Thurston commissioners receive briefing on county's risk pool self-insurance

Thurston County’s Board of County Commissioners (BoCC) received a briefing on the Self-Insurance Analysis & 2023 Insurance Renewal during a meeting yesterday, September 5.

Tammy Devlin, Risk Manager, led the briefing about the insurance relating to the Washington Counties Risk Pool (WCRP).

Background on WCRP and risk pooling

Risk pooling is when interested parties come together to form a common pool to mitigate risk, and it is used as protection for the members against catastrophic events.

The Washington Counties Risk Pool was "created by counties for counties" in 1988 to provide member counties programs of joint self-insurance, joint purchasing of insurance, and joint contracting for or hiring personnel to provide risk management, claims handling, and administrative services.

“When the insurance market got really hard, many of the counties in the state back in 1988 couldn't insure to the commercial market. That's why they created a risk pool, so they’re joint self-insuring,” said Devlin.

WCRP’s mission is to provide comprehensive and economical risk coverage, reduce the frequency and severity of losses, and decrease costs incurred in managing litigation claims.

The pool comprises approximately 12,500 employees around 20 member counties in Washington, including Thurston County.

Thurston County’s Board of County Commissioners (BoCC) met yesterday, September 5, 2023, for the Self-Insurance Analysis & 2023 Insurance Renewal.

Joint self-insurance

Devlin explained what WCRP’s Joint Self-Insurance is, and how different it is from the Traditional Commercial Excess:

“When we joined it originally, the vantage of the risk pool is that they decide and write the actual coverage document. It's a 15-page document that tells you what’s covered and what’s not. If you go to a commercial insurer, it's a manuscript policy,” said Devlin.

The agenda packet shows the difference between WRCP’s Joint Self-Insure versus Commercial Excess Self-Insured.

WCRP allows its members to decide on and write the coverage document, whereas commercial insurers provide a manuscript policy which is very narrowly written. WCRP also defends claims with “reservation of rights” for allegations not covered by the agreement, whereas commercial policies exclude indemnity if any alleged claims are not covered.

“Risk pool defends claims with a reservation of rights. If one of the claims in there is not covered, they'll still defend you and indemnify you for all the sections of the claim that are covered, but as a commercial policy – would not if they find one issue that's not covered by financial considerations,” said Devlin.

Thurston County currently has a $2,600,000 to $3,100,000 estimated share of Risk Pool Capital and a $250,000 deductible.

The table below shows the Liability & Property Insurance Premiums for 2022-2023 and 2023-2024 years.

The risk management team presented two insurance renewal options the members shall decide on for this year.

1. Members have deductible options up to $500,000
1. Thurston County has a $250,000 deductible per claim. To increase to $500K county would have to build a larger reserve by an additional 40% in the annual rates. This increases volatility in annual claim payment needs. Not a viable budget option given the claim experience.
2. The risk management team recommended it stay at $250,000
2. Members may have the option to purchase the $5M excess of $20M for the 2023-2024 renewal
1. Last year’s cost for this layer was $101,092
2. The risk management team recommended purchasing an additional $5 million excess limit if the price is less than $150,000