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Indian River County, Florida
<br />Notes To Financial Statements
<br />Year Ended September 30, 2006
<br />NOTE 18 - RISK MANAGEMENT
<br />General Liability, Property, Worker's Compensation and Medical
<br />The County is exposed to various risks of loss related to torts, theft of, damage to and destruction of
<br />assets, errors or omissions, injuries to employees, and natural disasters. The County established a Self
<br />Insurance Fund (an internal service fund) to account for and finance its uninsured risk of loss. Under
<br />this program, the Self Insurance Fund provides coverage as follows:
<br />The County purchases excess insurance to cover claims in excess of the amounts listed above. The
<br />County has not incurred any settlements in excess of the insurance coverage listed above in the past
<br />three fiscal years. All departments of the County participate in the program. Payments are made by
<br />various funds to the Self Insurance Fund based on past experience and actual estimates of the amounts
<br />needed to pay current year claims.
<br />The County is also self insured for medical claims covering employees and their eligible dependents.
<br />As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the
<br />same health care coverage as is offered to active employees, however, the retirees are responsible for
<br />payment of the premiums. Medical claims are paid from premiums contributed by employees, retirees
<br />and by the County. Premiums and contributions are determined by projected claims based on historical
<br />and actuarial experience. The self insurance plan assumes all risk for claims up to $100,000 per
<br />individual/$200,000 per occurrence, and has purchased a reinsurance policy to cover claims in excess of
<br />this amount. There were no claims in excess of this limit for the 2004, 2005, and 2006 fiscal years.
<br />The claims liability of $5,866,000 reported at September 30, 2006, is based on the requirements of
<br />generally accepted governmental accounting standards, which require that a liability for claims be
<br />reported if information prior to the issuance of the financial statements indicates that it is probable that a
<br />liability has been incurred at the date of the financial statements, and the amount of the loss can be
<br />reasonably estimated. Estimates for claims incurred but not reported are actuarially determined and
<br />recorded. Based on the actuary's report, $3,518,628 will be liquidated over the next twelve months.
<br />A
<br />92 D
<br />Prior to
<br />10/1/03 to
<br />10/1/04 to
<br />10/1/03
<br />10/1/04
<br />Present
<br />Worker's Compensation
<br />$ 350,000
<br />$ 500,000
<br />$ 600,000
<br />General Liability
<br />200,000
<br />200,000
<br />200,000
<br />Auto Liability
<br />200,000
<br />200,000
<br />200,000
<br />Property Damage
<br />500-25,000
<br />500-25,000
<br />500-25,000
<br />Error or Omissions
<br />200,000
<br />200,000
<br />200,000 O
<br />Annual Aggregate
<br />1,000,000
<br />1,000,000
<br />1,000,000
<br />Annual Aggregate
<br />1,000,000
<br />1,000,000
<br />1,000,000 n
<br />The County purchases excess insurance to cover claims in excess of the amounts listed above. The
<br />County has not incurred any settlements in excess of the insurance coverage listed above in the past
<br />three fiscal years. All departments of the County participate in the program. Payments are made by
<br />various funds to the Self Insurance Fund based on past experience and actual estimates of the amounts
<br />needed to pay current year claims.
<br />The County is also self insured for medical claims covering employees and their eligible dependents.
<br />As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the
<br />same health care coverage as is offered to active employees, however, the retirees are responsible for
<br />payment of the premiums. Medical claims are paid from premiums contributed by employees, retirees
<br />and by the County. Premiums and contributions are determined by projected claims based on historical
<br />and actuarial experience. The self insurance plan assumes all risk for claims up to $100,000 per
<br />individual/$200,000 per occurrence, and has purchased a reinsurance policy to cover claims in excess of
<br />this amount. There were no claims in excess of this limit for the 2004, 2005, and 2006 fiscal years.
<br />The claims liability of $5,866,000 reported at September 30, 2006, is based on the requirements of
<br />generally accepted governmental accounting standards, which require that a liability for claims be
<br />reported if information prior to the issuance of the financial statements indicates that it is probable that a
<br />liability has been incurred at the date of the financial statements, and the amount of the loss can be
<br />reasonably estimated. Estimates for claims incurred but not reported are actuarially determined and
<br />recorded. Based on the actuary's report, $3,518,628 will be liquidated over the next twelve months.
<br />A
<br />92 D
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