29A - INSURANCE RENEWALS - Laserfiche WebLink

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Insurance Renewals June 21, 2004 Page 2 balance ($807,000) of this premium purchases $50 million of excess workers' compensation insurance coverage per occurrence. The self-insured retention is still undetermined but will be $500,000 to $1,000,000. We may not know the exact amount of insurance coverage and premium until June 30, 2004. The current excess insurance policies will expire on July 1, 2004. The City Manager will review the quotations and make the final approval and coverage will be bound. In the interest of continuing to strengthen BICEP and minimize Santa Ana's share of risk in the pool, BICEP periodically considers new pool members. The City of Riverside and the Community Development Commission of the County of Los Angeles are interested in joining BICEP effective July 1, 2004. BICEP's actuary has reviewed the history and claims data of these two agencies and recommends their membership in BICEP. Their average frequency of claims is better than the existing BICEP members. Addition of these agencies in BICEP will reduce our City's costs and will give BICEP greater negotiating power in this difficult insurance market. On June 3, 2004, the BICEP Board of Directors unanimously approved both entities for membership effective July 1, 2004, subject to 1) forma~ acceptance of one or both agencies to participate in BICEP, and 2) approval by two-thirds of the BICEP member city councils. Staff seeks authorization to grant Santa Ana's approval of these two new members and to execute any agreements granting waivers, approval or amendments to documents including, but not limited to, the Liability Risk Coverage Agreement and/or the Joint Powers Agreement, as may be deemed necessary or desirable by the City Manager and the City Attorney in order to carry out the City Council's approval of this action. The Public Entity property Insurance Program (PEPIP) was established on May 15, 1993 with seventeen public agencies that included the City of Santa Ana. The purpose of PEPIP is to provide public agencies with group purchasing strength in a challenging property insurance market. Since 1993, PEPIP has grown to include over 5,000 members, which has allowed the group to purchase adequate property insurance at affordable premiums. Renewal of the City's participation in PEPIP will ensure the City's ability to continue purchasing property insurance at competitive rates. The premium will provide $750 million coverage on City properties, except for boiler & machinery, flood, sabotage & terrorism, and earthquake damage. PEPIP will provide $100 million in boiler & machinery, and 82.5 million in flood damage. However, due to the excessive premium costs of earthquake, sabotage and terrorism insurance the City will not seek renewal of this coverage. 29A-2