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FY2O14. The payments received in fiscalyears ended June 30, 2003,2004,2005, 2006, 2OO7,2OOB, 2009,2010,2011,2012 and 2013 have been recorded in the Refuse Fund as other operating revenue.


D. Risk Management


The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the government has established various funds to account for and finance its uninsured risks of loss.


The City has established a Health lnsurance Reserve Fund for insuring benefits provided to City employees and covered dependents, which is included in the internal service fund type. Health benefits were self-insured up to a specific stop loss amount of $85,000 and an aggregate stop loss of approximately $3,344,144for 2013. Coverage from a private insurance company is maintained for losses in excess of the stop loss amounts. All claims handling procedures are performed by a third- party claims administrator. lncurred but not reported claims have been accrued as a liability based upon the claims administrator's estimate.


All funds of the City participate in the program and make payments to the Health lnsurance Reserve Fund based on actuarial estimates of the amounts needed to pay prior-year and current-year claims. The City has also established reserve funds for insuring workers' compensation, liability, and long- term disability claims which are included in the general fund type. Liability benefits were self-insured up to a specific stop loss amount of $100,000 and an aggregate stop loss amount of $260,000. Long- term disability benefits are self funded for the first six months, and the maximum benefit per individual is $18,000. Workers'compensation benefits were self-insured up to an aggregate stop loss amount of $350,000 with no specific stop loss amount. Coverage from private insurers is maintained for losses in excess of the stop loss amounts. An independent claims administrator performs all claims handling procedures. Settled claims for the above funds have not exceeded commercial coverage in any of the last three fiscal years.


Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (lBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs), and other economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims.


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