NFHS Insurance Programs

The NFHS leadership and representatives of American Specialty recently reviewed the current NFHS insurance programs. General liability and participant accident policies are up for renewal following three-year rate guarantees. Excess and Directors and Officers' liability are coming off one-year policies. The picture for the insurance market looks rather bleak. Prior to the events of 9/11, the industry raised rates. Following 9/11 rates are coming in much higher. Projections for the NFHS at this time indicate that we could experience a tripling of our current premiums.

The projected increases would place a tremendous strain on the NFHS budget. The NFHS must consider either a reduction in coverage and benefits or an increase in fees. In reality a combination of both options is likely. We will consider the essential items based on cost for all our programs. The costs of our insurance programs for NFOA and NFCA will be part of that. It is likely that an insurance surcharge will be needed to continue funding the insurance programs for these organizations.

Further compounding this problem is the repositioning of many insurance carriers. The large losses of 9/11 have reduced the amount of premium carriers can write. Some carriers are getting out of market segments that are not within their "core business." There is reduced number of companies writing specialty business such as what the NFHS needs. In addition, ratings of companies are changing. Some companies that were once "A" rated have been rated down. We are enclosing a copy of the A.M. Best ratings on three companies writing risk such as the NFHS for your information.

The NFHS loss history is also proving to be a problem. The latency of claims from minors is affecting losses from past policies. This is particularly true in some of the current high profile cases. In addition, our professional organizations' losses are growing.

Requests for quotes for NFHS insurance are going out. We hope to receive these prior to April in time for the April NFHS Board meeting. We will keep you informed regarding this important issue. We will also provide an insurance update at the legal meeting in April. We urge you to attend this important meeting.