Liability Rating Plan

SCORE

Liability Rating Liability Rating PlanPlan

What is it? How does it work?

Presented ByJackie Parker

Today’s OutlineToday’s Outline Members in Liability What is the Rating Plan? SCORE’s Liability Program CJPRMA Layer Shared Risk Layer Banking Layer SCORE Administrative Costs Breakdown of SCORE Liability

Layers

Who’s in the Liability Program?

What is the Rating What is the Rating Plan?Plan?The Rating Plan is a method for

equitably allocating premium amongst SCORE member cities for:

Bodily InjuryProperty DamagePublic Officials Errors & Omissions

The Rating Plan uses risk sharing concepts and techniques.

The Rating Plan allocates all program costs to members.

A Look at the SCORE A Look at the SCORE Liability ProgramLiability Program

California Joint Powers Risk California Joint Powers Risk Management Authority (CJPRMA)Management Authority (CJPRMA)

$500,000 to $40,000,000 per $500,000 to $40,000,000 per occurrenceoccurrence

SCORE Shared Risk LayerSCORE Shared Risk Layer$25,000 to $500,000 per occurrence$25,000 to $500,000 per occurrence

SCORE Banking LayerSCORE Banking Layer$25,000 per occurrence$25,000 per occurrence

Total “Voting” Members = 22

Total City Members = 9305/06 Member Contrib. =

$16,397,844

CJPRMA member since 198722% of Total City Members05/06 SCORE Contrib. =

$211,712 (1.3% of CJPRMA Total Contributions)

CJPRMACJPRMA$500,000 to $40,000,000 per occurrence$500,000 to $40,000,000 per occurrence

SCORE

Fort Jones $3,511 Loomis $18,208 Dorris $3,950 Ione $20,616 Loyalton $4,672 Live Oak $22,833 Montague $6,864 Williams $26,863 Isleton $9,643 Weed $41,089 Biggs $9,814 Mt. Shasta $45,055

Etna $10,252 Crescent City $66,717

Colfax $12,785 Yreka $82,064 Portola $13,908 Susanville $90,472 Rio Dell $14,202 Shasta Lake $99,814 Dunsmuir $14,939 TOTAL: $618,271

SCORE Shared Risk LayerSCORE Shared Risk Layer$25,000 to $500,000 per occurrence$25,000 to $500,000 per occurrenceMember Contributions (FY 05/06)Member Contributions (FY 05/06)


Actuarial Funding RatesFY 2005-2006

Recommended RangeExpecte

d70%

CL75%

CL80%

CL85%

CL90%

CL$1.99 $2.42 $2.65 $2.95 $3.31 $3.80


Deposit Premium = Actuarial Rate @ 80%* Confidence Level x Member Estimated Payroll Adjusted by their Experience Modification FactorExperience Modification Factor = Relative Loss Rate x Credibility Factor

Relative Loss Rate = Individual Member Loss Rate ÷ by Total Loss Rate for all members* Minimum Governing Documents Require. Recommendation of 85% Confidence Level for 2007/2008 Budget.


Credibility Factor =Individual Members Payroll divided by (Total Members Payroll + Constant)

The Credibility Factor is applied to members payroll to create a more equitable distribution of payrolls.

Loss Rate = Individual Member Losses Past Five Years (2001-2006) ÷ Individual Member Payroll Past Five Years (2001-2006)

Isleton $6,736 Fort Jones $14,828Biggs $7,422 Ione $15,062Etna $8,003 Live Oak $16,193Colfax $8,788 Williams $17,569Montague $9,590 Mt. Shasta $33,613Rio Dell $9,606 Weed $33,947Portola $10,155 Crescent City $42,431Dunsmuir $12,032 Susanville $58,553Loyalton $12,995 Yreka $61,131Loomis $13,320 Shasta Lake $84,671Dorris $14,245 TOTAL: $490,889

SCORE Banking LayerSCORE Banking Layer$0 to $25,000 per occurrence$0 to $25,000 per occurrence

Member Contributions (FY 05/06)Member Contributions (FY 05/06)

SCORE Banking LayerSCORE Banking Layer$0 to $25,000 per occurrence$0 to $25,000 per occurrence

Member Contributions (FY 05/06)Member Contributions (FY 05/06)

Actuarial Funding RatesFY 2005-2006

Recommended RangeExpect

ed70%

CL75%

CL80%

CL85%

CL 90% CL

$1.65 $1.98 $2.14 $2.32 $2.56 $2.88

Deposit Premium = Actuarial Rate @ 80%* Confidence Level x Member Estimated Payroll Adjusted by their Experience ModificationMinimum deposit premium of $20,000

3 member cities currently pay the minimum Maximum deposit premium of $250,000.

2 member cities are close to paying the maximumExperience Modification = Relative

Loss Rate x Credibility Factor

SCORE Banking Layer SCORE Banking Layer (Same as (Same as Shared Layer)Shared Layer)

$0 to $25,000 per occurrence$0 to $25,000 per occurrence

* Minimum Governing Documents Require. Recommendation of 85% Confidence Level for 2007/2008 Budget.

Credibility Factor =Individual Members Payroll divided by (Total Members Payroll + Constant)

The Credibility Factor is applied to members payroll to create a more equitable distribution of payrolls.

Loss Rate = Individual Member Losses Past Five Years (2001-2006) ÷ Individual Member Payroll Past Five Years (2001-2006)

Relative Loss Rate = Individual Member Loss Rate ÷ by Total Loss Rate for all members

SCORE Banking Layer SCORE Banking Layer (Same as (Same as Shared Layer)Shared Layer)

$0 to $25,000 per occurrence$0 to $25,000 per occurrence

Member Entity

DE6 Payroll Inflated

Percentage of Total

Expense Allocated

By Payroll

Cost Allocat

edEqually

Liability Admin

CostsBiggs $284,120 1.35% $1,619 $5,691 $7,310Colfax $460,964 2.20% $2,627 $5,691 $8,318Crescent

City $2,708,364 12.91% $15,433 $5,691 $21,124Dorris $127,551 0.61% $727 $5,691 $6,418Dunsmuir $390,996 1.86% $2,228 $5,691 $7,919Etna $276,802 1.32% $1,577 $5,691 $7,268Fort Jones $118,832 0.57% $677 $5,691 $6,368Ione $691,831 3.30% $3,942 $5,691 $9,633

Isleton $327,438 1.56% $1,866 $5,691 $7,557Live Oak $813,938 3.88% $4,638 $5,691 $10,329Loomis $604,396 2.88% $3,444 $5,691 $9,135Loyalton $159,377 0.76% $908 $5,691 $6,599Montague $232,589 1.11% $1,325 $5,691 $7,016Mt. Shasta $1,502,827 7.17% $8,564 $5,691 $14,255Portola $452,951 2.16% $2,581 $5,691 $8,272Rio Dell $530,598 2.53% $3,024 $5,691 $8,715Shasta

Lake $2,486,180 11.85% $14,167 $5,691 $19,858Susanville $3,848,292 18.35% $21,929 $5,691 $27,620

Weed $1,077,260 5.14% $6,139 $5,691 $11,830Williams $1,095,599 5.22% $6,243 $5,691 $11,934Yreka $2,781,609 13.26% $15,851 $5,691 $21,542Total: $20,972,515 100.00% $119,509 $119,511 $239,020

Breakdown of SCORE Breakdown of SCORE Liability LayersLiability Layers

CJPRMA$40 Million Limit21 Participating Cities$211,712 Premium (05/06 FY)>2% of Program Costs

SCORE Shared Layer$150,000 Limit$913, 328 Premium (05/06 FY)>3% of Program Costs

SCORE Banking Layer$25,000 Limit$649, 401 Premium (05/06 FY)>17% of Program Costs