I've never really been bothered by change. I like new ideas (especially if they are mine....) and I try to be open to new projects and ways to do things. I agree with what Benjamin Franklin said: "When you are finished changing, you're finished."

In this issue of IM you will see strong evidence that our insurance programs continue to change, grow and improve. The PCoRP renewal is bringing some coverage enhancements and changes (and some money savings too). We have a new member of the PComp board. We have information about the federal health care reform changes and how they impact benefit plans.

SCHRPP, CCAP's newest affiliated organization, the Society of County Human Resource Professionals of Pennsylvania, is another great example of how things evolve. Back in 1996 CCAP's insurance programs started the first of many annual County Personnel Workshops. This was the first time personnel directors across the state had a chance to meet and exchange information, and for a time we considered organizing them a little more formally. However, there were not many HR directors at that time, and other than putting together a directory for them, not much else transpired. The Personnel Workshop eventually became a two day event, and then morphed into the County Administration Conference (CAC). This combination of personnel, finance and administrative issues works well, as many counties have one person who does not only one but all of these duties.

As the number of HR directors grew CCAP started an HR list serve. Julia Jackson's continued work on the employee benefits side of our insurance programs led to requests from the county HR staff to create their own association. This happened January 1, 2010 and now 29 counties and 4 county related entities are members. The first SCHRPP quarterly newsletter just went out to the membership, and the first of quarterly webinars has started. The first SCHRPP annual conference will be held on August 19 in State College. A new quick call legal hotline is now available for SCHRPP members to use for free legal and labor law consultation.

Congratulations also to the SCHRPP board of directors; listed below. This group spent a lot of time imagining how this new organization would work, and putting the plan into place.

John Aguirre, President, Franklin County HR Director

Vince Pavic, President-Elect, Somerset County HR Director

Jennifer Harris, Vice President of Membership, Adams County HR Director

Maryanne Koleny, Treasurer, Armstrong County HR Director

Jennifer Biehn, Secretary, Berks County HR Director

Meredith Dolan, Bucks County HR Director

Chuck Dominick, Westmoreland County HR Director

Ann Gehret, Lycoming County HR Director

Judy Rolick, McKean County HR Administrative Assistant

Dee Robinson, Union County Chief Clerk

Faye Fisher, Dauphin County Personnel and Payroll Director

Sue Kern, Forest-Warren Human Services HR Director

Three of CCAP's insurance programs - PCoRP, PComp and the CCAP UC Trust - are sponsors of SCHRPP. We are excited about the services and assistance this new organization brings to counties!

The PCoRP Board met on April 8 to make renewal decisions, and staff is currently finishing the proposal details for each member. Local insurance producers for PCoRP members will receive the complete renewal packets in early May.

Overall costs for the members decreased about $357,000 from the prior policy year. For 2010-2011 total costs to the members will be slightly more than $11.5 million, with about $6.5 million going to the PCoRP Loss Fund. Almost 57% of members' payments will be used for the Loss Fund, which pays claims costs above the member's deductible up to $350,000 for liability claims and up to $250,000 for property claims.

One major reason for the overall cost savings was a reduction in monies needed for the Loss Fund, resulting from better than expected claims experience by the members.

Of the 46 PCoRP members, 32 will see a decrease in costs from the prior policy year, and 13 will see increased costs. One member's costs are almost identical to the prior policy year. The members seeing increased costs had higher than average exposure increases - new buildings or more payroll for example - or had higher claims experience than other members.

PCoRP is not changing any of its reinsurers for the coming policy year. The renewal does brings some coverage changes, the first being an increase in the limit for crime coverage, from $600,000 per occurrence to $1 million. The limit increase comes in preparation of upcoming legislation which will change the County Code public official bonding provisions. While the proposed legislation does not require a certain limit, work on the bill led PCoRP staff to reevaluate the coverage, and with no change in the limit in about 15 years, it was felt an increase was prudent.

Other coverage changes will be outlined in the renewal packet in detail. They include:

·         Elimination of UM/UIM increased limits. All members will receive $35,000

·         The auto medical payments limit increases from $5,000 per person per accident

·         PCoRP will now provided limited civil rights non-pecuniary defense coverage up

·         Coverage for suits filed by one elected official against another will be

·         The computer fraud coverage was completely rewritten to upgrade to current

·         Contractual liability limits are reduced to $2 million from the prior full policy limit

·         The power interruption coverage has been expanded and better defined.

PLEASE NOTE changes have also been made to the waiver of subrogation provision section of the PCoRP coverage document (see the article in this issue of IM by Dave Harman). We are adding back in coverage, but making the deductible for claims involving a waiver of subrogation in a contract $250,000 for property losses and $350,000 for liability losses. We still continue to see contracts signed by counties which waive the right to subrogate against the vendor for their errors!

Questions about the PCoRP renewal can be directed to Karen Cohen or John Sallade at CCAP.

Every major construction project starts with the hiring of an architect. And with that hiring comes a contract for their services. The standard American Institute of Architects (AIA) contract, a fairly common document used by architects, has an entire section on indemnification which attempts to shift all responsibility from the architects to the county for anything that might happen - whether it is a lawsuit, a breach of the contract or a legal action. This is Section 11 of the model contract. Section 11.4.7 is titled "Waiver of Subrogation." The language in this section of the contract prevents the county from holding the architect responsible for any errors in their design and for the work of any sub-contracted firm the architect hires to complete the work of their design.

Pennsylvania's courts have ruled a contract which prohibits the county from subrogating also prohibits the county's insurance company from subrogating. This means the insurer will be responsible for the costs of the repairs even though the county, nor any of their employees, were at fault for the damage. Then the county will have to pay more in premiums because the insurance company has to pay the claim.

For the past two policy years, PCoRP has indicated in its Coverage Document that if a member enters into such a contract where it waives the ability to subrogate a claim, we would deny coverage for that claim. However, with the new policy year, the PCoRP Board of Directors has approved a policy language change to benefit our membership but also protect the pool and its loss fund. Starting June 1, for any claim submitted to PCoRP in which a contract, signed after June 1, 2007, waives the county's right to subrogate, the member's deductible will be $250,000. This is the amount of PCoRP's self-insured retention (the amount paid by PCoRP before reinsurance starts paying). This change restores coverage for members, but with a higher deductible.

PCoRP's claim representatives will still handle all aspects of the claim, including making all payments to the vendors involved in the repair work as well as coordinate the reporting of the claim with our reinsurers. However, PCoRP will then bill the county for the appropriate amount after the claim has been concluded. The claim representative assigned to the file will also notify the member immediately after it has been determined that a waiver of subrogation was included in the signed contract and therefore the higher deductible will be initiated for the claim, so the member is aware of the additional costs it may be facing.

We cannot stress enough how important it is that ALL contracts that a county enters into should be reviewed by the county's solicitor and particular attention be paid to the section of the contract that deals with these issues.