4.4. SR 03-18-2013 - Laserfiche WebLink

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LEAGUE OF CONNECTING & INNOVATING MINNESOTA sty( ' )`'' CITIES RISK MANAGEMENT INFORMATION THE AGENT'S ROLE AND COMPENSATION IN LMCIT The League of Minnesota Cities Insurance Trust(LMCIT)property/casualty and workers' compensation programs are designed to operate through a local agent. The city must designate an agent as a condition of participating in the property/casualty program. The selection of the agent is entirely up to the city, and any licensed agent is eligible to participate. The city has the option not to use the services of an agent for the workers'compensation program, although most but not all cities do work with an agent on workers'compensation as well. Agent Formalization LMCIT is a cooperative self-insurance pool of cities and is not an insurance company by traditional standards. Because of this,there sometimes is confusion and uncertainty about the role of the agent. Not everyone is completely aware of the flexibility and options that are available for structuring the relationship between the city and the agent. LMCIT believes it's important for city officials and agents to periodically discuss the agent's role. The critical points are to make sure that everyone involved understands and agrees on what duties and responsibilities the agent will perform, and to make sure that both parties are comfortable with the compensation the agent receives for those services. LMCIT recommends the selection of the agent and the establishment of the agent's duties and compensation be addressed at the city council level. A good way to do this is through a council motion or resolution. The resolution should not only name the agent, but should also specify what services the agent is expected to provide and what compensation the agent will receive for those services. Another approach is to develop a formal written contract between the city and the agent addressing these same points. Such a contract might also address the role the agent might play in overseeing the insurance options a city might purchase from sources other than LMCIT, such as specialty liability coverage for a hospital or nursing home. To help cities and agents address these points, LMCIT and the Minnesota Independent Insurance Agents (MIIA) developed the attached model resolution for appointing an agent. This model is intended only as a starting point. Some cities may be able to use it nearly verbatim, while others may wish to make substantial changes in the list of services to be provided by the agent, in the amount or basis of the compensation the agent receives, or both. LEAGUE OF MINNESOTA CITIES 1^t UNIl RqiYAVP ‘\lSr l'110N U') )281-1200 AX (651) 281-1298 INSURANCE TRUST sr. PAtrt. MN Silo,-axoi 101 t RI (800) 925.1122 )A, I) tiNvwAvI Anc:.Ui&c,