title
Renewal of Excess Workers’ Compensation Insurance for RTA Employees [2023-2025]
end
|
DESCRIPTION: Renewal of Excess Workers’ Compensation Insurance Coverage for RTA employees |
AGENDA NO: Click or tap here to enter text. |
|
ACTION REQUEST: ☒ Approval ☐ Review Comment ☐ Information Only ☐ Other |
RECOMMENDATION:
recommendation
Authorize the Chief Executive Officer to proceed with renewal of Excess Workers’ Compensation insurance coverage for all RTA employees for the policy period of 12/20/2023-12/20/2025 at a total cost of $455,742.00.
end
ISSUE/BACKGROUND:
body
Under Louisiana law, every employer is required to carry workers’ compensation insurance or must be approved for self-insurance. All employees, full- or part-time, must be covered. Until 2020, RTA employees, all classified as administrative, were covered under a first-dollar workers’ compensation program through LWCC, the Louisiana Workers’ Compensation Corporation, with a corresponding minimal cost in premium. However, with the transition of Transdev employees to the RTA in late 2020, the bulk of whom were operational, the cost of such a program with LWCC became prohibitive. As such, in December 2020, RTA moved to a self- insurance program managed by a third-party administrator, with excess workers’ compensation insurance in place for only the most severe or catastrophic claims. With Board approval, this coverage was initially placed with Safety National Casualty Company for policy period 2020-2021, and again, for policy period 2021-2022. For policy period 2022-2023, the Board approved Midwest Employers Casualty Company for optimal coverage.
Request for approval is sought today for a renewal of this excess workers’ compensation insurance coverage with incumbent Midwest Employers Casualty Company, which has provided a highly competitive two-year quote for policy period 2023-2025.
end
DISCUSSION:
The RTA insurance broker of record, The Kennedy Financial Group of Louisiana, Inc., has obtained three (3) excess workers’ compensation quotations. One is from Safety National Casualty Corporation, the initial carrier, for a one-year term. The other two (2) quotations are from Midwest Employers Casualty Company, the current carrier, for both a one-year and two-year term. Each carrier is rated highly by A M Best. And all quotes have Self-Insured Retentions [“SIRs”] of $1,000,000, with limits of $1,000,000.
Note that the RTA insurance broker of record approached all potential Excess Workers’ Compensation carriers writing in Louisiana. Other than the incumbent Midwest Employers Casualty Company, Safety National Casualty Corporation is the only other entity that offered a quote.
The terms provided by each carrier for a one-year quote are essentially the same. Midwest Employers is quoting an annual premium of $227,871; Safety National is quoting an annual premium of $240,784.
However, Midwest is also offering a two-year quote of $455,742.00 [$227,871 for 2023-2024; $227,871 for 2024-2025] with no increase in the premium cost for year two [2024-2025] of coverage. Given the current insurance market, it is highly advisable that RTA secure this quote and elect this two-year option.
Therefore, staff and broker hereby recommend selection of Midwest Employers Casualty Company for renewal of RTA excess workers’ compensation coverage for a two-year term [2023-2025] for optimal cost savings.
FINANCIAL IMPACT:
$455,742.00
Funds for this contract are available from the RTA operational budget [Account # 1830002.9137.167] for year one [2023-2024] and will be available from the operational budget for year two [2024-2025].
NEXT STEPS:
Proceed with this renewal of excess workers’ compensation insurance coverage with Midwest Employers Casualty Company.
ATTACHMENTS:
1. Resolution for Renewal of Workers’ Compensation Insurance for RTA Employees [2022-2025]
2. Excess Workers’ Compensation Insurance Options: Midwest Employers Casualty Company and Safety National Insurance Corporation
Prepared By: Marc Popkin
Title: Risk Analyst
Reviewed By: Mark A. Major
Title: Deputy CEO
Reviewed By: Lona Edwards Hankins
Title: Chief Executive Officer
11/3/2023
Lona Edwards Hankins Date
Chief Executive Officer