HomeMy WebLinkAboutReso - CC - 006-2007RESOLUTION NO. 6-2007
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME
APPROVING EXECUTION OF THE CALIFORNIA STATE ASSOCIATION OF
COUNTIES EXCESS INSURANCE AUTHORITY (CSAC-EIA)
AND AUTHORIZING CITY MANAGER TO SIGN THE AGREEMENT
RESOLVED, by the City Council of the City of Burlingame:
WHEREAS, the City of Burlingame has obtained excess workers compensation insurance
coverage through California State Association of Counties California Public Entity Liability
Insurance Authority (CSAC-CPEIA) since October 1, 2003; and
WHEREAS, the California State Association of Counties has restructured the membership and
governance of its Excess Insurance Program to now include CPEIA members; and
WBEREAS, the California State Association of Counties Excess Insurance Program is
transitioning CPEIA members into its revised CSAC Excess Insurance joint powers authority,
NOW, TBEREFORE, IT IS RESOLVED AND ORDERED:
1. The City Manager is authorized and directed to execute the Joint Powers Agreement creating
the CSAC Excess Insurance Authority on behalf of the City of Burlingame as contained in Exhibit
A hereto and to further execute the Memorandum of Understanding for the CSAC Excess Workers
Compensation Program on behalf of the City as contained in Exhibit B hereto.
2. The Clerk is directed to attest to the signature of the Manager.
MAYOR
I, DORIS MORTENSEN, City Clerk of the City of Burlingame, do hereby certify that
the foregoing resolution was introduced at a regular meeting of the City Council held on the I e day of
January, 2007, and was adopted thereafter by the following vote:
AYES: COUNCII.MEMBERS: BAYLom, COHEN, KEIGHRAN, NAGEL, O'NAHOw
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE]
601Y CLERK
Ak
JOINT POWERS AGREEMENT
Adopted: October 5, 1979
Amended: May 12, 1980
Amended: January 23, 1987
Amended: October 7, 1988
Amended: March 1993
Amended: November 18, 1996
Amended: October 4, 2005
Amended: February 28, 2006
CREATING THE CSAC EXCESS INSURANCE AUTHORITY
This Agreement is executed in the State of California by and among those counties and public
entities organized and existing under the Constitution of the State of California which are parties signatory
to this Agreement. The CSAC Excess Insurance Authority was formed under the sponsorship of CSAC.
All such counties, hereinafter called member counties, and public entities, hereinafter called member
public entities, [collectively "members"] shall be listed in Appendix A, which shall be attached hereto and
made a part hereof.
RECITALS
WHEREAS, Article 1, Chapter 5, Division 7, Title 1 of the California Government Code (Section
6500at seq.) permits two or more public agencies by agreement to exercise jointly powers common to
the contracting parties; and
WHEREAS, Article 16, Section 6 of the California Constitution provides that insurance pooling
arrangements under joint exercise of power agreements shall not be considered the giving or lending of
credit as prohibited therein; and
WHEREAS, California Government Code Section 990.4 provides that a local public entity may
self -insure, purchase insurance through an authorized carrier, or purchase insurance through a surplus
line broker, or any combination of these; and
WHEREAS, pursuant to California Government Code Section 990.6, the cost of insurance
provided by a local public entity is a proper charge against the local public entity; and
WHEREAS, California'Govemment Code Section 990.8 provides that two or more local entities
may, by a joint powers agreement, provide insurance for any purpose by any one or more of the methods
specified in Government Code Section 990.4 and such pooling of self-insured claims or losses is not
considered insurance nor subject to regulation under the Insurance Code; and
WHEREAS, the counties and public entities executing this Agreement desire to join together for
the purpose of jointly funding and/or establishing excess and other insurance programs as determined;
NOW THEREFORE, the parties agree as follows:
Page 1 of 22
JPA, CSAC-EIA
ARTICLE 1
DEFINITIONS
Amended: February 28, 2006
"CSAC" shall mean the County Supervisors Association of California, dba California State
Association of Counties.
"Authority" shall mean the CSAC Excess Insurance Authority created by this Agreement.
"Board of Directors" or "Board" shall mean the governing body of the Authority.
"Claim" shall mean a claim made against a member arising out of an occurrence which is
covered by an excess or primary insurance program of the Authority in which the member is a participant.
"Executive Committee" shall mean the Executive Committee of the Board of Directors of the
Authority.
"Fiscal year" shall mean that period of twelve months which is established by the Board of
Directors as the fiscal year of the Authority.
"Government Code" shall mean the California Government Code.
"Insurance program" or "program" shall mean a program of the Authority under which
participating members are protected against designated losses, either through joint purchase of primary
or excess insurance, pooling of self-insured claims or losses, purchased insurance or any other
combination as determined by the Board. The Board of Directors or the Executive Committee may
determine applicable criteria for determining eligibility in any insurance program, as well as establishing
program policies and procedures.
"Joint powers law" shall mean Article 1, Chapter 5, Division 7, Title 1 (commencing with Section
6500) of the Government Code.
"Loss" shall mean a liability or potential liability of a member, including litigation expenses,
attorneys' fees and other costs, which is covered by an insurance program of the Authority in which the
member is a participant.
"Member county" shall mean any county which, through the membership of its supervisors in
CSAC, has executed this Agreement and become a member of the Authority. "Member county" shall
also include those entities or other bodies set forth in Article 3 (c).
"Member Public Entity" shall mean any California public entity which does not maintain a
membership in CSAC, has executed this Agreement and become a member of the Authority, "Member
Public Entity" shall also include those entities or other bodies set forth in Article 3(c).
"Occurrence" shall mean an event which is more fully defined in the memorandums of coverage
and/or policies of an insurance program in which the participating county or participating public entity is a
member.
"Participating county" shall mean any member county which has entered into a program
offered by the Authority pursuant to Article 14 of this Agreement and has not withdrawn or been canceled
therefrom pursuant to Articles 20 or 21.
Page 2 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
"Participating public entity" shall mean any member public entity which has entered into a
program offered by the Authority pursuant to Article 14 of this Agreement and has not withdrawn or been
canceled therefrom pursuant to Articles 20 or 21.
"Self-insured retention shall mean that portion of a loss resulting from an occurrence
experienced by a member which is retained as a liability or potential liability of the member and is not
subject to payment by the Authority.
"Reinsurance" shall mean insurance purchased by the Authority as part of an insurance
program to cover that portion of any loss which exceeds the joint funding capacity of that program.
ARTICLE 2
PURPOSES
This Agreement is entered into by the member counties and member public entities in order to
jointly develop and fund insurance programs as determined. Such programs may include, but are not
limited to, the creation of joint insurance funds, including primary and excess insurance funds, the pooling
of self-insured claims and losses, purchased insurance, including reinsurance, and the provision of
necessary administrative services. Such administrative services may include, but shall not be limited to,
risk management consulting, loss prevention and control, centralized loss reporting, actuarial consulting,
claims adjusting, and legal defense services.
ARTICLE 3
PARTIES TO AGREEMENT
(a) There shall be two classes of membership of the parties pursuant to this Agreement
consisting of one class designated as Member Counties and another class designated as Member Public
Entities.
(b) Each member county and member public entity, as a party to this Agreement, certifies
that it intends to and does contract with all other members as parties to this Agreement and, with such
other members as may later be added as parties to this Agreement pursuant to Article 19 as to all
programs of which it is a participating member. Each member also certifies that the removal of any party
from this Agreement, pursuant to Articles 20 or 21, shall not affect this Agreement or the members
obligations hereunder.
(c) A member for purposes of providing insurance coverage under any program of the
Authority, may contract on behalf of, and shall be deemed to include:
Any public entity as defined in Government Code § 811.2 which the member requests to
be added and from the time that such request is approved by the Executive Committee of the Authority.
Page 3 of 22
JPA, CSAC-EIA Amended: February 2B, 2006
Any nonprofit entity, including a nonprofit public benefit corporation formed pursuant to
Corporations Code §§ 5111, 5120 and, 5065, which the member requests to be added and from the time
that such request is approved by the Executive Committee.
(d) Any public entity or nonprofit so added shall be subject to and included under the
member's SIR or deductible, and when so added, may be subject to such other terms and conditions as
determined by the Executive Committee.
(e) Such public entity or nonprofit shall not be considered a separate party to this
Agreement. Any public entity or nonprofit so added, shall not affect the members representation on the
Board of Directors and shall be considered part of and represented by the member for all purposes under
this Agreement.
(f) The Executive Committee shall establish guidelines for approval of any public entity or
nonprofit so added in accordance with Article 3(c) and (d).
(g) Should any conflict arise between. the provisions of this Article and any applicable
Memorandum of Coverage or other document evidencing coverage, such Memorandum of Coverage or
other document evidencing coverage shall prevail.
ARTICLE 4
TERM
This Agreement shall continue in effect until terminated as provided herein.
CREATION OF THE AUTHORITY
Pursuant to the joint powers law, there is hereby created a public entity separate and apart from
the parties hereto, to be known as the CSAC Excess Insurance Authority, with such powers as are
hereinafter set forth.
ARTICLE 6
POWERS OF THE AUTHORITY
The Authority shall have all of the powers common to General Law counties in California, such as
Alpine County and all additional powers set forth in the joint powers law, and is hereby authorized to do
all acts necessary for the exercise of said powers. Such powers include, but are not limited to, the
following:
(a) To make and enter into contracts.
Page 4 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
(b) To incur debts, liabilities, and obligations.
(c) To acquire, hold, or dispose of property, contributions and donations of property, funds,
services, and other forms of assistance from persons, firms, corporations, and government entities.
(d) To sue and be sued in its own name, and to settle any claim against it.
(e) To receive and use contributions and advances from members as provided in
Government Code Section 6504, including contributions or advances of personnel, equipment, or
properly.
(f) To invest any money in its treasury that is not required for its immediate necessities,
pursuant to Government Code Section 6509.5.
(g) To cant' out all provisions of this Agreement.
Said powers shall be exercised pursuant to the terms hereof and in the manner provided by law.
ARTICLE 7
BOARD OF DIRECTORS
The Authority shall be governed by the Board of Directors, which shall be composed as follows:
a) One director from each member county, appointed by the member county board
of supervisors and serving at the pleasure of that body. Each member county board of supervisors shall
also appoint an alternate director who shall have the authority to attend, participate in and vote at any
meeting of the Board when the director is absent. A director or alternate director shall be a county
supervisor, other county official, or staff person of the member county, and upon termination of office or
employment with the county, shall automatically terminate membership or alternate membership on the
Board.
b) Ten directors consisting of seven directors and three alternate directors chosen
in the manner specified in the Bylaws from those participating as public entity members. A director or
alternate public entity director shall be an official, or staff person of the public entity member, and upon
termination of office or employment with the public entity, shall automatically terminate membership or
alternate membership on the Board.
G) Member county directors shall consist of a minimum of 80% of the eligible voting
members on the Board. The public entity member directors shall be reduced accordingly to ensure at
least 80% of the Board consists of county director members (By way of example, if the number of county
members is reduced from the current 54 by member withdrawals to a level of 28, then county members
would be at the 80% level, 28/35. If the county members go to 27, then the public entity members would
lose one seat and would only have 6 votes).
Any vacancy in a county director or alternate director position shall be filled by the appointing
county's board of supervisors, subject to the Provisions of this Article. Any vacancy in a public entity
director position shall be filled by vote of the public entity members.
Page 5 of 22
JPA, CSAC-EIA Amended: February 28, 2006
A majority of the membership of the Board shall constitute a quorum for the transaction of
business. Each member of the Board shall have one vote. Except as otherwise provided in this
Agreement or any other duly executed agreement of the members, all actions of the Board shall require
the affirmative vote of a majority of the members; provided, that any action which is restricted in effect to
one of the Authority's insurance programs, shall require the affirmative vote of a majority of those Board
members who represent counties and public entities participating in that program. For purposes of an
insurance program vote, to the extent there are public entity members participating in a program, the
public entity Board members as a whole shall have a minimum of one vote. The public entity Board
members may in no event cast more votes than would constitute 20% of the number of total county
members in that program (subject to the one vote minimum). Should the number of public entity Board
votes authorized herein be less than the number of public entity Board members at a duly noticed
meeting, the public entity Board members shall decide among themselves which Board member shall
vote. Should they be unable to decide, the President of the Authority shall determine which director(s)
shall vote.
ARTICLE 8
POWERS OF THE BOARD OF DIRECTORS
The Board of Directors shall have the following powers and functions:
(a) The Board shall exercise all powers and conduct all business of the Authority, either
directly or by delegation to other bodies or persons unless otherwise prohibited by this Agreement, or any
other duly executed agreement of the members or by law.
(b) The Board of Directors may adopt such resolutions as deemed necessary in the exercise
of those powers and duties set forth herein.
(c) The Board shall form an Executive Committee, as provided in Article 11. The Board may
delegate to the Executive Committee and the Executive Committee may discharge any powers or duties
of the Board except adoption of the Authority's annual budget. The powers and duties so delegated shall
be specified in resolutions adopted by the Board.
(d) The Board may form, as provided in Article 12, such other committees as it deems
appropriate to conduct the business of the Authority. The membership of any such other committee may
consist in whole or in part of persons who are not members of the Board; provided that the Board may
delegate its powers and duties only to a committee of the Board composed of a majority of Board
members and/or alternate members. Any committee which is not composed of a majority of Board
members and/or alternate members may function only in an advisory capacity.
(e) The Board shall elect the officers of the Authority and shall appoint or employ necessary
staff in accordance with Article 13.
(f) The Board shall cause to be prepared, and shall review, modify as necessary, and adopt
the annual operating budget of the Authority. Adoption of the budget may not be delegated.
Page 6 of 22
JPA, CSAC-EIA Amended: February 28, 2006
(g) The Board shall develop, or cause to be developed, and shall review, modify as
necessary, and adopt each insurance program of the Authority, including all provisions for reinsurance
and administrative services necessary to cavy out such program.
(h) The Board, directly or through the Executive Committee, shall provide for necessary
services to the Authority and to members, by contract or otherwise, which may include, but shall not be
limited to, risk management consulting, loss prevention and control, centralized loss reporting, actuarial
consulting, claims adjusting, and legal services.
(i) The Board shall provide general supervision and policy direction to the Chief Executive
Officer.
Q) The Board shall receive and act upon reports of the committees and the Chief Executive
Officer.
(k) The Board shall act upon each claim involving liability of the Authority, directly or by
delegation of authority to the Executive Committee or other committee, body or person, provided, that the
Board shall establish monetary limits upon any delegation of claims settlement authority, beyond which a
proposed settlement must be referred to the Board for approval.
(1) The Board may require that the Authority review, audit, report upon, and make
recommendations with regard to the safety or claims administration functions of any member, insofar as
those functions affect the liability or potential liability of the Authority. The Board may, forward any or all
such recommendations to the member with a request for complianbe and a statement of potential
consequences for noncompliance.
(m) The Board shall receive, review and act upon periodic reports and audits of the funds of
the Authority, as required under Articles 15 and 16 of this Agreement.
(n) The Board may, upon consultation with a casualty actuary, declare that any funds
established for any program has a surplus of funds and determine a formula to return such surplus to the
participating counties and participating public entities which have contributed to such fund.
(o) The Board shall have such other powers and duties as are reasonably necessary to carry
out the purposes of the Authority.
ARTICLE 9
MEETINGS OF THE BOARD OF DIRECTORS
(a) The Board shall hold at least one regular meeting each year and shall provide for such
other regular meetings and for such special meetings as it deems necessary.
(b) The Chief Executive Officer of the Authority shall provide for the keeping of minutes of
regular and special meetings of the Board, and shall provide a copy of the minutes to each member of the
Board at the next scheduled meeting.
Page 7 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
(c) All meetings of the Board, the Executive Committee and such committees as established
by the Board pursuant to Article 12 herein, shall be called, noticed, held and conducted in accordance
with the provisions of Govemment Code Section 54950 et seq.
ARTICLE 10
OFFICERS
The Board of Directors shall elect from its membership a President and Vice President of the
Board, to serve for one-year terms.
The President, or in his or her absence, the Vice President, shall preside at and conduct all
meetings of the Board and shall chair the Executive Committee.
ARTICLE 11
EXECUTIVE COMMITTEE
The Board of Directors shall establish an Executive Committee of the Board which shall consist
of eleven members: the President and Vice President of the Board, and nine members elected by the
Board from its membership.
The terms of office of the nine non -officer members shall be as provided in the Bylaws of the
Authority.
The Executive Committee shall conduct the business of the Authority between meetings of the
Board, exercising all those powers as provided for in Article 8, or as otherwise delegated to it by the
Board.
ARTICLE 12
COMMITTEES
The Board of Directors may establish committees, as it deems appropriate to conduct the
business of the Authority. Members of the committees shall be appointed by the Board, to serve two year
terms, subject to reappointment by the Board. The members of each committee shall annually select one
of their members to chair the Committee.
Each committee shall be composed of at least five members and shall have those duties as
determined by the Board, or as otherwise set forth in the Bylaws.
Each committee shall meet on the call of its chair, and shall report to the Executive Committee
and the Board as directed by the Board.
Page 8 of 22
JPA, CSAC-EIA
ARTICLE 13
STAFF
Amended: February 28, 2006
(a) Principal Staff. The following staff members shall be appointed by and serve at the
pleasure of the Board of Directors:
(1) Chief Executive Officer. The Chief Executive Officer shall administer the
business and activities of the Authority, subject to the general supervision and policy direction of the
Board of Directors and Executive Committee; shall be responsible for all minutes, notices and records of
the Authority and shall perform such other duties as are assigned by the Board and Executive
Committee.
(2) Treasurer. The duties of the Treasurer are set forth in Article 16 of this
Agreement. Pursuant to Government Code Section 6505.5, the Treasurer shall be the county treasurer
of a member county of the Authority, or, pursuant to Government Code Section 6505.6, the Board may
appoint one of its officers or employees to the position of Treasurer, who shall comply with the provisions
of Government Code Section 6505.5 (a -d).
(3) Auditor. The Auditor shall draw warrants to pay demands against the Authority
when approved by the Treasurer. Pursuant to Government Code Section 6505.5, the Auditor shall be the
Auditor of the county from which the Treasurer is appointed by the Board under (2) above, or, pursuant to
Government Code Section 6505.6, the Board may appoint one of its officers or employees to the position
of Auditor, who shall comply with the provisions of Government Code Section 6505.5 (a -d).
(b) Charges for Treasurer and Auditor Services. Pursuant to Government Code Section
6505, the charges to the Authority for the services of Treasurer and Auditor shall be determined by the
board of supervisors of the member county from which such staff members are appointed.
(c) Other Staff. The Board, Executive Committee or Chief Executive Officer shall provide
for the appointment of such other staff as may be necessary for the administration of the Authority,
ARTICLE 14
DEVELOPMENT, FUNDING AND IMPLEMENTATION
OF INSURANCE PROGRAMS
(a) Program Coverage. Insurance programs of the Authority may provide coverage,
including excess insurance coverage for:
(1) Workers' compensation;
(2) Comprehensive liability, including but not limited to general, personal injury,
contractual, public officials errors and omissions, and incidental malpractice liability;
(3) Comprehensive automobile liability;
(4) Hospital malpractice liability;
(5) Property and related programs;
Page 9 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
and may provide any other coverages authorized by the Board of Directors. The Board shall determine,
for each such program, a minimum number of participants required for program implementation and may
develop specific program coverages requiring detailed agreements for implementation of the above
programs.
(b) Program and Authority Funding. The members developing or participating in an
insurance program shall fund all costs of that program, including administrative costs, as hereinafter
provided. Costs of staffing and supporting the Authority, hereinafter called Authority general expenses,
shall be equitably allocated among the various programs by the Board, and shall be funded by the
members developing or participating in such programs in accordance with such allocations, as hereinafter
provided. In addition, the Board may, in its discretion, allocate a share of such Authority general expense
to those members which are not developing or participating in any program, and require those counties
and public entities to fund such share through a prescribed charge.
(1) Development Charge. Development costs of an insurance program shall be
funded by a development charge, as established by the Board of Directors. The development charge
shall be paid by each participant in the program following the program's adoption by the Board.
Development costs are those costs actually incurred by the Authority in developing a program for review
and adoption by the Board of Directors, including but not limited to: research, feasibility studies,
information and liaison work among participants, preparation and review of documents, and actuarial and
risk management consulting services. The development charge may also include a share of Authority
general expenses, as allocated to the program development function. '
The development charge shall be billed by the Authority to all participants in the
program upon establishment of the program and shall be payable in accordance with the Authority's
invoice and payment policy.
Upon the conclusion of program development: any deficiency in development
funds shall be billed to all participants which have paid the development charge, on a pro -rata or other
equitable basis, as determined by the Board: any surplus in such funds shall be transferred into the
Authority's general expense funds. .
(2) Annual Premium. Except as provided in (3) below, all post -development costs
of an insurance program shall be funded by annual premiums charged to the members participating in the
program each policy year, and by interest earnings on the funds so accumulated. Such premiums shall
be determined by the Board of Directors upon the basis of a cost allocation plan and rating formula
developed by the Authority with the assistance of a casualty actuary, risk management consultant, or
other qualified person. The premium for each participating member shall include that participant's share
of expected program losses including a margin for contingencies as determined by the Board, program
reinsurance costs, and program administrative costs for the year, plus that participant's share of Authority
general expense allocated to the program by the Board.
(3) Premium surcharge
(i) If the Authority experiences an unusually large number of losses under a
program during a policy year, such that notwithstanding reinsurance coverage for large individual losses,
Page 10 of 22
JPA, CSAC-EIA Amended: February 28, 2006
the joint insurance funds for the program may be exhausted before the next annual premiums are due,
the Board of Directors may, upon consultation with a casualty actuary, impose premium surcharges on all
participating members; or
(ii) If it is determined by the Board of Directors, upon consultation with a
casualty actuary, that the joint insurance funds for a program are insufficient to pay losses, fund known
estimated losses, and fund estimated losses which have been incurred but not reported, the Board of
Directors may impose a surcharge on all participating members.
(iii) Premium surcharges imposed pursuant to (1) and/or (ii) above shall be in
an amount which will assure adequate funds for the program to be actuarially sound; provided that the
surcharge to any participating member shall not exceed an amount equal to three (3) times the member's
annual premium for that year, unless otherwise determined by the Board of Directors.
Provided, however, that no premium surcharge in excess of three times
the member's annual premium for that year may be assessed unless, ninety days prior to the Board of
Directors taking action to determine the amount of the surcharge, the Authority notifies the governing
body of each participating member in writing of its recommendations regarding its intent to assess a
premium surcharge and the amount recommended to be assessed each member. The Authority shall,
concurrently with the written notification, provide each participating member with a copy of the actuarial
study upon which the recommended premium surcharge is based.
(iv) A member which is no longer a participating member at the time the
premium surcharge is assessed, but which was a participating member during the policy year(s) for which
the premium surcharge was assessed, shall pay such premium surcharges as it would have otherwise
been assessed in accordance with the provisions of (1), (ii), and (iii) above.
(c) Program Implementation and Effective Date. Upon establishment of an insurance
program by the Board of Directors, the Authority shall determine the manner of program implementation
and shall give written notice to all members of such program, which shall include, but not be limited to:
program participation levels, coverages and terms of coverage of the program, estimates of first year
premium charges, program development costs, effective date of the program (or estimated effective date)
and such other program provisions as deemed appropriate.
(d) Late Entry Into Program. A member which does not elect to enter an insurance
program upon its implementation, pursuant to (c) above, or a county or public entity which becomes a
party to this Agreement following implementation of the program, may petition the Board of Directors for
late entry into the program. Such request may be granted upon a majority vote of the Board members,
plus a majority vote of those board members who represent participants in the program. Alternatively, a
county or public entity may petition the Executive Committee for late entry into the program, or a program
committee, when authorized by an MOU governing that specific program, may approve late entry into that
program. Such request may be granted upon a majority vote of the Executive Committee or program
committee.
As a condition of late entry, the member shall pay the development charge for the
program, as adjusted at the conclusion of the development period, but not subject to further adjustment,
Page 11 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
and also any costs incurred by the Authority in analyzing the member's loss data and determining its
annual premium as of the time of entry.
(e) Reentry Into A Program. Any county or public entity that is a member of an insurance
program of the Authority who withdraws or is cancelled from an insurance program under Articles 21 and
22, may not reenter such insurance program for a period of three years from the effective date of
withdrawal or cancellation.
ARTICLE 15
ACCOUNTS AND RECORDS
(a) Annual Budget. The Authority shall annually adopt an operating budget pursuant to
Article 8 of this Agreement, which shall include a separate budget for each insurance program under
development or adopted and implemented by the Authority.
(b) Funds and Accounts. The Auditor of the Authority shall establish and maintain such
funds and accounts as may be required by good accounting practices and by the Board of Directors.
Separate accounts shall be established and maintained for each insurance program under development
or adopted and implemented by the Authority. Books and records of the Authority in the hands of the
Auditor shall be open to inspection at all reasonable times by authorized representatives of members.
The Authority shall adhere to the standard of strict accountability for funds set forth in
Government Code Section 6505.
(c) Auditor's Report. The Auditor, within one hundred and twenty (120) days after the
close of each fiscal year, shall give a complete written report of all financial activities for such fiscal year
to the Board and to each member.
(d) . Annual Audit. Pursuant to Government Code Section 6505, the Authority shall either
make or contract with a certified public accountant to make an annual fiscal year audit of all accounts and
records of the Authority, conforming in all respects with the requirements of that section. A report of the
audit shall be filed as a public record with each of the members and also with the county auditor of the
county where the home office of the Authority is located and shall be sent to any public agency or person
in California that submits a written request to the Authority. The report shall be filed within six months of
the end of the fiscal year or years under examination. Costs of the audit shall be considered a general
expense of the Authority.
ARTICLE 16
RESPONSIBILITIES FOR FUNDS AND PROPERTY
(a) The Treasurer shall have the custody of and disburse the Authority's funds. He or she
may delegate disbursing authority to such persons as may be authorized by the Board of Directors to
perform that function, subject to the requirements of (b) below.
(b) Pursuant to Government Code Section 6505.5, the Treasurer shall:
Page 12 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
(1) Receive and acknowledge receipt for all funds of the Authority and place them in
the treasury of the Treasurer to the credit of the Authority.
(2) Be responsible upon his or her official bond for the safekeeping and
disbursements of all Authority funds so held by him or her.
(3) Pay any sums due from the Authority, as approved for payment by the Board of
Directors or by any body or person to whom the Board has delegated approval authority, making such
payments from Authority funds upon warrants drawn by the Auditor.
(4) Verify and report in writing to the Authority and to members, as of the first day of
each quarter of the fiscal year, the amount of money then held for the Authority, the amount of receipts
since the last report, and the amount paid out since the last report.
(c) Pursuant to Government Code Section 6505.1, the Chief Executive Officer, the
Treasurer, and such other persons as the Board of Directors may designate shall have charge of, handle,
and have access to the properly of the Authority.
(d) The Authority shall secure and pay for a fidelity bond or bonds, in an amount or amounts
and in the form specified by the Board of Directors, covering all officers and staff of the Authority, and all
officers and staff who are authorized to have charge of, handle, and have access to property of the
Authority.
ARTICLE 17
RESPONSIBILITIES OF MEMBERS
Members shall have the following responsibilities under this Agreement.
(a) The board of supervisors of each member county shall appoint a representative and one
alternate representative to the Board of Directors, pursuant to Article 7.
(b) Each member shall appoint an officer or employee of the member to be responsible for
the risk management function for that member and to serve as a liaison between the member and the
Authority for all matters relating to risk management.
(c) Each member shall maintain an active safety program, and shall consider and .act upon
all recommendations of the Authority concerning the reduction of unsafe practices.
(d) Each member shall maintain its own claims and loss records in each category of liability
covered by an insurance program of the Authority in which the member is a participant, and shall provide
copies of such records to the Authority as directed by the Board of Directors or Executive Committee, or
to such other committee as directed by the Board or Executive Committee.
(e) Each member shall pay development charges, premiums, and premium surcharges due
to the Authority as required under Article 14. Penalties for late payment of such charges, premiums
and/or premium surcharges shall be as determined and assessed by the Board of Directors. After
withdrawal, cancellation, or termination action under Articles 20, 21, or 23, each member shall pay
promptly to the Authority any additional premiums due, as determined and assessed by the Board of
Page 13 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
Directors under Articles•22 or 23. Any costs incurred by the Authority associated with the collection of
such premiums or other charges, shall be recoverable by the Authority.
(f) Each member shall provide the Authority such other information or assistance as may be
necessary for the Authority to develop and implement insurance programs under this Agreement.
(g) Each member shall cooperate with and assist the Authority, and any insurer of the
Authority, in all matters relating to this Agreement, and shall comply with all Bylaws, and other rules by
the Board of Directors.
(h) Each member county shall maintain membership in CSAC.
(i) Each member shall have such other responsibilities as are provided elsewhere in this
Agreement, and as are established by the Board of Directors in order to carry out the purposes of this
Agreement.
ARTICLE 18
ADMINISTRATION OF CLAIMS
(a) Subject to subparagraph (e), each member shall be responsible for the investigation,
settlement or defense, and appeal of any claim made, suit brought, or proceeding instituted against the
member arising out of a loss.
(b) The Authority may develop standards for the administration of claims for each insurance
program of the Authority so as to permit oversight of the administration of claims by the members.
(c) Each participating member shall give the Authority timely written notice of claims in
accordance with the provisions of the Bylaws.
(d) A member shall not enter into any settlement involving liability of the Authority without the
advance written consent of the Authority.
(e) The Authority, at its own election and expense, shall have the right to participate with a
member in the settlement, defense, or appeal of any claim, suit or proceeding which, in the judgment of
the Authority, may involve liability of the Authority.
ARTICLE 19
NEW MEMBERS
Any California public entity may become a party to this Agreement and participate in any
insurance program in which it is not presently participating upon approval of the Board of Directors, by a
majority vote of the members, or by majority vote of the Executive Committee.
Page 14 of 22
JPA, CSAC-EIA
ARTICLE 20
WITHDRAWAL
Amended: February 28, 2006
(a) A member may withdraw as a party to this Agreement upon thirty (30) days advance
written notice to the Authority if it has never become a participant in any insurance program pursuant to
Article 14, or if it has previously withdrawn from all insurance programs in which it was a participant.
(b) After becoming a participant in an insurance program, a member may withdraw from that
program only at the end of a policy year for the program, and only if it gives the Authority at least sixty
(60) days advance written notice of such action.
ARTICLE 21
CANCELLATION
(a) Notwithstanding the provisions of Article 20, the Board of Directors may:
(1) Cancel any member from this Agreement and membership in the Authority, on a
majority vote of the Board members. Such action shall have the effect of canceling the member's
participation in all insurance programs of the Authority as of the date that all membership is canceled.
(2) Cancel any member's participation in an insurance program of the Authority,
without canceling the member's membership in the Authority or participation in other programs, on a vote
of two-thirds of the Board members present and voting who represent participants in the program.
The Board shall give sixty (60) days advance written notice of the effective date
of any cancellation under the foregoing provisions. Upon such effective date, the member shall be
treated the same as if it had voluntarily withdrawn from this Agreement, or from the insurance program,
as the case may be.
(b) A member that does not enter one or more of the insurance programs developed and
implemented by the Authority within the member's first year as a member of the Authority shall be
considered to have withdrawn as a parry to this Agreement at the and of such period, and its membership
in the Authority shall be automatically canceled as of that time, without action of the Board of Directors.
(c) A member which withdraws from all insurance programs of the Authority in which it was a
participant and does not enter any program for a period of six (6) months thereafter shall be considered to
have withdrawn as a party to the Agreement at the end of such period, and its membership in the
Authority shall be automatically canceled as of that time, without action of the Board of Directors. -
(d) A member county that terminates its membership in CSAC shall be considered to have
thereby withdrawn as a party to this Agreement, and its membership in the Authority and participation in
any insurance program of the Authority shall be automatically canceled as of that time, without the action
of the Board of Directors.
Page 15 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
ARTICLE 22
EFFECT OF WITHDRAWAL OR CANCELLATION
(a) If a member's participation in an insurance program of the Authority is canceled under
Article 21, with or without cancellation of membership in the Authority, and such cancellation is effective
before the end of the policy year for that program, the Authority shall promptly determine and return to
that member the amount of any unearned premium payment from the member for the policy year, such
amount to be computed on a pro -rata basis from the effective date of cancellation.
(b) Except as provided in (a) above, a member which withdraws or is canceled from this
Agreement and membership in the Authority, or from any program of the Authority, shall not be entitled to
the return of any premium or other payment to the Authority, or of any property contributed to the
Authority. However, in the event of termination of this Agreement, such member may share in the
distribution of assets of the Authority to the extent provided in Article 23 provided; however, that any
withdrawn or canceled member which has been assessed a premium surcharge pursuant to Article 14 (b)
(3) (ii) shall be entitled to return of said members unused surcharge, plus interest accrued thereon, at
such time as the Board of Directors declares that a surplus exists in any insurance fund for which a
premium surcharge was assessed.
(c) Except as provided in (d) below, a member shall pay any premium charges which the
Board of Directors determines are due from the member for losses and costs incurred during the entire
coverage year in which the member was a participant in such program regardless of the date of entry into
such program. Such charges may include any deficiency in a premium previously paid by the member,
as determined by audit under Article 14 (b) (2); any premium surcharge assessed to the member under
Article 14 (b) (3); and any additional amount of premium which the Board determines to be due from the
member upon final, disposition of all claims arising from losses under the program during the entire
coverage year in which the member was a participant regardless of date of entry into such program. Any
such premium charges shall be payable by the member in accordance with the Authority's invoice and
payment policy.
(d) Those members which who have withdrawn or been canceled pursuant to Articles 20
and 21 from any program of the Authority during a coverage year shall pay any premium charges which
the Board of Directors determines are due from the members for losses and costs which were incurred
during the county's participation in any program.
ARTICLE 23
TERMINATION AND DISTRIBUTION OF ASSETS
(a) A three-fourths vote of the total voting membership of the Authority, consisting of member
counties, acting through their boards of supervisors, and the voting Board members from the member
public entities, is required to terminate this Agreement; provided, however, that this Agreement and the
Page 16 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
Authority shall continue to exist after such election for the purpose of disposing of all claims, distributing
all assets, and performing all other functions necessary to conclude the affairs of the Authority.
(b) Upon termination of this Agreement, all assets of the Authority in each insurance
program shall be distributed among those members which participated in that program in proportion to
their cash contributions, including premiums paid and property contributed (at market value when
contributed). The Board of Directors shall determine such distribution within six (6) months after disposal
of the last pending claim or other liability covered by the program.
(c) Following termination of this Agreement, any member which was a participant in an
insurance program of the Authority shall pay any additional amount of premium, determined by the Board
of Directors in accordance with a loss allocation formula, which may be necessary to enable final
disposition of all claims arising from losses under that program during the entire coverage year in which
the member was a participant regardless of the date of entry into such program.
ARTICLE 24
LIABILITY OF BOARD OF DIRECTORS, OFFICERS, COMMITTEE MEMBERS
AND LEGAL ADVISORS
The members of the Board of Directors, Officers, committee members and legal advisors to any
Board or committees of the Authority shall use ordinary care and reasonable diligence in the exercise of
their powers and in the performance of their duties pursuant to this Agreement. They shall not be liable
for any mistake of judgment or any other action made, taken or omitted by them in good faith, nor for any
action taken or omitted by any agent, employee or independent contractor selected with reasonable care,
nor for loss incurred through investment of Authority funds, or failure to invest.
No Director, Officer, committee member, or legal advisor to any Board or committee shall be
responsible for any action taken or omitted by any other Director, Officer, committee member, or legal
advisor to any. committee. No Director, Officer, committee member or legal advisor to any committee
shall be required to give a bond or other security to guarantee the faithful performance of their duties
pursuant to this Agreement.
The funds of the Authority shall be used to defend, indemnify and hold harmless the Authority
and any Director, Officer, committee member or legal advisor to any committee for their actions taken
within the scope of the authority of the Authority. Nothing herein shall limit the right of the Authority to
purchase insurance to provide such coverage as is hereinabove set forth.
Page 17 of 22
JPA, CSAC-EIA Amended: February 28, 2006
ARTICLE 25
BYLAWS
The Board may adopt Bylaws consistent with this Agreement which shall provide for the
administration and management of the Authority.
ARTICLE 26
NOTICES
The Authority shall address notices, billings and other communications to a member as directed
by the member. Each member shall provide the Authority with the address to which communications are
to be sent. Members shall address notices and other communications to the Authority to the Chief
Executive Officer of the Authority, at the office address of the Authority as set forth in the Bylaws.
ARTICLE 27
AMENDMENT
A two-thirds vote of the total voting membership of the Authority, consisting of member counties,
acting through their boards of supervisors, and the voting Board members from member public entities, is
required to amend this Agreement.
ARTICLE 28
PROHIBITION AGAINST ASSIGNMENT
No member may assign any right, claim or interest it may have under this Agreement, and no
creditor, assignee or third party beneficiary of any member shall have any right, claim or title to any part,
share, interest, fund, premium or asset of the Authority.
ARTICLE 29
AGREEMENT COMPLETE
This Agreement constitutes the full and complete Agreement of the parties.
Page 18 of 22
JPA, CSAC-EIA Amended: February 28, 2006
ARTICLE 30
EFFECTIVE DATE OF AMENDMENTS
Any amendment of this Agreement shall become effective upon the date specified by the Board
and upon approval of any Amended Agreement as required in Article 27. Approval of any amendment by
the voting boards of supervisors and public entity board member's must take place no later than 30 days
from the effective date specified by the Board.
ARTICLE 31
DISPUTE RESOLUTION
When a dispute arises between the Authority and a member, the following procedures are to be
followed:
(a) Request for Reconsideration. The member will make a written request to the Authority
for the appropriate Committee to reconsider their position, citing the arguments in favor of the member
and any applicable case law that applies. The member can also, request a personal presentation to that
Committee, if it so desires.
(b) Committee Appeal. The committee responsible for the program or having jurisdiction
over the decision in question will review the matter and reconsider the Authority's position. This
committee appeal process is an opportunity for both sides to discuss and substantiate their positions
based upon legal arguments and the most complete information available. If the member requesting
reconsideration is represented on the committee having jurisdiction, that committee member shall be
deemed to have a conflict and shall be excluded from any vote.
(c) Executive Committee Appeal. If the member is not satisfied with the outcome of the
committee appeal, the matter will be brought to the Executive Committee for reconsideration upon
request of the member. If the member requesting reconsideration is represented on the Executive
Committee, that Executive Committee member shall be deemed to have a conflict and shall be excluded
from any vote.
(d) Arbitration. If the member is not satisfied with the outcome of the Executive Committee
appeal, the next step in the appeal process is arbitration. The arbitration, whether binding or non-binding,
is to be mutually agreed upon. by the parties. The matter will be submitted to a mutually agreed arbitrator
or panel of arbitrators for a determination. If Binding Arbitration is selected, then of course the decision of
the arbitrator is final. Both sides agree to abide by the decision of the arbitrator. The cost of arbitration
will be shared equally by the involved member and the Authority.
(e) Litigation. If, after following the dispute resolution procedure paragraphs a -d, either party
is not satisfied with the outcome of the non-binding arbitration process, either party may consider litigation
as a possible remedy to the dispute.
Page 19 of 22
JPA, CSAC-EIA Amended: February 26, 2006
ARTICLE 32
FILING WITH SECRETARY OF STATE
The Chief Executive officer of the Authority shall file a notice of this Agreement with the office of
California Secretary of State within 30 days of its effective date, as required by Government Code Section
6503.5 and within 70 days of its effective date as required by Government Code Section 53051.
Page 20 of 22
JPA, CSAC-EIA Amended: February 28, 2006
IN WITNESS WHEREOF, the undersigned party hereto has executed this Agreement on the date
indicated below.
Seal:
(Print Name of Member)
BY:
(Authorized signature of Member)
Page 21 of 22
JPA, CSAC-EIA . Amended: February 28, 2006
IN WITNESS WHEREOF, the undersigned party hereto has executed this Agreement on the date
indicated below.
DATE:
Seal:
MEMBER:
(Print Name of Member)
M
(Authorized signature of Member)
Page 21 of 22
JPA, CSAC-EIA
Amended: February 28, 2006
APPENDIX A
JOINT POWERS AGREEMENT
CREATING THE CSAC EXCESS INSURANCE AUTHORITY
MEMBER COUNTIES (AS OF MARCH 20051
ALAMEDA
ALPINE
AMADOR
BUTTE
CALAVERAS
COLUSA
CONTRA COSTA
DEL NORTE
ELDORADO
FRESNO
GLENN
HUMBOLDT
IMPERIAL
INYO
KERN
KINGS
LAKE
LASSEN
MADERA
MARIN
MARIPOSA
MENDOCINO
MERGED
MODOC
MONO
MONTEREY
NAPA
NEVADA
PLACER
PLUMAS
RIVERSIDE
SACRAMENTO
SAN BENITO
SAN BERNARDINO
SAN DIEGO
SAN JOAQUIN
SAN LUIS OBISPO
SANTA BARBARA
SANTA CLARA
SANTA CRUZ
SHASTA
SIERRA
SISKIYOU
SOLANO
SONOMA
STANISLAUS
SUTTER
TEHAMIA
TRINITY
TULARE
TUOLUMNE
VENTURA
YOLO
YUBA
Page 22 of 29
AAOJS444,
Adopted: September 11, 1980
Amended: May 7, 1982
Amended: January23, 1987
Amended: June 3, 1988
Amended: October 5, 1990
Amended: June 7, 1996
Amended March 3, 2006
BYLAWS
OF THE
CSAC EXCESS INSURANCE AUTHORITY
ARTICLE 1. DEFINITIONS
The definitions of terms used in these Bylaws shall be the same as are contained in the
Agreement Creating the Excess Insurance Authority, hereinafter called the Agreement, unless
otherwise expressly provided.
ARTICLE 11. OFFICES
The Authority's principal office for the transaction of business is located at 3017 Gold
Canal Drive, Suite 300, Rancho Cordova, California. The Board of Directors may change the
location of the principal office from time to time.
The Board may establish one or more subordinate offices at any place or places where
the Authority is qualified to do business.
ARTICLE III. MEETINGS OF THE BOARD OF DIRECTORS
1. Regular Meetings
(a) Time Held
The Board of Directors shall hold a minimum of three meetings per year.
These meetings should, if at all possible, be scheduled at least one year prior to each meeting.
Unless otherwise changed by a majority vote of the Board of Directors at a regular meeting,
these meetings shall be held at 8:30 a.m. on the first Friday of March, June and October.
Should any of these days fall upon a legal holiday, the meeting of the Board shall be held on
the same day of the following week.
1of12
Bylaws
Amended: March 3, 2006
(b) Business to be Transacted
At the second yearly regular meeting, the Board shall review, modify if
necessary, and adopt the annual operating budget of the Authority.
At the last yearly regular meeting, the Board shall elect officers and Executive
Committee members as required by the Agreement and these Bylaws.
At any meetings, the Board may transact any other business within its powers,
and receive reports of the operations and affairs of the Authority.
(c) Notice
Written notice of each regular meeting of the Board shall be delivered to each
director and/or alternate director at least seven (7) days in advance of the meeting. The notice
shall specify:
L The place, date and hour of the meeting.
ii. Those matters which are intended to be presented for action by the
Board.
iii. The general nature of any proposal for action by the Board concerning
a change in the Agreement or these Bylaws, a change in the membership of the Authority, or
any other matter substantially affecting the rights and obligations of the members.
iv. If officers and Executive Committee members are to be elected, the
names of the persons nominated for such positions at the time the notice is sent.
2. Special Meetings
A special meeting of the Board of Directors and/or of the participating members in any
insurance program may be called at any time by the President of the Board, or by a majority of
the members of the Board or such participating members subject to the requirement for 24-
hour written notice to the members, participating members and to requesting representatives of
the media provided in Section 54956 of the California Government Code. The notice of a
special meeting shall specify the time and place of the meeting and the business to be
transacted. No other business shall be considered at the meeting.
3. Annual Meeting of Public Entity Members
(a) The Public Entity members of the Authority shall hold at least one meeting
each year. Members attending shall be reimbursed expenses in accordance with Authority
policy.
(b) The Chief Executive Officer of the Authority shall provide for the keeping of
minutes of annual meetings of the Public Entity members, and shall provide a copy of the
minutes to each member of the Board at the next scheduled meeting.
2of12
Bylaws
Amended: March 3, 20D6
(c) The annual meeting of the Public Entity members shall be called, noticed, held
and conducted in accordance with the provisions of Government Code Section 54950 at seq.
4. Place of Meeting
Each regular or special meeting of the Board of Directors or participating members in
any insurance program shall be held at a place within the State of California designated by the
Board of Directors at its preceding meeting, or if no such designation is made, as designated
by the Executive Committee or the President of the Board.
5. Adjourned Meetings
The Board of Directors may adjourn any regular or special meeting to a time and place
specified in the order of adjournment, whether or not a quorum has been established. If a
quorum is not established, no business other than adjournment may be transacted.
A copy of the order for adjournment shall be posted as required by Section 54955 of
the Government Code. No other notice of an adjourned meeting shall be necessary, unless the
adjournment is for a period of 30 days or more, in which case notice of the adjourned meeting
shall be given in the same manner as notice of the original meeting.
ARTICLE IV. THE EXECUTIVE COMMITTEE
1. Membership
The eleven member Executive Committee shall consist of: President, Vice -President,
one county CAO, one county Risk Manager, one financially -oriented member (preferably with
investment background) from a member county but not necessarily a member of the Board,
one county supervisor, two members from the public entity Board members, and the balance
shall be elected at large. The immediate Past President shall also be a member of the
Executive Committee, but shall serve in an advisory capacity only. If the Past President is
elected to the Executive Committee for a term immediately succeeding his/her term as
President, then the position of Past President shall remain vacant until filled in accordance with
these Bylaws. The Executive Committee shall appoint the County Counsel representative who
shall serve in an advisory capacity to the Board of Directors and the Executive Committee.
If a specific category is not able to be filled, then the Board of Directors will fill from
within its own membership.
Any duly appointed or elected member of the Board may be elected by the Board to
serve as President or Vice -President, provided however, that in no event shall there be more
than two public entity directors on the Executive Committee.
2. Terms of Office
3of12
Bylaws Amended: March 3, 2006
The terms of office of the nine non -officer members of the Executive Committee shall
be for two (2) years, or as otherwise provided for in the Agreement. The term of office for the
immediate Past President shall be for one (1) year.
3. Removal, Vacancies and Alternates
The Board of Directors may remove any or all non -officer members from the Executive
Committee of any time.
A vacancy in any non -officer position on the Executive Committee, because of death,
resignation, removal, disqualification, or any other cause, shall be filled by election of the
Board. Pending action by the Board, the remaining members of the Executive Committee may
fill a vacancy on an interim basis, except in the case of a vacancy caused by removal, which
may only be filled by the Board.
The alternate director for a director who is a member of the Executive Committee may
attend and participate in a meeting of the Committee as the representative of the member, but
may not vote.
Continued membership of any Executive Committee member who misses more than
50% of the meetings in any calendar year or who misses two consecutive meetings shall be
reviewed by the Executive Committee with any removal recommendations to be made to the
Board of Directors.
4. Meetings
The Executive Committee shall meet on the first Thursday of every month, or on the
call of the President of the Board, at such times and places as are designated by that officer.
The Committee shall also meet on the call of any six of its members, at such time and
place as they may designate.
Written notice of regular meetings shall be in accordance with the provisions of Article
III. (1). (c). Special meetings shall be called and noticed in accordance with the provisions of
Article III. (2).
5. Quorum and Voting Requirements
Seven members of the Executive Committee shall constitute a quorum for the
transaction of business. All actions of the Committee shall require the affirmative votes of a
majority of the members at a meeting duly held at which a quorum is present. .
6. Adjourned Meetings
The Executive Committee may adjourn any meeting to a time and place specified in the
order for adjournment, whether or not a quorum has been established. If a quorum is not
established, no business other than adjournment may be transacted.
4of12
Bylaws
Amended: March 3, 2006
A copy of the order for adjournment shall be posted as required by Section 54955 of
the Government Code. No other notice of an adjourned meeting shall be necessary, unless the
adjournment is for a period of 24 hours or more, in which case notice of the adjourned meeting
shall be delivered to the members who were not present at the time of adjournment.
ARTICLE V. OFFICERS
1. Duties of the President
The President shall preside at and conduct all meetings of the Board and shall chair
the Executive Committee.
2. Duties of Vice President
In the absence of the President, the Vice President shall perform all duties assigned to
the President by the Agreement and by these Bylaws.
3. Terms of Office
The terms of office of the President and Vice -President shall be for one (1) year.
4. Removal and Vacancies
The Board of Directors may remove an officer at any time. A vacancy in an officer
position, because of death, resignation, removal, disqualification, or any other cause, shall be
filled by election of the Board.
ARTICLE VI. COMMITTEES
1. Establishment of Committees
In accordance with Article 12 of the Agreement, by adoption of these Bylaws, the
following committees are hereby established.
(a) Claims Review Committee
The Claims Review Committee shall review all claims arising out of the
Workers' Compensation, Liability I, and Property programs against members which involve or
may involve liability of the Authority. The Claims Review Committee may, subject to monetary
limits established by the Board, settle claims within its monetary limits in accordance with
Article X of these Bylaws. The Committee shall advise the Executive Committee and the Board
as to the nature and extent of claims adjusting and legal defense services necessary to protect
the funds of the Authority, as to settlement of claims above its monetary limits which involve
5of12
Bylaws
Amended: March 3, 2006
liability of the Authority and such other functions as the Board and/or Executive Committee may
direct. The Executive Committee may appoint County Counsel representatives to serve in an
advisory capacity to the Claims Review Committee.
(b) Underwriting Committee
The Underwriting Committee shall be responsible for approvalof applications
by non-members for membership in the Workers' Compensation and Liability programs of the
Authority subject to ratification by the Executive Committee. The Committee shall formulate,
advise and make recommendations to the Executive Committee regarding the allocation of
premiums to members and prospective non-members; advise and make recommendations
regarding the distribution of such premiums; assess the stability of insurers and reinsurers and
advise and make recommendations regarding said insurers and reinsurers and perform such
other functions as the Board and/or Executive Committee may direct.
(c) Property Committee
The Property Committee shall review all matters pertaining to property
insurance, including but not limited to, coverage and claims for the purpose of evaluating the
Authority's property program. The Committee shall advise the Executive Committee and the
Board as to matters affecting the Authority's property insurance program. The Property
Committee shall be responsible for approval of applications by non-members for membership
in the Authority's Property Insurance Program.
(d) Finance Committee
The Finance Committee shall serve in an advisory capacity to the Chief
Executive Officer and Executive Committee. The Committee shall study and recommend
policies, procedures and practices to be implemented regarding various financial matters of the
Authority and may:
L Review budgets
ii. Review financial statements on a quarterly basis
iii. Recommend for approval the external auditor to perform annual audits
iv. Recommend for approval an investment program for trust monies
V. Recommend for approval the accounting and internal control systems
which monitor the safeguarding of the Authority's assets.
vi. Recommend for approval the Treasurer of the Authority
(e) Medical Malpractice Committee
6of12
Bylaws Amended: March 3, 2006
The Medical Malpractice Committee shall review all matters pertaining to the
Medical Malpractice Program, including but not limited to, coverage and claims, for the purpose
of evaluating the Authority's Medical Malpractice Program. The Medical Malpractice
Committee shall have authority to decide all matters as described in the Memorandum of
Understanding between the CSAC Excess Insurance Authority and Medical Malpractice
members. The Medical Malpractice Committee shall be responsible for approval of applications
by non-members for membership in the Authority's Medical Malpractice Program.
(f) Loss Prevention Committee
The Loss Prevention Committee shall develop, evaluate and review all matters
pertaining to the Authority's loss prevention services. The Committee shall advise and make
recommendations to the Executive Committee or the Board of Directors regarding the
programs, proposed regulatory changes specific to loss prevention and safety, the drug and
alcohol testing consortium and perform such other functions as the Board and/or Executive
Committee may direct.
(g) Employee Benefits Committee
The Employee Benefits Committee shall develop, evaluate and review all
matters pertaining to the Authority's employee benefits programs. The Committee shall advise
and make recommendations to the Executive Committee or the Board of Directors regarding
existing programs and the development and implementation of new employee benefits
programs and perform such other functions as the Board and/or Executive Committee may
direct.
(h) Legislative Committee
The Legislative Committee shall actively propose amending, supporting, or
opposing legislation and regulations for the benefit of the members regarding issues of concern
to public entities. Such legislation, legislative reform, and/or regulation shall be in the areas of
workers' compensation, tort, workplace safety and loss prevention, and other areas of interest
to public entities. The Committee shall advise and make recommendations to the Executive
Committee regarding legislative activities to be sponsored by the Authority and perform such
other functions as the Board and/or Executive Committee may direct.
2. Committees Created by Memorandums of Understanding
The Board of Directors may, from time to time, approve development of insurance
programs through Memorandums of Understanding (MOU). Those programs may create
committees through the MOU to act for and on behalf of such programs. Any committee so
created, except as otherwise provided in any applicable MOU, shall be established and act in
accordance with the provisions of Article 12 and these Bylaws.
7of12
Bylaws Amended: March 3, 2006
3. Appointment of Members
By adoption of these Bylaws, the Board of Directors delegates to the Executive
Committee the appointment of the members of the Claims Review, Underwriting, Property,
Finance, Medical Malpractice, Loss Prevention and Employee Benefits Committees, such
appointment to be in accordance with the provisions as set forth in Article 12 of the Agreement.
4. Committee Meetings
(a) Committees shall meet at regularly scheduled times and places or upon the
call of their chairs. Written notice of regular meetings shall be in accordance with the
provisions of Article III. (1). (c). Special meetings shall be called and noticed in accordance
with the provisions of Article III.(2).
A majority of the members of the respective Committees shall constitute a
quorum for the transaction of business. All actions of the Committees shall require the
affirmative votes of a majority of the members at a meeting duly held at which a quorum is
present.
ARTICLE VII. DELEGATION OF AUTHORITY
1. Adoption of Resolutions
As provided in Article 8 of the Agreement, the Board of Directors may adopt such
resolutions as are deemed necessary in the exercise of its power and duties, including the
delegation of certain powers and duties to the Executive Committee. Any resolutions so
adopted by the Board are by this reference incorporated herein as though fully set forth.
2. Adoption of other Policies and Procedures
As also provided in Article 8 of the Agreement, the Board of Directors is vested with
authority to exercise all powers and conduct all business of the Authority. In furtherance of that
authority, the Board of Directors and the Executive Committee shall develop and implement
such policies and procedures, not otherwise prohibited by the Agreement or law, as they from
time to time deem necessary to aid and assist in the conduct of the business of the Authority.
Any such policies and procedures as adopted are by this reference incorporated herein as
though fully set forth.
ARTICLE Vlll. MISCELLANEOUS
8of12
Bylaws
1. Execution of Contracts
Amended: March 3, 2006
The Board of Directors or the Executive Committee may authorize any officer, staff
member, or agent of the Authority to execute any contract in the name of and on behalf of the
Authority, and such authorization may be general or specific in nature. The Chief Executive
Officer, or his or her designee, may enter into such contracts and authorize such payments as
are approved in the Authority's budget, renew any existing contract or authorize any payment
which does not exceed $10,000.00. Except as otherwise provided, no officer, staff member or
agency shall have any power to bind the Authority by contract.
2. Authorization of Payments
All invoices, billings, and claims of members for payment of losses under an excess
insurance program shall be approved and signed by the following before payment by the
Treasurer:
(a) President of the Board or,
(b) The Vice President of the Board or,
(c) The Chief Executive Officer or his or her designee.
3. Rules of Procedure for Meetings
All meetings of the Board of Directors, Executive Committee, and other committees or
bodies of the Authority shall be conducted in accordance with Robert's Rules of. Order,
provided that in the event of a conflict, such rules shall be superseded by the Agreement, these
Bylaws, and California law.
ARTICLE IX. FISCAL YEAR
The fiscal year of the Authority shall be from July 1 to June 30.
ARTICLE X. ADMINISTRATION AND NOTICE OF CLAIMS
A. Administration of Claims
In accordance with Article 18 of the Agreement, each member shall be
responsible for the investigation, settlement or defense, and appeal of any claim made, suit
brought, or proceeding instituted against the member arising out of a loss covered by an
insurance program of the Authority of which the member is a participant.
2. The Authority may develop standards for the administration of claims for
designated insurance programs of the Authority. Any standards for the administration of claims
9of12
Bylaws Amended: March 3, 2006
which have been developed for any designated program, or which otherwise may be
developed, are by this reference incorporated herein as though fully set forth.
B. Notice of Claims
If a member is a participant in the Workers' Compensation, Liability I and/or Liability II
programs of the Authority, the member shall give the Authority timely written notice in
accordance with the adopted reporting requirements established for each such program. Such
reporting requirements, as adopted or as amended, are by this reference incorporated herein
as though fully set forth.
ARTICLE XI. CLAIMS SETTLEMENT AUTHORITY
In accordance with Article 6 paragraph Q) of the Agreement, by adoption of these
Bylaws, the following claims settlement authority is established.
(a) The Board of Directors hereby delegates to the Executive Committee full
settlement authority for the full limits of coverage for any claim involving coverage under any
established program of the Authority.
(b) The first $5,000,000 of settlement authority involving liability under the
Workers' Compensation and Excess Liability Programs, and full settlement authority for liability
under the Property Insurance Program, is hereby delegated to the Claims Review Committee.
(c) The Executive Committee hereby delegates all of its settlement authority up to
the full limit of coverage for liability involving coverage under the Medical Malpractice Program
to the Medical Malpractice Committee.
ARTICLE XII. TREASURER AND AUDITOR
1. Treasurer
The duties of the Treasurer are set forth in Article 16 of the Agreement Pursuant to
Government Code Section 6505.6 and in accordance with Article 13(a)(2) of the Agreement,
the Board appoints the Chief Executive Officer to the position of Treasurer, who shall comply
with the provisions of Government Code Section 6505.5 (a -d).
2. Auditor
The Auditor shall draw warrants to pay demands against the Authority when approved
by the Treasurer. Pursuant to Government Code Section 6505.6 and in accordance with
Article 13(a)(3) of the Agreement, the Board appoints the Chief Financial Officer to the position
of Auditor, who shall comply with the provisions of Government Code Section 6505.5 (a -d).
10 of 12
Bylaws Amended: March 3, 2006
ARTICLE XIII. PUBLIC ENTITY BOARD MEMBERS
1. Election
In accordance with Article 7(b -c), the Public Entity members shall elect seven (7) voting
directors and three (3) alternate directors to the Board of Directors. The election shall be
conducted by mail in ballot under the direction of the Executive Committee. The Executive
Committee shall adopt rules and procedures for the conduct of the elections, which shall
include, but not be limited to, a nominating committee which shall be responsible for
determining a slate of candidates. Election of Board members shall be by a majority vote of
those responding. In order for the election to be valid, a response rate of at least one-third of
the public entity membership is required. Should there be a tie vote for the election of any
Board member, the winner will be determined in accordance with the adopted rules and
procedures for the conduct of elections. Unless otherwise approved by the Executive
Committee, the names of nominated candidates shall be mailed to all members no later than
August 1s` of each year. Ballots shall be returned no later than September Vt. Elected Board
members shall take office on October 18t.
2. Composition and Terms
The ten directors shall be those that receive the highest votes from the participating
public entity members, with the top seven highest vote totals designated as the director
members and the remaining three with the highest vote totals designated as alternate
directors. Three of the director seats shall consist of one from a city member, one from a
schools member, one from a special district member and the remaining four seats shall be
elected at large. The terms of the seven director positions shall be staggered such that
approximately half of the directors' terms will expire each year. Terms of office for the directors
shall generally be two-year terms, provided however, that some one-year terms will be
established initially and may be established from time to time in order to establish and maintain
the appropriate stagger. Alternate members will be elected for one year terms and will be
permitted to vote only if the required number of director members are absent. Should the
number of altemate votes authorized due to director absences be less than the number of
alternate members at any meeting, the alternates shall decide which alternate members shall
be entitled to vote, and if they cannot agree, the President of the Board will determine which of
the alternate directors may vote in a director's absence. Alternate directors who attend Board
meetings will be entitled to expense reimbursement as if they were a director regardless of
whether or not they are in a voting capacity.
ARTICLE XIV. AMENDMENTS
11 of 12
Bylaws
Amended: March 3, 2006
These Bylaws may be amended at any time by a majority vote of the Board of
Directors. Following adoption of amendments, the Chief Executive Officer shall prepare and
distribute a revision of the Bylaws to all members.
CERTIFICATE OF CHIEF EXECUTIVE OFFICER
I, the undersigned, certify that I am presently the Chief Executive Officer of the CSAC
Excess Insurance Authority and that the above Bylaws, consisting of ten pages, are amended
Bylaws of the Authority, as adopted at a meeting of the Board of Directors held on March 3,
2006.
Date: March 3, 2006
Executed at Rancho Cordova, California
MICHAEL FLEMING
CHIEF EXECUTIVE OFFICER
12 of 12
Adopted: March 5, 1993
Amended: October 4, 1996
Amended: October 6, 2006
MEMORANDUM OF UNDERSTANDING
EXCESS WORKERS' COMP ENSAT ION PROGRAM
This Memorandum of Understanding is entered into by and between the CSAC Excess
Insurance Authority (hereinafter referred to as the "Authority") and the participating
members who are signatories to this Memorandum.
1. Joint Powers Agreement. Except as otherwise provided herein, all terms used
herein shall be as defined in Article 1 of the Joint Powers Agreement Creating the CSAC
Excess Insurance Authority (hereinafter referred to as "Agreement"), and all other
provisions of the Agreement not in conflict with this Memorandum shall be applicable.
2. Annual Premium. The participating members, in accordance with the provisions
of Article 14(b)(2) of the Agreement, shall be assessed an annual premium for the
purpose of funding the Excess Workers' Compensation Program (hereinafter referred to
as the "Program"). Annual premiums shall include expected losses for the policy period,
including incurred but not reported losses (IBNR), as well as a margin for contingencies
based upon a confidence level as determined by the Board of Directors of the Authority
(hereinafter Board), and adjustments, if any, for a surplus or deficit from all program policy
periods. In addition, the premium shall include program reinsurance costs and program
administrative costs, plus the Authority's general expense allocated to the Program by the
Board for the next policy period.
- - 3. Cost Allocation. Each participating member's share of annual premium shall be
determined pursuant to a cost allocation plan as described in Article 14(b)(2) of the
Agreement. The Board approved cost allocation plan is attached hereto as Exhibit A and
may be amended from time to time by an affirmative vote of the majority of the Board
representing the members participating in the Program.
4. Dividends and Assessments. The Program shall be funded in accordance with
paragraph 2 above. In general, the annual premium, as determined by the Board, will be
established at a level which will provide adequate overall. funding without the need for
adjustments to past policy period(s) in the form of dividends and assessments. However,
should the Program for any reason not be adequately funded, except as otherwise
provided herein, pro -rata assessments to the participating members may be utilized to
ensure the approved funding level for those policy periods individually or for a block of
Page 1 of 4
CSAC Excess Insurance Authority Amended: October 6, 2006
Excess Workers' Compensation Program MOU
policy periods, in accordance with the provisions of Article 14(b)(3) of the Agreement.
Pro -rata dividends will be declared as provided herein. Dividends may also be declared
as deemed appropriate by the Board.
5. Closure of Policy Periods. Notwithstanding any other provision of this
Memorandum, the following provisions are applicable:
(a) Upon reaching ten (10) years of maturity after the end of a program period,
that period shall be "closed" and there shall be no further dividends
declared or assessments made with respect to those program periods
except as set forth in paragraphs 6(a) and 6(b), below;
(b) Notwithstanding sub -paragraph (a) above, the Board may take action to
leave a policy period 'open" even though it may otherwise qualify for
closure. In addition, the last ten (10) policy periods shall always remain
"open" unless the Board takes specific action to declare any of the last ten
(10) policy periods closed.
(c) Dividends and assessments (other than as outlined in paragraphs 6(a) and
6(b), below) shall be administered to the participating members based upon
the proportion of premiums paid to the Program in"
openn periods only. For
purposes of administering dividends and assessments pursuant to this sub-
paragraph, all "open" policy periods shall be considered as one block.
6. Declaration of Dividends. Dividends shall be payable from the Program to a
participating member in accordance with its proportionate funding to the Program during
the applicable program period as follows:
(a) A dividend shall be declared at the time a program period is closed on all
amounts over the 90% confidence level;
(b) A dividend shall be declared at the time a program period is closed on all
amounts which represent premium surcharge amounts assessed pursuant
to Article 14(b)(3) of the Agreement where the funding exceeds the 80%
confidence level.
7. Memorandum of Coverage. A Memorandum of Coverage will be issued by the
Authority evidencing membership in the Program and setting forth terms and conditions of
coverage.
Page 2 of 4
CSAC Excess Insurance Authority
Excess Workers' compensation Program MOU
Amended: October 6, 2006
8. Claims Administration. Each participating member is required to comply with
the Authority's Underwriting and Claims Administration Standards (including Addendum
A - W.C. Claims Administration Guidelines) as amended from time to time, and which
are attached hereto as Exhibit B and incorporated herein.
9. Late Payments. Notwithstanding any other provision to the contrary regarding
late payment of invoices or cancellation from a Program, at the discretion of the Executive
Committee, any member that fails to pay an invoice when due may be given a ten (10)
day written notice of cancellation.
10. Disputes. Any question or dispute with respect to the rights and obligations of the
parties to this Memorandum regarding coverage shall be determined in accordance with
the Joint Powers Agreement Article 31, Dispute Resolution.
11. Amendment. This Memorandum may be amended by two-thirds of the CSAC
Excess Insurance Authority's Board of Directors and signature on the Memorandum by
the members designated representative who shall have authority to execute this
Memorandum. Should a member of the Program fail to execute any amendment to this
Memorandum within the time provided by the Board, the member will be deemed to have
withdrawn as of the end of the policy period.
12. Complete Agreement. Except as otherwise provided herein, this Memorandum
constitutes the full and complete agreement of the members.
13. Severability. Should any provision of this Memorandum be judicially determined
to be void or unenforceable, such determination shall not affect any remaining provision.
14. Effective Date. This Memorandum shall become effective on the effective date
of coverage for the member and upon approval by the Board of any amendment,
whichever is later.
15. Execution in Counterparts. This Memorandum may be executed in several
counterparts, each of which shall be an original, all of which shall constitute but one and
the same instrument.
Page 3 of 4
CSAC Excess Insurance Authority
Excess Workers' Compensation Program MOU
Amended: October 6, 2006
IN WITNESS WHEREOF, the undersigned have executed this Memorandum as of
the date set forth below.
Dated:
Dated:
CSAC Excess Insurance Authority
Member Entity:
Page 4 of 4
CSAC Excess Insurance Authority
Excess Workers' Compensation Program MOU
Amended: October 6, 2006
IN WITNESS WHEREOF, the undersigned have executed this Memorandum as of
the date set forth below.
Dated:
Dated:
CSAC Excess Insurance Authority
Member Entity:
Page 4 of 4
EXHIBIT A
EXCESS WORKERS' COMPENSATION PROGRAM
COST ALLOCATION PLAN
As delegated by the Board of Directors, the Executive Committee will determine
the specific allocation of all costs among the members subject to the following
parameters:
Actuarial Analysis
An annual actuarial analysis will be performed using loss data and payroll
collected from the members. The analysis will determine the necessary funding
rates at various confidence levels and using various discount assumptions.
Different rates may be developed for different groups or classes of business as is
deemed necessary or appropriate by the Executive Committee. At the March
Board meeting, the Board of Directors will select the funding level rates and
discount factors to be used based upon the actuarial analysis and
recommendations from the actuary, the Underwriting Committee and the
Executive Committee.
Pool Contributions
The total needed deposit pool contribution will be determined by multiplying the
rates described above by the payroll for all of the members participating in the
pool. Estimated payroll for the year being funded will be used. The Executive
Committee may break the pool into different layers for allocation purposes, and
may apply a different loss experience modification for each layer as is deemed
appropriate based on loss frequency. In general, the lower layers will be subject
to greater experience modification and the higher layers will be subject to lower
experience modification or no experience modification. Within the layers, the
-- larger members will be subject to greater experience modification than the
smaller members. After the experience modification has been applied for each
layer, there will be a pro -rata adjustment back to the total needed deposit pool
contribution. This amount will be collected from the members at the beginning of
the policy period. The actual payroll for the period will be determined after the
completion of the policy period and an adjustment to each member's pool
contribution will be made to account for the difference between the estimated and
actual payroll. Additional contributions will be collected or return contributions
will be refunded as appropriate.
Reinsurance Premiums
The reinsurance premium will be determined through negotiations with the
reinsurer(s) and approved by the Board upon recommendation of the
EWC Program MOU
Exhibit A
Page 2 of 2
Underwriting and Executive Committees. This premium will then be allocated
among the members based upon their estimated payroll. Adjustments will be
made based on the actual payroll upon completion of the policy period in the
same manner as described in the Pool Contribution section above.
EIA Administration Fees
The total EIA Administration Fees will be determined through the annual
budgeting process with an appropriate amount allocated to the Excess Workers'
Compensation Program. These fees will be allocated among the members as
determined by the Executive Committee. In general, the basis for this allocation
will be each member's percentage of the total pool contributions and reinsurance
premium.
Deviation From the Standard
The Executive Committee may establish policies to deviate from the standard
allocation methodology selected for each year on a case-by-case basis, if
necessary. They may also elect to further delegate some or all of the decision-
making authority described herein to the Underwriting Committee.
ro
EXHIBIT B
Adopted:
December 6, 1985
Amended:
January23, 1987
Amended:
October 6, 1995
Amended:
October 1, 1999
Amended:
October 3, 2003
Amended:
October 1, 2004
CSAC EXCESS INSURANCE AUTHORITY
UNDERWRITING AND CLAIMS ADMINISTRATION STANDARDS
I. GENERAL
A. Each Member shall appoint an official or employee of the Member to be
responsible for the risk management function and to serve as a liaison
between the Member and the Authority for all matters relating to risk
management.
B. Each Member shall maintain a loss prevention program and shall consider
and act upon all recommendations of the Authority concerning the reduction
of unsafe conditions.
C. Each Member shall maintain records of claims in each category of
insurance covered by a program of the Authority and shall provide copies of
such records to the Authority as directed by the Executive, Underwriting or
Claims Review Committees.
Such records shall provide the following information by fiscal year: number
of claims (open and closed); amounts paid, amounts reserved and total
incurred. Allocated expenses shall be included. If losses are capped, the
excess amount shall be indicated.
II. EXCESS WORKERS' COMPENSATION PROGRAM
A. The Member shall be responsible for the investigation, settlement, defense
and appeal of any claim made, suit brought or proceeding instituted against
the Member.
1. The Member shall use only qualified personnel to administer its
workers' compensation claims. At least one person in the claims
office (whether in-house or outside administrator) shall be certified by
the State of California as a qualified administrator of self -insured
workers' compensation plans.
2. Qualified defense counsel experienced in workers' compensation
law and practice shall handle litigated claims. Members are
encouraged to utilize attomeys who have the designation "Certified
Workers' Compensation Specialist, the State Bar of California, Board
of Legal Specialization".
3. The Member shall use the Authority's Workers' Compensation
Claims Administration Guidelines (Addendum A) and shall advise its
claims administrator that these guidelines are utilized in the
Authority's workers' compensation claims audits.
B. The Member shall provide the Authority written notice of any potential
excess workers' compensation claims in accordance with the requirements
of the Authority's bylaws. Updates on such claims shall be provided as
requested by the Authority and/or the Authority's excess carrier.
C. A claims administration audit utilizing the Authority's Workers'
Compensation Claims Administration Guidelines (Addendum A) shall be
performed once every two (2) years. In addition, an audit will be performed
within twelve (12) months of any of the following events:
1. There is an unusual fluctuation in the Member's claim experience or
number of large claims or
2. There is a change of workers' compensation claims administration
firms or
3. The Member is a new member of the Excess Insurance Authority.
The claims audit shall be performed by a firm selected by the Authority.
Recommendations made in the claims audit shall be addressed by the
Member and a written response outlining a program for corrective action
shall be provided to the Authority within sixty (60) days of receipt of the
audit.
D. The Member shall obtain an actuarial study performed by a Fellow of the
Casualty Actuarial Society (FCAS) at least once every three (3) years.
Based upon the actuarial recommendations, the Member should maintain
reserves and make funding contributions equal to or exceeding the present
value of expected losses and a reasonable margin for contingencies.
III. EXCESS LIABILITY PROGRAMS
A. The Member shall be responsible for the investigation, settlement, defense
and appeal of any claim made, suit brought or proceeding instituted against
the Member.
1. The Member shall use only qualified personnel to administer its
liability claims.
Page 2of5
2. Qualified defense counsel experienced in tort liability law shall
handle litigated claims. Members are encouraged to utilize defense
counsel experienced in the subject at issue in the litigation.
3. The Member shall use the Liability Claims Administration Guidelines
(Addendum B) and shall advise its claims administrator that these
guidelines be utilized in the Authority's liability claims audits.
B. The Member shall provide the Authority written notice of any potential
excess liability claim in accordance with the requirements of the Authority's
Bylaws. Updates on such claims shall be provided as requested by the
Authority and/or the Authority s excess carrier.
C. A claims administration audit utilizing the Authority's Liability Claims
Administration Guidelines (Addendum B) shall be performed once every
three (3) years. In addition, an audit will be performed within twelve (12)
months of any of the following events:
1. There is an unusual fluctuation in the Member's claims experience or
number of large claims or
2. There is a change of liability claims administration firms or
3. The Member is a new member of the Excess Insurance Authority.
The claims audit shall be performed by a firm selected by the Authority.
Recommendations made in the claims audit shall be addressed by the
Member and a written response outlining a program for corrective action
shall be provided to the Authority within sixty (60) days of receipt of the
audit.
D. The Member shall obtain an actuarial study performed by a Fellow of the
Casualty Actuarial Society (FCAS) at least once every three (3) years.
Based upon the actuarial recommendations, the Member should maintain
reserves and make funding contributions equal to or exceeding the present
value of expected losses and a reasonable margin for contingencies.
IV. PROPERTY PROGRAMS
A. The Member shall maintain appropriate records including a complete list of
insured locations and schedule of values pertaining to all real property.
Copies of such records shall be provided to the Authority or its brokers as
requested by the Executive or Property Committees.
B. Each Member shall perform a real property replacement valuation for all
locations over one million dollars. Valuations shall be equivalent to the
Marshall Swift system and shall be performed at least once every five (5)
V.
years. New members shall have an appraisal or valuation performed within
one year from entry into the Program.
MEDICAL MALPRACTICE PROGRAM
A. The Member, if a member of Medical Malpractice Program I (hereinafter
Program 1), or Mid Mal Program; or the third party administrator for Medical
Malpractice Program II (hereinafter Program II); shall be responsible for the
investigation, settlement, defense and appeal of any claim made, suit
brought or proceeding instituted against the Member.
1. The Member (Program I and Mid Mal Program) or third party
administrator (Program 11) shall use only qualified personnel to
administer its health facility claims.
2.
3.
Qualified defense counsel experienced in health facility law shall
handle litigated claims.
The Member (Program I and Mid Mal
administrator (Program II) shall use the
Handling Guidelines" in the
Medical Malpractice Excess
Guidelines Manual (hereinaft
MANUAL), and shall advise its
handling guidelines are utilized
claims audits.
Program) or third party
"Claims Reporting And
CSAC Excess Insurance Authority
Insurance Program Operating And
�r OPERATING AND GUIDELINES
,laims administrator that these claims
in the Authority's medical malpractice
B. The Member (Program I and Mid Mal Program) or third party administrator
(Program II) shall provide the Authority and its excess carrier written notice
of any potential excess claim or "major incident" in accordance with the
requirements of the Authority and of the excess carrier as stated in the
OPERATING AND GUIDELINES MANUAL. Updates on such claims or
major incidents shall be provided as requested by the Authority and/or the
Authority's excess carrier.
C. A claims administration audit utilizing the Authority's Claims Reporting and
Handing Guidelines in the OPERATING AND GUIDELINES MANUAL shall
be performed once every three (3) years. In addition, an audit will be
performed within twelve (12) months of any of the following events:
1. There is an unusual fluctuation in the Member's claims experience or
number of large claims or
There is a change of health facility claims administration firms or
3. The Member is a new member of the Excess Insurance Authority or
Page 4 of 6
4. The Medical Malpractice Committee requests an audit.
The claims audit shall be performed by a firm selected by the Authority.
Recommendations made in the claims audit shall be addressed by the
Member and a written response outlining a program for corrective action
shall be provided to the Authority within sixty (60) days of receipt of the
audit.
D. If a Member of Program 1 or the Mid Mal Program, the Member shall obtain
an actuarial study performed by a Fellow of the Casualty Actuarial Society .
(FCAS) at least once every three (3) years. Based upon the actuarial
recommendations, the Member should maintain reserves and make funding
contributions equal to or exceeding the present value of expected losses
and a reasonable margin for contingencies.
E. The Member shall have an effective risk management program in
accordance with the "Risk Management Guidelines" as states in the
OPERATING AND GUIDELINES MANUAL.
VI. SANCTIONS
A. The Authority shall provide the Member written notification of the Member's
failure to meet any of the above-mentioned standards or of other concerns,
which affect or could affect the Authority.
B. The Member shall provide a written response outlining a program for
corrective action within sixty (60) days of receipt of the Authority's
notification.
C. After approval by the Executive Committee of the Member's corrective
program, the Member shall implement the approved program within ninety
(90) days. The Member may request an additional sixty (60) days from the
Executive Committee. Further requests for extensions shall be referred to
the Board of Directors.
D. Failure to comply with subsections B or C may result in cancellation of the
Member from the affected Authority insurance program in accordance with
the provisions in the Joint Powers Agreement.
E. Notwithstanding any other provision herein, any Member may be canceled
pursuant to the provision of the Joint Powers Agreement.
-__,-_rI
ADDENDUM TO EXHIBIT B
Adopted:
Amended:
December 6, 1985
March 4, 1988
Amended:
October 7, 1988
Amended:
October 6, 1995
Amended:
October 1, 1999
J/d Amended:
416,
June 6, 2003
ADDENDUM A
WORKERS' COMPENSATION
CLAIMS ADMINISTRATION GUIDELINES
The following Guidelines have been adopted by the CSAC Excess Insurance Authority in
accordance with Article 18(b) of the March 1993 Amended Joint Powers Agreement
Creating the CSAC Excess Insurance Authority.
1. CASELOAD
A. On or after 07/01/2004, the claims examiner assigned to the Member shall
handle a caseload not to exceed 175 indemnity claims. This caseload will
include future medical cases with every 4 future medical cases counted as 1
indemnity case.
B. Supervisory personnel should not handle a caseload, although they may
handle specific issues.
II. CASE REVIEW AND DOCUMENTATION
A. Documentation should reflect any significant developments in the file and
include a plan of action. The examiner should review the file every 45 days.
The supervisor shall monitor any significant activity on the file every 120 days.
An accomplishment level of 95% shall be considered acceptable.
III. COMPENSABILITY
A. The initial compensability determination (accept claim, deny claim or delay
acceptance pending the results of additional investigation) and the reasons for
such a determination will be made and documented in the file within fourteen
(14) calendar days of the filing of the claim with the employer. An
accomplishment level of 100% shall be considered acceptable.
B. Delay of benefit letters shall be mailed in compliance with Department of
Industrial Relations' guidelines. An accomplishment level of 100% shall be
considered acceptable.
C. The final compensability determination shall be made by the claims examiner
or supervisor within 90 days of employer receipt of the claim form. An
accomplishment level of 100% shall be considered acceptable.
Page 1 of 6
IV.
V.,
VI.
VII.
Vlll.
THREE POINT CONTACT
A. The claims examiner shall conduct the three (3) point contact with the injured
worker, employer representative and treating physician within five (5) working
days of receipt of the notice of the claim. An accomplishment level of 95%
shall be considered acceptable.
INITIAL INDEMNITY PAYMENT
A. The initial indemnity payment will be issued and mailed to the injured
employee within fourteen (14) days of the first day of disability. This shall not
apply with salary continuation. An accomplishment level of 100% shall be
considered acceptable.
B. The properly completed DWC Benefit Notice shall be mailed to the employee
within fourteen (14) days. An accomplishment level of 100% shall be
considered acceptable.
C. Late payments due directly to the injured worker must include the self
imposed 10% penalty in accordance with Labor Code Section 4650. An
accomplishment level of 100% shall be considered acceptable.
SUBSEQUENT INDEMNITY PAYMENTS
A. All indemnity payments subsequent to the first payment will be verified, except
for obvious long-term disability, and issued in compliance with Labor Code
Section 4651. An accomplishment level of 100% shall be considered
acceptable.
B. Late payments must include the self-imposed 10% penalty in accordance with
Labor Code Section 4650. An accomplishment level of 100% shall be
considered acceptable.
FINAL INDEMNITY PAYMENTS
A. All final payments will be issued with the appropriate DWC benefit notices.
TRANSPORTATION EXPENSE
A. Transportation reimbursement will be mailed within fifteen (15) working days
of the receipt of the claim for reimbursement. Advance travel expense
payments will be mailed to the injured employee ten (10) days prior to the
anticipated date of travel. An accomplishment level of 100% shall be
considered acceptable.
IX. MEDICAL PAYMENTS
A. Medical treatment billings (physician, pharmacy, hospital, physiotherapist,
etc.) will be matched to the file, reviewed for correctness, approved for
payment and paid within sixty (60) calendar days of receipt. An
accomplishment level of 100% shall be considered acceptable.
B. The medical provider must be notified in writing within 30 working days if a
medical bill is contested, denied or incomplete.
C. A bill review process should be utilized wherever possible. There should be
participation in a PPO whenever possible.
X. PHYSICIAN CONTACT
A. In cases involving loss of time from work, the attending physician's office will
be contacted within five (5) working days of notice of claim. Such contact will
continue as needed during the continuation of temporary disability to assure
that treatment is related to a compensable injury or illness.
XI. LITIGATED CASES
The claims administrator and Member shall establish written guidelines for the
handling of litigated cases. The guidelines should, at a minimum, include the
points below, which may be adopted and incorporated by reference as "the
guidelines".
A. Defense of Litigated Claims
1. The claims administrator shall promptly initiate investigation of issues
identified as material to potential litigation. The Member shall be alerted
to the need for in-house investigation, or the need for a contract
investigator who is acceptable to the Member. The Member shall be
kept informed on the scope and results of investigations.
2. The claims administrator shall, in consultation with the Member, assign
defense counsel from a list approved by the Member. (Note: To comply
with Government Code Section 25203, the Member's list should be
approved by a two-thirds vote of the board of supervisors.)
3. Settlement proposals directed to the Member shall be forwarded by the
claims administrator or defense counsel in a concise and clear written
form with a reasoned recommendation. Settlement proposals shall be
presented to the Member as directed so as to insure receipt in sufficient
time to process the proposal.
4. Knowledgeable Member personnel shall be involved in the preparation
for medical examinations and trial, when appropriate or deemed
necessary by the Member so that all material evidence and witnesses
are utilized to obtain a favorable result for the defense.
5. The claims administrator shall comply with any reporting requirement of
the Member.
Page 3 of 6
B. Subrogation
1. In all cases where a third party (other than a Member employee or
agent) is responsible for the injury to the employee, the third party shall
be contacted within 10 days with notification of the Member's right to
subrogation and the recovery of certain claim expenses. If the third
party is a governmental entity, a claim shall be filed with the governing
board (or State Board of Control as to State entities) within 6 months of
the injury or notice of the injury.
2. Periodic contact shall be made with the responsible party and/or insurer
to provide notification of the amount of the estimated recovery to which
the Member will be entitled.
3. The file will be monitored to determine the need to file a complaint in civil
court in order to preserve the statute of limitations.
4. If the injured worker brings a civil action against the party responsible for
the injury, the claims administrator shall consult with the Member about
the value of the subrogation claim and other considerations. Upon
Member authorization, subrogation counsel shall be assigned to file a
Lien or a Complaint in Intervention in the civil action.
5. Whenever practical, the claims administrator will aggressively pursue
recovery in any subrogation claim. They should attempt to maximize the
recovery for benefits paid, and assert a credit against the injured
workers' net recovery for future benefit payments.
XII. VOCATIONAL REHABILITATION
A. Adjusting personnel will notify the injured worker of their potential rights to
rehabilitation benefits per Labor Code Section 4636 after 90 days of
aggregate temporary disability and get the treating doctor to determine if
injured worker is a Qualified Injured Worker.
B. Determination of the Qualified Injured Worker/Non-Qualified Injured Worker
status shall be made in accordance with Labor Code Section 4637. The
adjusting personnel shall advise the injured worker of his/her rehabilitation
benefits in accordance with the Rules of the Division of Workers'
Compensation, within ten (10) days of knowledge of medical eligibility. The
claims administrator will:
1. Notify the employer of the employee's permanent work restrictions so
that the employer can determine the availability of permanent modified
or alternate work.
2. Make timely referral to a Qualified Rehabilitation Representative in
accordance with Labor Code Section 4637
--- ^ _r,.
3. Control rehabilitation costs.
4. Attempt to secure the prompt conclusion of vocational rehabilitation
benefits, and settle rehabilitation where appropriate.
XIII. FISCAL HANDLING
A. Active indemnity cases will be balanced with appropriate file documentation
on a semi-annual basis to verify that statutory benefits are paid, and medical,
legal and vocational rehabilitation charges are appropriate. An
accomplishment level of 100% shall be considered acceptable.
XIV. EXCESS INSURANCE
A. Potential Workers' Compensation excess cases shall be reported in
accordance with the reporting criteria established by The Bylaws of the CSAC
Excess Insurance Authority.
All cases which meet the established reporting criteria are to be reported
within five (5) working days of the day on which it is known the criterion is met.
An accomplishment level of 100% shall be considered acceptable.
XV. AWARD PAYMENT
A. Payments on undisputed Awards, Commutations, or Compromise and
Releases will be issued within ten (10) days following receipt of the
appropriate document. An accomplishment level of 100% shall be considered
acceptable.
XVI. PENALTIES
A. If the Member utilizes a third party administrator, the Member will be advised
of the assessment of any penalty for delayed payment and the reason thereof,
and the administrators plans for payment of such penalty within five (5) days
of assessment. An accomplishment level of 100% shall be considered
acceptable.
B. If the Member utilizes a third party administrator, the Member, in their contract
with the administrator, shall specify who is responsible for specific penalties.
XVII. RESERVES
A. Using the information available at the time, an initial reserve will be
established at the most probable case value. Claim reserves shall be
reviewed on a regular basis and updated as case values increase or
decrease.
Page 5 of 6
XVIII. RESOLUTION OF CLAIM
A. Within ten (10) days of receiving medical information indicating that a claim be
finalized, the claims examiner shall take appropriate action to finalize the
claim. An accomplishment level of 95% shall be considered acceptable.
XIX. CASE CLOSURE
A. All indemnity cases will be closed within sixty (60) days of the final financial
transaction or final correspondence to the injured worker as required by law.
An accomplishment level of 95% shall be considered acceptable.
B. All medical only cases will be closed or transferred to an indemnity status by
the ninetieth (90) day following incurral. An accomplishment level of 95%
shall be considered acceptable.
XX. TELEPHONE INQUIRIES
A. Return calls will be made within one working day of the original telephone
inquiry. An accomplishment level of 90% shall be considered acceptable.
XXI. INCOMING CORRESPONDENCE
A. All correspondence received will have the date of receipt clearly stamped on
the front side. An accomplishment level of 100% shall be considered
acceptable.
XXII. RETURN CORRESPONDENCE
A. All correspondence requiring a written answer will have such answer
completed and transmitted within five (5)working days of receipt. An
accomplishment level of 95% is acceptable.
XXIII. SETTLEMENTS
A. The third party administrator shall obtain the Members authorization on all
settlements or stipulations in excess of the settlement authority provided in
any provision of the individual contract between the Member and the claims
administrator.
B. No agreement shall be authorized involving liability, or potential liability, of the
Authority without the advance written consent of the Authority.
--__ c _cc