Agency: ISF - Administrative Services

Line Item: ISF - Risk Management

Function

The Division of Risk Management was organized in 1980 to implement a self-insurance program for the state. The division provides liability, property, and auto physical damage coverage to all state agencies and school districts, many charter schools, and all state-owned colleges and universities. The division also offers an Owner Controlled Insurance Program (OCIP) to provide optional insurance on construction projects; however, due to the lack of interest and funding concerns, the division will phase out this program. The division also acts as an agent in purchasing aircraft insurance for various state entities that have airplanes or flight instruction programs, but does not provide medical malpractice coverage at the University of Utah.

Statutory Authority

UCA 63A-4 outlines the duties and powers of the division. Duties include:

• Acquire and administer all property, casualty insurance, and workers' compensation insurance purchased by the state
• Make rules setting forth reasonable underwriting and risk control standards, risks that will be covered by the Risk Management Fund, eligibility for payments from the fund, procedures for making claims, and procedures for settling disputes
• Implement a risk management and loss prevention program for state agencies
• Work with state agencies that manage and protect state property, such as the state fire marshal or DFCM
• Maintain necessary records
• Manage the Risk Management Fund according to economically and actuarially sound principles
• Purchase insurance or reinsurance as necessary
• Submit rates and fees to the Rate Committee and Legislature for approval

The division may:

• Enter into contracts
• Purchase insurance
• Adjust, settle, and pay claims
• Pay expenses and costs
• Study the risks of all state agencies and properties
• Issue certificates of coverage to state agencies
• Make recommendations to state agencies
• Prescribe insurance and liability provisions to be included in all state contracts
• Review building plans and make recommendations
• Spend monies from the Risk Management Fund (created under UCA 63A-4-201

UCA 63A-4-204 through 205.5 allows school districts, charter schools, and the Utah Communications Agency Network to participate in the Risk Management Fund.

Performance

The division contracts with an insurance consulting firm to audit adjustors' work to see if they are meeting standards in documentation, timeliness, fairness to both sides, compliance with regulations, etc. The contractor uses a rating scale to assign a score and considers 95 percent or above a "Superior Rating." Note that the Governor's Office of Management and Budget is currently revamping the performance measures for Administrative Services.

Risk Management resolves liability claims against the state. While these claims may take months to years to resolve, the program endeavors to process claims within seven days of receiving them. Note that the Governor's Office of Management and Budget is currently revamping the performance measures for Administrative Services.

Related Links

Glossary of Terms

Funding Detail

The following table summarizes funding for the two programs in this line item. Restricted Revenue represents collections of Workers' Compensation premiums.

Sources of Finance (click linked fund name for more info)
Premiums
Interest Income
Risk Management - Workers Compensation
Total

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
$25,135,300	$30,493,800	$30,196,900	$30,761,400	$30,507,500	($3,300)	$30,504,200	$2,576,700	$33,080,900
$464,100	$425,800	$339,600	$256,600	$311,000	$0	$311,000	$0	$311,000
$7,141,900	$7,108,500	$6,925,100	$7,104,800	$7,208,500	$1,800	$7,210,300	$1,830,600	$9,040,900
$32,741,300	$38,028,100	$37,461,600	$38,122,800	$38,027,000	($1,500)	$38,025,500	$4,407,300	$42,432,800

Programs: (click linked program name to drill-down)
ISF - Risk Management Administration
ISF - Workers' Compensation
Total

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
$25,599,400	$30,892,500	$30,535,400	$31,004,400	$30,818,500	($3,300)	$30,815,200	$2,576,700	$33,391,900
$7,141,900	$7,135,600	$6,926,200	$7,118,400	$7,208,500	$1,800	$7,210,300	$1,830,600	$9,040,900
$32,741,300	$38,028,100	$37,461,600	$38,122,800	$38,027,000	($1,500)	$38,025,500	$4,407,300	$42,432,800

Categories of Expenditure (mouse-over category name for definition)
Personnel Services
In-state Travel
Out-of-state Travel
Current Expense
DP Current Expense
Capital Outlay
Other Charges/Pass Thru
Depreciation
Transfers
Total

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
$2,532,400	$2,579,900	$2,664,200	$2,752,000	$2,753,000	($9,200)	$2,743,800	$183,000	$2,926,800
$17,400	$18,900	$19,500	$19,700	$20,600	$700	$21,300	$0	$21,300
$11,500	$18,700	$16,300	$22,900	$16,200	($700)	$15,500	$2,000	$17,500
$31,276,400	$31,323,100	$34,211,200	$39,647,300	$34,884,100	($100)	$34,884,000	$3,913,000	$38,797,000
$159,600	$315,300	$175,300	$78,900	$186,000	($10,700)	$175,300	$2,900	$178,200
$0	$0	$0	$70,200	$0	$192,400	$192,400	($192,400)	$0
($533,000)	$112,400	$91,100	($882,700)	$413,800	$8,900	$422,700	($51,100)	$371,600
$0	$0	$70,400	$0	$192,400	($192,400)	$0	$110,400	$110,400
$0	$0	$0	$1,630,000	$0	$0	$0	$0	$0
$33,464,300	$34,368,300	$37,248,000	$43,338,300	$38,466,100	($11,100)	$38,455,000	$3,967,800	$42,422,800

Other Indicators
Budgeted FTE
Actual FTE
Authorized Capital Outlay
Retained Earnings
Vehicles

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
26.0	26.0	26.0	27.0	27.0	0.0	27.0	1.0	28.0
25.6	25.7	25.6	25.9	0.0	0.0	0.0	0.0	0.0
$0	$62,100	$289,500	$255,800	$200,000	$0	$200,000	$0	$200,000
$2,844,400	$6,504,200	$6,719,800	($126,200)	$5,975,000	($6,538,800)	($563,800)	$10,000	($553,800)
7	7	7	7	7	0	7	0	7

Subcommittee Table of Contents

Program: ISF - Risk Management Administration

Function

The Administration Program includes liability, property, and auto physical damage coverage. The liability insurance and auto physical damage programs are entirely self-insured, while the property insurance program is self-insured up to a $3.5 million aggregate yearly deductible with private insurance being purchased for amounts in excess of the deductible.

The Risk Management Fund handles claims against the state. The State Risk Manager makes final determinations on claims management, defense, and settlements.

During the 2006 General Session the Legislature passed S.B. 113, increasing the state's government immunity aggregate cap from $1,167,900 to $2,000,000.

Funding Detail

All revenue comes from insurance premiums or interest earned. The Legislature may return excess retained earnings to the General Fund.

Sources of Finance (click linked fund name for more info)
Premiums
Interest Income
Total

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
$25,135,300	$30,493,800	$30,196,900	$30,761,400	$30,507,500	($3,300)	$30,504,200	$2,576,700	$33,080,900
$464,100	$398,700	$338,500	$243,000	$311,000	$0	$311,000	$0	$311,000
$25,599,400	$30,892,500	$30,535,400	$31,004,400	$30,818,500	($3,300)	$30,815,200	$2,576,700	$33,391,900

Categories of Expenditure (mouse-over category name for definition)
Personnel Services
In-state Travel
Out-of-state Travel
Current Expense
DP Current Expense
Capital Outlay
Other Charges/Pass Thru
Depreciation
Total

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
$2,367,100	$2,364,800	$2,429,500	$2,525,800	$2,513,000	($1,400)	$2,511,600	$174,200	$2,685,800
$16,200	$18,900	$19,000	$19,700	$19,000	$700	$19,700	$0	$19,700
$11,500	$18,700	$16,200	$22,900	$16,200	($700)	$15,500	$2,000	$17,500
$24,194,200	$24,797,500	$27,317,900	$32,415,300	$27,684,100	($100)	$27,684,000	$2,420,700	$30,104,700
$159,600	$315,300	$175,300	$78,900	$186,000	($10,700)	$175,300	$2,900	$178,200
$0	$0	$0	$70,200	$0	$192,400	$192,400	($192,400)	$0
($638,100)	$7,700	($13,700)	($1,482,900)	$307,800	$8,900	$316,700	($51,100)	$265,600
$0	$0	$70,400	$0	$192,400	($192,400)	$0	$110,400	$110,400
$26,110,500	$27,522,900	$30,014,600	$33,649,900	$30,918,500	($3,300)	$30,915,200	$2,466,700	$33,381,900

Other Indicators
Budgeted FTE
Actual FTE
Authorized Capital Outlay
Retained Earnings
Vehicles

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
24.0	24.0	24.0	25.0	25.0	0.0	25.0	1.0	26.0
24.0	23.7	23.6	23.9	0.0	0.0	0.0	0.0	0.0
$0	$62,100	$289,500	$255,800	$200,000	$0	$200,000	$0	$200,000
($486,700)	$2,882,900	$3,405,800	($870,100)	$3,255,800	($4,225,900)	($970,100)	$10,000	($960,100)
7	7	7	7	7	0	7	0	7

Subcommittee Table of Contents

Program: ISF - Workers' Compensation

Function

The Workers' Compensation program is a pass-through of workers' compensation expenses paid by the state and its employees to the Workers' Compensation Fund of Utah, which provides coverage to employees on the state's payroll system. Higher education and school districts are not included in the program. The state collects monthly rates from employees' paychecks to pay the premiums billed by the Workers' Compensation Fund of Utah.

The fund supports two employees who work to reduce Workers' Compensation exposure and to increase risk-awareness by employees in an attempt to reduce accidents and therefore reduce claims. The fund also pays state agencies for half of approved expenses for ergonomic furniture, keyboards, and similar injury-preventing items for employees.

Funding Detail

Sources of Finance (click linked fund name for more info)
Interest Income
Risk Management - Workers Compensation
Total

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
$0	$27,100	$1,100	$13,600	$0	$0	$0	$0	$0
$7,141,900	$7,108,500	$6,925,100	$7,104,800	$7,208,500	$1,800	$7,210,300	$1,830,600	$9,040,900
$7,141,900	$7,135,600	$6,926,200	$7,118,400	$7,208,500	$1,800	$7,210,300	$1,830,600	$9,040,900

Categories of Expenditure (mouse-over category name for definition)
Personnel Services
In-state Travel
Out-of-state Travel
Current Expense
Other Charges/Pass Thru
Transfers
Total

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
$165,300	$215,100	$234,700	$226,200	$240,000	($7,800)	$232,200	$8,800	$241,000
$1,200	$0	$500	$0	$1,600	$0	$1,600	$0	$1,600
$0	$0	$100	$0	$0	$0	$0	$0	$0
$7,082,200	$6,525,600	$6,893,300	$7,232,000	$7,200,000	$0	$7,200,000	$1,492,300	$8,692,300
$105,100	$104,700	$104,800	$600,200	$106,000	$0	$106,000	$0	$106,000
$0	$0	$0	$1,630,000	$0	$0	$0	$0	$0
$7,353,800	$6,845,400	$7,233,400	$9,688,400	$7,547,600	($7,800)	$7,539,800	$1,501,100	$9,040,900

Other Indicators
Budgeted FTE
Actual FTE
Retained Earnings

2010 Actual	2011 Actual	2012 Actual	2013 Actual	2014 Approp	2014 Change	2014 Revised	2015 Change	2015 Approp
2.0	2.0	2.0	2.0	2.0	0.0	2.0	0.0	2.0
1.6	2.0	2.0	2.0	0.0	0.0	0.0	0.0	0.0
$3,331,100	$3,621,300	$3,314,000	$743,900	$2,719,200	($2,312,900)	$406,300	$0	$406,300

Subcommittee Table of Contents