In the late 1970s, many municipalities helplessly watched as the cost of insuring cities and other entities rose higher and higher. Recognizing the need to diffuse the strain, the California Contract Cities Association (CCCA) began searching for new measures to take. The CCCA looked toward other fields, including the medical profession that also had dealt with ballooning costs. Doctors, faced with impending bankruptcy as a result of the high cost of malpractice coverage, had responded years earlier by forming their own insurance companies.
With city managers and administrators advocating for a full, professional study to determine the viability of a self-insured pooling program, the CCCA oversaw a two-year analysis involving city managers, finance officers, city attorneys, and consultants.
The plan quickly took shape. In March 1977, a committee of city attorneys presented a first draft of a joint powers agreement that would allow for the pooling of risk. Eventually, it was submitted for ratification, and on June 29, 1977, the Southern California Joint Powers Insurance Authority (SCJPIA) officially came into being, with a total of 33 cities signing the agreement. Liability coverage, then, began in 1978 with workers’ compensation being added in 1980.
The original name of the Authority was Southern California Joint Powers Insurance Authority, but was changed to its current name in the late 1990s to reflect the growing membership throughout the state.