TRANSMITTAL LETTER FOR BOARD MEETING OF DECEMBER 5, 2024
COMMITTEE ON PROCUREMENT
Mr. Brian Perkovich, Executive Director
Title
Issue purchase order to Alliant Insurance Services, Inc. for Furnishing Excess Casualty Insurance Coverage for the District in an amount not to exceed $1,780,567.00, Account 101-25000-612290, Requisition 1628262
Body
Dear Sir:
At the Board Meeting of December 1, 2022, in accordance with Contract 22-RFP-12, the Board of Commissioners awarded a purchase order to Mesirow Insurance Services, Inc., whose name was changed to Alliant Insurance Services, Inc. (Alliant) as of May 31, 2024, to serve as the District's broker-of-record for casualty lines of insurance and related services for a three-year period. In this capacity, Alliant has responsibility for securing quotes from the insurance market for the excess casualty insurance policies. The current excess casualty insurance policies will expire on December 11, 2024.
On November 14, 2024, the District received certain quotes and market responses which Alliant had solicited pursuant to the detailed specifications in the underwriting submission for a one-year period to be effective December 11, 2024 to provide a tower of excess casualty insurance, including general liability, public officials liability, employment practices liability, law enforcement/police professional liability, employers liability, automobile liability, and excess liability for marine. A liability limit of $25,000,000.00 subject to a self-insured retention (SIR) of $7,500,000.00 was requested.
For the 2024 excess casualty program, forty insurance carriers were approached for quotes. Five carriers provided quotes. Two carriers provided indications. Thirty-three carriers declined to offer a quote citing various reasons, including the public entity class of business, particularly in Cook County, and nature of operations.
The quotes have been evaluated by Alliant, the Senior Risk Analyst, the Risk Manager, and the Director of Human Resources. It is recommended that the District purchase a program, through Alliant, with total Liability Limits of $25,000,000.00 over a SIR of $7,500,000.00 at a total program cost of $1,780,567.00 structured as follows:
First Layer: AIG/Lexington Insurance Company: Limit of $5,000,000.00 with a SIR of $7,500,000.00, at a cost of $575,682.00
Second Layer: Allied World Assurance Company: Limit of $5,000,000.00 excess of the $5,000,000.00 first layer, at a cost of $414,160.00
Third Layer: Upland Specialty Insurance Company: Limit of $5,000,000.00 excess of $10,000,000.00, at a cost of $300,991.00
Fourth Layer: Gemini Insurance Company: Limit of $5,000,000.00 excess of $15,000,000.00, at a cost of $280,583.00
Fifth Layer: Westchester Surplus Lines Insurance Company: Limit of $5,000,000.00 excess of $20,000,000.00, at a cost of $209,151.00
This is an increase in limits of $5,000,000.00 from the expiring program. For the recommended program, the overall premium is $1,780,567.00, which is an increase of $409,878.00 (29.90%) over total premium paid (total cost) for the prior year’s program. It is an increase of $200,727.00 (14.64%) over the comparable limits/layers of the expiring program.
The casualty insurance market continues to be challenged by large jury verdicts, class action lawsuits, litigation funding and tort reform rollbacks, which continue to have a significant effect on claims-related losses. Social inflation and adverse judgments against public entities have resulted in less competition among insurance carriers for new public entity business, as well as a decreasing interest in underwriting public sector risks altogether.
All insurance carriers being recommended for this placement are licensed/allowed to do business in Illinois and have A.M. Best Company ratings of A- (Excellent), VIII ($100 Million to $250 Million) or better.
The Diversity Section has reviewed the contract for Alliant Insurance Services, Inc., which serves as the District’s intermediary as required in the State of Illinois for the purchase of excess casualty insurance, and determined that it has met the requirements of Appendix A. The Minority-owned Business Enterprises (MBE), Women-owned Business Enterprises (WBE) and/or Small Business Enterprises (SBE) goals are: 20% MBE, 10% WBE and 10% SBE.
In view of the foregoing, it is recommended that the Director of Procurement and Materials Management be authorized to issue a purchase order to Alliant Insurance Services, Inc. in an amount not to exceed $1,780,567.00. This is the total amount for the excess casualty program placements.
Funds for the 2024 expenditure in the amount of $1,780,567.00 will be made available in Account 101-25000-612290.
Requested, Thaddeus J. Kosowski, Director of Human Resources, TJK:BLW
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Marcelino Garcia, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for December 5, 2024
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