Insurance Programme Procurement – contract tender and award

Authority is required for insurance premium expenditure greater than the authority delegated by the MOPAC Scheme of Delegation; therefore requiring approval from the Deputy Mayor for Policing and Crime.

Within an Insurance Programme, MOPAC-MPS purchases two insurance policies that were previously awarded 4 and 5 years ago following competitive tenders, however, are coming to the end of their long-term agreements on 1st October 2020.

The particular way the insurance market works, the periods required by the tender and the need for decisions to be made before cover expires on 1st October 2020, means that this paper, as in previous years, seeks approval to obtain terms and award, within agreed financial parameters. The expected premium payable is already budgeted for within the existing revenue budget.

The Deputy Mayor for Policing and Crime is recommended to:

Approve action to conduct a tender for Property insurance and General Legal Liability Insurance and award contracts with agreed financial parameters, in protection of MOPAC-MPS property assets and potential legal liabilities, which are due to expire on 1st October 2020.

1. Introduction and background

1.1. This proposal needs to be considered because MOPAC-MPS purchases two insurances policies that were previously awarded under a long-term agreement that is coming to an end on 1st October 2020. Because the premium levels involved are greater than the authority delegated by the MOPAC Scheme of Delegation, approval needs to be sought from the Deputy Mayor for Policing and Crime.

1.2. The MOPAC/MPS purchases this insurance to mitigate the potential financial and business impact of risks by transferring them to an insurance company. The insurance policies to be tendered form part of a range of insurance policies within an insurance programme covering MOPAC-MPS assets and potential legal liabilities. This should be noted in the context that MPS has property assets with a rebuilding and replacement value in the region of £2bn and can be subject to unlimited legal liabilities arising from injury to persons and damage to third party property.

1.3. The MOPAC/MPS uses its size and leverage to maximise insurance premium savings and employs a qualified in-house insurance professional, the Head of Insurance and Claims Services, who in liaison with the appointed Insurance Broker, ensures that all policies are suitable.

1.4. The nature of the insurance market and the required timings to conduct the procurement does not match with the MOPAC governance process. This paper therefore seeks empowerment to conduct the procurement via a tender and award within agreed parameters. It is the first year of a three-year Insurance Strategy that was previously approved by the Deputy Mayor for Policing and Crime (DMPC) (under decision number PCD607 dated 19/07/19), which these two insurance policies are in line with.

2. Issues for consideration

2.1. We will be conducting a Restricted Tender, compliant with OJEU requirements, in order to get the best possible response from the broadest possible market, disclosing information required by prospective insurers satisfying pre-tender qualification and remaining compliant with Procurement Regulations for the Public Sector.

2.2. The current annual insurance cost is contained in the restricted section of the report and approval is requested to tender and award the contract up to a budgeted value also set out in that restricted section.

2.3. Maintenance of this insurance cover provides critical financial risk transfer

2.4. Given the requirements of the insurance market, timescales requirements by an OJEU compliant tender and the need to prepare for cover to continue beyond expiry on 1st October, preparatory activity is already under way in the early stages of the tender process, without commitment to premium costs.

3. Financial Comments

3.1. The current annual insurance cost of these insurances is commercially sensitive and set out in the restricted section of this report. Approval is sought to conduct a tender and award up to a budgeted value also set out in the restricted section of the report.

3.2. The intention is to maintain the insurance premium at the expiring premium level or under, however there is a possibility that renewal terms will be at a higher cost depending on terms received from the insurance market. We would seek to manage any increase in the cost of the insurance premium within the overall Insurance Programme revenue budget.

3.3. There is no impact on the Capital Plan

3.4. The insurance policies will be procured via an OJEU compliant tender process, supported by our contracted insurance broker, managed by the MPS Head of Insurance and Claims Services and in liaison with the MPS Commercial department

4. Legal Comments

4.1. On approval of the recommendation, tender and award will be conducted in accordance with the Public Contract Regulations 2015, EU law and the MOPAC’s Scheme of Delegation and Consent. Commercial Services are engaged in the process and legal advice from the Directorate of Legal Services is sought as required.

4.2. The Mayor's Office for Policing Crime is a contracting authority as defined in the Public Contracts Regulations 2015 ("the Regulations"). All awards of public contracts for goods and/or services valued at £181,302 or above will be procured in accordance with the Regulations.

4.3. Paragraph 4.13 of the MOPAC Scheme of Delegation and Consent provides that the Deputy Mayor for Policing and Crime (DMPC) has delegated authority to approve all requests to go out to tender for contracts of £500,000 or above.

5. Commercial Issues

5.1. The insurance policies will be procured via an OJEU compliant tender process, supported by the MPS contracted insurance broker, managed by the MPS Head of Insurance and Claims Services and in liaison with the MPS Commercial department.

6. GDPR and Data Privacy

6.1. GDPR matters have been discussed with the Data Protection Officer, who has confirmed that no Data Protection Impact Assessment (DPIA) is required for this programme. However, the personal details of any individuals or organisations with whom contact is made for the purposes of the engagement will be managed in accordance with MOPAC’s wider Privacy Notice. Any organisation that is contracted to conduct work in support of this programme will be required to sign a MOPAC contract that will specify their GDPR responsibilities.

7. Equality Comments

7.1. MOPAC is required to comply with the public sector equality duty set out in section 149(1) of the Equality Act 2010. This requires MOPAC to have due regard to the need to eliminate discrimination, advance equality of opportunity and foster good relations by reference to people with protected characteristics. The protected characteristics are: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

7.2. An Equalities Impact Assessment (EIA) has been completed which evidences those disproportionately affected by stop and search.

7.3. There are no known negative equality or diversity implications

8. Background/supporting papers

8.1. The MPS report.