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TO: Bill Collins Acting County Administrator FROM: DATE: October 26, 1988 FILE: SUBJECT: SELECTION OF INSURANCE COVERAGES FOR FISCAL 88-89 Susan M. TillQ REFERENCES: Risk Manager BACKGROUND On September 27, 1988 at The Commission Meeting, the Risk Manager presented renewal rates for present insurance coverages. At this meeting the Risk Manager also recommended that the County Commission not renew former negotiated coverages and in lieu of same consider the Gallagher Bassett Package Program. The Board asked all insurance representatives at the meeting which included Louis Schlitt, Hamilton Arden, Brad Clark, Florida League of Cities and Glen Toby, Gallagher Bassett questions relating to each offered coverage. It was then decided to take the matter of insurance under advisement for thirty days for review by staff. During the thirty day period a meeting was called by the Risk Manager so that Joe Baird, Charles Vitunac and Bill Collins could meet with each insurance company who put forth a package plan and ask questions. The Board of County Commissioners was also given copies of all package proposals for their review. ANALYSIS The average dollars paid for Property and General Liability claims (including Auto and Public Officials Liability) for the past four years was $20,983 or a total of $83,933. During the past four years the premiums paid on the above cove- rage approximated in excess of two million dollars. This is $1,900,000 more than claims paid. The question becomes why are such premiums paid.when the claims experience is so low. The $2,000,000 paid during that time could have accumulated interest for the County so that with current premium money budgeted the insurance fund could be at almost four million dollars in fiscal 89-90. Average dollars paid for Worker's Compensation over the past four years was $113,090. Total dollars paid during that time was $452,361. Approximately $2,000,000 in premiums was also paid on this type coverage over the past four years or $1,500,000 more than we paid in claims. The interest accumulated on this money plus the addition of this year's budgeted premium could have accumulated to develop a fund of approximately $3,000,000 by now. The above analysis shows that the County could have accumulated approximately seven million dollars in an insurance fund on this date had claims been paid in house rather than through the purchase of exorbitant insurance premiums. NOV 11988 45 BOOK 75 PAGE 45