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Elk River <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Theresa Slominski, Finance and Office Manager <br /> John Dietz—Chair <br /> Al Nadeau—Vice Chair <br /> Daryl Thompson—Trustee <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> July 12, 2016 2.7 <br /> SUBJECT: <br /> Renewal Premium for LMCIT Property/Casualty Insurance <br /> BACKGROUND: Our annual renewal for Property and Casualty Insurance is effective 7/1/2016 <br /> through 7/1/2017. <br /> DISCUSSION: We have received our renewal premium from the LMCIT for the 2016/2017 <br /> year. The 2016/2017 premium is $117,432 with a$20,000 per occurrence/$40,000 annual <br /> aggregate deductible, except the Equipment Breakdown has a separate $20,000 per accident <br /> deductible. This is a reduction from the prior year of$23,074 or 16%. <br /> We have a reduction in premium this year due to a few different factors. <br /> • The property premium decreased about 2% due to rate decreases. Also, our <br /> experience modification factor decreased about 2% from .880 to .863 (however <br /> our aggregate factor is still slightly above 1 at 1.01). <br /> • The municipal liability premium decreased about 54%. There are a few factors <br /> that contributed to this large decrease: 1) the decrease in the experience <br /> modification factor, 2) decreases in rates, and 3)the most significant factor is the <br /> elimination of the transition factor that has been applied the past few years to <br /> assist us in transitioning into the new liability rating method. We are now fully <br /> transitioned into this new rating system. <br /> • The auto liability premium decreased about 5% due to the decrease in the <br /> experience modification factor and a change in exposure. <br /> I have attached the Renewal Premium Summary for your review, which lists the various <br /> coverages and related premiums of the prior and current year. <br /> Our agents are not recommending any changes to our current occurrence and aggregate <br /> deductibles. If the Commission desires to make any such changes, we would need to let the <br /> LMCIT know as soon as possible. <br /> INATURE <br /> EN Page 1 of 2 <br /> Reliable Public' <br /> Power Provider POWERED T O S ERV E <br /> 56 <br />