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How the Risk Rates are established: The Risk Rates are determined based on the cost projections of the four <br />insurance program areas plus administrative costs. The Risk Rates for each of the programs are calculated based <br />on the following: <br />• "Exposure" -Full Time Employee (FTE) counts by division (DVSW) <br />• Insurance premium projections <br />• "Experience" -Past five-year actual cost of claims/losses. <br />• Property values (building occupancy) <br />• Claim cost projection -based on annual actuarial analysis <br />• Administrative costs <br />Program costs for the four insurance program areas are allocated as follows: <br />• Workers' Compensation ............ 60% Experience,'40% Exposure <br />• Auto/GenerallPublicOffkials' <br />Liability/Bonds ........................ 60%Experience, 40% Exposure <br />• Property and Miscellaneous <br />Insurance .................................... 100% Property Value (building occupancy) <br />• Unemployment Insurance ........ 100% Experience <br />Other factors affecting Risk Rates: Each department's percentage of the City's total experience or exposure <br />will cause the department's rates to fluctuate. If a department has an increase or decrease in its percentage of the <br />City's total FTE, its percentage of the total cost of claims or its property value, the costs associated with those <br />variables will also increase or decrease. <br />~''' ~ ~~~ In addition, if the projected insurance premiums or projected claim costs <br />_ -_;;.,~~.3'~ increase or decrease, it will subsequently increase or decrease the cost to <br />the departments and divisions as well. Yearly fluctuations in the Risk Rates <br />are largely due to the fluctuation in the cost of insurance premiums and the <br />~ = severity of damage claims, including legal fees. <br />;i <br /> <br /> <br />5 <br />