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City risk sharing pools meet to stay competitive.

Elected and appointed local government officials who serve as trustees of 21 state municipal league intergovernmental risk sharing pools met last month in Atlanta for a workshop designed especially for pool trustees.

Guided by the desire to provide the best services available, the group convened to review major issues facing pools and discuss how to remain competitive and on the cutting edge of insurance and risk management services to cities and towns.

State league risk sharing pools, some more than 15 years old, have a special niche in the insurance services industry. Many were established in the late 1970s and early 1980s when insurance companies dropped municipal risk from their lines of business as a result of an increase in lawsuits and huge judgements against local governments. Today, 34 state municipal leagues administer over 80 liability, workers' compensation and health insurance pools with a combined premium volume of nearly $3/4 billion.

NLC's Risk Management Pool Service Program (NLC/RMPSP) sponsored this first Pool Trustees Workshop to provide a forum for pool administrators and trustees to share with each other their insights and examples of how state league pools can meet the challenges that lie ahead.

To set the tone for the workshop, Thomas J. Wander, vice president of Tillinghast and manager of the firm's Risk Management Consulting Group, provided a perspective on what to expect from the insurance industry in the 1990s and the roles that intergovernmental pools can play to continue to provide a vital service to cities and towns.

Wander, a nationally recognized expert in insurance and risk management, noted that this year there are a whole series of new financial pressures that will have an impact on pools.

"Critical challenges will be faced with lower interest and reinvestment rates, more conservative investment policies and higher taxes," Wander said. "While the soft market continues, cash flow will be constricted further," he added.

Wander also emphasized four major issues that pools will confront: regulation and reform, the growing workers' compensation crisis, environmental impairement liability and the growth of alternative risk financing.

In other sessions, the focus was on issues ranging from pool finances and the fiduciary responsibilities of pool trustees to innovative loss control and training programs to strategic planning for pools. The trustees also looked at how they can assess their own board's performance in meeting their mission.

NLC/RMPSP, which celebrated its 10 year anniversary last month, recently undertook a strategic planning effort of its own, the outcome of which is a continued and expanded commitment to offer specialized services to state league pools.
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Author:Shapiro, Marc
Publication:Nation's Cities Weekly
Date:May 4, 1992
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