HomeMy WebLinkAboutResolution #3946 (MICA)Resolution No. 3 9 4 6
A RESOLUTION AUTHORIZING MEMBERSHIP IN THE
MUNICIPAL (SEL>E~ INSURANCE COOPERATIVE
WHEREAS, Section 10 of Article VII of the Illinois Constitution of 1970 authorizes units of
local government to contract or otherwise associate among themselves in any manner not prohibited
by law or by ordinance; and
WHEREAS, the Illinois Governmental Cooperation Act, 5 ILCS 220/1 etseq (2008} contains
provisions specifically authorizing units of local government to enter into intergovernmental
agreements to jointly provide areas of coverage for liability or loss and authorizes each public agency
member of the contract to utilize its funds to protect, wholly or partially, any public agency member
of the contract against liability or loss in the designated insurance areas; and
WHEREAS, a large number of Illinois units of local government and intergovernmental
agencies have entered into an intergovernmental contract which established the Municipal (SELF)
Insurance Cooperative (MICA); and
WHEREAS, MICA has successfully operated for a number of years; and
WHEREAS, after substantial study and investigation, it has been determined that the
best method of achieving the goals of comprehensive insurance and insurance-like coverages
and risk management services of the City of Canton can be achieved by participating in and by
entering into a contractual relationship with MICA and its Members; and
WHEREAS, the stated purposes, organizational structure and other governance
provisions contained within the Contract and By-Laws document, which have been submitted to
the governing board of this body for adoption, represents the position shared by this governing
board and, in the case of a Member which is created through an intergovernmental contract, by
its constituent contracting parties; and
WHEREAS, the City Council of the City of Canton finds that it is in its best interest to
become a member of MICA under the submitted Contract and By-Laws;
NOW, THEREFORE, BE IT RESOLVED BY THE City of Canton as follows:
SECTION i : That the Mayor and Clerk are hereby authorized to execute the Contract
and By-Laws of MICA. A copy of the Contract and By-Laws is appended to and made a part of
this Resolution.
SECTION 2: The powers of MICA, unless the Contract and By-Laws be amended
under its terms, shall be limited to those contained within the Contract and By-Laws and
Agency Policies.
SECTION 3: The obligation of this unit of local government or intergovernmental
contractual or other approved entity to fully participate in such operations shall be effected in
accordance with that Contract and By-Laws.
SECTION 4: If a Member of MICA, passing this Resolution, is an intergovernmental
entity which provides special recreational services to its Members, the passage of this
Resolution shall be acknowledged as the approval of the Contract and By-Laws by the
intergovernmental entity and by' each of its contracting Members such that all contracting
Members acknowledge their individual responsibility to comply with the Contractand By-Laws
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of MICA in any matters involving the obligations assumed by the intergovernmental entity.
SECTION 5: Except to the extent of the f nancial contributions to MICA set forth in the
Contract and By-Laws, no contracting party by authorizing the execution of the Contract and
By- Laws acknowledges or accepts any responsibility in anyway for claims due to the property
losses, claims in tort or contract or other claims or losses made against any other Member of
MICA.
SECTION 6: This Resolution shall be in full force and effect from and after its
passage.
PASSED this- 21 day of December , 2010.
YES: Aldermen West, Sarff, Reed, Schneck, Hartford, Pickel,
Rivero, Ellis
NAYS: None
ABSENT: None
APPROVE
Kevin R. Meade, Mayo
t,
iaria Tucker, City Clerk
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MUNICIPAL INSURANCE COOPERATIVE AGENCY
REPRESENTATIVE DOCUMENT
The City of Canton being a member of the Municipal Insurance Cooperative Agency (hereafter
referred to a MICA) has agreed to actively and effectively participate in MICA pursuant to the
bylaws of MICA.
Each member governmental body must appoint a representative and an alternate representative to
represent them in MICA per the by-laws.
The sole purpose of this document is to confirm the representative and alternative representative
from the City of Canton is:
• Representative: Jim Snider, City Administrator
• Alternative: Diana Tucker, City Clerk
Any change in representative and/or alternate representative should be indicated to Arthur J.
Gallagher Risk Management Services, Inc. immediately.
Kevin R. Meade
Mayor
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COMPREHENSIVE AMENDMENT TO THE
CONTRACT AND BY-LAWS
OF THE
MUNICIPAL (SELF) INSURANCE COOPERATIVE AGENCY (MICA)
ARTICLE I. DEFINITIONS AND PURPOSE.
DEFINITIONS:
As used in this agreement, the following terms shall have the meaning
hereinafter set out:
AGENCY -The Municipal (Self) Insurance Cooperative Agency established
pursuant to the Constitution and the statutes of this State and by this
intergovernmental agreement.
AGGRCGATE INSURANCE -Insurance purchased by the Agency from an
insurance company approved by the Department of Insurance to write such
coverage in Illinois providing certain coverage up to a contracted amount for
otherwise uninsured losses to be borne by the Joint Risk Management Fund,
which in any one year aggregate to a pre-set maximum amount of coverage.
ANNUAL PAYMENTS -The amount each Member must annually pay to fund
the anticipated costs of the full operation of the Agency.
CONVENTIONAL INSURANCE -Insurance of any kind, including, but not limited
to, Excess, Aggregate, Reinsurance and Directors and Officers liability
insurance, purchased by the Agency from an insurance company approved by
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the Illinois Department of Insurance to write such coverage in Illinois providing
various types of insurance which may be subject to deductible amounts.
CORPORATE AUTHORITIES -The governing body of a municipality or other
governmental unit which is a Member of the Agency.
EXCESS INSURANCE -Insurance purchased by the Agency from an insurance
company approved by the Department of Insurance to write such coverage in
Illinois providing certain coverage for losses over apre-set amount up to a pre-
set maximum amount of coverage.
FLOATING SUPER FUND - A fund of public monies, interest income and other
funds available to the Agency established to pay claims and expenses of the
Agency attributable to any year in which the Agency is in existence.
JOINT RISK MANAGEMENT FUND - A fund of public monies established by the
Agency to administer and jointly self-insure certain risks within an agreed scope
and to purchase conventional insurance and to pay other expenses within the
scope of this Contract and By-Laws.
JOINT SELF-INSURANCE - Aself-insurance program in which the Members
agree to contribute annual and, where required, supplementary payments to
support a risk management program and a joint risk management fund.
MEMBERS -The units of government or intergovernmental agencies which
initially or later entered into the intergovernmental contract established by this
intergovernmental agreement.
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REINSURANCE -Insurance purchased by the Agency from an insurance
company allowed to sell reinsurance to the Agency in which payments of certain
amounts shall be to pay for claims under the Scope of Coverage offered by the
Agency or some agreed coverage document.
RISK MANAGEMENT - A program attempting to reduce or limit casualty losses
to the property of Members and injuries to persons or property caused by the
operations of the Members. Where claims arise, the Agency shall cause the
processing of such claims, investigate their validity, settle or defend against such
claims which the financial limits of the risk management agreement, tabulate
such claims, costs and losses and carry out other assigned duties.
SELF-INSURANCE -The decision of the Agency not to purchase insurance
coverage for risks below certain high limits; to seek all immunities provided by
Illinois law for anon-insured government; to rely upon its financial capabilities to
pay any property losses and third-party claims which are held valid and not
barred by available immunities and to purchase some conventional insurance to
protect against excess or aggregate losses.
SUPPLEMENTARY PAYMENTS -Members shall also be obligated as required,
to make supplementary payments if the amount of the annual payments shall be
insufficient to fund the operations of the Agency.
PURPOSE:
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The MUNICIPAL (SELF) INSURANCE COOPERATIVE AGENCY is a
cooperative agency voluntarily established by contracting municipalities and other units
of government pursuant to Article VII, Section 10 of the 1970 Constitution of the State of
Illinois and 5 ILCS 220/6 of the Illinois Compiled Statutes for the purpose of seeking the
prevention or reduction of casualty losses to governmental properties and injuries to
persons or property which might result in claims being made against Member units.
It is the intent of the Members of the Agency to create an entity which will
administer a Joint Risk Management Fund and utilize such funds contributed by the
Members to defend and protect, in accordance with these By-Laws, any Member of the
Agency against stated liability or loss. Such By-Laws shall constitute the substance of a
contract among the Members.
All funds contained within the Joint Risk Management Fund are monies directly
derived from its Members which are municipalities and other units of local government
within the State of Illinois. It is the intent of the parties in entering into this agreement
that, to the fullest extent possible, the scope of risk management undertaken by them
through a joint governmental self-insurance program using governmental funds shall not
waive, on behalf of any local public entity or public employees as defined in the Local
Governmental and Governmental Employees Tort Immunity Act, any defenses or
immunities therein provided.
ARTICLE II. POWERS AND DUTIES.
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The powers of the Agency to perform and accomplish the purposes set forth
above shall, within the budgetary limits and procedures set forth in these By-Laws, be
the following:
A. To employ agents, employees and independent contractors;
B. To purchase or lease real property and to purchase or lease equipment,
machinery, or personal property necessary for the carrying out of the
purpose of the Agency;
C. To sell or issue bonds or other financial instruments, either in its own
name or through one of its Members to the fullest extent permissible under
the law.
D. To carry out educational and other programs relating to risk reductions;
E. To cause the creation of, see to the collection of funds for, and administer
a Joint Risk Management Fund and Floating Super Fund;
F. To purchase conventional, excess, aggregate and reinsurance to
supplement the Joint Risk Management Fund;
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G. To establish reasonable and necessary loss reduction and prevention
procedures which shall be followed by the Members;
H. To provide risk management services and the defense of, settlement and
subrogation of claims;
I. Solely within the budgetary limits established by the Members to carry out
such other activities as authorized by the Board of Directors to be
performed by the Agency, its Executive Committee or any officer or agent.
ARTICLE III. PARTICIPATION AND TERM.
The Members of the Agency, at the date of the passage of this Comprehensive
Amendment, shall be those entities, the names of which are listed on Appendix A.
So long as the Agency shall continue in existence, any new Member joining the
Agency shall remain a Member for at least three (3) years. After a new Member's initial
required term of membership in the Agency, any Member of the Agency may withdraw
from the Agency at the end of a fiscal year of the Agency upon the giving of at least one
(1) year's prior written notice. Such notice shall be addressed to the Chair of the
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Agency and shall be accompanied by a resolution of the Corporate Authorities of the
Member electing to withdraw from the Agency. A Member which withdraws from the
Agency shall not be permitted to reapply for membership in the Agency for a period of
two (2) years from the date on which the Member's resolution was served upon the
Chair, unless such prohibition is waived by the Board of Directors upon afour/fifths vote
of the entire membership of the Board. Furthermore, said Member must reapply
through the normal application process, having once again met membership criteria for
a new Member.
A Member which gives notice of withdrawal and then wishes to rescind such
notice within the twelve-month notice period may do so only upon approval of such
action by the affirmative vote of two-thirds of the Executive Committee present at a
regular or special meeting under terms established for readmission by the Executive
Committee or Board of Directors. The Board of Directors may, at its sole discretion, if
requested by the withdrawing Member, choose to waive any portion of the one-year
notice requirement it deems necessary in order to protect the best interests of the
Agency. If a Member withdraws from the Agency, it shall be entitled to coverage for the
period of its membership to the same extent as other Members of the Agency, but it
shall not continue to have a representative on the Board of Directors. No Member
which withdraws from the Agency shall receive a return of surplus funds or rebate(s)
approved by the Board of Directors from any year for which said withdrawn Member
was a Member of the Agency unless, for all years the withdrawn Member was a
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Member of the Agency, the withdrawn Member has had a positive cash balance when
its total net losses (to be defined as completed payment, including defense costs,
damages, any reasonable administrative and any other non-allocated costs incurred by
the Agency for all claims known to have been incurred by the withdrawing Member in all
years for which the withdrawing Member participated in the Agency plus any reasonable
reserve which the Executive Committee shall require to be established for any incurred
but not reported claims during said years) for that withdrawn Member's claims for al-
years combined are compared to that withdrawn Member's total contributions to the
Joint Risk Management Fund for those years. A withdrawing or withdrawn Member
shall receive a distribution of surplus funds or rebate(s) approved by the Board of
Directors when its total net losses for all years of its membership are less than its total
loss fund contributions for said years. In no case shall a withdrawing or withdrawn
Member receive a distribution of surplus funds or rebate(s) approved by the Board of
Directors in excess of its final combined cash balance for all years while a Member of
the Agency. The Board of Directors may, in its absolute discretion, withhold distribution
of any surplus funds or rebates to any withdrawn Member until the Board of Directors is
assured there is sufficient evidence to establish with reasonable certainty the withdrawn
Member's total net losses. The withdrawing Member shall continue to be responsible for
its share of the payment of all supplementary and other payments attributable to years
during which it was a Member of the Agency and other obligations of membership.
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The Board may establish and periodically review standards for the admission of
new Members.
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ARTICLE IV. TERM.
The Agency commenced its operations on May 1, 1984. The Members last
authorized a twelve (12) year term to commence on May 1, 1996. This Comprehensive
Amendment shall constitute a new intergovernmental agreement amongst and between
the Members and, in its initial form and as it is validly amended, shall govern the
relationship between the Agency and its Members during the entire existence of the
Agency. As a new Agreement, the term of the Agency shall run thru and including
2014. At the end of that twelve (12) year term, the term of the
Agency may be extended for amulti-year term, as permitted by law, by atwo-thirds
(2/3) affirmative vote of the entire Board of Directors or, by majority action of the Board,
it may continue in existence from year-to-year as an intergovernmental agreement.
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ARTICLE V. BOARD OF DIRECTORS.
A. There is hereby established a Board of Directors of the Agency. Each
Member shall appoint one (1) person to serve as the authorized
representative of that body on the Board of Directors along with another
person to serve as an alternate representative when the authorized
representative is unable to carry out his or her duties. The representative
and alternate shall be appointed as other municipal officers are appointed
by the Member. Once such appointments are made known to the Agency,
the persons appointed shall remain in office until the Agency receives
evidence of the appointment of other persons. The Agency shall be the
judge of the proper appointment of authorized representatives and
alternates to the Board of Directors and shall utilize, in case of a dispute,
general principles of Illinois municipal law. The representative and
alternate selected need not be elected officials of the Member.
B. The Board of Directors shall, during the final quarter of each even
numbered fiscal year, select from among the authorized representatives, a
Chair and Vice Chair and Treasurer to serve during the subsequent two
fiscal years. The Chair shall be the chief executive officer of the Agency.
The Chair shall preside at all meetings of the Board and the Executive
Committee at which the Chair is present. The Chair may request
information from any officer of the Board or the Agency or any employee
or independent contractor of the Agency. The Chair shall vote on all
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matters that come before the Board or Committees on which the Chair
serves. The Chair shall be a non-voting ex-officio Member of all
committees of the Agency on which the Chair does not directly serve. The
Chair shall have such other powers as are set forth in these By-Laws and
such other powers as he may be given from time to time by action of the
Board.
C. The Vice Chair shall carry out all duties of the Chair of the Board during
the absence or inability of the Chair to perform such duties and shall carry
out such other functions as are assigned from time to time by the Chair or
the Board of Directors.
D. The Treasurer may not be a representative or alternate representative
from the same Member as the Chair, the Vice-Chair or any person serving
on the Executive Committee.
1. The Treasurer shall:
a. Have charge and custody of and be responsible for alf funds
and securities of the Agency; receive and give all receipts for
moneys due and payable to the Agency from any source
whatsoever; deposit all such moneys in the name of the
Agency in such banks, savings and loan associations or
other depositories as shall be selected by the Board of
Directors or Executive Committee; and, invest the funds of
the Agency as are not immediately required in such
securities as the Board of Directors shall specifically or
generally select from time to time. Maintain the financial
books and records of the Agency. Provided, however, that
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all investments of the Agency funds shall be made only in
those securities which may be purchased by Illinois non-
home rule municipalities under the provisions of the Illinois
Compiled Statutes.
b. In general, perform all duties incident to the office of
Treasurer and such other duties as from time to time may be
assigned to him by the Board of Directors or the Executive
Committee;
3. The Agency shall purchase a bond in the minimum amount
contained within the Joint Risk Management Fund from time to time
to assure the fidelity of the Chair and the Treasurer. Without
amending these By-Laws, the Executive Committee may increase
the amount of the bonds for the aforesaid officers and procure
fidelity and other bonds for officers, directors, employees or
independent contractors of the Agency.
4. The Board or Executive Committee may select a financial institution
to carry out some or all of the functions which would otherwise be
assigned to a Treasurer to assist the Treasurer.
E. The Board of Directors may from time to time establish other officers of
the Board who shall serve for such terms as are established by the Board
and may elect a representative of the Board to serve in any of such
offices. The Executive Committee shall fill any vacancies which may
occur in any offices for the remainder of the respective term of said office.
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F. There shall be established an Executive Committee with five (5) members.
The Executive Committee shall consist of the Chair, the Vice Chair and
the Treasurer of the Agency. In addition, the Board of Directors, during
the last quarter of each odd numbered fiscal year, shall elect from the
representatives or the Board of Directors or Alternates, two (2) persons,
each serving a two (2) year term on the Executive Committee. Vacancies
on the Executive Committee shall be filled by a qualified appointee by the
vote of at least a majority the remaining members of the Executive
Committee for the remainder of the unexpired term of the person whose
resignation or inability to serve caused the vacancy. No more than one (1)
member of the Executive Committee shall be a delegate or alternate of
any single Member. The term of a member of the Executive Committee
shall cease immediately upon the submission of a notice of withdrawal
from the Agency by the Member for which he or she serves as a
representative or alternate. Meetings of the Executive Committee may be
called by the Chair or any two Executive Committee members. The
Executive Committee may authorize and employ persons and hire
independent contractors, approve expenditures, authorize the settlement
of claims and suits, admit new Members into the Agency, and take such
other actions as shall be delegated to it by the Board of Directors.
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G. The Board of Directors shall determine the general policy of the Agency
which policy shall be followed by the officers, agents, employees and
independent contractors employed by the Agency. Among other items, it
shall have the responsibility for (1) Approval of amendments to the By-
Laws, (2) Approval of the process for the acceptance of new Members; (3)
Approval and amendment of the annual budget of the Agency, (4)
Approval of reasonable and necessary loss reduction and prevention
procedures which shall be followed by all Members, (5) Approval of annual
and supplementary payments to the Joint Risk Management Fund and/or
Floating Super Fund for each Member, (6) Approval of additional terms for
the existence of the Agency, and (7) Resolution of disputes over the scope
of Agency self-insurance coverage or over late notice of a claim provided
by the Agency on an appeal from the decision of the Executive
Committee, and (8) Selection of a claims administrator which may be
given discretionary authority to settle claims within certain standards. The
Board of Directors may establish such rules and regulations regarding the
payout of funds from the Joint Risk Management Fund as shall from time
to time seem appropriate.
H. Each voting Member shall be entitled to one (1) vote on the Board of
Directors. Such vote may be cast only by the authorized representative of
the Member or, in the representative's absence, by an alternate selected
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by the Member in the same manner as specified for the selection of the
authorized representative. No proxy votes or absentee votes shall be
permitted. Voting shall be conducted by voice vote unless one (1) or more
Members of the Board of Directors shall request a roll call vote; provided,
however, that
1. Any vote which requires a greater than majority vote for passage
shall be by roll call vote, and
2. In the event that an authorization of the expenditure of funds shall
pass by a voice vote, any Member of the Board seeking to abstain
or vote in the negative regarding such authorization and wishing
that vote to be specifically recorded shall indicate such vote to the
presiding officer. On any other vote taken by the Board, a Member
voting in the minority position on a voice vote may also have that
vote recorded in the Minutes by specifically indicating such vote to
the presiding officer.
The representative appointed by the Member may be removed at any time
by that Member. In the event that a vacancy occurs in the representative
or alternate representative, the Member shall appoint a successor. The
failure of a Member to select a representative or the failure of that person
to participate shall not affect the responsibilities or duties of a Member
under this Contract.
J. The Board of Directors and Executive Committee shall have the power to
establish both standing and ad hoc committees. The Chair may also
establish ad hoc committees which do not conflict with those established
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by the Board or Executive Committee. Unless the Board of Directors shall
establish some other procedure, the selection of persons who shall serve
on such committees and chair them shall reside with the Chair. The
Board of Directors may assign to a committee the authority to authorize
the expenditure of funds and to settle claims or suits brought against
entities within the scope of coverage provided by the Agency.
K. The Board of Directors and Executive Committee may establish rules
governing their own conduct and procedures not inconsistent with the By-
Laws.
L. A quorum at a meeting of the Board of Directors or Executive Committee
or any standing or ad hoc committee shall consist of a majority of the
Board or Committee. Except as otherwise provided in these By-Laws, a
simple majority of a quorum shall be sufficient to pass upon all matters.
M. A greater vote than a majority of a quorum shall be required to approve
the following matters:
1. Such matters as the Board of Directors shall establish within its
rules as requiring for passage a vote greater than a majority of a
quorum, provided, however, that such a rule can only be
established by a greater than a majority vote at least equal to the
greater than majority percentage within the proposed rule.
2. The expulsion of a Member shall require the two-thirds (2/3) vote of
the entire voting membership of the Board of Directors.
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3. Any amendment of these By-Laws except as provided in Subsection (4)
below, shall require the two-thirds (2/3) vote of a quorum of the
Board of Directors.
4. The amendment of these By-Laws to cause a reduction or
elimination in the scope of loss protection set out in Article IX to be
furnished by the Agency derived from payments from the Members.
5. The continuation in existence of the Agency after each approved
fixed term shall require a vote as described in these By-Laws.
N. No one serving on the Board of Directors shall receive any salary or other
payment from the Agency and any salary, compensation, payment or
expenses for such representative, shall be paid by each Member separate
from this Contract. The Chair, Vice Chair, Treasurer and such other
officers as may be selected from time to time may submit to the Executive
Committee for their approval reimbursement of the actual cost of
expenses incurred on behalf of the Agency.
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ARTICLE VI. MEETINGS OF THE BOARD OF DIRECTORS.
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A. Regular meetings of the Board of Directors shall be held at least two (2)
times a year. The dates of regular meetings shall be on the third
Thursday of March and the third Thursday in September of each year
unless said date is changed by the Executive Committee with at least
seven (7) days notice prior to the respective regularly scheduled meeting.
Any item of business may be considered and voted on at a regular
meeting. Special meetings of the Board of Directors may be called by its
Chair, or by representatives of any three Members. The Chair or in the
Chair's absence, the Vice Chair, shall give at least five (5) days written
notice of regular or special meetings to the authorized ~ and alternate
representatives of each Member and an agenda specifying the subject of
any special meeting shall accompany such notice. Business conducted at
special meetings shall be limited to those items specified in the agenda.
B. The time, date and location of regular and special meetings of the Board
of Directors shall be determined by the Chair, or in the Chair's absence,
by the Vice Chair or by the convenor(s) of a special meeting.
C. To the extent not contrary to these By-Laws, and except as modified by
the Board of Directors, Roberts Rules of Order, latest edition, shall govern
all meetings of the Board of Directors. Minutes of all regular and special
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meetings of the Board of Directors shall be sent to all Members of the
Board of Directors.
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ARTICLE VII. OTHER AGENCY OFFICERS.
A. Other Officers of the Agency (in addition to the Chair, Vice-Chair and
Treasurer) shall consist of such other officers as are established from time
to time by the Board of Directors. All Agency officers shall be selected by
the Board of Directors unless authority to do so is assigned to the
Executive Committee.
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ARTICLE VIII. FINANCES AND AGENCY RISK MANAGEMENT.
A. The fiscal year of the Agency shall commence on May 1, and end on April
30 of each year.
B. The annual payments from the Members shall be in an amount sufficient
to fund the administrative expenses of the Agency, the Joint Risk
Management Fund, the purchase of Conventional Insurance, and other
costs relating to the services and projects of the Agency. In determining
the amount of the Annual Payment due from each Member, the Executive
Committee may recommend and the Board of Directors may take into
consideration some or all of the following factors:
1. Population of the governmental body;
2. Property values of the governmental body;
3. Number of vehicles owned by the governmental body and the use
made of the vehicles;
4. The size and scope of the governmental programs of the Member;
5. The payroll of the Member;
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6. The budget and revenue of the Member;
7. The claims and loss experience of the Member;
8. Such other factors as the Executive Committee and Board shall
deem relevant.
The Annual Payments due shall be based, in whole or in part, upon
an objective formula which may vary from year to year. This formula must
be applied equally to all Members similarly situated.
It is the responsibility of each Member to provide the Agency with
accurate information relating to the factors used in determining the amount
of the annual payment due from each Member pursuant to this Section .
(B). In the event the Executive Committee determines that a Member has
failed to report to the Agency accurate information relating to these
factors, then the Executive Committee shall have the authority to impose
the following remedies:
i. To assess against the Member the amount which properly
would have been charged as that Member's annual payment
for all years for which improper information was provided by
the Member. Interest at the maximum rate permitted by law
shall be charged on all amounts equal to the proper sum
which should have been charged as an annual payment less
any payments actually made by the Member for all
applicable years; and
ii. In the event the Executive Committee determines that a
Member has intentionally or with reckless disregard failed to
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report to the Agency accurate information relating to these
factors, then, for each year for which improper information
was so reported by the Member to the Agency, an amount
equal to 25% of the difference between what should have
been the Member's proper annual payment for that year and
the actual payment charged to the Member. For example, if
due to a Member's improper reporting it appears that a
Member's annual payment should have been $80,000.00,
but rather was $60,000.00, the Member would be charged,
pursuant to this sub-paragraph, the sum of $5,000.00, that
being 25% of the difference between $80,000.00 and
$60,000.00.
A Member accused of improper reporting pursuant to this
paragraph, shall have the right to appeal any decision of the Agency to the
full Board of Directors. The procedure to be used for such an appeal shall
be the same as is provided for a Member who may be expelled from the
Agency. Any decision o~ the Board of Directors is final.
The Board of Directors may grant debits or credits to Members with
above or below average loss or claims records for a period of no more
than five (5) years immediately preceding the fiscal year for which
contributions are to be determined. The amount of such debits or credits
may not vary more than 25% above or below the amount which the
Member would pay if it were not to have been granted the debit or credit.
When admitting a new Member, the Executive Committee may establish
the rate and amount which the new Member shall pay for at least two
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years and may take into consideration, in setting such a rate, factors and
formula other than those described above in this Article.
C. Calls for Supplementary Payments may be made by the Board of
Directors, providing, however, that such additional sums may be called for
in a total amount attributable to any one year of not more than once again
the regular Annual Payment for that year. The Board shall also make calls
for Supplementary Payments from Members which have withdrawn or
been expelled for years during which they were Members. The forwarding
of such Annual and Supplementary Payments within a time specified in
notices to the Members giving them not less than forty-five (45) days to
make such payments, shall be of the essence of this contract.
Supplementary Payments shall only be required by the Board of Directors
in a situation in which there is a reasonable concern that the sum
remaining from the Annual Payments will not be sufficient to meet the
responsibilities of the Agency established in these By-Laws. Members
shall be responsible for Supplementary Payments during the entire life of
the Agency and any later period when claims or expenses need be paid
which are attributable to the year of membership when the event out of
which the expense or claim occurred. Supplementary Payments may be
called for in a number of individual requests provided that the total amount
25
4/3/02
of the Supplementary Payments may not exceed the maximum amount
permitted.
D. The Board of Directors, at any time, may allocate a portion of the Joint
Risk Management Fund for any year during which the Agency has been in
existence, into a separate account to be known as the Floating Super
Fund. The money in this account maybe utilized to pay claims and
expenses of the Agency attributable to any year during which the Agency
is in existence. In the creation of and with regard to payments to the
Floating Super Fund, it is one of the desires of the Members to be able to
consider purchasing less Conventional Insurance of any kind and to fund
losses previously covered within the scope of such insurance from the
Floating Super Fund. It is anticipated that claims for such losses will occur
infrequently but will require significant amounts of money. Amounts of
money sufficient to cover such claims can best be achieved through the
accumulation of funds over a number of claims years. Any Member which
leaves the Agency, in any way, shall not have any claim against the funds
within the Floating Super Fund, except for the payment of claims during
the years in which it was a Member of the Agency. Provided, however,
that in the event that the Agency should terminate, any surplus amounts
within the Floating Super Fund which are available after all claims and
26
4/3/02
expenses of the Agency have been paid, shall be returned to all of those
Members which contributed to the Floating Super Fund in the proportion to
which they made contributions to the Fund. Any new Member which joins
the Agency shall be entitled to the use of the monies within the Floating
Super Fund for claims which occurred during the period of its membership
in the Agency, but any funds which it contributes to the Floating Super
Fund shall also be available for claims which occurred during prior years.
E. The Executive Committee may permit the Annual or Supplementary
Payments to be paid on a monthly or quarterly basis. The amount of any
Supplementary Payments required shall be based upon the same formula
as was used in establishing the Annual Payment for that year.
F. If, for any year during which the Agency was in existence, all claims
known or unknown have either been paid or provision has been made for
such payment, the Board of Directors as then constituted shall distribute
surplus funds to the Members who constituted the membership of the
Agency in that prior year, after first deducting therefrom reasonable
administrative and other non-allocated costs incurred by the Agency in the
processing of the claims in years other than the one in which the claim
was made.
27
4/3/02
G. If Conventional Insurance of any kind is purchased, and the insurance
provider should fail to perform its contractual obligations, the Members
shall be called upon to repay to the Agency, within a period of time of not
less than sixty (60) days after notice, any amounts, then needed for
reserves or to make payments, for the claim year in question, as had been
previously distributed to them as refunds, rebates or other repayment of
surplus funds. The Executive Committee shall determine the extent to
which the Floating Super Fund may be used to establish reserves or to
pay some or all of such claims before a call for the return of some or all of
the returned surplus funds for the claim year in question is made.
Members shall also be obligated to make Supplementary Payments, up to
the maximum allowed amount, for losses or claims which fall within the
scope and amount of coverage which the Agency agreed to cover through
Joint Self-Insurance rather than through levels of coverage which were to
be paid from the proceeds of Conventional Insurance of any kind.
In all cases where the Agency has purchased Conventional
Insurance of any kind, the Members shall look solely to the provider of the
Conventional Insurance coverage for the payment of claims or losses
within the scope of coverage of the policies purchased. Neither the Joint
Risk Management Fund or Floating Super Fund, nor funds procured
28
4/3/02
through Supplementary Payments, shall be used to pay claims or losses
within the dollar amount and scope of coverage assumed by an insurance
company which has sold Conventional Insurance of any kind to the
Agency. Provided, however, that the Board of Directors may authorize the
use of Agency funds to pay the costs of litigation of a Member against
such Conventional Insurance provider which contends that a claim or loss
has not been paid as contractually required by the Conventional Insurance
company.
H. A budget for the Agency shall be recommended to the Board of Directors
by the Executive Committee for each fiscal year. That budget shall
confirm and authorize the payment of any funds made earlier during that
first fiscal year as well as such funds as are estimated to be required
during the remainder of that fiscal year.
29
4/3/02
ARTICLE IX. SCOPE OF LOSS PROTECTION.
In the absence of a motion by the Board of Directors expanding or contracting
the scope of loss protection furnished by the Agency, the Agency shall provide loss
protection from its self-insured retention funds only to the extent that protection would
be accorded within the terms of the Conventional Insurance held from time to time by
the Agency for the benefit of its Members. The intent of this Contract and By-Laws shall
be that except to the extent to which the scope of coverage provided by the Agency is
specifically expanded by action of the Board of Directors, the Members herein do not
intend to utilize the Joint Risk Management Fund or Floating Super Fund of the Agency
to cover claims or losses where the conventional, excess, aggregate or reinsurance
covers the claim or loss. Provided, however, that without limiting the generality thereof,
except in the amount and to the extent paid for by the conventional, excess aggregate
or re-insurance purchased by the Agency, the Agency shall not provide self-insurance
pooled coverage in the following areas:
A. Punitive or exemplary damages.
B. Liability of individuals otherwise covered for acts committed outside the
scope of their duties and powers.
C. Those portions of causes of action seeking only non-monetary claims
such as injunction, mandamus and declaratory relief.
30
4/3/02
D. The payment of the attorneys' fees of opposing counsel or other court
costs where a judgment providing no other monetary relief to the plaintiff is
entered.
E. Those portions of causes of action where the plaintiff seeks no damages
but only the return of tax funds or any other fund alleged to have been
paid or received by the Member in error or without authority in law.
F. Those portions of causes of actions grounded solely in contract except for
validly extended contractual obligations of Members to indemnify third-
parties. For a contractual obligation of a Member to indemnify third parties
to be validly extended, it must be approved by the Chair in writing through
the issuance of a Certificate of Protection/ Insurance specifically naming
the Member and the third party to whom a contractual obligation to
indemnify is being extended. The Executive Committee may establish
guidelines to be used by the Chair in determining whether to extend a
contractual obligation to indemnify third parties.
G. Those portions of causes of action seeking only back pay or retroactive
salary increases based upon alleged discrimination.
31
4/3/02
H. Those portions of causes of action alleging improper acts by officers of
Members who serve as representatives of those Members on other
intergovernmental agencies.
I. Fire or casualty losses to property owned by the Member not listed upon
the annual statement of values or property report furnished to the Agency.
J. Those portions of causes of action alleging improper acts by police
officers, whether sworn or unsworn, police departments or other officers of
Members serving as law enforcement officers where said individuals or
departments are not certified by the State of Illinois or other agency
approved by the Executive Committee to certify local police officers and
local police departments, or have been found, previous to the cause of
action arising, to not meet minimum State of Illinois requirements
established for said police officers or departments. The minimum state
requirements referred to in this exclusion shall be those requirements
promulgated pursuant to the Illinois Police Training Act, 50 ILCS 705/1 et
seq. or any related Illinois statute intended to regulate the training and/or
certification of local police offices and local police departments, effective
on the date the alleged cause of action accrues.
32
4/3/02
K. Continuing damages for an action of a Member, where the Member has
been requested to terminate the practice during litigation by the written
request of the Executive Committee and refuses to do so within no more
than 30 days thereafter.
The Chair, after having reviewed a claim forwarded to the Agency for coverage
shall be permitted to decline to provide coverage for such claim if, in his opinion, the
claim is not within the scope of coverage accorded by the Agency. The Chair may also
agree to accept the claim and provide a defense but may reserve the right of the
Agency to withdraw from the defense or to refuse to provide indemnification against the
claim in the event that it is later determined that the claim is not properly within the
scope of protection accorded by the Agency. Any decision by the Chair on coverage
may be appealed, in writing, to the Executive Committee within thirty (30) days after the
Chair has issued a written decision on coverage.
By entering into this Contract and By-Laws, each Member of the Agency agrees
to be bound by a decision of the Executive Committee that a particular matter presented
to the Agency for defense and indemnification is or is not within the scope of coverage
provided by the Agency. The decision of the Executive Committee shall be final in the
absence of fraud or a gross abuse of its discretion.
33
4/3/02
ARTICLE X. CONVENTIONAL INSURANCE.
The Agency may purchase excess, aggregate insurance or reinsurance from a
company approved by the Department of Insurance to write such coverage in Illinois in
such amounts as shall be approved by the Board of Directors.
In addition to any excess insurance coverage established by the Agency, the
Agency may purchase aggregate insurance or reinsurance such that in the event that
the Agency should in any single year expend a maximum aggregate sum set from time
to time by the Board of Directors for the payment of claims, aggregate insurance or
reinsurance will pay additional claims above that amount to certain maximum annual
amount. The Board of Directors shall determine the commencement level of the
aggregate insurance or reinsurance and its limit based upon the current assets and risk
history of the Agency.
In the event that a series of losses should deplete the amounts which could be
raised from Annual and all callable Supplementary Payments, the excess insurance, the
aggregate insurance and reinsurance for any one year and the funds of the Floating
Super Fund have been entirely depleted, then the payment of such uncovered valid loss
shall be the obligation of the individual Member or Members against which the claim
was made and perfected by judgment or settlement. Unless otherwise provided for, the
Agency shall make payments from the Joint Risk Management Fund and Floating Super
Fund, and the excess insurance, reinsurance and aggregate insurance proceeds in the
34
4/3/02
order in which the judgments against the Agency have been entered or settlements of
claims have been reached.
35
4/3/02
ARTICLE XI.OBLIGATIONS OF MEMBERS.
The obligations of Members of the Agency shall be as follows:
A. To budget for, where necessary to levy for and to promptly pay all Annual
and Supplementary or other payments to the Agency at such times and in
such amounts as shall be established by the Board of Directors within the
scope of this agreement. Any delinquent payments shall have added to
them an amount equal to the highest interest rate allowed by statute to be
paid by an Illinois unit of local government.
B. To appoint an authorized representative to serve on the Board of Directors
and to appoint an alternate representative.
C. To allow the Agency reasonable access to all facilities of the Member and
all records including but not limited to financial records which relate to the
purpose or powers of the Agency.
D. To allow attorneys employed by the Agency to represent the Member in
investigation, settlement discussions and all level of litigation including
subrogation arising out of any claim made against the Member within the
scope of loss protection furnished by the Agency.
36
4/3/02
E. To furnish full cooperation with the Agency's attorneys, claims adjusters,
and any agent, employee, officer or independent contractor of the Agency
relating to the purpose and powers of the Agency.
F. To follow in its operations all loss reduction and prevention procedures
established by the Agency within its purpose and powers.
G. To report to the Agency within the time limit specified the following items:
1. To report, within ten (10) days of receipt, a statutory notice of claim,
a summons and complaint or other pleading before a court or
agency for which coverage is sought.
2. To report, within thirty (30) days of receipt, a written demand for
monetary relief for which coverage is sought.
a. To report to the Agency at the earliest practicable moment
any information of an occurrence received by the Member
and from which the Member could reasonable conclude that
coverage will be sought.
In the event that the items set forth above are not submitted
to the Agency within the time periods set forth above, the Chair may, in
whole or in part, decline to provide a defense to the Member or to extend
the funds of the Agency for the payment of losses or damages incurred.
In reaching its decision, the Chair shall consider whether and to what
extent the Agency was prejudiced in its ability to investigate and defend
the claim due to the failure of the Member to promptly furnish notice of the
37
4/3/02
claim. Any Member may, within thirty (30) days after receiving such a
decision of the Chair, request, in writing, that the Executive Committee
take official action to affirm or reverse that decision. In the absence of
fraud or a gross abuse of discretion, the decision of the Executive
Committee shall be final.
38
4/3/02
ARTICLE XII. LIABILITY OF BOARD OF DIRECTORS OR OFFICERS.
The Members of the Board of Directors or officers of the Agency should use
ordinary care and reasonable diligence in the exercise of their power and in the
performance of their duties hereunder; they shall not be liable for any mistake of
judgment or other action made, taken or omitted by them in good faith; nor for any
action taken or omitted by any agent, employee or independent contractor selected with
reasonable care; nor for loss incurred through investment of Agency funds, or failure to
invest. No Director shall be liable for any action taken or omitted by any other Director.
No Director shall be required to give a bond or other security to guarantee the faithful
performance of their duties hereunder. The Agency may purchase Conventional
Insurance providing liability coverage for such Directors or officers. Where no such
insurance has been purchased to provide liability coverage for such Directors or
officers, or the amount of the Conventional Insurance purchased shall be inadequate to
cover all claims, the Joint Risk Management Fund shall be utilized to defend and pay
claims on behalf of such Directors or officers.
39
4/3/02
ARTICLE XIII. NO THIRD-PARTY BENEFICIARIES.
The scope of coverage of the Agency shall extend only to the Members and this
intergovernmental agreement is not intended to, nor does it grant, any rights, including,
but not limited to, the right to an interpretation of its provisions or benefits to any third
parties. Any language in Conventional, Excess, Aggregate or Reinsurance policies
expanding the scope of coverage to any third-parties extends to the Members only, and
not to such third-parties.
40
4/3/02
ARTICLE XIV. OPTIONAL DEFENSE BY MEMBER.
Whenever the Agency proposes to settle any pending claim or suit where the
amount of that proposed settlement shall exceed an amount established from time to
time by the Executive Committee, the Member shall be given advance notice of that
settlement. Such notice may be given by the establishment of a new reserve amount.
The officers and employees of the Agency shall, however, endeavor to give specific oral
or written notice to a Member of the exact amount of any proposed settlement in excess
of the reserved amount at least fourteen (14) days prior to the date at which the Agency
proposes to bind itself to pay such settlement amount. It is recognized by the Members
that under some circumstances the Agency may not be able to give fourteen (14) days' .
prior oral or written notice of the proposed settlement. The officers, employees or
independent contractors of the Agency shall attempt to give the Members as much
notice of the settlement as is possible under the circumstances of each case.
In the event that a Member should disagree with the amount at which the Agency
proposes to settle a case or claim, the authorized representative of the Member on the
Board of Directors of the Agency, the alternative representative, or the Manager or other
Chief Executive Officer of the Member may notify the Chair of the Agency in writing that
the Member exercises its right to prevent the Agency from reaching a settlement at the
agreed upon amount. In cases where such a written objection is received, the Agency
will not settle the case without the consent of the Member. In the event that the Agency
does not settle a case based upon the objection of a Member, the Agency shall
41
4/3/02
continue to provide a defense to the defendants unless the Member should desire to
itself undertake the defense. In the event that the case or claim is eventually resolved
through a settlement or judgment in an amount less than the amount at which the case
could have been previously settled by the Agency then the Member which has
undertaken the costs of its own defense shall be entitled to its additional actual costs,
including attorneys' fees, up to the level at which its costs and the prior allocated costs
of the Agency, including attorneys' fees, equal the amount at which the case could have
been settled by the Agency. To the extent that the case or claim is resolved through
settlement or judgment at an amount greater than that at which the case or claim could
have been previously settled by the Agency, the Member shall be obligated to pay to
the Agency, within thirty (30) days upon receipt of written notice, the amount that the
sum of the settlement or judgment, plus all other allocated costs of the Agency, exceed
the sum of money at which the case could have been earlier settled by the Agency.
Such payments shall be unlimited in amount and the Agency shall not be required to
advance the payment due from the Member. If at any time the amount of the allocated
costs of the Agency devoted to the case shall equal or exceed the amount at which the
case could have been settled, the Agency may require periodic payments from the
Member if the Member wishes to have the Agency continue to provide the defense.
Allocated costs shall mean those costs which are allocated to individual cases
under the bookkeeping and accounting system utilized by the Agency. The Agency
may establish the amount at which it could have settled the case through a written
42
4/3/02
settlement offer by the plaintiff, or through other competent evidence of the availability
of the settlement at a particular sum.
To the extent that payment shall be made from an aggregate, excess or other
insurance carrier, the provision of this Article shall prevail when not contrary to those
insurance contracts.
43
4/3/02
ARTICLE XV. CONTRACTUAL OBLIGATION.
This document shall constitute a contract among those units of local government
which become Members of the Agency. The obligations and responsibilities of the
Members set forth herein including the obligation to take no action inconsistent with
these By-Laws as originally written or validly amended shall remain a continuing
obligation and responsibility of the Member. The terms of this Contract may be
enforced in a court of law by the Agency or any Member. Should the Agency be
required to enforce the terms of this Agreement against a Member in a court of law and
the Agency be the prevailing party, the Member (or former Member) against which the
claim is brought shall pay the Agency's costs and attorney's fees within sixty (60) days
after the litigation is terminated.
The consideration for the duties herewith imposed upon the Members to take
certain actions and to refrain from certain other actions shall be based upon the mutual
promise and agreements of the Members set forth herein. This Contract and By-Laws
may be executed in duplicate originals and its passage shall be evidenced by a certified
copy of an ordinance or resolution passed by a majority of the Members. Provided,
however, that except to the extent of the limited financial contributions to the Agency
agreed to herein or such additional obligations as may come about through
amendments to these By-Laws no Member agrees or contract herein to be held
responsible for any claims in tort or contracts made against any other Member. The
contracting parties intend in the creation of the Agency to establish an organization for
44
4/3/02
joint risk management only within the scope herein set out and have not herein created
as between Member and Member any relationship of surety, indemnification or
responsibility for the debts of or claims against any Member.
45
ARTICLE XVI. EXPULSION OF MEMBERS.
4/3/02
By the vote of two-thirds (2/3) of the entire membership of the Board of Directors,
any Member may be expelled. Such expulsion may be carried out for one or more of
the following reasons:
A. Failure to make any payments due to the Agency.
B. Failure to undertake or continue loss reduction and prevention procedures
adopted by the Agency.
C. Failure to allow the Agency reasonable access to all facilities of the
Member and to all records which relate to the purpose or powers of -the
Agency.
D. Failure to furnish full cooperation with the Agency's attorneys, claims
adjusters, and any agent, employee, officer or independent contractor of
the Agency relating to the purpose and powers of the Agency.
E. Failure to carry out any obligation of a Member which impairs the ability of
the Agency to carry out its purpose or powers.
No Member may be expelled except after notice from the Chair of the alleged
failure along with reasonable opportunity of not less than thirty (30) days to cure the
46
4/3/02
alleged failure. The Member may request a hearing before the Board before any
decision is made as to whether the expulsion shall take place. The Board shall set the
date for a hearing which shall not be less than fifteen (15) days after the expiration of
the time to cure has passed. A decision by the Board to expel a Member after notice
and hearing and a failure to cure the alleged defect shall be final unless the Board shall
be found by a court to have committed a gross abuse of discretion. The Board of
Directors may establish the date at which the expulsion of the Member shall be effective
at any time not less than thirty (30) days after the vote expelling the Member has been
made by the Board of Directors except that the expulsion of a Member for reason A may
be made effective immediately. If the motion to expel the Member made by the Board
of Directors or a subsequent motion does not state the time at which the expulsion shall
take place, such expulsion shall take place thirty (30) days after the date of the vote by
the Board of Directors expelling the Member.
After expulsion, the former Member shall continue to be fully obligated for its
portion of any claim against the assets of the Risk Management Agency which was
created during the term of its Membership along with any other unfulfilled obligations as
if it was still a Member of the Agency. The Agency shall continue to provide coverage
for all claims which would have been covered prior to the expulsion except that it shall
be excused from such coverage if the actions of the Member prevent the Agency from
providing an adequate defense on its behalf. The expelled Member shall, after
expulsion, no longer be entitled to participate or vote on the Board of Directors and shall
47
4/3/02
not be entitled to any refund, rebate or other return of surplus funds which may be
authorized by the Agency for any year for which the expelled entity was a Member of
the Agency nor shall the expelled Member be entitled to the return of any funds
declared by the Agency to be surplus from the Floating Super Fund.
48
ARTICLE XVII. TERMINATION OF THE AGENCY.
4/3/02
If, at the conclusion of any fixed term of the Agency, the Board of Directors does
not vote to continue the existence of the Agency, or, if at any time the number of the
Members of the Agency which will continue as Members into the next fiscal year shall
be less than five (5), or at any time upon a 2/3rds vote of the entire Board of Directors at
a regular or special meeting thereof, then the Agency shall cease its existence at the
close of the then current fiscal year. Under those circumstances, the Board of Directors
and the Executive Committee shall continue to meet on such a schedule as shall be
necessary to carry out the winding up of the affairs of the Agency. It is contemplated
that such meetings may continue for some substantial period of time in order to
accomplish this task.
All Members upon a general termination of the Agency shall remain fully
obligated for their portion of any claim against the assets of the Joint Risk Management
Fund or Floating Super Fund which was created during the term of their membership
along with any other unfulfilled obligations, including, but not limited to calls for
Supplementary Payments for years of their membership which may be required and
called for in subsequent years.
RKB\cid\L:\My Documents\Mica\Bylaws\BYLAWS.REV5.wpd\1487027.000
49
Municipal Insurance
Cooperative Agency
City of Canton
2 North Main Street
Canton, IL 61520
Proposal of Insurance
Presented: December 7, 2010
Package, Ezcess Property, Excess Liability,
Ezcess Workers' Compensation, and Boiler
Effective: December 31, 2010
z
,~rt~~a:r.j. ~~~iia~her R~~~ ,a.na~e~-en~t ~erv~ces, ~r~~.
Mark Noffert
Senior Area Vice President
Ryan Doyle
Account Executive
Public & Non-Profit Division
The Gallagher Centre
Two Pierce Place
Itasca, II.60143
mark noffert@ajg.com
ryan_doyleCa jg.com
www.ajg.com
630-773-3800
This proposal of coverage is intended to
facilitate your understanding of the insurance
program we have arranged on your behalf. tt
• zoio ~,tiv a. c~e.~ ~ co. is not intended to replace or supersede your
insurance pdicies.
Proposal of Instuance for:
Table of Contents
Introduction ......................................................................................................................................................................1
Operation of the Plan .......................................................................................................................................................2
Service Team ................................................................................................................................................................. ..3
The Gallagher Team Approach .......................................................................................................................................3
The Gallagher Team Approach ..................................................................................................................................... ..4
Carrier Ratings and Admitted Status of All Bindable Quotes ..........................................................................................5
Coverage and Premium ................................................................................................................................................. ..6
Coverage Summary ....................................................................................................................................................... ..7
Excess Loss Fund Protection .................................................................................................................................. ..9
Loss Fund, Self-Insured Retentions, Maintenance Deductibles, and Premium ..................................................... ..9
Property Coverage Highlights ........................................................................................................................................ 10
Section I -Property ................................................................................................................................................. 10
Section II -Comprehensive General Liability ......................................................................................................... 12
Section III -Automobile Liability ............................................................................................................................. 13
Section IV -Errors &Omissions ............................................................................................................................. 14
Section V -Workers' Compensation and Employers' Liability ............................................................................... 15
Section VI -Employee Benefits Liability ................................................................................................................. 16
Section VII -Crime ................................................................................................................................................. 17
Excess Coverages ......................................................................................................................................................... 18
Excess Property ...........................................................................................•---....................................................... 19
Excess Comprehensive General Liability ................................................................................................................ 21
Workers' Compensation and Employers' Liability ................................................................................................... 22
Ancillary Coverages ....................................................................................................................................................... 23
Boiler & Machinery .................................................................................................................................................. 24
Gallagher Bassett Services, Inc ..................................................................................................................................... 25
Loss Control Consulting Services .................................................................................................................................. 26
R ISX-FACS® .................................................................................................................................................................. 27
MICA Advantages .......................................................................................................................................................... 28
Member Contact List.-• ................................................................................................................................................... 29
Gallagher Disclosures...........-•-• ..................................................................................................................................... 30
Client Authorization to Bind Coverage ........................................................................................................................... 33
~~ Arthur J. Gallagher Risk Management Services, Inc.
s~~
RaCLNiDOCS103WonProfiB21374.AOC 12/1/70
Proposal of Insurance for:
Introduction
MICA has grown to be a very successful pooled insurance program originally formed May 1, 1984 with four charter
members. There are currently 23 public entities in the agency. Insurance coverage is provided to the agency by a
Protected Self-Insured program that provides Liability coverage limits to $10,000,000 on an occurrence form. MICA's
program includes coverage for: Property, Liability, Auto Liability, Workers' Compensation, Crime, Boiler, and Sales
Tax Interruption.
MICA, as a group, is very aggressive in controlling losses and reducing claim costs to its members since its inception.
Effective Loss Control measures and a concerted effort from the entire Pool have lead to a surplus in the loss fund.
The total dollar amount of loss fund money returned to the MICA members as of 5/112008 is in excess of
$7,900,000, and additional returns will be distributed in the future.
To put this more into perspective, the loss fund as a percent of MICA's total insurance program costs is over 70%. A
50% return of the loss fund, therefore, represents a 35% reduction of total insurance costs to MICA members as a
group; most MICA members had already seen substantial savings when they joined MICA.
With continued loss control awareness, MICA members hope to continue to receive similar loss fund returns in the
future. Some basic reasons for MICA's success include:
• Careful selection of new members;
• Membership is from a varied geographic area;
• Aggressive loss control and risk management techniques;
• Slow controlled growth;
• Direct working relationship with claims administration;
• Spedalized safety education seminars; and
• Interest income from loss fund reserves produces additional equity for members.
~ Arthur J. Gallagher Risk Management Services, Inc.
~~a
R:1CLNiDOCS03WonProfl621374.doC 12/1!10
Proposal of Insurance for:
Operation of the Plan
• Effective on a given date, the public entity becomes a member of the Municipal Insurance Cooperative Agency.
To protect all members, athree-year commitment is required.
• Arthur J. Gallagher & Co. arranges a comprehensive excess insurance program written to self-insure small losses
and fully insure any catastrophe.
• All loss fund contributions are held by MICA instead of insurance companies. Only the premiums for the excess
insurance premiums are payable to the carriers.
• Gallagher Bassett Services, Inc. (a division of Arthur J. Gallagher & Co.) administers the program for MICA.
Gallagher Bassett Services, Inc. would settle all claims, keep MICA members informed of all losses and
expenditures on a monthly basis, as well as provide loss control services to members.
• Losses are paid from MICA's Loss Fund. This fund is retained by MICA. Excess insurance is available if the Loss
Fund is exhausted. If the Loss Fund is not exhausted, MICA keeps the surplus, and at an appropriate time the
membership can decide to return unused Loss Fund money back to members.
• The plan is designed so that no single loss can use up the Loss Fund. MICA will pay only the self-insured
retention of each loss, over which there will be insurance coverage.
• Summary of the plan in operation:
Losses are paid from MICA's Loss Fund.
If the fund is exhausted, excess insurance is available.
If the fund is not exhausted, MICA keeps the surplus.
~~ Arthur J. Gallagher Risk Management Services, Inc.
~~.
R:1CW7"DOCSt03NbnPrdflV21374.doc 12/1/10
Proposal of Insurance for:
Service Team
Fax Number: (630) 285-4062
Office Hours: 9:00 a.m. to 5:00 p.m.
Monday -Friday
The Gallagher Centre
Two Pierce Place
Itasca, IL 60143
Service Team
Mark Noffert
Area Senior Vice President
(630) 285-3758
mark_noffert(~a)g.com
Julia Seidel, ARM
Risk Management Representative
(630) 285-3579
julia_seidel~ajg.com
A service team approach will be implemented for City of
Canton to provide a senior level availability for all of your
services and risk management needs as well as daily
service requirements.
Ryan Doyle
Account Executive
(630) 285-3678
ryan_doyle~ajg.com
Cindy LaMantia
Area President
(630) 285-4375
dndy_lamantia(~ajg.com
Kathy Nykaza
f=xecuUve Risk Management
Representative
(630) 285-3896
kathy_nykaza(~ajg.com
Arthur J. Gallagher Risk Management Services, Inc.
~/~.
R:1CLNiDOCSW3WonProfll121374.dot 12/1!10
3
Proposal of Insurance for:
The Gallagher Team Approach
Delivering the services required can only be accomplished through the focus of a team of quality people. We realize
that no one individual can adequately handle an account, or know all there is to know about your organization.
To achieve the level of service you expect, your team at Arthur J. Gallagher Risk Management Services, Inc. will be
led by your primary Account Executive. As team leader, it will be my responsibility to make sure that your service
needs and interests are recognized, understood, and provided for by the designated service team.
The following is the integrated service team of Gallagher professionals:
Primary Account Executive -Mark Noffert, Area Senior Vice President, wilt serve as your primary account
executive. In this role, he will be the team leader of your account service team. Mark will work with the Municipal
Insurance Cooperative Agency in implementing strategic risk management plans, assist in defining risk tolerance
levels, coordinating Arthur J. Gallagher & Co.'s resources, and communicating with the Municipal Insurance
Cooperative Agency concerning work plans, special projects, and other relevant management issues. He will review
work plan issues and attend all meetings. Additionally, Mark will work closely with the Municipal Insurance
Cooperative Agency to market insurance coverages for the Municipal Insurance Cooperative Agency.
Account Executive -Ryan Doyle, Account Executive, will work closely with the primary account executive in
marketing efforts, prospecting activity, special projects, and other relevant management issues. Ryan will attend client
meetings as required.
Branch Management -Cynthia LaMantia, Area President, oversees the management of Arthur J. Gallagher Risk
Management Services, Inc. Public and Non-Profit Division.
Account Manager -Kathy Nykaza, Executive Risk Management Representative, will be responsible for managing
the Municipal Insurance Cooperative Agency's insurance program on a day-to-day basis. In this capacity, Kathy
markets, reviews, and oversees the administration of coverage documents, a task which includes: auditing current
policies, negotiating with reinsurers, reviewing new coverages, comparing/monitoring alternative coverage forms, and
policy checking. Kathy will also attend client meetings as required.
Account Assistant -Julia Seidel, ARM, Risk Management Representative, will assist Kathy Nykaza and provide
support services including certificate issuance, maintenance of underwriting schedules, processing miscellaneous
endorsements, and handling day-today service requests.
Risk Services Director -Anne Sclalabba, Assistant ~ce President is our in-house claim advocate. Anne has over
15 years experience in claim management services including claims adjusting. She is very strong in facilitating
solutions for problem claims, specifically working with carriers and reinsurers to bring complicated cases to successful
closure.
~` Arthur J. Gallagher Risk Management Ser~tices, Inc.
~~~
R:1CLNiDOCSf03WonProfrt421374.doc 1?/1/10 4
R~oposal of Insm~ance for:
Carrier Ratings and
Admitted Status Rating
Levels and Categories
Copies of the Best's Insurance Reports on the
insurance companies are available upon your request.
Gallagher companies use A.M. Best & Co.'s rating
services to evaluate the financial condition of insurers
whose policies we propose to deliver. Arthur J.
Gallagher $ Co. makes no representation and warranties
concerning the solvency of any carrier, nor does it make
any representation or warranty concerning the rating of the
carrier which may change.
Carriers that Quoted
A.M. Best's Rating Admitted/
Non Admitted
Selective Insurance Com an of the Southeast A+ XII Admitted
Everest National Insurance Com an A+ XV Admitted
Safe National Casual Co ration A X Admitted
Travelers Insurance Com an A+ XV Admitted
Ii the above indicated coverage is placed with aNon-Admitted Carrier, the carrier Is doing business in the state as a surplus ~
Ilnes or non-admitted carrier. As such, this carrier is not subject to the same regulations which apply to an admitted carrier nor
do they participate in any insurance guarantee fund applicable In that state. '
The A.M. Best Rating was verified on the date the proposal document was created.
Level Level Cat o Level Ca o
A++, A+ .......................... Superior B. B-............................ Fair D ..............................................Poor
A, A- .............................. Excellent C++, C+ .............. Marginal E.......Under Regulatory Supervision
B++, B+ ...................... Very Good C, C- ........................ Weak F................................. In Liquidation
S ........................ Rating Suspended
Financial Size Categories
FSC I Up to 1,000 FSC IX 250,000 to 500,00
FSC II 1,000 to 2,000 FSC X 500,000 to 750,00
FSC III 2,000 to 5,000 FSC XI 750,000 to 1,000,00
FSC IV 5,000 to 10,000 FSC XII 1,000,000 to 1,250,00
FSC V 10,000 to 25,000 FSC XIII 1,250,000 to 1,500,00
FSC VI 25,000 to 50,000 FSC XIV 1,500,000 to 2,000,00
FSC VII 50,000 to 100,000 FSC XV 2,000,000 or more
FSC VIII 100,000 to 250,000
(In $000 of Reported Policyholders' Surplus Plus Conditional Reserve Funds)
Best's Insurance Reports. published annually by A.M. Best Company, Inc., presents comprehensive reports on the financial
position, history, and transactions of insurance companies operating in the United States and Canada. Companies licensed to
do business in the United States are assigned a Best's Rating which attempts to measure the comparative position of the
company or association against industry averages.
~'~ Arthur J. Gallagher Risk Management Services, Inc.
~.
R:1CLM'DOC3U13NbnProfit521374.doc t211l10
Proposal of Insurance frn•:
Coverage and Premium
Cove Arthur J. Gallagher
Risk Management
Service Inc.
Package $33,349
General Liability Included
Automobile Included
Excess Workers' Compensation 10,982
Umbrella Liability 23,923
Excess Property 12,773
Boiler & Machinery 3,846
Public Officials' Errors & Omissions Bonds 750
Loss Fund 303,855
Claims Administration/Brokerage Fee/Loss Control 63,294
Total MICA Program Cost -Annualized $452,772
Notes:
• Coverage would incept on December 31, 2010 and run through May 1, 2011, at which time, a full annual policy
period would begin.
• Quoted annual rate of $452,772 is guaranteed for policy period commencing 5/1/2011 through 4/30/2012.
• Pro Rate premium for the period of December 31, 2010 to May 1, 2011 is $164,529
~~ Arthur J. Crallagher Risk Management Services, Inc.
~~.
R:1CLN1DOC5503NbnPm/f821374.doc 1?/1l10
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a
Z • • • • •
Proposal of Insw~ance for:
Excess Loss Fund Protection
• The insured is responsible for the payment of each claim to which an applicable self-insured retention applies.
• The Loss Fund is the policy period aggregate amount to be accumulated for claims incurred by the insured to
satisfy the insured's obligation. In the event the aggregate limit is reached during the policy period, the amount of
the Excess Loss Fund drops down to pay losses within the self-insured retention.
• If there is an applicable maintenance deductible underlying the self-insured retention, this maintenance deductible
is not considered part of the self-insured retention, and does not accrue to the exhaustion of the Loss Fund.
• Each loss payment made by the insured of such applicable self-insured retention shall reduce the Loss Fund
amount available by the amount of such loss payment until such Loss Fund amount is exhausted. Upon
exhaustion of the Loss Fund, the Excess Loss Fund Protection begins.
• The Excess Lass Fund Protection ends when the Excess Loss Fund Protection annual aggregate limit has been
exhausted by payments to the insured.
• Upon exhaustion of the Excess Loss Fund Protection annual aggregate limit, the insured is once again
responsible for the applicable self-insured retention amount.
• Only losses covered within the self-insured retention serve to reduce the Loss Fund.
~'~ Arthur J. Gallagher Risk Management Services, Inc.
~f •
RICLNTDOCS103NbnProfit421374.doc 1?/1/10
Proposal of Insurance for:
Section f -Property
Limit of Liability: $1,000,000 blanket limit including the insured's retention
Valuation: Replacement cost on buildings and contents, actual cash value (ACV) on motor
vehicles and mobile equipment
Perils Insured: All risk
Coinsurance: None
Maintenance Deductible: $1,000
Coverages Included:
• Accounts Receivable
• Architects' Fees
• Automatic Acquisition
• Data Processing -Extra Expense
• Data Processing -Media
• Data Processing -System Equipment
• Debris Removal
• Demolition
• Earthquake -subject to $1,000,000 annual aggregate
• Extra Expense
• Fine Arts
• Flood -subject to $1,000,000 annual aggregate, excludes Zone V
• Gross Earnings Business Interruption
• Hired, Owned, and Nonowned Autos, including Rental
• Joint Loss Agreement
• Loss of Rents
• Mine Subsidence - $500,000 Per Building
• Miscellaneous Equipment
• Mobile Equipment
• Ordinance Deficiency
• Owned Builders' Risk
• Property in Transit
• Replacement Cost if Not Repaired
• Sales Tax Interruption - $1,000,000 sublimit to participating members
• Terrorism
• Valuable Papers and Records
• Unintentional Errors & Omissions
*~
..++,~•
R:ICLNTDOCSV03WanPrdm21374.doc 12/1/10
Arthur J. Gallagher Risk Management Services, Inc.
10
Proposal of Insurance for:
Property Excluded:
• Animals
• Aircraft
• Watercraft (over 25 feet in length)
• Standing timber
• Growing crops
• Bills
• Currency
• Money
• Notes
• Securities
• Deeds
• Evidence of debt
• Land and land values
Exclusions:
With regard to all property:
• Loss by moth, vermin, termites, or other insects
• Wear, tear, or gradual deterioration
• Rust, wet or dry rot, or mold
• Loss from nuclear reaction, nuclear radiation, or radioactive contamination
• Loss resulting from loss of use, delay, or loss of markets
• Breakdown of machinery and/or boiler explosion
• Loss resulting from dampness of atmosphere or variation in temperature
• Loss of electrical appliances or devices from artificial causes
• Loss by normal settling, normal shrinkage, or normal expansion
• Loss resulting from shrinkage, evaporation, loss of weight, or leakage
• Inventory shortage, mysterious disappearances
• Asbestos-related claims
With regard to personal property:
• Loss by mechanical derangement, inherent vice, or latent defect
• Loss resulting from processing or faulty workmanship
Note:
The above is only a summary of the major exclusions in this policy. Please review the actual policy for a complete
listing of exclusions.
~~
~~a
R:ICLNTDOCS103WonPtofl021374.doc 1211!10
Arthur J. Gallagher Risk Management Services, Inc.
11
Proposal of Insurance for:
Section 11 -Comprehensive General Liability
Limit of Liability: $1,000,000 per occurrence including the insured's retention, any one claim
Aggregate: $2,400,000 per member
Coverage Form: Occurrence
Coverages:
• Host and/or Liquor Liability Law Enforcement Liability
• Watercraft Liability Employees and Volunteers as Insureds
• Volunteer Workers Incidental Medical Malpractice
• Personal Injury Garage Liability
• Premises/Operations Advertising Liability
• Product/Completed Operations Blanket Contractual Liability
• Fire Legal Liability Pollution from Hostile Fire
• 911 E&O Liability Property in the Care, Custody, Control
• Sexual Abuse/Harassment Terrorism
Exclusions:
• Assault and Battery, except to protect persons or property, and corporal punishment
• Ownership, maintenance, or use of aircraft except operations performed by independent contractors
• Ownership, maintenance, or use of watercraft over 26 feet in length, except operations performed by independent
contractors
• Property owned by the insured
• AIDS-related claims
• Asbestos-related claims. Pollution Liability
• Nuclear Liability
• ERISA
• War
• Inverse Condemnation
• Hospital Malpractice
Note:
The above is only a summary of the major exclusions in this policy. Please review the actual policy for a complete
listing of exclusions.
. ~~
~~.
R:1CLNi000SW3WonProlil121374.doc t?/1l10
Arthur J. Gallagher Risk Management Services, Inc.
12
Proposal of Inswance for:
Section I11 -Automobile Liability
Limit of Liability: $1,000,000 per occurrence, including the insured's self-insured retention, any one claim
$10,000 Medical Payment sublimit
Coverage Form: Occurrence
Aggregate: None
Coverages:
• Permissive Users
• Owned Autos
• Hired/Nonowned Autos
• Underinsured/Uninsured Motorist (per state statute)
• No Fault -minimum statutory benefits
• Medical Payments
Exclusions:
• Property owned by the insured
• Employee bodily injuries covered under any Workers' Compensation or similar law
• Racing, demolition contest, or stunting activities
Note:
The above is only a summary of the major exclusions in this policy. Please review the actual policy for a complete
fisting of exclusions.
~~
~~.
R:ICLNTDOCSW3Wa~Proflrt21374.doc 12/1110
Arthur J. Gallagher Risk Management Services, Inc.
13
Proposal of Insurance for:
Section IV -Errors & Omissions
Limit of Liability:
Aggregate:
Coverage Form:
Coverage Extensions:
$1,000,000 per occurrence including the insured's self-insured retention
$2,400,000 per pool, all entities combined
Claims-Made
• Employment-Related Practices
• 911 Errors & Omissions
• Discrimination
• Civil Rights
Extended Reporting Period:
Retroactive Date shall be as
follows with respect to the
following entities:
Exclusions:
One year
Village of Glen Ellyn January 1, 2002
City of Kewanee November 1, 1990
City of Sterling June 15, 1991
Quincy Civic Center December 31, 1993
JAWA August 30, 1994
Village of Montgomery January 1, 1995
City of Des Plaines December 31, 1997
Glenbard Wastewater January 1, 2003
Village of Gurnee October 1, 1998
Village of South Elgin January 1, 2000
All Other Members May 1, 1989
Village of Huntley October 25, 1991
N.W. Water Comm. January 1, 2010
East Dundee & Countryside May 1, 2009
Fire Protection
• Intentional breach of contract
• Loss resulting from a wrongful act committed prior to the retroactive date
• Any claim brought as a counter claim or cross claim by an assured against any other assured
• Any claim based upon or attributable to the rendering or failure to render any opinion, treatment, or service unless
acting within the scope of their duties as an assured
Note:
The above is only a summary of the major exclusions in this policy. Please review the actual policy for a complete
listing of exclusions.
~~
~~.
R:ICLNTDOCS103UbnPrnfift21374.0oc t?J1/10
Arthur J. Gallagher Risk Management Senrices, Inc.
14
Proposal of Inswance for:
Section V -Workers' Compensation and Employers' Liability
Limit of Liability: $500,000 any one accident including the insured's self-insured retention
Coverage Form: Occurrence
Coverages:
• Workers' Compensation
• Employers' Liability
• Other States
• Volunteers
• Voluntary Compensation
Exclusions:
• Asbestos-related claims (Employers' Liability only)
• Liability assumed under contract
• Employees knowingly employed in violation of the law
• Punitive or exemplary damages
• Damages arising out of the:
Federal Employers' Liability Act
• Loss payable under the Workers' Compensation law if the insured is protected from the toss by any other
insurance
• Punitive damages due to:
Bodily injury to any employee
Failure of the insured to comply with any health or safety law
• Any claim for damage, direct or inconsequential, for any cause of action covered under any other section of the
policy
• Bodily injury to an employee'while employed in violation of the law
• Damages arising out of operations of the insured in which the insured violated or failed to comply with any
Workers' Compensation law.
• Mold
Note:
The above is only a summary of the major exclusions in this policy. Please review the actual policy for a complete
listing of exclusions.
~~.
R:ICLNTDOCSW31rbnProfih21374.doc 12/1!10
Arthur J. Gallagher Risk Management Services, Inc.
15
Pibposal of Insurance for:
Section VI -Employee Benefits Liability
Limit of Liability: $1,000,000 per occurrence including the insured's self-insured retention
Aggregate: $2,400,000 per pool, all entities combined
Coverage Form: Claims-Made
Exclusions:
• Any negligent acts, errors, or omissions that are dishonest, fraudulent, criminal, or malicious.
• Bodily Injury, Personal Injury, or Property Damage.
• Any claim based upon the insured's failure to comply with ERISA or any similar federal, state, or focal law.
• Any claim based upon failure of investments, including stocks and bonds, to perform as represented by the
insured.
Extended Reporting Period: One year
Retroactive Date:
Note:
The above is only a summary of the major exclusions in this policy. Please review the actual policy for a complete
listing of exclusions.
~~
~~.
R:1CLNiDOCS103WonProlfM121374.dac 12/1J10
Arthur J. Gallagher Risk Management Services, Inc.
16
Proposal of Insurance for:
Section V11-Crime
Limit of Liability:
Money and Securities (including Containers):
Empbyee Dishonesty {including Faithful Performance):
Commercial Blanket Bond:
Forgery or Alteration
(including Money Orders and Counterfeit Papers):
Deductible:
Coverage Form:
Exclusions:
$500,000
$ 500,000
$500,000
$500,000
$1,000
Occurrence
• Money or securities after they have been transferred or surrendered to a person or place outside the premises
based upon unauthorized instructions or as a result of a threat to do bodily harm or damage to any property.
• Loss of property in any money-operated device unless the amount of money deposited in it is recorded by a
continuous recording instrument in the device
• Damage where the only proof of the loss or the amount of the loss is dependent upon an inventory or a profit and
loss computation
• Any part of a loss involving an employee after discovering any dishonest acts committed by the employee
whether before or after being employed by the insured
Discovery Period: One year
Retroactive Date: May 1, 1986, except:
Village of Hodgkins July 1, 1986
City of Kewanee November 1, 1990
City of Sterling June 15, 1991
Quincy Civic Center December 31, 1993
JAWA August 30, 1994
Village of Montgomery January 1, 1995
City of Des Plaines December 31, 1997
Village of Glen Ellyn January 1, 2002
Glenbard Wastewater January 1, 2003
Village of Gurnee October 1, 1998
Village of South Elgin January 1, 2000
Village of Huntley October 25, 1991
N.W. Water Comm. January 1, 2010
East Dundee & Countryside May 1, 2009
Fire Protection
Note:
The above is only a summary of the major exclusions in this policy. Please review the actual policy for a complete
listing of exclusions.
'~
~,~.
R:ICLNTDOC3103WonProfi1V21374.doc 1211110
Arthur J. Gallagher Risk Management Services, Inc.
17
Proposal of Insurance for:
Excess Coverages
• Property
• Workers' Compensation and Employers' Liability
• Casualty
*~
f.
R:1CLN7DOCSV03NbnPfoflt121374.dot 1211/10
Arthur J. Gallagher Risk Management Services, Inc.
~8
A•oposal of Iustuance for:
Excess Property
Company: Travelers Indemnity Company
Limits: $400,000,000 per occurrence excess of underlying insurance and retention
Valuation: Replacement cost except actual cash value (ACV) on:
Automobiles
Vacant Property
Property if not repaired, rebuilt, or replaced
Mobile Equipment
Notes:
• Maximum recovery is limited to the amount of value shown on MICA's statement of values.
• Agreed values provided on those locations designated as such on the schedule on file with the companies.
Perils Insured -All Risk including Flood and Earthquake
Coverages Included:
• Flood -subject to an annual aggregate of $25,000,000 -excluding Flood Zone V, $2,500,000 per occurrence,
and annual aggregate with respect to Flood Zone A
• Earthquake -subject to an annual aggregate of $25,000,000
• Mine Subsidence -subject to Board ratification 5/1/2011
• Builders' Risk -all projects must be reported and added to policy -subject to additional premium
• Accounts Receivable - $1,050,373 sublimit
• Extra Expense - $1,268,814 sublimit
• Valuable Papers - $2,377,243 sublimit
• EDP Equipment, Extra Expense
• Business Interruption - $1,108,013 sublimit
• Architects' Fees
• Fire Legal Liability
• Ordinance Deficiency - $2,000,000 sublimit
• Miscellaneous Property
• Sales Tax Interruption - $5,000,000 per occurrence excess $1,000,000 underlying limit and retention to
participating members
• Newly Acquired Property - $2,500,000 occurrence/sublimit - 90-day reporting, additional premium due
• Fine Arts - $1,240,408 sublimit
• Unintentional Errors & Omissions - $1,000,000 sublimit
Note:
• The preceding is only a summary of the major exclusions in this policy. Please review the actual policy for a
complete listing of the exclusions.
• Sales Tax interruption is coverage purchased by specific members and these losses do not impact the loss fund.
Village of Deerfield
Village of Hodgkins
Village of Montgomery
Town of Normal
Village of North Riverside
i Arthur J. Gallagher Risk Management Services, Inc.
i.
R:1CLNiDOCS1031NonProfll521374.tlot 1~/tl70 19
Proposal of Insw•ancc for:
Quincy Civic Center
Village of River Grove
City of Sterling
Village of Streamwood
City of Des Plaines
City of Kewanee
Village of Gurnee
Property Excluded
Property not listed on schedule kept on file with the underwriter.
Exclusions
In addition to the excusions contained in the underlying policy:
• Dishonesty
• Property Shortage
• Vehides off premises -physical damage
• Terrorism
• Mold
Note: The above is only a summary of the major exclusions in this policy. Please review the actual policy for a
complete listing of the exclusions.
~~.
R:tCLNTDOCS103WonProfilh21374.doc 1?/1J10
Arthur J. Gallagher Risk Management Services, Inc.
2l)
Proposal of Insurance for:
Excess Comprehensive General Liability
Carrier: Everest National Insurance Company
Limit of Liability: ~'i $9,000,000 per occurrence excess $1,000,000 primary, any one claim
Aggregate: $9,000,000 as defined in underlying policy excess of $1,000,000 primary for Errors &
Omissions, Employment Practices and Employee Benefit Liability
Coverage Form: Occurrence except Public Officials' Liability, Employee Benefits Liability, and Wrongful Acts
which are Claims-Made with a retro date of December 31, 2010.
Coverages:
• Host and/or Liquor Liability Automobile Liability
• Watercraft Liability Law Enforcement Liability
• Volunteer Workers Employees and Volunteers as Insureds
• Personal Injury Incidental Medical Malpractice
• Premises/Operations Garage Liability
• Product/Completed Operations Advertising Liability
• Fire Legal Liability Blanket Contractual Liability
• 911 E&O Liability Pollution from Hostile Fire
• Employment Practices Liability Errors & Omissions Liability
• Employers' Liability
Exclusions:
• Asbestos Exclusion
• Sexual Abuse/Sexual Harassment
• Pollution (except Hostile Fire) Exclusion
• Fungi or Bacteria
• UM/UIM Exclusion -rejection letter required prior to binding
• Trampoline Exclusion
• Dams Exclusion
• Care, Custody and Control, and Personal Exclusion
• Employers' Liability Exclusion
• ERISA
• Workers' Compensation
• Terrorist Activity
• War
• Landfills
• Fireworks
• Amusement Devices
Note:
The above is only a summary of the major exclusions in this policy. Please review the actual policy for a complete
listing of exclusions. This coverage follows form of underlying policy.
(~~ $1,000,000 excess of $1,000,000 limit of (lability afforded to the City of Des Plaines, Village of Deerfield, and Village of
Streamwood.
Arthur J. Gallagher Risk Management Services, Inc.
~,~•
R:\GLNTDOCS\03NbnProfitV21374.doc 12/1N0 21
Proposal of Insurancc for:
Workers' Compensation and Employers' Liability
Carrier: Safety National Casualty Corporation
Limits:
Workers' Compensation: Statutory Per occurrencelaggregate excess of underlying insurance
and retention
Employers' Liability: $1,000,000 Per occurrence excess of underlying insurance and
aggregate retention
Coverages: Coverage A: Statutory coverage
Coverage B: Employers' Liability
Attachment Point: $600,000
Extensions: Voluntary Compensation endorsement
Arthur J. Gallagher Risk Management Services, Inc.
'~.
R:ICLNTDOCS103VJOnPto1ttf21374.doc 17/1/10 22
Proposal of Insurance for:
Ancillary Coverages
• Boiler 8 Machinery
'~~
~,~•
R:ICLNTDOCSID3WonPrafih21374.doc 1211110
Arthur J. Gallagher Risk Management Ser~rices, Inc.
23
A~oposal of Insm~ance for:
Boiler & Machinery
Company: Travelers Indemnity Company of Illinois
Limit: $50,000,000
Deductible: $1,000, except $25,000 for Glenbard Wastewater and Northwest
Water Commission
Sublimits:
Expediting Expenses
Ammonia Contamination
Water Damage
Hazardous Substances
Ordinance or Law
Policy limit
Policy limit
Excluded if covered elsewhere
$2,000,000/sublimit
$1,000,000
Broad Comprehensive Coverage: Yes
Including Certain Electronic Control
Equipment: Yes
Repair or Replacement: Yes
Contingent Business Interruption!
Extra Expense: Excluded
Spoilage and Refrigeration Interruption: Part of policy limit
Service Interruption: Part of policy limit excludes property perils; four-hour waiting period
Location Insured: Per schedule on file with Travelers
Special Provisions:
Property of Insured Included
Property of Others Included
Supplementary Payments Included
Joint Loss Agreement Yes
Connected Ready for Use Included (no restrictions)
Explosion Exclusion Yes, if covered elsewhere
Lightning Exclusion Yes, if covered elsewhere
Automatic Coverage for New
Locations Included/365 days
Data or Media $500,000
Errors in Description Included
~~
~~.
R:ICLNTDOCS103WonPlofl[h21374.doc 1?/1/10
Arthur J. Gallagher Risk Management Services, Inc.
24
Proposal of Insurance for:
Gallagher Bassett Services, Inc.
The Gallagher Bassett Services, Inc.'s claims management system encompasses far more than the calculation of
losses and the payment of claims. While proper field investigation and claims adjusting are essential to the overall
effectiveness of the system, Gallagher Bassett Services, Inc.'s claims management functions in a multitude of other
areas. We excel, for example, in:
• Litigation Management: Selecting, directing, and controlling defense counsel.
• Subrogation Management: Actively pursuing reimbursement from the primary loss source.
• Rehabilitation Management: Contracting and managing the best rehabilitation resources available.
• Reserve Management: Establishing realistic reserves with periodic review and adjustment.
• Settlement Management: Reviewing payment alternatives available including °Structured Settlements."
Accountability, planning, and involvement comprise the cornerstone of Gallagher Bassett Services, Inc.'s "hands-on"
claims management philosophy. Specific aspects of our comprehensive approach include review committees to
monitor potentially serious claims, area claims managers to provide input to the field adjusting staff, and realistic
assignment of adjuster case loads.
In the final analysis, Gallagher Bassett Services, Inc.'s claims management is a partnership with the client; that is why
the system works.
l,~•
R:ICLNTDOCS103WonProfilV21374.0oc 1211!10
Arthur J. Gallagher Risk Management Services, Inc.
25
Proposal of Instu~ance for:
Loss Control Consulting Services
Gallagher Bassett Services, Inc.'s Loss Control Consulting Services works to reduce injuries, preserve lives and
property, and eliminate waste caused by accidents. Services available include:
• Safety program evaluation and development
• Accountability programs
• Management progress reports
• Seminars and training programs
• Hazard surveys and OSHA advisory services
• Material handling and other specialized services
~~
~~•
R:ICLNTDOCS1D31NonProfil521374.dot 12/1/10
Arthur J. Gallagher Risk Management Services, Inc.
26
Proposal of Insurance for:
RISX-FACS°
Information management is more than just producing reports. Gallagher Bassett Services, Inc.'s information services
are integrated into every aspect of the risk management program through RISX-FACS®, our on-line computerized
system designed specifically for risk cost control and decision support. RISX-FACS® organizes client information to
produce the ordinary and extraordinary reports required by decision makers. It provides information that is
comprehensive, flexible, accurate, and timely.
Two additional decision support tools put information right at the risk manager's fingertips. SELEX-FACS® permits
users to selectively extract ftom RISX-FACS® up-to-the-minute information about losses. MICRO-FACS®will link an
IBM personal computer (or IBM compatible computer) to the RISX-FACS® system, providing access to information.
RISX-FACS®, SELEX-FACS®and MICRO-FACS®are Gallagher Bassett Services, Inc.'s high-tech tools that totally
integrate our risk management programs and control the overall cost.
~~
~a
R:ICLNTDOCS103WonProlft121374.doc 12/1/16
Arthur J. Gallagher Risk Management Services, Inc.
27
Proposal of Insm~ance for:
MICA Advantages
• Potential for substantial return of loss fund contributions.
• Higher limits (some coverages).
• Broader coverage.
• Premium stability.
• Better control of claim cost and claim handling.
• Direct input and a strong voice on coverage and program decisions.
• Receive annual property appraisal, which includes fixed asset reports.
• A flexible, tailored approach to address specific loss occurrences and frequencies.
~,~.
R:ICLNTDOCS103WonPtoflf121374.doc 12/1110
Arthur J. Gallagher Risk Management Services, Inc.
28
Proposal of Insurance for:
Member Contact List
Member
Contact Name Telephone
Number
Brookfield/North Riverside Water Commission Don Miskell ~~ ~ (708) 485-4244
Village of Deerfield Robert Fialkowski (847} 945-5000
City of Des Plaines Mike Earl (847) 391-5328
Village of Glen Ellyn Danamarie Izzo (630) 469-5000
Glenbard Wastewater Authority Danamarie lao (630) 469-5000
Village of Gurnee
____-__ Patrick Muetz (847) 623-7650
Village of Hodgkins Melody Salerno - (708) 579-6700
Village of Inverness Curt Carver
_ (847) 358-7740
City of Kewanee Kip Spear (309) 852-2611
Village of Montgomery Jeff Zcephel {630) 896-8080
Town of Normal
~W_..___..__.__._.____.__.___- Mark Peterson (Treasurer) (309) 454-2444
Village of North Riverside Guy Belmontey~_ ~-_________..__ - (708) 447-4211
Northwest Suburban Municipal Joint Action Water
Agency (JAWA) Jce Fennell (847) 882-5950
Palatine Rural Fire Protection District Chief Henry C. Clemmensen (847) 991-8700
City of Quincy Doug Olson (217) 228-4548
Quincy Civic Center
~ ~_~ ~~~^ Rob Ebbing
.
.
_
~~ -___ (217) 223-1000
Village of River Grove _
.
_
._._____.~
Frank Calistro (708) 453-8000
Village of South Elgin Art Skibley (847) 742-5780
City of Sterling Cindy von Holten (815} 632-6636
Village of Streamwood
~____._~_._.____.____.___-_- Dave Richardson (Chairman)
_ ~ ~ (630) 837-0200
Village of Huntley Jennifer Chemak
~.. (847) 515-5200
N.W. Water Commission Jon DuRocher (847) 635-0777
East Dundee & Countryside Fire Protection District Acting Chief Steve Schmitendorf (847) 426-7521
*~
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R:1CLNiDOCS103WonPrdtY21374.doc 1211110
Arth1u• J. Gallagher Risk Management Ser~rices, Inc.
29
Proposal of Insurance for:
Gallagher Disclosures
Proposal Disclaimer
The proposal is an outline of certain of the terms and conditions of the insurance proposed by the insurers, based on the
information provided by your company. It does not include all the terms, coverages, exclusions, limitations, or conditions of
the actual policy contract language. The insurance policies themselves must be read for those details. Policy forms for your
reference will be made available upon request.
We will not be operating in a fiduciary capacity, but only as your broker, obtaining a variety of coverage terms and
conditions to protect the risks of your enterprise. We will seek to bind those coverages based upon your authorization,
however, we can make no warranties in respect to policy limits or coverage considerations of the carrier. Actual coverage is
determined by policy language, so read all policies carefully. Contact us with questions on these or any other issues of
concern.
Actuarial Disclaimer
The information contained in this proposal is based on the historical loss experience and exposures provided to Arthur J.
Gallagher Risk Management Services, Inc. This proposal is not an actuarial study. Should you wish to have this proposal
reviewed by an independent actuary, we will be pleased to provide you with a listing of actuaries for your use.
Compensation Disclosure
One of the core values highlighted in The Gallagher Way states, "We are an Open Society," and our open society extends
to the compensation Gallagher receives. For more information on Gallagher's compensation arrangements, please visit
httg:Nwww.aig.com/compdisclosure. In general, Gallagher may be compensated as follows:
1. Gallagher Companies are primarily compensated from the usual and customary commissions or fees received from the
brokerage and servicing of insurance policies, annuity contracts, guarantee contracts and surety bonds (collectively
"insurance coverages") handled for a client's account, which such commissions and fees may vary from company to
company and insurance coverage to insurance coverage. As permitted by law, Gallagher companies occasionally
receive both commissions and fees. In placing, renewing, consulting on or servicing your insurance coverages,
Gallagher Companies may participate in contingent commission arrangements with intermediaries and insurance
companies that provide for additional contingent compensation if underwriting, profitability, volume or retention goals
are achieved. Such goals are typically based on the total amount of certain insurance coverages placed by Gallagher
with the insurance company and/or through the intermediary, not on an individual policy basis. As a result, Gallagher
may be considered to have an incentive to place your insurance coverages with a particular insurance company.
2. Gallagher Companies may also receive investment income on fiduciary funds temporarily held by them, such as
premiums or return premiums.
3. Gallagher Companies may access other facilities, including wholesalers, reinsurance intermediaries, captive managers,
underwriting managers and others that act as intermediaries for both Gallagher and other brokers in the insurance
marketplace. Gallagher Companies may own some of these facilities, in whole or in part. If such a facility was utilized in
the placement of a client's account, the facility may have earned and retained customary brokerage commission or fees
for its work.
4. Gallagher assists its customers in procuring premium finance quotes and unless prohibited by law may earn
compensation for this value-added service.
Questions/Concerns
If you have specific questions about the compensation received by Gallagher and its affiliates in relation to your insurance
placements, please contact your Gallagher representative for more details.
In the event you wish to register a formal complaint regarding compensation Gallagher receives from insurers or third
parties, please send an e-mail to Compensation_Complaints@ajg.com or send a letter to:
AVC Compliance Officer
Arthur J. Gallagher & Co.
Two Pierce Place, 20th Floor
Itasca, IL 60143
~,~a
R:ICLNTDOC5103WgiPfofll521374.doc 12!1/10
Arthur J. Gallagher Risk Management Ser~7ces, Inc.
30
G
COMMERCIAL ACCOUNTS
Supplemental Commission Disclosure
Effective October 1, 2009, Arthur J. Gallagher & Co., and its subsidiaries operating as insurance agents/brokers
under the corporate holding company known as Arthur J. Gallagher Brokerage & Risk Management Services, LLC,
resumed participating in contingent commission arrangements which are routinely offered by insurance companies
and intermediaries to agents and brokers, after voluntarily foregoing the benefit of this type of compensation since
January 1, 2005. Contingent commission arrangements provide for additional compensation if certain underwriting,
profitability, volume or retention goals are achieved. Such goals are typically based on the total amount of certain
insurance coverages placed by Gallagher with the insurance company and/or through the intermediary, not on an
individual policy basis. As a result, Gallagher may be considered to have an incentive to place your insurance
coverages with a particular insurance company.
During the time Gallagher's retail operations did not accept contingent commissions, some insurance markets and
intermediaries, including Gallagher owned intermediaries, modified their commission schedule with Gallagher,
resulting in an increase in some commission rates. The additional commissions, commonly referred to as
"supplemental commissions," are known at the effective date of the policy, but some intermediaries and insurance
companies are paying the commission increase apart and later from when the commission is normally paid at policy
issuance.
Unlike contingent commissions, supplemental commission payments are determined without regard to any
pertormance factors which are contingent on future growth, retention, profitability, etc.
Contingent and supplemental commission ranges from less than 1 % up to 10% of written or earned premium on
eligible lines of business (not all lines of business qualify).
NOTE: Upon request, your Gallagher representative can provide more specific market information regarding
contingent and supplemental commission related to your insurance coverage.
R:~CLNTDOCSI°3WOnPfolYIh21374.°°t 12/V7° 31
Client
Signature Requirements
32
Proposal of Instu~ance for:
Client Authorization to Bind Coverage
After careful consideration of Gallagher's proposal dated December 7, 2010, City of Canton accepts your insurance
program subject to the following exceptions/changes:
Exceptions
1. Completed applications for Position Schedule Bond.
It is understood this proposal provides only a summary of the details; the policies will contain the actual coverages.
City of Canton confirms the values, schedules, and other data contained in the proposal are from our records and
acknowledge it is our responsibility to see that they are maintained accurately.
Please provide us with a binder(s) and invoice(s) for the coverages agreed upon at your earliest convenience.
Client Signature
l~ - 2 ~- ~~
Dated
~~
~~,
R:ICLNTDOCS103WonProM121374.doc 3317/1/10
Arthur J. Gallagher Risk Management Services, Inc.
33
°~ ~' CITY OF CANTON
~"~r
;; . an~;.+.M1~ztn
''~"` ~ 2 North Main, Canton, Illinois 61520 • Telephone (309) 647-2640 • Facsimile (309) 647-2348
, A.0.1A97 ~
James W. Snider City Administrator
Via Certified Mail
December 22, 2010
Ms. Kathy Nykaza
Executive Risk Management Representative
Arthur J. Gallagher
Risk Management Services, Inc.
Two Pierce Place
Itasca, IL 60143
Dear Kathy,
Please find the following documents in regard to the City of Canton officially joining
MICA effective December 31, 2010. I have also included a check in the amount of
$164,529.00 to bind our coverage for the period December 31, 2010 -May 1, 201 1.
• Client Authorization to Bind Coverage, executed by Mayor Meade
• Resolution Authorizing Membership in the Municipal (Self) Insurance
Cooperative (MICA) passed December 21, 2010
• Cancellation letter to IMLRMA cancelling our insurance coverage with them
effective December 31, 2010
• Competed applications for Public Official Bonds
Thank you for your assistance in this matter.
Best Regards,
~m Snider
City Administrator
cc: Mark A. Noffert
Area Senior Vice-President
Executive Risk Management Representative
Arthur J. Gallagher
Risk Management Services, Inc.
Two Pierce Place
Itasca, IL 60143
- ~J7~GIb7~1~1~7UPilaC~~^/'F7't~i~l~~J-i%•1~1 7'l~7 t~l-N1VCI~l~1C~11--i~~---- 1" " -
N1~LLS FARGO E3ANK. R1 A. CHECK NO.
CAM ON. IL 61520 i ,.. `i ~~i ';:~ ?;
CITY OF CANTON, ILLINOIS '°-isn-~11
2 N. MAIN STREET
-^/^~~ DCAN~T~OyN. ILLINOIS 61c5-20 9 ,, 1~ " ~ ~7Q
"~ "I.~CG~C,.f ~y ~ ~ ~~ J o2.~ (~D l ~Q./J G+1 d UO c.-~w J -----"""_" OATS ! a /ap'~ ~ AMOUNT .~ ~ ~ ~I Sam t • CEO .'__
Y l
PAY
TO J'Y~ZC~
THE
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OF
M: ~Sv~a-n~Q
,,,./ C~'TYTREASURER ,_
~i'0 7 54 56n' ~:0 7 i i0 i 30 7~: 5400000 i08~i'
R~oposal of Insw~nce for: : ~ t , ' ~:e - m_>
Client Authorization to Bind Coverage
After careful consideration of Gallagher's proposal dated December 7, 2010, City of Canton accepts your insurance
program subject to the following exceptions/changes:
Exceptions
1. Completed applications for Position Schedule Bond.
It is understood this proposal provides only a summary of the details; the policies will contain the actual coverages.
City of Canton confirms the values, schedules, and other data contained in the proposal are from our records and
acknowledge it is our responsibility to see that they are maintained accurately.
Please provide us with a binder(s) and invoice{s) for the coverages agreed upon at your earliest convenience.
Client Signature
l2 - 2 /-- ~ ~
Dated
~~
R.4JLIV7DOCSf03WOnPtofiri21374.doc 331211/10
Arthur J. Gallagher Risk Management Services, Inc.
33