Insurance Trust History
If a school entity has a need, chances are that PSBA has a service, expert or program to meet that need.
During the late 1960s and early '70s school directors across the commonwealth expressed concern that it was difficult to obtain responsibly priced insurance products with coverage specifically designed for schools. In addition, availability was a problem because of the unfavorable view insurance carriers took toward public entities that resulted from social unrest throughout the country.
In 1971, PSBA formed a common law trust known as the Pennsylvania School Boards Association Insurance Trust (“Insurance Trust”). Over the years, the Insurance Trust provided risk management and other services to PSBA members, and endorsed insurance products provided by various insurers. Additionally, the Insurance Trust provided legal liability coverage and an unemployment compensation insurance program to PSBA members.
In 1978, School Boards Insurance Company, Ltd. was formed as a captive in Bermuda by the Insurance Trust. Initially, SBIC, Ltd. assumed risk relative to the Insurance Trust’s unemployment compensation insurance program. However, in the ensuing years, SBIC, Ltd. also began to reinsure workers’ compensation, general liability, professional liability and property/casualty package programs offered to PSBA members by U.S. admitted insurers.
The Insurance Trust considered the potential of forming a Pennsylvania domestic insurance company in the mid-1990’s. To facilitate that strategy, in 1995, the Insurance Trust formed a Pennsylvania business corporation named School Boards Insurance Company of Pennsylvania, Inc. (SBIC of PA). However, since its inception (until now), SBIC of PA has been only a corporate shell, and has not engaged in any business activities.
In 2005, shortly after the company earned a financial strength rating of A- VII by A.M. Best Company, the decision was made to activate the domestic insurance company. On January 1, 2006, SBIC of PA received a Certificate of Authority to operate as an admitted, licensed insurance company in the Commonwealth of Pennsylvania. At that time, SBIC of PA started to act as the reinsurer on the programs previously reinsured by SBIC, Ltd. July 1, 2006, saw the first policies issued by SBIC of PA, the School Leader’s Legal Liability policies.