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provide primary or excess public entity liability insurance to <br />local governments at reasonable rates or, in certain cases as <br />at present, at any rate, mandates that the City seek not only <br />an immediate solution but also a long-term permanent solution <br />to this problem which will in future years free them from <br />exposure to the vagaries of commercial insurance cycles; <br />WHEREAS, the Original Providees, in consultation with <br />independent professional insurance consultants, have formulated <br />a joint risk -sharing insurance program administered by the <br />Provider to meet the public entity liability insurance coverage <br />needs of the Providees which provides the following advantages, <br />among others, to the Providees: <br />(a) immediate funding of a claims payment fund (the <br />"Claims Payment Fund") for the dual purpose of providing <br />immediate protection from large claims loss and <br />facilitating eventual access to the commercial reinsurance <br />market, <br />(b) mutual agreement by the Providees to pay annual <br />premium amounts on both a prospective and a retrospective <br />basis calculated actuarially to spread and moderate the <br />cost of claims loss to each Providee, <br />(c) relief from the burden of paying premiums to <br />commercial insurers at levels reflecting the insurers' high <br />costs of underwriting, administration and brokerage fees <br />since the Provider's costs will be limited to reasonable <br />administrative costs, <br />4 <br />2658001B/2 <br />