ORDER N0. c_E094
SELECTION OF RISK NANRGER CONSULTANT
TO ASSIST WITH EVALURTING INSURRNCE
AND INSURRNCE RIDS
On this the CSth day of Octo6er• 1`3S'3, ~_ipon motion made by
Commissioner Griffin, seconded by Commissioner Williams, the
Co~_ir•t unanimously approved by a vote of 4-fD-0, that the Co~_inty
R~_tditor and Co~.inty .7~_idge be a~_ithor•ized to negotiate a fee
contract for ins~ar•ance risk management services in an amo~_tnt
not to exceed S7,,i00.
COMMISSIONERS' COURT AGENDA REQUEST
PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE
REVIEWED BY THE COURT.
MADE BY: Fred Henneke OFFICE: Count~Judg_e
MEETING DATE: October 25. 1999 TIME PREFERRED:
SUBJECT: (PLEASE BE SPECIFIC)
Consider and discuss selection of Risk Manager Consultant to assist with evaluating
insurance and insurance bids.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT:
ESTIMATED LENGTH OF PRESENTATION:
IF PEKSONNEL MATTER -NAME OF EMPLOYEE:
Count~Judge/Auditor
Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter
551 and 552, Government Code, is as follows:
Meeting scheduled for Mondays:
THIS REQUEST RECEIVED BY:
THIS REQUEST RECEIVED ON:

All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been
prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be
appreciated and contribute towards you request being addressed at the earliest opportunity. See Agenda Request Rules
Adopted by Commissioners' Court.
5:00 P.M. previous Tuesday.
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GRAY & COMPANY, LLC
CONSULTING CONTRACT
November 9, 1999
Mr. Tommy Tomlinson
Kerr County Auditor
700 Main, #103
Kerrville, Texas 78028-5327
Re: Insurance Consulting Contract
Deaz Mr. Tomlinson,
~~~~~
This letter and the attached proposal dated November 8, 1999 will serve as the basis of the
relationship between Ken County (hereinafter referred to as Client) and Gray & Company, LLC.
(Gray & Co.) effective on October 25, 1999.
Gray & Co. offers four (4) areas of service to Client as described in the attached proposal. Client
hereby retains Gray & Co. to provide services desired by Client as indicated by the initials of the
Client's representative that executes this contract in the appropriate "Yes" or "No" column. Gray
& Co. shall not be responsible for performing services in those areas where Client has initialed in the
"No" column.
YES NO
Insurance Assessment
p Insurance Administration Audit
'loll !Y Insurance RFP Project
~~9~ On-Going Insurance Management Services
1204-B Lakeway Drive ~ Ausun, "fe*az 78734 ~ pbanr SIY261-0900 ~ fux 512-367-7295
wwwmsomulrancrom ~ don@irsrraruu[ranarom
Insurance Consulting Contract Page 2 of 3
November 9, 1999
~~ ~ P.Ic~ ~ a,S G~J- od
Client will pay to Gray & Co. for services rendered the fees and expensesJldescribed in the Proposal
for each service area for which has been initialed by Client under the "Yes' column above. Gray &
Co. will maintain time records of all personnel which provide billable services to Client, and those
time records will be attached to each invoice.
Confidential information obtained by Gray & Co. concerning Client will be treated as confidential and
will not be released to outside parties without prior approval by an appropriate representative of
Client. The foregoing shall not apply to the extent that disclosure is required by law or order of a
court or governmental body.
Client will promptly provide Gray & Co. accurate and complete information as requested by Gray
& Co. from time to time with regard to Client's loss experience, risk exposures, or current or
anticipated changes in Client's business operations that may affect the service areas selected above
which Client requests Gray & Co. to provide or which may affect coverages which are provided
under insurance policies in force as of the date of Gray & Co.'s engagement or under insurance
policies that maybe purchased by Client during Gray & Co.'s engagement.
Client will promptly review all policies and other coverage documents in connection with insurance
purchased by Client. Client will promptly advise Gray & Co. of any errors or changes desired by
Client in such policies or coverage documents.
Client is be responsible for making final decisions with respect to the accuracy and completeness of
any underwriting submissions which Client requests Gray & Co. to submit to insurance agents,
insurance brokers, or insurance companies on Client's behalf.
Client is responsible for making the final decisions concerning whether to purchase or to decline
insurance coverages. If insurance coverage is recommended by Gray & Co. and declined by Client,
Client agrees to confirm its decision in writing for Gray & Co.'s files to avoid misunderstanding
should an uninsured loss occur.
Gray & Co.'s relationship with Client shall be on a continuing basis until the purchased services have
been completed with the understanding that this Agreement may be terminated by Client or Gray &
Co. with thirty (30) days written notice. If this Agreement is terminated by Client, it is agreed that
Client will be responsible for payment of all fees and expenses due Gray & Co. through the thirty (30)
day notification period. If this Agreement is terminated by Gray & Co., Gray & Co. will be
responsible for concluding, to the extent reasonably possible, any work in progress for Client within
the thirty (30) day notification period.
This Agreement shall be governed by and construed in accordance with the laws of the State of Texas
(except those relating to the conflict of laws) and shall be performable in Kerr County, Texas. Each
party hereto submits to the jurisdiction of the courts of the State of Texas and the federal courts in
and for the Western District of Texas in connection with any dispute arising under this Agreement
or any document or instrument entered into in connection herewith.
Insurance Consulting Contract Page 3 of 3
November 9, 1999
If any provision of this Agreement is unenforceable, the enforceability of the remaining provision shall
not be affected thereby. This instrument contains the entire agreement of the parties. No
modification, dischazge, or waiver of any term of this Agreement shall be valid unless in writing and
signed by the parties to this Agreement.
This Agreement supersedes all prior agreements or representations, whether oral or written, between
the parties hereto relating to the subject matter hereof, and all such prior agreements or
representations aze terminated. This Agreement shall be binding upon and shall insure to the benefit
ofthe legal successors, heirs, and permitted assigns of the parties hereto. Nothing contained in this
Agreement creates any rights or benefits in any third party.
If Client is in agreement with the terms and conditions of this Agreement, please indicate acceptance
by signing both the original and a photocopy, keeping the original for your files and returning the
photocopy to Gray & Co..
Respectfully submitted on behalf of Gray & Company, LLC.
by:
Donald K. Gray, ARM'
Gray & Company, LLC
Accepted on behalf of
by: ~-/k~i~~
(Signature)
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(Title)
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(Date) '
(Address)
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PROPOSAL FOR
RISK MANAGEMENT CONSULTING SERVICES
FOR
KERB COUNTY
Presented by
Gray & Company, LLC
1204-B Lakeway Drive
Austin, Texas 78734
(512)261-0900
Fax (S12) 367-7295
November 8, 1999
GRAY
TABLE OF CONTENTS
Introduction ............................................................I
SECTION ONE -GRAY & COMPANY SERVICES
Insurance Assessment (Property & Liability) .................................... 3
Insurance Administration Audit (Property & Liability) ............................. 5
Insurance Request For Proposal "RFP" Project (Property & Liability) ................. 7
On-Going Insurance Management Services (Property & Liability) ................... I3
"Basic" Insurance Management Services ................................. 13
"Optional" Insurance Management Services ............................... 15
SECTION TWO -FEES. REFERENCES & BIOGRAPHIES
Fees ...................................................................
References ..............................................................
Biography ..............................................................
~' C'iRAY
INTRODUCTION
Gray & Company, LLC is pleased to provide this proposal to Kerr County (the County). We have
prepared this material to give you a brief bit of background about our firm and our services. The
following pages will provide information about the various forms of service available from our firm
and our qualifications.
Gray & Company was founded in 1999 by its principal, Don Gray, ARM. Don Gray has over 11
years of experience in providing consulting services to governmental entities. Don is licensed to
provide insurance consulting services by the State of Texas.
Our list of clients in Texas includes more than 32 governmental entities. We are very familiar with
the insurance markets and insurance policies available to county governments. Our extensive
ex erience means that the County can be assured that our analysis and recommendations will be
founded on proven knowledge of what is reasonable, customary and achievable with regard to your
insurance program.
Grav & Co. does not sell insurance, is not affiliated with any insurance sales organization and does
not promote a particular coverage or industry program. Further, we do not provide our services to
any organizations that market insurance coverage to our clients. Our independent status puts us in
the proper position to provide the unbiased and objective opinions sought by our clients.
We hope that the County will find our firm to be acceptable as we would welcome the opportunity
to be of service.
If additional information is needed to clarify our proposed services, please contact Don Gray, ARM
at (512) 261-0900.
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SECTION ONE
GRAY & COMPANY'S SERVICES
NOTE: Each of the four proposed services are available on a "stand-alone" basis.
While Gray & Co. prefers to provide afull-range of services, we will not require
the County to purchase each of the four services.
Gray & Co. is a consulting firm and does not serve in the capacity of an
insurance agent or insurer. Gray & Co.'s reputation is based on
providing a high level of service to our clients. Our role is to assist our
clients by providing the services that we have agreed to provide. Gray
& Co. assumes no responsibility for the insolvency of any insurer or the
decision of an insurer to not cover a particular claim. Gray & Co. shall
have no responsibility for recommendations or suggestions made by
Gray & Co. which are outside the scope of the service agreement.
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INSURANCE ASSESSMENT
Gray & Co. proposes a review of the County's insurance policies that pertain to following areas of risk:
1. Physical loss of the County's property, including property insurance, boiler and machinery, inland
marine or other property damage, business interruption insurance, and fidelity insurance.
2. Legal liability for bodily injury, property damage, advertising injury, and personal injury. Included
within this would be general liability, automobile liability, public officials errors and omission,
umbrella liability, law enforcement liability, and workers' compensation.
This project will involve interviews with the County staff members and visits to several of the County
facilities. Gray & Co. will make use of an exposure survey checklist to learn about the County's loss
exposures. Upon completion of the assessment, Gray & Co. will prepare a report that will provide the
following information:
1. A listing of the County's uninsured exposures to accidental loss that are traditionally insured by
similar county governments.
2. Our opinion of the appropriateness of the coverage and competitiveness of the pricing provided by
the County's insurance policies, along with specific recommendations for improvement.
3. A review of the contractual liability obligations to third parties assumed by the County to assure that
the insurance requirements have been satisfied in the County's insurance policies.
4. An evaluation of current levels of risk retention and deductibles maintained by the County.
5. A discussion of how the County's insured property values are to be determined (buildings,
contents, mobile equipment, computer equipment, etc.)
6. An analysis of current property insurance limits on the three most highly valued buildings in relation
to the estimated replacement cost to determine whether current values are in line.
7. A review of business interruption and extra expense exposures.
8. A review of the County's liability for the property of others in your care, custody or control.
9. A review of prior loss experience with a commentary on how these losses are impacting your
current insurance costs.
10. A commentary on the financial strength of the insurance companies providing coverage to the
County.
It is understood that the Assessment will be based on materials and information furnished to Gray & Co. by
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the County and its insurance agents, brokers and insurers. Further, the Assessment will be based on
conditions observed by Gray & Co. and information supplied to Gray & Co. by the County during the term
of Gray & Co.'s engagement to complete the Assessment. To this extent, the findings of the Assessment will
necessarily be limited in scope and Gray & Co. does not claim to address every potential loss exposure,
hazard, statutory violation, code violation, or violation of good practices to which the County may now or
in the future be subject.
Gray & Co. estimates that this project would involve 53 hours of consultin to ime. Hourly rates are detailed
in Section Two (Fees). Based on the hourly rates, Gray & Co. estimates a cost of $6,625 for this project
(plus reimbursable expenses). The hourly rates will also apply to any services requested by the County that
are outside of items 1-10 above.
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INSURANCE ADMINISTRATION AUDIT
While the "Insurance Assessment" focuses with the adequacy of the County's insurance policies, the
"Insurance Administration Audit" focuses on the internal mana eg ment of the County's insurance
program. This project will result in a report which will include specific recommendations for
improvement and a checklist of the items that were considered by Gray & Co. in conducting the review.
The review will concentrate on the following areas of insurance management:
Issuance of Insurance Policies (issued prior to expiration of binders, issued in a timely manner,
agree with the insurance bids, etc.)
2. Filing of Insurance Policies (attachment of mid-year endorsements, retention of expired
policies, file organization)
Maintenance of Insurance Policy Schedules (policy numbers, limits, deductibles, agent, policy
period, total premiums, total claims, loss ratio, etc.)
4. Maintenance of Buildings/Fleet Schedules (automated, current, contain sufficient underwriting
sufficient details)
5. Reporting of schedule addition/deletions to Insurers (timeliness, written confirmation,
confirmation by endorsement)
6. Incident reporting (internal procedures, investigation, timeliness of reporting to insurer)
Loss Runs (frequency, timeliness, dissemination)
Insurance Provisions in Contracts with Third-Parties (include an accurate assessment of the
coverage that is needed, review by an insurance professional prior to execution, suggestions
for improvement)
9. Certificates of Insurance (manual or automated access to certificate information, reviewed by
qualified individual, compared to contract before being approved, monitored for expiration)
10. Premium Invoices (approval procedures)
11. Property Values (basis of values in comparison to insurance policy requirements)
12. Communication with Insurance Agents and Loss Control representatives (frequency,
documentation, adequacy)
13. Agent Services (level provided, level desired, formalized service agreement)
aT e«
14. Insurance Purchasing (frequency of bidding efforts, timeliness of bidding efforts, purchasing
laws, bidding procedures, distribution to marketplace, proper analysis of bids)
Gray & Co. estimates that this project will involve 14 hours of consulting time. The hourly rates are
detailed in Section Two (Fees). Based on the hourly rates, Gray & Co. estimates a cost of $1,825 for
this project (plus reimbursable expenses). The hourly rates will also apply to any services requested
by the County that are outside of items 1-14 above.
GRAY
INSURANCE "RFP" PROCESS
The County recognizes the need for an independent risk manager to manage a "Request For Proposal"
(RFP) process that will culminate in the purchase of the following insurance coverages to become
effective 1/1/2000:
* General Liability
* Automobile Liability & Physical Damage
* Public Officials Errors & Omissions
* Property, Inland Marine and EDP Coverage
* Boiler & Machinery
* Workers' Compensation
* Above Ground Fuel Storage Tank Pollution Liability
The services proposed by Gray & Co. are detailed below:
L In order to plan the process, Gray & Co. will telephone the County to discuss the following
topics:
Calendar of Key Dates
a. Completion of Underwriting Information
b. Submission of Draft RFP document to the County
c. Approval of the RFP document by the County
d. Release of Final RFP document
e. Gray & Co. Telephone Follow-up with Agents
£ Proposal
g. Due Date
h. Discussions of Proposals at a Commissioners Court meeting
i. Effective Dates of Insurance
The type of underwriting information that will be required to get the most competitive bids
a. Automobile Schedule (including owner, year, make model, owned/leased, vehicle
identification number (VIN #), and cost new to the original owner)
b. List of Drivers (including name, date of birth, drivers license number and State of
issuance if other than Texas)
c. Expenditure Summary (budget information)
d. Annual Premiums by Year for Each Line of Coverage (1992, 1993, 1994, 1995, 1996)
e. Currently Dated Loss Runs from the Insurers That Provided Liability Coverage in
1995-1999 (including details on claims in excess of $25,000)
f. Personnel Policy (Table of Contents)
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g. General Liability application (questions involving use of pesticides and herbicides,
bridge conditions, employee benefit programs„ sponsored fairs and events, closed
landfills, miles of roads, land/facilities leased from others, land/facilities leased to
others, vacant land owned by the County, underground fuel storage tanks)
h. Audited Financial Statement (most recent)
i. Budget
j. WC Payrolls for the year 2000
k. Property Schedule
1. Computer Listing
m. Mobile Equipment Listing
n. WC Experience Modifier Worksheet
o. Fuel Tank Pollution Application
p. Public Officials Errors & Omissions application
3. Distribution of the RFP (distributed to what sources?, distributed by what method?).
4. Market Assignment vrs. Open Market Approach.
5. Identify Desired Insurance Carriers, Agents, Governmental Pools, and Direct Writing
Insurance Companies.
6. Reproduction of the RFP.
7. Agent Qualifications.
8. Insurance Company Qualifications.
9. Presentation to Commissioners Court.
10. Insurance Limits and Deductibles Desired by the County.
1 I. Proposal Questionnaire to be completed by Proposing Agents and/or Insurers
Prior to the telephone conference (or during the meeting), the County should provide Gray & Co. with
complete copies of the in-force insurance policies that are to be included in the RFP.
During the telephone conference (or meeting), Gray & Co. will discuss the type of insurance coverage
desired by the County and the underwriting information that will be required. Gray & Co. will provide
the County with questionnaires and schedules for completion. Gray & Co. will answer questions
about the questionnaires and schedules and will offer advice as how to gather the underwriting
information. The County will be responsible for validity and accuracy of the underwriting information
prepared by the County, including but not limited to insured values, vehicle schedules, and
questionnaires.
Gray & Co. estimates devoting 1.5 hour of consultin tg ime to Item I.
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II. While the County is in the process of gathering underwriting information, Gray & Co. will
start preparing the insurance specifications by:
1. Becoming familiar with the insurance policies currently in force that the County desires to be
included in the insurance specifications (Automobile Liability & Physical Damage, Workers
Compensation, Public Officials E&O, General Liability, Buildings & Contents, Boiler &
Machinery, EDP, Mobile Equipment).
2. Drafting the description of the insurance coverage desired by the County to be included in the
RFP. Unless advised otherwise by the County, the RFP will request proposals for the same
coverages provided by the policies currently in force as listed in II.2 above. Further, Gray &
Co. may request for the proposers to propose certain coverage enhancements as "options" for
the County's consideration.
4. Editing Gray & Co.'s standard RFP text to incorporate the County's suggestions (Agent
Services, Agent Qualifications, Insurer Qualifications, Negotiation Process, Market
Assignment, etc.).
The RFP will include a majority, if not all, of the underwriting information that agents will need. The
RFP will contain the following sections:
a. Introduction
b. Procedures (procedures to be followed in the RFP process)
c. Governmental Immunity & Limited Liability (a discussion of the statutory protection
enjoyed by the County for the purpose of informing underwriters and obtaining
favorable pricing).
d. A description of the coverage provided by the insurance policies currently in force.
e. A description of the description of coverage desired by the County (similar to in-force,
plus quotes for any options suggested by the County or by Gray & Co.)
f Underwriting data prepared by the County
g. Proposal Response Form (to be completed by proposers)
When completed, Gray & Co. will submit the draft RFP to the County for review and approval. Gray
& Co. will the incorporate the County's comments into the final text and provide the County with
another opportunity to review the RFP.
Gray & Co. estimates twenty hours of consulting_time and ten hours of clerical time to complete
Item II.
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III. As available, the County should "piece-meal" the various types of underwriting data to Gray
& Co.. Gray & Co. will review the material and contact the County if there are any questions.
The underwriting data need not be provided in final form, as Gray & Co. will enter the data
into its computer prior to printing the final form.
Gray & Co. estimates two hours of consultin time to complete the review of the underwriting
information and two hours of clerical time to prepare the underwriting information.
IV. Gray & Co. will be responsible for reproducing the RFP. Each copy will be 3-hole punched.
The County will be responsible for the cost of photocopying.
V. The RFP will be mailed by either Gray & Co. or the County (the County's choice). The
County will reimburse Gray & Co. for actual out-of-pocket mail expenses (U.S. mail and
overnight delivery).
VI. Gray & Co. recognizes the need to maintain an open relationship with all proposers. Gray &
Co. will attempt to contact each agent on at least two occasions prior to the date bids are due
(except those agents who indicate no interest or ability to submit a bid). The primary purpose
ofthe telephone calls will be to I) judge the agent's level of interest and each insurer's level
of interest and 2) to ask if any additional underwriting information is needed.
Another purpose of the phone calls is to foster a good working relationship with the agent and the
underwriters.
Gray & Co. estimates four hours of consultant's time to complete Items IV-VI.
VII. The RFP will instruct proposers to contact Gray & Co. if additional information is needed
about the County. Gray & Co. will review any requests for additional underwriting
information to make certain that the information was not included in the RFP. If the requested
information is not in the RFP, Gray & Co. will forwazd the request to the County. Gray & Co.
will disseminate the County's response to all bidders via addendums to the RFP.
Gray & Co. estimates that Item VII will involve four hours of consultin to ime and two hours of
clerical time.
VIII. Upon receipt of the proposals, Gray & Co. will review the questionnaires that are to be
completed by the proposing agents/insurers and prepare a spreadsheet which will provide a
brief summary of each proposal and the projected annual premium. If desired, the County may
elect to use this spreadsheet to eliminate some of the bids from further review (minimizing
additional consulting time).
Gray & Co. estimates five hours of consultin tg ime and two hours of clerical time to complete Item
VIII.
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IX. Gray & Co. suggests that the RFP should require the proposers to submit an exact copy of the
proposed policy language as part of the proposal. Gray & Co. will closely review each
Questionnaire that was submitted and accompanying proposal material. Further, on the
proposals that appear to be candidates for being awarded coverage, Gray & Co. will review
the policy language provided along with the proposals. If a proposer submits a Questionnaire
that has not been fully completed, Gray & Co. will advise the County. The County can then
1) direct the proposer to provide the missing details, 2) instruct Gray & Co. to not consider
the proposal, or agree to compensate Gray & Co. on a time basis for completing the
Questionnaire by reviewing the proposed policy language.
Gray & Co. will prepare a spreadsheet to compare each proposal and policy language with
the RFP coverage requirements and to any optional coverage enhancements. Gray & Co.
will discuss the differences between the proposals with the County and assist the County in
identifying the aspects of coverage that are of most importance to the County.
Without knowing the number of proposals that will be submitted, it is difficult to project the amount
of consulting time and clerical time required for item IX. However, Gray & Co. estimates an average
of 45 minutes of consultin tg ime to review each proposed line of coverage proposal by an agent. The
term "line of coverage" applies separately to General Liability proposal, Auto Liability and Physical
Damage proposal, Public Officials E&O proposal, and Property, Workers' Compensation, and
Pollution proposal. This will likely equate to 4.5 hours per agent (assuming each agent submits only
one proposal for each line of coverage). In addition, Gray & Co. estimates an average of 30 minutes
of clerical time for each line of coverage proposal by an agent. Based on past experience, Gray & Co.
would expect the County to receive proposals from 3 to 5 different sources. Assuming 4 sources,
Gray & Co. would expect to devote 18 hours to analyzing the proposals (plus 8 hours of clerical
time). As per Item VIII, this figure would be reduced if the County elected to eliminate any "non-
competitive proposals" from an in-depth review.
X. Gray & Co. will discuss the proposals (in person) with the Commissioners Court to identify
the proposals that should be considered for purchase to the County. This will include a
discussion (possibly lengthy) of the key differences in coverage between the proposals and a
recommendation for the placement of coverage. Gray & Co. estimates that item X will involve
8 hours (including travel time and preparation for the meeting).
CONSULTING FEE
Gray & Co. will agree chazge the county at the hourly rates indicated in Section II with the
understanding that the minimum consulting/clerical fee will be no less than $6,000 and that the
maximum consulting/clerical fee will be no greater than $7,000. This minimum maximum fee
arrangement is limited to the services proposed in items I-X above and does not include any fee for
Gray & Co.'s time spent at the County's direction in completing proposers Questionnaires. Any
services that are requested by the County outside of Items I-X above will be billed at the rates detailed
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in Section II of this proposal Also, the maximum fee does not include the reimbursable expenses that
are detailed in Section II. The expenses will be billed in addition to the consulting fee.
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"ON-GOING" INSURANCE MANAGEMENT SERVICES
Most Gray & Co. clients recognize the importance of maintaining a close relationship with Gray & Co.
throughout the yeazs. This allows Gray & Co. to be in position to continue providing independent and
objective advice to the client regarding the management of the property and liability insurance program.
Since it is common for businesses to change insurance companies and insurance brokers every few
years, many Gray & Co. clients feel it is important to maintain a relationship with Gray & Co. for
continuity purposes.
"BASIC" INSURANCE MANAGEMENT SERVICES
Gray & Co. will provide the "Basic" Insurance Manasement Services detailed below for an annual fee
of 2 900.00 (as respects property, liability, fidelity and workers' compensation insurance coverage).
The hourly rates detailed in Section Two (Fees) will apply.
Annrove Invoices
We will receive copies of your insurance invoices at the same time you receive the originals. We will
review the invoices for accuracy and recommend payment or advise you if the bill contains an error.
Prior to approving an invoice, we will re-calculate the premium to assure that the invoice is based on
correct rates, credits and exposure units.
Insurance Policy Review
We will review all renewal policies to make sure that they agree with the proposals. We will advise you
of all errors that we discover.
Maintain Insurance Schedules
We will maintain current underwriting schedules of your insured vehicles, equipment, building and
contents, computers, boilers, etc. This information, when combined with your historical premium and
claims data, allows us to immediately update your RFP when the need arises in the future. This gives
you more control when responding to changes in the insurance marketplace. This requires that you
provide Gray & Co. with copies of additions and deletions to the schedules at the same time that the
broker is notified.
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Premium Estimates for Bud ee t Purposes
We will provide you with our "eazly projection" of premiums for insurance policies that are scheduled
to renew.
Insurance Renewal Planning
We will contact the insurance underwriters approximately 150 days prior to the anniversary of each
policy and request an early "indication" of the renewal premiums and coverage terms. Based on the
response and Gray & Co.'s knowledge of the mazketplace, Gray & Co. will provide you with a strategy
to be used in planning for the continuation of coverages at competitive prices. This should provide
sufficient time to solicit proposals from other sources if needed.
Financial Ratings
We will monitor the A.M. Best ratings assigned to your insurance tamers and promptly advise you after
we learn of a change in any of the rating factors.
Insurance Schedule & Insurance Policies
We will prepaze and maintain an insurance schedule which will summazize the policies that are presently
in force.
Client Contact
Gray & Co. will contact the County on a quarterly basis to inquire about any new loss exposures or
business plans that may impact the County's insurance program.
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"OPTIONAL "INSURANCE MANAGEMENT SERVICES
Gray & Co. offers the following services to supplement the "On-Going" Insurance Management
Services. These services are provided at Gray & Co.'s hourly rates (See Section Two -Fees). Gray
& Co. will not provide any of the "Optional" Insurance Management Services unless specifically
requested to do so by the client. Upon request, Gray & Co. can provide an estimate of the time
requirements for each of the following services.
Review Contracts and Leases
We can assist the County by reviewing proposed contracts and leases for proper use of insurance
requirements, insurance terminology, and risk transfer. Further, we will manage the enforcement of the
insurance requirements in your contracts by reviewing Certificates of Insurance and Additional Insured
endorsements that you receive to make certain that they meet the requirements set forth in leases and
contracts.
Certificates of Insurance
We can evaluate the procedures in place at the County as respects the handling of Certificates of
Insurance and provide our suggestions as to how the procedures can be improved to better serve the
County.
Insurance Administration Review
We can review the County's efforts in administering it's property, liability and workers' compensation
insurance programs. This review will focus on internal administration in the following areas (adding
and deleting property, claim reporting, loss reports, contractual risk transfer, property valuation
methods, underwriting records, retention of insurance policies, certificate of insurance, etc). The review
will provide the County with a list of helpful recommendations to improve the administration of the
insurance program.
Claim Negotiations
We can assist you by negotiating with claim adjusters in an effort to make sure that claims are paid in
accordance with the terms of the policy.
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RespondinPto Your Insurance Concerns
We are available to provide you with objective, unbiased answers to most any insurance and risk
management questions or issues that may arise.
Insurance Purchasing Assistance
We can prepaze insurance and claim service specifications and manage the entire insurance RFP process,
including all communication with agents and brokers. We will review the proposals and provide you
with an independent evaluation of each proposal.
Insurance Manual
Many of our clients ask us to prepaze an Insurance Manual that can be used as reference material by the
client. The Manual covers the entire insurance program and provides claim reporting instructions, a
"plain English" summary of your coverages, and a schedule of your insurance coverages. It is an
excellent reference tool for anyone that works with your coverages (the County staff, outside auditors,
County Attorney, etc).
Client Meetines
We are available to meet with the County staff, County Attorney or the the Commissioners Court to
discuss any aspect of the property and liability insurance program.
Exposure Audits
We can conduct a survey of the County's exposure to accidental loss and advise you of any "insurable"
exposures we discover that are not insured.
Risk Management Subject Files & Library
We maintain an extensive collection of risk management publications, materials and manuals covering
a wide range of risk management subjects. We can provide information from our library as well as
copies of any material that is not copy-protected.
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SECTION TWO
GRAY & CO. FEES. REFERENCES & BIOGRAPHY
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FEES
Hourly Rates
Gray & Co. fees are based on the following hourly rates:
Consultant: $105/hour
Clerical $ 18/hour
These fees will apply to each of the services offered in this proposal. Further, these fees will apply to
any services requested by the County that aze outside the scope of the proposed services. Detailed time
records are kept for all personnel and will be attached to each invoice.
Expenses
In addition to the hourly rates outlined above, the County would be billed for reasonable expenses
incurred by Gray & Co. in the process of providing services to the County. Expenses chargeable to the
County would include the following categories:
Automobile mileage at $0.36 per mile (does not apply to rental vehicles)
Postage, express mail expenses (actual expenses)
Photocopying and binding of reports (actual expenses)
Long distance telephone calls made on the County's behalf (actual expenses)
Airfare, hotel, rental car and pazking expenses (if approved by the County in advance)
Meals while in travel (not to exceed $15/day)
Receipts will be attached to each invoice.
Grav & Co. Invoices
Gray & Co. clients are billed at the conclusion of the first and 15`s day of each month for eazned fees
and expenses for the period. Invoices aze due and payable 15 days following their receipt. Gray & Co.
may charge interest on past due amounts at an annualized rate not exceeding 1.5% per month.
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REFERENCES
The following is a partial list of governmental entities for which we have provided services.
1. Mr. Mark Stroeher, County Judge
Gillespie County
830-997-7502
2. Mr. Terry Horton, Director
Texas County & District Retirement System
(512)328-8889
3. The Honorable Lee Groce, County Commissioner
Liberty County
(409) 298-2790
4. The Honorable Alvin Jones, County Judge
Brazos County
(409) 361-4102
5. The Honorable Horace Groff, County Judge
Grayson County
(903)813-4228
6. Ms. Hanna McCleary, Purchasing Director
Ellis County
(214)923-5115
Please feel free to contact any of these individuals in regard to our abilities. Additional references will
be furnished upon request.
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BIOGRAPHY
The following information identifies the Consultant that would be responsible for assisting Kerr County.
Donald K. Grav, ARM
Don will be the lead consultant in servicing the County. Don's knowledge of governmental
entities and insurance companies that specialize in serving Texas county government would be
valuable to the County.
Don is a 1976 graduate of the University of Texas-Austin, earning a BBA in Risk Management
and Insurance.
Don is the principal at Gray & Company, LLC. Prior to establishing Gray & Company in 1999,
Don served for I1 years as the lead consultant and office manager of Risk Management
Group's Texas office. Prior to joining Risk Management Group in 1988, Don was the Director
of Insurance at the Texas Association of Counties. In this position, Don managed the
administration of several statewide insurance programs for county governments. His prior
experience included serving as a risk manager for the Texas A&M University System.
Don is a consultant to numerous educational and governmental entity clients.
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November 9, 1999
Mr. Tommy Tomlinson
Kerr County Auditor
700 Main, #103
Kerrville, Texas 78028-5327
Re: Insurance Consulting Contract
Deaz Mr. Tomlinson,
This letter and the attached proposal dated November 8, 1999 will serve as the basis of the
relationship between Kerr County (hereinafter referred to as Client) and Gray & Company, LLC.
(Gray & Co.) effective on October 25, 1999.
Gray & Co. offers four (4) azeas of service to Client as described in the attached proposal. Client
hereby retains Gray & Co. to provide services desired by Client as indicated by the initials of the
Client's representative that executes this contract in the appropriate "Yes" or "No" column. Gray
& Co. shall not be responsible for performing services in those areas where Client has initialed in the
"No" column.
YES NO
Insurance Assessment
Insurance Administration Audit
Insurance RFP Project
On-Going Insurance Management Services
1204-B Lakeway Drive ~ Ausri~, Texas 78734 ~ phorse 512-2GL0900 ~ fax 5 1 2 3 67-72 9 5
wwwrrssronm(rantrom ~ don@inammu[rantram
Insurance Consulting Contract Page 2 of 3
November 9, 1999
Client will pay to Gray & Co. for services rendered the fees and expenses described in the Proposal
for each service area for which has been initialed by Client under the "Yes" column above. Gray &
Co. will maintain time records of all personnel which provide billable services to Client, and those
time records will be attached to each invoice.
Confidential information obtained by Gray & Co. concerning Client will be treated as confidential and
will not be released to outside parties without prior approval by an appropriate representative of
Client. The foregoing shall not apply to the extent that disclosure is required by law or order of a
court or governmental body.
Client will promptly provide Gray & Co. accurate and complete information as requested by Gray
& Co. from time to time with regard to Client's loss experience, risk exposures, or current or
anticipated changes in Client's business operations that may affect the service areas selected above
which Client requests Gray & Co. to provide or which may affect coverages which are provided
under insurance policies in force as of the date of Gray & Co.'s engagement or under insurance
policies that may be purchased by Client during Gray & Co.'s engagement.
Client will promptly review all policies and other coverage documents in connection with insurance
purchased by Client. Client will promptly advise Gray & Co. of any errors or changes desired by
Client in such policies or coverage documents.
Client is be responsible for making final decisions with respect to the accuracy and completeness of
any underwriting submissions which Client requests Gray & Co. to submit to insurance agents,
insurance brokers, or insurance companies on Client's behalf.
Client is responsible for making the final decisions concerning whether to purchase or to decline
insurance coverages. If insurance coverage is recommended by Gray & Co. and declined by Client,
Client agrees to confirm its decision in writing for Gray & Co.'s files to avoid misunderstanding
should an uninsured loss occur.
Gray & Co.'s relationship with Client shall be on a continuing basis until the purchased services have
been completed with the understanding that this Agreement may be terminated by Client or Gray &
Co. with thirty (30) days written notice. If this Agreement is terminated by Client, it is agreed that
Client will be responsible for payment of all fees and expenses due Gray & Co. through the thirty (30)
day notification period. If this Agreement is terminated by Gray & Co., Gray & Co. will be
responsible for concluding, to the extent reasonably possible, any work in progress for Client within
the thirty (30) day notification period.
This Agreement shall be governed by and construed in accordance with the laws of the State of Texas
(except those relating to the conflict of laws) and shall be performable in Kerr County, Texas. Each
party hereto submits to the jurisdiction of the courts of the State of Texas and the federal courts in
and for the Western District of Texas in connection with any dispute arising under this Agreement
or any document or instmment entered into in connection herewith.
Insurance Consulting Contract Page 3 of 3
November 9, 1999
If any provision of this Agreement is unenforceable, the enforceability of the remaining provision shall
not be affected thereby. This instrument contains the entire agreement of the parties. No
modification, discharge, or waiver of any term of this Agreement shall be valid unless in writing and
signed by the parties to this Agreement.
This Agreement supersedes all prior agreements or representations, whether oral or written, between
the parties hereto relating to the subject matter hereof, and all such prior agreements or
representations are terminated. This Agreement shall be binding upon and shall insure to the benefit
ofthe legal successors, heirs, and permitted assigns of the parties hereto. Nothing contained in this
Agreement creates any rights or benefits in any third party.
If Client is in agreement with the terms and conditions of this Agreement, please indicate acceptance
by signing both the original and a photocopy, keeping the original for your files and returning the
photocopy to Gray & Co..
Respectfully submitted on behalf of Gray & Company, LLC.
by:
Donald K. Gray, ARM
Gray & Company, LLC
Accepted on behalf of Kerr Countv
by:
(Signature)
(Title)
(Date)
(Address)
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