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HomeMy WebLinkAboutMMIA Newsletter January 2002N MIA Newsletter January 2002 Winter Issue We continue to receive reports of governmental agencies across the country receiving renewal premiums with increases for 50 to 150%. 1 MMIA Workers' Compensation Program Announces $1,000,000 Distribution 2 MMIA Moving to New Office Facility 3 Jim Tillotson Service Program 3 24 Hour Emergency Service 4 Saving Money 4 Where's the Flood? 5 Coping with C.O.P.E. 5 Winter Maintenance Woes 6 MMIA Welcomes New Employee MMIA WORKERS' COMPENSATION PROGRAM ANNOUNCES $1,000,000 DISTRIBUTION By Robert A. Worthington, CEO While some MMIA Programs, especially the Property Program, will experience some premium increase as a result of the hardening market, any increase will be modest in comparison with the news we have been receiving. The structure of the MMIA Workers' Compensa- tion and Liability Programs significantly insulate them from national market pressures. The Workers' Compensation Program will experience very little, if any, premium in- crease associated with the current difficult insurance market. During the 2001 Annual meeting of the MMIA, Board Chair Kathy Denke announced that the Board had authorized a financial distribution of $1,000,000 to members of the Workers' Compensation Program. The distribution was authorized for January 2002. 1 am pleased to announce that even in light of recent world events, it has been determined that assets of the Workers' Compensation Program remain sufficient and the distribution will take place. We are all aware that events of 2001 were unprecedented. The total effect of the events of September 11 will not be known for some time to come. We do know that those events are having a significant impact on the insurance industry throughout the world. We are continually bom- barded with information suggesting that insurance premi- ums will rise and coverage will become more difficult to obtain. Members of the MMIA can take great pride in the fact that in 1986 individuals had the foresight to develop a self- insurance program. One of the stated goals of that development was to stabilize the availability and cost of insurance for Montana cities and towns. As we proceed through these difficult times, evidence that we are achiev- ing this goal becomes more apparent. This newsletter is published quarterly by Montana Municipal Insurance Authority, P.O. Box 6669, Helena, MT 59604-6669. MMIA provides this newsletter as a service to its members to inform and educate local officials on liability, workers' compensation, property, and employment practices issues. The articles are not a substitute for the Memorandum of Liability Coverage or other coverage documents. All coverage determinations are made on a case-by-case basis, and can only be viewed on the unique facts of the claim pres _ As prescribed by the Program documents, the monies will come from the Program's Membership Designated Equity or surplus account. The amount of the distribution for each individual member is established as prescribed in Section 4.5 of the Revised and Restated Workers' Compensation Risk Retention Program Agreement. The Agreement calls for the funds available for distribution to be allocated 50% on a pro rata basis and 50% based on each member's loss experience for the period under consideration As used here the term pro rata means each member's proportionate contribution of income deposited in the Program Fund in relation to the total income of the Pro- gram without regard to any expenses of the Program. The 2001 distribution represents the sixth year that a distribu- tion has been made to members of the Workers' Compen- sation Program. This year's $1 million brings the total of the distributions to nearly $8 million. In the early 1990's, the Workers' Com- pensation system was in significant disarray statewide. Consequently, the success of your Workers' Compensa- tion Program is quite remarkable. The membership should take great pride in the fact that collectively you have developed a Program that benefits all city and town employees and saved your taxpayers significant money. In her remarks about the Workers' Compensation Program distribution, Board Chair Kathy Denke congratulated the membership on its diligence and hard work in making the program a success. Chair Denke noted that every city or town that was a member of the Program as of June 30, 2001, will receive a check. Checks for each member's proportionate share of the distribution will be mailed in late January 2002. MMIA MOVING TO NEW OFFICE FACILITY By Robert A. Worthington, CEO In 1998 the MMIA added the Property Insurance Program placing additional demands on staff and resulted in the development of a position to manage this program. In 1999 when we brought our claims Administration operation in house, the size of our staff grew significantly and today totals sixteen. The growth resulted in our outgrowing our current office space. An analysis of our needs and the lack of appropri- ate rental space, resulted in the Board deciding to con- struct an office building. This will provide the MMIA with space that meets our current needs, provide room for growth and is a financial asset. As many of you know, the construction path is not gener- ally a smooth one. After completion of a financial and needs analysis, we established an appropriate budget. Meeting this budget necessitated that the project be bid on three different occasions before we were successful. Construction on the 8,400 sq ft facility finally began in late July 2001. The structure contains individual offices for most of the staff. It will provide appropriate privacy for our type of work, on-site storage for all our claim files, and room for future expansion. I am pleased to announce that we are scheduled to move into the new building on January 30 and 31, 2002. The building is located just north of the intersection of Custer Avenue and McHugh Drive. The physical address is 3115 McHugh Drive, Helena, MT 59602. Our mailing address and telephone numbers will not change. The move requires that we shut down our computer system on Tuesday, January 29"' and the phones on January 3011 and 31s. Hopefully both will be back up February 151 but no later than the 411. If there is an emer- gency, please call us at (406) 439-0907 or 439-9157. When you are in Helena, please stop in and visit us at our new location. JIM TILLOTSON SERVICE PROGRAM By Robert A. Worthington, CEO Last spring the MMIA held the first Jim Tillotson Service Program. The Program, named in honor of long-time Billings City Attorney and MMIA Board member Jim Tillotson, is designed to assist city and town attorneys with education on matters crucial to their management of municipal interests. MMIA Newsletter 2 Planning for this years Program is well under way. The 2002 Jim Tillotson Service Program will be held May 9 & 10, 2002, in Billings. The Program will again be in con- junction with the Clerks and Elected Officials Institute at the Billings Plaza Holiday Inn. The Program will begin with a reception the evening of May 8, 2002 and consist of eight hours of training on May 9 and four hours on May 10. The Program will conclude at noon on the 101h to allow for individual travel. The Program will provide legal training for city and town attorneys. The curriculum will limit discussion to two or three subjects, allowing us the opportunity to provide an in-depth analysis of matters critical to Montana municipal operations. The open discussion format allows for consid- erable interaction by the Program attendees. Details for the Program are currently being completed and will be announced soon. Watch for the distribution of the Program information. The Program will total twelve (12) hours of training. The curriculum and materials will be submitted to the Montana State Bar to obtain Continuing Legal Education (CLE) credits for participants. Expenses, including meals, for the Program will be born by the MMIA. Participants are responsible for their individual travel and lodging expenses. Information and registration materials for the Jim Tillotson Service Program will be distributed in early 2002. Block out May 9, 10 & 11, 2002 on your calendar and get your registration in early. For additional information call the MMIA office at (800) 635-3089. THE MMIA IS NOW OFFERING 24-HOUR SERVICE FOR EMERGENCIES By Alan Hulse, Risk Manager In our ongoing effort to provide better service to our membership, the MMIA has implemented a program of 24-hour emergency service for our members. In the past if your community had an emergency situation occur during business hours, the process was easy. You just called our toll free number, 1-800-635-3089, for service. However, if an emergency situation occurred after hours, or on a weekend, your only recourse was to wait until the next business day to contact your insurance pool. Let's face it, there are emergency situations that arise where the ability to immediately talk with an MMIA representative would be a great benefit to all parties. You now have that ability) l!! The process is simple. If you have an emergency that occurs after hours, or on weekends or holidays, just call our toll free number 1-800-635-3089. You'll get our voice mail recording advising that our office is closed and what our business hours are. In addition to this standard recording, you'll be given two cell phone numbers that you can call in the event of an emergency. The MMIA administrative staff will carry these two cell phones after hours, on weekends and holidays and will be available to handle your emergency calls. For those of you who want to short cut the process, the emergency cell phone numbers are 406-439-0907 and 406-439-9157. Our intent in providing this service is really two fold: 1) To provide better service to our members by being acces- sible during your time of need; and 2) create a better claims product by being more responsive to emergency claims that may be catastrophic in nature. Our only request is that you use discretion in deciding what consti- tutes an emergency. From now on, if your community finds itself in a crisis that occurs at an inconvenient time, your insurance represen- tative with the MMIA is only a phone call away. SAVING MONEY By Dan Wickens, Employment Practices Specialist I hope you had a Merry Christmas and a happy holiday season. If I were Santa, I would have allocated at least $1,000,000 for each city and town in the state, but the position isn't open right now so I get to go with the next best thing. If your municipality is part of the MMIA's liability program, you can receive free Employment Practices Liability Insurance (EPLI) that will then pay for litigation defense costs should an employee bring a complaint against your city or town. As many of you know, employment-related lawsuits often cost tens of thousands of dollars to defend, if not more. An MMIA EPLI Endorsement will cover that exposure, and your municipality needs only to meet some simple underwriting criteria to acquire that coverage. Getting the endorsement is easily done if your city/town has a personnel policy manual. The manual must be sent to the MMIA, and it will be reviewed to let you know what areas must be reexamined by your City/Town Attorney. A formal application is required and shall be provided to the city/town while the manual is being reviewed. It's impor- tant to understand the policy manual is being reviewed to make sure it meets MMIA underwriting criteria, not every municipality's specific ordinances. As much as we would like to play Santa, it is still the responsibility of the city/ town to know and follow the law and its municipal ordi- nances. The EPLI program has been available since 1996, and there are still very few municipalities that take advantage of it. I don't know of any other insurer that provides such coverage for free. I also understand how busy city personnel can be, so please don't be afraid to use us as a resource. Questions on receiving an EPLI Endorsement should be directed to me at: (800) 635-3089, ext. 114 or via email at: dan-mmia@mt.net. MMIA Newsletter 3 FREE TRAINING The MMIA performs free risk management training in a variety of areas, including employment practices. The following training presentations are available: - Sexual harassment/harassment - Violence in the workplace - "Supervising 101" (this covers numerous human resources and compliance issues, and can be tailored to each municipality) - Americans with Disabilities Act (ADA), an overview, is being developed, and I would be very interested to get feedback on whether or not this would be a helpful presentation. plan to be on the road more, doing more training, and hopefully helping you to better manage your employment- related risk exposures. WHERE'S THE FLOOD? By John Craig, Assistant Risk Manager/ Property Claims Manager At a time when every community in Montana is praying for rain, it seems odd to be thinking of flood insurance needs, but in a tightening insurance market, the need for informa- tion has moved to critical. As we approach policy renewal for the Property Program, MMIA is anticipating the need for communities to identify city-owned property located in Zone A flood plains. This is a large undertaking, so the sooner we start the better. We anticipate problems in gathering this informa- tion, and it will take time. Your response is essential and could make a difference in the availability of future cover- age. As insurance markets tighten, insurance underwrit- ers perform much more detailed assessments of the property they insure. They will analyze the exposures they are insuring to ensure profitability. If information is not made available to them, they may assume (right or wrong) the risk is too great and choose not to provide it. They may decide to place their limited insurance investment where they have more complete information and, thus, a better comfort level. We want to prevent this from hap- pening to you. We at MMIA know how hard it is for cities to gather new information, so we wouldn't ask if it were not extremely important. If you are a member of the Property Program and have property located in Flood Zone A, please be prepared to compile information on these properties. If you are unsure if you have properties in Zone A, begin the process by contacting the following: Montana Department of Natural Resources Water Resources Division Phone: (406) 444-6601 Or The Federal Emergency Management Administration (FEMA) web site at www.landinfo.com Property Program participants will receive formal request with instruction on how to submit flood plain information in the near future. Please take the time to quickly respond. Your action is an essential element in maintaining this exceptional program that benefits so many Montana Communities. COPING WITH C.O.P.E. By John Craig, Assistant Risk Manager/ Property Claims Manager Many of the participants in the MMIA Property Program received a call of desperation from MMIA in late Novem- ber. We needed your property information, fast. In a first reaction to September 1 T" and a tightening insurance market, your underwriters requested Construction Occu- pancy Protection Exposure information to fill in the blanks on property insurance schedules. C.O.P.E. provides the essential little bits of data, that when aggregated, give meaning to the much larger insurance picture. From the big picture, an underwriter can draw conclusions about the risk and exposure they are insuring, which helps them determine rates. All indications suggest we can expect these types of requests to continue. While this was not an unreasonable demand, the response timeframe pressured the MMIA and membership to do the research and provide responses quickly. Our special thanks to all who shifted their schedules and responded with amazing accuracy and speed. By filling in C.O.P.E. information, MMIA property schedules are now complete at this time, but stay tuned. If you did not hear from us, our C.O.P.E. record for your insured community was already current and complete. With this exercise done, we will be even more ready to attack the renewal process for 2002. GOOD JOB AND THANKS! The renewal process for 2002 will involve an individual member analysis of all data to make further additions and deletions. There will be added emphasis on schedule accuracy this year. WINTER MAINTENANCE WOES By Mark Gauthier Liability and Property Claims Adjuster Is Jack Frost nipping at your nose and heels? Freezing temperatures can lead to underground utility problems. Unfortunately, you do not have control over cold tempera- tures and in many cases the problems that ground frost brings. The cold weather can result in an increase in complaints and claims against your entity. As you know, an active maintenance program does not eliminate the unpredictable broken water lines and main sewer line blockages. This is about the time of year that the MMIA sees an increase in underground utility claims. All claims should be promptly processed internally through designated personnel. In most communities this MMIA Newsletter 4 person is the Clerk, Finance Officer or Risk Manager. Your designated representative will then complete a loss report and forward it to the insurance carrier. Once the MMIA receives your notice of a claim, the claim is assigned to an MMIA claims adjuster who will investigate the incident to determine the municipality's liability for the loss. Good record keeping is a vital part of maintaining and operating your infrastructure. Good record keeping is also vital to our tort claims investigation. In order to thoroughly investigate a claim, an MMIA liability adjuster will request a copy of your maintenance and call-out records for the section of underground utility in question. Don't be surprised to receive a request for a copy of your mainte- nance records and documented call-out history for five years or longer. You might think of your maintenance program as routine and see no need for documentation. Or maybe record keeping is an inconvenience. In Floyd v. Butte-Silver Bow County, the Montana Supreme Court established that municipalities have a duty to inspect its sewer system and keep it in repair. A lack of record keeping can be per- ceived as "it never happened". The only way to support that you have met your duty is by accurately documenting it. The information that we will ask for includes dates of scheduled and unscheduled maintenance, a description of the type of maintenance performed, maintenance frequency, call-out history, type of utility, a description of the utility, a description of the problem, call-out dates and times, and response times. The liability claims adjuster will determine your entity's liability once all pertinent information is gathered. A lack of maintenance documentation usually leads to the assigned MMIA adjuster taking up your valuable time to conduct a thorough investigation. Good documentation will support a proactive maintenance program and will answer most of the adjuster's questions, freeing up your valuable time to serve your customers. A NEW FACE AT THE MMIA MMIA welcomes it's newest member to the Workers' Compensation Unit, Kate Hartill. Kate is a 1999 graduate of Carroll College, majoring in communication studies. After graduating, Kate worked at Helena's NBC and FOX television affiliates as an anchor/ reporter. She recently moved back to Helena after working in Bakersfield, California at the ABC affiliate as a reporter and anchor. Kate is ready to take on new challenges and is excited to be a part of the MM IA. We welcome Kate and look forward to all the exciting contributions she has to offer. Welcome aboard! MMIA Newsletter 5 MMIA PO Box 6669 Helena, MT 59604-6609