Repository: UIHistories Project: Board of Trustees Minutes - 1978 [PAGE 51]

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40

BOARD OF TRUSTEES

[July 21

OuHine of Program

The University will replace the funding of claims and the administrative services provided by the commercial insurance companies with a risk financing program which would include: 1. Retention of risk within financial capability by setting self-insurance limits as. determined by the normal loss levels. 2. Solicitation of outside loss control and claim-adjusting services through insurance companies or from others on a "fixed fee" or a "cost-plus" basis. 3. Creation of a self-insured fund to stabilize the cost of risk. 4. Protection against "catastrophe" through the purchase of insurance in excess of self-insured limits, if economically feasible. Administration It is proposed that the Committee on Accident Compensation, which is appointed by the President, assume the responsibility of evaluating all hospital, medical malpractice, and all other types of tort claims against the University and its employees not covered by other insurance contracts. Under this proposal, the committee will include members as listed below. 1 The administration of risk management and of each of the three funds as described below is the responsibility of the Vice President for Administration who, on the advice of the Committee on Accident Compensation, will establish the amounts to be assessed and authorize expenditures from the funds for individual claims up to the limit of his authority to contract for the University, presently $10,000. Expenditures in excess of the Vice President for Administration's authority will be submitted to the Board for approval. Reserve Funds Financing amounts will be assessed and deposited in three reserve funds. T h e amounts assessed for each type of exposure (public liability, professional liability, and workmen's compensation) will be designed to fund, to the extent feasible, the accrued liability and the cost of services which were previously provided by the insurance companies and the previous self-insurance program. This will require an increase in the charges to the accounts currently assessed the insurance premiums for public and professional liability insurance, which premiums are paid from funds other than State appropriations (except for the continuing automobile coverage). Given the anticipated substantial expenditures for claims and loss prevention services, an increase in the assessments from State and Federal contracts, auxiliary enterprise units, et al., will be necessary as well. An illustration of the funding required, anticipated claim experience, and administrative expense is provided in an exhibit (filed with the Secretary). Self-Insurance Funding and Commercial Insurance A. Public Liability T h e assessment for the Public Liability Reserve Fund will provide $100,000 initially and will be increased annually as feasible. B. Professional Liability T h e Professional Liability Fund will provide an initial source of $900r00& and will be increased annually as feasible. Representatives of the Medical Service Plan have agreed and recommended that an additional $1,000,000 bemade available from the Medical Service Plan for professional liability claims: against participants in the Medical Service Plan, subject to the approval of the Board of Trustees, if the Professional Liability Reserve for malpractice

1 The Committee on Accident Compensation will include a member of the University Counsel's Office; Vice Chancellor for Health Services, Medical Center campus; Executive Dean, College of Medicine, Medical Center campus; Administrator^ University of Hiinou Hospital, Medical! Center campus; a member of a Medical Service Flan Review Committee, Medical Center campus;. and other members as appointed by the .President.