[Adopted 7-7-2014 by Ord. No. 14-2014]
The City Council has recognized that there is an insurance crisis within the State of New Jersey with respect to municipal liability insurance coverage. Such coverage can either not be obtained at all or only obtained at prohibitive premium rates. In order to respond to the aforesaid crisis, the City of East Orange Township desires to create a Municipal Insurance Fund and an Insurance Fund Commission pursuant to authority granted it by the laws of New Jersey.
As used in this article, the following terms shall have the meanings indicated:
- The City of East Orange selected liability insurance broker.
- The duly elected Chairperson of the City of East Orange Municipal Insurance Fund Commission.
- The City of East Orange Insurance Fund Commission.
- Any properly chosen member of the City of East Orange Municipal Insurance Fund Commission.
- The duly elected members of the City Council of the City of East Orange.
- The City of East Orange Municipal Insurance Fund.
- The duly elected Mayor of the City of East Orange.
- Any department head employed by the City of East Orange and the Mayor and members of the City Council.
- The duly appointed Secretary to the City of East Orange Municipal Insurance Fund Commission.
- The City of East Orange selected third-party claims administrator.
There is hereby created a Municipal Insurance Fund Commission within the City, consisting of eight members; three of such members, who shall be called "Commissioners," have voting authority. Nonvoting members shall be a Secretary, the City's Chief Financial Officer or her designee, the City's Corporation Counsel or her designee, a representative of the City's third-party claims administrator and a representative of the City's liability insurance broker.
Commissioners of the Fund shall be appointed as follows:
Three Commissioners shall be appointed by the Mayor with the advice and consent of the Council.
The first Commissioner shall hold office for a term of one year, the second Commissioner for two years, and the third Commissioner for three years. Thereafter, all terms shall be for periods of three years. A calendar year shall be used to determine the terms of office for the Commissioners.
Vacancies in the office of Commissioner caused by any reason other than the expiration of term shall be filled for the unexpired term.
Commissioners shall serve without compensation.
The Council shall establish within the municipal budget a fund or funds for the payment of judgments or settlements and the payment of the reasonable and necessary expenses of defending claims against the City. The amounts of these funds shall be established yearly in each municipal budget. All unused amounts in said funds from previous budgets shall be carried over into the current municipal budget.
These funds shall be used for the following purposes:
To self-insure against loss or damage caused to any property, motor vehicles, equipment or apparatus owned by the township or owned by or under the control of any township department, board, agency or commission where no insurance coverage is in effect.
To self-insure against liability resulting from the use or operation of motor vehicles, equipment or apparatus owned by or controlled by the City or any City department, board, agency or commission where no insurance coverage is in effect.
To self-insure against liability for the City's negligence or that of its officers, employees and servants, whether full- or part-time, who are acting within the scope of their authority, but not including an independent contractor, within the limitations of the New Jersey Tort Claims Act (N.J.S.A. 59:1-1 et seq.), where no insurance coverage is in effect, or prior to any excess liability coverage taking effect. Nothing in this article shall obligate the City to pay any costs if the factors established in § 23-1F have been determined to exist.
The Insurance Commission shall appoint a Secretary, who will serve as Secretary to the Commission.
The Secretary shall be entrusted with the daily operations of the Fund and shall submit a report to the Commissioners at least once a month.
The City's broker and TPA shall serve as advisors to the Commission.
Immediately upon their appointment, the Commissioners shall organize for the ensuing year and elect a Chairperson from their membership, who shall serve for a term of one year.
Subject to consultation and review by the governing body and with the consultation of the Corporation Counsel and the TPA, the Commissioners shall have the following powers and authority:
To invest the Fund and all additions and accretions thereto in such securities as they shall deem best to maintain the integrity of the Fund.
To adopt rules and regulations for the control and investment of the Fund.
To keep on hand in the Fund sufficient cash or securities which can immediately be converted to cash for the payment of losses.
The TPA shall assist the Commissioners in the proper design and administration of the Fund.
Claims shall be administered and paid through the TPA in accordance with the TPA administration contract.
The City, directly or through the broker and TPA, shall arrange for the purchase and maintenance of additional "stop loss" or "excess" liability coverage in order to provide ascertainable limits to the liability of the Fund.