ARIZONA STATE SENATE
Phoenix, Arizona
school district insurance;
procedures.
Purpose
Exempts all public agencies
from the procurement code for the purpose of negotiating reinsurance contracts.
Background
Arizona statute allows
public agencies to establish pooled self-insurance programs. Statute also authorizes two or more public
agencies to enter into contracts or agreements for the joint purchasing of
insurance or to pool retention of their risks for property and liability losses
(ARS § 11-952). Agencies may also
provide for the payment of property loss or claim of liability made against any
member of the pool on a cooperative or contract basis with one another.
In the months following the
events of September 11, 2001, the ability to negotiate reinsurance contracts
has become increasingly difficult. One effective method of keeping cost
increases to a minimum is to maintain the current relationship with a long-term
provider. In the statute enabling
public entity pooling, there is an exemption from the procurement code, which
allows pools to maintain their relationships with current insurers and
reinsurers. However, pools established
under the education statutes are required to follow the procurement rules for
the purchase of insurance and reinsurance.
This legislation will add all public agency pools to the list of pools
that are exempted from the procurement code.
According to the proponents
of this legislation, there are also some inconsistencies found in statute about
the types of health and welfare coverage for school districts and public
agencies. This bill conforms language
to allow public agency pools to establish programs for the joint purchasing of
a health benefits plan, life or disability insurance or the pooling of the
retention of losses for health, accident or disability claims.
A fiscal note has been
requested for this bill.
1. Exempts public agency pools from the procurement code for the purposes of the procurement of reinsurance.
2. Adds disability, accident and life insurance to the categories of insurance covered for all public entities.
3. Specifies property, liability and workers' compensation losses as the types of insurance two or more public agencies may enter into contracts or agreements for purchase.
4. Increases the entities allowed to form and participate in a construction insurance pool, from only school district governing boards to all public entities.
5. Makes technical changes.
6. Provides for a general effective date.
Prepared by Senate Staff
January 17, 2002