|
|
August 16, 2002/Elul 8 5762, Vol. 54, No. 48
Dodging insurance woes
Local Jewish nonprofits buck escalating rates
BARRY COHEN
Editor
Insurance rate hikes impacting Jewish charities nationwide have not yet hit Valley agencies.
"I would have heard complaints (about increased insurance rates) from synagogues and other Jewish organizations (if there were any)," said Bill Straus, regional director of the Anti-Defamation League.
An Associated Press story headlined "Jewish charities paying higher insurance rates" (Arizona Republic, June 9), reported that Jewish nonprofits across the nation have been confronted with exorbitant increases. Local nonprofits, however, report only moderate increases, if any.
"Our rates have not gone up substantially - though we are holding our breath," said Ilene Singer, executive director of Temple Chai in Phoenix. She said synagogues in Boston and Philadelphia, among other cities, are facing significant rate increases.
Insurance premiums at Temple Emanuel of Tempe also have increased only 5 percent in the past two years, said Administrator Evan DuBro.
"For non-health insurance, we expect no increase at all," said Gail Parin, president and CEO of Jewish Family and Children's Service in Phoenix. "At least that's what we expect."
The Tri-City Jewish Community Center, which just moved into new facilities in Tempe, is paying 30 to 50 percent more for insurance than a year ago. Ilene Blau, executive director, blames the Sept. 11 terror attacks, which triggered steep insurance company payouts to victims.
Higher costs will not affect Tri-City JCC's programs, she said.
Premiums went up 8.5 percent for the Jewish Federation of Greater Phoenix when it renewed its policy Dec. 1, although coverage remained the same, said Mark Hoover, federation comptroller.
During the past year, insurance rates for nonprofit organizations increased 25 percent to 30 percent, said Robert Shcolnik of Harris, Shcolnik and Associates, a Phoenix insurance firm.
The primary reason is insurance payments to compensate individuals and companies impacted by Sept. 11. "The insurance industry at that time took a bath," he said.
Shcolnik has helped the Jewish Community Foundation of Greater Phoenix, Council for Jews with Special Needs, the Bureau of Jewish Education, the Tri-City JCC and the Valley of the Sun Jewish Community Center obtain insurance coverage.
Insurance companies distributed approximately $75 billion in the aftermath of the attacks, said John Carder of the Alliance Insurance Group in Phoenix. "No industry can lose 25 percent of its operating cash and not be affected," he said.
Insurers raised their rates to compensate for their losses, said Shcol-nik. The stock market downturn meant additional losses of investment income for insurance companies, and again they raised premium rates to compensate, he explained.
A third blow to insurers is actual or potential payouts on directors-and-officers-liability insurance - "coverage carried to protect against lawsuits claiming mismanagement (of funds)," he said. Lawsuits filed against Enron, Arthur Andersen and Global Crossing forced indemnities of $750 million, he noted.
"The trickle-down effect caused all insurance rates - including for nonprofits - to go up across the board," he said.
Shcolnik is working to obtain insurance coverage for the new Ina Levine Jewish Community Campus, expected to open in September at the southeast corner of Sweetwater Avenue and Scottsdale Road in Scottsdale.
Insurance for the property will cost more than expected, based on the way rates have been rising, said Hoover. "We have already been told that what we have in the (campus) budget will not cover the insurance demands," he said.
Each of the six campus tenants - the federation, the JCF, the VOSJCC, the BJE, CJSN and the Phoenix Hebrew Academy - will be charged a fair share of operating expenses, including maintenance, electricity and insurance, he said. The agencies' assessments for the first year were set several months ago so they could complete their budgets, he explained.
For the upcoming year, the burden will fall on the campus to make up the difference to cover anticipated higher insurance premiums, he said. The tenants will not directly feel the impact of increased insurance rates until the 2003-2004 fiscal year.
"It has not been resolved yet who will cover the additional expenses," said Hoover. The $2 million endowment may provide "a cushion," and there's always the chance the stock market will turn around, he said.
Contact the writer at barry_cohen@jewishaz.com.
|
