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Council hears detailed briefing on shift to self‑insured retention program, escrow account and third‑party administrator
Summary
County staff briefed the council on transitioning to a self‑insured retention insurance model with a $250,000 per‑claim deductible, a $500,000 stop‑loss and the need to pre‑fund an escrow account administered by a TPA; council directed staff to coordinate with the commissioners and set a follow‑up.
Staff briefed the Scott County Council on changes to the county’s property and liability insurance, describing a move to a self‑insured retention model that imposes larger deductibles and requires a bank/escrow account to cover the county’s portion of claims before primary insurance attaches.
The county’s new program would put a $250,000 deductible on liability and auto physical damage claims and a $150,000 deductible on property claims, with a contract stop‑loss of $500,000 that limits total county exposure beyond the deductible. County staff described recent years’ claims experience — including a $428,000 claims year — and said those historical swings informed the decision to adopt partial self‑insurance.
Under the proposed arrangement, a third‑party administrator (TPA) would adjudicate and process claims and would operate an escrow account used to pay the county’s share of claims. Staff and several councilors expressed concern about custody and control of county funds in a TPA‑managed escrow account. The TPA model proposed would allow the TPA to administer claims and write checks from the escrow after county approval; council members emphasized that every claim payment would require county legal review and approval before funds are disbursed.
Staff estimated a suggested initial pre‑funding amount to open the escrow account. In discussion the county financial officer suggested an initial balance could be modest (the staff suggestion of $50,000 was discussed) but councilors and staff said $42,000 (the county’s recent claims average line) would be a more conservative starting point. Multiple councilors urged the commissioners to formally create the fund on paper and coordinate with the treasurer’s office on the account structure; staff said the TPA can create and operate the account, but that the commissioners must establish the fund for appropriations.
Council members raised concerns about loss control and the county’s limited tools to force better driver behavior or department‑level risk controls when claims arise; staff recommended strengthening risk management and department coordination to limit exposure. The council directed staff to coordinate with the board of commissioners and the treasurer to establish the required fund structure and to return with proposals and required appropriation language at the February agenda.
No council appropriation was finalized at the meeting; staff said commissioners had already signed the TPA contract and the council will need to appropriate funds into the insurance fund (non‑reverting or reverting to be decided by the commissioners) before the county’s exposure can be funded.
