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City of Raleigh

Financial Section

Note 4.  Other Information 

A. Risk management and employees’ health benefits 

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and 

omissions; injuries to employees; natural disasters; and medical and dental claims for employees, retirees, and 

dependents. 

The City protects itself from potential loss through a combination of self‐insurance programs and the purchase 

through the private sector of commercial insurance for various primary and excess coverages.  There were no 

significant changes in insurance coverage from the prior year; however the City did add cyber insurance effective 

July 1, 2015.   

City insurance coverage includes workers’ compensation, general liability, automobile liability, police liability, cyber 

liability, automobile comprehensive, real and personal property.  For workers’ compensation, the City self‐insures 

the first $1,100,000 per occurrence with excess coverage of $10,000,000 per occurrence and employers’ liability 

coverage of $1,000,000 per occurrence and in the aggregate.   For liability, the City self‐insures the first $1,000,000 per 

occurrence, with excess coverage of $10,000,000 in the aggregate.  For cyber liability, the City has coverage up to 

$5,000,000. For property, the City self‐insures the first $100,000 per occurrence, with excess coverage up to the 

replacement value of $300,000,000 in the aggregate.  The excess coverage includes $100,000,000 in the aggregate for 

loss due to flood and $10,000,000 annual aggregate for flood plain location losses.    

The City of Raleigh, in accordance with NC General Statute §159‐29, maintains a Public Official Bond on The Chief 

Financial Officer in the amount of $500,000.  In addition, the City purchases a Crime and Fidelity insurance policy for 

all other employees in the amount of $1,000,000.  City taxes are collected by the Wake and Durham County tax 

collectors.  Wake and Durham County tax collectors are endorsed onto the City of Raleigh’s Crime and Fidelity 

insurance policy for their collection of taxes on behalf of the City of Raleigh up to the $1,000,000 coverage limit. 

The City provides medical and dental coverage for employees and retirees.  Additional premium‐based dependent 

coverage is available at employee expense. 

The City, as allowed by GASB Statement No. 10 

Accounting and Financial Reporting for Risk Financing and Related 

Insurance Issues

, uses internal service funds, the risk management fund and the employees’ health

benefits fund, to

account for its risk financing activities.  The claims liability total of $27,871,426  reported for these two internal service 

funds at June 30, 2016, is based upon the requirements of Statement 10, which require that a liability for claims be 

reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has 

been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.  Claims 

liabilities reported include an estimate for claims incurred but not reported.  The changes in reported claims liabilities 

in fiscal years 2015‐16 and 2014‐15 are as follows: 

2016

2015

Insurance claims payable, beginning of year

24,006,300

$           

24,395,044

$            

Current year claims and changes in estimates

50,498,958

37,225,767

Claim payments

(46,633,832)

(37,614,511)

Insurance claims payable, end of year

27,871,426

$           

24,006,300

$            

Employees’ health benefits and risk management current portion of pending claims is $9,420,831. 

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