HomeMy WebLinkAboutC-8972-1 - Agreement Regarding Insurance pool MembershipN
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00 AGREEMENT WITH CALIFORNIA INSURANCE POOL AUTHORITY
t REGARDING INSURANCE POOL MEMBERSHIP
This Agreement regarding insurance pool membership ("Agreement") is made
and entered into on WOV 92L ("Effective Date"), by and between CALIFORNIA
INSURANCE POOL AUTHORI ("CIPA"), a California joint powers authority, and the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city
("C ity") .
RECITALS
A. City will be a Member Agency of CIPA pursuant to the Joint Powers Agreement
for California Insurance Pool Authority ("JPA Agreement"), executed on or about
October 25, 2022. City's status as a Member Agency will be effective July 1, 2023.
B. The JPA Agreement provides City, as a Member Agency, membership in an
insurance pool, which includes the benefits of general insurance broker services from
Aon Risk Insurance Services West, Inc. ("Insurance Broker"). The scope of Insurance
Broker services is set forth in that Agreement for Insurance Broker Services dated July
1, 2019, as amended, between CIPA and Insurance Broker ("Aon Agreement").
C. Pursuant to a solicitation process, CIPA was selected to provide City with access
to an insurance pool and related services upon the expiration of City's existing
insurance policies on June 30, 2023. The switch from the City's current insurance pool
will require certain transitional services.
NOW, THEREFORE, it is mutually agreed by and between he undersigned
parties as follows:
1. Term: The term of this Agreement shall commence on the Effective Date, and
shall terminate on June 30, 2028, unless terminated earlier.
2. Services: Starting July 1, 2023, City shall be able to obtain general insurance
brokerage services from Insurance Broker in accordance with the Aon Agreement. From
October 26, 2022 until July 1, 2023, City shall have access to certain insurance broker
services, which are set forth in the Second Amendment to the Aon Agreement
("Transition Services"), a copy of which is attached hereto as Exhibit A.
3. Cost: The cost for Insurance Broker services shall not exceed $190,000, in
accordance with the cost proposal attached hereto as Exhibit B, payable to CIPA.
Transition Services shall be provided at no cost.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: h
By:
A on . Har
City Attorney
ATTEST: A (' �2Z Date: D f�(J
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Kevin oon
Mayor
CALIFORNIA INSURANCE POOL
AUTHORITY, a California joint powers
authority
Date:
Signed in Counterpart
By: V wWvwV v 1rV*• 1 By:
Leilani I. Brown ��Po Janet Kiser
00"City Clerk 4 .. AN General Manager
-_-� ND OF SIGNATURES]
Attachment(s): xhibit A - Second Amendment to the Aon Agreement
Exhibit B - Cost Proposal
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: �dh��-
By: y
�A on . Har
City ttorney
ATTEST:
Date:
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
Bv:
Kevin Muldoon
Mayor
CALIFORNIA INSURANCE POOL
AUTHORITY, a California joint powers
authority
Date: `0.Al�Z �.
By: By:
Leilani I. Brown Janet Wser
City Clerk Gener I Manager
[END OF SIGNATURES]
Attachment(s): Exhibit A — Second Amendment to the Aon Agreement
Exhibit B — Cost Proposal
EXHIBIT A
SECOND AMENDMENT TO THE AON
AGREEMENT
SECOND AMENDMENT TO AGREEMENT FOR
INSURANCE BROKER SERVICES
This Second Amendment ("Amendment") is entered into on October 26, 2022 ("Effective Date"),
as an Amendment to the Agreement for Insurance Broker Services dated July 1, 2019
("Agreement"), by and between the California Insurance Pool Authority ("CIPA"), a California
public joint powers authority, on behalf of Member Agencies, and Aon Risk Insurance Services
West, Inc. ("Insurance Broker").
The terms and conditions of the Agreement shall remain in full force and effect, except as
otherwise set forth in this Amendment.
IT IS HEREBY AGREED AS FOLLOWS:
The existing Exhibit A "Minimum Scope of Services & Requirements" to the Agreement is
replaced with the version attached to this Amendment.
The City of Newport Beach ("City") will be a Member Agency of California Insurance Pool
Authority effective July 1, 2023. In consideration of City's pending membership, CIPA shall
provide the transitional services listed below to the City effective October 26, 2022, up and until
the City becomes a Member Agency of CIPA on July 1, 2023, at which time the City will have the
full scope of services available to CIPA Member Agencies.
The terms and conditions of this Agreement, including the amended Exhibit A "Minimum Scope
of Services & Requirements," shall be applicable to the City for all policies placed on behalf of
the City on and after October 26, 2022.
1. Review City's current Memorandums of Coverage, insurance policies, detailed schedules
of insurance, actuarial reports and claims history in preparation for the initial transition
meeting with the City, CIPA and broker.
2. Develop a transition plan with City and broker including monitoring and reporting progress
to City.
Assist the City in completing applications for the pooled and excess policies renewing on
July 1, 2023.
4. Keep the City fully informed on the status of all marketing efforts.
5. Respond within 24 hours to inquiries.
6. Attend meetings at the request of the City.
Each Member Agency and the City shall be a third -party beneficiary of this Agreement with the
right to enforce the provisions of this Agreement.
Page 1 of 2
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the Effective
Date.
California Insurance Pool Authority
Aut rized Signature
�J-a ,) c k/5e/'
Name
Date
OX�
AonRiisk Insurance Services West, Inc.
Authorized Signature
1, '- ( (�� S , Oepe�
Name
0tf(C* Op
Title
10 'm 20
Date
Page 2 of 2
EXHIBIT A
MINIMUM SCOPE OF SERVICES & REQUIREMENTS
Insurance Broker shall perform all of the customary duties of an insurance broker for the insurance program(s),
of CIPA, and for Member Agencies placing individual policies, including but not limited to the following:
1. Review marketing plans with CIPA, or Member Agencies as applicable, prior to approaching potential
coverage providers.
2. By December 1 of each year, provide a written report stating anticipated renewal terms, conditions and
opportunities for program enhancements. An updated written report shall again be provided if there are
any changes to the anticipated renewal terms and conditions.
3. Draft insurance policy specifications which address loss exposures, adequacy of coverage, appropriate
retention levels, significant restrictions in coverage, duplications or gaps in coverage, suitability of forms,
and other related matters.
4. Develop underwriting information, structure offerings to coverage providers and secure coverage in
excess of self-insurance programs with financially acceptable coverage providers taking into
consideration breadth of coverage, cost and service.
5. Provide documents for Board packets no later than 14 days prior to Board meeting and review all
proposals, documents, policies and other correspondence for accuracy prior to submitting to CIPA, and
to Member Agencies as applicable.
6. Assist Member Agencies and potential new Member Agencies in the completion of applications and
compile all information for submittal to carriers and copy to CIPA.
7. Prepare a comprehensive summary report for presentation to the Board no later than June 1 of each year,
outlining all quotations, conditions and analysis of the recommended coverages. The summary shall
include any changes in terms and conditions from the prior year.
8. Provide a disclosure report of any and all commissions, rebates or other earnings on renewal placements
at June 1 of each year and provide an update by August 15, and at any time thereafter, if there are any
changes to the June 1 report. Insurance broker will disclose in detail all compensation received from any
source resulting from the marketing of insurance programs for CIPA or Member Agencies.
9. Prepare schedule of insurance by August 1 of each year.
10. Deliver binders or other evidences of coverage within five (5) working days after the placement of any
coverage under the program(s) to be effective until such time as the policy or policies for the placement
are received from the insurance carriers.
11. Deliver complete policy or policies within ninety (90) calendar days of placement. If such policy or
policies are not delivered timely, Insurance Broker will provide written documentation stating the reason
for such failure.
12. Review insurance policies, binders, certificates, billings and other documents for accuracy and
conformance with negotiated coverage within fourteen (14) calendar days of receipt, or earlier if needed.
13. Process requests for additions or deletions to policies or endorsements within five (5) working days of
receipt and continue to follow-up until received. Provide status of request every fourteen (14) days until
received.
14. Monitor Program(s) to assure continuing balance of coverage scope, cost, service and stability.
Page 1 of 2
15. Evaluate the financial status and service capabilities of current and past coverage providers and notify
CIPA, or Member Agency if applicable, immediately of any adverse changes in the financial condition
of its insurers.
16. Assist Member Agencies with filing claims and represent CIPA and Member Agencies claim
negotiations with insurance carriers. Provide CIPA and/or Member Agencies with status updates
throughout process.
17. Prepare annual stewardship report which will include a complete list of coverages in force, an evaluation
of the overall insurance program(s), including recommendations for change, a forecast of market
conditions and estimated premiums for future budgeting purposes, and a description of the activities
performed on CIPA matters by the account team members.
18. Provide renewal certificates by July 1 of each year and prepare additional requests from Member
Agencies within three (3) working days of request.
19. Assist CIPA and Member Agencies in the evaluation of contractual risk for the purpose of determining
appropriate insurance requirements.
20. At the request of CIPA and/or Member Agencies, review evidence of insurance and provide guidance on
acceptability.
21. Review contracts and lease agreements as requested by CIPA and/or Member Agencies and notify
whether insurance programs meet specifications.
22. Attend Board and other meetings at the request of CIPA and/or Member Agencies.
23. Assist in the recruitment and marketing of new Member Agencies.
24. Disclose on a timely basis all real or potential conflicts of interest.
25. Respond to phone calls and emails within 24-hours.
26. Comply with all State and Federal laws and regulations pertaining to insurance brokers licensed in the
State of California.
Page 2 of 2
EXHIBIT B
COST PROPOSAL
Exhibit B
Please provide the proposed yearly fee for general brokerage services or joint powers
authority, as described in the Scope of Services.
PROPOSED PRICING FOR CONTRACT DURATION
Year
Not -to -Exceed Compensation Amount
Year 1
$35,000
Year 2
$35,000
Year 3
$39,000
Year 4
$40, 000
Year 5
$41, 000
TOTAL AGREEMENT COMPENSATION
$190,000
Other Costs: In the space below or on a separate page, please indicate any other costs that may
be associated with providing the requested services in this RFP that are not included in the table
above. Please also assume a five (5) year contract term and describe any annual rate increases
over this time, if applicable:
The above represents the estimated insurance broker fees that would be allocated to the City of Newport
Beach for the CIPA group purchased insurance programs, including excess liability, excess workers'
compensation, property, cyber, pollution and crime/bond policies.
CIPA has a contract with Aon, our insurance broker, for the placement of CIPA's group purchased insurance
policies. The flat fee arrangement with the broker is allocated between Members and is the only brokerage
fee paid on the group purchased policies. Thus, the City would not have a flat fee arrangement with the
broker, plus insurance broker commissions built into the JPA's group purchased programs. Any fees or
commissions paid by carriers to Aon in excess of CIPA's contracted flat fee are rebated back to CIPA as a
reduction in Member premium.
CIPA's agreement with the broker includes a fee option for Members placing unique stand-alone policies to
be based on a commission. This approach for stand-alone policies is no different than the City's current
arrangement. CIPA's broker can offer the City an option of a flat fee to place stand-alone policies, although
it may be advantageous to the City to pay based on CIPA's contracted commissions which range between
10% and 15%. Additionally, our Members have derived savings when the placement of insurance policies
were transferred to Aon from another broker.
As with any JPA or insurance carrier, we are unable to guarantee premiums in future years
Pricing provided shall include any and all labor; materials; equipment; supervision; travel
and expenses; and insurance to provide the services described in this RFP solicitation.
The undersigned certifies that submission of this Proposal is made without prior understanding,
arrangement, agreement, or connection with any corporation, firm or person submitting a
210922.1
RFP No. 22-59 26
Proposal for the same services, and is in all respects fair and without collusion of fraud. The
undersigned certifies that they have not entered into any arrangement or agreement with any City
of Newport Beach public officer. The undersigned understands collusive practices are a violation
of State and Federal law and can result in fines, prison sentences, and civil damage awards.
Digitally signed by Janet Kiser 6/7/2022
Janet Kiser Date: 2022.06.07 17:30:46-07'00'
Proposer Signature Date
Janet Kiser, General Manager
Printed Name and Title
2 10922.1
RFP No. 22-59 27