HomeMy WebLinkAbout08 - Joint Powers Authority Agreement with California Insurance Pool Authority (CIPA)Q SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
October 25, 2022
Agenda Item No. 8
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Barbara J. Salvini, Human Resources Director - 949-644-3300,
bsalvini@newportbeachca.gov
PREPARED BY: Marissa Sur, Human Resources Manager,
msur@newportbeachca.gov
PHONE: 949-644-3302
TITLE: Joint Powers Authority Agreement with California Insurance Pool
Authority (CIPA)
ABSTRACT:
The City of Newport Beach (City) has risk exposures related to being a full -service city
providing fire and police services, as well as related to its beaches, oil wells, reservoirs
and protected wildlife and lands. Since December 1, 2010, the City has contracted with
Alliant Insurance Services (Alliant) for insurance brokerage services to secure
comprehensive insurance coverage for these exposures. Since the Alliant agreement
expires on November 30, 2022, the City recently conducted and completed a Request for
Proposals (RFP), seeking a broker or joint powers authority to perform these services.
Based on the information received and analyzed, staff's recommendation is to award the
contract to the California Insurance Pool Authority.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
b) Authorize the Mayor to enter into the proposed five-year Joint Powers Authority
Agreement with California Insurance Pool Authority (CIPA) and proposed five-year
Agreement with CIPA Regarding Insurance Pool Membership; and
c) Delegate authority to the City Manager to bind coverage and authorize the City
Manager to approve premium payments in the amount of the annual premiums from
the Council -approved budget accounts designated for insurance for the term of the
Joint Powers Authority Agreement.
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The City maintains comprehensive insurance coverage with a schedule of insurance that
includes All Risk Property (including Boiler and Machinery), Earthquake and Flood,
Crime, Fiduciary, Watercraft, Cyber, Excess Workers' Compensation, Excess General
Liability, Pollution Liability, and Public Official and oil well bonds. Every renewal cycle the
City works with the broker to re-evaluate the City's risks and policy options to ensure it is
receiving robust coverage for the best price.
RX
Joint Powers Authority Agreement with California Insurance Pool Authority (CIPA)
October 25, 2022
Page 2
On May 20, 2022, the City published RFP No. 22-59, seeking proposals from qualified
parties interested in providing Insurance Broker of Record services to the City. The RFP
was posted on the City's PlanetBids portal for public availability. The RFP submittal
deadline closed on June 13, 2022, and the City received two proposals, one from Alliant
Insurance Services, Inc. and one from the California Insurance Pool Authority (CIPA).
The proposals were evaluated in accordance with City Council Policy F-14 regarding the
procurement of services. An evaluation panel was assembled consisting of the City's
current risk manager and two other employees involved in risk management and
insurance administration with the City. The panel rated the proposals using a
Qualifications -Based Selection (QBS) process that was outlined in the RFP solicitation.
The following criteria comprised the QBS proposal scoring:
• Proposer's qualification and experience in providing the necessary services;
• A demonstrated understanding of the City's insurance needs;
• Ability to perform all services requested in the RFP;
• References and past performance on projects with local government agencies;
and,
• Proposed project cost.
Independently of one another, the panel members evaluated the written proposals.
Following completion of the proposal review by the panel and cost evaluations by the
Purchasing Division, the panel conducted interviews with each of the vendors. The
vendors were rated on the information contained in their written proposals and provided
orally at the interviews. Evaluative criteria included each firm's qualifications and
experience with municipal risks; the qualifications and experience of the individuals who
would be assigned to the City's account; their ability to provide the scope of services
required by the City (including their information systems technology capabilities and
value-added services/expertise); and the quality of their conceptual approach to
marketing and servicing the City.
The RFP indicated that 60% of the total consideration for award would be determined by
the aforementioned qualitative criteria (known as the Technical Score) and the remaining
40% determined by evaluating the proposed cost element of the proposals (known as
Cost Score). The Technical Score is the average of each proposal's score as rated by the
panel, combined with the average interview score. The Cost Score is a ratio of points
assigned by a metric wherein the proposal with the lowest cost is awarded the maximum
of 40 points and each proposal thereafter is assigned a number of points directly
proportional to the amount in which it is costlier than the lowest cost proposal. The table
below outlines the results of the Technical Score and Cost Score.
Proposer
Technical
Cost Score
Total
Overall
Score
5-Year Cost
Score
Rank
California Insurance
40.00
Pool Authority
48.33
$190,000)
88.33
1
Alliant Insurance
19.43
Services, Inc.
57.33
$391,146
76.76
2
Joint Powers Authority Agreement with California Insurance Pool Authority (CIPA)
October 25, 2022
Page 3
Overall, CIPA ranked highest. CIPA demonstrates a stable history with an experienced
pool manager. As a CIPA member, the City would have access to the broker of record for
the Joint Powers Authority (JPA). By accessing the broker of record through the JPA, the
City is able to receive the same benefits of contracting directly with the broker, including
marketing and placement for all other City insurance policies. Additionally, CIPA and its
broker can offer critical subject matter expertise to the City's internal Risk Management
program. These resources include training opportunities, assistance with reviewing
contract insurance requirements, certificates of insurance and reviewing trends in the
insurance market, and marketing for premier and competitive coverages.
Staff recommends the selection of CIPA based on the collection of information received.
CIPA initially scored lower than Alliant in the Technical Scoring due to their written
proposal not identifying how the City would be able to access the pool's broker. However,
during the interview, CIPA demonstrated an ability to provide the services outlined in the
RFP, including direct access to the broker for standalone policies, assistance with claims
management, and review of market trends. CIPA received the highest overall scores from
the panel and demonstrates its ability to meet the City's insurance, service and training
needs at a reasonable price. The cost of these services is included in the annual cost with
CIPA. Additionally, contracting with CIPA provides a significant cost savings for broker
services. The information received from agency members during the interview process
indicated CIPA places an emphasis on service, collaboration with its members, and
accessibility of the broker to address all insurance needs.
The City is currently a member of the PRISM risk -sharing pool. Should Council approve
the proposed Agreements, the City will provide notice of non -renewal to PRISM, which
will terminate our membership at the end of the policy period. Membership with CIPA and
placement in the insurance pool under the Joint Powers Agreement with CIPA
(Attachment A) will take place effective July 1, 2023. In the meantime, the proposed
Agreement with California Insurance Pool Regarding Insurance Pool Membership
(Attachment B) addresses the City's need for transitional services following Council
approval, including broker services and assistance with completing the insurance renewal
and placement process.
Lastly, staff recommends that during the term of the Joint Powers Authority Agreement,
the City Council delegate authority to the City Manager to annually bind coverage and
authorize premium payments from Council -approved insurance budget accounts for
routine insurance renewals. Staff will bring to the City Council any significant changes to
the coverage structure or premium quotes which exceed the approved budget.
FISCAL IMPACT:
The adopted budget includes sufficient funds for this agreement. Funds are budgeted in
the Miscellaneous Insurance Fund — Broker Fees account — 74804-891039.
FIN
Joint Powers Authority Agreement with California Insurance Pool Authority (CIPA)
October 25, 2022
Page 4
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Joint Powers Authority Agreement with California Insurance Pool
Authority
Attachment B — Agreement with California Insurance Pool Authority Regarding
Insurance Pool Membership
ATTACHMENT A
JOINT POWERS AGREEMENT
FOR
CALIFORNIA INSURANCE POOL AUTHORITY
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TABLE OF CONTENTS
JOINT POWERS AGREEMENT FOR
CALIFORNIA INSURANCE POOL AUTHORITY
Page
ARTICLE1. DEFINITIONS......................................................................................................
I
ARTICLE 2. SEPARATE ENTITY...........................................................................................2
ARTICLE 3. PROGRAM...........................................................................................................
3
ARTICLE4. CIPA POWERS....................................................................................................
3
ARTICLE 5. MEMBERS; BOARD OF DIRECTORS..............................................................3
ARTICLE6. POWERS OF BOARD.........................................................................................4
ARTICLE 7. MEETINGS OF THE BOARD............................................................................4
ARTICLE 8. QUORUM; VOTING...........................................................................................4
ARTICLE 9. EXECUTIVE COMMITTEE...............................................................................4
ARTICLE 10. CIPA FUNDS.......................................................................................................
5
ARTICLE 11. TERM OF AGREEMENT....................................................................................
5
ARTICLE 12. MEMBERSHIP TERM; WITHDRAWAL; TERMINATION ............................5
ARTICLE 13. DISPOSITION OF CIPA PROPERTY AND FUNDS........................................6
ARTICLE 14. ENFORCEMENT AND DISPUTE RESOLUTION............................................6
ARTICLE 15. INVALIDITY.......................................................................................................
7
ARTICLE 16. AMENDMENTS..................................................................................................
7
ARTICLE 17. LIABILITY OF BOARD OF DIRECTORS, OFFICERS, AND
COMMITTEE MEMBERS.................................................................................7
ARTICLE18. BYLAWS..............................................................................................................8
ARTICLE 19. PROHIBITION AGAINST ASSIGNMENT........................................................
8
ARTICLE 20. LIABILITY TO THIRD PARTIES......................................................................8
ARTICLE 21. AGREEMENT COMPLETE................................................................................
8
ARTICLE 22. DATE AGREEMENT EFFECTIVE....................................................................
8
114695.0000001708740.05
JOINT POWERS AGREEMENT
FOR
CALIFORNIA INSURANCE POOL AUTHORITY
This Agreement is entered into pursuant to the provisions of Chapter 5 (beginning with
Section 6500) of Division 7 of Title 1 of the Government Code authorizing specified local public
entities to exercise jointly the power to provide Risk Management, including insurance, pursuant
to the provisions of Chapter 3 (beginning with Section 989) of Part 6 of Division 3.6 of Title 1 of
the Government Code.
WITNESSETH:
WHEREAS, the public interest requires and it is in the mutual interest of the parties
hereto to join together to establish and operate a cooperative program of risk management; and
WHEREAS, the operation of such a cooperative program is of such magnitude that it is
necessary for the parties to this Agreement to join together to accomplish the purposes
hereinafter set forth; and
WHEREAS, each of the local public entities which is a party to this Agreement has the
power to establish and operate a program of risk management; and
WHEREAS, Title 1, Division 7, Chapter 5 of the California Government Code authorizes
the joint exercise by two or more local public entities of any power which is common to each of
them; and
WHEREAS, each of the parties to the Agreement desires to join together with the other
parties for the purpose of minimizing risk through any, all or any combination of the following:
pooling of risk, joint funding of insurance or risk reserves in any legal manner, formation or
rental of a captive insurer, establishing certain self -insured reserves against losses and jointly
purchasing insurance, excess insurance, reinsurance and administrative services in connection
with a cooperative program of risk management;
NOW, THEREFORE, for and in consideration of the mutual advantages to be derived
from and in consideration of the execution of this Agreement by other local public entities, each
of the parties hereto does agree as follows:
ARTICLE 1. DEFINITIONS
The following definitions shall apply to the provisions of this Agreement and its Bylaws:
(a) "Agreement" or "Joint Powers Agreement" shall mean this "Joint Powers
Agreement for California Insurance Pool Authority," as it may be amended.
(b) "Authority' or "CIPA" shall mean the California Insurance Pool Authority
created by this Agreement.
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(c) "Board of Directors" or "Board" shall mean the governing body of the Authority.
(d) "Claim" shall mean a claim made against a member arising out of an occurrence,
incident or other event which is covered by an excess or primary insurance program of the
Authority in which the Member participates.
(e) "Current Member" shall mean a Member Agency that has not been terminated or
withdrawn from the Authority or any program thereof.
(f) "Eligible Member" shall mean a Member Agency eligible to vote on a matter
coming before the Board in a given area of risk, due to the Member Agency's participation in
that area of risk. In the case of new areas of risk that CIPA is considering, "Eligible Members"
shall be all Members who reasonably expect to participate in that area of risk.
(g) "Executive Committee" shall mean the committee of the Board of Directors
responsible for management of the affairs of the Authority between meetings of the Authority.
(h) "General Manager" shall mean the person or entity appointed by the Board and
given responsibility for the management, administration and operation of the cooperative
programs of risk management of the Authority.
(i) "Insurance program" or "program" shall mean a program of the Authority under
which participating Members are protected against designated losses through joint purchase of
primary or excess insurance, pooling of self -insured claims or losses, purchased insurance or any
other combination or method as determined by the Board. The Board of Directors or the
Executive Committee may determine applicable criteria for determining eligibility for any
insurance program, as well as establish program policies and procedures.
0) "Local Public Entity' shall mean city, county, public authority and such other
governmental entities as the Authority may determine to be qualified to participate in the
Authority.
(k) "Member Agency" or "Member" shall mean a Local Public Entity that is a party
to this Agreement.
(1) "Participation" or "Participating" shall mean a Member Agency's action or state
of taking part in the programs of the Authority.
(m) "Risk Management" is the process through which exposure to loss is identified,
the feasibility of alternatives evaluated, the best risk management techniques are selected and
implemented, and the selected program(s) monitored and improved upon. Risk management
techniques may include, but not be limited to, loss prevention and reduction, transferring losses,
self-insurance, pooling, commercial insurance, and other funding mechanisms.
ARTICLE 2. SEPARATE ENTITY
There is hereby created a separate public entity, the full legal name of which shall be
"California Insurance Pool Authority", and may be referred to herein as "CIPA" or the
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"Authority." The Authority is a public entity separate from the parties to this Agreement. The
debts, liabilities and obligations of the Authority shall not be the debts. liabilities or obligations
of the parties to the Agreement.
ARTICLE 3. PROGRAM
A risk management program is hereby established by the parties to this Agreement. This
cooperative program of Risk Management, which may include the joint purchase of primary or
excess insurance, pooling of self -insured claims or losses, or purchased insurance, shall include
liability coverage, and may include any or all the following risk areas: worker's compensation,
accident and health, property damage and such other areas as agreed upon by the Board.
ARTICLE 4. CIPA POWERS
(a) CIPA shall have the power and the duty to establish and operate a program of risk
management and provide for its execution either directly by CIPA or by contract.
(b) CIPA is authorized to make and enter into contracts; to employ agents and
employees; to acquire, construct, manage, maintain or operate any building, works or
improvements; to acquire, hold or dispose of property, liabilities or obligations; establish risk
management related lines of credit, to incur indebtedness, liabilities or obligations, to sue and be
sued in its own name, and to exercise all powers necessary and proper to carry out the terms and
provisions of this Agreement, or otherwise authorized by law. The foregoing powers include,
but are not limited to, those relative to contracting for excess insurance or reinsurance, risk
pooling, including formation of an owned or use of a non -owned captive insurance company,
funding of self-insurance in any legal manner, claims administration services and consulting
services.
(c) The operations of CIPA shall be subject to, and governed by the Bylaws adopted
by the Board.
(d) The powers exercised by the Authority shall be subject to the restrictions upon the
manner of exercising the powers of a general law city.
ARTICLE 5. MEMBERS; BOARD OF DIRECTORS
(a) Each Member Agency is entitled to the rights and privileges and is subject to the
obligations as provided for in this Agreement and the Bylaws.
(b) A new Member Agency may be accepted upon application to CIPA and upon
acceptance by the Board by two-thirds vote, and subject to acceptance by the prospective
member of the financial arrangements. fund contributions and such other conditions as may be
specified by the Board, consistent with this Agreement.
(c) Each Member Agency shall be entitled to one voting representative to serve as a
director on the Board.
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(d) Each Member Agency shall designate a representative to the Board. Each
Member may designate one alternate to attend meetings and vote in the event of absence of the
representative. To be qualified to serve, each representative and alternate shall be an officer or
employee of the appointing Member Agency.
ARTICLE 6. POWERS OF BOARD
The Board shall exercise all powers and conduct all business of the Authority, either
directly or by delegation to other bodies or persons unless otherwise prohibited by this
Agreement including, but not limited to, the following powers and functions:
(a) To approve an annual budget and any assessments of the Authority.
(b) To select officers, including a treasurer, auditor, and secretary, as may be
necessary to carry out the purposes of this Agreement.
(c) To establish committees as it may deem necessary to carry out its purposes.
(d) To exercise all of the powers and duties of CIPA, including all business assigned
to the Executive Committee, in the absence of the Executive Committee.
(e) To approve all changes to the Bylaws. This authority may not be delegated.
(f) To perform such other duties and functions as are provided for in this Agreement.
ARTICLE 7. MEETINGS OF THE BOARD
The Board shall establish a time and place to hold regular meetings not less often than
annually. Meetings shall be conducted pursuant to the most current edition of Roberts Rules of
Order or such other procedural rules as the Board shall adopt.
ARTICLE 8. QUORUM; VOTING
(a) A quorum for the transaction of business by the Board shall consist of a majority
of the Board of Directors, or of the Eligible Members, whichever is less.
(b) All matters within the purview of the Board of Directors may be decided by
majority vote of a quorum of the Board, except those matters which the Agreement or Bylaws
specify as requiring a two-thirds vote of the Board must be decided by a vote of two-thirds of all
representatives on the Board.
(c) Each Eligible Member may vote on each matter brought before the Board for
decision.
ARTICLE 9. EXECUTIVE COMMITTEE
The Board shall establish an Executive Committee of the Board of Directors as provided
in the Bylaws. The Executive Committee shall exercise general supervisory and policy control
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1
over the General Manager, and may exercise any and all powers of the Board between Board
meetings and when delegated by the Board, as provided in this Agreement and the Bylaws.
ARTICLE 10. CIPA FUNDS
The Treasurer of the Authority shall receive and receipt for all of the funds of CIPA. The
treasurer of a Member Agency shall be the Treasurer and Auditor of CIPA unless another
Treasurer or Auditor is designated by CIPA. The Treasurer will cause an annual audit of the
financial affairs of CIPA to be made by a certified public accountant at the end of each fiscal
year in accordance with generally accepted auditing principles. Except for those duties
prescribed by Government Code sections 6505 and 6505.5, the Treasurer's selection,
responsibilities, compensation and related matters shall be governed by the Bylaws. The
Treasurer shall be the disbursing officer of CIPA and shall draw warrants against the funds of
CIPA in the treasury when demands are presented and authorized as designated in the Bylaws.
The Treasurer and any other person authorized to be in charge of any CIPA funds shall be
bonded.
ARTICLE 11. TERM OF AGREEMENT
This Agreement shall continue in effect until it is rescinded by mutual consent of the
parties or terminated by the written consent of two-thirds of all Member Agencies; provided that
this Agreement and CIPA shall continue to exist for the purpose of disposing of all claims,
distributing assets and performing all other functions necessary to wind up the affairs of CIPA.
The Executive Committee shall be vested with all powers of CIPA for the purpose of winding up
and dissolving the business affairs of CIPA.
ARTICLE 12. MEMBERSHIP TERM; WITHDRAWAL; TERMINATION
(a) A party to this Agreement shall remain a Member Agency for two years from the
date it first joined CIPA; thereafter the Member Agency may withdraw by giving written notice
to the Board or its designee, on or before the next succeeding March 1, of the intent to withdraw
as of 12:01 a.m. on the next July 1.
(b) On the July 1 specified in the notice the withdrawing party shall cease to be a
Member of CIPA; however, the withdrawing party shall remain responsible to contribute its
share of premiums, contributions or assessments, as described in Article 13, and shall continue to
comply fully with the terms and conditions of this Agreement and programs in which they were
participants. Withdrawal of a party from CIPA shall automatically concurrently terminate any
and all coverages obtained by and through CIPA as to the withdrawing party and all additional
insureds and named insureds affiliated with the withdrawing party, excepting only: (1)
commercial insurance policies specifically naming the withdrawing party or related insureds: (2)
tail or extended reporting coverage offered by CIPA and accepted by the withdrawing party; (3)
pending covered claims: and (4) continuation of any coverage provided on an occurrence basis.
(c) The Board shall have the right to terminate, for good cause, any Member
Agency's participation in the Authority, or any program thereof, upon a 2/3 vote of the entire
Board of Directors: provided that a reasonable time shall be afforded, in the discretion of the
Board of Directors. for the Member to seek coverage elsewhere.
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(d) The Executive Committee shall have the right to recommend termination of any
Member Agency's participation in the Authority, or any program thereof, in the event of
nonpayment of any of the Member Agency's obligations. Such a recommendation may be
approved by a majority of the entire Board of Directors.
ARTICLE 13. DISPOSITION OF CIPA PROPERTY AND FUNDS
(a) A Member Agency may withdraw as a Member in accordance with this
Agreement and the Bylaws, provided that no withdrawing party shall be entitled to payment or
return of any earned premium, contribution, consideration, or property paid or donated by the
party to the Authority, or to any distribution of assets prior to final termination of this
Agreement, except in connection with final termination of a program pursuant to subparagraph
(b). The withdrawal or cancellation of any Member Agency shall not terminate its responsibility
to contribute its share of premium or funds to any insurance program of CIPA or to cooperate
with CIPA in the resolution of claims, until all claims or other unpaid liabilities covering the
period the Member Agency was a participant have been finally resolved and a determination of
the final amount of payments due by the Member Agency or credits for such period has been
made by the Authority.
(b) In the event of the dissolution of CIPA or the complete rescission or final
termination of the Joint Powers Agreement by all of the then parties thereto, or final termination
of any program by CIPA, any assets of CIPA remaining after all claims and obligations have
been paid, and after the payment of all liabilities, costs, expenses and charges incurred pursuant
to this Agreement, or provision made for the payment of same through establishment of a
liquidation fund, purchase of insurance or reinsurance, or a combination thereof. shall be
returned to the then Current Members of CIPA based on their total net contributions from
inception, determined as of the date of dissolution, rescission or final termination. For the
purposes of this paragraph "net contributions" shall mean the sum of actual contributions paid in,
less losses and allocated claims expenses, but not less than zero for any individual Member. Net
contributions shall be reduced by any rate credits given. Losses and allocated claims expenses
shall include contributions used to pay for reinsurance, but not any proceeds therefrom. Net
contributions shall include any interest actually earned thereon by the Authority. The Authority
may adjust the interest earnings attributable to the contributions of a Member whose net
contribution is zero or less based on a reasonable estimate of any periods during which no
interest was earned.
ARTICLE 14. ENFORCEMENT AND DISPUTE RESOLUTION
CIPA shall have the authority to enforce this Agreement. Any dispute regarding the
interpretation of this Agreement, the Bylaws, a Memorandum of Coverage, or any other CIPA
documents, or the collection or return of funds, between or among CIPA and any Member
Agency or Agencies, shall be addressed in accordance with the administrative procedures
established by CIPA. If unresolved, any such disputes shall then submitted to final and binding
arbitration, except in the case of a dispute exclusively for the collection or return of assessments,
contributions or premiums for a given year of coverage. However, where there is a coverage
dispute between CIPA and any Member Agency or Agencies between such Member Agency or
Agencies and one or more third party insurance providers concerning the same common nucleus
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of operative facts. the Member Agency or Agencies may request, and the Board of CIPA may, in
its sole, reasonable discretion, approve or conditionally approve waiver of these dispute
resolution procedures to permit adjudication of the disputes in a single forum. Such arbitrations
shall be conducted in accordance with the procedures established in the California Code of Civil
Procedure and referred to the Judicial Arbitration and Mediation Service or other arbiter as may
be agreed by the parties, and such other procedural rules as the CIPA Board may establish. The
decision of the arbitrator(s) may be entered as a judgment in any court of the State of California
or elsewhere. Cost of such arbitration proceedings shall be allocated by the arbitrators. As to
disputes exclusively for the collection or return of assessments. the Authority may sue, or any
affected Member may sue provided it has timely presented a claim therefore to the Authority.
As to such a claim for the collection or return of funds, the prevailing party shall be entitled to
reasonable attorney's fees.
ARTICLE 15. INVALIDITY
Should any portion, term, condition or provision of this Agreement be determined by a
court of competent jurisdiction to be illegal and in conflict with any law of the State of California
or be otherwise rendered unenforceable or ineffectual, the validity of the remaining portions,
terms, conditions and provisions shall not be affected thereby.
ARTICLE 16. AMENDMENTS
No amendments to this Agreement shall be effective unless accomplished by written
agreement executed by the governing bodies of at least two-thirds of the parties to this
Agreement. This Agreement may be executed in one or more counterparts. and shall be deemed
effective as to all signatories as though signed in one document. Reasonable prior notice of any
Board meeting in which amendments are to be voted upon must be given to each Member in
writing. Such notice must include mention of the nature of the amendments to be voted upon.
Any party that has failed to approve an amendment which has become effective shall be bound
by such amendment.
ARTICLE 17. LIABILITY OF BOARD OF DIRECTORS, OFFICERS, AND
COMMITTEE MEMBERS
(a) To the extent permitted by law, the Authority shall defend and indemnify a
Director, Officer or committee member of CIPA for a claim which is based on, or arises out of,
activities undertaken in good faith and within the course and scope of his or her duties, as such.
(b) The cost of defense and indemnity of a Director, Officer or committee member of
CIPA shall be a proper charge against the funds of the Authority, except as to those claims
arising as a result of such persons traveling to or from a meeting of the Authority, it being the
intent of the parties that the risks of such travel be borne by the Member Agency. No Director.
Officer or committee member shall be required to give a bond or other security to guarantee the
faithful performance of their duties pursuant to this Agreement. Nothing herein shall limit the
right of the Authority to purchase insurance, bonds or master bonds to provide coverage within
the scope of this Article.
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ARTICLE 18. BYLAWS
(a) By a two-thirds vote of the entire Board, the Board shall develop and adopt
Bylaws to govern the operations of CIPA and may amend such document.
(b) Each Member Agency agrees to comply with and be bound by the provisions of
the Bylaws as may be amended. Notwithstanding any provision in the Bylaws adopted by the
Board, in the event of any conflict between this Agreement and the Bylaws this Agreement shall
prevail.
ARTICLE 19. PROHIBITION AGAINST ASSIGNMENT
No Member Agency may assign any right, claim or interest it may have under this
Agreement, and no creditor, assignee or third party beneficiary of any Member shall have any
right, claim or title to any part, share, interest, fund, premium or asset of the Authority.
ARTICLE 20. LIABILITY TO THIRD PARTIES
Pursuant to Government Code section 6512.2, no Member Agency shall be liable to any
third party for CIPA's conduct in carrying out the purposes of this Agreement. The Member
Agencies hereby declare that CIPA is a member of the Authority and shall at all times participate
in the liability insurance program of the Authority. The Member Agencies further direct the
Board of Directors to at all times maintain insurance or reinsurance to cover the operations of the
Authority as the Board, in its discretion, shall deem appropriate. Notwithstanding the
availability of any such coverage, the assets of CIPA shall be available to satisfy the liabilities of
CIPA.
ARTICLE 21. AGREEMENT COMPLETE
The foregoing constitutes the full and complete Agreement of the parties. There are no
oral understandings or agreements not set forth in writing herein.
ARTICLE 22. DATE AGREEMENT EFFECTIVE
This Agreement shall become effective as of July 1, 2007 upon approval in accordance
with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their proper officers thereunto duly authorized.
Executed before me this
day of .2022 CITY OF NEWPORT BEACH
City Clerk
App G O izokcs By
Gl� A�
pttocneY
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ATTACHMENT B
AGREEMENT WITH CALIFORNIA INSURANCE POOL AUTHORITY
REGARDING INSURANCE POOL MEMBERSHIP
This Agreement regarding insurance pool membership ("Agreement") is made
and entered into on ("Effective Date"), by and between CALIFORNIA
INSURANCE POOL AUTHORITY ("CIPA"), a California joint powers authority, and the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city
("City"}.
RECITALS
A. City will be a Member Agency of CIPA pursuant to the Joint Powers Agreement
for California Insurance Pool Authority ("JPA Agreement"), executed on or about
October 25, 2022. City's status as a Member Agency will be effective July 1, 2023.
B. The JPA Agreement provides City, as a Member Agency, membership in an
insurance pool, which includes the benefits of general insurance broker services from
Aon Risk Insurance Services West, Inc. ("Insurance Broker"). The scope of Insurance
Broker services is set forth in that Agreement for Insurance Broker Services dated July
1, 2019, as amended, between CIPA and Insurance Broker ("Aon Agreement").
C. Pursuant to a solicitation process, CIPA was selected to provide City with access
to an insurance pool and related services upon the expiration of City's existing
insurance policies on June 30, 2023. The switch from the City's current insurance pool
will require certain transitional services.
NOW, THEREFORE, it is mutually agreed by and between he undersigned
parties as follows:
1. Term: The term of this Agreement shall commence on the Effective Date, and
shall terminate on June 30, 2028, unless terminated earlier.
2. Services: Starting July 1, 2023, City shall be able to obtain general insurance
brokerage services from Insurance Broker in accordance with the Aon Agreement. From
October 26, 2022 until July 1, 2023, City shall have access to certain insurance broker
services, which are set forth in the Second Amendment to the Aon Agreement
("Transition Services"), a copy of which is attached hereto as Exhibit A.
3. Cost: The cost for Insurance Broker services shall not exceed $190,000, in
accordance with the cost proposal attached hereto as Exhibit B, payable to CIPA.
Transition Services shall be provided at no cost.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date. -
BY: --,
7q�A on . H a rr--"j
City Attorney
ATTEST:
Date:
By:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Kevin Muldoon
Mayor
CALIFORNIA INSURANCE POOL
AUTHORITY, a California joint powers
authority
Date:
By:
Janet Kiser
General Manager
[END OF SIGNATURES]
Attachment(s): Exhibit A -- Second Amendment to the Aon Agreement
Exhibit B — Cost Proposal
EXHIBIT A
SECOND AMENDMENT TO THE AON
AGREEMENT
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SECOND AMENDMENT TO AGREEMENT FOR
INSURANCE BROKER SERVICES
This Second Amendment ("Amendment") is entered into on October 26, 2022 ("Effective Date"),
as an Amendment to the Agreement for Insurance Broker Services dated July I, 2019
("Agreement"), by and between the California Insurance Pool Authority ("CIPA"), a California
public joint powers authority, on behalf of Member Agencies, and Aon Risk Insurance Services
West, Inc. ("Insurance Broker").
The terms and conditions of the Agreement shall remain in full force and effect, except as
otherwise set forth in this Amendment.
IT IS HEREBY AGREED AS FOLLOWS:
The existing Exhibit A "Minimum Scope of Services & Requirements" to the Agreement is
replaced with the version attached to this Amendment.
The City of Newport Beach ("City") will be a Member Agency of California Insurance Pool
Authority effective July 1, 2023. In consideration of City's pending membership, CIPA shall
provide the transitional services listed below to the City effective October 26, 2022, up and until
the City becomes a Member Agency of CIPA on July 1, 2023, at which time the City will have the
full scope of services available to CIPA Member Agencies.
The terms and conditions of this Agreement, including the amended Exhibit A "Minimum Scope
of Services & Requirements," shall be applicable to the City for all policies placed on behalf of
the City on and after October 26, 2022.
1. Review City's current Memorandums of Coverage, insurance policies, detailed schedules
of insurance, actuarial reports and claims history in preparation for the initial transition
meeting with the City, CIPA and broker.
2. Develop a transition plan with City and broker including monitoring and reporting progress
to City.
3. Assist the City in completing applications for the pooled and excess policies renewing on
July 1, 2023.
4. Keep the City fully informed on the status of all marketing efforts.
5. Respond within 24 hours to inquiries.
6. Attend meetings at the request of the City.
Each Member Agency and the City shall be a third -party beneficiary of this Agreement with the
right to enforce the provisions of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the Effective
Date.
is Insurance Pool Authority
Authorized Signature
Date
Aon Risk Insurance Services West, Inc.
Signature
Name
Title
Date
Page 2 of 2
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EXHIBIT A
MINIMUM SCOPE OF SERVICES & REQUIREMENTS
Insurance Broker shall perform all of the customary duties of an insurance broker for the insurance program(s),
of CIPA, and for Member Agencies placing individual policies, including but not limited to the following:
1. Review marketing plans with CIPA, or Member Agencies as applicable, prior to approaching potential
coverage providers.
2. By December 1 of each year, provide a written report stating anticipated renewal terms, conditions and
opportunities for program enhancements. An updated written report shall again be provided if there are
any changes to the anticipated renewal terms and conditions.
3. Draft insurance policy specifications which address loss exposures, adequacy of coverage, appropriate
retention levels, significant restrictions in coverage, duplications or gaps in coverage, suitability of forms,
and other related matters.
4. Develop underwriting information, structure offerings to coverage providers and secure coverage in
excess of self-insurance programs with financially acceptable coverage providers taking into
consideration breadth of coverage, cost and service.
5. Provide documents for Board packets no later than 14 days prior to Board meeting and review all
proposals, documents, policies and other correspondence for accuracy prior to submitting to CIPA, and
to Member Agencies as applicable.
6. Assist Member Agencies and potential new Member Agencies in the completion of applications and
compile all information for submittal to carriers and copy to CIPA.
7. Prepare a comprehensive summary report for presentation to the Board no later than June 1 of each year,
outlining all quotations, conditions and analysis of the recommended coverages. The summary shall
include any changes in terms and conditions from the prior year.
8. Provide a disclosure report of any and all commissions, rebates or other earnings on renewal placements
at June 1 of each year and provide an update by August 15, and at any time thereafter, if there are any
changes to the June I report. Insurance broker will disclose in detail all compensation received from any
source resulting from the marketing of insurance programs for CIPA or Member Agencies.
9. Prepare schedule of insurance by August 1 of each year.
10. Deliver binders or other evidences of coverage within five (5) working days after the placement of any
coverage under the program(s) to be effective until such time as the policy or policies for the placement
are received from the insurance carriers.
11. Deliver complete policy or policies within ninety (90) calendar days of placement. If such policy or
policies are not delivered timely. Insurance Broker will provide written documentation stating the reason
for such failure.
12. Review insurance policies, binders. certificates. billings and other documents for accuracy and
conformance with negotiated coverage within fourteen (14) calendar days of receipt. or earlier if needed.
13. Process requests for additions or deletions to policies or endorsements within five (5) working days of
receipt and continue to follow-up until received. Provide status of request every fourteen (14) days until
received.
14. Monitor Program(s) to assure continuing balance of coverage scope, cost. service and stability.
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15. Evaluate the financial status and service capabilities of current and past coverage providers and notify
CIPA, or Member Agency if applicable, immediately of any adverse changes in the financial condition
of its insurers.
16. Assist Member Agencies with filing claims and represent CIPA and Member Agencies claim
negotiations with insurance carriers. Provide CIPA and/or Member Agencies with status updates
throughout process.
17. Prepare annual stewardship report which will include a complete list of coverages in force, an evaluation
of the overall insurance program(s). including recommendations for change, a forecast of market
conditions and estimated premiums for future budgeting purposes, and a description of the activities
performed on CIPA matters by the account team members.
18. Provide renewal certificates by July 1 of each year and prepare additional requests from Member
Agencies within three (3) working days of request.
19. Assist CIPA and Member Agencies in the evaluation of contractual risk for the purpose of determining
appropriate insurance requirements.
20. At the request of CIPA and/or Member Agencies, review evidence of insurance and provide guidance on
acceptability.
21. Review contracts and lease agreements as requested by CIPA and/or Member Agencies and notify
whether insurance programs meet specifications.
22. Attend Board and other meetings at the request of CIPA and/or Member Agencies.
23. Assist in the recruitment and marketing of new Member Agencies.
24. Disclose on a timely basis all real or potential conflicts of interest.
25. Respond to phone calls and emails within 24-hours.
26. Comply with all State and Federal laws and regulations pertaining to insurance brokers licensed in the
State of California.
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EXHIBIT B
COST PROPOSAL
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Exhibit B
Please provide the proposed yearly fee for general brokerage services or joint powers
authority, as described in the Scope of Services.
PROPOSED PRICING FOR CONTRACT DURATION
Year
Not -to -Exceed Compensation Amount
Year 1
$35,000
Year 2
$35,000
Year 3
$39,000
Year
$40,000
Year 5
$41 ,0D0
TOTAL AGREEMENT COMPENSATION
$1 90,000
Other Costs: In the space below or on a separate page, please indicate any other costs that may
be associated with providing the requested services in this RFP that are not included in the table
above. Please also assume a five (5) year contract terra and describe any annual rate increases
over this time, if applicable:
The above represents the estimated insurance broker fees that would be allocated to the City of Newport
Beach for the CIPA group purchased insurance programs, including excess liability, excess workers'
compensation, property, cyber, pollution and crime/bond policies.
CIPA has a contract with Aon, our insurance broker, for the placement of CIPA's group purchased insurance
policies. The Flat fee arrangement with the broker is allocated between Members and is the only brokerage
fee paid on the group purchased policies. Thus, the City would not have a flat fee arrangement with the
broker, plus insurance broker commissions built into the JPA's group purchased programs. Any fees or
commissions paid by carriers to Aon in excess of CIPA's contracted flat fee are rebated back to CIPA as a
reduction in Member premium.
CIPA's agreement with the broker includes a fee option for Members placing unique stand-alone policies to
be based on a commission. This approach for stand-alone policies is no different than the City's current
arrangement. CIPA's broker can offer the City an option of a flat fee to place stand-alone policies, although
it may be advantageous to the City to pay based on CIPA's contracted commissions which range between
10% and 15%. Additionally, our Members have derived savings when the placement of insurance policies
were transferred to Aon from another broker.
As with any JPA or insurance carrier, we are unable to guarantee premiums in future years
Pricing provided shall include any and all labor; materials; equipment; supervision; travel
and expenses; and insurance to provide the services described in this RFP solicitation.
The undersigned certifies that submission of this Proposal is made without prior understanding,
arrangement. agreement, or connection with any corporation, firm or person submitting a
210922.1
RFP No, 22-59 26
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Proposal for the same services, and is in all respects fair and without collusion of fraud. The
undersigned certifies that they have not entered into any arrangement or agreement with any City
of Newport Beach public officer. The undersigned understands collusive practices are a violation
of State and Federal law and can result in fines, prison sentences, and civil damage awards.
Janet Kiser Digitally signed by Janet Kiser 6/7/2022
Date: 2022.06-07 17:30:46-07'00'
Proposer Signature Date
Janet Kiser, General Manager
Printed Name and Title
210922.1
RFP No. 22-59
27