www.mymanatee.org
Manatee County Government Administrative Center Commission Chambers, First Floor 9:00 a.m. - May 23, 2017
REVISED May 23, 2017 - Regular Meeting
Agenda Item #20


Subject
Purchase of Excess Property Insurance

Briefings
Briefing Provided Upon Request

Contact and/or Presenter Information

Mitchell O. Palmer, County Attorney, ext. 3750

Linda R. Klasing, Risk Manager, ext. 3750



Action Requested

Motion to approve the purchase of excess property insurance and terrorism property insurance in an amount not to exceed $2,633,760 (inclusive of term premiums and all Federal/State mandated fees) as shown in the attached proposal from First Florida Insurance Brokers, and to approve the County Attorney, or his designee, to execute all required documents.



Enabling/Regulating Authority

Ordinance No. 16-26



Background Discussion

The Board of County Commissioners of Manatee County purchases excess property insurance to protect the County’s real and personal property assets against losses caused by natural and man-made perils.  Manatee County maintains an insurance program to protect its buildings against catastrophic financial loss. There are two parts to this program; property insurance and flood insurance, the combination of which are intended to comply with Section 311 of the Stafford Act (42 U.S.C 5154). The Stafford Act requires that an applicant for Federal FEMA assistance “shall comply with regulations prescribed by the President to assure that, with respect to any property to be replaced, restored, repaired, or constructed with such assistance, such types and extent of insurance will be obtained and maintained as may be reasonably available, adequate, and necessary, to protect against future loss to such property.”

The current excess property insurance program expires on June 1, 2017, and contains the following provisions. The total loss limit per expiring is $250,000,000 which includes a $90,000,000 Named Storm Limit. The current Named Storm deductible is 5% per building and contents, with a minimum named storm deductible of $250,000 with a $20,000,000 deductible maximum. For all other perils the deductible is $100,000 per occurrence. The County separately purchases primary flood coverage on select properties through the National Flood Insurance Program (NFIP) on properties in special flood hazard zones.

In addition to the above excess property insurance, the County purchases property terrorism insurance which also expires on June 1, 2017 and contains the following provisions. The total loss limit per the expiring policy is $552,873,188.  The sub limit is $25,000,000.  The deductible is $100,000.   

One of the methods for determining rates and risk is the use of catastrophic modeling programs to determine the Probable Maximum Loss (PML), which is the anticipated loss from the destruction or loss of use of the property.  The PML for the 250 year storm was determined to be $50,396,834 based on a Statement of Value (SOV), which shows the County’s insurable values of $1,173,757,530.  The SOV sets the basis for determining the “rate per $100 of value”, and ultimately our premium for excess property insurance.

The proposed excess property insurance program for this renewal contains the following provisions. The total loss limit remains at $250,000,000 which includes a $90,000,000 Named Storm Limit, which is per expiring, and $75,000,000 in flood coverage, which is also per expiring. The named storm deductible is 3% per building and contents, with a minimum named storm deductible of $250,000 with a $20,000,000 deductible maximum. For all other perils the deductible is $100,000 per occurrence.  The renewal premium is $2,601,368, which is a 3.94% decrease from last year. 

In addition to the proposed excess property insurance renewal, the proposed terrorism property insurance program for this renewal, for several County owned locations noted in the below table, contains the following provisions.  The total loss limit is increased to $556,378,535.  The sub limit remains at $25,000,000.  The deductible is reduced from $100,000 to $25,000.  The premium is $32,392, which is a 4.73% reduction from last year.

Historic Courthouse

Judicial Center

Administration Building

Emergency Operations Center

Lake Manatee Dam

Lena Road WWTP

North County WWTP

SW Regional WWTP

Waterline WWTP

For the 2017-2018 renewal, the following premium savings have been obtained as shown in the below tables.

Description

Excess Property Annual Premium

[not inclusive of fees]

Rate Per

$100 of Value

% Change Rate Per $100

$ Change in Annual Premium

% Change in Annual Premium

Expiring

Program

$2,706,912

.236

N/A

N/A

N/A

Proposed

Renewal

$2,600,010

.222

(5.93%)

($106,612)

(3.94%)

 

Description

Terrorism Annual Premium (not inclusive of fees)

$ Change in Annual Premium

% Change in Annual Premium

Expiring Program

$34,000

N/A

N/A

Proposed Program

$32,392

($1,608)

(4.73%)

The Risk Management Division recommends the Board approve the proposed renewals for our excess property insurance program and terrorism property insurance program.



County Attorney Review
Not Reviewed (No apparent legal issues)

Explanation of Other


Reviewing Attorney
N/A

Instructions to Board Records

Please return a stamped copy of this Agenda Memorandum certifying its approval by the Board of County Commissioners to Mitchell O. Palmer, County Attorney, at mitchell.palmer@mymanatee.org, and Linda R. Klasing, Risk Manager, at linda.klasing@mymanatee.org



Cost and Funds Source Account Number and Name
$2,633,760 Fund 5050001500 Risk Management General Liabililty

Amount and Frequency of Recurring Costs
$2,633,760 One Time Payment


Attachment:  MCBOCC FY18 Excess Property Proposal - 04.12.17.pdf