28.304
Risk-pooling arrangements
Agencies can create risk-pooling arrangements to manage insurance risks efficiently, but must appoint a single manager for oversight and coordination.
Overview
FAR 28.304 allows federal agencies to establish risk-pooling arrangements as a means to manage insurance-related risks more efficiently. These arrangements leverage the expertise of the insurance industry, particularly in safety engineering and claims handling, to minimize costs to the government. The regulation requires that each risk-pooling arrangement have a designated manager or point of contact, ensuring clear oversight and accountability within the agency.
Key Rules
- Establishment of Risk-Pooling Arrangements
- Agencies are permitted to create risk-pooling arrangements to manage insurance risks collectively.
- Use of Insurance Industry Services
- These arrangements should utilize insurance industry services for safety engineering and claims management to achieve cost savings.
- Appointment of Arrangement Manager
- Agencies must appoint a single manager or point of contact for each risk-pooling arrangement to oversee operations and communications.
Responsibilities
- Contracting Officers: Ensure that any risk-pooling arrangement is managed according to agency policy and that a manager is appointed.
- Contractors: May interact with the designated manager regarding claims or safety engineering issues under the arrangement.
- Agencies: Must establish oversight by appointing a manager or point of contact for each arrangement.
Practical Implications
- This section exists to promote efficient risk management and cost control in government insurance practices.
- It impacts daily contracting by streamlining claims handling and safety engineering through centralized management.
- Common pitfalls include failing to appoint a manager or not leveraging industry expertise, which can lead to inefficiencies or increased costs.