Beachwood leaves NORMA and changes insurance provider | Local News


The town of Beachwood has the distinction of being the first city to leave the Northern Ohio Risk Management Association’s insurance pool in the pool’s 34-year history after NORMA’s legal counsel said Beachwood had to “Serious internal and legal problems”.

Michael Cicero, NORMA’s legal advisor, said he was concerned about the potential for further lawsuits against Beachwood.

While the decision to leave was not entirely Beachwood’s choice, the town will save $ 66,520 in premiums over the coming year under its policy with USI Insurance Services, via the entity pool. Ohio Public. The NORMA insurance policy, which expired September 30, cost $ 328,270. The new annual policy, which takes effect on October 1, will instead cost the city $ 261,750.

Beachwood exit

Beachwood has informed NORMA of its intention to vacate the NORMA Pool following a Beachwood City Council vote on March 15.

As a result, at NORMA’s March meeting, Larry Heiser, Chief Financial Officer of Beachwood, resigned from his position on the NORMA Board of Directors. At this quarterly meeting, NORMA agreed to inform Beachwood that it has until June 1 to reverse its withdrawal. There was no further communication, Heiser said.

Then at the June 24 meeting, despite not meeting the deadline, Heiser told NORMA that Beachwood was completing its renewal information for NORMA. Heiser added that he was presenting information from other insurance brokers to Beachwood City Council for review. Heiser then left the meeting.

“I excluded myself and left the meeting because the next topic was Beachwood,” Heiser told the Cleveland Jewish News in a September 29 email.

At the June 24 NORMA meeting, Cicero told NORMA directors that Beachwood had “serious internal and legal issues,” according to minutes obtained by the Cleveland Jewish News.

“(Cicero) gave examples of their discord and dysfunction,” the record read. “They face a lot of legal issues and have had five general counsel in six years. He urged the group to take all of this into account when deciding whether to meet the June 1, 2021 cancellation deadline. Beachwood’s risks aren’t going to abate anytime soon.

Minutes for June 24, 2021

Tom Wichert, CEO and Director of Wichert Insurance of Cuyahoga Falls, NORMA’s insurance agent, agreed.

“(Wichert) said NORMA’s regulations are written to maintain stability, and Beachwood’s actions work against that,” according to the minutes.

After Cicero presented options on how to proceed, NORMA President Jeff Knoblauch “then asked if any of the directors had an interest in allowing Beachwood to return to NORMA; all the directors said no.

Wichert told the group he could adjust to the Beachwood withdrawal and that “none of the members will see a lot of negative effects,” the minutes said.

Heiser said he received the minutes of the June 24 NORMA meeting on August 2 from Knoblauch.

Threat of prosecution

As Beachwood faces a lawsuit from a fired police officer and settles the claims of two female employees alleging inappropriate conduct by Mayor Martin S. Horwitz, Cicero told CJN his concerns stem from several threatened lawsuits. by Beachwood City Councilor Mike Burkons. , who was the subject of a criminal investigation and charged with a misdemeanor. This charge was eventually dropped.

“It is evident that there is a looming litigation that has been threatened by City Councilor Burkons against potentially other council members, the former legal director, potentially the mayor, said Cicero, partner of Nicola Gudbranson & Cooper LLC of Cleveland. CJN September 28. “He had made noise about suing another NORMA member, Ms. (Stephanie) Scalise, who was the special prosecutor who was appointed in this case, and that the litigation was not going to end.”

Scalise is the University Heights City Attorney and Deputy General Counsel. She acted as special prosecutor in the criminal case against Burkons.

“I’m not going to comment on a possible litigation, but I’m not surprised that they realize that the city may face real responsibility for the way it has handled things,” Burkons wrote in an email from the September 28 at CJN. “However, getting fired from NORMA has turned out to be a good thing as the city is saving around $ 60,000 per year by moving our insurance to PEP.”

Moving forward

At its September 20 meeting, Beachwood City Council voted to authorize the mayor to enter into an agreement with PEP and authorized the payment of liability insurance from October 1, 2021 to September 30, 2022, with USI Insurance Services.

Beachwood General Counsel L. Stewart Hastings Jr. read the over 400-page policy.

“There are differences,” Hastings told city council on September 20, adding that no two insurance policies are the same. “It’s comparable insurance for big, important issues. “

Councilor Alec Isaacson introduced a motion to add increased coverage for employee benefits liability, pesticide and herbicide liability, floods and earthquakes. City Councilor Justin Berns seconded the motion.

Those present voted unanimously on the amendment, raising the cost of the bonus from $ 248,008 to $ 261,750.

A lack of comparison

At the Beachwood City Council Finance and Insurance Committee meeting on September 13, Robert Beglin, USI’s vice president of public entities practice, presented the policy.

Council Chairman James Pasch said he was concerned the Council saw only one quote from an insurance company.

Heiser said he also requested a quote from Travelers Insurance through the Fedeli Group of Independence.

“I don’t have a basis for comparison, and now we’re facing it,” Pasch said at the September 13 meeting. “So if Fedeli doesn’t come in, nobody else comes in, you know, obviously everyone in this room is going to vote for the PEP plan. I’m just afraid I won’t compare it to anything.

Burkons said he would also like to “see a lot more players in space.”

Berns, who is challenging Horwitz for mayor in the November 2 general election, echoed Pasch and Burkons’ sentiment at the September 20 council meeting.

“We had a meeting of the Citizens’ Finance Advisory Committee in mid-March and just had it last week, which is unsettling,” Berns said. “And unfortunately we only had one proposal. … I wish we had another option. It might be the best at the end of the day, but we’ll never know. And I guess I don’t know how much incentive there will be for travelers if we approve this tonight.

Heiser said the board still had time to take Travelers if the quote was received by Oct. 1 and if this was a better policy.

“I understand,” Berns said. “We are between a rock and a hard place.”

The vote was 6-0 to adopt the USI policy. Councilor June Taylor was absent.

In his email to CJN, Heiser explained his process for soliciting insurance quotes. He said he approached PEP in 2020 and restarted the process in June 2021 by sending data to PEP for a quote. He also approached the Fedeli Group on July 2 and said he sent most of the information before the end of July.

In his September 29 email, he said he received questions from Travelers on September 28, but no quotes.

Heiser rated the change in insurance at USI in a positive light.

“My opinion is that we will get better coverage with higher limits and a lower price – a real economy of scale,” he wrote.

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