Repository: UIHistories Project: Board of Trustees Minutes - 1980 [PAGE 197]

EXTRACTED TEXT FROM PAGE:

1979]

UNIVERSITY OF ILLINOIS

187

4. Established a claim registry and a procedure to review, evaluate, and make recommendations on the disposition of all claims. T h e Risk Management Policy Committee and the subcommittees have recommended to the vice president for administration a revision of the program to provide a less costly method for financing some of the risks, to improve the administration of claims, and to provide coverage more responsive to the University's needs: A. Pooling of Funds There are three claim reserve funds (accounts) established for the self-insurance programs: Workmen's Compensation Reserve Fund, Public and Contract Liability Reserve Fund, and the Hospital Medical Professional Liability Reserve Fund (a part of which is held by the First National Bank of Chicago in the University of Illinois Hospital Trust F u n d ) . Currently, the funds deposited in an account are used only to pay the predicted claims and expenses assigned to that account. T h e three funds are separate and are not pooled for the purpose of paying claims or establishing actuarially sound reserves. T h e Risk Management Policy Committee has recommended that the Public and Contract Liability Reserve Fund (now to be called General and Contract Liability Reserve Fund) and the Hospital Medical Professional Liability Reserve Fund be continued as separate funds for internal accounting purposes only but pooled for the purpose of paying claims for general, contract, and professional liability. This pooling of the accounts will be accomplished by transferring money between these two accounts as necessary for claim payments and will permit a lower level of funding without reducing the level of confidence that the funds will be sufficient to pay the anticipated claims. The United States Department of Health, Education and Welfare "Regulations for Provider's Reimbursement under the Medicare Program" do not allow transfer of funds from the University of Illinois Hospital Trust Fund to other accounts. It is not recommended at this time that the Workmen's Compensation Reserve Fund be pooled. B. Program Document for General and Professional Liability T h e self-insurance coverage for general and professional liability was originally subject to the same terms, conditions, limitations, and exclusions as the insurance contracts which expired on August 1, 1976. T h e insurance contracts provided by commercial insurance companies are not entirely suitable for the description and operation of a self-insurance program. Therefore, it is recommended that the University of Illinois Self-Insurance Plan for General and Professional Liability, dated February 21, 1979 (this document is filed with the secretary of the board for record), be accepted as the document which describes the coverage of the University's program in the general and professional liability areas, and as replacing various published references to the "insurance contracts." It is further recommended that the authority of the vice president for administration to approve claim payments be increased to ($30,000). J C. Administration of Workmen's Compensation Program The Workmen's Compensation Act requires the employer to provide for the payment of loss of income and all necessary first aid, medical, surgical, and hospital services incurred which are reasonably required to cure or relieve from the effects of an accidental injury. T h e present procedure for the administration of claims is for the risk management staff to review and recommend to the vice president for administration the payment of loss of income up to six weeks, medical expenses up to $3,000, and permanent disabilities up to $1,500. Claims which exceed these

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The amount recommended was reduced to $30,000 by action of the trustees (see p. 188).