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Department of Central Services Risk Management Division (RM). Welcome Property and Liability Insurance Coverage Overview 2011. Introductory Remarks Today’s presentation will be available for you on the DCS Risk Management Website http://www.ok.gov/DCS/. Questions. - PowerPoint PPT Presentation
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Welcome
Property and Liability Insurance Coverage Overview
2011
Department of Central ServicesRisk Management Division
(RM)
1
Introductory Remarks
Today’s presentation will be available for you on the DCS Risk Management Website
http://www.ok.gov/DCS/
4
Questions
• When the lines are opened, all participants will be able to hear your internal discussions;
• Please speak one at a time and state:o Your nameo Your positiono Your agency or higher education entityo Your question
5
Today’s Discussion Items
• Introductory Remarks
• Underwriting Surveys
• Premium Payments
• Purchase of Property and Liability Insurance Outside of RM Program
• To Avoid Problems and Reduce Costs
• MMSEA
• Liability Trends
• Liability (Self-insured)o Torto Auto
2
Today’s Discussion ItemsMarsh Commercial Lines of Coverage
• Directors and Officers, Educators Legal Liability, Employment Practices Liability (Commercial Insurance with Self-insured Retention (SIR))
• Insurance Policy Coverage Issues
• Employee Dishonesty (Commercial Insurance)
• Property Insurance
• Fine Arts Insurance
• Auto Physical Damage – Specialty/Passenger Vehicles
• Other lines: Aviation, Foreign Liability, Out of State
3
Underwriting Surveys
• Property• Fine Arts and Valuable Papers & Records• D&O / ELL• Vehicles• Out of State Travel• Foreign Travel• Employee Dishonesty
6
Premium Payments
• Budget for insurance costs
• Credit incentives offered if payment received within 45 days of invoice
• If it’s a budget issue, call RM
7
Purchase of Property and Liability Insurance Outside of the RM Program
• Call Risk Management
• Governmental Tort Claims Act (51 O.S. § 158 (C). “If a policy or contract of insurance . . . is applicable, the terms of the policy govern the rights and obligations of the state . . .”
• “Other Insurance” (You may have bought nothing but trouble.)
8
To Avoid Problems and Reduce Costs
• Need additional Property & Casualty coverage?
• Call RM before purchasing (74 O.S. § 85.58A)
9
Medicare Secondary Payer Mandatory Reporting Provisions
Update
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of
2007
See 42 U.S.C. 1395y(b)(7) & (8)(MMSEA)
10
Major Coverage Areas
State of Oklahoma Liability Trends
11
Tort Liability Trend
7/1/00-01 7/1/01-02 7/1/02-03 7/1/03-04 7/1/04-05 7/1/05-06 7/1/06-07 7/1/07-08 7/1/08-09 7/1/09-100
2
4
6
8
10
12
14
16
1816.317000000000116.8170000000001
14.241
11.679
12.28311.553
9.684
12.667
6.834
6.731
Frequency(Ultimate Claims/1000 FTE's)
As of 6/30/10TORT FrequencyLinear (TORT Frequency)
Report Year
Freq
uenc
y
12
Vehicle Liability Trend
7/1/00-01 7/1/01-02 7/1/02-03 7/1/03-04 7/1/04-05 7/1/05-06 7/1/06-07 7/1/07-08 7/1/08-09 7/1/09-100
5
10
15
20
25
30
3533.2380000000001
22.705
24.889
21.4719.407
21.462
17.77415.042 14.803
11.86
Frequency(Ultimate Claims/1000 Vehicles)
As of 6/30/10VEHICLE Frequency
Linear (VEHICLE Frequency)
Report Year
Freq
uenc
y
13
D&O, ELL, EPL Trend
11/1/00-01 11/1/01-02 11/1/02-03 11/1/03-04 11/1/04-05 11/1/05-06 11/1/06-07 11/1/07-08 11/1/08-09 11/1/09-100.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
0.800
0.409 0.395 0.4080.450
0.184
0.452
0.7030.647
0.585
0.578
Frequency(Ultimate Claims/1000 FTE's+Board)
As of 6/30/10
D&O/ELL Frequency
Linear (D&O/ELL Frequency)
Report Year
Freq
uenc
y
14
ELL - Higher Education
11/1/00-01 11/1/01-02 11/1/02-03 11/1/03-04 11/1/04-05 11/1/05-06 11/1/06-07 11/1/07-08 11/1/08-09 11/1/09-100.000
0.050
0.100
0.150
0.200
0.250
0.300
0.350
0.400
0.450
0.500
0.259
0.367
0.108
0.248
0.099
0.401
0.324
0.448
0.258
0.099
Frequency(Ultimate Claims/1000 FTE's+Board)
As of 6/30/10
ELL FrequencyLinear (ELL Frequency)
Report Year
Freq
uenc
y
15
D&O – State Agencies
11/1/00-01 11/1/01-02 11/1/02-03 11/1/03-04 11/1/04-05 11/1/05-06 11/1/06-07 11/1/07-08 11/1/08-09 11/1/09-100
0.2
0.4
0.6
0.8
1
1.2
0.514
0.414
0.6230000000000020.597
0.247
0.491
0.993
0.8020.845000000000001
0.970000000000001
Frequency(Ultimate Claims/1000 FTE's+Board)
As of 6/30/10D&O Frequency
Linear (D&O Frequency)
Report Year
Freq
uenc
y
16
Similar to Commercial General Liability and Business Auto
Liability Insurance In the Private Sector
Liability Discussion:Tort Liability and Auto Liability
17
Self-Insured Programs:
• Tort Liability including Auto Liability
• Governed by 51 O.S. § 151, et seq. the Governmental Tort Claims Act (GTCA) and RM Promulgated Rules, OAC 580:25-1-1, et seq.
• No policy of insurance applies/No deductibles apply
18
Strict Adherence to GTCA
• Limits:o Maximum of $25,000 Property Damageo Maximum of $175,000 each claimant (other than property)o Maximum of $1,000,000 all claimants arising out of single
occurrence or accident• Claimant has 1 year from date of loss to file a claim• Claim shall be filed with RM• Exclusive remedy for tortious conduct of State employees• Specifies how recovery may be made• Broad exemptions from liability
19
State Tort Sub-activity FundWill Only Respond
• If claim filed in accordance with GTCA• If the State or its employee is negligent• If the State employee is within the Scope of
Employment as defined by the GTCA• State employees may be held personally
responsible per GTCA • If there are no GTCA exemptions
20
Public Officials Liability (D&O)
Educators Legal Liability (ELL)
Employment Practices Liability (EPL)
Claims Outside of GTCA Protection(U.S. Constitutional and OK
Constitutional)
21
D&O, ELL, EPL
• All lines insured
• Self-insured retention applies
• Essentially protects against U.S. Constitutional and Oklahoma Constitutional violations per exclusionary endorsement to all policies
22
Tort Claims With D&O or ELL Allegations
• Claim filed under GTCAo Claim alleges Tort issues covered by GTCAo Claim alleges U.S. Constitutional and Oklahoma
Constitutional Issues or possibly other allegations outside of GTCA
• Possible coverage under both GTCA and D&O, ELL, EPL policies
23
Why should you care about the difference between
GTCA and D&O, EPL & ELL?
Before a claim can be paid out of the Tort fund, a tort claim must be filed pursuant to the terms of the GTCA.
GTCA Claims vs. D&O, EPL &ELL Claims
24
Some claims allege both GTCA violations as well as constitutional violations
Deductibles come into play: $0 for GTCA allegations; agency selected deductible for other allegations
Why should you care about the difference between GTCA and
D&O, EPL & ELL?
25
Sample of claim with mixed allegations:
Claim properly made under the GTCA but also alleges a claim covered D&O or ELL--all claims (state and federal) settle for $1 million:
Payment allocated as follows:
o Risk Tort Fund (GTCA) $175,000o Agency $150,000 (or agency selected deductible)o Risk D&O Fund $100,000o D&O Insurance $575,000o Total $1 million
GTCA Claims vs. D&O, EPL &ELL Claims
26
To Avoid Problemsand Maximize Recovery of Losses
• Coordinate all property and liability claims through RM.
• Report all claims to RM immediatelyo Do not delay reportingo Delays may inhibit your ability to recover losses
27
Insurance Policy Coverage Issues
• Do not attempt to interpret insurance coverage.
• Do not allow others to interpret coverage.
Call RM
28
Communication
Reporting
Timeliness
Our Ability To Protect Your AssetsDepends Upon You
29
MARSH COMMERICIAL LINES OF COVERAGE
30s