Clark County booted from insurance risk pool

It expects to save as much as $200K yearly by self-insuring

By Tyler Graf, Columbian county government reporter


Updated: April 30, 2014, 6:50 PM



■ Previously: As part of a settlement agreement in September, Clark County said two men wrongfully convicted of a 1993 rape could sue the Washington Counties Risk Pool for up to $24 million. The risk pool said that was a violation of an interlocal agreement with the county and threatened to dismiss the county from the pool.

■ What’s new: The Washington Counties Risk Pool executive committee voted to sever ties with Clark County on Monday. The county is now self-insured.

■ What’s next: The Washington Counties Risk Pool board will meet in July.

Clark County is now self-insured after being kicked out of the Washington Counties Risk Pool.

For the first time in 12 years, the county will be responsible for insuring itself rather than sharing resources with other counties from around the state.

The risk pool’s executive committee made the decision following a conference call with the county Monday. The pool’s other members had argued for months that Clark County had violated an interlocal agreement when it assigned a multi-million-dollar wrongful imprisonment claim to the pool.

While the risk pool is made up of several smaller Washington counties that, in theory, receive better insurance rates by purchasing policies as a group and sharing administrative services, Clark County Risk Manager Mark Wilsdon said he was confident the county could actually save as much as $200,000 a year by self-insuring.

“This coverage is just as good as the coverage with the pool,” he said.

The new plan, provided by Starr Indemnity and Liability Co., features a $1 million retention, which is similar to a deductible, along with up to $25 million in coverage annually. The coverage will cover most claims against the county, including those tied to workers’ compensation. Buildings are a different matter. The county will remain a nonmember participant in the risk pool’s program that insures publicly owned buildings until that coverage expires in September.

The shift toward self-insuring also comes with downsides, Wilsdon acknowledged Wednesday. For one, the county will have to hire another employee to manage administrative services.

Insurance costs also tend to go beyond premiums, fees and charges. Along with staffing enhancements, there are also added claims adjustments, broker services and administrative costs.

In spite of Monday’s decision, ties between the risk pool and the county haven’t been completely severed. Clark County will continue operating under a parallel track, with its self-insurance plan covering new claims at the same time it’s coverage through the risk pool closes out existing ones. Then there’s the matter of the county’s premium, paid to the risk pool in October, and the remainder of which the county has asked to be refunded.

That request was not well-received, said Chris Horne, the county’s chief civil deputy prosecuting attorney.

“They laughed when we brought up the issue of a refund,” he said. The risk pool’s full board is expected to make a final decision on a potential refund, totaling $259,560, at its July meeting.

But what’s working against the county is the ongoing nature of the dispute between the county and the risk pool. The dispute stems from a settlement with two men, Larry Davis and Alan Northrop, who were wrongfully convicted of a 1993 rape.

While the county agreed to pay the men $5.25 million each, the terms of the settlement also authorized the men to sue the risk pool for $24 million more. The risk pool said that was a direct violation of its agreement with the county. The men are now suing the risk pool in King County Superior Court.

The dispute reached ultimatum status in March, when the Washington Counties Risk Pool Board considered oral arguments from Clark County. At the same meeting, the board gave the county 30 days to propose a solution to the alleged violation that was acceptable to the risk pool.

Vyrle Hill, the executive director of the Washington Counties Risk Pool, said Clark County hadn’t taken adequate measures to solve the dispute over the past five months.

“Nothing was forthcoming from Clark County by the deadline, so there was nothing more the executive committee could do to negate the cancellation action imposed by the Board of Directors during the March meeting,” he said.