April 6, 2018 at 1:53 p.m.
INSURANCE
How Diocese recompenses abuse victims
Q. What is the Diocese's self-insurance program?
A. Each of the Diocese's 181 parishes and diocesan institutions pays a certain amount annually for insurance, based on the parish's property values and risk ratings. That insurance covers damage to any diocesan or parish property through fire, theft etc., as well as liability claims for such things as slip-and-fall accidents or clergy misconduct.Q. Is that the only insurance the Diocese has?
A. The Diocese determines, through a periodic analysis, whether it is more economical to purchase insurance coverage from an insurance carrier or to create a diocesan self-insurance fund.For the past 24 years, the practice of the Diocese has been a combination of the two: the bulk of the diocese's coverage is through a self-insurance fund, but "excess" coverage (i.e. for claims over a certain dollar figure) is secured through an outside carrier. This protects the Diocese from such things as a catastrophic fire or a large liability settlement.
The effect on the parishes is the same: They pay a certain premium towards the total insurance package, and then the Diocese decides whether it is more economical to self-insure or to purchase coverage, so that the parishes can benefit from the lower rates.
Q. Is a self-insurance program unusual? Can it really be called an insurance fund?
A. Self-insurance for smaller claims, together with purchasing coverage from a national carrier for larger ones, is a common form of insurance for thousands of companies. Self-insurance is recognized by the New York State Insurance Department as a valid form of insurance product, and certain components of it are certified and regulated by that Department."Roughnotes," a widely recognized resource manual in the insurance industry, defines it this way: "Self-insurance [means] protecting against loss by setting aside one's own funds to provide for future contingencies. Through self-insurance, it is possible to protect against high-frequency, low-severity losses. Utilizing self-insurance eliminates the various loadings, such as acquisition expenses (i.e. commissions), taxes and general expenses, that would be incurred if the same loss coverage were secured through an insurance company."
Q. We have noted previously that the Bishop's Appeal was never used to settle abuse claims. Is that correct?
A. That is correct. Bishop Hubbard has said repeatedly that diocesan development efforts, such as the annual Bishop's Appeal and the diocesan Capital Campaign, are used only for their stated purposes (Catholic Charities, Catholic education etc.), and that neither those funds nor any legacies or bequests are ever used for insurance settlements.It stands to reason that money to cover insurance had to originate with parishioners, in the form of insurance premiums paid by the parishes. The people who make up the Church are, of course, the only source of the Church's income, and they know instinctively that the cost of doing business includes purchasing insurance for fire damage to parish and diocesan buildings, for people who slip on the ice and fall, and for employee misconduct -- including such things as harassment, discrimination or wrongful termination in the workplace, as well as sexual abuse.
So parishes and diocesan institutions pay the Diocese an insurance premium, and the Diocese determines the most economical way of dividing that money between a self-insurance fund and a national carrier.
Q. How does the Diocese go about recompensing abuse victims, and how much has the Diocese paid?
A. Over the last 25 years, there have been 11 insurance settlements for clergy sexual abuse of minors, for a total of $2.3 million. The particular settlement figure in each case was arrived at in negotiation with the victim's attorney, and was governed by a confidentiality agreement signed by the victim, the Diocese and the offending priest in order to protect the privacy of all parties.Confidentiality agreements will not be included in any future settlements, in accord with a decision announced by the Diocese in April and confirmed by the national bishops' conference in Dallas in June.
Q. Can a financial settlement ever make up for the harm done when a child is sexually abused?
A. The damage done when a minor is abused sexually is deep and enduring. When wrongful acts are done by the Church through an offending employee, the people who make up the Church feel a responsibility to reach out in healing. No amount of help can fully repair the injury, but effective counseling can begin to make the pain a bit more manageable. The Church pays for that counseling, as it has in the past and will continue to do should any new victims come forward.Q. Has the cost of insurance risen in recent years?
A. There are eight carriers for the Diocese's excess coverage (including St. Paul's Insurance, Travelers and United National). The threshold figures are $500,000 for property damage, and $250,000 for liability and sexual misconduct. The cost of that excess coverage has increased by 15 percent over the last eight years (i.e. from 1993-94 through 2001-02), while the cost of living index has increased by 21.2 percent over that same time period.There has been no increase in the parishes' premiums for insurance over the last eight years. In fact, in the last three years, parishes have received rebates ranging from 9 to 15 percent in their insurance payments, due to a favorable performance by the diocesan insurance fund.
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