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As
of June 30, 2007, the Risk Management Department completed its 26th
year administering the County's self-insurance program. Risk Management's
mission is to provide loss prevention and control programs and direction,
insurance, environmental and claims management services to Maricopa
County departments, districts, and Trust members to reduce or eliminate
losses. Its vision is to be recognized as a leader, and to be relied
upon for a Countywide risk management philosophy and culture. Risk Management's
primary activities are:
The
Risk Management Department is divided into three operating divisions,
Claims, Safety, and Environmental, and one Administration division.
Highlights for each division are contained in this report. The Department
strives to accomplish its mission with assistance and direction from
the Maricopa County Board of Supervisors, the Maricopa County Self-Insured
Trust Fund Board of Trustees, and the Office of the County Attorney.
The Risk Manager reports to the Chief Financial Officer of Maricopa
County.
Arizona law (ARS § 11-981) authorizes Maricopa County to self-insure, procure insurance from any insurer authorized by the State of Arizona Department of Insurance, or both. Insurance (defined in Title 20 Arizona Revised Statutes) includes, but is not limited to, auto liability, auto physical damage, general liability, medical malpractice, property, workers' compensation, and unemployment insurance. Upon establishment of a self-insurance program, Maricopa County is required to designate a Trust Administrator (Risk Manager), and establish a Trust. The Trust is funded by an allocation of funds from General Fund and Non-General Fund departments and Special Districts, or such other funding techniques permitted by state statute and authorized by the Trust's Board of Trustees. A Board of Trustees manages and directs the Trust's activities and affairs. Trustees must be United States citizens and residents of Maricopa County, and are appointed by the Maricopa County Board of Supervisors (BOS) and County Manager.
Maricopa County enjoyed mixed results this fiscal year in the risk/exposure area. Total dollars paid plus open reserves were $5,863,201, down 58.7% for this fiscal year compared to the prior fiscal year. However, the Cost of Risk increased slightly. Risk Management's costs increased $2,807,709 (9.9%), due primarily to significant increases in claim payments and legal expenses, resulting in the Cost of Risk (Risk Management's costs compared to total County and MIHS expenditures) coming in at an unacceptable 1.24%. (Note that the number of claims filed this fiscal year decreased 1.5%, from 1,505 to 1,483. This claims figure represents the number of claims filed in the fiscal year. This figure is not based on event date, and does not include unemployment or workers compensation claims.) The County realized $2,526,604 in net savings in FY06-07 through the use of in-network medical providers and a medical bill review service, and collected $321,352 through subrogation, restitution, and deductible recovery efforts (the Claims and Environmental divisions, and our Third Party Administrator for Workers' Compensation). These mixed results need to be viewed in light of the County's growth in the number of people served within the County and the noted number of claims filed. Maricopa County continues to be one of the fastest growing counties in the nation with a population over 3.8 million. It is the 4th most populous County in the United States, larger in population than 21 states, and larger geographically than 7 states. The County continues to enjoy a significant growth rate in population. Such size and growth, while economically positive, has resulted in the noted increase in the number of claims. Risk Management's emphasis on responsible claim handling and a strong proactive loss prevention and safety program is designed to keep this increase to a minimum. The
number of Maricopa County and MIHS employees varies from month to month.
For FY05-06 and FY06-07, the numbers of actual positions were 16,607
and 18,563, respectively. (Note that we are using "actual positions"
not "actual budgeted positions" as we have used in the past.)
Workers' compensation claims with an event date in FY05-06 were 1,113,
while Workers' Compensation claims with an event date in FY06-07 were
1,374. (Note, here we use event dates for these claims as these figures
better reflect safety issues within the fiscal year.) This reflects
an increase in the number of actual positions of 11.8% over the previous
fiscal year, and an increase in the number of workers' compensation
claims of 23.5% over this period. This highlights safety concerns that
will be addressed in the coming fiscal year.
Maricopa
County Risk Management
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