On the heels of the New Hampshire Senate’s recent vote not to change oversight of public risk pools, Londonderry School District Business Administrator Peter Curro, also the chair of the Board of Directors of Health Trust, told the School Board at their June 16 meeting that the District may find itself in the market for property liability and casualty coverage.
If Property Liability Trust (PLT) is not permitted to write new business, the public risk pool could become financially unviable and will cease to exist. The District would then need either to contract with Primex or try to find a private carrier, according to Curro.
“The reason this is important is because private carriers don’t get involved in property liability and casualty coverage for municipalities for a variety of reasons,” he said.
State Rep. Al Baldasaro, R-Londonderry, who recently met with Secretary of State William Gardner and Curro, said he and fellow Londonderry legislators are involved in the process.
The risk pool “is financially troubled,” and the decision to restrict PLT from writing new business is about protecting taxpayer money, according to Gardner.
“They have a set number of members that have to be protected so claims are covered. The question is, do you want to expand membership with the hope the expansion will help keep this going a little longer and maybe do better? Do we want to risk and add more towns to a troubled financial institution?” he asked.
PLT is one of two public risk pools that were created when Local Government Center split – the other being Health Trust, which Gardner said served as a parent company to PLT, subsidizing the workers’ compensation pool.
The State Supreme Court ordered the pools to return $33 million in surplus money that was withheld contrary to state law. Additionally, PLT agreed not to accept new members.
Curro said the District is fully covered under its contract with PLT until June 2016, at which point it will need to find a new risk pool if the company ceases to operate.
“It means the School Board will have to renegotiate with Primex. They need to be looking for a ‘plan b,’” Baldasaro said.
“If Property Liability Trust is not allowed to write new business, we will need to seek a private company or go to Primex and see if they are willing to take us,” Curro said. “But Primex can simply say we don’t have room for you, there’s no law that tells them they must take us. We may end up in the private sector because of the situation the Secretary of State’s office has created.
“This is happening because the Secretary of State believes, for a variety of reasons, Property Liability Trust shouldn’t go forward, even though his own expert and liaison officer has stated in public it has the financial resources to stay in business and write new business, and even stated it’s in the best interest of PLT to write new business,” Curro said. “And it’s also in the best interest of the 200 other governments to allow a market of risk pools.”
Curro said Gardner’s decision will create a monopoly in the State. But Gardner argues it was the competition that created the issue they’re now facing.
“Health Trust was trying to put Primex out of business,” he said.
Curro told the Board legislation has been proposed that could help the company, and the Senate Finance Committee is looking at other options for the company.
“This will all come to a head about the third week of July,” he said. “Time is not the essence right now. Certainly, we can wait and see what transpires in the next three weeks.”