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
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Explain JIF Concept
Provide JIF Overview
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Organizational Structure
Staff Roles & Responsibilities
Operations & Programs
Coverage Provided
Financial Results
Answer Questions
This is YOUR JIF!
We Are Here to Serve You
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Use Fund Commissioner
Handbook
Contact a Fund Professional
• Safety Consultant Commerce Risk Control Services
• Managed Care
CHN/CSG
• Claims Scibal Associates
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• Fund Administrator AJG Risk Management Services, Inc.
Use your Risk
• Fund Attorney William J. Kearns, Jr., Esq.
Management Consultant
What’s A JIF?
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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?
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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
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JIF Bylaws
• Set forth operating authority
• Requires 75% member
approval to amend
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Plan of Risk Management
• Updated each year
• Delineation of coverage
• Claims handling philosophy
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Coverage Documents
• Distributed in June each year
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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
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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
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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
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Executive Committee
• Third Tuesday of each month
• Discuss reports
• Review claims
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Committee Meetings
• as needed
MEL - Jeff Hatcher
 RCF - Dave Matchett
 E-JIF – Rich Brook
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JIF Safety Programs
Safety First, Last, and Always
Why is Safety Important?
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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
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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
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• JIF Safety Program
• Loss Control Policy
• Policies and
procedures
• Safety Bulletins
• Self-Help Checklists
JIF Safety Programs
Helping Towns Help Themselves
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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
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Annual allowance
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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
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$27,900
Balances published monthly
in JIF Agenda Packet
Must be used by November 30, 2008
Annual Safety Incentive Program
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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
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Improved MSI Training
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MORE CLASSES: MSI conducted over 1,300 classes in
2007 and MSI registrations topped 27,000 statewide!!
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600 BURLCO Employees attended MSI Classes in 2007
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Class Updates and Revisions for 2008
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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”
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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
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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
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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
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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
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• Management of Aggressive
Behavior
• Fatigue Awareness Seminar
Ad Hoc Committee of Chiefs
 Police specific safety
program
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Law Enforcement
Accreditation Program
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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
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JIF Reports
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Loss Runs
• Lists all claims
– Name of claimant
– Date of loss
– Payments
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Financials
• Treasurer
• Audit
• Financial Fast Track
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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
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Public Officials Liability
Employment Practices
Liability
•Various Sub-Committees
– Legislative
– Safety
– Coverage
MEL issues periodic Coverage Bulletins
Financial Structure
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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
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JIF retains low level of loss
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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)
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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
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Safety
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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
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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
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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
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Can I buy it cheaper elsewhere?
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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
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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
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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?