90-004 Risk Management Program with RISC Risk Management SpecialistsKodiak Tsland Borough
C/o Bryce S. Weeks
Finance Director
710 Mill Bay Road
Kodiak, Alaska 95615-6340
Dear Bryce:
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RISK MANAGEMENT SPECIALISTS
January 3, 1990
As per our discussion, RISC is prepared to assist Kodiak Island
with a: analysis of their risk/insurance administrative process;
audit of the property and casualty insurance programs;
quantitative review of the liability program. The above three
segments should be broken down into three phases which will
accomplish the following:
1) Develop administrative guidelines for a functional risk
management program.
2) Determine if the present insurance program adequately
Provides coverage to existing exposures to loss.
3) Determine the present frequency and severity of liability
losses and the cost to fund these losses if self insurance
was a consideration.
SCOPE OF SERVICES
Phase I:
1) Examine indemnity provisions in a representative sampling of
major contracts and lease agreements to determine if risk is
being transferred appropriately.
2) Review any chargeback systems in use to determine if cost
allocations are properly made to participating departments/
agencies. If none exists, one will be developed.
RISC, INC • 150 WILLIAM STREET • NEW YORK, N.Y. 10038 • (212) 553-3180 • FAX (212) 553-3244
3) Review written policies and procedures currently in effect for
the safety and insurance/risk management functions to
determine if modifications should be made. If none exist,
policy and procedures will be recommended.
Phase II
Conduct a detailed review of the property and casualty insurance
coverage to determine:
1) adequacy of coverage, conditions and limits to meet the
existing exposures to loss.
2) relationship of premium cost to values received.
3) duplication of coverage or coverage omissions, and methods
of reducing any overlaps or eliminating any gaps.
4) appropriate deductible levels.
Phase III
Conduct a quantitative analysis of the Borough's liability losses
to determine appropriate funding levels. This will entail:
1) evaluation of historical losses to identify the areas of
high frequency and severity.
2) projection of ultimate loss funding levels for the upcoming
years, using standard risk management statistical
techniques; and
3) formulation of a report detailing the alternative funding
levels for liability exposures.
PROJECT TEAM
The entire staff of RISC will be available to work on this project
as needed. However, a special team has been chosen to perform the
work required. A brief statement outlining the experience of each
member is provided below.
ROBERT M. BIEBER ARM has over 23 years in risk management, of
which 17 years has been working with municipalities. He holds a
Masters degree in Occupational Safety and Health from New York
University and a Bachelors degree from the College of Insurance in
insurance.
KAREN W. Nussman, ARM, CPCU has over 11 years of risk management
and insurance experience which consist of, pricing property and
liability coverages, setting up alternative funding programs and
policy coverage reviews. She has a Masters degree in business
from the University of North Carolina and a Bachelors degree from
Virginia Polytechnic Institute and University.
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COMPENSATION
Professional fees for this study will be as follows:
Phase I Risk/Insurance
Administrative Review $4,500
Phase II Policy Review $5,000
Phase III Liability Quantitative
Analysis $4,500
The foregoing fees do not include out-of-pocket expense which will
include travel and living expenses, telephone toll charge and
report reproduction costs. These costs will be in addition to
professional fTVS. (Travel from NY to Kodiak, AK only if mutually agreed to
by both parties).
Billing for se ces and expenses will be on a monthly basis as
the work progresses.
If additional/continuing services are requested, they will be
charged at a rate of $125 per hour.
RISC agrees to maintain strict confidentiality of any records,
work papers or reports, or other proprietary material contained as
part of this consulting assignment.
If the terms of this agreement meet with your approval, please
sign the attached copy and return it to us.
We appreciate the opportunity to present this proposal. We will
he happy to answer any questions.
Sincerely
Robert M. Bieber
Vice President
RMB/bl
ACCEPTED for KODIAK ISLAND BOROUGH
By Jerome Selby _
Title Mayor
Date 3%7J90
3176d/86-8