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KCAMP SELF-INSURED POOL

The Kansas Counties Association Multi-Line Pool is a member owned and funded property-liability self-insurance pool. KCAMP was originally formed under the laws of Kansas by the Kansas Association of Counties, for the benefit of Kansas counties. Today, KCAMP is not associated with KAC and operates as a stand alone organization. KCAMP is managed and operated by its members through a Board of Trustees, which is made up of elected officials from member counties.

 

KCAMP employs the necessary staff in Topeka, Kansas to provide various services including claims adjusting, loss control and daily insurance needs. The Board of Trustees contracts with various vendors for other services necessary for operation of the Pool.

The features of pools are numerous, but a concise list would include:

1. Structure

KCAMP is structured as a self-insured pool and formed under Kansas law; K.S.A. 12-2616 et seq.; and regulated by the Kansas Insurance Department.

KCAMP is not an insurance company

All participants are members of the pool and are represented by a Board of Trustees responsible for pool oversight.

 

2. Funding

KCAMP is structured with the intent that contributions (premiums) of the member counties will fund operations and expected losses of the pool and produce equity.

KCAMP is required by law to have an assessment feature which helps guarantee the financial condition of the Pool. To date KCAMP has never had an assessment.

 

 3. Cost Savings

In most instances, pools realize a 10-20% long-term cost savings for members. This is because the member-owned pool retains all profits, which are generated by lower expense ratios, investment income and improved claim handling.

 

4. Improved Coverages

KCAMP issues policies written on a manuscript basis approved for use by the Kansas Insurance Department. The policies contain standard industry exclusions common to all industry policies, but eliminate many of the limiting exclusions and conditions existing on current forms.

 

5. Stability of the Program

In addition to our in-house claims and loss control specialists, the services provided by various consultants is extremely beneficial to the Pool.

The insurance industry has consistently experienced wide cycles. In conservative periods, counties experience price increases, reductions in coverage or cancellations. Since KCAMP's expense related to the standard insurance marketplace is limited to reinsurance cost (about 20% of contributions), the impact of these cycles is substantially reduced and the ultimate long term cost is more a function of our own members' claim experience.

 

6. Claim Control

Other insurance companies which offer insurance to Kansas counties employ many adjusters who handle a wide variety of losses. It would be extremely unusual to find an adjuster whose monthly caseload consisted solely of county business.

KCAMP has hired dedicated and seasoned claims professionals from the industry who adjust county losses exclusively. These adjusters will integrate with all of your departments and develop strong working relationships with all county personnel.

 

7. Safety and Loss Control

The commercial insurance sector offers safety/loss control services on a very limited basis to counties. Since these loss control individuals answer to a number of different clients, their knowledge of county risks is extremely limited.

KCAMP strives to offer loss control services, which are beneficial and unique to your needs. These specialists dialogue with the claims staff and member personnel who already have a strong working knowledge of property and liability issues and risks.

 

8. Loss Sharing

Each member of the KCAMP is loss sharing only with other members of the pool. In the commercial insurance system, counties are combined with chemical companies, contractors and other ventures over which they have no commonality or control. KCAMP is structured with monthly financial reviews by contracted financial experts and the pool's own governing Board.

 

9. Investment Income

In the commercial system, the insurance company earns the investment income on your premiums.

With KCAMP, approximately 70% of the funds remain with the Fund waiting to pay claims. That money is deposited and remains in Kansas banks at the direction of the pool's investment committee until it is needed for expense or claim payments. The investment income from the KCAMP is substantial and goes right to our bottom line.

 

10. Information

KCAMP has developed a very sophisticated database of claim information, which is reviewed monthly by your governing Board. This is a critical first step in controlling your costs.

Attempting to get any meaningful information from the several commercial carriers who currently underwrite the risk has been a futile task. This lack of good management information puts you at the mercy of the commercial insurance marketplace, as you have no control of or knowledge of how your costs are determined.

With the claim reports supplied by KCAMP, you will be able to monitor your claim activity and implement meaningful risk control programs.

A monthly newsletter provides information on issues important to our members.

 

11. Attorney Assist

Member counties have unlimited access to our Attorney Assist program to ask questions and obtain advise on matters that could give rise to claims against the county.

 

12. Risk Management Function

The standard method of purchasing insurance leaves you out of the true risk management functions designed to lower costs. These are:

Exposure analysis

Loss control

Claim administration

Claim information reports

 

  In contrast, KCAMP has developed a team of professionals who administer the program for the member counties. The members share risk management information with each other, which does not happen with the commercial insurance sector. Our proactive involvement with all risk management functions results in a cost effective program for member counties.

 

QUESTIONS AND ANSWERS

1. What is KCAMP?

KCAMP is a group self-insured property/casualty plan formed under Kansas law, K.S.A. 12-2616 et seq., the Kansas Municipal Group-Funded Pool Act and subject to regulation under that act by the Kansas Insurance Department.

 

2. What is a group self-insured property/casualty plan?

This is a plan in which similar entities, in our case - counties, band together to self-insure their property/casualty exposures. Instead of paying premiums to an insurance company, contributions are made to KCAMP. KCAMP provides managed claims service and dedicated loss prevention services for its members.

 

3. Do insurance companies provide claims and loss prevention services?

Yes, but not county-dedicated claims and loss prevention specialists. Insurance companies operate within their own profit goals. The claims adjusters and loss prevention personnel are employees of the insurance company and not of the insured. They work at the direction and under the restraints of the insurance company's expense constraints.

 

4. Will KCAMP show a profit?

KCAMP's goal is to show a profit in the form of member-owned equity. This equity will be created by reducing loss through a dedicated, managed claims operation and through effective use of loss prevention programs established by a dedicated loss prevention specialist.

 

5. How can KCAMP provide an increased level of service?

In addition to our in-house claims and loss prevention specialists, the services provided by our consultants gives KCAMP members the benefit of having individuals with high levels of expertise working for them.

 

 6. Who pays for this service?

A portion of each member county's contribution (premium) will be used to pay for the services provided by KCAMP and its service providers, with the remainder going to pay losses. The combined administrative expense and loss expense (reduced by investment income) will determine the ultimate cost to members.

 

7. Who pays for the loss?

At current rate levels, KCAMP should operate at a level where equity of 10-15% of contributions will develop over the long term. In the unlikely event losses greatly exceed our projections, the members of KCAMP will be assessed an additional charge to pay the operating loss. This would be done on a basis determined by the Board of Trustees.

KCAMP has never assessed it's members.

 

8. Have other pools been assessed?

There are currently over 200 public entity pools operating in the United States. Some of these pools have assessed their members. In all cases with which we are familiar, the assessment was caused by providing coverage at prices far lower than anticipated claim experience could justify. This resulted in under funded programs. These pools used low pricing as a method to attract members.

 

9. Why is an assessment of members unlikely?

KCAMP will use the property/casualty rates and rules approved by the Kansas Insurance Department as is required by the Municipal Group-Funded Pool Act. These are calculated similar to the rates and rules used by the insurance industry.

 

KCAMP's decision to take a prudent approach to pricing coupled with rates approved by the Kansas Insurance Department as adequate should allow KCAMP members to enjoy equity savings.

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