LARIMER COUNTY, COLORADO
NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 2000

NOTE 6 - SELF-INSURANCE:

The County has established self-insurance funds (internal service funds) for dental, unemployment, workers' compensation, general liability, automobile liability and physical damage, law enforcement liability, professional liability, and a self-insured reserve. Fees collected from other County funds are recognized as revenues in the period in which the insurance coverage is provided. Insurance claims are recognized as expenses as they are incurred. There have been no significant reductions in insurance coverage from coverage in the prior year. Insurance settlements have not exceeded insurance coverage for each of the past three fiscal years.

The claims liability reported in each fund is based on the requirements of GASB Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Estimated liabilities include claims as of December 31, 2000.

  1. Dental insurance: County departments are charged a monthly fee per employee and employees are charged a monthly fee for any dependent coverage they request. Actual claims are processed and paid by a third party administrator for a fee based on the number of eligible employees participating during the month, plus any expenses for identifiable printing and postage. The third party administrator is reimbursed weekly from the Self-Insured Dental Fund. Changes in the balances of claims liabilities during the past two years are as follows:

     

    1999

    2000
         

    Claims payable, January 1

    $ 35,841

    $ 28,480

    Incurred claims (including IBNR's)

    499,651

    484,289

    Claims paid

    (507,012)

    (486,878)

    Claims payable, December 31

    $ 28,480

    $ 25,891

  2. Risk Management: County departments are charged a fee for direct costs of property and casualty based on individual departments' exposures and losses. Liability claims are processed by a third party administrator for a fee per each claim processed. The third party administrator is reimbursed weekly from the Self-Insured Risk Management Fund. Personal injury limit is $150,000 per person, $600,000 per occurrence as stated in the Colorado Governmental Immunity Act. Property insurance is provided by a commercial insurance company with a $25,000 deductible and a limit of liability per occurrence of $125,000,000. In 2000, excess liability insurance was purchased with Self-Insured retention of $500,000, to be paid by the County, with additional coverage of $3,000,000 limit of liability to be paid by a commercial insurance company.

    3. Workers' compensation: County departments are charged a fee per $100 of gross wages based on the relative risk of each employee's position. Actual claims are processed and paid by a third party administrator for a fee per each claim processed. The third party administrator is reimbursed weekly from the Self-Insured Risk Management Fund. The maximum self-insured liability per person is $300,000. Any excess is covered by a commercial insurance company.

    Changes in the balances of claims liabilities during the past two years are as follows:

     

    1999

    2000
         

    Claims payable, January 1

    $ 1,182,659

    $ 1,616,135

    Incurred claims (including IBNR's)

    1,017,424

    1,434,651

    Claims paid

    (583,948)

    (900,021)

    Claims payable, December 31

    $ 1,616,135

    $ 2,150,765

  3. Unemployment insurance: County departments are charged 0.15% of gross wages for unemployment coverage. Actual claims are processed and paid by the State of Colorado. The State is reimbursed quarterly from the Self-Insured Unemployment Fund. Changes in the balances of claims liabilities during the past two years follow on the next page:

     

    1999

    2000
         

    Claims payable, January 1

    $ 43,033

    $ 73,615

    Incurred claims (including IBNR's)

    102,207

    122,440

    Claims paid

    (71,625)

    (109,152)

    Claims payable, December 31

    $ 73,615

    $ 86,903

  4. Reserve: The Reserve is funded by annually appropriated transfers from the insurance funds. In the event that an insurance fund has a deficit, funds are transferred back to it from the Reserve. The Self-Insured Reserve's fund equity detail by type of insurance is as follows:

         

    Risk

    		    

    December 31, 2000

    Other

    Dental

    Management

    Unemployment

    Total

    Prior years activity:

    		          

    Initial contribution

    $ 70,893

    $ -

    $ 605,610

    $ 407

    $ 676,910

    Interest

    58,608

    73,568

    1,190,536

    55,599

    1,378,311

    Transfers in

    136,380

    153,844

    3,859,772

    210,304

    4,360,300

    Transfers out

    (143,940)

    (122,536)

    (1,549,593)

    (113,651)

    (1,929,720)

    Miscellaneous revenue

    30,471

    -

    8,613

    -

    39,084

    Current year activity:

    		          

    Interest

    9,018

    7,469

    254,596

    9,395

    280,478

    Transfers in

    -

    5,320

    -

    -

    5,320

    Transfers out

             -

             -

    (114,123)

    (43,436)

    (157,559)

    Total Fund Equity

    $ 161,430

    $ 117,665

    $ 4,255,411

    $ 118,618

    $ 4,653,124

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