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HomeMy WebLinkAboutCC RESO 2003 - 133RESOLUTION NO. 2003 —133 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING PARTICIPATION IN THE CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY (CPEIA) WHEREAS, pursuant to Government Code Section 6500 et seq., the City of National City is authorized to enter into a joint powers agreement with other public agencies; and WHEREAS, it is proposed that cities and special districts throughout California join together to create the California Public Entity Insurance Authority (CPEIA) to provide "pooled funding" of workers' compensation insurance benefits and costs; and WHEREAS, the City of National City has decided to join and become a member of the CPEIA; and WHEREAS, as a member of the CPEIA, the City has also decided to join the Excess Worker's Compensation Program of the CSAC Excess Insurance Authority (EIA). NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of National City as follows: 1. The City of National City hereby approves and authorizes participation in the California Public Entity Insurance Authority (CPEIA). 2. The Joint Powers Agreement creating the California Public Entity Insurance Authority is hereby approved, and the Mayor is hereby authorized and directed to execute the Agreement on behalf of the City. Said Agreement is on file in the office of the City Clerk. 3. The Memorandum of Understanding (MOU) between the CPEIA and the CSAC EIA is hereby approved, and the Mayor is hereby authorized and directed to execute the MOU on behalf of the City. Said MOU is on file in the office of the City Clerk. 4. The Mayor is also authorized to execute any other document(s) on behalf of the City that may be necessary or appropriate to enter into and implement the Joint Powers Agreement and the Memorandum of Understanding on behalf of the City of National City. Resolution No. 2003 - 133 September 16, 2003 Page Two 5. The Risk Manager of the City of National City is hereby appointed as the City of National City's representative on the CPEIA Governing Board, and the Senior Assistant City Attorney of the City of National City is hereby appointed as the City of National City's alternate representative on such Governing Board. PASSED and ADOPTED this 16th day of September, 2003. Nick Inziih 'a, Mayor ATTEST: Michael R. Dalla, Cit Clerk /4).//‘- APPROVED AS TO FORM: George H. Eiser, III City Attorney Adopted: 06/01/01 CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY EXCESS LIABILITY PROGRAM MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (hereafter "MEMORANDUM") is entered into by and between the California Public Entity Insurance Authority (hereafter "CPEIA"), the CSAC Excess Insurance Authority (hereafter "EIA") and the participating public entities (hereafter "MEMBERS") who are signatories to this MEMORANDUM. 1. JOINT POWERS AGREEMENT. Except as otherwise provided herein, all terms used shall be as defined in Article 1 of the Joint Powers Agreement Creating the CPEIA (hereafter "AGREEMENT"), and all other provisions of the AGREEMENT not in conflict with this MEMORANDUM shall apply. 2. PURPOSE. CPEIA MEMBERS are signatories to this MEMORANDUM for the express purpose of joining the EIA's Excess Liability Program (hereafter "PROGRAM"). Under this PROGRAM, CPEIA Excess Liability MEMBERS shall be considered to be one (1) MEMBER for purposes of participating in the PROGRAM. ENTRY INTO PROGRAM. Any public entity wishing to become a MEMBER Of the PROGRAM shall make application to and be approved by the CPEIA Board of Directors in a manner prescribed by them and must also be approved by the EIA Board of Directors (hereafter "EIA BOARD") in a manner prescribed by the EIA BOARD. PROGRAM DEVELOPMENT. MEMBERS shall be charged a $750.00 program development charge that shall be a one-time charge assessed upon entry into the PROGRAM. 5. ANNUAL PREMIUM. Participating MEMBERS shall be assessed an annual premium for the purpose of funding the PROGRAM. Premiums for the PROGRAM shall be established annually in conjunction with the insurance carriers. Premiums to CPEIA Excess Liability MEMBERS shall be billed and paid annually in accordance with the EIA's Invoicing and Payment Policy (Resolution 94-003). Premium rates shall be established based upon factors that include, but are not limited to, negotiations with insurance carriers, expenditures, administrative costs and other appropriate factors. 6. COST ALLOCATION. Each participating MEMBER'S share of annual premium shall be determined by the EIA BOARD. 1 7. ASSESSMENTS, DIVIDENDS AND PREMIUM SURCHARGE. (a) Assessments. The PROGRAM shall be funded in accordance with paragraph 5 above. In general, the annual premium, as determined by the EIA BOARD, will be established at a level that will provide adequateoverall funding without the need for adjustments to past policy period(s) in the form of dividends and assessments. However, should the PROGRAM for any reason not be adequately funded, except as otherwise provided herein, pro-rata assessments to the participating MEMBERS may be utilized to ensure the approved funding level for those policy periods individually or for a block of policy periods, in accordance with the Premium Surcharge provision set forth below. (b) Dividends. Pro-rata dividends will be declared as provided herein. Dividends may also be declared as deemed appropriate by the EIA BOARD. (c) Premium Surcharge. (i) If there are an unusually large number of losses under the PROGRAM during a policy year, such that notwithstanding reinsurance coverage for large individual losses, the funds for the PROGRAM may be exhausted before the next annual premiums are due, the EIA BOARD may, upon consultation with a casualty actuary, impose premium surcharges on all MEMBERS; or (ii) If it is determined by the EIA BOARD, upon consultation with a casualty actuary, that the funds for the PROGRAM are insufficient to pay losses, fund known estimated losses, and fund estimated losses which have been incurred but not reported, the EIA BOARD may impose a surcharge on all participating MEMBERS. (iii) Premium surcharges imposed pursuant to (i) and/or (ii) above shall be in an amount that will assure adequate funds for the PROGRAM to be actuarially sound. Premium surcharges shall be assessed in accordance with paragraph 8 below. (iv) A MEMBER which is no longer participating in the PROGRAM at the time the premium surcharge is assessed shall pay such premium surcharges as it would have otherwise been assessed in accordance with the provisions of (i), (ii), and (iii) above. 8. CLOSURE OF POLICY PERIODS. Notwithstanding any other provision of this MEMORANDUM, the following provisions are applicable: Excess Liability Program Memorandum of Understanding Adopted 06/01/01 2 (a) Upon reaching ten (10) years of maturity after the end of a program period, that period shall be "closed" and there shall be no further dividends declared or assessments made with respect to those program periods except as set forth in paragraphs 9(a) and 9(b), below. (b) Notwithstanding sub -paragraph (a) above, the EIA BOARD may take action to leave a policy period "open" even though it may otherwise qualify for closure. In addition, the last ten (10) policy periods shall always remain "open" unless the EIA BOARD takes specific action to declare any of the last ten (10) policy periods closed. (c) Dividends and assessments (other than as outlined in paragraphs 9(a) and 9(b), below) shall be administered to the participating MEMBER based upon the proportion of premiums paid to the PROGRAM in "open" periods only. For purposes of administering dividends and assessments pursuant to this sub- paragraph, all "open" policy periods shall be considered as one block. 9. DECLARATION OF DIVIDENDS. Dividends shall be payable from the PROGRAM to a participating MEMBER in accordance with its proportionate funding to the PROGRAM during the applicable program period as follows: (a) A dividend shall be declared at the time a program period is closed on all amounts over the 90% confidence level. (b) A dividend shall be declared at the time a program period is closed on all amounts which represent premium surcharge amounts assessed pursuant to this MEMORANDUM where the funding exceeds the 80% confidence level. 10. MEMORANDUM OF COVERAGE. A Memorandum of Coverage will be issued by the EIA evidencing membership in the PROGRAM and setting forth terms and conditions of coverage. 11. CLAIMS ADMINISTRATION AND RESPONSIBILITY FOR CLAIMS. (a) Subject to subparagraph (e), each MEMBER shall be responsible for the investigation, settlement or defense, and appeal of any claim made, suit brought, or proceeding instituted against the MEMBER arising out of a loss. (b) CPEIA Excess Liability MEMBERS are required to comply with the EIA's Underwriting and Claims Administration Standards (including Addendum B — Liability Claims Administration Guidelines) as amended from time to time, and which are attached hereto as Exhibit A and incorporated herein. (c) Each participating MEMBER shall give the EIA timely written notice of claims in accordance with the policy established by the EIA. Excess Liability Program Memorandum of Understanding Adopted 06/01/01 3 (d) A MEMBER shall not enter into any settlement involving liability of the EIA without the advance written consent of the EIA. (e) The EIA, at its own election and expense, shall have the right to participate with a MEMBER in the settlement, defense, or appeal of any claim, suit or proceeding which, in the judgment of the EIA, may involve liability of the EIA. 12. DISPUTES. Any question or dispute with respect to the rights and obligations of the parties to this MEMORANDUM shall be determined by the EIA Executive Committee. If the MEMBER is not satisfied with the Committee's decision, the matter may be appealed through arbitration. Arbitration may be either binding or non -binding, as mutually agreed upon by the parties. The matter will be submitted to a mutually agreed upon arbitrator or panel of arbitrators for determination. If binding arbitration is selected, the decision of the arbitrator or panel of arbitrators will be final and conclusive, and the MEMBER and EIA will abide by the decision. The cost of arbitration will be shared equally by the MEMBER and the EIA. 13. AMENDMENT. This MEMORANDUM may be amended by a majority vote of the EIA BOARD and signature on the MEMORANDUM by the MEMBER'S designated liaison who shall have authority to execute this MEMORANDUM. Any MEMBER that fails or refuses to execute an amendment to this MEMORANDUM shall be deemed to have withdrawn from the PROGRAM on the next annual renewal date. 14. WITHDRAWAL FROM THE PROGRAM. Withdrawal of a MEMBER from the PROGRAM shall be in accordance with the withdrawal provisions of Article 19 of the AGREEMENT. 15. COMPLETE AGREEMENT. Except as otherwise provided herein, this MEMORANDUM constitutes the full and complete agreement of the MEMBERS. 16. SEVERABILITY. Should any provision of this MEMORANDUM be judicially determined to be void or unenforceable, such determination shall not affect any remaining provision. 17. EFFECTIVE DATE. This MEMORANDUM shall become effective on the first effective date of coverage for the MEMBER and upon the approval by the EIA and CPEIA and the signing of this agreement by the MEMBERS, the General Manager/Secretary/Treasurer of the EIA and the President of the CPEIA. Excess Liability Program Memorandum of Understanding Adopted 06/01/01 4 18. EXECUTION IN COUNTERPARTS. This MEMORANDUM may be executed in several counterparts, each of which shall be an original, all of which shall constitute but one and the same instrument. In Witness Whereof, the undersigned have executed this MEMORANDUM as of the date set forth below. ''CSAC Excess Insurance Authority Dated: By: California Public Entity Insurance Authority Dated: By: [Name of Public Entity] City of Nati•+- Ci Dated: Sept. 16, 2003 By: Ni zunza,` u or Excess Liability Program Memorandum of Understanding Adopted 06/01/01 5 Adopted:December 6, 1985 Amended:January 23, 1987 Amended: October 6, 1995 Amended: October 1, 1999 EXHIBIT A CSAC Excess Insurance Authority Underwriting and Claims Administration Standards I. GENERAL A. Each County shall appoint an official or employee of the County to be responsible for the risk management function and to serve as a liaison between the County and the Authority for all matters relating to risk management. B. Each County shall maintain a loss prevention program and shall consider and act upon all recommendations of the Authority concerning the reduction of unsafe conditions. Each County shall maintain records of claims in each category of insurance covered by a program of the Authority and shall provide copies of such records to the Authority as directed by the Executive, Underwriting or Claims Review Committees. Such records shall provide the following information by fiscal year: number of claims (open and closed); amounts paid, amounts reserved and total incurred. Allocated expenses shall be included. If losses are capped, the excess amount shall be indicated. II. EXCESS WORKERS' COMPENSATION PROGRAM A. The County shall be responsible for the investigation, settlement, defense and appeal of any claim made, suit brought or proceeding instituted against the County. 1. The County shall use only qualified personnel to administer its workers' compensation claims. At least one person in the claims office (whether in-house or outside administrator) shall be certified by the State of California as a qualified administrator of self -insured workers' compensation plans. 2. Qualified defense counsel experienced in workers' compensation law and practice shall handle litigated claims. Counties are encouraged to utilize attomeys who have the designation "Certified Workers' Compensation Specialist, the State Bar of California, Board of Legal Specialization". 3. The County shall use the Authority's Workers' Compensation Claims Administration Guidelines (Addendum A) and shall advise its claims administrator that these guidelines are utilized in the Authority's workers' compensation claims audits. B. The County shall provide the Authority written notice of any potential excess workers' compensation daims in accordance with the requirements of the Authority's bylaws. Updates on such claims shall be provided as requested by the Authority and/or the Authority's excess carrier. C. A claims administration audit utilizing the Authority's Workers' Compensation Claims Administration Guidelines (Addendum A) shall be performed once every three (3) years. In addition, an audit will be performed within twelve (12) months of any of the following events: 1. There is an unusual fluctuation in the County's claim experience or number of large claims or 2. There is a change of workers' compensation claims administration firms or 3. The County is a new member of the Excess Insurance Authority. The claims audit shall be performed by a firm selected by the Authority. Recommendations made in the daims audit shall be addressed by the County and a written response outlining a program for corrective action shall be provided to the Authority within sixty (60) days of receipt of the audit. D. The County shall obtain an actuarial study performed by a Fellow of the Casualty Actuarial Society (FCAS) at least once every three- (3) years. Based upon the actuarial recommendations, the County should maintain reserves and make funding contributions equal to or exceeding the present value of expected losses and a reasonable margin for contingencies. Excess Liability Program Memorandum of Understanding Exhibit A 2 III. EXCESS LIABILITY PROGRAMS A. The County shall be responsible for the investigation, settlement, defense and appeal of any claim made, suit brought or proceeding instituted against the County. 1. The County shall use only qualified personnel to administer its liability claims. 2. Qualified defense counsel experienced in tort liability law shall handle litigated claims. Counties are encouraged to utilize defense counsel experienced in the subject at issue in the litigation. 3. The County shall use the Liability Claims Administration Guidelines (Addendum B) and shall advise its claims administrator that these guidelines be utilized in the Authority's liability claims audits. B. The County shall provide the Authority written notice of any potential excess liability claim in accordance with the requirements of the Authority's bylaws. Updates on such claims shall be provided as requested by the Authority and/or the Authority's excess carrier. C. A claims administration audit utilizing the Authority's Liability Claims Administration Guidelines (Addendum B) shall be performed once every three (3) years. In addition, an audit will be performed within twelve (12) months of any of the following events: 1. There is an unusual fluctuation in the County's claims experience or number of large claims or 2. There is a change of liability claims administration firms or 3. The County is a new member of the Excess Insurance Authority. The claims audit shall be performed by a firm selected by the Authority. Recommendations made in the claims audit shall be addressed by the County and a written response outlining a program for corrective action shall be provided to the Authority within sixty (60) days of receipt of the audit. D. The County shall obtain an actuarial study performed by a Fellow of the Casualty Actuarial Society (FCAS) at least once every three- (3) years. Based upon the actuarial recommendations, the County should maintain reserves and make funding contributions equal to or exceeding the present value of expected losses and a reasonable margin for contingencies. Excess Liability Program Memorandum of Understanding Exhibit A 3 IV. PROPERTY PROGRAMS A. The County shall maintain appropriate records including a complete list of insured locations and schedule of values pertaining to all real property. Copies of such records shall be provided to the Authority or its brokers as requested by the Executive or Property Committees. B. Each County shall perform a real property replacement valuation for all locations over one million dollars. Valuations shall be equivalent to the Marshall Swift system and shall be performed at least once every five- (5) years. New members shall have an appraisal or valuation performed within one year from entry into the program. V. MEDICAL MALPRACTICE PROGRAM A. The County, if a member of Medical Malpractice Program I (hereinafter Program I), or Mid Mal Program; or the third party administrator for Medical Malpractice Program II (hereinafter Program II); shall be responsible for the investigation, settlement, defense and appeal of any claim made, suit brought or proceeding instituted against the County. 1. The County (Program 1 and Mid Mal Program) or third party administrator (Program II) shall use only qualified personnel to administer its health facility claims. 2. Qualified defense counsel experienced in health facility law shall handle litigated claims. 3. The County (Program I and Mid Mal Program) or third party administrator (Program II) shall use the "Claims Reporting And Handling Guidelines" in the CSAC/Excess Insurance Authority Medical Malpractice Excess Insurance Program Operating And Guidelines Manual (hereinafter OPERATING AND GUIDELINES MANUAL), and shall advise its claims administrator that these claims handling guidelines are utilized in the Authority's medical malpractice claims audits. B. The County (Program I and Mid Mal Program) or third party administrator (Program II) shall provide the Authority and its excess carrier written notice of any potential excess claim or "major incident" in accordance with the requirements of the Authority and of the excess carrier as stated in the OPERATING AND GUIDELINES MANUAL. Updates on such claims or major incidents shall be provided as requested by the Authority and/or the Authority's excess carrier. Excess Liability Program Memorandum of Understanding Exhibit A 4 C. A claims administration audit utilizing the Authority's Claims Reporting and Handing Guidelines in the OPERATING AND GUIDELINES MANUAL shall be performed once every three (3) years. In addition, an audit will be performed within twelve (12) months of any of the following events: 1. There is an unusual fluctuation in the County's claims experience or number of large claims or 2. There is a change of health facility claims administration firms or 3. The County is a new member of the Excess Insurance Authority or 4. The Medical Malpractice Committee requests an audit. The claims audit shall be performed by a firm selected by the Authority. Recommendations made in the claims audit shall be addressed by the County and a written response outlining a program for corrective action shall be provided to the Authority within sixty (60) days of receipt of the audit. D. If a member of Program I or the Mid Mal Program, the County shall obtain an actuarial study performed by a Fellow of the Casualty Actuarial Society (FCAS) at least once every three (3) years. Based upon the actuarial recommendations, the County should maintain reserves and make funding contributions equal to or exceeding the present value of expected losses and a reasonable margin for contingencies. E. The County shall have an effective risk management program in accordance with the "Risk Management Guidelines" as states in the OPERATING AND GUIDELINES MANUAL. VI. SANCTIONS A. The Authority shall provide the County written notification of the County's failure to meet any of the above -mentioned standards or of other concerns, which affect or could affect the Authority. B. The County shall provide a written response outlining a program for corrective action within sixty (60) days of receipt of the Authority's notification. C. After approval by the Executive Committee of the County's corrective program, the County shall implement the approved program within ninety (90) days. The County may request an additional sixty (60) days from the Executive Committee. Further requests for extensions shall be referred to the Board of Directors. Excess Liability Program Memorandum of Understanding Exhibit A 5 D. Failure to comply with subsections B or C may result in cancellation of the County from the affected Authority insurance program in accordance with the provisions in the Joint Powers Agreement. E. Notwithstanding any other provision herein, any member County may be canceled pursuant to the provision of the Joint Powers Agreement. Excess Liability Program Memorandum of Understanding Exhibit A 6 Adopted: December 6, 1985 Amended: January 23, 1987 Amended: October 6, 1995 Amended: October 1, 1999 ADDENDUM B Liability Claims Administration Guidelines The following Guidelines have been adopted by the CSAC Excess Insurance Authority in accordance with Article 18(b) of the March 1993 Amended Joint Powers Agreement Creating the CSAC Excess Insurance Authority. I. CLAIMS INVESTIGATION A. Factual investigation should be completed within forty-five (45) days of county's knowledge of claim, including statements from participants and witnesses. (Answer questions who, what, where, when and why). B. Develop liability issues, including immunities, comparative negligence, joint tort feasors and joint and several liability. Transfer of risk is an important aspect of any claims investigation. C. Begin to develop information on damages: 1. Property damage 2. Nature and extent of injuries 3. Medical costs 4. Lost wages 5. Dependency 6. Other damages D. Obtain and review contracts that may be in effect relating to specific accidents, to determine whether there is any sharing or complete transfer of the risk. 1. Hold -harmless indemnity agreements. 2. Additional insured requirements. E. Obtain defective products and/or other evidence, and hold it if at all possible, or at least locate where it is being held. Obtain product information for the file. Early preservation of evidence is imperative for a proper defense. Excess Liability Program Memorandum of Understanding Exhibit A — Addendum B 1 F. Utilize experts appropriately on cases. Consideration should be given to structured settlements and Voluntary Settlement Conferences. EIA has a resource manual with the names, addresses, etc. on various experts that can be retained to investigate and testify on behalf of the member counties. G. The EIA maintains membership in the Index Bureau. 1. Report all bodily injury claims to the Index Bureau. 2. Follow up on Index Bureau information by sending the Inquiry Form to insurance companies reporting other injuries to the claimant. Do not hesitate to call and discuss the losses with other adjusters. Instruction manuals, reporting forms, inquiry forms and envelopes may be obtained from the EIA. H. Arrange appraisals for damaged property. Do not rely on the appraisal obtained by the plaintiffs' own carriers.. In some instances they may not utilize the local A.C.V. and the "computerized" appraisal figure can be inflated. II. EXCESS REPORTING REQUIREMENTS A. First Report Timely report to the Excess Insurance Authority those losses with potential or existing exposure. Utilize the First Report Potential Excess Liability Claims form currently in use. 1. The Excess Liability Programs' reporting criteria are those criterion established and adopted by the Board and/or the Liability II committee. B. Update Reports The EIA should be provided copies of periodic reports in order to be kept apprised of the developments of the case. On litigated cases, defense counsel should also include the EIA on their mailing lists for copies of correspondence, reports, evaluations, interrogatory summaries, deposition summaries and medical summaries. Actual deposition transcripts, interrogatories, their answers and interim billings are not required. On reserving and payment changes utilize the Reserve and Payment Update form currently in use. Excess Liability Program Memorandum of Understanding Exhibit A — Addendum B 2 C. Closure Reports When a case that has been reported to the EIA is settled, dismissed or closed in any other fashion, provide the EIA with the closing documents and a completed Closure Information form currently in use. HI. TORT CLAIM REQUIREMENTS/GOVERNMENT CODE A. All notices (pertaining to claim insufficiency, returning late claims, claims rejections, etc.) shall be timely done in accordance with the relevant Govemmental Code provisions. B. Appropriate Dismissal Motions should be made for failure to meet the applicable Code of Civil Procedure statutes for timely serving, conducting discovery or bringing a complaint to trial. IV. DOCUMENTATION A. Accurate reserves shall be established based on facts known, within thirty (30) days of receipt of the investigative report. Legal and adjusting expenses shall be included. The following formula is recommended in establishing and updating the reserves for each file: 1. (Maximum Value x County's % of Liability) + Expense Factor = Reserve. Maximum value is the potential total amount a plaintiff could expect to receive, either through settlement or verdict, if he/she was completely free of negligence. Maximum value should include any potential award of plaintiffs attorney fees, such as in cases involving Federal Civil Rights. Percentage of liability is determined by various factors that are discovered during an investigation. Reserves should be adjusted accordingly, as facts are developed, to properly reflect the exposure. These factors include but are not limited to: a. The extent of plaintiffs liability. b. The number of co-defendants and their percentage of liability. c. The ability of the co-defendants to respond financially to any settlement or verdict. Excess Liability Program Memorandum of Understanding Exhibit A - Addendum B 3 d. On cases occurring after June 3, 1986, Proposition 51 allows defendants to limit their liability on non -economic damages to their percentage of fault. 2. The reserve shall be set at the full exposure after applying the above formula, even if it exceeds the member County's Self -Insured Retention. B. The file shall contain reports necessary to document the decisions made, including all demands, offers of settlement and settlement authority. 1. A complete "typed" captioned report to the file shall be placed in each file for: a. Bodily Injury claims reserved above 25% of the S.I.R. b. Property Damage claims reserved above 25% of the S.I.R. c. All claims that meet the EIA's excess reporting requirements regardless of reserves. Member counties and/or claims administrators may follow stricter guidelines. The captioned report should include the following topical headings and subsequent entries: 1. Date of report 2. County name 3. S.I.R level 4. Claimant(s) Information 5. Date of Loss 6. Claim Number (if used) 7. Facts of accident or occurrence 8. Witness/Participant Statement 9. Suggested reserves (see IV. A) Do they reflect exposure? 10. Assessment of liability 11. Review of damages/injuries, including medical costs, lost wages, dependency and other damages 12. Index Bureau reporting 13. Addressing of coverage questions 14. Excess potential 15. Structured Settlement possibilities 16. Voluntary Settlement Conference potential 17. Subrogation potential 18 Governmental Code compliance and immunities Excess Liability Program Memorandum of Understanding Exhibit A — Addendum B 4 19. Identify future course of action 20. State next diary date 21. If litigated, identify counsel on both sides. C. Photos, diagrams, estimates, statements, plans, contracts, medical, law enforcement and coroner's reports (where applicable) shall be in the claims file in a timely fashion. V. CASE SETTLEMENT FACTORS A. The settlement should be reasonable in light of damages, injuries and liability. B. Settlements should be effected in a timely manner, with consideration given to structures and/or voluntary settlement conferences. C. Contributions from joint tort feasors should be considered. D. Settlement evaluation and authority shall be documented. On cases exceeding the S.I.R., prior written authority must be obtained from the EIA. E. Proper releases and dismissals shall be secured. VI. LITIGATED FILES A. Defense plan shall be in the file. B. Defense attorney evaluation shall be completed and in the file within sixty (60) days of assignment. C. The defense attorney should make proper follow-up requests for investigation. D. Defense costs shall be controlled by the County and depositions and other defense expenses approved by the County. E. There should be timely recommendations from defense firms regarding settlements and trial preparation. F. Results and total expenses shall be documented. VII. SUMMARY The file should be completely documented. Audits conducted by the EIA Auditor not only utilize industry standards, but also these Guidelines. Excess Liability Program Memorandum of Understanding Exhibit A - Addendum B 5 The California Unfair Claims Settlement Practices Regulations went into effect on January 15, 1993. These regulations apply to the Insurance Industry as a whole. Public Agencies (including J.P.A.'s) are not governed by these regulations. Many Counties utilize outside claims administrators that must comply with these regulations in their private insurance industry work, and have already had their adjusters certified. Excess Liability Program Memorandum of Understanding Exhibit A — Addendum B 6 Adopted: April 18, 2001 JOINT POWERS AGREEMENT CREATING THE CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY This Agreement is executed in the State of California by and among those public agencies organized and existing under the Constitution of the State of California, which are parties signatory to this Agreement. All such agencies which become members shall be listed in Appendix A, attached hereto and made a part hereof. RECITALS WHEREAS, Article 1, Chapter 5, Division 7, Title 1 of the California Government Code (section 6500 et seq.) permits two or more public agencies by agreement to exercise jointly powers common to the contracting parties; and WHEREAS, the public agencies executing this Agreement desire to join together for the purpose of jointly funding, purchasing and/or establishing insurance and risk management programs as determined; and WHEREAS, Article 16, Section 6 of the California Constitution provides that insurance pooling arrangements under joint exercise of power agreements shall not be considered the giving or lending of credit as prohibited therein; and WHEREAS, California Government Code Section 990.4 provides that a local public entity may self -insure, purchase insurance through an authorized carrier, or purchase insurance through a surplus line broker, or any combination of these; and WHEREAS, California Government Code Section 990.6 provides that the cost of insurance is a proper charge against the local public entity; and WHEREAS, California Government Code Section 990.8 provides that two or more local public entities by a joint powers agreement may provide insurance by any one or more of the methods specified in Government Code Section 990.4, and the pooling of self -insured claims or losses is not considered insurance nor subject to regulation under the Insurance Code; and JPA, CPEIA Adopted: April 18, 2001 WHEREAS, California Government Code Section 990.8 also provides that a joint powers agreement may provide that if any peril insured or covered under a contract has existed and the joint powers authority or other parties participating in the pool have been liable for any period, the agreement may provide that the insured or covered party is not entitled to the return of premiums, contributions, payments, or advances so far as the particular risk insured or covered is concerned; NOW THEREFORE, the parties agree as follows: ARTICLE 1. DEFINITIONS "Authority" or "CPEIA" shall mean the California Public Entity Insurance Authority created by this Agreement. "Authority Program" or "CPEIA separate Program" "Board of Directors" or "Board" "Excess Insurance Authority" or "EIA" "EIA Program" "Fiscal Year" "Government Code" "Insurance program" or "Program" shall mean a program authorized by the Board and apart from a program of the EIA. shall mean the governing body of the Authority. shall mean the CSAC Excess Insurance Authority. shall mean a program established by the EIA that is made accessible to the Authority and in which the Board may authorize Authority participation. shall mean that period of twelve (12) months which is established by the Board as the fiscal year of the Authority. shall mean the California Government Code. shall mean a program of the Authority under which a participating member or other public entity is protected against designated losses, either through joint purchase of primary or excess insurance, pooling of self -insured claims or losses, purchased insurance or reinsurance or any other combination as determined by the Board. The Board may determine applicable criteria for determining eligibility in any program, as well as establishing program policies and procedures. Page 2 of 19 JPA, CPEIA "Joint Powers Law" "Memorandum of Understanding" or "MOU" "Participating Member" or "Member" Adopted: April 18, 2001 shall mean Article 1, Chapter 5, Division 7, Title 1 (commencing with section 6500) of the Government Code. shall mean a document executed by a member setting forth provisions for program coverage or establishing a program of the Authority or otherwise providing for implementation of the provisions of this Agreement. shall mean any public agency, which has entered a program of the [or, which has obtained insurance coverage through the] Authority pursuant to this Agreement and has not withdrawn or been canceled therefrom. "Public Agency" shall also mean "public entity." "Reinsurance" shall mean insurance purchased by the Authority as part of an insurance program to cover that portion of any loss that exceeds the joint funding capacity of that program. "Self -Insured Retention" or "SIR" shall mean that portion of a loss resulting from an occurrence experienced by a member that is retained as a liability or potential liability of the member and is not subject to payment by the Authority. ARTICLE 2. PURPOSES This Agreement is entered into by the members in order to jointly develop and fund insurance and other related programs as determined by members and other public entities wishing to participate in such programs or obtain services. Programs may be either EIA Programs or Authority Programs and may include, but are not limited to, the creation of joint insurance funds, including excess insurance funds, the pooling of self -insured claims and losses, purchased insurance, including reinsurance, and the provision of necessary administrative and other services. Such services may include, but shall not be limited to, risk management Page 3 of 19 JPA, CPEIA Adopted: April 18, 2001 consulting, loss prevention and control, centralized loss reporting, actuarial consulting, claims adjusting and legal defense services. ARTICLE 3. PARTIES TO THE AGREEMENT (a) Each member, as a party to this Agreement, certifies that it intends to and does contract with all other members as parties to this Agreement and, with such other members as may later be added as parties to this Agreement pursuant to Article 18 as to all programs in which the member participates. Each member also certifies that the removal of any party from this Agreement, pursuant to Articles 19 and 20, shall not affect this Agreement or the member's obligations hereunder. (b) Should any conflict arise between the provisions of this Article and any applicable Memorandum of Understanding or other similar document evidencing coverage, such Memorandum of Understanding or other document shall prevail. ARTICLE 4. TERM This Agreement shall become effective when executed and returned to the Authority within thirty (30) days after execution by at least two (2) public agencies. The Authority shall promptly notify all members in writing of the effective date of this Agreement. This Agreement shall remain in effect until terminated as provided herein. ARTICLE 5. CREATION OF THE AUTHORITY Pursuant to the joint powers law there is hereby created a public entity separate and apart from the parties hereto, to be known as the California Public Entity Insurance Authority, with such powers as are hereinafter set forth. ARTICLE 6. ACCOUNTABILITY AND REPORTS The Authority, pursuant to Government Code Section 6505, shall provide for strict accountability of all funds and report of all receipts and disbursements. The auditor or controller Page 4 of 19 JPA, CPEIA Adopted: April 18, 2001 of the Authority shall contract with a certified public accountant to perform an annual audit of the accounts and records of the Authority. ARTICLE 7. POWERS OF THE AUTHORITY The Authority shall have all of the powers common to its members and all additional powers as set forth in the joint powers law, and it is hereby authorized to do all acts necessary in the exercise of said powers. Such powers include, but are not limited to, the following: (a) To make and enter into contracts. (b) To employ agents and employees. (c) To incur debts, liabilities and obligations. (d) To acquire, hold, or dispose of property, contributions and donations of property, funds, services and other forms of assistance from persons, firms, corporations and public agencies. (e) To sue and be sued in its own name and to settle any claim against it. (f) To receive and use contributions and advances from members as provided in Government Code Section 6504, including contributions or advances of personnel, equipment or property. (g) To invest any money in its treasury that is not required for its immediate necessities, pursuant to Government Code Section 6509.5. (h) To carry out all provisions of this Agreement Said powers shall be exercised pursuant to the terms hereof and in the manner provided by law. ARTICLE 8. BOARD OF DIRECTORS The Authority shall be governed by a Board of Directors, which shall consist of the eleven (11) members. Beginning on July 1, 2001, the members shall consist of the nine (9) voting members of the EIA Executive Committee, plus two (2) representatives of parties to the Agreement appointed by the Board. As of January 1, 2002, the Board shall consist of seven (7) voting members of the EIA Executive Committee to be selected by the EIA Executive Committee, plus four (4) representatives of parties to the Agreement to be elected by the CPEIA members in a manner prescribed in the Bylaws. Page 5 of 19 JPA, CPEIA Adopted: April 18, 2001 As of January 1, 2003 the Board shall consist of five (5) EIA Executive Committee members and six (6) elected CPEIA members. As of January 1, 2004, the Board shall consist of two (2) EIA members and nine (9) elected CPEIA members. As of January 1, 2004, the membership of the Board shall remain the same unless otherwise amended by this Agreement. If at any time sufficient CPEIA members are not available to fill their designated slots, then the EIA Executive Committee shall fill vacant positions from their own membership until the next annual election. The Board, through adoption or amendment of its Bylaws, may designate certain positions of the Board members to be from designated entities (for example, three (3) from Joint Powers Authorities, three (3) from cities, three (3) from other entities.). Seven (7) members of the Board shall constitute a quorum for the transaction of business. Each Board member shall have one vote. Except as otherwise provided in this Agreement or any other duly executed agreement of the participating members, action by the Board shall require an affirmative vote of a majority of the member present and voting. At any meeting at which a quorum is initially present the Board may continue to transact business notwithstanding the withdrawal of enough members to leave less than a quorum, provided that no action shall be valid or binding unless approved by a majority of the members of the Board. ARTICLE 9. POWERS OF THE BOARD OF DIRECTORS The Board of Directors shall have the following powers and functions: (a) The Board shall exercise all powers and conduct all business of the Authority, either directly or by delegation to other bodies or persons unless otherwise prohibited by this Agreement, or any other duly executed agreement of the member or by law. (b) The Board of Directors may adopt such resolutions as deemed necessary in the exercise of those powers and duties set forth herein. (c) The Board, in accordance with Article 12 of the Agreement, may create those committees it deems appropriate to carry out the work of the Authority. The Board may designate those committees that are advisory only, and may from time to time provide powers and duties to any committee, as the board deems appropriate. The committees may develop, evaluate and review all matters pertaining to the business of the Authority, as well as any of its Page 6 of 19 JPA, CPEIA Adopted: April 18, 2001 programs and services. The powers and duties so delegated shall be specified in resolutions adopted by the Board or otherwise set forth in the Bylaws. (d) The membership of any such committee may consist in whole or in part of persons who are not members of the Board. (e) (0 The Board may appoint or employ necessary staff in accordance with Article 13. The Board shall cause to be prepared, and shall review, modify as necessary, and adopt the annual operating budget of the Authority. Adoption of the budget may not be delegated. (g) The Board shall develop, or cause to be developed, and shall review, modify as necessary, and adopt each program of the CPEIA, including all provisions for reinsurance and administrative services necessary to carry out such program and the Board shall determine those programs of the EIA that will be available to members of CPEIA (h) The Board shall provide for necessary services to the Authority and to members, by contract or otherwise, which may include, but shall not be limited to, staff, risk management consulting, loss prevention and control, centralized loss reporting, actuarial consulting, claims adjusting, and legal services. (i) The Board shall provide general supervision and policy direction to the staff. (j) The Board shall receive and act upon reports of the committees and the staff. (k) The Board shall act upon each claim involving liability of the CPEIA, directly or by delegation of authority to a committee, body or person, provided, that the Board shall establish monetary limits upon any delegation of claims settlement authority, beyond which a proposed settlement must be referred to the Board for approval. (1) The Board may require that the Authority review, audit, report upon, and make recommendations with regard to the safety or claims administration functions of any member, insofar as those functions affect the liability or potential liability of the Authority. The Board may forward any or all such recommendations to the member with a request for compliance and a statement of potential consequences for noncompliance. (m) The Board shall receive, review and act upon periodic reports and audits of the funds of the Authority, as required under Article 16 of this Agreement. Page 7 of 19 JPA, CPEIA Adopted: April 18, 2001 (n) The Board may, upon consultation with a casualty actuary, declare that any funds established for any CPEIA program has a surplus of funds and determine a formula to return such surplus to the participating members that have contributed to such fund. (o) The Board shall have such other powers and duties as are reasonably necessary to carry out the purposes of the Authority. ARTICLE 10. MEETINGS OF THE BOARD OF DIRECTORS (a) The Board shall hold at least two (2) meetings each year and shall provide for such other meetings and for such special meetings, as it deems necessary. (b) The staff of the Authority shall provide for the keeping of minutes of regular and special meetings of the Board, and shall provide a copy of the minutes to each member of the Board at the next scheduled meeting. (c) All meetings of the Board and such committees as established by the Board pursuant to Article 12 herein, shall be called, noticed, held and conducted in accordance with the provisions of Government Code Section 54950 et seq. ARTICLE 11. OFFICERS The President and Vice President of the Board shall be selected as provided in the Bylaws and shall serve for one-year terms. The President, or in his or her absence, the Vice President, shall preside at and conduct all meetings of the Board. ARTICLE 12. COMMITTEES The Board of Directors may establish committees, as it deems appropriate to conduct the business of the Authority. Members of the committees shall be appointed by the Board, to serve two-year terms in accordance with the Bylaws. The members of each committee shall annually select one of their members to chair the Committee. Each committee shall be composed of at least five members and shall have those duties as determined by the Board, or as otherwise set forth in the Bylaws. Each committee shall meet on the call of its chair, and shall report to the Board. Page 8 of 19 JPA, CPEIA Adopted: April 18, 2001 ARTICLE 13. STAFF (a) Principal Staff. The following staff members shall be provided by the EIA to the Authority as set forth in the Joint Powers Agreement between the EIA and CPEIA, which provisions are incorporated herein by reference: (1) General Manager/Secretary/Treasurer. The General Manager/Secretary/Treasurer shall administer the business and activities of the Authority, subject to the general supervision and policy direction of the Board of Directors; shall be responsible for all minutes, notices and records of the Authority and shall perform such other duties as are assigned by the Board. (2) Treasurer. Pursuant to Government Code Section 6505.6, the Board shall use the Treasurer of the EIA, who shall comply with the provisions of Government Code Section 6505.5 (a-d). (3) Auditor. The Auditor shall draw warrants to pay demands against the Authority when approved by the Treasurer. Pursuant to Government Code Section 6505.6, the Board shall use the Auditor of the EIA, who shall comply with the provisions of Government Code Section 6505.5 (a-d). (b) Other Staff The Board or General Manager/Secretary shall provide for the appointment of such other staff as may be necessary for the administration of the Authority. ARTICLE 14. DEVELOPMENT, FUNDING AND IMPLEMENTATION OF PROGRAMS (a) Access to the EIA's programs and services shall be made available to public entities and members as is more particularly set forth in the Joint Powers Agreement between the EIA and CPEIA. CPEIA programs and services may be established by the Board, the details of which will be outlined in a Memorandum of Understanding. (b) Program Coverage. Programs may include CPEIA Programs and EIA Programs both of which may provide coverage, including, but not limited to, excess or primary insurance coverage for: (1) Workers' compensation; (2) Comprehensive liability, including but not limited to general, personal injury, contractual, public officials errors and omissions, and incidental malpractice liability; Page 9 of 19 JPA, CPEIA Adopted: April 18, 2001 (3) (4) (5) Comprehensive automobile liability; Health facilities professional liability; Property and related programs; and may provide any other coverages authorized by the Board of Directors. (c) EIA Programs. CPEIA members participating in EIA programs shall execute a Memorandum of Understanding (MOU) for each EIA program in which they are a participant. Such MOU(s) may provide for, but not be limited to, program funding, Authority funding, development charges, annual premium, premium surcharge, implementation and effective date, late entry into program, administration of claims, underwriting and claims administration standards, and program withdrawal or cancellation. CPEIA members participating in EIA Programs shall fund program charges, program administrative costs and general administrative costs in accordance with the equitable allocation formula developed and approved by the EIA. (d) CPEIA Programs. Members participating in CPEIA programs shall execute a MOU for each CPEIA Program in which they are a participant. Such MOU(s) may provide for, but not be limited to, program funding, Authority funding, development charges, annual premium, premium surcharge, implementation and effective date, late entry into program, administration of claims, underwriting and claims administration standards, and program withdrawal or cancellation. Members participating in CPEIA Programs shall fund program charges, program administrative costs and general administrative costs in accordance with an equitable allocation formula developed and approved by the Board of Directors. ARTICLE 15. ACCOUNTS AND RECORDS (a) Annual Budget. The Authority shall annually adopt an operating budget pursuant to Article 9 of this Agreement, which shall include a separate budget for each program under development or adopted and implemented by the Authority. (b) Funds and Accounts. The Auditor of the Authority shall establish and maintain such funds and accounts as may be required by good accounting practices and by the Board of Directors. Separate accounts shall be established and maintained for each program under development or adopted and implemented by the Authority. Books and records of the Authority Page 10 of 19 JPA, CPEIA Adopted: April 18, 2001 in the hands of the Auditor shall be open to inspection at all reasonable times by authorized representatives of the members. The Authority shall adhere to the standard of strict accountability for funds set forth in Government Code Section 6505. (c) Auditor's Report. The Auditor, within one hundred and twenty (120) days after the close of each fiscal year, shall give a complete written report of all financial activities for such fiscal year to the Board and to each member. (d) Annual Audit. Pursuant to Government Code Section 6505, the Authority shall either make or contract with a certified public accountant to make an annual fiscal year audit of all accounts and records of the Authority, conforming in all respects with the requirements of that section. ARTICLE 16. RESPONSIBILITIES FOR FUNDS AND PROPERTY (a) The Treasurer shall have the custody of and disburse the Authority's funds. He or she may delegate disbursing authority to such persons as may be authorized by the Board of Directors to perform that function, subject to the requirements of (b) below. (b) Pursuant to Government Code Section 6505.5, the Treasurer shall: (1) Receive and acknowledge receipt for all funds of the Authority and place them in the treasury of the Treasurer to the credit of the Authority. (2) Be responsible upon his or her official bond for the safekeeping and disbursements of all Authority funds so held by him or her. (3) Pay any sums due from the Authority, as approved for payment by the Board of Directors or by any body or person to whom the Board has delegated approval authority, making such payments from Authority funds upon warrants drawn by the Auditor. (4) Verify and report in writing to the Authority and to members, as of the first day of each quarter of the fiscal year, the amount of money then held for the Authority, the amount of receipts since the last report, and the amount paid out since the last report. (c) Pursuant to Government Code Section 6505.1, the General Manager/Secretary/Treasurer, and such other persons as the Board of Directors may designate shall have charge of, handle, and have access to the property of the Authority. Page 11 of 19 JPA, CPEIA Adopted: April 18, 2001 (d) The Authority shall secure and pay for a fidelity bond or bonds, in an amount or amounts and in the form specified by the Board of Directors, covering all officers and staff of the Authority, and all officers and staff who are authorized to have charge of, handle, and have access to property of the Authority. ARTICLE 17. RESPONSIBILITIES OF MEMBERS Members shall have the following responsibilities under this Agreement. (a) Each member shall appoint an officer or employee of the entity to be responsible for the risk management function for that member and to serve as a liaison between the member and the Authority for all matters relating to risk management. (b) Each member shall maintain an active safety program, and shall consider and act upon all recommendations of the Authority concerning the reduction of unsafe practices. (c) Each member shall provide the Authority such other information or assistance as may be necessary for the Authority to develop and implement insurance programs under this Agreement. (d) Each member shall cooperate with and assist the Authority, the EIA, and any insurer of the Authority or EIA, in all matters relating to this Agreement, and shall comply with all Bylaws, and other rules adopted by the Board of Directors. (e) Each member shall have such other responsibilities as are provided elsewhere in this Agreement, program MOU(s), and Bylaws, and as are established by the Board of Directors in order to carry out the purposes of this Agreement. ARTICLE 18. NEW MEMBERS Any non-member may become a party to this Agreement and participate in any CPEIA Program in which it is not presently participating upon approval of the Board of Directors, by a majority vote of the Board. For participation in an EIA Program, approval by the EIA in a manner prescribed by the EIA shall also be required. Page 12 of 19 JPA, CPEIA Adopted: April 18, 2001 ARTICLE 19. WITHDRAWAL A member, after becoming a participant in a program of the Authority, may withdraw from that program only at the end of a policy year for the program, and only if it gives the Authority at least sixty (60) days advance written notice of such action. ARTICLE 20. CANCELLATION (a) Notwithstanding the provisions of Article 19, the Board of Directors may: (1) Cancel any member from this Agreement and membership in the Authority, on a vote of two-thirds of the Board members present and voting. Such action shall have the effect of canceling the member's participation in all CPEIA Programs and EIA Programs as of the date that all membership is canceled. (2) Cancel any member's participation in a CPEIA or EIA Program, without canceling the member's membership in the Authority or participation in other programs, on a vote of two-thirds of the Board members present and voting. The Board shall give sixty (60) days advance written notice of the effective date of any cancellation under the foregoing provisions. Upon such effective date, the member shall be treated the same as if it had voluntarily withdrawn from this Agreement, or from the program, as the case may be. (b) A member which withdraws from all programs of the Authority in which it was a participant and does not enter any program for a period of six (6) months thereafter shall be considered to have withdrawn from the Agreement at the end of such period, and its membership in the Authority shall be automatically canceled as of that time, without action of the Board of Directors. ARTICLE 21. EFFECT OF WITHDRAWAL OR CANCELLATION (a) If a member's participation in a program is canceled under Article 20, with or without cancellation of membership in the Authority, and such cancellation is effective before the end of the policy year for that program, the Authority shall promptly determine and return to that member the amount of any unearned premium payment from the member for the policy year, such amount to be computed on a pro-rata basis from the effective date of cancellation. Page 13 of 19 JPA, CPEIA Adopted: April 18, 2001 (b) Except as provided in (a) above, a member which withdraws or is canceled from this Agreement and membership in the Authority, or from any CPEIA or EIA program, shall not be entitled to the return of any premium or other payment to the Authority, or of any property contributed to the Authority. However, in the event of termination of this Agreement, such member may share in the distribution of assets of the Authority to the extent provided in Article 22 provided; however, that any withdrawn or canceled member which has been assessed a premium surcharge pursuant to any Memorandum of Understanding shall be entitled to return of said member's unused surcharge, plus interest accrued thereon, at such time as the Board of Directors declares that a surplus exists in any insurance fund for which a premium surcharge was assessed. (c) Except as provided in (d) below, a withdrawn or cancelled member shall pay any premium charges which the Board of Directors determines are due from the member for losses and costs incurred during the entire coverage year in which the member was a participant in such program regardless of the date of entry into such program. Such charges may include any deficiency in a premium previously paid by the member, any premium surcharge assessed to the member under an MOU; and any additional amount of premium which the Board determines to be due from the withdrawn or cancelled member upon final disposition of all claims arising from losses under the program during the entire coverage year in which the member was a participant regardless of date of entry into such program. Any such premium charges shall be payable by the member in accordance with the Authority's invoice and payment policy. (d) Those members which who have withdrawn or been canceled pursuant to Articles 19 and 20 from any program of the Authority during a coverage year shall pay any premium charges which the Board of Directors determines are due from the members for losses and costs which were incurred during the member's participation in any program or as otherwise defined in any program MOU. ARTICLE 22. TERMINATION AND DISTRIBUTION OF ASSETS (a) This Agreement may be terminated by three -fourths of the members, acting through their governing bodies; provided, however, that this Agreement and the Authority shall continue to exist after such election for the purpose of disposing of all claims, distributing all assets, and performing all other functions necessary to conclude the affairs of the Authority. Page 14 of 19 JPA, CPEIA Adopted: April 18, 2001 (b) Upon termination of this Agreement, all assets of the Authority in each program shall be distributed among those members that participated in that program in proportion to their cash contributions, including premiums paid and property contributed (at market value when contributed). The Board of Directors shall determine such distribution within six (6) months after disposal of the last pending claim or other liability covered by the program. (c) Following termination of this Agreement, any member who was a participant in a program of the Authority shall pay any additional amount of premium, determined by the Board of Directors in accordance with a loss allocation formula, which may be necessary to enable final disposition of all claims arising from losses under that program in accordance with an applicable MOU. (d) Termination of this Agreement by any party shall not be construed as a completion of the purposes of the Agreement and shall not require the repayment or return to the parties of all or any portion of any contributions, payments, or advances made by the parties until the Agreement is rescinded or terminated as to all parties. ARTICLE 23. LIABILITY OF BOARD OF DIRECTORS, OFFICERS, COMMITTEE MEMBERS AND LEGAL ADVISORS The members of the Board of Directors, Officers, committee members and legal advisors to any Board or committees of the Authority shall use ordinary care and reasonable diligence in the exercise of their powers and in the performance of their duties pursuant to this Agreement. They shall not be liable for any mistake of judgment or any other action made, taken or omitted by them in good faith, nor for any action taken or omitted by any agent, employee or independent contractor selected with reasonable care, nor for loss incurred through investment of Authority funds, or failure to invest. No Director, Officer, committee member, or legal advisor to any Board or committee shall be responsible for any action taken or omitted by any other Director, Officer, committee member, or legal advisor to any committee. No Director, Officer, committee member or legal advisor to any committee shall be required to give a bond or other security to guarantee the faithful performance of their duties pursuant to this Agreement. The funds of the Authority shall be used to defend, indemnify and hold harmless the Authority and any Director, Officer, committee member or legal advisor to any committee for Page 15 of 19 JPA, CPE1A Adopted: April 18, 2001 their actions taken within the scope of the authority of the Authority. Nothing herein shall limit the right of the Authority to purchase insurance to provide such coverage, as is hereinabove set forth. ARTICLE 24. BYLAWS The Board may adopt Bylaws consistent with this Agreement, which shall provide for the administration and management of the Authority. ARTICLE 25. NOTICES The Authority shall address notices, billings and other communications to a member as directed by the member. Each member shall provide the Authority with the address to which communications are to be sent. Members shall address notices and other communications to the Authority to the General Manager/Secretary of the Authority, at the office address of the Authority as set forth in the Bylaws. ARTICLE 26. AMENDMENT This Agreement may be amended by a two-thirds (2/3) vote of the Board following a ninety (90) day review and comment period during which time proposed amendments shall be circulated to the members of the CPEIA and approved by the EIA Executive Committee. After five (5) years from the date of this Agreement, approval of the EIA Executive Committee shall no longer be needed for amendment of this Agreement. ARTICLE 27. PROHIBITION AGAINST ASSIGNMENT No member may assign any right, claim or interest it may have under this Agreement, and no creditor, assignee or third party beneficiary of any member shall have any right, claim or title to any part, share, interest, fund, premium or asset of the Authority. ARTICLE 28. AGREEMENT COMPLETE This Agreement constitutes the full and complete Agreement of the parties. Page 16 of 19 JPA, CPEIA Adopted: April 18, 2001 ARTICLE 29. EFFECTIVE DATE OF AMENDMENTS Any amendment of this Agreement shall become effective upon the approval of any Amended Agreement by the Board of Directors as set forth in Article 26. ARTICLE 30. DISPUTE RESOLUTION When a dispute arises between the Authority and a member, the following procedures are to be followed: (a) Request for Reconsideration. The member will make a written request to the Authority or the appropriate Committee to reconsider its position, citing the arguments in favor of the member and any applicable case law that applies. The member can also request a personal presentation to that Committee, if it so desires. (b) Committee Appeal. The committee responsible for the program or having jurisdiction over the decision in question will review the matter and reconsider the Authority's position. This committee appeal process is an opportunity for both sides to discuss and substantiate their positions based upon legal arguments and the most complete information available. If the member requesting reconsideration is represented on the committee having jurisdiction, that committee member shall be deemed to have a conflict and shall be excluded from any vote. (c) Board of Directors Appeal. If the member is not satisfied with the outcome of the committee appeal, the matter will be brought to the Board of Directors for reconsideration upon request of the member. If the member requesting reconsideration is represented on the Board, that Board member shall be deemed to have a conflict and shall be excluded from any vote. (d) Arbitration. If the member is not satisfied with the outcome of the Board of Directors appeal, the next step in the appeal process is arbitration. The arbitration may be binding or non -binding, as mutually agreed upon by the parties. The matter will be submitted to a mutually -agreed -upon arbitrator or panel of arbitrators for a determination. If binding arbitration is selected, the decision of the arbitrator or panel of arbitrators will be final and conclusive and the member and the Authority will abide by the decision of the arbitrator. The cost of arbitration will be shared equally by the involved member and the Authority. Page 17 of 19 JPA, CPEIA Adopted: April 18, 2001 (e) Litigation. If, after following the dispute resolution procedure set forth in paragraphs (a)-(d) above, either party is not satisfied with the outcome of the non -binding arbitration process, either party may consider litigation as a possible remedy to the dispute. ARTICLE 31. FILING WITH SECRETARY OF STATE The General Manager/Secretary of the Authority shall file a notice of this Agreement with the office of California Secretary of State within 30 days of its effective date, as required by Government Code Section 6503.5 and within 70 days of its effective date as required by Government Code Section 53051. IN WITNESS WHEREOF, the undersigned party hereto has executed this Agreement on the date indicated below. DATE: September 16, 2003 BY: MEMBER Nick Inzunza, Mayor City of National City Page 18 of 19 JPA, CPEIA Adopted: April 18, 2001 APPENDIX A JOINT POWERS AGREEMENT CREATING THE CALIFORNIA PUBLIC ENTITIES INSURANCE AUTHORITY MEMBER COUNTIES (AS OF DECEMBER 2002) ACCEL Alameda County Medical Center Antelope Valley Healthcare District BICEP Califomia JPIA Campbell Union High School District Casitas Municipal Water District Central Sierra Child Support Agency City of El Cajon City of Fresno City of Hemet City of Long Beach City of Napa City of Oakland City of Pacific Grove City of San Buenaventura City of Torrance City of West Covina Clovis Unified Corona Norco Unified East Bay Regional Park District East San Gabriel Valley ROP Eastside Union School District Golden State Risk Management Authority Irvine Ranch Municipal Water District Irvine Unified School District Kern Health Systems Marin County Transit District Military Department of California Mt. Diablo Unified School District NCSDIA Oakland Base Reuse Authority PARDEC PASIS - San Bernardino PASIS - San Diego Riverside IHSS Public Authroity Sacramento County Contracts San Bernardino Specified Departments San Jose Unified School District Santa Clara Sport & Open Space Authority Santa Cruz Fire Agencies Ins. Group SCSRMA SIRMA JPA SLIM Torrance Unified Tri-City Mental Health Authority West San Gabriel Property & Liability JPA Westside Union School District Page 19 of 19 THIS BINDER IS A TEMPORARY INSURANCE CONTRACT, SUBJECT TO THE CONDITIONS SHOWN ON THE REVERSE SIDE OF THIS FORM. ISSUE DATE (MM/DDIYY) 09/29/03 PRODUCER DRIVER ALLIANT INSURANCE SERVICES, INC. P.O. Box 6450 Newport Beach, CA 92658-6450 (949) 756-0271 CODE SUB -CODE Coverage Provider CSAC Excess Insurance Authority BINDER NO. 063003-B-2 EFFECTIVE DATE TIME EXPIRATION DATE TIME 10/01/03 12:01 AM 12/31/03 12:01 AM THIS BINDER IS ISSUED TO EXTEND COVERAGE IN THE ABOVE NAMED COMPANY PER EXPIRING POLICY NO: INSURED CSAC EIA Excess Workers' Compensation Members CPEIA Excess Workers' Compensation Members CIO CSAC Excess Insurance Authority 3017 Gold Canal Dr. #300 Rancho Cordova, CA 95670 PROPERTY CAUSES OF LOSS BASIC BROAD GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY CLAIMS MADE OCCUR OWNER'S & CONTRACTOR'S PROT. RETRO DATE FOR CLAIMS MADE: DESCRIPTION OF OPERATIONSNEHICLES/PROPERTY (including Location) EXCESS WORKERS' COMPENSATION PROGRAM MEMBER AND SELF -INSURED RETENTIONS PER THE ATTACHED BINDER ADDENDUM. GENERAL AGGREGATE PRODUCTS-COMP/OP AGG. PERSONAL & ADV. INJURY EACH OCCURRENCE FIRE DAMAGE (My one fire) MED. EXPENSE (Any one person) AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS GARAGE LIABILITY COMBINED SINGLE LIMIT BODILY INJURY (Per person) BODILY INJURY (Per accident) PROPERTY DAMAGE MEDICAL PAYMENTS PERSONAL INJURY PROT. UNINSURED MOTORIST AUTO PHYSICAL DAMAGE COLLISION: OTHER THAN COL: DEDUCTIBLE ALL VEHICLES SCHEDULED VEHICLES ACTUAL CASH VALUE STATED AMOUNT OTHER EXCESS LIABILITY UMBRELLA FORM I I OTHER THAN UMBRELLA FORM 1 RETRO DATE FOR CLAIMS MADE: EACH OCCURRENCE AGGREGATE SELF -INSURED RETENTION WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY Excess Workers' Compensation & Employer's Liability (See attached Terms & Conditions) STATUTORY LIMITS EACH ACCIDENT See Attached DISEASE -POLICY LIMIT See Attached DISEASE -EACH EMPLOYEE See Attached SPECIAL CONDITIONS/OTHER COVERAGES SUBJECT TO THE TERMS, CONDITIONS AND EXCLUSIONS OF THE CSAC EIA EXCESS WORKERS' COMPENSATION MEMORANDUM OF COVERAGE. THIS BINDER IS ADDING CITY OF NATIONAL CITY EFFECTIVE 10/1/03 WITH A $500,000 SIR. I E CITY OF NATIONAL CITY MORTGAGEE LOSS PAYEE LOAN # AUTHORIZED REPRESENTATIVE ADDITIONAL INSURED EVIDENCE ONLY G:\jpunit\standalones\torrance\02-03 we csac binder CONDITIONS This Company binds the kind(s) of insurance stipulated on the reverse side. The Insurance is subject to the terms, conditions and limitations of the policy(ies) in current use by the Company. This binder may be cancelled by the Insured by surrender of this binder or by written notice to the Company stating when cancellation will be effective. This binder may be cancelled by the Company by notice to the Insured in accordance with the policy conditions. This binder is cancelled when replaced by a policy. If this binder is not replaced by a policy, the Company is entitled to charge a premium for the binder according to the Rules and Rates in use by the Company. APPLICABLE IN NEVADA Any person who refuses to accept a binder which provides coverage of less than $1,000,000.00 when proof is required: (A) Shall be fined not more than $500.00, and (B) is liable to the party presenting the binder as proof of insurance for actual damages sustained therefrom G:\jpunit\standalones\torrance\02-03 we csac binder CSAC Excess Insurance Authority EXCESS WORKERS' COMPENSATION PROGRAM Effective July 1, 2003 Terms & Conditions (BINDER ADDENDUM) INSURANCE PROVIDER: PROGRAM TERM: PROGRAM'S COVERAGE AND LIMITS: COVERED PARTIES: SELF -INSURED RETENTION: $125,000 Self Insured Retention Alpine County *•j• Amador County Butte County Calaveras County Colusa County * j Del Norte County *•j- Humboldt County Inyo County Lake County Lassen County *f Madera County Mendocino County Modoc County *-j- Mono County Nevada County Placer County Plumas County San Benito County *j Sierra County * f CSAC-EIA Memorandum of Coverage (MOC) Reinsured by American Re -Insurance Company July 1, 2003 to June 30, 2004 Pooled Retention • $5,000,000 Workers' Compensation and Employers Liability each occurrence (difference between $5,000,000 and the Covered Party's SIR). Reinsured Laver • $45,000,000 Workers Compensation each occurrence excess of $5,000,000 Pooled Retention. Includes $5,000,000 Employers Liability Excess of $5,000,000 Pooled Retention. As Respects All Layers • Limits apply per occurrence for all program members combined • $10,000,000 sub -limit for Terrorism • Limit are eroded by allocated claims expense Participating Members within CSAC Excess Insurance Authority Excess Workers' Compensation Program Siskiyou County Solano County Sutter County Tehama County Trinity County *f Yuba County CPEIA Members Casitas Municipal Water Dist Central Sierra Child Support Agency 09-15-03 City of El Cajon City of Hemet City of Imperial Beach City of Lancaster 8/1/03 City of Solana Beach 10/01/03 Eastside Union School. Dist CPEIA Members (Cont) Irvine Ranch Water District Kings Waste & Recycling Authority PARDEC Sacramento Co Contracts — - City of Elk Grove -Police -City of Elk Grove —Animal Control - City of Citrus Heights- Transportation&Animal Cntrl -City of Folsom -Animal Control Santa Cruz Fire Agencies SIRMA I JPA Southern CA Schools Risk Management JPA West San Gabriel JPA EXCESS WORKERS' COMPENSATION PROGRAM Terms & Conditions (Continued) $250,000 Self Insured Retention Napa County San Luis Obispo County Shasta County CPEIA Member Ca. Housing Work Comp Authority (CHWCA) Golden State Risk Management Authority $300,000 Self Insured Retention El Dorado County Imperial County Kings County Mariposa County Merced County Santa Barbara County Sonoma County Tuolumne County $350,000 Self Insured Retention CPEIA Member City of Daly City $400,000 Self Insured Retention County of Monterey $500,000 Self Insured Retention Fresno County Marin County San Joaquin County Santa Cruz County Stanislaus County CPEIA Members ACCEL - City of Bakersfield ACCEL - City of Mt. View ACCEL - City of Ontario ACCEL - City of Santa Cruz Antelope Valley Hosp Dist. BICEP - City of Oxnard BICEP - City of Santa Ana California Fair Services Authority Community Development Comm. of the County of L.A. City of Concord City of National City 10/01/03 City of San Buenaventura City of Simi Valley CPEIA Member (Continued) Lake Elsinore USD Northern California Special District Insurance Authority (NCSDIA) Special District Risk Management Authority (SDRMA) CPEIA Members City of Hawthorne City of Lompoc — 9/1/03 City of Moreno Valley City of Napa City of Pacific Grove PASIS -San Bernardino CPEIA Member ACCEL - City of Monterey City of Rialto CPEIA Members (Continued) City of Stockton Contra Costa County Municipal RMIA Elk Grove Unified School District Fire Districts Assn. Of CA -Fire Assn. Self Ins. System (FDAC-FASIS) Northern Ca. Cities Self Ins. Fund (NCCSIF) Orange County Sanitation District PASIS — San Diego CSAC Excess Insurance Authority Excess Workers' Compensation Program Effective July 1, 2003 Terms & Conditions $750,000 Self Insured Retention Contra Costa County CPEIA Members. ACCEL - City of Modesto ACCEL — City of Palo Alto ACCEL — City of Santa Barbara $1,000,000 Self Insured Retention Santa Clara County Central Fire District CPEIA Members ACCEL - City of Anaheim ACCEL - City of Santa Monica BICEP - City of Huntington Beach BICEP - City of San Bernardino $2,000,000 Self Insured Retention Alameda County Riverside County Sacramento County San Bernardino County CPEIA Member Alameda County Medical Center California JPIA City of Burlingame 10/01/03 $3,000,000 Self Insured Retention CPEIA Member City of Orange 08/27/03 $4,000,000 Self Insured Retention Santa Clara County $5,000,000 Self Insured Retention CPEIA Member City of Long Beach CPEIA Members (Continued) City of Corona 07/30/03 City of Fairfield City of West Covina Independent Cities Risk Mgmt. Authority (ICRMA) CPEIA Member (Continued) City of Fresno City of Torrance Local Agency Workers' Comp. Excess Joint Powers Authority (LAWCX) Single SIR applies in event of a combined Workers' Compensation and Employer's Liability claim. SIR is eroded by payment of allocated claims costs *TrindelInsurance Fund 1 Member of CSAC-EIA Primary Workers' Compensation Program Marti Alvarez From: Sent: To: Subject: 03-04 Membe EWC Binder Nation... coverage binder. Kassia Kossyta Monday, September 29, 2003 3:42 PM Marti Alvarez FW: CPEIA-coverage binder effective 10-1-03 The City's buying excess workers' compensation insurance through CPEIA. For your files, attached is a Original Message From: KWorden@driveralliant.com[mailto:KWorden@driveralliant.com] Sent: Monday, September 29, 2003 3:35 PM To: Kassia Kossyta Subject: CPEIA-coverage binder effective 10-1-03 Kassia, We are pleased to enclose the following insurance binder evidencing coverage as bound in the CPEIA Excess Workers' Compensation program, effective 10-1-03. (See attached file: 03-04 Member EWC Binder National Cty-10-1.doc) The original copy and invoice will follow under separate cover. Sincerely, Karen Worden, ARM-P Assistant Vice President 949) 660-8101 kworden@driveralliant.com Driver Alliant Insurance Service, Inc. Lic # 0C36861 1