Iowa Risk Management Agreement_Iowa Communities Assurance PoolMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Iowa Risk Management Agreement for the Iowa Communities Assurance
Pool
DATE: June 14, 2011
Frank O'Connor submitted various information relative to renewing the City's liability
insurance coverage with the Iowa Communities Assurance Pool. The increase is less
than 1 %. Two options were presented to increase the deductible levels and reduce
premiums, but Finance Director Ken TeKippe recommends the City keep the current
deductible of $10,000 with a maximum cap of $100,000.
Finance Director Ken TeKippe recommends City Council approval of a Revised Iowa
Risk Management Agreement for the Iowa Communities Assurance Pool.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
Michael C. Van Milligen
Dubuque
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TO: Mike Van Milligen, City Manager
FROM: Ken TeKippe, Finance Director (-t& �q4T
SUBJECT: Iowa Risk Management Agreement for the Iowa Communities Assurance
Pool
DATE: June 8, 2011
Frank O'Connor submitted various information relative to renewing the City's liability
insurance coverage with the Iowa Communities Assurance Pool (ICAP). A copy of the
letter and benefits is enclosed. The increase is less than 1%. The FY'12 premium will
be paid the first business day of the new fiscal year, July 1. A recap of several years
premium is included.
Two options to increase the deductible levels and reduce premiums were also provided.
The reduction in premium would be $12,623 for a $15,000 liability deductible and
$29,041 premium reduction for a $20,000 liability deductible. Both of these options
have a maximum cap of $150,000. Our current deductible is $10,000 with a maximum
cap of $100,000. I do not recommend the City accept either option since the potential
premium savings would most likely be exceeded by the new maximum cap.
A revised Risk Management Agreement needs to be signed this year for the Pool. It
requires signature on page 10. I request that you sign and return the agreement to me.
I will deliver to continue participation in the program. Frank would like the agreement
returned within the next week. The City of Dubuque was the third entity to join the Pool
in 1985. A similar revised agreement for the DMASWA will be sent to Don Vogt.
If you have any questions on this information, please let me know. Thank you.
KT /jg
Enclosures
cc: Barry Lindahl, City Attorney
City of Dubuque
ICAP Premium Recap
Fiscal Year
2012 2011 2010 2009 2008 2007
General Liability 198,099.00 199,876.00 181,070.00 175,001.00 157,551.00 155,130.00
Excess 42,080.00 42,505.00 38,505.00 37,264.00 33,420.00 25,649.00
Auto Liability 131,329.00 130,644.00 122,832.00 123,568.00 116,102.00 121,653.00
Excess 43,005.00 43,005.00 39,574.00 39,722.00 38,231.00 20,069.00
Wrongful Acts Officials Liability 43,406.00 41,481.00 38,692.00 40,114.00 37,576.00 39,074.00
Excess 9,962.00 9,589.00 9,048.00 9,323.00 8,833.00 6,479.00
Law Enforcement Liability 44,652.00 42,453.00 43,583.00 49,359.00 47,246.00 46,551.00
Excess 9,263.00 8,822.00 8,911.00 10,126.00 9,690.00 6,861.00
Auto Physical Damage 83,956.00 81,089.00 134,553.00 131,732.00 120,862.00 118,006.00
Less Member Credit (36,986.55) (36,120.53) (35,357.29) (32,496.66) (35,940.90) (50,587.93)
Agency Fee 7,800.00 7,200.00 7,200.00 7,000.00 7,000.00 7,000.00
Total 576,565.45 570,543.47 588,610.71 590,712.34 540,570.10 495,884.07
$12,000,000 liability limit, increased from $5,000,000 in FY'07
$10,000 liability deductible, $100,000 maximum per fiscal year
Vehicle liability deductible increased from $600 to $2,500 in FY'11
F: \123DATA \FINSEC \Ken \Insurance \ICAP - O'Connor \ICAP Expense Recap.xls
To: The Members of the Iowa Communities Assurance Pool
From: The Board of Directors of the Iowa Communities Assurance Pool
RE: Revised Iowa Risk Management Agreement for the Iowa Communities Assurance Pool
We are pleased to announce we have revised the Iowa Risk Management Agreement for the Iowa Communi-
ties Assurance Pool (IRMA), which is the document that sets forth the agreement among the Pool and its
members. We would like to take this opportunity to share with you some information about the IRMA.
The IRMA was created when ICAP was formed in 1986 and has been amended from time to time
thereafter. For example, the IRMA was amended in 1989 to reflect the addition of property coverage
to the ICAP program.
The IRMA was amended again in 2006. Recognizing the growth in the Pool's financial strength over
the previous two decades, the ICAP Board of Directors conducted a member equity and surplus evalu-
ation in 2005. The evaluation showed that ICAP could return a portion of member equity and continue
to maintain a strong financial position (indeed, ICAP has received an AAA Unsurpassed Financial Sta-
bility Rating® for twenty consecutive years). Consequently, the IRMA was amended in 2006 to reduce
the Cumulative Reserve Fund (CRF) maintenance level, which resulted in the return of a portion of
vested members' contributions to the CRF.
And now, in 2011, we are at it again! We recently revisited our evaluation of member equity and surplus
and concluded that ICAP could return a portion of member equity and continue to maintain a strong
financial position. This is one of the many advantages of pooling with ICAP - returning Pool surplus
to its membership!
Accordingly, we have amended the IRMA again to provide flexibility with respect to CRF maintenance
levels and distributions and to provide for another return of a portion of vested members' contribu-
tions to the CRF. And while we were making those changes, we updated and modified the agreement
in various other areas as well.
The following are some changes that were made (this is not a comprehensive list; the revised IRMA
should be reviewed in its entirety):
• We revised the introduction to set forth the history of the IRMA and to include citations to the
pooling statute;
• We merged the content of the Property Rider into the main body of the IRMA;
• We modified Article III to delete references to terms that are no longer used, add definitions from
the Property Rider, and revise existing definitions;
• We modified Article VI and added provision 13, which relates to distributions of surplus;
• We included the Property Budgetary Fund (formerly in the Property Rider) and clarified the pur-
poses of each fund (Article IX, X and XI);
• We provided flexibility with respect to surplus and deficiencies in the casualty and property funds
(Articles IX and X);
• We provided flexibility with respect to CRF funding, maintenance and distributions (Article XI);
and
• We clarified the CRF refund formula (Article XII).
In addition, we made several other changes and reorganized the content of the IRMA to make it easier
to read.
Your ICAP agent will present the revised IRMA to you and will ask that you return a signed copy with
your entity's anniversary materials. If you have any questions regarding the revised IRMA -- or any
other ICAP document -- please ask your ICAP agent.
On a final note, this year ICAP celebrates its 25th anniversary. Congratulations ICAP members on 25
years of success! ICAP's success is due, in no small part, to your dedication and long -term commit-
ment, and so we are extending a sincere note of appreciation with this new document.
Thank you for your membership in ICAP. Together we are making ICAP the premier local government
risk sharing pool in the country.
Sincerely,
The Board of Directors of the Iowa Communities Assurance Pool
Jody Smith Larry Burger Pam Ward
Gary Mahannah Holly Fokkena Bill Peterson
David Hageman Tom Roth Alan Kemp
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1986 I 2011
SCOPE OF COVERAGE
APPENDIX
The Iowa Communities Assurance Pool may provide the following:
1. Coverage Documents
a. Coverages offered by the Pool may include:
3. Limits of Coverage
4. Deductibles
ICAP IRMA APPENDIX 2011
General Liability
Automobile Liability
Automobile Physical Damage
Public Officials Liability
Property and Inland Marine
Police Professional Liability
Workers' Compensation
Public Officials Bonds
b. THE COVERAGES LISTED ABOVE ARE INTENDED TO BROADLY OUTLINE THE
PROGRAM THAT MAY BE PROVIDED BY THE POOL. SEPARATE RISK SHARING
CERTIFICATES ITEMIZING ALL COVERAGE INCLUSIONS, EXCLUSIONS AND
CONDITIONS WILL BE ISSUED TO EACH POOL MEMBER. THE RISK SHARING
CERTIFICATES AND THE IOWA RISK MANAGEMENT AGREEMENT FOR THE IOWA
COMMUNITIES ASSURANCE POOL, AS AMENDED FROM TIME TO TIME, CONTROL THE
POOL MEMBER'S SCOPE AND TERMS OF COVERAGE.
2. Pool Retention
Casualty: The Pool may retain up to $350,000 of any one claim or loss.
Property: The Pool may retain up to $150,000 of any one claim or loss.
The Pool offers limits of coverage above the Pool Retentions through various risk - sharing, reinsurance and
excess arrangements. Such additional limits are offered subject to availability of reinsurance.
Deductibles may be applied as appropriate to the individual risk, subject to the approval of the Administrator.
NOTICE: CONFIRMATION OF THE SCOPE, TERMS AND CONDITIONS OF THE COVERAGE
OF ANY MEMBER OF THE POOL CAN ONLY BE MADE BY A CAREFUL
EXAMINATION OF THAT MEMBER'S RISK SHARING CERTIFICATES.
IOWA RISK MANAGEMENT AGREEMENT FOR THE
IOWA COMMUNITIES ASSURANCE POOL
Whereas, Section 670.7 of the Code of Iowa, as the same may be amended from time to time, authorizes and permits
Governmental Authorities to form, join, and pay funds into a local government risk pool to protect against any or all liability.
Whereas, in 1986, certain Governmental Authorities formed a local government risk pool by entering into an agreement
bearing the title Intergovernmental Contract_ for the Iowa Communities Assurance Pool, which agreement has been amended from
time to time and is now referred to as the Iowa Risk Management Agreement for the Iowa Communities Assurance Pool
(Agreement);
Whereas, since 1986, additional Governmental Authorities have joined the Pool by executing the Agreement;
Whereas, the Board desires to update the Agreement and hereby amends and restates the Agreement in its entirety as set forth
herein; and
Now, therefore, all new and existing Members agree to abide by the terms and conditions of this Agreement and all actions
taken pursuant to this Agreement. In consideration of the mutual covenants of all signatories hereto, it is agreed as follows:
ARTICLE I - NAME AND DURATION
The signatories hereto, together with future signatories, establish a local government risk pool as a separate legal and
administrative entity for the purpose of effectuating this Agreement. The local government risk pool created by this Agreement
shall be known as the Iowa Communities Assurance Pool and shall have a perpetual duration and shall continue until terminated
pursuant to this Agreement.
ARTICLE II - PURPOSE
The purposes of this Agreement are to form a local government risk pool pursuant to Section 670.7 of the Code of Iowa, as
amended, protect against any or all liability, provide for joint or cooperative action by Members relative to their financial and
administrative resources, provide risk management services and risk sharing facilities to the Members and to the Members'
employees, and defend and protect any Member against liability in accordance with this Agreement and the risk sharing
certificates.
The Pool is not insurance and the Pool's activities and operations pursuant to this Agreement shall not constitute conducting an
insurance business.
This Agreement shall constitute a contract among those Governmental Authorities that are currently Members or that at any
time enter into this Agreement and become Members of the Pool.
The liability of each Member is limited to the amount of financial contributions required to be made to the Pool pursuant to
this Agreement.
This Agreement shall not inure to the benefit of third parties nor does any party hereto waive, by becoming a Member of the
Pool, such sovereign or governmental immunity as may be available to it individually. Except as provided for herein, no Member
shall be responsible, jointly or severally, for the liabilities of any other Member.
ARTICLE III - DEFINITIONS
In the interpretation of this Agreement the following definitions shall apply unless the context requires another interpretation:
1. "Administrator" shall mean American Risk Pooling Consultants, Inc., and its successors and assigns, the entity designated
to supervise the administration of the Pool and to perform those duties delegated to it by the Board and those duties set forth in the
Administration Agreement incorporated herein by reference.
2. "Agreement" shall mean this Iowa Risk Management Agreement for Iowa Communities Assurance Pool, including all
attachments, appendices and amendments hereto and all of its counterparts.
3. "Annual Casualty Budgetary Contribution" shall mean those contributions made by Members pursuant to Article IX.
ICAP IRMA 2011 Page 1 of 10
4. "Annual Property Budgetary Contribution" shall mean those contributions applicable to coverage for Property Risks made
by Members pursuant to Article X.
5. "Basis Rate" shall mean that amount annually promulgated by the Administrator deemed necessary to provide the Scope
of Coverage afforded to a Member for the period of one year.
6. "Board" shall mean the Board of Directors of the Iowa Communities Assurance Pool.
7. "Casualty Budgetary Fund" shall mean that fund established and maintained pursuant to Article IX, which may be
supplemented by investment income.
8. "Cumulative Reserve Fund" also referred to herein as the "CRF" shall mean that fund established and maintained pursuant
to Article XI, which may be supplemented by investment income.
9. "Deficiency" shall mean the amount withdrawn from surplus, including without limitation the CRF, to fulfill the purposes
of either budgetary fund should either budgetary fund become exhausted during any Pool fiscal year.
10. "Director" shall mean a member of the Board of Directors of the Iowa Communities Assurance Pool.
11. "Governmental Authorities" shall mean without limitation, cities, counties, townships, school districts, and any other unit
of local government exercising quasi - legislative, quasi-judicial, or quasi- executive power over a territory comprised of
municipalities, except soil and water conservation districts.
12. "Member" shall mean a Governmental Authority participating in the Iowa Communities Assurance Pool by approving and
executing this Agreement.
13. "Pool" shall mean the Iowa Communities Assurance Pool, an unincorporated association of all of its Members.
14. "Property Budgetary Fund" shall mean that fund established and maintained pursuant to Article X, which may be
supplemented by investment income.
15. "Property Coverage" shall mean the coverage afforded a Member for Property Risk as outlined in the Scope of Coverage
and the Member's Property Risk Sharing Certificate and subsequent amendments and /or endorsements thereto.
16. "Property Risk" shall mean Property, Vehicle Physical Damage, Inland Marine, Fidelity and other similar coverage
commonly provided to a Governmental Authority.
17. "Property Risk Sharing Certificate" shall mean that document provided to a Member evidencing its scope, nature and
limits of Property Coverage participation in the Pool.
18. "Casualty Risk Sharing Certificate" shall mean that document provided to a Member evidencing its scope, nature, and
limits of participation in the Pool.
19. "Scope of Coverage" shall mean the coverage, limits, and deductibles as outlined in the Appendix and subsequent
amendments and /or endorsements thereto.
ARTICLE IV - MEMBERSHIP
The membership of the Pool shall consist of Governmental Authorities that have entered into this Agreement by and through
an individual duly authorized by the governing body of the Governmental Authority to execute this Agreement. Members agree to
the admission of future Members and acknowledge that they shall have no right to object to the addition of new Members provided
the new Members are admitted in accordance with the terms hereof. This Agreement shall automatically renew and continue in
force unless the provisions for withdrawal or termination are applied.
Each Member shall appoint an individual and an alternate to represent the Member with the Pool. That individual shall act as
liaison between the Member and the Pool and shall communicate to the Member risk reduction and loss control information, and
any other information or instructions concerning the obligations of the Member imposed by this Agreement and the rules and
regulations established hereunder. Either the individual or alternate shall vote on behalf of the Member.
ICAP IRMA 2011 Page 2 of 10
Members of the Pool shall:
l . Promptly report to the Pool any incident that could result in a claim being made by or against the Member within the
Scope of Coverage;
2. Cooperate with the Board and Administrator in establishing, to the degree possible, loss control procedures required by
the Board and Administrator;
3. Provide to the Pool such information as needed for rating purposes, including, but not limited to, an audit prepared by the
Member's staff or a certified public accountant of all revenues and expenditures by the Member for any fiscal year of the Member
for which figures are requested by the Administrator and/or the Pool;
4. Provide access to all records, including financial records and/or properties of the Member upon request of the
Administrator and/or representatives of the Pool;
5. Cooperate with the Pool's attorneys, claims adjusters, the Administrator and any employee, officer or subcontractor
relating to the purpose, powers and work of the Pool;
6. Allow attorneys and others employed by the Pool to represent the Member in investigation, settlement, and all levels of
litigation arising out of any claim made against the Member within the Scope of Coverage furnished by the Pool; and
7. Pay when due all contributions or other monetary obligations, due or required, pursuant to this Agreement.
ARTICLE V - BOARD OF DIRECTORS
l . Administration of the Pool. The administration of the Pool and management of the Casualty Budgetary Fund, Property
Budgetary Fund, and the Cumulative Reserve Fund shall be governed by the seven (7) voting Directors.
2. Director's Qualifications. Directors shall be either: (a) elected or appointed officials of Pool Members, or (b)
representatives or employees of a Pool Member.
3. Board Composition. The Board shall be comprised of two (2) Directors affiliated with county Members, three (3)
Directors affiliated with city Members, and two (2) at -large Directors. The Board may periodically appoint no more than three (3)
additional, non- voting Directors representing sponsoring organizations. Non - voting Directors may not be an officer of the Pool or
a member of the Executive Committee.
4. Term of Directors and Resignation. Directors shall serve a term of four (4) years or until such new Director or
Directors are elected. Director terms shall be staggered so that no more than three (3) Directors are up for election in any one (1)
year. There shall be no prohibition on successive terms. Directors may resign by sending notice of resignation to the Board.
5. Election Procedures. Director elections shall be by majority vote and shall be held annually within forty -five (45) days
before the close of the fiscal year of the Pool. Members may nominate candidates for the Director positions affiliated with their
specific class (city or county) and the at -large Director positions. Each Member shall have one (1 vote for each Director position
up for election, which may be cast in person, by proxy, electronically or by mail.
6. Eligibility and Vacancies. Should the number of voting Directors become less than seven (7) due to disqualification,
death, incompetence, resignation or other cause, the remaining Directors shall appoint by majority vote a person or persons to fill
such vacancy or vacancies so that a Board of seven (7) Directors shall be maintained. The new appointee(s) shall be of the same
class (city, county or at- large) of the vacated Director(s) and shall serve the remaining portion of the term of the vacated
Director(s).
7. Board Meetings. Meetings of the Board shall be held at least annually at such time as it shall prescribe. Any item of
Pool business may be considered at a meeting where a quorum of four (4) voting Directors is present. Special meetings may be
called by the Administrator or by a majority of the Board. Meetings may be held by telephone, electronically, or by written
executed document.
8. Executive Committee. At the first meeting of each fiscal year, by majority vote the Board shall select no more than three
(3) voting Directors to form an Executive Committee. Membership of the Executive Committee may be changed at any time by a
ICAP IRMA 2011 Page 3 of 10
two - thirds majority vote of the Board. The Executive Committee shall inform and direct the Administrator on Board policy and
shall exercise powers for and on behalf of the Board as it deems necessary for the prudent operation and management of the Pool
until matters requiring Board action are considered at the next Board meeting.
9. Directors Compensation. The Directors shall be entitled to reimbursement of actual expenses incurred in the pursuit of
Pool business and such other reasonable and lawful compensation as may be awarded from time to time by a majority vote of the
Board.
10. Officers. At the first meeting of each fiscal year, by majority vote the Board shall select from the seven (7) voting
Directors a Chair, Vice Chair and Secretary. Officers may be changed at any time by a two - thirds majority vote of the Board. The
Officers shall inform and direct the Administrator on Board policy and shall exercise powers for and on behalf of the Board as it
deems necessary and prudent for the operation and management of the Pool.
1 1 . Clerk. The Administrator or designee shall serve as clerk to the Board and shall attend all Board meetings.
ARTICLE VI - BOARD POWERS AND DUTIES
The Board shall be permitted and authorized to perform and carry out, or delegate to others to perform and carry out on behalf
of the Pool, each and every act necessary, convenient or desirable for carrying out the purpose of the Pool, including but not
limited to:
1. Administer a local government risk pool, receive Members' contributions and contractual obligations to the Pool, and
settle and pay claims and losses on behalf of its Members;
2. Make and enter into contracts to conduct and operate the business of the Pool, including, but not limited to, the execution
of any Administration Agreement;
3. Employ agents and employees;
4. Incur debts, liabilities and obligations on behalf of the Pool, but no debt, liability or obligation so incurred shall be the
specific debt, liability or obligation of any Member to this Agreement;
5. Engage in legal actions deemed necessary by the Board and/or Administrator and prosecute and defend claims against the
Board. Pool, and Director(s);
6. Acquire, hold or dispose of real and personal property;
7. Advise Members on loss control guidelines and procedures, and provide them with risk management, loss control, and
risk reduction services and information;
8. Purchase reinsurance and/or excess insurance and enter into such excess risk sharing pools as may be available and
deemed desirable for the protection of the Members and /or the Pool itself;
9. Invest Pool funds and securities and investments in a prudent, lawful manner and direct where investment earnings may
be applied;
10. Promulgate procedures and regulations for the general operation of the Pool and the general administration of this
Agreement, including Board procedures;
11. Take such action as is necessary to cancel the participation/terminate the contract of any Member as provided herein;
12. Provide surety and/or fidelity bonds, as may be available, for Directors, Officers, and all persons charged with the custody
or investment of Pool monies.
13. Authorize distributions of any surplus, including without limitation, casualty and property surplus and the Cumulative
Reserve Fund. The Board shall have the sole authority to establish a basis for distribution and decide when the distribution of
surplus shall be made and the amount to be distributed.
ICAP IRMA 2011 Page 4 of 10
ARTICLE VII - ADMINISTRATOR
The Board shall have the authority to hire the Administrator and delegate to the Administrator certain powers and duties as the
Board shall deem advisable, and all signatories hereto ratify and endorse the Administration Agreement currently in effect between
the Pool (executed by the Board) and the Administrator. The undersigned further acknowledges that in the event the
Administration Agreement has been executed prior to the execution of this Agreement, the undersigned ratifies and adopts the
Administration Agreement currently in effect.
At least annually the Board shall receive a report from the Administrator. The nature and details of the report shall be
established by the Board and shall be in addition to any reports that the Administrator shall be required to file with any regulatory
authority having jurisdiction over the Pool.
ARTICLE VIII - LIABILITY OF THE BOARD, ADMINISTRATOR, SUBCONTRACTORS AND EMPLOYEES
The Directors of the Pool and the Administrator, its directors, officers, employees, and subcontractors shall:
1. Use reasonable and ordinary care in the exercise of their duties hereunder;
2. Be afforded all of the privileges and immunities that attach generally to governmental officers;
3. Not be liable for, and be held harmless and defended by the Pool, for any act, omission, or any other action, made, taken
or omitted in good faith; and
4. Not be liable for any loss incurred through investment of funds, securities and investments or failure to invest the same.
Pool funds may be used to purchase insurance providing coverage for Directors, Officers and the Administrator.
The Pool shall, and the undersigned agrees that the funds of the Pool shall be used to, indemnify, hold harmless and defend
any Director, Officer, Administrator or its employees (including its officers) or its subcontractors for any act or omission taken or
omitted in good faith by the Board or a Director or by the Administrator, its employees (including its officers) or its subcontractors
relating to or arising out of the conduct of Pool business. The hold harmless and indemnity provisions of this Article shall be
considered an expense of the Pool and in no event shall any individual signatory be liable for more than its pro rata contractual
obligation.
Neither the Administrator, its employees (including its officers) nor any of its subcontractors shall be liable for any act,
omission, or any other action, made, taken or omitted in good faith, nor for any loss incurred through investment of funds,
securities and investments or failure to invest the same, unless the same is the result of a willful act done in bad faith.
No covenant or agreement contained herein shall be deemed to be the covenant or agreement of any member of the Board or
the Administrator nor any of its employees (including its officers) or subcontractors, and none of such persons shall be subject to
any personal liability or accountability by reason of the acceptance of a position or the undertaking of the performance of any of
the responsibilities, obligations, or duties contemplated in the carrying out of this Agreement, whether by virtue of any
construction, statute or rule of law.
ARTICLE IX - ESTABLISHMENT AND MAINTENANCE OF THE CASUALTY BUDGETARY FUND
The Board shall establish and maintain a Casualty Budgetary Fund for the purpose of:
I. Funding the Pool's general and administrative expenses for casualty;
2. Funding the Pool's casualty reinsurance and excess expenses;
3. Funding the Pool's claims and claims expenses;
4. Funding all or any portion of any Deficiencies which may occur from withdrawals from the Cumulative Reserve Fund
and/or the Property Budgetary Fund;
5. Funding the Pool's obligation to satisfy the requirements of any regulatory authority and the Pool's obligations and
expenses set forth in this Agreement; and establishing and maintaining surplus in a reasonable amount deemed
appropriate by the Board.
At least thirty (30) days prior to the Pool's fiscal year end, the Administrator shall prepare an Annual Casualty Budget for the
succeeding fiscal year, which shall consist of the foregoing items in amounts deemed sufficient for the succeeding fiscal year; the
total of which shall be known as the Annual Casualty Budget.
ICAP IRMA 2011 Page 5 of 10
Each Member's share of the Annual Casualty Budget shall be allocated to the Member as its Annual Casualty Budgetary
Contribution and shall be in the proportion that each Member's total paid Basis Rate bears to the total paid Basis Rates of all
Members as of the date of such calculation, modified to reflect the loss experience of the Member and with due consideration to
the Member's individual characteristics.
In the event that there shall exist a surplus in the Casualty Budgetary Fund at the end of the Pool's fiscal year, any portion of or
all of such surplus maybe retained by the Pool as surplus or applied toward the Annual Casualty Budget for the subsequent year.
In the event that the Casualty Budgetary Fund is exhausted during any Pool fiscal year, any funds required to fulfill the
purpose of the Casualty Budgetary Fund may be withdrawn from the Cumulative Reserve Fund and/or the surplus within the
Property Budgetary Fund. The sum so withdrawn shall constitute a Deficiency and shall be repaid with funds from the Casualty
Budgetary Fund in the time and manner prescribed by the Board.
ARTICLE X - ESTABLISHMENT AND MAINTENANCE OF THE PROPERTY BUDGETARY FUND
The Board shall establish and maintain a Property Budgetary Fund for the purpose of:
1. Funding the Pool's general and administrative expenses for property;
2. Funding the Pool's property reinsurance and excess expenses;
3. Funding the Pool's losses and loss expenses for Property Risks;
4. Funding all or any portion of any Deficiencies which may occur from withdrawals from the Cumulative Reserve Fund
and /or the Casualty Budgetary Fund;
5. Funding the Pool's obligation to satisfy the requirements of any regulatory authority and the Pool's obligations and
expenses set forth in this Agreement; and establishing and maintaining surplus in a reasonable amount deemed
appropriate by the Board.
At least thirty (30) days prior to the Pool's fiscal year end, the Administrator shall prepare an Annual Property Projection for
the succeeding fiscal year, which shall consist of the foregoing items in amounts deemed sufficient for the succeeding fiscal year;
the total of which shall be known as the Annual Property Projection.
Each Member's share of the Annual Property Projection shall be allocated to the Member as its Annual Property Budgetary
Contribution, which shall be due on the Member's Property Risk Sharing Certificate anniversary date.
In the event that there shall exist a surplus in the Property Budgetary Fund at the end of the Pool's fiscal year, any portion of
or all of such surplus may be retained by the Pool as surplus or applied toward the Annual Property Projection for the subsequent
year.
In the event that the Property Budgetary Fund is exhausted during any Pool fiscal year, any funds required to fulfill the
purpose of the Property Budgetary Fund may be withdrawn from the Cumulative Reserve Fund and /or the surplus within the
Casualty Budgetary Fund. The sum so withdrawn shall constitute a Deficiency and shall be repaid with funds from the Property
Budgetary Fund in the time and manner prescribed by the Board.
ARTICLE XI - ESTABLISHMENT AND MAINTENANCE OF THE CUMULATIVE RESERVE FUND
The Board shall establish and maintain a Cumulative Reserve Fund for the purpose of providing funds in the event that the
Casualty Budgetary Fund and /or the Property Budgetary Fund are exhausted during any Pool fiscal year and establishing and
maintaining surplus in an amount deemed appropriate by the Board.
In addition to the Annual Casualty Budgetary Contributions made to the Casualty Budgetary Fund pursuant to Article IX,
Members purchasing casualty coverage shall make annual contributions to the CRF until each Member's annual contributions to
the CRF total the amount required by the Board, which shall not exceed 300% of Basis Rate. Such contributions shall be based on
each Member's Basis Rate in accordance with the following schedule (prorated as needed):
Initial Contribution
First Anniversary
Second Anniversary
Third Anniversary
Fourth Anniversary
Fifth Anniversary
ICAP IRMA 2011 Page 6 of 10
100% of Basis Rate
75% of Basis Rate
50% of Basis Rate
30% of Basis Rate
25% of Basis Rate
20% of Basis Rate
Thereafter, no contribution shall be made to the CRF unless the Board shall require contributions for the purpose of
maintaining the CRF at a level determined by the Board not to exceed 300% of Basis Rate or to comply with the requirements of
any applicable regulatory authority having jurisdiction over the Pool.
The Board may authorize distributions of Cumulative Reserve Funds to fully vested Members whose CRF balance exceeds the
level determined by the Board for a distribution. The Board shall have the sole authority to establish a basis for distribution and
decide when the distribution of surplus shall be made and the amount to be distributed.
ARTICLE XII - MEMBER WITHDRAWAL, CANCELLATION, OR TERMINATION OF CASUALTY COVERAGE
The provisions of this Article pertain exclusively to casualty coverage.
1. Members agree to continue membership for a period of not less than one full year. At the conclusion of such period, or
anniversary thereof, a Member who has given sixty (60) days prior written notice to the Pool may withdraw.
Within one hundred twenty (120) days following withdrawal, the Pool shall apply the following formula to determine the
amount (if any) to be refunded to the withdrawing Member.
The formula to determine the amount (if any) to be refunded to the withdrawing Member shall be calculated as follows:
The withdrawing Member's "Vested Interest in CRF Contributions"
minus distributions of CRF received by the withdrawing Member;
minus the Annual Casualty Budgetary Contribution which the withdrawing Member would have made for
the one year period following withdrawal;
minus the withdrawing Member's proportionate share (determined in the same proportion as contributions)
of any Deficiencies
Total: to be received by the withdrawing member
As used herein, "Vested Interest in CRF Contributions" shall mean the percentage of CRF contributions made to the Pool by
said withdrawing Member according to the following vesting schedule:
End of Member's First Full Year 50%
End of Member's Second Full Year 60%
End of Member's Third Full Year 70%
End of Member's Fourth Full Year 80%
End of Member's Fifth Full Year 90%
End of Member's Sixth Full Year and thereafter 100%
Effective 12:01 a.m. on the date of withdrawal and notwithstanding anything contained to the contrary within this Agreement
or the Casualty Risk Sharing Certificate issued pursuant to this Agreement, payments for all claims and claims expense shall
thereafter become the sole responsibility of the withdrawing Member without regard to whether a claim occurred or was reported
prior to the withdrawal of the Member's participation in the Pool.
At the request of the withdrawing Member, the Pool will continue to service all claims which have been reported to the Pool
during the withdrawing Member's period of participation so long as the withdrawing Member shall promptly reimburse the Pool
for all claims expenses incurred. Payment of all claims so serviced by the Pool for a withdrawing Member shall be the sole
responsibility of the withdrawing Member and the Pool shall incur no liability for payment of claims by virtue of servicing claims
under the terms of this paragraph.
2. The Pool may, by a two- thirds (2/3) majority vote of the Board and by providing a Member sixty (60) days prior written
notice, cancel a Member's participation in the Pool effective at the end of any Casualty Risk Sharing Certificate year. Thereafter it
shall be the responsibility of the Pool to defend, settle and pay claims within the scope and limits set forth in the cancelled
Member's Casualty Risk Sharing Certificate in effect on the date of the occurrence out of which such claim arose. This
responsibility of the Pool to defend, settle and pay claims shall apply solely to claims that occurred during the cancelled Member's
participation and evidenced by the Member's Casualty Risk Sharing Certificate. The cancelled Member shall have the right, prior
to the actual date of cancellation, to withdraw from the Pool by giving notice of such withdrawal. Electing to so withdraw, the
ICAP IRMA 2011 Page 7 of 10
Member shall be subject to the provisions of section one (1) of this Article. Failure to elect to give notice of withdrawal, the
cancelled Member forfeits all rights to a refund pursuant to the formula set forth in section one ( 1 ) of this Article.
3. Any Member failing to make payments when due as required by this Agreement shall be terminated from the Pool
effective on the date the payment was due and upon that effective date of termination all coverages and benefits hereunder shall
cease. All claims and claims expenses thereafter shall become the sole responsibility of the terminated Member without regard to
whether a claim occurred or was reported prior to the termination of the Member's participation in the Pool. At the request of the
terminated Member, the Pool will continue to service all claims which have been reported to the Pool during the terminated
Member's period of participation so long as the terminated Member shall promptly reimburse the Pool for all claims expenses
incurred. Payment of all claims so serviced by the Pool for a terminated Member shall be the sole responsibility of the terminated
Member and the Pool shall incur no liability for payment of claims by virtue of servicing claims under the terms of this paragraph.
The terminated Member shall also forfeit all rights to any return of contributions including a refund pursuant to the formula set
forth in section one (1) of this Article. The Pool shall apply any or all of the terminated Member's forfeited funds towards said
Member's Annual Casualty Budgetary Contribution due for the one (1 ) year period following termination. If the Member shall
subsequently submit its payment, the Administrator may, in its discretion, reinstitute such membership.
4. If a Member created pursuant to Section 28.6 of the Code of Iowa, as amended, dissolves and ceases to exist by resolution
of the governing body without a statutory or contractual procedure that provides for the distribution of liabilities, the Pool agrees to
continue to service and pay, to the extent of the coverage provided pursuant to said Member's Casualty Risk Sharing Certificate
and this Agreement, all claims that are properly reported to the Pool that occurred during said Member's period of membership in
the Pool in exchange for said Member's release of all rights to any return of contributions, including a refund pursuant to the
formula set forth in section one (1) of this Article, and relinquishment of same to the Pool. Nothing herein shall be deemed to
increase the amount or type of said Member's coverage and all other conditions of the Casualty Risk Sharing Certificate and this
Agreement shall continue to apply.
ARTICLE XIII - SCOPE OF RISK SHARING PROTECTION
1. The Pool provides risk sharing protection to each Member and will make or secure payment on behalf of each Member
under criteria and procedures to be established for the payment of claims and losses as provided in the Member's risk sharing
certificates. A Member may, with the approval of the Administrator, add additional parties to its risk sharing certificates.
2. The Pool may obtain excess insurance, reinsurance, or join in excess risk sharing pools as may be available to the Pool.
3. In the event that a claim or loss or a series of claims or losses exceed the amount of risk sharing protection provided by
the Member's risk sharing certificates, or in the event that a claim or loss or a series of claims or losses should exhaust the Casualty
Budgetary Fund, the Property Budgetary Fund, the Cumulative Reserve Fund and any reinsurance, then payment of claims and
losses shall be the sole and separate obligation of the individual Member or Members against whom the claim was made or the loss
was incurred.
4. The Pool's retention in any one claim or loss is limited to that amount stated under "Pool Retention" in the Appendix.
The Pool shall have no responsibility to respond to claims or losses in excess of the stated retention except to the extent that such
sums are recoverable from reinsurance or excess insurance. The Pool shall use its best effort to collect or recover any reinsurance
running to or benefiting the Pool. The failure of such reinsurance or excess insurance to respond to any request for payment shall
in no way increase the Pool's liability to an amount greater than that stated as the Pool retention.
5. A Member may purchase, in its sole discretion, any insurance coverage in addition to those amounts provided by the
Pool.
6. The Board may make changes in the Scope of Coverage, the amount of risk sharing protection or risk sharing retention by
the Pool upon consideration of the needs and requirements of Members, loss experience, the kind and amounts of reinsurance
coverage available and any such changes shall require a two - thirds (2/3) majority of the Board. When the Board makes changes in
the Scope of Coverage, notice after the taking of such action shall be sent to all Members (or their representatives) at the next
certificate anniversary together with a replacement or updated Appendix to reflect the changes made.
ARTICLE XIV - TERMINATION
The Pool shall terminate at such time as two- thirds (2/3) of the Members vote for such termination. After a vote to terminate,
the Board shall commence with the orderly liquidation of the Pool's business and shall complete the same as promptly as possible.
During such period of liquidation the Pool shall continue to pay claims and losses incurred within the Scope of Coverage and
pursuant to the risk sharing certificates until all funds of the Pool are exhausted. After payment of all claims and losses, any
ICAP IRMA 2011 Page 8 of 10
•
remaining funds held by the Pool shall be paid to all Members of the Pool at the time of the vote of termination, on a pro rata basis
determined by the Board.
No Member shall be responsible for any claim, claims, judgment or judgments against any other Member or Members except
to the extent of the assets of the Cumulative Reserve Fund, the Casualty Budgetary Fund and the Property Budgetary Fund.
However, if upon termination of the Pool the remaining assets of the Pool are insufficient to satisfy indebtedness of the Pool
(excluding claims or judgments against the Members), such deficiency shall be made up by the Members of the Pool by a fair and
reasonable method established by the Board.
ARTICLE XV — PROVISIONS PERTAINING TO PROPERTY COVERAGE
The provisions of this Article pertain exclusively to Property Coverage.
I. Members agree to continue Property Coverage for a period of not less than one (1) full year. At the conclusion of such
period, or anniversary thereof, a Member may terminate such coverage by giving notice to the Pool at least thirty (30) days prior to
the end of such period. A Member's election to cease Property Coverage shall not constitute a withdrawal from the Pool under any
other terms and conditions of this Agreement.
2. Termination for Non - Payment. In the event that a Member does not make its Annual Property Budgetary Fund
Contribution, all Property Coverage shall terminate on the date when such contribution was due (the Property Termination Date).
If the Member shall subsequently submit its payment, the Administrator may, in its discretion, reinstate Property Coverage.
3. Termination Other Than Non- Payment. The Pool may, by a two- thirds (2/3) majority vote of the Board, terminate a
Member's Property Coverage for reasons other than non- payment by giving notice to the Member of such termination at least sixty
(60) days prior to the end of any Property Risk Sharing Certificate year. The notice of termination shall state the last day of the
then - expiring Property Risk Sharing Certificate year as the effective date of termination (the Property Termination Date), at which
time the coverage provided by the Property Risk Sharing Certificate shall terminate.
4. Property Coverage applies only to losses that occur prior to the Property Termination Date. All rights for reimbursement
and any right to make a claim against the Pool shall terminate for losses that occur after the Property Termination Date.
ARTICLE XVI - MISCELLANEOUS PROVISIONS
1. The provisions of this Agreement shall be interpreted pursuant to the laws of the State of Iowa.
2. The parties hereto consent that courts in the State of Iowa shall have jurisdiction over any dispute arising under this
Agreement. The terms of this Agreement may be enforced in a court of law in the State of Iowa either by the Pool or by any
Member.
3. The consideration for the obligations imposed upon Members pursuant to and under this Agreement shall be based upon
the mutual promises and agreements of all Members who now execute or who hereinafter execute this Agreement.
4. The Board shall make available to requesting Members a copy of the annual audit of the financial affairs of the Pool
within a reasonable time after the end of the fiscal year. The audit shall be made by a certified public accountant in accordance
with generally accepted auditing principles which must make it possible both: (a) to present fairly and with full disclosure the
financial operations of the Pool; and (b) to determine and demonstrate compliance with finance- related legal and contractual
provisions.
5. This Agreement may be executed in duplicate originals or counterparts now or at any time in the future. The individual
executing this Agreement on behalf of the participating Member hereby represents and certifies that he is duly empowered to so
execute this document.
6. No waiver of any breach of this Agreement or any provision herein contained shall be deemed a waiver of any preceding
or succeeding breach thereof or of any of the other provisions herein contained. No extension of time for performance of any
obligation or act shall be deemed an extension of time for performance of any other obligations or acts.
7. This Agreement shall be binding and shall inure to the benefit of all Members who shall have executed this Agreement
and complied with the financial requirements hereunder; provided that the Members shall have been duly approved in accordance
with the terms and provisions of this Agreement.
ICAP IRMA 2011 Page 9 of 10
8. The provisions of this Agreement shall be deemed severable and if any provision or part thereof is held illegal, void or
invalid under applicable law, such provision or part may be changed to the extent reasonably necessary to make the provision or
part, as so changed, legal, valid or binding. If any provision of this Agreement is held illegal, void, or invalid in its entirety, the
remaining provisions of this Agreement shall not in any way be affected or impaired but shall remain binding in accordance with
their terms and this Agreement shall be so interpreted.
9. This Agreement, the Appendix, and the risk sharing certificates contain the complete Agreement between the parties and
no representations or oral statements made or heretofore given shall constitute a part of this Agreement. In the event that any
provision of this Agreement is in conflict with or is incompatible with the Appendix or attachments hereto or the risk sharing
certificates issued hereunder, the terms and conditions of this Agreement shall prevail and take precedence.
10. This Agreement may be altered or amended only by amendments duly adopted in accordance with the terms and
conditions of this Agreement; provided, however, that the risk sharing certificates may be amended from time to time to reflect the
exposures of each Member and such changes shall be exempted from the preceding ternis of this paragraph.
11. The caption headings used in this Agreement are used merely for identification purposes and shall not be deemed apart of
this Agreement.
12. Whenever in this Agreement words, including pronouns are used in the singular or plural, or masculine or feminine they
may be read and construed in the plural or singular, or feminine or masculine, respectively, wherever they so apply.
13. This Agreement may be amended by the Board with the approval of two- thirds (2/3) of the Directors. Amendments shall
be sent to all Members (or their representatives) at the next risk sharing certificate anniversary. All Members agree to accept, as a
condition of their membership in the Pool, those amendments adopted from time to time by the Board.
14. The Board may, with the approval of two - thirds (2/3) of the Directors, elect to reform or reconstitute the Pool to a stock,
mutual, or reciprocal insurance company operating as a captive, Risk Retention Group, or other risk bearing entity.
15. The Pool shall maintain a fiscal year ending December 31.
16. The parties acknowledge and agree that facsimile and electronic signatures shall be legal and binding and the signature of
the Administrator on behalf of the Pool shall be legal and binding.
ARTICLE XVII - AGENT AND OFFICE
The agent of the Pool for service of notice shall be the Iowa Communities Assurance Pool, attention General Counsel. The
office of the Pool shall be 5701 Greendale Road, Johnston, Iowa, 50131.
ARTICLE XVIII - NOTICE
All notices required to be given under this Agreement shall be in writing and sent certified mail, return receipt requested, with
postage prepaid. Notices by a Member to the Pool shall be sent to the address in Article XVII to the attention of the
Administrator. Notices to any Member shall be sent to the representative of the Member at the Member's last known address.
In the event that any party to this Agreement desires to change its address, notice of change of address shall be sent to the
other party in accordance with the terms and provisions of this Article.
In witness whereof, this Agreement was executed on the day of , 2 , by the
undersigned duly authorized officer of the Governmental Authority indicated below:
ACCEPTED FOR THE IOWA COMMUNITIES
ASSURANCE POOL
By:
ADMINISTRATOR ON BEHALF OF ALL OTHER
CURRENT AND FUTURE SIGNATORIES
ICAP IRMA 2011 Page 10 of 10
GOVERNMENTAL AUTHORITY:
Title: Mayor Pro —Tem
Mr. Ken TeKippe
City Treasurer
City of Dubuque
50 West 13 Street
Dubuque, Iowa 52001
O'CONNOR ASSOCIATES
305 Locust St. I P.O. Box 737 I Dubuque, Iowa 52004 -0737
563.557.7440 I Fax: 563.583.9142 I www.oconnor - insurance.com
Re: IOWA COMMUNITIES ASSURANCE POOL (ICAP)
Anniversary
July 1, 2011
Dear Ken:
June 6, 2010
Enclosed are the following materials for your coverage anniversary with ICAP effective July 1, 2011:
1. Summary of liability coverages.
2. Anniversary Information Acknowledgement form —needs signature.
3. Proxy Statement —needs signature.
4. Schedule of covered Vehicles —needs signature.
5. Concentration of Values form —needs signature.
6. Statement of Values —needs signature.
7. Cost breakout for automobile, general liability and physical damage.
8. Anniversary Invoice.
9. Revised Iowa Risk Management Agreement (IRMA)— signature required.
The change in ICAP contribution from 2010 to 2011 is $6,288 (less than 1 %) without taking into account
the member credit or agent fee.
A copy of your third part liability benefits schedule is attached for review. The schedule as well as the
coverage document continues automatically with your continued participation in the ICAP program.
There has been no change in coverage. Please recall that the City has declined premises medical
payments coverage which could be provided at no cost.
Upon completion of the IRMA agreement and payment of contribution, ICAP will prepare all certificates
of coverage for third parties.
A member of State Central Financial Services, Inc.
An Independent Insurance Agent
Trusted
Choice®
Last year we reviewed with you options to the deductible levels. The same options are available to you
this year if you are interested. The reduction in cost was $12,623 for a $15,000 deductible and $29,041
cost for a $20,000 deductible. Both of these had a maximum cap of $150,000.
Thank you for your participation in the best third party liability program in Iowa. If you have any
questions or concerns please contact me.
Enclosures
FRO /j
Very truly you
O'C• nnor Ins �,�.- Agency
Frank R. O'Connor, CPCU
Last year we reviewed with you options to the deductible levels. The same options are available to you
this year if you are interested. The reduction in cost was $12,623 for a $15,000 deductible and $29,041
cost for a $20,000 deductible. Both of these had a maximum cap of $150,000.
Thank you for your participation in the best third party liability program in Iowa. If you have any
questions or concerns please contact me.
Enclosures
FRO /j
truly you
nnor Ins
Agency
Frank R. O'Connor, CPCU
LDCP Benefit
Form
No.
0101 Legal Liab. /3rd Party
0101 Automobile Liab
0101 Wrongful Acts
0101 Law Enf. Liab.
0101 Appeal Bonds
0101 Bail Bonds
0101 Bonds to Release Property
0101 Claim and Defense Expenses
0101 Covered Pollution Cost or Expense for
Automobiles
0101 Employee Benefit
0101 Employment Expense
0101 Good Samaritan
0101 Injunctive Relief
0101 Medical Malpractice
0101 Member Expenses
0101 Post- Judgement Interest
0101 Pre - Judgement Interest
0101 Stop Gap
0101 Underinsured Motorist
0101 Uninsured Motorist
0101 Uninsured Motorist (Buses Only)
0101 Underinsured Motorist (Buses Only)
0205 Broad Legal Defense Fund
0225 Moral Obiligation to Pay
0235 -10 Public Health Department
POLLUTION LIABILITY BENEFITS
0240 Chlorine
0245 Fire Department Training Activities
0250 Fire Departments
0255 Pesticides
0260 Anti -Skid Material Storage &
Application
0265 Sewer Back -Up
0290 Wastewater Treatment Plants - Third
Party Liability
0291 Wastewater Treatment Plants - Clean
Up Expense
LDCP 0100 -ICAP SB (7/98)
IOWA COMMUNITIES ASSURANCE POOL
SCHEDULE OF BENEFITS
Effective Retroactive Limit
Date Date
07/01/2006 07/01/2006 $12,000,000
10/24/2006 10/24/2006 $12,000,000
07/01/2006 07/01/2006 $12,000,000
07/01/2006 07/01/2006 $12,000,000
Unlimited
Unlimited
Unlimited
Unlimited
10/24/2006 10/24/2006 $12,000,000
07/01/1999 07/01/1999
07/01/2006 07/01/2006
07/01/2006 07/01/2006
07/01/1998 07/01/1998
07/01/2006 07/01/2006
07/01/2006 07/01/2006
07/01/1999 07/01/1999
07/01/1999 07/01/1999
07/01/1999 07/01/1999
07/01/1999 07/01/1999
07/01/1998 07/01/1998
07/01/1998 07/01/1998
02/08/2010 02/08/2010
07/01/2006
07/01/1999
07/01/1999
07/01/2006
07/01/2006
07/01/1999
07/01/1999
07/01/1999
07/01/2006 $12,000,000
07/01/1999 $500,000
07/01/1999 $500,000
07/01/2006 $12,000,000
07/01/2006 $12,000,000
07/01/1999
07/01/1999
07/01/1999
REVISED
$100,000
$12,000,000
$12,000,000 Each Action
$25,000
$12,000,000
$10,000
Unlimited
Unlimited
$12,000,000
$40,000
$40,000
$1,000,000
$1,000,000
$5,000 Each Claim
$5,000 Aggregate
$2,500 Aggregate
$12,000,000
$250,000 each occurrence,
$250,000 aggregate
$50,000 each accident,
$50,000 aggregate
$50,000 each accident,
$50,000 aggregate
Deductible
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
See Benefit
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
See Benefit
See Benefit
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000