MUSIC Matters – Volume 24 – Second Quarter

MESSAGE FROM THE BOARD CHAIRMAN

DR. BERNARD DUBRAY

SUPERINTENDENT OF SCHOOLS

FORT ZUMWALT SCHOOL DISTRICT

Dear MUSIC Member,

After 51 years in education, I thought I would never see anything new that I hadn’t experienced before. That was until COVID-19 hit our country. We all started hearing bits and pieces about this virus back in December and January. Little did we know that it would grow to such a global pandemic that our country would basically be shut down beginning in March. With such a robust economy at the shutdown who would have thought in a scant few weeks that unemployment would go to levels not seen since the Great Depression of 1929. Events continued to worsen until peak incidents occurred in many of our states and we began to put the pieces back together by beginning to open up our economy. At this point, we really don’t know what is going to happen in the future. Either our economy will begin to rebound fairly quickly, or we will be into a long recovery that will really challenge our education systems throughout our country. At this point, we hope for the best and prepare for the worst.

The MUSIC Board held its most recent meeting on Friday, June 19. The meeting was held face-to-face for most of the Board, and two of our members dialed in on a Zoom call. The news was mostly good, in spite of world conditions. Investments initially showed dips, but were recovering nicely due to our conservative investment strategy.

The budget, overall, looks good in part because most of the staff members from our member schools and community colleges were not around for the fourth quarter of the school year. Therefore, typical injury incidents did not occur. We also did not have buses on the roads, so those lines of coverage looked quite good. We did, however, have some large property losses, mostly due to storms throughout our state. The Board approved the 2019 draft audit, which continued to show good management of our organization. We also approved three new members, the largest of which was Jefferson City Public Schools. So, in spite of the world and national issues, the organization remains strong and is prepared to serve its membership for all of their needs.

Best wishes to you all as we prepare to restart our school districts and community colleges and I really believe better days are ahead.


MESSAGE FROM THE EXECUTIVE DIRECTOR

MR. MARK STOCKWELL

MUSIC EXECUTIVE DIRECTOR

Time seems to just slip away…even when the world takes a pause! It’s hard to believe we’re half way through 2020 and have no idea what the second half will bring. I wish you smooth sailing this summer and a great start to the 2020-2021 school year.

The 2019 MUSIC audit has been completed and the results were shared with the Board of Directors at its quarterly meeting on June 19th. The auditors provided a clean opinion on our financial statements and there were no surprises to share. 2019 Revenues exceeded expenses by $7.2 million or 8.3% of assessments. Member fund balances remain strong at $34.9 million or approximately 40% of assessments.

The 2020 operations are currently trending in line with the original projections. The decline in workers’ compensation and auto liability claims caused by the early closure of schools has been mostly offset by large wind and hail storms. If this trend continues through the fall, we are optimistic that some level of membership credit or assessment reduction will be available for the 2021 plan year. The MUSIC Board of Directors will make that decision at the 4th quarter meeting in October.

We’d also like to welcome Belton, Jefferson City, and Morgan County R-2 as the newest members of MUSIC.

Your work has become increasingly more difficult and important with the pandemic. THANK YOU for taking care of our kids during this very difficult time!

Have a great summer and please give me a call if you have any questions about the program or if I can assist you in any way.


2020 SCHOLARSHIP WINNERS

Mark Stockwell – MUSIC Executive Director

MUSIC is proud to announce the 2020 Dr. Darrell “Jack” Holley Scholarship recipients:

The scholarships are funded with the golf tournament proceeds and corporate donations. Since the 2020 MOASBO – MUSIC golf tournament was cancelled, we appreciate the corporate donations as well as those that donated their entrance fee back to the MUSIC Scholarship Fund this year. The winners each will receive a $2,000 scholarship (nonrenewable) to support their future education!

There were approximately 200 applicants for the six available scholarships. The selection committee members were extremely impressed with all applicants and wish them the best in their future endeavors.

Congratulations to the 2020 Dr. Darrell “Jack” Holley Scholarship winners:

Lauren Frazier – Canton R-V
Olivia Owen – Maysville R-I
Kathryn Vanden Hoek – Brentwood
Parker Triplett – Scotland County R-I
Mya Burken – Rolla 31
Ryan Sellers – Parkway


IS MUSIC PLANNING TO PROVIDE REFUNDS AS SOME COMMERCIAL AUTO LIABILITY COMPANIES ARE DOING?

By Peggy Wilson, CSS – VP – Member Services and

Alan Schmitt, ARM – VP – Loss Control

The short answer is, because MUSIC is a self-insured pool, any claims savings caused by the pandemic and early closure of schools will be reflected in the 2021 assessment rates.

What is a Self-Insured Pool?

A self-insurance pooling arrangement is a group of organizations, normally homogeneous in nature, banding together to create an association for the purpose of providing risk coverage and related services to its members. The members pay assessments into the association for the purpose of:

  • Funding a loss account for paying member claims as they occur
  • Procuring excess insurance or reinsurance to protect the pool from large losses
  • Hiring a staff – full-time or part-time, one person or multiple individuals
  • Engaging a brokerage firm and/or pool administrator depending on internal staffing levels
  • Contracting with a third party claims administrator to manage member claims
  • Engaging other vendors such as an actuary and auditor
  • Paying insurance-related taxes to help fund State agencies

There are many benefits in belonging to a self-insured pooling program, but would like to focus on:

Savings Stay in the Program or Distributed Back to Members – A well-managed pool will accumulate a surplus over time which may be retained in the program to lower future rates or increase self-insured retentions, or may be distributed back to the membership in the form of a dividend. This decision is up to the Board and/or membership with some oversight from state regulators.

MUSIC is able to provide a Membership Credit that is applied to the upcoming renewal assessment which is based on the surplus at the end of the policy term.  Dependent upon the monies paid from the loss fund on claims that year helps to determine the percentage that can be given back to its membership.

Due to the COVID-19 pandemic, you may have noticed that some personal auto insurance companies are giving a refund, since you are not using your auto in the capacity it was once used prior to the pandemic.  This was done since the insurance carriers risks were lowered – less of a chance to be involved in an accident, if you are staying in place and working from home.

Even though MUSIC will not be issuing individual checks to its members, if losses are lowered and not paid out of the loss fund, this can create a larger surplus.  But please remember, MUSIC provides coverage and pays losses for all lines of coverage.  This is not new to MUSIC, as credits have been provided to its members for many years, prior to the pandemic.  This is why Risk Control is a high priority to MUSIC. They are able to provide resources to assist in keeping claims down, workers’ compensation training, video aids to employees, webinars, legal workshops, and much more.  We want to help the member keep claims to a minimum, so there is a surplus to provide back to the members whose program it belongs.

In addition to providing risk control services to assist districts reduce accidents and injuries, our team can also provide guidelines and best practices as you manage through the COVID pandemic.  If you have any questions or would like assistance please contact MUSIC.


CYBER – IT’S RISKY BUSINESS – So Don’t Risk Losing Money by not following these simple procedures

Anita Kiehne – Vice President Claims

For the last two years, MUSIC has included Cyber coverage for all members as part of the regular assessment.  This year, the policy included a sublimit of coverage for “social engineering” that is new to this policy and those prior policies placed on an individual basis.

The limit is for $250,000 of coverage and applies to a loss when a criminal or fraudster uses a deceptive practice to get money or access information from a district or college.  In most cases, the criminal purports to be an employee, vendor or contractor of the school or college and issues fraudulent information and instructions for you to transfer money to an account that the district or college does not control.  It is a tactic used to get you (a designated employee) to send funds to an otherwise legitimate recipient, but instead to a fraudulent account using email, telephone requests or by fraudulent invoices.  The act requires the participation of an insured to act upon the request, as opposed to the account of the member being hacked by an outside third party.

The best way to prevent social engineering is to have a policy and or procedure to validate the request upon first receipt.

The Cyber carrier providing our social engineering coverage has an endorsement that actually REQUIRES ALL MEMBERS validate the source of any wire transfer request before acting on it for the first time.  The authenticity MUST be verified through a known source outside of the email or phone/invoice request.

The process is simple and REQUIRES  that every member have a written procedure within your district or college requiring the recipient of a wire transfer use an authentication procedure of the request by contacting a “known source” of the vendor at a phone or email address outside of the actual request.

This process will ensure you will have coverage in the event you do transfer funds, but can verify you attempted to authenticate the request.  It is critical in triggering your insurance coverage for this particular area of Cyber coverage.  Most importantly, you will need to document the procedure was in place and followed in the event of a loss to be able to obtain coverage.

We want all members to be aware of this important element of coverage so we eliminate any potential for coverage declinations.  Once you establish your protocol, please take the appropriate steps to share it with any staff who are involved with disbursements for the district or college.

Additional Cyber Resources

CyberRiskConnect.com.

Complete the New User Registration section including your access code. Your access code is 10448.


RENEWAL QUESTIONNAIRE REMINDER

Deanna Sharley – Client Service Manager

Just a note to remind you to keep a lookout for the 2020 Renewal Questionnaire e-mail that should be arriving in your inbox around August 1st. If your e-mail address or personnel will be changing, please contact us so we can update our records.


JUST DO IT – SEXUAL MISCONDUCT TRAINING

Jackie Turnage-Ferber – Client Training and Technology Coordinator

As school districts and colleges make plans for the upcoming school year, do not forget to have all faculty and staff complete the MUSIC Sexual Misconduct:  Staff-to-Student training through the SafeSchools learning management system (LMS). This course is the required replacement for the former required training named, Smarter Adults, Safer Children. If training is not completed by faculty and staff and a sexual misconduct loss occurs, the member will be subject to a $100,000 deductible per claim. As of 12/31/2020, MUSIC members will not be able to purchase umbrella policies if this training has not been completed by 12/31/2020.

The MUSIC Sexual Misconduct: Staff-to-Student training can be completed individually or in a group / offline training session. If the training is completed as a group, documentation of participation must be completed by your school’s SafeSchools administrator.

There are two methods of documenting a group / offline training session.

  • Method 1: Use sign-in sheets as proof of completion; these sheets should be uploaded to the SafeSchools LMS as a .CSV or plain text Please Note: There is not a method for uploading scanned PDF’s.
  • Method 2: Add employees to the session by selecting the position and location or by using the attendee upload tool.

Here is a video tutorial on how to utilize the Offline Training Session, including both methods of documenting participants:

https://safeschoolshelp.zendesk.com/hc/en-us/articles/360002309733-How-to-Create-an-Offline-Training-Session

MUSIC provides a total of 11 training courses to members, but only require members to complete the MUSIC Sexual Misconduct:  Staff-to-Student training. To view all complimentary courses provided to members, please visit the training tab on the MUSIC website.

All questions and concerns should be directed to Jackie Turnage-Ferber at jackie_turnage-ferber@ajg.com or by direct phone 314-800-2234.


Workers’ Compensation Incident Tracker

Jim Akers – Loss Control Consultant

MUSIC has been working to develop a new tool to assist in tracking your workers’ compensation claims.  The Workers’ Compensation Incident Tracker does exactly that, it tracks your claims and incidents. The Tracker was designed to give you a format to log and track all of your workers’ compensation claims.  By utilizing this tool, the WC Coordinator at your school will be able to log necessary information regarding the claim to help get injured employees back on the job in a timely manner and will have this information at their fingertips.  It will also allow the WC Coordinator to communicate with administrators to keep them abreast of any problem claims or incidents. It will allow sorting of information in case you want to sort by various groupings to look for trends, repeat issues, and other information which can identify repeated incidences therefore giving you the information to address and lower or eliminate the same type of incidences.

The WC Coordinator will be provided training on the Tracker, and once training has been viewed, they will be granted access to this tool.  Only those that have done the training will be provided access.  This is on an individual basis, so that the incidents that are entered can only be seen by those that have entered them into the Tracker.  This is due to privacy laws.

It will be located on the MUSIC website, meaning all you have to do is log in to the MUSIC website and it will be one of the choices you can select.

The key reason MUSIC is providing this tool is to help members save money by lowering or eliminating your work comp claims which will in turn lower your experience mod, thereby realizing a positive financial impact to your workers’ compensation costs on your assessments.  The Tracker also can assist you with bringing employees back to work on restricted duty instead of having them off work unnecessarily, which will also show a savings in your temporary total disability costs.

MUSIC will be rolling out more information in weeks to come and we ask that if you are interested in utilizing this new tool to assist in lowering costs, please contact Jim Akers at jim_akers@ajg.com who will provide the brief training that the WC Coordinator needs to access and utilize which will benefit the member as well as the injured employee.

If you have any questions please contact Jim anytime.


MUSIC 2019 Financial Audit

Scott Wightman – Area Executive Vice President – Gallagher

Our 2019 year-end financial audit has been completed and approved by the Board the Directors. We had another very good year and over the last two years have added $11.7 million to our surplus. Our surplus at the end of 2019 was $34.9 million and getting closer to a point where the Board would consider another surplus allocation credit. Past policy has been to refund any surplus over 50% of member assessments and we are now within $8.5 million of that mark. If things go as well as they have over the last couple years, it may not take long to get there.

The full 2019 audit is available on the website under About MUSIC/Financial Audits.