ATTACHMENT #4
THIRD PARTY CLAIMS ADMINISTRATION AGREEMENT
LIABILITY SELF INSURANCE PROGRAM
THIS AGREEMENT, entered into effective January 1, 2026 by and between (1) CITY OF THOUSAND OAKS , hereinafter called "MEMBER," (2) ATHENS ADMINISTRATORS, hereinafter called "THIRD PARTY ADMINISTRATOR or TPA," and (3) CALIFORNIA JOINT POWERS INSURANCE AUTHORITY, hereinafter called “AUTHORITY” is for certain services as outlined in connection with the duties and responsibilities of administering a program of self insurance.
W I T N E S S E T H
WHEREAS, the MEMBER has undertaken to self insure a defined Member Retained Limit (MRL) in conjunction with its participation in the AUTHORITY’S Excess Liability Program and is in need of a qualified third party to whom to delegate the responsibilities and duties of administering said partially self insured liability insurance program (the “Self Insurance program”), and
WHEREAS, the TPA is engaged in the handling and administration of claims within the MRL, WHEREAS, the AUTHORITY is a party to this Agreement for the purpose of providing oversight,
NOW, THEREFORE, the MEMBER, the TPA, and the AUTHORITY mutually understand and agree as follows:
1. GENERAL
The TPA shall: (a) supervise and administer the handling of liability claims within the MRL for the MEMBER; (b) represent the MEMBER in all matters covered under the AUTHORITY’s Memorandum of Coverage for the Excess Liability Program, related to the investigation, adjustment, processing, supervision and resolution of liability claims for money damages asserted by third parties against the MEMBER and other participants in the program as specified; and (c) provide to the MEMBER and to the AUTHORITY all services more particularly set forth hereinafter.
2. CLAIMS INVESTIGATION SERVICES
The TPA shall provide complete claims adjustment services on each accident, incident, damage or law suit that may be the subject of a claim against the MEMBER which is reported to the TPA by the MEMBER and is covered under the AUTHORITY’s Memorandum of Coverage for the Excess Liability Program. Such services shall include, but not be limited to (a) maintenance of a claim file on each potential or actual claim reported to the TPA; (b) whenever its investigation results in a determination that the MEMBER has sustained a liability to a third party, the TPA shall process any such claim or potential claim for settlement in accordance with the MEMBER'S instructions for settlement of such claims, as set forth in the Payment Guidelines; (c) obtain all release agreements or proofs of loss on settlement of any claim or potential claim; (d) act as account manager for CMS (Centers for Medicare and Medicaid Services) reporting purposes and provide notification of potential section III-CMS information to Medicare or its designated administrator, however per Medicare the TPA cannot be the official Responsible Reporting Entity (RRE).
Investigative and analytical services shall include, but not be limited to on-site investigation, photographs, interviewing of witnesses, determination of losses and other such investigative services necessary to determine liability and loss.
3. SETTLEMENT AUTHORITY
Settlement authority within the MRL shall be defined in EXHIBIT A attached hereto and referred to herein as the “Payment Guidelines”. Such Payment Guidelines will be binding on the three parties, and incorporated into this Agreement, when executed by the three parties. From time to time during the Term, the Payment Guidelines may be adjusted by mutual agreement of the three parties, with each revised Payment Guidelines superseding any previously adopted Payment Guidelines and becoming binding on the three parties, and incorporated into this Agreement, when executed by the three parties.
The TPA shall promptly notify both the MEMBER and the AUTHORITY in writing of any claim where the total incurred value reaches 50% of the MRL.
4. ADMINISTRATIVE SERVICES
The TPA shall provide the following administrative services: (a) assignment of a Claims Adjuster to the MEMBER; (b) provide the MEMBER and the AUTHORITY with monthly reports which state the status of each claim, and the amount of outstanding reserves and claim payments; and (c) provide the MEMBER and the AUTHORITY with a periodic review of all open claims along with an explanation of the strategy for managing and resolving the claims.
5. LEGAL AND SUPPORT SERVICES
The TPA shall provide the following legal and support services on each claim wherein the claimant has commenced litigation: (a) Upon notification from the MEMBER that litigation has been filed on an open claim, the TPA shall notify the MEMBER and in accordance with the MEMBER’S instructions notify the AUTHORITY, as well as any other applicable reinsurance and/or excess insurance provider, and/or trial attorney assigned to handle the case and provide the aforementioned parties with all information and files concerning the claim; (b) maintain liaison with the aforementioned parties and provide such investigation services as are required by such attorney during pre-trial and trial stages; and (c) assist the aforementioned parties with discovery and other legal processes.
6. SUBROGATION SERVICES
For liability claims which are covered, handled and paid under the Excess Liability Program, the TPA, where necessary, shall supervise and administer subrogation, restitution and recovery for the MEMBER, represent the MEMBER in all matters related to the investigation, collection processing, supervision and resolution of subrogation claims against any responsible third parties.
7. TERM OF AGREEMENT
The Term of the Agreement (the “Term”) shall commence on July 1, 2026 and may be terminated by any of the three parties to the Agreement pursuant to Section 12 herein.
This Agreement will be automatically renewed (extended) unless a request for termination is received. Claims of the MEMBER shall be administered by the TPA for the life of the contract between the three parties; meaning, in the event that the contract is terminated, commencing on the effective date of the termination, the TPA is no longer responsible for administering the claims but shall comply with Section 13 herein regarding the disposition of files upon termination of the Agreement.
8. PRICING
The MEMBER agrees to pay the AUTHORITY for claims handling and related services in accordance with the fee schedule attached hereto as EXHIBIT B and the AUTHORITY agrees to pay the TPA.
Revisions to the fee schedule are subject to approval by the AUTHORITY with appropriate notice provided to the MEMBER. In addition to the fee schedule (EXHIBIT B), pass- through expenses may be charged to the MEMBER, which are defined as claim-related or claims adjustment expenses that are deemed by the MEMBER and the AUTHORITY to be categorized as pass-through expenses; as opposed to routine expenses which are charged to the claim file. The MEMBER agrees to pay for all reasonable and supportable pass-through expenses incurred in connection with services provided under this Agreement. The TPA agrees to obtain approval from the MEMBER and the AUTHORITY for pass-through expenses. Charges for non-file-related professional services performed at the specific request of the MEMBER will be billed on an as quoted basis.
Any expenses related to meeting attendance by Claims Adjusters or any other representatives of the TPA shall be borne by the TPA. No TPA travel expenses shall be charged to the MEMBER or to the AUTHORITY.
9. DATA PROCESSING AND OWNERSHIP OF RECORDS
The following standard services are included in the services provided pursuant to this Agreement: electronic claims data for up to three recipients (periodic scheduled reports), and access to the AUTHORITY’s electronic claims management system for up to three users. For security purposes, access to the claims management system and any report subscriptions will automatically terminate at the end of twelve (12) months. The MEMBER shall be responsible for notifying the AUTHORITY to renew user subscriptions and access or to substitute users. Additional users or report recipients shall be charged on a per person basis at an annual fee of $250.
Custom reports, and data feeds can also be requested. They are subject to a cost per quote at a rate per project or per hour once the scope has been agreed upon. Claim files and electronic records created and maintained by the TPA are the property of the MEMBER . The TPA does not possess any interest, title, lien or right to any client data or records.
Therefore, upon termination of the contract, the TPA is relieved of all obligations to provide data processing services to the MEMBER and to the AUTHORITY and will deliver to the MEMBER and to the AUTHORITY all claim data and records in a readily available excel and PDF format. If a different format is desired by the MEMBER or the AUTHORITY, the TPA will provide it at an agreed upon and reasonable cost and timeline.
10. MEMBER'S RESPONSIBILITIES
The MEMBER shall provide the TPA with copies of all relevant documents upon request and without charge and shall make available any MEMBER employee for interviews by the TPA at reasonable times concerning any investigation of a claim or incident pursuant to this Agreement.
The AUTHORITY shall invoice the MEMBER for services rendered in accordance with the fee schedule as set forth in this Agreement (EXHIBIT B). The AUTHORITY will invoice the MEMBER as needed should there be any pass-through costs as noted in Section 8.
Pricing. All sums due shall be paid by delivery of the MEMBER’S check, or wire transfer to the AUTHORITY’S offices located at the address set forth herein, within thirty (30) days following the invoice date.
11. CONFLICT OF INTEREST
In the event a claim or incident is reported to the TPA by the MEMBER and it is determined that the actual or potential claimants therein are also clients of the TPA, then the TPA shall immediately notify both the MEMBER and the AUTHORITY of such potential conflict of interest so that an alternative, independent investigator and adjuster may be considered by the MEMBER and the AUTHORITY.
12. CANCELLATION OF AGREEMENT
a. Voluntary Termination. This Agreement may be terminated at any time by any of the three parties, without cause, by giving the other parties not less than ninety (90) days prior written notice of such termination.
b. Termination for Cause. This Agreement shall terminate at the election of the MEMBER, the TPA, or the AUTHORITY if any party breaches any material provision of this Agreement and fails to cure such breach within thirty (30) business days after written notice thereof is given.
13. DISPOSITION OF FILES UPON TERMINATION OF AGREEMENT a. All files on each claim shall be the property of the MEMBER. b. In the event of expiration of this Agreement, non-renewal thereof, or cancellation, the MEMBER agrees to pay any outstanding invoice for the annual fee on a pro-rated basis, and in full for non-disputed, outstanding pass-through expense invoices.
Alternatively, the AUTHORITY shall reimburse the MEMBER, on a pro-rated basis, for the portion of the annual fee that has not been earned. Upon receipt of payment of outstanding invoices or along with issuance of a reimbursement, the AUTHORITY shall notify the TPA to promptly forward all completed and pending claim files to the MEMBER unless the MEMBER requests the TPA to continue to process any files on a time and expense basis as provided for in the TPA'S Rate Manual at the time such services are rendered.
c. The MEMBER agrees to pay separately for the external retaining, storing, retrieving, logging, packing and shipping of files which are stored off premises by the TPA.
14. HOLD HARMLESS
a. MEMBER’S Indemnification Obligation. The MEMBER agrees it will indemnify, defend and hold harmless the AUTHORITY, and the TPA and its affiliates, and their respective officers, directors, employees, agents, attorneys, shareholders, and their successors and assigns (collectively “TPA Indemnity”), from and against any loss, claim, damage, cost or expense, including but not limited to reasonable attorney’s fees and costs, that such TPA Indemnity may incur arising out of, in connection with, or in any way related to the performance of the TPA’S duties and obligations under this Agreement except claims resulting from or arising out of:
(i) acts the TPA performed in bad faith, TPA’s failure to act resulting in a breach of TPA’s duties and obligations under this Agreement, and/or TPA’S negligence, gross negligence or willful misconduct; or
(ii) acts of the TPA which exceed the authority granted to it by the MEMBER under this Agreement; or
(iii) acts or failures to act of the TPA which are not in compliance with lawful written instructions issued by the MEMBER to the TPA provided such instructions are consistent with the scope, objectives and terms of this Agreement.
b. TPA’S INDEMNIFICATION OBLIGATION. The TPA agrees it will indemnify, defend and hold harmless the AUTHORITY, the MEMBER and its respective affiliates, and their respective officers, directors, employees, agents, attorneys, shareholders, and their successors and assigns (collectively “MEMBER Indemnity”), from and against any loss, claim, damage, cost or expense, including but not limited to reasonable attorney’s fees and costs, that such MEMBER Indemnity may incur resulting from or arising out of:
(i) acts the TPA performed in bad faith, TPA’s failure to act resulting in a breach of TPA’s duties and obligations under this Agreement, and/or TPA’S negligence, gross negligence or willful misconduct. TPA agrees that its duty to indemnify the MEMBER as provided herein includes any claims, penalties or liabilities resulting from the negligence, omission or willful misconduct of TPA related to TPA’s provision of Medicare notification services as provided in Section 4(d).
(ii) acts of the TPA which exceed the authority granted to it by the MEMBER under this Agreement; or
(iii) acts or failures to act of the TPA which are not in compliance with lawful written instructions issued by the MEMBER to the TPA provided such instructions are consistent with the scope, objectives and terms of this Agreement.
c. Limitations on Indemnity Obligations. The indemnification obligations set forth in this Agreement shall apply only to the extent such obligations solely relate to or solely arise in connection with claims serviced by the TPA during the Term and under the scope of this Agreement.
d. Survival of Obligations. The obligations of the parties set forth in this Section shall survive termination of this Agreement.
15. AUDITS
The TPA’S files shall be made available for audits at any time upon reasonable notice from the MEMBER or the AUTHORITY. Reasonable notice shall be defined as thirty (30) days or as otherwise agreed to by the parties. If special retrieval or shipment of the requested files is necessary, the MEMBER or the AUTHORITY (whichever party initiates the audit) shall reimburse the TPA at cost. The TPA reserves the right to reject an auditor proposed by the MEMBER or the AUTHORITY if the proposed auditor may gain an unfair competitive advantage over the TPA by conducting such an audit.
16. MISCELLANEOUS
a. Governing Law. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of California. b. Amendments, etc. Neither this Agreement nor any of the terms hereof may be amended, changed, waived, discharged or terminated except by an instrument in writing signed by the three parties hereto.
c. No Waiver. No delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any waiver on the part of any party hereto of any such right, power or privilege, or any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other right, power or privilege. d. Severability. If any part of this Agreement is contrary to, prohibited by or deemed invalid under, any applicable law of any jurisdiction, then such provision shall, as to such jurisdiction, be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, without invalidating the remainder hereof or affecting the validity or enforceability of such provision in any other jurisdiction. e. Independent TPA. At all times during the term of this Agreement, the TPA shall be deemed to be an independent TPA to the MEMBER and to the AUTHORITY acting in the capacity as the MEMBER’S and the AUTHORITY’S agent subject to the limited authority granted herein. Nothing contained in this Agreement shall be deemed to create the relationship of employer and employee, partners, or joint ventures between the MEMBER and the TPA or the AUTHORITY. The TPA shall not act as an insurer, nor shall it be ultimately financially responsible for payment or satisfaction of Claims or causes of action against the MEMBER or the AUTHORITY. f. Current Law & Regulation. This Agreement is entered into with the understanding that existing Federal, State or other jurisdictional regulations will remain in effect for the duration of this Agreement. The MEMBER agrees that should administrative or other costs of service provided hereunder be substantially increased as a result of modifications in existing law, enactment of new legislation, or promulgation of new administrative guidelines, the TPA service fees may be renegotiated during the Agreement Term. If revised fee agreements cannot be reached, the TPA may terminate this Agreement, at its option, after ninety (90) days written notice to both the MEMBER and the AUTHORITY.
g. Counterparts. This Agreement may be executed simultaneously in three counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument, and all signatures need not appear on any one counterpart. A facsimile, copy or other reproduction of this Agreement may be executed by any party and delivered by such party by facsimile or other electronic transmission including e-mail, and such execution and delivery shall be considered valid, binding and effective for all purposes.
17. ROLE OF AUTHORITY
The AUTHORITY is party to this Agreement for the purpose of providing oversight of the contractual relationship between the MEMBER and the TPA for the benefit of the MEMBER. The role of the AUTHORITY is to ensure that the MEMBER receives excellent customer service from the TPA and to ensure that the TPA remains in compliance with industry best practices for liability claims administration in accordance with Performance Standards described herein. It is also the role of the AUTORITY to negotiate fair and reasonable pricing for services rendered under this Agreement on behalf of the MEMBER, which means the fee schedule attached hereto as EXHIBIT B is established in consultation with both the MEMBER and the TPA but is ultimately determined by the AUTHORITY at its sole discretion.
The AUTHORITY is also responsible for exercising any delegated settlement authority conferred to it by the MEMBER pursuant to the Payment Guidelines attached hereto as EXHIBIT A. The AUTHORITY is also responsible for ensuring that the administration of the self insurance program remains in compliance with the terms and conditions of the AUTHORITY’S Memorandum of Coverage for the Excess Liability Program in which the MEMBER participates.
18. NO UNDUE INFLUENCE
The TPA declares and warrants that no undue influence or pressure is used against or in concert with any officer or employee of the MEMBER or the AUTHORITY in connection with
the award, terms or implementation of this Agreement, including any method of coercion, confidential financial arrangement, or financial inducement. No officer or employee of the MEMBER or the AUTHORITY will receive compensation, directly or indirectly, from the TPA, or from any officer, employee or agent of the TPA, in connection with
the award of this Agreement or any work to be conducted as a result of this Agreement. Violation of this Section shall be a material breach of this Agreement entitling the
MEMBER or the AUTHORITY to any and all remedies at law or in equity.
19. NO BENEFIT TO ARISE TO LOCAL EMPLOYEES
No officer, or employee of the MEMBER or the AUTHORITY, or their designees or agents, and
no public official who exercises authority over or responsibilities with respect to the Agreement during his/her tenure or for one year thereafter, shall have any interest, direct or
indirect, in any agreement or sub-agreement, or the proceeds thereof, for work to be performed in connection with the work performed under this Agreement.
20. ASSIGNMENT
The TPA shall not assign, transfer, or pledge any portion of its interest in this Agreement without the written consent of both the MEMBER and the AUTHORITY.
21. NOTICES
Any notices which any of the three parties may desire to give to one or more of the other parties
under this Agreement must be in writing and addressed to the mailing address of the party as set forth below or as may be later designated by notice:
To MEMBER: City of Thousand Oaks
2100 E. Thousand Oaks Blvd., Thousand Oaks, CA 91362
Attn: Human Resources/Risk Management
To TPA: Athens Administrators
2552 Stanwell Drive, Concord, CA 94520
Attn: Custodian of Records
To AUTHORITY: California Joint Powers Insurance Authority 8081 Moody St, La Palma, CA 90623
Attn: Custodian of Records
22. INSURANCE
The TPA shall maintain prior to the beginning of and for the duration of this Agreement insurance coverage as specified in Exhibit “D” attached hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized representatives as of the day and year first written above.
MEMBER
By ________________________________ Title _______________________________ Entity Name _________________________________________ Date _____________ TPA
By ________________________________ Title _______________________________ Entity Name _________________________________________ Date _____________
AUTHORITY
By ________________________________ Title _______________________________ Entity Name _________________________________________ Date _____________
EXHIBIT A
PAYMENT GUIDELINES
These Payment Guidelines are entered into between (1) CITY OF THOUSAND OAKS (the “MEMBER)," (2) ATHENS ADMINISTRATORS (the "TPA"), and (3) CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (the “AUTHORITY”), pursuant to that certain Third Party Claims Administration Contract (the “Agreement”), dated January 1, 2025 between the three parties, and is incorporated in, and subject to the Agreement.
This delegation of settlement authority within the Member Retained Limit may be withdrawn or revised at the sole discretion of the MEMBER. These Payment Guidelines shall become binding on the MEMBER, the TPA, and the AUTHORITY on the date that they have been executed by each such party as set forth below.
DELEGATION OF SETTLEMENT AUTHORITY WITHIN THE MEMBER RETAINED LIMIT:
TO ATHENS ADMINISTRATORS $ 20,000
TO CALIFORNIA JOINT POWERS INSURANCE AUTHORITY $ 0 TOTAL SETTLEMENT AUTHORITY DELEGATED $ 20,000
OTHER PAYMENT INSTRUCTIONS AND PROCEDURES STIPULATED BY THE MEMBER:
<<< Please type any special instructions here. Example: Prior to any settlement payment being approved and extended to any claimant, TPA or Authority shall consult with the MEMBER regarding such proposed settlement. >>>
Note: the $20,000 delegation of settlement authority to Athens Administrators stated above is merely a recommendation from the Authority. The Member may choose any amount that it deems appropriate.
EXHIBIT B
FEE SCHEDULE
This Fee Schedule is agreed to by (1) CITY OF THOUSAND OAKS (the “MEMBER)," (2) ATHENS ADMINISTRATORS (the "TPA"), and (3) CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (the “AUTHORITY”), pursuant to that certain Third-Party Claims Administration Contract (the “Agreement”), dated January 1, 2025 between the three parties, and is incorporated in, and subject to the Agreement.
The annual fee is stated below. The fee was calculated based on the City’s historical claim volume and its mix of various claim types. Simple property damage claims were weighed less than more complex claims such as employment practice liability claims and litigated claims which require more time and expertise to administer. The annual fee is based on the assumption that the City’s claim volume will be similar to its historical claim volume during the contract period.
In addition to the annual fee, pass-through expenses may be incurred as described in section 8 (Pricing) of the Agreement. Additional fees may also be incurred if the MEMBER requests other services beyond the scope of those described in the Agreement.
In the event that the actual claim volume, for any given year, varies from the projected claim volume as stated below by 20% or more, then any of the three parties may request a fee review which could result in additional charges to the MEMBER if there is higher-than- expected claim volume, or refunds to the MEMBER if there is lower-than-expected claim volume. This fee review provision requires mutual agreement by all three parties prior to implementation.
Claim volume is defined as the total number of claims per year filed against the MEMBER based on the date they are reported to the TPA. Claim volume includes each individual claimant, regardless of whether or not some claimants are grouped together under a single occurrence for coverage purposes.
Finally, the cost of claims administration increases on an annual basis due to contractual obligations, merit increases and/or cost of living increases, therefore the amount stated below will also increase by the same percentage annually.
Projected Annual Claim Volume: 70
Annual Fee: $55,000
EXHIBIT C
PERFORMANCE STANDARDS
Excess Liability Program
PERFORMANCE STANDARDS
Excess Liability Program
The California JPIA supports industry best practices for its liability claims third-party administrator. The following standards detail performance expectations in providing excellent customer service to the Authority and its member agencies.
Communication
Account
Management
For reporting claims and significant incidents, the TPA shall maintain:
A designated email address
A 24-hour emergency telephone number
In response to Authority and member communications, the TPA shall:
Return telephone calls within one business day
Respond to written correspondence within two business days Respond to emails within one business day
Respond to calls to the 24-hour emergency number within 30 minutes
The TPA will have a dedicated Claims Director responsible for all day-to-day oversight of the account, TPA Supervisors and Examiners. This individual will be the lead contact person for the Liability Program Manager of the Authority. The Claims Director will be responsible for:
Ensuring adherence to the performance standards set forth herein.
Attending Monthly Executive Committee Meetings
Performing Monthly Internal Auditing
Manage TPA Claim Supervisors
Coordinating Training for account personnel
Oversight of the resolution of client service issues and complaints Management of small pending of high exposure cases
All other duties as indicated in the Claims Director for California JPIA Job Description (attached)
The TPA shall also have an Executive Level Management employee assigned to this account on a part-time basis. This person shall be available to discuss higher level goals for the account such as contract renewals, compensation, major staff revisions and other large-scale projects.
This individual will also be responsible for overseeing the performance of the Claims Director.
Claim File
Management
The TPA shall create and reserve a claim file within three working days of first report. Claims shall be assigned a severity index code, regardless of liability, as follows:
Death
Brain damage
Substantial burns
Substantial disfigurement
Amputation
Blindness
Comatose
Spinal cord injuries involving any degree of paralysis Inverse condemnation
Libel or Slander involving litigation
Class action lawsuit
Civil Rights Actions
Employment Practices Liability
Dislocation Fractures
The TPA shall maintain a diary system to ensure case review within the first 30 days of file creation, and every 90 days thereafter.
The Claims Director shall have access to and monitor the Examiners’ diary via an electronic overdue diary report, received weekly Appropriate action shall be taken by the Claims Director to bring any offending Examiners current.
Claim files shall include file notes; Examiner Reports; investigation documentation in support of recommended action. Litigation Management Plans on all litigated matters, all correspondence, claim code changes, defense counsel status reports, TPA supervisorial direction, and file closing reports or explanatory closing notes. All written correspondence shall be posted to the electronic claim file in the claims system provided by the Authority. File notes narrative shall be concise and
understandable.
Narrative shall reflect the claim status with a synopsis that includes but not limited to:
Loss description
Liability
Damages
Reserves
Payments
Potential recoveries
Overlap with other Authority programs
Supervision All claims shall be assigned to a TPA supervisor with the following responsibilities:
Review files and provide direction to examiners
Analyze key issues and recommend resources
Maintain diaries to monitor file progress
Recommend and approve all payments
Reclassify claims that change in exposure
Document TPA supervisor activities
Manage caseload of up to 100 litigated files (suffixes) Ensure proper coding of Examiner files and their own
Ensure proper reporting of qualifying claims to excess insurance carriers
Ensure that reserves on all claims under their supervision maintain an indemnity reserve that properly reflects the exposure and document that analysis.
Ensure that expense reserves mirror the amount of the
approved Case Budget from Defense Counsel.
Investigation The TPA shall investigate all claims for liability and damages using effective case management with cost containment measures. Make voice, written or electronic contact with claimant or claimant’s representative within one working day of receipt of the first report.
Make voice, written, or electronic contact with member within one working day of receipt of first report of incident. When warranted by damages and liability, take statements and collect documentation promptly.
When justified, inspect alleged property damage within five working days of receipt of first report of incident from member Assess Liability The TPA shall investigate and identify the legal basis on which the claimant has a cause of action, as follows:
Determine the legal elements the claimant must prove to recover.
Identify the potential defenses for each liability theory. Determine if contribution or indemnification from other tort feasors applies.
Assess the contractual liability of involved parties, and determine if indemnity provisions in a contract are valid and enforceable.
Explore applicable contracts, such as construction contracts and encroachment permits.
Where applicable, tender the defense and indemnity to the appropriate party, and follow up on the request a minimum of every 30 days.
The TPA shall gather information to resolve or defend liability issues, as follows:
Promptly interview the member, claimant, and independent fact witnesses. Obtain statements to support facts relevant to the claimant’s theories of liability or the member's defenses.
Investigate facts to determine liability.
Preserve evidence or testimony through statements,
photographs, video, diagrams, surveys etc. Conduct site inspections. Obtain police, weather or other reports to clarify the facts. Assist in determining or mitigating the exposure. Identify, notice, and pursue potential tort feasors resulting from the investigation.
If necessary, retain expert opinion to mitigate liability or enhance defenses. The TPA must weigh the cost of the expert with the potential impact on indemnity payout.
Causation and
Damages
The TPA shall determine the extent of injury and damages early in the case, as follows:
Obtain medical authorizations from the claimant or the claimant's attorney and contact vendors and health care providers for information.
Determine legally allowable damages.
Review medical documentation to determine the extent of disability, cause of injury, and whether lost work time was medically substantiated. Extensive medical information may not be needed if the first-call case settlement is nominal. Ascertain if the diagnosis is consistent with the trauma such as a slight impact in auto bodily injury cases. Develop the likely prognosis for each injury.
If a health care provider re-priced medical bills in delivering claimant benefits, use the re-priced value in the claim evaluation.
Determine the level of documentation appropriate to the injury.
Obtain medical provider notes and claimant medical history, when warranted. Obtain wage verification and income tax records, when warranted.
Develop the scope and proximate cause of property damage. Determine the fair market value (not replacement cost) to assess property damage. This may include a vehicle appraisal or estimates on small losses. Obtain expert opinion for unusual or complex damages.
Review all auto claim charges, such as storage and rental.
The TPA shall deduct for unrelated, prior, or subsequent injury or damage, as follows:
Research alternate causes for the injury or damage.
Use the CIB system to obtain prior and subsequent loss information and identify potential tort feasors and carriers. Index bodily injury claims. Re-index CIB on files open longer than six months.
Evaluate diagnostic and curative charges.
Use independent medical examinations and medical record reviews to mitigate damages.
Consider depreciation, salvage, betterment, and pre-existing damage to determine the fair market value of property
damage.
Reserves Reserves shall reflect the best estimate of a claim's ultimate settlement value, based on jurisdictional factors that influence the outcome. The TPA shall develop an accurate reserve by
investigating factors affecting the value including:
Liability
Damage related issues
Nature and extent of injury
Permanency
Anticipated medical treatment and cost
Claimant’s occupation and age
Anticipated length of disability
Lost earnings
Property damage
Anticipated defense costs
The TPA shall establish an initial reserve upon receipt of the claim, and maintain adequate reserves as follows:
The TPA adjuster will review the reserve within 72 hours and adjust as necessary.
The TPA supervisor shall review the reserves within 30 days of file creation to determine the need for subsequent reserves, and every 90 days thereafter.
Adjust the reserves when new information changes the claim's value.
Document file notes when setting reserves and also when changing reserve.
Evaluation/Settlement The TPA shall evaluate and pursue settlement opportunities, and utilize structured settlements and litigation alternatives when possible. The TPA shall assess coverage, liability, causation, and damages to determine the overall value. The TPA settlement authority is governed by Exhibit “A” of this agreement. Should the delegated amount of authority meet or exceed $150,000, TPA staff authority levels are as follows:
Examiners Up to $10,000
Senior Examiners Up to $25,000
Supervisors Up to $50,000
Claims Director Up to $150,000
The TPA shall document in the file notes that settlement authority was obtained before negotiating settlements. The TPA shall obtain written authority from the Authority’s Liability Program Manager should the settlement amount exceed $150,000.
The TPA shall report all CCP 998 Offers to Compromise made by plaintiffs exceeding the settlement authority to the Authority’s Liability Program Manager within two business days.
The TPA will conclude settlements by adhering to the following:
Request settlement checks within three days of receiving a signed release. In the case of litigated cases, a signed Request for Dismissal will also be obtained.
Mail settlement checks to the claimant or plaintiff’s attorney directly within ten days of receipt of required releases. Close claim files within 30 days of settlement check being mailed or defense counsel’s final legal billing having been provided.
Litigation
Management
When the TPA receives a lawsuit, a pre-litigation review form shall be completed by the TPA Supervisor, and reviewed by the TPA Client Relation Manager within five working days of receipt. A completed Litigation Management Plan will supplant the need for a Pre-Litigation Review form if completed within 5 days of receipt of a lawsuit.
If a settlement opportunity exists upon receipt of a lawsuit, the TPA will obtain an extension and begin efforts to settle. If the matter is non-jurisdictional, the TPA will obtain a Declaration of Non-Involvement from the member and present to the plaintiff attorney with a CC §1038 notice in an effort to dismiss the member from the litigation before incurring defense costs.
The TPA will create a litigation management plan for cases with no immediate settlement opportunities. The TPA shall recommend defense counsel, based on expertise and expected performance.
Approval for counsel will be given by the Authority’s Liability Program Manager.
The TPA supervisor will manage the defense counsel and monitor the case during litigation:
Prepare a letter of Authority’s direction to defense counsel within four working days of selection, outlining the case work and personnel assignment, providing brief facts and
recommendations for case handling, with a copy to the
member.
Develop and document strategies with the defense counsel in Litigation Management Reports and file notes.
Review and authorize defense attorney requests for discovery work and other activity.
Provide a Litigation Management Plan to Liability Program Manager and member risk management contact person within 90 days of case assignment and update every 90 days
thereafter.
Maintain an Internet-accessible activities calendar with trial dates, mediations, and alternative dispute resolution hearings. Provide a specific notice with strategy and recommendations 90 days before trial and 45 days before an ADR setting.
Receive a case budget from defense counsel within 30 days of assignment.
Adjust reserve to match the budget. Monitor the budget and ensure that defense counsel is not exceeding the budget. Withhold payments for legal billings exceeding the case budget. The TPA will not make payments until counsel submits an amended case budget and justification for excess charges. The TPA will review defense counsel billings for improper charges including multiple attorneys performing the same task, attending the same meetings, excessive charges for tasks, improper expenses or other charges the TPA deems
inappropriate. The TPA will document billing adjustments with correspondence to defense counsel, and a copy to the
Authority’s Liability Program Manager.
Defense Counsel
Assignments
The TPA will ensure that defense counsel performs only work that is necessary and appropriate for legal counsel. Defense counsel shall:
Provide a written opinion within 30 days of receipt of the case that includes liability evaluation, exposure, verdict potential, settlement value and settlement versus defense strategy.
Seek opportunities for settlement negotiations with cost- effective resolutions.
Review and submit itemized legal bills for payment within 90 days.
Conduct in-person meetings with the TPA every six months to review outstanding files.
Subrogation The TPA shall identify and report subrogation opportunities to the Authority’s Liability Program Manager. The Authority’s Liability Program Manager will then assign the subrogation matter and discuss payment terms.
Reporting The TPA will report severity claims reserved in excess of $250,000 to the Executive Committee every six months using the adopted Excel format and will report Significant Incidents as determined by the Claims Director to the Executive Committee monthly for inclusion on the agenda to the Executive Committee.
The TPA supervisor shall submit a Litigation Management Plan to the Authority’s Liability Program Manager with a copy to the member’s designated risk management contact within 90 days of defense counsel assignment. Litigation events will dictate subsequent reporting but at a minimum of every 90 days unless waived by written approval from the Authority’s Liability Program Manager. Certain other identified files may be exempted from this requirement by written approval of the Liability Program Manager.
The TPA shall notify excess carriers of potential excess exposures in compliance with policy documents governing coverage.
Thereafter the excess carriers will be kept advised as to the status of those claims or cases with copies of claim and/or litigation reports.
The TPA will report all Medicare eligible claimants to CMS as is required by MMSEA guidelines.
As part of claim reporting, the TPA Examiners will make Loss Prevention Recommendations where appropriate
The TPA shall alert the Authority when all litigated cases are resolved, in order that the Authority may transmit an electronic “Lessons Learned” report to defense counsel for completion. This notification shall be when the case is resolved by way of settlement, dismissal, motion or trial. TPA shall not wait until all other file handling functions are complete to transmit the above noted email.
EXHIBIT D
INSURANCE
Prior to the beginning of and throughout the duration of the Work, TPA will maintain insurance in conformance with the requirements set forth below. TPA will use existing coverage to comply with these requirements. If that existing coverage does not meet the requirements set forth here, TPA agrees to amend, supplement or endorse the existing coverage to do so. TPA acknowledges that the insurance coverage and policy limits set forth in this section constitute the minimum amount of coverage required. Any insurance proceeds available to the Authority in excess of the limits and coverage required in this agreement and which is applicable to a given loss, will be available to the Authority.
TPA shall provide the following types and amounts of insurance:
General liability insurance. TPA shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.
Automobile liability insurance. TPA shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the TPA arising out of or in connection with work to be performed under this Agreement, including coverage for any owned, hired, non-owned, or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident.
Workers’ compensation insurance. TPA shall maintain Workers’ Compensation Insurance (statutory limits) and Employer’s Liability insurance (with limits of at least $1,000,000).
Umbrella or excess liability insurance. TPA shall obtain and maintain an umbrella liability insurance policy with limits of $4,000,000 per occurrence and in the aggregate that will provide bodily injury, personal injury, and property damage liability coverage, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason, other than bankruptcy or insolvency of said primary insurer; • “Pay on behalf of” wording as opposed to “reimbursement”; • Concurrency of effective dates with primary policies.
Should TPA obtain and maintain an excess liability policy, such policy shall be excess over commercial general liability, automobile liability, and employer’s liability policies. Such policy or policies shall include wording that the excess liability policy follows the terms and conditions of the underlying policies.
Professional liability (errors & omissions) insurance. TPA shall maintain professional liability insurance that covers the services to be performed in connection with this Agreement, in the minimum amount of $5,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this agreement and TPA agrees to maintain continuous coverage through a period no less than three years after completion of the services required by this agreement.
Crime (fidelity) insurance. TPA shall maintain Fidelity Bond coverage or Commercial Crime Insurance, which shall be written on a “loss sustained form” or “discovery form” with limits of not less than $1,000,000 per occurrence or equivalent to the Authority Funds TPA has access to whichever amount is greater, for Employee Dishonesty, Fraud, Depositor Forgery, Money Orders & Counterfeit money, Fraudulent Fund Transfers, and Theft by Electronic Means. Said policy shall also include coverage for Money & Securities – On and Off Premises – including transportation by messenger, Fraudulent Instruction, Robbery, and Burglary, with limits of not less than $100,000 per occurrence. The Authority, its officers, employees, and agents shall be named as Loss Payees. If the policy is written on a “discovery form,” it must include an extended reporting period of not less than one (1) year.
Cybersecurity and privacy liability. TPA shall procure and maintain insurance with limits of $5,000,000 per occurrence and in the aggregate, which shall include the following coverage:
a. Liability arising from the theft, dissemination and/or use of confidential or personally identifiable information; including but not limited to personally identifiable information (PII), protected health information (PHI), security codes, access codes, passwords, etc.
b. Network security liability arising from the unauthorized use of, access to, or tampering with computer systems, including hacker or denial of service attacks. c. Liability arising from introducing a computer virus into or otherwise causing damage to vendor (first-party) or customer’s (third party) computer, computer system, network, or similarly related property and the data, software, and programs.
d. Liability arising from professional misconduct or lack of the requisite skill required for performing services defined in the contract or agreement. e. Costs associated with restoring, updating, or replacing data. f. Costs associated with a privacy breach, including notification costs, customer support, forensics, crises management, public relations consulting, legal services of a privacy attorney, credit monitoring, and identity fraud resolution services for affected individuals.
If coverage is maintained on a claims-made basis, TPA shall maintain such coverage for an additional three (3) years following termination of the contract.
General conditions pertaining to provision of insurance coverage by TPA. TPA and Authority agree to the following with respect to insurance provided by TPA:
1. Additional insured status. General liability, automobile liability, and umbrella/excess liability insurance policies shall provide or be endorsed to provide that the Authority and its officers, officials, employees, agents, and volunteers shall be additional insureds under such policies.
2. Waiver of subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against the Authority, its elected or appointed officers, agents, officials, employees, and volunteers or shall specifically allow TPA or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. TPA hereby waives its own right of recovery against the Authority and shall require similar written express waivers and insurance clauses from each of its sub-TPAs.
3. None of the coverage required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to the Authority and approved of in writing.
4. All coverage types and limits required are subject to approval, modification and additional requirements by Authority, as the need arises. TPA shall not make any reductions in scope of coverage (e.g. elimination of contractual liability or reduction of discovery period) that may affect the Authority’s protection without the Authority’s prior written consent.
5. Proof of compliance with these insurance requirements, consisting of certificates of insurance evidencing all of the coverage required and an additional insured endorsement to TPA’s general liability policy, shall be delivered to the Authority at or prior to the execution of this Agreement. In the event such proof of any insurance is not delivered as required, or in the event such insurance is canceled at any time and no replacement coverage is provided, the Authority has the right, but not the duty, to obtain any insurance it deems necessary to protect its interests under this or any other agreement and to pay the premium. Any premium so paid by the Authority shall be charged to and promptly paid by TPA or deducted from sums due TPA, at the Authority’s option.
6. Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the Authority’s Risk Manager.
7. Notice of cancellation. TPA agrees to oblige its insurance agent or broker and insurers to provide the Authority with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage. If any of the TPA’s insurers are unwilling to provide such notice, then TPA shall have the responsibility of notifying the Authority immediately in the event of TPA’s failure to renew any of the required insurance coverages, or insurer’s cancellation or non-renewal.
8. It is acknowledged by the parties of this agreement that all insurance coverage required to be provided by TPA or any subcontractor, is intended to apply first and on a primary, non-contributing basis in relation to any other insurance or self-insurance available to the Authority.
9. TPA agrees to ensure that subcontractors, and any other party involved with the project who is brought onto or involved in the project by TPA, provide the same minimum insurance coverage required of TPA. TPA agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. TPA agrees that, upon request, all agreements with subcontractors and others engaged in the project will be submitted to the Authority for review.
10. TPA agrees not to self-insure or to use any self-insured retentions or deductibles on any portion of the insurance required herein and further agrees that it will not allow any contractor, subcontractor, or other entity or person in any way involved in the performance of work on the services contemplated by this agreement to self-insure its obligations to the Authority. If TPA’s existing coverage includes a deductible or self- insured retention, the deductible or self-insured retention must be declared to the Authority. Deductibles or self-insured retentions shall not exceed $350,000.
11. The Authority reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving TPA ninety (90) days advance written notice of such change. If such change results in substantial additional cost to TPA, the Authority will negotiate additional compensation proportional to the increased benefit to the Authority.
12. For purposes of applying insurance coverage only, this Agreement will be deemed to have been executed immediately upon any party hereto taking any steps that can be deemed to be in furtherance of or towards performance of this Agreement.
13. TPA acknowledges and agrees that any actual or alleged failure on the part of the Authority to inform TPA of non-compliance with any insurance requirement in no way imposes any additional obligations on the Authority nor does it waive any rights hereunder in this or any other regard.
14. Requirements of specific coverage features or limits contained in this section are not intended as limitations on coverage, limits or other requirements or as a waiver of any coverage normally provided by any given policy. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue, and is not intended by any party or insured to be limiting or all-inclusive.
15. These insurance requirements are intended to be separate and distinct from any other provision in this agreement and are intended by the parties here to be interpreted as such.
16. The requirements in this Exhibit supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impairs the provisions of this Section.
17. TPA agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge the Authority or TPA for the cost of additional insurance coverage required by this agreement. Any such provisions are to be deleted with reference to the Authority. It is not the intent of the Authority to reimburse any third-party for the cost of complying with these requirements. There shall be no recourse against the Authority for payment of premiums or other amounts with respect thereto.
18. TPA agrees to provide immediate notice to the Authority of any claim or loss against TPA arising out of the work performed under this Agreement. The Authority assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve the Authority.
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