Request for Proposals: Insurance Brokerage Services

Closing Date & Time: Proposals must be received before 4:30 PM (Pacific) on April 7, 2023

Summary of the Opportunity

The Board has approved staff’s recommendation to develop a structure for a self-insured property program for the Non-Profit Housing Sector with policies being enforced July 1, 2024. BCNPHA’s vision is to see this self-insured property program become the signature and exclusive offering to the affordable housing sector in BC.


With the transition to a self-insurance program, BCNPHA has the goal of providing insurance premium stability to participating members on property premiums. Through pooled and managed risk, the new program will:

  • Share risk amongst the participating pool;
  • Avail the Subsidiary to bulk-buy insurance for the participating pool;
  • Permit the Subsidiary to set individual participant premiums, not the broker or insurer; and,
  • Stabilize participant premiums by the Subsidiary covering high frequency, low-cost losses that leads to premium increases in a direct insurance relationship.

On March 22, 2023, a virtual, anonymous, and non-disclosed session was held to provide interested proponents of BCNPHA’S Notice of Procurement to ask questions.

View all the questions and answers:

Q:          Will non-BCNPHA members be able to access the program and fronting arrangement?

A:           The program will be limited to members and its direct affiliates. The goal of the program is to maximize on BCNPHA education, training, and on-site programs to ensure that risk mitigation lives and breathes throughout building management, operations, and staff.

Q:          The contract will be rewarded on a ‘non-exclusive basis’- please can you expand on what this means?

A:           The rewarded contract will not have exclusive rights over all insurance offerings. BCNPHA currently offers tenant and group benefits with other brokers and may not move those programs to the rewarded contract.

Q:          BCNPHA will indemnify the insurer for property losses up to $500,000 per policy per annum. Is this amount capped with an aggregate amount across the whole program?

A:           BCNPHA will work with the selected broker to calculate the aggregate amount across the program based on historical loss data.

Q:          Is the $500,000 indemnity per policy per annum pre-determined and will the amount be the same for all member firms/individual policies?

A:           The indemnification amount is based on 2021 actuarial calculations, which will be recalculated on the latest available data.

Q:          Where is the funding coming from for the set-up of the subsidiary? Would there be funding available for re-capitalization if required?

A:           BCNPHA is in conversation with senior levels of government and funders. The discount on the bulk premium will be re-invested into the fund. BCNPHA is contributing to set-up finances. Re-capitalization will be a decision of the new subsidiary board AND dependent on the level of startup funds.

Q:          The RFP mentions 230 policies (Section 4). What is your current total membership?

A:           There are over 700 societies in BC that operate over 2,000 buildings in this rapidly growing sector. 550 societies are currently members of BCNPHA.

Q:          The diagram shows the Association ‘Owns’ the Members. Please can you provide some detail and background on this relationship?

A:           The members “own” the association through annual dues. The association exists because of and in service of its members.

Q:           Does, or will, BCNPHA hold or take on any liability on behalf of the member firms?

A:          Each policy is between the member and the broker/insurer. BCNPHA’s subsidiary will function as an intermediary.

Q:          How do you see the new subsidiary charging members for this offer to indemnify or receiving money?

A:           Indemnification will be funded through a combination of premium bulk discounts, contributions from government and funders, and any year-over-year retention surpluses. The long-term goal of the program is to lower premiums by not accessing the insurance layer.

Q:          Please can you explain why the new subsidiary is structured as a ‘for profit’ entity?

A:           To retain earnings, the new subsidiary is set up as a “for-profit”—with BCNPHA as its sole shareholder—to allow for the accumulation of profits. Non-profit organizations cannot accumulate excessive earnings.

Q:          Historical claims performance and volume:  Will proponents be provided a Loss History (min. 5 years) of the current BCNPHA Program?

A:           Current loss ratio is 9.6%. Loss ratio since 2019 is 11.9%

Q:          What is the Aggregate Earthquake limit on the current program?

A:           Current earthquake and flood exposures is $130 million. BCNPHA’s subsidiary will re assess this limit with the new program broker.

Q:          Of the $18,330,000 premium spent on the current program what percentage, roughly, is allocated to Property coverage?

A:           85%

Q:          Building Valuations:  How are members’ building limits calculated?

A:           Building valuations can be part of a broker’s proposal on how best to work with BCNPHA’s subsidiary.

Q:          Are you able to share a copy of the proposed Broker Service Contract?

A:           BCNPHA is looking to change how a Broker Service Contract is structured and open to working within the selected broker’s preferred contract framework

Q:          How will BCFSA regulations and Clarification by the Insurance Council of BC around rebating of premiums be ensured?

A:           BCNPHA’s subsidiary will work with the broker, the broker’s compliance team, and our legal team to ensure all regulatory requirements are met.

Q:          With regards to the yet to be determined indemnification amount, does this include boiler & machinery losses as a part of Property losses?  Will the final determined indemnity amount be strictly limited to the actual loss, or will indemnity also cover loss adjustment expenses?

A:           The indemnification amount will strictly be on property. All other non-property claims will not be self-insured and will be passed to the broker. Loss adjustment expenses (e.g., claims, adjuster costs) will be excluded from the limit.

Q:          The Major Changes section does not seem to contemplate that the parties may not be able to come to an agreement.  Will the parties be able to end the relationship if the Major Change cannot be agreed upon?

A:           BCNPHA envisions a continuous program with multi-year agreements. BCNPHA’s subsidiary will work with the broker on a comprehensive marketing strategy to ensure success. Minimums cannot be guaranteed. BCNPHA’s interest in a comprehensive sector-wide program is driven by its goal to stabilize participant premiums.

Q:          If member participation is down from the participation on the current program, what is the expectation for profit sharing?

A:           There may be other ways to incentivize that we have not contemplated. BCNPHA is interested in alternative profit-sharing arrangements. We are not committed to any current arrangements.

Q:          The Mandatory Criteria states that the Proponent must have the ability to become the Broker of Record with Insurers by June 30, 2023. Which insurers does this refer to?

A:           The new broker of record would begin to act in its capacity to negotiate and advise as early as July 1, 2023

Q:          Will full underwriting information be supplied upon execution of the contract?

A:           BCNPHA will make full efforts to obtain and provide this information to the new broker.

Q:          What are the specific technology systems that BCNPHA requires the broker to provide?

A:           We seek technology solutions in the areas noted in the RFP and will recognize what is currently available from interested candidates. Technology to allow BCNPHA’s subsidiary staff to input data, record claims information, and automate allocation of premiums is desired. Policy holder portal to generate codes and policies is an asset, though not required. Technology will be owned by the broker; BCNPHA’s subsidiary will own and acquire the pool’s data.

Q:          Has BCNPHA considered purchasing a Risk Management software or are they relying solely on the broker to provide all technology solutions? Perhaps state that BCNPHA will explore procurement of additional software if there are technology gaps.

A:           This would be determined after and upon the advice of the selected broker.

Q:          Does BCNPHA expect the broker to adjust claims within the SIR?

A:           We expect the broker or the insurer to adjust claims within the self-insured retention

Q:          Is profit sharing expected on all lines of business or just the Property program?

A:           Profit sharing is expected on all lines.

Q:          Where does BCNPHA expect the broker premium discount for the Property SIR to come from?

A:           Through a combination of premium reduction by the insurer, broker commission, and other revenue areas.

Q:          What is the expectation of the “seat at the table”?

A:           Our expectation is to directly communicate and present the uniqueness of our members and to explain the risk/loss prevention measures that the sector has undertaken. We do not seek to replace the broker’s role in the negotiation process.

Q:          Are you able to confirm the current total Property limits purchased and the current deductible(s)?

A:           See document.

Q:          What exactly does “Pool Recalculation” entail?

A:          Pool recalculation will entail premium allocation amongst members, within the self-insured retention.

Q:          Does BCNPHA have any Letters of Credit/collateral outstanding with their current Property insurers (or those coverages where they are looking to effect an SIR)?

A:           To be negotiated with the selected broker.

Q:           What is the quality and quantity of claims data available? How many years are available?

A:           Five years of high-level claims data is available.

Q:           On the applicable coverage lines, are there available risk engineering reports or MFL studies?

A:            Maximum financial loss is available on the property line.

Q:           Timeline of September 2023 to meet the prospective insurers – would these be the current insurers in place for the BCNHPA program or do you require to meet with new interested insurers?

A:            Any interested insurer as recommended by the broker.

Q:           Claims administered by the Subsidiary – what administrative tasks you envision the Subsidiary will be doing?

A:            BCNPHA’s subsidiary expects the broker or the insurer to adjust claims within the self-insured retention.

Q:           3rd party claims administrator – can the insurer choose this firm, have an input in this decision or is it totally up to the subsidiary to choose a firm of their own?

A:            BCNPHA’s subsidiary will work and negotiate with the insurer to choose a third-party claims administrator.

Q:           How do you envision the future of BCNPHA in the next 3-5 years?

A:            The initial fronting arrangement will be for three years; afterwards, we aim for the program’s evolution through other various possibilities.

Q:           Technology/platform:
  • Can you please elaborate more on this topic?
  • Understand the Sub would own the data, what about the technology tool? For example, when the 3 year contract is over and another provider is chosen, who would own the technology?

A:          We seek technology solutions in the areas noted in the RFP and will recognize what is currently available from interested candidates. Technology to allow BCNPHA’s subsidiary staff to input data, record claims information, and automate allocation of premiums is desired. Policy holder portal to generate codes and policies is an asset, though not required. Technology will be owned by the broker; BCNPHA’s subsidiary will own and acquire the pool’s data.

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