HomeMy WebLinkAboutNC Comprehensive Report (Finance) (53)CITY OF NATIONAL CITY
Notes to the Basic Financial Statements
(Continued)
(6) Risk Management (Continued)
Losses between the self -insured retention level and $2,000,000 are shared by the
participant cities. Excess liability insurance coverage is provided by the Program
Authority for losses greater than $2,000,000 up to $35,000,000. Losses in excess of
$35,000,000 are not covered and are self -funded by the City. The City is completely self -
insured for unemployment claims.
The City is also a member of CSAC Excess Insurance Authority ("CSAC"), a joint
powers authority, for workers compensation claims. The City is self -insured for workers
compensation claims and losses up to $500,000 per occurrence. Losses between the self -
insured retention level and $5,000,000 are shared by the participant cities. Losses in
excess of $5,000,000 up to $200,000,000 are reinsured by a commercial insurance
carrier. The City is completely self -insured for unemployment claims.
During the current year, there were no significant reductions in insurance coverage from
the prior year. For each of the past three fiscal years, the settlements have not exceeded
the City's insurance coverage.
At June 30, 2012, the City accrued $6,283,000 of workers' compensation and general
liability claims representing estimates of amounts to be paid for actual and incurred but
not reported claims based upon past experience, modified for current trends and
information. Allocated claim adjustment expenses are included in claim liabilities.
While the ultimate amount of losses incurred through June 30, 2012 is dependent on
future developments, based upon information from the City Attorney, outside counsel
and others involved with the administration of the programs, City management believes
that the aggregate accrual is adequate to cover such losses. For the past three years, no
settlements or claims payments have exceeded the amount of the applicable coverage.
For the past two fiscal years, the changes in the City's Liability for claims payable are
summarized as. follows:
Fiscal Year 2011-12 Fiscal Year 2010-11
Unpaid claims, July 1 $ 6,114,000 5,884,000
Incurred claims and adjustments 1,581,396 1,061,409
Claims paid (1,412,396) (831,409)
Total $ 6,283,000 6,114,000
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