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UNION OF B,C, MUNICIPALITIES

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MAYOR AND COUNCIL

CHAIRMAN AND REGIONAL BOARD

MAYOR JACKIE DRYSDALE

CHAIRMAN, LIABILITY TASK FORCE

OCTOBER 5, 1987

FORMATION OF THE MUNICIPAL INSURANCE ASSOCIATION OF BC

in what must be regarded as a most significant decision, the '7°7 UBCM Convention gave
overwhelming approval to establish the Municipal Insueance Association of BC on
December 1, 1987. Despite some apparent (but not universat) softening in the insurance
market at this time, I feel the delegates were voting for cost stability and adequate coverage
- two of the major cbjectives we held from the start of this initiative. We voted for a
program where costs will reflect the experience of BC municipalities’and a program
designed and run by local government for local government.

The Convention also urged as part of the go-ahead resolution, the need for municipalities
and regional districts such as yours to recommit their councils and boards to the program.

As one of those that originally agreed to enroll in the Municipal Insurance Association, lam
writing to ask you to make that decision as soon as possible.

The mechanics for this decision are straightforward. We would ask you to consider the
resolution that is enclosed, The substance of this resolution is unchanged frorn that which
you originally endorsed.

Similarly, details of the Municipal Insurance Association remain unchanged, specifically:

e coverage and costs remain as proposed and agreed to; and

« while your decision to enrol] must be made now, your effective date of coverage can be
on the expiry of current insurance contracts.

As our broker, Marsh and McLennan, reported to the Convention, we have insurers
interested in underwriting above the self-insured level (what is called the excess layer) and
they would not have expressed interest unless they were satisfied that the program will be
established on a sound and viable basis.

Claims management was also a concern and must be of a high standard acceptable to
"evoasg" insurers as well before they would agree to become involved. I am pleased to
announce that we will be working with the Provincial Risk Management Services to help
us with the claims management system. They currently administer self-insured programs
for the schools and hospitals and will guide us in selecting competent contract services for
the day-to-day operations.

The final prerequisite to establishing the Association is to satisfy the financial requirements
of the Superintendent of Insurance before a permit is issued. The Superintendent's
tentative approval (subject to sufficient enrollment) had been received for the program in
July and we are now in the process of reviewirg the present enrollment process with him.

It is crucial that we maintain the widespread commitment to the program. We knew that
with &0% of the municipalites and regional districts originally willing to enroll in July, we
could find a way to make it work. Lar confident that we will see even more municipalities
and regional districts decide to enroll now, in light of recent developrnents including the
fact we will be in a position to offer "excess" insurance to presently self-insured
municipalities. All this will make the Association stronger.

I would ask you to continue to give the Municipal Insurance Association your su
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we Can get on with the job and realize the Objectives we set. * P

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