School insurance limits fail in committee after tie vote
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Summary
A proposal to reduce county boards' per-occurrence liability limit from $1.25 million to $1 million and remove a required $5 million excess policy failed in the Senate Banking & Insurance Committee on a tie vote after discussion about market availability and impacts on large school systems.
The Senate Banking and Insurance Committee on March 4 considered an agency bill from the Board of Risk and Insurance Management (BRIM) that would lower the statutorily required per-occurrence liability limit for county boards of education from $1,250,000 to $1,000,000 and delete a mandatory $5,000,000 excess coverage requirement.
Counsel explained that BRIM's fiscal note indicated the cost of the $5,000,000 excess premium is ‘‘just above $5,000,000’’ and that those costs are passed to county boards of education; removing the $5 million excess requirement and lowering the per-occurrence limit would reduce county costs and address market-availability concerns. Jeremy Wolf, executive director of BRIM, testified that BRIM solicited 56 markets for the $5 million excess coverage and found only one partner, raising concerns that the market could become unavailable or prohibitively expensive.
Several senators raised concerns about lowering the limit for large districts that serve thousands of students and the potential effect on damages available to plaintiffs in certain claims. One senator noted recent high-profile cases involving harm to children and said reducing coverage ‘‘hurts the people that have been victims.’’ Another senator asked whether other states require $1,000,000 or higher limits; BRIM's director said he did not have comparative data at the hearing but noted that a $1,000,000 limit had been common historically.
After discussion the vice chairman moved to report the engrossed committee substitute for House Bill 54 63 to the full Senate with a recommendation that it pass. The committee conducted a division (hand-count) vote and the result was a tie; the chair declared that the bill did not pass in committee.
Why it mattered: Committee debate focused on a tradeoff between lowering costs and preserving recovery limits for claimants. BRIM said market constraints make the $5 million excess coverage difficult to obtain and costly, while some senators argued that the higher limits protect victims and large school systems.
What happens next: Because the bill failed in committee on a tie, it will not proceed to the full Senate from this committee report.
Action: Motion to report the engrossed committee substitute for House Bill 54 63 was moved by the vice chairman (speaker 2); division vote resulted in a tie and the bill failed to pass in committee.