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Cabarrus County, North Carolina
<br />Notes to the Financial Statements
<br />For the Year Ended June 30, 2010
<br />been allocated to all governmental fund types, and business types as applicable. This surplus is being retained for
<br />anticipated future catastrophic losses.
<br />Note 3. Other Information
<br />1. Risk Management
<br />The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors
<br />and omissions; injuries to employees; and natural disasters. The County participates in a liability program which is
<br />financed using a combination of self- funding and participation in the Carolina Governmental Alliance, Inc., a
<br />governmental corporation. The County retains the first $350,000 in liability claims and claims expenses which are
<br />payable by the Carolina Governmental Alliance, Inc. Excess liability insurance above the $350,000 retention is
<br />purchased up to a total limit of $2,500,000 per occurrence and $5,000,000 aggregate.
<br />The property insurance program is financed using a combination of self- funding and participation in the Carolina
<br />Governmental Alliance, Inc., a governmental corporation. Excess property insurance above a $25,000 deductible is
<br />purchased based on the replacement values, submitted to the Excess Property Company each year.
<br />At July 1, 1994, the County chose to establish a Workers Compensation Fund (an internal service fund) for risk
<br />associated with the workers compensation plan. The Workers Compensation Fund is where assets are set aside
<br />for claim settlements. At this time the fund is no longer being funded annually. The uninsured risk retention per
<br />accident is $350,000 for workers compensation. The County has purchased commercial insurance for claims in
<br />excess of that amount.
<br />A liability for a claim is
<br />established if information
<br />indicates that it is probable that
<br />a liability has been incurred at
<br />the date of the financial
<br />statements and the amount of
<br />the loss is reasonably estimable.
<br />The claims liability for fiscal year
<br />ended June 30, 2010 is shown
<br />at right.
<br />Workers Compensation
<br />6/30/2010
<br />Unpaid claims, beginning of fiscal year $ 307,632
<br />Incurred claim 1 ,172,058
<br />Claim payments (678,224)
<br />Unpaid claims, end of fiscal year $ 801,466
<br />6/30/2009
<br />$ 346,493
<br />506,342
<br />(545,203)
<br />$ 307 632
<br />On July 1, 2004, the County chose to establish a Self- Insured Health Insurance Fund (an internal service fund) for
<br />risk associated with the health insurance plan. The Health Insurance Fund is where assets are set aside for claim
<br />settlements. A premium is charged to each fund that accounts for full -time employees plus this benefit is also
<br />offered to retired employees who meet specific criteria. The total charge to each fund is based on actual calculated
<br />cost which includes but not limited to fixed cost, mature claim cost, expected monthly liability and the number of
<br />projected employees who will be covered by insurance.
<br />The uninsured risk retention per claim is $100,000 with an aggregate stop loss of 125 %. This coverage is for
<br />claims incurred and paid in 12 months. The benefits covered are medical MH /SA Pharmacy and Vision.
<br />A liability for a claim is established if
<br />information indicates that it is
<br />probable that a liability has been
<br />incurred at the date of the financial
<br />statements and the amount of the
<br />loss is reasonably estimable. The
<br />current claims liability for fiscal year
<br />ended June 30, 2010 is shown at
<br />right.
<br />In accordance with G.S. 159 -29, the County's employees that have access to $100 or more at any given time of the
<br />County's funds are performance bonded through a commercial surety bond. The Director of Finance and Tax
<br />Self- Insured Health Insurance
<br />6/30/2010
<br />6/30/2009
<br />Unpaid claims, beginning of fiscal year $ 122,643
<br />$ 145,397
<br />Incurred claims 7,483,627
<br />5,096,129
<br />Claim payments (6,370,788)
<br />(5,118,883)
<br />Unpaid claims, end of fiscal year $1 235 482
<br />$_i Z2.64a
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