HomeMy WebLinkAboutResolution No. 3142 RESOLUTION NO. 3142
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY
URGING STATE LEGISLATION TO SAFEGUARD MUNICIPALITIES
AGAINST FINANCIAL JEOPARDY CAUSED BY ARBITRARY AND
CAPRICIOUS CANCELLATION OF THEIR GENERAL LIABILITY
INSURANCE
WHEREAS, most municipalities and other governmental agencies must
insure themselves against the risks of general liability including personal
injury and property damages by obtaining policies of insurance from pri-
vate carriers; and
WHEREAS, such insurance policies are necessary to protect against
unforeseen events that could result in substantial money damages against
such cities and agencies; and
WHEREAS, said insurance carriers, in accepting such business, must
also accept the concomitant public responsibility and public trust inherent
in providing a service that affects the general welfare; and
WHEREAS, the premiums for such insurance represent a significant
factor in determining the annual budgets for such cities and agencies, and
the tax rate required to be levied for the budget revenues; and
WHEREAS, state statutory limits have been imposed on the tax rates
that can be levied by municipalities and agencies, which are intended to
check any upward spiral in government spending while maintaining the level
of public services; and
WHEREAS, insurance carriers have cancelled and are continuing to
cancel such insurance on short notice with increasing frequency and many
such cancellations have been made in an arbitrary and capricious manner
without regard to the loss experience of the insured municipality or agency
or the extreme circumstances faced by such municipality or agency whose
insurance is cancelled; and
WHEREAS, such cancellations are a breach of public responsibility
and trust; and
WHEREAS, municipalities and agencies affected by such cancellations
must, on short notice, obtain insurance at extraordinarily higher premiums,
resulting in unexpected financial burdens that can only be met by immediate
impairment of public services; and
WHEREAS, such unrestrained cancellations are contrary to the
State's purpose in limiting tax rates in that they may result in a reduc-
tion of public services for government entities, or an increase in tax
rates.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES RESOLVE
AS FOLLOWS:
SECTION 1. The City Council of the City of Downey urges the State
Legislature to enact appropriate legislation to safeguard municipalities
and other governmental agencies from the financial jeopardy placed upon them
by the uncontrolled cancellations of their general liability insurance
policies.
SECTION 2. The City Council further urges the State Legislatures,
as a minimum, to require that cancellation of such insurance shall be
effective only at the end of the fiscal year of the municipality or other
governmental agency, and only if notice of such cancellation by the
insurance carrier is given not less than four months prior to the end of
such fiscal year.
SECTION 3. The City Clerk shall certify to the adoption of this
Resolution and provide for appropriate distribution thereof.
APPROVED AND ADOPTED this 14th day of July, 1975.
j .- v ,
Jos ph E. DiLoreto, Mayor
ATTEST:
City Clerk
I HEREBY CERTIFY that the foregoing Resolution was duly adopted
at a regular meeting of the City Council of the City of Downey thereof
held on the 14th day of July, 1975, by the following vote, to wit:
AYES: 5 Council Members: Winton, Temple, Scotto, Jennings, DiLoreto
NOES: 0 Council Members: None
ABSENT: 0 Council Members: None
City Clerk
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