CARMA has always been a viable and highly successful alternative to the commercial insurance market. Throughout most of CARMA's existence, the economic climate in the United States has been good, and the insurance market has been "soft." During this period, CARMA has prospered by taking advantage of the low cost of excess insurance and reinsurance available in the market. As insurance rates begin to rise, and the economy steams toward a possible downturn, it becomes all the more important to be a part of an organization like CARMA that has the ability, in a relatively short period of time, to alter its purchasing strategy and increase the risk sharing layers we currently have in place. This allows us to accomplish our goal as an organization to provide economical liability protection for catastrophic losses to our various primary joint powers authority (JPA) members.
Most of the members of CARMA have participated and shared catastrophic insurance risks since CARMA's inception in 1993. During that period of time, CARMA members have successfully fine-tuned the organization and have continued to be receptive to the needs of its members. Below is a partial list of some of CARMA's most important strengths as an organization:
Low Administrative Costs - CARMA is an excess authority currently consisting of JPA's only. Administrative costs are kept to a minimum by focusing on claims management and litigation management and not on safety and loss prevention. All JPA members currently have exemplary safety programs in place at their primary layer.
Broad Coverage - The Board's philosophy has been to make coverage as broad as the coverage for each underlying JPA. To date, this has been accomplished. CARMA's current reinsurance relationship provides following form coverage up to $29,000,000 per occurrence.
Strong Litigation Management - At the excess level, experienced litigation oversight is the key to a successful program. CARMA's litigation management department has substantially reduced the JPA's liability exposure over the years.
Stable, Reasonable Costs - Rates have remained fairly stable on an annual basis. The Board annually selects the level of risk-sharing to retain based on market conditions.
Flexible Attachment Points - All members currently attach to CARMA at the $1,000,000 retention. However, with the reinsurance relationship, CARMA has the ability to offer other retention options as needed.
Cohesiveness of Board of Directors - The Board is a cohesive group that enjoys working together and is made up of JPA and other high level managers.
Annual Claims Audits - One claims audit is performed for the benefit of the excess and primary layers, thus eliminating that cost for the underlying JPA.
Accreditation - CARMA has received the designation "accredited with excellence" by the California Association of Joint Powers Authorities (CAJPA). All underlying members are also accredited.
Fiscal Soundness - The CARMA program as a whole is currently funded at the 80% confidence level.
As the old adage goes, there is strength in numbers. While CARMA has always been a successful organization, beginning with the 2000/2001 program year, CARMA welcomed two additional JPA members, the Central San Joaquin Valley Risk Management Authority (CSJVRMA) and the Municipal Pooling Authority of Northern California (MPA). Additionally, the Monterey Bay Area Self Insurance Authority (MBASIA) joined the program beginning with the 2003/2004 program year.