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HomeMy WebLinkAboutAgenda Report - November 28, 1990 (49)C0 J IL C0MMUNICAT(:•J.: TO: THE CITY COUNCIL COUNCIL MEETING DATE: FROM: THE CITY MANAGER'S OFFICE NOVEMBER 28, 1990 SUBJECT: CONTRACT RENEWAL WITH INSURANCE CONSULTING ASSOCIATES, INC. TO PROVIDE LIABILITY CLAIMS ADMINISTRATION AN5 GENERAL RISK MANAGEMENT CONSULTING SERVICES TO THE CITY OF LODI RECOMMENDED ACTION: That the City Council, by motion action, approve a three year contract with Insurance Consulting Associates, Inc. to provide liability claims administration and general risk management consulting service to the City of Lodi and authorized the City Manager and City Clerk to execute the contract on behalf of the City of Lodi. BACKGROUND INFORMATION: For the past year, the City of Lodi has contracted with Insurance Consulting Associates, Inc. (ICA) to provide liability claims administration and general risk management. ICA was retained when we experienced a very serious decline in the performance of the City's previous liability contract administrator. ICA was able to accomplish the transition under difficult circumstances with minimum disruption and have performed in a very expeditious and professional manner during the past 12 months. The following are conclusions contained in a recent audit performed for the California Joint Powers Risk Management Authority of which Lodi is a member: The City of Lodi liability clair: program is being very effectively managed and administered by Insurance Consulting Associates, Inc. There had been an apparent lapse in effective claim administration by the previous administrator due to a significant change in management and the City made a decision to change claim administrators approximately nine months ago. This has been a very positive change and the City benefits from a very professional and experienced claim technical staff at ICA. The changes contained in the proposed contract renewal are as follows: 1. Three year contract (subject to same termination conditions) instead of one. 2. $2.00 per hour increase (roughly 4%) on our claims management service fee. 3. $50.00 per month increase in computer service fee. 4. $15.00 per hour reduction for risk management and loss control services. Attached marked Exhibit A 'is a copy of the proposed renewal contract and cover letter from Daniel A. Blanquie, Executive Vice President, Insurance Consulting Associates, Inc. kt,e, lit , Pit( JFJ—'1/ -� Alice M. Reimch e City Clerk AMR/imp II NSURANCE ONSULTING J.,.�^�\\SSOCIATES. INC November 13, 1990 Ms. Alice Reimche City Clerk City of -Lodi Call Box 3006 Lodi, CA 95241-1910 Re: Contract Renewal with Insurance Consulting Associates, Inc. Dear Alice: f This letter follows our phone conversation of November 12, 1990. Insurance Consulting Associates, Inc. considers it an honor and privilege to continue to provide liability claims administration and general risk management consulting services to the City of Lodi. I have attached the proposed contract and one additional copy with the changes we discussed. The key changes are as follows: - Three year contract (subject to same termination conditions) instead of one. - $2.00 per hour increase (roughly 4%) on our claims management service fee. - $50.00 per month increase in computer service fee. I am sure you will agree that these increases are modest. They are meant only to cover the ever increasing costs of doing business. As I mentioned, our fees are very competitive within the industry. As an added incentive to the City, we have lowered our risk management and loss control hourly service fee from $90.00 to $75.00 per hour. It is our sincere belief that the best form of insurance the City can have is its employee's education. With proper education, we can help the City reduce its frequency and severity of losses. I will more fully discuss a loss control program for the City with you and Mr. McNatt at our next case review session. Risk Management Claims Administration Loss Control Mailing Address: P.O. BOX 750849 • PETALUMA, CA 94975-0849 Corporate Offices: 1125 NORTH McDOWELL BOULEVARD . PETALUMA. CA 93954 Telephones: (707) 778-1118. I -800 -CALL -ICA . FAX: (707) 778-8213 1--N., On07524 } This letter follows our phone conversation of November 12, 1990. Insurance Consulting Associates, Inc. considers it an honor and privilege to continue to provide liability claims administration and general risk management consulting services to the City of Lodi. I have attached the proposed contract and one additional copy with the changes we discussed. The key changes are as follows: - Three year contract (subject to same termination conditions) instead of one. - $2.00 per hour increase (roughly 4%) on our claims management service fee. - $50.00 per month increase in computer service fee. I am sure you will agree that these increases are modest. They are meant only to cover the ever increasing costs of doing business. As I mentioned, our fees are very competitive within the industry. As an added incentive to the City, we have lowered our risk management and loss control hourly service fee from $90.00 to $75.00 per hour. It is our sincere belief that the best form of insurance the City can have is its employee's education. With proper education, we can help the City reduce its frequency and severity of losses. I will more fully discuss a loss control program for the City with you and Mr. McNatt at our next case review session. Risk Management Claims Administration Loss Control Mailing Address: P.O. BOX 750849 • PETALUMA, CA 94975-0849 Corporate Offices: 1125 NORTH McDOWELL BOULEVARD . PETALUMA. CA 93954 Telephones: (707) 778-1118. I -800 -CALL -ICA . FAX: (707) 778-8213 1--N., On07524 Nis. Alice Reimche November 13, 1990 Page two Very truly yours, c.c. ac u; A)& Daniel A. Blanquie Executive Vice-president F1 kyX-1 a 13 Enclosures i SELF-INSURED CLAIMS MANAGEMENT AND GENERAL RISK MANAGEMENT CONSULTING CONTRACT THIS CONTRACT is made and entered into this 20th day of December, 1990, by and between the CITY OF LODI, hereinafter referred to as the CITY, and INSURANCE CONSULTING ASSOCIATES, INC., hereinafter referred to as the CLAIMS ADMINISTRATOR. INSURANCE CONSULTING ASSOCIATES, INC. is licensed in California to provide independent adjusting services. Its State License number is 0607524, It is a California Corporation with Home Office located at 1125 North McDowell Boulevard, Petaluma, CA 94954; Telephone number: 707/778-1118. The Corporate Officers are Ronald Blanquie, President, and Daniel A, Blanquie, Executive Vice President. IT IS HEREBY AGREED by and between the parties signing this Contract, as follows: I. GENERAL The CITY desires to have unified claims management and general risk management consulting services, INSURANCE CONSULTING ASSOCIATES, INC. is a Claims Management and Consulting firm experienced in providing the requested services and is ready and capable to perform such services for the CITY. The CLAIMS ADMINISTRATOR will assist the CITY in the management of the CITY's liability claims program. The CITY will transmit promptly to the CLAIMS ADMINISTRATOR all verified claims which it receives and will notify the CLAIMS ADMINISTRATOR through Incident Reports of circumstances which it believes may give rise to future claims. The CLAIMS ADMINISTRATOR will perform no investigation of Incident Reports without the express request of the CITY. It will initiate prompt investigations and attempt to secure the cooperation and confidence of claimants and their attorneys. It will provide reports to the CITY with respect to issues of fact, damages, and liability. It will provide recommendations with respect to courses of action regarding 1 settlement and/or defense. L provided by the CITY, it will i attorneys with the goal of resolution to any claim. It without litigation, If assignn is necessary, it will make the utilizing counsel specified an( It will receive and review pending cases and, before app will secure any necessary sl direction from the CITY to t 4 ;ilizing settlement authority as egotiate with claimants end their securing a mutually -acceptable will attempt to resolve cases int of a case to defense counsel assignment on behalf of the CITY approved in advance by the CITY. ill expense billings related to oving such billings for payment, pportive documentation, Absent -ie contrarv, it will attempt to secure open or limited extensions of time on cases which .it believes are likely to bl? resolved more quickly, efficiently, and economically in that manner. Releases of All Claims will be obtained from all claimants receiving settlements from the CITY through the CLAIMS ADMINISTRATOR. The CLAIMS ADMINISTRATOR will provide timely and appropriate reporting to the excess insurers of the CITY in a manner consistent with the reporting guidelines provided to it by the carriers. It will make itself available to the City Council for discussion of pending cases. Consistent with the expressed wishes of the CITY, it will make itself available for scheduled claim reviews with the CITY. It will provide to the CITY a monthly computerized Loss Run of pending and closed cases sorted in a format to be approved by the CITY. The CLAIMS ADMINISTRATOR will perform loss control analysis and consulting services for the CITY and will assist the CITY with risk management services in a manner and to an extent agreed upon. It will encourage cooperative activity amongst the various other firms providing administration or consulting services to the CITY. Settlement authority will be obtained by the CLAIMS ADMINISTRATOR from the CITY or, in the event of an exposure piercing the CITY's self-insured retention, jointly from the CITY and its Excess Insurer. Absent specific instructions to the contrary from the CITY, the CLAIMS ADMINISTRATOR is authorized to incur on behalf of the CITY defense costs including, but trot limited to attorney fees, court costs, charges for court reporters, experts, technical analyses and reviews, medical examinations, and related items as are necessary or appropriate in the judgment of the CLAIMS ADMINISTRATOR or defense counsel for the proper defense of any case. The annual Computer Services fee for the first year of this Contract is $3,000.00. That fee covers the cost of computer. hardware, space on the system, and production of Loss. Run Register, Graphic Summary, and Numeric Summary reports. The Fee is due in full at the inception of each year of the Contract, though, for the convenience of the CITY, payments of $250.00 or one -twelfth of the annual fee, whichever is greater, may be made monthly toward any remaining balance. There will be no charge for the time and attention necessary to review and respond by phone to Incident Reports not requiring investigation, adjustment, or contact with claimants, witnesses, or counsel. All activities related to the handling of specific claims will be billed on a Time & Expense basis, as follows, for the first year: Professional Services Claims Manaaement: *$ 52.00 per hour Risk Manaaement and Loss Control consulting:$ 75.00 per hour Based exclusively on time of investigative, supervisory, and management personnel. No additional charge, except as provided below, for routine secretarial, insurance, or ** office overhead. Although $90.00 per hour is resently the current fee, this amount shall be reduced �o $75.00 per hour as long as claims administration is performed by INSURANCE CONSULTING ASSOCIATES INC. Allocated Costs Local travel (billed from Fairfield) Photography Color photography (35mm) Recordingcassettes for statements Statementranscription Video cassettes Videotaping Long distance telephone calls (out of the 707 or 209 area codes; FAX services First page: Each additional page: Initial file set-up Posting costs Necessary expenses Special computer services and reports Computer record searches Travel out of area $ .40 per mile 2.00 per print $ 1.75 each 15.00 per age As incurred 75.00 per hour (As incurred) $ 2.50 1.75 *$ 25.00 (As incurred (As incurred (As incurred (As incurred (As incurred) * Applicable for claims management only. No set-up charge on consulting projects. 3 Increases are authorized for•the second and third years of this i' contract in an amount not to exceed 7% per year, plus:,a pro-ratz share of any increase in liability insurance cost,exceedina 258 of the previous year's premium. The CLAIMS ADMruT; TRATOR shall submit Statements on a monthly basis showing an itemized break - d m by claim or by consulting activity. Billings are payable upon presentation, with any unpaid item being subject;;to a. late charge of 1-1/2% per month imposed on the next billing cycle. V. TER The term of this Contract shall be for a period of three (3) years beginning December 20, 1990, and terminating at midnight, December 20, 1993. This contract maybe terminated by either party for any reason upon sixty (60) days' written notice. The Contract may be renewed subject to renegotiation of terms and conditions by the parties hereto. VI. INDEPENDENT CONTRACTOR It is expressly agreed that the CLAIMS ADMINISTRATOR shall have the status of an Independent Contractor and shall not be deemed to be an officer, employee, or agent of the CITY. VII. OWNERSHIP OF FILES It is agreed that the claim files maintained in the CLAIMS ADMINISTRATOR's offices are the property of the CITY and may be reviewed upon reasonable notice. Upon termination of this Contract, possession of the files will be transferred to the CITY which will pay the reasonable costs of any activity ass.o,:iated with the transfer including, but not limited to, the ccs: of photocopying in whole or in part any and all claims filer are required for the CLAIMS ADMINISTRATOR to be in c"pliance with any law pertaining to the maintenance of records by a licensed adjusting firm. The CLAIMS ADMINISTRATOR is authorized to destroy any claim file without notice to the CITY after seven years following the date of file closure. Each party hereto agrees to indemnify, hold harmless and defend the other, its officers, agents, and employees from and against ary and all claims, demands, liability, costs and expenses of whatever nature, including court costs and counsel fees arising 4 out of injury, death, or loss to any person or persons, or loss of, or physical damage to, any property resulting in any manner from the sole negligence or willful acts of the responsible party, its agents, employees, licensees, or guests in the making or arising out of the performance of this agreement. In the event it is determined by settlement or litigation that there is a joint liability and/or responsibility of the parties for the settlement or judgment, the parties hereto agree that the responsibility for payment of such settlement or judgment shall be borne by the parties in proportion to the share of fault as determined by the court or jury in case of a judgment,' and by agreement, or arbitration in the event that agreement cannot be reached, in the case of a settlement. The parties l further agree hereunder that in those cases described under this paragraph, each party shall bear its own costs and attorney fees. IX. INSURANCE The CLAIMS ADMINISTRATOR agrees to procure and maintain during the life of this contract and to provide evidence to the CITY that it carries General Liability, Non -Owned Automobile Liability, and Errors & Omissions insurance in an amount not less than $1,000,000, plus statutory Workers compensation coverages. X. LIMITATION OF LIABILITY It is agreed that the CLAIMS ADMINISTRATOR will provide services utilizing good faith efforts based upon its experience in claims management and consulting. The CLAIMS ADMINISTRATOR provides no warranty, express nor implied, that its services will result in any specific outcome for any case nor any reduction in the frequency, severity, or cost of any liability claims(s) nor any incidents giving rise to claims, no matter how caused. XI. ARBITRATION The CITY and the CLAIMS ADMINISTRATOR agree to submit any claims arising under this Contract to binding arbitration pursuant to the current provisions of the California Code of Civil Procedure and any successor statutes. 5 In the event of any claim between the parties hereto arising out of the terms and conditions of this agreement, tho prevailing party, whether by way of arbitration or by judicial litigation, shall be entitled to reasonable attorney"s fees and costs al determined either by the arbitrator or by a court of competent jurisdiction. XII. RESPONSIBILITY FOR CLAIMS ADMINISTRATION FEES It is agreed that the CITY is liable for payment for all services rendered in accord with this Contract. Should the self—insured retention, the deductible, or the annual aggregate applicable to a particular claim or policy year be exceedad, the CLAIMS ADMINISTRATOR`s billings remain the responsibility of the CITY, and the CLAIMS ADMINISTRATOR is expressly authorized to continue all claims management activities which it deems to be appropriate until it receives from the CITY express written instructions to terminate any involvement in the claim or grouping of claims. XIII. TERMKKATION OF SERVICES The responsibility of the CLAIMS ADMINISTRATOR to provide any services terminates on the date that this Contract is terminated, whether or not that date is the scheduled date provided herein or is earlier or later. Should this contract be terminated for any reason and should the parties agree ttat tho CLAIMS ADMINISTRATOR will continue to handle any aspect of any claims or grouping of claims, charges for services so rendered will be billed at the rates then in effect as established by the CLAIMS ADMINISTRATOR. CITY OF LODI By = Date Authorized Signature INSURANCE CONSULTING ASSOCIATES, INC. By: ��l Gc�. Date Daniel.A. Bl.anquie Executive Vice President on 4 CITY COUNCIL JOHN R. (Randy) SNIDER. Mayor DAVIDM. HINCHMAN Mayor Pro Tempore EVELYN M.0LS0N JAMES W. PINKERTON. Ir. FRED M. REID t CITY OF LOD I CITY HALL, 221 WEST PINE STREET CALL BOX 3006 L0%CALIFORNIA 95241-1910 (209) 334-5634 TTLTCOPRR (209)111.6795 November 29, 1990 THOMAS A. PETERSON City Manager ALICE M. REIMCHE City Clerk BOB McNATT City Attorney - 1 l Mr. Daniel A. Blanquie Executive Vice President Insurance Consulting Associates P.O. Box 750849 Petaluma , CA 94975-0849 Dear Dan: Enclosed please find a fully executed original copy of the contract renewal with Insurance Consulting Associates, Inc., covering a three-year period coi mencing December 20, 1990 which was approved by the Lodi Cit " )u n c i l at its adjourned regular meeting of November 28, 1990. We look forward to a mutually beneficial relationship during the period of this contract. Very truly yours, Ate' fh'l)rC �t-- Alice K Reimche City Clerk AMR/imp Enclosure cc: Finance Director, Robert H. IUn I