On September 7th, Ann Gergen, President of the Arizona Municipal Risk Retention Pool (AMRRP) sent a letter to the the Town of Quartzsite stating that Quartzsite politics and resulting lawsuits have exceeded the "appropriate distribution of risk financing". They are threatening terminating the town's insurance coverage.
A town can operate without insurance if they have a balanced budget that includes monies allocated to cover the damages that they incur. Quartzsite doesn't, it owes millions to it's state Highway User Revenue Fund and just borrowed millions from the Water Infrastructure Finance Authority and the USDA to expand the town's waste water treatment plant. If no insurance carrier wants to provide coverage to Quartzsite, the town could find itself having to hire a specialty attorney to file bankruptcy under chapter 12.
I'm not surprised. It's the aftermath of IRRESPONSIBLE government. What legitimate company wants to do business with crooks?
ReplyDeleteTIME TO UNINCORPORATE?
ReplyDeleteThis should be of real concern to anyone that lives in the Town. A "case reserve" (aka "loss reserve") is what it sounds like. The Pool estimates the values of outstanding active claims for ultimate settlement or adjudication. The Pool sets these reserves to estimate their future liabilities. In any event, by reserving this amount the Pool legitimately feels there is an estimated risk of $1M currently set aside for Quartzsite claims/cases.
ReplyDeleteI didn't know that 30 cases have been opened within the last two coverage periods, which I assume is the last two years. This amount is shocking high (remember, that even if a claim eventually is deemed unmeritorious the cost to defend is still real dollars).
Clearly, there are many indications within this letter that the Pool, in all probability, will not renew with Quartzsite. And, if it does, it will be with much different terms. Reading between the lines, mentioning that the Pool will shift defense costs to the Town's side of the ledger is very alarming. As is the statement that a council member should start procuring bids from other insurance groups. Unfortunately, with this warning letter circulating on the Web I doubt that the Town will be able to procure any other insurance that is not cost prohibitive. It is a pity that the Town's people will ultimately suffer with the consequences.
If it was me, I would have already contacted Ken Strobeck at the League for advice. He would be very helpful in setting a course for the Town to rebuild trustworthiness with the Pool. He would also help the Council put together a "corrective action plan" that the majority of the council members could live with for the betterment of the community.
I feel sorry that things seem to be getting worse, but sometimes they need to bottom-out in order to rebuild.
Yes Tempus, NOW IS DEFINITELY THE TIME TO UNINCORPORATE! Drop the bomb on the cockroaches at Town Hall! OOOOPS, did I say hate speech??? Wait, I said BOMB the cockroaches, does that make me a terrorist? Better Ask Joe Winslow if I should turn my guns over to the Sheriff! But I said this today, before Sammy is the Judge so I'm probably safe, for now! Forget what I said. Just forget it.
ReplyDelete