PSBA Becomes First School Boards Association to Own and Operate Insurance Company

The Pennsylvania Department of Insurance has approved the Pennsylvania School Boards Association's application for a license to operate School Boards Insurance Company of Pennsylvania, Inc., effective January 1, 2006. With this approval, PSBA becomes the first non-profit school boards association in the United States to own and operate a licensed insurance company.

SBIC of PA is being formed by merging the assets and liabilities of PSBA's Bermuda-based School Boards Insurance Company, Ltd., with the association's newly established Pennsylvania insurance corporation. The new entity will enable the PSBA Insurance Trust to continue providing Pennsylvania school districts with risk management services, endorsed insurance products and legal liability and unemployment compensation insurance programs.

"This is a historic achievement for PSBA and our members," said Thomas J. Gentzel, executive director of PSBA. "In addition to becoming the first association to operate an insurance company, PSBA has accomplished a rare feat in bringing business and jobs back on-shore to the commonwealth."

Previously, SBIC Ltd. performed all operations and services for school districts through its Bermuda offices. The new corporation will operate exclusively in Pennsylvania.

"Bringing the SBIC corporation on-shore allows the association to have more control over the delivery of insurance services and programs to our members," said Wayne Smith, PSBA assistant executive director for insurance services and president of SBIC of PA. "PSBA has a long history of providing insurance services to its members. This new corporation will enhance our success and offer new opportunities in the future."

PSBA's efforts to provide insurance services for its members began in 1971 with the formation of the Pennsylvania School Boards Association Insurance Trust. Over the years, the Insurance Trust offered risk management and other services, as well as endorsed insurance products from various insurers, to PSBA members. The trust also provided members with legal liability and unemployment compensation insurance programs.

In 1978, SBIC Ltd. was formed as a captive insurance company in Bermuda by the Insurance Trust. Initially, this entity assumed the risk relative to the Insurance Trust's unemployment compensation program. In the ensuing years, the corporation provided reinsurance programs to PSBA members in the areas of workers' compensation, general liability, professional liability and property/casualty programs.

With the Insurance Department's approval, the merger of SBIC Ltd. into SBIC of PA will begin immediately and take several months to complete. During this time, PSBA members will not experience any changes in coverage or services.

FOR FURTHER INFORMATION -- Scott K. Shewell, Director of Public Relations, Pennsylvania School Boards Association, (717) 506-2450, ext. 3375