Agenda - Council - 11/12/1991 - Laserfiche WebLink

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CASE By: INSURANCE AGENT OF RECORD Kay McAioney, Personnel Coordinator and Sandra Ashley Helling, Finance Officer Background: The City's three year Insurance Service Agreement with Agent of Record Michael Hadtrath expires on December 14, 1991. Due to this, an advertisement for bids was placed in the Anoka County Union for the September I3, 1991 issue. TwO bids were received for Agent of Record and one bid was received for Risk Management services. The proposal for Risk Management services would have resulted in significantly higher professional service cost to the City; consequently, it was not pursued. The two firms submitting proposals for Agent of Record and their proposed fee for these services are: Hadtrath and Associates T.C. Field and Company $2,000 per year for three years $4,061 per year for three years The City's contract for Insurance Agent of Record requires the following services: Exposure survey - provide an exposure list, updated annually. Draft specifications for insurance coverage. Obtain proposals and quote from qualified underwriters. Conduct all negotiations with Insurance Representatives. Serve as an advisor with respect to Loss Control and Safety Engineering Assist staff and advisors m the application and use of Risk Management procedures and information systems. Mr. Conway Olson, representing T.C. Field and Company, met with the Budget Committee on October 8, 1991 and Mr. Michael Hadtrath, representing Hadu-ath and Associates, met with the Committee on October 22, 1991, Both gentlemen discussed the services of their respective finns and responded to questions fi'om the Coramittee members and staff. As the City has been notified by the League of Minnesota Cities Insurance Trust (LMCIT) that the City's 1992 premium for property and casualty insurance has increased by $11,231 and represents a 28.6% increase over'all, many of questions dh'ected to Mr. Olson and Mr. Hadtrath were focused on the areas whereby the City could reduce premium cost, minimize risk and obtain a more comprehensive explanation from the League as to the specific reasons for the increases. At the Budget Committee meeting of October 29, 1991 staff clarified that the City's Agent of Record receives a flat annual fee for services that does not increase or decrease based on the preminm.~ paid by the City. This contrasts with the more traditional arrangement whereby the agent receives a commission on the insurance premi,~m and changes to this premium directly impact the agent's earnings. Staff recommended the City enter into a one vear contract with Mr. Hadtrath as the City's Insurance Agent of Record. Further, staff will look to Mr. I-Iadtrath for the services enumerated in the contract and work closely with Mr. Hadtrath to review our coverages and assess risk. Enclosure: Recap of 1992 Property. and Casualty Insurance Premium Detail as compared to 1991.