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11i09i93 biON 16:15 F~~ 5012439085 PG&E LLP PD1 TABLE 136 - SUMMARY OF 1997-98 & 1998-99 ADOPTED BUDGETS -(ALL FUNDS) Resources Requirements 1997-98 I G ~, 34H,~~ ! by+3~(o~89~{ Source~ Marion Counry 1997-98 and 1998-99 Adopted Budgets iNSURANCE 1998-99 a ~'1,70~, 3b3 l~j 009 I a~h~ho7,?:63 ~4a~ie~The Co~nry is exposed to various risks of loss related to: torts; tliefts of, damage to, and destruction of assets; errors and omissions: injuries to employees; employment and civil rights claims; and natural disasters. The County has established an insurance fund (an intemal fund) es~ab~ist~~-to account for risk management activities, including paymenc of insnrance policy premiums, payment of claims, third_-party administrators, adjusters and related costs; and to finance any and all uainsured losses. The insurance fund is go~erned by an ordinancc adopted by the Board of Counry Commissioners. Periodically an actuarial study is conducted by the County's BrokerlAg~nt of Record and a report is delivered to the Director of Suppon Services. This study includes the County's Workers' Compensation and Liability funding as well as a thorough cvaluation of the incurred but not reported ("IBNR") claims. Employee medical insurance bcncfits are provided by insurance companies. Department assessments are madc based on projected numbers of futl-time employees that are allocated through the budget process. Premiums are projected based on utilization and demographics of current employees. Any funds collected and not paid out in premium costs are saved in reserves and used to offset increases in health insurance premiums. All IBNR claims are recorded as an expense in the year they are incurred and a corresponding liability claim is recorded. In 1998 an actuarial study was conducced and a new cost allocation system for workers' compznsation tlnd liabiliry claims was developed. This system is based upon at1 actuarial determination of each dcpartmcnt's prorated share of the "fixed" costs such as personn~l and M& S, and the "loss sensitive", or actual claims related costs. With this formula, a deparnnent's fixed cost is tk~ei~its total payroll in relation to the Count~~ total_ The los~ sensitive portion is based on a ten_ yeat rolling average of actual claim costs, versus the ~unounts previously charged throu~h the cost allocation system for the same time period. The lnsurancz Fund allocates the cost of providing insurance and claims administration by charging a premium to the various Counry programs based on the actuarial estimates needed to pay prior and cutrent year claims, to establish sufficient reserves and pay for any actual insurance premiums. These charge backs take into consid~ration reccnt trends in accual claims e~perience as a County as a whole. Claims liabilities also take into consideration recently setclad c(aims, [he frequency of claims and ocher economic and social factors. The Insurance Fund provides risk -0f-loss coverages as follows: • General liability, bodi]y injury and property damage of third parties resulting from the negligencc of the Counry or its employees and errors and omissions; 7l~ese risks are covered by the Insurance Fund; 43