[Adopted 4-4-2012 by Ord. No. Z-165]
As used in this article, the following terms shall have the
meanings indicated:
INSURANCE
Includes the purchase of insurance coverage, alternatives
to insurance such as self-insurance programs, as well as participation
in a joint self-insurance fund, risk management program or related
services provided by a contracting unit insurance group, or participation
in an insurance fund established by a local unit pursuant to N.J.S.A.
40A:10-6, or a joint insurance fund established pursuant to N.J.S.A.
40A:10-36 et seq.
INSURANCE CONSULTING SERVICES
Includes all services associated with procuring, evaluating
and administering insurance, including but not limited to brokerage,
risk management or administrative services, and claims processing
or administration services, including such services provided by a
contracting unit insurance group, or an insurance fund established
by a local unit pursuant to N.J.S.A. 40A:10-6, or a joint insurance
fund established pursuant to N.J.S.A. 40A:10-36 et seq.
Prior to entering into any contract to obtain insurance or insurance
consulting services, the City shall secure full and open competition
among insurers, and insurance consulting service providers, for the
City's business. The City is hereby authorized, and directed, to use
the competitive contracting process set forth in N.J.S.A. 40A:11-4.1
et seq., and N.J.A.C. 5:34-4.1 et seq., to secure such competition,
except to the extent this article requires additional measures to
better ensure maximum competition and fairness to all interested parties.
This competitive contracting shall provide that at least 60,
but not more than 120, days prior to the contract commencement date,
the City Clerk shall advertise in the newspapers authorized to print
legal notices for the City, and in a newspaper circulated in at least
five counties in the state, and on the City's website, a "Competitive
Contracting — Request for Proposals" to provide insurance
and/or insurance consulting services. The notice shall state that
the details of the City's insurance requirements are available from
the City upon request and shall include the phone number of the appropriate
City official.
The request for proposals shall be designed and drafted by the
Administrator, or his designee, and shall set forth such detailed
information as may be required for all proposers to understand and
possess equal information concerning the City's insurance or insurance
consulting services needs, including the current terms of, and fees
or premiums paid for, such coverages or services, current coverages,
loss experience and anticipated or desirable needs with respect to
the relevant coverages or services sought. All request for proposal
information, including claims, expense and loss data, shall be made
available to all proposers in both written and electronic format.
The City shall accept submission of responses to the request
for proposal at least 30 days prior to the anticipated commencement
date of the contract.
Pursuant to N.J.S.A. 40A:11-4.4(c), at no time during the proposal
solicitation process shall any official or employee of the City Council,
or any officer, employee or representative of any provider of insurance
consulting services to the City Council, convey information, including
price, to any potential proposer which could confer an unfair advantage
upon that proposer over any other potential proposer.
Any insurance broker awarded a contract with the City of Hoboken
shall be compensated for its services to and on behalf of the City
of Hoboken solely by the City. Compensation shall be set on a fixed
fee basis. The request for proposals shall expressly state that only
flat fee compensation, paid directly by the City to the broker, shall
be allowed under the contract. The request for proposals shall expressly
state that the City's insurance broker shall not accept or request
additional compensation determined as a percentage of the premium
costs of any of the City's contracted insurance coverage. The evaluation
committee, subject to the restrictions contained in this section,
may consider costs and additional factors in deciding which proposal
for insurance brokerage services is most beneficial to the City.
A. No provider of insurance or of insurance consulting services to the
City shall pay to any insurance consulting service provider to the
City, or to any other third party, any form of compensation, including
but not limited to commissions, fees, incentives, bonuses, rebates
or any other thing of value, in consideration of obtaining the City's
insurance or insurance consulting business.
B. No provider of insurance consulting services to the City shall accept
any form of compensation, including but not limited to commissions,
fees, incentives, bonuses, rebates or any other thing of value, from
any provider of insurance, other insurance service provider, or any
other third party, in consideration of obtaining or servicing the
City's insurance or insurance consulting business.
C. Any person or entity proposing to provide insurance or insurance
consulting services to the City shall certify in its proposal that
it shall neither pay nor accept any form of compensation, including
but not limited to commissions, fees, incentives, bonuses, rebates
or any other thing of value, in consideration of obtaining or servicing
the City's insurance or insurance consulting business from any party
other than the City.
D. Any person or entity selected to provide insurance or insurance consulting
services to the City shall certify at least annually and prior to
any renewal of its contract, that it has not paid nor accepted any
form of compensation, including but not limited to commissions, fees,
incentives, bonuses, rebates or any other thing of value, in consideration
of obtaining or servicing the City's insurance or insurance consulting
business from any party other than the City.
Any provider of insurance consulting service that assists the
City in soliciting, evaluating, or selecting any provider of insurance
or other insurance consulting services to the City shall disclose
to the City the aggregate compensation, including but not limited
to commissions, fees, incentives, bonuses, rebates or any other thing
of value, it has received in each of the prior three years from each
provider of insurance or insurance consulting services solicited or
evaluated by the City. Such disclosure shall be made as soon as practicable,
but in no event later than the date of the evaluation report recommending
a contract award by the City Council.
The request for proposals for any insurance or insurance consulting
services for the City shall clearly establish the compensation restrictions
and the certification and disclosure requirements established by this
article as mandatory, nonwaivable terms, the violation of which shall
be grounds for the City to terminate any contract resulting therefrom,
and/or require the insurance consulting service provider to disgorge
to the public entity any compensation resulting therefrom, including
but not limited to commissions, fees, incentives, bonuses, rebates
or any other thing of value, paid or received in violation of this
article, and/or require the insurance consulting service provider
to obtain a commensurate reduction in premiums to be paid by the City
for the affected coverage(s) for the remainder of the insurance consulting
service provider's contract.
Whenever soliciting quotations for insurance coverage, the City's
insurance broker shall obtain at least three quotations and shall
submit a request for proposals to at least one joint insurance fund,
and with respect to health insurance, to the State Health Benefits
Plan, prior to the City awarding a contract to the insurance carriers
for the applicable period, and it shall be the insurance broker's
obligation to determine if the SHBP and/or joint insurance fund can
provide the same or similar coverages. The insurance broker shall
include an analysis and discussion of the availability, terms and
price of comparable coverage from such joint insurance fund and the
SHBP as part of its recommendation to the City. All requests for proposals
released by the City for insurance brokerage services shall include
a statement describing the obligations of this section as a material
term of the contract with the City's appointed insurance broker.