action item - ac transit...damage insurance as well as excess liability insurance. fiduciary...

67

Report No: Meeting Date:

Alameda-Contra Costa Transit District

STAFF REPORT TO: AC Transit Board of Directors

FROM: Denise Standridge, General Counsel

SUBJECT: District Insurance Renewals

ACTION ITEM

RECOMMENDED ACTION(S):

15-153a

June 10, 2015

Consider authorizing the Interim General Manager, or her designee, to bind the Crime; Commercial Property, Boiler & Machinery and Auto Physical Damage; Excess Workers' Compensation; and the Fiduciary Insurance policies for the District.

EXECUTIVE SUMMARY:

The District's insurance coverage is renewed on an annual basis. In April 2015, the Board approved the renewal of the Excess Liability and Travel insurance policies. All of the remaining renewal proposals have been received and staff is requesting approval to bind the following policies:

INSURANCE POLICY TYPE EXPIRATION RENEWAL PREMIUM

Crime Policy 6/30/2015 $21,292

Excess Workers' Compensation 6/30/2015 $370,093

Auto Physical Damage, Boiler & 7/1/2015 $464,970

Machinery, and Commercial Property

Fiduciary Liability 7/31/2015 $26,866

Total: S883,221

BUDGETARY/FISCAL IMPACT:

The FY 2014-15 impact will be $391,385; for FY 2015-16, it will be $491,836.

BACKGROUND/RATIONALE:

The Crime policy covers money, securities, or other tangible property belonging to the District

or for which the District is legally liable. This insurance is generally purchased to help manage

loss exposures resulting from criminal acts such as robbery, burglary and other forms of theft,

including embezzlement. While the District has not had any claims paid out since at least the

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Report No. 15-153a of 5

2008-20091 policy period, the most common source of financial recovery after discovering an

employee has embezzled is to file a claim with the insurance company. Crime claims are usually

severe in nature and are found to have occurred over a multiple year period, thus presenting

high value loss exposures. An example of such a situation is provided in Attachment 1, an article

about a small city's CFO who managed to embezzle approximately $30 million over the multiple

decades she worked for the city.

The crime policy proposal includes Faithful Performance Bond coverage and includes Bonded Employees and the Treasurer as "employees", which is crucial for any public entity. This coverage responds to crime losses arising out of the failure of an individual to faithfully execute duties required by company bylaws or those prescribed by law as in the case of a public official or employee. Below is the historical premium for review.

CRIME INSURANCE PREMIUMS PAID: 2008-PRESENT

COVERAGE LIMITS: $S,OOO,OOO

YR 14·15 VR 13-14 YR 12·13 YR 11·12 YR 10·11 YR 09-10 YR 08-09 2008 TO PRESENT

DEDUCTIBLE/SIR PREMIUM PREMIUM PREMIUM PREMIUM PREMIUMS PREMIUMS PREMIUMS PREMIUM TOTAL

$25,000/$5,000 $21,050 $20,397 $20,262 $19,866 $19,866 $19,872 $20,259 $141,572

LOSSES IN EXCESS OF DEDUCTIBLE N/A N/A N/A N/A N/A N/A N/A

The 2014-15 premium was $21,050; the 2015-16 proposed premium is $21,292, an increase of $242 or 1.15%. The coverage specifications are provided as Attachment 2.

Excess Workers' Compensation

The District maintains a $1,000,000 self-insured retention (SIR) for Workers' Compensation and procures a policy for Excess Workers' Compensation. Premiums are based on reported payroll. The 2014-15 premium was $350,361.00; based on a projected payroll of $133,897,634, the 2015-16 proposed premium is $370,093, an increase of $19,732 or 5.63%. At the end of each calendar year, a payroll audit is conducted and the District either pays an additional premium or no additional premium. The coverage specifications are provided as Attachment 3.

The policies are occurrence based. Therefore, assume Employee A is injured on January 1, 201X and makes a claim. The policy in effect on that date is the policy that covers the claim. Assume the SIR at the time is $1,000,000. The excess insurance would not come into play until the District expended $1,000,000 on the claim, which could be many years after the injury date. The District is still recovering on policies dating back as far as 1981 and will continue to recover on those policies provided that the claims remain open, including those that are open solely for future medical. An example of this is the Boykin case that was brought to the Board in August 2012. This was a case that involved an injury in 1994, at which time the District had a $500,000 SIR. The policy was considered an indemnity contract, wherein the District paid the claim and/or settlement and then sought reimbursement from the carrier. By the time the matter concluded, the District had recovered approximately $750,000.

1 The District's current insurance broker has been the broker since 2008 and has no records of loss data for the District prior to that time. Additionally, it is unknown what the District's former Risk Manager did with historical data when he left the District; these records cannot be located.

69


The chart below shows the premiums paid for excess worker's comp insurance from 7-1-08 thru 6-30-15. In the same period of time we had approximately $1,983,087.04 in recoveries; however the earliest date of loss associated with the excess recovery is from 9-28-1981.

EXCESS WORKERS COMPENSATION INSURANCE PREMIUMS PAID: 2008·PRESENT

STATUTORY COVERAGE LIMITS, EMPLOYERS LIABILITY: $1,000,000

YR 14-15 YR 13-14 YR 1Z-13 YR 11-1Z YR 10-11 YR 09-10 YROS-09 ZOOS TO PRESENT


$1,000,000 $350,361 $316,865 $306,686 $Z84,667 $334,63Z $3Z1,054 $357,080 $2,271,345

Losses in Excess of SIR N/A N/A N/A N/A N/A N/A N/A

Commercial Property, Auto Physical Damage, and Boiler & Machinery Coverage

This is a comprehensive property insurance policy that insures against damage to buildings and contents due to a covered cause of loss, such as a fire. The policy also covers loss of income/business interruption or increases in expenses that result from the property damage (PO), physical damages to District buses and non-revenue vehicles, property in transit, etc. A history of the premiums paid on this coverage is provided for your review.

PROPERTY, AUTO/BUS PHYSICAL DAMAGE & BOILER & MACHINERY PREMIUMS PAID: 2008-PRESENT

COVERAGE LIMITS:$ Various YR 14-15 YR 13-14 YR 1Z-13 YR 11-12 YR 10-11 YR09-10 YR 08-09 2008 TO PRESENT


Various $465,500 $446,000 $406,609 $405,498 $381,755 $376,SZS $341,645 $2,SZ3,S35

LOSSES IN EXCESS

OF DEDUCTIBLE N/A N/A N/A N/A N/A 1 N/A

There are various deductibles as identified in Attachment 4. The 2014-15 premium was $465,500; the 2015-16 proposed premium is $464,970, a decrease of $530 or .11%. The coverage specifications are provided as Attachment 4.

The District is a party to various agreements (Lease to Service, Tranche 1 & 2, and FHR Software) and Certificates of Participation that require the District to maintain property damage insurance as well as excess liability insurance.

Fiduciary Insurance

This coverage protects Board officials, trustees, and professional administrators of a pension plan and the plan itself with respect to errors and omissions (E&O) in the administration of employee benefit programs. A history of the premiums paid on this coverage is provided for your review.

FIDUCIARY LIABILITY INSURANCE PREMIUMS PAID: ZOOS-PRESENT

COVERAGE LIMITS: $5,000,000

YR 14-15 YR 13-14 YR 12-13 YR 11-12 YR 10-11 YR 09-10 YR OS-09 ZOOS TO PRESENT


~50,000 Per Claim $Z6,S66 $31,962 $31,96Z $30,534 $30,90S $30,733 $29,S42 $212,S07

LOSSES IN EXCESS

OF DEDUCTIBLE N/A N/A N/A N/A N/A N/A N/A

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The most common types of Fiduciary claims are, Denial or Change of Benefits, Administrative Error, Incorrect Benefit Calculation, Improper Advice or Counsel, Misleading Representation, Wrongful Termination of Plan, Civil Rights Denial or Discrimination, Failure to Adequately Fund a Benefit Program, Conflict of Interest, Imprudent Investment, Cash Balance Plan Conversions and Employer Stock Investments. Also insured is the Retirement Board itself, as the board members themselves can become personally liable. The policy under consideration provides a waiver of recourse provision to protect the members' personal assets. The coverage specifications are provided as Attachment 5.

As to the loss history under this policy- there was a claim filed under the 2012/2013 policy. A

lawsuit was filed by a former employee who was denied retirement benefits because the

employee had not vested under the Plan. The case was decided in favor of AC Transit. Defense

Costs were within the District's SIR for this coverage and the file was closed without any

payments under the policy.

Peer Agencies

Attached as Attachment 6 is a chart showing what 7 other transit agencies have in the way of

insurance coverage. The categories listed may not be everything the agencies carry insurance

for but does show what they do in regards to the coverages the District is considering.

Staff recommends that the Board authorize the binding of the policies.

ADVANTAGES/DISADVANTAGES:

Authorizing the binding of the policies will insure that the District maintains coverage in the areas identified and maintains compliance with its contractual obligations.

There are no disadvantages.

ALTERNATIVES ANALYSIS:

The alternative would be for the District to fully self-insure in these areas. This is not recommended as it leaves the District exposed to unknown financial liabilities and violates various sections of existing agreements/financial transactions. Also, the District would need to re-do the budget to allow for the potential liabilities, especially in the workers' compensation area.

PRIOR RELEVANT BOARD ACTIONS/POLICIES:

SR 13-194 SR 13-199 SR 15-153

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Report No. 15-153a

of 5

AITACHMENTS: 1: Article from NBC News re employee embezzlement case

2. Crime Policy Coverage Specifications 3: Excess Workers' Compensation Specifications

4: Commercial Property, Auto Physical Damage, and Boiler & Machinery Coverage

5: Fiduciary Coverage Specifications 6: Peer Agencies' Coverages

Executive Staff Approval:

Reviewed by:

Prepared by:

Denise C. Standridge, General Counsel

James Pachan, Interim Chief Financial Officer

Jean Paul Popoff, Claims & Liability Administrator Jean Paul Popoff, Claims & Liability Administrator

Anne Fudge, Executive Coordinator

Due Le, Human Resource Manager

This page intentionally blank

72

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City's finance chief accused of looting $30 million; lifestyle included $2.1 million motorhome Wednesday Apr 18, 2012 8:55AM

~~~· ' , fwMI 0

The chief financial officer of a

small Illinois city •• a woman who

had a lavish lifestyle that included a S2.1 million motor home and a

horse farm •• is under arrest. accused of embezzling S30

million from the city.

Rita Crundwell. 58, was arrested Tuesday at City Hall in Dixon, Ill .. the Chicago Tribune reported

(http://www.chicagotribune.com/n ewsllocal/ct-met-dixon

comptroller-embezzle-charges-20120418,0.5457912.story), and

later charged with wire fraud.

Paid a salary of $80,000 a year,

Crundwell spent large sums to operate her 150-horse Meri-J Ranch, as well as $340,000 on jewelry and S2.1 million on a

American Quarter Horse Association

Rita Crundwellls seen with one of her horses at an American Quarter Horse Association event.

luxury motor home. the FBI alleges in its criminal complaint

(http://www.justice.govlusaolilnlpr/rockfordl20121pr0417 _01a.pdf).

"I guess people assumed she was making a ton of money in the horse business," the Tribune quoted Dixon Mayor James Burke as saying about her apparent wealth.

Burke went to the FBI after an employee covering for Crundwell while she was away discovered an unusual bank account with multiple six-figure transactions The account was in the city's name but included "RSCDA" as a co-account holder. and that turned out to be Crundwell, the FBI said. Funds from the account had been withdrawn over time.

Purchases allegedly made by Crundwell with city funds include a S146.000 Kenworth

truck, a S140.000 Freightliner truck, a S57.000 Chevy Silverado pickup and a 5259,000 horse trailer.

Dixon. a city of 15,000 and boyhood home of President Ronald Reagan. has an annual budget of less than S9 million a year. The city has had budget cuts over the years. Burke said. but Crundwell argued some of the financial shortfalls were due to funds owed by the state.

Follow@msnbc_us ( 117followors

embezzlement.

Burke said Crundwell had worked for the city

since she was a teenager and was appointed comptroller in the early 1980s.

Tho FBI didn't know how the S30 million compares to past cases of public

·we don't keep official records or rankings of such things." FBI spokesman Royden Rice told msnbc.com. "Suffice it to say. according to the complaint. this was a very large fraud considering the size of Dixon."

Burke on Wednesday issued a statement trying to make sense of how so much money could have been embezzled.

Att.l to SR 15-153a Page I of2

httn://usnews.nhcnews.com/ news/20 12/0411 R/ 11 2o:'i7:S:'i-ci1vs-fimmce-chief:.~ccuserl-of-lo... 0/4/201 :S

74

"We realize the main question is how can someone allegedly steal 30 million dollars and get away with it for so long?" he said, and then explained that two accounting firms prepare an annual audit, while the state also reviews city documents. None ever cited "red flags," Burke said.

He added that the city will try to claim some of Crundwell's assets and it "will be interviewing and retaining a new certified public accounting firm to conduct the annual

city audit."

As for Crundwe\1, her Meri-J Ranch says on its website (http:/lwww.merijranch.coml) that horses bred by her have won 52 world championships.

Crundwe1l is well known on the horse circuit, having appeared at counUess shows.

Several YouTube videos by the American Quarter Horse Association relate her success raising and showing horses, and already on Wednesday some viewers were voicing their

anger.

~Rita Crundwe\1 should be banished from all (record) books and be forced to give back all trophies and of course these is no money to give back but she should be banished from all records," wrote one YouTube viewer (http://www.youtube.comlwatch? v=vbr2zfHRh6A). "The reserve winners should get their rightful earnings and trophies."

Page 2 of2

httn://usnews_nhcnews_com/ news/2012/04/18/11265755-c.itvs-finance-chief-accused-of-lo... 6/4/2015

75

Att . 2 to SR 15-153a

Crime coverage

Named insured:

Insurance carrier:

Policy number:

Policy term:

Premium:

Coverage:

Coverage and Limits Per Expiring Policy

$

Deductible $

National Union Fire Ins Co ofPA

Carrier name -Admitted A.M. Best rating: A, XV as of Februa1y 2015

TBD

June 30, 2015 to June 30, 2016

$21,292.00

Covers money, securities, or other tangible property belonging to you or for which you are legally liable. In the event of a loss, the burden of proof rests with you.

Government Crime Policy CR0027 (05/06). Loss Discovered Form.

5,000,000

5,000,000

500,000

500,000

500,000

s,ooo,ooo

5,000,000

5,000,000

25,000

25,000

25,000

25,000

25,000

5,000

5,000

5,000

Employee Theft - Per Loss Coverage

Forge1y or Alteration

Theft of Money & Securities - Inside Premises

Robbery, Safe Burglary- Other Property- Inside Premises

Outside the Premises

Computer Fraud

Funds Transfer Fraud

Money Orders and Counterfeit Paper Currency

Employee Theft - Per Loss Coverage

Forgery or Alteration

Computer Fraud

Funds Transfer Fraud

Money Orders and Counterfeit Paper Currency

Theft of Money & Securities - Inside Premises

Robbery, Safe Burglary- Other Property- Inside Premises

Outside the Premises

This proposal is merely a descriptive summary of coverage provided by the insurance companies being proposed and should be used f or reference purposes on ly. This is a quotation of coverage only. It is not a binder. This proposal does not amend or alter the insurance contract.

Please refer to the policy contract for specific terms, conditions, limitations, and exclusions. Proposal date: 4/17/2015 Prepared for AC Transit Confidential. © 2014 Wells Fargo Insurance Services USA, Inc. All Rights Reserved.

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76

Coverage Extensions

• • •

•

•

• •

•

Subjectivities to Bind:

• Signed and Dated Application

Bonded Employees Exclusion Deleted Endorsement

Include Treasurer or Tax Collectors as Employees

Additional Named Insured Endorsement

Economic Sanctions Endorsement

Include Expenses Incurred to Establish Amount of Covered Loss: $25,000 Add Faithful Performance of Duty Coverage for Government Employees: $5,ooo,ooo Omnibus Named Insured

Add Credit, Debit or Charge Card Forgery: $5,ooo,ooo Change Extended Period to Discover Loss (Loss Sustained Coverage): 120 Days

This proposal is merely a descriptive summary of coverage provided by the insurance companies being proposed and should be used for reference purposes only. This is a quotation of coverage only. It Is not a binder. This proposal does not amend or alter the insurance contract.

Please refer to the policy contract for specific terms, conditions, limitations, and exclusions. Proposal date: 4/17/2015 Prepared for AC Transit Confidential.© 2014 Wells Fargo Insurance Services USA, Inc. All Rights Reserved.

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Att. 3 to SR 15-153a

Excess Workers' Compensation Coverage

Safety National Safety National Insurance Company 2014/2015 2015/2016

Am Best Rating

Policy Period

California Status

Polic Premium:

Covered State(s)

Workers' Compensation Coverage

Coverage Limit

Employers Liability

Per Occurrence

Annual Aggregate

Self Insured Retention:

Payroll Basis:

Rate:

Commission:

Subject to Audit:

Coverage Extensions: Named Insured Additional Endorsement

TRIA

Waiver of Subrogation

A+, Excellent, FSCXIII

July 1, 2014 -July 1, 2015

Admitted

$350,361.00

California

Statutory

$1,000,000

$1,000,000

$1,000,000

o%

Yes

Included

Included

Included

A+, Excellent, FSCXIII

July 1, 2015- July 1, 2016

Admitted

$370,093.00

California

Statutory

$1,000,000

$1,000,000

$1,000,000

o%

Yes

Included

Included

Included

This proposa l is merely a descriptive summary of coverage provided by the insurance companies being proposed and should be used for reference purposes only. This is a quotation of coverage on ly. It is not a binder. This proposal does not amend or alter the insurance contract.

Please refer to the policy contract for specific terms, conditions, limitations, and exclusions. Proposal date: 4/17/2015 Prepared for Alameda Contra Costa Transit District Confidential. © 2014 Wells Fargo Insurance Services USA, Inc. All Rights Reserved.

Page 3


78

79

Att . 4 to SR 15-153a

Commercial property, auto physical damage and boiler & machinery coverage

Travelers Insurance Company Travelers Insurance Cmnpany

Policy Term July 1, 2014 to July 1, 2015 July 1, 2015 to July 1, 2016

AM Best Rating A++, Superior, Financial Size A++, Superior, Financial Size Category Category XV, $2 Billion or Greater XV, $2 Billion or Greater

California Status Admitted Admitted

Coverage All Risk of Direct Physical Loss or All Risk of Direct Physical Loss or Damage Including Equipment Damage Including Equipment Breakdown, Auto Physical Damage, Breakdown, Auto Physical Damage, Contractor's Equipment & Earth Contractor's Equipment & Earthquake Movement Sprinkler Leakage. Sprinkler Leakage. Excluding Excluding Earthquake And Flood As Earthquake And Flood As Respects Respects Property /Time Element Property/Time Element Coverages Coverages

Statement ofValues $590,535,853 $589,860,985

Limits: $10o,ooo,ooo Per Occurrence $1oo,ooo,ooo Per Occurrence

Subject to the following Subject to the following sublimits: sub limits:

Vehicle Physical Damage $50,000,000 $so,ooo,ooo

Including over the road exposures Including over the road exposures

Outdoor Property including 25% of physical loss/ damage for all 25% of physical loss/ damage for all Debris Removal Insured locations sustaining covered Insured locations sustaining covered

physical loss/damage plus physical loss/damage plus $5oo,ooo. $5oo,ooo. Trees, Shrubs and plants Trees, Shrubs and plants- $5,000 per - $5,000 per item item

Accounts Receivable $5,000,000 $5,ooo,ooo

Earthquake Sprinkler $1,000,000 $1,000,000 Leakage

Business $12,399,875 $12,344,050 Interruption/Rental Value Extended Rental Value 6o days 60 days

Civil Authority 30 days 30 days

Ordinance or Law - $250,000 $250,000 Increased Period of Restoration

This proposa l is merely a descriptive summary of coverage provided by the insurance companies being proposed and shou ld be used for reference purposes only. This is a quotation of coverage only. It is not a binder. This proposal does not amend or alter the insurance contract.

Please refer to the policy contract for specific terms, conditions, limitations, and exclusions. Proposa l date: 4/20/2015 Prepared for AC Transit Confidentia l. © 2014 Wel ls Fargo Insurance Services USA, Inc. All Rights Reserved.

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80

Travelers Insurance Company Travelers Insurance Cmnpany

Demolition/Increased Cost of Construction Ordinance or Law $25,000,000 $25,000,000

Demolition $2,500,000 $2,500,000

Increased Cost of $2,500,000 $2,500,000 Construction

EDP Data/Media $5,ooo,ooo $5,000,000

Errors and Omissions Covered- No sublimit Covered- No sublimit

Extra Expense $1,000,000 $1,000,000

Civil/Military Authority 30 days 30 days

Fine Arts $1,ooo,ooo subject to a maximum $1,ooo,ooo subject to a maximum of of $5,000 any one item $s,ooo any one item

Pollution Cleanup and $100,000 $100,000 Removal

Miscellaneous Unnamed $1,ooo,ooo subject to maximum $1,ooo,ooo subject to maximum Locations $5,000,000 $5,000,000

Newly Acquired Property 120 Days, not to exceed $5,000,000 120 Days, not to exceed $s,ooo,ooo

Claims Data Expense $100,000 $100,000

Service Interruption $1,000,000 $1,000,000

Property in Transit $1,000,000 $1,000,000

Valuable Papers $5,000,000 $s,ooo,ooo

Expediting Expense $1,000,000 $1,000,000

Course of Construction Not Covered Not Covered

Unscheduled bridges, Not Covered Not Covered tunnels, catwalks, streets, pavements, roads, highways, culverts, street lights, traffic signals

This proposal is merely a descriptive summary of coverage provided by the insurance companies being proposed and should be used for reference purposes only. This is a quotation of coverage only. It is not a binder. This proposal does not amend or alter the insurance contract.

Please refer to the policy cont ract for specific terms, conditions, limitations, and exclusions. Proposal date: 4/20/2015 Prepared for AC Transit Confidential. © 2014 Wells Fargo Insurance Services USA, Inc. All Rights Reserved.

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81

Travclet·s Insurance Company Travelers Insurance Cmnpany

Personal Property of $2,500 per Employee; $50,000 any $2,500 per Employee; $50,000 any one employees, directors, one occurrence. Coverage excludes occurrence. Coverage excludes outside officers, Trustees of the outside the USA. the USA. Insured located Outside of the US, Canada and Puerto Rico

Contractors Equipment $627,055 $627,055

Subject to the following sublimits: Subject to the following sub limits:

Leased/Rented Equipment Not covered Not covered from Others Newly Acquired $5o,ooo $50,000

Rental Reimbursement Not covered Not covered

Miscellaneous Not covered Not covered Tools/Equipment

Boiler and Machinery $25,000,000 $25,000,000

Business Interruption Included Included

Off P,•emises Prope1·ty Follows property Follows property damage Consequential Damage $250,000 $250,000

Extra Expense Follows property Follows property

Rental Value Follows property Follows property

Contingent BI/EE Not covered Not covered

Expediting Expense Follows property Follows property

Hazardous $250,000 $250,000 Substances/Pollutants Spoilage Part of Consequential Damage Part of Consequential Damage

Computer Equipment/EDP Follows property Follows property

Data Restoration Follows property Follows property

Demolition and ICC/Costs Follows property Follows property of Construction Service Interruption $1,000,000 $1,000,000

Ammonia Contamination $250,000 $250,000

Water Damage $250,000 $250,000

Newly Acquired Property Follows property Follows property

Errors and Omissions Follows property Follows property

Extended Period of 6o days 6o days Restoration

Limited Fungus, Wet Rot $100,000 $100,000 and Dry Rot Coverage

This proposal is merely a descriptive summary of coverage provided by the Insurance companies being proposed and should be used for reference purposes only. This is a quotation of coverage on ly. It Is not a binder. This proposal does not amend or alter the insurance contract.


Page 7

82

Travele•·s Insurance Company Travele1·s Insurance Company

Deductibles:

All Other Perils $100,000 $100,000

Vehicles $25,000 $25,000

Buses $100,000 $100,000

Earthquake Sprinkler 2%/$100,000 2%/$100,000 Leakage Service Interruption $25,000 $25,000

Boiler and Machinery $25,000 $25,000

Boiler & Machinery: Rental 48 hour waiting period on 48 hour waiting period on Interruption Value or Extra Expense Interruption of Service waiting of Service waiting period

period

Exclusions Newly acquired locations outside of Newly acquired locations outside of California California Furs; jewels; jewelry; precious, semi- Furs; jewels; jewelry; precious, semi-precious stones or metals. precious stones or metals. Watercraft Watercraft

Golf course greens, tees, fairways, Golf course greens, tees, fairways, sand-sand-traps traps Money, securities, notes, tickets Money, securities, notes, tickets

Any type of dam Any type of dam

Tax value for tax interruption Tax value for tax interruption

Rolling Stock Rolling Stock

Ocean marine transit or worldwide Ocean marine transit or worldwide transit transit Cyber secure( would need to Cyber secure( would need to complete an complete an application if coverage application if coverage is desired) is desired) Nuclear Hazard, War, Military Nuclear Hazard, War, Military Action, Action, Electronic Vandalism and Electronic Vandalism and Pathogenic or Pathogenic or Poisonous Biological Poisonous Biological or Chemical or Chemical Materials Materials

Coinsurance Not Applicable Not Applicable

Valuation Replacement Cost Replacement Cost

Time Element-Actual Loss Sustained Time Element-Actual Loss Sustained

Contractors Equipment- ACV Contractors Equipment- ACV

Vehicles- ACV Vehicles - ACV

Premium $465,500 $464,970

This proposal is merely a descriptive summary of coverage provided by the Insurance companies being proposed and should be used for reference purposes only. This is a quotation of coverage only. It is not a binder. This proposa l does not amend or alter the insurance contract .


Page 8

83


Premium overview


Please refer to the policy contract for specific terms, conditions, limit ations, and exclusions. Proposal date: 6/3/2015 Prepared for Alameda Contra Costa Transit District Confidential. © 2014 Wells Fargo Insurance Services USA, Inc. All Rights Reserved.

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84

Named insureds

Note: Any entity not named as an insured may not be covered under this policy. This includes partnerships, joint ventures, and newly formed entities of any type.

I

Named insured -- -

Retirement Board of AC Transit's Employee Retirement Plan (FKA Alameda Contra Costa Transit District Employee Pension Plan)



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85

Executive liability Fiduciary liability

Insurance Company Hudson Insurance Company

Policy Term August 1, 2014 to August 1, 2015

AM Best Rating A, XV FSC $2 Billion or Great

California Status Admitted

Policy Form(s) The Euclid Vanguard ESF-31210001 9-2012

Endorsement(s) CA Amendatory Endorsement

Public Entity Fiduciary Liability Endorsement

Extended Reporting Period Endorsement

Other Insurance Endorsement

Defense Costs Allocation Endorsement

Contract Exclusion Endorsement

Amend Defense and Settlement Endorsement

Acceptance of Substitute Carrier Application Endorsement

-Hudson Insurance Company

August 1, 2015 to August 1, 2016

A, XV FSC $2 Billion or Great

Admitted

The Euclid Vanguard ESF-31210001 9-2012

CA Amendatory Endorsement

Public Entity Fiduciary Liability Endorsement

Extended Reporting Period Endorsement

Other Insurance Endorsement

Defense Costs Allocation Endorsement

Contract Exclusion Endorsement

Amend Defense and Settlement Endorsement

Acceptance of Substitute Carrier Application Endorsement


Please refer to the policy contract for specific terms, cond itions, limitations, and exclusions. Proposal date: 6/3/2015 Prepared for Alameda Contra Costa Transit District Confidential. © 2014 Wells Fargo Insurance Services USA, Inc. All Rights Reserved.

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86

Limit(s) $s,ooo,ooo $s,ooo,ooo

$1,250,000 Trustee Claims Expenses Sublimit $1,250,000 Trustee Claims Expenses Sublimit

$250,000 Voluntary Compliance Program $250,000 Voluntary Compliance Program

$1,500,000 HIPPA & HITECH Fines & Penalties Sub limit $1,500,000 HIPPA & HITECH Fines & Penalties Sublimit

$250,000 Section 4975 Penalties Sublimit $250,000 Section 4975 Penalties Sublimit

1. Any breach of the responsibilities, obligations or duties imposed upon fiduciaries of a Plan by an Employee Benefit Law;

2. Any negligent act, error or omission by any Insured in the Administration of any Plan; and

3. With respect to Claims Expenses only, any negligent act, error or omission, other than a wrongful employment practice, by an Insured solely in such Insured's capacity as a trustee of a Plan that is not otherwise covered in subparagraphs (1) and (2) above.

$100,000 Essentials

$5o,ooo

1. Any breach of the responsibilities, obligations or duties imposed upon fiduciaries of a Plan by an Employee Benefit Law;

2. Any negligent act, error or omission by any Insured in the Administration of any Plan; and

3. With respect to Claims Expenses only, any negligent act, error or omission, other than a wrongful employment practice, by an Insured solely in such Insured's capacity as a trustee of a Plan that is not otherwise covered in subparagraphs (1) and (2) above.



Page 8

87

Insurance

Plan coverage included

coverage grants

Yes

Voluntary compliance program expenditures [I.B] $250,000

Privacy Breach coverage [I.C] -needs amendment to properly refer to Crisis Notification Expenditures. Will include forensics, credit monitoring, notification, public relations. $250,000

Covered penalties: Section 502@ of ERISA, or PPA 2006, 5% Section 502(i) of ERISA, 20% Section 5020) of ERISA, HIP AA/HITECH fines, PPACA, 15% excise tax Section 4975 IRC, Section 502(a)(3) of ERISA.

$1,500,000 HIPPA & HITECH Fines & Penalties Sublimit

$250,000 Section 4975 Penalties Sub limit

$1,250,000 Trustee Claims Expenses Sublimit

Yes

Voluntary compliance program expenditures [I.B] $250,000

Privacy Breach coverage [I.C] - needs amendment to properly refer to Crisis Notification Expenditures. Will include forensics, credit monitoring, notification, public relations. $250,000

Covered penalties: Section 502© of ERISA, or PPA 2006, 5% Section 502(i) of ERISA, 20% Section 5020) of ERISA, HIP AA/HITECH fines, PP ACA, 15% excise tax Section 4975 IRC, Section 502(a)(3) of ERISA.

$1,500,000 HIPPA & HITECH Fines & Penalties Sub limit

$250,000 Section 4975 Penalties Sublimit

$1,250,000 Trustee Claims Expenses Sublimit



Page 9

88

r- • ·• ·-·-···· ·.-.-

.•.... · - ., :>:-·-·· .···••· ; .- ... ; ...... · ;;- ; ! l·')>',t' ; ; . : .• ,~~.-;:· ·. . -.. •.; ·; ... ; ; ; 1-·····:·r·•·.··"i••····• r:·T···· : ··•········· .. ·-·:.··• - .. ; ...

Carrier selects Has final approval of insured's recommendation. Has final approval of insured's recommendation.

Insured selects Yes, with the insurer's final approval must notify insurer Yes, with the insurer's final approval must notify insurer with 20 days of claim. with 20 days of claim .

. ·.·· ~l~~ ) i&~ '"'':;Rt;·!:~~~\fWt'iS.' T~ :··············.·.· · · · .. :· .... .:. •··~··· ., •...... ... . •. ,,. . . • , · · '" .c:n·;:qr ~ ~$r.i;)X:··-•.•·•• J.C'; ''l''"' '• ': 'i'ij'''''t?'i ·. ;:_(·' .,, •• ; ; ;. . . .. .. ·.;·; /.···· ,;)!:i'+ :

Employees Yes, in his or her administration of a plan or in his or her Yes, in his or her administration of a plan or in his or her capacity as a fiduciary or trustee of a Plan capacity as a fiduciary or trustee of a Plan

_, or temporary No No

Directors and officers No, unless a committee member or employee of a plan, or No, unless a committee member or employee of a plan, or trustee. trustee.

No jNo

No No

I Le•secl No No

Independent~v••••u~·v~ No No

Spousal extension Yes, including domestic partners Yes, including domestic partners

Trustees or committee members of a plan in the capacity

Trustees or committee members of a plan in the capacity as a fiduciary or trustee Other individuals as a fiduciary or trustee



Page 10

89

Insurance Company

Most favored jurisdiction wording

under

Insurance Company

Yes: Enforceability of this paragraph shall be governed by the applicable law that most favors coverage for such penalties and punitive, exemplary and multiplied damages.

No

Yes

Yes

Yes, where permitted by law

Yes: Enforceability of this paragraph shall be governed by the applicable law that most favors coverage for such penalties and punitive, exemplary and multiplied damages.

No

Yes

Yes



Page 11


90

91


Peer Agencies Insurance Coverages TRANSPORTATION EXCESS WORKERS PROPERTY, B&M, TRAVEL FIDUCIARY CRIME/ AGENCY NAME EXCESS UABIUTV COMPENSATION AND AUTO ACODENT LIABILTV FPB

Golden Gate Transit Yes Yes Yes n/a Yes Yes

Los Angeles County No- (Self Insured: Dedicated

Metro Transit Yes Reserve Fund) Yes No No No

Sacramento Regional

Transit District Yes Yes Yes n/a No Yes

No- (Self Insured: Dedicated

SAMTRANS Yes Reserve Fund) Yes n/a Yes Yes

San Diego Metro

Transit Yes Yes Yes n/a n/a n/a

No- (Self Insures: Excess Property and Yes

Dedicated Reserve No- (Self Insured: Dedicated Auto PO as required BOD/Pension

SFMTA-MUNI Fund) Reserve Fund) by contract n/a Board No

Valley Transportation No- (Self Insured: Dedicated Yes- VTA/ATU

Authority Yes Reserve Fund) Yes No Pension Plan Yes


92

action item - ac transit...damage insurance as well as excess liability insurance. fiduciary...

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