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Committee swaps excess-risk component to lower premium, reduces retention from $1M to $500K
Summary
The committee voted to keep the primary option selected last month but to replace its excess-risk layer with a cheaper excess quoted in a second option, a change the broker said will lower premiums and the county's self-insured retention.
The Sumner County Self Insurance Board Committee voted to modify its previously selected insurance approach by keeping the primary coverage of Option 1 but replacing the excess-risk (reinsurance) component with the less costly excess option from Option 2; the committee passed the motion by voice vote.
Committee discussion cited a broker review and itemized figures. The committee’s broker, Jeremy, explained that Option 1’s combined liability premium was higher than Option 2’s liability premium and that swapping Option 2’s excess risk would reduce the county’s retention (self-insured retention or SIR) from $1,000,000 to $500,000 and lower overall premium costs. “If you do that, you save money, you save your SIRs lower,” Jeremy said during the meeting.
A staff speaker walked the committee through the agenda packet and pointed to page 81 as showing the relevant premiums and SIR comparisons; the committee clarified that taking the Option 1 base coverage and pairing it with Option 2’s excess layers would require instructing the broker to proceed and would change the insurer handling the excess from the State’s program to Palomar for the excess layer. Committee members approved the change and asked staff to notify the broker to proceed.
The action directs staff to move forward with the revised structure and to ensure the broker receives the committee’s instruction to place Option 1 primary coverage but Palomar excess layers. The committee did not identify additional coverage gaps during the meeting; staff and the broker said they would follow up on placement logistics and confirm paperwork.
