Page 104 - Moreno Valley 2025 Annual Financial Report

City of Moreno Valley, California

Notes to Financial Statements
For the Year Ended June 30, 2025

Note 11. Self-Insurance

The City is a member of CSAC Excess Insurance Authority. The Authority is a member directed
joint powers insurance pool, which has been operational since October 1979. The purpose of
the Authority is to arrange and administer programs for the pooling of self-insured losses, to
purchase excess insurance or reinsurance, and to arrange for group purchased insurance for
property and other coverage.
The City participates in the excess workers’ compensation and employer’s liability programs
of the Authority. For workers’ compensation, the City has a self-insured retention of $300,000
per occurrence. For employer’s liability, the City has a self-insured retention of $250,000 per
occurrence. The City has a pooled retention of $5,000,000 each occurrence, a $45,000,000
reinsurance layer in excess of the $5,000,000 pooled retention per occurrence for workers’
compensation claims, and a $5,000,000 employer’s liability reinsurance layer per occurrence in
excess of the $5,000,000 pooled retention. During the past three fiscal years, none of the above
programs of protection have had settlements or judgments that exceeded pooled or insured
coverage. There has been no significant reduction in pooled or insured liability coverage from
coverage in the prior year.

Self-Insurance Payable

The City is exposed to various risks of loss related to torts; theft of, damage to and destruction
of assets; errors and omissions; and injuries to employees. The City established two
self-insurance funds (Internal Service Funds) to account for and finance its uninsured risks
of loss. Under this program, the self-insurance funds provide coverage for up to a maximum
of $300,000 for each workers’ compensation claim and $250,000 for each general liability
claim. The City purchases commercial insurance for claims in excess of coverage provided
by the funds and for all other risks of loss. Settled claims have not exceeded this commercial
coverage in any of the past three years. All funds of the City participate in the program and
make payments to the self-insurance funds based on actuarial estimates of the amounts
needed to pay prior and current year claims.
The fund establishes claims liabilities based on estimates of the ultimate cost of claims
(including future claim adjustment expenses) that have been reported, but not settled, and
of claims that have been incurred but not reported. The City has accrued for its anticipated
liability with respect to claims filed and claims incurred but not reported to the City as of
year-end. The accruals are in the amounts of $2,515,000 and $2,007,000 for the general liability
claims and workers’ compensation claims, respectively, for a total of $4,522,000. Of these
amounts, the current year’s adjustment is a decrease of $18,000.

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