The Director of Resources reported that under the provisions of the Local Government and Housing Act 1989, local authorities were allowed to set aside financial provisions to cover self-insured losses. By self-insuring, an authority avoided paying insurers’ administration, profit margins and Insurance Premium Tax on predictable levels of claims and furthermore, only rarely did external insurers return any premium, irrespective of the profits generated by a policy. The Council had operated an Insurance Fund since its formation and was one of the first local authorities to adopt a high degree of self-insurance when large excesses on liability and material damage insurance were negotiated in the 1980s. Self-funding was a fundamental element of the Council’s approach to managing risk and provided a greater incentive to deal with risk more effectively, as the Council benefited directly from any reduction in claims.

She provided details of the principal risks which the Council currently self-insured, together with the probable maximum sum the Council might have to pay for losses in any given financial year. She set out relevant risks and provided details of the cost of the Risk and Insurance Section, which was charged to the Insurance Fund. The 2014/2015 Budget of £3,070,000 represented a net increase of £7000 (0.2%) compared with the Budget 2013/2014.

Resolved – That the Insurance Fund Budget 2014/2015 be agreed.