ATTN: Officers and Insurance $'s

Kapsig1 · #1 03-21-2002, 01:20 PM

I posted this in Risk mgmt, but thought I'd try to get some responses here as well. Thanks.
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As the Finance Commissioner for Kappa Sigma, we are faced yet again with the rapidly rising costs of purchasing liability insirance for our chapters.

I would like to know how a couple of the options we are currently faced with stacks up against our interfraternal friends.

Could you, IF YOU KNOW FOR A FACT, sound off with the cost of you CURRENT liability insirance assessment from your national organization? Most are a "per member" basis, if not, provide the chapter assessment and how many members you have in your chapter.

Thanks,
Brad

zete_boy · #2 03-21-2002, 03:21 PM

We were lucky for a while having a fee of $20 per person each year, but just this term our fees rose to $150 per person and most likely rising again to 200 by september. This is gonna kill some of our smaller chapters.

zete_boy · #3 03-21-2002, 03:24 PM

We were lucky for a while having a fee of $20 per person each year, but just this term our fees rose to $150 per person and most likely rising again to 200 by september. This is gonna kill some of our smaller chapters.

SAEalumnus · #4 03-21-2002, 07:24 PM

From "The Record of Sigma Alpha Epsilon" (Winter 2002, pg. 60)

Fraternity / Insurance Cost per member:

Beta Theta Pi / $75
Kappa Sigma / $60
Phi Delta Theta / $115
Sigma Alpha Epsilon / $124
Sigma Chi / $80
Sigma Phi Epsilon / $74

(The above information gathered from the Fraternity Executives Association)

Sig@ISU · #5 03-21-2002, 11:46 PM

I interned at our HQ this last summer and from what it sounds from our director is look for more increases. Sigma Chi has our own Insurance company (RMF), I was told if we could find it cheaper somewhere else......DO IT. It seems that our justice system is so twisted and the amount of claims that our being filed is crazy. Here's some advice, make sure each event is properly planned and cover yourself. Good luck but don't plan on any slack.

wood

Kapsig1 · #6 03-22-2002, 10:44 AM

Quote:

Originally posted by SAEactive
From "The Record of Sigma Alpha Epsilon" (Winter 2002, pg. 60)

Fraternity / Insurance Cost per member:

Beta Theta Pi / $75
Kappa Sigma / $60
Phi Delta Theta / $115
Sigma Alpha Epsilon / $124
Sigma Chi / $80
Sigma Phi Epsilon / $74

(The above information gathered from the Fraternity Executives Association)

Thanks for the info! Let me help others who read my original post. I am the Finance Comissioner for the fraternity, not a chapter of the fraternity. So the purpose of the request was to examine the rising costs of our poor behavior together. The above numbers look to be a little more recent than the last FEA report I had. But that data tends to trail the "real time" numbers significantly.

Our overall costs will increase dramatically this year. Kappa Sigma decided about 2 years ago to "Tier" our chapters based on violations. So, like your car insurance, if you've got the fraternal equivalent of speeding tickets or wrecks, your chapter pays more. But our chapters on Tier 1 (no violations, etc) will still pay more in the future.

I also know that many orgs are in the market for a renewal/new policy as I write this. I also know that the last two years have been particularly high claim/award years for greeks, and Kappa Sigma too. We've all seen the articles.

The immature decsions that are being made by each of us, affects the future of the system. I predict that if claims continue at their current level, and if settlements and awards continue to increase at their current rate, that NONE of us will be able to afford insuance in 8 to 10 years.

For those who self insure (everyone does to a degree) it won't take more than 10 average major claims to wipe out the richest reserve currently held.

This is the single largest threat to our existence, and it all boils down to two things: alcohol and hazing. Period. Our insurance should be for accidents. Accidents raise premiums, but accidents don't generate NEAR the number and size of jury awards.

So, you hazing proponents - just keep on killing us all.

Brad

DeltAlum · #7 03-22-2002, 11:28 AM

I've been pointing this out ever since I joined GreekChat. I won't say thanks for the bad news, but do appreciate the research.

As I've said before:

Is anyone listening?

I would also suggest that you post this copy this information to the Hazing threads (ie. is hazing bad, hazing, etc.) in the risk management section. I don't know how many people want to read about insurance, but this is information that is vital to the survival of the Greek System.

Thanks for your efforts...

Kapsig1 · #8 03-22-2002, 11:33 AM

Quote:

Originally posted by DeltAlum

I would also suggest that you post this copy this information to the Hazing threads (ie. is hazing bad, hazing, etc.) in the risk management section

DONE! Thanks for the thought.

Tom Earp · #9 03-22-2002, 05:14 PM

KappaSig1 you are so right on the head of the problem!

I do not know if You Tom Helbock our Executive Director of LXA. I have talked to him and he also said that many if not all of the Greeks are in financial straits, simply for the Insurance Cost caused by Risk Management and acts of Stupidity by the Active Members of the Chapters.

He stated that the cost of not only doing business but to cover the insurace costs will continue to climb! So where does an Organization come up with the money? They charge the members more!

If it keeps going up, it will be hard for new people to afford or even the current members to pay the bills.

This may be the very reason to see the demise of Greek Organizations!

In todays soceity, everyone is sue happy and will do at the drop of a hat!

I like the idea of a tier , but I think that is how we do it as they had us on the Insurance as being in Penn. Just because we are Pittsburg ( no H ) State U. in Kansas. They could not get it through their heads and we are still fighting it! It made a big difference in money we had to pay out!

It may be something that all Of the Internationals should sit and discuss if they have not already!

Fraternaly Yours,

LXAAlum · #10 03-22-2002, 06:22 PM

Tom, to a certain extent, LXA does a tier system - nothing truly formal, but I recall seeing Insurance Notices when I was High Pi, and that due to risk management issues ( or good management in that area ) you could have a credit or debit for that area, in addition to others....

LXA is part of the FPIG (I think I have the acronym right) for purchasing power for fraternities for insurance. I think it is call the Fraternity Purchasing Insurance Group - Sigma Chi, SigEp, SAE, and other national fraternities are or were members. That helps to a certain extent, but the common theme on this thread is very simple:

As long as we continue to allow the stereotypical Animal House chapters to function, we, the remaining brothers, pay the price.

DeltAlum · #11 03-22-2002, 06:49 PM

I thought it might be instructional to list the fraternities who are part of FRMT, Ltd. These are GLO's who either were unable to get liability insurance or unable to afford the skyrocketing rates.

The members are:

Acacia, Alpha Epsilon Pi, Alpha Gamma Rho, Alpha Kappa Lambda, Alpha Tau Omega, Chi Phi, Delta Chi, Delta Tau Delta, Delta Upsilon, FarmHouse, Kappa Alpha Order, Kappa Delta Rho, Phi Kappa Psi, Phi Kappa Tau, Phi Kappa Theta, Pi Kappa Phi, Pi Lambda Phi, Psi Upsilon, Theta Xi, Zeta Beta Tau and Zeta Psi.

I'm sure the FPIG is at least comparable.

A very few large litigations lost will bankrupt the organization, and potentially the member organizations.

To quote again, "The 21 member fraternities of the FRMT, Ltd. are in business together. Loss experience of any one member fraternity will affect the future costs of all 21 member fraternities."

33girl · #12 03-22-2002, 07:25 PM

Quote:

Originally posted by DeltAlum
A very few large litigations lost will bankrupt the organization, and potentially the member organizations.

To quote again, "The 21 member fraternities of the FRMT, Ltd. are in business together. Loss experience of any one member fraternity will affect the future costs of all 21 member fraternities."

I'm confused...so I assume the only reason they have gone together is for the purchasing power? I mean, why would you put your butt on the line for another group's potential mistakes if you didn't need to? Heck, Greek unity only goes so far. I know seeing KDR in there is weird to me....they are so much smaller than the rest of those groups...wouldn't the insurance companies differentiate between a GLO with 100 chapters and a GLO with 30 chapters (i.e. more chapters, more risk)?

DeltAlum · #13 03-22-2002, 09:41 PM

33,

It's not a matter of purchasing power. Some (maybe all, I'm not entirely sure) of these organizations could not get coverage AT ALL by themselves. Period. The entire group of 21 funds this enterprize. So, for all intents and purposes the group is self insured. That's why financing is so critical -- and so fragile -- they just don't have the deep pockets that an insurance company has.

As I understand the situation, an insurance company provides management services, but the financial liability is all (or at least almost all) absorbed by the fraternities.

It's a scary position to be in.

By the way, this is not new. It has been in place (and growing). If you look at some of my posts when I first joined GreekChat you will find me talking about this situation.

I learned about it first at a Division Conference about three years ago. At that time there were sixteen groups involved.