League of Oregon Cities & Association of Oregon Counties - City County Insurance Services ~ CITY COUNTY INSURANCE SERVICES
AGREEMENT AND DECLARATION OF ADMINISTRATIVE TRUST
THIS AGREEMENT AND DECLARATION OF ADMINISTRATIVE TRUST (hereinafter
"Declaration") is made this 1St day of October, 2000, by and between the LEAGUE OF
OREGON CITIES ("League") and the ASSOCIATION OF OREGON COUNTIES
("Association"), acting through their respective Boards of Directors.
RECITALS
I. The LEAGUE is an intergovernmental entity established by intergovernmental agreement
pursuant to Oregon Revised Statutes Chapter 190 to perform governmental purposes and
functions, to promote the common interests of its member cities and to institute programs to
assist those members in performing their proper functions at the least cost to their taxpayers.
The ASSOCIATION is an organization for intergovernmental cooperation created by its member
counties pursuant to ORS 190.010 to ORS 190.110 to promote the common interests of its
member counties and to institute programs to assist those members in performing their proper
functions at the least cost to their taxpayers.
The above intergovernmental agreements authorize the League and Association to establish by
trust or agreement a means to provide risk management and insurance services to their members.
This Declaration is adopted as an intergovernmental agreement pursuant to ORS 190.010 and
establishes an intergovernmental entity as permitted by ORS 190.010(5). Such entity shall be
known as the City County Insurance Services (CIS), and shall be administered pursuant to this
Declaration.
II. On June 22, 1958, the League established a trust known as the League of Oregon Cities
Insurance Trust to provide employee welfare benefits to employees of League members. The
trust was revised and restated November 1, 1984, and its name was changed to the League of
Oregon Cities Employee Benefits Services Trust ("EBS Trust"). The EBS Trust Agreement was
restated again on October 14, 1988, and is attached and incorporated as Exhibit A.
On March 11, 1960, the Association established a trust known as the Association of Oregon
Counties Insurance Trust ("AOCIT") to provide employee welfare benefits to employees of
Association members. The AOCIT was revised January 1, 1993 and restated on July 1, 1993,
and is attached and incorporated as Exhibit B.
On July 1, 1981, the League and the Association established the City/County Insurance Services
Trust (the "1981 CIS Trust") to provide property, liability and workers' compensation insurance
coverage to their members. The 1981 CIS Trust was revised February 1, 1988. A copy of the
revised Trust is attached and incorporated as Exhibit C.
On April 16, 1993, the League and the Association adopted the City/County Insurance Services
Declaration And Agreement of Trust (the "1993 CIS Trust") which established a trust and a
successor board of trustees, and consolidated the Exhibit A, B and C trusts for administration by
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that successor board. The 1993 CIS Trust, amended November 18, 1994, created an entity
known as the "CIS Trust"pursuant to ORS 190.010(5),the existence of which is ratified hereby.
This Declaration (also referred to as the "ADMINISTRATIVE TRUST") is effective October 1,
2000, and constitutes a revision and restatement of the above 1993 CIS Trust Declaration as
amended in 1994. The principal purpose of this DECLARATION is to consolidate
administration of the EBS Trust, the AOCIT, and the CIS Trust in the Board of Trustees of this
ADMINISTRATIVE TRUST to accomplish the further objectives set forth in the following
Recitals:
III. In furtherance of the above, the LEAGUE and the ASSOCIATION, for the benefit of
their respective members, agree:
A. To continue and improve the CIS Trust program whereby the risks incurred by
their member governments in the areas of tort liability, property loss, and workers'
compensation may be effectively and economically managed, and whereby
insurance and self-insured retention of such risks may be most responsibly and
economically funded.
B. To continue to provide and improve the EBS Trust programs and the AOCIT
programs to which contributions from participating employers and contributions,
if any, from participating employees can be paid and through which the Trust can
create and administer health and welfare benefit plans, including (a) life,
dependent life, accidental death and dismemberment insurance; (b) health
benefits; and (c) disability benefits for non-occupational illness or injury,
according to sound actuarial and underwriting principles.
C. To consolidate administration of the three existing trusts.
IV. This Declaration shall constitute a ratification, revision and restatement of the
City/County Insurance Services Declaration and Agreement of Trust between the same parties
dated November 18, 1994; provided, however,that amendments therein to the EBS Trust and the
AOCIT are not rescinded.
IN CONSIDERATION of the benefits to be derived for their respective members, and the
mutual covenants and conditions herein contained, the LEAGUE and the ASSOCIATION
declare and agree as follows:
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ARTICLE 1. DEFINITIONS
For the purposes of the consolidated administration of the CIS Trust, the EBS Trust and the
AOCIT, the definitions of the EBS Trust Agreement, as restated October 14, 1988, and of the
AOCIT Agreement, revised and adopted June 14, 1993, shall apply unless the context clearly
indicates otherwise, and "Board of Trustees" or "Trustees" means the CIS Board of Trustees,
designated under Article 2 of this Declaration to administer the trust plans of the CIS Trust, the
EBS Trust, and the AOCIT.
ARTICLE 2. BOARD OF TRUSTEES.
2.1 The ADMINISTRATIVE TRUST shall be governed by a Board of Trustees composed of
ten Trustees. Four Trustees shall be appointed by the Board of Directors of the LEAGUE and
four shall be appointed by the Board of Directors of the ASSOCIATION. The Executive
Directors of the LEAGUE and the ASSOCIATION shall serve as Trustees. The LEAGUE and
the ASSOCIATION, with respect to the Trustees appointed by each, shall adopt their own rules
and procedures for the appointment, tenure, and removal of Trustees, subject to the following
minimum standards:
2.1.1 If Trustees are appointed for a fixed term, terms shall be for no less than one
year, and shall be staggered so that no more than one LEAGUE-appointed Trustee's term,
and no more than one ASSOCIATION-appointed Trustee's term expires during any
calendar year.
2.1.2 As a qualification for appointment and continued service, each appointed
Trustee shall be an elected or appointed official of a city or county which is a member of
the LEAGUE or ASSOCIATION appointing the Trustee and which is a participant in one
or more coverages offered by the ADMINISTRATIVE TRUST.
2.1.3 In order to insure the faithful, independent, and impartial exercise of judgment
and discharge of their obligations, Trustees shall, during their term of office, be subject to
removal only for just cause. Nonattendance at three consecutive regular board meetings
shall constitute good cause.
2.1.4 No Trustee shall serve, and no appointment shall be effective until such
appointee acknowledges in writing full and unconditional acceptance of the terms of this
Declaration and Agreement.
2.2 In the event of a Trustee's resignation, ineligibility (including disqualification under
Paragraph 2.1.2 hereof), removal, or refusal to act, a successor Trustee shall be appointed as
provided in Paragraph 2.1 hereof.
2.2.1 If the Trustee being replaced was serving a fixed term, the successor Trustee
shall be appointed to serve the remainder of the unexpired term.
2.2.2 In the event that a Trustee shall cease to be qualified pursuant under Paragraph
2.1.2 hereof as an elected or appointed official, such Trustee may continue to serve for a
period of 90 days or until appointment of a successor, whichever shall come first.
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2.2.3 In the event that a Trustee shall cease to be qualified under Paragraph 2.1.2
hereof as an elected or appointed official of a participant in one or more coverages
offered by the ADMINISTRATIVE TRUST, such Trustee may continue to serve for a
period of one year, or until appointment of a successor, whichever shall occur first.
2.2.4 If a Trustee, within the times set forth in Paragraphs 2.2.2 or 2.2.3 above, shall
again be qualified to serve, then such Trustee shall continue to serve as if such period of
disqualification had not occurred.
2.3 Should a vacancy exist among the Trustees, the remaining Trustees shall have full power
to act as the Board of Trustees.
2.4 Trustees, officers and agents of the ADMINISTRATIVE TRUST shall use ordinary care
and reasonable diligence in the exercise of their powers and in the performance of their duties.
2.5 Trustees, officers and employees of the ADMINISTRATIVE TRUST shall be entitled to
all rights, indemnities, immunities and defenses as provided to other public officials pursuant to
the Oregon Tort Claims Act.
2.6 The Board of Trustees shall require designated persons performing services to the
ADMINISTRATIVE TRUST under the above provisions to be bonded or insured in a form and
amount set by the Board of Trustees.
2.7 The Board of Trustees shall be chaired by one of the appointed members chosen in
accordance with the Board of Trustees' bylaws, and, in the absence of the chair, by a vice-chair
chosen in accordance with the bylaws; provided, however, that the chair and vice-chair shall
alternate annually between appointees of the LEAGUE and the ASSOCIATION so that each
body is represented by an appointee holding one office or the other in any year, and the
following year the representation is reversed.
2.8 The Board of Trustees shall hold an annual meeting between January 1 and June 15 of
each year, and shall meet at such other times as may be necessary with the concurrence of any
six Trustees or upon call of the chair. At the request of the LEAGUE or the ASSOCIATION,the
Board of Trustees shall meet with Boards of Directors of the LEAGUE or the ASSOCIATION,
jointly or separately.
2.9 Six Trustees shall constitute a quorum; provided, however, that if there are three or more
vacancies in Trusteeships, the remaining Trustees shall constitute a quorum and shall have full
power to transact business and act for the ADMINISTRATIVE TRUST.
2.10 All ADMINISTRATIVE TRUST action shall require affirmative votes of a majority of
the members of the Board.
2.11 The chair or vice-chair of the Board of Trustees shall execute on behalf of the
ADMINISTRATIVE TRUST all contracts,documents, and pleadings as may be approved by the
Board of Trustees; provided that the Board of Trustees may delegate to any person or firm
engaged pursuant to Paragraphs 4.1.2, 4.1.3, or 4.1.4, 4.1.12 a limited agency authority to bind
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the ADMINISTRATIVE TRUST in certain cases or kinds of transactions to be specified in
writing by the Board of Trustees.
ARTICLE 3. PURPOSES OF ADMINISTRATIVE TRUST.
3.1 The express purposes and primary objectives of the ADMINISTRATIVE TRUST are:
3.1.1 To provide for the consolidated administration of the trusts described in the
Recitals.
3.1.2. To make available to the LEAGUE and ASSOCIATION, and to those members
who choose to participate, membership services in the form of a broad array of risk
management services, including but not limited to risk financing, loss prevention and loss
control programs, claims management and legal representation, risk management
consulting, data gathering, information sharing, training and related services;
3.1.3 To stabilize costs associated with financing risk by aggregating the collective
buying power of LEAGUE and ASSOCIATION members to secure the economic
advantages of group purchase,joint self-insurance and pooled risk retention;
3.1.4 To assure that there is available to LEAGUE and ASSOCIATION members a
market for liability, property and workers' compensation insurance coverage appropriate
to the risks to which such members are exposed;
3.1.5 To create and administer health and welfare benefit plans according to sound
actuarial and underwriting principles for members of the LEAGUE and ASSOCIATION,
and such other local governments whose participation may be approved by the LEAGUE
and ASSOCIATION.
3.1.6 To create and administer pooled self-insured retention f ind(s) for members of
the LEAGUE and ASSOCIATION, and such other local governments whose
participation may be approved by the LEAGUE and ASSOCIATION, and to establish
actuarially sound contribution schedules for participants in such pool(s) at appropriate
retention levels;
3.1.7 To provide leadership in collaboration with CIS members, the LEAGUE and the
ASSOCIATION in presenting to appropriate legislative and administrative bodies and
committees information related to the programs administered pursuant to this
Declaration.
3.1.8 To receive, account for, invest, and disburse, as lawfully due and payable,moneys
collected from participating cities, counties and other local governments as premiums,
fees, and other contributions to the ADMINISTRATIVE TRUST, and to establish and
maintain reserves reasonably required to provide security and stability to the Trust Plans.
3.1.9 To be a leader in working with other programs and affiliates of AOC and LOC on
issues of joint interest.
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3.1.10 To recognize the diversity of Oregon's cities and counties and make every effort
to design and actively market innovative and competitive risk management products and
services appropriate for their wide range of needs and interests.
3.2 The above purposes and objectives of the ADMINISTRATIVE TRUST shall be
construed to include those purposes stated in the trusts described in the Recitals.
3.3 The foregoing expression of purposes is not exhaustive, and in addition to other related
objectives reasonably inferred from that list, the ADMINISTRATIVE TRUST shall have such
other objectives, not inconsistent with this Declaration, as may be lawful for a trust or an
intergovernmental.association under Oregon law.
3.4 To the extent of any conflict or inconsistency between this Declaration and the
declarations of trust described in the Recitals, this Declaration shall control.
ARTICLE 4. POWERS, DUTIES,AND FUNCTIONS OF BOARD OF TRUSTEES.
4.1 In furtherance of the purposes set forth above, the Board of Trustees shall have the
following powers and duties:
4.1.1 To act as the trustees of the trusts described in the Recitals, to exercise the
trustee powers described in the declarations of those trusts, and to administer those trusts
as described in this Declaration.
4.1.2. To approve the provisions of ADMINISTRATIVE TRUST plans, programs and
policies;; determine, increase, decrease, or terminate, in whole or in part, the benefits and
coverage provided by the ADMINISTRATIVE TRUST plans, programs and policies;
select the carriers providing the benefits and to exercise all rights granted to a policy
holder; and establish or modify rules of eligibility for benefits and employer
participation.
4.1.3 To engage and oversee, as the Board of Trustees deems appropriate, the services
of competent insurance agents and brokers to negotiate on behalf of the TRUST with
insurance underwriters, and to market coverage and services to prospective participants in
the ADMINISTRATIVE TRUST'S services.
4.1.4 To engage, employ and oversee, as the Board of Trustees deems appropriate, the
services of competent professionals and consultants to manage or assist in the
management, collection, investment, and disbursement of ADMINISTRATIVE TRUST
funds.
4.1.5 To engage, employ and oversee the services of competent administrators and
other staff to provide risk management and insurance related services to the
ADMINISTRATIVE TRUST and its participants, including such claims reporting and
adjusting, record keeping, information sharing, loss control and prevention consulting,
and such related administrative and consulting services as the Board of Trustees deems
appropriate, and to delegate such administrative authority deemed necessary or
convenient by the Board.
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4.1.6 To review and approve policy forms, service contract forms, and other
documents appropriate to the operation of the ADMINISTRATIVE TRUST, and to
establish the limits of authority of the persons engaged under Paragraphs 4.1. 2, 4.1. 3
and 4.1. 4.
4.1.7 To establish methods of calculating premiums for insurance coverages offered,
and other service fees to be charged to participants in the ADMINISTRATIVE TRUST'S
services; and to establish procedures for the collection, investment, and disbursement of
moneys owed to and by the ADMINISTRATIVE TRUST, and actions to be taken with
respect to delinquent accounts receivable.
4.1.8 To establish and maintain, from contributions and other assets of the
ADMINISTRATIVE TRUST, reserves necessary according to sound actuarial and
underwriting principles to provide stability and security to the ADMINISTRATIVE
TRUST'S programs.
4.1.9 To provide for complete accounting, and at least annually, audit of the funds
received, invested, kept and disbursed by the ADMINISTRATIVE TRUST; and to
establish such accounts with financial and investment institutions and brokerages as may
be necessary and prudent for the proper management of ADMINISTRATIVE TRUST
funds. All such funds of the ADMINISTRATIVE TRUST may be aggregated for
purposes of deposit, investment and disbursement. However, records of moneys received
and disbursed shall also be maintained by classes of local governments participating in
each of the separate programs and services of the ADMINISTRATIVE TRUST. Funds
from each separate program of the ADMINISTRATIVE TRUST shall not be
commingled but shall be held and used exclusively for the benefit of current and past
participants of each separate program. This shall not preclude payment for shared
administrative costs in such proportions as the Board of Trustees, in its discretion, may
determine.
4.1.10 To acquire and retain, to the extent allowed by state law, every kind of property,
real, personal or mixed, and every kind of investment, specifically including, but not by
way of limitation, bonds, debentures, and other corporate or government obligations,
interests in common trust funds, and securities of any open-end or closed-end
management type investment company or investment trust, provided that in the making
of investments the Trustees shall comply with the investment limitations of applicable
law and investment policies of the Board.
4.1.11 To hold title to all investments or other assets of the ADMINISTRATIVE
TRUST in the name of the TRUST, provided that for convenience in transferring bonds
or other negotiable securities, title to the securities may be held in the name of the
ADMINISTRATIVE TRUST'S custodian bank, or of its nominee
4.1.12 To maintain accurate records and accounts of all transactions, consistent with
generally accepted accounting practices, which shall be available at all reasonable times
for inspection by members,participating employers or beneficiaries.
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4.1.13 To contract with the LEAGUE and the ASSOCIATION for such services and
facilities as the Board of Trustees shall consider necessary and appropriate. The Board of
Trustees may pay for such services and facilities out of ADMINISTRATIVE TRUST
funds.
4.1.14 To compensate the LEAGUE and the ASSOCIATION for the use of their name
and goodwill in support of marketing the products and services of the
ADMINISTRATIVE TRUST. The Board of Trustees may pay such compensation out of
ADMINISTRATIVE TRUST funds to the extent permitted by applicable law and
prudent under pertinent tax laws.
4.1.15 To establish such advisory committees as the Board of Trustees deems advisable
to assist in policy and operations of the ADMINISTRATIVE TRUST; and to appoint
qualified persons to such committees to serve at the pleasure of the Board of Trustees.
4.1.16 To promulgate bylaws, polices and regulations for the operation of the Board of
Trustees and the ADMINISTRATIVE TRUST consistent with the provisions of this
Declaration and Agreement and the trusts described in the Recitals.
4.1.17 To exercise such other powers and to prepare and execute such other documents
and agreements as may be lawful and necessary to implement more fully this Declaration
and the purposes thereof.
ARTICLE 5. USE OF ADMINISTRATIVE TRUST FUNDS.
5.1 Without further specific action of the Board of Trustees, but subject to any limitations or
conditions set by the Board of Trustees in its bylaws or regulations,the administrators designated
by the Board of Trustees shall disburse or authorize disbursement of moneys from funds of the
ADMINISTRATIVE TRUST for any of the following purposes:
5.1.1 Payment of moneys due and certain under or by virtue of any contract, bond,
benefit, plan or policy of insurance made or obtained by or on behalf of the
ADMINISTRATIVE TRUST, or pursuant to any pooled self-insured retention fund
established by the ADMINISTRATIVE TRUST;
5.1.2 Investment and reinvestment of ADMINISTRATIVE TRUST funds under such
standards and limitations as may be approved by the Board of Trustees;
5.1.3 Payment of premiums due on fidelity, performance, errors and omissions, or other
bonds and insurance which the Board of Trustees may require in its bylaws to protect the
ADMINISTRATIVE TRUST and its Trustees and employees;
5.1.4 Reasonable and necessary expenses incurred by Trustees and employees for such
items as travel, meals, lodging, telephone calls, and other out-of-pocket expenses
incurred in performing their duties; provided that the personal services and time devoted
by Trustees shall not be compensated.
5.1.5 Any other purpose authorized by this Declaration or by the trusts described in the
Recitals.
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5.2 Except as provided in Paragraph 5.1, or as authorized in a budget duly adopted by the
Board of Trustees, ADMINISTRATIVE TRUST funds shall not be disbursed, expended or
obligated without express approval of the Board of Trustees.
5.3 The Board of Trustees shall provide for an annual audit of ADMINISTRATIVE TRUST
funds and operations, and for such interim audits as it deems necessary. Copies of such audits
shall be furnished to each Trustee, and to the LEAGUE and the ASSOCIATION. The cost of
such audits shall be paid out of ADMINISTRATIVE TRUST funds.
5.4 The Board of Trustees shall adopt an annual budget, consistent with generally accepted
government budgeting principles, not later than the last day of June of each year. Such budget
shall identify revenue and expenses for each ADMINISTRATIVE TRUST program, including
but not limited to the trusts described in the Recitals. The Board of Trustees or its administrator
shall, in the process of preparing the annual budget, solicit the advice of the LEAGUE and the
ASSOCIATION regarding services required by their respective members.
5.5 Income from investments of the ADMINISTRATIVE TRUST in excess of obligations
payable under this Article may, at the direction of the Board of Trustees, be distributed in whole
or in part, from time to time, to local government participants in the program, either directly or
by way of reduction of premiums, contributions, or other fees assessed to participants. Such
distributions shall be based upon such formula as the ADMINISTRATIVE TRUST shall approve
which includes both losses incurred and proportionate premiums, contributions, and fees paid by
individual local governments participating in the program during the period since the last
distribution, if any. Except as provided in this section, investment income shall remain with the
ADMINISTRATIVE TRUST for reinvestment or satisfaction of the obligations of the
ADMINISTRATIVE TRUST as provided in Paragraphs 5.1 through 5.3.
ARTICLE 6. ELIGIBILITY FOR PARTICIPATION AND TERMINATION.
6.1 Subject to the terms of the trusts described in the Recitals and to regulations adopted by
the Board of Trustees, the LEAGUE, the ASSOCIATION and each of their members shall be
eligible to participate in the coverage, programs and services offered by or through the
ADMINISTRATIVE TRUST.
6.2 In addition, "public bodies" as defined in ORS 30.260 (4) (b) and (c), may be allowed to
participate in ADMINISTRATIVE TRUST programs and services.
ARTICLE 7. INTEREST IN ADMINISTRATIVE TRUST PLAN ASSETS
7.1 Neither participating employees, participating employers, beneficiaries, parties to the
Trust Plans nor any other person or entity shall have any right,title, or interest in the assets of the
ADMINISTRATIVE TRUST.
7.2 Neither participating employees nor beneficiaries shall have any right to assign any
benefits provided by any employee benefit plan of the ADMINISTRATIVE TRUST except to a
beneficiary or to a provider of medical or hospital services. The benefits provided by plans of
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the ADMINISTRATIVE TRUST shall not be subject to seizure by legal process or be in any
way subject to the claims of creditors of a participating employee or beneficiary except for an
authorized assignment to a provider of medical or hospital services.
7.3 For the purposes of this Declaration, the assets of the EBS Trust, AOCIT and 1981 CIS
Trust shall be the property of the ADMINISTRATIVE TRUST.
ARTICLE 8. DISSOLUTION OR TERMINATION OF ADMINISTRATIVE TRUST.
8.1 This ADMINISTRATIVE TRUST may be voluntarily dissolved upon declaration of the
LEAGUE, acting through its Board of Directors, or the ASSOCIATION, acting through its
Board of Directors. Such declaration of dissolution shall not become effective until delivered, in
writing, to each Trustee, and to the chief administrative officer or governing body of each
participating city, county, and other public body, and then not until the happening of either of the
following:
8.1.1 Expiration or termination of every policy, contract, or other agreement under
which any city or county participates in the services offered by the ADMINISTRATIVE
TRUST, or is indemnified or insured by or through the ADMINISTRATIVE TRUST; or
8.1.2 The adoption and approval of a distribution plan pursuant to paragraph 8.3.
8.2 This ADMINISTRATIVE TRUST shall automatically terminate and dissolve upon the
first occurrence of any of the following:
8.2.1 The date, on which there are no members of the LEAGUE or ASSOCIATION
then participating in the services offered by or indemnified or insured by or through the
ADMINISTRATIVE TRUST;
8.2.2 The date on which all cities and counties then participating in the
ADMINISTRATIVE TRUST cease to be members of the LEAGUE or the
ASSOCIATION; or
8.2.3 Upon the dissolution, adjudication of bankruptcy, or appointment of a receiver
for either the LEAGUE or the ASSOCIATION.
8.3 Upon dissolution or termination of the ADMINISTRATIVE TRUST;
8.3.1 The balance, if any, of assets arising from property/casualty programs of the
ADMINISTRATIVE TRUST remaining after satisfaction of all obligations of the
ADMINISTRATIVE TRUST shall be distributed according to a plan furthering the
purposes of this ADMINISTRATIVE TRUST and adopted by the Board of Trustees with
the approval of the LEAGUE and the ASSOCIATION. In the event such a plan is not
approved within 180 days of such termination or dissolution, such remaining assets shall
be distributed among those local governments who were participants in the
ADMINISTRATIVE TRUST at any time during the 12 months immediately preceding
dissolution or termination, in proportion to their individual actual payments made to the
ADMINISTRATIVE TRUST of premiums, contributions, and fees during that 12 month
period. .
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8.3.2 The balance, if any, of assets arising from health and welfare benefits programs
of the ADMINISTRATIVE TRUST remaining after satisfaction of all obligations of the
ADMINISTRATIVE TRUST shall be applied to purchase or provision of benefits which
the Board of Trustees may determine for employers who are participating employers on
the date of termination, or for individuals who are participating employees or
beneficiaries on the date of termination. The Trust Plans' assets shall not revert to, or be
used for, the Trustees of the Board of Trustees or the LEAGUE or the ASSOCIATION.
8.4 Automatic termination as provided in Section 8.2 shall not affect the rights of any
participating local government under any policy of insurance underwritten by an insurer other
than the ADMINISTRATIVE TRUST.
8.5 Upon dissolution or termination of the ADMINISTRATIVE TRUST, the Board of
Trustees shall continue to act for the purpose of dissolution and the execution of all instruments
which may be required to dissolve and liquidate the Trust Plans or ADMINISTRATIVE TRUST.
8.6 Termination or dissolution of the ADMINISTRATIVE TRUST shall not cause
termination or dissolution of the trusts described in the Recitals. Such trusts shall dissolve or
terminate according to the terms of each trust declaration.
ARTICLE 9. AMENDMENTS.
9.1 This Declaration and Agreement may be amended from time to time by mutual written
agreement of the LEAGUE and the ASSOCIATION acting through their respective Boards of
Directors; provided that the LEAGUE and the ASSOCIATION deliver to each Trustee a full
copy of the proposed amendment at least ten days prior to taking any action approving the
amendment, and consider any written or oral comments by the Trustees either individually or as
a Board of Trustees prior to such action.
9.2 No amendment shall operate to the prejudice of any vested rights held by any participant
in the program under a policy, contract, or other document for the benefit of such participants.
9.3 The ADMINISTRATIVE TRUST shall not be amended in any manner inconsistent with
the legal requirements applicable to the ADMINISTRATIVE TRUST to permit the
ADMINISTRATIVE TRUST'S assets, or any part thereof to revert, or be diverted, to the benefit
of any employee or any person other than the Participating Employers, Participating Employees
or Beneficiaries to the extent contributions were made for the benefit of the Participating
Employees or Beneficiaries. An amendment, by its terms,may be retroactive.
ARTICLE 10. SEVERABILITY.
If any provision of this Declaration and Agreement is adjudicated to be invalid, unenforceable,or
unconstitutional, the remainder of the provisions not subject to such adjudication shall not be
affected and shall continue in full force and effect.
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IN WITNESS WHEREOF, the LEAGUE and the ASSOCIATION have approved the foregoing
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amendments on the 1"day of October 2000.
ASSOCIATION OF OREGON COUNTIES
President
Executive Director
LEAGUE OF OREGON CITIES
President
Executive Director
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CITY COUNTY INSURANCE SERVICES TRUST
LOSS FUND PROTECTION AND SURPLUS DISTRIBUTION
RULE NUMBER 1
This Rule, effective July 1, 2001, supercedes and replaces Rule Number 1 ("Net
Income Distribution"); Rule Number 2 ("Contribution and Loss Allocation"); and
the policy statement on "Loss Fund Surplus" dated April 14, 1989.
The City County Insurance Services (CIS) Board of Trustees
adopts the following rule regarding the protection of CIS Trust
Loss Funds for pooled self-insurance operations and the
distribution of surplus from such funds.
A. Loss Funds.
CIS Trust Loss Funds consist of Member Contributions, investment earnings and
other miscellaneous revenue.
For such coverage as the Member elects in a Fund Year, an "Initial Contribution"
is charged in accordance with CIS rating guidelines. CIS rates are based on
estimated losses expected expenses and a prudent level of reserves determined
by the Board.
In any one Fund Year, the Board's targeted reserve funding level is an amount
sufficient to pay the maximum probable claims in that year at confidence levels
determined by the Board upon the advice of its consulting actuary.
"Initial Contributions" represent a deposit into the Loss Fund against which
losses and expenses are charged.
The Board may impose "Deferred Contributions" as described in Section B of this
rule, in the event that:
(1) Ultimate losses and expenses exceed Loss Fund revenues for the Fund
Year, and
(2) In the judgement of the Board, this shortfall presents a threat to the overall
fiscal viability of the Trust's Loss Funds,
The Board may declare a Surplus distribution as described in Section C of this
rule when Loss Fund amounts exceed ultimate losses, expenses and the Board's
target level for outstanding claims reserves.
Loreen\H:\DOCS\Insurance\CCIS\Rule one-2001.doc
B. Deferred Contributions:
If the Board determines that the collection of 'Deferred Contributions" is
necessary in order to protect Member assets in one or more Loss Funds, then the
following will apply:
(1) Deferred Contributions shall be assessed against the Members who
participated for such coverage during the Fund Year for which such Deferred
Contribution applies. Amounts due shall be in the proportion that each such
Member's contribution and share of losses bear to the total contributions
and shared losses of all Members for such coverage in such Fund Year.
(2) An Entity that participated as a Member during the Fund Year for which
Deferred Contributions are assessed is obligated to pay such Deferred
Contribution when requested by the Board, regardless of its membership
status at the time such Deferred Contributions are imposed.
(3) The total of all contributions paid by a Member for a coverage for a Fund
Year, including any Deferred Contributions paid pursuant to this rule, shall
be used for purposes of determining distribution of Surplus as described in
Part C of this rule.
(4) Members shall be notified by January 31 if the Board proposes to collect
Deferred Contributions in the upcoming fiscal year beginning July 1. The
Board shall advise Members of their individual Deferred Contribution amount
not later than March 31. Such amount will be due and payable at the same
time as contributions for fiscal year coverage.
(5) A Member's Deferred Contribution will not exceed 50% of its Initial
Contribution.
C. Surplus Distribution.
"Surplus," is defined in the CIS Bylaws (Article 1.17) as "those monies remaining
in a Loss Fund after the payment of the costs of administration and excess
insurance, payment of claims and establishment of prudent reserves for
outstanding claims"
No distribution of Surplus funds will be made until reserve funds for outstanding
claims have been accumulated to the target levels set by the Board, and then
only to the extent such reserve levels are not impaired.
If the Trustees determine that, consistent with this rule, a distribution of Surplus
is appropriate, funds shall be distributed to the Members in accordance with the
following:
Loreen\H:\DOCS\Insurance\CCIS\Rule one-2001.doc
(1) If the Board declares a distribution of Surplus funds for one or more Fund
Years, it may direct staff to offset such distribution for individual Members by
some, or all, of any Deferred Contributions that Member may be required to
pay under Part B of this rule.
(2) No Member shall have a right to any specific share of Surplus funds except
as herein provided.
(3) Distributions, as determined herein, and with appropriate offset for Deferred
Contributions, shall be by means of loss stabilization credits held in the name
of the Member and available to apply against future contributions or, at the
sole discretion of the Board, by means of cash payments to current
Members. Loss stabilization credits accruing to non-Members expire on July 1
following three complete Fund Years after the distribution is made.
(4) No distribution of Surplus shall be made in any manner to any Member which
withdraws prior to the end of the period of Membership established by the
Trust, which period shall not exceed three (3) full Fund Years.
(5) At such time as the Board determines an amount of Surplus available for
distribution, said Surplus shall be distributed as follows:
i. One-third (1/3) of the Surplus will be distributed to Members who
made contributions in the Fund Year, for the coverage for which
Surplus is to be distributed. The proportion is that which each
Member's contribution bears to the total contributions of all
Members in the Fund Year, for the coverage for which Surplus is
to be distributed.
ii. Two-thirds (2/3) of the Surplus will be distributed to Members
who made contributions in the Fund Year, for the coverage for
which Surplus is to be distributed. The proportion is that which
each Member's contributions, less incurred losses, bears to the
total contributions, and less total incurred losses, of all Members
in the Fund Year, for the coverage for which Surplus is to be
distributed. However, no distribution shall be made of the two-
thirds of Surplus to Members whose contributions, in the Fund
Year, for the coverage for which Surplus is to be distributed, are
less than their incurred losses.
(6) More than one distribution may be made for a given coverage for any Fund
Year. In the event of a second, or subsequent, distribution the amount to be
distributed to a Member shall be computed in accordance with this rule,
based on contributions and loss information as of the date of such later
distribution. The amount so determined shall be reduced by any amounts
previously distributed to the Member. No adjustment will be made due to
changes in incurred losses after the date of the distribution.
Loreen\H:\DOCS\Insurance\CCIS\Rule one-2001.doc
D. Other Provisions.
The following also apply to CIS Loss Funds.
(1) Payment of Claims. The Trust will make or secure payment or settlement of
claims in accordance with the terms and conditions of the coverage
agreements.
(2) Excess Losses. In the event that a single loss or series of losses may exceed
the amount of protection afforded by the Loss Fund, other insurance carried
by the Trust and provisions for Deferred Contributions under this rule,
payment of valid losses shall be the obligation of the individual Member or
Members against whom the claim(s) were made and perfected by judgment
or settlement.
(3) Transfer Among Loss Funds. The Trustees may, in their sole discretion,
transfer monies among CIS Trust Loss Funds, in the event of a deficit in any
one Loss Fund in a Fund Year. However, such transfers shall be made only
when there is a reasonable expectation that repayment can be made from
future contributions and earnings of the Loss Fund that has incurred the
deficit.
Loreen\H:\DOCS\Insurance\CCIS\Rule one-2001.doc
9 0
CITY COUNTY INSURANCE SERVICES TRUST
APPLICATION OF AGGREGATE PAID LOSS DEDUCTIBLE
RULE NUMBER 2
Adopted April 6th, 2001.
The following supercedes and replaces Rule 3 adopted 8/16/91
The City County Insurance Services Trust (CIS) adopts the following Rule
regarding the application of aggregate paid loss deductibles for all Fund Years
beginning on or after July 1, 1987.
1. Paid losses shall be invoiced and paid quarterly. Amounts due under the
deductible shall be considered Contributions subject to the provisions of
Articles 2.8 and 3.1.1. of the CIS Bylaws.
2. For ease of administration, the liability deductible shall apply jointly to
general automobile liability losses. The obligation of the Member to pay
for losses shall cease when the aggregate amount paid equals the amount
of the deductible, regardless of the type of the claims involved.
3. CIS and any Member with a deductible may, by mutual written
agreement, agree to a liquidated value for the remaining payments due
under the deductible.
4. Surplus Distribution which may be due to a Member pursuant to Rule
Number 1 shall be computed as if the Member had no deductible. From
such distribution shall be deducted the savings, if any, resulting to the
Member from the deductible. For liability coverage such savings shall be
computed by allocating the deductible between general liability and
automobile liability based on initial contributions, less paid losses for each
coverage.
5. For liability coverage, Contributions and Loss Allocation pursuant to Rule
Number 1 shall be computed as if the Member had no deductible and the
full amount of the initial Contributions had been paid.
Loreen\H:\DOCS\Insurance\CCIS\Rule two-2001.doc
0
CITY COUNTY INSURANCE SERVICES TRUST
OPTIONAL DEFENSE BY MEMBER
RULE NUMBER 3
Adopted April 6th, 2001 .
The following supercedes and replaces Rule 5 adopted 8/16/91
The City County Insurance Services Trust (CIS) adopts the following
Rule relating to Optional Defense by Member, pursuant to Article 3.2 of the Trust
Bylaws.
1. In any casualty case or claim where CIS staff or claims administrators
reasonably believe a Member will object to settlement, the following
actions shall be taken:
a. The Member shall be advised in writing of the nature of the
proposed settlement and of the Trust's reason, in summary, for
recommending such settlement.
b. The Member shall be advised in writing of its right to refuse to
accept the settlement, on the terms set forth in the Trust Bylaws.
2. A Member electing to refuse a settlement shall execute an agreement with
the Trust accepting responsibility for all additional costs as set forth in
Article 3.2 of the Trust Bylaws.
3. The Member shall have the option of assuming the defense of the case or
claim, in which event the Trust shall tender to the Member such sum as
was payable under the terms of the settlement rejected by the Member.
Otherwise, the Trust will continue to administer the case or claim, and any
associated legal defense, with all amounts expended thereupon, in excess
of the amount of the settlement rejected pursuant to this rule, payable by
the Member.
Loreen\H:\DOCS\Insurance\CCIS\Rule three-2001.doc
?_oreen Mills - Resolution
Page 1
From: "Rebecca Hill" <rhill@cciservices.com>
To: <Loreen@ci.tigard.or.us>
Date: 9/24/2001 10:01:43 AM
Subject: Resolution
Loreen,
Thank you for your email regarding the resolution. The resolution was sent(along w/the
Trust Agreement, Bylaws and Rules) in the July coverage binder mailing. Due to some
changes in the wording of the Trust Agreement and Rules, it was necessary that the
Resolution should be sent in order for Members to agree that they have read and
understand these changes. The CIS Bylaws, at Articles 2.2.2. and 3.3. provide that
Articles 2 and 3 of the bylaws shall constitute a contract between the Member and CIS
and that the Member shall adopt a resolution acknowledging that contractual relationship.
I have attached the resolution and named documents below. Please let me know if I can
be of further assistance.
Rebecca Hill
Admin. Asst/Internal HR Rep.
City County Insurance Services
Ph* 1-503-585-1121 Ext. 332
Fax: 1-503-585-1140
Email: Rhill@cciservices.com
"Building Your Trust..."
Loreen Mills -Tigard's Resolution for C N Page 1
From: Loreen Mills
To: rhill@cciservices.com
Date: 10/30/2001 1135:41 AM
Subject: Tigard's Resolution for CCIS
Rebecca: Attached is the resolution Tigard City Council passed on 10/23/01.
Thanks for your help with this.
Loreen Mills
Risk Manager
City of Tigard
13125 SW Hall Blvd.
Tigard, OR 97223
503-639-4171
loreen@ci.tigard.or.us
CITY OF TIGARD,OREGON
RESOLUTION NO.OI-�
A RESOLUTION OF THE TIGARD CITY COUNCIL ACKNOWLEDGING A CONTRACTUAL
RELATIONSHIP WITH CITY COUNTY INSURANCE SERVICES TRUST.
WHEREAS, City County Insurance Services Trust (CIS) is a trust established by the League of Oregon Cities
(LOC) and Association of Oregon Counties (AOC) to create and administer pooled retention funds to protect
members against the financial consequence of property, casualty, and workers compensation losses pursuant to
coverage agreements;
WHEREAS, CIS provides its Members a broad array of risk management services, including risk financing, loss
prevention and loss control programs, claims management and legal representation, risk management consulting,
data gathering,information sharing,training and related services;
WHEREAS, the Tigard City Council finds that membership in CIS is a benefit in managing the risks involved in
providing services to its citizens;
WHEREAS, Tigard has been provided with copies of the CIS Trust Agreement, Bylaws and Rules which have
been recently updated and revised;and
WHEREAS,The CIS Bylaws,at Articles 2.2.2 and 3.3 provide that Articles 2 and 3 of the bylaws shall constitute
a contract between the Member and CIS and that the Member shall adopt a resolution acknowledging that
contractual relationship.
NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that:
SECTION 1: The City of Tigard finds it financially desirable to currently use City County Insurance Services
Trust (CIS) to provide risk financing, loss prevention and loss control programs, claims
management and legal representation, risk management consulting, data gathering,
information sharing,training and related services.
SECTION 2: The City of Tigard does hereby acknowledge and agree that it has received copies of the CIS
Agreement and Declaration of Administrative Trust, Bylaws, and Rules and accepts the terms
and conditions therein with respect to any CIS coverage programs in which it elects to participate
turd for which it is accepted as a Member by CIS.
EFFECTIVE DATE:This resolution shall be effective upon its passage by the Tigard City Council.
PASSED: This oQ 3rc day of 0c4-0Vj 1L- 2001.
yor-City f d
ATTEST:
d
City Recorder-City of Tigard
RESOLUTION NO.O1-lt3
Page 1
0
AGENDA ITEM#
FOR AGENDA OF 10/23/01
CITY OF TIGARD, OREGON
COUNCIL AGENDA ITEM SUMMARY
ISSUE/AGENDA TITLE City County Insurance Services (CCIS) Trust — Resolution Acknowledging
Contractual Relationship
PREPARED BY: Loreen Mill ° '!�� DEPT HEAD OK Y MGR OK
ISSUE BEFORE THE COUNCIL
Agree to the Trust Agreement and Rules with City County Insurance Services Trust so that the City can enter into a
contractual agreement with CCIS for continued property/casualty insurance coverage.
STAFF RECOMMENDATION
Approve the attached resolution.
INFORMATION SUMMARY
The City of Tigard has obtained its property and casualty insurance coverage for the last 3.5 years from CCIS. Due
to some changes in the wording of the Trust Agreement and Rules, it is necessary that each member of the Trust
adopt a resolution stating they have read and understand these changes. The resolution acknowledges this
contractual relationship with CCIS and states that we have received copies of the Agreement and Rules and that we
accept the terms and conditions of coverage. While the City Council doesn't normally receive this type of
information from commercial insurance companies, CCIS is different in that Tigard is a member of the trust;
therefore Council action is required.
The changes in the agreement are mostly clerical in nature and have not changed the substance of our coverage or
relationship with CCIS. The City's Agent of Record,Mr.Ron Graybeal of JBL&K also recommends approval.
This action will not affect the outcome of the self-insurance review that is currently underway.
OTHER ALTERNATIVES CONSIDERED
N/A
VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY
N/A
ATTACHMENT LIST
Resolution to approve.
CCIS Agreement& Rules.
FISCAL NOTES
Funds are budgeted for insurance through CCIS this fiscal year. This action will not change the needed funding
for coverage in 2001-02.
CITY OF TIGARD, OREGON
RESOLUTION NO. 01-
A RESOLUTION OF THE TIGARD CITY COUNCIL ACKNOWLEDGING A CONTRACTUAL
RELATIONSHIP WITH CITY COUNTY INSURANCE SERVICES TRUST.
WHEREAS, City County Insurance Services Trust (CIS) is a trust established by the League of Oregon Cities
(LOC) and Association of Oregon Counties (AOC) to create and administer pooled retention funds to protect
members against the financial consequence of property, casualty, and workers compensation losses pursuant to
coverage agreements;
WHEREAS, CIS provides its Members a broad array of risk management services, including risk financing, loss
prevention and loss control programs, claims management and legal representation, risk management consulting,
data gathering, information sharing,training and related services;
WHEREAS, the Tigard City Council finds that membership in CIS is a benefit in managing the risks involved in
providing services to its citizens;
WHEREAS, Tigard has been provided with copies of the CIS Trust Agreement, Bylaws and Rules which have
been recently updated and revised; and
WHEREAS,The CIS Bylaws,at Articles 2.2.2 and 3.3 provide that Articles 2 and 3 of the bylaws shall constitute
a contract between the Member and CIS and that the Member shall adopt a resolution acknowledging that
contractual relationship.
NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that:
SECTION 1: The City of Tigard finds it financially desirable to currently use City County Insurance Services
Trust (CIS) to provide risk financing, loss prevention and loss control programs, claims
management and legal representation, risk management consulting, data gathering,
information sharing,training and related services.
SECTION 2: The City of Tigard does hereby acknowledge and agree that it has received copies of the CIS
Agreement and Declaration of Administrative Trust, Bylaws, and Rules and-accepts the terms
and conditions therein with respect to any CIS coverage programs in which it elects to participate
and for which it is accepted as a Member by CIS.
EFFECTIVE DATE:This resolution shall be effective upon its passage by the Tigard City Council.
PASSED: This day of 2001.
Mayor-City of Tigard
ATTEST:
City Recorder-City of Tigard
RESOLUTION NO. 01
Page 1