CITY OF EDMOND, OKLAHOMA ANNUAL FINANCIAL REPORT June 30, 2021
4.B. RISK MANAGEMENT The City is exposed to various risks of loss related to torts, theft of, damage to, or destruction of assets; errors and omissions; injuries to employees; employee’s health and life; and natural disasters. The City manages these various risks of loss as follows: Type of Loss
Method Managed
Risk of Loss Retained
a. General Liability: - Torts - Errors and omissions - Police liability - Vehicle
City has insurance coverage for General Liability coverage. All claims are submitted to a third party administrator for determination of liability. Claims below the self-insured retention (SIR) are accounted for within the Liability Tort Claim Fund.
City retains risk of losses up to $100,000 or $250,00 SIR per occurrence with excess coverage up to $5,000,000
b. Physical Property: - Theft - Damage to assets - Natural disasters
City has insurance coverage for Property & Contents and Boiler & Machinery. Claims for losses are submitted to insurance provider for reimbursement of losses.
City retains risk of loss up to the deductible amount of $10,000 for property and $10,000 for B & M. Coverage amounts vary by type of loss.
c. Workers Compensation: - Employee injuries
Self-insured with third-party administration of the claims process. Liability Tort Claim Fund used to account for activities with participating funds charged through an estimated annual claim cost for each fund. Administered by Cannon Cochran Management Services, Inc.
City retains risk of loss for first $450,000 or $750,000 of damage per occurrence depending on job classification. Stop loss insurance carried for damages above the City deductible up to a maximum aggregate of $2,000,000 per occurrence.
d. Health and Life: - Medical - Dental - Vision - Life and ADD - LTD
Self-insured with City paying a portion of health care premiums, and all of life, ADD and LTD premiums. Administered by Aetna, Delta Dental, VSP and Mutual of Omaha.
Claims up to $200,000 per individual self-funded with stop-loss insurance up to $1,000,000 per person.
The City maintains a stop-loss policy for plans to limit risk associated with the plans. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage for the current year or the four prior years. Claims Liability Analysis The claims liabilities related to the above noted risks of loss that are retained are determined in accordance with the requirements of Statement of Financial Accounting Standards No. 5., which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The City has elected to report its estimated claim liability at the discounted net present value of future payments. For the internal service self-insurance funds, changes in the claims liability for the City from July 1, 2019 to June 30, 2021, are as follows:
82
