Carpentersville preemptively drops insurance group

Sensing the writing on the wall, Carpentersville trustees this week broke ties with the village's insurer after learning the agency would likely drop the town from its coverage because of its high number of claims.

The village board on Tuesday passed a resolution withdrawing from the Intergovernmental Risk Management Agency - or IRMA - a pool of 75 local municipalities and special service districts that have joined together to manage and fund their compensation claims.

Though Village President Bill Sarto voted in favor of the withdrawal, on Thursday he called the resolution "disingenuous," because it gives the impression that the village had a choice in the matter.

"We were dropped and had been on their watch-list for years because of the high number of workman compensation claims and other liability claims," Sarto said. "This is making it appear as though this is no big deal and we are just changing companies. They dropped our coverage."

Village Manager Craig Anderson said the village's departure was proactive, allowing staff to obtain alternate coverage options before the village's contract with IRMA expires on January 1. The village recently retained the services of the Owens Group to serve as its insurer effective Jan. 1, 2009.

"We had been on their watch list for a number of years based on losses claims and other sorts of claims," Anderson said. "I don't know if we were formally asked to leave, but in conversations with the IRMA board and staff we knew that was probably coming."

A representative from IRMA could not be reached for comment Thursday.

Anderson said the village's overall claims to contributions ratio exceeded 100 percent over the last five years. The two major areas of concern were property damage and workers' compensation, he said.

Trustee Paul Humpfer said a switch in providers would benefit the village.

"We can get fresh eyes looking at claims, new underwriters, new loss control people and new people experienced with risk management to somehow reduce the number of claims the village has suffered," Humpfer said.

How the change in insurance provider will affect the village's premiums is unknown, Anderson said.

"The goal would be to have the same or similar coverage at the same or lesser amount," Anderson said. "This will be more specifically tailored to Carpentersville and focus more on what is bleeding, so to speak."

Under IRMA, the village pays $906,000 in premiums.

The Intergovernmental Risk Management Agency will continue to provide coverage to the village until the end of the calendar year and will also continue to represent the village in a $30 million lawsuit filed against the village and two of its emergency workers last year.