LARM provides its members with Coverage and Service specifically tailored to the needs of Nebraska municipalities. It operates under the direction of a Board of Directors made up of municipal officials elected by the membership.
As the sponsoring organization for LARM, LNM provides administrative services, legal assistance, coordination of legislative efforts and information/education. LNM is responsible for contracting with and overseeing all professional service providers including the Pool Manager, Claims Administrators, Loss Control Consultants, Accountants, Actuaries, Investment Managers and Auditors.
Click on "LARM Members" to view a list of current members.
Although in some ways Pools operate much like insurance companies, there are several very important differences. The Intergovernmental Risk Management Act (IRMA) very clearly states that Pools created under IRMA are not considered insurance companies. LARM is a public agency formed through the use of an Interlocal Agreement and as such it is an extension of each member.
LARM is required to operate in accordance with the State statute and comply with the rules regulating the operation of a public agency. IRMA exempts Intergovernmental Risk Management Pools from the standardized regulations that apply to traditional insurance companies that are designed to protect the public's interest in insurance costs, coverage, services and financial stability. IRMA recognizes the unique legal status of Pools and creates regulations specifically for them. IRMA allows the Director of the Nebraska Department of Insurance to adopt and promulgate rules and regulations related to maintaining reserves, payment of dividends, payment of claims and changes to the structure of the Pool.
Members determine the rates used by LARM to calculate contributions. As a result, they are based on the interests of the constituents. LARM does not pay agent's commissions or corporate shareholders. Contributions are reported to the Director of Insurance for review and approval and any surplus may, with the Director's approval, be returned to the members in the form of dividends.
One of the many advantages of participating in a Risk-sharing Pool is the ability to spread the risk of loss with other members with similar exposures, thereby reducing the cost of risk on an individual basis. The assets of the Pool are the assets of its members. The LARM Board of Directors is statutorily charged with assuring that the contributions charged are adequate to cover LARM's liabilities.
LARM's members, through the Board of Directors, also dictate the terms of the coverage to be provided. This allows LARM to provide its members with a comprehensive package of coverage specifically tailored to the changing needs of Nebraska municipalities. LARM does not charge for a lot of industry "bells and whistles" which provide little or no benefit to the municipality. Coverage limits and terms are developed with the special tort limitations and immunities provided municipalities in mind. Many insurers waive these limitations and immunities, passing the increased costs of claims back to the municipality in the form of increased premiums.
As with coverage and price, the services provided by LARM are determined by it's members. Where many insurance companies put the label "Loss Control" on visits which are actually geared toward providing underwriters information to modify price, LARM's service package has been developed with a focus on educating members in the practice of Risk Management and Loss Control. Members receive services that will help reduce the number of claims they suffer and the cost of those that do occur. In this way, LARM hopes to ultimately reduce rates (or return dividends) as a result of reduced liabilities for the losses of its members.