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Liability Rating Plan

Liability Rating Plan. What is it? How does it work? Presented By Jackie Parker. Today’s Outline. Members in Liability What is the Rating Plan? SCORE’s Liability Program CJPRMA Layer Shared Risk Layer Banking Layer SCORE Administrative Costs

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Liability Rating Plan

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  1. Liability Rating Plan What is it? How does it work? Presented By Jackie Parker

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

  3. Who’s in the Liability Program? EVERYONE! All 21 of Us!

  4. What is the Rating Plan? The Rating Plan is a method for equitably allocating premium amongst SCORE member cities for: • Bodily Injury • Property Damage • Public Officials Errors & Omissions • The Rating Plan uses risk sharing concepts and techniques. • The Rating Plan allocates all program costs to members.

  5. A Look at the SCORE Liability Program California Joint Powers Risk Management Authority (CJPRMA) $500,000 to $40,000,000 per occurrence SCORE Shared Risk Layer $25,000 to $500,000 per occurrence SCORE Banking Layer $25,000 per occurrence

  6. CJPRMA $500,000 to $40,000,000 per occurrence Total “Voting” Members = 22 Total City Members = 93 05/06 Member Contrib. = $16,397,844 CJPRMA member since 1987 22% of Total City Members 05/06 SCORE Contrib. = $211,712 (1.3% of CJPRMA Total Contributions) SCORE

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

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

  9. SCORE Shared Risk Layer $25,000 to $500,000 per occurrence Deposit Premium = Actuarial Rate @ 80%* Confidence Level x Member Estimated Payroll Adjusted by their Experience Modification Factor Experience Modification Factor =Relative Loss Rate x Credibility Factor Relative Loss Rate = Individual Member Loss Rate ÷ by Total Loss Rate for all members * Minimum Governing Documents Require. Recommendation of 85% Confidence Level for 2007/2008 Budget.

  10. SCORE Shared Risk Layer $25,000 to $500,000 per occurrence Loss Rate = Individual Member Losses Past Five Years (2001-2006) ÷ Individual Member Payroll Past Five Years (2001-2006) Credibility Factor =Individual Members Payroll divided by (Total Members Payroll + Constant) The Credibility Factor is applied to members payroll to create a more equitable distribution of payrolls.

  11. SCORE Banking Layer $0 to $25,000 per occurrence Member Contributions (FY 05/06)

  12. SCORE Banking Layer $0 to $25,000 per occurrence Member Contributions (FY 05/06)

  13. SCORE Banking Layer (Same as Shared Layer) $0 to $25,000 per occurrence • Deposit Premium = Actuarial Rate @ 80%* Confidence Level x Member Estimated Payroll Adjusted by their Experience Modification • Minimum deposit premium of $20,000 3 member cities currently pay the minimum • Maximum deposit premium of $250,000. 2 member cities are close to paying the maximum Experience Modification = Relative Loss Rate x Credibility Factor * Minimum Governing Documents Require. Recommendation of 85% Confidence Level for 2007/2008 Budget.

  14. SCORE Banking Layer (Same as Shared Layer) $0 to $25,000 per occurrence Relative Loss Rate = Individual Member Loss Rate ÷ by Total Loss Rate for all members Loss Rate = Individual Member Losses Past Five Years (2001-2006) ÷ Individual Member Payroll Past Five Years (2001-2006) Credibility Factor =Individual Members Payroll divided by (Total Members Payroll + Constant) The Credibility Factor is applied to members payroll to create a more equitable distribution of payrolls.

  15. Breakdown of SCORE Liability Layers

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