Human Resources Action Item

DATE:	Thursday, April 26, 2012
TO:	School Board Members
FROM:	MaryEllen Elia, Superintendent
SUBJECT / RECOMMENDATIONS
Approve the Purchase of Quoted Excess Property Insurance Program.
EXECUTIVE SUMMARY
Hillsborough County Public Schools purchases insurance coverage for its excess property for loss due to perils such as fire, flood, windstorm, etc.  The coverage renews May 1, 2012.  Coverage limits will be set at $150,000,000.  An excess property insurance history is captured in (Attachment A).  The insurance market introduced an updated version of the wind modeling system, RMS v.11.0 which produced significant increases in the Probable Maximum Loss [PML]. Our PML for the 250 year event increased from $186,000,000 to $458,320,333; an increase of 146%.  The above conditions resulted in capacity shortages as well as significant premium increases.  Due to this, for the renewal this year, the District will be self-insuring 40% of the primary $25,000,000 layer, or $10,000,000 for wind coverage.  Our deductible for named windstorm-flood remains at 5% with a minimum deductible of $250,000. The deductible for all other perils remains at $100,000.  Our insured values have increased by $584,703,684 to $3,962,218,838; an increase of 17.31% based on a recent appraisal of the top 50 valued locations.  A list of insurance carriers contacted is included as (Attachment B).  The 12-month excess property insurance premium will be $6,997,283 which is a 9% increase from the total expiring program for the 2012 annual renewal based on the increased TIV at the expiring rate.  (Attachment C).  First Florida Insurance Brokers, the District’s Insurance Broker, has recommended coverage in the amount of $150,000,000 with the Probable Maximum Loss for a 250 year storm of $458,320,333.  The Florida Office of Insurance Regulation will be petitioned for validation that this amount meets the requirements for reasonable insurance coverage of the Stafford Act.  The May 1, 2012, 12-month excess property quote is for $6,997,283, plus taxes and assessments (Attachment D).
STRATEGIC OBJECTIVES
• Align financial resources to support the district’s strategic goals • Demonstrate best financial practices • Demonstrate "best practices" in all aspects of safety including students, employees, visitors, facilities, transportation, and health
FINANCIAL IMPACT (Budgeted:  Yes)
The annual 12-month excess property insurance premium of $6,997,283 in the 2012-2013 General Fund budget reflects a 9% increase from the 2011-2012 budget.
EVALUATION
Yearly renewal.
SUBMITTED BY:

Glen A. Lathers		Daniel J. Valdez
Manager of Safety and Risk Management Programs (813) 872-5263		Deputy Superintendent (813) 272-4166
		A 3.05R
Hillsborough County Public Schools (Florida) * Mtg.#20120426_499 (Board Meeting) * Section A Item# 3.05R