HomeMy WebLinkAbout12098 ORD - 05/29/1974. � JRR:hb:5/28/74:2nd
AN ORDINANCE
AUTHORIZING AND DIRECTING THE CITY MANAGER TO
ENTER INTO CONTRACT WITH OTHER CITIES AND
POLITICAL SUBDIVISIONS AS EMPLOYER MEMBERS,
THROUGH AND WITH THE TEXAS MUNICIPAL LEAGUE
WORKMEN'S COMPENSATION JOINT INSURANCE FUND TO
PROVIDE WORKMEN'S COMPENSATION AND THROUGH
A FOND POOL OF SELF - INSURED TEXAS POLITICAL
SUBDIVISIONS, ALL AS MORE FULLY SET FORTH IN
THE CONTRACT, A COPY OF WHICH IS ATTACHED
HERETO, MARKED EXHIBIT "A"; AUTHORIZING RE-
TAINER BY THE CITY ATTORNEY; PROVIDING AN
EFFECTIVE DATE; AND DECLARING AN EMERGENCY.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS
CHRISTI, TEXAS:
SECTION 1. That the City Manager be and he is hereby authorized
and directed to enter into a contract with the Texas Municipal League
Workmen's Compensation Joint Insurance Fund, as the administrative agency
created by the member cities (political subdivisions), to provide work-
men's compensation through a fund pool of self - insured Texas political
subdivisions, for a term of three years, all as more fully set forth in
the contract, a copy of which is attached hereto, marked Exhibit "A",
designating Texas Municipal League Joint Insurance Fund as the administrative
agency of the contract, pursuant to Art. 4413 (32c) Interlocal Cooperation
Act, Sec. 4(d).
SECTION 2. The effective date of the aforesaid contract shall
be July 1, 1974.
SECTION 3. The City of Corpus Christi City Attorney's recom-
mendation and request for authorization through the City Manager for the
retainer of the General Counsel of Texas Employers' Insurance Association,
his duly authorized assistants, and other counsel he may retain, all in
accordance with this Interlocal Agreement between Texas Municipal League
Workmen's Compensation Joint Insurance Fund and employer members and with
the contract between said Fund and the Texas Employers' Insurance Associ-
ation, as shown by Exhibit "B" attached to represent the City as stated in
said Exhibit, is hereby approved.
SECTION 4. The City of Corpus Christi hereby authorizes
• .
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and directs the City Manager to enter into agreements, as provided by
Art. 830gh, V.T.S., and by Art. 4413(32c) Interlocal Cooperation Act,
Sec. 4(d), exemplified by Exhibit "A" and Exhibit "A1" consisting of
twenty (20) pages, with the Texas Municipal League Workmen's Compensation
Joint Insurance Fund, and, through it, with the Texas Employers' Insurance
Association, for provision for the City of Corpus Christi of self- insurance,
catastrophe specific excess, and aggregate excess stop loss insurance, all
as more particularly described in the Exhibits aforesaid.
SECTION 5. The City of Corpus Christi, by execution of said
agreements and upon filing of the same with the created administrative
agency, Texas Municipal League Joint Insurance Fund, for the administration
of this self- insurance program, is hereby declared to have contracted with
the cities and other political subdivisions which have executed the same
or substantially similar agreements and filed the same with the said Texas
Municipal League Joint Insurance Pund on or before July 1, 1974 for the
common and mutual purpose of establishing and operating a self- insurance
program as provided by the exhibits aforesaid.
SECTION 6. The necessity to immediately enter into the
aforesaid contract in order to effect the terms thereof creates a public
emergency and an imperative public necessity requiring the suspension of
the Charter rule that no ordinance or resolution shall be passed finally on
the date of its introduction and that such ordinance or resolution shall
be read at three several meetings of the City Council, and the Mayor
having declared that such emergency and necessity exist, and having requested
the suspension of the Charter rule and that this ordinance be passed
finally on the date of its introduction and take effect and be in full
force and effect from and
after its passage, IT IS ACCORDINGLY SO
ORDAINED, this the �day of May, 1974.
ATTES
City Secretar MAYOR
THE CITY OF CORPUS CHRISTI, TEXAS
APPROVED:
DAY OF Y, 1974:
�S�City Attorney � v
TM1 JOINT WORKMEN'S
E FUP➢ ®TI ®R!
1020 Southwest Tower, Austin, Texas 78701
(A Service of the Texas Municipal League)
INTERLOCAL AGREEMENT
This Contract and Interlocal Agreement entered into by and between the Texas Municipal
League Workmen's Compensation Joint Insurance Fund (hereinafter referred to as "Fund ") and the
undersigned political subdivision of the State of Texas (hereinafter referred to as "Employer Mem-
ber") for the purpose of providing the statutory benefits prescribed by Article 8309h of the Texas
Workmen's Compensation Act for employees of political subdivisions.
WITNESSETH:
The undersigned Employer Member in consideration of the adoption of a plan of self - insurance
as _ uthorized in Article 8309h, Vernon's Annotated Texas Statutes, to provide Workmen's Compen-
sa5nn benefits at a minimum cost and in further ponsideration of other political subdivision execut-
ing identical interiocal agreements does hereby agree to become a self- insured workmen's
co noensation employer by becoming one of the members of the Fund Pool of self - insured Employer
Members. The conditions of membership agreed upon by and between the parties are as follows:
1. The term of this Contract shall be for a term of three years commencing on July 1, 1974,
unless the same is sooner terminated by sixty (60) days written notice of intent to terminate by
either party unless otherwise specified under the terms and agreements of this Contract or by the
Bylaws of the Fund. The Fund will have the right to terminate this agreement only for non - compliance
with paragraphs 6 and 16.
2. An annual estimated payroll by payroll classifications will be furnished by the Employer
Member to the Fund. It is understood that this is an estimate that shall be adjustable at the end of
each Fund year to reflect the actual payroll on the books of the Employer Member.
3. The Employer Member agrees to pay the premiums payable for the payroll classifications
based upon a standard annual premium determined by first computing the rates, using as a guide
the classifications of payroll as established by the State Board of Insurance. This premium shall be
modified by the experience modification of the political subdivision if same has previously earned an
experience modification by virtue of having been insured by a workmen's compensation insurer and
having earned an experience modification promulgated by the State Board of Insurance. In the ab-
sence of an earned experience modification for the Employer Member, the manual rate as estab-
lished by the State Board of Insurance in effect at the beginning of each fund year will be used as a
guide to produce a manual as well as a standard premium. The premium payable shall be 75% of the
standard premium thus obtained. Once the standard annual premium has been computed, the
Employer Member agrees to pay the payable premium in twelve (12) equal monthly installments
commencing June 15. 1974, with subsequent installments commencing August 1, 1974, provided that
if the payable premium shall be less than 55,000 such shall be payable in four (4) equal quarterly
installments commencing June 15. 1974, with subsequent installments commencing October 1, 1974.
It is understood by the Employer Member that there will be a rate adjustment on September 1, 1974,
and at subsequent periods thereafter based upon the increased benefit levels mandated by the Work-
men's Compensation Act which rate adjustments will use as a guide those promulgated by the
State Board of Insurance.
EMPLOYER MEMBER COPY A A�,
4. The estimated- payable premium for the Employer Members shall' be based upon payo
estimates and shall be payable as provided in ", above. At the end of each and every Fund year there
shall be submitted by the Employer Member actual payrolls as reflected by the books of the Em-
ployer Member and any additional amounts payable into the Fund based upon the actual payroll
shall be paid and lesser amounts payable shall be adjusted by refund to the Employer Member. The
Fund reserves the right to audit the payroll records of any Employer Member.
5. The Fund agrees to use as a guide the workmen's compensation experience' rating plan as
prescribed by the State Board of Insurance and to calculate and furnish each Employer Member its
individual experience modification when earned in accordance with the provisions of such experi-
ence rating plan.
6. The Fund agrees that it has obtained aggregate stop loss reinsurance to assure that the in-
curred losses and expenses for the total Fund shall not exceed the maximum 75% of standard
premiums paid and payable by Employer Members into this Fund. The Employer Members have no
joint or several liability other than the maximum 75% of standard premium payable by each Em-
ployer Member. Any savings to the Fund resulting from overall loss experience less than 60% of
the standard premium shall be available for dividend credit to future premiums as declared by the
Board of Trustees (hereinafter referred to as "Board ") from time to time. The Fund shall invest
any and all funds that are on deposit with the Fund and the investment earnings from these particu-
lar funds shall be used for the benefit of the Employer Members that remain as members of the
Fund until such time as the Board deems that it is financially feasible to declare dividends in the
form of a further reduced premium to the Employer Members. Such dividend determinations will be
made annually.
7. The Fund shall at all times provide for reinsurance of the Fund itself so that the participation
of the Employer Members shall at all times be on a non - assessable basis beyond the amounts as
set Forth in this Contract. The Fund has catastrophe loss protection excess of 550,000.00 for any one
accident or occurrence up to a limit of $5,000,000.00 and aggregate stop loss protection excess of
6010 aggregate incurred losses to aggregate standard premiums for the total Fund for the initial
three year contract period. The Board reserves the right to adjust either one of these reinsurance pro-
vi , ions in the event that the fiscal soundness of the Fund will justify such an adjustment and result
in = sav!Ogs to the Employer Members. Before any such adjustment is made, notice will be given to
e!' r.- a Employer Memoers together with an accounting from the Fund in order that any Employer
Mar. ber may appear before the Board to discuss the fiscal soundness of the Board's action.
3. The Undersigned Employer Member agrees that it will cooperate in instituting any and all
ree3on3ble safety regulations that may be recommended for the purpose of eliminating or minimiz-
Ing hazards that would contribute to workmen's compensation losses. In the event that the recom-
mendations submitted by the contractor on behalf of the Fund seem unreasonable, the Employer
Member has a right to appeal to the Board and the decision of the Board shall then be final.
9. The Employer Member agrees that it will appoint a workmen's compensation coordinator for
the Employer Member and that the Fund and its contractor shall not be required to contact any other
individual except this one person. Any notice to or any agreements with the workmen's compensa-
tion coordinator shall be binding upon the Employer Member. The Employer Member reserves the
right to change the coordinator from time to time by giving written notice to the Fund and to the
contractor.
10. In addition to the premium as hereinabove set forth there shall be payable a filing fee
payable by the Employer Member (currently S7.50) which amount is paid to the Industrial Accident
Board for a filing on behalf of the Employer Member.
11. The Fund through the contractor employed by the Fund agrees to handle any and all claims
after notice of injury has been given, to prepare all required Industrial'Accident Board forms, and to
provide a defense. They shall carry on all negotiations with the injured employee or his attorney at
the prehearing conferences and negotiate within authority previously granted by the Fund. If a per-
sonal appearance by the employer or a co- employee is necessary the expense of this appearance
will be paid by the Employer Member. The contractor will retain and supervise legal counsel in behalf
of and at the expense of the Fund necessary for the prosecution of any litigation. There will be
safety engineering services supplied by the contractor to the Employer Member to assist them in
following a plan of loss control that may result in reduced losses. The contractor shall provide all of
the services as provided in the proposed service contract entered into by and between the con-
tractor and the Fund on behalf of the Employer Member. Not withstanding any provisions of this
paragraph, all reports and filings required by the Industrial Accident Board of an employer will be
the responsibility of the Employer Member.
12. Each month there shall be supplied to each Employer Member a computer printout involv-
ing a statement of claims, claims status, and activity report cumulative for each Fund year.
13. The Employer Member agrees to execute necessary authorization forms permitting the Fund
and the contractor to obtain from the State Board of Insurance the experience rating modification
for the Employer Member that has previously carried workmen's compensation insurance. Upon any
contract termination or non- renewal the Employer Member agrees that the Fund may file with the
State Board of Insurance loss and payroll data pertaining to the Employer Member as used to develop
experience modification.
14. In the event that the Employer Member fails or refuses to make the payments of premiums
as herein provided the Fund reserves the right to terminate such Employer Member by giving ten
(101 days written notice and to collect any and all premiums that are earned pro -rata for the period
preceding contract termination. Any Employer Member that is terminated hereunder shall not be en-
titled to any of the dividends that have not been paid at that time.
15. The undersigned Employer Member does hereby agree that any suit brought by one of its
employees pursuant to the provisions of Article 8309h shall be defended in the name of the political
subdivision by the counsel selected by the Contractor. Full cooperation shall be extended to supply
any Information needed or helpful in such defense.
16. The Employer Member agrees to abide by the Bylaws of the Fund as adopted by the Board
of Directors of the Texas Municipal League.
17. The Employer Member is a political subdivision of the State of Texas.
18. In order to have an orderly, complete and well understood basis for contributions to the
Fund, the current plans and future amendments with respect to Workmen's Compensation rates and
premiums of the State Board of Insurance are hereby adopted as a guide but by such adoption it is
recognized that the rating structure promulgated by the State Board of Insurance is not applicable
to self insurance and there is no intention to bestow rating authority over this plan of self insurance
upon the State Board of Insurance. Any reference at any time in this contact to an insurance term
not ordinarily a part of self insurance shall be deemed for convenience only and is not to be con-
strued as being contrary to the self insurance concept except where the context clearly indicates no
other possible interpretation such as but not limited to the reference to "reinsurance ".
IN WITNESS WHEREOF, the parties have hereunto set their hands by their representatives there-
unto auly authorized this _ day of ___ __
Con,rac, Number
The Workmen's Compensation Coordinator
for the Employer Member is:
NAME —
ADDRESS
CITY
TELEPHONE
ATTEST:
City Secretary
ZIP _
BY
TEXAS MUNICIPAL LEAGUE
WORKMEN'S COMPENSATION
JOINT INSURANCE FUND
N. Alex Bickley, Chairman
Austin, Texas
FOR __CITY OF CORPUS CHRISTI
Employer Member
BY
1974.
Authorized Official
__. R. Marvin Townsend, City Manager
__ _ Co_rpua Christi, , Texas
APPROVED:
City Attorney
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Texas EMPLOVeRS' insuRance ASsociaTlon
POST OFFICE BOX 2759 1 DALLAS, TEXAS 75221
March 20, 1974
Mr. N. Alex Bickley
Municipal Building
City of Dallas
Dallas, Texas 7$201
Re: Contract Agreement
Dear Alex:
Please accept this letter as the Contract Agreement by and between Texas
Employers' Insurance Association and the Texas Municipal League WorIFnen's
Compensation Joint Insurance Fund. Our proposal submitted to you dated
December 17, 1973 as subsequently amended and confirmed to you by my letters
dated December 27 and 28, 1973 shall be deemed included in and part!of this
Contract Agreement as if reproduced verbatim herein.
The reinsurance protection to be afforded by Employers Casualty Company drill
be finalized in a separate instrument which will be furnished to�you in due
course.
Please execute the original and one copy of this Contract Agreement, retain
the original for the Texas Municipal League 'Workmen's Compensation point
Insurance Fund, and return the executed copy to me for the Texas,EmVloyers'
Insurance Association .
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Acknowledged and &ecuted by The Undersigned:
I ALEX BICiLEY, CIMIRMANj H. 14Arilt PffTCH, CPCLJ,, CLU
Board of Trustees Regional Vles Manager 11!
Texas Municipal League Texas Flnplovers' Insurance Association
Workmen's Compensation Joint �1
Insurance Fund
Date Date
I�
Ali
.il ^'ERC iN' .IiFnNi F I )I i[MAS �'u-14
ti
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4i.
Texas EMPLOVeRS' inSLBF3anca ASSOC9a Tion
POST OFFICE BOX 2759 1 DALLAS, TEXAS 75221
Texas Municipal League
Attn: Mr. Alex Bickley
December 27, 1973
BE: Proposal for Self Insurance
As discussed with you today, we hereby_ amend our Alternate _Hid_&-proposed- charges
(total charges by contractor) tc 16.0% of standard premium adjustable at the end
of each fund year in keeping with the following schedule:
Annual Standard Premium
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
11,000,000
12,000,000
13,000,000
14,000,000
15,000,000
and above
Total Charges by Contractor
16.o%
15.8
15.6
15.4
15.2
15.0
14.9
14.8
14.7
14.6
14.5
The above is conditioned on the following:
I. Minimum development of $5,000,000 annual standard premium but no
minimum percentage of eligible DM premium.
2. Deletion of the optional escalator formula tied to incurred loss
ratio.
3. $50,000 loss retention.
4. 601 stop loss including allocated claims expense over contract
period.
5. 3-year contract.
6. No reduction of services as proposed under Alternate Hid §2.
Sincerely,
H. Sda e Dortch, CPQJ, CLU
EMPLOYERS INSURANCE OF TEXAS: 4—::� k-41 —T 74 I '
Ten, En'G',e,a.Y In3— A—iatp I Empl %are Casualty C—pa y I Ee,playere N. M.1 -- Company I Emplgara N.1—.1 U1. Inaurence C..w7
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Texas EMPLOYeRe'S' tnSURance AssociaTio'3
POST OFFICE BOX 2759 1 DALLAS, TEXAS 75221
December 28, 1973
Xr. Alex Bickley
City of Dallas
Re:' Proposal for Self Insurance
Texas Municipal League
Dear Alex:
We are delighted with the contract award for our organization to work
with the Fund under our Alternate Bid #2 as modified by my letter
dated December 27 and by this letter.
The two remaining provisions agreed to in our discussion today are these:
1. The Fluid will have the option on any anniversary date dur-
ing this three year contract to select one of the alter -
native loss retentions ($100,000 or $150,000) at the pro -
posed reduction in charge.
2. The Fund will have the option on any anniversary date dur-
ing this three year contract to select the alternative
stop loss at 68% aggregate incurred losses including allo-
cated claims expense to aggregate standard premium at the
proposed reduction in charge, provided a loss ratio of 60%
or less is attained:for the fund year or aggregate fund .years
preceding selection of alternative stop loss option.
In the event this option is exercised, the stop loss provisions
will operate independently for the two aggregate periods in-
volved under this three year contract.
Any stop loss change other than as described will be subject
to renegotiation of proposed charges.
Sincerely,
H. wteDoftch, CPCU, CLU
Et:.PLOYERS'NEURANCE OF TEXAS.
leas Enm y— .nay— A I Empl,, —Ca IyCwnpwry I EmpWen Natbrel Ineaanpe Company I Employes National We Iruumnoe Compwry
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l tT.,� -per /a MPO Y e S n e n aygp+e SS eaT n
POST OFFICE BOX 2759 1 DALLAS, TEXAS 75221
December 17, 1973
Texas Municipal League
Austin, Texas
RE: Proposal for Self Insurance
Gentlemen:
We are pleased to submit our proposal for self insurance (five copies) for
your consideration. Additional copies can be made available as needed after
contract award.
The Texas Employers Insurance Association was created by-the Texas Workmen's
Compensation Act itself in 1913 to provide workmen's compensation insurance
to employers in this state at cost and is today the preeminent insurer in
the state writing over three times again as much premium as its closest
competitor.
We welcome any inquiry or opportunity to discuss this proposal further.
Sincerely,
i nc a re ly,
67� �aye
H. o rtch, CPCU, CLU
EMPLOYERS INSURANCE OF TEXAS:
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
The Texas Employers' Insurance Association, hereinafter called the Association,
proposes to contract to serve as Contractor for the administration of the
Fund -- operating under the overall supervision of the Fund Administrator
and the Board of Trustees. This essentially means all contracted functions,
services, and other aspects of operating the self insurance program for the
Fund. As the leading workmen's compensation organization in the state, we
offer a highly trained field staff of experienced claims adjusters and safety
engineers geographically dispersed in 23 service offices over the State of
Texas.
The administrative services outlined in this proposal together with the
outstanding management team supervising this program will be domiciled in
our home offices in Dallas. All proposed services will be provided by the
Association. No service or function will be normally performed by personnel
other than those of the Association except for such customary matters involving
other personnel as outside attorneys.
The_Association_'s affiliated- cnmpany,_Employers Casualty Company, will provide__
catastrophe _specific excess_ and aggregate excess stop loss insurance to
protect_the Fund,
A. Proposed Bids and Summary of Costs
Proposed Bids
The Fund's program, in order to be successful, should involve a minimum
participation of 50% of standard premium available from eligible TMS. members.
Our proposal is predicated on minimum participation of 50% and development
of a minimum of $3,000,000 annual standard premium. Failing to reacli these
levels, we must reserve the right to modify our charges. Any significant
downward deviation from these minimum levels should cause this entire self
insurance program to be seriously re- evaluated.
We submit three bids - one bid conforming as closely as possible to the TML
specifications - two alternate bids providing options as to possible improve-
ment of the overall program. Differences between these three bids are
detailed throughout our proposal. Proposed charges are consolidated for
contracted services (claims, loss prevention, administrative) and contracted
insurance protection (catastrophe and stop loss options available). Proposed
charges are constant at $3,000,000 annual standard premium or more. All
__charges are based _on the_gresgnt Act_ and administration thereof. Major
changes outside our control may necessitate modification of proposed charges.
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
Charges & Allowances Expressed
as Percent of Standard Premium
Proposed Alternate Alternate
Bid Bid #1 Bid #2
Claims, Loss Prevention and
Administrative Servicesi 10.0% 10.57 11.5%
Catastrophe2 and Stop Loss3
Insurance (Stop Loss included
in Alternate Bids) 2.7 3.0 3.0
Total Charges by Contractor 12.7% 13.5% 14.5%
1 Optio 1 with a Fund is a followin esc lator formula:
The As oci ion's charge r contr ted se ces on each o the
th ee bids will b adjusted at the a of a contract eriod bas on losses
as7f six months fo wing contract ex p ation at 0.1% o tan rd premium
for a ch 1.0% viatio from 60.0% of nc rred losses inclu g allocated
claims xpens to standa premium bject o a maximum va a 'on in the
Associat'on's charges of 2. , plus or minus.
Example: sing Alternate Bid charges, incu ed to ratio of
40% and below wo produce adjuste c rge of 9.5
0% would produ a ad sted charge of 10.5%
60 would pro ce adju ed charge 11.5%
70% uld p duce adjust char of 12.5%
80% an a ve would produce d usted charge f 13.5%
2 Catastrophe charge based on $50,000 loss retention. Reduction in
charges for alternative loss retentions of 1% for $100,000 and 1.7% for
$150,000.
3 Stop Loss charge based on 60.0% losses including allocated claims
expense to standard premium. Additive charge of 2% for alternative stop
loss at 60% loss ratio.
2
I
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
Summary of Costs
Charges & Allowances Expressed
as Percent of Standard Premium
Proposed Alternate Alternate
Bid Bid #1 Bid #2
Charges by Contractorl
12.7%
13.0%
16.0%
Expensb(allov, cf_ Qr F
Admin'st to /� �\
\ /5
1C
Expense Allowance for State Board
of Insurance Maintenance Taxes,
Industrial Accident Board Main-
tenance Taxes, Index System Fees,
and Other Contingencies2
1.0
1.0
1.0
Total Charges and Expense Allowances
15.2%
15. 67,
17.0%
Allowance for Losses Including Allocated
Claims Expense (Alternate Bids guaranteed
by Stop Loss Insurance)
68.3%
68.0%
60.0%
Total Charges, Expense, and Loss
Allowances
83.5%
83.5%
77.0%
Total Charges and Expense Allowances
With Optional Stop Loss in Alternate
Bids 15.2% 17.0% 17.07—
Allowance for Losses Including
Allocated Claims Expense (Alternate
Bids guaranteed by Stop Loss Ins.) 62.3% 60.0% 60.07
Total Charges, Expense, and Loss
Allowance 77.5% 77.5% 77.0%
I See Footnote 1 on Page 4. This Contractor's charge includes stop loss insurance
based on 60% losses. Castrophe charge based on $50,000 loss retention.
2 These expenses are estimated only and deviation therefrom will increase
or decrease the total charges, expense, and loss allowance.
3
PROPOSED.SERVICES PROVIDED BY THE ASSOCIATION
B. Services To Be Provided
1. Claims Services - InvestiQation
The Association will provide all claims services for the Fund through
130 designated men and women claims adjusters geographically located
throughout the state (See Appendix for roster and claims office
locations). These adjusters are particularly experienced in the
investigation of workmen's compensation claims. Their average comp -
senation claims adjustment experience is 11.6 years; all providing a
high standard of performance. Each is licensed by the State of Texas.
In addition to such staff personnel, we have 55 additional claims
employees located in Texas district offices who adjust other lines of
insurance, but who have received training in workmen's compensation.
There are eleven additional people, hired within the past year, who
have not completed their basic training courses. The total Texas claim
field force is 196.
Specific supervision responsibility will rest with one qualified Claims
Coordinator whose time will be devoted to supervision of all claims
from the Fund. He will be immediately available to the Fund
Administrator. This Home Office direction and control through a
single individual, and on a daily basis, will enable close direction
and control of Fund losses as well as being in a position to note
trends, attorney involvement, claims reserves, etc.
Representation of the Fund at Industrial Accident Board (hereinafter
referred to as IAB) will be the responsibility of the Association.
Its Manager, IAB Services, is an Assistant Secretary, responsible for
the daily contact with IAB Austin personnel as well as filing all
necessary forms with it. He_ also handles hearings in the Austin area.
Four other Hearing Coordinators have the sole duty of traveling about
the state attending IAB docket hearings.
Occasionally, specialized skills are required to investigate fraudulent
or exaggerated claims. Special investigation and surveillance will
be handled by our four staff special investigators - costs included in
our bids. They also obtain evidence and work under the direction of
defense counsel in litigated claims.
Maritime claims are highly technical, therefore the Association has a
maritime department consisting of a four man _full time staff heavily__
experienced in handling claims under federal workmen's compensation,
enabling maximum expertise to be available in the handling of this
-. type loss. Close liaison is maintained with the Dupty Commissioner
and leading admiralty attorneys in coastal cities.
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION o
The Association has available legal facilities through its General
Counsel's staff (five attorneys) that are specialists in workmen's
compensation. Our General Counsel has accumulated a bank of workmen's
compensation decisions and is available for consultation and research
on questions of law. Occasionally the General Counsel is called upon
to file and handle subrogation cases. These services, as well as the
accumulated decisions and opinions, will be available to the Fund -
costs included in our bids.
This service agreement is predicated on the basis that there will be
a right of hearing at the pre - hearing conference level as well as the
right of trial beyond the IAg_jurisdiction (see Appendix for General
Counsel's opinion).
When an employee is injured, the employer will promptly complete an
Employer's First Report of Injury. Receipt of this report by the
Association is the initial step of a properly handled claim. Early
determination will be made whether personal contact with injured
employee is required or verification of incident through supervisor
or witnesses is warranted.
Fatal.claims will be thoroughly investigated..as to liability and
lawful beneficiaries. Prompt payment of fatal benefits will be
instituted when due.
An important aspect of claims investigation is a claim report (inquiry)
to a national non - profit organization, The Index System. Self- insurance
organizations and insurance companies report numerous categories of
accidents, resulting in the accumulation of a bank of information on
individuals who have been involved in accidents and filed claims for
benefits.
If the claimant has had a prior accident, the Index System will notify I
the subscriber the nature of the injury and the subscriber involved.
Previous injury information is thus available, enabling the adjuster
to complete a factual investigation.
For a minimum fee of $200.00, the Index System will accept from a,
self- insured organization 550 reports annually. Thereafter, a fee of
36q per report is charged. As the Fund will want to report each lost
time injury as well as cases of possible fraud or exaggeration, your
reporting would be expected to exceed the 550 minimum. We recommend
the Fund's subscription to the Index System.
2. Claims Services - Cases Involving Medical Expense Only Claims
We anticipate 75 - 807 of employee accidents to involve less than one
day's lost time with no resulting disability. Payments of medical
bills on these claims will be made by the Fund Administrator. The
only services to be performed by the Association will be consultation
when needed and periodic review and audit reports to the employer and
Fund Administrator. Copies of the claim drafts issued by the
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
Fund Administrator and employer reports on first aid station aggregate
expenditures will be furnished to the Association for inclusion on
computer claims reports.
In reco$gn�iti�on of the need for (1) the Fund Administrator to staff
for not�'CiYo'ctlerical jobs but our projection of up to double that to
handle these claims and (2) the Association to consult with and audit
and process for computer claims record keeping - such activities
duplicative to an extent with those of the Fund Administrator, we
strongly recommend that the handling of all such claims be contracted
to the Association. Therefore, Alternate Bids i�1 and #2 contemplate
this additional service.
3. Claims Services - Active Cases (See Attachment)
An injury in lost time of more than one day or where such lost time
or disability is expected will be known as an active case. Since
most active cases involve payment of indemnity, the adjuster's
preliminary work will include procurement of prior wage data to insure
accurate benefits are paid. Activity checks will be conducted, when
appropriate, as a part of our investigation.
Of the 20 -25% of accidents requiring payment of weekly indemnity
i' and /or settlements, the local staff adjuster will make necessary
investigation of the incident, including contacts with the designated
Workmen's Compensation Coordinator and attending physician. Medical
reports will be analyzed and processed. Such routine procedure enables
the Association to maintain a current status of the case, resulting in
proper loss reserving practices. The Fund Administrator will be advised
of the circumstances of the accident and injury, if any, and the
appropriate reserve.
Contractor shall pay all medical and indemnity payments on active
claims subject to review by the Fund Administrator - payments to be
made by draft authority on the Fund.
If final settlement is warranted, the Association's representatives
will negotiate with the employee or his attorney; however, the Fund
Administrator's prior approval is necessary if settlement involves
an amount of $2,000.00 or more except as hereinafter noted.
If the employee brings suit against the Fund, the Association will be
responsible for the selection of a qualified local defense firm. Until
the case is closed, we will supervise the claim and be responsible for
the development of any investigation requested by defense counsel.
All settlement negotiations with employee's attorney will-be_ conducted
by either the defense firm or our staff personnel.
The Association will advise the Fund Administrator and the employer
when an employee files suit against the Fund. Thereafter, periodic
status reports concerning the lawsuit will be submitted to the Admin-
istrator and the employer. All legal fees, cost of appeal bonds,
witness expense, experts,-medical testimony, normally referred to as
an allocated expense item, will be paid by the Fund.
PROPOSED SERVICES PROVIDED, BY THE ASSOCIATION •
With the enactment of the Administration Reform Bill of 1969
(establishing Prehearing procedures by the IAB), settlements prior
to litigation have substantially increased. In as much as injured
employee's counsel is entitled to a maximum fee from the employee's
settlement of 25% at any stage of the claim, a large percentage of
attorney involved cases are resolved in Prehearing Conferences. It
is extremely important that the individual representing the Fund at
these hearings be experienced and qualified in all aspects of
Workmen's Compensation Laws.
Nearing representatives of the Association will be responsible for
assimilation of proper evidence, preparation of all required TAB forms,
and presentation of defense. They also are responsible for negotiations
with the injured employee or his attorney at the Prehearing Conferences.
As these hearing representatives, are staff personnel, their services
are included in our proposed charges. This is a critically important
point in evaluating competitive proposals because our bids contemplate
Prehearing representation by Association staff personnel as opposed to
outside legal counsel whose costs would be borne by the Fund. There
may be a rare occasion where a formal hearing involves complex questions
of law that require an attorney. In such an event, the Association will
employ outside counsel with legal expense to be borne by the Fund.
Our hearing representatives will negotiate within the authority pre-
( viously granted by the Fund Administrator prior to the conference.
Unforeseen circumstances such as new evidence, change in medical, etc.
may warrant settlements in excess of the figure previously authorized
by the Fund Administrator. If the Association representatives agree
to a settlement at a prehearing conference in excess of the figure
previously authorized, an immediate report will be made to the Fund
Administrator. Only unusual necessities imposed during a particular
conference will constitute an acceptable reason for the hearing repres-
entative to settle a loss beyond a sum previously authorized by the
Fund Administrator.
If personal appearance by the employer, a co- employee, or any repre-
sentative of the Fund is deemed necessary for proper handling of the
loss, their expense will be the responsibility of the Fund.
When an employee injury-is caused by a third party, a right of recoup
ment (subrogation) for compensation expenditure exists.. - The claims
representative will be responsible for developing evidence to enable
such right of recovery. We have a Rome Office staff of five people
whose sole responsibility is the detection and prosecution of subro-
gation claims. 4ny recoupment, less legal fees and expenses, will be
returned to the Fund. If legal representation is required for recovery,
we will select the attorney, subject to the Fund's reserving the right
to assign recovery efforts to a firm of its choice.
Close supervision by the IAB of employee injuries generates numerous
requests for medical reports, wage statements, photographs, status
reports, etc. Complying with these inquiries, as well as the required
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
filings of numerous IAB forms regarding disability payments, initiation
and termination of weekly benefits and settlements prior to litigation
are the responsibility of the Association (with copies to employer
when appropriate),
The Association will prepare and process the Form 1099 (as required
by the Internal Revenue Service) on payments make to outside parties
such as, but not limited to, attorneys, physicians, etc.
Prompt and careful attention to the maintenance of reserves is an
important area of our responsibility. Periodic reports on reserves
will be rendered to the Fund Administrator. All closing and reopening
notices will be prepared by the Association.
In the event the injured employee moves to another state or an inves-
tigation outside Texas is required, the cost of the adjusting firm or
agency required to complete the handling of the loss or necessary
investigation will he borne by the Association.
An instructiu it will be prepared and distributed to all employers
as a guide in reporting injuries. Association representatives will
participate in a reasonable number of regional or state -wide meetings
conducted by the Fund to educate employers as to pertinent provisions
and requirements of the workmen's compensation law of Texas.
We will furnish monthly cymputer printouts involving Statement of
Claims to Fund Administrator and employer; Claims Status and Activity
Report, Cumulative Claims Report, Closed Claim Report, and claim ditto
card on each claim to the Fund Administrator - all such records
serving management control purposes for the Fund Administrator as well
as the Association. (See Appendix for Computer Printouts.)
In as much as approximately 35 %•of the workmen's compensation loss
dollar is paid for medical, careful attention will be given to this
large part of the cost dollar. Our Medical Service Manager is res-
ponsible for continuous evaluation of our medical management control
programs resulting in reductions of medical and drug costs in many
instances.
The Association has six medical advisors in Texas, all respected and
qualified-physicians, to assist us in evaluating injury cases, treat-
ment rendered, anticipated disability as well as consultation on fees
charged by the attending doctor. The nominal fees of the advisors
(generally $15 to $25 per case) will be the expense of the Fund.
Our pharmaceutical advisor is responsible for a drug cost control
program in the major cities in the state. This program has achieved
drug cost reduction of approximately 20 %. The expense of the phar-
maceutical advisor is included in our bids.
Serious injury cases requiring physical rehabilitation specialists
will be assigned to Medical Rehabilitation Services, Inc., (herein-
_ after referred to as MRS). This nationally recognized organization
is a subsidiary of the Association and is directed by our Manager of
Medical Services. MRS is staffed with nine rehabilitation nurses
0 1. .. •
PROPOSED SERVICES PROVIDED -BY THE ASSOCIATION
(registered nurses trained in treatment of severely injured persons)
strategically located throughout the state. MRS is a professional
rehabilitation service available to self- insureds and other insurance
companies requiring expertise in physical rehabilitation. Approximately
30 other insurance companies and reinsurance carriers assign their
severely involved cases to MRS for medical and rehabilitation manage,
ment under various kinds of insurance. Many cases have been handled
by MRS for the Assocation and its affiliated companies.
Rehabilitation of serious injury is both humanitarian and economically
sound and necessary. The end result of successful rehabilitation
allows the injured employee to re- establish himself as a useful and
gainfully employed member of society.
Rehabilitation nurses work as a liaison or coordinator of the efforts
of all people involved in a case. These may include medical profess-
ionals; general hospital, rehabilitation and extended care facility
personnel; the patient; family members; insurance representatives;
employers; community and state agency personnel; attorneys; etc.
With lifetime medir-al- benefits allowed by the Act, physical rehab-
ilitation does reduce medical costs and social loss.
Current MRS service fee is $27.50 per hour. The Association will make
appropriate recommendations to the Fund Administrator for'the employment
of MRS when their service is deemed necessary. The fees of MRS will
be payable-by the Fund In addition to injuries such as co =d _damage
brain damage, serious burns, amputees, their services will be considered
on any injury involving extended treatment and convalescence.
The bid specifications request claims service to be bid as a percent
of claims paid up to a maximum percent of premium. In as much as
practically all claims expense is incurred during the investigative
and settlement period as opposed to being equitably spread over the
payment period which could range up to a life time, the bidding of
claims service as a percent of claims paid is not realistic and -
would involve record keeping and other costs detrimental to the Fund
and the Association.
In lieu thereof and in recognition of the principle that the Fund
wishes to limit its unallocated claims expense proportionate to its
actual claims, we propose on all three bids the escalator formula Debit
outlined on Page 2, Footnote --1. This is an optional feature - reject4c+6
ion of which would result in our proposed charges for contracted - F'
services being both minimum and maximum. tno •V
4. Loss Prevention (Safety Engineering) Services
The Association has more than 60 years of experience in the field of
loss prevention and control. During this period, our policyholders
have consistently maintained a lower frequency (accidents per $10,000
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
Cpremium) than that of other companies writing compensation insurance
in Texas.
We believe that our success in this field is due primarily to our
basic philosophy: That accidental loss control can best be accomp-
lished by giving equal attention to all phases of the problem, i.e.,
(a) studying the interrelationship of the worker, his tools -
materials - equipment, and the environment in which he works;
(b) integrating and implementing appropriate accident prevention
measures into the job situation; (c) maintaining controls through
records, reviews, analyses, and re- evaluation.
To assist the members of the Fund in following this plan of loss
control, we will assign a team of qualified, well trained safety
professionals to act as consultants in making surveys, recommendations,
developing training programs, analyses of accident causes and in
giving industrial hygiene and industrial health services.
(a) Services
(1) Surveys of Operations and Service Contacts
It is our general policy to spend a majority of the loss control
dollar in having a qualified engineer on the premises of the policy-
holder in a consultation capacity. There are 60 engineers located
in our various offices across Texas, plus the necessary clerical
assistance. There will be one engineer in each district designated
as the servicing engineer for the Fund locations in his area. He
will have the authority and responsibility to make surveys of oper-
ations and service contacts, to determine where engineering service
time is most needed, and to assign to other engineers Fund service as
deemed necessary. In addition, there will be one Rome Office engineer
assigned the responsibility of coordinating overall Fund service and
to assist field personnel in problem areas.
(2) Accident Studies and Investigation
Each engineer who is assigned the responsibility of servicing Fund
operations will be notified of each serious accident in his area
promptly after its occurrence, and will receive information on less
serious accidents in a few days after they are reported. In addition,
computer printouts will be furnished the Engineering Department to
use in analysis and in determining accident trends, both on an overall
and local basis. This information will assist in determining service
needs and recommending program improvements. Accidents of a catast-
rophic or serious nature will be given on -site investigation by an
engineer to determine cause and needed corrective measures to prevent
reoccurrence.
10
0 ' PROPOSED SERVICES PROVIDED BY THE ASSOCIATION •
(3) Industrial Hygiene and Industrial Health
The Association's Industrial Hygiene Laboratory was the first estab-
lished in'the Southwest, and is still the most completely equipped
lab of any operated by an insurance carrier in this area. Our
Director of Industrial Hygiene, Mr. Charles Reed, has over 25 years
of experience in the determination and elimination of industrial
hygiene and health problems throughout the state. Each field engineer
has also been trained in health hazard recognition. A mobile lab is
used to increase the availability and speed with which industrial
hygiene service can be given.
(4) Hazard Survey Equipment
All engineers are trained in the use of instruments and equipment
such as carbon monoxide testers, universal testers, explosimeters,
volometers, anemometers, smoke tubes, hydrogen sulfide testers, sound
level meters, air samplers, light meters, etc. The number of instru-
ments located in each district varies according to the needs of the
office; however, all such equipment is available on an immediate basis
from the Home Office or district where is assigned.
(5) Safety Training, Literature and Administrative Aids
An important part of the Engineering Department is its Communication
Section which includes technical writers, industrial artist, photo-
graphic technician, library, and the necessary equipment to develop
various training programs, seminars, film strips, technical data
sheets, posters, hazard survey guides and other such material to aid
its customers in their accident prevention efforts. Of specific
interest to the Fund is a five -day seminar which can be used to train
those persons who have the safety responsibility in the various member
districts. There are also shorter courses to be used in training
supervisors, foremen, and other key personnel. Additional "tailor -
made" material will be developed for the Fund as its needs are
determined. O
(b) Personnel
(1) qualifications
All Engineering Department servicing personnel meet the requirements
of the Texas Insurance Code. Fifty -seven have degrees from accredited
engineering colleges and three have Bachelor of Science degrees.
Twenty -seven have received their designation as Professional Engineers,
31 are Certified Safety Professionals, and 43 are members of the
American Society of Safety Engineers. The average experience of all
engineers is 10.6 years. The average experience of management per-
sonnel (Home Office staff and District Engineering Managers) is 18.3
years.
11
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
(2) Organization and Location of Personnel
A line - management organization is used. Engineers are located in
21 district offices as outlined on the service map.
(3) Training
In order to keep our servicing engineers up -to -date on the rapid
changes in standards, codes, materials, methods, and new technology,
we have developed a training program which includes eight formal
study courses, plus special seminars and various college courses
when they are needed. .
(c) Fund Safety Program
The following procedures will be used in developing a program tailor -
made for the Fund operations:
Immediately after a contract agreement is reached,.a Staff
Engineer will be given the assignment of developing a loss
control program. Surveys of operations and management consult -
ation contacts will be initiated by our field engineers immed-
iately. Reports of the surveys will be analyzed and used in
working out a "plan of service ".
2. After a program and plan is 'determined and approved by the Fund
Administrator, each district will be assigned the responsibility
of calling on all Fund members in his area, discussing the plan,
and beginning a program of implementation.
3. Loss control service will then be provided on a continuing basis
as outlined in the agreement on an"as needed" basis in such
quantity and such quality as to assist in producing a low freq-
uency and severity of accidents.
a
With respect to the above described safety engineering services, we
propose to furnish engineering services similar in quantity and qual-
ity to those furnished by the Association to its insured subscribers
having similar exposures under the Texas Workments Compensation Act.
This would normally involve approximately 2400 hours annually of on-
site involvement by safety engineering personnel for the minimum
$3,000,000 annual standard premium contemplated by this proposal with
approximately 800 additional hours for each one million standard
premium in excess of $3,000,000.
12
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
5. Catastrophe Specific Excess and Aggregate Excess Stop Loss Insurance
For the protection of the Fund, insurance as below described is pro-
posed by Employers Casualty Company, an insurance carrier admitted in
the state of Texas and rated by A. M. Best Company with general policy-
holders rating A+ (highest possible) and financial rating AAAAA
(highest possible).
1. Specific Excess of Loss Insurance (Catastrophe Insurance)
This insurance indemnifies the Fund against any loss exceeding
$50,000 (alternatively $100,000 or $150,000) up to a maximum
of $5,000,000 which results from one accident or occurrence.
Our proposed charges on all bids contemplate insurance excess
of $50,000 loss retention. The amount by which our charges
would be reduced for alternative loss retentions of $100,000
and $150,000 are outlined on Page 2, Footnote 2. We do not
consider loss retentions less than $50,000 and maximum limits
less than $5,000,000 realistic for the Fund.
2. Aggregate Excess Insurance (Stop Loss Insurance)
This insurance indemnifies the Fund for aggregate.losses incl-
uding allocated claims expense which are in excess of 68%
(alternatively 60 %) of aggregate standard premium during the
contract period. In conformity with the specifications, our
proposed bid does not include stop loss insurance. For the
protection of the Fund, we strongly recommend such insurance
and our proposed charges on alternate Bids #1 and #2 contem-
plate stop loss insurance at 68% aggregate losses to aggregate
standard premium. The amount to be added to our proposed I
charge for alternative stop loss insurance at 60% aggregate
losses to aggregate standard premium is outlined on Page 2,
Footnote 3.
6. Records
This proposal contemplates that computer printouts, reports, files,
forms including claims draft design, and all other records will
approximate and in most insxances identically be those customarily
used by the Association. All computer printouts (but not computer
programs) and other records (but not raw work papers) prepared and
maintained under this contract shall be deemed property of the Fund
and shall be returned to the Fund on demand.
In addition to the customary records and files maintained for admin-
istering claims and providing loss prevention service, our proposed
bid and alternate Bid #1 contemplate maintenance by the Association of
the following management reports and computer printouts:
13
n
0
PROPOSED SERVICES PROVIDED BY THE: ASSOCIATION
Statement of claims on a monthly basis rendered to each employer,
cumulative through the year. In subsequent years, a statement of
claims will be furnished to the employer on the prior year as of
6 months following expiration of the fund year and at 12 month
internals thereafter for so long as there may be open claims.
Claims Status and Activity Report, Cumulative Claims Report,
Closed Claim Report - all on a monthly basis - claims ditto card
on each claim, loss prevention studies, and analyses will be
furnished to the Fund Administrator. (See Appendix for Computer
Printouts.)
We propose under alternate Bid #2 to complete and render all manage-
ment reports, records and filings that are customary to insurance
operations or as may be required of self insurers. Such additional
reports would include, but not be limited to, the following:
Periodic Statement of Operations and Balance Sheets to be rendered
to the Board of Trustees. The format will be similar to that pres-
cribed by the National Association of Insurance Commissioners for
casualty insurance companies and will present all pertinent facts
regarding financial status of the Fund. These reports can be
modified to reflect particular information desired by the Fund.
Filings other than individual claim data required by the Industrial
Accident Board, the Texas State Board of Insurance, or other
regulatory agencies.
Tax returns as required by federal, state, and local authorities.
Experience Rating Plan modifications actuarially computed as would
otherwise be promulgated by State Board of Insurance to be furnished
to each employer prior to the fund year in which an experience mod-
ification is earned. With respect to this modification, it is anti-
cipated that virtually all employers who do not already have an
experience modification would earn such a modification commencing
with the third fund year. (See Appendix for Experience Rating
format.)
Appropriate accounting records for the Fund as required to present
clearly all transactions of the.Fund.
Annual Report certified by the certified public accounting firm of
Peat, Marwick, Mitchell & Co., or a similarly qualified firm will
be rendered to the Board of Trustees. Fee for audit by Peat,
Marwick, Mitchell is included in our proposed charges. Selection
of a different firm would necessitate review of charges for this
service.
14
Ll
•
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
7. Investment Management
Under alternate Bid 02, we propose to manage the Fund's investment
portfolio in accordance with the investment policy prescribed by the
Trustees. Investment funds will represent those funds not needed .
immediately to meet obligations and will include unearned premiums,
claim reserves, and any Fund surplus accumulated. A conservative
investment policy is recommended during the early years. We propose
to handle the investment management activities as included within our
proposed charges.- contingent on the selection by the Fund by a Dallas
bank, such as Republic National Bank, as its banking depository.
Republic National Bank is presently handling many of the transactions
for our organization and we could adopt procedures presently utilized
by our organization. When investment funds grow so as to require more
sophisticated portfolio management, we reserve the right to negotiate
appropriate investment management charges.
C. Duties and Responsibilities of Employers
Each employer will execute a contract with the Fund. Employer will pay the
required premiums on time. Employer will designate a Workmen's Compensation
Coordinator to work with the Association.
A physical examination form to be designed by the Fund Administrator and
completed by each new employee will be obtained. However, we do not deem
this procedure to be constructive or necessary. We do recommend that each
employer require a pre - employment physical examination on each new employee
to be completed by a practicing physician.
When called upon by the Association to make specific contacts such as talking
to witnesses, assisting in negotiations with employees, or making other
personal contacts on those persons within the control or employment of the.
employer, the employer will provide the information requested.
Each employer shall, within a reasonable time, correct any unsafe practice or
condition pointed out by the Association that may result in unusual or excess-
ive losses to the Fund. If the employer should fail to take steps to alleviat
such described practice or condition, the Association will notify the Board
of Trustees. It is anticipated that the Association will view as an emergency
any unsafe practice or condition that might lead to a catastrophe. Any
dispute that may arise between the Association and an employer with respect
to an alleged unsafe practice or condition will be submitted to the Fund
Administrator with right of appeal to the Board of Trustees.
D. Other Information
This proposal is conditioned upon execution of a two year contract commencing
July 1, 1974, with contract award to be made not later than January 15, 1974.
Such contract may be terminated by either the Fund or the Association upon
OLI
PROPOSED SERVICES PROVIDED BY THE ASSOCIATION
giving 30 days written notice of intent not to renew the contract on
July 1, 1976, or by mutual consent at any time during the contract period.
We recommend a three year contract which we believe would be mutually bene-
ficial to the Fund and the Association.
Payments to the Association for services rendered under this proposal will be
payable monthly at one - twelfth of the estimated annual payments to be adjusted
at the end of each year based on actual standard premium developed by the Fund.
We propose to provide any requesting employer during the pre - commencement
period between contract award to the Association and commencement of the Fund
on July 1, 1974 a policy of voluntary workmen's compensation at the prevail-
ing rates and rules on a short term premium discount plan to expire July 1,
1974 -- to be issued by Employers Casualty Company.
The Association shall not be held accountable for any increased loss cost or
expense under any contention that any claim could have been handled differently
at a savings from the actual loss sustained except the Association may be held
accountable if there has been a deliberate or willful failure to carry out
any instructions of the Bpard of Trustees with respect to any specific case.
In the event of contract termination, the Association will assume responsib-
ility for claims administration on a run -off basis of claims as of the end of
the contract period and will furnish performance bond or other evidence of
financial stability as may be required.
The Association will furnish a fidelity bond or other evidence of financial T
stability as may be required by the Board of Trustees.
Under the proposed bid and alternate Bid #1, the Association will furnish not
less than 800 square feet of suitable office space including appropriate cust-
odial and utility service, but not including telephone service in its home
office building located at 423 South Akard, Dallas, Texas.
Under alternate Bid 02, a Fund Administrator and office space are not contem-
plated. The Association would work directly under supervision of the Board
of Trustees. It would be anticipated that the TML staff (assisted by other
TML representatives) would market the self insurance program, would enroll
participating employers, and would collect the payable premium depositing
same to the Fund's account to be administered and accounted by the Association.
The Association will make its representatives available to participate in a
reasonable number of regional or statewide meetings to assist the ML.
16
13. The Employer Member agrees to execute necessary authorization forms permitting the Fund
and the contractor to obtain from the State Board of Insurance the experience rating modification
for the Employer Member that has previously carried workmen's compensation insurance. Upon any
contract termination or non - renewal the Employer Member agrees that the Fund may file with the
State Board of Insurance loss and payroll data pertaining to the Employer Member as used to develop
experience modification.
14. In the event that the Employer Member fails or refuses to make the payments of premiums
as herein provided the Fund reserves the right to terminate such Employer Member by giving ten
(10) days written notice and to collect any and all premiums that are earned pro -rata for the period
preceding contract termination. Any Employer Member that is terminated hereunder shall not be en-
titled to any of the dividends that have not been paid at that time.
15. The undersigned Employer Member does hereby agree that any suit brought by one of its
employees pursuant to the provisions of Article 8309h shall be defended in the name of the political
subdivision by the counsel selected by the Contractor. Full cooperation shall be extended to supply
any information needed or helpful in such defense.
16. The Employer Member agrees to abide by the Bylaws of the Fund as adopted by the Board
of Directors of the Texas Municipal League.
17. The Employer Member is a political subdivision of the State of Texas.
18. In order to have an orderly, complete and well understood basis for contributions to the
Fund, the current plans and future amendments with respect to Workmen's Compensation rates and
premiums of the State Board of Insurance are hereby adopted as a dulde but by such adoption it is
recognized that the rating structure promulgated by the State Board of Insurance is not applicable
to self insurance and there is no intention to bestow rating authority over this plan of self insurance
upon the State Board of Insurance. Any reference at any time in this contact to an Insurance term
not ordinarily a part of self insurance shall be deemed for convenience only and is not to be con-
strued as being contrary to the self insurance concept except where the context clearly indicates no
other possible interpretation such as but not limited to the reference to "reinsurance ".
N WITNESS WHEREOF, the parties have hereunto set their hands by their representatives there-
unto duly authorized this __, - -- ___ day of __ -- .— —_ 1974.
Contract Number
The Workmen's Compensation Coordinator
for the Employer Member is:
NAME — - - - -- - - -- -- - --
ADDRESS
CITY -- -- - ZIP - - -
TELEPHONE —_
ATTEST:
City Secretary
TEXAS MUNICIPAL LEAGUE
WORKMEN'S COMPENSATION
JOINT INSURANCE FUND
BY
N. Alex Bickley, Chairman
Austin, Texas
FOR - CITY-OF - CORPUS MMTSTT
Employer Member
BY--- - - - - --
Authorized Official
R. Marvin Townsend, City Manager
Corpus Christi ,Texas
APPROVED:
INTER- OFFICE COMMUNICATION
Dept. Legal
To R. Marvin Townsend, City Manager
From James R. Riggs, City Attorney Date May 28, 1974
Recommendation and Reauest for Authorization to Emolov Private Counsel_ the General
Matters and Cases Arising Under the City of Corpus Christi Contract /TML Joint Insurance
Fund - Article 8309h. (City Charter Article IV, Section 27).
Pursuant to City Charter Article IV, Section 27, I hereby request, and recommend,
authorization to retain the General Counsel of the Texas Employer Insurance
Association, or his successor in office, his assistants, and such other attorneys
as he may engage, to serve as attorneys for the City of Corpus Christi in the
bringing of defense or suits or proceedings in connection with workmen's compen-
sation benefits provided by the City of Corpus Christi as a self - insurer, under
the captioned TML Joint Insurance Fund contract.
The payment of the fees for the legal services performed as recommended herein
will be forthcoming from the payments made by the City of Corpus Christi, as
authorized by the City Council, under the contract between the City and the TML
Joint Insurance Fund.
Please indicate your approval of this recommendation and thereby furnish my
authorization to enter into a letter agreement for the purpose stated with the
General Counsel of the Texas Employers Insurance Association.
Very truly, /� /� �
i' James R. Riggs
City Attorney
JRR:e
Approved:
day of 1974:
R. Marvin Townsend, City Manager
„
CITY ®F' CORPUS CHRISTI, TEXAS
MAYOR
JABpN LUCY - CITY MANAGER
R. MANVIN TpwNBEND
CITY COUNCIL
"'Y SECRETARY
JAM Ee T. Acu.E LEGAL DEPARTMENT T- RAY KRINp
JAMES M RIGGS - CITY ATTORNEY CITY OFFICES
EVN HAROLD T. BRANCH
AROO p RELIN6
TH pMAH May 29, 1974 Per =E NECK 92TT
L OZA N D. BR. CpRPUe ECHR18TI. TEk49 284
PHONE [912] FIIM1 -201]
J. HAROLD STARK
ASSISTANT CITY ATTORNEYS
The General Counsel
The Texas Employers Insurance Association
% The Texas Employers Insurance Association
423 South Akard
Dallas, Texas 75202
Dear Sir:
C. M. HENKE" 111 — A-T. CITY ATTORNEY
CLYDE JACKBpN — ABBT. CITY ATTORNEY
MICHAEL MAY —
EXEC. ABBT. CITY ATTORNEY
DERRY MILLER — ABBT. CITY ATTORNEY
B.B TERRY — CHIEF PROBEC"TCR
Re: Employment Contract: City of Corpus
Christi - Member, TML Joint Insurance
Fund. Legal Representation of the
City of Corpus Christi
Under the terms of Article IV, Section 27, of the City Charter of the
City of Corpus Christi, Texas, it is provided:
"No contract for the employment of private counsel shall
be made by the city, except upon the request in writing
of the city attorney stating the necessity therefor and
with the consent of the city manager, and such employ-
ment shall not be a general retainer but only for pro-
fessional services in specific litigation or particular
matters set forth in the request for such employment."
In accordance with this requirement I have duly made recommendation
and request for authorization of such employment contract to the City
Manager and the City Council by letter of May 29, 1974, duly approved
by the Manager and Council as an Exhibit "B ", attached to the authori-
zation ordinance for the City's contract with the TML Joint Insurance
Fund. Such approval, having been duly obtained, you are hereby author-
ized and employed to represent the City of Corpus Christi, pursuant to
the captioned letter and Ordinance No. and as specified by the
approved contract, attached as Exhibit "A" between the Workmen's
Compensation Joint Insurance Fund -TML and the City, as detailed in the
self- insurance proposal made by the Texas Employers Insurance Association
on December 17, 1973, and as amended by letter agreements of December 27,
1973, December 28, 1973, and March 20, 1974, between the Texas Employers
Insurance Association and the TML Workmen's Compensation Joint Insurance
Fund.
G '�
s •
JRRiggs to The General Counsel
Texas Employers Insurance Association
Re: Employment Contract Page 2
You are hereby engaged, until termination as provided by the captioned
agreement, to represent the City of Corpus Christi, as a member of the
Texas Municipal League Workmen's Compensation Joint Insurance Fund, as
well as your duly authorized assistants, and other counsel retained by
you under the terms of said agreement, for the purpose of representing
the City of Corpus Christi in the bringing of defense or suits and pro-
ceedings in connection with workmen's compensation benefits provided by
the City of Corpus Christi as a self- insurer.
Your compensation for these services will be as provided by the subject
agreement.
Please signify your acceptance of this employment contract, for the
purposes of satisfying the provision of Article IV, Section 27, of the
Corpus Christi City Charter, by signing the space hereinbelow provided,
returning one signed original to me.
Very truly,
James R. Riggs
City Attorney
JRR:e
Accepted:
day of , 1974:
General Counsel
Texas Employers Insurance Association
Atts.
Corpus Christi, Texas
,,?f day of , 19
TO THE MEMBERS OF THE CITY COUNCIL
Corpus Christi, Texas
For the reasons set forth in the emergency clause of the foregoing
ordinance, a public emergency and imperative necessity exist for the suspen-
sion of the Charter rule or requirement that no ordinance or resolution shall
be passed finally on the date it is introduced, and that such ordinance or
resolution shall be read at three meetings of the City Council; I, therefore,
request that you suspend said Charter rule or requirement and pass this ordi-
nance finally on the date it is introduced, or at the present meeting of the
City Council.
Respectfully,
MAYOR
THE CITY OF CORPUS CHRISTI, TEXAS
The Charter rule was suspended by the following vote:
Jason Luby
James T. Acuff
Rev. Harold T. Branch
Thomas V. Gonzales
Ricardo Gonzalez
Gabe Lozano, Sr.
J. Howard Stark �L
The above ordinance was passed by the following vote:
Jason Luby
James T. Acuff
Rev. Harold T. Branch
Thames V. Gonzales
Ricardo Gonzalez
Gabe Lozano, Sr.
J. Howard Stark