COMPLETE THESE

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					     KEY DECISION

         Yes
    DATE ADDED TO
    FORWARD PLAN

    General Exception
         4.2.15
                                          CABINET

                                   28 SEPTEMBER 2005

         INSURANCE CONTRACT – RENEWAL OF LONG TERM AGREEMENTS

SPECIFIC WARDS AFFECTED

None

EXEMPT/CONFIDENTIAL ITEM

No


1      DECISION REQUESTED

        To approve the award of the insurance long term agreements (LTA’s) in accordance
        with the Council’s insurance broker’s recommendations, as shown in Appendix 1.

           To award the Liability and Motor policies to Risk Management Partners on a 3
            year long term agreement with an annual premium of £351,426.

           To award the Fidelity Guarantee policy to Zurich Municipal on a 3 year long term
            agreement with an annual premium of £7,658.

           To award the Personal Accident policy to Ace Insurance on a 3 year long term
            agreement with an annual premium of £3,523.


        The total cost of these policies, inclusive of 5% insurance premium tax, is £380,174.

        (Note: Insurance premium tax is not payable on claims handling, which is included in
        the Risk Management Partners tender).


2      JUSTIFICATION FOR THE DECISION

       Establishing long term agreements for the insurance policies helps to ensure that the
       Council obtains the maximum value from the premiums paid by securing discounts
       and preferential terms for the duration of those agreements.

       The long term agreements will run for 3 years, with a financial commitment beyond
       the current financial year.
3   FACTS SUPPORTING THE PROPOSED DECISION

    The Council’s insurance policies fall into three broad types: Liability; Property; and
    Motor. The existing three year long term agreements for Liability and Motor are due
    for renewal on 1 October 2005, and are the basic covers being tendered at this time,
    along with Fidelity Guarantee, and Personal Accident.

    Liability covers include Employers Liability, Public Liability, Libel & Slander, Officials
    Indemnity, Professional Negligence, Land Searches, and breaches of the Public
    Health Act. Fidelity Guarantee is an insurance policy that covers losses incurred as a
    consequence of frauds and thefts carried out by employees of the Council.

    The Property policies are subject to a 5 year long term agreement, which will run until
    October 2008.

    The Council’s appointed brokers (Heath Lambert) were charged with the task of
    guiding the Council through the tendering process to comply with European Union
    regulations, and to help identify the most economically advantageous package to the
    Council.

    In carrying out the tender exercise, the Chief Financial Officer has complied with the
    Financial Rules of Procedure in that the Directors and Heads of Service have all
    been consulted over which covers were to be tendered. As a result of these
    consultations, those areas where insurance cover arrangements were identified as
    requiring improvement have now been addressed.

    The package recommended by the broker is within budget, and represents a saving
    on the previous years premiums. The 2006/07 budget for these policies was
    £413,295, uplifted in line with the medium term budget strategy.

    The total cost of the policies tendered for this year is £380,174, which represents a
    direct saving of £33,121. However, additional cover of approximately £12,000 has
    been incorporated into the new policies,.

    The Council has therefore gained a cashable saving of £33,121, and a non-cashable
    efficiency gain of approximately £12,000.

    The individual premiums are reviewed annually.


4   RISKS ASSOCIATED WITH THE PROPOSED DECISION

    Without securing long term agreements, the Authority would not be able to ensure
    that the most economically advantageous terms have been obtained.

    Failure to award the insurance contract, which is due to commence on 1 October
    2005, would mean that the Authority would not have insurance cover for the areas
    being tendered. Without insurance in place, the Authority could not operate vehicles,
    and may fail to comply with some of its statutory requirements. The Authority would
    also be exposed to the risk of significant financial losses if a claim occurred during
    this time.
     In order to mitigate this risk, the broker has been instructed to ensure that all insurers
     submitting tenders have agreed, should they be successful, to provide interim cover
     for the period between 1 October 2005 and the date the Cabinet decision is
     implemented.



5    OTHER IMPLICATIONS

     Financial             - Premiums and excesses will be met from existing budgets
     Staffing              - No significant implications
     Legal                 - Tender has complied with EU Regulations
     Assets                - Contained within report
     Policy                - No significant implications
     Other implications    - None.


6    ALTERNATIVE OPTIONS AND IMPLICATIONS THEREOF

     None.


7    APPENDICES

     None.


Cabinet Member:      Councillor G Marshall        Tel Ext No: 4178

Director:            Mrs E Alexander              Tel Ext No: 4700

Head of Service:     Mrs C Booth                  Tel Ext No: 4801

The Contact Officer for this report is Mr P Adams, extension 4804.


BACKGROUND PAPERS

The following list of documents were used to complete this report and are available for
public inspection for four years from the date of the meeting from the Contact Officer
named above.

     None