Transcript ACM JIF
Burlington County Municipal Joint Insurance Fund 2008 Fund Commissioner Orientation April 15, 2008 Burlington County Municipal Joint Insurance Fund Purpose of Today’s Meeting Explain JIF Concept Provide JIF Overview • • • • • Organizational Structure Staff Roles & Responsibilities Operations & Programs Coverage Provided Financial Results Answer Questions This is YOUR JIF! We Are Here to Serve You Use Fund Commissioner Handbook Contact a Fund Professional • Safety Consultant Commerce Risk Control Services • Managed Care CHN/CSG • Claims Scibal Associates B U R L C O J I F • Fund Administrator AJG Risk Management Services, Inc. Use your Risk • Fund Attorney William J. Kearns, Jr., Esq. Management Consultant What’s A JIF? Joint Insurance Fund commonly referred to as a “JIF” Successful example of inter-local cooperation. Statutory Authorization - N.J.S.A. 40A:10-1 et. seq. A JIF is a mechanism through which municipalities can join together to take advantage of lower costs associated with self insurance. Why JIF? JIFs Proved to be a Better Way! JIFs have allowed municipalities to join together to take advantage of lower costs and additional services associated with self insurance and to achieve coverage and pricing STABILITY! Who’s In The JIF? • Bass River Beverly Bordentown City Chesterfield Delanco Delran Edgewater Park Florence Hainesport Lumberton Mansfield Medford Mt. Laurel Riverside Shamong Tabernacle Southampton Springfield Westampton Medford Lakes, Moorestown, Evesham, Maple Shade, and Willingboro belong to affiliated JIFs New Jersey’s Joint Insurance Funds Highly regulated: Specific Legislation • N.J.S.A. 40A:10-1 et. seq.. Rules and Regulations • Department of Banking and Insurance • N.J.A.C. 11:15-2.1 et. seq. Makes Joint Insurance Funds highly accountable! JIF Operations Operating Documents JIF Bylaws • Set forth operating authority • Requires 75% member approval to amend Plan of Risk Management • Updated each year • Delineation of coverage • Claims handling philosophy Coverage Documents • Distributed in June each year B U R L C O J I F Organizational Structure Member Municipality Risk Management Consultant Fund Commissioner (Elected Official or Employee) JIF members are represented on a board that manages the fund, paying claims and investing its assets. The Fund hires an administrator, and the members share a safety director and specially qualified claims attorneys. Executive Committee (Seven members) Attorney Treasurer Defense Panel Executive Director/Administrator Committees Safety Director Claims Administrator Safety Coverage Auditor Actuary Finance Strategic Planning Fund Commissioner Member of Municipality’s governing body - 2 yrs. One of its municipal employees - until replaced Responsibilities • Empowered to operate the Fund • Represent municipality • Serve as liaison between Fund and municipality Fund Professionals Actuary – The Actuarial Advantage Attorney - William J. Kearns, Jr. Auditor – Bowman & Company Claims Administration - Scibal Associates Managed Care – CHN/CSG Safety - Commerce Risk Control Services Treasurer - Tom Tontarski Administrator - AJG Risk Management Services, Inc. “The Fund hires an administrator, and the members share a safety director and specially qualified claims attorneys.” Risk Management Consultants Under contract with municipality to provide specific professional services: • update exposure data • place optional coverage • respond to coverage questions • order and review certificates of insurance • provide technical advice • other duties as negotiated Formerly served as insurance agent JIF Meetings Executive Committee • Third Tuesday of each month • Discuss reports • Review claims Committee Meetings • as needed MEL - Jeff Hatcher RCF - Dave Matchett E-JIF – Rich Brook JIF Safety Programs Safety First, Last, and Always Why is Safety Important? Safety is the cornerstone of a successful JIF Prevention of claims is less costly in long run It makes good sense to reduce costs and risks associated with accidents because it’s your money 76% of local JIF budget is devoted to claims payments An ounce of prevention is worth a pound of cure! “This savings comes through the pooling of assets and losses and the sharing of services,” NJ Banking and Insurance Commissioner Elizabeth Randall explained. “And because the cities, towns and school boards own the funds, they carefully monitor safety in order to reduce claims.” It’s your money! Safety Coordinator Full time municipal employee Usually supervisory level or above Responsibilities • Coordinate safety efforts • Chair municipal safety committee • Serve as liaison between Commerce Nat’l and member municipality •Disseminate safety information Safety Documents B U R L C O J I F • JIF Safety Program • Loss Control Policy • Policies and procedures • Safety Bulletins • Self-Help Checklists JIF Safety Programs Helping Towns Help Themselves Member driven safety policies On-site Loss Control Surveys Policies, procedures and guidelines • Self-help facilities checklists • Certificate of insurance guidelines • Accident investigation reports • Safety Handbook Training Programs - MSI • Right to Know, Defensive Driving, Confined Space, etc.. Safety Bulletins Seminars and Educational Updates • Police Civil Liability • Sexual Harassment Safety Video Library Optional Safety Budget Annual allowance Available to members to use to meet local safety needs (i.e., equipment, supplies, training) Can also be used to assist members in completing Safety Director’s Suggestions for Improvement Reimbursement directly to municipality $27,900 Balances published monthly in JIF Agenda Packet Must be used by November 30, 2008 Annual Safety Incentive Program Heighten Safety Awareness Encourage Safe Behavior Create a Safer Workplace Build a Safety Culture Reward Safety Effort • Annual cash awards $23,525 The Safety Incentive Program is the most successful program of its kind in the state with high member participation! Safety First! “It’s better to be careful a hundred times, than to get killed once.” Mark Twain MEL SAFETY INSTITUTE (MSI) MEL Safety Institute (MSI) Readily available training Valuable training Convenient Cost training effective training MEL Safety Institute (MSI) Initial focus was on regulatory compliance Training provided on a regional basis, utilizing approximately 90 sites throughout the state. All programs are available to all member employees. Many of the training programs will provide Continuing Education Credits. MSI Learning Management System Website On-line registration for MSI Classes Track MSI learning history Record external (non-MSI) learning events Planning & Recordkeeping tool Order videos on line Telephone HELP Line: 1-866-661-5120 Improved MSI Training MORE CLASSES: MSI conducted over 1,300 classes in 2007 and MSI registrations topped 27,000 statewide!! 600 BURLCO Employees attended MSI Classes in 2007 Class Updates and Revisions for 2008 • • • • • • Jetter / Rodder Heavy Equipment Ladder and Fall Prevention Leaf Vac Sanitation & Refuse Collection Accident Investigation More New MSI Classes in 2008! Bloodborne Pathogen Train-the-Trainer Playground Safety Inspection Seasonal Public Works Operations Advanced Safety Leadership Program NJMEL.ORG On-Line Safety Videos Password = “mel” MEL Initiatives: On Line Safety Videos & Training Storm Water Management Training Crossing Guards Urban Driving “Survival Driving” Don’t Do It – Don’t Take It On-line videos “for members only” MEL VIDEO LIBRARY www.njmel.org Over 600 Titles! World Wide Web Page WWW.NJMEL.ORG Address: http:\\www.burlcojif.org Access to worldwide safety resources “JIF Information Center” In the JIF, everyone has to be a Risk Manager! We’re all in this together! Everyone shares in the JIF’s success! Safety is everyone’s job! All employees and supervisors must recognize that they play an important role in risk management. Risk Management . . . . . . Beyond Safety Risk Avoidance Risk Transfer • Certificate of Insurance Guidelines Facilities • Indemnification and Hold Harmless Agreements • Contract Review Risk Control Special Events Contractors/ Vendors JIF Claims Programs When Florence has a claim ... … Medford says OUCH! REPORT ALL CLAIMS PROMPTLY! “Workplace injuries reported within ten (10) days of their occurrence cost an average of $10,172, while ones reported after thirty (30) days average $15,745, Kemper National Insurance Companies finds. Early reporting leads to quicker treatment, while delay lets problems fester and increases chances of litigation, says Kemper.” Time is money.... “LABOR LETTER’, THE WALL STREET JOURNAL, AUGUST 10, 1993 Still holds true today! Claims Coordinator Full time municipal employee Usually in administration Responsibilities • Coordinate prompt reporting of all claims • Maintain supply of claim forms • Coordinate flow of information between Scibal and member municipality BURLCO Claims Experience Fund Years 2005 - 2007 50% Auto GL Property WC Auto GL Property 74% WC 50% our claims are for Workers Compensation But they account for 74% of our costs! Establish Claims Procedures Take charge and remain in control Coordinate all claims reporting • Report accidents promptly • Require employees to report ALL injuries Conduct prompt accident investigations • Gather facts & interview witnesses while memories are fresh • Learn from mistakes and teach others Direct medical care • 1-800 Claims Reporting 24/7 – Immediate medical intervention – Encourage early return to work Establish lines of communication • Employee • Nurse Case Manager • Adjuster • Physician Average Cost Per Claim (Fund Years 2005-2007) $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $9,140 $4,163 $3,129 $1,398 Property Auto W.C. Liability Liability claims are also costly! Liability Issues JIF Liability Initiatives Road, Sign and Walkway Condition Report Program Additional workshops • Snow plow safety, jetter safety, etc. • Personnel policies/procedures EPL Hotline! Police Liability Initiatives “Liability Beat” Newsletter Civil Litigation Handbook Police liability seminars • Management of Aggressive Behavior • Fatigue Awareness Seminar Ad Hoc Committee of Chiefs Police specific safety program Law Enforcement Accreditation Program Administered by NJ Association of Chiefs of Police Application Fee waived for JIF members JIF will reimburse 50% of Accreditation & Re-accreditation fee upon completion Participation is encouraged by JIF/MEL 5% MEL liability discount AND $1,000 MEL Grant for agencies who complete the program Is It Worth the Effort? The proof is in the results.... • Fewer Claims • Premium Stability • Dividends! Fewer Claims 281 300 250 252 11% 200 150 100 50 0 1994 2007 An 11% increase in claims as membership has grown by 80%! Average Cost Per Claim $5,753 $6,000 $5,000 $4,000 $3,000 $1,975 $2,000 $1,000 $0 1994 2007 Claims Counts are Steady But Severity is on the Rise! Budget Stability 45.00% 35.00% Budget Change 25.00% 15.00% 5.00% -5.00% -15.00% -25.00% 14.03% 3.40% 13.88% 4.61% 8.40% 10.83% 4.76% 1.51% -1.30% 2000 2001 2002 2003* 2004 2005* 2006 2007 2008 * Indicates Increase in JIF SIR JIFs Pay Dividends Finance Committee returned $300,000 in surplus to members last year: • Take as check • Offset 2008 bill • Bank it for future “Rainy Day Fund” Total Combined Dividends = $3,280,854 All money not required to pay claims is returned to members in direct proportion to amount they paid into the Fund. Comparison of Members 2008 Member Beverly City Delanco Township Delran Township Florence Township Hainesport Township Lumberton Township Mansfield Township Medford Township Riverside Township Shamong Township TOTAL $ 2007 Dividend Net Assessment 186,796 $ 157,777 434,134 419,427 113,038 11,985 $ 17,875 38,954 44,317 13,037 174,811 139,902 395,180 375,110 100,001 375,634 212,856 832,160 308,330 41,989 15,640 72,317 28,330 333,645 197,216 759,843 280,000 79,430 $3,119,582 8,597 $293,041 70,833 $2,826,541 2007 Dividend Represents 10% of Budget! JIF Finances Budget Audit Coverage JIF Reports Loss Runs • Lists all claims – Name of claimant – Date of loss – Payments Financials • Treasurer • Audit • Financial Fast Track Loss Ratio Snapshots • Quarterly report • Three years results • Listing of open claims Miscellaneous •LTAF •Late reporting times JIF and MEL BUDGET 24% 4% 3% MEL 13% 56% Claims Operations RMC MEL E-JIF 24% of budget protects Fund from catastrophic loss. JIF BUDGET 18% Claims Operations RMC 6% Claims 76% 76% of our budget is devoted to claims payments! Where does all the money go? Loss Funds Budget 67% 8% 5% Property Auto 20% Liability Workers Comp 8% Pays for Property Damage Replacement Cost City Hall Including Boiler & Machinery and Crime! 5% for Automobile Liability $5,000,000 limit per accident (Option to $20M) Covering all municipal vehicles. 20% for General Liability $5,000,000 limit per occurrence (Option to 20M) Injuries to members of the public 67% for Workers Compensation Statutory benefits This is where we have to work hardest! MEL Coverage Public Officials Liability Employment Practices Liability •Various Sub-Committees – Legislative – Safety – Coverage MEL issues periodic Coverage Bulletins Financial Structure JIF retains lower layer of claims • $ 50,000 Property • $200,000 Liability • $200,000 Workers’ Compensation JIF purchases “Large Loss” protection • $100,000,000 Property • Up to $20,000,000 Liability • Statutory Workers’ Compensation Can’t a big claim hurt us? Financial Structure JIF retains low level of loss MEL protects JIF from catastrophe losses $20,000,000 MEL Protects JIF from Large Losses $200,000 Joint Insurance Fund Covers smaller routine claims (Working Layer) What’s our bottom line? (BURLCO Financial Results as of June 30, 2007) Contributions Payments • Sub-total Investment Income Return of Surplus • Cash Position Case Reserves • Position after Reserves IBNR Reserves • Aggregate Excess Recov. • Net Surplus $33,190,034 (25,292,250) $7,897,784 2,445,617 (2,814,386) $7,529,015 (2,048,114) $5,480,901 (920,538) 0 $4,560,363 There’s Nothing Like Success! The JIF has succeeded far beyond its founders dreams! So what can hurt us? MEMBERS MUST AVOID COMPLACENCY Support the JIF programs: • Safety – In house efforts – Training seminars • Claims Management – Prompt reporting – Internal coordination • Risk Management – Certificates of Insurance – Special Events Our Most Important Member For the JIF to succeed, every member must participate in the JIF Safety, Claims Management, and Risk Management Programs Membership Commitment Safety • • • • Adoption of Policy Statement Appointment of Safety Coordinator Development of Safety Committee Attendance at Training Seminars Claims Management • Appointment of Claims Coordinator • Prompt Reporting of All Claims • Adoption of Tort Claims Notice Questionnaire Membership Commitment Risk Management • Implementation of Certificate of Insurance Guidelines • Review of Contractual Agreements Participation • Attendance at Monthly Executive Committee Meetings • Involvement through Committee Assignment • Three Year Membership Agreement A JIF is NOT an Insurance Company ! Additional Member Benefits Property Appraisals • Performed by Maximus • Paid for by JIF • Eligible for further discounts on fixed asset inventories EPL Attorney Hotline MSI Training – No Additional Cost Can I buy it cheaper elsewhere? In the depths of a soft market you may be able to buy cheaper insurance but what about next year? Will we have all the coverage we require? • JIF negotiates broad coverage • After a loss, no one asks what the insurance cost! Examine all the facts premiums, dividends, surplus, stability. $ $ “After largely shunning local governments in the 1970s and 1980s, insurance companies are now vying for their business.” American City & County - Jan. 1998 Maybe, but will they be there tomorrow? Been there ... Done that ! Long Term Stability Remember why JIFs formed in the first place: • Hard market! –High rates –Loss of coverage Not a single JIF has ever failed to meet its obligations. JIFs will outperform insurance industry in the long run because of their conservative nature and emphasis on cost control, loss control, and claims management! Membership Process Requirements • exposure audit • claims history • loss control survey • actuarial review • approval by Fund’s Executive Committee Timetable • 45 days to complete application • 45 days for Fund to process application Cost • $1,500/$600 paid by applicant – loss control survey – actuarial review Questions?