Risk Management Policies and Procedures
Inter-University Council Insurance Consortium (IUC-IC)
Recognizing the tremendous benefits to be realized through the group purchase of insurance, Ohio established the Inter-University Council Insurance Consortium (IUC-IC) that includes fourteeon of the fifteen state colleges and universities. Three (3) committees (Executive, Claims and Loss Control, and Underwriting) handle the overall administrative functions of the IUC. The University of Toledo became part of the Inter-University Council's pooled property insurance program on July 1, 1994.
B. Goals and Objectives
The goal of the IUC-IC is to improve the coverage and service provided to each university, while permitting the group to assume additional risk by taking an increased primary deductible retention. The assumption of this risk translates into overall cost savings. The IUC-IC's objective is to take advantage of the economies of scale of making a group purchase of insurance.
C. Group Purchase Benefits
While each university retains control over its insurance program, this group purchase program reduces the impact of underwriting, pricing, servicing, and coverage limitations on the individual schools by creating market clout. The larger the "account", the greater the ability to negotiate price, coverage, and service parameters. By combining all of the state schools into one "account", the influence of each school is magnified to that of the entire group.
The program allows the combined value of all the participating institutions to be used to leverage the insurance carriers for the lowest possible rate. In a changing market, large group programs are also better able to retain coverage enhancements and negotiate lower deductibles. This ability to stabilize terms and conditions provides long term benefits for individual schools as well as for the group.
D. Structure of IUC Group Property Insurance Program
The structure for the group purchase of property insurance for state institutions includes: A basic deductible of $100,000 per occurrence, and a pre-funded group deductible of $350,000 excess of $100,000, with an annual aggregate stop-loss of $700,000. The excess insurance would drop down upon the exhaustion of the aggregate limit. The commercial insurance layer purchased excess of the primary $350,000/$700,000 are at a significantly reduced rate for the total group.
The program is built with a single carrier, which provides the schools with the single policy concept but allows for control over the cost of reinsurance and the total program. The funded retentions and aggregate stop loss prevent any one school and the group from taking any additional risk.
E. Group Casualty Insurance Program
Effective July 1, 1999, the IUC-IC entered into a group liability insurance program.
The core coverages of this group casualty insurance program include: auto liability, general liability, crime, educators legal liability and umbrella/excess liability. The principal benefit of the program is a discount on group insurance costs. The program allows members the opportunity to participate together in a group without assuming additional internal or external risk.