Documents from the April 7 workshop (updated)

[update at end]

The insurance agency presentation to the city council at the April 7, 2008 workshop was characterized by VeNita Schnebele, the Area President for Arthur J Gallagher, as a "come to Jesus" moment about Maplewood's insurance issues. Her discussion was supported by these letters and reports obtained via a Data Practices request.

Just prior to the 2007 primary election campaign, the League of Minnesota Cites Insurance Trust (LMCIT) was already communicating to the city that the both the loss experience and the lack of communication and cooperation between the League and the city would have premium and coverage implications. The letters, which Mr. Ahl reports were not in the City Managers files when he assumed his current duties, illustrate the communication issues. Here is an excerpt from a June 8, 2007 letter to Mr. Bethel.

[Please click on the image for a more readable view]

A chart of 20 years worth of premium and loss data was provided illustrating the significant change in losses during the first year of the Copeland council. Ms. Schnebele updated the printed chart, produced on 3/31/2007, from $690,927 for the 06-07 policy year to $1,099,000 to reflect current reserves for cases recently settled and not yet settled.

[Please click on the image for a more readable view]

The hard to read shaded numbers are
690,927 updated in discussion to 1,099,000
10,327
7265

Councilperson Juenemann reported this was all new to her. Ms. Longrie was quick to establish that insurance renewal presentations had not been made prior to 2007 either, but then as the chart shows up until that time losses had been more consistent with premiums.

Rather than dropping Maplewood, Ms. Schnebele is advocating with LMCIT to increase the deductible to $200,000 along with a substantial premium increase. She pointed out that, had that deductible been in place last year, Maplewood's direct settlement payments would have been $475,000 rather than $200,000. Any new deductible would apply to settlements currently being negotiated. She also defended the League as more than fair since they only charged a single deductible last year to cover all three reorganization settlements*, where the normal practice with other carriers would have been to charge separate deductibles, and then drop coverage the following year.


Ms. Schnebele's recommendation was for the city to work at improving communication and cooperation with the League and demonstrate that commitment to them. In her recent meeting with them, LMCIT officials were still concerned about communication and cooperation issues, citing comments made to the press after the Le decision. Ms. Longrie's commentary in today's Pioneer Press, coming on the day of the LMCIT Board meeting, might not put their concerns to rest.


Please see our editorial Opinions that matter for further information.

[Update 4/8 4:00 PM]

A specific request Ms. Schnebele made was for council members to write to the LMCIT Board expressing their commitment. Mr. Nephew has done so.
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* this may account for some of the confusion over total settlement costs involved in the Banick case.