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Mon January 14, 2013
KSBIT Members Facing Assessment for $60M Deficit
Past and present Kentucky School Board Insurance Trust members need to pay an assessment to fix a $60-million deficit in its worker’s compensation and property and liability pools. KSBIT protects school districts from incidents ranging from employee injuries to school bus accidents.
Kentucky School Board Association Executive Director Bill Scott says the biggest reason for the growing deficit is an increase of medical expenses.
“The ultimate cost of a worker’s comp claim is in the medical treatment that required for the injured worker. And the biggest factor has been that the cost of medical care has skyrocketed and continues to grow,” he says.
Another reason for the growing assessment is that many school districts are turning from KSBIT to private insurance companies. Scott says the trust once covered almost all Kentucky school districts but now covers only around 40 percent. Although the rest have turned to private insurance companies, KSBIT still has to pay the claims filed when those school districts were under its care.
“When you lose a school district from the pool, that means that you’re no longer receiving that premium to help pay the claims and other expenses. But on the other hand the claims that are already on the books while they were a member of yours stay on the books because worker’s comp claims in Kentucky go on for a long time,” he says.
A low return on investments also contributed to KSBIT’s growing shortfall. Scott says the assessment was a last resort to make up for the deficit.