Stock photo by John Hoff, neighborhood organization meetingAccording to a memo from Robert "Bob" Miller of the Neighborhood Revitalization Program, "NRP has been informed by the insurance company carrying our Director's & Officer's (D & O) Insurance that they will not be renewing our coverage when the current policy year ends in March 2010."
The memo (a public document distributed recently at an open meeting of the Hawthorne Neighborhood Council Board of Directors) goes on to state that "The company has indicated that...
...they are concerned that the coverage they provided was too broad, the management and employee controls used by neighborhood organizations are too varied, and the risks are disproportionate to the premium."
Though the memo makes no mention of the pointless, never-ending lawsuit by the "Old Majority" JACC faction, the source of the concern by the insurance carrier almost certainly stems from this expensive and never-ending frivolous litigation.
Good ol' Bob Miller is taking steps to remedy the situation as well as it can be remedied, scheduling a working session with NRP's insurance agents (R.J. Ahman) for Thursday, October 29 and having all neighborhood organizations complete questionnaires.
That is my summary of the situation, but for the reader who needs to know more of the nitty-gritty, here is the memo itself:
October 1, 2009
To: Neighborhood Leaders and Neighborhood Staff
From: Robert D. Miller, NRP Director
Subject: Director's & Officer's Insurance
NRP has been informed by the insurance company carrying our Director's & Officer's (D & O) Insurance that they will not be renewing our coverage when the current policy year ends in March 2010.
The company has indicated that they are concerned that the coverage they provided was too broad, the management and employee controls used by the neighborhood organizations are too varied, and the risks are disproportionate to the premium. As a result, we are now trying to find another insurance company to underwrite and issue a master D & O Policy that will cover all of our neighborhoods. If we cannot find a carrier willing to underwrite such a policy, each neighborhood will have to determine its need for coverage, find a carrier for their own organization, and pay for the premium from their operating funds.
Each neighborhood organization is required to have a General Liability Insurance policy and you may want to check with your insurance agent to see if they have access to a D & O insurance provider and the coverage and premiums that would be available to you. If you identify a possible source for your D & O coverage, please let me know so that NRP can pursue the possibility of a master contract with your carrier.
The one good thing about this cancellation is that the carrier has given us a good amount of lead-time to try and find another option.
(JNS editorial comment: why do people say "try and" instead of "try to?" It drives me nuts)
As the first step in pursuing another underwriter, we need to update the material that you have previously submitted to us and have you complete a new questionnaire that is widely used as a preliminary step in the underwriting process. Your previously submitted information and the new questionnaire are attached. Please give this your prompt attention and return the updated material for your organization and the completed questionnaire by Friday, November 6. Only organizations that provide the updated and completed questionnaires will be considered for coverage under any new policy.
We have scheduled a working session with our insurance agents (R.J. Ahman) for Tuesday, October 29 for organizations that may want to help with completing the questionnaire. The session will be held 7 p.m. in CPED Conference Room 3 on the 2nd floor of the Crown Roller Mill Building. Please bring with you financial reports and organizational policies that will help you and our advisors complete the forms at the meeting.
Thank you for your prompt attention to this important matter.
The memo (a public document distributed recently at an open meeting of the Hawthorne Neighborhood Council Board of Directors) goes on to state that "The company has indicated that...
...they are concerned that the coverage they provided was too broad, the management and employee controls used by neighborhood organizations are too varied, and the risks are disproportionate to the premium."
Though the memo makes no mention of the pointless, never-ending lawsuit by the "Old Majority" JACC faction, the source of the concern by the insurance carrier almost certainly stems from this expensive and never-ending frivolous litigation.
Good ol' Bob Miller is taking steps to remedy the situation as well as it can be remedied, scheduling a working session with NRP's insurance agents (R.J. Ahman) for Thursday, October 29 and having all neighborhood organizations complete questionnaires.
That is my summary of the situation, but for the reader who needs to know more of the nitty-gritty, here is the memo itself:
October 1, 2009
To: Neighborhood Leaders and Neighborhood Staff
From: Robert D. Miller, NRP Director
Subject: Director's & Officer's Insurance
NRP has been informed by the insurance company carrying our Director's & Officer's (D & O) Insurance that they will not be renewing our coverage when the current policy year ends in March 2010.
The company has indicated that they are concerned that the coverage they provided was too broad, the management and employee controls used by the neighborhood organizations are too varied, and the risks are disproportionate to the premium. As a result, we are now trying to find another insurance company to underwrite and issue a master D & O Policy that will cover all of our neighborhoods. If we cannot find a carrier willing to underwrite such a policy, each neighborhood will have to determine its need for coverage, find a carrier for their own organization, and pay for the premium from their operating funds.
Each neighborhood organization is required to have a General Liability Insurance policy and you may want to check with your insurance agent to see if they have access to a D & O insurance provider and the coverage and premiums that would be available to you. If you identify a possible source for your D & O coverage, please let me know so that NRP can pursue the possibility of a master contract with your carrier.
The one good thing about this cancellation is that the carrier has given us a good amount of lead-time to try and find another option.
(JNS editorial comment: why do people say "try and" instead of "try to?" It drives me nuts)
As the first step in pursuing another underwriter, we need to update the material that you have previously submitted to us and have you complete a new questionnaire that is widely used as a preliminary step in the underwriting process. Your previously submitted information and the new questionnaire are attached. Please give this your prompt attention and return the updated material for your organization and the completed questionnaire by Friday, November 6. Only organizations that provide the updated and completed questionnaires will be considered for coverage under any new policy.
We have scheduled a working session with our insurance agents (R.J. Ahman) for Tuesday, October 29 for organizations that may want to help with completing the questionnaire. The session will be held 7 p.m. in CPED Conference Room 3 on the 2nd floor of the Crown Roller Mill Building. Please bring with you financial reports and organizational policies that will help you and our advisors complete the forms at the meeting.
Thank you for your prompt attention to this important matter.
4 comments:
Thanks again Ben, Jerry, and Jill.
Well, the bright-side (if there is one) to this issue is that, stricter reporting issues related to the operational aspects of the neighborhood organizations will be required, I am sure.
Thus, reducing the chance that individuals like those from the JACC board of the recent past, could ever get away with something similiar in the future.
I'd love to know how much the insurance company has collected in premiums over the past 10-20 years? 71 neighborhood organizations? Recent premiums are well in excess of $1,000. And they drop the policy because of one lawsuit?
Responding to the 2nd Anonymous above: I don't know how stricter reporting issues would reduce the likelihood of past events repeating themselves. The leadership of JACC had no problems with issuing reports that were not truthful.
There are a few things that might have ended the problem a lot sooner: (1) more engagement by residents--it is always the same 15-20 people who get involved, (2) less divisiveness between the black and white factions of the neighborhood, (3) ensuring that all board members realize they are personally liable for board decisions made without due diligence, and (4) outside officials willing to enforce the contractual obligations they place on neighborhood organizations, on non-profits, etc. As long as people turn a deaf ear to complaints, believe that questioning leadership is racist, and try to avoid conflict at all costs, nothing will stop those who use their authority for personal gain or power.
"outside officials willing to enforce the contractual obligations they place on neighborhood organizations, on non-profits, etc. As long as people turn a deaf ear to complaints, believe that questioning leadership is racist, and try to avoid conflict at all costs, nothing will stop those who use their authority for personal gain or power."
I agree wholeheartedly with this observation--I think it is the root of the problem. The truth is that the neighborhoods most in need of effective advocacy (which neighborhood organizations should provide) are also the most vulnerable to being taken over by corrupt "leaders" who see control over city funds as their one shot at personally striking it rich and playing the big shot. Not that this is the case in every Northside neighborhood, but as evidenced by the previous JACC board, the current NRRC board, and the floundering WHO "committee," it certainly does happen all too frequently.
For this reason, I'm afraid that the Northside might really have ruined NRP for the whole city, and that Northside communities would actually benefit from the end of NRP, and the centralization of neighborhood development with the city. When all the neighborhoods can get their act together while we're running around like the keystone cops, we're actually better off letting the city make the decisions for us--at least that way, we'll get SOMETHING rather than just letting a few fools throw the community's development dollars down the tube.
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