Agenda item

Purpose: To review the current level at which the Self Insurance Fund has been set, balancing the level of risk with the size of the reserve.

Councillor Alan Law introduced the report (Agenda Item 11) concerning the Self Insurance Fund. Councillor Law reminded the Commission that he had asked for a review to include:

1.    The identification and recommendations on the required level of reserves to be held in the fund;

2.    To recommend the balance that should be held between the assumed level of risk and size of the reserve;

3.    A review the last 3 years of claims and performance.

The Commission heard that an actuarial review was completed in July 2012 and again in October 2014. In between the two reviews the forecast funding requirement had changed from £1.5m in 2012 to £2.4m in 2014. But, it was not clear why the review had required a reserve fund of £1.24m and a further provision of £1.17m.

Councillor Law explained that previous claims information was not easily available, as evidenced in support of an increase in reserve but such detail was critical in order to understand the level of risk.

The Commission was asked to review the topic and consider the accuracy of the recommendations provided by the actuary.

Councillor Jeff Brooks stressed that he could not consider the topic in full without historic data. The information would influence the Commission’s understanding of liability and risks which were essential elements of the review.

Ian Priestley advised that the actuarial review considered the date on which a claim was made rather than the completion date. The data was not available in full because it covered a wide cross section of dates. Councillor Brooks challenged the Officer’s response and suggested that irrespective of dates it could still be possible to consider trends and inform the review.

In response to questions asked by the Commission, Ian Priestley advised that service areas had reserve funds to cover insurance claims. The Self Insurance Fund was retained in order to manage overspend.

The Commission challenged the processes between calculating perceived risk and planning risk which in turn influenced the reserve fund. However, they concluded that without historic data it had not been possible to review the topic in full.

The Commission requested that the review took place in the form of a task group. David Lowe advised that an attempt had been made to conduct a task group review but due to limited resources it was not possible. He would liaise with the Head of Strategic Support to agree the most effective method of supporting the Commission with their review.

Resolved that:

(1)       The topic would be deferred until such time when the historic data would be available to consider liabilities and actual risk.   

(2)       The topic would be considered in the form of a task group.