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July
1, 2006 was a very important and memorable date for ARM
of Illinois. What makes this date stand out? It was the
kick-off date for the Prairie State Insurance Cooperative
(“PSIC”), a startup K-12 non-accessible school
pool developed by and for ARM of Illinois member agencies
in conjunction with the Public Entity and Scholastic Division
of Arthur J. Gallagher, spearheaded by Bob Pegg, Executive
Director, ARM of Illinois.
“It certainly wasn't easy”, Pegg reflects. “Selling
a new non-traditional product is a hard sell. There was
an enormous learning curve for both our members and the
school districts. Plus, the existing market players did
everything in their power to kill PSIC.”
Although the targeted effective date was set for July
1, 2006, the marketing plan was put into motion in the
spring of 2005. Mailings were sent to over 500 districts
in Illinois inviting school officials to attend one of
five regional informational meetings being held throughout
the state. By the time the last of the five meetings had
been held in late 2005, 107 districts were willing to take
a quotation for the property & casualty and the workers
compensation programs. This equated to approximately $7,500,000
premium being taken out to market.
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As
the month of June came to an end, PSIC was able to secure
the binding commitment from 20 school districts. Selective
Insurance Company ended up writing the package on a self-insured
retention basis. Hartford wrote the workers compensation
on a first dollar guaranteed cost basis. The initial written
premium totaled just under $1,000,000.
Four more districts have been added since July 1st. Another
10 districts are expected to join prior to next July’s
renewal. “Our program is up and running now”,
adds Pegg. “We continue to market it very aggressively.
The PSIC Board is now formed. We are issuing policies and
paying claims. We are getting a very positive buzz in the
marketplace.”
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