Res 1705 9/2/1975RESOLUTION NO. /7i7;97'
RESOLUTION APPROVING CONTRACT WITH ESIS, INC.
FOR PERFORMANCE OF CERTAIN ADMINISTRATIVE
SERVICES IN THE CITY' S WORKMEN' S COMPENSATION
SELF-INSURANCE PROGRAM.
BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE CITY OF
WICHITA FALLS , TEXAS, THAT:
That certain contract, a copy of which is attached hereto,
between the City of Wichita Falls and ESIS, Inc. , effective
September 1, 1975, whereby ESIS , Inc. shall provide to the City
certain administrative services in the operation of the City' s
Workmen' s Compensation Self-Insurance Program, is hereby
approved, and the City Manager is authorized to execute the
same for the City of Wichita Falls.
PASSED AND APPROVED this the 2nd day of September, 1975.
Ilwa
MAYOR
L
ATTEST :
77Zea..2
y CITY CLERK
SELF-INSURANCE SERVICE CONTRACT
This contract, effective September 1, 1975, made and entered
into by and between the City of Wichita Falls, Texas, hereinafter
called Self-Insurer, and E$IS, Inc. , a California corporation here-
inafter called Service Company,
WITNESSETH:
WHEREAS, On July 1, 1974 , Self-Insurer became subject to the
Workmen' s Compensation laws of the State of Texas, and it has become
and will continue to be a self-insurer as the method by which its
employees will receive Workmen' s Compensation benefits; and,
WHEREAS, the parties hereto desire that Service Company shall
provide to Self-Insurer certain administrative 'services in the oper-
ation of such Self-Insurance program.
NOW, THEREFORE, for and in consideration of the mutual coy,
enants herein contained, the parties hereto do hereby agree as
follows:
1. Service Company agrees that it shall perform the following
services :
a. It shall examine, on behalf of Self-Insurer, all
reports of industrial injury to or disease of employees reported to
it.
b. It shall conduct such investigation of such cases as
in its judgment is deemed necessary.
c. It shall decide on behalf of Self-Insurer what bene-
fits, if any, should be paid or rendered under the applicable Work-
men ' s Comepensation law of Texas in each reported claim.
d. It shall issue checks in payment of benefits or claims
for compensation and medical expenses on the Trust Fund account,
subject to any discretionary authority or limit desired by Self-
Insurer; the money for the Trust Fund account shall be provided by
Self-Insurer.
11 e. It shall create and maintain a complete file on each
reported claim at the local claim office servicing Self-Insurer,
and these claim files shall be available to Self-Insurer at all
reasonable times for inspection.
f. It shall provide all forms necessary for the efficient
operation of the self-insurance program and prepare and file, where
legally permitted, all legally required forms and reports.
1 ] g . It shall provide monthly reports to Self-Insurer which
will set forth sufficient accounting and statistical data to allow
ISelf-Insurer to interpret and evaluate the self-insurance program.
h. It shall develop, in conjunction with Self-Insurer, an
1 appropriate benefit or claims payment system, utilizing a Trust Fund
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account, to meet Self-Insurer' s fiscal policies and procedure.
i . It shall provide recommendations on the amount and
method of reimbursement of the Trust Fund account in order to meet
current benefit and/or claim payment demands . Such recommendations
will be as nominal as possible, consistent with sound business prac-
tice, in order to maximize the cash flow and investment potential of
the self-insurance program.
ilj . It shall provide a monthly reconciliation of the Trust
Fund account to Self-Insurer together with a copy of each check and
11 request Trust Fund account reimbursement for funds expended by
Self-Insurer.
k. It will provide Self-Insurer with as many copies as
Irequired of a monthly Loss Experience Report, which shall be designed
for Self-Insurer ' s specific requirements and wishes. Such report
shall consist essentially of three sections as follows:
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1) Trust Fund Recap, which provides a reconciliation
of the Trust Fund account beginning with the previous month' s closing
11 balance; itemizes and applies current month' s disbursements by check
number, claim number and type of payment (compensation and/or
JImedical) to the trust balance; credits subrogation recovery payments
and deposits made to trust account; concludes with the current month' s
ilclosing balance.
11 2) Detailed Report, which itemizes current contract
year reported injuries and accidents; provides full information as to
where and when the injury/accident occurred, name of claimant, de-
partment for which claimant works , description of injury/accident,
I amounts paid, medical and compensation benefits accrued to date, and
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an estimate of future liability (reserves) existing at the time each
report is made.
3) Summary Report, which provides a recapitulation
1 of Self-Insurer' s entire program; all contract years are summarized
to reflect total claims activity, open and closed claims, payments
1 and estimates of future liability, from inception of Self-Insurer' s
program to date.
1. It shall be entirely responsible for the accurate and
1 realistic determination of the future liability (reserves) on all
open cases; open cases shall be constantly reviewed and their re-
serves frequently adjusted, upward and downward, based upon the best
available medical and legal advice as to the prognosis of the case.
1 m. It shall represent Self-Insurer before the Industrial
1 Accident Board and at prehearing conferences.
2. Self-Insurer shall make available funds for the payment of
IWorkmen' s Compensation benefits or services to or for injured or
diseased employees, or their dependents in the event of their death,
1 and Allocated Loss Expense.
11 3. Self-Insurer shall pay to Service Company the sum of
9 , 280. 00 as administrative service fee; this fee shall be payable
11 in four (4) quarterly installments of $2, 320 .00 each, for which
Service Company will bill Self-Insurer quarterly. This administra-
11 tive fee is based upon two hundred (200) reported claims. In addi-
11 tion to the administrative service fee, Self-Insurer agrees to pay
46 . 40 per claim for all claims reported in excess of two hundred
200) during this accident year.
4. Service Company shall establish a Trust Fund account from
11 which they shall pay all losses. Self-Insurer shall provide the
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funds for such Trust Fund account. Self-Insurer shall furnish
Service Company the sum of $8, 000 . 00 on the effective date hereof
IIto be placed in such Trust Fund; thereafter, Service Company will
bill Self-Insurer monthly for the amount necessary to reimburse the
IITrust Fund for all losses paid therefrom by the Service Company.
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5. "Allocated Loss Expense" shall mean all Industrial Acci-,
dent Board or court costs, fees, and expenses; fees for service of
process; fees to attorneys; the cost of services of undercover
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operatives and detectives; fees of independent adjusters or attor-
neys for investigation or adjustment of claims in areas removed
from reasonable access to salaried employees of Service Company;
the costs of employing experts for the purpose of preparing maps,
photographs, diagrams, chemical or physical analysis, or giving
expert advice or opinions involving chemical or physical questions;
the cost of copies of transcripts of testimony at coroner' s inquests
or criminal or civil procedings; the cost of obtaining copies of
any public records; the costs of depositions and court reporter or
recorded statements; and any similar costs or expenses properly
chargeable to the defense of a particular claim or to protection of
the subrogation rights of Self-Insurer. Allocated Loss Expense is
not included in the service fee; such expenses shall be paid by
Service Company out of the Trust Fund account, which shall be reim-
bursed by Self-Insurer.
6 . The employment by Service Company of such professionals
and experts shall be done with the consent of Self-Insurer.
7. If requested by Self-Insurer, Service Company shall fur-
nish Loss Control Service for an additional fee at the rate of '
150. 00 per day. Such Loss Control Service includes the following
major functions: an evaluation of the scope and level of proficiency
of Self-Insurer' s existing loss control program, and a consultative
report to guide Self-Insurer in the upgrading of such loss control
program.
11 8. This contract shall be in effect for a period of one year,
beginning September 1, 1975. It will automatically be renewed
annually on the same terms unless written notice is given by one party
to the other to the contrary on or before sixty (60) days prior to
any anniversaryanniversar date of the contract.
9 . Within sixty (60) days after the annual anniversary date
either party may propose to the other a revision in the basis of
fees retroactive to the anniversary date. In the event no agreement
can be reached on such proposed revision of fees, either party may
terminate the contract on sixty (60) days written notice to the other.
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10. In the event Self-Insurer purchases Workmen' s Compensation •
insurance, this contract automatically and immediately is terminated
and cancelled.
11. On termination by written notice or otherwise, a final
accounting will be made of the fees payable to Service Company and
of any funds belonging to Self-Insurer in possession of Service
Company, and any balance due either party will be promptly paid by
the debtor party.
12 . On termination, Service Company will deliver all claim
files on cases reported to it under this contract to Self-Insurer as
soon as reasonably practicable.
1 IN WITNESS WHEREOF, the parties hereto have caused this con-
tract to be executed this the 3rd day of September, 1975 .
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CITY OF WICHITA FALLS, TEXAS
I
By:
Gerald G. Fox
City Manager
ATTEST:
I
City Clerk
11 ESIS, INC.
By:
President
ATTEST:
Secretary
I.
I.
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Y