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Home My WebLink About7 Property Liability Insurance Agenda Item # 7 ty District Public Ut4h ACTION To: Board of Directors From: Mary Chapman Date: May 21, 2008 Subject: Award of Property and Liability Insurance 1. WHY THIS MATTER IS BEFORE THE BOARD The District's property and liability insurance covered 5/1/ 7 to renew the Onsuran through forlthe period thirty day extension to 6/1/08. It is now time beginning 6/1/08 through 6/1/09. 2. HISTORY For the last several years we have been us arrange for our insurance renewals. Keith G anda s the rsh l client executive that sk & Insurance love ces sees ograp this process for the District. Information about Marsh G and will be at themeet right are on the last pages of the proposal (Section ) make the renewal presentation. In the past, the insurance renewal period has been May ist of each year. compet five Recently, we asked for a 30 day extention to allow Marsh more time to receive quotes from insurers. We were also in favor of moving our renewal date to June 1st of each year. 3. NEW INFORMATION Attached is the Renewal Insurance Program proposed by Marsh. You will want to focus on the first three sections: Section 1 contains the Premium Summary. Section 2 is a comparison of all of the quotes that were received and a coverage diagram. Section 3 is the actual proposal showing the recommended renewal carriers. Sections 4 through 14 are copies of the quotes received from the various carriers. Section 15 contains required disclosure information. 4. FISCAL IMPACT The renewal premiums as presented total $ $ 701.97. This amount make. There is $371 167�nbc uded subject to any changes that the Board wishes in the 2008 budget to cover renewal expenses. 5. RECOMMENDATION ent on the insurance renewal package and For the Board to review and comm approve the renewal as discussed. Mary Ch ma , Administrative Services Michael D. Holley, General Manager Manager MARSH a i e '" ; C mK"E E D NEIR, s : i r z RENEWAL INSURANCE PROGRAM June 1, 2008 to June 1, 2009 Presented May 21, 2008 Marsh Home Office, 1166 Avenue of the Americas,New York, NY 10036 Marsh San Francisco,One California Street, San Francisco,CA 94111 a _ Section 1 Premium Summary r : Section 2 Quotation Spreadsheet/Coverage Diagram Section 3 Proposal Section 4 Travelers Package Quotation n=y Section 5 REA Package Quotation Section 6 Chubb Pollution Quotation Section 7 Zurich Pollution Quotation Section 8 AIG (AISLIC) Pollution Quotation Section S AIG Crime Quotation Section 10 Ace Property Quotation Section 11 Ch ubb Crime Quotation Section 12 Great American Excess Liability Quotation Section 13 Landmark Earthquake Quotation Section 14 Fidelity A Deposit Treasurer Bond Quotation Section 15 Transparency Documents s' a' 08-09 E EAPIRIN f2,,NFNv1, RE tCt �I PREMIUM ` 4 $89,620.00 $77,341.00 Property (including Flood) �rIncluded in Included in Boiler&Machinery 5perty Property General Liability including Employee6 $75,788.00 $62,893.00 Benefits Liability _ Automobile 7 $38,596.00 $34,585.00 Crime 8 $2,398.00 $5,500.00 Umbrella Liability 9 $35,353.00 $43,263.00 v Pollution (including taxes&fees)i 10 $10,312.50 $6,994.97 Difference In Conditions(DIC) -Earth- 11 J $41,559.38 $40,239.38 quake (including taxes and fees) Public Of Bond 12 $125.00. $125.00 z Public Entity Management(D&O/EPLI) 13- 1 S $11,053.00 $12,761.00 Marsh Brokerage Fee $40,000.00 $45,000.00 Program Premium $344,804.88 $328,701.97 4 1 This proposal is not intended to describe all coverages provided or available x < _- or all of their exclusions, conditions or limitations It is design to give you an outline of your insurance/risk management program, but it does not amend, alter, or extend the coverages afforded by the policies described herein. Ti Truckee Donner Public Utility District Insurance Program 07/08 08/09 'Yt 16 Millio _ Excess . 12 Million7Umbrelta 2 Millions 11 Million Excess 'TO 11 Million ` *� 11 Million _ a ' }a 1 Million 1 Million � �� 500,000 ' t 25k aryl �1l General Auto Auto D &O EBL EPLI Property/B&M Pollution EQ Crime Bond Liability Liability Physical 10k Ded 1 k Ded 10k Ded Ded Ded Ded 25k Ded 2% Ded 5k Ded Treasurer 1 k Ded Damage 25k Min 1 k Ded TRUCKEt DONNER PUBLIC UTILITY DISTRICT RENEWAL QUOTATIONS 2008-09 Policy/Feature Expiring 07-08 RENEWAL OPTIONS 200", , Property/Boiler&Machinery National UE3 nion/zurich B&M ACE American ACE American Travelers 'Insurer $44,788,894 Total insured Value $44,148,129 $47624087 $$5,000,000 $5,000,000 $10,000,000 $1Q004QW $5,000,000 Flood Sublimit $1,000 $25,000,exceot tools$50,000 Deductibles-All Other Perils $1,000 $4 000 2%,$25,000 min Flood 2%,$25,000 min 2% $26 0- min $25,000 $10,000 $10,000 $t0000 $10,000 Boiler&Machinery,except 0 Ot70 $10,000 Trans! ens$1 50/KVA,$10K min -transformers,generators $50,000 1 LEE Premium Pollution Legal Liability AIG A►SLIC Insurer Chubb Custom Chubb Custom Zurich Steadfas/ Limit $1,000,000/$1,000,000 $1,000,000/$1,000,000 $10 0001$1000,000 $1,000,000/$1,000,000 $25,000 $25 000 $25 000 $25.000 Deductible 05/01/2004 05/01/2004 05/01/2004 Retro Date 05101/2004 16f 11 1 Liability Package-Gen Liability Trayslsrs New Hampshire Insurer Travelers $1 000 000/$6 000 000 Limit $1 000,000/$6 000 000 000 00 000 rim $1,000 EBL only Deductible $1,000 11,000 A ^ Premium . Employes Benefit Admin Liability National Union Insurer Travelers T+avekrs $1,000,000!$6,000,000 Limit $1,000,00043,000,011 $1,000 Deductible $1,000 $1 000 Public Entity Mgt Liab(D&O) National Union Insurer Travelers Travelers $1,000,000/$1,000,000 Limit $5,000,000/$5,000,000 $5 000 54000, Ofl0 $25,000 Deductible $10,000 1 000 $ 4255 Preadum $2 i7't TRUCKEE DONNER PUBLIC UTILITY'DISTRICT RENEWAL QUOTATIONS 2008-09 Policy/Feature/Feature Expiring -- RENEWAL OPTIONS 200849 Employment Practices Liability National Iniongg Insurer Travelers Travelers $1,000,0 Limit $5,000,000/$5,000,000 ,000 0001$5 000,000$10,000 10,00(1 Deductible 05/01/2002 Retro Date 05I01I2002 Automobile Liability New Ham shire Insurer Travelers Travelers $1,000,000 Limit $1,000,000 1 000 $0 Deductible $0 0 R Automobile Physical Damage New Ham shire Insurer Travelers Travelers Actual Cash Value Limit Actual Cash Value Actual Cash Value Actual Com /$1,000 Coll Deductible $1,000 Com /$1,000 Coll $i 000 Com 1 000 Colk $Ierrrtt7rrl, ,rr Crime oW Hartford Hartford Insurer Travelers Travelers National Union 1 National Union 2 $500,000 $1,000 000 Limit $500 000 $500 000 $1 000 000 $2$10 0 $2,500 $10.000 Deductible $5,000 $5,000 $5,000 $10.0051 $.1,551 $5,518 Pre Came oW Travelers 1 Travelers 2 Travelers 3 Insurer Chubb 1 Chubb $1,000,000 $2,000,000 $3,000 000 Limit $1,000,000 $2 000 $25,000 $50,000 $75,000 Deductible $5,000 $5 000 19 5$14 Umbrella Travelers National Union Insurer Travelers Travelers 000000 $10,000 000 Limit $11.000,000 11 000 OfNf AdditwInd in umbnllla $10,000 Retention $10,000 10 000 incl 444.023 P E ExcessLiability e Auto) Great American Great American Insurer Limit Additional$8,000,000 Additional$13,000,000 in umbrella in umbrella Retention I Premium . .aE TRUCKEE DONNER PUBLIC UTILITY DISTRICT RENEWAL QUOTATIONS 2008-09 RENEWAL OPTIONS 2008-08 Polic /Feature Expiring 07-08 Excess Errors b omissions Tra"We Insurer Travelers $11.000.000 t1 000 Limit Excess of EBL and PE Mat Only , 4 a Landmark American LatldRt�rlt�At�e1�' Insurer $45,148,128 Total Insured Value $5,000,00045,000,000 5 000 .000 Limit 5%,$25,000 min 5% 25 000 min Deductible '' � rwnw R tax fee , r surer Bond Fideli 8 De it Suret $25,00 $ S. Limit Deductible Pre $40,000.00 $45,000 Marsh Fee $344 804.88 • Total {f i 1 Ila ACE 'MERIC\N INS CO (A XV) POLICY LIMIT (TOTAL, INSURED VALUE): S50,124,087 t:ovElzl:r� PROPEWFY- VALUES Real&Personal Property including Substations Included Included Tanks, Wells, Water Equipment Contractors Equipment Owned Included Included Mobile Equipment—Owned Completer Equipment—Hardware and Re-creation of Media Included #" SUBLl3l1TS $25,000 Motor Cargo Sub-limit Flood Sub-limit(Except Zones A and V—no coverage) $10,000,000 Extra Expense Sub-limit $1,500,000 $1,000,000 Business Interruption Sub-limit Perils ln- All Risk of Direct Physical Loss or Damage, Business Interruption and Extra Expense sured: t Coverage Excludes:Earthquake, Time Element Coverages(except Business Interruption and ExtraEx- pense, which are included) Valuation: Replacement Cost except Contractors Equipment that is older than.five(5)years and substations older than 25 years, not rewound-actual cash value will apply. -_. Deduetble: Property Damage and Extra Expense: $1,000 Per Occurrence. Flood: 2%of Total Insurable Value at time of loss subject to $25,000 minimum A. ADDITIONAL POLICY BENEFITS t L,li.NtJ PROVIDED COV N,RAGE 100,000 Accounts Receivable Coverage............................................................................................ 7 g Contingent Power Line Movement Expense Reimbursement $50 per line, $500 maximum $ 50,ODO Contractors Equipment—Rented or Leased(short term/90 days or less)........................•• $ 50,000 Computer Equipment—Used in the field(owned, rented or[eased)................................... Debris Removal............................................. ...25%of Liability for Physical Damage Loss Demolition and Increased Cost of Construction................................................... ..$ 125,000 Service Charge...................................... . ............................... Fire&Police Department ..$ 25.000 $ 25,000 Hazardous Substances or Contaminants(to a covered loss at your location)..................... 250,000 Miscellaneous Unnamed Locations................................................................................... $ 1,000,000 ............................................................... Newly Acquired Buildings&PersonaProperty $ 500 0011 Builders Risk/Course of Construction (completed project not to exceed)................... ............................................. .... $ 250,000 Property In Transit.............................. .... •.......................... Tools owned by Employees (Any one tool$500;$5,000 any one loss)...............................$ 5,000 $ 100,000 Valuable Papers Coverage................................................................................................... 000 Water Damage Due To Back—Up, Sewers And Drains........................................................$ 25,000 Fine Arts Coverage..................................................................................................................$ Included TerrorismCoverage......................................................................................................... , F s ACE AN1ER1C_N INS CO (A+ XV) Ct)�'i RFD PROPI;R`TY t,cm T ACE ANIFIRICAN INS CO (A+ ?ACV) 'Blanket Property Damage Limit Included Generation Facilities Excluded a 'Perils Insured: Provides sudden and accidental breakdown coverage to scheduled properties. Comprehensive Coverage: Including transformers, switchgear and electrical distribution equip- ment, as well as emergency generators,pumps, motors, boilers and air conditioning equipment `Sublimits: $125,000 Expediting Expenses: $125,000 Extra Expense �e Q-. ,;eduucti e: t Combined, All Coverages $10,000 Except Transformers $2.50 per KVA, $50,000 Minimum ` Except ICE/Generator Units $30.00 per horsepower, $50,000 minimum Losses are calculated on Repair or Replacement Cost except Actual Cash Valuation will apply on equipment 5 years of age or .older and on transformers over 25 years of age which have not been rewound. r f 4 3 k ; , TY 'OM1VJERC1AL GENERAL. Ll"kBILITY $ 1,000,000 per occurrence Bodily Injury, Property Damage $ 6,000,000 annual aggregate. $ 1,000,000 per occurrence Personal Injury $ 1,000,000 per occurrence Advertising Injury $ 1,000,000 peroeeurrence Products and Completed Work $ 6,000,000 annual aggregate Fire Legal Liability $ 500,000 per occurrence Pollution Coverage for Pesticide, Herbicide Application $1,000,000 each Wrongful Act Employee Benefit Plans Administration Liability $3,000,000 Total Limit Failure to Supply (when loss rescelts from accidental $ 1,000,000 per occurrence e, . loss to tangible property owned/used by the Insured). $ 1,000,000 per wrongful act Employee Benefits Liability-$1,000 Deductible $ 3,000,000 total limit x COVFE AGE INCLUDED* Blanket Contractual ,., Failure to Supply when loss results from accidental damage to utility generating or distributing equipment owned or used by insured. Employees and Volunteers as Insureds Host Liquor Law Liability ' Incidental Medical Malpractice Pesticide or Herbicide application 'P Non-Owned watereraf"t less than 75 feet long. Owned watercraft less than 25 feet long r ` E`{C(,t!S10NS 9• Pollution Liability "< Nuclear Energy Liability v Care, Custody or Control of Property Uninsured—Underinsured Motorist Liability `Y Mold, Bacteria, Other Fungi H;• Mobile Equipment Subject to Compulsory Financial Responsibility Laws TRAVELERS COMPANIES (A+- X ) VEMCLES COVERED: Any owned, rented, leased or borrowed auto. It includes hired, non—owned, newly acquired, replacement and temporary substitute autos, but does not in- clude autos owned by your employees or members of their households, bor- rowed private passenger type autos, or autos where coverage has been reduced or limited on the auto schedule. COVERAGE. LiNn'r OF LIABRA'f Y Bodily Injury and $ 1,000,000 CSL each accident Property Damage Liability Uninsured/Underinsured Motorist Coverage $ 1,000,000 Bodily Injury each accident Uninsured/Underinsured Property Damage $ 1,000,000 Property Damage each accident <>; Medical Payments $ 1,000 per person Physical Damage Coverage Deductible $ 1,000 per claim Comprehensive $ 1,000 per claim ,• Collision ADDITIONAL PO1.iCY BENEFITS Fleet Automatic applicable :• Employees as Insureds Blanket Additional Insured :v Rental Reimbursement- 30 clays I• Non—Owned and Hired Automobile Liability fi>�l CtIUBB (A++ XV) BLANKET COVFRAGE Umff Theft $2,000,000 Employee Theft $2,000,000 Forgery or Alteration Theft of' Money and Securities $2,000,000 Loss Inside Your Building $2,000,000 Loss outside Your Building Computer Fraud&Funds Protection $2,000,000 $ 5,000 Deductible III INPi TRAVELERS COMPANIES 4V) This insurance provides liability insurance protection for your business in excess of the below listed primary insurance. L1N11`r OF LIAB11,11Y $ 11,000,000 Each Occurrence $ 11,000,000 Annual Aggregate $ 10,000 Self—Insured Retention Additional Limits of Liability: $ 8,000,000 Each Occurrence $ 8,000,000 Annual Aggregate r $Included Sell-Insured Retention SC11E t)L LE OF UNDERLYING, PRIMARN' INSURANCE Commercial General Liability(Bodily Injury, Property $ 1,000,000 Per Occurrence Damage, Personal Injury) $ 6,000,000 Annual Aggregate 1 'r Products, Completed Operations $ 1,000,000 Per Occurrence$ 2,000,000 Annual Aggregate l Advertising Injury $ 1,000,000 Per Occurrence B Employee Benefit $ 1,000,000 Automobile Liability Bodily Injury and Property Damage $ 1,000,000 Combined Employers Liability •• Bodily Injury By Accident $ 1,000,000 Each Accident i $ 1,000,000 Policy Limit Bodily Injury By Disease »• Bodily Injury By Disease $ 1,000,000 Each Employee EjCCL I-SIONS Pollution Liability ;• Nuclear Energy Liability _• Asbestos and Electromagnetic field Failure to Supply Services • Health Care Prgfessional Services >• Injury to Volunteer Firefighters Mold, Fungi or Other Bacteria �• Property Damage Change and Intellectual Property �• Public Use of*Property Unsolicited Communication ZURICH (S't E,WF SST) (A XV) I, PO 1,1,UTION LIABILITY—CLAIMS NIALDF. ollution Liabili : This policy will pay on behalf of'amounts any protected person is legally required to pay p tv 3 as damages for bodily injury,property damage or Clean-up Costs resulting from Pollution Conditions. n Discovery Period: 14 days from incident Reporting period: 30 days from discovery of'incident Covered Pollution Condition means: the discharge,not limited to smoke vapore or s soot,fi�mese of any oa ids,alka is, toxic `, or thermal irritant or contaminant, iuid, gaseous ncludtng, t chemicals, medical waste and waste materials r to or aeon land, or any structure on land, the atmosphere or any watercourse or body of water, excluding g $25,000 ded. =` $1,000,000 Each Incident/$1,000,000 Annual Aggregate cleanup costs means any reasonable and necessary expenses, including legal expenses incurred by Pollution p you for pollution work. Subject to: 1) Completed, signed Zurich Pollution application. 2) Signed Privacy Agreement Y �y LANDMARK AtiIERICAV INSURANCE COMPANY — NON-ADMITTED (A XI[) Insurance Summary - Company: Landmark American Insurance Company—Non-Admitted Coverage: Property -Difference In Conditions—Earthquake Limit of Liability $5,000,000 per occurrence/annual aggregate $1,000,000 per occurrence sub-limit for Extra Expense Deductible: $25,000 - All Other Perils Except ,. 5%Of Values At Time And Place Of Loss, subject to $25,000 mini- mum Valuation: Replacement Cost except Actual Loss Sustained as respects Extra Expense Coverages. Building, Contents, EDP, Extra Expense, Fences Perils: Difference in Conditions Including Earthquake Terrorism coverage offered at additional premium f Remarks: Based on total insured values of$47,572,117 Exclusions: Exclusion and limited additional coverage for Fungus. Exclusion and limited additional coverage for Electronic Data Pathogenic or Poisonous Biological or Chemical Material Terrorism Exclusion EMMET °s > z Fidelity and Deposit Company (A XV) Public Officials Bond COVERAGE FORM(S) FORMING LIMIT OF NO. PART OF THIS POLICY INSURANCE l. Public Officials Bond $25,000 This bond covers Mary Lynne Chapman of Truckee, CA for$25,000 in the capacity of Treasurer of Truckee Donner Public Utility District. Note: The District's$500,000 limit of Crime Insurance applies to Mary Lynne Chapman, as treasurer, in excess of this treasurer Bond Limit of$25,000. T { 4'^s a 1J n 1 11111 loyal y MU M Travelers Companies (A+ XV) Claims Made Limit Coverage $ 5,000,000 Total Limit Each Wrongful Act Limit $ 5,000,000 Retro Date 5/1%02 l , $ 10,000 Deductible Each Wrongful Act-Loss&Loss Expense { ' The following exclusions apply: Excluded Boards and Commissions: Joint Power Authority Hospitals Airport j School Health Clinics Gas Utility Transit Authority Hospitals Housing Authority Health Care Facilities Blood Banks i Health Clinics Rehabilitation Facilities i <> Port Authority Features & Benefits � .r Coverage Agreement s agreement is designed to cover damages(other than bodily injury, personal injury, advertising injury or property dam- `Thi I ages any protected person is legally required to pay for covered loss that results from the conduct of duties by or for a public entity and is caused person a wrongful act. Wrongful act is defined as any act, error or omission. However, wrongful employment practice offenses are not covered. Cho is Protected Employees(including employees of the entity's boards) Public Entity Elected or Appointed Officials Estates,Heirs, Legal Representatives or Assigns Board Members Volunteer Workers Other ♦ Pay on behalf of basis,(Deductible Options Only). ♦ Duty to defend claims and suits even if allegations are groundless,false,or fraudulent(Deductible Options Only). ♦ Punitive damages covered up to full policy limits,if allowed by law. ♦ No exclusion for Architects,Engineers or Lawyers. ♦ Automatic Limited Reporting Period of 60 days after agreement is cancelled or not renewed. ♦ Health care professional services and law enforcement duties exclusions apply. ♦ Taking of private property for public use(eminent domain),diminution in value,and inverse condemnation are excluded. Typical claims made against protected persons include: ♦ Failure to properly zone ♦ Violation of civil rights ♦ Wrongful denial of permit ♦ Improper procedures/management 'i L } L i _ ) L Travelers Companies (A+ XV) Claims Made Limit Coverage V, $ 5,000,000 Limit Wrongful Employment Practice Offense Limit $ 5,000,000 Date 5/1/02 IMPORTANT CONDITIONS TO NOTE: t. Defense expenses are within the limits of coverage. l Our Right to Settle Claims Without Your Written Consent Endorsement applies(Deductible Option Only) 1 ` Deductible Each Wrongful Employment Practice Offense(Loss&loss expense) $10,000 r= Features & Benefits i:<< Coverage Agreement This agreement is designed to cover damages(other than bodily injury or property damage) any protected person is le- gally required to pay for covered employment injury to employees or independent contractors that results from a wrongful employment practice offense first committed after the retroactive date. Wrongful employment practice of- fense is defined to include discrimination, termination, harassment, retaliation, discipline, hiring, supervision, demo- i ' tion,promotion, defamation,libel,slander, and invasion of privacy. Who is Protected Employees includin employees of the entity's boards) Public Entity (including i. Elected or Appointed Officials Volunteer Workers Board Members Other ♦ Pay on behalf of basis(Deductible Options Only). ♦ Duty to defend claims and suits even if allegations are groundless, false, or fraudulent(Deductible Options Only). ♦ Punitive damages covered up to full policy limits, if allowed by law. ♦ Administrative proceedings conducted by governmental agencies in which damages are sought are included in the definition of suit. ♦ Defense costs erode the limit of liability, subject to state exceptions (see Important Notice on preceding page). ♦ Right,but no duty,to defend any protected person in an administrative proceeding, which does not seek damages. Defense costs for these proceedings are in addition to the limit of liability. ♦ Damages include attorneys' fees of the person bringing the claim if the protected person is legally required to pay them under the law,which was violated. non-monetary relief costs are excluded. n injunctive or other non-m ♦ Declaratory, m un �, , „ rY� JIm i41 TRAVELERS Cf)M3'ANIFS (A+ XV) Claims Made Limit Coverage Total Limit $3,000,000 Each Wrongful Act Limit $1,000,000 u Retro Date 5/1/02 $1,000 Deductible Each Wrongful Act-Loss&Loss Expense 1Z The following exclusions apply: k Excluded Boards and Commissions: Airport Joint Power Authority Hospitals School Health Clinics i Transit Authority Hospitals tj Gas Utility Housing Authority Health Care Facilities Blood Banks Port Authority Health Clinics Rehabilitation Facilities l =: Features & Benefits .: Coverage Agreement This agreement is designed to cover damages(other than bodily injury, personal injury, advertising injury or property damage) any protected person is legally required to pay for covered loss that results from the conduct of duties by or for a public entity and is caused by a wrongful act. Wrongful act is defined as any act,error or omission. However, wrongful employment practice offenses are not covered. Who is Protected Public Entity Employees(including employees of the entity's boards) Elected or Appointed Officials Estates, Heirs, Legal Representatives or Assigns Board Members Volunteer Workers Other °" ♦ Pay on behalf of basis, (Deductible Options Only). l- ♦ Duty to defend claims and suits even if allegations are groundless, false, or fraudulent(Deductible Options Only). ♦ Punitive damages covered up to full policy limits, if allowed by law. ♦ No exclusion for Architects,Engineers or Lawyers. ♦ Automatic Limited Reporting Period of 60 days after agreement is cancelled or not renewed. ♦ Health care professional services and law enforcement duties exclusions apply. ♦ Taking of private property for public use(eminent domain), diminution in value, and inverse condemnation are excluded. Typical claims made against protected persons include: ♦ Failure to properly zone ♦ Violation of civil rights ♦ Wrongful denial of permit ♦ Improper procedures/management � .; 3 About Marsh Marsh,the world's leading risk and insurance services firm, has nearly 30,000 employees and annual revenues ex- ceeding$5 billion. We provide global risk management,risk consulting, insurance broking, fmancial solutions,and insurance program management services for businesses,public entities, associations, professional services organi- zations,and private clients in over 100 countries. Business Reforms Marsh is implementing a series of significant reforms to its business model that will ensure that the best interests of its clients are served and that every transaction is executed in accordance with the highest professional and ethical standards. The following reforms have been initiated: Marsh has permanently eliminated the practice of receiving any form of contingent compensation from in- surers. All revenue streams will be 100 percent transparent to clients. Each client will receive a full accounting of all revenue earned by Marsh, including fees, retail commission,wholesale commission and premium fi- nance compensation, if any. Marsh will insist that insurance companies show commission rates on all policies. Marsh will seek consistent commission rates so that insureds are better able to compare costs of alternative proposals. Marsh will provide transparency to its clients regarding its negotiations with insurers on their behalf. is San Francisco Office San Francisco is home to the second largest office of Marsh in the United States the third largest in the world, after New York and London—making us an influential voice in our firm. Located in the heart of the San Francisco Finan- cial District, at 1 California Street, we have been in continuous operation for 89 years, since 1916. Staffed b approximately 700 employees, we rovide a comprehensive array of insurance brokerage and risk manage- i Y pp YP p ment consulting services to Fortune 500 and 1000 companies, regional businesses and public entities. Public Entity Practice Within Marsh, the Public Entity practice has been operational as a specialized practice since 1988, now representing more than 1,500 public entities in the U.S. and Canada. In addition, the practice represents approximately 90 intergov- ernmental pools and hundreds of public entities throughout the rest of the world. These clients are handled by a net- work of 250 public entity specialists throughout Marsh, all available to contribute their expertise to any Marsh col- league or client. The range of public entity clients encompasses, as of recent count, 98 utilities, 289 cities, 176 coun- ties, 37 housing authorities, 10 Native American tribes, 90 pools, 50 ports, 28 states, 328 school clients and 53 transit districts. Marsh's San Francisco office is home to the largest concentration of public entity specialists in the firm. MARSH An MMC Company PUBLIC ENTITY PRACTICE QUEST ZONE F KEITH GRAND Keith Grand is a public entity insurance and risk management specialist in the San Francisco Marsh office and is a veteran of 40 years in the insurance and risk management business. Responsibilities include account management, contract and insurance review, marketing of insurance programs. Current activities include brokerage and risk management services for a range of clients, including a California pool of school distracts, several water and electric utilities, a state-wide court system pool and various other California public entities, such as counties and special districts. Keith came to Marsh from another major brokerage firm. His background includes extensive public entity risk management experience as Risk Manager for Alameda County and, following that, City and County of ' San Francisco. Prior experience includes risk management for a multinational, publicly-traded corporation 1 ' and commercial lines underwriting superintendent for a major national insurer. His scope of risk manage- ment experience includes airports, ports, public transit, electric and water utilities, Owner Controlled Insur- ance Programs, fine arts museums, State legislative activities, formation of pools, as well as the full gamut of operations of cities, counties and special districts, including internal budgeting, accounting and procedural practices. Keith earned a BA from the University of Maine, and holds the professional designations of Chartered Prop- erty and Casualty Underwriter (CPCU) and Associate in Risk Management (ARM). Prior affiliations include memberships in RIMS, PARMA, PRIMA and numerous occasions as speaker and panelist at industry meet- ings. 1101 r- 11,