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City manager: Temple City's pooled liability fund remains solvent at about $170 million; claim values rising
Summary
City Manager Brian Cook updated the council on the LA County liability trust fund that serves 42 contract cities, reporting roughly $170 million in reserves, a pooled premium described as a 12.5% 'search charge' on sheriff contracts, and growing claim severity despite lower claim frequency.
City Manager Brian Cook reported Dec. 2 that Temple City continues to participate in a pooled LA County liability trust fund that covers 42 contract cities and that the fund currently holds about $170 million in reserves.
Cook described the board nd insurance structure: the liability trust fund board has authority to resolve claims up to $100,000; claims above that level are recommended to the Los Angeles County Board of Supervisors. He said the pooled premium is assessed as roughly a 12.5 percent charge on the base sheriff contract and that the frequency of claims has fallen while the average value of claims has grown.
Cook summarized the layered insurance approach: the pool functions with a self-insured retention level (described in the meeting as about a $10 million deductible per occurrence) and additional insurance layers that, in the board iscussion, were described as extending coverage up to about $50 million. The City uses CJPIA and top actuarial firms for risk projections and to purchase excess insurance in the commercial market.
On trends and policy, Cook said rising award amounts and claim severity have been a major driver of higher premiums; council members asked whether tort-reform efforts at the state level are being pursued to limit runaway verdicts. Cook said discussions about tort reform are underway with CJPIA leadership and the League of California Cities but that no state legislation has yet passed.
Council members asked for trend details and whether the 12.5 percent charge will hold; Cook said the percentage is based on actuarial studies, could change, and has been relatively stable in recent years after sharp increases in prior years. Cook concluded that the liability trust fund is currently solvent and that the pooled arrangement gives contract cities stability and access to excess insurance markets.
Cook also tied reduced claim frequency to improved training, noting the county's new Emergency Vehicle Operations Center in Santa Clarita as a factor in better vehicle-operation training for sheriff and allied agencies.
