CLAIMS COMMITTEE MEETING AGENDA A.M. 11111 …Jan 08, 2020 · 11111 Brookshire Ave. Downey, CA...

CLAIMS COMMITTEE MEETING AGENDA

Downey City Hall Wednesday, January 8, 2020 2nd Floor Training Room 9:30 A.M. 11111 Brookshire Ave. Downey, CA 90241

CALL TO ORDER

ESTABLISHMENT OF QUORUM/INTRODUCTIONS

PUBLIC COMMENTS This time is reserved for members of the public to address the Committee relative to matters of ICRMA that are not on the agenda. Persons wishing to address items on the agenda will be permitted to do so during the discussion of the item. No action may be taken on non-agenda items unless authorized by law. Comments will be limited to five minutes per person, twenty minutes in total.

APPROVAL OF AGENDA AS POSTED OR AMENDED As a matter of procedure, the Committee should approve the agenda.

CONSENT CALENDAR If the Committee would like to discuss any item listed, it may be pulled from the Consent Calendar.

A. Minutes of the November 6, 2019 Claims Committee Meeting ........................................................ 3 B. Minutes of the December 4, 2019 Special Claims Committee Meeting ............................................ 9 C. Arx Alert Risk Management Pilot Program Update ....................................................................... 11 D. 2019/20 Claims Committee Attendance Record .............................................................................. 12

Action: Approve items A-B and direct staff to finalize, and file items C-D.

OPEN SESSION As to each agenda item, the Committee may take action and/or receive informational reports as appropriate.

A. Provide Settlement Authority for Santa Ana Property Claim (Mike) .............................................. 13 Action: Review and provide $250,000 in authority for resolution of the Santa Ana Southwest Senior Center property claim.

B. Liability Attorney Report Card (Sara) ............................................................................................. 29 Action: Review and provide direction.

C. Program Underwriting & Administration Manual Proposed Revisions (Jennifer) ......................... 40 Action: Review and recommend Board approval of the proposed revisions to the Program Underwriting & Administration Policy Manual to be effective February 13, 2020.

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Claims Committee Meeting Agenda January 8, 2020

D. Liability & Workers’ Compensation Program Structure Updates (Beth) ........................................ 61 Action: Review and provide direction.

CLOSED SESSION The Committee will hold a closed session to discuss any or all claims listed on the agenda. Members are reminded to destroy closed session materials after the meeting.

A. Discussion of Open Claims and Conference with Legal Counsel pursuant to Government Code Section 54956.95(a):

• Hermosa Beach Fitness, LLC v. Hermosa Beach, coverage appeal • Lopez, Krystal v. Glendora • Lopez, v. El Monte • Juarez v. Azusa

REPORT FROM CLOSED SESSION Report from Closed Session: Pursuant to Government Code Section 54957.1, the Committee must report in open session any action taken in closed session. CLOSING COMMENTS This time is reserved to identify matters for future Committee business. ADJOURNMENT FUTURE MEETING • March 11, 2020, Downey City Hall 2nd Floor Training Room

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact ICRMA at (949) 349-9879. Notification 48 hours before the meeting will enable ICRMA to make reasonable arrangements to ensure accessibility (28 CFR 35.102.35.104 ADA Title II).

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MINUTES OF THE CLAIMS COMMITTEE MEETING

November 6, 2019 9:30 A.M.

A meeting of the Claims Committee was held on November 6, 2019. Members Present Yvette Garcia, Chair Downey Alison Stevens, Vice Chair Hawthorne Sergio Ibarra Bell (arrived at 11:12 a.m.) Sara Nazir Lynwood Nellie Cobos South Gate Members Absent Deborah Scott-Leistra Santa Ana Others in Attendance: RPA Beth Lyons Bob May Johnson Schachter & Lewis Luther Lewis Carl Warren & Company Rose Nuno (arrived 9:40 a.m.) Heather Mendez (arrived 9:45 a.m.) 1. CALL TO ORDER

Chair Yvette Garcia, Downey, called the meeting to order at 9:40 a.m. and new committee member Nellie Cobos was welcomed.

2. ESTABLISHMENT OF QUORUM/INTRODUCTIONS Introductions took place and it was determined a quorum was present.

3. PUBLIC COMMENTS

4. APPROVAL OF AGENDA AS POSTED OR AMENDED Motion was made by Yvette Garcia, Downey, and seconded by Alison Stevens, Hawthorne, to approve the agenda as posted. The motion carried unanimously.

5. CONSENT CALENDAR A motion was made by Sara Nazir, Lynwood, and seconded by Yvette Garcia, Downey, to approve the A) Minutes of September 4, 2019 Claims Committee Meeting and direct staff to finalize; and to review and file the B) 2019/20 Claims Committee Attendance Record. The motion carried unanimously.

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MINUTES ICRMA Claims Committee

November 6, 2019

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6. OPEN SESSION A. Set a meeting date for a Special Meeting of the Claims Committee

The Claims Committee evaluated dates to hold a special meeting to discuss program management structure and alternatives. A working lunch meeting will be held in Downey. A motion was made by Sara Nazir, Lynwood, and seconded by Nellie Cobos, South Gate, to meet at 11:30 a.m. December 4. The motion passed unanimously.

B. Liability Attorney Report Card Update

At its December 2018 meeting, the ICRMA Board engaged consultant Sara Peterson to create a structure for, and perform, the ICRMA liability defense panel attorney report card project. The project began in January 2019 and the Committee discussed the timeline, which includes the report being presented to the Claims Committee at its January 2020 meeting and to the Board in February. The Committee also reviewed the draft report structure and shared the following feedback: 1) types of claims should be categorized so attorneys for EPL claims, for example, can be more easily compared; 2) asked that a note be added to the summary analysis table to make it clear that the payments are from ground up (i.e. include payments in the member retained limit as well as ICRMA payments). The item was informational, direction provided, and no action taken.

C. Proposed Litigation Management Policies and Procedures Revisions The Litigation Management Policies and Procedures (LMPP) was last revised during the 2017/18 program year. In September the Claims Committee reviewed proposed revisions and provided feedback regarding the attorney selection amendments. General commentary was also provided by the Board in October during strategic planning. Based upon the feedback and existing governing documents, no revisions were proposed to the attorney selection section of the LMPP. The Claims Committee agreed it is in the best interest of the individual members and ICRMA to ensure the most qualified, experienced, and efficient attorney is engaged to defend ICRMA reportable claims. Based upon the current policy language, there is an obligation on ICRMA reportable claims for the member/TPA adjuster to discuss selected counsel with the ICRMA Liability Program Manager (LMP) before the engagement letter is sent. The LPM will remind members and adjusters of this provision to ensure compliance. When the LPM distributes a reminder about the attorney selection, the members and TPA adjusters will also be reminded that Section III – Defense and Settlement of the 2019-20 Memorandum of Coverage requires the use of approved panel counsel for all litigated claims, and that ICRMA has no obligation to pay fees or costs incurred by counsel if they are not on the panel. Additionally, if a member uses non-panel counsel, the member shall be deemed to have waived any coverage.

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November 6, 2019

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The following revisions were reviewed by the Claims Committee. o Requirement that all attorneys submit bills to Bottomline/LegalX o Requirement that “Lessons Learned” be completed for all litigation o Added language to make it clear that the Claims Committee considers defense panel

attorney nominations, then forwards to the Board o Added a provision that claims not in litigation utilize the TPA for investigation rather

than the defense attorney. o Added language regarding the defense attorney’s role in reporting to

Medicare/Medicaid o Requirement that each defense attorney submit a plan of action on early resolution of

litigation o Requirement that defense attorneys obtain authorization before filing Motions

A motion was made by Alison Stevens, Hawthorne, and seconded by Nellie Cobos, South Gate, to recommend Board approval of proposed changes to the Litigation Management Policies and Procedures effective January 1, 2020. The motion carried unanimously.

D. Member Requests to add attorneys to the Liability Defense Panel The cities of Glendora and Lynwood submitted requests that several attorneys be added to the liability defense panel: Araceli Almazan, Richard Lam and Tania Ochoa of Alvarez-Glasman & Colvin; and William Wynder, Alison Flowers, Jeffrey Hurada, Lum Gobi, and Nicholas Dwyer of Aleshire & Wynder. The Committee considered the Board’s expressed desire to add quality panel members that offer specific expertise, knowledge and skill sets. The Committee also reviewed whether the core work provided by the attorney would fall within the covered exposures of ICRMA. Tania Ochoa did not respond to the questionnaire thus the Committee was unable to determine if she met the requisite five years of substantial public entity experience. The Committee evaluated the information provided by the attorneys, and learned Alison Flowers and Lum Fobi did not meet the Litigation Management Policies and Procedures experience requirements. The Committee and Liability Program Manager did not have knowledge of Jeffrey Harada’s public entity experience. William Wynder serves as a city attorney, however, he is not directly handling liability litigation. With that in mind, the Claims Committee recommended the addition of two attorneys to the panel. A motion was made by Alison Stevens, Hawthorne, and seconded by Yvette Garcia, Downey, to recommend Board approval to add attorney Araceli Almazan, Alvarez-Glasman & Colvin, and Nicholas Dwyer, Aleshire & Wynder, to the Liability Defense Panel. The motion carried unanimously.

E. Hawthorne request to retain non-panel defense attorney

The city of Hawthorne submitted a request that ICRMA allow the city to utilize attorney Michael Jaeger of Lewis, Brisbois, Bisgaard and Smith (Seattle office) for the specific litigation of Varsos et al v. Hawthorne. The plaintiffs are in Seattle, WA, so the city would like to use Jaeger’s services to ensure cost effective management of depositions.

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November 6, 2019

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A motion was made by Sergio Ibarra, Bell, and seconded by Yvette Garcia, Downey, to recommend Board approval of retention of a non-panel attorney, Michael Jaeger, by Hawthorne for the specific litigation of Varsos, et al v. Hawthorne. The motion carried unanimously.

F. Liability Defense Panel Review and proposed removal of attorneys from the Liability Defense Panel The Liability Program Manager recommended six attorneys be removed from the Liability Defense Panel. Removal was recommended for a variety of reasons, including attorneys no longer handling municipal cases, not performing liability litigation, not meeting the LMPP requirements, and a recent death. A motion was made by Sara Nazir, Lynwood, and seconded by Alison Stevens, to recommend Board removal of the following six attorneys from the Liability Defense Attorney Panel: Richard Padilla, Olivarez Madruga; David Garcia, Tafoya & Garcia; Kyle Bevan, Ferguson Praet; Angela Powell, of Manning, Kass, Ellrod, Ramirez & Trester; David Lawrence, Lawrence Beach Allen Choi; and Julie Tran, Aleshire & Wynder. The Committee also provided feedback regarding the attorney panel format. The Committee asked that the panel be maintained in a database and reports provided in two formats: 1) by attorney name (as presented in the agenda packet), and 2) in Excel format so it can be sorted by specialty area or proficiency. During the January meeting the Claims Committee would like to explore the creation of sub-panels within the attorney panel for both employment practices liability and police liability. The Committee also asked that, if implemented, the Board proactively promote the list of “sub-panel” attorneys to the members, city attorneys, city managers. Verdict and settlements list, biography of the attorneys, statistics and other helpful statistics could also be included. The Committee offered to help develop topics for a seminar for member staff, council members, and city attorneys to help them understand the attorney selection process, claim trends, and so on. Recessed for lunch from 11:50 a.m. – 12:10 p.m.

G. Proposed Liability TPA Performance Standards Revisions The Liability TPA Performance Standards document was last revised in 2018. Due to the proposed revisions to the LMPP, updates are also being recommended to the TPA performance standards to ensure consistency. The Committee considered the following: Litigation Management: Defense attorney analysis required for early resolution, motions require prior authority, case summary and lessons learned required after resolution of case or after trial. The investigation checklist was also updated to include: record statements of claimant and any potential witnesses, obtain medical records, detail change related to statements and scene diagram/photos, and Medicare reporting.

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November 6, 2019

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A motion was made by Sergio Ibarra, Bell, and seconded by Sara Nazir, Lynwood, to recommend Board approval of the proposed Third Party Administrator Performance Standards Revisions effective January 1, 2020.

H. Bottomline Update ICRMA has over 120 attorneys on its defense panel, however, 38 firms engage the attorneys. Twenty-two (22) of the 38 firms have registered with Bottomline, After Board approval of Bottomline, the Liability Program Manager sent an email to the accounting departments of each panel attorney firm. The firms then needed to register by July. The Claims Committee asked that the Board report in December include a list of firms that have not yet registered in Bottomline. Forty-six (46) invoices from five firms were reviewed between July 1 and October 17. The 26 cases equate to approximately 25% of claims reported. The total amount billed in the 46 invoices received was over $156,000. The deductions totaled $42,691 for an average of 27.33%. The deduction percentage is higher than usual, which is not uncommon, as the program has been active for less than three (3) months. The deduction amount will change as appeals are made, and the firms become more compliant with the Board-adopted Litigation Management Policies and Procedures.

ICRMA budgeted $20,000 during the 2019-20 year to use the program as a “pay-as-you-go” model, priced at 2% of the gross dollar amount of legal bills audited and billed monthly. Fees for utilizing Bottomline from July-October 2019 were $3,124. Additionally, a review of invoicing related to the Salcedo v. Baldwin Park matter was performed and resulted in an invoice of nearly $9,000. The fees in the first quarter are over half of the entire amount budgeted for the year. Because the legal bill review service has already demonstrated benefit to the members through the reduction of claim expenses, RPA and Carl Warren recommend the program structure be modified to allow the fees to be charged directly to the claim files as an allocated loss adjustment expense. If the Bottomline review fees are charged back to the claim file, members can consistently run every claim through Bottomline, regardless of if the claim is ICRMA reportable. This is critical to enable control of member costs, provide greater transparency, and allow consistent reporting. A motion was made by Nellie Cobos, South Gate, and seconded by Sara Nazir, Lynwood, to recommend Board approval of the allocation of Bottomline attorney bill review fees directly to the related liability claim files.

7. CLOSED SESSION The Committee convened in closed session at 12:54 p.m.

8. REPORT FROM CLOSED SESSION

The Committee convened in open session at 1:54 p.m. General Counsel Luther Lewis reported authority was granted in the McLucas, Floyd v. Hawthorne matter, authority was granted and

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November 6, 2019

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direction given in the Gomez, Maria & Trinidad v. South Gate. No action was taken on the Salcedo, David v. Baldwin Park, Sharp, Timothy v. El Monte, Kitahara, Junko v. Monterey Park, Torrez, Jerry & Delores v. South Gate, Hadsell, Lili v. Baldwin Park matters.

9. CLOSING COMMENTS

None

10. ADJOURNMENT The meeting was adjourned at 1:55 p.m.

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MINUTES OF THE SPECIAL CLAIMS COMMITTEE MEETING

December 4, 2019 11:30 A.M.

A special meeting of the Claims Committee was held on December 4, 2019. Members Present Yvette Garcia, Chair Downey Alison Stevens, Vice Chair Hawthorne Sergio Ibarra Bell Sara Nazir Lynwood Deborah Scott-Leistra Santa Ana Nellie Cobos South Gate Members Absent Others in Attendance: RPA Beth Lyons Jennifer Achterberg J.T. Babish 1. CALL TO ORDER

Chair Yvette Garcia, Downey, called the meeting to order at 11:40 a.m.

2. ESTABLISHMENT OF QUORUM/INTRODUCTIONS Introductions took place and it was determined a quorum was present.

3. PUBLIC COMMENTS

4. APPROVAL OF AGENDA AS POSTED OR AMENDED Motion was made by Sara Nazir, Lynwood, and seconded by Sergio Ibarra, Bell, to approve the agenda as posted. The motion carried unanimously.

5. OPEN SESSION A. Program Structure review

The Claims Committee held a special meeting to discuss the liability and workers’ compensation program management services, program structure, and alternatives. Earlier in the year the Board delegated authority to the Committee to evaluate and determine a program structure responsive to ICRMA needs and report back to the Board at a future meeting.

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MINUTES ICRMA Special Meeting Claims Committee

December 4, 2019

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After discussion, the Committee provided the following direction to the administrative team: 1. Workers’ Compensation Program:

a. Contact AdminSure to determine if AdminSure is willing and able to incorporate the Program Management scope of services into the existing contract for TPA services, and if so ask AdminSure to provide approximate pricing.

b. Explore incorporating program management scope of services items, such as AdminSure contract oversight and monitoring program trends, into the RPA contract.

2. Liability Program: a. Draft a request for proposals (RFP) for liability program management

i. The RFP should include language regarding conflicts of interest and express a preference for proposals with staff that can be based in Southern California. After discussion with general counsel, issue the RFP if the Claims Committee has authority to do so.

ii. Based on conflict of interest concerns with one of the primary TPAs also serving as the Program Manager (i.e. supervising itself), reach out to both Carl Warren and AdminSure to notify them that proposals from neither organization would be considered unless they were able to state independence and that they are free from conflict.

6. CLOSING COMMENTS

None

7. ADJOURNMENT The meeting was adjourned at 12:58 p.m.

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January 8, 2020 Claims Committee

Subject: Arx Alert Risk Management Pilot Program Update Action for consideration: Review and file. Background: At the April 11, 2019 Board meeting the Board authorized the contract for a pilot program with Altovista (Arx Alert). The cities of El Segundo and Monterey Park have been working through the set-up process for the past several months. According to Project Manager Bo Cheng, the implementation team completed the technical setup before the end of September. The system is up and running and user access has been provided to El Segundo and Monterey Park police department command staff, who have logged into the system. The challenge in taking the tool live primarily revolves around scheduling due to unplanned command staff and shift changes over the past couple of months. The anticipated go live date is February 2020. El Segundo Police Department Executive reviews have been completed and all necessary changes to the system have been made. Police command staff is communicating to the labor group regarding the implementation of the risk management platform. Arx Alert is waiting for the completion of labor group meetings to schedule training. Monterey Park Police Department The Human Resources Department completed all HR user provisioning in our system. The city’s main liaison with Arx Alert retired, so Chief Smith took over the implementation. The city completed executive reviews and made all necessary changes to the system. Arx Alert is currently scheduling training with command staff.

Attachments: None Prepared by: Bob May, Risk Control Director

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Subject: 2019-20 Claims Committee Attendance Record Action for consideration: Review and file Background: The Claims Committee (Committee) Attendance Record is presented for review. Pursuant to Article 11 Section B.4. of the Bylaws, attendance of Committee members is essential to ICRMA business. A Claims Committee member missing two (2) meetings in a fiscal year shall be subject to Board review concerning forfeiture of his/her seat on the Committee.

Prepared by: Jennifer Achterberg, Assistant Program Administrator

Member City 7/10/19 9/4/19 11/6/19 12/4/19 1/8/20 3/11/20 5/6/20 % of Attendance

Yvette Abich Garcia Downey 1 1 1 1 100%Alison Stevens Hawthorne 1 1 1 1 100%Sergio Ibarra Bell 1 1 1 1 100%Sara Nazir Lynwood Absent 1 1 1 75%Debbie Scott-Leistra Santa Ana n/a n/a Absent 1 50%Nellie Cobos South Gate n/a n/a 1 1 100%

Total: 3 4 5 6 0 0 0

ICRMACLAIMS COMMITTEE ATTENDANCE RECORD

FY2019/2020

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Subject: Provide Settlement Authority for Santa Ana Property Claim Action for consideration: Review and provide $250,000 in authority for resolution of the Santa Ana

Southwest Senior Center property claim. Background: This claim stems from an incident wherein a plastic water filter housing attached to the primary water system of the Southwest Senior Center developed cracks and failed. ICRMA First Party Pool Coverage has a Deductible of $250,000 that will be exhausted through the handling of this loss anticipated to resolve at over $300,000. Excess Coverage is available to property program members through Fireman’s Fund – Allianz. The TPA Claims Administrator is seeking the authority from the Claims Committee for the full amount of the $250,000 deductible in order to pay for the now completed remediation of the damages and in order to complete repairs with the assistance of Allianz Insurance for the remainder of the loss. Mr. Reed & Mr. Hidalgo will be in attendance to review the documents with the Committee. Attachments: TPA Report – Investigations/Authority Request Prepared by: Mike Reed, AdminSure

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3380 Shelby Street Ontario, CA 91764

Telephone (909)861-0816

Fax (909)860-3995 www.adminsure.com

REPORT #2 – Authority Request for Pool Deductible ICRMA First-Party Property 18201 Von Karman, Suite 200 Irvine, CA 92612 Attention: Ms. Beth Lyons, Executive Director Reference: Principal: ICRMA Property Program Member: City of Santa Ana Loss Date: 10/21/2019 Claimant(s): City of Santa Ana/ Southwest Senior Center Our File Number: 19-144971 Location: 2201 W. Senior Center, Santa Ana, CA 92704 Dear Ms. Lyons; FACTS IN BRIEF: This claim stems from an incident at 2201 W. McFadden Ave. Santa Ana, CA 92704 wherein a water filter spontaneously developed one or more cracks and leaked in the interior of the South West Senior Center flooding most of the center to about 2-3 inches of clean water. The Senior Center was closed on the weekend that the water began to leak from the filter and on Monday 10/21/2019 at approximately seven thirty in the morning, city employees reporting to work discovered approximately 2-3 inches of water covering ~seventy-five percent of the building floor.

Authority Request - By the attachments to this report it is clear that this loss will exceed the ICRMA Pool Deductible of $250,000.00. As remediation is completed and the repairs have begun, we wish to make the funds available to the City for payment of the contractor that remediated the loss and as well, begin progress payments toward the repair of the Senior Center anticipated to exceed $275,000.00.

MEMBER/DEPARTMENT: City of Santa Ana – Parks & Recreation – Primary Contact:

Samantha M. Lambert | Risk Management Supervisor Human Resources | 20 Civic Center Plaza | Santa Ana, CA 92701 714-647-6959 | [email protected]

DATE, TIME & PLACE: Monday October 21, 2019 at 7:30 AM, 2201 W. Senior Center, Santa Ana, CA 92704. COVERAGE: Confirmed as Covered – Code # 2749 – Site Code # 90 – Valuation $3,762,899.00. OTHER INSURANCE: No other insurance is available for this loss to the City of Santa Ana, however a possible culpable third-party - the water filter manufacturer will be our target of subrogation. Page 14 of 61

mailto:[email protected]

EXCESS: This matter warranted notification of the excess insurer, Fireman’s Fund - Allianz above the ICRMA First-Party Pool Deductible of $250,000.00 and their response has been received to our primary contact: * Claim Number: 00519378550 * Policy Prefix : DXJ * Policy Number: 80998318 * Insured Name: INDEPENDENT CITIES RISK MGMT A * Date of Loss:10/21/2019 * Loss Location State: California * Description of Loss: Water damage * Claimant Name: INDEPENDENT CITIES RISK MGMT A * Claim Adjuster Name: David Melton * Claim Adjuster e-mail address: [email protected] * Claim Adjuster Phone: (661) 993-1827 * Claim Adjuster Address: P.O Box 970, O'Fallon, Missouri 63366 United States

INCIDENT DESCRIPTION / FACTS IN BRIEF: City employees replaced the water filter in approximately July 2019, 3-months before the incident at South West Senior Center 2201 West McFadden Santa Ana, CA 92704. The water filter appeared to have cracked in 3 places causing clean water to flood the majority of the Senior Center. PHOTOGRAPHS: Photographs were taken by ATI (American Technologies Inc.) city crews and our ICRMA adjuster at the time of loss discovery and are attached to this report (complete collection is available upon request). These photographs show the use of moisture meters to identify areas of drywall requiring removal and replacement as well as other specialized equipment that was used to mitigate the loss. PROPERTY DAMAGE: The City sustained the following property damage loss: Clean water intrusion to approximately 9,000 square feet of low-pile carpeting, tile and lower wall saturation to approximately ~ 2-3 inches in the lobby, nine offices, two conference rooms, a game room and a large theater room with stage. The estimates include the removal of all furniture, and office equipment including desks and personal property for access, remediation and drying operations. LIABILITY EVAUATION: This incident is confirmed to be the spontaneous leak of a water filter cover, serviced by City staff and an identifiable product part failure which will allow for the pursuit of negligent manufacture by a third-party and a product defect claim of subrogation. SALVAGE / SUBROGATION: Based on our findings, subrogation to third parties for whom subrogation would be viable will be our focus and that of our excess carrier, Allianz:

Amy Martin Subrogation Representative Allianz Global Corporate & Specialty® 1 Progress Point Pkwy, Suite 200 O’Fallon, MO 63368 USA Direct: +1.314.817.2981 Email: [email protected]

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There was no salvage to be retained or considered in relation to this project as carpet square footage was limited to individual offices and linoleum tile removed from the floor is not re-useable. ATI performed post-loss mitigation of all areas with the re-use of furniture and personal property upon the completion of drying operation and installation of new flooring.

WORK TO BE COMPLETED:

1. Remediation and removal of water damage to the Southwest Senior Center2. Obtain and review full ATI remediation Invoice - review and payment pending3. Receive and review Estimates from ATI and SHR for selection of repair contractor4. Commence repair and restoration of the Southwest Senior Center

CLAIM STATUS/RESERVE: 1. City of Santa Ana Open – Property $250,000.00

COMMENT: We will continue our handling as outlined above and keep you advised as significant events occur and/or upon the finalization of repair.

Sincerely,

Michael Reed, Claims Manager AdminSure Inc. 3380 Shelby Street Ontario, CA 91764-5566 Phone 909-612-5644 | Fax 909-860-3995 [email protected]

cc: Fireman’s Fund Insurance Company c/o Allianz Global Corporate & Specialty

Enc: Building Diagram Photographs Lead Testing Results Estimate Cover Pages – ATI & Sunny Hills (5) Mobile Modular Option (not implemented)

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Claim #: 19-144971 Name:City of Santa Ana Incident Date: 10/21/2019 Type: First Party - Property Examiner: Hidalgo, Doug Organization: Status: Open Insured:ICRMA Property Program Insurance Type: First Party

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Claim #: 19-144971 Name:City of Santa Ana Incident Date: 10/21/2019 Type: First Party - Property Examiner: Hidalgo, Doug Organization: Status: Open Insured:ICRMA Property Program Insurance Type: First Party ________________________________

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General location of cause – Filter cover screws into the dark area between the copper pipes in the lower right.

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January 8, 2020 Claims Committee Subject: Attorney Report Card Update Action for consideration: Review work to date and direct next steps for completing the project Background: In November 2019, the Claims Committee received an update regarding this project. That update included an overview of the process to date, timeline for completion, and report skeleton for comment. In order to move forward, it is critical that the Claims Committee review the attachment to this memo and arrive at the meeting prepared to ask questions. Sara Peterson will present further data via PowerPoint and discuss the following:

1. Does the Claims Committee understand the presentation of how the analysis/metrics are used?

2. What are the thoughts of the Claims Committee regarding confidentiality of various project elements and report format?

3. Given recommendations to management and next steps presented in the PowerPoint, is the Claims Committee comfortable with the proposed roll out of the reports to the Board as below?

o Presentation of structure, analysis, and findings in February o Implementation of recommendations during 2020 o Individual report cards and member analysis release TBD

Attachments: 10-pages excerpted from draft project reports, providing:

• An overview of the now 4 reports that will come from the project • A sample from Report II: Defense Cost Analysis • A sample from Report III: Confidential Report Card

Prepared by: Sara Peterson, Consultant

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Liability Defense Report Card Project

DRAFT OVERVIEW FOR

CLAIMS COMMITTEE DISCUSSION AT JANUARY 8, 2020 MEETING

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Page 2 – DRAFT FOR COMMITTEE DISCUSSION ONLY

PROJECT CONTENTS

REPORT I: Project & Findings

Introduction ...................................................................................................................................... X 2014 Recap ....................................................................................................................................... X 2019 Findings ................................................................................................................................... X

REPORT II: Defense Cost Analysis

Reader’s Guide ................................................................................................................................. X Coverage Type .................................................................................................................................. X Current (Former) Members .............................................................................................................. X Defense Firms ................................................................................................................................... X

REPORT III: Confidential Report Card

Reader’s Guide ................................................................................................................................. X Current v. Future Report Cards ........................................................................................................ X Currently on the Defense Panel ....................................................................................................... X In-House City Attorneys ................................................................................................................... X

REPORT IV: Recommendations to Management

Reader’s Guide .................................................................................................................................. X Defense Panel Management ............................................................................................................ X Data for Future Report Cards ........................................................................................................... X Litigation Management Policies & Procedures (LMPP) Oversight ................................................... X Claim, Litigation & Program Management ....................................................................................... X

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REPORT II: Defense Cost Analysis

Reader’s Guide On the pages that follow, you will find the following table structure repeated three times: once for coverage type, once for members, and the last for defense firms. Throughout the order of tables is consistent. The order of rows within the tables of each section is also consistent. These formatting rules are intended to make the report more user-friendly. In some cases, it results in empty columns or rows. Lastly, purple boxes are used to highlight “so what” information. Each table provides a listing of all items in the analysis group (coverage type, member or defense firm)and the number of OCCURRENCES tied to each item. Occurrences may include multiple claims as identified by the claim numbering system. However, the Report Card dataset may not include all claims for each.

Coverage Type The Table below breaks down liability and defense amounts paid for each item listed

• Damages – Includes all payments regardless of type (bodily injury, personal injury, errors/omissions, etc.) • Costs – Includes both ALAE (allocated loss adjustment expenses) and legal expenses as a single sum • Total Incurred – The sum of the prior three columns

1. Overview Damages + COSTS = Total Incurred Occurrences Sample Coverage/Injury Type $38,581,373 $15,413,643 $53,995,016 296 $97,105,342 $35,913,991 $133,114,864 625

Getting to DEFENSE COST RATIOS The Table below provides the ratio of defense costs paid (ALAE and Legal) to total incurred, average cost fo occurrence, and highest cost occurrence.

2. Metrics Occurrences RATIOS Average

Cost/Occurrence Highest Cost Occurrence Dam. Cost

Sample Coverage/Injury Type 296 71% 29% $52,073 $ Amount

Breaking Down INCURRED OUTCOMES The Table below breaks down the number of occurrences into four groups by their liability and defense cost outcome:

• Defense Outcomes WITHOUT Liability Incurred: o Zero incurred – Occurrences that closed without any payments o Cost without damages – These closed with ALAE or legal costs but no payment of damages (purple box)

• Plaintiff Outcomes WITH Liability incurred:

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o Damages without cost – These closed with payment of damages but no other costs accrued o Damages with cost – These closed with payment of costs (ALAE or legal) and damages (purple box)

Dividing between defense and plaintiff results suggests a win/loss comparison. In the future, “wins” might be viewed more broadly to include verdicts less than the last demand to settle. The data to track this broader definition is not adequately captured in the database to apply it here.

3A. Defense Outcomes Occurrences Zero Incurred +

COST W/O DAMAGES

= % of Occ. W/O Liability

Sample Coverage/Injury Type ## 10% 37% 47%

3B. Plaintiff Outcomes Occurrences Damages w/o Cost +

DAMAGES WITH COST

= % of Occ. WITH Liability

Sample Coverage/Injury Type ## 5% 48% 53%

Delving into the COST OF DEFENSE OUTCOMES The Table below looks more closely at the “Cost without Damages” column of the prior Table (i.e., defended claims without liability). The purple box provides total liability and defense amounts paid for each item listed as in the prior table but ONLY for those occurrences that closed with either ALAE or legal costs but no payment of damages. Then it repeats, providing those same liability and defense amounts paid averaged by occurrences. In this table cost ratios ratio will always be 100% by definition.

4A. Defense Outcomes: Defended W/OUT Damages Damages + COSTS = Total Incurred Occurrences Sample Coverage/Injury Type - $4,156,073 $4,156,073 110 - $9,293,620 $9,293,622 184

4B. Metrics Occurrences RATIOS Average


Sample Coverage/Injury Type 110 - 100% $34,976 $ Amount

Delving into the COST OF PLAINTIFF OUTCOMES The Table below repeats the process and content of the prior Table with two exceptions. First, the focus is on the “Damages with Cost” column (i.e., defended claims resulting in liability). Second, cost ratios (purple box) are included as a valuable evaluation measure.

5A. Plaintiff Outcomes: Damages WITH Cost Damages + COSTS = Total Incurred Occurrences Sample Coverage/Injury Type $37,810,938 $11,257,570 $49,068,508 141



Sample Coverage/Injury Type 141 77% 23% $71,955 $ Amount Sample Coverage/Injury Type 1 77% 23%

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Current (Former) Members Before diving in, the reader should also note the following regarding each analysis group:

• Former Members Included – Both the body of Report II and the Appendix include current and former members. The inclusion of former members creates a richer dataset for current members to use.

• In-House City Attorneys Included – While the LMPP prevents in-house city attorneys from billing time to defense of a claim, there are costs associated with that defense in Origami. For this reason, in-house City Attorneys are included throughout. The reader should pay careful attention whenever a claim or occurrence in the data uses such counsel. It will skew both totals and ratios.

1. Overview Damages + COSTS = Total Incurred Occurrences City of Current Member $622,406 $288,763 $911,169 8 City of Former Member $9,184,811 $2,337,841 $11,522,651 34 $ Total $ Total $ Total # Total

2. Metrics Occurrences

RATIOS Average Cost/Occurrence

Highest Cost Occurrence Dam. Cost

City of Current Member 8 68% 32% $ Amount $ Amount City of Former Member 34 80% 20% $ Amount $ Amount

3A. Defense Outcomes Occurrences Zero Incurred +

COST W/O DAMAGES

= % of Occ. W/O Liability

City of Current Member ## % % % City of Former Member ## % % %

3B. Plaintiff Outcomes Occurrences Damages w/o Cost +

DAMAGES WITH COST

= % of Occ. WITH Liability

City of Current Member ## % % % City of Former Member ## % % %

4A. Defense Outcomes: Defended W/OUT Damages Damages + COSTS = Total Incurred Occurrences City of Current Member - $ Amount $ Amount ## City of Former Member - $ Amount $ Amount ## - $ Total $ Total # Total



City of Current Member 8 68% 32% $ Amount $ Amount City of Former Member 34 80% 20% $ Amount $ Amount

5A. Plaintiff Outcome: Damages WITH Cost Damages + COSTS = Total Incurred Occurrences City of Current Member $ Amount $ Amount $ Amount ## City of Former Member $ Amount $ Amount $ Amount ## $ Total $ Total # Total

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City of Current Member 8 68% 32% $ Amount $ Amount City of Former Member 1 77% 23%

Defense Firms Before diving in, the reader should also note the following regarding each analysis group:

• Select Defense Firms Omitted – There is a snapshot for each of the firms that appeared in the data is in the Appendix. However, they are not all included in the body of Part II. Specifically, firms were removed if all of the claims associated with that firm had either 1) “zero incurred” outcomes, or 2) “damages without cost” outcomes. In sum the following are in the Appendix only:

Tables will be repeated here with a Law Firm for Each Line

Confidential Appendix Report II includes a lengthy appendix in which the reader can find individual snapshots for each coverage type, member, and defense firm. Those snapshots include all of the information summarized here as well as further detail related to:

• Coverage Type o The liability and defense amounts paid for individual occurrences o Defense firms and attorneys associated with the coverage type

• Current (Former) Members o The liability and defense amounts paid for individual occurrence o Breakdown of claims by coverage type and fiscal year o Defense firms and attorneys associated with that member or former member

• Defense Firms o The liability and defense amounts paid for individual occurrence o Breakdown of claims by member and coverage type o Attorneys associated with that defense firm

Snapshots for each defense attorney in this project are provided in Part III as individual Report Cards.

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Appendix

Coverage Type 1. Auto Bodily Injury (ABI) 2. Auto Liability Other (ALO) 3. Auto Property Damage (APD) 4. Errors & Omissions (EAO) 5. Employment Practices Liability (EPL) 6. Other Bodily Injury (OBI) 7. Other Liability Other (OLO) 8. Other Property Damage (OPD) 9. Other Personal Injury (OPI) Members 1. City of Bell 2. City of Downey 3. City of El Monte 4. City of El Segundo 5. City of Fullerton 6. City of Glendora 7. City of Hawthorne * 8. City of Hermosa Beach 9. City of Huntington Park 10. City of Inglewood * 11. City of Lynwood 12. City of Monterey Park 13. City of San Fernando 14. City of South Gate 15. City of Alhambra 16. City of Azusa 17. City of Baldwin Park 18. City of Colton 19. City of Culver City 20. City of Manhattan Beach 21. City of Monrovia 22. City of Redondo Beach 23. City of Upland Defense Firms 1. Albright, Yee & Schmit 2. Alderman & Hilgers, LLP 3. Aleshire & Wynder, LLP 4. Alvarado Smith, APC 5. Alvarez-Glasman & Colvin 6. Arent Fox (omitted from body of document) 7. Artiano & Associates 8. Atkinson, Andelson, Loya, Ruud & Romo 9. Bergener Mirejovsky (omitted)

10. Bergman Dacey Goldsmith 11. Best Best & Kreiger, LLP 12. Boornazian, Jensen & Garthe (omitted) 13. Burke, Williams & Sorensen, LLP 14. Carico Macdonald Kil & Benz LLP 15. Carpenter, Rothans & Dumont, LLP 16. City of Hawthorne (includes in-house) * 17. City of Inglewood (includes in-house) * 18. Doumanian & Associates 19. Drociak, Yeager and Associates 20. Ferguson Praet & Sherman 21. Ford, Walker, Haggerty & Behar 22. George L. Mallory, Jr. & Associates 23. Gutierrrez, Fierro & Erickson 24. Harris & Associates 25. Hensley Law Group 26. Hunt Ortmann Palffy Nieves Darling & Mah, Inc

(omitted) 27. Jenkins & Hogan (BB&K as of 2018) 28. Jones & Mayer 29. Kutak Rock LLP 30. Law Office of Kenneth E. Meyer 31. Law Office of Robert J. Gokoo 32. Law Offices of Damian D. Capozzola 33. Law Offices of Daniel A. Gibalevich 34. Law Offices of Jonathan D. Winters (omitted) 35. Law Offices of Leech & Associates 36. Lawrence Beach Allen & Choi, PC 37. Lewis Brisbois Bisgaard & Smith LLP 38. Liebert Cassidy Whitmore 39. Lynberg & Watkins, APC 40. Manning & Kass, Ellrod, Ramirez, Trester LLP 41. McCune & Harber, LLP 42. Michel & Associates, P.C. 43. Olivarez Madruga Lemieux O’Neill, LLP 44. Richards, Watson & Gershon 45. Rippetoe Law, P.C. 46. Rutan & Tucker, LLP 47. Scott J. Grossberg, PC 48. Shute, Mihaly & Weinberger LLP 49. Tafoya & Garcia LLP 50. The Sohagi Law Group (omitted) 51. Tyson & Mendes LLP (omitted) 52. Vanderford & Ruiz LLP 53. Wolfe & Wyman, LLP 54. Small Claims 55. Unknown

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REPORT III: CONFIDENTIAL

Reader’s Guide On the pages that follow, you will find a Report Card for each of the attorneys listed below.

Current Defense Panel 1. Alderman, Dan 2. Allen, Michael D. 3. Andrews, Lawrence 4. Behar, Jeff 5. Coleman, Susan 6. Colvin, Roger 7. Davis, Tim 8. Doumanian, Nancy 9. Ferguson, Peter J. 10. Fox, Dana Alden 11. Gallagher, Terence 12. Goldsmith, Michele M. 13. Harrell, Shelton 14. Hensley, Mark 15. Jones, Royce K. 16. Leech, Wayne

17. Madruga, Tom 18. Mallory, George L. 19. McCune, Dana John 20. Medelin, Sharon 21. Meyerhoff, Mark 22. Montes, Joe 23. Moore, Kenton 24. Mulkerin, Mark 25. O'Linn, Mildred 26. Oyster, Nathan A. 27. Park, Traci 28. Potter, Harold W. 29. Ramirez, Gene 30. Redford, Jonathan 31. Richards, Ed 32. Rothans, Steve 33. Ruiz, Rodolfo 34. Rutter, Mark

35. Sain, Tony 36. Salinas, Raul 37. Sarno, Justin Reade 38. Sheldon, Geoffrey 39. Sherman, Steven A. 40. Tafoya, Robert 41. Taylor, Steven 42. Touchstone, James R. 43. Tucker, Glen E.

In-House City Attorneys 44. Brenneman, Derald 45. Campos, Ken 46. Hsieh, Jenny 47. Joshua, Taufiki 48. L., Jeff 49. Stevens, Alison

The Report Card structure mimics the Snapshots of Part II. All of the data and tables are the same as for coverage type, members, and defense firms. The intent is for these Report Cards to present a complete picture of the attorney’s work with ICRMA and compliance with the LMPP so that:

• Members can make informed decisions regarding choice of counsel • ICRMA can:

o Hold attorneys accountable to ICRMA policy o Track attorney performance over time o Oversee panel effectiveness in ICRMA and member objectives o Manage composition of the panel

Because of the gaps in data and need to implement additional litigation management tools discussed in the Findings, the Report Cards provided include only some of the information needed to meet all goals. However, Report IV of this document makes detailed recommendations for doing so. The Appendix to this section includes those same snapshots for the rest of the attorneys that appeared in the dataset. They are in the Appendix because they are no longer on the liability defense panel or are unidentified (“no attorney” or “unknown”). These do not include additional Report Card information. Each Report Card is color coded.

• Green indicates that the attorney is currently listed on the defense panel • Purple indicates that the attorney is in-house as a city employee • Red indicates that the attorney was recently removed from the defense panel

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Future Report Cards The Report Cards created with this project represent a significant step forward from 2014. The recommendations in Report IV are designed to move the Report Cards forward another significant step.

Below is the first part of an expanded template. It focuses on caseloads, defense costs/ratios, and outcomes.

This template includes several key shifts:

• From a project-by-project definition of the dataset to one based on a rolling three-year backward look • From closed claims to resolved claims – a shift from the claim administration status to the legal status • From only closed claims to resolved and open claims, giving a better view of attorney caseload for members

It also has several key additions that are not currently possible given the data:

• Showing a three-year window with open claims requires consistent, accurate attorney data • Breaking resolved cases down by the stage at which they resolved requires new data capture and coding • Calculating average days to resolution by coverage type and stage requires new data capture and coding

Finally, the financial data will become more accurate and thus more useful, as ICRMA continues its work with Bottomline (billing submission and review). Ideally, an expanded Report Card includes a second part tied more directly to defense panel and LMPP management.

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Appendix

Unidentified 50. No attorney 51. Unknown

Recent Defense Panel 52. Carpenter, Martin 53. Garcia, David 54. Grossberg, Scott 55. Lawrence, David D. 56. Padilla, Richard 57. Powell, Angela

Others in Dataset 58. Alimi, Nazli 59. Alyman, Lauren 60. Bannan 61. Benz, William 62. Bergener, James 63. Birrueta, Isabel 64. Bond, Lisa 65. Brady, Andrew 66. Briskin, Boris 67. Buchman, Joseph 68. Capozzola, Damian D. 69. Cardinale, Christopher 70. Carpenter, Scott 71. Chueng, Joseph 72. Culp, Melissa 73. Dale, Joshua Robert 74. Danforth, Scott 75. De Soto, Dan 76. Drociak, Joseph L. 77. Ferguson, N. 78. Frank, Ronald F. 79. Garthe, David 80. Gerli, Elena 81. Germano, Cynthia 82. Gillette, Jessica 83. Gokoo, Robert

84. Grimm, L. Trevor 85. Gutierrez, Jimmy 86. Harris, John 87. Higginbotham, John 88. Huntley, Mily C. 89. Jenkins, Mike 90. Kammeyer-Yates, Meagan 91. Kelly, Matthew 92. Kral, Tim 93. Kranker, Gary 94. Kromke, Emily 95. Larin, Michael 96. Le, Michael 97. Lee, Daniel 98. MacNevin, Krista 99. Mangarpan, Tina 100. Marino, Louis 101. Martinez, Marco 102. Monroe, Mary 103. Morin, Pilar 104. Navarette, Rick 105. Norman, John 106. Olson, David 107. Patel, Divya 108. Quiller, Dominic 109. Rose, M. 110. Rusin, Trevor 111. Salamone, Mary 112. Schmit, Lucien 113. Schwartz, Andrew 114. Simon, Maureen 115. Singh, Ajit 116. Torres, David G. / Siegrist, David Torres 117. Trinnaman, Jay 118. Tyson, Robert 119. Vessey, Dana 120. Wada. Emily 121. Whenlan, John 122. Williams, Jill 123. Winters, Jonathan D. 124. Wong, Alex 125. Zweiback, Michael

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Subject: Program Underwriting & Administration Policy Manual Proposed Revisions Action for consideration: Review and recommend Board approval of the proposed revisions to the

Program Underwriting & Administration Policy Manual to be effective February 13, 2020.

Background: The ICRMA Program Underwriting & Administration Policy Manual was approved by the Board at its April 12, 2018 meeting, and has had three revisions. As this manual is utilized in administering the pool, the Administration team continues to identify areas where it may be helpful to document additional guidelines to express the pool’s intent and practices. The proposed revisions will support more effective management of ICRMA’s programs, and continue to establish best practices across the programs. To facilitate review, the proposed revisions are attached in redline format and outlined below:

1. Page 9: Added language to address TPA Data Transmission Expenses after exit

• If a former member changes TPA firms after exit, while ICRMA reportable claims remain open, the former member shall incur the fees associated in establishing a new data feed as well as the annual fees associated with the feed.

2. Typographical corrections, clarifying language, or items already Board-approved, were

made on the following pages: • Page 2: Updated Change Record to reflect page on which corrections were made • Page 4: Item A.2. Replaced “effect” with “affect” • Page 4: Item A.3. and A.4. Revised listings of risk sharing and non-risk sharing

programs. • Page 4: Items B.1. and B.2. Added “or applicable policy documents” • Page 6: Item C.1.c.iii. Revised table to reflect program coverages offered and the

exposure standard associated. • Page 6/7: Item D.2.b. Replaced SIR to instead correctly state MRL • Page 7: Language added that allows ICRMA to calculate member payroll due to late

underwriting data submission (approved by the Board May 2017) • Page 8: Item E.1.b. Replaced “access” with “assess”; replaced “Treasurer” with

“Finance Manager” to reflect current practice; replaced SIR to correctly state MRL Attachments: Redline ICRMA Program Underwriting & Administrative Policy Manual Prepared by: Beth Lyons, Executive Director Jennifer Achterberg, Assistant Program Administrator

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ICRMA PROGRAM UNDERWRITING & ADMINISTRATION POLICY MANUAL

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As approved 10/10/2018 2/13/2020

*** ICRMA General Counsel reviewed and approved prior to Board vote. Page 2 of 20

Change Record

Date Description 4/12/2018 The Board approved this manual at its April 12, 2018 meeting for immediate effect.

Approval of this manual:

1. Is intended to supplant ICRMA’s various program bylaws, in conjunction with the March 1, 2018 restatement of ICRMA’s Bylaws;

2. Incorporates and thus supersedes the following stand-alone policies: Code of Ethics adopted 2/12/2007 Governing Board Roles & Responsibilities adopted 12/12/2007 Service Provider Agreement Policy Renewal adopted 11/17/2005 Underwriting Manual adopted 10/7/2015

3. Includes approval of a new policies related to payments following exit; and

4. Incorporates roles and responsibilities from key vendor contracts so that those positions can be guided by this document and more easily adjusted by the Board.

6/14/2018

The Board formally repealed the following by two-thirds vote at its June 14, 2018 meeting:

• Liability Program Bylaws as revised through that date • Workers Compensation Program Bylaws as revised through that date • Property Program Bylaws as revised through that date

The Board approved additional clarifying language to Section E. Member Payments, 3a. Payments Following Exit.

8/9/2018 The Board approved the addition of a new, Section C, paragraph 1(b), entitled “Marketing to Prospective Members.”

10/10/2018 Non-substantive typographical correction to pages 8 and 9.

2/13/2020 Added language to “Renewal Application & Delinquent Data Surcharges” which allows ICRMA to calculate member payroll due to late underwriting data submissions (approved by the Board May 2017). Added language to “Payments Following Exit” to explicitly address data feed transmission expenses if a former member changes TPAs after exit.

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As approved 10/10/2018 2/13/2020


Table of Contents

A. Introduction

B. Program Parameters

C. Member & Program Application 1. Prospective Members 2. Current Members

D. Underwriting Guidelines

1. General 2. Application Analysis 3. Review of Existing Members 4. Renewal Application & Delinquent Data Surcharges

E. Member Payments

1. Annual Contribution 2. Rating Methodology 3. Payments following Exit

F. Administrative Roles & Responsibilities

1. Executive Director 2. Finance Director 3. Program Manager– All Programs 4. Program Manager– Specific to Program 5. Risk Management 6. Vendor Evaluation & Renewal

G. Board Responsibilities

H. Code of Ethics

I. Amendment

Appendix • Appointment Resolution Template

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ICRMA Program Underwriting & Administration Policy Manual A. Introduction

1. Purpose – The purpose of this Program Underwriting & Administration Policy Manual (Program Manual) of the Independent Cities Risk Management Authority (ICRMA) is to provide policies and procedures that ensure consistent management of and clear expectations for ICRMA Member entities regarding ICRMA’s coverage programs. It is intended to supplement the ICRMA Bylaws and relevant Memorandum of Coverage (MOC) as the primary sources of information and serve as the operational guide for the conduct of ICRMA’s coverage programs.

2. Effect as Governing Document – It shall be treated as one of ICRMA's Governing Documents and, as such, shall have the same

aeffect as the Joint Exercise of Powers Agreement for Insurance and Risk Management Purposes (Agreement), the ICRMA Bylaws and MOC. If any provision of this document conflicts with any of these, the then current version of those documents govern whenever approved.

3. Effect as Program Bylaws – ICRMA’s Agreement requires of program Bylaws in order for each risk sharing program to become operational with the full authority of ICRMA and the powers specifically delegated to it by the Board. ICRMA Bylaws, as restated in 2018, make clear that the policies and procedures contained in this manual, in conjunction with each program’s authorizing ICRMA Resolution and approval of its MOC, meet the Agreement’s requirement. The programs currently active under this provision include the following:

Program Established Effective

Risk Sharing Programs • Liability January 14, 1981 • Worker’s’ Compensation February 1, 2003 • Property / Auto Physical Damage July 1, 2017 – June 30July 1,

2019 • Property July 1, 2019 • Auto Physical Damage July 1, 2019

4. Effect as Operating Policies – Finally, this manual governs ICRMA’s non-risk sharing programs, including the following and others

that may be approved in the future:

Program NON – Risk Sharing Coverage • Earth Movement & Flood • Crime / Employee Dishonesty • Cyber Liability • Terrorism

B. Program Parameters

1. General – In general, the authority for creating and core policy statements governing ICRMA’s coverage programs are as provided in the ICRMA Bylaws. Each program pursues specific goals and objectives as set forth in its MOC or applicable policy documents.

2. Terms – Programs provide coverage under the terms and conditions set forth in the relevant MOC or applicable policy

documents.

3. Program Elements – Program elements are, likewise, as provided in the ICRMA Bylaws and relevant MOC with the following clarifications as approved by the Board from time to time.

a Unless otherwise specified, each program year begins at 12:01 am on July 1, and ends at 12:01 am on the following July 1.

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b Member Retained Limits available to current or prospective members are as approved by the Board and posted on the ICRMA website.

C. Member & Program Application

1. Prospective Member Application a Application Timing

i. It is recommended that an entity only enter each program at the commencement of a new program year.

ii. If an entity chooses to enter the program at any other time, the annual contribution for the remainder of the program year will be pro-rated. The new member entity will begin coverage on the date that is mutually acceptable to the entity and the Board. However, the new participant will be required to share losses with the other members of the program for the entire program year.

iii. The application for participation should be submitted at least sixty (60) days prior to the date the entity wishes

coverage to begin to ensure that the Board has adequate time to review and evaluate the acceptability of the applicant

b. Marketing to Prospective Members - The Executive Director shall provide oversight for all marketing activities to prospective members of ICRMA. i. The Executive Director may engage in marketing activities directly with prospective members or delegate these

responsibilities to qualified staff, ICRMA’s broker, or other preferred marketing agents and outside brokers. Efforts among these parties shall be coordinated to expand and grow the pool’s membership and protect ICRMA’s assets.

ii. The ICRMA Broker shall be entitled to charge additional brokerage fees and commissions, paid by ICRMA, for each

member added to the pool in accordance with the brokerage contract in place at the time a new member is added. iii. As needed and with specific authorization from the Board, the Executive Director may engage one or more “preferred

marketing agents” to market ICRMA, supplementing the marketing activities of the ICRMA staff and broker. Preferred marketing agents so engaged shall be assigned specific marketing targets or territories. All authorized preferred marketing agents shall be compensated by ICRMA and shall be trained by the ICRMA staff and broker to properly promote the messaging, coverage programs and services of the pool, prior to engaging in marketing efforts.

iv. Prospective members may access ICRMA and its programs, directly, without the need to utilize the services of an outside

broker. However, an outside broker may be authorized by contract with a member, to act as an intermediary with ICRMA, on an ongoing basis. Ongoing contractual arrangements between a member and an outside broker shall be at the sole discretion and at the sole cost of the member. ICRMA shall have no duty to invoice or collect broker fees or costs for an outside broker. Nor shall the member's obligation to ICRMA be altered in any way by contract with an outside broker.

v. Under no circumstances may an outside broker be appointed as an ICRMA governing board representative.

c. Application Requirements – Any eligible governmental entity may apply to participate in ICRMA and its programs by providing EACH of the following: i. Resolution – An adopted resolution of its city council committing the applicant entity, if accepted, to the obligations of

membership as found in the ICRMA Bylaws and consenting to be governed for liability matters in accordance with the Agreement, Bylaws, and relevant MOC(s); AND

ii. Application – A completed ICRMA Prospective Member Application with statement of desired member retained limit (MRL) for each program; AND

iii. Documentation as requested in the application, including but not limited to:

i. Financial Statements – The entity’s most recent audited financial statements; ii. Payroll Reports – Quarterly payroll information (DE-9 or equivalent) for the prior six (6) quarters listing total

subject wages; iii. Loss History – Loss data for the last ten (10) years for each line of coverage desired, which includes the total incurred

value of each loss including retention, subrogation and other recoveries iv. Additional data relevant to specific lines of coverage desired:

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Program Participant Exposure Standard

Liability Actual payroll (D-9 total subject wages) and/or population Worker’s Compensation Estimated Actual payroll (D-9 total subject wages) Property / Auto Physical Damage Total insured value of buildings (real property), and contents (personal

property), contractors’/mobile equipment, and vehicles Auto Physical Damage Total insured value of vehicles Earth Movement & Flood Total insured values for property Crime / Employee Dishonesty Total employee count Cyber Liability Total general fund budget Terrorism Total insured value of buildings (real property), contents (personal

property), and total insured value of vehicles.

d. Approval / Rejection – After reviewing the resolution and other underwriting criteria, the Board shall determine the acceptability of the exposures presented by the applicant entity and shall advise the applicant entity in writing, of its decision to accept or reject the request within ten (10) business days after the decision has been made.

2. Current Member Application A current ICRMA Member seeking to participate in additional risk sharing programs or additional lines of coverage will follow the same process as for prospective members above with the following exceptions:

i. Application and documentation will be limited to the desired lines of coverage ii. Approval / rejection of NON-risk sharing programs can be done by staff rather than going before the Board

D. Underwriting Guidelines

1. General These guidelines provide direction to staff and the Board when evaluating prospective members to ICRMA and its Program(s) and when calculating the appropriate contribution for participation in the Program(s). They have been designed to ensure that prospective members are analyzed thoroughly and consistently. ICRMA’s goal in adding new entities to ICRMA and its programs is to create a relationship that is beneficial for both the entity and ICRMA.

2. Application Analysis

a. Prior to asking the Board to consider a prospective member, staff will review the information provided and make a recommendation regarding the entity’s appropriateness for membership. Staff’s analysis will initially focus on the areas noted below, as they pertain to the coverages requested, and may expand depending upon the findings.

1. Experience

2. Exposure a. Services b. Activities c. Physical d. Political e. Historical

3. Management a. Governance b. Effective Operational Processes

4. Financial Solvency

5. Risk Management/Safety Program(s)

b. An acceptable prospective member will generally meet the following criteria:

i. Loss History • Claim frequency (count/$100 payroll) should be consistent with but not exceed 200% of the ICRMA average • Claim severity (incurred cost/$100 payroll) should be consistent with but not exceed 120% of the ICRMA average • Loss Ratio (average losses above requested member SIRretained limit/quoted contribution) should not exceed 80%

ii. Exposure • Entity does not present a risk profile or set of coverage needs that is substantially different from ICRMA’s overall

membership

Commented [JA1]: Jennifer clarified the following program exposure standards with Ryan Jacques:

1.Property 2.APD 3.Terrorism

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iii. Self-Insured Retention (SIR)Member Retained Limit (MRL) • On average, a history of no more than 1-2 claims exceeding the requested member retained limit (MRL) per year • Calculated contribution should be adequate to have covered average annual losses over the requested MRL as

indicated by the loss ratio test noted above

3. Review of Existing Members a. ICRMA’s annual review of members is a holistic review of ICRMA’s membership that supports ICRMA’s stated purpose.

ICRMA’s Bylaws identify conditions under which a member would be in default of the Agreement and Bylaws. Some of these conditions can be tested with objective measures, while others must be addressed on a case-by-case basis, as situations arise

Objective measures that will be used to test member obligations include:

• Consistent attendance at Committee and Board meetings over the preceding 12 months • Response within 30 days to requests for information • Payment within 30 days of ANY amount due (e.g., contribution, tender of retention, surcharge, penalty, or interest) • Loss history metrics as defined in underwriting guidelines • Bankruptcy filing or similar act

The Board will address the remaining conditions (below) on a case-by-case basis, as situations arise.

• Respect Board decision-making authority and ICRMA’s integrity as a joint powers agency • Consistent cooperation fully in the fulfillment of the ICRMA objectives, including with any insurer, claims adjuster,

legal counsel or other service provider engaged or retained by ICRMA in all matters relating to ICRMA • Observation of and/or performance on any covenant, condition, or agreement under the Governing Documents

including, but not limited to, risk management or loss reporting procedures • Creation of any condition the Governing Board believes to be unduly detrimental to ICRMA.

b. Staff will prepare a Comprehensive Underwriting Review that encompasses each of the conditions listed above at least once

per year. The report will provide an assessment of each member against the objective conditions above and provide further notation of conditions the Board might consider in assessing the subjective conditions. This report will be presented to the Board when all necessary information is available, generally after the close of a fiscal year, but not later than its April meeting.

c. Failure of members to meet any of these conditions can trigger surcharges and/or remedies available to ICRMA on default of member obligation as outlined in ICRMA’s Bylaws

4. Renewal Application & Delinquent Data Surcharges

a. ICRMA Bylaws oblige each Member to 1) provide accurate and factual data on a timely basis to determine appropriate cost of coverage; and 2) cooperate with ICRMA and its agents including the collection of loss data in accordance with ICRMA’s Universal Data Specifications. ICRMA Bylaws assess a surcharge for delinquent data. ICRMA implements that surcharge as follows.

i. Each year of the program, each member entity will complete and return a renewal application to staff by a date

specified by the Executive Director, or designee of the Executive Director. Should complete exposure data not be received from a member by the stated deadline (i.e., incomplete applications), the surcharge will be assessed as follows:

Amount of Surcharge to be Assessed

Immediate assessment once due date passes

5% of the member’s premium or $1,000, whichever is less

Applications received by staff more than ten (10) calendar days after their due date

5% of the member’s next year’s program premium *ICRMA will determine payroll for members who do not respond within 10 days of the Annual Renewal deadline by increasing the previous year’s actual payroll by 5%, or the average increase of pool payroll, whichever is greater.

Applications received by staff more than twenty (20) calendar days after their due date

10% of the member’s next year’s program premium Commented [BL2]: This concept was approved by the Board in May 2017

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Applications not received by staff sixty (60) calendar days prior to the beginning of the new program year

The Member will be subject to the previously referenced surcharge and, in addition, the member may receive a rate different from the pooled rate obtained for the member entities as a group. Any rate obtained outside of the group rate may subject the member entity to additional broker fees. The member entity may also be subject to suspension of coverage until a completed application is received by staff, have no coverage placed, or be terminated from the program. A written notice of this will be provided to the member entity not in compliance

ii. The ICRMA TreasurerFinance Manager will directly invoice all surcharges levied against members in violation of this to

the individual member.

iii. Any late fee assessed in accordance with the provisions of this Section may be appealed. Such appeal shall be in accordance with ICRMA’s Dispute Resolution Policy.

E. Member Payments

1. Annual Contribution a Current Members – Each participant shall pay an annual contribution to ICRMA for each program year. b Prospective Members – A prospective member’s contribution shall be calculated based on the program’s rating

methodology. If the calculated contribution is inadequate to meet the criteria established above, however the prospective member is otherwise acceptable, staff may recommend that the Board access assess a surcharge. A preliminary indication may be provided including available self-insured retention (SIR)member retained limit (MRL) options. If an indication is requested before the fiscal year’s rates are established, an indication can be provided based on the current year’s rates.

2. Rating Methodology

a. Purpose – The annual contribution methodology is designed to result in amounts sufficient to cover: i. Purchased insurance, excess insurance and/or reinsurance premiums (if any): AND ii. Administrative expenses; AND iii. Actuarially-determined funding plus a margin for added confidence as determined by the Board each year

b. Components – The annual contribution for each participant shall be calculated using: i. ICRMA’s actuarially determined discounted expected funding adjusted for:

• Risk margin (confidence level), • Participant’s loss experience, • Participant’s exposure as measured by specific program standards (See Application Requirements), and • Member retained limit; AND

ii. A rate covering the cost of any excess coverage, AND

iii. A rate for operating expenses including a charge for program administrative, as well as broker and other expenses as

required by the pool.

c. Annual Variation – The Board may adjust the specific rating formula as part of the budget process each year as well as the use of a specific discount rate and/or confidence level for funding.

d. Billing – Each year ICRMA shall bill participants for a contribution amount for the next program year. The billings shall be due and payable in accordance with the ICRMA Governing Documents.

Participants that have formerly participated in a program, but have withdrawn as a participant, shall be required to pay all applicable billings for the program years in which they participated. Delinquent billings shall be charged and collected from the participant in accordance with the ICRMA Bylaws.

e. Interest – Interest accrues on all delinquent amounts due and payable to ICRMA in accordance with the ICRMA Bylaws.

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3. Payments Following Exit According to ICRMA Bylaws, “ALL current AND past ICRMA members shall be responsible for … paying their respective share of ICRMA expenses UNTIL ALL claims or other unpaid liabilities, covering the period of the Member’s participation in the program have finally resolved and the Board has determined the final amount of payments due by, or credited to, the Member for the period of its participation. These obligations include payment of assessments, retrospective adjustments, as well as any other amounts due and payable. The Board determines all such amounts.” In order for Members to better understand this obligation, the Board has provided the following guidance to staff for invoicing expenses when a Member leaves either a program or ICRMA. a. General Administration – Any withdrawing or expelled Member shall be subject to an administrative fee equal to its pro rata

share of ongoing expenses for the three (3) program years following withdrawal. As a pro rata share of expenses, this fee serves to 1) ensure that existing members meet their payment obligations as defined in the Bylaws in a way that is transparent and predictable for ICRMA, the exiting member, and the remainder of the membership; and 2) mitigate the impact of departure on the remaining members such that the entirety of their pro rata share is not absorbed immediately but instead happens over time. As such, it aligns with the core value of risk sharing fundamental to public entity pooling. This fee and its calculation are specifically not intended as a penalty for exit or as a means to increase net assets of the pool. Ongoing expenses include but are not limited to staff payroll and benefits, vendor contracts, actuarial services, investment services, financial audits, and claims audits and administration.

The administrative fee is calculated based on the member’s actual payroll and self-insured retention level in the last year in which the Member participated. It is charged to the Member as follows: i. In year one (1), 100% of the administrative fee will be charged to the member; ii. In year two (2), 50% of the administrative fee will be charged to the member; and iii. In year three (3), 25% of the administrative fee will be charged to the member.

b. Program-Specific Expenses – ICRMA will invoice any withdrawn or expelled member for previously accrued or ongoing direct

program expenses (e.g., OSIP fee, property appraisal, assessments).

c. Extraordinary Expenses – The Board may, at its discretion, invoice withdrawn or expelled members for additional unexpected or extraordinary expenses that emerge in servicing the Member’s claims following exit.

d. TPA Data Transmission Expenses - When a former member has a change in third party claims administrators, the former

member shall incur the implementation fees to establish a new data feed, and the annual fees associated with the feed, as long as ICRMA reportable claims remain open.

ICRMA staff may invoice these general administration and program-specific expenses as part of its usual invoicing process each year without specific approval from the Board. Staff will, however, include the sums in budget reports to the Board. Should a Member disagree with the invoice, it will follow the Dispute Resolution process as in the ICRMA Bylaws and other governing documents.

F. Administrative Roles & Responsibilities

1. Executive Director Responsibilities a. Executive-Level Leadership

i. Provide executive leadership to ICRMA and its Board in line with strategic priorities, while implementing Board policies and ensuring continuous improvement as a pool. • Maintain effective communication and services to ICRMA members, service providers and interested parties • Keep the Board informed with regular reports and updates on the status and performance of ICRMA as well as the

need for and timing technical assistance

ii. Provide executive-level analysis and recommendations to the ICRMA Board regarding: • Selection of service providers as required • Program renewal and selection of reinsurance/excess insurance • The results of various actuarial studies, financial audits, and claims audits • Financial benchmarks, surplus targets, retention levels, and member rates • Specific loss trends as well as general industry and legislative developments • Other analysis or assistance as appropriate for effective, healthy operations

Formatted: Font: Bold

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iii. Assist the Board in meeting, advising and making recommendations on significant matters of interest to ICRMA before

elected or appointed State and local officials, and provide advice and information as requested to member cities on legislative and administrative matters.

iv. Oversee all vendor contracts from RFP through completion of the work while ensuring compliance with all relevant policies (e.g., contract due diligence, invoice review and payment). • Represent ICRMA in all dealings with outside vendors • Coordinate activities of and among service providers to assure ICRMA program and service success • Assist ICRMA in the selection of vendors who may provide services to ICRMA including:

1. Prepare specifications for services as directed 2. Negotiate fees and other agreements on behalf of ICRMA to minimize costs and obtain the best services 3. Coordinate the annual renewal of all professional contracts

• Monitor performance of all vendors assuring that needs of ICRMA and members are being met – challenge all vendors to encourage best and most cost effective outcomes for members; “trust but verify”

b. Operations Management – Oversee and manage the day-to-day operations of ICRMA, including established and future

programs in line with ICRMA governing documents, agreements, established policies and procedures, strategic goals, industry standards, and legal constraints.

i. Policy & Regulatory Compliance • Carry out the policies of the Governing Board • Coordinate CAJAPA Accreditation process with all relevant vendors • Coordinate with counsel retained by ICRMA to ensure compliance with all relevant laws and regulatory

requirements • Establish procedures and policies as necessary • Represent ICRMA in dealings with all regulatory agencies • Cooperate with requests for information and documents requested by regulators • Ensure proper preparation and submission of all regulatory filings in accordance with applicable laws and

regulations in coordination with ICRMA’s various vendors

ii. Meeting Management & Support – Prepare for and staff all ICRMA Board, sub-committee and ad hoc meetings as well as special events and retreats as determined by the Board. This includes but is not limited to: • Preparation, review and dissemination of agendas and agenda materials • Ensuring meetings are noticed, conducted and recorded in accord with Governing Documents and state law • Research of issues as directed by the Board • Coordination of the logistical arrangements for meeting notices, locations, catering, and facilities • Coordination of service provider and advisor participation as required and materials – “trust but verify” • Maintain proper records of all actions taken via minute preparation and distribution of all relevant meetings

iii. Service to Membership – Provide appropriate service and assistance to member cities with respect to ICRMA business

as required. • Advise members on risk management matters • Assist members in obtaining services from ICRMA vendors • Ensure coordinated response to coverage questions with Program Managers and ICRMA Counsel • Coordinate certificates, endorsements, and declaration pages, and provide proof of ICRMA coverage • Respond to member requests for assistance at city meetings including presentation of pool updates • Coordinate annual renewal process including oversight of member exposures and withdrawal requests

iv. Strategic Loss Review • Maintain and update ICRMA Underwriting Manual, guidelines and procedures • Use Origami to oversee service to member cities and their claims in cooperation with Claims Managers • Analyze loss runs and individual claims, when necessary, to minimize claims costs to ICRMA • Work with Financial Management provider to review alternatives for financially strengthening ICRMA’s programs,

and report on such alternatives • Monitor the status of ICRMA’s programs and operations, member agencies’ losses, administrative and operational

costs, and vendor performance, and provide the Board with appropriate status reports • Assist actuaries in their review and analysis of ICRMA components with the objective of obtaining the best

coverage and benefits with the minimum cost to the member agencies

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v. Data Management & Analysis • Annually compile loss data, by program, as submitted from ICRMA member city TPAs using ICRMA Universal Data

Specifications, or ensure such compilation takes place as required • Verify data quality and communicate any problems to the Program Managers, TPAs and/or Members • Integrate the pool layer claims data with the underlying claims data provided by the primary TPAs • Combine data into a single location for ICRMA claims by program in order to complete “roll-up” for multiple

coverages, claimants and suffixes and the separate primary and pool layers for reporting and analysis • Provide a standardized loss data to actuary for annual actuarial studies (ICRMA and individual member) and to

ICRMA’s broker for excess insurance/reinsurance placements

vi. Member Development – Market ICRMA to attract new member cities per strategic goals and annually agreed-upon work plans, and develop and prepare guidelines and standards for accepting new members • Respond to member requests to attend special meetings to assist in the decision process • Respond to prospective members requests for information about ICRMA • Attend prospective members meetings to deliver ICRMA Concept Presentations • Follow underwriting procedures for new members • Ensure coordinated review of applications for ICRMA membership with Financial and Program Managers • Make recommendations to the Board regarding ICRMA membership applications • Coordinate collection of data and actuarial and safety reports, summarize and prepare Underwriting reports

vii. Record Management & Transparency • Ensure implementation of processes and procedures relating to the protection of electronic data, including a

suitable security and back-up system for all stored data and a written policy with respect to disaster recovery, physical and electronic data security, and electronic data retention, across vendors as per the standards for Accreditation with Excellence by the California Association of Joint Powers Authorities

• Ensure all official records of ICRMA, including but not limited to correspondence, reports, insurance policies, notices, agendas, minutes, Governing Documents, administrative records, membership documents including applications and pool agreements, and member contact information are captured within ICRMA data and document systems, website platform and cloud-based document manage

• Ensure the pool’s website is up-to-date and includes at least ICRMA’s agendas, agenda materials, minutes, calendars, contacts and relevant program documents

viii. Clerical Support

• Establish and maintain schedules for ICRMA activities (e.g., meetings, audits, studies) • Prepare all records and documents under this Agreement in a form and content acceptable to the Board • Maintain ICRMA memberships (e.g., AGRIP, PRIMA, CAJPA) as appropriate • Prepare any correspondence required for the operation of ICRMA • Maintain up-to-date lists of all member cities, Board and committee members, and service provider.

2. Finance Director Responsibilities

a Executive-Level Leadership i Provide executive-level guidance to ICRMA and its Board for financial matters in line with strategic and long-term

financial plans and priorities, while implementing Board financial policies and ensuring continuous financial improvement as a pool.

ii Provide financial analysis and recommendations to the ICRMA Board regarding: • Emerging trends in risk pool finances as well as changes in industry standards; • Selection of service providers as appropriate; • The results of various actuarial studies, financial audits, claims audits, and investment reports; and • Financial benchmarks, surplus targets, retention levels, and member rates.

iii Provide financial oversight of the activities of the independent investment advisors, actuaries, external auditors, or

other providers of finance or accounting related services to ICRMA.

iv Oversee and manage all financial matters, including but not limited to all day-to-day and long-term financial management of ICRMA, in line with ICRMA governing documents, agreements, established policies and procedures, strategic goals, industry standards, and legal constraints.

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v Policy & Regulatory Compliance • Ensure compliance in financial matters with relevant laws and regulatory requirements • Cooperate with requests for financial information and documents requested by regulators • Prepare or provide for the preparation and submission of regulatory filings in accordance with applicable laws and

regulations in coordination with ICRMA’s various vendors.

vi Financial Management • Prepare the annual budget for ICRMA approval and oversee its implementation. • Provide timely delivery of financial statements, investment reports, annual budgets, audited financials, and

management letters, particularly to keep the Board informed on the financial status and performance of ICRMA. • Implement all program billing, collections, banking, and disbursements in accordance with all Board-established

procedures, with appropriate records of each. • Develop premium and refund/assessment amounts by:

o Using payroll/loss information as collected/compiled by ICRMA administrator and claims managers o Directing the activities of the ICRMA actuary o Calculating annual contributions in pooled programs o Verifying premium rates o Calculating refunds or assessments

• Calculate annual renewal allocations using pool quotes received from ICRMA’s administrator and the ICRMA allocation formula to determine members annual premiums for renewal

• Collect reinsurance reimbursements, excess insurance reimbursements, primary insurance reimbursements, and other reimbursements due from reinsurers, insurers, or vendors

• Coordinate activities with other service providers to assure ICRMA program and service success • Maintain any additional financial or other records as may be necessary or appropriate to the operation of ICRMA,

including but not limited to financial reports to ICRMA members, service providers and interested parties. • Complete any other related duties and/or special reports as requested by a duly authorized official • Respond to requests for confirmation made by member agencies' financial auditors • Provide advice and assistance to member agencies, as requested

b Management’s Annual Financial Statements i Prepare financial statements in accordance with accounting principles generally accepted in the USA based on

information provided by you; and ii Apply accounting and financial reporting expertise to assist you in the presentation of financial statements without

undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements in order for them to be in accordance with accounting principles generally accepted in the USA.

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c Accounts Payable Process payables, including receive and record all invoices, obtain approval when necessary, and prepare and issue checks per ICRMA policy, specifically: i Obtain and or gather vendor invoices on a semi monthly basis or as directed ii Record by placing invoices into Intacct and enter transaction to submit to the ICRMA administrator for approval iii Once the invoices are approved, the Treasurer will receive notification to approve invoices iv Once the Treasurer or other authorized signer approves the invoices, checks will be electronically submitted to check

service company to print and mail checks out to the vendors

d Accounts Receivable / Billing Process receivables, including verify demands for payment made upon ICRMA and prepare a warrant listing to include all such demands made since the last warrant listing, specifically: i Receive and record invoices, receive and record payments, and follow up delinquent accounts ii Obtain underwriting data and member premiums to be billed iii Upload data into Intacct and send out electronic invoices to members iv Upon receipt of payment, deposit the payment electronically via desktop deposit or wire transfer v Ensure upload is accurate

e General Ledger / Journal Entries

In accordance with Generally Accepted Accounting Principles (GAAP), as promulgated by the Governmental Accounting Standards Board (GASB), maintain detailed records of all income, expenditures, deposits, and withdrawals, including maintain check registers of all applicable accounts and submit to Board in a timely manner, specifically: i Perform accrual journal entries every month ii Enter periodic adjusting entries iii Ensure each account has supporting documentation attached.

f Investment Reconciliation

Reconcile the investment activity as reported by both the independent investment advisor and custodian bank and monitor investment activities. i Reconcile to custodian statement. ii Verify balance to advisors statement. iii Review securities to ensure that investments are being transacted in accordance with ICRMA’s investment policy. iv Act as liaison between associated investment advisors and custodian banks, as required

g Cash Management & Bank Reconciliation

i Perform required money transfers between accounts and/or financial institutions per the ICRMA policies. ii Reconcile all bank accounts on a monthly basis iii Act as liaison between associated banks, as required.

h Reporting

i Quarterly and annual financial statements will be generated for fiscal year using economic resources measurement approach and financial flow measurement focus.

ii Budget vs Actual report will be generated and available online. iii Monthly report of cash receipts and disbursements will be prepared iv Additional reports will be available online for viewing

i Strategic Loss Review

Work with ICRMA’s administrator to review alternatives for financially strengthening ICRMA’s programs, and report on such alternatives

j. Data Management & Analysis

Coordinate with ICRMA’s administrator liability and workers’ compensation programs reports in the quarterly and annual financial statements

k. Meeting Management & Support Prepare for and staff ICRMA Board, sub-committee and ad hoc meetings as well as special events and retreats as determined by the Governing Board, including preparation and timely delivery of requested agenda materials.

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l. Record Management & Transparency Ensure implementation of processes and procedures relating to the protection of electronic data, including a suitable security and back-up system for all stored data and a written policy with respect to disaster recovery, physical and electronic data security, and electronic data retention, across vendors as per the standards for Accreditation with Excellence by the California Association of Joint Powers Authorities.

3. Program Manager Responsibilities – All Programs

a. Executive-Level Leadership i. Provide executive leadership to ICRMA and its Board for all claims and litigation in line with strategic priorities, while

implementing Board policies and ensuring continuous improvement as a pool. • Maintain effective communication and services to ICRMA members, service providers and interested parties • Keep the Board informed with regular reports and updates on the status of all ICRMA claims and litigation matters

as well as the need for and timing technical assistance

ii. Provide executive-level analysis and recommendations to the ICRMA Board – to avoid unnecessary disputes, legal expenses and/or unnecessary financial risk to ICRMA – regarding: • Changes or proposed changes in statutes, rules and regulations and case law affecting its programs • Problem areas or trends and recommend solutions • Analysis of coverage issues as requested • Selection of service providers as appropriate • Appropriate reserves • Resolution of claims • Assignment of appropriate defense counsel • Other analysis or assistance as appropriate for effective, healthy operations

iii. Provide oversight of the activities of TPAs, the defense panel, and other providers of claims and litigation related

services to ICRMA and its member cities

b. Policy & Regulatory Compliance i. Carry out the policies of the Board ii. Assist with periodic revisions of policies, procedures and governing documents as necessary iii. Ensure compliance with all relevant laws and regulatory requirements iv. Assist in the development of policies and procedures relating to each of ICRMA’s programs v. Cooperate with requests for information and documents requested by regulators vi. Report claims in compliance with Medicare, Medicaid, and SCHIP Extension Act (MMSEA) Section 111. vii. Prepare and submit all reports related to claims and litigation management required by Government Code and required

by ICRMA Boards and Committees. viii. Assist as necessary in ICRMA’s preparation and submission of all regulatory filings in accordance with applicable laws

and regulations

c. Administration of Programs i. Develop and prepare underwriting guidelines and procedures ii. Monitor the status of ICRMA's liability and worker’s compensation programs iii. Maintain all required statistical information on the member agencies and their claims within Origami including

correspondence and documentation for immediate access by ICRMA administration. iv. Maintain on-call service on a 24-hour, 7 days per week basis via a 24-hour phone number, or the phone numbers of key

personnel who will be available. v. Attend meetings at the request of ICRMA and/or Member Cities. vi. Conduct seminars at the request of ICRMA and/or Member Cities. vii. Provide ICRMA and its members with ongoing information on the progress of individual claims, recommended loss

prevention actions and other cost control measures regarding any ICRMA programs. viii. Make observations and recommendations in regards to claims handling; provide input on regulatory or legislative

changes or industry trends that effect liability, potential liability or property claims ix. Distribute Litigation Management Policies and Procedures (LMPP) to defense attorneys, collect and maintain signed

LMPP acknowledgement pages. Notify Board of non-compliance. x. Complete OSIP reports in compliance with the state requirements xi. Request, collect and maintain proof of attorney insurance in compliance with the LMPP requirements. Notify Board of

non-compliance. xii. Annually review attorney licensing of defense attorneys and report loss of licenses to the Board

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d. Claims Management

i. Request and review Coverage Counsel opinion letters. ii. Request and review all reported claims reported, which will or may potentially expose ICRMA, including, but not limited

to, coverage verification, investigation, reserving, evaluation, litigation management, and preparation of periodic claims status reports to ICRMA.

iii. Institute reporting procedures and forms whereby member cities and/or its claims administrators report claims which will or may potentially expose ICRMA. These reporting procedures are contained in ICRMA’s Litigation Management Policies and Procedures for reporting to ICRMA. Report non-compliance to the Board.

iv. Report any and all reported claims to ICRMA’s excess carriers that will or may potentially expose ICRMA in excess of its shared risk layer, if any for fiscal year.

v. Attend all Board meetings and Claims Committee meetings as required by ICRMA. vi. Maintain claim file documents, notes, and diaries within Origami on each ICRMA reportable claim. The claim files will be

ICRMA’s property and will be available for inspection by ICRMA upon request. vii. Provide written statistical and loss experience reports concerning the claims status at least annually. viii. Engage, with ICRMA’s prior approval, the services of persons such as defense counsel and investigators. ix. Be available for consultation on claims and related issues potentially involving ICRMA as necessary

e. Litigation Management ICRMA’s or Member’s legal counsel will handle litigation of claims. However once litigation has commenced, the Program Manager will work in conjunction with assigned counsel in defense of the claim and remain the point of contact for ICRMA during the entire pendency of the litigation, including, but not limited to: i. Oversee and implement ICRMA’s Litigation Management Policies and Procedures, including billing guidelines. ii. Ensure compliance with ICRMA’s Policies and Procedures. iii. Recommend settlements and further litigation strategy subject to the supervision of ICRMA’s administrator and/or

General Counsel iv. Attend mediations, settlement conferences and any other hearings or court dates as necessary v. Assist in gathering documents for production requests vi. Ensure that defense counsel is properly reporting to ICRMA and ICRMA’s excess carriers, subject to any conflicts of

interests and review and recommend payment of all reasonable litigation expenses.

f. Meeting Management & Support Prepare for and staff all ICRMA Claims Committee (or its successor) meetings as determined by the Board, including preparation and timely delivery of requested agenda materials

g. Service to Membership i. Provide appropriate service and assistance to member cities with respect to ICRMA business as required. ii. Advise members on risk management matters iii. Assist members in obtaining services from ICRMA vendors iv. Ensure coordinated response to coverage questions with Program Managers and ICRMA Counsel v. Respond to member requests for assistance at meetings in communication with the ICRMA administrator

h. Data Management & Analysis i. Support any necessary data cleanup projects and the vendors supporting them as required ii. Verify data quality and communicate any problems to the Program Managers, TPAs and/or Members iii. Facilitate report generation using ICRMA’s claim software for the actuary, broker, administrative and risk control team

Combine data into a single location for ICRMA claims by program in order to complete “roll-up” for multiple coverages, claimants and suffixes and the separate primary and pool layers for reporting and analysis

iv. Provide a standardized loss data to actuary for annual actuarial studies and to ICRMA’s broker for excess insurance/reinsurance placements

4. Program Manager Responsibilities – Specific to Program

PLACEHOLDER FOR FUTURE AS APPLICABLE

5. Risk Management Responsibilities a. Prepare annual Plan of Risk Management for Board approval b. Monitor Pool loss trends by periodically reviewing claims reports. Institute corrective action plans with Loss Control team,

Claims TPA, General Counsel, and Defense Panel c. Investigate new and emerging trends that may affect ICRMA results and recommend or coordinate the development of

safety, claims management or risk management programs designed to address those trends

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d. Develop trainings, sample policies, risk management manuals and other relevant materials in response loss trends, emerging issues in the field and ICRMA’s strategic goals

e. Plan and coordinate ICRMA University, training meetings, educational seminars and special meetings f. Review relevant

i. Loss Control Reports in order to monitor effectiveness of Loss Control visits ii. Claims correspondence and comment, where appropriate, on claims management effectiveness

g. Communicate relevant loss trends with vendors, and work collaboratively to develop recommendations h. Maintain accessible “library” of relevant information for use by staff, vendors, and members in managing risk i. Maintain copies of current and historical loss runs for individual members and ICRMA summaries j. Monitor performance through quarterly reports, safety committee meetings, and feedback from members k. As required, provide risk control assistance to member agencies, including program development, on-site services, online

and live training, as well as telephone and email consultation. i. Conduct annual risk assessment with each member then follow up to:

• Provide an annual safety plan that supports the goals of ICRMA and is reasonable to budgetary limitations • Assist members on identified risk management issues • Provide for services as approved within the safety plan

ii. Provide relevant manuals (e.g., claims procedures, contractual risk transfer) and periodic training thereon iii. Oversee administration of Scholarship program iv. Receive, review, and process member requests for reimbursement and pre-approval from their risk management fund

accounts in accordance with ICRMA’s Risk Management Fund Guidelines, and present quarterly updates of fund account balances

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6. Vendor Performance Evaluation & Renewal a Policy – It shall be ICRMA policy to evaluate all service provider agreements annually or at least six (6) months prior to the

end of an agreement period. The evaluation will compare the required services under the agreement to those provided during its term.

b Purpose & Applicability – The process is not intended to mimic a comprehensive review process in the vein of annual staff performance supervision. Instead it is to provide: i Contract oversight ensuring vendors are meeting contract expectations within industry standards ii Proper oversight of contract performance for ongoing improvement and inform the renewal process

The process is intended to supplement existing financial and function audits. It provides oversight of contracted functions: pool administration, financial management, program and litigation management, risk control, general/coverage counsel and broker services.

c Process – The process takes advantage of and is informed by the following existing processes including three (3) elements:

Member Feedback Survey reflecting on prior year This element ensures that both board and members have regular input into the process and that their satisfaction is appropriately valued. ICRMA should complete a comprehensive annual survey that focuses on satisfaction with and improvement of performance across functions. The resulting information would be used on an ongoing basis by vendors, would inform the larger process, and would serve as an early alert system so that items can be addressed before they become problems.

July – Sep Complete both items in the first quarter of the year, reflecting on the prior year. Assessment of the internal review would rely on the expertise of other members of the ICRMA “team” – those who interact with the vendor most on a daily basis Oct – Dec Management reviews with contractors for feedback. Then present results to board for response. Jan – Mar Adjust contract terms accordingly and or prepare for RFP processes.

Internal Review based on contracts and standard performance checklist Vendors make promises to ICRMA in the form of the contract they sign and as they implement that contract (e.g., various work plans, agenda follow up, etc.). This element contemplates a review of those promises: • A checklist review of major duties defined under the contract as amended • A sample review of specific work plans and assignments across a given year • Assessment of performance re a common list of service expectations such as:

o Responsiveness and timely performance o Quality of communication and understandability and usability of advice given o Proactive ethics and conflict of interest management o Sufficient data security and confidentiality o Legal accountability (e.g., licensing and filings) and maintenance of required

liability coverage

External Audits against Industry Standards This element will draw upon the findings of the external audit processes described above. We recognize that not all functions being considered for review are covered by that list. When that is the case, the process will need to rely more heavily on the latter two elements.

Annual – Financial audit, which naturally looks at adequacy of financial management and accounting function

Bi-Annual – Liability and Workers Compensation claims audits taking place in alternating years, which naturally look at adequacy of program and litigation management functions

Tri-Annual – CAJAPA accreditation process, which naturally looks at how these functions compare with industry standards

G. Board Responsibilities

1. The Board as a whole is responsible for the following: a. Oversight of ICRMA affairs and wellbeing including:

i. Developing policies related to the governance of ICRMA and taking action necessary to preserve ICRMA’s mission and operations

ii. Establish and be accountable for the purpose, values, and vision of ICRMA iii. Develop and monitor a strategic plan, annual action plans, and long-range financial plans iv. Stewardship of ICRMA assets, including allocating resources appropriately and approving the annual ICRMA budget to

achieve annual operating goals

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v. Appoint and annually review the performance of the Executive Director, General Counsel, and all other service providers

b. Establish a policy and procedures, which direct and enable officers to assure continuity of leadership, resulting in the highest

quality in Board performance i. Review the governing policies and procedures of ICRMA on an annual basis ii. Establish a method and process for assessing Board performance on a scheduled basis iii. Elect Officers who will assure the highest quality of Board leadership and performance iv. Identify and develop successors for election or appointment as Board Officers or Committee Members who can display

exemplary leadership and vision in the governance of the pool

c. Performance of all duties set forth in law and ICRMA’s Governing Documents 2. Each individual Board Member (Director or Alternate) is expected to meet all legal obligations of board service, including:

a. Diligent attention to Board responsibilities – acting as a prudent person would in a like position and under similar circumstances (duty of care) i. Familiarize oneself and Member agency with the ICRMA Governing Documents. ii. Perform all duties set forth in ICRMA Governing Documents iii. Attend meetings of the Board and any relevant committees, be well informed, and be prepared to actively participate in

Board discussions. iv. Prioritize committee service when nominated and do so in a conscientious and professional manner.

b. The dedicated pursuit of ICRMA interests rather than personal interests or the interest of another person or entity (duty of

loyalty) i. Support and promote ICRMA’s vision, purpose, and goals in carrying out Board responsibilities. ii. Be accountable to ICRMA’s interests, mission, and values in the decision making process when acting on its behalf. iii. Be an effective ambassador and supporter of ICRMA when discussing risk management pooling with other public

agencies. iv. Assist in the recruitment of new members to ICRMA.

c. Adherence to the ICRMA mission, within the bounds of law generally (duty of obedience)

i. Follow and support the Code of Ethics, Conflict of Interest Policies adopted in accordance with the California Fair Political Practices Commission, the Brown Act and all other applicable organizational policies.

d. Participate in support training and other risk reduction activities and events sponsored by ICRMA and encourage

participation by others.

e. Serve with keen attention to ICRMA’s core principals and high ethical standards.

H. Code of Ethics

ICRMA has established this Code of Ethics for the Board, its members and their representatives, ICRMA staff, and service providers. It is intended to act as a guide in ensuring that all such individuals conduct their official business with social responsibility that encourages public trust. ICRMA is dedicated to promoting excellence in the governance and management of governmental risk-sharing and to promote risk-sharing as a risk financing strategy for California public entities. The intent of the Code of Ethics is to regulate the activities of ICRMA, the Board representatives, staff, and service providers. To further this goal, ICRMA is committed to the following principles:

1. Dedication to the highest ideals of honor, integrity, and due diligence to merit respect and public confidence in all its dealings.

2. Dedication to the concepts of democratic, effective and efficient governance by responsible, knowledgeable representatives with

an understanding that official decisions made and actions taken by ICRMA are always made in the best interests of the ICRMA, as opposed to the interests of individual members, staff, service providers, or other outside interests.

3. Commitment to the principle that the ICRMA Board is ultimately responsible for establishing goals and objectives and in making policy decisions on behalf of the members. This responsibility cannot be transferred or delegated.

4. Dedication to the principle that staff should consistently seek guidance and direction from the Board on matters of policy and refrain from promoting any candidate for election and/or appointment to the Board.

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5. Commitment to the principle that staff is expected to provide policy proposals and recommendations to the Board and provide

representatives of the Board with information and advice on matters of policy as a basis for making decisions. Once the Board has acted, staff is responsible for implementing and upholding all official policies and decisions adopted by the Board, without interference.

6. Dedication to the continual improvement of the professional abilities and expertise of the Board representatives and staff in matters relating to governance, management, and administration.

7. Dedication to the principle that representatives of the Board and staff share a responsibility to communicate with the membership regarding ICRMA’s objectives/activities/outcomes and should seek to improve the quality and image of the ICRMA at all times.

8. Dedication to the principle that all matters of procurement, personnel administration, and outside contracting are administered on the basis of merit so that fairness and impartiality govern all governance and management decisions.

9. Dedication to the principle that matters of ICRMA management or administration cannot be bought or sold. No representative of the Board and staff should ever solicit a personal gift or political contribution of any value from any third party performing work on behalf of, or in any way associated with (or potentially associated with) the ICRMA. By adoption of this Code of Ethics, it is the intent that the Conflict of Interest Policy required by the California Fair Political Practices Commission to the Board representatives and staff.

10. Dedication to the principle that conflicts of interest should be avoided and, where present, shall be fully disclosed. This includes situations when a representative of the Board and staff member’s personal interest (including those of his/her family) is contrary to his/her responsibility to the ICRMA

I. Amendment

This Program Manual may be reviewed and amended by the Board of Directors from time to time, as it deems appropriate.

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Appendix: Appointment Resolution Template

RESOLUTION NO. _________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ______________, FULFILLING ITS OBLIGATIONAS A MEMBER OF THE INDEPENDENT CITIES RISK MANAGEMENT AUTHORITY (ICRMA) TO APPOINT A VOTING DELEGATE TO THE ICRMA BOARD OF DIRECTORS, [AND OPTIONAL] ELECTING TO APPOINT ALTERNATES TO THE BOARD OF DIRECTORS IN ORDER TO ENSURE CONSISTENT ATTENDANCE.

WHEREAS, The City of ______________ ("City") is a member of ICRMA, a joint powers authority created pursuant to the provisions of

the California Government Code; and WHEREAS, ICRMA provides a Liability Program, Workers' Compensation Program, Property Program, and other coverage programs for

its members; and WHEREAS, The Joint Powers Agreement provides that ICRMA’s Board shall be comprised of one representative from each member; and WHEREAS, The ICRMA Bylaws require that ALL members not only appoint a representative to the Board but that the representative

attend meetings as a condition of City membership; and WHEREAS, City council of each member may select and change any of its representatives, subject to ICRMA Board approval, by filing a

resolution with ICRMA; and WHEREAS Appointees must be 1) elected officials, OR 2) City Managers, OR 3) hold positions with authority equivalent to a

Department Director within the Member hierarchy; OR 4) IF APPROVED FOR APPOINTMENT BY THE ICRMA BOARD be dedicated (full time) to risk management for the Member; and

WHEREAS, City desires to designate its representative(s) to the ICRMA Board of Directors; WHEREAS, City acknowledges and affirms that its representatives have full authority to bind City; WHEREAS, City acknowledges and affirms that actions properly approved or taken by the Board shall be binding on City regardless of

the vote of its designee or her/his presence when the action was taken; WHEREAS, City acknowledges and affirms that each appointee is individually expected to meet all legal obligations of Board service,

perform all duties set forth in ICRMA’s Governing Documents, and serve with keen attention to ICRMA’s purpose and high professional standards

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of _________ does hereby find, determine and declare as follows:

SECTION 1. That ________________ (one person) is hereby appointed to serve Voting Director on the ICRMA Board of Directors. SECTION 2. (OPTIONAL) That ________________ (one or two persons) is hereby appointed as alternate, to serve on the ICRMA Board in

the absence of the primary member noted in Section 1 above. SECTION 3. That the individuals designated by this City Council as the City's Voting Director or alternate to serve on the ICRMA Board of

Directors are hereby confirmed and designated as the City's delegates for all purposes of representing the City's interests and exercising the authority of the City with respect to all matters delegated to the Board of Directors and signing all amendments as are contemplated to be approved by Board of Directors.

RESOLVED, That a certified copy of this Resolution shall be provided to the Executive Director of ICRMA before it may be deemed

effective.

PASSED, APPROVED, AND ADOPTED this _____ day of ____________, 20____. ____________________________________ Mayor, City of _______________________ ATTEST: ______________________________ City Clerk, City of ______________

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Subject: Liability & Workers’ Compensation Program Structure Updates Action for consideration: Review and provide direction. Background: Effective July 1, 2016, the Board entered into a three-year contract with Carl Warren and Company for Liability and Workers’ Compensation (WC) Program Management services for an annual fee of $330,000. Earlier this year the Board asked RPA to review program alternatives. The president appointed an ad hoc committee which met in February to discuss claim auditor suggestions as well as expectations for the remainder of the contract. A few days prior to the ad hoc meeting, the sale of Carl Warren was announced. Subsequent to that announcement, ICRMA learned Dwight Kunz was no longer with Carl Warren & Company. Because Mr. Kunz was designated as a “key personnel,” his replacement required ICRMA approval. Carl Warren proposed Rose Nuno for the position of Liability Program Manager. At a special meeting, the Claims Committee met with Ms. Nuno and ultimately extended ICRMA’s approval for her to serve as Liability Program Manager through the end of the contract term. At the April Board meeting, a variety of options with regard to program structure were discussed including: best practices, member needs, cost, claim auditor feedback, necessary skill set, and the marketplace. The Board provided feedback and directed RPA staff to work with both AdminSure and Carl Warren to develop blanket contracts for primary TPA services with the goals of eliminating individual member contracts and keeping pricing similar to current. The contract with Carl Warren was implemented effective July 1, 2019. Implementation with AdminSure is underway and anticipated by July 1, 2020. The Board also directed the Claims Committee to evaluate program structure, conflicts, and efficiency and determine the optimal program for ICRMA. At its special meeting on December 4, the Claims Committee directed administrative staff to:

1. Separate the Liability and WC Program Management services into separate contracts 2. Discuss integrating the WC program manager into the AdminSure single TPA contract 3. After discussion with general counsel, develop an RFP for liability program management

a. Talk with both liability TPAs regarding the perceived conflict of interest having the program manager oversee the primary TPA adjusters; if a “sister” company is interested in applying, it will need to demonstrate there is no conflict of interest

b. State preference for respondents with a Southern California office c. Require provision of experienced team members, references, etc.

4. Follow-up with members that do not have trust accounts A verbal status update will be presented at the meeting.

Attachments: None Prepared by: Beth Lyons, Executive Director

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