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HomeMy WebLinkAbout12/16/2014 General & Auto Liability Third-Party Claims Administrationji ±Loon[ Prospcc-t Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM v r TO: DAVID STRAHL, ACTING VILLAGE MANAGER l FROM; FINANCE DIRECTOR DATE: DECEMBER 9, 2014 SUBJECT: GENERAL AND AUTO LIABILITY THIRD -PARTY CLAIMS ADMINISTRATION PURPOSE: To present a recommendation for renewal of the annual service agreement for third - party liability claims administration for the period January 1, 2015 - December 31, 2015. BACKGROUND: To assist in the administration of general and auto liability claims the Village has contracted out the service to a third -party administrator. The Village's current agreement for claims administration expires on December 31, 2014. A new agreement is needed at this time for the current provider to continue to service the Village. DISCUSSION: Gallagher Bassett (GB) is the current service provider for general and auto liability claims administration. The agreement for 2015 contains no changes to the terms and conditions from the prior year. Below is a summary of fees for the prior year and 2015. Service..................._2014 Rates._....._ 2014RatesClmaims..Administrati.on .....................................................................1......0.8.2....._ ......................................1�......._......1..25.. ............_..._.........................._......_.............................................. SIMMS Bankinq Fee :��.. 410 ...... 434 M i n i m u.m...An..�.....������� .�m........ ........m................. nual Fee 8..............................,..... ....................�..... .m..... ...... w........w®..................�.m.�m.000 8m 000 .....................__.....................Tota.L...Fee.................................._� ........ ..........._W.......... $�.9._4.92........................................................... $9....,55.9.... The claims administration fee increased 4.0% ($43) from the prior year's program. The SIMMS Banking fee is an annual flat fee assessed for maintaining the escrow and processing and making payment on claims. This service relieves the Village from having to process payments internally. The SIMMS fee increased 5.9% ($24) from the prior year's program. General and Auto Liability Third -Party Claims Administration December 9, 2014 Page 2 The Village is subject to an $8,000 minimum annual fee. Time and expense charges are invoiced against the annual fee until the balance is exhausted. When the entire annual fee is depleted, the Village will begin making payments for charges incurred in managing the open claims. Our liability ends when all the claims for a particular period are closed. Our experience with GB continues to be very positive. Communication between the Finance Department, Corporation Counsel and third -party claims administrator continues to be strong. Based on our satisfaction with the service provided and modest increase to the minimum annual fee I recommend we continue the relationship with GB. RECOMMENDATION: It is recommended we approve the agreement for GB to provide general and auto liability claims administration services during 2015 according to the proposed funding and fee schedule. David O. Erb Finance Director DOE/ Attachment I:\Insurance\GAB-GBS\Renewal - 2015.docx Village of Mount Prospect - #007474 1 LAG1/1/2015 - 1/1/2016 '�1�� � �i, PRICING OPTI : TIME & EXPENSE HANDLING This program is quoted at a total minimum of $9,559 (including administration and banking fees). WiltiUf�MWWN'WW mm wuww.wuuu .wu... w.W .... um..M 0n m 'm'uromoN uuuuiWwi�I�W4W4llY0N01�hWNVW,b1 NOWVWWWV�NOMONV@U4W4w�'k49tiNNtlom,A�'roWV4WW New Business Cost & Terms Revision date: 6/27/2013) Page 1