RES-7772 Approving Revised Governing Documents for Orange County Cities Risk Management AuthorityI
RESOLUTION NO. 7772
A RESOLUTION OF THE CITY COUNCIL OF THE
CZTY OF ORANGE APPROVING REVISED
GOVERNING DOCUMENTS FOR TIiE ORANGE COUNTY
CITIES RZSK MANAGEMENT AUTHORZTY.
WHEREAS, the Orange County Cities Risk Management Authority
was created in 1978 as a joint powers agency to administer a
program of risk management, self-insurance and risk sharing; and
WHEREAS, said risk management program continues to offer
significant advantages to the City in terms of cost, liability
protection and services; and
WHEREAS, the efficient administration of OCCRMA requires
amendments to the Joint Powers Agreement, By-laws and Plan Document
governing the operations of OCCRMA; and
WHEREAS, these revised documents shall be effective
immediately upon the approval by the governing bodies of two-thirds
of the members of OCCRMA and may thereafter be amended in
accordance with their terms.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of Orange.
1. That the City of Orange hereby approves:
a) That amended Joint Powers Agreement entitled "Joint
Powers Agreement for the Orange County Cities Risk
Management Authority" which is attached hereto as
Exhibit "A" ; and
b} The revised By-laws for OCCRMA entitled "By-laws for
the orange County Cities Risk Management Authority"
which is attached hereto as Exhibit "B" ; and
c) The revised Plan Document governing the general
liability program of OCCRNtA entitled "General
Liability Insurance Plan Document for the Orange
County Cities Risk Management Authority", which is
attached hereto as Exhibit "C".
2. That the City Manager is hereby authorized to execute the
Joint Powers Agreement on behalf of the City, forthwith.
3. That the Clerk is directed to certify a copy of this
Resolution and the forward the same, together with a copy of theexecutedJointPowersAgreement, to OCCRMA.
ADOPTED this 19th day of March 1991.
y o the City Orange
ATTEST:
H.,P
City C1 k o th ity of Orange
I hereby certify that the foregoing Resolution was duly andregularlyadoptedbytheCityCounciloftheCityofOrangeata
regular meeting thereof held on the 19th day of March1991, by the following vote:
AYES: COUNCIL MEMBERS: STEINER,BARRERA,MAYOR BEYER COONTZ,SPURGEON
NOES: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
i s., - P o
City Cle of e ty of Orange
Reso No. 7772 2- dg
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JOINT POWERS AGREEMENT
FOR
ORANGE COUNTY QTIES RISK MANAGEMENP AUI'HORI'IY
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Exhibit A — Reso. No. 7772
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TABLE OF CONTENTS
PaQe
Secrion 1.10 JOINT EXERCISE OF POWERS. . . . . . . . . . . . . . . . . 1
AR'ITCLE l. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2. SEPARATE ENTITY. . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3. SYSTEM ES'I'ABLISHED. . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 4. OCCRMA POtNERS. . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 5. MEMBERS: GOVERNING BQARD. . . . . . . . . . . . . . . 4
ARTIGLE 6. POWERS OF BOARD . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 7. MEETINGS OF THE BOARD . . . . . . . . . . . . . . . . . . . 5
ARTTCLE 8. QUORUM; VOTING . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 9. EXECUTNE COMMITTEE. . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 10. OCCRMA FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 11. TERM OF AGREEMEIV'i'. . . . . . . . : . . . . . . . . . . . . . 6
ARTICLE 12. MEMBERSHIP TERM; WITHDRAWAL;
EXPULSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 13. DISPOSITION OF OCCRMA PROPERTY AND FUNDS. . . 7
ARTICLEI4. ENFORCEMENT. . . . . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE 15. INVAL,IDITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLEI6. AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 17. BYI,AWS AND PLAN DOGUMENT . . . . . . . . . . . . . . . . 8
ARTICLE 18. PRdHIBITTON AGAINST ASSIGNMEIVT' . . . . . . . . . . . . 8
AR'ITCI.E 19. TORT LtABII.I'I'Y . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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ARTICLE 20. AGREEMENT COMPLETE. . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 21. DATE AGREEMENT EFFEGTIVE. . . . . . . . . . . . . . . . . . 9
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JOINT POWERS AGREEMENT
FOR
ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORITY
Section 1.10 JOIIVT EXERQSE OF POWERS
This Agreement is entered into puisuant to the provisions of Chapter 5
@eginning with Section b500) of Division 7 of Title 1 of the Government Code
authorizing specified local public entiries to exercise joindy the power to provide Risk
Management, including insurance, pursuant to the provisions of Chaptez 3 (be nning
with Section 989) of Part 6 of Division 3.6 of Title 1 of the Government Code.
4VITNESSETH:
WHEREAS, the public interest requires and it is to the mutual interest of the
parties hereto to join tagether to establish and operate a cooperative program of risk
management; and
WHEREAS, the operation of such a cooperative program is of such magnitude
that it is necessary for the parties to this Agreement to join together to accomplish
the purposes herein- after set forth; and
WHEREAS, each of the local public enuties which is a party to this
Agreement has the power to establish and operate a program of risk management;
and
WHEREAS, Tide 1, Division 7, Chapter 5 of the California Governmeni Code
authorizes the joint exercise by two or more local public entities of any power which
is common to each of them; and
WHEREAS, each of the parties to the Agreement desires to join together wiih
the other parties for the purpose of minimizing risk through any, all or any
combinarion of the following: pooling of risk, joint funding of insurance ar risk
reserves in any legal manner, formation or rental of a captive insurer, establishing
certain self-insured reserves againsi losses and joindy purchasing insurance, e ccess
insurance, re-insurance and administrative services in connection with a cooperative
program of risk management;
NOW, THEREFORE, for and in consideration of the mutual advantages to be
derived therefrom and in consideration of the execution of this Agreement by other
local public entities, each of the parties hereto does agree as follows:
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ARTICLE 1. DEFINIT'IONS
1
The following definitions shall apply to the provisions of this Agreement and
its By-Lawr.
a)Authorit}r' - shall mean the Orange County Cities Risk Management
Authority created by this Agreement.
@) "Risk Management Boazd" or "Boazd" shall mean the goveming body
of the Authoriry.
c}Claims management" shall mean the process of identifying,
controlling and resolving demands by individuals, public entities or private entities to
recover losses from an insured, otherwise indemnified, or self-insured entity.
Disposing of such demands for payment requires skills in insurance, law,
adjusting/investigation, loss control en neering and general business. Ctaims
management is the function of supervising legal, adjusting, investigation and
engineering services to resolve such demands.
d) "Locai Public Entit}t' shall mean city, county, public authority and
such other govemmental entities as the Authority may determine.
e)Fxecutive Committee" or "Committee" shall mean the Management
Committee of the Boazd of Directors of the Authoriry.
fl Participation" ar "Participating" shall mean a member agency's acrion
or state of taking part in the programs of the Authoriry by doing all, any, or any
combination of the following through the Authority with respect to one or more risk
azeas:
1) purchase of risk management administrative services;
2) purchase of insurance or re-insurance;
3) purchase of claims administration services;
4)contribute to designated reserve, operating and other funds
or costs as required under the Avthorit}s program;
5) pay or make provisions for payment of assessments, defense
costs, claim and judgment costs and oiher related cosu as
required by this Agreement or Authorit s By-Laws;
6) participate by the payment of premiums and entering into
requisite agreements in any pooling of losses, capuve
insurance program or other self-insurance program
established and admuustered by the Authoriry.
g) "Rating Structure" shall mean the means by which premiums,
assessments, contriburions to a fund, or allocated expenses are established for a risk
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area or insurance program on the basis of conditions which affect the probabiliry of
loss.
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h) "Risk Area" shall mean an azea of exposure to pure risk of financial
loss. As used hezein, this term refers to one of the following fields of exposure:
workes's compensation, public liability, accident and health, unemployment
compensation, property damage and such other areas as the Board shall agree upon.
i)Risk Management" shall mean the process of identifying, evaluating,
reducing, transferring, and eliminating risks. Risk management includes various
methods of funding claims payments. Risk management includes elements of
insurance, law, administration, technology and general business utilized to effectively
manage risks.
j)Risk Manage" shall mean the person or entiry appointed by the
Boazd and given responsibility for the management, administration and operation of
the cooperative programs of risk management of the Autharity.
k) "Eligible Membei" shall mean a representative eligible to vote on a
matter coming before the Boazd in a given area of risk, due to the regresentative's
public entiry parcicipation in that azea of risk. In the case of new areas of risk that
OCCRMA is_considering, "Eligible members" shall be all members who reasonably
expect to participate in that azea of risk.
ARTTQ.E 2. SEPARATE ENP11Y
There is hereby created a separate public entity, the full legal name of which
shall be "Orange Counry Gities Risk Management Authorit}t', and may be referred to
herein as "OCCRMA" or the "Authority." The Authority is a public entity separate
from the paities to this Agreement. The debts, liabilities and obligauons of the
Authority shall not be the debts, liabilities or obligations of the parties to the
Agreement.
ARTICLE 3. SYSTEM ESfABLISHED
A risk management system consisting of the parties to this Agreemenc is
hereby established. This system represents a cooperative program of risk
management which may encompass, but is not limited to, the following risk azeas:
Public liabiliry, worke's compensarion, accident and health, property damage and
unemployment compensation and such other areas as the Boazd shall agree upon.
I Each parry to this Agreement agrees to comply with and be bound by the provisions
of the By-Laws as the same may be amended from time to time.
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ART'ICI.E 4. OCC 2MA POWERS
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a)OCCRMA shall have the power and the dury to establish and operate
a program of risk management and provide for its execution either directly byOCCRMAorbycontract.
b) dCCRMA is anthorized to make and enter into contracu; to employ
agents and employees; to acquire, construct, manage, maintain or operate any
building, works or improvements; to acquire, hoid or dispose of property, liabilititorobligarions; establish risk management related lines of credit, to incur
indebtedness, liabilities or obligations, to sue and be sued in its own name, and to
exercise all powers necessazy and proper to cazry out the terms and provisions of this
a eement, or otherwise authorized by law. The foregoing powers include, but are
not limited to, those relative to contracting for excess nn,+*+ce or re-insurance, risk
pooling, including formation of an owned or use of a non-owned captive insurance
company, funding of seif-insurance in any legal manner, claims administrarion
services and consulting services.
c)The day-to-day operations of OCCRMA shall be subject to, and shall
be govemed by the By-Laws adopted by the Boazd.
d) The powers exercised by the Authority shall be subject to the
resuictions upon the manner of exercising such powers of a general law ciry.
ARTICLE 5. MEMBERS: GQVERNING BOARD
a) Each local Public Entity which is a party to this Agreement is a
member agenc}' of QCCRMA and is enuded to the rights and privileges and is
subject to the obligations of inembers, all as provided for in this Agreement and ihe
BY-Laws.
b) After formation of OCCRMA by the initiai membership group, new
members may be accepted upon application to OCCRMA and upon acceptance by theBoardbytwo-thirds vote, and subject to acceptance by the prospective member of
ihe financial arrangements and fund contributions specified by the then current
members. .
c)Each locai Public Entity shall be entided to one voting representadve
on the governing body of the Authority which shall be known as the "Risk
Management Boazd" and may be referred to herein as the "Boazd."t
d) Each membe's representative shall be designated by appointment by the
member agenc s city council or other goveming body. Each member also may, in
the same manner, appoint one alternate who may attend meetings and vote in the
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event of absence of the representative. Each representative or alternate shall be a
public agency employee.
ARTICLE 6. POWERS OF BOARD
The Board shall have the following powers and functions:
a) To elect from its members, as provided herein, an Execuuve Committee.
@) To establish such other committees as it may, from time to time, deem
necessary to carry out its purposes, inciuding, but not limited to underwriting and
claims review committees.
c) To review all acts of the Executive Committee and to modify or override
any decision or action of the Execuuve Committee.
d) The power to exercise all of ihe powers of OCCRMA, including allbusinessassignedtotheF.cecutive Committee.
e) To elect a president and vice-president, and establish and appoint such
other officers, including an auditor, clerk and treasurer, as may be necessary or
desirable to carry out the purposes of this Agreement, and to provide therefor in the
BY-Laws.
fl To perform such other duties and functions as are provided for in this
Agreement.
ARTICLE 7. MEE'I'INGS OF T'EIE BOARD
The Boazd shall establish a time and place to hold regulaz meetings not less
often than quarterly. Meetings shall be conducted pursuant to the most current
edition of Robezts Rules of Order or such other procedural rules as the Boazd shall
adopt.
ARTTCLE 8. QUORUM; VOTING
a) A quorum for the transaction of bnsiness by ihe Boazd shall consisi of a
majoriry of the representatives, ar their alternates, of inembers of OCCRMA eligiblei to vote on the business at hand.
b All matters within the purview of the Board of Directo may bedecidedbymajoriryvoteofaquorumoftheboazd, except those matters which the
Agreement or By-Laws specify as requiring a two-thirds vote of the Board must be
decided by a vote of two-thirds of all members of the Board.
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c)Each representative on the Boazd may vote an each matter brought
before the Board for decision. Except, if the Board by majority vote designates a
particulaz matter as one which pertains only to a given risk azea (e.g., workers'
compensation), or a specific insurance program (e.g., self insured pool), then only
ihe representadves of those members who aze pardcipating members with respect to
the given risk azea or specific insurance program may vote upon the matter. This
limitarion respecting who may vote on certain matters is not intended to prohibit any
member from expressing its opinion as to how those qualified ta vote should vote.
ARTICI.E 9. EXECLITTVE GOMIVIII'TEE
The Board may establish an F cecutive Committee of the Board of D'uectors
which shall consist of at least three members, as provided in the By-Laws. The
president of the Boazd shall be a member of the Executive Committee; the remainder '
of the membeis may be selected as provided in ihe By-Laws. The Executive
Committee shall exercise general supervisory and policy control over the Risk
Manager, and may exercise any and all powess delegated by the Board, as provided
in the By-Laws.
ARTTLZE 10. dCCf22MA FUNDS
The Treasurer of the Authority shall be the depositary of the funds of
OCCRMA. The Treasure's selection, responsibilities, comgensation and related
matters shall be govemed by the By-Laws. The auditor shall be the disbursing officer
of OCCRMA and shall draw warrants against the funds of OCCRMA in the treasury
when demands aze presented and authorized as designated in the By-Laws.
ARTICLE 11. T'ERM OF AGREEMENT
This Agreement shall continue in effect until it is rescinded by mutual
consent of the parties or tenninated by the written consent of two-thirds of all
member agencies; provided that this agreement and OCCRMA shall continue to e st
for [he purpose of disposing of all claims, distribution of assets and all other
funcrions necessary to wind up the affairs of OCCRMA. If established, the Ea ecutive
Committee shall be vested with all poweis of OCCRIVIA for the purpose of winding
up and dissolving the business affairs of OCCRMA as may be provided in the
By-Laws.
ARTTCLE 12. MEMBERSHIP TERM; WPTEIDRAWAL; EXPUISION
a) A parry to this Agreement shall remain a member agency for two
years; thereafter the member agency may withdraw by:
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1) Giving written norice to the Boazd or its designee, on or
before the next succeeding March l, of the intent to
withdraw as of 12:01 a.m. on the next July 1, and
2) Fully perfornvng its obligations as a member agency.
bi On the July 1 specified in the notice pursuant to subdivision (a) (1)
above. and upon fully performing its obligations as a metnber agency, whichevez is
later, the member agency shall cease to be a parry to this Agreement.
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c)The Boazd shall have the right to cancel, for good cause, any city s
participation in the Authoriry, or any program thereof, upon a 2/3 vote of the entire
Boazd of Directors; provided that a reasonable time shall be afforded, in the
discretion of the Boazd of Directors, for the member to seek coverage elsewhere.
ARTIQ.E 13. DISPOSTPION OF OCCRMA PROPERTY AND FUNDS
a)If a party withdraws as a member of OCCRMA, any prope.rty interest
of that member agency remaining in the funds of OCCRMA following a dischazge of
all obligations attributable to that party, its officers and employees, shall be disposed
of as provided in the By-Laws. A member agency of the Authority may withdraw as
a membes in accordance with the adopted By-Laws, provided that no withdrawing
agency shall be enudad to payment or retum of any earned premium, except as
provided in paragraph {c). The withdrawal or cancellarion of any city shall not
temtinate iu responsibiIity to contribute its share of premium or funds to any
insurance program of OCCRMA, until all claims or other unpaid liabilities covering
the period the city was a participant have been finally resolved and a determination
of the final amount of payments due by the city or crediu for such period has been
made by the Authoriry.
b)In the event of the dissolution of OCCRMA or the complete rescission
or final termination of the Joint Powen Agreement by all of the then pardes thereto,
any properry of OCCRMA remaining after all claims and obligarions have been paid,
or provision made for the payment of the same, shall be retumed to the then cuirent
members of QCCRMA in proportion to their current deposits.
c)If this Agreement is finally terminated as to all parcies who aze then
members, any money or assets in possession of OCCRMA after the payment of all
liabilities, costs, expenses and chazges incurred pursuant to this Agreement shall be
returned to the parmes in proportion to their contributions to OCCRMA deternuned as
of the date of termination.
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ARTICLE 14. ENFORCEMENT
OCCRMA shall have the autharity to enforce this Agreement. Any dispute
regazding the interpretation of this Agreement or the Bylaws adopted, hereunder,
between or among OCCRMA and any Memter agency or agencies shall be submitted
to final and binding azbitration in accordance with the procedures established in ihe
Califomia Code of Civil Procedure and referred to the Judicial Arbitration and
Mediation Service or other azbitez as may be agreed by the parties; ea cept that the
Authority or affected member may sue for the collecuon or retum of assessments orIpremiums. As to such a claim for the collection or mturn of funds, the prevailingparryshallbeenridedtoreasonableattornesfees.
ARTIC[.E 15. IlWALIDTIY
Should any pordon, term, condirion or provision of this Agreement be
determined by a court of competent jurisdiction to be illegal and in conflict with any
law of the State of California or be otherwise rendered unenforceable or ineffectual,
the validity of the remaining portions, terms, conditions and provisions shall not be
affected thereby.
ARTTCL.E 16. AMENDMEATPS
No amendments to ihis Agreement shall be effective unless accomplished by
written agreement executed by the goveming bodies of at least two-thirds of the
parties to this Agreement. Reasonable prior nodce of any Board meeting in which
amendmenu aze to be voted upon, must be given to each member in writing. Such
notice must include mention of the nature of the amendmenu to be voted upon.
ARTICLE 17. BYLAWS AND PLAN DOCIJMENT
a) By a two-thirds vote of the entire Boazd, the Boazd shall develop and
adopt By-Laws and a Plan Document to govem the day-to-day operarions of
OCCRMA and may amend such documents from time to time.
b) Notwithstanding any provision in the By-Laws or Pian Document adopted
by OCCRMA.and its member agencies, in the event of any conflici between this
Agreement and the By-Laws or Plan Document, this Agreement shall prevail; in the
event of any conflict between the By-Laws and the Plan Document, the By-Laws shall
prevail.
ARTICLE 18. PROHIBPTION AGAINST ASSIGNMENTE
No member agency may assign any right, claim or interest it may have under
this Agreement, and no creditor, assignee or third parry beneficiary of any member
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shall have any right, ciaim or title to any part, share, interest, fund, premium or
asset of the Authoriry.
ARTICLE 19. TORT LL4BIITIY
Section 895.2 of the Govemment Code imposes certain tort liabiliry jointly
upon public entities solely by reason of such enrities being parcies to an agreement as
defined in Section 895 of said Code. Therefore, ihe parties hereto, as between
themselves pursuant to the authoriza[ion contained in Sections 895.4 and 845.6 of
the Govemment Code, each assumes the full liability imposed upon it or any of its
officers, agenu, or employees by law for injury caysed by a negligent or wrongful act
or omission occurring in the performance of the Agreement, to the same extent that
such liabiliry would be imposed in the absence of Section 895.2 of said Code. To
achieve ihis purpose, each pazty indemnifies and holds harmless the other party for
any loss, cost or expense ihat may be imposed upon such other party solely by virtue -
of Section 895.2 of the Government Code.
ARTICLE 20. AGREEML'NT COMPI.EI'E
The foregoing constitutes the full and complete Agreement of the parties.
There aze no oral understandings or agreements not set forth in writing herein.
ARTICLE 21. DATE AGREEr NT EFFECTIVE
This Agreement shall become effective immediately after it has been
approved as an amendment to the prior joint pawers agreement establishing
OCCRMA in accordance with its terms.
Executed by the undersigned local public entides upon the respective dates
set forth after the signatures of their duly authorized officers.
112\OCCRMJGA.ClM7
NoveQber 13, 799
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BY-LAWS
QF T'HE
ORANGE COUNlY CC[TIFS RTSK MANAGEMENT AUTHORITY
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Exhibit B - Reso. No.7772
TABLE OF CQNTENTS
1
PaQe
Sec. l.l PURPOSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 2.1 RISK MANAGEMENT BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sec. 2.110 MEETTNGS OF THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Sec. 2.120 BOARD AND RISK MANAGER . . . . . . . . . . . . . . . . . . . . . . . . . 3
Sec. 3.1 EXECUTNE COMMI"I"TEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Sec. 3.120 RESPONSIBILITfES; DELEGABILIT'Y . . . . . . . . . . . . . . . . . . . . . . 4
See. 3.130 RESPQNSIBILPITES; ADVISORY . . . . . . . . . . . . . . . . . . . . . . . . . 5
Sec. 3.140 MEETINGS OF THE COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . 5
Sec. 3.150 REPdRTS . . . . . . . . . . . . . . . . . • • • - . . . . . . . ... . . . . . . . . 6
Sec. 3.160 APPEAL TO BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Sec. 3.2 OTHER COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
a) Undermiting Committee . . . . . . . . . . . . . . . . . . . . . . . . . 6
b) Claims Review Committee . . . . . . . . . . . . . . . . . . . . . . 6
c) Inves nent Committee . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Sec. 4.1 OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Sec. 4:110 PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Sec. 4.124 VICE PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Sec. 4.13d CLERK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Sec. 4.140 TREASURER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
i Sec. 4.150 AUDITOR . . . . . . . . . . . . 93
Sec. 5.1 RISK MANAGEF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exhibit B - Reso. No. 7772
Sec. 5.110 RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Sec. 5.120 COMPENSATION, EMPLOYMENT . . . . . . . . . . . .. . . . . . . . . . . 11
Sec. 6.1 MEMBER AGENCIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Sec. 6.110 DUTIES OF THE MEMBER AGENCIES . . . . . . . . . . . . . . . . . . . . 12
Sec. 6.120 RIGHTS OF MEMBER AGENCIES . . . . . . . . . . . . . . . . . . . . . . . 13
Sec. 7.115 CLAIMS SETTLEMENT 13
Sec. 7.120 DEPOSIT AND INVESTMENT OF AUTHORITY Ft7NDS . . . . . . . . . 13
Sec. 7.130 AUDI'f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . .
13
Sec. 8.2 CLAIMS AGAINST T'HE AUTHORITY . . . . . . . . . . . . . . . . . . . . . 14
Sec. 9.1 DISPLTTES OR CLAIMS BETWEEN MEMBERS . . . . . . . . . . . . . . . 14
Sec. 10.1 -- MEMBER WITHDRAWAL; OCCRMA DISSOLUITON . ..... . . . ... . . . 15
Sec. I1.1 EXPULSION OF MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sec. 121 LEGAL R.EPRESENTATION . . - • • • • . . . . . . . . . . . . . . . . . . . . . 16
Sec. 13.1 AMENDMENT OF BYI.AWS AND PLAN DOCUMENT . . . . . . . . . . . lb
Sec. 14.1 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Sec. 15.1 EFFECT'IVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1
l
Exhibit B. - Reso. No. 7772
BY-LAWS
QF 'II
ORANGE COUNTY CITIES RISK MANAGEMENT AUTHORTIYi
PREAMBLE
The Orange Counry Cides Risk Management Authoriry (hereinafter re{erred to az
OCCRMA) is established for the purpose of operating and maintaining a cooperativeprogramofinsurance, self-insurance and risk management and to provide a fonun for thediscussion, study, development and implementation of procedures of mutual benefit in risk
management progrdms.
Sec 1.1 PURPOSES
a) The purposes of OCCRMA are;
t1) To provide a self-insurance and risk management progtam and system
which will achieve the following objectives for the benefit of OCCRMA's member agenciesinallriskazeashandledbyOCCRMA:
i) Reduced costs of insurance coverage through effective loss control practices,pooling of risk, and combined purchasing power;
ii) Reduced costs of claims administration services through central managemeni,volume and combined purchasing power,
iri) Greater stability of insurance markeu through size of combined membership,longer duration of insurance agreements and effective loss control practices;
iv) Reduced amount and frequency of losses of inember agencies;
v) Improved control of sources of risk through the application of risk
management - loss conh ol techniques;
vi) Improved recovery from responsible third panies;
vii) Funding of adequate reserves by members to ease the impact of heavyIosses; and
vrii) Monitor local, state and federal legislauve and agency risk management
activities with the intent of advocating OCCRMA's position through coordinarion with
appropriate representatives.
1
Exhibit B - Reso. No. 7772
2) To provide a self-insvrance and risk management program and
system, including any, all, or any combination of the following: payment of claims and
benefiu as authorized by OCCRMA's member agencies; adminis ation of one or more
programs wherein member agencies subscribe to a funding plan designed to relieve the
impact of heavy losses; administration of a self-insurance pool to be funded in any legalmanner, induding, but not limited to, premiums, assessments or the issuance of
certificates of participation;joint purchase of insurance, reinsurance, or ea cess insurance,
subject to any legai limitations; formarion of an owned or use of a non-owned onshore
or offshore capuve insnrance company to provide insurance and acquire reinsurance;
joint purchase of adminis ative and other services induding risk management, consulting,brokering, claims administration, claims adjusting, loss prevendon, data processing, legatandrelatedservices.
3) To acquire, hold and dispose of property, real and personal, necessaryordesirabieforthepurposeofpmvidingthemembersofOCCRMAwithacomplete
self-insurance and risk management program, including but not limited to the acquisidon
of necessazy facilities and equipment, the empioyment of personnel, and the operadon
and maintenance of a system of risk management.
Sec 2.1 - RISK MANAGEMENT BOARD
a) The goveming body of the Authority shall be the "Risk Management Boazd"
and may be referred to herein as the "Board."
@) Voting members of the Boazd shall consist of one representative from each
participating member agency. Each membei's representative shall be so designated by
appointment by the member agenc s goveming board. Each member's goveming boazd
aLso may appoint one alternate who may attend meetings and vote in the event of
absence of the representarive. Each representarive or alternate must be a public agencystaffinember.
c) The Risk Management Board shall meet at least quarterly to review all
operations of OCCRMA conducted pursuant to the OCCRMA Joint F cercise of Powers
Agreement and these By-Laws. The Boazd shall provide policy direction for the Executive
Cominittee and the Risk Manager. Other functions of the Boazd shall include, but not
be limited to, final-approval of:
lj All matters with respect to which it is mandatory that the Eacecutive
Committee make recommendarions the Boazd, and
2) The following matters not covered by Paragraph (1) above:
2
Exhihit B - Reso. No. 7772
i) Selection and employment of a Risk Manager;
u) Admission of new Members;
ui) Expulsion of present Members;
i) operaring budget for OCCRMA, to be approved in advance of thecommencementofeachfiscalyear,
Arrangemenis, if any be made, with outside agencies for establishment ofriskmanagementrelatedlinesofcredit;
Selecrion of claims administrators;
vii) Selection of braker;
viii Selection of insurance policies afrer considering advice of the Risk manage:;and
ix) Deterinine, by majority vote, reductions in participahon in services or costsofclaimsadministrarianorriskmanagementduetospecialcircumstances. .
Sec. 2.110 MEETINGS OF THE BOARD
The Boazd shall establish a time and place to hold regclar meetings not less oftenthanquarteriy. Meetings shall be conducted pursuant to the most current edition ofRobertsRulesofOrderorsuchotherproceduralrulesasihegoardshalladopt.
Sec. 2.120 BOARD ,4ND RISK MANAGER
a) The Board shall employ or con act for the services of a Risk Manager toadministerandoperateOCCRMA's programs of risk management under the direction andsupervisionoftheBoazdandExecutiveCommittee. The Risk Managez may, but neednotbe, a consuitant, a corporation, or an empioyee of a member of OCCRMA.
b) Compensation, ternunation and other employment matters respecting theRiskManagersha11begovernedbytheBy-Laws to the extent covered iherein, OCCRMAmay, but is not required to, enter into a written contract of empioyment with the RiskManager.
Sec. 3.1 EXECU'I'IVE COMMITTEE
a) An Fxecurive Committee is hereby established for OCCRMA.
3
1
Exhibit B — Reso. No. 7772
@) The Executive Committee shall consist of the President, Vice-President,Treasurer, Clerk, and Chairpersons of the Claims and Underwriting Committees.Each person on the F cecutive Committee shall be entided to one vote.
C) The Execurive Committee shall be responsible for ihe adminis ation and
operadon of the risk management programs of OCCRMA subject to the policy wnhol anddirectionoftheBoazd.
d) The Execurive Committee shall implement general policy and monitoroperationsoftheTreasurer, Auditor, and Risk Managez.
e) The Ezecurive Committee shall have such ather powers and functions asmaybedelegatedtoit, from time to time, by the Boazd.
The President of the Anthority, or ihe Vice President in the President'sabsence, shall serve as the Chaiiperson of the F cecuIIve Committee.
Sec. 3.120 RESPONSIBILI'I'IES• DELEGABILITY
Ca) The following Executive Comtnittee functions may not be delegated:
1) Impiementing policy and monitoring activities of the Treasurer,Auditor, and Risk Manager.
developmentstwhich may affectg0 CRMA handled California p biic en 'ury t field
3) Adopting a set of procedural rules for Committee meetings.
4) Performing those advisory responsibilities set forth in Section 3.130oftheseOCCRMABy-Laws.
5) Retaining overall supervisory responsibility respecting delegatedfunctions.
@) The Executive Committee shall perform, delegate ar contract to haveperformedthefollowingfunctions:
a l Establish criteria for selection of a Risk Manager. Interview Candidates.i ; Make recommendations to the Boazd respecting employment.
i '
4
Exhibit B - Reso. No. 7772
2) Establish criteria for selection of insurance brokers or companies,underwriting and actuarial consultants, legal counsel and other consultants, as needed.
3) Establish criteria for selection of claims administrarion and claims adjustingservices. Interview candidates. Make selection recommendations to the Boazd. Selectioncriteriashallincludearequirementthatdairnspersonsshowknowiedgeandunderstandingofthelawsregardingclaimsagainstpublicentities.
Sec. 3.130 RESPONSIBILITIES• ADVISORY
a) The Eacecutive Committee shall make recommendations to the BoazdresPectingthefollowingmatterswhichmustbeapprovedbytheBoardbeforebecomingeffective:
1) Recommend to the Boazd risk management programs administration sezvices, adjusting services, loss prevention services and other risk `management services which can help the Authoriry carry out its risk managementobjectivesandiuobligarionstomemberagencies.
2) Recommend to the Boazd each member agenc}s share of operatingcosts.
3) Recommend to the Board appropriate insurance broker(s);
4) Recommend ta the Boazd such taxes and assessments as y beleviedbyeachmemberagencypursuanttoparagraph (q) of Sec. 6.110.
5} Recommend authorizing payment of proper chazges for costs ofadministeringthisAgreement.
b) Recommend whether to approve payment requests from member
agencies when the requests aze in excess of the Auditor's authorization.
7) Recommend a Conflict of Interest Code for adoption by the Boazd,Committee, Officers, and Risk Manager.
Sec. 3.14d MEETTNGS OF THE COMMITTEE
I'he Execurive Committee may establish a time and place to hold regulaz meetings.Meedngs of the F.cecutive Committee shall be called, as needed, by the President or byamajorityofitsmembers. The meetings of the Committee shall be held, noticed andcondnctedinthesamemannerasthemeetingsoftheRiskManagementBoazd.
5
Exhibit B — Reso. No. 7772
Sec. 3.150 REPORTS
The Committee shall report to the Boazd not less than quarcerly in order to advisetheBoardofiudecisionsandactivitiesconcerningimplementationandoperanonoftheAuthoriry's cooperative program and system of self-i„,,,nce and risk management,
1
Sec. 3.160 APPEAL TO BOtLR
Any decisions to the Facecutive Committee may be appealed to the goard by anymemberagencysubjecttosuchrestrictionsastheBoazdmayadopt.
Sec. 3.2 OTHER COMMITTEES
The Board shall establish such committees as it shall require to assist it inconductingthebusinessofOCCRMA. The following committees shall be appointed bythePresidentandapprovedbytheBoazd:
a) Underwritin Committee. The Underwriting Committee shall consist of five5) members of the Board. The Underwriung Committee shall be responsible for reviewofcoverageissuesconcerningiaimcreprtedtoOCCRMApursnanttothepooledgeneralliabilityandautomobilecoveragesofferedthroughOCCRMA. In addition, the Committeeshall: review and recommend coverage changes; review and make recommendations onnewapplications; review and recommend reinsurance levels; and perform other dutiesprescribedbythePlanDocument. The Underwriting Cammittee shall recommendassessments, if necessary, to the Boazd. Imposition of an assessment map be approvedbyasimpiemajorityoftheBoazd, however, a 2/3 vote of a quorum of the Boazd shallberequiredtomodifysucharecommendadonoftheUnderwritingComttee.
@) Ciaims Review Committee. The Claims Revie,v Committee shall consist offive (5) members of ihe Boazd. The Claims Review Committee shall be chazged with theresponsibilityforreviewofclaimsreportedtoOCCRMApursuanttothepooledgeneralliabilityandautomobilecoveragesofferedthroughOCCRMA. As to such claims, iheCommitteeshall: review and recommend reserve leveLs; review and recommend claimsprocedures; recommend, as necessary, legal defense firms; assist the Risk Manager andlaims .4dministrator in planning and implementing loss controi activities and performotherdutiesazprescribedbythePlanDocument.
Investment Committee. The Invesunent Committee shall consist of not lessthanthree (3) members af the Board appointed by the President from among therepresentativeswhoseciciesazepar[icipants in the pooled generai liability program. ThecommitteeshallberesponsibleforrecommendinginvesunentpoliciestotheBoazdandtheTreasurerofOCCRMA.
1
6
E chibit B — Reso. No. 7772
Except as expressly noted, the Investment, Clairns and Underrvriting CommitteeswillbeadvisorycommitteesonlyandtheyshallreporttheirfindinSsand
mcommendarions to the OGCRMA Boazd. The Ciaims Review Committee and
Underwriting Committee shall be assisted in their deliberations by the Risk Manager,
OCCRMA brokers,underwriter, ciaims administrator and other consultanu, as appropriate.
Sec. 4.1 OFFICERS
a) The officen of the Authoriry shall be:
1) President
2) ce President
3) Clerk, who may also serve as Treasurer, and his or her duly . ..
appointed deputies, if any
4} Treasurer and Auditor, and his or her duly appointed deputies, if any
b) The Boazd shall elect the President and Vice President of the Authority for
such terms and in such manner as the Board shall pr°vide.
c) The Boazd st all designate the C1erk, Treasurer and Auditor in the manner
provided for in these BY-I.aWs•
d) Each Officez shall hold his or her position until relieved of functions as an
Officer by either:
1) Expiradon of his or her elected or te.nn, or
appointed term, or
2) Removal by a two-thirds vote of the Risk Management Boazd.
Sec. 4.110 PRESIDENT
a} The President shall be elected by the Board from its membership.
b) The duties of the President are to:
1) Preside at and conduct meetings of the Board.
2) Preside at and conduct meetings of the Fxecutive Committee.
7
Exhibit B — Reso. No. 7772
3) Execute documents on behalf of the Authority.
4) Exercise such spending authority as may be authorized by a
resolution approved by the Board.
Sec. 4.120 VICE PRESIDENT
a) The Vice President shall be elected by the Boazd from its membership.
b) The Vice President shall exercise the duties of the president in the absence
of the President.
Sec. 4.130 CLERK
a) The Clerk shall be elected by the Board from iu membership by majority
vote or by resolution.
b) The duties of the Cierk aze to:
1) Attend the meetings of the Boazd and of the Executive Committee,
and make minutes thereof.
2) ICeep all official records of the Authority not required to be kept by
the Treasurer.
3) File such notices and statemenu as aze requited by Sections 6503.5
and 53051 of the Government Code.
4) Cause notices of ineetings to be given as required by the Raiph M.
Brown Act.
c) in the absence of the Clerk, the President may appoint a Clerk pro tempore .
from among the members of the Board to carry out the Clerk's duties at any meeting.In addition, the Clerk shall recommend, and the Board may appoint such assistant or
deputy clerks to act on behalf of the Clerk, as the Clezk deems necessary or convenient.
Sec. 4.140 TREASURER
a) The Treasurer shall be elected by the Board from its membenhip by
majority vote or resolution.
1
8
Exhibit B — Reso. No. 7772
b) The duties of the Treasurer are to:
1 perform the duties of the Treasurer prescribed in Section 6505.5 of
the Govemment Code.
2) Attend meetings of the Executive Comxnittee as a member thereof.
3) To sign warrants or such other negotiable instruments as may be
used for proper disbursement of moneys from any OCCRMA fund.
c) The Treasures shall recommend, and the Board may appoint such assistant
or deputy treasurers to act on behalf of the Treasurer, as the Treasurer deems necessaryorconvenient. In addition, the Boazd may set minimum qualifications which any such
assistant or deputy may be reQuired to meet.
Sec. 4.150 AUDITOR
a} The Treasurer shall serve as Auditor.
b) The duties of the Auditor aze to:
1) Perform the duties of the Auditor prescribed in Section 6505 and
6505.5 of the Govemment Code.
2) Issue warrants for the payment of daims of inember agencies after
obtaining the membei's authorization.
c) Any assistant or depury of the Treasurer is> ex officio, a depury Auditor of
the Authority.
Sec. 5.1 RISK MANAGER
a) There shall be an OCCRMA Risk Manager appointed by the Boazd. The
Risk Manager shall be responsible for the day to day administration, manaSement and
operation of OCCRMA's programs of risk management and he or she shall be subject to
the direction and control of the Boazd and Executive Committee. The Risk Manager may,
but need not be, a consultant, a corporation or an empioyee of a member of OCCRMA.
9
Exhibit B - Reso. No. 7772
Sec. 5.110 RESPONSIBILITIES
a) The responsibilities of the Risk Manager shall inciude, but not be limited
to:
1) Monitoring status of: OCCRMA's programs and operations, member
losses, administrative and operational costs, service companies' performa-nce, bmkers'
performance.
i
2) providing appropriate risk management counsetinS and inforination
to member agencies.
3) Writing quaz erly reports to each member agency detailing lossexperience, desirable correction actions and other information pertinent to risk
inanagesnent programs bein8 handled by OGCRMA.
4 p=eparing an annual budget.
5) Advising State Legislators on OCCRMA needs. Advising member
cities on legislative developmenu.
6) Advising member cities on the risk impact of proposed new or
changed programs•
7) qssisting the Executive Committee and Risk Management Boazd in
selecri g bmkers, insurance companies> insurance policies, and claims administrarion
services.
g) Performing or con acting for, actuarial studies to determine cost
allocations.
g) Advising member cities on selection of claims attorneys.
10) Developing criteria to assist cities in preparation of risk management
plans consistent with the Authorit}s master risk management plan.
11) Conducting risk management audits to review the participation of
each member agency in one or more of the Authorit}s programs. The audit team shallincludetheRiskManager, the Boazd representative from the entiry being audited and a
l Board representative from at least one other member agency. The Risk Manager will
submit an audit report to the governing body of the audited member agency,
L'
10
Exhibit B - Reso. 7772
12) Developing effective risk management and loss control procedures and
advising member entities on how to implement them.
13} Selecting and supervising QCCRMA employees as authorized by the
Boazd or Executive Committee.
The Risk Manage's responsibiliry to perform the above services with respect to any
member agency is limited to those risk areas or specific insurance programs in which the
member agency is a parcicipating member.
Sec. 5.120 COMPENSATION, EMPLOYMENT
a) The Risk Manager shall be compensated for his services to the OCCRMA
in such amounts and manner as may be fixed from time to rime by the Board.
b) Details respecting compensation, terminadon and other employment related
matters percaining to the Risk Manager shall be govemed by the By-Laws and such terms
and conditions as the Boazd shall set.
Sec. 6.1 MEMBER AGENCIES
a) Any party to the Agreement is a member agency. Any local public entity
may become a party to the OCCRMA Agreement by agreeing to be bound by the
Agreement and these By-Laws and by complying with all of the following requirements:
1) Submit application for membership and obtain Board approval.
2) Execute the original of the OGCRMA Joint Exercise of Powers
Agreement as amended from time to time, and
3) Become a par[icipating member with respect to at least one risk area
or insurance pmgram handled by OCCRMA, and
4) Pay a fee to OCCRMA as deternuned by the Boazd for initial risk
program analysis and structuring consuiting services.
b) Non-tity local public entities may be admitted as par[icipating member
agencies upon terms and conditions, if any, appmved by the Boazd.
c} Additional requirements, as approved by the Board, may be unposed for
participation in specific insurance programs or risk areas.
11
Exhibit B - Reso. No. 7772
Sec. 6.110 DUTIES OF THE MEMBER AGENCIES
Each member agency shall:
a) Appoint a member to the Risk Management Soard and an altemate.
b) Establish a Risk Management Advisory Committee to act as a liaison with
the OCCRMA Risk Manager and to advise him or her of any proposed or altered program
vhich may have significant risk management ramifications.
c) Maintain an active Safety Coaunittee.
d) provide necessary data to assistin obtaining reinsurance, excess insurance,
claims adminisu'ation services quotes, or as otherwise required for participation in specific
insurance programs.
e) Establish and maintain a risk management program approved by the
Fjcecutive Committee.
Establish and maintain a prudent claims manaSement program for the
member agenc s self insvred risks.
g) Pay when due all premiums or assessmenu levied by the Board pursuant
to the OCCRMA Agreement, By-Laws> specific ^"Tance plans, or Boazd policies adopted
in furtherance of the Agreement or By-Laws•
h) Enter into and maintain conuacts of insurance or reinsurance as required
by the Boazd in risk areas or specific insurance programs in 'hich the member agency
is par[icipating.
i) Pay from other funds or levy and collect taaces and assessments to gay -judgments pursuant to Chapter 2 (beginning with Secuon 970) of Part 5 of Division 316ofTitle1oftheGovemmentCode; pursuant to Ardcle 3 (beginnin8 with Secnon 43720)of Chapter 4 of Division 4 of Tide 4; or pursuant to Article 7 (begumin8 withSection50170) of Chapter 1 of Part 1 of Division 1 of Tide 5 af the Govemment Code,
if necessary.
j) Comply with the letter and spirit of the OCCRMA Agreement and these
t
By-Laws.
J
ia
Exhibit B — Reso. No. 7772
Sec. 6.12Q RIGHTS OF MEMBER AGENGIES
The rights of inember agencies are to:
a) Have the Board designate appropriate required contracts ofinsurance with
ezcess insurers or reinsurers to provide coverage above the level of risks retained by the
member agency or the Authority.
b) Receive assistance from the Executive Gommittee and Risk Manager in
establishing and maintaining a risk managemenc program compatible with the master risk
management program of the Authority.
c) Appeal decisions of the F ecurive Committee to the Boazd, subject to such
restriction as the Boazd may adopt by resolution or By-Laws•
d) Withdraw from membership as provided huein.
e) Amend the Joint Powers Agreement or dissolve the Authority by a
two-thirds vote of all the Member Agencies, and amend these Bylaws by 2/3 majority
vote of a quorum of the Boazd.
Sec. 7.115 CLAIMS SETTLEMENT
Unless othenvise provided in an approved plan of insurance or risk-pooling
administered by the Authority, the determination of whethez a daim for generai liability,automobile liabiliry, workes's compensation, or accident and health is to be allowed,compromised, settled, or rejected shall be that of the party against whom the claim is
filed; provided that no party shall have the power to commit the funds of the Authoriry
to pay any daim without the consent of the Authoriry.
Sec. 7.120 DEPOSIT AND INVESTMENT OF AUTHORITY FUNDS
The Treasurer may deposit and invest Authority funds subject to the same
requirements and restrictions that apply to deposit and investment of the funds of a
general law ciry.
Sec. 7.130 AUDIT
An annual audit of the financial affairs of OCCRMA shall be made by a certified
public accountant at the end of each fiscal year in accordance with generally acceptedauditingprinciples. A copy of the annual report shall be delivered to each member. The
13
Exhibit B - Reso. No. 7772
cost of the annual audit constitutes an administrative expense of OCCRMA and shall be
paid for in the same manner as other administrative expenses aze paid.
Sec. 8.1 CLAIMS AGAINST THE AUTHORITY
a) Defense of Claims. As to any claim or action against the Authoriry which
is based on or arises out of an occurrence invoiving an officer or employee of the
Authority and arises out of acrivities within the course and scope of his or her duties as
such, who is also an officer or employee of a member agenry, such claim or acdon
against the Authority will be defended by the Authority, except as to those ciaims arising
while such officer or employee is traveling to or firom a meeting of the Authoriry, it being
the intent of the Authority that the risks of such avel be borne by the member agency
in accordance with Articie 19 of the OCCRMA Joint Powers Agreement. The Authority
may secure workers compensation, liability, or other appropriate polides for its own
activities.
b) Payment of Claims. Claims and judgments against the Authority as to
which the Authoriry has a duty to defend pursuant to Paragraph (a) shall be paid from,
or charged to, the appropriate coverages or self-insured funds the Authority has
established against such claims, judgmenu, or losses. Such amounts shall be paid from
the Authorit}s own coverage or self-insured funds.
c) Costs of Defense. Ail costs of defense incurred pu:suant to Paragraph (a)
shall be paid firom such funds of the Authoriry as the Boazd shall designate, but shall not
be chazged disproportionately to the accouni of the member agency of the officer or
employee.
Sec. 9.1 DISPUTES OR CLAIMS BETWEEN MEMBERS
a) Arbitration. Any differences, claims or matters in dispute arising between •
or among members shall, if such differences arise out of these By=Laws, be submitted by
such members to arbitration in accordance with the provisions of the Joint Powers
Agreemeni. The decision of the arbitrator(s) may be entered as a judgment in any covrt
of the S[ate of California or elsewhere.
b) Authority Representation Conflicts. Any differences, claims or matters in
dispute arising between or among memben shall, if such differences do not arise out of
the OCCRMA Agreement or By-Laws, be handled as follows:
1) After being notified in writing that one member agency has filed a
i formal claim against another in accordance with provisions of the California Government
f Code, the Authoriry can no longer act on behalf of either member insoiaz as the case
14
Exhibit B - Reso. No. 7772
giving rise to the claim is concemed if the claim involves a risk azea or azeas in which
each of the involved members is a participating member.
2) Convenely, the Authority may continue to act on behalf of a
participating member, even after receipt of written notice of a formal claim filed by one
member agency against another, provided the claim only involves a risk area or areas in
which only one of the irroolved member agencies is participating.
c) In any case falling within the ambit of (1) or (2) above, the Authority may,
in its discretion, act on behalf of one or all involved members, provided that the
Authority first obtains the written consent of all such members.
Sec. 10.1 MEMBER WITHDRAWAL: OCCRMA DISSOLUTTON
a) A member agency of the Authoriry may withdraw az a member upon ..
compiying with the Joint Powers Agreement and these By-Laws.
b) In the event of the dissolution of OCCRMA or the complete rescission or
final terminauon of the Joint Powers Agreement by all of the then parties thereto, any
pmperiy of OCCRMA remaining aher all claims and obligations have been paid, or
pmvision made for the payment of the same, shall be returned to the then current
members of OCCRMA in proportion to iheir current deposits.
Sec. 11.1 EXPULSION OF MEMBERS
a) A party to this Agreement may be excluded from membership when its
actions:
1) Cause the member to not substantially comply with the terms of the
Joint Powers Agreement, or
2) Cause the member to fail in substantially complying with a written
and acknowledged term or condirion imposed on the member by a simple majority vote
of the Boazd;
3) Cause an adverse effect on OCCRMA's relations with the insurance
market and the member fails to remedy the adverse effeci within a reasonable time afcer
receiving written norice from the Board as to appropriate corrective action.
b) The Boazd may, by a two-thirds (2/3) vote, terrninate and exclude the
offering member from any and all benefits of inembership in OCCRMA.
15
E chibit B — Reso. No. 7772
Sec. 12.1 LEGAL REPRESENTATION
Legal counsel to advise on matters relating to the operation of OCCRMA may be
recommended by the Execurive Committee or Risk Manager and approved by the Board.
OCCRMA shall have the right to pay such legai counsel a reasonabie compensarion for
said services under a contract.
Sec. 13.1 AMENDMENf OF BYLAWS AND PLAN DOCUMENT
By a two-thirds vote of the entire Board, the Board shall develop and adopt By-
t,J' Laws and a Plan Document to govern the day-ta-day operations of OCCRMA and may
amend such documenu from time to time.
Sec. 14.1 NOTICES
a) Notice to the Authoriry shall be given by delivery of such notices to the
Clerk of the Authority.
b) Norice to member agencies shall be given by delivery of such notice to the
clerk of each member agency.
Sec. 15.1 EFFECtIVE DATE
These By-Laws shall be effective immediately upon the effective date of the
Amended Joint Powers Agreement; subsequent amendments to these By-Laws shall be
effecuve upon their adoption by the Boazd.
o vP,s o cn v.c srt
M
m.s u
i
16
J
Exhibit B — Reso. No. 7772
i
GENERAt. LIABILtTY SELF-INSUF2ANCE PROGFtAM
PLAN DOC,tJMENT
FOR
ORANGE COUNIY C(TIES RISK MANAGEMENT AUTHORIT'Y
Exhibit C - Reso. 7772
TABLE OF CONTENTS
I. PURPOSE OF PLAN DQCUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. MODIFICATION OF THIS DOCUMENT . . . . . . . . . . . . . . . . . . . . . . . 1
i" III. EXECUTNE COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
V
N. UNDERWRITING COMMITTEE z
V. CLAIMS REVIEW COMMI'I'I'EE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
VI. DEFINIT[ONS . . . . . . . . . . . . . . . . . . . . • - • - . . .. . . . . . . . . . . . . . 3
VII. GENERAL PROGRAM OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 4
VIII. ELIGIBILITY GUIDELINES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
IX. UNDERWRITING CRI'I'ERIA . . . . .5
X. ACCEPTANCE OF NEW MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
XI. ASSESSMENT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
XII. CLAIMS HANDLING PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . • 8
XIII. RISK MANAGER ROLE IN CLAIMS HANDLING . . . . . . . . . . . . . . . . . . 12
XIV. EXHAUSTION OF ANNUAL AGGREGATE LIMITS . . . . . . . . . . . . . . . . . 12
XV. WITHDRAWAL (TAIL) COVERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XVI. OVERFUNDING - RETURN OF PREMIUMS . . . . . . . . . . . . . . . . . . . . . 13
XVII. CLAIMS AUDI'I'S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
XVIII. DISPt7'I'ES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
i
1
u -
Exhibit C - Reso. No. 7772
XIX. POLICY FORMS, ENDORSEMENTS, COVERAGE QUESTTONS . . . . . . . . . 14
I XX. LIMI'TS OF LIABILIT'Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
JC}. HANDLING/INVESTMENT OF F2ESERVE FtJNDS . . . . . . . . . . . . . . . . . 15
X}ffI. PARTICIPATING MEMBER RESERVE FUND LEVELS . . . . . . . . . . . . . . . 16
Exhibit C - Reso. No. 7772
I. PURPOSE OF PI.AN DOCUMENT
This document is intended to guide the day-to-day operations of the general
Iiability self-insurance program of OCCRMA. This Plan Document shall not:
1. Limit the authority of the board of directors of OGCRMA except as
specifically agreed.
2. Infringe on rights and authorities of individual member agencies except as
specifically agreed.
3. Modify in any way, the tenns and conditions of the agreement establishing
OCCRMA, or the Bylaws.
On September l, 198b, the Orange County Ciues Risk Management Authoriry
OCCRMA) established a new Self Insurance Program, covering municipal liability, for
its members. The purpose of this document is to formally summarize general
understanding and guidelines as respects the administration of the self-insurance
programs of OCCRMA.
It is the recognized interest of all participants in this program that a method of
pooled self-insurance is a desirable alternative to the "standard" insurance markets
coverage from same being unavailable or unacceptable) and that this program
represents such desirable altemative. By entering into Lhis program, parcicipants
recognize that the only source for payment of claims against the program may be the
pooled assets of inember agencies. It is also recognized that this entails an exposure to
members above and beyond premium payments.
II. MODIFICATION QF THIS DOCUMENT
Modification of this document once adopted may be raade with 2/3 majority vote
of a quorum of the members of the Board of Directors of OCCRMA. All member
agencies shall receive copies of the revised Plan Document within 30 days of the
amendment.
III. EXECUTTVE COMMITI'EE
It is intended that the Executive Committee of dCCRNIA shall be made up solely
of representatives of participating members of the Self-Insurance Program. Duties shall
include review and assessment of all matters relative to the Self-Insurance Program as
may be appropriate.
I
1 -
Exhibit C - Reso. No. 7772
N. UNDERWRITIIVG COIvIl4IIT1'EE
The purpose of this committee will be to act on recommendations firom the
Program Underwriter as respecu:
a. Acceptance of new members.
b. Rejecdon of new members.
c. Conu act of Pooled Self Insurance form changes.
d. No 'nfication of premium calculations.
e. Establishment of self insured retention levels.
f.Levels of assessmenu.
g. Allocation of Assessments.
h. Rule on questions of coverage on specific excess claims or incidents
and recommend action to the Claims Review Committee or Boazd. _
i.Recommend purchase or rejection of all excess and reinsurance.
j.And any other matters as may from time to time be necessary.
The Underwriting Committee shall submit actions to the Boazd of Directors of OCCRMA
for review or approval as necessary. The OCCRMA Risk Manager, Program Underwriter
and Pragram Broker serve as advisors to the Underwriting Committee.
V. Q.AIMS REVIEW COMMITI'EE
The purpose of the committee shall be to review all open claims submitted through the
reporting requiremenu contained herein and to:
a. Set and review reserve levels as respects potential Self-Insurance
Program exposure.
b. Report claims to the Self-Insurance Program Claims Coordinator and
F ccess Claims Manager as necessary.
c. Review the specific "handling" of all potential program losses.
d. Make recommendations to individual members for settlement or
defense andlor tendering of losses to the Self Insurance Program.
e. Refer questions regarding the existence of coverage to the
Undersvriting Committee.
f.Accept or reject claims after due consideration of ihe
recommendations of the Undenvriting Committee.
g. Set reserve levels on all excess claims.
h. Adopt set of grocedures under which claims will be reported,
reviewed, and handled, to be distributed to all members for
reference.
The Risk Manager, Pmgram Undexwriter, Program Brokez, and Program Excess Claims
Manager will serve as advisors to the Claims Review Committee.
2 _
Exhibit C - Reso. No. 7772
VI. DEFINI'TIONS
The following terms are used in this Plan Document:
1. Excess Qaim is a claim which may exceed the Self-Tnsured Retention of a
ciry and which meets the guidelines contained herein and has been labeled an excess
claim by the Claims Review Committee and referred to the Program Claims Coordinator
and Program Excess Ciaims Manager for handling.
i ,
2. Program Claims Coordinator shall be the Risk Manager of OCCRMA and shall
perform the duties prescribed in Anicle XItI.
3. Program Excess Claims Manager shall be an individual or legal entity under
contract or employed with or by the Boazd of Directon of OCCRMA for the express
purposes of representing the Self-Insurance Program as respects claims which may be
expected to be paid within Self-Insurance (excess insurance) Program.
4. Tendered C1aim is a claim which is tendered to the Self-Insurance Program for
handling by the Claims Coordinator and Program Excess Claims Manager by an
individual city and accepted by OCCRMA. That ciry thereby agrees to pay the full self
insured retention liability accruing from any judgement or settlement arising from such
claim.
5. Premium is the amount payable annually by participating public entities to
qualify as members of the "pool" and insureds under the Contract of Pooled Self-
Insurance issued under the pragram. Such premium amounts will be estabiished by the
Program Underwritez in accordance with underwriting guidelines established in this
document. Non-subject premium is deemed to be exclusive of all fees.
6. Program Underwriter is an individual or legal entiry either on contract with
or employed by OCCRMA for agreed purposes.
7. Assessments are additional funds required to be paid from time to time as
are necessary through the assessment procedure to ensure the "solvenc' or abiliry to
meet financial obligauons of the program.
8. Risk Management is the process through which risk or loss is transferred,
reduced, eliminated, or knowingly assumed to muumize the overall exposure to a
member agency.
9. Non-sub'ect remiums are the total remiums aid exclusive of ro mlPPPPS
administrarive fees. To be identified by the Program Underwriter.
3 -
Exhibit C - Reso. No. 7772
10. The tem s "the Board", "the Board of Directors", and "the Boazd of Directors
of OCCRMA" are defined to mean those members of the governing body of OCCRMA
who are currenfly participants in the Self-Insurance Program and aze entitled to vote on
matters relative to the Self-Insurance Program as provided in the OCCRMA bylaws.
VII. GENERAI. PROGRAM OPERATIONS
All program paitidpants shall pay "premiums," az detennined through accepted
undenvriting methods, into a"pool" of funds to be held as reserves against futUre losses.
Risk of Loss is shared under this pro am among parcicigants. Assessments may be
required in event "pooled" premiums aze inadequate to pay projected losses. Projected
assessment amounu aze limited by both per-occurrence and aggregate limiu of coverage
under the program.
Adminis ation of this program shall be consistent with sound professional
insurance industry standazds and indudes:
1. Adherence to underwriting principies in an effort to accurately predict
propez funding levels.
2. Fstablishment of sound claims management procedures to protect "pooled"
premiums.
3. Use of professional consultants to counsel in all matters relating to
insurance practices and legal issues.
4. Control of the program by participating agencies.
5. "Pooled° premiums maintained in a trust or custodial account or its
functional equivalent.
Participants have agreed to pay premiums, assessments (if any) share risk of loss,
and cooperate on claim management under the OCCRMA agreement and the Contract
of Pooled Self-Insurance offered through the Authority.
VIII. ELIGIBILTIY GUIDELINES
The following represent general guidelines of risk acceptabiliry:
1. Members shall be of general size, geographical location and quality of risk
as to be comparable to evsting membership. It is the intent to limit eligibiliry of cities
to a maximum population of 250,000.
4 -
Exhibit C - Reso. No. 7772
2. This program does not allow for the inclusion of any agencies with
unusual" risk exposure.
3. As long term commitment is essential to any program of this nature, all
members shall be required to remain in the program for a minimum period of 2 years.
Early withdrawal may be authorized by written appeal to the underwriting committee
demonstrating just cause, on such terms and conditions as the committee may presrn'be.
Cancellarion of individual members will be in accordance with standazd insurance policy
langvage, as provided in the Contract of Pooled Seif Insurance and will reqnire a
majority vote of the full Boazd.
4. Financial condidon of prospective members must be such as to ensure
ability to pay premiums and assessments.
5. Risk management attitude of each member will be consistent with other
members as well az generally accepted guidelines. Such attitude shall be reviewed by
the Underwriting Gommittee.
IX. UNDERWRITING CRTTERIA
Overall premium levels as well as individual (member) premium allocation shall
be the responsibiliry of the program underwriter. However, all such sums shall be
reviewed and approved by the Underwriting Committee and may, with justificauons, be
modified, rejected, or accepted by same.
Once accepted, such premium levels and allocations shall be deemed "fixed" and
shall be an obligation of individual members (and OCCRMA collecuvely) in order to
retain or be admitted to membership in the program. Premiums are due and payable
within 30 days of effective date of coverage.
Such premium levels shall be reasonably calculated in accordance with general
insurance practices by a qualified underwriter retained by OCCRMA. The undenvriter
shall consider the following in ariiving at recommended overall premium levels (such
consideracion shall not be Iimited to these factors alone):
i. Pastloss experience.
2. Projected loss exposure potentiai based on overall group eacposures.
1 3. A "safety facto' in order to build or maintain reserves at an acceptable
1`
level. It is the intent of OCCRMA that this fvnding basis be conservative to establish
reliability in the solvency of the program.
S -
Exhibit C — Reso. No. 7772
Such individual premium allocations shall be reasonably calculated in accordance
with genezal underwriting practices by a qualified underwriter retained by OCCRMA.
The underwriter shall consider the following in arriving at individual premium
allocations (such considerations shall not be limited to these factors alone):
l. Psst loss experience (most recent past five years).
2. Size of self insured retention.
3. Underwriting factors relating to:
a. Population.
b. Miles of streets.
c.Police exposure.
d. Automobile exposure.
e.Unusual exposures (beaches, utilities, risk management attitude,
etc.).
f.Fire department exposures.
g.New construction in City/Member.
h. Entiry Budget.
X ACCEPTANCE OF NEW MEMBERS
It is generally accepted that program growth through the acquisition of new
members of "like kind and qualit}' is good for program stabiliry.
Prospective new members shall make application on a form provided by the
Program Broker, and shall work with said broker in accurately and completely
completing same. Such application shall contain any and all information deemed
necessary by the Pzogram Underwriter and Underwriting Committee and shall fumish,
as a minimum, the information described under "Underwriting Guidelines" as well as
complete financial information as to establish the financial capabillties to meet potential
program obligations.
It is the intent that all program members be memben of OCCRMA and shall
make concurrent application for same, fulfilling any financial obligations of inembership.
There is an applicarion fee of $500.00 (subject to change at the discretion of the
Board).
Such program application shall be reviewed by the Program Broker and presented
to the Program Undenvriter. The Program Underwriter shall perform the underwriting
task in a fashion consistent with "Underwriting Guidelines" and with methods used on
all existing members. Rates and/or premiums shall noi be discriminatory in any way.
6 -
Fachibit C — Reso. No. 7772
The Program Underwriter shall make written submission to the Undenvriting
Committee as to establish recommended premiums, self-insured retention, specific
exclusions and other considerarions. The Underwriting Committee shall have available
any underwridng data used in the Program Underwritei's evaluation.
The Underwriung Committee shall accept, reject or modify the Undernrite s
recommendations and report same to the Board of Directors of OCCRMA. T'he Board of
Directors of OCCRMA shall have final right of acceptance or rejecrion of prospective
members.
XI. ASSESSMFNT' PRQVISIONS
It is acknowledged that the Contract of Pooled Self Insurance is fully assessable.
Such assessabiliry is necessary to provide for complete solvency of the program. It is
the intent of all members to adhere to these provisions.
It is the desire of all parties concerned that future claims and claims expense
cosu be funded through annual premiums determined as described herein. Premium
levels should be "conservative" so as to provide reasonable confidence that all future
claims obligations be met ihrough this source alone. Assessments aze agreed to be
undesirable by program members. However, in the event of imminent short-fall of funds
so that it may be reasonabiy concluded additional monies w 71 be needed to assure
solvency and maintain reasonable reserves, assessment provisions will be enforced as
follows:
The Program Underwriter shall have primary responsibility in projecting future
short-falls. To assist in this matter, a smdy may be done (with approval of the
Underwriting Committee) by an outside consulting firm to recommend short-fall amounu
and methods of allocating assessments. Such recommendarions may be modified in the
judgement of the Underwriter. The Underwriter shall make recommendation of
assessment level, and allocation thereof, to the Underwriting Committee for review and
action. The Committee may amend the amount recommended, reject the Underwritei's
recommendation or accept same.
The assessment level shall be detennined taking into considerarion all incurred
losses and associated expenses, projected reserves and anticipated payment dates as well
as current reserve levels and using an acceptabie "Incurred But Not Reported" (IBNR
factor.
The assessment level shall be allocated based on ihe following:
1. All claims reasonably concluded to have dir dy led to the short-fall shall
be idenufied.
7 -
Exhibit C - Reso. No. 7772
2. The amount of the assessment shall be apportioned by policy yeaz based
on date of occurrence in a ratio which the claims from each yeaz beazs to the overall
claims being considered. Such pereentage shall be applied to the overall assessment to
determine the assessable amount per policy year.
3. That amount assessable for each policy yeaz will be apportioned in
accordance with the ratio of non-subject premiums paid by members during that policy
yeaz bears to tatal non-subject preaniums paid by all members. This percentage may be
increased or decreased up to 100%based on Underwrite's and Underwriting Committee
judgement. Such penaity (increase) of up to 1Q046 shall be based solely on the
contribution to the overall short-fall by individual member agency claims.
Once determined and accepted by the Underwriring Cominittee, the Board of
D'ueciors of OCCRMA shall review and take prompt action on the recommendadon of . :
the Committee. A majority vote shall be sufficient to approve the recommendation.
Rejection of the Undeiwriring Committee recommendation shall require a 2!3 majority
vote of a quonun of Board of Directors. However, in the event of such rejection, an
alternate funding mechanism musi be implemented by the Board of Directors to assure
solvency of the program, and the Boazd MUST AGT to implement an allocation of the
agreed assessment amount in an altemate plan within fourteen (14) days.
All assessments aze due and payable within 30 days of date of mailing of nouce
by the Boazd of Directors. Any agency not fulfilling this or any other financial
obligation st all be deemed to be delinquent in payment.
Delinquent payments shall be subjeM to a penalty to cover liquidated damages,
covering adminisuation and other costs of collection, which cannot be accurately
estimated in advance, which shall accrue at a rate equal to two percent (2%) over the
prevailing prime interest rate, begitming on the date when the assessment is due and
payable.
7III. CLAIl4IS HArTDLING PROCEDURES
It is the general intent that all Self-Insurance Program claims be handled in a
fazhion consistent with professional insurance company claims handling procedures.
Certain intentions as respects incurred claims aze as follows:
1. It is the intent of OCCRMA to estabiish and maintain a data base of all
claims reserved or paid at an amount of $10,000 or higher. A data base management
system will be established to maintain records in all such cases.
2. Ail ciaims falling within the self-insured retentions of the individual
members shall be administered by such member untii determined to be an"excess claim"
8 -
Exhibit C - Reso. No. 7772
and even then shall be handled in conjunction with the OCCRMA and its Program
Claims Coordinator and Program Excess Claims Manager.
I
3. It is not the intent of the program to assume control of or usurp any
authority as respects an individual ciaim from the member agency involved unless such
excess claim is voluntarily"tendered° to the Self-Insurance Program and accepted by the
i"`y
Authoriry.
4. It is the intent of all member agencies that there be full cooperarion
between member claims handling peisonnel and program risk management personnel in
the method and direction af claims management of "excess claims:'
5. a. Committee and Baazd considerauon of individual claims shall take place
in closed session. Any representative of a member, regardless of appointment on either
the Claims or Underwriting Committee, may attend a comznittee meeting to present
their position on the initiai review of their daim or matter that is under consideration
by that committee.
b. In no case shall a member agency participate in nor be present during any
vote or acuon pertaining to a specific claim where tl at member agency is a party or- - - -potential parry to that claim. The representative will be excused from the meering at
the condusion of their presentation. If the president or claims chairperson has a conflict
on a specific claim or matter, the Vice President of Vice Chairperson will assume the
duIIes of the president or chair.
c. Upon request of the committee chairman, OCCRMA consultants may be present
in an advisory capacity.
d. The committee chairman will inshvct the committee members on the
confidentiality of the information discussed and will distribute coverage opinion letters
and any other confidential material needed to assist members in the decision process.
The chairman will conclude the discussion and ask the committee to vote its position
on the uutial review of the claim or matter. Prior to the conclusion of the closed
session, the committee chairman wilI collect all confidenual information from committee
members and consultants.
e. The chairman will announce the committee's decision on the inirial review of
the claim or issue to the cit}s representative.
f. If the member does not agree with the decision rendered by the Committees
on their claim or matter, the member city can appeal the decision to the full Boazd of
Directors. The appeai pzocess will follow the same procedures as were followed by theiClaimsandUnderrzitingCommitteesiniheirinitialdeternunationofthedispositionof
9 -
Exhibit C - Reso. No. 7772
the claim or matter as outlined in steps a - e, wherein the Committees will be replaced
by the full Board of Directors, as the decision making body.
I
g. If the member does not agree with the final decision rendered by the full
Boazd of Directots, the member can pursue binding azbi ation.
h. If the Claims and Underwriting Committees can not reach agreement on the
disposition of the claim or matter, the claim will be sent for detennination directly to
the Board of Directors.
i. If the Boazd of Directors is the first to render a decision on the claim or
matter, the Boazd may refer the matter to the Underwriung or Claims Conunittees for
a recommendarion.
j. Reservations of Rights letters will be issued by the Claims Committee. The
Committees decision on other issues will be communicated to the involved member in
writing by the respective committee chairman.
k Upon receipt of a request from a member for a decision on a coverage issue,
a claim issue or any other issue, the comtnittee should endeavor to render their decision
within a reasonable time.
6. if the Claims Committee is unable to convene the Claims Committee
Chairman or the President may authorize the hiring of an Excess Claims Attomey to
represent OCCRMA in an amount not to euceed $25,000. This action should be
reported at the next Claims Committee meeting.
At the recommendation of the Program Ciaims Coordinator, the Claims Committee
Chairman and the OCCRMA President may authorize the payment of a claim up to the
limit of $540,d00 in excess of the membei's Self Insured Retenuon (SIR) amount.
At the recommendation of the Program Claims Coordinator and Claims Committee,
the Executive Comznittee may authorize the payment of a claim up to the limit of
1,000,000 in excess of the membei's Self Insured Retention (SIR) amount.
If the Program Claims Coordinator recommends payment of a claim in an amount
greater than $1,000,000 excess of a membe s Self Insured Retention (SIR) amount, the
Boazd of Directors approval is needed.
7. All documenu and reports prepazed by or on behalf of OCCRh3A, or
provided to OCCRMA by a member agency, which pertain to a specific claim shall be
considered provided in confidence, and OCCRMA shall be considered an agent of the
member to the same extent as aa ordinary insurer. Such information shall not be
10 -
Exhibit C — Reso. No. 7772
distributed beyond OCCRMA representatives. Every effort shall be made to further
protect such documents under the attomey-ciient privilege and work-product doctrine.
Ail claims with reserves or potential payments, inciuding defense costs, of
10,000 or more, or involving any of the following, shall be reported in writing to theRiskManagerofOCCRMA:
l. Deaths.
1 , 2. Any paralysis.
3. Multiple ciaimants.
4. Any amputation.
S. Burn cases.
6. Loss of sight/hearing.
7• Any serious head injury cases.
8. Any multiple fractures.
A claim is one that has been made in writing by or on behalf of any injured
party to the member agency.
The repon to the Risk Manager shail be in writing and contain all particulars as
determined by OCCRMA Claims Review Committee, including any summons or
complaint. Additional facts requested shali not be withheld.
Such reports and additional facts shail be considered confidential by the program
and disclosed only as necessary to furcher the purposes of the program.
No less frequentiy than quanerly, the Claims Review Committee shall meet to
review alt open reported claims. The Program Claims Coordinatar and Program Excess
Claims Manager shall make recommendations as to which claims shall be deemed "excess
claims." The Claims Review Committee shall make such determination based on claims
potenrial to penetrate into Self Insurance Program Contract of Pooled Self Insurance.
All ciaims labeled "excess claims" shall be assigned to the Program Claims Coordinator
and the Program Excess Claiins Manager for handiing.
Handling by the Program Excess Claims Manager shall involve the assessment of
claims potential, recommended reserve level, regular reports to the Claims Coordinator,
quarterly report to the Claims Review Committee and working directly with member
agency claims handling persannel to assess the claims handling procedures and make
appropriate recommendations regarding same.
Quesrions of coverage shall be referred to the Underwriting Committee by the
Claims Review Committee for review and recommendations of acceptance, rejection, or
acceptance subject to reservation of rights to deny at a later date due to just cause.
Such recommendations shall be acted upon by the Claims Review Committee in formally
11 -
Exhibit C — Reso. No. 7772
accepting, rejecting or reservation of rights. Member agencies shall be advised
immediately of actions of Underwriting and/or Claims Review Committees in this regard.
1
XIIL- RLSK M1INAGER ROLE IN QAIMS HANDLING
resP dling claims, it is agreed that the OCCRMA Risk Manager shall
also serve as the Claims Coordinator and shall have responsibilities and authority asgrantedbytheBoazdofDirectorsandappropriatecommittees. These duties sha21indude, but not be limited to:
1. Review claims for the existence of possible coverage questions and report
same to the Claims Review Committee.
2. Recommend and, with authorization, retain outside counsel to represent
OCCRMA interests.
3. Act (with approved authority) to pay claims to the benefit of OCCRMA.
4. Coordinate obtaining coverage interpretations from the coverage attorney
and ensure that third party adjusters under contract to OCCRMA provide-prompt andcompleteinformation.
5. Notify membecs when their claim has been placed on the "Watch List".
6. Norify members when the Claims Committee has hired the services of an
excess attomey to represent the interests of OCCRMA on a claim.
7. Manage and direct activities of thizd party adjusters under contract to
OCCRMA.
XN. EXf IAUSITON OF ANNUAL AGGREGATE LIMITS
It is agreed by all member agencies that in the event of short-fall of annual
aggregate limits all affected members shall shaze the short-fall proportionally based on
the ratio of total claims ihat wouid have been paid by the Contract of Pooled Self
Insurance had no short-fall occurred as bears to the total amount collectible. If return
funds are due from cercain memBer agencies to others, these funds will be due and
payable within 30 days of determination of short-fall claim.
XV WTI'FIDRAWAL (TAII.) COVERAGE
In event of withdrawal of one or more member agencies, it is the intent of the
pzogram to offer a 2 yeaz "tail" or extended discovery period coverage as respects the
claims made form of coverage. The premium charged for same shall be derived,
i
12 -
Eachibit C — Reso. No. 7772
reviewed and approved in ihe same manner as for other program premiutns, provided
that in no case should the "tail coverage" premium exceed 200% of the prior yea's
pzemium.
In no way does the offer or.purchase of"tail° coverage waive any other provision
of the Contract of Pooled Self Insurance or of this plan document.
XVI. Oti'ERFtTNDING - REt'[JRN OF PREMIUMS
i It is the intent of this program to adjust for over or under funding levels through
the decrease or increase in ann u al premiums. In the event of a "retro-retum" of
premium in the form of cash or other negotiable method the calculation and atlocarion
of such return shall be made in accordance with ihe "assessment" provisions (contained
in this document) calculated in reverse. Such calculation shall be the responsibiliry of
the Program Underwriter. However, the nse of a study by an outside consulring firm
may be included if approved by the Underwriting Committee. This return premium will
be approved or disapproved by the Boazd of Directors and all such retvrns shall not
discriminate ag ainst any membexs who have withdrawn.
It is noted that no such re o-return is required and that overfiuiding may be
neutralized by reduced premit ms and withdrawn member agencies will not benefit from
same. However, this is offset by the possibility of increased premiums to make up for
underfunding and such wiihdrawn member agency will not be subject to this method
of raising funds.
XVII. Q.tIIMS AUDTfS
A claims audit will be required of an on-going member of this program.
Such audit will be made at least once in three years and shall be performed by a
qualified outside fuin (selected by the Claims Review Gommittee and approved by the
Board of Directors). The cost of such audit shall be the responsibility of the Self-
Insurance Program. Such audit shall be considered a condition of inembership in the
program.
A ciaims audit (such as described above) may be required of a prospective
member or an existing member (under special circumstances) other than on a three
yeaz periodic basis. Such requirement may be requested by either the Underwriter or
Claims Review Committee. Final authority for making such audit mandatory shall be
f
with the Board of Directors.
XVIII. DISPVTES
It is agreed by all pro-am member agencies and all withdrawn member agencies
that all disputes arising from enforcement of the terms of the Contract of Pooled Self
13 -
Exhibit C - Reso. No. 7772
Insurance as well as agreements contained herein shall be addressed and settled to
conclusion as follows (in order):
1. A al to the a ro riate roPPepppp gram committee or committees.
2. Appeal to the Board of Directon of OCCRMA,
Following such appeals decisions by the above shall be made and affected parciesnotifiedofsuchdecisionsinwriringvufthinseven (7) days of the hearing of such appeat.
If the matter remains unresolved, affected agencies shall paiticipate in the processofbindingarbitration. Any differences, daims or mattexs in dispute arising between or
among members shall be submitted by such memben to azbivation in accordance with
the Joint Powers Agreement. The decision of the azbitrator(s) may be entered as a
judgment in any court af the State of California or elsewhere. Cost of such azbitration
proceedings shall be allocated by the azbi ators.
No Court proceedings shall be initiated by OCCRMA or affected member or
withdrawn member agency other than for the collection of gremiums and/or assessments
or re o-renun of premiums payable as outlined in this document, or enforeement of anazbitrationawazd.
7 C. POLICY FORMS, ENDORSEMENpg, CpVERAGE QUESTIONS
tt is the intent of OCCRMA that all matten dealing with coverages proyided
under the Self-Insurance Program be the sole responsibiliry of the UnderwritingCommittee. The Underwriting Committee shall receive advice in all such matters from
the Program Underwriter. Decisions of the Undersvriring Committee may be appeaIedtothefullBoazdofDirectorsofOCCRMA.
When specific coverage questions arise pending claims, the Claims Review -
Committee shall refer ihe question to the Undernriting Committee for a report. The
Claims Review Committee shall then take such acrion as it may deem appropriate after
due consideration of the report. Disputes between the committees on coverage questionsshallberesolvedbymajoriryvoteoftheBoazdofDirectorsbeforefinalactionistaken.
It is recognized that time may be of the essence, and that special meetings of
committees or the Boazd may be required.
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Exhibit C — Reao. No. 7772
XX. LIl4IITS OF I.IABILCIY
It is the intent of inember agencies of the Self-Insurance Program that the limiu
of liability be established using the following general guidelines_
1) Per occurrence limit shall approximate two times ihe annual premiums
collection under the program.
j
2) Annual aggregate limits shall approximate four times the annual premiumcollectedundertheprogram. The purpose of this limitarion is to assure member
agencies that potential assessments shall be limited to a maximum relarive to the annual
aggregate exposure,
The limits of liability shall be established annually (at each anniversary) and shall
not be amended with the mid-term addition or deletion of parcicipating member 'agendes.
The limiu of liability shall be recommended by the Program Undenvriter to the
Unde.rwriting Committee, The Undersvriting Committee shall approve, disapprove or
modify such recommendation with just cause, However, finallimiu shall be established
by the Underwriting Committee sufficiendy in advance of policy anniversar}, so as to
allow for final Board of Directors' approval. The Board of Directors of flGCRMA shall
have final authoriry in the establishment of the limits of liabiliry.
Limits of liabiliry may be expanded above the general guide lines establishedabovebasedon:
1. Availabiliry of excess or reinsurance.
2• Accumulation of adequate reserves to justify same.
XXt. HANDLIIVGIINVESTMENT OF RESERVE FCTNDS
A11 Self-Insurance Program reserve funds shall be held in a custodial (or
comparable) account in an appropriate financial insutution. Funds in such insutuuons
shall be removed oniy for the following causes:
1. Payment of claims and related claims expenses.
2. Payment of administrative oz other program costs.
3. Re o-return of premiums as described herein.
4. Liquidarion of the Self-Insurance Program (returns established as if
retro-return premiums)_
Other than the above, the integrity of the reserve funds shall be inviolate.
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Exhibit C - Reso. No. 7772
X7{II. PARTICIPATING MEMBER RESERVE FUND t.F'vFr c
It is [he intention of program members to establish and maintain individual
reserve fund levels. As to the Authoriry itself, the Board shall establish a method of
funding reserves for the Authoriry, at such levels as the Board shall deem appropriate.
The level of such reserves shall be reviewed from time to time by the UnderwritingCommitteewhoshallmakerecommendationsforadjustmentsasnecessary.
In general the following guidelines shouid be followed as to other members:
1. Maintenance of a reserve fund for the individuai member Self tnsured
Retention losses is mandatory to compiy with, within the first policy year. The fund
level should approacimate three times the individual membez Self [nsured Retention at
any given time.
2. Maintenance of a reserve fund to provide for possible assessment
provisions contained herein. This fund level should approximate three times the highest
annual premium paid to the Self-Insurance Program within the past five years.
Fuil contral of such reserve funds shall remain.with the individual member.
public agency.
It must be noted that the above fund leveis are recommendations only.
Howevez, lack of appropriate funding may be a cause for cancellation of coverage
provided by the Self-Insurance Program. 5uch review, recommendations for adjustment
of funding levels, and recommendation for cancellation shall be the responsibiliry of the
Undeiwriting Committee. Final action in ail such cases shall be the responsibility oftheBoardofDirectorsofOCCRMA.
IC:\025\JPAS\OCCRMA.PD]
Jarwary 24, /991
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Exhibit C - Reao. No. 7772