independent Cities Risk Management Authority and Arthur J. Gallagher

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Renew Citywide Insurance Program and Policies Procured through Independent Cities Risk Management Authority and Arthur J. Gallagher August 6, 2024 Page 2 4. Authorize the City Manager to approve the City's obligation to pay the State of California DIR estimated assessment in the amount not to exceed $500,000. 5. Approve an Appropriation Adjustment to recognize $2,200,000 in the Liability and Property Insurance Revenue, Prior Year Carryforward revenue account (No. 08009002-50001) and appropriate the same amount into the Liability & Property insurance account (No. 08009051-64010). (Requires five affirmative votes) GOVERNMENT CODE §84308 APPLIES: Yes DISCUSSION Staff is recommending renewal with ICRMA, a joint powers authority formed in 1980 in accordance with California Government Code Section 6500. ICRMA's purpose is to provide: 1) excess and re -insurance to protect members from extensive financial debt due to large claims, settlements, and judgments; 2) group insurance purchasing power that can offer broader coverage at a lower cost; 3) rate stability; and 4) protect individual member cities through pooling of losses and self-insurance. ICRMA also offers to its members actuarial services, appraisal services, loss control assessments and recommendations, safety trainings, claims audits, contract risk transfer consultation, and other services and resources. Currently composed of 14 California cities, Santa Ana joined ICRMA in July 2019. For this renewal period: • The City's Workers' Compensation coverage experienced an increase of approximately 12%. • The City's Liability and Property premiums increased approximately 10%, which overall is a very good outcome. • The City's Property & Equipment Program premium decreased approximately 10%. • Overall, the City's insurance coverages remain the same with a lower than expected increase in premiums on the Liability and Property program and an average increase in premiums on the Workers' Compensation program. Cost of insurance continues to increase primarily due to the following ongoing reasons: 1. An insurance market with continually decreasing excess carriers willing to quote municipal government entities in California, primarily those with police departments; 2. High dollar jury awards of litigated matters against public entities; 3. High dollar settlements of litigated and non -litigated matters; 4. Rising cost of repairs and replacement of damaged vehicles, property, and equipment; 5. Increased number of claims filed against the City resulting from aging infrastructure including sidewalks and streets; and 6. Increased number of claims filed against the City resulting from damage caused by