Regents Policy 5301: University Risk Financing Policy

Approved January 16, 1970
Amended September 22, 2005

1. Recognizing that the University of California is exposed to various property and liability risks which either may be insured or not insured, in whole or in part, it is University policy with respect to the financial management of such risks to:
   1. evaluate risk primarily from the standpoint of the entire University, rather than a single campus or department;
   2. eliminate or modify conditions and practices, whenever practical, which may cause loss;
   3. assume risks whenever the amount of potential loss would not significantly affect the University-wide financial position;
   4. insure risks whenever the amount of potential loss would be significant; and
   5. purchase insurance from whichever insurance carrier is deemed to be in the best interests of the University.
2. The President is assigned the authority and responsibility for:
   1. coordination of the University risk management program;
   2. purchase of all property and liability insurance, including selection of sources; and
   3. administering all University insurance programs.
3. In determining what constitutes a significant loss, the President will rely on a Biannual Risk Retention Study to determine the appropriate level of risk retention. Exceptions to these guidelines may be made by the President when:
   1. it is desirable to buy special services, such as inspection or claim adjustment services, in connection with insurance;
   2. insurance is required by law or contractual agreement;
   3. deductible insurance or non-insurance does not satisfy the test of economic feasibility;
   4. insurance is not available;
   5. insurance is not available on a financially sound basis;
   6. in the judgment of the President, an exception is deemed to be in the best interests of the University.
4. In purchasing insurance, the President will use the following guidelines:
   1. insurance negotiations will be conducted by a qualified broker on behalf of the University.
   2. selection will be based on quality of protection and services provided and the ultimate cost, in that order;
   3. the University will maintain a competitive atmosphere, but with continuity of relationships with insurance sources unless a significant reason for change exists.