History and Current Status of Pools
Local governments began forming pools after commercial insurers abandoned the municipal market in the 1970s. Pools were created to reduce and stabilize long-term insurance costs and ensure access to coverage and services needed to sustain key local government functions.
Many pools ensure appropriate governance and operations by undergoing the rigorous standards or accreditation processes of respected national and state organizations.
Pools harness the power of group leverage and emphasize shared accountability. When two or more public entities share risk, aggregate costs are less than the sum of participating entities’ costs. All members’ contributions to a risk pool help pay claims for any member’s claims. Pool members share knowledge and information, helping each other to avoid and reduce future losses.
Today about 450 pools serve municipalities, school districts, and other U.S. and Canadian public entities. There are more than 90,000 public entities in the United States. The Association of Governmental Risk Pools (AGRiP) estimates that at least 80 percent of them participate in one or more pools.
Talking Points
• Pools’ responsible financial practices enhance the ultimate taxpayer value of this inter-governmental cooperation.
• Pools are not-for-profit entities. Any “surplus” accumulated is returned to members in the form of reduced future rates and/or dividends.
• Pools understand local government risks and needs and work with members to avoid losses that would otherwise inflate taxpayer costs.
• Pools provide long-term risk management; pools do not offer insurance as a commodity. Their goal is to contain and stabilize long-term costs while reducing risks and increasing safety.
UCIP
The Utah Counties Indemnity Pool is a public agency insurance mutual organized in accordance with the Utah Interlocal Cooperation Act and the Utah Immunity Act. It was formed in 1992 as a way for counties to obtain a stable alternative to traditional insurance.
All pools practice self-regulation through member-based boards of directors/trustees. The UCIP board is comprised of many elected officials and those who deal directly with the daily operations of counties. This is an effective form of regulation because the trustees – and the members they represent – understand the risks they are managing and have skin in the game. UCIP’s Board of Trustees are committed to keeping elected and appointed municipal officials connected to pooling concepts, invested in pooling outcomes, and committed to a long-term vision.
Innovative coverages, such as cyber liability, have been generated by UCIP to continually address the changing needs of counties. UCIP also provides training to elected officials and county personnel throughout the year.
UCIP Current Rates
• Overall rates have decreased 52.2% since 1998
• Property rate has decreased 76.7%
• Auto liability rate has increased 12.1% ($15/car)
• Liability rate has decreased 18.5%