Executive Director's Report - January/February 2000

ACCA Liability Self-Insurance Fund Starts Twelfth Year

The Association of County Commissions of Alabama Liability Self-Insurance Fund (Fund) began its twelfth year on January 1, 2000. Thirty-seven counties and one county solid waste authority entered into a three-year contract with the Fund on the first day of the new millennium.

The following is a list of the Fund's participants effective January 1, 2000:

Bibb, Blount, Butler, Chambers, Choctaw, Clay, Coffee, Colbert, Conecuh, Coosa, Crenshaw, DeKalb, Elmore, Etowah, Etowah Solid Waste, Fayette, Geneva, Hale, Henry, Houston, Jackson, Lamar, Lauderdale, Lawrence, Lee, Limestone, Lowndes, Marengo, Marion, Marshall, Monroe, Perry, Russell, St, Clair, Tallapoosa, Walker, Wilcox and Winston.

Most county commissions renew their liability and other insurance in October. A few renew in January. Representatives of the Fund and Meadowbrook Insurance Group (the third-party administrator for the Fund) traveled throughout the state during Fall of 1999 making presentations to county commissions, urging them to renew their participation or participate for the first time. Representatives of insurance companies are frequently also present making proposals for the various counties' insurance. This time of the year is generally referred to as "renewal season." Competition during this past renewal season was, as expected, vigorous. Unlike years past, there are now many insurance companies interested in selling insurance to counties.

When the renewal season was over and the score computed, the ACCA Liability Self-Insurance Fund did well. Two new county commissions joined the Fund and three decided to withdraw. Considering the fierceness of the competition, we were pleased with the outcome.

Why do many county commissions continue their participation in the Fund? There are six words that reveal the answer to the question: costs, deductibles, coverage, service, comfort and refunds. County commission members and county employees who have responsibility in insurance matters have come to realize that determining the real costs of insurance involve more than just the initial premium. They know that the bottom line costs of insurance includes amounts that must be paid in meeting deductible requirements and also amounts paid for events that are excluded from coverage. Some of the counties participating in the Fund have received premium quotes from insurance companies that were in amounts less than the amount actually paid to the Fund. In most, such instances, a comparison of coverage revealed that bottom line costs of participation in the Fund is actually less.

If there is one thing county officials and employees have come to appreciate about participation in the Fund it is the nature of the services provided. Claim handling, legal representation and loss control assistance are all parts of service and the Fund has a proven record in that regard.

Officials and employees in counties that participate in the Fund have grown to appreciate the comfort that comes with participation. Knowing and having confidence in the adjusters and attorney's who handle claims is a part of this feeling of comfort. Another part of the comfort is knowing that the people who run the Fund know and have great appreciation and empathy for their feelings and concerns regarding liability issues.

The Fund has reached a point of financial maturity where it has for the past two years been in a position to refund assets to eligible participants. The Fund's Board of Directors approved refunds in the total amounts of $400,000 in 1998 and $500,000 in 1999. The list on page 7 indicates the amounts received by each eligible participant from the 1999 refund.

Refunds are approved by the Board of Trustees and are based on the Funds financial condition. Fund participants view the amounts they receive as a reduction in the cost of insurance.

For all the reasons (words) discussed above, county commissions and county employees continue to support the Liability Self - Insurance Fund. Because of the support, the Fund will continue to provide a valuable service to Alabama's county government.