9 Cities Form Insurance Pool

Faced with rising premiums and dwindling coverage, nine of the 11 Orange County cities that joined eight years ago to purchase group insurance coverage are pooling their funds in a self-insurance plan.

The cities, members of the 11-city Orange County Cities Risk Management Authority, will begin paying into a self-insurance pool today, when their current policy lapses, said David Barrett, assistant city manager of Cypress and president of the authority. Cypress, Irvine, La Palma, Laguna Beach, Los Alamitos, Orange, San Clemente, Westminster and Yorba Linda have voted to join the pool.

Tustin is expected to decide next week whether to join the pool. Tustin City Manager William Huston said he is recommending that the council vote to join. The final member, Stanton, voted Wednesday night to leave the risk management authority and join a pool operated by the Coachella Valley Joint Powers Insurance Authority.

The 11 cities’ insurance company under the group plan, Philadelphia-based Planet Insurance Co., wanted to reduce coverage from $5 million to $1 million and raise premiums a total of more than $100,000 a year, Barrett said. The 11 cities’ current premium is just over $1.5 million, divided according to a complex formula based on claims, population and other factors. A spokesman for the firm said Thursday that Planet officials would not comment on the proposed increase.