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Insurance The County is exposed to various risks of loss related to: torts; thefts of, damage to, and destruction of assets; errors and omissions; injuries to employees; employment and civil rights claims; and natural disasters. The County has established an Insurance Fund (an internal fund) to account for risk management activities, including payment of insurance policy premiums, payment of claims, third-party administrators, adjusters and related costs; and to fmance any and all uninsured losses. The Insurance Fund is governed by an ordinance adopted by the Board of County Commissioners. Periodically an actuarial study is conducted by the County's Broker/Agent of Record and a report is delivered to the Director of Support Services. This study includes the CDUnty's Workers' Compensation and Liability funding as well as a thorough evaluation of the incurred but not reported ("IBNR") claims. Employee medical insurance benefits aze provided by insurance companies. Department assessments are made based on projected numbers of full-time employees that are allocated through the budget process. Premiums are projected based on utilization and demographics of current employees. Any funds collected and not paid out in premium costs are saved in reserves and used to offset increases in health insurance premiums. All IBNR claims are recorded as an expense in the year they are incurred and a corresponding liability claim is recorded. In 1998 an actuazial study was conducted and a new cost allocation system for workers' compensation and liabiliry claims was developed. This system is based upon an actuarial determination of each department's prorated shaze of the "fixed" costs such as personnel and M& S, and the "loss sensitive", or actual claims related costs. With this formula, a department's fixed cost is its total payroll in relation to the County total. The loss sensitive portion is based on a ten-year rolling average of actual claim costs, versus the amounts previously charged through the cost allocation system for the same time period. The Insurance Fund allocates the cost of providing insurance and claims administration by chazging a premium to ~ the various County programs based on the actuarial estimates needed to pay prior and current year claims, to establish sufficient reserves and pay for any actual insurance premiums. These charge backs take into consideration recent trends in actual claims experience as a County as a whole. Claims liabilities also take into consideration recently settled claims, the frequency of claims and other economic and social factors. The Insurance Fund provides risk-of-loss coverages as follows: • General liability, bodily injury and property damage of third parties resulting from the negligence of the County or its employees and errors and omissions. These risks are covered by the Insurance Fund; • Property damage to County owned facilities: Property coverage covers individual claims in excess of $1,000,000, $250,000 for earthquake and $150,000 for flooding; • Excess Liability: The County has purchased coverage providing $5,000,000 per Occurrence and Aggregate with a Self-Insured Retention of $1,000,000. • Boiler and Machinery insurance is purchased: $10,000,000 property damage and other coverage including business interruption and extra expense. • Workers' Compensation & Excess Workers' Compensation, bodily injury or illness to employees while in the course and scope of employment: Individual worker claims up to the statutory limits are paid by the Insurance Fund, any claim in excess of the self-insured retention of $300,000 is insured; • Volunteer and Inmate Insurance Coverage is provided for all low-risk volunteers and inmates working for the County: This risk is covered by the Insurance Fund; • Employee medical, dental, vision, life insurance and disability benefits: These benefits are covered by insurance carriers for losses with exception of LTD, which is Counry funded for years 1 through 5, and then reverts to an insured disability plan after that. An Employee Assistance Program (EAP) and wellness activities such as flu vaccinations are covered by the Insurance Fund; • Unemployment Insurance: All unemployment claims are covered by the Insurance Fund; • The County owns and operates two auto transport vesseis (fenies) and purchases Hull and P& I ~ coverage up to $1,000,000 ; 42