Insurance program
aids isle churches
When First Christian Church members gathered for a pancake breakfast Sunday, the spiffy state of the fellowship hall was a hot conversation topic. New carpet, fresh paint, new kitchen appliances, "even the pots and pans are new," said interim pastor Jon Bullock.
The best news for members was that they did not have to worry about paying for the restoration of the hall, which sustained $150,000 in damage in an Aug. 27 fire.
First Christian is one of 100 island churches and 4,200 churches nationwide covered by a unique church-based insurance program. The United Church of Christ denomination established the program 20 years ago, with the Rev. Mineo Katagiri, a former Hawaii resident, as one of its creators.
The United Church of Christ Insurance Board, with headquarters in Gaithersburg, Md., is a nonprofit organization owned by the 38 regional conferences of the denomination.
Last year, church officials celebrated Hawaii's new role in providing insurance protection for United Church of Christ and Disciples of Christ congregations. The national board established a subsidiary, the United Church Insurance Co., under the Hawaii "captive" insurance law.
"Today, some $8 billion in property is insured, and the annual premium is over $35 million," said the Rev. Don Sevetson, interim minister of the Hawaii conference. "By grouping together, we have been able to secure coverage for the rare event that individual churches would not be able to buy," he said.
What the insurance means for an individual congregation like First Christian is that "they did not have to spend the next five years digging themselves out of a hole," Sevetson said.
The insurance aided Kauai churches of the denomination in rebuilding after the 1992 ravages of Hurricane Iniki.
The state's "captive" insurance law, which allows creation of a company that benefits a particular clientele, was a lure in setting up the subsidiary here. "We did a national search and chose Hawaii because it has the financial infrastructure and Hawaii law proved advantageous," said Honolulu attorney Sherman Hee, who was on the 14-member board of the parent company. He was named manager of the Hawaii subsidiary.
Hee said another deciding factor for basing the company in Hawaii was the historical bond: The denomination sent the first Christian missionaries to the islands in 1820.
With its own company to negotiate reinsurance with other companies, the organization provides broad coverage. For a premium of $800 or so, a church buys coverage for general liability, bodily injury, property and contents damage, employment practices, even for the actions of directors and officers for which churches, like corporations, may be held liable.
Hee said it amounts to a $50 million umbrella policy covering all churches "from Riverside, which covers a square block in Manhattan, to the smallest church with 30 members." What is unique is that the program is nationwide; other large denominations such as the Catholic and Episcopal churches provide insurance within a diocese or geographic area, Hee said.
"What we do is, in essence, is subsidize the small church; Kawaiaha'o will pay more so a little neighbor island church can pay less. The concept is that there is one church."
Hee, a member of Community Church of Honolulu, said: "This is not just about insurance or business; it is about church. Because of insurance, they are able to put their resources into youth ministry, helping troubled families, rather than putting all their time and energy into selling sausages to rebuild. We hold that in high priority.
"The idea is, without insurance it is difficult to grow churches or start new churches," he said. "They need insurance for pastors, for staff, for volunteers. To get a bank loan, they had to have insurance."
Hee said that before creation of the Hawaii company, the national insurance board paid $25 million in annual premiums to outside insurers.
"Now the 4,000 churches all put money in the pot. Instead of writing a check to Aetna, you write a check to yourself. You create your own personal rainy-day fund. If it doesn't rain, you get to keep the money."
And, said Hee, "When it's your own rainy-day fund, you take care it doesn't rain."
The company follows through on that concept with an education campaign for the customers, with agents talking to church groups about risk management, inspecting premises for potential threat such as propane tank storage and underscoring the need to establish policies and train the hordes of volunteers on which churches rely. "Churches do have vulnerability in that area, screening and training lay volunteers as well as employees," Hee said.
"We teach churches how to protect themselves," Hee said. "We had a church burn down because young boys got in and lighted candles near curtains. The lesson learned was that they should lock their church when no one is there to watch it.
"Our biggest loss was in Seco, Maine, where a painter involved in renovating, stripping paint, needed a smoke. Flammable material was ignited, a beautiful church burned down and $7 million later ..."
The participating congregations are fewer than half of those eligible, and the coverage may someday be extended to church-affiliated businesses such as schools or retirement homes.
"In the future it may embrace other denominations as ecumenical partners," Hee said.
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