Agenda - 12-19-1986 - Laserfiche WebLink

Browse Search

!/ Afte— ••per w s ■ (...._ COUNTY of ORANGE Department of Purchasing and Central Services Pamela K.Jones,Director TO: Ken Thompson, County Manager FROM: Pam Jones, Purchasing & Central Services Director RE: Liability Insurance DATE: December 17, 1986 In session with the Commissioners on December 16, I understand action was passed to bind General Liability, Property, and Auto Property Damage and Liability to Charter House through Collier Cobb and Associates in Chapel Hill. I further understand the reasoning behind the action was, in part due to local agency preference and the fact that the other proposal had not yet been received. While both of these are indeed relevant factors, I wish to present information that should likewise be considered. First, a brief look at where we have come from. At renewal time in 1985 we took proposals to approximately 30 markets and were turned down by all but Charter House, which at that time was a new company writing coverage in North Carolina. My memo, dated November 19, indicated we had verbal commitments but nothing in , writing on the policy that was scheduled to renew on November 28. We did in fact not get a firm quotation until three days prior to renewal, since that was the only option we had, we chose to bind to Charter House with the Illinois Insurance Exchange carrying the paper. One year later we are 100% better off because we have received two quotes. One is from Charter House and one is from Fred S. James. The quotation from Charter House has some subtle differences from last year's policy, such as the increased deductible on some of our big equipment. The major difference however, falls in a much more critical area - the strength of the reinsurers. Illinois Insurance Exchange determined they had consumed too much capacity in the N.C. market and pulled out of Charter House. They were replaced with three (3) companies (listed on Exhibit A) whose strength is considerably less than the Exchange and far below the capacity of those reinsurers listed for Fred S. James. I would likewise call to your attention that since the pool is 100% reinsured, ie. the first dollar of a claim is covered by some insurer, that the strength of these companies becomes even more important, especially since State Statute dictates that if a pool is deemed to be insolvent it can come back to it's subscribers to participate in the loss. The pool with Fred S. James was set up at the request of NACO to Human Services Building • 300 West Tryon Street • Hillsborough, North Carolina 27278 Telephones: 919 732-8181 • 919 967-9251 • 919 688-7331 • 919 227-2031 V