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HomeMy WebLinkAboutAgenda Report - November 6, 1991 (72)OF o4�r r CITY OF LOCI COUNCIL COMMUNICATION AGENDA TITLE: California Joint Powers Risk Management Authority Liability Claims Audit Report MEETING DATE: November 6, 1991 PREPARED BY: City Clerk RECOMMENDED ACTION: Report only. BACKGROUND IN ORKATIW Attached, marked Exhibit A, is a copy of the Liability Claims Audit Report completed by Nick CaiIi on behalf of the California Joint Powers Risk Management Authority which indicates that the City of Lodi continues to receive very effectively managed and administered liability claim administration from Insurance Consulting Associates, Inc. There were no negative patterns or trends found as a result of this audit. The findings of the audit are very positive as to the entire City of Lodi liability claims program and of the people involved in the program. FUNDING: None required. A:i i < �e ' the City Clerk AMR/ jmp APPROVED: THOMAS A. PETERSON ` Ctty Managar I. EXCESS NOTIFICATION The City of Lodi continues as a member of the California Joint Powers Risk Management Authority since March 5, 1986 with a Self Insured Retention of $250,000 per claim, I carefully reviewed the Loss Experience Report effective August 31, 1991 and discussed excess potential claims with Mr. Benson and Nir. Slanquie in order to identify any and all excess potential claims based on the CJPRMA reporting requirements. I found three claims that qualified. Appendix "C" were completed for each of these claims and are being transmitted, under separate cover, to CJPRMA legal counsel, Austin Gibbons. All claims identified with excess potential had been reported by ICA. 5 E. SETTLEMENTS Files involving the settlement, evaluation and negotiation process were reviewed during this audit. It is apparent that Mr. Benson utilizes verified and documented special damages upon which to base his evaluations. Settlement values were in the low to medium range. F. LITIGATION City Attorney, Bob McN.att, continues to make defense counsel assignments when it is necessary. Some litigation continues to be handled by Mr. McNattIa staff in-house. A majority of litigation continues to be handled by outside defense counsel in the following firms: Taylor, Scott and Nichols Mayall, Hurley, Knutsen, Smith and Green Reviews indicate that the City Attorney's staff, as well as outside defense counsel are knowledgeable and competent regarding the handling of defense fosthe City. Communications among Mr. Benson, City Attorney's staff and outside counsel continue to be very good to excellent. Mr. Benson continues his strong case management of litigated claims. G. TRANSFER OF RISK It is apparent that Mr. Benson and defense counsel are aware of the transfer of risk concept. Investigations are directed toward development of third party liability and in litigated claims the discovery is directed toward developing third party liability as well. It appears the City's before -the -fact transfer of risk program is in good condition, H. RESERVES The ICA reserving philosophy and practice appears to be very sound. Mr. Benson attempts to establish and maintain an "ultimate probable cost" reserve for each claim based on current information available. There is no evidence of stereotype or stair -step reserving. All claims reviewed were matched to the August 31, 1991 computerized Loss Experience Report provided by ICA. All payment and reserve amounts were accurately posted. 4 III. FINDINGS A. STAFFING The City of Lodi liability claim program continues to be administered by Insurance Consulting Associates, Inc. (ICA) in their Petaluma offices. The program is managed by Executive Vice President, Ran Blanquie and the day-to-day claim technical handling and administration is provided by Supervisor, Bill Benson. As indicated in previous audits, Mr. Blanquie and Mr. Benson are thoroughly experienced professional liability claim handlers. File reviews during this audit indicate that Mr. Benson's diary is current and the files reflect an aggressive approach toward investigation, file development and disposition effort. Staffing for the City of Lodi's program is proper. B. REPORTING Claims For Damages are being forwarded to ICA in a timely manner by the City Clerk, Alice M. Reinche. Usually within 2-3 days of receipt by the City. This provides ample opportunity for mr. Benson to review the claim, perform any necessary investigation and make a recommendation regarding further handling of the claim. C. GOVERNMENT CODES Compliance with the reporting procedures required by the California Government Codes was proper in all files reviewed. The City Attorney, Bob McNatt has good knowledge in this area and the commuinicationp between Mr. McNatt and Bill Benson are very good. A review of litigated clains indicates that the City Attorney, as well as outside defense counsel are knowledgeable and aggressive in application cf the Government code immunities available. D. INVESTIGATION Mr. Benson continues to be responsible for all investigation. Much of the necessary investigation is performed by way of telephone fact -gathering techniques and correspondence with the appropriate City department involved. Field investigation is performed when necessary by ICA staff investigators. The investigation is performed promptly and competently and the reporting is timely and comprehensive. 11. RECOMMENDATIONS There are no recommendations being made as a result of the findings of this audit. FA Z. I. CONCLUSIONS The City of Lodi continues to receive very effectively managed and administerd liability claim administration from Insurance Consulting Associates, Inc. There were no negative patterns or trends found as a result of this audit and it is apparent that Mr. Benson continues his very strong case management. Communications are excellent among ICA, the City Attorney's office, as well as outside defense counsel. The City of Lodi should continue to anticipate above average liability claim administration from ICA with the present staffing. 1