2015 STATE OF THE FUND

(1)

www.acmjif.org

Prepared by your JIF Administrators: Paul J. Miola, CPCU, ARM & Paul Forlenza of Arthur J. Gallagher & Co.

December 2015

Atlantic County Municipal Joint Insurance Fund

P.O. Box 488, Marlton, New Jersey 08053 · P: 856-446-9100 · F: 856-446-9149 · www.acmjif.org

www.acmjif.org

2015

STATE

OF

THE

FUND

Atlan c

County

Municipal

Joint

Insurance

Fund

P.O.

Box

488,

Marlton,

New

Jersey

08053

· P:

856 ‐

446 ‐

9100

· F:

856 ‐

446 ‐

9149

· www.acmjif.org

(2)

(3)

www.acmjif.org

Mission Statement

We are an organization of municipalities united to achieve

savings and stability through comprehensive insurance, safety,

and claims management programs dedicated to reducing

public sector risk.

www.acmjif.org

Absecon City Middle Township

Avalon Borough Millville City Brigan ne City Mullica Township Buena Borough Newfield Borough Cape May City North Wildwood City Cape May Point Borough Northfield City

Commercial Township Ocean City

Corbin City Pleasantville City Deerfield Township Sea Isle City

Dennis Township Somers Point City Downe Township Stone Harbor Borough Egg Harbor Township Upper Deerfield Township

Estell Manor City Upper Township

Folsom Borough Ventnor City

Galloway Township Waterford Township Hamilton Township West Cape May Borough

Linwood City West Wildwood Borough Longport Borough Weymouth Township

Lower Township Wildwood City

Margate City Wildwood Crest Borough

Woodbine Borough

M

EMBER

M

UNICIPALITIES

(4)

M

ESSAGE

FROM

THE

JIF C

HAIRPERSON

It is my pleasure to address you, the members. The Atlan c County Municipal Joint Insurance Fund

(ACM JIF) is now in its 28th year of existence, and we con nue to be a leader, and the best example of how

shared services among public en es in the State of New Jersey are supposed to work. The ACM JIF

started in 1987, and has grown from 7 charter members to 41 ac ve member municipali es.

Times change, but the ACM JIF defies the odds, and con nues to provide financial stability and coverage to

the members. Addi onally, the ACM JIF con nues to be a leader by establishing and enhancing programs

that allow the members to be the best stewards of public funds.

Safety is a primary concern to the ACM JIF, and the professionals that are employed to direct and support

the culture of safety are second to none. We rely on the members and professionals to cul vate an

a tude of safety, and to that end, risk is reduced and members are able to come to work in a safe and

secure environment. But, when there are claims that arise, the JIF claims professionals make the process

as quick and eﬃcient as possible. And it is through their eﬀorts, that costs of claims have been reduced

resul ng in increased dividends to the members, as well as strengthening the overall JIF surplus.

But none of these programs would work if there was no involvement from the membership. The keys to

the JIF’s success is par cipa on and understanding of how the JIF func ons. Con nued par cipa on by

Fund Commissioners is an important part of why we are so good at what we do.

Commi ees of the ACM JIF provide strong leadership in how the JIF performs. Without the guidance and

dedica on of commi ee chairs and members, the JIF would struggle to maintain the level of

professionalism that we have enjoyed for the last 28 years.

I want to conclude this message by saying that it is my privilege to be not only a Fund Commissioner, but

the Fund Chairman for this wonderful organiza on. I want to assure each and every member that the JIF

will con nue to provide superior service in the upcoming years so long as each and every member

con nues to par cipate. Thank you for the opportunity to serve as your Chairman for 2015. I appreciate

all that you have done to make the ACM JIF the superior organiza on that it is.

Edward F. Beck

2015 ACM JIF Chairperson

Code Enforcement Oﬃcer

City of Linwood

CYBER LIABILITY

Data breaches seem to be on the rise and some could say a daily occurrence. As these events take place, it

makes us examine in depth the coverage and protec on oﬀered to the fund’s members. As the threats,

number of risk and types of risks have increased, so has the JIF’s liability protec on. Some of the enhanced

measures that the ACM JIF has implemented are:

 Increased Limits

 Request for Proposals for Technology Risk Management Exposure Audit services

This audit would provide complete risk assessment of each JIF member in determining their current

level cyber security, and iden fy any weaknesses.

 MEL JIF is preparing model policy and procedures guidelines to protect municipali es against

technological liabili es.  Cyber Awareness Training

TULIP: TENANT AND USER LIABILITY INSURANCE PROGRAM

TULIP provides special event insurance for use of member en ty facili es by guests, groups, organiza ons and

community members. TULIP allows for a general liability policy to be wri en in the name of the “tenants” and

“users” naming the member en ty as addi onal insured.

EXIGIS

Exigis is a private, customized exposure database management system for the ACM JIF members to manage

their exposure data to be er control risks.

WEBSITE www.acmjif.org

Members can download monthly agenda packets and mee ng minutes, access contact informa on, JIF policies

and procedures for various programs, request cer ficates of insurance, and obtain vouchers or other important

documenta on. Announcements and upcoming events are directly on the homepage for quick access.

JIF MEMBER FORUM

The JIF Member Forum is a private, secured message board for the JIF

Members to come together to share common concerns, ask ques ons

and to connect with other member municipali es.

www.jifmemberforum.org

OTHER RISK MANAGEMENT TOOLS

 Model Indemnifica on & Hold Harmless Language Agreement

 Cer ficate of Insurance Guidelines

 EPL Helpline

 Model EPL/POL Policies & Procedures

 Model Municipal Facility Use Agreement

 Police Accredita on Credit

(5)

www.acmjif.org

MEL SAFETY INSTITUTE

The MEL Safety Ins tute (MSI) was established in 1999 as a way to coordinate the training eﬀorts of 19 local

Joint Insurance Funds. The MSI has allowed the JIF to provide significantly more training opportuni es to its

members at a much lower cost per employee. For approximately $26 per employee per year, your staﬀ has

unlimited access to over 1,200 classes held each year at convenient loca ons, even your own municipal

complex. A total of 1,810 ACM JIF employees have been trained through 9/30/2015. MSI ONLINE TRAINING

The MEL MSI has started to develop online training program library of courses. There are 19 online training

courses now available for the members to access. Below are some of the training topics available. For a full

lis ng, please visit the MSI website.

POLICE COMMAND STAFF TRAINING

As part of the con nuing commitment to Police Command Staﬀ Training, the ACM, BURLCO and TRICO JIFs

sponsored the bi‐annual Police Risk Management Training Seminar for all Chiefs, Deputy Chiefs, Lieutenants,

Captains, Sergeants and Corporals. This training opportunity focused on common employee/employer issues

including discipline and discharge, promo on procedures, and discrimina on and harassment including the

Conscien ous Employee Protec on Act (CEPA) as well as Post Trauma c Stress Syndrome (PTSD).

CYBER AWARENESS TRAINING

In early 2016, the MEL will make Cyber Awareness Training available to all member employees via the New

Jersey MEL website (www.njmel.org). This short online training course will provide par cipants with a basic

understanding of the risks associated with the use of email, the internet, websites, and social media. All

employees are encourage to par cipate in this important training. An announcement will be sent to all

members once the training is available.

SPECIAL OFFICER PATROL PRACTICES SEMINAR

This annual training is intended for any addi onal police oﬃcers that may be hired by a municipality to assist

with the seasonal influx of residents and visitors. These Special Oﬃcers are trained on sources of legal

authority, municipal ordinance enforcement, first amendment issues, risk management and civil liability as well

as other related topics.

MANAGERIAL & SUPERVISORY TRAINING SEMINAR

This bi‐annual seminar is intended for all employees who manage or supervise others within a municipality. This

training will include informa on on how managers and supervisors can help reduce accidents in the workplace

over me and the importance of safety. It addresses common employee/employer issues including discipline

and discharge, and discrimina on and harassment.

ELECTED OFFICIALS SEMINAR

Annual seminar extended to the JIF Elected Oﬃcials focusing on per nent issues that challenge municipali es.

This year the program will focus on controlling the cost of Public Oﬃcials and Employment Prac ces Liability

Claims. Upcoming seminars are listed on the JIF’s website.

S

EMINARS

, W

ORKSHOPS

& T

RAININGS

 New Employee Orienta on  Li ing Safety  Department of Public Works  Oﬃce Safety  Fire Safety  Crossing Guards

 Defensive Driving  Bloodborne Pathogen Refresher  Right to Know Refresher  Leaf Collec on Safety

14 _{www.acmjif.org}

JIF O

RGANIZATIONAL

S

TRUCTURE

JIF members are represented on an Execu ve Commi ee that manages the Fund, paying claims and inves ng its

assets. The fund hires professionals such as an administrator, safety director and specially qualified claims a or‐

neys to assist members in the daily opera ons of the JIF.

(6)

JIF LEADERSHIP

E

XECUTIVE

C

OMMITTEE

The Execu ve Commi ee serves as the Governing Body of the Fund with five elected Fund Commissioners

serving along with the Chairperson and the Secretary of the Fund. During their terms of oﬃce, members of

the Execu ve Commi ee shall exercise the full power and authority of the Fund Commissioners as expressly

provided by these Bylaws.

Member

Execu ve

Commi ee Role Member

Execu ve

Commi ee Role

Linwood City Edward Beck Fund Chair Buena Borough Joe Santagata Alt. 1 Upper Township Teri Smuz Fund Secretary Longport Borough Richard B. Hirsch, Jr. Alt. 2 Sea Isle City George Savastano Execu ve Commi ee Estell Manor City Linda Kent Alt. 3 Millville City Susan Robostello Execu ve Commi ee Ventnor City James Goos Alt. 4 Somers Point City Lucy Samuelsen Execu ve Commi ee West Cape May Borough Lauren Vitelli Alt.5 Cape May Point

Borough Kimberly S. Hodsdon Execu ve Commi ee

Middle Township Connie Mahon Execu ve Commi ee

F

UND

C

OMMISSIONERS

This is an appointed posi on and candidates may be either a member of the governing body or a municipal

employee. Fund Commissioners are generally responsible for the opera on of the Fund in accordance with the

Fund Bylaws and all applicable statutes and regula ons. The Fund Commissioner is responsible for ac ng as a

liaison between the member municipality and the Fund. Each member municipality may also appoint an

Alternate Fund Commissioner to a end mee ngs in the absence of the member’s regular Fund Commissioner.

C

LAIMS

C

OORDINATORS

Each member municipality in the Fund appoints a Claims Coordinator. It is the responsibility of the Claims

Coordinator to oversee the repor ng of claims within the municipality and serve as a liaison between the

municipality, the Claims Administrator (TPA), and the Managed Care Organiza on (MCO). The Claims

Coordinator can be very eﬀec ve in controlling the ul mate cost and outcome of claims.

S

AFETY

C

OORDINATORS

The Safety Coordinator is appointed by the municipality to oversee the member’s safety eﬀorts and act as a

liaison between the municipality, the JIF Safety Director and other outside agencies.

As Wellness Director, I have the opportunity to share my excitement for good health and wellness with the members of the ACM JIF. My professional career and personal life has been centered on health and wellness, whether it has been the workplace, classroom, fitness center, or playground.

What is Wellness and why the workplace? Being healthy in body and mind especially as the result of deliberate

eﬀort. Also an approach to healthcare that emphasizes preven ng illness and prolonging life. The workplace is the perfect loca on for promo ng wellness because the majority of the employee’s day is spent at the workplace. Health promo on programs in the workplace may include companywide policies designed to support healthy behaviors, such as healthy selec ons in the vending machines, employee walking groups, or on site medical screenings. Par cipa on in any company sponsored health program is always on a volunteer basis. I have spent much of my me assis ng those municipali es that have requested my assistance.

2015

Wellness

Accomplishments

• In Good Health ‐ monthly newsle er on JIF website that contains monthly updates including:  2‐3 na onally observed health topics

 Exercise for each month, including pictures and descrip ons  Healthy recipe for each month

• Have visited 40 of the 42 municipali es

• Have assisted with or been present for the following wellness ac vi es:

 Health Fairs :

 Several member municipali es held health fairs throughout the year with great success.

 The goal is to increase par cipa on at these fairs and strive to have addi onal municipali es host them in the future

 Other Wellness Events & Ac vi es:

This is a short lis ng of just some of the wellness events and ac vi es that took place during 2015  Women’s Health Day— Invited die cian to speak, made smoothies, led par cipants in

weight training and body composi on analysis

 Screenings for Employees— Had representa ves from Atlan care come to the municipality to perform for blood pressure and cholesterol screenings. This event also had a lunch and learn.

 Encouragement to Walk: One member distributed pedometers and encouraged a “walk at lunch day”, employees walked a 1 mile course together

 Wellness Wednesdays ‐ This consists of wellness events that focus on diﬀerent aspects of wellness. Includes health challenges, biometrics, and lunch & learns

 Municipali es have used their own cer fied staﬀ to check employee blood pressures

 Designated certain days of the month as employee health days and on these days oﬀer events such as: healthy smoothies, or employee massages

2016

Wellness

Goals

• Assist each municipality to have at least one wellness event.

• “Move It Mondays” ‐ 1st Monday of each month will email a movement p to Fund and Safety Commissioners to share with employees

• Distribute exercise and stretching posters to each municipality to display for oﬃce staﬀ, public works, police and fire

• Provide the necessary support and steps for pu ng together a wellness program

Thank you for a great year and for your par cipa on! Valerie Smith

ACM JIF Wellness Director

(7)

www.acmjif.org

Workers’ compensa on claims account for 71% of claims dollars expended over the past six years. Medical and

wage infla on have had a significant impact on the JIF’s workers’ compensa on costs and the JIF must seek every

possible way to control costs in this area. The JIF contracts with a managed care provider to assist in this

endeavor. Every workers’ compensa on case reported within 3 days allows the JIF to control the course of the

claim from the very start. The average days to report a workers’ compensa on claim for the ACM JIF from

January to October of 2015 is 2.0 days. A nurse case manager is assigned to every case and constantly monitors

the course of medical treatment to make sure that essen al services are delivered on a mely and cost eﬃcient

basis. All medical care is delivered through a PPO network of doctors who specialize in occupa onal injuries and

agree to the JIF’s rate schedule. Over 94% of the fund’s medical services are delivered through network facili es

resul ng in significant savings as illustrated below. On a final note, JIF members have wholeheartedly embraced

transi onal duty thus allowing injured employees to return to work in a produc ve role while comple ng their

final course of treatment. Dollars saved in disability payments, indemnity costs, and over me costs can be

measured in the hundreds of thousands of dollars.

M

C

R

(January

‐

October)

CLAIMS: M

ANAGED

C

ARE

2015 2014

# Transi onal Duty Days: 9,377 (available) 9,650 (available)

6,834 (worked), 72.9% _6,746_(worked),_69.9%

PPO Provider Charges Penetra on Rate: 96.2% _97.2%

PPO Provider Billing Penetra on Rate: 94.40% _92.9%

PPO Provider Savings: 64.7% _65.6%

EPO Provider Charges Penetra on Rate: 86.4% _88.7%

EPO Provider Billing Penetra on Rate: 84% _86.8%

Total Provider Charges: $6,673,433 _$7,899,304

Total Repriced (Allowance): $2,328,566 _$2,706,395

Total Savings: $4,314,689 or 64.7% _{$5,182,198 or 65.6%}

64 Lost Time 61 Lost Time

497 Medical Only 509 Medical Only

89:11 Medical Only/Lost Time Ra o 89:11 Medical Only/Lost Time Ra o

Lost Time/ Medical Only:

12 _{www.acmjif.org}

FUND COMMITTEES

All individuals who serve on Fund Commi ees are from the Member Municipali es to ensure that decisions

and policies of the ACM JIF are member driven.

FINANCE COMMITTEE

The Finance Commi ee serves as the focal point for communica on between the Fund’s Commissioners and the Fund’s Professionals for the development of an annual budget. The Finance Commi ee works with the Fund’s Actuary, the Professionals and commi ees to develop claims funding, expense funding and funding for special programs. The Finance Commi ee recommend budget, dividend, and assessment strategies that make sense in the world of municipal finance. The Commi ee with the Fund Auditor review the financial posi on and recommend the return of surplus.

STRATEGIC PLANNING COMMITTEE

The Strategic Planning serves as the focal point for communica on between the Administrator, the Fund Commissioners, and any other professionals regarding long range strategies which should be pursued in order to ensure the integrity, growth, and viability of the JIF. The Strategic Planning Commi ee advises the Execu ve Commi ee regarding long term strategies and planning considera ons. The Strategic Planning Commi ee recommends programs designed to keep the JIF membership informed and up to date on current issues.

NOMINATING COMMITTEE

The Nomina ng Commi ee is made up of the Chairs of all standing Commi ee’s of the Fund, the two most recent past Fund Chairs s ll serving as a Fund Commissioner, and two members at large chosen by the si ng Fund Chair. The Nomina ng Commi ee shall be charged with reviewing and nomina ng candidates for presenta on in the event of a need to elect oﬃcers to the Execu ve Commi ee.

SAFETY COMMITTEE

The Safety Commi ee serves as a focal point for communica on between the JIF, the Execu ve Director, the Safety Director and the member municipali es. The func on of the Commi ee is advisory in nature and is not intended to infringe upon the responsibility of the Safety Director or employees of member towns. The Safety Commi ee advises the Execu ve Commi ee on safety policies, performance of municipali es in terms of safety, and of the individual firms responsible for repor ng on same. The Safety Commi ee works with the Execu ve Director and the Safety Director in a emp ng to iden fy services which may be provided by the JIF to member municipali es in order to reduce the risks of accidents. Safety Commi ee members review professional reports that iden fy claims trends and recommend loss preven on programs that work in a municipal environment to prevent future claims.

COVERAGE COMMITTEE

The Coverage Commi ee serves as a focal point for discussion on issues pertaining to coverage, underwri ng, and reinsurance. The Coverage Commi ee advises the Execu ve Commi ee on issues pertaining to coverage requirements of members of the JIF, coverage issues in the insurance industry which should be addressed by the JIF, the eﬃciency and clarity of the JIF in addressing areas of insurance outside of its normal purview, reten on and reinsurance issues, and underwri ng guidelines.

EMPLOYMENT PRACTICES LIABILITY/CYBER COMMITTEE

The Employment Prac ces Liability/ Cyber Commi ee serves as a focal point for discussion on issues pertaining to employment prac ces liability and public oﬃcial’s liability claims. The Commi ee advises the Execu ve Commi ee on issues pertaining to the source, amount, and types of these claims and their financial impact on members and on the ACM JIF. The Commi ee reviews observa onal, sta s cal, and historical informa on presented by the Fund Professionals and recommends policies to be adopted and ac ons to be taken to eliminate, reduce, or mi gate the financial impact of these claims on the membership. The Employment Prac ces Liability Commi ee shall also serve as the focal point for discussions on issues pertaining to Technology Liability. The Commi ee shall advise the Execu ve Commi ee on issues pertaining to the source, number, and types of claims impac ng members. The Commi ee shall review observa onal, sta s cal, and historical informa on presented by the Fund Professionals and shall recommend policies to be adopted and ac ons to be taken to eliminate, reduce, or mi gate the financial impact of these claims on the membership.

CLAIMS REVIEW COMMITTEE

The Claims Review Commi ee serves as the focal point for communica on between the Claims Administrator and the Fund Commissioners. The Commi ee reviews all Payment Authoriza on Requests (PARs) and review li ga on strategies with the Fund’s A orney. The Claims Review Commi ee advises the Execu ve Commi ee regarding claims administra on and payments.

(8)

M

ESSAGE

FOR

THE

E

XECUTIVE

D

IRECTOR

January 1, 2016 marks the 29th year of existence of the Atlan c County Municipal Joint Insurance Fund (ACM

JIF). While several compe ng Joint Insurance Funds have sprung up none can compare with the success of the

ACM JIF. The pages that follow highlight many of the JIF’s accomplishments and provides evidence of this

extraordinary success. I can delineate the JIF’s success into three categories:

FINANCIAL

The ACM JIF has saved Atlan c County taxpayers millions of dollars in insurance premiums and has returned

$28, 297, 986* in dividends to member municipali es. Premium savings are made possible by keeping

overhead costs low and placing emphasis on loss control and claims management. Dollars not spent on claims

are returned to members as dividends. This is a stark contrast to compe ng JIF organiza ons that carry much

a higher overhead and bill members addi onal assessments due to poor management and rocky claims

experience. The JIF’s 2016 budget reflects a flat budget over 2015 and members will receive dividend checks

for the 21st year.

MEMBER INVOLVEMENT

The expenditure of taxpayer dollars requires a high degree of stewardship. With an annual budget

approaching $23,900,000, members need to know where every dollar is spent and this is accomplished

through monthly bill lists and reports that track every expenditure to the penny. Annual audits conducted by

RMAs confirm proper accoun ng. The ACM JIF was featured in a report from the New Jersey State Comptroller’s Oﬃce that analyzed the online transparency of the state’s local authori es and commissions for

its high level of transparency and accountability. A recent audit by the Department of Banking and Insurance found the JIF in full compliance with the statutes and administra ve code governing New Jersey Joint

Insurance Funds.

PROGRAMS AND SERVICES

The JIF is more than insurance coverage. It is an organiza on dedicated to helping municipali es control risk,

prevent workplace injuries, and defend lawsuits against its members. Training in safety and risk management

topics occur throughout the year with special seminars conducted for elected oﬃcials, managers and

supervisors, and police personnel. We were the first JIF in New Jersey to embrace wellness programs designed

to encourage healthy lifestyles among municipal employees. Studies have demonstrated that healthy

employees are less likely to be injured on the job and likely to recover more quickly following an injury.

All in all, the ACM JIF is dis nguished by the commitment of its members to each other and the principle of

cost control through safety and risk management. This is what truly diﬀeren ates us from other JIFs.

Paul J. Miola, CPCU, ARM

Arthur J. Gallagher & Co.

2015 Execu ve Director for the ACM JIF

*includes addi onal dividends issues directly to Members by the MEL.

As the charts below illustrate, 44% of claims are workers’ compensa on claims but they account for 71% of the

fund’s claims dollars. Upon joining the JIF, every member is required to appoint a Claims Coordinator who serves

as a point of contact between the member and the JIF Claims Administrator. Special training and a Claims

Coordinator Handbook is provided to your Claims Coordinator so that they are prepared to handle any claims

situa on that arises within your town.

The JIF Workers’ Compensa on Claims Adjusters are assigned a maximum of 150 files at any given me so that

they can focus on working their claims to achieve the best possible results.

The JIF also employ the services of the very best defense a orneys in South Jersey to defend the fund’s claims.

Their knowledge of workers’ compensa on and tort claims against public en es has resulted in excellent results

for the JIF and its members. Comprehensive Li ga on Management Guidelines assure the JIF members that their

claims are being defended in the most aggressive and cost‐eﬀec ve means possible.

CLAIMS: C

LAIMS

D

ATA

C

L

C

Fund Years 2009‐2014 (valued as of 9‐30‐15)

(9)

www.acmjif.org

FINANCIALS: D

IVIDENDS

& R

ECOVERIES

S

Subroga on refers to an insurance company seeking reimbursement from the person or en ty legally

responsible for a claim a er the insurer has paid out money on behalf of its insured. This could include any

money paid out for property damage, deduc ble amounts, diminished value, pain and suﬀering, loss of

consor um, etc. In an eﬀort to eﬀec vely pursue subroga on, it is important to properly iden fy possible

contractors, manufacturers, installers, suppliers, designers, subcontractors, etc. The JIF recommends that each

municipality retain purchasing records, invoices, manufacturer’s recommenda ons, specifica ons, instruc ons,

damaged equipment, change orders, etc. so that this iden fica on can be made promptly and responsible

par es placed on no ce. It is also very important to retain all contracts, Cer ficates of Insurance & Hold

Harmless Agreements, so that the insuring party can also be placed directly on no ce of lien rights. All

documents should have consistent language throughout any addi ons, dele ons or changes.

Recoveries:

For

the

Year

of

2015

(Valued as of 10/31/2015):

$

559,785

All

Years:

$

7,800,000+

D

Because the JIF is a public en ty owned and controlled by the member municipali es all premiums collected by

the JIF, not spent on losses and other program expenses are returned to the members with interest! In 2015,

$1,750,000 was returned and $28,297,986* has been returned to ACM JIF members since incep on. Listed

below is the historical dividend distribu on grand total by member.

Absecon City $22,710 Middle Township $937,384

Avalon Borough $849,493 Millville City $513,775

Brigan ne City $1,248,938 Mullica Township $144,482

Buena Borough $309,787 Newfield Borough $241,170

Cape May City $192,308 North Wildwood City $1,160,677

Cape May Point Borough $6,149 Northfield City $921,184

Commercial Township $71,578 Ocean City $4,002,679

Corbin City $2,302 Pleasantville City $2,027,606

Deerfield Township $113,653 Sea Isle City $1,021,342

Dennis Township $420,422 Somers Point City $947,705

Downe Township $378 Stone Harbor Borough $184,339

Egg Harbor Township $1,986,539 Upper Deerfield Township $399,877

Estell Manor City $62,966 Upper Township $41,166 Folsom Borough $168,963 Ventnor City $1,594,868 Galloway Township $303,230 Waterford Township $959,094 Hamilton Township $1,201,195 West Cape May Borough $38,056 Linwood City $38,899 West Wildwood Borough $49,715 Longport Borough $484,968 Weymouth Township $86,040 Lower Township $1,259,780 Wildwood City $139,591 Margate City $68,689 Wildwood Crest Borough $894,412 Woodbine Borough $109,564

Member Grand Totals All Years Member Grand Total All Years

10

*includes addi onal dividends issues directly to Members by the MEL.

www.acmjif.org

FINANCIALS: H

IGHLIGHTS

2015 Financial Highlights  Flat Budget

 Increasing Exis ng Member Programs

 Funding increased for Safety Incen ve Program (SIP), Police Defense & Training, AGRiP/ PRIMA Funding reinstated

 Funding for the addi on of a Wellness Program

 No Members qualified for the Retrospec ve Program

 Con nual use of Renewal Revalua on Program benefi ng 11 Members

 Con nuing with a $300,000 SIR for Workers’ Compensa on & Liability claims

2016 Financial Vision  Flat Budget

 All Member Programs remain intact

 Con nued use of the Renewal Revalua on Program benefi ng 10 Members

 No Members qualified for the Retrospec ve Program

 Con nuing with a $300,000 SIR for Workers’ Compensa on & Liability claims

 Increase Property SIR to $100,000

A

UDIT

A

NALYSIS

Historical Opera ng Results Summary All Fund Years (as of 9/30/15)

Total

Earned Contribu ons & MEL / RCF Dividends $359,983,819 Claims Paid (Net of Subroga on) (148,310,094)

Excess Recoveries 284,889

Excess Insurance Premiums Paid (72,151,725)

Residual Claims Fund Premiums Paid (23,061,710)

Opera ng Expenses Paid (60,844,671)

Total Payments (304,083,311)

Posi on A er Expenses 55,900,508

Investment Income (per Treasurer) 19,314,036

Transfers ‐

Return of Surplus (24,859,680)

CASH POSITION $50,354,864

Case Reserves (14,302,202)

Posi on A er Case Reserves 36,052,662

IBNR Reserves (8,915,388)

Net Current Surplus/(Deficit) $27,137,274

(10)

The pie chart displayed below demonstrates the eﬃciency of the JIF program. A percentage of the JIF’s

budget pays for member claims within the JIF Self Insured Reten on of $300,000 for workers’ compensa on

and liability and $50,000 for property. Once a claim exceeds the local JIF level, the financial responsibility

falls to the Municipal Excess Liability Joint Insurance Fund (MEL). The chart below illustrates the alloca on of

member dollars to JIF expenses. The JIF never relinquishes control over the claim; however, claims experts at

the MEL level monitor the more diﬃcult large claims that occur and provide guidance on their disposi on.

FINANCIALS: F

INANCIAL

A

UDIT

R

ESULTS

The ACM JIF increased total assets 7.66% and its net posi on by 31.25% in 2014. It was able to adopt a 2015

flat budget. The JIF outperforms compe ng JIFs in every category but especially where it counts ‐ FINANCIAL

STRENGTH! Because of the Members’ commitment to loss control and claims management, the ACM JIF has

the assets and surplus to pay Member claims both today, and in the years to come!

Remember: It doesn’t ma er who insures you un l it does!

Net Posi on Summary 12/31/2014 12/31/2013 Change Percentage

Assets

Cash & Cash Equivalents, Investments &

Accrued Interest Receivable $46,652,640 $43,198,411 8.0%

Other Assets 778,341 858,952 ‐9.38%

Total Assets 47,430,981 44,057,363 7.66%

Liabili es & Net Posi on

Liabili es

Loss Reserves 20,266,379 22,801,705 ‐11.12%

Other Liabili es & Reserves 875,874 1,226,734 ‐28.60%

Total Liabili es 21,142,253 24,028,439 ‐12.01%

Net Posi on ‐ Unrestricted $26,288,728 $20,028,924 31.25%

2016

B

H

The JIF budget is made up of five components:

 Loss Funds – The amount needed to pay claims

 Opera ons ‐ Expenses in which are related to the opera on of the JIF

 Member Programs – Consists of member program benefit costs

 Excess Insurance Costs – Premiums paid for reinsurance or direct insurance purchases

 RMC Fees ‐ Consists of risk management consultant fees

The Loss Funds are calculated by the Fund Actuary based upon historical claims and exposure trends and makes

up over one half (58.05%) of the JIF’s budget. Excess Insurance Costs (28.03%) provide coverage through the

membership of the Fund in the Municipal Excess Liability Joint Insurance Fund (MEL) which uses the joint

purchasing power of 19 NJ JIFs to nego ate the lowest responsible rates. Opera ng Expenses comprise 8.92%

of the budget and are kept at a reasonable level under the watchful eye of the Finance Commi ee. For 2016, the overall budget remained Flat!

Once the Finance Commi ee agrees to a dra budget the task of alloca ng member shares begins. Using the

previous year’s premium as a base, member alloca ons are adjusted based upon their claims history. Members

with fewer claims costs as compared to their premiums (loss ra o) over a six year period are rewarded with

lower premium modifica ons than members with higher loss ra os. In order to maintain rela vity among the

members, the Fund Actuary re‐prices each member once every three years, and if necessary, an addi onal

modifica on factor is applied to bring members’ premiums in line with their rela ve exposure and claims

experience.

Beginning in 2011, several members with unusually poor claims history were placed in a loss sensi ve program

in which they are charged a set premium and their final premium is determined by the claims they actually incur.

This has the eﬀect of maintaining a stable base premium for the member and only paying more if their claims

con nue to escalate. The resul ng benefit to the remaining members is lower premiums and member equity.