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Board declines additional reinsurance, cites contingency reserves and statutory stop‑loss
Summary
Aon Hewitt recommended the board not purchase additional reinsurance for the self‑funded programs; the board approved the recommendation after discussion of contingency reserves and existing stop‑loss arrangements.
The board reviewed a fiduciary analysis of whether to purchase extra outside reinsurance for the city’s self‑funded programs. The presenter explained the board maintains contingency reserves calculated by an actuary and that the flex‑funded product is required by California to maintain a minimum million‑dollar stop‑loss layer.
Aon Hewitt recommended no additional outside reinsurance at this time, arguing the contingency reserves and existing stop‑loss arrangements sufficiently limit exposure. Board members asked for future detail on the stop‑loss premium and the administrative line that includes it; staff agreed to provide the premium cost at the next meeting. A motion to approve the recommendation was made, seconded and passed by voice vote.
