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Wellington North switches insurers

by Kris Svela

KENILWORTH - It took a tiebreaker to separate a long standing relationship between Wellington North and its insurer.

Following a 3-2 vote on Monday, council decided not to renew its  insurance policy with Frank Cowan Company,  represented by Padfield-Nelson Insurance Brokers Limited, and instead opted to go with  Jardine Lloyd Thompson Canada Inc., represented by Coburn Insurance Brokers.

At issue was a difference of about $69,000 between the  Cowan premium of $251,493 and Jardine’s quote of $182,308.

Councillor Dan Yake raised concerns outlined in a report by township treasurer John Jeffery about the two insurance bids.

“This proposal and premium is subject to adjustment as a result of a more extensive assessment of the township assets,” Jeffery said of the Jardine quote. “The company was not provided with enough time to do this assessment to the degree that they would have preferred.

Yake said, “The first thing that raises a flag is the Jardine proposal needs a  more extensive assessment. A $69,000 difference to me seems too much of a difference if we’re getting the same coverage.”

Jeffery said in discussions he had with the broker, “They didn’t feel it would have a significant impact on the premium,” after a further assessment of township property and equipment.

Yake said he could support the savings provided to taxpayers by the lower premium; however he is concerned both quotes provided similar protection.

“If we’re comparing apples  to apples I’m in favor of Jardine,” he  said. “It’s a good thing we’re reviewing it, but I’m quite concerned  about it.”

He suggested a further review to ensure the companies’ bids provided the same service.

“I think we should have learned a lesson in making sure all our ducks are in a row before we make a decision,” he said, referring to council’s recent decision to rescind a lower development charges bylaw when it was ruled council had brought in the bylaw without doing a proper study.

Jeffery said he checked with two municipalities who switched to Jardine and they were satisfied with the service provided.

Broker Bill Nelson, of Padfield-Nelson, was the only insurer to make a presentation to council. He was critical of the way the bidding proposal was handled. Nelson said his company was informed by the treasurer about competitive bids on Oct. 28, with a deadline of Nov. 21.

“This only provided a couple of weeks to accommodate this request,” Nelson told council. “I’ve been actively engaged in the insurance brokerage business for almost 33 years. During that time I’ve learned that municipal and some commercial insurance can be extremely  complicated. To prepare an accurate assessment of risk, the process can take anywhere from two to four months.”

“I certainly acknowledge that it’s a good business practice to periodically conduct a review of services purchased,” Nelson said. 

“In all fairness to the competition with the township asking anyone to prepare a comprehensive proposal of this nature within a period of only two, three weeks would seem a little unrealistic. The township   has 91 different structures that would require inspection and   assessment.”

He concluded, “I would suggest to council that obtaining a premium based on a  written submission, without on-site inspections and assessment, would  be like sending a note to a doctor asking for a diagnosis and treatment plan without ever having given him or her the opportunity to conduct a physical examination or other exploratory tests.”

In a recorded vote councillors Sherry Burke, Andy Lennox and Mayor  Ray Tout voted for the Jardine proposal, while councillors Yake and  Mark Goetz voted against it. Coverage starts in 2012.

 

December 16, 2011

 
 

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